Treasury's $26.7M contract for circulating coinage metal awarded to Wieland Rolled Products

Contract Overview

Contract Amount: $26,746,202 ($26.7M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2008-06-24

End Date: 2012-09-30

Contract Duration: 1,559 days

Daily Burn Rate: $17.2K/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 $26.7 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE BASE MATERIAL FOR CIRCULATING COINAGE Key points: 1. Value for money assessed through fixed-price with economic price adjustment, allowing for market fluctuations. 2. Competition dynamics indicate a competitive delivery order, suggesting a potentially favorable price environment. 3. Risk indicators include reliance on a single supplier for a critical component of coinage production. 4. Performance context is tied to the consistent demand for circulating coinage metal. 5. Sector positioning places this contract within the nonferrous metal rolling industry, supporting essential government functions.

Value Assessment

Rating: good

The contract's fixed-price with economic price adjustment (FPEPA) structure aims to balance cost stability with market volatility for the raw materials. While specific unit costs are not provided, the FPEPA mechanism is a common approach for commodity-based contracts to ensure fair pricing for both parties. Benchmarking against similar contracts for coinage metal would require access to detailed pricing data from other government agencies or private sector transactions, which is not readily available in the provided data.

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 fact that it was competed suggests that the United States Mint sought to leverage market competition to secure favorable pricing and terms for the supply of circulating coinage metal. The number of bidders is not specified, but a competitive award generally implies a degree of price discovery and potential cost savings for the government.

Taxpayer Impact: A competitive award process for essential materials like circulating coinage metal helps ensure that taxpayer dollars are used efficiently by fostering a market-driven price. This approach mitigates the risk of overpaying for critical government supplies.

Public Impact

Benefits the United States Mint in its mission to produce circulating coinage for the nation. Ensures the availability of essential metals required for the production of pennies, nickels, dimes, and quarters. Geographic impact is national, as the coinage produced is distributed across the United States. Workforce implications include supporting jobs within the metal rolling and coinage manufacturing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential over-reliance on a single supplier for a critical national resource.
Economic price adjustment clauses can lead to cost increases if raw material prices surge unexpectedly.

Positive Signals

Awarded through a competitive process, suggesting efforts to secure favorable terms.
Fixed-price elements provide a baseline cost control mechanism.
Contract duration of over 1500 days indicates a stable, long-term supply chain.

Sector Analysis

This contract falls within the nonferrous metal rolling industry, a sector crucial for manufacturing various products, including coinage. The market for such specialized metals is often characterized by a limited number of large-scale producers capable of meeting stringent quality and volume requirements. The United States Mint's demand for circulating coinage metal represents a significant, albeit specialized, segment of this market. Comparable spending benchmarks would likely involve other government agencies procuring similar raw materials or large industrial consumers.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The primary contractor, Wieland Rolled Products North America, LLC, is likely a large entity, and its own supply chain practices would determine any indirect impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Treasury and the United States Mint. Accountability measures are embedded in the contract terms, including specifications for material quality and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would typically cover investigations into fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Circulating Coinage Production
Precious Metals Procurement
Industrial Materials Acquisition
Manufacturing Supply Chain Contracts

Risk Flags

Potential single-source dependency risk (post-award concentration)
Commodity price volatility risk

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.7 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 $26.7 million.

What is the period of performance?

Start: 2008-06-24. End: 2012-09-30.

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

Historical spending on circulating coinage metal by the US Mint has likely fluctuated based on demand for coinage, metal market prices, and the specific contracts awarded. While this specific contract is for approximately $26.7 million over its duration, broader historical data would reveal trends in annual spending, average contract values, and the number of suppliers utilized over time. Analyzing past contracts would help determine if this award represents a typical expenditure or a deviation, and whether spending has increased or decreased in response to economic conditions or changes in coinage production volumes. Without access to historical contract databases beyond this single award, a comprehensive analysis of spending patterns is not possible.

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) pricing structure is a common and often preferred method for government contracts involving raw materials or commodities subject to market volatility, such as metals. This structure provides a baseline fixed price while allowing for adjustments based on pre-defined economic indicators (e.g., commodity indices, producer price indexes). This contrasts with pure Fixed Price (FP) contracts, which carry higher risk for the contractor if market prices rise significantly, potentially leading to higher initial bids to compensate for that risk. It also differs from Cost-Plus contracts, which are more common for services or R&D where costs are less predictable. For raw materials, FPEPA offers a balance, protecting the government from excessive price spikes while ensuring the contractor can cover fluctuating input costs, thereby promoting a more stable supply.

What are the potential risks associated with relying on a single supplier for a critical component like circulating coinage metal?

Relying on a single supplier for a critical component like circulating coinage metal presents several significant risks. Firstly, there's a risk of supply chain disruption due to unforeseen events affecting the supplier, such as natural disasters, labor disputes, or geopolitical issues, which could halt coinage production. Secondly, a sole supplier may have increased leverage in price negotiations, potentially leading to higher costs for the government over time, especially if competition is limited in the broader market for that specific grade and form of metal. Thirdly, quality control issues or changes in the supplier's manufacturing processes could impact the metal's suitability for coinage. While this contract was competitively awarded, the ongoing supply might be concentrated with one entity, necessitating robust monitoring and contingency planning by the US Mint.

What is the track record of Wieland Rolled Products North America, LLC in fulfilling government contracts?

Wieland Rolled Products North America, LLC has a history of supplying materials to various sectors. Information regarding their specific track record with government contracts, particularly with the US Mint or other agencies requiring similar materials, would typically be available through federal procurement databases. A review of past performance evaluations, on-time delivery rates, and any disputes or contract modifications would provide a clearer picture of their reliability and performance history. Without direct access to detailed performance data for this specific contractor across all their government engagements, a definitive assessment of their track record is limited to the general understanding that they are a significant player in the rolled products industry.

How does the volume and value of this contract compare to the overall US Mint budget for coinage production?

This contract represents a significant portion of the materials cost for circulating coinage. The $26.7 million value over approximately 4 years (1559 days) suggests a substantial ongoing requirement for metal. To compare this to the overall US Mint budget for coinage production, one would need to examine the Mint's annual budget justifications and financial reports. These reports detail expenditures across various categories, including metals, manufacturing, personnel, and distribution. Understanding the proportion this contract represents would indicate its criticality and the Mint's reliance on this specific procurement for its core mission of producing circulating currency.

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: $26,746,202

Exercised Options: $26,746,202

Current Obligation: $26,746,202

Parent Contract

Parent Award PIID: TMHQ08C0006

IDV Type: IDC

Timeline