Treasury's $68.7M contract for precious metals awarded to Sunshine Minting Inc. under SAP

Contract Overview

Contract Amount: $68,671,724 ($68.7M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2011-03-29

End Date: 2011-03-31

Contract Duration: 2 days

Daily Burn Rate: $34.3M/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 $68.7 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Value for money appears fair given the scale of the procurement, though specific performance metrics are not detailed. 2. Competition dynamics indicate a limited competition environment, potentially impacting price discovery. 3. Risk indicators are moderate, with a fixed-price contract type mitigating some cost overrun risks. 4. Performance context is limited to the contract award details, lacking specific delivery or quality outcomes. 5. Sector positioning places this contract within the wholesale precious metals and jewelry merchant sector. 6. The contract duration of two years suggests a need for ongoing supply of precious metals.

Value Assessment

Rating: fair

The contract value of $68.7 million over two years for precious metals is substantial. Benchmarking against similar government procurements for precious metals is challenging without more specific details on the types and quantities of metals. However, the fixed-price nature of the contract suggests an attempt to control costs. The awarded amount is within the broader range of government spending on raw materials, but a direct comparison to market rates for the specific items procured is not feasible with the provided data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was competed under the Simplified Acquisition Procedures (SAP), which typically involves a less extensive competition process than full and open competition. The data indicates two bidders participated in this procurement. While SAP aims for efficiency, a lower number of bidders can sometimes lead to less competitive pricing compared to procurements with numerous offers. The limited competition may have influenced the final negotiated price.

Taxpayer Impact: For taxpayers, limited competition can mean a higher likelihood of paying more than might be achieved in a more robustly competed environment. This underscores the importance of ensuring that even SAP procurements solicit adequate interest to drive competitive pricing.

Public Impact

The primary beneficiaries are likely government agencies requiring precious metals for various purposes, potentially including coinage or other official uses by the United States Mint. The services delivered involve the supply of precious metals, a critical component for mint operations. The geographic impact is primarily centered around the operations of the United States Mint and its supply chain. Workforce implications are likely within the precious metals supply and processing industry, supporting Sunshine Minting Inc.'s operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition under SAP could result in suboptimal pricing for the government.
Lack of detailed performance metrics makes it difficult to assess the contractor's effectiveness beyond delivery.
The specific types and purity of precious metals procured are not detailed, hindering precise value assessment.

Positive Signals

The use of a Firm Fixed Price contract type helps to mitigate cost overrun risks for the government.
The contract was awarded to a known entity, Sunshine Minting Inc., suggesting some level of established capability.
The procurement was conducted under SAP, indicating an effort towards efficient acquisition for a moderate dollar value.

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. Government procurements in this area are often for specific uses, such as coinage or reserves. Comparable spending benchmarks are difficult to establish without knowing the exact specifications of the metals, but the scale of this award suggests a significant supply requirement for the United States Mint.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus was likely on obtaining the best value from qualified suppliers, regardless of size. There is no explicit information on subcontracting plans for small businesses within this award notice. The impact on the small business ecosystem is therefore likely indirect, depending on Sunshine Minting Inc.'s own supply chain practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury and the United States Mint. As a competed contract under SAP, standard procurement regulations and oversight apply. Accountability measures are embedded in the contract terms, particularly the fixed-price nature, which holds the contractor responsible for delivering the specified goods at the agreed-upon price. Transparency is facilitated by the public availability of contract award data, though detailed operational oversight information is not provided.

Related Government Programs

United States Mint Operations
Treasury Department Procurement
Precious Metals Acquisition
Government Supply Contracts

Risk Flags

Limited competition may impact price competitiveness.
Short contract duration for a large value award requires further clarification.
Lack of detailed performance metrics hinders full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $68.7 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 $68.7 million.

What is the period of performance?

Start: 2011-03-29. End: 2011-03-31.

What is the track record of Sunshine Minting Inc. with government contracts, particularly with the Department of the Treasury?

Sunshine Minting Inc. has a history of receiving government contracts, including those with the Department of the Treasury and the United States Mint. The provided data shows this specific contract (NAICS 423940) was awarded on March 29, 2011, with an end date of March 31, 2011, indicating a very short duration for a contract of this value, or potentially an initial award with subsequent modifications and extensions not detailed here. Further investigation into contract databases would reveal the full scope of their government work, including past performance, any disputes, or significant contract modifications. Their specialization in precious metals suggests a core competency relevant to this award.

How does the awarded price of $68.7 million compare to market rates for precious metals during the contract period?

Directly comparing the $68.7 million contract value to market rates for precious metals is challenging without precise details on the quantities, types (e.g., gold, silver, platinum), and purity of the metals procured. Precious metal prices are highly volatile and fluctuate daily. The contract was awarded in March 2011, a period when silver prices, in particular, were experiencing significant upward trends. To assess value for money, one would need to obtain the specific itemized list of metals and quantities from the contract and compare their market value at the time of award against the negotiated price. The fixed-price nature suggests the government aimed to lock in a price, but whether it was competitive requires detailed commodity analysis.

What are the specific risks associated with a limited competition procurement under SAP for precious metals?

A limited competition procurement under Simplified Acquisition Procedures (SAP) for precious metals carries several risks. Firstly, price discovery may be suboptimal, meaning the government might pay more than if a broader range of suppliers had competed. Secondly, the pool of potential suppliers is restricted, potentially excluding innovative or more cost-effective providers. For precious metals, which are commodities with global market prices, the risk is that the limited competition could lead to a price that doesn't fully reflect the most advantageous market conditions available. This could result in inefficient use of taxpayer funds. Ensuring adequate outreach even within SAP is crucial to mitigate these risks.

What is the expected effectiveness and performance of Sunshine Minting Inc. in fulfilling this contract?

The effectiveness and performance of Sunshine Minting Inc. in fulfilling this contract are primarily assessed through their ability to deliver the specified precious metals according to the contract's terms and conditions. As this was a Firm Fixed Price contract, the expectation is that they will deliver the required materials within the agreed-upon timeframe and quality standards without additional cost to the government. While the award data doesn't include specific performance metrics or quality assurance details, the United States Mint, as the contracting entity, would have internal processes to monitor delivery and quality. Past performance on similar contracts would be a key indicator of expected effectiveness.

How has historical spending by the United States Mint on precious metals compared to this contract's value?

Historical spending by the United States Mint on precious metals can vary significantly year over year, influenced by demand for commemorative coins, bullion programs, and operational needs. The $68.7 million awarded to Sunshine Minting Inc. represents a substantial single procurement. To understand historical context, one would need to analyze annual reports and contract spending data for the US Mint over several preceding years. For instance, if the Mint has consistently spent tens or hundreds of millions on precious metals annually for coinage, this contract might represent a typical or even slightly below-average expenditure for a specific period. Conversely, if historical spending was much lower, this award could indicate a significant increase in demand or a shift in procurement strategy.

What oversight mechanisms are in place for this specific contract, and how transparent is the process?

Oversight for this contract is managed by the Department of the Treasury and the United States Mint. Standard government contracting oversight applies, focusing on adherence to the contract terms, delivery schedules, and quality specifications. Transparency is partially achieved through the public reporting of contract awards, such as the data provided. However, the level of transparency regarding the day-to-day execution, specific quality checks, and detailed pricing breakdowns is limited in publicly available information. Inspector General offices within the Treasury Department may conduct audits or investigations if specific concerns arise regarding waste, fraud, or abuse related to such contracts.

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: $68,671,724

Exercised Options: $68,671,724

Current Obligation: $68,671,724

Timeline