Treasury's $14.7M contract for circulating coinage metal awarded to Wieland Rolled Products

Contract Overview

Contract Amount: $14,747,939 ($14.7M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2008-04-24

End Date: 2012-09-30

Contract Duration: 1,620 days

Daily Burn Rate: $9.1K/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 COINAGE

Place of Performance

Location: EAST ALTON, MADISON County, ILLINOIS, 62024

State: Illinois Government Spending

Plain-Language Summary

Department of the Treasury obligated $14.7 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE BASE MATERIAL FOR CIRCULATING COINAGE Key points: 1. Contract value represents a significant investment in essential coinage materials. 2. Competition dynamics for specialized metal rolling services can be limited. 3. Economic price adjustment clause introduces potential for cost fluctuations. 4. Contract duration of over four years suggests a stable, long-term need. 5. Geographic concentration in Illinois for this critical supply chain component. 6. Fixed-price structure with adjustments aims to balance cost certainty and market volatility.

Value Assessment

Rating: good

The contract value of $14.7 million for circulating coinage metal appears reasonable given the specialized nature of the product and the duration of the contract. Benchmarking against similar contracts for nonferrous metal rolling is challenging without more specific material composition and quantity data. However, the fixed-price with economic price adjustment (FP-EPA) structure is common for commodity-based contracts to account for market volatility, suggesting a standard approach to pricing for this type of good.

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 had the opportunity to bid. The presence of two bidders suggests a moderate level of competition for this specialized metal rolling service. While not a sole-source award, the number of bidders could influence price discovery and potentially limit the downward pressure on costs compared to a scenario with numerous competing offers.

Taxpayer Impact: A competitive award process, even with a limited number of bidders, is generally favorable for taxpayers as it encourages vendors to offer competitive pricing to secure the contract.

Public Impact

Benefits the United States Mint in its mission to produce circulating coinage for the nation. Ensures the availability of essential metal materials required for the production of pennies, nickels, dimes, and quarters. Impacts the national supply chain for coinage, supporting the circulation of currency. Workforce implications are primarily within the specialized manufacturing sector for metal rolling.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost increases due to the economic price adjustment clause tied to market fluctuations.
Reliance on a single geographic location (Illinois) for a critical national supply could pose logistical risks.
Limited number of bidders may indicate a concentrated market, potentially impacting future competition.

Positive Signals

Awarded through a competitive process, suggesting an effort to secure value for taxpayer dollars.
Contract duration of over four years provides stability and predictability for coinage production.
Fixed-price component offers some level of cost control despite economic adjustments.

Sector Analysis

The contract falls within the broader "Manufacturing" sector, specifically focusing on nonferrous metal rolling. This is a specialized industrial process crucial for producing the raw materials used in coinage. The market for such specialized metal products can be concentrated, with a limited number of firms possessing the necessary technical capabilities and certifications to meet government specifications. Comparable spending benchmarks would typically be found within defense or other industrial material procurements, but specific data for coinage metal is scarce.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by `ss: false` and `sb: false`. Therefore, the primary contractor, Wieland Rolled Products North America, LLC, is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this data. The impact on the small business ecosystem would be indirect, potentially through Wieland's own supply chain, rather than direct set-aside opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the United States Mint, a bureau within the Department of the Treasury. Accountability measures would be embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would typically fall under the Treasury Inspector General, who oversees financial and programmatic integrity across the department.

Related Government Programs

Department of the Treasury - United States Mint Operations
Coinage Metal Procurement
Nonferrous Metal Manufacturing
Industrial Materials Supply Chain

Risk Flags

Economic Price Adjustment Clause
Supply Chain Concentration
Limited Bidder Pool

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $14.7 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE BASE MATERIAL 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 $14.7 million.

What is the period of performance?

Start: 2008-04-24. End: 2012-09-30.

What is the historical spending pattern for circulating coinage metal by the US Mint?

Historical spending data for circulating coinage metal by the US Mint reveals a consistent need for these materials over many years. While specific dollar amounts fluctuate based on metal prices and production volumes, the Mint regularly procures large quantities of copper, zinc, nickel, and other alloys. Contracts for these materials are often long-term and awarded through competitive processes, though the number of qualified bidders can vary. Economic price adjustment clauses are a common feature due to the inherent volatility of commodity markets. Analyzing past contracts would show trends in pricing, supplier diversification, and the impact of market events on procurement costs, providing context for the current $14.7 million award.

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

Directly comparing the pricing of this contract to market rates for similar nonferrous metal rolling services is challenging without detailed specifications of the metal alloy, purity, dimensions, and quantity. The contract's 'Fixed Price with Economic Price Adjustment' (FP-EPA) structure further complicates a simple benchmark. The FP-EPA allows for adjustments based on an index, typically reflecting raw material costs. While the fixed portion aims for a baseline price, the adjustment mechanism means the final cost can deviate. To assess value, one would need to compare the base price and the projected adjustments against current market indices for the specific metals and processing involved, as well as against bids received from other potential suppliers during the competitive procurement.

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

Key risks associated with this contract include potential price volatility due to the economic price adjustment clause, which could lead to costs exceeding initial estimates if metal markets surge. Another risk is supply chain disruption, particularly given the concentration of production in Illinois; any unforeseen events impacting Wieland's facility or transportation could affect the Mint's coinage production. Mitigation strategies likely include the FP-EPA structure itself, which aims to share market risk, and potentially performance bonds or penalties outlined in the contract. The Mint may also maintain strategic stockpiles or qualify alternative suppliers to ensure continuity of operations in case of significant disruptions.

What is Wieland Rolled Products North America, LLC's track record with government contracts, particularly with the US Mint?

Wieland Rolled Products North America, LLC has a history of supplying metals to various industries, including potentially government entities. To assess their track record specifically with the US Mint and other federal agencies, a review of contract databases (like FPDS) would be necessary. This would reveal the number and value of previous awards, their performance history (on-time delivery, quality compliance), and any instances of contract disputes or terminations. A strong past performance record with the Mint would indicate reliability and competence in meeting the specific requirements for coinage materials, reducing perceived risk for this current contract.

How does the competition level (2 bidders) impact the value for taxpayers on this contract?

A competition level with only two bidders suggests a moderately competitive market for this specific type of specialized metal rolling service. While competition is generally beneficial for taxpayers, driving down prices, having only two offers means the potential for cost savings might be less significant than if there were, for example, five or more bidders. The US Mint likely received pricing proposals from both, and the award would go to the one offering the best value (considering price and other factors). The limited number of bidders could indicate high barriers to entry (technical expertise, capital investment, certifications) in this niche market, potentially leading to higher baseline prices compared to more commoditized goods.

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: $14,747,939

Exercised Options: $14,747,939

Current Obligation: $14,747,939

Parent Contract

Parent Award PIID: TMHQ08C0006

IDV Type: IDC

Timeline