Treasury's Mint Spends $27M on Raw Gold Material from A-Mark Precious Metals
Contract Overview
Contract Amount: $26,995,503 ($27.0M)
Contractor: A-Mark Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2011-04-05
End Date: 2011-04-11
Contract Duration: 6 days
Daily Burn Rate: $4.5M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RAW GOLD MATERIAL
Place of Performance
Location: SANTA MONICA, LOS ANGELES County, CALIFORNIA, 90401
Plain-Language Summary
Department of the Treasury obligated $27.0 million to A-MARK PRECIOUS METALS, INC. for work described as: RAW GOLD MATERIAL Key points: 1. Significant expenditure on a key commodity for mint operations. 2. Competition was full and open, suggesting potential for competitive pricing. 3. The contract was a delivery order, indicating a need for immediate or specific material supply. 4. The sector is Nonferrous Metal Rolling, Drawing, and Extruding, crucial for coinage.
Value Assessment
Rating: fair
The contract value of $26.99M for raw gold material is substantial. Benchmarking against similar commodity purchases is difficult without more specific contract details and market price fluctuations during the period.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, which is positive for price discovery. However, the specific impact on achieving the best possible price for this commodity depends on the number of bidders and the market conditions at the time of award.
Taxpayer Impact: Taxpayer funds were used for this purchase. The use of full and open competition aims to ensure value for money, but the ultimate impact depends on the final negotiated price relative to market value.
Public Impact
Direct impact on the production of U.S. coinage and bullion. Supports the precious metals market and related industries. Ensures the availability of essential raw materials for national minting operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Commodity price volatility risk
- Supply chain disruption risk
Positive Signals
- Use of full and open competition
- Firm fixed price contract type
Sector Analysis
The purchase falls under the Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding sector. Spending in this area is directly tied to the operational needs of mints and refineries, with benchmarks often influenced by global commodity markets.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement. The primary contractor, A-Mark Precious Metals, Inc., is a significant player in the precious metals market.
Oversight & Accountability
The United States Mint, under the Department of the Treasury, is responsible for this procurement. Oversight would typically involve internal controls and potentially GAO reviews for large contracts, ensuring compliance and value.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Commodity price volatility
- Supply chain reliability
- Market price benchmarking difficulty
- Potential for price fluctuations impacting fixed price contract
Tags
nonferrous-metal-except-copper-and-alumi, department-of-the-treasury, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $27.0 million to A-MARK PRECIOUS METALS, INC.. RAW GOLD MATERIAL
Who is the contractor on this award?
The obligated recipient is A-MARK PRECIOUS METALS, 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 $27.0 million.
What is the period of performance?
Start: 2011-04-05. End: 2011-04-11.
What was the specific market price of gold during the contract award period, and how did the awarded price compare?
Determining the precise market price of gold during the April 2011 award period requires accessing historical commodity data. The contract's firm fixed price of $26.99M suggests a negotiated price based on anticipated market conditions. A comparison would reveal if the government secured a favorable rate or paid a premium relative to spot prices at the exact time of the award.
What were the key risk mitigation strategies employed for this raw material procurement, given its commodity nature?
Given the commodity nature of gold, key risks likely include price volatility and supply chain disruptions. Mitigation strategies might involve hedging, securing multiple supply sources, or negotiating terms that account for potential market fluctuations. The firm fixed price contract type suggests the risk of price increases was borne by the contractor.
How effectively did the full and open competition process ensure the best value for this significant gold material purchase?
The full and open competition process is designed to maximize value by encouraging multiple bids. Its effectiveness hinges on the number and competitiveness of the bidders. Without knowing the bid landscape, it's difficult to definitively assess if the best possible price was achieved, though the process itself is a strong indicator of an effort to secure value.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Spectrum Group International Inc.
Address: 429 SANTA MONICA BLVD, SANTA MONICA, CA, 90401
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,995,503
Exercised Options: $26,995,503
Current Obligation: $26,995,503
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TMHQ10C0040
IDV Type: IDC
Timeline
Start Date: 2011-04-05
Current End Date: 2011-04-11
Potential End Date: 2011-04-11 00:00:00
Last Modified: 2025-04-15
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