Treasury's Mint awards $17.6M contract for coinage metal, highlighting efficient procurement for essential currency production

Contract Overview

Contract Amount: $17,611,464 ($17.6M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2020-02-04

End Date: 2020-03-03

Contract Duration: 28 days

Daily Burn Rate: $629.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE STRIP AND METAL FOR CIRCULATING COINAGE.

Place of Performance

Location: EAST ALTON, MADISON County, ILLINOIS, 62024

State: Illinois Government Spending

Plain-Language Summary

Department of the Treasury obligated $17.6 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE STRIP AND METAL FOR CIRCULATING COINAGE. Key points: 1. The contract demonstrates effective procurement for a critical component of U.S. currency. 2. The firm-fixed-price structure likely provided cost certainty for the government. 3. The short duration suggests a focused need for immediate supply. 4. The award to a single vendor indicates a potentially streamlined but less competitive process for this specific order. 5. The use of a delivery order under an existing contract suggests efficient use of established procurement vehicles.

Value Assessment

Rating: good

The contract value of $17.6 million for coinage metal appears reasonable given the specialized nature of the material and the quantities required for minting operations. Benchmarking against similar contracts for raw materials used in coinage is challenging without more specific material composition and volume data. However, the firm-fixed-price contract type suggests that the government secured a predictable cost, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it was a delivery order suggests it may have been placed against a pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework agreement. The presence of two bids, as indicated by the 'no' field, suggests a moderate level of competition for this specific order.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers by encouraging multiple vendors to offer competitive pricing.

Public Impact

Benefits the United States Mint in its mission to produce circulating coinage. Ensures the availability of essential metals for the production of U.S. currency. Supports the national economy by facilitating the flow of money. The contract has implications for the metals processing and supply chain industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in raw metal markets impacting future contracts.
Dependence on a limited number of suppliers for specialized coinage metals.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Awarded under full and open competition, suggesting a fair process.
Delivery order mechanism indicates efficient use of existing procurement vehicles.

Sector Analysis

This contract falls within the broader industrial sector of metals and materials manufacturing, specifically focusing on the supply of specialized metals for coinage. The United States Mint is a significant consumer of such materials, and its procurement activities are crucial for maintaining the national currency supply. Comparable spending benchmarks would typically involve other government agencies or large industrial manufacturers requiring similar high-purity metals for specialized applications.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a delivery order, it's possible that the underlying contract vehicle had different small business considerations. However, for this specific award, the focus appears to be on the prime contractor's ability to supply the required materials, with no explicit subcontracting requirements for small businesses mentioned.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The Department of the Treasury and the United States Mint have internal oversight processes to ensure compliance with procurement regulations. The firm-fixed-price nature of the contract simplifies some aspects of financial oversight, focusing on delivery and quality. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

United States Mint Operations
Coinage Metal Procurement
Federal Supply Chain Management
Industrial Materials Acquisition

Risk Flags

Potential for price volatility in raw materials
Dependence on specialized metal suppliers

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $17.6 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE STRIP AND METAL FOR CIRCULATING COINAGE.

Who is the contractor on this award?

The obligated recipient is WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (United States Mint).

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2020-02-04. End: 2020-03-03.

What is the specific composition and grade of the 'strip and metal for circulating coinage' procured under this contract?

The specific composition and grade of the 'strip and metal for circulating coinage' procured under this contract are not detailed in the provided data. However, for U.S. circulating coinage, the standard compositions are typically copper-nickel alloys for dimes and quarters, and a clad composition of copper and nickel bonded to a pure copper core for pennies and half-dollars. The 'strip' likely refers to the rolled metal form from which coins are punched. The United States Mint has stringent specifications for the purity, thickness, and mechanical properties of these metals to ensure coin durability, appearance, and security features.

How does the $17.6 million award compare to historical annual spending by the U.S. Mint for coinage metal?

To compare the $17.6 million award to historical annual spending, one would need access to historical U.S. Mint procurement data. This single award represents a specific delivery order, likely for a defined period or quantity of metal. Annual spending can fluctuate significantly based on coinage demand, production schedules, and metal market prices. For instance, if the Mint produces billions of coins annually, $17.6 million might represent a portion of its total annual requirement or a significant procurement for a specific type of metal or coin series. A comprehensive analysis would involve summing up all such awards over a fiscal year and comparing it to previous years' total expenditures for coinage metals.

What are the primary risks associated with procuring coinage metal, and how are they mitigated in this contract?

Primary risks in procuring coinage metal include price volatility of raw materials (like copper and nickel), supply chain disruptions, quality control issues (ensuring metal meets precise specifications), and potential for counterfeiting or diversion. This contract, being a firm-fixed-price award, mitigates price volatility risk for the government by locking in the cost. The award under full and open competition suggests the Mint selected a vendor capable of meeting quality standards. However, risks related to supply chain disruptions or unforeseen quality defects would still exist and would typically be managed through contract clauses, performance monitoring, and potentially alternative sourcing strategies.

What is the typical lead time for producing and delivering coinage metal strips, and does the 28-day duration of this order align with expectations?

The typical lead time for producing and delivering specialized coinage metal strips can vary depending on the supplier's capacity, the specific alloy required, and the order volume. A 28-day duration from award (February 4, 2020) to completion (March 3, 2020) for a $17.6 million order suggests either a rapid production capability by Wieland Rolled Products North America, LLC, or that the metal was readily available or already in production. For large-volume orders, lead times can often extend beyond a month. This short duration might indicate a need for immediate replenishment of inventory or a specific, time-sensitive production run by the Mint.

How does the U.S. Mint ensure fair pricing when awarding contracts for essential metals like those used in coinage?

The U.S. Mint employs several strategies to ensure fair pricing for essential metals. Firstly, the mandate for 'full and open competition' on many contracts, as seen here, allows multiple vendors to bid, fostering a competitive environment that drives prices down. Secondly, the use of firm-fixed-price contracts helps establish a clear cost ceiling. Thirdly, the Mint likely maintains market intelligence on metal prices and may use established pricing indices (e.g., London Metal Exchange for copper and nickel) as benchmarks. They also conduct price reasonableness analyses, comparing offered prices against historical data, other bids, and market rates. Finally, robust contract administration and oversight help ensure that the awarded price reflects the agreed-upon terms and quality.

Industry Classification

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

Product/Service Code: METAL BARS, SHEETS, SHAPES

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: 4801 OLYMPIA PARK PLZ STE 3500, LOUISVILLE, KY, 40241

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,611,464

Exercised Options: $17,611,464

Current Obligation: $17,611,464

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031JG18D00001

IDV Type: IDC

Timeline