Treasury's Mint Spends $28.2M on Raw Gold Material from A-Mark Precious Metals

Contract Overview

Contract Amount: $28,244,458 ($28.2M)

Contractor: A-Mark Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2013-03-04

End Date: 2013-03-15

Contract Duration: 11 days

Daily Burn Rate: $2.6M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RAW GOLD MATERIAL

Place of Performance

Location: SANTA MONICA, LOS ANGELES County, CALIFORNIA, 90401

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $28.2 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 critical materials procurement for government functions.

Value Assessment

Rating: good

The $28.2M spend for raw gold material appears reasonable given the commodity's market value. Benchmarking against similar bulk precious metal procurements would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was utilized, which typically fosters competitive pricing and ensures a broad range of suppliers can participate. This method is ideal for commodity purchases where market prices are transparent.

Taxpayer Impact: The use of competitive bidding aims to secure the best possible price for taxpayers on this significant raw material purchase.

Public Impact

Ensures the supply of essential raw materials for U.S. coinage and bullion. Supports the economic activity of precious metals suppliers. Price stability of gold impacts the overall cost of mint operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Commodity price volatility
Supply chain disruptions for precious metals

Positive Signals

Competitive procurement process
Established supplier relationship

Sector Analysis

This procurement falls within the critical materials sector, specifically for precious metals essential to the U.S. Mint's operations. Spending benchmarks are difficult due to the volatile nature of gold prices.

Small Business Impact

Analysis indicates no direct small business participation in this specific contract, which is common for large-volume, specialized commodity procurements.

Oversight & Accountability

The contract was awarded via a delivery order under a broader agreement, suggesting existing oversight mechanisms. Further review of the specific delivery order terms is recommended.

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
Supplier dependency
Market fluctuations

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $28.2 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 $28.2 million.

What is the period of performance?

Start: 2013-03-04. End: 2013-03-15.

What was the specific market price of gold at the time of the contract award, and how did the awarded price compare?

The contract was awarded on March 4, 2013. Gold prices fluctuated significantly around this period, trading between approximately $1,550 and $1,620 per troy ounce. A detailed analysis would require comparing the contract's per-unit price against the prevailing spot price on the award date and considering any bulk purchase discounts or premiums.

What are the primary risks associated with relying on a single supplier for such a critical raw material, even under full and open competition?

Even with full and open competition, reliance on a single supplier for raw gold material presents risks such as potential supply chain disruptions, quality control issues, or future price leverage. Diversifying suppliers or establishing robust contingency plans can mitigate these risks.

How effectively does the firm fixed price contract protect the government against price fluctuations in the volatile gold market?

A firm fixed price contract generally shifts the risk of price increases to the contractor. However, for highly volatile commodities like gold, the initial price might be set higher to account for anticipated fluctuations. The effectiveness depends on the contractor's hedging strategies and the accuracy of their price forecasting.

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: 7

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: $28,244,458

Exercised Options: $28,244,458

Current Obligation: $28,244,458

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