Treasury's $22.7M Contract for Raw Gold with Coins 'N Things Faces Scrutiny Over Long Duration and Limited Small Business Participation
Contract Overview
Contract Amount: $22,769,074 ($22.8M)
Contractor: Coins 'N Things, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2011-08-26
End Date: 2030-05-30
Contract Duration: 6,852 days
Daily Burn Rate: $3.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
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 $22.8 million to COINS 'N THINGS, INC. for work described as: RAW GOLD Key points: 1. The contract value of $22.7 million is significant for the specified commodity. 2. Competition appears to have been robust initially, but the long duration raises questions about sustained market engagement. 3. Potential risks include price volatility of gold and the long-term commitment of taxpayer funds. 4. The sector involves raw material procurement, critical for minting operations.
Value Assessment
Rating: fair
The contract's fixed price for a volatile commodity like gold over a 19-year period is unusual. Without specific unit cost data, it's difficult to benchmark against market prices, but the long-term nature suggests potential overpayment if gold prices fluctuate significantly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. However, the extended duration of the delivery order might limit future competitive opportunities and could mask price escalations.
Taxpayer Impact: The long-term commitment of $22.7 million for raw gold procurement represents a substantial taxpayer investment, with potential for both savings and losses depending on market fluctuations.
Public Impact
Taxpayers are funding the acquisition of a precious metal, a significant portion of the national reserve. The long contract duration means funds are committed for nearly two decades, impacting budget planning. The United States Mint's ability to secure raw materials impacts the production of coinage and bullion. Fluctuations in the global gold market directly affect the value and cost of this contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (19 years)
- Lack of small business participation
- Fixed price for volatile commodity
Positive Signals
- Awarded under full and open competition
- Established supplier relationship
Sector Analysis
This contract falls within the raw materials sector, specifically nonferrous metals. Spending benchmarks for such contracts are highly variable, depending on market prices and the specific metal. The Treasury's procurement of gold is essential for mint operations.
Small Business Impact
The data indicates that small businesses were not involved in this contract, as the 'sb' field is false. This suggests a missed opportunity for small business engagement in the supply chain for precious metals.
Oversight & Accountability
The long duration of this delivery order warrants oversight to ensure continued fair pricing and performance. Accountability rests with the United States Mint to manage this long-term commitment effectively and report on any price adjustments or market impacts.
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 contract duration
- Fixed price for volatile commodity
- Lack of small business participation
- Potential for price escalation/overpayment
- Limited ongoing competition
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 $22.8 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 $22.8 million.
What is the period of performance?
Start: 2011-08-26. End: 2030-05-30.
What is the rationale behind a 19-year fixed-price contract for a commodity as volatile as gold, and how is price adjustment managed?
The rationale for such a long-term fixed-price contract for gold is unclear given its inherent price volatility. Typically, contracts for commodities like gold would include mechanisms for price adjustment based on market indices or periodic renegotiations to mitigate risk for both parties. Without such clauses, the government could overpay significantly if market prices fall, or the supplier could face substantial losses if prices rise dramatically, potentially impacting supply.
What are the specific risks associated with locking in a fixed price for gold over nearly two decades, and how are these risks mitigated?
The primary risk is significant price fluctuation. If gold prices increase substantially over the 19-year period, the government will be paying below-market rates, potentially leading to supply shortages or contract disputes. Conversely, if prices fall, taxpayers could be overpaying. Mitigation strategies are not evident in the provided data, suggesting a potential lack of robust risk management for this long-term commitment.
How does the long duration of this contract impact the effectiveness of competition and the discovery of optimal pricing for raw gold?
The extended duration of this delivery order, spanning 19 years, likely diminishes the effectiveness of ongoing competition. While initially awarded competitively, the long timeframe may discourage new entrants or limit the Mint's ability to leverage market shifts for better pricing. This could lead to suboptimal pricing over the contract's life, as the initial price discovery may not reflect future market conditions or innovations.
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
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: $22,769,074
Exercised Options: $22,769,074
Current Obligation: $22,769,074
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: TMHQ10C0044
IDV Type: IDC
Timeline
Start Date: 2011-08-26
Current End Date: 2030-05-30
Potential End Date: 2030-05-30 00:00:00
Last Modified: 2025-04-15
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