Treasury's $30.7M contract for precious metals awarded to Sunshine Minting Inc. amid 2 bidders

Contract Overview

Contract Amount: $30,688,614 ($30.7M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2010-01-04

End Date: 2011-01-07

Contract Duration: 368 days

Daily Burn Rate: $83.4K/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 $30.7 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Contract value of $30.7M for precious metals suggests significant scale of operations. 2. Awarded to Sunshine Minting Inc., indicating a specific supplier relationship. 3. Competition involved 2 bidders, suggesting moderate but not extensive market engagement. 4. Contract duration of 368 days points to a medium-term operational requirement. 5. Firm Fixed Price contract type aims to control costs and provide budget certainty. 6. Awarded under SAP (Small Acquisition Procedures) may indicate a streamlined procurement process for this value.

Value Assessment

Rating: fair

The contract value of $30.7 million for precious metals is substantial. Benchmarking this against similar contracts for precious metal acquisition or processing would be necessary to fully assess value for money. The limited number of bidders (2) could suggest either a specialized market or potential limitations in competitive pricing. Without more detailed service descriptions or market data, a definitive value assessment is challenging, but the fixed-price nature provides some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under Small Acquisition Procedures (SAP), which typically involves a more streamlined process than full and open competition. With only 2 bidders, the level of competition was limited. This suggests that while some competition existed, it may not have fully explored the breadth of the market for these specific precious metal goods or services. The limited competition could potentially impact price discovery and lead to less aggressive bidding.

Taxpayer Impact: For taxpayers, limited competition can mean a higher likelihood of paying a premium compared to a scenario with numerous bidders vying for the contract. It reduces the pressure on the contractor to offer the lowest possible price.

Public Impact

The United States Mint benefits from the acquisition of precious metals, likely for coinage or other official purposes. The contract supports the operational needs of the Treasury Department's United States Mint. The geographic impact is primarily national, related to the Mint's operations, though the supplier's location in Idaho is noted. Workforce implications are likely within Sunshine Minting Inc. and potentially its supply chain, rather than direct federal employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have restricted price discovery.
Award under SAP might bypass more rigorous market research and competition requirements.
Lack of detailed service description makes it hard to assess if the price reflects true market value.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to a specific company suggests a potentially established relationship or capability.
The contract was competed, indicating an effort to engage the market.

Sector Analysis

This contract falls within the wholesale trade sector, specifically dealing with precious metals. The market for precious metals is global and subject to significant price volatility. Contracts of this nature are crucial for entities like the U.S. Mint that require consistent and reliable access to these commodities for production. Benchmarking would involve comparing pricing and terms against other government or large commercial procurement of similar precious metal quantities and types.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While awarded under SAP, which can sometimes be used for small business set-asides, the 'sb' flag is false. Therefore, the primary impact on the small business ecosystem would be indirect, potentially through subcontracting opportunities if Sunshine Minting Inc. utilizes them, or through competition with larger firms for resources.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Treasury and the United States Mint's internal procurement and financial management systems. As a competed contract, standard procurement regulations would apply. Transparency is generally provided through contract databases like FPDS. Specific accountability measures would be detailed in the contract's terms and conditions, including performance standards and payment schedules. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Precious Metals Procurement
U.S. Mint Operations
Treasury Department Acquisitions
Government Commodity Purchases

Risk Flags

Potential for suboptimal pricing due to limited competition.
Use of SAP for a large contract value warrants scrutiny.
Dependence on a single supplier for critical materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $30.7 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 $30.7 million.

What is the period of performance?

Start: 2010-01-04. End: 2011-01-07.

What is the track record of Sunshine Minting Inc. with federal contracts, particularly with the U.S. Mint?

Sunshine Minting Inc. has a history of receiving federal contracts, primarily from the U.S. Mint, as indicated by the contract award data (NAICS code 423940). While this specific contract is for $30.7 million, a comprehensive review would involve examining the volume, value, and types of previous contracts awarded to the company. Analyzing past performance, on-time delivery rates, and any documented issues or disputes would provide a clearer picture of their reliability and capability as a federal contractor. Without access to a detailed contract history database, it's difficult to provide specific past performance metrics beyond the existence of prior awards.

How does the $30.7 million contract value compare to typical U.S. Mint spending on precious metals?

To assess if $30.7 million is typical, one would need to analyze historical U.S. Mint spending data for precious metals over several fiscal years. This contract represents a significant single award, suggesting a substantial procurement need. Comparing it to the average annual expenditure or the range of contract values for similar precious metal acquisitions would provide context. Factors like market price fluctuations of gold, silver, or platinum, and the specific quantities and forms of metal required (e.g., bullion, planchets) would influence this comparison. A higher or lower value than historical averages could indicate shifts in production demands, market conditions, or strategic inventory management by the Mint.

What are the primary risks associated with this contract, given the limited competition and nature of the goods?

The primary risks include price volatility of precious metals, which could impact the value proposition even with a fixed price if market conditions change drastically before delivery. Limited competition (2 bidders) presents a risk of suboptimal pricing and reduced incentive for the contractor to offer the best value. There's also a risk related to supply chain disruptions affecting Sunshine Minting Inc.'s ability to deliver. Furthermore, the quality and authenticity of the precious metals are critical; any compromise in this area would represent a significant risk to the U.S. Mint's operations and reputation. Ensuring compliance with contract specifications and delivery schedules under potentially tight market conditions is another key risk area.

How effective is the Small Acquisition Procedures (SAP) in ensuring value for money for contracts of this size?

Small Acquisition Procedures (SAP) are designed to streamline the procurement process for acquisitions below certain thresholds (often $250,000, though this contract is significantly larger, suggesting potential use of other simplified procedures or specific agency flexibilities). While SAP can increase efficiency, its effectiveness in ensuring value for money for contracts like this $30.7 million award is debatable. The primary concern is that SAP may involve less rigorous market research and competition than full and open procedures. If this contract was indeed processed under a simplified procedure not requiring extensive competition, the government might not achieve the best possible price or terms. The effectiveness hinges on how well the procuring agency applied the SAP rules and conducted its due diligence within those parameters.

What are the potential implications of awarding a large precious metals contract under SAP?

Awarding a contract of $30.7 million under Small Acquisition Procedures (SAP) raises questions about the appropriateness of the procurement method. Typically, SAP is intended for much smaller purchases to reduce administrative burden. Using it for a contract of this magnitude might suggest that the agency perceived specific circumstances justifying simplified procedures, or potentially that the contract was broken down into smaller components. The implications include potentially less robust competition, reduced transparency, and a higher risk of not achieving optimal market prices compared to a full and open competition. It could also indicate a highly specialized market where only a few vendors are capable, making extensive competition impractical.

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: $30,688,614

Exercised Options: $30,688,614

Current Obligation: $30,688,614

Timeline