B-221233, JAN 27, 1986, OFFICE OF GENERAL COUNSEL

B-221233: Jan 27, 1986

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THE PROPOSAL IS TO CHANGE THE SUBSECTION TO STATE THAT ONE ALTERNATIVE MEANING OF THE F.O.B. ORIGIN DELIVERY TERM IS THAT. THE CONTRACTOR IS REQUIRED TO MAKE DELIVERY TO ANY GOVERNMENT-DESIGNATED POINT WITHIN THE SAME CITY OR COMMERCIAL ZONE AS THE F.O.B. A COMMERCIAL ZONE IS DEFINED AT 49 C.F.R. ORIGIN POINT IS IN A FOREIGN CITY. THE BASIC PROPOSAL IS TO DELETE SUBPARAGRAPH (C)(1) FROM EACH CLAUSE. CONFORMING CHANGES ALSO ARE PROPOSED. SUBPARAGRAPH (C)(1) PROVIDES THAT IF THE CONTRACTOR'S SHIPPING PLANT IS LOCATED IN THE SAME CITY OR COUNTY AS THE DESTINATION POINT OR PORT OF LOADING LISTED IN THE CONTRACT. DELETION OF THIS REQUIREMENT WILL ELIMINATE THE INEQUITY OF HAVING SUBSTANTIALLY DIFFERENT PERFORMANCE REQUIREMENTS FOR DIFFERENT CONTRACTORS DEPENDING SOLELY ON THE LOCATIONS OF THEIR SHIPPING PLANTS.

B-221233, JAN 27, 1986, OFFICE OF GENERAL COUNSEL

FEDERAL ACQUISITION REGULATION - PROPOSED REVISION DIGEST: GAO HAS NO OBJECTION TO PROPOSED CHANGES TO FEDERAL ACQUISITION REGULATION (FAR) SEC. 47.303 AND THE CLAUSES FOUND AT FAR SECS. 52.247 29, 52.247-31, AND 52.247-32, ALL OF WHICH CONCERN FREE ON BOARD (F.O.B.) ORIGIN CONTRACT DELIVERY TERMS.

MS. MARGARET A. WILLIS:

FAR SECRETARIAT

GENERAL SERVICES ADMINISTRATION

THIS RESPONDS TO YOUR LETTER OF NOVEMBER 27, 1985, REQUESTING OUR COMMENTS ON A PROPOSAL TO AMEND FEDERAL ACQUISITION REGULATION (FAR) SEC. 47.303 AND THE CLAUSES FOUND AT FAR SECS. 52.247-29, 52.247-31, AND 52.247.32, ALL OF WHICH CONCERN FREE ON BOARD (F.O.B.) ORIGIN DELIVERY TERMS (FAR CASE NO. 85-43). WE DO NOT OBJECT TO THE PROPOSED CHANGES.

THE CHANGES PROPOSED TO FAR SEC. 47.303 INVOLVE THE FOLLOWING SUBSECTIONS: (1) 47.303-1, F.O.B. ORIGIN; (2) 47.303-3, F.O.B. ORIGIN, FREIGHT ALLOWED; (3) 47.303-4, F.O.B. ORIGIN, FREIGHT PREPAID; AND (4) 47.303-5, F.O.B. ORIGIN, WITH DIFFERENTIALS. IN EACH CASE, THE PROPOSAL IS TO CHANGE THE SUBSECTION TO STATE THAT ONE ALTERNATIVE MEANING OF THE F.O.B. ORIGIN DELIVERY TERM IS THAT, UNLESS OTHERWISE PROVIDED IN THE SOLICITATION, THE CONTRACTOR IS REQUIRED TO MAKE DELIVERY TO ANY GOVERNMENT-DESIGNATED POINT WITHIN THE SAME CITY OR COMMERCIAL ZONE AS THE F.O.B. ORIGIN POINT SPECIFIED IN THE CONTRACT. A COMMERCIAL ZONE IS DEFINED AT 49 C.F.R. SEC. 1048.101 (1984) AS MEANING, GENERALLY, UNITED STATES MUNICIPALITIES AND SURROUNDING AREAS.

CURRENTLY, THE CITED FAR SUBSECTIONS PROVIDE THAT THE GOVERNMENT MAY DESIGNATE A DELIVERY POINT ONLY WITHIN THE SAME COMMERCIAL ZONE AS THE F.O.B. ORIGIN POINT SPECIFIED IN THE CONTRACT. BY ADDING THE WORD "CITY," THE PROPOSED CHANGE WOULD ALLOW THE GOVERNMENT TO DESIGNATE A DELIVERY POINT WITHIN A CITY THAT MAY NOT BE PART OF A COMMERCIAL ZONE, SUCH AS WHEN THE F.O.B. ORIGIN POINT IS IN A FOREIGN CITY. IN ADDITION, THE PROPOSED CHANGE WOULD MAKE THIS MEANING OF THE F.O.B. ORIGIN DELIVERY TERM THE RULE RATHER THAN THE EXCEPTION.

THE PROPOSAL ALSO CONTAINS OTHER CHANGES THAT CONCERN ONLY THE FAR CLAUSES LISTED ABOVE. THE BASIC PROPOSAL IS TO DELETE SUBPARAGRAPH (C)(1) FROM EACH CLAUSE. CONFORMING CHANGES ALSO ARE PROPOSED. SUBPARAGRAPH (C)(1) PROVIDES THAT IF THE CONTRACTOR'S SHIPPING PLANT IS LOCATED IN THE SAME CITY OR COUNTY AS THE DESTINATION POINT OR PORT OF LOADING LISTED IN THE CONTRACT, THEN THE CONTRACTOR MUST MAKE DELIVERY TO THAT POINT OR PORT OF A F.O.B. DESTINATION BASIS. DELETION OF THIS REQUIREMENT WILL ELIMINATE THE INEQUITY OF HAVING SUBSTANTIALLY DIFFERENT PERFORMANCE REQUIREMENTS FOR DIFFERENT CONTRACTORS DEPENDING SOLELY ON THE LOCATIONS OF THEIR SHIPPING PLANTS.