Treasury's $21.19M Contract for Coinage Metal Awarded to PMX Industries Amidst Fixed Price Adjustments
Contract Overview
Contract Amount: $21,190,513 ($21.2M)
Contractor: PMX Industries, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2008-03-25
End Date: 2012-09-30
Contract Duration: 1,650 days
Daily Burn Rate: $12.8K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 2
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Manufacturing
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 $21.2 million to PMX INDUSTRIES, INC. for work described as: PROVIDE STRIP + METAL FOR CIRCULATING COINAGE Key points: 1. The contract value is $21.19 million over approximately 4.5 years. 2. PMX Industries, Inc. secured this contract, indicating potential market concentration. 3. The fixed-price with economic price adjustment structure introduces cost volatility risk. 4. The sector is manufacturing, specifically related to coinage production materials.
Value Assessment
Rating: fair
The contract uses a fixed-price structure with economic price adjustments, which can lead to costs exceeding initial estimates if material prices rise significantly. Benchmarking against similar contracts for raw metal supply is difficult without more specific material composition and market data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
The contract type is listed as 'COMPETITIVE DELIVERY ORDER', but details on the number of bidders or the specific competitive process are not provided. This lack of transparency makes it difficult to assess if the pricing achieved reflects optimal market value.
Taxpayer Impact: The economic price adjustment clause means taxpayers could bear the brunt of fluctuating metal prices, potentially increasing the overall cost beyond the initial $21.19 million.
Public Impact
Ensures the supply of essential metals for U.S. currency production. Potential for increased costs to taxpayers due to economic price adjustments. Relies on a single contractor, PMX Industries, for a critical component of coinage. Contract duration spans over four years, indicating a long-term supply need.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause introduces cost uncertainty.
- Limited transparency on competitive bidding process.
- Sole source potential for critical material supply.
Positive Signals
- Ensures continuity of supply for coinage.
- Contract awarded to a known entity in the industry.
Sector Analysis
This contract falls within the manufacturing sector, specifically supplying raw materials for coinage. Spending benchmarks for such specialized metal supply contracts are not readily available, but the value suggests a significant volume of material is required for U.S. Mint operations.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. The focus appears to be on a specialized industrial supplier.
Oversight & Accountability
The contract is managed by the Department of the Treasury, specifically the United States Mint. Oversight would involve monitoring material quality, delivery schedules, and adherence to the economic price adjustment formula.
Related Government Programs
- Copper Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Economic Price Adjustment (EPA) clause introduces cost uncertainty.
- Lack of transparency regarding the competitive bidding process.
- Potential for sole-source reliance on PMX Industries for critical materials.
- Contract duration of over 4 years requires long-term budget commitment.
Tags
copper-rolling-drawing-and-extruding, department-of-the-treasury, ia, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $21.2 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 $21.2 million.
What is the period of performance?
Start: 2008-03-25. End: 2012-09-30.
What was the competitive landscape for this contract, and how did it influence the final price?
The data indicates a 'COMPETITIVE DELIVERY ORDER' but lacks specifics on the number of bidders or the evaluation criteria. Without this information, it's challenging to determine the extent of competition and its impact on price discovery. Further investigation into the bidding process is needed to ascertain if the government secured the best possible price.
What is the potential risk associated with the economic price adjustment clause on taxpayer funds?
The 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' clause exposes taxpayers to the risk of increased costs if the market prices of the metals supplied by PMX Industries rise during the contract period. This uncertainty makes precise budget forecasting difficult and could lead to expenditures exceeding the initial $21.19 million estimate.
How effective is this contract in ensuring a stable and cost-efficient supply of coinage metals?
The contract ensures a supply of essential metals for coinage over a significant period. However, the effectiveness regarding cost-efficiency is questionable due to the economic price adjustment clause and the lack of detailed competition data. The reliance on a single supplier also presents a potential risk to supply chain stability.
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: $21,190,513
Exercised Options: $21,190,513
Current Obligation: $21,190,513
Parent Contract
Parent Award PIID: TMHQ08C0005
IDV Type: IDC
Timeline
Start Date: 2008-03-25
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2009-08-22
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