Treasury's $17.8M precious metals contract awarded to A-Mark Precious Metals, Inc. for 12 days

Contract Overview

Contract Amount: $17,840,767 ($17.8M)

Contractor: A-Mark Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2008-06-26

End Date: 2008-07-08

Contract Duration: 12 days

Daily Burn Rate: $1.5M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: OTHER (NONE OF THE ABOVE)

Sector: Other

Official Description: PROVIDE RAW GOLD MATERIAL

Place of Performance

Location: SANTA MONICA, LOS ANGELES County, CALIFORNIA, 90401

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $17.8 million to A-MARK PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. Contract value appears high for a short duration, suggesting potential for premium pricing or urgent need. 2. Limited contract duration (12 days) may indicate a specific, time-sensitive requirement rather than ongoing services. 3. The sole awardee, A-Mark Precious Metals, Inc., suggests a focused procurement, potentially due to specialized capabilities or market conditions. 4. Awarded under 'FULL AND OPEN COMPETITION', indicating multiple bidders were considered, despite a single award. 5. The contract's purpose, likely related to the U.S. Mint's operations, warrants scrutiny for efficiency and market alignment. 6. A significant number of bids (3) were received, which is positive for competition, but the final price needs benchmarking. 7. The contract's relatively small size for the agency suggests it might be a supplementary or specialized procurement.

Value Assessment

Rating: fair

The contract value of $17.8 million for a 12-day period is substantial. Without specific details on the quantity and type of precious metals procured, a direct value-for-money assessment is challenging. However, the high daily expenditure rate warrants comparison with market prices for similar quantities of precious metals during the contract period. The limited duration suggests a potential premium for expedited delivery or a specific, high-volume transaction.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION', indicating that the solicitation was broadly advertised and multiple interested parties could submit bids. Three bids were received, suggesting a reasonable level of interest and competition for this procurement. While competition existed, the award to a single entity implies that A-Mark Precious Metals, Inc. offered the best overall value or met specific requirements that other bidders did not.

Taxpayer Impact: The full and open competition, with three bidders, suggests that taxpayers benefited from a process designed to solicit competitive offers, potentially leading to a more favorable price than a sole-source award.

Public Impact

The primary beneficiaries are likely the U.S. Mint and potentially the broader financial system, through the acquisition of essential precious metals for coinage, reserves, or investment purposes. The services delivered involve the procurement and likely delivery of precious metals, crucial for the operational continuity of the U.S. Mint. The geographic impact is national, as the U.S. Mint operates nationwide, though the specific delivery locations are not detailed. Workforce implications are minimal for the contracting agency, but the contract supports the precious metals supply chain industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for a very short duration raises questions about cost efficiency and potential overpayment.
Lack of detailed scope of work makes it difficult to assess the necessity and appropriateness of the expenditure.
The specific type and quantity of precious metals are not detailed, hindering a precise value assessment.
The urgency implied by the short duration could lead to less favorable pricing.
Limited contract duration may not reflect long-term strategic needs or market engagement.

Positive Signals

Awarded through full and open competition, indicating a structured procurement process.
Receipt of multiple bids (3) suggests market interest and a degree of competitive tension.
The contractor, A-Mark Precious Metals, Inc., is a known entity in the precious metals market, implying relevant expertise.
The contract was awarded by the Department of the Treasury, a major federal agency with established procurement protocols.
The contract aligns with the operational needs of the United States Mint.

Sector Analysis

The precious metals market is a global commodity sector influenced by economic conditions, geopolitical events, and investor demand. Contracts for precious metals by government entities like the U.S. Mint are typically for coinage, bullion, or strategic reserves. Benchmarking this contract's value requires comparing the price per ounce of the specific metals procured against prevailing market rates during the contract's short window. The U.S. Mint is a significant purchaser, and its procurement activities can influence market dynamics.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). There is no information provided regarding subcontracting plans or actual performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless A-Mark Precious Metals, Inc. voluntarily engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Treasury's internal procurement regulations and the U.S. Mint's operational oversight. Accountability measures would include adherence to contract terms, delivery schedules, and quality specifications. Transparency is facilitated by the contract award data being publicly available. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

U.S. Mint Operations
Treasury Commodity Procurement
Bullion and Coinage Programs
Federal Strategic Reserves

Risk Flags

High value for short duration
Lack of specific itemization
Potential for premium pricing due to urgency

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $17.8 million to A-MARK PRECIOUS METALS, INC.. PROVIDE RAW GOLD MATERIAL

Who is the contractor on this award?

The obligated recipient is A-MARK PRECIOUS METALS, 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 $17.8 million.

What is the period of performance?

Start: 2008-06-26. End: 2008-07-08.

What specific types and quantities of precious metals were procured under this contract?

The provided data does not specify the exact types (e.g., gold, silver, platinum, palladium) or quantities of precious metals purchased. The contract value of $17.8 million and the 12-day duration suggest a significant volume, but without itemization, it's impossible to determine if the price paid was competitive on a per-unit basis. Understanding the specific metals is crucial for benchmarking against market prices during the June 2008 period.

How does the price per unit for these precious metals compare to market rates in June 2008?

To assess this, one would need the specific quantities and types of precious metals procured. For example, if the contract was primarily for gold, we would compare the implied price per ounce to the average spot price of gold in June 2008. Given the contract value and duration, the implied daily expenditure was approximately $1.48 million. If this daily rate significantly exceeded market benchmarks for the expected quantities of metals, it would indicate potential overpayment or inefficient procurement. Without the detailed breakdown, a precise comparison is not feasible.

What was the specific need or justification for such a large procurement over a short 12-day period?

The short duration (12 days) suggests a time-sensitive requirement, possibly to meet immediate production needs for coinage or bullion, replenish rapidly depleted inventory, or capitalize on a perceived favorable market opportunity. The U.S. Mint might have experienced an unexpected surge in demand for specific products or faced a critical shortage. The 'FULL AND OPEN COMPETITION' with three bidders indicates the urgency did not preclude a competitive process, but it might have influenced the pricing strategy.

What is A-Mark Precious Metals, Inc.'s track record with federal contracts, particularly with the U.S. Mint?

A-Mark Precious Metals, Inc. is a well-established dealer in precious metals. While this specific contract was awarded in 2008, their history with federal agencies, including the U.S. Mint, would be relevant. A review of their past performance on similar contracts, including on-time delivery, quality adherence, and pricing competitiveness, would provide context. Information on whether they have consistently met or exceeded expectations in previous government engagements would inform the assessment of their reliability for this procurement.

Were there any performance issues or contract modifications during the 12-day period?

The provided data does not indicate any performance issues, modifications, or disputes related to this contract. A 12-day contract is extremely short, making significant performance issues less likely to arise or be formally documented within that timeframe. However, a deeper dive into contract close-out documentation or agency records might reveal minor adjustments or confirmations related to delivery and acceptance.

How does this contract's value compare to other U.S. Mint procurements of precious metals?

The $17.8 million value for a 12-day period is substantial. Comparing it to other U.S. Mint contracts for precious metals would require analyzing historical procurement data. If the Mint typically procures similar volumes over longer periods or at lower unit costs, this contract might appear less efficient. Conversely, if market conditions in June 2008 necessitated higher prices or urgent, large-volume purchases, the value might be justified. Analyzing trends in quantity, duration, and price per unit for similar procurements is key.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: OTHER (NONE OF THE ABOVE) (3)

Evaluated Preference: NONE

Contractor Details

Parent Company: Spectrum Group International Inc. (UEI: 806666475)

Address: 100 WILSHIRE BLVD FL 3, SANTA MONICA, CA, 36

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $17,840,767

Exercised Options: $17,840,767

Current Obligation: $17,840,767

Timeline