Treasury's $14M contract for coinage metal awarded to Wieland Rolled Products for circulating coinage

Contract Overview

Contract Amount: $14,077,215 ($14.1M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2007-12-14

End Date: 2012-09-30

Contract Duration: 1,752 days

Daily Burn Rate: $8.0K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: PROVIDE BASE STRIP+ 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 $14.1 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE BASE STRIP+ METAL FOR CIRCULATING COINAGE. Key points: 1. Contract awarded for essential materials for U.S. coinage production. 2. Wieland Rolled Products, a significant player in metal manufacturing, secured this award. 3. The contract duration spans over four years, indicating a sustained need for these materials. 4. Fixed Price with Economic Price Adjustment (FPEPA) contract type suggests potential for price fluctuations based on market conditions. 5. The award was a competitive delivery order, implying multiple bids were considered. 6. The contract value of approximately $14 million reflects the scale of U.S. Mint's material requirements.

Value Assessment

Rating: good

The contract value of $14.1 million over nearly five years suggests a reasonable annual spend for a critical component of U.S. coinage. Benchmarking against similar contracts for nonferrous metals used in minting is challenging without more specific material composition and volume data. However, the fixed-price with economic price adjustment structure aims to balance cost certainty for the government with market volatility for the contractor, which is a common and generally fair approach for commodity-based contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that the U.S. Mint solicited bids from multiple potential suppliers. While the specific number of bidders is not detailed, the 'full-and-open' competition suggests a robust process designed to achieve the best value. Competitive bidding for essential raw materials like those used in coinage is crucial for ensuring fair pricing and preventing monopolies.

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

Public Impact

The primary beneficiaries are the U.S. Mint and the American public, who receive circulating coinage. This contract ensures the continuous supply of base metals necessary for producing pennies, nickels, dimes, and quarters. The geographic impact is national, as the coinage produced is distributed across the United States. The contract supports jobs within the metal manufacturing and minting industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to the economic price adjustment clause if raw material costs rise significantly.
Dependence on a single supplier for a critical component could pose a risk if supply chain disruptions occur.

Positive Signals

Awarded through a competitive process, suggesting favorable pricing and quality.
Long-term contract duration indicates a stable relationship and reliable supply.
The contractor, Wieland Rolled Products, is an established entity in the metal industry, implying experience and capability.

Sector Analysis

This contract falls within the broader 'Manufacturing' sector, specifically focusing on nonferrous metal rolling, drawing, and extruding. The U.S. Mint's demand for coinage metals represents a niche but critical segment of this market. Comparable spending benchmarks would involve analyzing the U.S. Mint's historical procurement of similar metals and potentially comparing pricing with other government agencies or large industrial consumers of nonferrous metals.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be indirect, potentially through subcontracting opportunities if Wieland Rolled Products engages them. However, without specific subcontracting plans or goals, the direct impact on the small business ecosystem is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Mint's contracting officers and program managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing payments. Transparency is facilitated through public contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

U.S. Mint Coinage Production
Federal Procurement of Industrial Materials
Manufacturing Sector Contracts

Risk Flags

Potential supply chain disruption risk
Price volatility risk due to economic price adjustment

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $14.1 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE BASE STRIP+ 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 $14.1 million.

What is the period of performance?

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

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

Analyzing historical spending for base metals by the U.S. Mint reveals a consistent need driven by public demand for coinage. While specific figures fluctuate annually based on production volumes and metal market prices, the U.S. Mint has continuously procured materials like copper, zinc, and nickel alloys for decades. For instance, prior to this contract, similar procurements were made to ensure sufficient supply. The total annual expenditure can range from tens to hundreds of millions of dollars, depending on the year's coinage output and prevailing commodity prices. This particular contract, valued at approximately $14 million over its duration, represents a portion of the overall annual material acquisition strategy, focusing on specific metal compositions required for circulating denominations.

How does the pricing structure (Fixed Price with Economic Price Adjustment) compare to other government contracts for raw materials?

The Fixed Price with Economic Price Adjustment (FPEPA) is a common pricing structure used by the government for contracts involving raw materials or commodities subject to market volatility. It offers a balance: the government secures a base price, while the contractor is protected against significant fluctuations in input costs. This contrasts with pure Fixed Price (FP) contracts, which offer greater price certainty but can lead to higher initial bids to account for potential cost increases, or Cost-Plus contracts, which offer flexibility but less cost control. For raw materials like metals, FPEPA is often preferred over FP to avoid overpaying if market prices drop or underpaying if they rise, thereby promoting fair market value and supplier willingness to bid.

What is Wieland Rolled Products' track record with the U.S. government and specifically the U.S. Mint?

Wieland Rolled Products North America, LLC has a history of supplying metals to various sectors, including potentially government contracts. While this specific contract with the U.S. Mint for circulating coinage metal is a significant award, their broader experience in the rolled products industry suggests a capacity to meet stringent quality and volume requirements. A deeper dive into federal procurement databases would reveal the extent of their past performance with the U.S. Mint and other federal agencies. Generally, companies awarded contracts of this nature have demonstrated technical capability, financial stability, and a history of successful delivery on similar projects, which are key considerations during the competitive bidding process.

What are the potential risks associated with relying on a single supplier for critical coinage metals?

Relying on a single supplier for critical coinage metals, even if awarded competitively, introduces several risks. The primary concern 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 shortages of circulating coins, impacting commerce. Additionally, a sole supplier might have increased leverage in future negotiations, potentially leading to higher prices if competition is not re-established or maintained. Mitigation strategies often include maintaining strategic stockpiles, qualifying alternative suppliers, and robust contract management to ensure performance.

How does the volume and value of this contract compare to the overall U.S. Mint budget or spending on materials?

This contract, valued at approximately $14.1 million over its duration, represents a specific procurement for circulating coinage base metals. The U.S. Mint's overall budget and operational spending are considerably larger, encompassing expenses for personnel, facility maintenance, security, research and development, and the production of numismatic items in addition to circulating coinage. Annual spending on metals alone can fluctuate significantly based on production needs and market prices, potentially reaching tens or even hundreds of millions of dollars in aggregate across various metal types and contracts. Therefore, this $14 million contract, while substantial for the specific material it covers, is a component within a much larger financial framework for the Mint's operations.

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: $14,077,215

Exercised Options: $14,077,215

Current Obligation: $14,077,215

Parent Contract

Parent Award PIID: TMHQ08C0006

IDV Type: IDC

Timeline