Treasury's $17.9M Copper Contract Awarded to PMX Industries for Rolling, Drawing, and Extruding Services

Contract Overview

Contract Amount: $17,920,944 ($17.9M)

Contractor: PMX Industries, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-08-28

End Date: 2007-09-30

Contract Duration: 33 days

Daily Burn Rate: $543.1K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: PROVIDE 5, 10, 25-CENT & $1-GOLDEN STRIP + METAL

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52404

State: Iowa Government Spending

Plain-Language Summary

Department of the Treasury obligated $17.9 million to PMX INDUSTRIES, INC. for work described as: PROVIDE 5, 10, 25-CENT & $1-GOLDEN STRIP + METAL Key points: 1. The contract value of $17.9 million for copper processing services appears to be within a reasonable range for specialized industrial materials. 2. Competition dynamics for this specific type of industrial material processing are likely limited due to specialized equipment and expertise required. 3. The contract's fixed-price with economic price adjustment (EPA) structure introduces some risk related to fluctuating raw material costs. 4. Performance context is tied to the United States Mint's need for high-quality copper for coinage and other applications. 5. This contract positions PMX Industries as a key supplier within the niche sector of precious and industrial metal processing for government entities. 6. The duration of the contract (33 days) suggests a focused, short-term requirement rather than a long-term supply agreement.

Value Assessment

Rating: good

Benchmarking the value of this contract is challenging without specific details on the exact specifications and quantities of copper processed. However, the $17.9 million figure for specialized rolling, drawing, and extruding services for a government entity like the Mint suggests a significant undertaking. Compared to typical industrial material contracts, this amount seems commensurate with the complexity and potential value of the processed copper. The fixed-price with economic price adjustment (EPA) clause indicates an effort to manage cost volatility, which is a common practice in commodity-based contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded as a 'COMPETITIVE DELIVERY ORDER,' indicating that multiple vendors were likely solicited. The presence of two bidders (no: 2) suggests a degree of competition, though the exact level of interest and the rigor of the competition process are not fully detailed. A competitive process, even with a limited number of bidders, generally aids in price discovery and ensures the government receives a fair market price for the services rendered.

Taxpayer Impact: A competitive award process, even with two bidders, is beneficial for taxpayers as it helps ensure that the price paid for these critical copper processing services is not inflated due to a lack of alternatives.

Public Impact

The primary beneficiaries of this contract are the United States Mint, which receives the processed copper essential for its operations. The services delivered include the specialized processes of rolling, drawing, and extruding copper to meet specific metallurgical standards. The geographic impact is primarily centered around the facilities of PMX Industries and the United States Mint's operational sites. Workforce implications include employment opportunities at PMX Industries for skilled labor involved in metal processing and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to the economic price adjustment (EPA) clause if copper market prices rise significantly.
Dependence on a single supplier (PMX Industries) for this specific processing requirement could pose a risk if performance issues arise.
Limited competition (two bidders) might suggest potential barriers to entry for other qualified firms in this niche market.

Positive Signals

Awarded through a competitive process, indicating an effort to secure fair pricing.
PMX Industries' specialization in metal processing suggests a high likelihood of quality and timely delivery.
The contract is a delivery order, implying a specific, defined need rather than an open-ended commitment.

Sector Analysis

The contract falls within the industrial materials and manufacturing sector, specifically focusing on metal processing. This niche involves specialized equipment and expertise for transforming raw metals into usable forms like rolled sheets or drawn wires. The market for such services, particularly when catering to government entities with stringent quality requirements, is often characterized by a limited number of highly qualified suppliers. Comparable spending benchmarks would depend heavily on the specific grade, quantity, and processing techniques required for the copper.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The focus remains on larger, specialized industrial suppliers capable of meeting the contract's demands.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Treasury and the United States Mint. As a delivery order under a larger contract vehicle, the terms and conditions are established, and performance is monitored by the contracting officer. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

United States Mint Coinage Production
Industrial Metal Supply Contracts
Government Procurement of Raw Materials
Manufacturing and Processing Services

Risk Flags

Economic Price Adjustment Clause
Limited Competition
Short Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $17.9 million to PMX INDUSTRIES, INC.. PROVIDE 5, 10, 25-CENT & $1-GOLDEN STRIP + METAL

Who is the contractor on this award?

The obligated recipient is PMX INDUSTRIES, 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: 2007-08-28. End: 2007-09-30.

What is the historical spending pattern for copper processing services by the United States Mint?

Analyzing historical spending patterns for copper processing by the United States Mint requires access to detailed procurement data over several fiscal years. While this specific contract from 2007 represents a $17.9 million award, understanding the broader trend involves looking at the frequency, value, and types of contracts awarded for similar services. Factors such as changes in coinage demand, metal market fluctuations, and shifts in manufacturing strategies can influence these patterns. Without a comprehensive historical dataset, it's difficult to ascertain if this $17.9 million award is typical, an outlier, or indicative of a growing or shrinking need for such specialized copper processing services.

How does the price paid for copper processing in this contract compare to market rates for similar services?

Directly comparing the price paid for copper processing in this 2007 contract to current market rates is challenging due to the passage of time and the specific nature of the services (rolling, drawing, extruding). The contract's 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (EPA) clause indicates that the final cost was subject to fluctuations in raw material prices. To assess value for money, one would need to compare the unit prices for the specific copper grades and processing steps against contemporary bids from other qualified industrial metal processors. The limited competition (two bidders) also complicates a definitive price comparison, as robust competition typically drives prices closer to market lows.

What is PMX Industries' track record with federal contracts, particularly with the Department of the Treasury or the Mint?

PMX Industries, Inc. has a history of receiving federal contracts, including those with the Department of the Treasury. This specific contract, awarded in 2007, highlights their capability in providing specialized metal processing services. A thorough assessment of their track record would involve reviewing their performance on other government contracts, looking for any instances of contract disputes, performance issues, or exceptional delivery. Their ability to secure this competitive delivery order suggests they met the required qualifications and offered competitive terms at the time of award. Further investigation into their contract history database would reveal the breadth and success of their federal engagements.

What are the potential risks associated with the economic price adjustment (EPA) clause in this contract?

The primary risk associated with the economic price adjustment (EPA) clause in this contract is the potential for increased costs to the government if the price of copper or other relevant commodities rises significantly between the time of the bid and the delivery of services. While EPA clauses are designed to protect contractors from unforeseen market volatility and ensure fair compensation, they can lead to budget overruns for the procuring agency if market conditions are unfavorable. The extent of this risk depends on the specific indexation formula used in the EPA and the volatility of the underlying commodity prices during the contract period.

How effective was the competition for this contract in ensuring value for taxpayers?

The effectiveness of the competition for this contract in ensuring value for taxpayers is moderate. The contract was awarded via a 'COMPETITIVE DELIVERY ORDER,' indicating that it was not a sole-source procurement. However, with only two bidders (no: 2), the level of competition was limited. While competition is generally beneficial, a smaller number of bidders might suggest higher barriers to entry in this specialized industrial sector or a limited pool of qualified suppliers. This could potentially lead to less aggressive pricing than might be achieved in a market with more robust competition. Nonetheless, a competitive process is superior to a sole-source award for taxpayer value.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Copper Rolling, Drawing, and Extruding

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Poongsan Holdings Corporation (UEI: 687755603)

Address: 5300 WILLOW CREEK DR SW, CEDAR RAPIDS, IA, 02

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,920,944

Exercised Options: $17,920,944

Current Obligation: $17,920,944

Parent Contract

Parent Award PIID: TMK0202

IDV Type: IDC

Timeline