Treasury's Mint Spends $19.4M on Raw Gold Material from A-Mark Precious Metals
Contract Overview
Contract Amount: $19,369,722 ($19.4M)
Contractor: A-Mark Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2011-08-30
End Date: 2011-09-04
Contract Duration: 5 days
Daily Burn Rate: $3.9M/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 $19.4 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. Risk is moderate, tied to commodity price fluctuations and supplier reliability. 4. Sector context is precious metals procurement for coinage and bullion.
Value Assessment
Rating: fair
The contract value of $19.4 million for raw gold material is substantial. Benchmarking against market prices for gold during the contract period is necessary to assess value, but the firm fixed price suggests a commitment to a specific rate.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was utilized, which is a positive indicator for price discovery. This method allows multiple suppliers to bid, theoretically driving down costs and ensuring fair market value.
Taxpayer Impact: The use of competitive bidding aims to ensure taxpayer funds are used efficiently for acquiring necessary raw materials.
Public Impact
Direct impact on the availability and cost of U.S. coinage and bullion. Supports the precious metals industry and related supply chains. Transparency in procurement is crucial for public trust in government spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Commodity price volatility
- Supplier dependency
- Contract duration and delivery timing
Positive Signals
- Competitive procurement process
- Clear contract type (firm fixed price)
Sector Analysis
This contract falls within the broader category of raw material procurement for manufacturing. Spending benchmarks for precious metals acquisition by mints are highly dependent on global market prices and specific metal purity requirements.
Small Business Impact
The data indicates that small businesses were not a direct awardee in this specific transaction, as the award went to A-Mark Precious Metals, Inc. Further analysis would be needed to determine if small businesses participated as subcontractors or suppliers within the supply chain.
Oversight & Accountability
The contract was awarded by the Department of the Treasury's United States Mint, indicating established oversight mechanisms. The use of a delivery order under a larger contract suggests a structured procurement process.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Potential for price volatility in raw material costs.
- Dependency on a specific supplier for a critical commodity.
- Limited duration of the delivery order (5 days) may not reflect long-term supply needs.
- Lack of explicit small business participation noted.
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 $19.4 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 $19.4 million.
What is the period of performance?
Start: 2011-08-30. End: 2011-09-04.
How did the firm fixed price compare to prevailing market rates for raw gold at the time of award?
Assessing the value requires comparing the contract's firm fixed price against the spot price of gold and any associated premiums for refining and delivery during August 2011. Without access to the specific pricing terms and market data from that period, it's difficult to definitively state if the price was optimal. However, the competitive bidding process suggests an effort to secure a fair market rate.
What are the primary risks associated with relying on a single supplier for such a critical raw material?
Reliance on a single supplier, even if selected through competition, introduces risks such as supply chain disruptions, potential price increases in future contracts, and reduced leverage for the government. Diversifying suppliers or establishing robust contingency plans can mitigate these risks. The contract's duration and the specific terms negotiated are key to understanding the immediate risk exposure.
How effectively does this procurement strategy support the Mint's mission of producing coinage and bullion?
The procurement of raw gold material is fundamental to the Mint's mission. Utilizing full and open competition for this essential input suggests a strategic approach to ensuring supply chain integrity and cost-effectiveness. The firm fixed price provides budget certainty, enabling the Mint to plan production schedules and manage inventory effectively.
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: $19,369,722
Exercised Options: $19,369,722
Current Obligation: $19,369,722
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: 2011-08-30
Current End Date: 2011-09-04
Potential End Date: 2011-09-04 00:00:00
Last Modified: 2025-04-15
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