Treasury's $17.2M Contract for Base Metal Coinage: PMX Industries Secures Supply Amidst Fixed Price with Economic Adjustment
Contract Overview
Contract Amount: $17,191,173 ($17.2M)
Contractor: PMX Industries, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2008-05-28
End Date: 2012-09-30
Contract Duration: 1,586 days
Daily Burn Rate: $10.8K/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 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 $17.2 million to PMX INDUSTRIES, INC. for work described as: PROVIDE BASE METAL FOR CIRCULATING COINAGE. Key points: 1. The contract value is $17.2 million, primarily for copper. 2. Competition was competitive, indicating potential for fair pricing. 3. Risk factors include economic price adjustments and contract duration. 4. The sector is manufacturing, specifically metal processing for coinage.
Value Assessment
Rating: good
The fixed price with economic price adjustment (FPEPA) contract type allows for flexibility in fluctuating metal markets. Benchmarking against similar contracts for raw material procurement would be necessary for a precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This was a competitive delivery order, suggesting multiple vendors had the opportunity to bid. The competitive nature likely contributed to price discovery and a reasonable outcome for the government.
Taxpayer Impact: The use of competitive bidding and an economic price adjustment clause aims to ensure fair pricing for taxpayers while securing necessary materials.
Public Impact
Ensures a consistent supply of base metals for U.S. circulating coinage. Supports the operational needs of the United States Mint. Potential impact on the price of coins if metal costs rise significantly.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause could lead to cost overruns.
- Long contract duration (over 4 years) increases exposure to market volatility.
Positive Signals
- Competitive award process.
- Fixed price component provides some cost certainty.
Sector Analysis
This contract falls within the manufacturing sector, specifically focusing on metal processing and supply chain for government-issued currency. Benchmarks for similar raw material procurement contracts would typically consider market prices for copper and other base metals.
Small Business Impact
The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The contract was awarded by the Department of the Treasury, United States Mint, suggesting established oversight mechanisms. The competitive delivery order process implies adherence to procurement regulations.
Related Government Programs
- Copper Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Economic Price Adjustment (EPA) clause
- Long contract duration (over 4 years)
- Potential for commodity price volatility
- Limited insight into specific EPA formula impact
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 $17.2 million to PMX INDUSTRIES, INC.. PROVIDE BASE 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 $17.2 million.
What is the period of performance?
Start: 2008-05-28. End: 2012-09-30.
What was the specific economic price adjustment formula used, and how has it impacted costs over the contract's life?
The specific formula for the economic price adjustment is not detailed in the provided data. However, such clauses typically tie price changes to established commodity indices or market prices for the base metals. Over the contract's life, this would have allowed for increases or decreases in the per-unit cost based on market fluctuations, potentially mitigating risk for both parties but requiring careful monitoring by the government to ensure fair pricing.
What were the primary risks associated with the long contract duration and the use of economic price adjustments?
The primary risks involved market volatility in base metal prices, which could lead to significant cost increases beyond initial projections due to the economic price adjustment clause. A long duration also increases the chance of unforeseen supply chain disruptions or changes in manufacturing costs. For the government, the risk is paying a premium if market prices rise substantially, impacting the overall cost of coinage production.
How effectively did the competitive delivery order process ensure value for money in securing base metals for coinage?
A competitive delivery order process generally promotes value for money by allowing multiple vendors to bid, fostering price competition. This likely resulted in a more favorable price than a sole-source award. The effectiveness is further supported by the fixed price component, which provides a baseline cost, though the economic price adjustment introduces variability that requires ongoing monitoring to ensure continued value.
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: $17,191,173
Exercised Options: $17,191,173
Current Obligation: $17,191,173
Parent Contract
Parent Award PIID: TMHQ08C0005
IDV Type: IDC
Timeline
Start Date: 2008-05-28
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2009-08-22
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