Product orders tend to rise as the fiscal year nears its end, and many arrive with tight delivery dates. A shipment that arrives late, at the wrong dock or without the required markings can be refused, delaying acceptance and payment and leaving a poor impression with a buyer you hope to see again. Reviewing the basics of federal shipping in June, before the busiest weeks, is time well spent.
Read the delivery terms first
The contract or order tells you where, when and how to deliver. Look for the delivery schedule, the ship-to address, any marking instructions, and the inspection and acceptance terms, which say whether the government will inspect at your facility or at destination. Delivery dates in federal contracts are firm commitments. If you cannot meet one, tell the contracting officer before the date passes, not after.
FOB origin and FOB destination
The FOB term defines when title and risk of loss pass to the government and who pays freight. In general:
- FOB destination means the contractor delivers to the specified destination at its own expense and bears the risk of loss or damage until delivery. It is common for many purchases.
- FOB origin generally means the government takes title and risk when the contractor delivers the goods to the carrier, and the government arranges or pays for transportation from that point.
Price your quote to match the FOB term, and follow the shipping instructions exactly, especially when the government is arranging transportation.
Packaging and marking
Many civilian purchases accept commercial packaging. Defense purchases often specify more. Military marking requirements, defined in a military standard for marking shipments and storage, govern labels, bar codes and the information that must appear on packages. Certain defense shipments require radio frequency identification tags, and some items must carry permanent unique identification markings. Solicitations and contracts reference the specific standards and clauses that apply; obtain the current versions and follow them literally. Packaging that protects the item but ignores the marking requirements can still be rejected.
Hazardous materials bring their own shipping and documentation rules under transportation regulations, and many government receiving sites expect safety data sheets in advance.
Receiving reports and delivery appointments
On defense contracts, the receiving report is usually created in the department’s electronic invoicing and receiving system, and it often serves as the acceptance document that triggers payment. Prepare it accurately, with the contract number, line items, quantities and shipment details that match the physical shipment. Civilian agencies use a variety of systems and paper processes; the contract will specify yours.
Large government warehouses and installation receiving sections frequently require delivery appointments, and security procedures can affect when and how a carrier may enter. Confirm receiving hours and procedures for each destination, and make sure your carrier knows them. A truck that arrives without an appointment, or after the dock closes on a Friday in September, may be turned away.
A short pre-shipment checklist
- Do the item, quantity, part number and packaging match the order exactly?
- Are all required markings, labels and identification tags in place?
- Is the ship-to address correct, and is a delivery appointment needed?
- Is the receiving report or packing list ready and consistent with the shipment?
- Will the shipment arrive by the delivery date under the FOB terms you quoted?
Getting delivery right is part of winning the next order. The FAR’s transportation rules are in Part 47 at acquisition.gov, and APEX Accelerators can help firms find and interpret the marking standards that apply to defense shipments.