Treasury's Mint awards $12.6M contract for copper coinage material to PMX Industries

Contract Overview

Contract Amount: $12,567,377 ($12.6M)

Contractor: PMX Industries, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-10-31

End Date: 2012-09-30

Contract Duration: 1,796 days

Daily Burn Rate: $7.0K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: PROVIDE STRIP + METAL FOR CIRCULATING COINAGE

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52404

State: Iowa Government Spending

Plain-Language Summary

Department of the Treasury obligated $12.6 million to PMX INDUSTRIES, INC. for work described as: PROVIDE STRIP + METAL FOR CIRCULATING COINAGE Key points: 1. Contract value represents a significant investment in essential coinage materials. 2. Competition dynamics for specialized metal processing can influence pricing and availability. 3. Contract duration suggests a stable, long-term need for these materials. 4. Economic price adjustment clause indicates sensitivity to market fluctuations in raw material costs. 5. The United States Mint's reliance on specific suppliers highlights potential supply chain risks. 6. Performance context is critical to ensure consistent quality and timely delivery of coinage material.

Value Assessment

Rating: good

The contract value of $12.6 million for copper rolling, drawing, and extruding appears reasonable given the specialized nature of the work and the duration of the contract (nearly 5 years). Benchmarking against similar contracts for coinage metal processing is challenging due to the niche market. However, the fixed-price with economic price adjustment structure suggests an effort to balance cost control with market volatility, aiming for fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors had the opportunity to bid. The presence of competition is a positive sign for price discovery and ensuring the government receives competitive pricing for the required materials. The specific number of bidders is not provided, but the 'competitive' designation implies a robust bidding process.

Taxpayer Impact: A competitive award process helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Benefits the United States Mint in its mission to produce circulating coinage for the nation. Ensures a consistent supply of high-quality copper material essential for coin production. Supports the broader economy by facilitating the production of currency. Indirectly impacts the public through the availability of coinage for everyday transactions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if raw material costs surge.
Dependence on a single supplier for a critical component could pose supply chain risks.
Quality control is paramount to prevent defects in coinage material that could disrupt production.

Positive Signals

Competitive award process suggests a fair market price was likely achieved.
Long contract duration indicates a stable and predictable supply chain for the Mint.
Fixed-price element provides some cost certainty, mitigating against unexpected price hikes.

Sector Analysis

The contract falls within the broader industrial manufacturing and materials sector, specifically focusing on non-ferrous metal processing. The market for specialized coinage metal is relatively concentrated, with a limited number of qualified suppliers capable of meeting the stringent specifications required by mints. The United States Mint's annual spending on coinage materials can fluctuate based on demand for new coins and the condition of existing metal stocks, but this contract represents a significant portion of its material procurement for circulating coinage.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The focus is on specialized industrial capabilities likely held by larger firms. There is no explicit information on subcontracting plans, but given the nature of the work, it's possible that specialized processes might involve smaller, niche suppliers, though the primary contract is with a larger entity.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the United States Mint's contracting officers and potentially the Treasury Inspector General's office. Accountability measures would be embedded in the contract's performance standards, delivery schedules, and quality requirements. Transparency is generally maintained through contract award databases, though specific performance metrics might be internal.

Related Government Programs

United States Mint Operations
Coinage Production
Precious Metals Procurement
Industrial Materials Supply

Risk Flags

Potential supply chain disruption risk due to single-source reliance.
Price volatility risk managed by economic price adjustment clause.
Quality control is critical for coinage material.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $12.6 million to PMX INDUSTRIES, INC.. PROVIDE STRIP + METAL FOR CIRCULATING COINAGE

Who is the contractor on this award?

The obligated recipient is PMX INDUSTRIES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.6 million.

What is the period of performance?

Start: 2007-10-31. End: 2012-09-30.

What is the historical spending pattern for copper rolling, drawing, and extruding by the United States Mint?

Historical spending data for this specific service is not readily available in the provided snippet. However, the United States Mint procures significant quantities of metals annually for coinage production. The value of this $12.6 million contract over nearly five years suggests an average annual expenditure in the range of $2.5 million for this particular service. To understand the broader pattern, one would need to examine historical contract awards for coinage metals over several fiscal years, looking at both the volume and value of materials procured, and compare this to the Mint's overall production targets and metal inventory levels. Fluctuations in demand for circulating coinage, changes in metal prices, and the introduction of new coin designs can all influence historical spending.

How does the pricing of this contract compare to market rates for similar metal processing services?

Directly comparing the pricing of this contract to 'market rates' is complex because the United States Mint likely has highly specific technical requirements for coinage material that may not align perfectly with standard industrial metal processing. The 'fixed price with economic price adjustment' (FP-EPA) structure is designed to account for market volatility in raw material costs, particularly for copper. While the base price is fixed, the EPA component allows for adjustments. Without detailed cost breakdowns or access to bids from other potential suppliers, a precise market rate comparison is difficult. However, the competitive nature of the award suggests that the pricing achieved was considered fair and reasonable within the context of the specialized market for coinage metals.

What are the key performance indicators (KPIs) and quality standards expected for this contract?

While specific KPIs are not detailed in the provided data, contracts of this nature typically include stringent quality standards related to the purity, dimensions, and surface finish of the rolled, drawn, and extruded copper. Key performance indicators would likely focus on on-time delivery, adherence to specifications, and defect rates. For coinage material, consistency is paramount to ensure seamless operation of high-speed minting presses and the final quality of the coins produced. The contract likely specifies tolerances for thickness, width, and tensile strength, along with requirements for material certification and traceability.

What is the track record of PMX Industries, Inc. in supplying materials to government agencies?

The provided data indicates PMX Industries, Inc. as the contractor for this specific award. To assess their track record, one would need to research their past performance on federal contracts. This would involve looking at contract databases (like FPDS or SAM.gov) for previous awards, their values, durations, and any associated performance reviews or past performance evaluations. A positive track record with the government, particularly with agencies like the United States Mint or other entities requiring specialized metal products, would indicate reliability and capability. Conversely, any history of performance issues, disputes, or contract terminations would raise concerns.

What are the potential risks associated with relying on PMX Industries for this critical coinage material?

The primary risks associated with relying on PMX Industries, Inc. for this critical coinage material include potential supply chain disruptions (e.g., production issues at PMX, raw material shortages affecting PMX), quality control failures leading to defective coinage blanks, and potential price increases beyond expectations if the economic price adjustment clause is heavily triggered by market volatility. Dependence on a single supplier for such a vital component also presents a risk. Mitigation strategies would involve close monitoring of PMX's performance, maintaining open communication, and potentially developing contingency plans or identifying alternative suppliers for future procurements.

How does this contract align with the overall mission and strategic goals of the United States Mint?

This contract directly supports the core mission of the United States Mint, which is to produce circulating coinage for the nation's commerce. By securing a reliable supply of high-quality copper material, the Mint ensures it can meet the demand for coins. Strategically, this contract contributes to the Mint's operational efficiency and cost-effectiveness in its production processes. The long-term nature of the award suggests a strategic alignment with the Mint's production planning and inventory management, aiming for stability in the supply chain for essential raw materials.

Industry Classification

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

Product/Service Code: METAL BARS, SHEETS, SHAPES

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: Poongsan Holdings Corporation (UEI: 687755603)

Address: 5300 WILLOW CREEK DR SW, CEDAR RAPIDS, IA, 02

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,567,377

Exercised Options: $12,567,377

Current Obligation: $12,567,377

Parent Contract

Parent Award PIID: TMHQ08C0005

IDV Type: IDC

Timeline