Treasury's $21.4M contract for copper rolling awarded to PMX Industries, Inc. for circulating coinage base metal

Contract Overview

Contract Amount: $21,367,160 ($21.4M)

Contractor: PMX Industries, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2011-04-27

End Date: 2012-09-30

Contract Duration: 522 days

Daily Burn Rate: $40.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

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 $21.4 million to PMX INDUSTRIES, INC. for work described as: PROVIDE BASE METAL FOR CIRCULATING COINAGE. Key points: 1. Contract value appears reasonable for the specified services, though detailed benchmarking is limited. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. The contract duration of 522 days is standard for this type of supply agreement. 4. Performance is tied to the production of base metal for circulating coinage, a critical national function. 5. The award falls within the broader manufacturing and materials sector supporting government operations.

Value Assessment

Rating: good

The contract value of $21.4 million for copper rolling services is difficult to benchmark precisely without more granular data on market rates for specific copper alloys and processing complexities. However, given the duration and the nature of the product (base metal for coinage), the price appears within a plausible range. Comparisons to similar contracts for metal processing would be beneficial for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while initial sources might have been considered, the final award was made after a broad solicitation. The presence of two bidders suggests a degree of competition, which generally aids in price discovery and ensures the government receives competitive offers.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a level playing field, encourages multiple suppliers to bid, and typically leads to more cost-effective pricing for government procurements.

Public Impact

The United States Mint benefits directly through the reliable supply of essential base metal for producing circulating coinage. This contract supports the production of pennies and potentially other coins, ensuring the availability of currency for public use. The geographic impact is primarily national, as the coinage produced is distributed across the United States. Workforce implications are likely within PMX Industries, Inc.'s manufacturing facilities, supporting skilled labor in metal processing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if PMX Industries faces production issues, impacting coinage output.
Reliance on a single supplier for a critical component could pose a risk if alternative sources are not readily available.

Positive Signals

PMX Industries, Inc. has a track record in metal processing, suggesting experience relevant to this contract.
The use of full and open competition indicates a structured procurement process that should yield fair pricing.
The contract specifies firm fixed price, which transfers cost risk to the contractor and provides budget certainty.

Sector Analysis

This contract falls within the industrial products and materials sector, specifically focusing on non-ferrous metal processing. The market for copper rolling is competitive, with several established players. The United States Mint's demand for coinage metal represents a specialized segment within this broader industry, requiring adherence to strict quality and purity standards.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem appears minimal for this particular award.

Oversight & Accountability

Oversight for this contract would typically reside with the United States Mint, a bureau within the Department of the Treasury. Accountability measures would include performance monitoring against contract specifications, delivery schedules, and quality standards. Transparency is generally maintained through public contract databases, though specific operational details may be sensitive.

Related Government Programs

Coinage Production
Base Metal Procurement
Manufacturing Services
Industrial Materials Supply

Risk Flags

Supply Chain Risk
Quality Control Risk
Price Volatility (Mitigated by FFP)

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $21.4 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 $21.4 million.

What is the period of performance?

Start: 2011-04-27. End: 2012-09-30.

What is the historical spending pattern for the base metal used in circulating coinage?

Historical spending on the base metal for circulating coinage has varied based on production needs and metal market prices. The U.S. Mint has procured copper and zinc for pennies, and cupronickel for other denominations. Contracts for these materials are typically awarded through competitive processes. For instance, prior contracts for copper rolling or similar metal processing services would provide a benchmark. Fluctuations in commodity prices for metals like copper and zinc directly impact the cost of these materials. Analyzing past contract awards, their values, durations, and the number of bidders can reveal trends in pricing and supplier competition over time. This specific contract for $21.4 million represents a portion of this ongoing expenditure, and its value should be assessed against historical norms and current market conditions for copper.

How does the price per unit for this copper rolling compare to market rates?

Determining a precise per-unit cost comparison for this contract is challenging without knowing the exact specifications of the copper alloy, the thickness, width, and length of the rolled products, and the specific processing techniques employed by PMX Industries. The contract value of $21,400,000 over 522 days suggests an average annual value of approximately $16.5 million. If we assume a significant volume of metal processed, the per-pound or per-ton cost would be the key metric. Market rates for copper rolling can fluctuate based on global copper prices, energy costs for manufacturing, and the complexity of the order. Benchmarking would require accessing current commodity prices for copper and comparing them against the effective processing fee charged by PMX Industries, factoring in any value-added services. Without these specifics, a definitive per-unit comparison remains elusive.

What is PMX Industries, Inc.'s track record with government contracts, particularly with the Department of the Treasury?

PMX Industries, Inc. has a history of engaging with government contracts, including those potentially related to metal supply or processing. While specific details of their past performance with the Department of the Treasury or the U.S. Mint require deeper database searches, their involvement in this $21.4 million contract suggests they meet the qualifications and competitive standards set by the agency. Companies in the metals industry often supply materials for various government applications, from infrastructure to defense. A thorough review would involve examining past contract awards, any reported performance issues or commendations, and their overall history of compliance and delivery on federal procurements. Their ability to win this 'Full and Open Competition' award indicates a level of capability and competitiveness recognized by the U.S. Mint.

What are the primary risks associated with this contract for the U.S. Mint?

The primary risks associated with this contract revolve around supply chain reliability and quality assurance. Any disruption in PMX Industries' production capabilities, whether due to operational issues, labor disputes, or unforeseen events, could impact the U.S. Mint's ability to produce sufficient coinage, potentially leading to currency shortages. Furthermore, ensuring the consistent quality and purity of the copper supplied is critical for coinage production; deviations could lead to defective coins or processing problems downstream. Price volatility of raw copper is another risk, although the firm fixed-price nature of the contract shifts this risk primarily to the contractor. Finally, reliance on a single supplier for a critical component, even if competitively selected, introduces a degree of vulnerability.

How does the competition level for this contract influence its value for taxpayers?

The competition level for this contract, described as 'Full and Open Competition After Exclusion of Sources,' is generally favorable for taxpayers. This procurement method aims to maximize the number of potential bidders, thereby fostering a competitive environment. When multiple qualified companies vie for a contract, they are incentivized to offer their best pricing and terms to secure the award. This process helps ensure that the government is not overpaying for goods or services and that taxpayer funds are used efficiently. The fact that there were two bidders suggests that the market is sufficiently robust to support competition, leading to a more efficient price discovery mechanism and ultimately benefiting the Treasury through cost savings compared to a sole-source or limited-competition scenario.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

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: $21,367,160

Exercised Options: $21,367,160

Current Obligation: $21,367,160

Parent Contract

Parent Award PIID: TMHQ08C0005

IDV Type: IDC

Timeline