47.303-17 Contractor-prepaid commercial

bills of lading, small package shipments.

(a) If it is advantageous to the Government, the contracting officer may authorize the contractor to

ship supplies, which have been acquired f.o.b. origin, to domestic destinations, including DoD air

and water terminals by common carriers on commercial bills of lading. Such shipments shall not

exceed 150 pounds by commercial air or 1,000 pounds by other commercial carriers and shall not

have a security classification.

(b) The contracting officer may authorize the shipments under paragraph (a) of this subsection to be

consolidated with the contractor’s own prepaid shipments for delivery to one or more destinations, if

all appropriate f.o.b. origin shipments under one or more Government contracts have been

consolidated initially. The contractor may be authorized to consolidate less-than-carload or less-thantruckload Government shipments with its own shipments so that the Government can take

advantage of lower carload or truckload freight costs. The Government shall assume its pro rata

share of the combined shipment cost. Agency transportation personnel shall evaluate overall

transportation costs before authorizing any movement to ensure savings to the Government

consistent with other contract and traffic management considerations. When consolidation is

authorized, a copy of the commercial bill of lading shall be mailed promptly to each consignee.

(c) Shipments under prepaid commercial bills of lading, as authorized in paragraph (a) of this

subsection, do not require a contract modification. Unless otherwise provided in the contract, the

supplies move for the account of, and at the risk of, the Government. The supplies become

Government property when loaded on the carrier’s equipment and the contractor has obtained the

carrier’s receipt. The contractor pays the transportation charges and is reimbursed by the

Government. Loss or damage claims shall be processed in accordance with agency regulations.

(d) The contractor’s invoice for reimbursement by the Government shall show the prepaid

transportation charges as agreed (see paragraph (b) of this subsection), as a separate item for each

individual shipment. The contractor shall support the transportation charges with a copy of the

carrier’s receipted freight bill or other evidence of receipt, except as follows:

(1) A Government agency may determine that receipted freight bills or other evidence of receipt are

not required for transportation charges of $100 or less.

(2) A Government agency may pay an invoiced but unsupported transportation charge of $250 or

less per transaction (i.e., purchase, invoice, or aggregate billing or payment for multiple purchases),

if-

(i) The contractor cannot reasonably provide a receipted freight bill; and

(ii) The agency has determined that the charges are reasonable. Determination of reasonableness

may be based on-

(A) Past experience (authenticated transportation charges for similar shipments);

(B) Rate checks;

(C) Copies of previous freight bills submitted by the contractor; or
(D) Other information submitted by the contractor to substantiate the amount claimed.

(3) Receipted freight bills in support of invoiced transportation charges of $100 or less are not

required for reimbursement by the Government, if-

(i) The underlying contract specifies retention by the contractor of all records for at least 3 years

after final payment under the contract; and

(ii) The contractor agrees to furnish evidence of payment when requested by the Government.

(e) Shipments and invoices shall not be split to reduce transportation charges to $100 or less per

transaction as a means of avoiding the required documented support for the charges. See paragraph

(d)(2) of this subsection for unsupported transportation charges of $250 or less.

(f) The contracting officer shall insert the clause at 52.247-65, F.o.b. Origin, Prepaid Freight-Small

Package Shipments, in solicitations and contracts when f.o.b. origin shipments are to be made.

Parent topic: 47.303 Standard delivery terms and contract clauses.