Treasury's $9.8M paper contract to Crane & Co. for currency paper awarded in 2007

Contract Overview

Contract Amount: $9,842,040 ($9.8M)

Contractor: Crane & CO., Inc.

Awarding Agency: Department of the Treasury

Start Date: 2007-12-06

End Date: 2007-12-06

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PAPER SECURITY DISTINCTIVE CURRENCY

Place of Performance

Location: FORT WORTH, TARRANT County, TEXAS, 76131

State: Texas Government Spending

Plain-Language Summary

Department of the Treasury obligated $9.8 million to CRANE & CO., INC. for work described as: PAPER SECURITY DISTINCTIVE CURRENCY Key points: 1. Contract awarded for specialized currency paper, a critical component for national security. 2. Sole supplier for U.S. currency paper, indicating a unique market position. 3. Long-term relationship with a single supplier may limit price negotiation flexibility. 4. Fixed-price contract provides cost certainty for the government. 5. Awarded under full and open competition, suggesting a fair process despite single supplier. 6. Performance period was a single day, implying a one-time or initial delivery.

Value Assessment

Rating: fair

The contract value of $9.8 million for currency paper is difficult to benchmark without specific quantity and quality details. Given Crane & Co.'s established role as the sole provider of U.S. currency paper, direct comparisons to other contracts are limited. The firm fixed-price nature of the award suggests that the government accepted the price as fair at the time of award, but the lack of ongoing competition over time could lead to less favorable pricing in future procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition. Despite the competition, Crane & Co. is the only known manufacturer of U.S. currency paper, suggesting that while the process was open, the pool of potential bidders was effectively limited to one. This scenario highlights a common challenge in procuring highly specialized or proprietary goods where market competition is inherently constrained.

Taxpayer Impact: While the competition was technically open, the practical reality of a single qualified supplier means taxpayers may not have benefited from the price reductions typically seen in robustly competitive markets.

Public Impact

Benefits the Bureau of Engraving and Printing (BEP) by ensuring a supply of essential material for currency production. Enables the continued production of U.S. dollar bills, supporting the national economy. The geographic impact is national, as currency is distributed nationwide. Workforce implications are primarily within Crane & Co.'s specialized paper manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price escalation in future contracts due to sole-source nature of the product.
Reliance on a single supplier creates supply chain risk if Crane & Co. faces production issues.

Positive Signals

Crane & Co. has a long-standing, proven track record in producing high-quality currency paper.
The firm fixed-price contract provides budget certainty for this specific procurement.
Awarded under full and open competition, indicating adherence to procurement regulations.

Sector Analysis

The paper manufacturing industry is diverse, but the segment for currency paper is highly specialized and dominated by a few global players. Crane & Co. holds a unique position as the sole supplier for U.S. currency. This contract represents a small portion of the overall paper industry but is critical for the financial infrastructure. Comparable spending benchmarks are difficult to establish due to the proprietary nature of currency paper production.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting implications for small businesses. The specialized nature of currency paper production means that large, established manufacturers are typically the only entities capable of fulfilling such requirements.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Treasury and the Bureau of Engraving and Printing. Accountability measures are inherent in the contract terms, particularly the fixed-price nature. Transparency is generally high for government contracts, though specific details of the paper's composition and manufacturing process are proprietary.

Related Government Programs

Bureau of Engraving and Printing Operations
Currency Production
Federal Reserve Note Production

Risk Flags

Sole-source dependency risk
Potential for price escalation
Supply chain vulnerability

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $9.8 million to CRANE & CO., INC.. PAPER SECURITY DISTINCTIVE CURRENCY

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 $9.8 million.

What is the period of performance?

Start: 2007-12-06. End: 2007-12-06.

What is Crane & Co.'s historical track record with the federal government, particularly regarding currency paper supply?

Crane & Co. has a long and exclusive history of supplying the paper for U.S. currency, dating back to the mid-19th century. Their expertise in producing the highly specialized, secure paper required for banknotes is well-established. The company has consistently met the stringent quality and security standards set by the Bureau of Engraving and Printing (BEP). This long-standing relationship underscores their reliability and the unique capabilities they possess in this niche market. The BEP relies heavily on Crane & Co. for the foundational material of the nation's currency, indicating a high level of trust and proven performance over decades.

How does the value of this contract compare to other federal procurements for specialized paper or security materials?

Direct comparisons for this specific contract are challenging due to the unique nature of currency paper. The $9.8 million value for a single award in 2007 is significant for a raw material procurement. However, when considering the critical security features, specialized manufacturing processes, and the fact that Crane & Co. is the sole qualified supplier for U.S. currency paper, the price reflects a specialized market rather than a commodity. Broader comparisons to other federal procurements for high-security printing materials or specialized industrial papers might show similar value ranges, but the exclusivity factor for currency paper sets this contract apart.

What are the primary risks associated with relying on a single supplier for critical national infrastructure components like currency paper?

The primary risks of relying on a single supplier, such as Crane & Co. for currency paper, include supply chain disruptions, potential price escalations, and a lack of competitive pressure to innovate or improve efficiency. A disruption at Crane & Co.'s facility due to natural disaster, labor issues, or other unforeseen events could halt the production of U.S. currency. Furthermore, without competitive bidding for subsequent contracts, the government may face higher prices over time as the supplier leverages its monopoly position. This dependence necessitates robust contingency planning and strong contractual oversight to mitigate these risks.

How effective is the 'full and open competition' designation when there is effectively only one qualified bidder?

The 'full and open competition' designation in this context signifies that the government followed the legally mandated process for soliciting bids from all responsible sources. However, when only one entity possesses the unique qualifications, technology, or certifications required (as is the case with U.S. currency paper), the practical outcome is a de facto sole-source procurement, even if advertised openly. While the process itself adheres to regulations, it does not generate the price discovery or innovation benefits typically associated with robust competition among multiple capable bidders. The effectiveness lies in ensuring fairness and transparency in the solicitation, rather than in driving down costs through market forces.

What are the historical spending patterns for currency paper by the Bureau of Engraving and Printing?

Historical spending patterns for currency paper by the Bureau of Engraving and Printing (BEP) show a consistent, long-term reliance on Crane & Co., Inc. While specific dollar amounts fluctuate based on currency demand and paper specifications, the BEP has historically awarded contracts for currency paper primarily to Crane & Co. due to their unique capabilities. The frequency and value of these contracts are tied to the nation's need for new currency. Over the years, the BEP has managed these procurements, often through fixed-price contracts, to ensure a steady supply of high-quality, secure paper. The total expenditure reflects the ongoing operational needs of printing U.S. currency.

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: SEALED BID

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 30 SOUTH ST, DALTON, MA, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $9,842,040

Exercised Options: $9,842,040

Current Obligation: $9,842,040

Parent Contract

Parent Award PIID: TEP070004

IDV Type: IDC

Timeline