Treasury's $28.6M Sunshine Minting Contract for Raw Silver: Firm Fixed Price Awarded
Contract Overview
Contract Amount: $28,606,027 ($28.6M)
Contractor: Sunshine Minting Inc
Awarding Agency: Department of the Treasury
Start Date: 2010-12-14
End Date: 2010-12-16
Contract Duration: 2 days
Daily Burn Rate: $14.3M/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: PROVIDE RAW SILVER
Place of Performance
Location: COEUR D ALENE, KOOTENAI County, IDAHO, 83814
State: Idaho Government Spending
Plain-Language Summary
Department of the Treasury obligated $28.6 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Significant expenditure on raw silver highlights demand in precious metals. 2. Sunshine Minting Inc. secured the contract, indicating potential market concentration. 3. The firm fixed price contract mitigates cost escalation risks for the government. 4. This procurement falls within the broader 'Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers' sector.
Value Assessment
Rating: good
The contract value of $28.6 million for raw silver appears reasonable given market prices for precious metals. Benchmarking against similar bulk silver procurements would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was competed under SAP (Simplified Acquisition Procedures), suggesting it was likely awarded to a limited number of pre-qualified vendors or through a streamlined process. This method may not always yield the lowest possible price compared to full and open competition.
Taxpayer Impact: The government's ability to procure raw silver at a competitive price through this method impacts taxpayer funds allocated for such materials.
Public Impact
Impacts the supply and price of silver available for other industrial or investment purposes. Supports the operations of the United States Mint in its production of silver-related products. Demonstrates government's role as a significant purchaser in the precious metals market.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price volatility in the silver market impacting the fixed price contract.
- Limited competition under SAP could lead to suboptimal pricing.
- Dependence on a single supplier (Sunshine Minting Inc.) for a critical material.
Positive Signals
- Firm fixed price contract provides cost certainty.
- Procurement supports a key government function (United States Mint).
- Awarded to a known entity in the minting industry.
Sector Analysis
This contract falls under the wholesale merchant sector for precious metals. Spending benchmarks in this niche are difficult to establish due to market fluctuations and the specialized nature of the goods.
Small Business Impact
Analysis of small business participation is not directly available from the provided data. The contract was awarded to Sunshine Minting Inc., a specific company, and the procurement method (SAP) may limit opportunities for smaller businesses.
Oversight & Accountability
Oversight of this contract would primarily involve ensuring timely delivery of the specified quantity and quality of raw silver by Sunshine Minting Inc. The United States Mint, as the acquiring entity, is responsible for contract administration and performance monitoring.
Related Government Programs
- Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Silver price volatility risk.
- Potential for limited competition under SAP.
- Dependence on a single supplier.
- Market manipulation risk in precious metals.
- Quality control and assaying challenges.
Tags
jewelry-watch-precious-stone-and-preciou, department-of-the-treasury, id, po, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $28.6 million to SUNSHINE MINTING INC. PROVIDE RAW SILVER
Who is the contractor on this award?
The obligated recipient is SUNSHINE MINTING 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 $28.6 million.
What is the period of performance?
Start: 2010-12-14. End: 2010-12-16.
What was the specific pricing mechanism used by Sunshine Minting Inc. to arrive at the firm fixed price, considering silver's market volatility?
The firm fixed price suggests Sunshine Minting Inc. absorbed the risk of price fluctuations. They likely based their bid on projected average silver prices over the contract period, potentially incorporating hedging strategies or market analysis to ensure profitability while offering a stable price to the government. The exact methodology remains proprietary.
How does the government ensure the quality and authenticity of the raw silver procured under this contract, especially given the value?
The United States Mint, as the procuring agency, would have stringent quality assurance protocols. This likely includes specifications for purity, form, and origin of the silver. Upon receipt, the silver would undergo testing and verification processes to confirm it meets all contractual requirements before being accepted and utilized in minting operations.
What is the long-term strategic value of maintaining a contract for raw silver with a specific supplier like Sunshine Minting Inc.?
Maintaining a relationship with a reliable supplier like Sunshine Minting Inc. can ensure consistent access to a critical raw material, potentially at predictable prices. This strategic sourcing can mitigate supply chain risks and support the continuous operation of the Mint's production facilities, contributing to the reliable availability of silver-based coinage and bullion.
Industry Classification
NAICS: Wholesale Trade › Miscellaneous Durable Goods Merchant Wholesalers › Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7600 N MINERAL DR STE 700, COEUR D ALENE, ID, 01
Business Categories: Category Business, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,606,027
Exercised Options: $28,606,027
Current Obligation: $28,606,027
Timeline
Start Date: 2010-12-14
Current End Date: 2010-12-16
Potential End Date: 2010-12-16 00:00:00
Last Modified: 2010-12-14
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