Treasury's Mint awards $6M for gold blanks, with full competition ensuring value

Contract Overview

Contract Amount: $6,054,340 ($6.1M)

Contractor: Leachgarner, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2024-02-07

End Date: 2026-03-31

Contract Duration: 783 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PURCHASE OF 1-OZ; .50 OZ; .25 OZ; .10 OZ - 22 KT GOLD BLANKS

Place of Performance

Location: ATTLEBORO, BRISTOL County, MASSACHUSETTS, 02703

State: Massachusetts Government Spending

Plain-Language Summary

Department of the Treasury obligated $6.1 million to LEACHGARNER, INC. for work described as: PURCHASE OF 1-OZ; .50 OZ; .25 OZ; .10 OZ - 22 KT GOLD BLANKS Key points: 1. Contract leverages full and open competition to secure gold blanks. 2. Fixed-price contract type mitigates cost overrun risks. 3. Delivery order structure allows for phased acquisition of materials. 4. Supplier has a strong track record in precious metal fabrication. 5. Acquisition supports the Mint's production of bullion and numismatic products. 6. Geographic concentration of supplier in Massachusetts may indicate regional specialization.

Value Assessment

Rating: good

The contract value of $6.05 million for gold blanks appears reasonable given the fluctuating market prices of precious metals. Benchmarking against similar contracts for gold bullion or fabricated gold products is challenging due to the specialized nature of the materials and the specific weights requested. However, the firm fixed-price structure suggests that the government has locked in a price, which is a positive indicator for value, assuming the initial pricing was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive process. This approach is generally expected to yield competitive pricing and a wider selection of qualified suppliers.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for lower prices through a broad bidding process and encourages market efficiency.

Public Impact

The United States Mint benefits from a reliable supply of gold blanks for its production needs. Consumers and investors purchasing American Eagle gold coins and other numismatic products will receive items made with these blanks. The contract supports the Mint's mission to produce and sell circulating, bullion, and commemorative coins. The workforce at the United States Mint facilities involved in coin production is supported by this acquisition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full assessment of competitive intensity.
Market volatility of gold prices could impact the long-term value proposition if not managed effectively.
Dependence on a single supplier for a critical raw material, even if competitively sourced, carries inherent supply chain risk.

Positive Signals

Awarded under full and open competition, maximizing potential for best value.
Firm fixed-price contract protects against cost increases.
Supplier's specialization in precious metal fabrication suggests expertise and quality.
Delivery order structure allows for flexible procurement aligned with production schedules.

Sector Analysis

The acquisition of gold blanks falls within the fabricated metal products manufacturing sector, specifically related to precious metals. This sector is characterized by specialized processes and high-value materials. The United States Mint is a significant consumer of such materials for its coin production, which includes both investment-grade bullion and collectible numismatic items. Spending in this area is directly tied to the Mint's operational requirements and market demand for precious metal products.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. Leach Garner, Inc. is a large business. There is no information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award appears minimal, though the overall supply chain for precious metals may involve smaller entities.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. As a delivery order under an existing contract vehicle (likely a General Services Administration Schedule or similar), it benefits from the oversight inherent in that vehicle. The firm fixed-price nature simplifies financial oversight. The United States Mint, as part of the Department of the Treasury, operates under the Treasury Inspector General's jurisdiction for audits and investigations.

Related Government Programs

United States Mint Coin Production
Precious Metals Procurement
Bullion and Numismatic Coin Sales
Fabricated Metal Product Manufacturing

Risk Flags

Potential for price volatility in gold market
Reliance on specialized supplier for critical material

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $6.1 million to LEACHGARNER, INC.. PURCHASE OF 1-OZ; .50 OZ; .25 OZ; .10 OZ - 22 KT GOLD BLANKS

Who is the contractor on this award?

The obligated recipient is LEACHGARNER, 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 $6.1 million.

What is the period of performance?

Start: 2024-02-07. End: 2026-03-31.

What is the historical spending pattern for gold blanks by the United States Mint?

Historical spending data for gold blanks by the United States Mint is not readily available in public databases without specific contract identifiers or detailed searches within the Mint's procurement records. However, the Mint has consistently procured precious metals for its bullion and numismatic programs for decades. Spending levels fluctuate based on market conditions, legislative mandates (like the Gold Bullion Coin Act of 1985), and consumer demand for gold products. The current $6.05 million award represents a specific procurement action, and understanding the broader historical context would require analyzing annual reports, budget requests, and past contract awards over several fiscal years to identify trends in volume and value.

How does the price per ounce of gold blanks in this contract compare to the spot price of gold?

Directly comparing the price per ounce of gold blanks in this contract to the spot price of gold is complex without knowing the exact breakdown of ounces purchased across the different denominations (.25 oz, .50 oz, 1 oz) and the specific date the pricing was negotiated relative to the spot market. The contract value is $6,054,339.77 for various weights of 22-karat gold blanks. To estimate a per-ounce cost, we would need the total weight of gold purchased. Assuming the contract is for a significant quantity of 1-ounce blanks, the price would include not only the raw gold value (spot price) but also the manufacturing costs (fabrication, minting specifications, quality control) and the supplier's profit margin. Therefore, the effective price per ounce will always be higher than the raw spot price of gold.

What is Leach Garner, Inc.'s track record with the US Mint and other government agencies?

Leach Garner, Inc. has a history of supplying precious metals and fabricated products to the United States Mint. Their specialization in precious metal refining and fabrication makes them a logical supplier for the Mint's needs. Publicly available contract data indicates past awards to Leach Garner from the US Mint for similar materials. Beyond the Mint, companies specializing in precious metals often supply various government entities, including potentially the Department of Defense or other agencies requiring high-purity metals for specific applications, though specific contract details with other agencies would require further database searches.

What are the risks associated with procuring gold blanks, and how are they mitigated?

Key risks in procuring gold blanks include price volatility of the underlying commodity (gold), supply chain disruptions, quality control issues, and potential for theft or loss of high-value material. This contract mitigates some risks through a firm fixed-price award, which locks in the price and shifts some of the price risk to the contractor. Awarding under full and open competition helps ensure a qualified supplier is chosen, and the US Mint's established quality assurance processes are expected to address quality control. Supply chain risks are inherent but can be managed through contract terms and supplier vetting. The physical security of the gold blanks during transit and storage is managed through specific handling protocols by both the supplier and the Mint.

How does this contract align with the US Mint's overall mission and strategic goals?

This contract directly supports the US Mint's core mission of producing and selling circulating, bullion, and numismatic coins. The gold blanks are essential raw materials for manufacturing popular bullion products like American Eagle gold coins and potentially components for numismatic collections. Ensuring a steady and cost-effective supply of these blanks is crucial for meeting market demand, generating revenue for the Treasury, and fulfilling the Mint's role in the precious metals market. The strategic goal of maintaining operational efficiency and product quality is served by procuring these essential inputs from a specialized and competitively selected vendor.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › All Other Miscellaneous Fabricated Metal Product Manufacturing

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Berkshire Hathaway Inc.

Address: 49 PEARL ST, ATTLEBORO, MA, 02703

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,054,340

Exercised Options: $6,054,340

Current Obligation: $6,054,340

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031JG24D00014

IDV Type: IDC

Timeline