Treasury's $24.1M contract for base metals awarded to PMX Industries, Inc. for circulating coinage

Contract Overview

Contract Amount: $24,149,894 ($24.1M)

Contractor: PMX Industries, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2015-06-26

End Date: 2015-07-31

Contract Duration: 35 days

Daily Burn Rate: $690.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE BASE METAL AND STRIP 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 $24.1 million to PMX INDUSTRIES, INC. for work described as: PROVIDE BASE METAL AND STRIP FOR CIRCULATING COINAGE. Key points: 1. The contract value of $24.1 million represents a significant investment in the nation's coinage production. 2. PMX Industries, Inc. secured this award through full and open competition, indicating a competitive bidding process. 3. The fixed-price contract structure suggests predictable costs for the government, mitigating budget overruns. 4. The short performance period of 35 days points to a specific, time-sensitive need for these materials. 5. This award falls within the Nonferrous Metal Rolling, Drawing, and Extruding sector, highlighting specialized industrial capabilities. 6. The contract's focus on circulating coinage underscores its direct impact on the U.S. economy and public use.

Value Assessment

Rating: good

The award of $24.1 million for base metals for circulating coinage appears reasonable given the specialized nature of the materials and the supplier's role in mint operations. Benchmarking against similar contracts for coinage metals is challenging due to the specific alloy requirements and the limited number of qualified suppliers. However, the firm fixed-price structure provides cost certainty. The value is assessed in the context of ensuring a consistent supply of essential materials for the U.S. Mint's production needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The presence of four bidders indicates a healthy level of competition for this requirement. This competitive environment is generally expected to drive more favorable pricing and terms for the government, as contractors vie to win the award.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by leveraging market forces to obtain the best possible price for these essential coinage materials.

Public Impact

The primary beneficiaries are the U.S. Mint and, by extension, the general public who rely on circulating coinage for daily transactions. The services delivered involve the provision of base metals essential for the production of coins. The geographic impact is national, as the coinage produced is intended for circulation across the United States. Workforce implications are likely within the manufacturing and supply chain sectors related to metal processing and coinage production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if PMX Industries faces production issues, impacting coinage output.
Dependence on a single supplier for a critical component of circulating currency could pose a risk.
Fluctuations in base metal market prices could impact future contract costs if not adequately hedged.

Positive Signals

Award through full and open competition suggests a robust vetting process and competitive pricing.
Firm fixed-price contract provides cost certainty and protects the government from price escalations.
PMX Industries' role in supplying essential materials highlights their established capability in this niche market.

Sector Analysis

The contract falls within the Nonferrous Metal Rolling, Drawing, and Extruding sector, a specialized area of manufacturing. This sector is crucial for providing raw materials to various industries, including defense, aerospace, and consumer goods. The U.S. Mint's reliance on such suppliers for coinage metals underscores the strategic importance of domestic metal processing capabilities. Comparable spending benchmarks are difficult to ascertain precisely due to the unique specifications for coinage alloys, but the scale of this award is significant within its niche.

Small Business Impact

This contract was awarded through full and open competition and does not appear to have a specific small business set-aside. There is no explicit information provided regarding subcontracting plans with small businesses. The direct award to a large manufacturer like PMX Industries suggests that the primary focus was on meeting the specific technical and volume requirements for coinage metals, rather than prioritizing small business participation in the prime contract.

Oversight & Accountability

Oversight for this contract would typically reside with the U.S. Mint, a bureau within the Department of the Treasury. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified materials by a certain date. Transparency is generally maintained through contract award databases, though detailed operational oversight specifics are internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

U.S. Mint Coinage Production
Department of the Treasury Procurement
Nonferrous Metal Supply Contracts
Circulating Coinage Materials

Risk Flags

Single Source Dependency Risk
Supply Chain Vulnerability
Market Price Fluctuation Impact (Future Contracts)

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $24.1 million to PMX INDUSTRIES, INC.. PROVIDE BASE METAL AND STRIP 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 $24.1 million.

What is the period of performance?

Start: 2015-06-26. End: 2015-07-31.

What is the historical spending pattern for base metals for circulating coinage by the U.S. Mint?

Historical spending data for base metals used in circulating coinage by the U.S. Mint reveals a consistent need for these materials, though specific dollar amounts fluctuate annually based on coinage demand and metal market prices. The Mint procures various metals, including copper, nickel, zinc, and manganese, often in alloy forms, to produce cents, nickels, dimes, quarters, and half dollars. Contracts are typically awarded through competitive bidding processes, with suppliers needing to meet stringent quality and composition standards. Over the past decade, annual spending on these raw materials has likely ranged from tens to hundreds of millions of dollars, depending on production volumes and prevailing commodity prices. For instance, the price of copper and zinc, key components in many coins, can significantly impact the total expenditure. The U.S. Mint aims to secure these materials through long-term agreements and spot purchases, balancing cost-effectiveness with supply chain reliability.

How does the price of this contract compare to market rates for nonferrous metals?

Comparing the price of this specific contract to general market rates for nonferrous metals requires careful consideration of several factors. The contract is for 'base metal and strip for circulating coinage,' implying specific alloys and purity standards mandated by the U.S. Mint, which may differ from standard industrial-grade metals. Furthermore, the contract is firm fixed-price, meaning the price is set regardless of market fluctuations during the contract period. To assess value, one would need to compare the unit price of the metals (e.g., per pound or kilogram) stipulated in the contract against prevailing market prices for comparable alloys at the time of award, adjusted for quantity discounts and any premium for meeting mint specifications. Given that this was a competitive award, it suggests PMX Industries offered a price deemed competitive by the U.S. Mint. However, without the specific unit pricing details from the contract, a precise market comparison is not feasible.

What is PMX Industries, Inc.'s track record with government contracts, particularly with the U.S. Mint?

PMX Industries, Inc. has a history of supplying metals to various sectors, and their involvement with the U.S. Mint for coinage materials is a key aspect of their government contracting record. While this specific award is for $24.1 million, the company has likely secured other contracts, potentially smaller or larger, over time. A review of federal procurement databases would reveal the extent and nature of their past awards. Their ability to win this contract through full and open competition suggests they possess the necessary qualifications, production capacity, and competitive pricing to meet the U.S. Mint's stringent requirements. Companies supplying critical materials like coinage metals often have long-standing relationships with government agencies, built on consistent performance, quality adherence, and reliability. Further investigation into their contract performance history, including any past issues or commendations, would provide a more comprehensive understanding of their track record.

What are the potential risks associated with relying on PMX Industries for this critical supply?

Relying on any single supplier for a critical component like base metals for circulating coinage introduces inherent risks. One primary risk is supply chain disruption. If PMX Industries experiences unforeseen operational issues, such as equipment failure, labor disputes, or natural disasters affecting their facilities, it could halt or delay the production of essential coinage metals. This could lead to shortages of coins in circulation, impacting commerce. Another risk involves price volatility; although this is a fixed-price contract, future procurements could be subject to significant price increases if market conditions change unfavorably. Furthermore, dependence on a single source might reduce the government's leverage in future negotiations. Ensuring robust quality control and contingency planning by both the contractor and the U.S. Mint is crucial to mitigate these potential risks.

How does the volume of this contract align with the U.S. Mint's typical annual needs for circulating coinage metals?

The volume represented by the $24.1 million contract needs to be contextualized against the U.S. Mint's annual production targets for circulating coinage. The Mint produces billions of coins each year to meet public demand. The specific quantity of base metals required depends on the types of coins being produced (e.g., cents, nickels, dimes, quarters) and their respective metal compositions. For example, the composition of the Lincoln cent (97.5% zinc, 2.5% copper) differs significantly from that of the nickel (75% copper, 25% nickel). Therefore, a $24.1 million award could represent a substantial portion of the annual requirement for certain metals or alloys, or it could be one of several awards covering the total annual need. Without knowing the exact metal quantities and unit prices, it's difficult to definitively state if this volume is typical, but it signifies a significant procurement event for the U.S. Mint's operational needs.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding

Product/Service Code: METAL BARS, SHEETS, SHAPES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Poongsan Corporation (UEI: 631128498)

Address: 5300 WILLOW CREEK DR SW, CEDAR RAPIDS, IA, 52404

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, International Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $24,149,894

Exercised Options: $24,149,894

Current Obligation: $24,149,894

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TMHQ13C0002

IDV Type: IDC

Timeline