Treasury's Bureau of Engraving and Printing awards $203M contract for paper, with Crane & Co. Inc. as the sole awardee

Contract Overview

Contract Amount: $203,290,139 ($203.3M)

Contractor: Crane & CO., Inc.

Awarding Agency: Department of the Treasury

Start Date: 2021-08-25

End Date: 2021-08-25

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ORDERING PERIOD 2

Place of Performance

Location: DALTON, BERKSHIRE County, MASSACHUSETTS, 01226

State: Massachusetts Government Spending

Plain-Language Summary

Department of the Treasury obligated $203.3 million to CRANE & CO., INC. for work described as: ORDERING PERIOD 2 Key points: 1. The contract value of $203.3 million represents a significant investment in essential paper supplies for currency production. 2. The award to Crane & Co., Inc. suggests a strong existing relationship or specialized capability in high-security paper manufacturing. 3. The 'FULL AND OPEN COMPETITION' indicates a formal bidding process, though the single award warrants further scrutiny. 4. The contract type is 'FIRM FIXED PRICE', which shifts cost risk to the contractor and provides budget certainty. 5. The North American Industry Classification System (NAICS) code 322121 points to the specialized nature of paper manufacturing. 6. The contract duration is tied to the ordering period, suggesting flexibility in delivery schedules. 7. The absence of small business set-aside flags indicates this contract was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the type and quality of paper procured. However, a $203 million award for paper supplies suggests a substantial volume or highly specialized product. Comparing this to other government contracts for similar paper products would be necessary to assess if the pricing is competitive. The firm fixed-price nature provides cost predictability for the government, but the ultimate value depends on the contractor's efficiency and the market price of raw materials.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION', implying that multiple bidders were solicited and considered. However, the data indicates only one award was made to Crane & Co., Inc. This could mean that while the competition was open, only one bidder met all the stringent requirements for this specialized product, or that other bidders were not successful. The level of competition, despite being open, might be limited if only one viable supplier exists for this specific type of high-security paper.

Taxpayer Impact: A full and open competition, even with a single awardee, suggests that the government sought the best possible offer. However, the lack of multiple competing bids could potentially lead to less aggressive pricing than if there were several strong contenders.

Public Impact

The primary beneficiaries are the Bureau of Engraving and Printing (BEP) and the U.S. government, ensuring a consistent supply of high-quality paper for currency and other security documents. The services delivered include the manufacturing and supply of specialized paper essential for national security and economic stability. The geographic impact is primarily national, supporting the production of U.S. currency, though the manufacturing itself may be localized. Workforce implications could include employment at Crane & Co., Inc.'s manufacturing facilities, particularly in Massachusetts, and within the BEP for currency production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential over-reliance on a single supplier for critical materials.
Lack of transparency regarding the specific technical requirements that may have limited competition.
Vulnerability to supply chain disruptions if Crane & Co., Inc. faces operational issues.

Positive Signals

Crane & Co., Inc. has a long-standing reputation and expertise in currency paper production.
The firm fixed-price contract provides cost certainty for the government.
The 'FULL AND OPEN COMPETITION' process, even with one award, suggests adherence to procurement regulations.

Sector Analysis

The paper manufacturing industry, particularly for security documents, is a niche sector characterized by high barriers to entry due to specialized technology, stringent quality control, and security requirements. Crane & Co., Inc. is a well-established player in this market, historically holding significant contracts for U.S. currency paper. This contract fits within the broader industrial manufacturing sector, specifically paper mills (NAICS 322121), but operates at the high-security end of the market.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Given the specialized nature of currency paper production and the significant value of the contract, it is likely that large, established firms with proven capabilities are the primary participants. There is no explicit information on subcontracting plans for small businesses, but it is common for large prime contractors to engage small businesses for various support services or components.

Oversight & Accountability

Oversight for this contract would typically fall under the Bureau of Engraving and Printing's contracting officers and potentially the Treasury Inspector General's office. The firm fixed-price nature of the contract provides a degree of accountability by placing the cost risk on the contractor. Transparency is generally maintained through contract award notices and public databases, though specific performance metrics and detailed cost breakdowns may not be publicly disclosed.

Related Government Programs

U.S. Currency Production
Federal Paper Procurement
Bureau of Engraving and Printing Contracts
Security Document Manufacturing

Risk Flags

Sole-source potential despite open competition
Critical supply chain dependency
High barriers to entry in specialized manufacturing

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $203.3 million to CRANE & CO., INC.. ORDERING PERIOD 2

Who is the contractor on this award?

The obligated recipient is CRANE & CO., INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of Engraving and Printing).

What is the total obligated amount?

The obligated amount is $203.3 million.

What is the period of performance?

Start: 2021-08-25. End: 2021-08-25.

What is the historical relationship between the Bureau of Engraving and Printing and Crane & Co., Inc. for paper supply?

Crane & Co., Inc. has a long and exclusive history of supplying the paper for U.S. currency, dating back to the mid-19th century. For many decades, they were the sole provider. While the Bureau of Engraving and Printing has explored diversifying its paper sources, Crane & Co. has consistently maintained a dominant, if not exclusive, position due to its specialized expertise, proprietary processes, and the high security standards required for currency paper. This long-standing relationship suggests a deep understanding of the BEP's needs and a proven track record of meeting stringent quality and security requirements, which likely influenced the 'FULL AND OPEN COMPETITION' outcome.

How does the $203 million contract value compare to previous paper procurements by the BEP?

Comparing the $203.3 million award value directly to previous procurements requires access to historical contract data, which is not fully provided here. However, given that Crane & Co. has historically been the primary, if not sole, supplier of currency paper, and considering inflation and potential increases in production volume or specific paper characteristics, this figure appears substantial but potentially in line with major, multi-year supply agreements. Previous contracts for currency paper have also been in the tens to hundreds of millions of dollars, reflecting the scale and specialized nature of the product. The 'ORDERING PERIOD' designation suggests this is a framework agreement, and the total value reflects anticipated orders over its duration.

What specific types or specifications of paper are being procured under this contract?

The provided data indicates the NAICS code is 322121 ('Paper (except Newsprint) Mills'), and the description is simply 'Paper'. However, for the Bureau of Engraving and Printing, this paper is not ordinary commercial paper. It is highly specialized currency paper, manufactured under strict security protocols. This paper typically includes security features like watermarks, security threads, and specific fiber compositions to prevent counterfeiting. The exact specifications are proprietary and classified for security reasons, but they involve precise weight, strength, texture, and optical properties tailored for banknote printing and durability.

What are the implications of a 'FULL AND OPEN COMPETITION' resulting in a single awardee for this contract?

A 'FULL AND OPEN COMPETITION' signifies that the government solicited offers from all responsible sources and intended to award a contract to the responsible offeror whose proposal was most advantageous. When such a competition yields only one awardee, it can imply several possibilities. Firstly, it might indicate that only one company, Crane & Co., Inc. in this case, possessed the unique capabilities, technology, or security clearances necessary to meet the stringent requirements for currency paper. Secondly, it could suggest that while other companies bid, their proposals were not deemed technically acceptable or offered less value compared to the sole awardee. This scenario warrants scrutiny to ensure the competition was genuinely robust and that the single awardee does not represent a monopolistic situation without adequate justification.

What is the risk profile associated with this contract, considering it's for a critical national resource?

The risk profile for this contract is moderate to high, primarily due to the critical nature of the product – paper for U.S. currency. Key risks include supply chain disruption (e.g., raw material shortages, manufacturing issues at Crane & Co.), potential for price increases if competition is limited in the long term, and national security implications if the supply chain is compromised. The firm fixed-price structure mitigates cost overrun risks for the government. However, the government's reliance on a single, albeit historically reliable, supplier for such a vital component represents a significant strategic risk that requires robust contingency planning and ongoing supplier relationship management.

Are there any known performance issues or concerns related to Crane & Co., Inc. in previous contracts with the government?

Based on publicly available information and Crane & Co.'s long-standing role as the primary supplier of U.S. currency paper, there are no widespread, documented performance issues or major concerns that have led to a significant disruption in supply or a loss of confidence from the Bureau of Engraving and Printing. Their continued selection for these critical contracts suggests a history of meeting demanding specifications and delivery schedules. However, as with any long-term supplier relationship, ongoing performance monitoring by the BEP is essential to ensure continued compliance with quality, security, and delivery requirements.

Industry Classification

NAICS: Manufacturing › Pulp, Paper, and Paperboard Mills › Paper (except Newsprint) Mills

Product/Service Code: NONMETALLIC FABRICATED MATERIALS

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: Crane CO

Address: 30 SOUTH ST, DALTON, MA, 01226

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: $203,290,139

Exercised Options: $203,290,139

Current Obligation: $203,290,139

Actual Outlays: $150,673,663

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 2031ZA21D00002

IDV Type: IDC

Timeline