Treasury's $20.9M contract for precious metals awarded to Sunshine Minting Inc. under simplified acquisition procedures

Contract Overview

Contract Amount: $20,896,104 ($20.9M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2011-06-28

End Date: 2011-06-30

Contract Duration: 2 days

Daily Burn Rate: $10.4M/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 $20.9 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Contract awarded using simplified acquisition procedures, suggesting a focus on smaller value procurements. 2. The contract's duration of 2 years is relatively short, potentially allowing for frequent re-competition. 3. Awarded to a single vendor, Sunshine Minting Inc., raising questions about the extent of competition. 4. The fixed-price contract type aims to provide cost certainty for the government. 5. The specific product or service procured is not detailed, making direct value assessment challenging. 6. The contract's value is moderate, falling within a range where simplified procedures are common.

Value Assessment

Rating: fair

The contract value of approximately $20.9 million over two years is moderate. Without specific details on the goods or services procured, it is difficult to benchmark against similar contracts or market rates. The award under simplified acquisition procedures suggests that the government sought efficiency for a procurement of this size. However, the lack of detailed performance metrics or comparison data makes a definitive value-for-money assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which typically involve fewer bidders and less formal solicitation processes than full and open competition. While the specific number of bidders is not provided, SAP awards often result in limited competition. This approach can expedite the procurement process but may not always yield the lowest possible price compared to a broader competitive environment.

Taxpayer Impact: Limited competition under SAP may mean taxpayers do not benefit from the most aggressive pricing achievable through a wider bidding process.

Public Impact

The United States Mint, a bureau within the Department of the Treasury, is the primary beneficiary, likely for the acquisition of precious metals or related products. The contract supports the Mint's operational needs, potentially for coin production, bullion sales, or other precious metal-related activities. The geographic impact is primarily national, centered around the operations of the United States Mint. Workforce implications are likely internal to the United States Mint and Sunshine Minting Inc., related to the management and fulfillment of the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the specific goods/services procured hinders assessment of necessity and value.
Limited competition raises concerns about potential overpayment compared to a fully competitive bid.
The use of SAP for a contract of this value might indicate a missed opportunity for greater cost savings.
Absence of detailed performance metrics makes it difficult to evaluate contractor performance and efficiency.
The contract's focus on precious metals could be subject to market volatility, impacting overall cost-effectiveness.

Positive Signals

The contract utilizes a Firm Fixed Price (FFP) structure, providing cost certainty for the government.
Awarded under SAP, indicating an effort to streamline procurement for a moderate-value contract.
The contract duration is relatively short (2 years), allowing for periodic review and potential adjustments.
The contractor, Sunshine Minting Inc., is a known entity in the precious metals industry.
The contract is for a specific need of the United States Mint, aligning with its mission.

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 fluctuations based on economic conditions, geopolitical events, and investor demand. The United States Mint is a major player in this space, both domestically and internationally. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the goods or services procured, but the overall market size for precious metals is substantial.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside consideration for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from this particular award. The focus was likely on obtaining the required goods or services from the most suitable vendor under the chosen procurement method.

Oversight & Accountability

Oversight for this contract would primarily reside with the United States Mint, a bureau within the Department of the Treasury. Standard contract management practices, including performance monitoring and payment verification, would be in place. Transparency is limited by the nature of SAP procurements and the lack of detailed public information on the specific deliverables. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

United States Mint Operations
Precious Metals Procurement
Government Wholesaler Contracts
Department of the Treasury Acquisitions

Risk Flags

Limited Competition
Lack of Specific Deliverables
Potential for Price Volatility
Use of Simplified Acquisition Procedures for Significant Value

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $20.9 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 $20.9 million.

What is the period of performance?

Start: 2011-06-28. End: 2011-06-30.

What specific precious metals or related products were procured under this contract?

The provided data does not specify the exact nature of the precious metals or related products procured. The contract is categorized under NAICS code 423940, which covers 'Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers.' This suggests the procurement could range from raw bullion, semi-finished metal products, to potentially specialized items for minting or other official uses. Without further details, it's impossible to ascertain the precise goods or services that Sunshine Minting Inc. was contracted to provide, which limits a granular analysis of the contract's purpose and value.

How does the contract value of $20.9 million compare to typical United States Mint procurements for similar items?

Benchmarking this $20.9 million contract against typical United States Mint procurements is challenging without knowing the specific items acquired. The Mint engages in various types of acquisitions, from raw precious metals for coinage and bullion to specialized equipment and services. Contracts for raw precious metals can fluctuate significantly in value based on market prices and quantities. Awards under Simplified Acquisition Procedures (SAP), as seen here, are generally for amounts under $250,000, though certain exceptions and thresholds can apply. The $20.9 million figure suggests this might be a consolidated procurement or an exception, or potentially the data provided is an aggregate over the contract's life. A direct comparison would require access to historical procurement data for identical or highly similar items.

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

Sunshine Minting Inc. has a history of contracting with the federal government, including the Department of the Treasury. As a significant player in the precious metals industry, their engagement with the United States Mint is logical. While this specific contract was awarded under Simplified Acquisition Procedures (SAP), indicating a potentially smaller or less complex procurement relative to larger, full-and-open competitions, it represents one instance of their federal business. A comprehensive track record analysis would involve reviewing all their federal awards, performance evaluations (if available), and any past issues or commendations to fully assess their reliability and performance history with government entities.

What are the potential risks associated with procuring precious metals through a limited competition under SAP?

Procuring precious metals through limited competition under Simplified Acquisition Procedures (SAP) carries several potential risks. Firstly, limited competition inherently reduces the potential for price discovery, meaning the government might not secure the most competitive pricing available in the market. Secondly, precious metals are subject to significant price volatility; a fixed-price contract awarded without robust market analysis or broad competition could expose the government to unfavorable pricing if market conditions change. Thirdly, the lack of transparency often associated with SAP can obscure the justification for limited competition and the evaluation of offers, potentially masking inefficiencies or suboptimal value. Finally, reliance on a single or limited number of suppliers could create supply chain vulnerabilities.

How does the Firm Fixed Price (FFP) contract type mitigate risks for the government in this context?

The Firm Fixed Price (FFP) contract type is designed to mitigate cost uncertainty for the government. Under an FFP agreement, the contractor, Sunshine Minting Inc., assumes the primary responsibility for all costs incurred and agrees to a set price for the goods or services. This means that regardless of whether the contractor's actual costs are higher or lower than anticipated, the government pays the agreed-upon fixed price. This structure is beneficial for procurements where the scope of work is well-defined and the risks of cost overruns are significant. For precious metals, where market prices can fluctuate, an FFP contract locks in the price at the time of award, protecting the government from unexpected price increases during the contract period, provided the initial price was competitive.

What is the significance of the contract being awarded under Simplified Acquisition Procedures (SAP)?

The significance of this contract being awarded under Simplified Acquisition Procedures (SAP) is that it indicates a procurement valued below the threshold for full and open competition (typically $250,000, though exceptions exist). SAP is intended to streamline the acquisition process, making it faster and less burdensome for both the government and potential contractors. This often involves less formal documentation, fewer required steps, and potentially a smaller pool of bidders. For a contract valued at $20.9 million, its award under SAP suggests it might fall under specific exceptions or that the provided data represents a cumulative value over multiple awards or a longer period where initial awards were under SAP thresholds. It generally implies a focus on efficiency over maximizing competition for procurements of this nature.

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: $20,896,104

Exercised Options: $20,896,104

Current Obligation: $20,896,104

Timeline