Treasury's $18.9M contract for coinage metal rolling awarded to Wieland Rolled Products

Contract Overview

Contract Amount: $18,914,180 ($18.9M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2008-02-29

End Date: 2012-09-30

Contract Duration: 1,675 days

Daily Burn Rate: $11.3K/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 MATERIAL FOR CIRCULATING AND PROOF COINAGE

Place of Performance

Location: EAST ALTON, MADISON County, ILLINOIS, 62024

State: Illinois Government Spending

Plain-Language Summary

Department of the Treasury obligated $18.9 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE BASE MATERIAL FOR CIRCULATING AND PROOF COINAGE Key points: 1. Contract value represents a significant investment in essential coinage materials. 2. Competition dynamics for specialized metal rolling services warrant further examination. 3. Potential risks include supply chain disruptions and price volatility for raw materials. 4. Contract performance context is tied to the consistent production of U.S. currency. 5. This contract positions Wieland as a key supplier within the Mint's supply chain. 6. Economic price adjustments indicate sensitivity to market fluctuations in metal prices.

Value Assessment

Rating: good

The contract value of $18.9 million over approximately four years for nonferrous metal rolling appears reasonable given the specialized nature of the product and the critical function it serves for the U.S. Mint. Benchmarking against similar contracts for coinage metal supply is challenging due to the specific requirements and limited number of qualified suppliers. However, the fixed-price with economic price adjustment structure suggests an effort to balance cost certainty with market realities, which is a common practice 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 multiple vendors were likely considered or competed for this specific order. The presence of competition, even if limited to a few highly specialized firms, is crucial for ensuring fair pricing and encouraging efficiency. The fact that it was a competitive delivery order suggests that the U.S. Mint actively sought proposals and evaluated them based on established criteria, aiming to secure the best value.

Taxpayer Impact: A competitive award process, even for a specialized item, helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The primary beneficiaries are the U.S. Mint and, by extension, the American public, who rely on a steady supply of coinage. The service delivered is the rolling of nonferrous metals into specific forms required for minting coins. The geographic impact is national, as the coinage produced circulates throughout the United States. Workforce implications include employment at Wieland Rolled Products and its suppliers, as well as within the U.S. Mint's production facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single supplier for a critical component could pose a risk if that supplier faces production issues.
Economic price adjustments, while necessary, can lead to cost overruns if metal prices increase significantly.
The long duration of the contract (over 4 years) means potential for unforeseen market shifts impacting cost-effectiveness.

Positive Signals

The contract was competitively awarded, suggesting a degree of price discovery and value for money.
The use of economic price adjustments helps mitigate risks associated with volatile metal markets.
The supplier, Wieland Rolled Products, is likely experienced in this specialized field, reducing performance risk.

Sector Analysis

The contract falls within the broader industrial sector of metal manufacturing and processing, specifically nonferrous metal rolling. This is a niche but critical segment supporting national infrastructure and production needs. The market for coinage metal supply is concentrated, with a limited number of companies possessing the specialized capabilities and security clearances required by government mints. Comparable spending benchmarks are difficult to ascertain publicly due to the proprietary nature of coinage production and the limited number of global suppliers.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The nature of specialized metal rolling for coinage likely requires significant capital investment and advanced technological capabilities, which may favor larger, established industrial firms. There is no explicit information provided regarding subcontracting plans with small businesses, but given the specialized nature of the work, it is less likely to involve extensive subcontracting to small entities.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Mint, a bureau within the Department of the Treasury. Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and quality control. Transparency is generally maintained through contract award databases and public reporting, although specific operational details are often sensitive. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

U.S. Mint Coinage Production
Department of the Treasury Procurement
Nonferrous Metal Manufacturing
Government Supply Contracts

Risk Flags

Potential for supply chain disruption
Price volatility of raw materials
Dependence on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $18.9 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE BASE MATERIAL FOR CIRCULATING AND PROOF 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 $18.9 million.

What is the period of performance?

Start: 2008-02-29. End: 2012-09-30.

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

Historical spending data for coinage metal rolling by the U.S. Mint reveals a consistent need for these specialized materials to support the production of circulating and proof coinage. While specific figures for individual contracts fluctuate based on demand, metal prices, and competition, the Mint has historically relied on a select group of suppliers for these critical components. The contract awarded to Wieland Rolled Products for approximately $18.9 million over four years (2008-2012) fits within this pattern of significant, recurring investments in raw materials. Analysis of past contracts would likely show similar values for comparable periods, adjusted for inflation and market conditions, underscoring the ongoing financial commitment required to maintain coinage production.

How does the pricing of this contract compare to market rates for nonferrous metal rolling?

Direct comparison of this contract's pricing to general market rates for nonferrous metal rolling is complex due to the specialized nature of coinage metal and the stringent quality requirements imposed by the U.S. Mint. This contract includes an 'Economic Price Adjustment' (EPA) clause, indicating that the final price is subject to fluctuations in the cost of raw materials. While the base price is fixed, the EPA allows for adjustments based on market indices for metals like copper, zinc, or nickel. Without access to the specific EPA formula and the prevailing market prices at the time of each adjustment, a precise benchmark against non-governmental contracts is difficult. However, the competitive award process suggests the Mint aimed to secure favorable terms relative to other qualified suppliers in this niche market.

What are the key performance indicators (KPIs) for this contract, and how was performance measured?

Key performance indicators (KPIs) for a contract involving the rolling of coinage metal would typically focus on material quality, dimensional accuracy, timely delivery, and adherence to specifications. The U.S. Mint would likely have rigorous quality control processes, including material testing and inspection, to ensure the metal meets the precise standards required for coin production. Delivery schedules would be critical to maintain the Mint's production output. Performance would be measured against these contractual requirements, with potential penalties for non-compliance or incentives for exceeding expectations. While specific KPIs are not detailed in the provided data, the nature of the product implies a high degree of precision and reliability are paramount.

What is the track record of Wieland Rolled Products in supplying the U.S. government or similar entities?

Wieland Rolled Products North America, LLC, has a significant history in the metals industry, specializing in rolled products. While the provided data specifically links them to this U.S. Mint contract (331491), their broader corporate background suggests experience with industrial-scale manufacturing and potentially supplying other government agencies or large industrial clients requiring specialized metal products. Further investigation into their contract history with federal agencies, particularly those with similar material requirements (e.g., defense, aerospace, or other manufacturing sectors), would provide a more comprehensive view of their track record. However, securing a contract with the U.S. Mint implies they met stringent qualification and performance standards.

What are the potential risks associated with relying on a single primary supplier for coinage metal?

Relying on a single primary supplier, even if competitively selected, introduces several potential risks. Firstly, supply chain disruptions, whether due to natural disasters, labor disputes, geopolitical events, or the supplier's own operational issues, could halt or delay the delivery of essential coinage metal, impacting national currency production. Secondly, a lack of ongoing competition could reduce the supplier's incentive to innovate or offer cost efficiencies over time, although the EPA clause partially addresses price volatility. Thirdly, if the supplier experiences financial difficulties, it could jeopardize the continuity of supply. The U.S. Mint likely mitigates these risks through robust contract management, contingency planning, and potentially maintaining relationships with secondary suppliers for critical materials.

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: $18,914,180

Exercised Options: $18,914,180

Current Obligation: $18,914,180

Parent Contract

Parent Award PIID: TMHQ08C0006

IDV Type: IDC

Timeline