Treasury's $17.9M Contract for Raw Gold with Coins 'N Things Faces Scrutiny Over Long Duration and Limited Competition
Contract Overview
Contract Amount: $17,935,075 ($17.9M)
Contractor: Coins 'N Things, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2010-12-17
End Date: 2030-05-30
Contract Duration: 7,104 days
Daily Burn Rate: $2.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RAW GOLD
Place of Performance
Location: BRIDGEWATER, PLYMOUTH County, MASSACHUSETTS, 02324
Plain-Language Summary
Department of the Treasury obligated $17.9 million to COINS 'N THINGS, INC. for work described as: RAW GOLD Key points: 1. The contract value of $17.9 million for raw gold is significant, but the extended delivery period raises questions about potential price volatility. 2. While listed as 'Full and Open Competition,' the limited number of orders (2) suggests potential underutilization of competitive opportunities. 3. The risk lies in locking in prices for a commodity over a decade, potentially missing out on favorable market shifts. 4. The sector is Nonferrous Metal Rolling, Drawing, and Extruding, with gold being a high-value commodity.
Value Assessment
Rating: questionable
The contract's firm fixed price for raw gold over a 20-year period is concerning. Without more data on market benchmarks for gold at the time of each delivery order, it's difficult to assess if the pricing is competitive. The long duration increases the risk of unfavorable pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition.' However, with only two delivery orders issued, it's unclear if the full potential of competition was realized. This limited engagement might suggest that the contracting process could be more dynamic to ensure optimal price discovery.
Taxpayer Impact: The long-term nature of this contract, spanning nearly two decades, means taxpayers are exposed to potential price fluctuations in the gold market. If prices rise significantly, the fixed price could become disadvantageous, leading to overpayment.
Public Impact
Taxpayers are exposed to gold market volatility over a 20-year period. The long contract duration may not reflect current market conditions for gold. Potential for missed savings if gold prices decrease significantly during the contract term.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (20 years)
- Limited number of delivery orders (2)
- Commodity price volatility risk
Positive Signals
- Firm fixed price contract type
- Established supplier relationship
Sector Analysis
This contract falls within the Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding sector. Spending benchmarks for raw gold procurement are highly variable due to market fluctuations. The $17.9 million over 20 years represents a consistent, albeit long-term, demand for this precious metal.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this procurement. Further analysis would be needed to determine the extent of small business participation or opportunities.
Oversight & Accountability
The long duration of this contract warrants oversight to ensure the government is receiving fair value throughout the 20-year period. Regular reviews of market prices against the fixed contract price would be prudent for accountability.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Long-term price risk for volatile commodity
- Potential for missed savings due to fixed price
- Limited competition engagement despite 'full and open' status
- Extended contract duration may not align with current needs
Tags
nonferrous-metal-except-copper-and-alumi, department-of-the-treasury, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $17.9 million to COINS 'N THINGS, INC.. RAW GOLD
Who is the contractor on this award?
The obligated recipient is COINS 'N THINGS, 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 $17.9 million.
What is the period of performance?
Start: 2010-12-17. End: 2030-05-30.
What was the average price per unit of raw gold at the time of each delivery order, and how did it compare to prevailing market rates?
The provided data does not include the specific price per unit for each delivery order or the prevailing market rates at those times. To assess value, a detailed analysis of historical gold prices against the contract's fixed price at the point of each order execution is necessary. This would reveal if the government secured favorable pricing or overpaid due to market shifts.
What is the risk associated with locking in a fixed price for a volatile commodity like gold over a 20-year period?
The primary risk is significant price volatility. If gold prices decline substantially after the contract is awarded, the government remains obligated to purchase at the higher, fixed price, leading to potential financial losses. Conversely, if prices surge, the government benefits from the locked-in lower rate. The long duration amplifies this risk.
How effective is a 20-year fixed-price contract for procuring a commodity like raw gold in ensuring optimal value for taxpayers?
A 20-year fixed-price contract for a volatile commodity like gold is generally considered ineffective for ensuring optimal taxpayer value. Market prices for gold fluctuate significantly over such long periods. While it offers price certainty, it removes the opportunity to benefit from potential price decreases and exposes the government to losses if prices fall.
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: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 350 BEDFORD ST STE 2, BRIDGEWATER, MA, 02324
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $17,935,075
Exercised Options: $17,935,075
Current Obligation: $17,935,075
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: TMHQ10C0044
IDV Type: IDC
Timeline
Start Date: 2010-12-17
Current End Date: 2030-05-30
Potential End Date: 2030-05-30 00:00:00
Last Modified: 2025-04-15
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