Treasury's $26.8M contract for circulating coinage metal awarded to Wieland Rolled Products North America, LLC

Contract Overview

Contract Amount: $26,825,132 ($26.8M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2007-10-10

End Date: 2007-11-23

Contract Duration: 44 days

Daily Burn Rate: $609.7K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: PROVIDE STIRP + METAL FOR CIRCULATING COINAGE

Place of Performance

Location: EAST ALTON, MADISON County, ILLINOIS, 62024

State: Illinois Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.8 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE STIRP + METAL FOR CIRCULATING COINAGE Key points: 1. Contract awarded for nonferrous metal rolling, drawing, and extruding services. 2. Fixed-price contract with economic price adjustment indicates potential for cost fluctuations. 3. Delivery order issued under a larger contract, suggesting a phased approach to procurement. 4. Contract duration of 44 days for this specific order. 5. Awarded by the United States Mint, a key component of the Treasury. 6. The contract value is significant for specialized metal products.

Value Assessment

Rating: good

The contract value of $26.8 million for circulating coinage metal appears reasonable given the specialized nature of nonferrous metal rolling and extruding. Benchmarking against similar contracts for raw materials procurement by the Mint or other government agencies would provide a more precise value-for-money assessment. However, the fixed-price with economic price adjustment clause suggests a mechanism to manage market volatility, which is a common practice for commodity-based contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was issued as a competitive delivery order, indicating that the initial award was subject to a full and open competition. The presence of multiple bidders in the initial competition likely contributed to price discovery and ensured a competitive rate for the services. The specific number of bidders for this delivery order is not detailed, but the 'COMPETITIVE DELIVERY ORDER' designation implies a competitive process was followed.

Taxpayer Impact: A competitive award process helps ensure that taxpayer funds are used efficiently by securing favorable pricing for essential government supplies like coinage metal.

Public Impact

Benefits the United States Mint in its production of circulating coinage. Ensures the availability of essential raw materials for currency production. Supports the broader economy by providing materials for U.S. currency. Indirectly impacts the public through the continuous supply of coins.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to increased costs if metal prices rise significantly.
Reliance on a single supplier for a critical component of coinage production carries inherent supply chain risk.

Positive Signals

Awarded through a competitive process, suggesting favorable initial pricing.
The United States Mint has a long history of managing coinage production, indicating established expertise.
The contract specifies delivery order terms, providing clear expectations for performance.

Sector Analysis

The procurement of nonferrous metals for coinage falls within the broader industrial sector of metal manufacturing and processing. This specific contract relates to the specialized area of rolling, drawing, and extruding metals like copper and zinc alloys, which are key components in U.S. coinage. The market for such specialized metal products is often characterized by a limited number of highly capable suppliers, making competitive bidding crucial for securing fair pricing.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. As a large-scale industrial material procurement, it is likely that the prime contractor, Wieland Rolled Products North America, LLC, is a large business. Subcontracting opportunities for small businesses may exist within the supply chain for raw materials or specialized processing, but this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the United States Mint's contracting officers and the Department of the Treasury's internal oversight mechanisms. Transparency is generally maintained through contract award databases. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

United States Mint Coinage Production
Department of the Treasury Procurement
Nonferrous Metal Supply Chain

Risk Flags

Supply Chain Risk: Reliance on a single supplier for critical coinage metal.
Price Volatility: Potential for increased costs due to the economic price adjustment clause.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.8 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE STIRP + METAL FOR CIRCULATING COINAGE

Who is the contractor on this award?

The obligated recipient is WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (United States Mint).

What is the total obligated amount?

The obligated amount is $26.8 million.

What is the period of performance?

Start: 2007-10-10. End: 2007-11-23.

What is the historical spending pattern for circulating coinage metal by the U.S. Mint?

Historical spending on circulating coinage metal by the U.S. Mint can fluctuate based on demand for coins, metal market prices, and the specific composition of coinage alloys. The Mint procures significant quantities of copper, zinc, and nickel for its circulating coins. Over the years, contracts for these materials have been awarded through competitive processes, with prices influenced by global commodity markets. Analyzing past contract awards for similar metals, such as copper-nickel clad or zinc-plated steel, would reveal trends in volume, pricing, and supplier engagement. For instance, periods of high economic activity might correlate with increased coin production and thus higher metal procurement spending. Conversely, fluctuations in the price of base metals like zinc and copper directly impact the total expenditure. The U.S. Mint's annual reports and historical contract databases are key resources for understanding these spending patterns and the factors driving them.

How does the economic price adjustment (EPA) clause in this contract typically function?

The Economic Price Adjustment (EPA) clause in this contract is designed to protect both the government and the contractor from significant fluctuations in the cost of raw materials, specifically nonferrous metals. Typically, an EPA clause establishes a baseline price for the material at the time of contract award. As market prices for the specified metals change (e.g., copper, zinc), the contract price is adjusted upwards or downwards based on a pre-defined formula or index. This formula often references published market prices from recognized sources. For the government, it means the price could decrease if metal prices fall. For the contractor, it mitigates the risk of incurring losses if metal prices surge unexpectedly. The 'COMPETITIVE DELIVERY ORDER' context suggests that the EPA terms were likely a point of negotiation during the initial competitive bidding process, ensuring that the potential for price changes was factored into the overall value proposition.

What is Wieland Rolled Products North America, LLC's track record with government contracts, particularly for metal supply?

Wieland Rolled Products North America, LLC, is a significant player in the metals industry, and its track record with government contracts, particularly for metal supply, is generally robust. As a subsidiary of Wieland-Werke AG, a global leader in copper and copper alloy production, the company possesses extensive experience and capacity. While specific details on all past government contracts may not be publicly itemized, their role as a supplier for critical materials like coinage metal indicates a history of meeting stringent government specifications and delivery requirements. Government agencies, especially those involved in manufacturing or infrastructure, often rely on established industrial suppliers like Wieland for high-quality materials. Their ability to secure contracts with entities like the U.S. Mint suggests a proven capacity for competitive bidding, quality control, and reliable delivery, which are paramount for such sensitive procurements.

What are the potential risks associated with relying on a single supplier for coinage metal, even if competitively sourced?

Relying on a single supplier for critical materials like coinage metal, even if competitively sourced initially, introduces several potential risks. The primary risk is supply chain disruption. Any unforeseen event affecting the supplier's operations—such as natural disasters, labor disputes, equipment failures, or geopolitical issues impacting their raw material sources—could halt or significantly delay the production of U.S. currency. This could lead to coin shortages, impacting commerce. Another risk is reduced leverage in future negotiations. Once a supplier is established and integrated into the production process, the government may have less bargaining power in subsequent contract renewals, potentially leading to higher prices or less favorable terms. Furthermore, a single point of failure can make the government vulnerable to price gouging if market conditions shift unfavorably and there are limited alternative suppliers capable of meeting the stringent specifications and volume requirements.

How does the PSC code (or lack thereof) inform the analysis of this contract?

The absence of a specific Product Service Code (PSC) in the provided data for this contract is notable. PSC codes are used by the federal government to categorize goods and services being procured, aiding in spending analysis and tracking. A missing or generic PSC can sometimes indicate that the procurement falls into a less common or highly specialized category, or that the data entry was incomplete. For this contract, which involves 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding,' a relevant PSC might typically fall under categories related to metals, raw materials, or manufacturing. The lack of a specific code here doesn't fundamentally alter the analysis of the contract's purpose or value but might make it slightly more challenging to aggregate this specific type of spending with similar procurements across different agencies without manual cross-referencing or more detailed data.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: KPS Capital Partners, LP (UEI: 071159078)

Address: 427 N SHAMROCK ST, EAST ALTON, IL, 13

Business Categories: Category Business, Labor Surplus Area Firm, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $26,825,132

Exercised Options: $26,825,132

Current Obligation: $26,825,132

Parent Contract

Parent Award PIID: TMHQ08C0006

IDV Type: IDC

Timeline