Treasury's Mint Spends $33.8M on Raw Gold Material from A-Mark Precious Metals
Contract Overview
Contract Amount: $33,790,140 ($33.8M)
Contractor: A-Mark Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2011-05-02
End Date: 2011-05-09
Contract Duration: 7 days
Daily Burn Rate: $4.8M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
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 $33.8 million to A-MARK PRECIOUS METALS, INC. for work described as: RAW GOLD MATERIAL Key points: 1. Spending on raw gold material is a core function for the U.S. Mint. 2. A-Mark Precious Metals, Inc. is a significant supplier in the precious metals market. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The sector involves specialized materials critical for minting operations.
Value Assessment
Rating: fair
The contract value of $33.8 million for raw gold material is substantial. Without specific benchmarks for gold prices during the contract period (2011), it's difficult to definitively assess if this price was optimal. However, the firm fixed price suggests the government aimed to lock in costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to compete. This method generally promotes price discovery and can lead to more competitive pricing.
Taxpayer Impact: The $33.8 million expenditure represents a significant investment of taxpayer funds for essential raw materials. The competitive nature of the award aims to ensure value for money.
Public Impact
Taxpayers fund the acquisition of precious metals for coinage and bullion. The U.S. Mint's operations are directly impacted by the availability and cost of raw gold. Fluctuations in gold prices can affect the overall cost of minting operations. This spending supports the broader precious metals supply chain.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential price volatility of gold
- Dependence on a single supplier for a critical material (if A-Mark is the sole source for this specific grade/quantity)
- Short contract duration (7 days) may limit long-term price negotiation benefits
Positive Signals
- Awarded under full and open competition
- Firm Fixed Price contract type locks in costs
- Awarded to a known entity in the precious metals market
Sector Analysis
The U.S. Mint operates within the broader precious metals and mining sector. Spending on raw materials like gold is essential for its function. Benchmarks for this specific type of raw material procurement are highly dependent on global commodity prices.
Small Business Impact
The data does not indicate whether small businesses were involved in this specific contract, either as prime contractors or subcontractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The contract was awarded by the Department of the Treasury, specifically the U.S. Mint. Standard procurement oversight processes would apply, ensuring compliance with federal acquisition regulations.
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 (Gold)
- Potential for price fluctuations within short delivery window
- Limited contract duration
- Lack of small business participation data
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 $33.8 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 $33.8 million.
What is the period of performance?
Start: 2011-05-02. End: 2011-05-09.
What was the prevailing market price of gold during the contract award period, and how does the contract price compare?
The contract was awarded in May 2011. Gold prices were experiencing a significant upward trend during this period, reaching record highs. The average price of gold in May 2011 was around $1,500 per troy ounce. Without the specific quantity and purity of gold purchased, a direct comparison is difficult, but the $33.8 million expenditure suggests a substantial volume was acquired during a period of high market prices.
What is the risk associated with the short 7-day duration of this delivery order for raw gold?
A 7-day delivery order duration for a large quantity of raw gold presents a risk of price volatility. The market price of gold can fluctuate significantly even within a week. A firm fixed price mitigates this for the government, but it also means the supplier bears the risk of price increases. If the price drops, the government might have overpaid relative to the spot market at the time of delivery.
How effective was the full and open competition in securing favorable pricing for this raw gold material?
Full and open competition is generally effective in driving favorable pricing by allowing multiple suppliers to bid. Given the high market prices for gold in May 2011, the competition likely ensured that the U.S. Mint secured the material at a price that was competitive within that specific market context, rather than accepting a non-competitive offer. The firm fixed price further solidifies the cost.
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: 1
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: $33,790,140
Exercised Options: $33,790,140
Current Obligation: $33,790,140
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: 2011-05-02
Current End Date: 2011-05-09
Potential End Date: 2011-05-09 00:00:00
Last Modified: 2025-04-15
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