Treasury's $27M precious metals contract awarded to A-Mark Precious Metals for fabricated metal products

Contract Overview

Contract Amount: $27,017,887 ($27.0M)

Contractor: A-Mark Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2009-03-24

End Date: 2009-04-02

Contract Duration: 9 days

Daily Burn Rate: $3.0M/day

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

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 $27.0 million to A-MARK PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. Contract value of $27 million for fabricated metal products suggests a significant need for specialized manufacturing. 2. The short duration (9 days) indicates an urgent or specific, time-bound requirement. 3. Awarded to a single vendor, raising questions about the extent of competition and potential price discovery. 4. The North American Industry Classification System (NAICS) code 332999 points to a niche manufacturing sector. 5. The contract's focus on 'All Other Miscellaneous Fabricated Metal Product Manufacturing' implies a broad range of potential goods. 6. The contract was awarded under the 'Firm Fixed Price' type, which shifts cost risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the fabricated metal products. However, a $27 million award for a 9-day duration suggests a high per-diem cost or a very large quantity of goods. Comparing it to similar contracts for specialized fabricated metal products would be necessary for a more precise value assessment. The firm fixed price structure aims to control costs, but the lack of competition could have led to a less favorable price for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, meaning only one vendor was solicited. This approach is typically used when only one responsible source is available or when a compelling justification exists for not seeking competition. The lack of multiple bidders means there was no opportunity for price comparison or negotiation based on competitive offers, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium, as the government does not benefit from the cost-saving pressures inherent in a competitive bidding process.

Public Impact

The United States Mint is the primary beneficiary, likely acquiring essential fabricated metal products for its operations. The services delivered involve the manufacturing of specialized metal products, crucial for minting or related governmental functions. The geographic impact is primarily centered around the contractor's facilities in California, where the products would be manufactured. Workforce implications would be within the specialized manufacturing sector, potentially supporting skilled labor in metal fabrication.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Short contract duration may indicate rushed production or a lack of planning, increasing risk.
Lack of detailed product specification makes it difficult to assess true value for money.
The 'All Other Miscellaneous Fabricated Metal Product Manufacturing' category is broad, raising questions about specificity and oversight.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Award to a single, potentially specialized, vendor might indicate unique capabilities required.
The contract was awarded to a company located in California, potentially supporting regional economic activity.

Sector Analysis

The fabricated metal products manufacturing sector is diverse, encompassing a wide range of goods from structural components to intricate metal parts. NAICS code 332999 specifically covers establishments primarily engaged in manufacturing miscellaneous metal products, except machinery and equipment. This contract likely falls into a specialized niche within this sector, possibly related to coinage, medals, or other high-security metal items given the awarding agency (United States Mint). Market size for such specialized fabrication can vary significantly, but contracts of this magnitude suggest a substantial requirement.

Small Business Impact

There is no indication that this contract involved a small business set-aside. The award was made to A-Mark Precious Metals, Inc., which is likely a larger entity given the contract value. Subcontracting opportunities for small businesses are not specified, but it is possible that a large prime contractor might engage smaller suppliers for specific components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury and the United States Mint. As a sole-source award, scrutiny might be higher to ensure the necessity and fairness of the procurement. Transparency is limited due to the lack of competitive bidding details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of the Treasury Procurement
United States Mint Operations
Fabricated Metal Product Manufacturing Contracts
Sole-Source Procurements
Precious Metals Management

Risk Flags

Sole-source award
Short contract duration
Lack of detailed product specification
High contract value for short duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $27.0 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 $27.0 million.

What is the period of performance?

Start: 2009-03-24. End: 2009-04-02.

What specific fabricated metal products were procured under this contract?

The contract details specify the North American Industry Classification System (NAICS) code 332999, which covers 'All Other Miscellaneous Fabricated Metal Product Manufacturing.' However, the raw data provided does not list the specific items procured. Given the awarding agency is the United States Mint, it is plausible that the contract was for materials or components related to coinage, medals, or other minting operations. Without further documentation or a detailed contract statement of work, the exact nature of the 'fabricated metal products' remains unspecified in the provided data.

Why was this contract awarded as a sole-source procurement?

The provided data indicates the contract was awarded under a sole-source basis. Typically, sole-source awards are justified when only one responsible contractor can provide the required goods or services, or in cases of urgent and compelling need where competition is not feasible. For a contract valued at $27 million, a strong justification would be required by federal procurement regulations. Potential reasons could include unique manufacturing capabilities, proprietary technology, or a critical, time-sensitive requirement that only A-Mark Precious Metals, Inc. could fulfill within the specified short timeframe.

What is the typical cost structure for 'All Other Miscellaneous Fabricated Metal Product Manufacturing' contracts of this size?

The cost structure for 'All Other Miscellaneous Fabricated Metal Product Manufacturing' contracts can vary widely depending on the specific products, materials, complexity, and labor involved. For a contract of $27 million awarded under a Firm Fixed Price (FFP) type, the contractor, A-Mark Precious Metals, Inc., assumes the risk of cost overruns. Benchmarking this specific contract's value is difficult without knowing the exact deliverables. However, the short duration (9 days) suggests either a very high volume of standardized items or a high-value, specialized item. The price would typically be influenced by raw material costs (e.g., precious metals, if applicable), labor, overhead, profit margin, and any specialized tooling or processes required.

How does the short contract duration of 9 days impact the assessment of value for money?

A contract duration of only 9 days for a $27 million award is exceptionally short and raises questions about the value for money. It suggests either an extremely rapid production requirement or the delivery of a large quantity of pre-manufactured goods. If it implies expedited manufacturing, the cost per unit or per day could be significantly higher than for a longer-term contract due to overtime, rush fees, and potentially less efficient production scheduling. If it involves delivery of existing inventory, the 'value' is more about the availability and price of that inventory. Without more context, it's difficult to definitively assess value for money, but the compressed timeline inherently increases the risk of higher costs.

What is A-Mark Precious Metals, Inc.'s track record with federal contracts, particularly with the Department of the Treasury?

The provided data indicates that A-Mark Precious Metals, Inc. received this $27 million contract from the Department of the Treasury's United States Mint. To assess their track record, one would need to examine historical federal procurement databases for other contracts awarded to this entity. Information regarding past performance, contract types, values, and agencies served would be crucial. A review of their history could reveal patterns of successful contract completion, any past performance issues, or a specialization in specific types of goods or services relevant to this award. Without access to that broader contract history, it's difficult to provide a comprehensive assessment of their track record.

What are the potential risks associated with awarding a large contract for fabricated metal products to a single vendor?

Awarding a $27 million contract for fabricated metal products to a single vendor, as in this case with A-Mark Precious Metals, Inc., carries several potential risks. Firstly, the lack of competition means the government may not have secured the best possible price, potentially leading to overspending. Secondly, there's a risk of vendor lock-in, where the government becomes dependent on this specific supplier, making future procurements more difficult or expensive. Thirdly, if the sole-source vendor encounters production issues, delays, or quality problems, there are limited alternative options for the government to quickly fulfill its needs. Finally, the absence of competitive pressure might reduce the vendor's incentive to innovate or maintain the highest quality standards over time.

Industry Classification

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

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

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: $27,017,887

Exercised Options: $27,017,887

Current Obligation: $27,017,887

Timeline