FAR Part 47: Transportation

In plain English

FAR Part 47 prescribes policies and procedures for applying transportation and traffic management considerations in the acquisition of supplies, and for acquiring transportation or transportation-related services. It matters to contractors because it dictates how delivery terms, bills of lading, insurance, and transportation costs are handled in Government contracts, affecting pricing and risk.

Key rules

• For domestic shipments, contracting officers must authorize shipments on commercial bills of lading; Government bills of lading may be used for international or noncontiguous domestic shipments. (47.101)
• The Government generally retains the risk of loss or damage to its property that is not the legal liability of commercial carriers and does not buy insurance coverage for its property. (47.102)
• Government rate tenders under 49 U.S.C. 10721 and 13712 apply to shipments moving for the account of the Government on commercial bills of lading endorsed to show that the shipment is for the Government. (47.104-1)
• For fixed-price f.o.b. destination contracts, Government rate tenders do not apply; for f.o.b. origin contracts, they may apply if advantageous to the Government. (47.104-2)
• For cost-reimbursement contracts, Government rate tenders may be applied to shipments other than those made by the Government if the total benefit accrues to the Government. (47.104-3)
• Contracting officers must include the clause at 52.247-1, Commercial Bill of Lading Notations, in solicitations and contracts to ensure application of Government rate tenders where authorized. (47.104-4)
• When Government rate tenders apply, transportation offices or contractors must identify the applicable tender by endorsement on bills of lading. (47.104-5)
• Contracting officers must determine f.o.b. terms generally on the basis of overall costs, considering the criteria in 47.304. (47.304-1)

Who does what

In practice

• When bidding, check the delivery terms (f.o.b. origin or destination) because they determine who pays freight and when risk of loss transfers.
• If you are shipping f.o.b. origin, you may need to endorse bills of lading to allow the Government to get reduced rates under 49 U.S.C. 10721 and 13712.
• For cost-reimbursement contracts, ensure that any transportation charges are allowable and that Government rate tenders are applied when beneficial.
• Be aware that the Government does not buy insurance for its property, so you may need to carry your own insurance for your liability.

Common pitfalls

• Assuming that Government rate tenders apply to all contracts; they do not apply to fixed-price f.o.b. destination contracts.
• Failing to endorse commercial bills of lading as required, which could result in the Government not receiving applicable rate tenders.
• Not including the required clause 52.247-1 when authorized, which may lead to improper billing and payment issues.
• Overlooking the need for advance shipment notice (REPSHIP) when required, which can cause delays or security issues at receiving activities.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.