Treasury's $14.3M contract for coin blanks awarded to PMX Industries, Inc. for circulating coinage production

Contract Overview

Contract Amount: $14,328,573 ($14.3M)

Contractor: PMX Industries, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-12-14

End Date: 2012-09-30

Contract Duration: 1,752 days

Daily Burn Rate: $8.2K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Other

Official Description: PROVIDE BASE 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 $14.3 million to PMX INDUSTRIES, INC. for work described as: PROVIDE BASE STRIP + METAL FOR CIRCULATING COINAGE. Key points: 1. Contract value appears reasonable for specialized metal processing services. 2. Competition dynamics for this specific niche may be limited. 3. Performance risk is moderate, given the specialized nature of the product. 4. Contract duration of nearly five years provides stability for production. 5. This contract supports the essential function of producing U.S. currency. 6. The fixed-price redetermination structure allows for some cost flexibility.

Value Assessment

Rating: good

The contract value of $14.3 million over approximately five years for specialized metal rolling and extrusion services for coin blanks suggests a fair price. Benchmarking against similar contracts for metal fabrication for coinage is challenging due to the niche nature of the product. However, the fixed-price redetermination contract type indicates an effort to balance cost control with market fluctuations. The award to PMX Industries, Inc., a known entity in metal production, suggests a level of confidence in their ability to deliver at a competitive price point.

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 were likely solicited. The specific number of bidders is not detailed, but the 'full-and-open' competition suggests a robust process. This level of competition is generally expected to drive favorable pricing and ensure that the government receives the best value. The use of a competitive delivery order under a broader contract vehicle implies that the initial solicitation was competitive.

Taxpayer Impact: A competitive award process ensures that taxpayer dollars are used efficiently by fostering price discovery and encouraging multiple suppliers to offer their best terms.

Public Impact

Benefits the United States Mint in its mission to produce circulating coinage. Ensures a steady supply of essential metal blanks for coin production. Supports domestic manufacturing and potentially jobs within the metal processing industry. Impacts the availability and quality of U.S. currency for the public.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to the redetermination clause if raw material costs escalate significantly.
Dependence on a single supplier for a critical component of coinage production could pose a supply chain risk.
Ensuring consistent quality of metal blanks is crucial to avoid disruptions in coin minting.

Positive Signals

Award to an established supplier with experience in metal production.
Competitive bidding process likely secured favorable terms.
Long-term contract provides supply chain stability for the Mint.
Fixed-price elements offer some cost predictability.

Sector Analysis

The contract falls within the broader industrial manufacturing and materials sector, specifically focusing on metal processing and fabrication. The market for specialized metal products used in coinage is relatively niche, with a limited number of qualified suppliers capable of meeting the stringent specifications required by the U.S. Mint. This contract represents a portion of the Mint's overall spending on the raw materials and processing needed to produce circulating currency, a critical government function.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a competitive delivery order, it is possible that small businesses could have participated if they met the qualifications. However, the specialized nature of metal rolling and extrusion for coinage may favor larger, more established industrial firms. Subcontracting opportunities for small businesses are not explicitly detailed but could arise if PMX Industries, Inc. utilizes specialized services.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Mint, a bureau within the Department of the Treasury. The contract's performance would be monitored through regular reporting, quality inspections, and adherence to delivery schedules. The fixed-price redetermination clause would require careful review and justification of any price adjustments. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed.

Related Government Programs

U.S. Mint Coinage Production
Federal Currency Manufacturing
Industrial Metal Fabrication Contracts
Department of the Treasury Procurement

Risk Flags

Potential for raw material price volatility impacting final cost.
Dependence on a single supplier for critical coinage components.
Ensuring consistent quality and adherence to precise specifications.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $14.3 million to PMX INDUSTRIES, INC.. PROVIDE BASE 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 $14.3 million.

What is the period of performance?

Start: 2007-12-14. End: 2012-09-30.

What is the historical spending pattern for coin blanks by the U.S. Mint over the last decade?

Historical spending data for coin blanks by the U.S. Mint reveals a consistent need for these materials, driven by public demand for circulating currency. While specific dollar amounts fluctuate annually based on coinage production targets, the overall expenditure remains significant. The Mint typically procures blanks through competitive contracts, often with multi-year durations to ensure supply chain stability. Analyzing past contracts can provide insights into pricing trends, supplier performance, and the evolution of material specifications. For instance, shifts in metal prices (like copper and zinc) can impact contract values. Understanding these patterns helps in assessing the current contract's value and identifying any anomalies in spending.

How does the price per unit for these coin blanks compare to industry benchmarks or previous U.S. Mint contracts?

Determining a precise per-unit cost for these coin blanks is challenging without access to the detailed pricing structure within the fixed-price redetermination agreement and specific volume data. However, the total contract value of approximately $14.3 million over roughly 1752 days (nearly five years) suggests an average annual spend of around $2.86 million. If we assume a production volume in the hundreds of millions or billions of blanks annually (typical for circulating coinage), the per-unit cost would be fractions of a cent. Benchmarking this requires detailed knowledge of the specific alloy composition, tolerances, and finishing requirements, which are proprietary to the Mint's specifications. Generally, government contracts for specialized materials aim for competitive pricing, but the niche nature of coin blank production might limit direct comparisons to off-the-shelf metal products.

What is PMX Industries, Inc.'s track record with the U.S. Mint and other government agencies?

PMX Industries, Inc. has a documented history of supplying metal products, including to the U.S. Mint. Their expertise lies in copper and brass products, which are relevant to coinage. Government contract databases often show awards to PMX for various metal-related materials and services. Their track record with the U.S. Mint specifically for coin blanks indicates a level of established capability and reliability. Beyond the Mint, PMX may have contracts with other federal agencies requiring specialized metal fabrication or rolling services. A thorough review of their contract history would assess past performance ratings, any instances of contract disputes or terminations, and their overall compliance with government procurement regulations.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential supply chain disruptions, fluctuations in raw material costs, and ensuring consistent quality of the coin blanks. Supply chain risks are mitigated by the contract's multi-year duration, which provides a degree of stability, and potentially by the U.S. Mint's supplier diversification strategies. Raw material cost fluctuations are addressed through the fixed-price redetermination clause, which allows for adjustments based on market conditions, though this requires careful monitoring and justification. Quality control is paramount; the U.S. Mint likely has stringent inspection protocols and performance standards in place to ensure the blanks meet precise specifications, preventing issues in the coining process. The contractor's established experience also serves as a risk mitigation factor.

How does this contract align with the U.S. Mint's overall mission and strategic objectives?

This contract is fundamental to the U.S. Mint's core mission of producing and circulating coinage for the nation. Ensuring a reliable and cost-effective supply of high-quality coin blanks is a prerequisite for fulfilling this mission. Strategically, the contract supports the Mint's objective of maintaining the integrity and availability of U.S. currency. By securing these essential components through a competitive process, the Mint aims to achieve value for taxpayer money while ensuring operational continuity. The long-term nature of the award also contributes to strategic planning by providing predictability in a critical aspect of their manufacturing process.

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 REDETERMINATION (A)

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: $14,328,573

Exercised Options: $14,328,573

Current Obligation: $14,328,573

Parent Contract

Parent Award PIID: TMHQ08C0005

IDV Type: IDC

Timeline