Treasury's Mint awards $32.4M contract for base metals strip, highlighting efficient price discovery

Contract Overview

Contract Amount: $32,447,508 ($32.4M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2023-08-01

End Date: 2023-09-05

Contract Duration: 35 days

Daily Burn Rate: $927.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE BASE METALS STRIP FOR CIRCULATING COINAGE.

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40241

State: Kentucky Government Spending

Plain-Language Summary

Department of the Treasury obligated $32.4 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE BASE METALS STRIP FOR CIRCULATING COINAGE. Key points: 1. Contract value appears reasonable given the specialized nature of the materials required for coinage. 2. Full and open competition likely ensured competitive pricing and access to qualified suppliers. 3. Short performance period suggests a focused need, potentially mitigating long-term price volatility risks. 4. The contract supports the essential function of producing circulating coinage, a critical government service. 5. Supplier is a known entity in rolled products, indicating a degree of established capability. 6. Fixed-price contract structure transfers some risk to the contractor, potentially stabilizing costs.

Value Assessment

Rating: good

The contract value of $32.4 million for base metals strip for circulating coinage is within a reasonable range for specialized metal products. Benchmarking against similar contracts for coinage metal supply is difficult without more specific material composition and quantity data. However, the fixed-price nature of the award suggests that the Mint secured a defined cost for the specified materials, 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 bidders were likely solicited and evaluated. This process generally leads to competitive pricing as suppliers vie for the award. The presence of two bidders suggests a healthy, albeit potentially limited, competitive landscape for this specific type of specialized metal product.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces, ensuring the government obtains the best possible value for its spending on essential materials like those for coinage.

Public Impact

The primary beneficiaries are the citizens who rely on a consistent supply of circulating coinage for everyday transactions. The contract delivers essential base metals strip, a foundational component for minting coins. The geographic impact is national, as the produced coins will enter circulation across the United States. This contract supports manufacturing jobs within the metals processing sector, specifically at the awarded company's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in base metals markets impacting future contract costs if not managed effectively.
Dependence on a limited number of qualified suppliers for specialized coinage metals could pose a future risk.
Ensuring consistent quality and timely delivery of the metal strip is crucial for uninterrupted coin production.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contractor, WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC, is an established player in the metals industry.
The firm fixed-price contract structure provides cost certainty for the government.
The short duration of the delivery order may indicate efficient procurement for an immediate need.

Sector Analysis

The contract falls within the broader metals and mining sector, specifically focusing on the supply of processed metals for industrial and governmental use. The market for specialized coinage metals is relatively niche, often dominated by a few key suppliers capable of meeting stringent quality and production standards. This contract represents a small but critical component of the overall metals supply chain, directly supporting the U.S. Mint's operational needs.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The nature of producing specialized base metals strip for coinage typically requires significant industrial capacity and specialized equipment, which may limit the direct participation of small businesses in prime contracting roles. However, the prime contractor may engage small businesses for ancillary services or supplies.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Mint, a bureau within the Department of the Treasury. The Mint is responsible for ensuring the contractor meets all specifications, quality standards, and delivery schedules. The Department of the Treasury's Office of Inspector General may also provide oversight depending on the scope and potential risks identified. Transparency is facilitated through contract award databases like FPDS.

Related Government Programs

U.S. Mint Coinage Production
Precious and Base Metals Procurement
Manufacturing and Industrial Supplies

Risk Flags

Potential for commodity price volatility impacting future procurements.
Dependence on specialized suppliers for critical materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $32.4 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE BASE METALS STRIP 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 $32.4 million.

What is the period of performance?

Start: 2023-08-01. End: 2023-09-05.

What is the specific composition and grade of the base metals strip being procured, and how does it compare to industry standards for circulating coinage?

The provided data indicates the contract is for 'BASE METALS STRIP FOR CIRCULATING COINAGE' with a North American Industry Classification System (NAICS) code of 331420 (Copper Rolling, Drawing, Extruding, and Alloying). While the exact alloy composition and grade are not detailed in the summary data, the NAICS code suggests a focus on copper-based materials. Circulating coinage typically uses specific alloys like copper-nickel for dimes and quarters, and manganese brass (copper, zinc, manganese, nickel) for nickels, or copper and zinc for pennies. The U.S. Mint maintains strict specifications for these alloys to ensure durability, machinability, and resistance to corrosion. The award to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC, a known producer of rolled metal products, implies that the supplied strip meets these stringent requirements. Further details on the precise alloy would be found in the contract's statement of work or technical specifications.

How does the awarded price of $32.4 million compare to historical spending for similar base metals strip procurements by the U.S. Mint?

Direct historical price comparisons for this specific 'base metals strip for circulating coinage' are challenging without access to detailed historical contract data specifying exact quantities, alloy compositions, and delivery timelines. The provided data shows a total award amount of $32,447,507.74 for a delivery order with a duration of 35 days (August 1, 2023 - September 5, 2023). This suggests a relatively short-term procurement for immediate needs. The U.S. Mint procures significant quantities of metals annually. Fluctuations in global commodity prices for copper, nickel, zinc, and other base metals directly impact the cost of coinage. Given the fixed-price nature, this award reflects market conditions at the time of solicitation. Analyzing year-over-year spending trends for similar metal types and volumes would provide a more robust comparison, but this data point alone suggests a substantial investment in coinage materials.

What are the key performance indicators (KPIs) and quality assurance measures in place for this contract to ensure the integrity of the coinage metal supply?

While specific KPIs are not detailed in the summary data, contracts for critical materials like coinage metal typically include rigorous quality assurance measures. These would likely involve stringent material testing and certification processes to verify alloy composition, dimensional tolerances, and physical properties against the U.S. Mint's specifications. Performance indicators would focus on on-time delivery, adherence to quality standards (e.g., defect rates), and potentially responsiveness to any issues. The U.S. Mint's own quality control laboratories would likely inspect and test incoming shipments. Failure to meet these standards could result in contract penalties, rejection of materials, or even termination, underscoring the importance of these measures for maintaining the integrity and security of the nation's coinage.

What is the track record of WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC in supplying metals to government agencies, particularly for sensitive applications like coinage?

WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC is part of the Wieland Group, a global manufacturer of copper and copper alloy products. Their extensive experience in producing rolled metal products suggests a strong capability to meet the technical requirements for coinage strip. While specific government contract history for this exact application isn't detailed in the provided summary, their position as a significant player in the rolled products market implies they likely have experience supplying various industrial sectors, potentially including government contracts for materials. The U.S. Mint's selection of this company indicates confidence in their ability to meet the demanding specifications for circulating coinage production. A deeper dive into federal procurement databases would reveal the extent of their past government awards.

Given the short duration (35 days) of this delivery order, does this indicate a one-time need or a recurring requirement for base metals strip?

The short duration of 35 days for this specific delivery order (August 1 to September 5, 2023) suggests it was likely intended to fulfill an immediate or short-term need for base metals strip. This could be due to several factors: managing inventory levels, responding to a sudden surge in demand for specific denominations, addressing a temporary disruption in a longer-term supply chain, or fulfilling a specific production run. It does not necessarily preclude recurring needs; the U.S. Mint likely has ongoing requirements for coinage metals. Such short-term orders might be part of a broader, potentially longer-term strategy for metal procurement, possibly supplemented by larger, multi-year contracts or other delivery orders issued throughout the year to ensure a continuous supply.

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, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,447,508

Exercised Options: $32,447,508

Current Obligation: $32,447,508

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031JG23D00001

IDV Type: IDC

Timeline