Treasury's $25M contract for precious metals fabrication awarded to A-Mark Precious Metals, Inc. for 15 days

Contract Overview

Contract Amount: $25,036,310 ($25.0M)

Contractor: A-Mark Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2009-11-30

End Date: 2009-12-15

Contract Duration: 15 days

Daily Burn Rate: $1.7M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

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 $25.0 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 a focus on specialized or high-volume production. 2. The award was made under full and open competition, indicating a robust bidding process. 3. Limited duration of 15 days may point to a specific, time-sensitive project or a pilot program. 4. The contract falls under 'All Other Miscellaneous Fabricated Metal Product Manufacturing,' a broad category. 5. Fixed-price contract type suggests predictable costs for the government, assuming scope is well-defined.

Value Assessment

Rating: fair

The contract value of $25 million for a 15-day period is substantial. Without more context on the specific precious metals and fabrication services required, it's difficult to benchmark against similar contracts. The firm fixed-price nature provides cost certainty, but the high per-day cost warrants scrutiny to ensure value for money was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with three bidders participating. This level of competition is generally positive for price discovery and ensuring the government receives competitive offers. The presence of multiple bidders suggests a healthy market for these services.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces, leading to potentially lower costs for government procurement.

Public Impact

The United States Mint is the primary beneficiary, likely receiving fabricated precious metal products for its operations. Services delivered include the fabrication of miscellaneous metal products, specifically precious metals. The geographic impact is primarily within California, where the contractor is located. Workforce implications are likely within the specialized metal fabrication sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High contract value for a very short duration raises questions about efficiency and potential overpayment.
The broad NAICS code 'All Other Miscellaneous Fabricated Metal Product Manufacturing' makes it difficult to assess the specificity of services and potential for cost overruns.
Lack of detail on the specific precious metals and end products makes it hard to evaluate the true value and necessity of the contract.

Positive Signals

Awarded under full and open competition with multiple bidders, indicating a competitive process.
Firm fixed-price contract type provides cost certainty for the government.
Contractor has a significant contract history with the government, suggesting some level of established performance.

Sector Analysis

The fabricated metal product manufacturing sector is diverse. This contract, focusing on precious metals, likely falls into a niche within this sector. The value of $25 million for a short period suggests a high-value, specialized output, potentially related to coinage, bullion, or other high-purity metal products. Comparable spending benchmarks are difficult without knowing the exact product.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests the primary contractor is likely a larger entity capable of fulfilling the contract requirements independently.

Oversight & Accountability

Oversight would typically be managed by the contracting officer and program officials within the United States Mint. As a firm fixed-price contract, oversight would focus on delivery and quality rather than cost management. Transparency is moderate, with basic award details available, but specific project details are limited.

Related Government Programs

Precious Metals Programs
Coinage and Bullion Production
Fabricated Metal Product Manufacturing Contracts

Risk Flags

High daily expenditure rate
Broad NAICS code lacks specificity
Limited contract duration for significant value

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $25.0 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 $25.0 million.

What is the period of performance?

Start: 2009-11-30. End: 2009-12-15.

What specific precious metal products were fabricated under this contract?

The provided data does not specify the exact precious metal products fabricated. The NAICS code '332999 - All Other Miscellaneous Fabricated Metal Product Manufacturing' is very broad. Given the contractor is A-Mark Precious Metals, Inc. and the awarding agency is the United States Mint, it is plausible the contract involved the fabrication of components for coinage, bullion, or other numismatic products. However, without explicit details, this remains an assumption. Further investigation into the contract's statement of work would be necessary to confirm the specific items produced.

How does the $25 million value for a 15-day contract compare to typical fabrication costs for precious metals?

A contract value of $25 million for only 15 days translates to an average daily expenditure of approximately $1.67 million. This is an exceptionally high daily rate for fabrication services. Typically, fabrication contracts, even for high-value materials like precious metals, would have longer durations or lower daily costs unless the contract involves extremely high-volume production of specialized, high-value items, or perhaps rapid prototyping or emergency supply needs. Without knowing the specific quantity, purity, and complexity of the fabricated items, a direct comparison is challenging, but the rate suggests a very intensive or high-value output.

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

A-Mark Precious Metals, Inc. has a history of receiving government contracts, including with the US Mint. The provided data shows this specific contract (ID 332999) awarded in 2009. Their involvement with the US Mint suggests they possess the necessary capabilities and security clearances to handle precious metals for government purposes. A deeper analysis of their contract history would reveal the types and values of previous awards, performance ratings, and any past issues or successes to better assess their reliability and suitability for such high-value contracts.

What are the risks associated with a short-duration, high-value contract for precious metal fabrication?

Key risks include potential for inflated pricing due to the compressed timeline, difficulty in ensuring quality control and adherence to specifications within a rapid production cycle, and the possibility of the government overpaying if the scope of work is not precisely defined and managed. There's also a risk of supply chain disruptions impacting the short delivery window. For precious metals, security and accurate accounting of materials throughout the fabrication process are critical risks that require stringent oversight.

How does the 'All Other Miscellaneous Fabricated Metal Product Manufacturing' NAICS code impact the analysis of this contract?

This broad NAICS code (332999) signifies that the contract does not fall into a more specific manufacturing category. While it covers a wide range of fabricated metal products, it lacks the specificity needed to precisely understand the nature of the precious metal fabrication. This ambiguity can make it harder to benchmark costs, assess technical requirements, and evaluate the contractor's specialized expertise. It suggests the fabricated items might be unique or do not fit neatly into other established manufacturing subsectors.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $25,036,310

Exercised Options: $25,036,310

Current Obligation: $25,036,310

Timeline