FAR Part 47
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Transcript of FAR Part 47
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FAR Part 47
Things You Need to Know About Transportation
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Vocabulary
• Bill of Lading (BOL) – a form type contract used to transport goods– Provides evidence of title permitting cargo to clear
customs– Commercial BOL is a simple contract saying “I will
transport these goods from x to y for a fee and if they are damaged I will pay a set value (usually per pound) in compensation”
– Government BOL provides the above and is a negotiable instrument (can be presented for payment)
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Vocabulary
• Carrier – the transportation firm responsible for moving the goods– Common Carrier – available to anyone willing to
contract their services– Contract Carrier – Available to a source under a
continuing agreement – Private Carrier – Usually owned by the
manufacturer and is not for hire
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Vocabulary
• Shipper – Person, agency, or firm initiating the shipment of goods
• Consignee – Person agency or firm to which the goods are delivered.
• Overpack – A carton or crate which contains individually packaged items.
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Vocabulary
• Goods & Cargo– Household Goods – Personal property and effects– Bulk Goods/Cargo – Unpackaged material (oil,
coal, grain, etc.)– Break Bulk Cargo – General items of cargo that
have to be loaded individually and may be packaged or crated.
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Vocabulary
• Accessorial Services – Special services authorized and paid for as they occur such as special packing etc.
• Demurrage – A cost levied by the carrier against the shipper for delays in loading or unloading (e.g., excessive laytime) or for failure to return shipping containers in a timely manner.
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Vocabulary
• (Transportation) Tariff – A rate schedule applying to the transportation of goods– Intrastate tariff. A rate applied to goods shipped
between two points both of which lie within the same state. Rates are approved by the state.
– Interstate tariff – A rate applied to shipments that cross state lines.
– Tariffs are typically based on class of goods, weight and distance for less than truckload (LTL) or on truckload rates which set a max weight and then are quoted by distance.
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Vocabulary
• Freight Consolidator (or Aggregator) – a firm that combines less than truckload (LTL) shipments into a complete load– Using LTL rates is less expensive than truckload
rates but runs a greater risk of loss or damage– Truckload rates are often paid for sensitive
material or delicate cargo to provide traceability and minimize handling of cargo.
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Government Transportation
• The Government solicits rate quotes for intrastate, interstate and international transportation of goods under FAR 47– The resulting contract(s) establish government – unique rates that
are often significantly below “man-on-the street” rates.– The contract may be either
• A single purpose contract to provide specific transportation services on a one-time basis
• A Basic Ordering Agreement with delivery (of services) being directed via a GBL or a specially annotated CBL.
– Contracts are typically solicited as Fixed Price contracts using sealed bids but may also be negotiated.
– Rates may not exceed those available to the general public or otherwise available to the federal government.
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Contractor Transportation
• Transportation of Goods is an allowable contract expense.– On FFP contracts transportation cost are included as a
part of the contract price if delivery is “f.o.b. Destination”– On FFP contracts transportation charges for goods that
are f.o.b. Origin and later shipped at government direction are recoverable.
– On Cost Reimbursement contracts the contractor shall take advantage of government shipping rates by annotating their CBL per 52.247-1 Commercial Bill of Laden Notations if the clause is in their contract.
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Liability and Insurance
• Carrier must be responsible for and insured against loss or damage of goods and injury to personnel
• If contract does not specify liability, the Interstate Commerce Commission rules apply
• The government ‘self-insures’ for damages that exceed the coverage provided by the carrier.
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Delivery Terms & Conditions
• F.o.b. Origin – Free of expense to the Government on board the designated conveyance at the designated point of origin which can be:– The contractor’s facility (F.o.b. Origin, Contractor’s
Facility)– A point designated by the contract for pick-up
within a commercial zone; at a wharf or dock; or a U.S. Postal facility. (F.o.b. Origin, Freight Allowed or Freight Prepaid)
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Delivery Terms & Conditions
• F.o.b. Destination. Free of expense to the Government delivered to a specified destination– Contractor responsible for loading, unloading,
storage prior to delivery, demurrage.– May include ‘constructive placement’– Unusually heavy or bulky items to be unloaded by
consignee.
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Other Delivery Terms & Conditions
• F.a.s Vessel, Port of Shipment• F.o.b. Vessel, Port of Shipment• Ex dock, pier, or warehouse, Port of
importation• C&F (Cost and Freight) Destination• C.I.F. (Cost, Insurance and Freight) Destination
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Mode of Transportation
• Generally, solicitations shall not specify a particular mode of transportation or a particular carrier.
• If the use of particular types of carriers is necessary to meet program requirements, the solicitation shall provide that only offers involving the specified types of carriers will be considered.
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Preferred Carriers
• Preference for U.S. Flagged Vessels – Registered and operated under the laws of the United States,– Used in commercial trade of the United States,– Owned and operated by U.S. citizens, including a vessel
under voyage or time charter to the Government, and– A Government-owned vessel under bareboat charter to, and
operated by, U.S. citizens.• Required by:
– The Cargo Preference Act of 1904 (10 U.S.C. 2631)– The Merchant Marine Act of 1936 (46 U.S.C. 1101)– The Cargo Preference Act of 1954 (46 U.S.C. 1241(b