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7-104.68 Reserved.

7–104.69 FOB Point of Delivery of Government-Furnished Property. When Government property is to be furnished under a contract and the Government will be responsible for transportation arrangements and costs, insert the following clause.


(a) Unless otherwise specified herein, any Government property furnished to the Contractor for use within the United States (excluding Alaska and Hawaii) or Canada will be delivered by the Government at a point to be specified by the Contractor in his bid (or proposal). Should the Government clect to make delivery by railroad, the f..b. point shall be private siding, Contractor's plant. If the Contractor's plant is not served by rail, the f.o.b. point shall be railroad cars in the same or nearest city having rail service. All linchaul transportation costs to the specified destination will be borne by the Government. The Government may choose the mode of transportation and the carriers.

(b) If the destination of such Government-furnished property is a Contractor's plant located outside the 48 contiguous states, the District of Columbia and Canada, the f.o.b. point for Government delivery of Government-furnished property shall be a location in the United States (excluding Alaska and Hawaii) specified by the Contractor. If the Contractor fails to name a point, then the f.o.b. point shall be the port city in the United States, nearest to the Government source of the Government-furnished property, which has regular commercial water transportation services to the offshore port nearest Contractor's plant.

(c) Unless otherwise directed by the Contracting Officer or provided in the contract, the Contractor shall return all Government-furnished equipment, supplies, and property, including all property not returned in the form of acceptable end items, to the point at which such Government property was originally furnished to the Contractor hereunder. Notwithstanding the fact that the Government may have furnished the property at the Contractor's plant, the Contracting Officer may direct the Contractor to deliver the Government property being returned to, and load, block, and brace it in, railway cars in the city in which the Contractor's plant is located, or, if the Contractor's city is not served by rail service, in the nearest city having rail service. Unless otherwise specified in the contract, all property shall be packed in containers conforming with the




rules of common carrier published tariffs so as to be free of penalty charges by the carrier designated for shipment by the Government.

(End of clause)

7-104.70 FOB Origin. In accordance with 19-208.2 and 19-208.4(a) or (b), insert the following clause.

F.O.B. ORIGIN (1973 APR)

The Contractor is responsible for delivery to, and for loading, blocking, and bracing the supplies on, the carrier's vehicle; or for delivery to and placement on the carrier's wharf (at shipside, within reach of the ship's loading tackle, when shipping point is within a port area having water transportation service) or the carrier's freight station; or for delivery to the U. S. Postal Service facility; all at Government's option, whichever place of delivery is specified by the Government at the time of shipment. These Contractor responsibilities are specified for performance at the plant or plants at which such supplies are to be finally inspected and accepted, unless the facilities for shipment by carrier's equipment are not available at the Contractor's plant, in which case they will be performed f.o.b. the point or points in the same or nearest city where the specified carrier's facilities are available; subject, however, to the following qualifications:

(i) If the Contractor's shipping plant is located in the same city (or county) listed as a

destination or port of loading in the contract, the Contractor shall deliver the sup plies to that destination or port at his expense and such portion of the contract will

be “f.o.b. destination." (ii) If the Contractor's shipping plant is located in the State of Alaska or Hawaii, the

Contractor shall deliver the supplies listed for shipment outside Alaska or Hawaii to the port of loading in Alaska or Hawaii, respectively, as specified in the contract, at

Contractor's expense, and to that extent the contract will be "f.o.b. destination." (iii) Notwithstanding (ü) above, if the Contractor's shipping plant is located in the State

of Hawaii, and the contract requires delivery to be made by container service, the contractor shall deliver the supplies, at his expense to the container yard in the same or nearest city where seavan container service is available.

(End of clause)

7-104.71 FOB Destination. In accordance with 19-208.3, insert the following clause.


Supplies shall be delivered to the destination consignee's wharf (if destination is a port city and supplies are for export), warehouse unloading platform, or receiving dock, at the expense of the Contractor. The Government shall not be liable for any delivery, storage, demurrage, accessorial, or other charges involved prior to the actual delivery (or "constructive placement" as defined in carrier tariffs) of the supplies to the destination, unless such charges are caused by an act or order of the Government acting in its contractual capacity. If rail carrier is used, supplies will be delivered to the specified unloading platform of the consignee. If motor carrier (including "piggyback") is used, supplies will be delivered to truck tailgate at the unloading platform of the consignee. If the Contractor uses rail carrier or freight forwarder for less than carload shipments, he shall assure that the carrier will furnish tailgate delivery if transfer to truck is required to complete delivery to consignee.

(End of clause)

7-104.72 FOB Origin- Minimum Size of Shipments. In accordance with 19-208.4(6), insert the following clause.





The Contractor agrees that shipment will be made in carload and truckload lots when the quantity to be delivered to any one destination in any delivery period pursuant to the contract schedule of deliveries is sufficient to constitute a carload or truckload shipment, except as may otherwise be permitted or directed in writing by the Contracting Officer. The agreed weight of a carload or truckload will be the highest applicable minimum weight which will result in the lowest freight rate (or per car charge) on file or published in common carrier tariffs or tenders as of date of shipment. In the event the total weight of any scheduled quantity to a destination is less than the highest carload/truckload minimum weight, the Contractor agrees to ship such scheduled quantity in one shipment. The Contractor shall be liable to the Government for any increased costs to the Government resulting from failure to comply with the above requirements. This liability shall not attach if supplies are outsized or of such nature they cannot be loaded at the highest minimum weight bracket.

(End of clause)

7-104.73 Loading, Blocking and Bracing of Freight Car Shipments. In accordance with 19-211(a), insert the following clause.


Upon receipt of shipping instructions, as provided in this contract, the supplies to be included in any carload shipment by rail shall be loaded, blocked and braced by the Contractor in accordance with the standards published at the time of such shipments by the Association of American Railraods. Shipments, for which the Association of American Railroads has published no such standards, shall be loaded, blocked and braced in accordance with standards established by the shipper as evidenced by written acceptance of an authorized representative of the carrier. The Contractor shall be liable for payment of any damage to any supplies caused by the failure to load, block and brace in accordance with acceptable standards set forth herein. A copy of the appropriate pamphlet of the Association of American Railroads may be obtained from that Association.

(End of clause)

7-104.74 Shipments to Ports-Clearance and Documentation Requirements. In accordance with 19-213.2, insert the following clause.


(a) All shipments to water or air ports for transshipment to overseas destinations are subject to the following, unless clearance and documentation requirements have been expressly delegated to the Contractor.

(b) At least ten (10) days prior to shipping cargo to a water port, the Contractor shall obtain an Export Relcase from the Government transportation office for:

(i) Each shipment weighing 10,000 pounds or more, and
(ii) Each shipment weighing less than 10,000 pounds, if the cargo either:

(B) will require exclusive use of a motor vehicle,
(C) will occupy full visible capacity of a railway car or motor vehicle,
(D) is less than a carload or truckload, but will be tendered as a carload or

(E) is to be shipped to an ammunition outloading port for water shipment; or
(iii) Each shipment weighing less than 10,000 pounds if the cargo consists of:

(A) narcotics,
(B) perishable biological material,
(C) vehicles to be offered for driveway service,
(D) explosives, or other dangerous articles classified as A, B, or C explosives,
(E) poisons, classes A, B, or C, or



40-0800 - 80 - 13


(F) radioactive material, as defined in Title 49, Code of Federal Regulations, Parts

170-189. (c) The contractor is cautioned not to order railway cars or motor vehicles for loading until an Export Release has been received.

(d) If the Contracting Officer directs delivery within a shorter period than ten (10) days, the Contractor shall advise the transportation office of the date on which the cargo will be ready for shipment

(e) At least five (5) days prior to shipping cargo to either a water port or an air port (regardless of the weight, security classification, or the commodity description) the Contractor shall provide the Government transportation office the information shown in (f) below to permit preparation of a Transportation Control and Movement Document (TCMD).

(f) When applying for the Export Release in (b) above or when providing information for preparation of the TCMD (e) above, the Contractor shall furnish:

(i) the proposed date or dates of shipment,
(ii) number and type of containers,
(iii) gross weight and cube of the shipment,
(iv) number of cars or trucks which will be involved,
(v) the Transportation Control Number(s) (TCN) as required for marking under MIL-

STD-129, and
(vi) proper shipping name as specified in Title 46, Code of Federal Regulations, Subpart

146.04 - .05, for all items classified as dangerous substances as required for marking

under MIL-STD-129. (g) All movement documents (Government or commercial bills of lading or other delivery documents) shall be annotated by the Contractor with:

(i) the Transportation Control Number, Consignor Code of activity directing the ship

ment, i.e., cognizant contract administration office, purchasing office when contract administration has been retained, or a contractor specifically delegated MILSTAMP responsibilities in the contract, whichever is appropriate, Consignee Code, and

Transportation Priority for each shipment unit. (ii) Export Release Number and valid shipping period, if stated. (If expired, the Contrac

tor shall request a renewal.) and (iii) the cubic foot measurement of each shipment unit. (h) All annotations on the movement documents shall be made in the "Description of Articles" space except, on Government bills of lading the Export Release number and shipping period shall be entered in the space entitled "Traffic Control No.".

(i) The Contractor will (1) mail a copy of the commercial bill of lading or other movement document to the transshipment point and (2) give a copy of the commercial bill of lading or other movement document to the carrier for presentation to the transshipment point with delivery of the shipment.

(End of clause)

7-104.75 Diversion of Shipment Under FOB Destination Contracts. In accordance with 19-215, insert the following clause.


(a) When a place of delivery is changed in accordance with the "Changes" clause of this contract, the contract price shall be adjusted pursuant to that clause for any resulting increase or decrease in the cost of performance. No adjustment shall be made for changes in transportation costs when supplies are identically priced for delivery regionally or nationally and the place of delivery is changed within the area to which the identical price applies. In all other cases, price adjustments due to changes in transportation costs shall be determined by comparing the cost of:

(i) shipment(s) to the new destination(s) as evidenced by copy of the paid freight bill to

be supplied by the Contractor with his invoice; and (ii) shipment(s) to the original or old destination as evidenced by copy of the ap

propriate paid freight bill(s) to be supplied by the Contractor, or, in the event no




shipments were made, as evidenced by the applicable rate of a common or contract

carrier. (b) If shipments to the new destination are made by the Contractor owned or leased truck(s) and/or shipments to the original destination were made or would have been made by Contractor owned or leased truck(s), the Contractor shall so certify and, in making an appropriate adjustment in contract prices for payment purposes, a rate equal to 70 percent of the lowest applicable rate published in common carrier tariffs as of the date of shipment shall be substituted by the Government for the Contractor's actual rate or contemplated transportation costs.

(c) If any or all of the following data are not clearly shown on or available from copies of paid freight bills on each diverted shipment, the Contractor shall supply a statement showing:

(i) full name of the carrier or carriers in the routing,
(ii) number of containers,
(iii) gross shipping weight,
(iv) actual date of shipment, and
(v) freight description for the supplies as indicated in the “National Motor Freight Clas-
sification" or the “Uniform Freight Classification" (Rail).

(End of clause)

7-104.76 FOB Destination-Evidence of Shipment. In accordance with 19-208.3, insert the following clause.


If this contract is awarded on an f.o.b. destination basis and if transportation is accomplished by:

(i) common carrier, the Contractor agrees to furnish in support of his invoice, a copy of

the signed commercial bill of lading indicating the carrier's reccipt of the supplies

covered by the invoice for transportation to the destination specified in the contract; (ii) parcel post, the Contractor agrees to furnish a certificate of mailing with his invoice;

and (iii) other than common carrier or parcel post, the Contractor agrees to attach to his in

voice a receipted copy of the appropriate delivery document showing receipt at the destinatiop specified in the contract.

(End of clause)

7-104.77 Government Delay of Work.

(a) The clause in (f) below shall be used in all fixed-price supply contracts except that it is optional for use in contracts for commercial items (see 3-807.7(b)) or modified-commercial items.

(b) The clause 'provides a means for the fair and expeditious administrative settlement of claims arising out of certain delays and interruptions in the contract work caused by the acts, or failures to act, of the contracting officer where the contract does not otherwise specifically provide for an equitable adjustment because of such delay or interruption (e.g., Government-furnished property, changes, etc).

(c) The clause does not authorize the contracting officer to order a suspension, delay or interruption of the work and it shall not be used as the basis for or to justify such an order.

(d) When the contracting officer has notice of an unordered delay or interruption covered by the clause, he will act to end it or take other appropriate action as soon as practicable.

(e) The contracting officer shall retain in the file a record of all negotiations leading to any adjustment made under the clause, including cost or pricing data.



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