Treasury's $24.9M contract for precious metals awarded to Sunshine Minting Inc. under simplified acquisition procedures

Contract Overview

Contract Amount: $24,913,950 ($24.9M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2011-09-07

End Date: 2011-09-15

Contract Duration: 8 days

Daily Burn Rate: $3.1M/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

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 $24.9 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Value for money assessed through competitive bidding under simplified acquisition procedures. 2. Competition dynamics indicate a potentially less robust market due to simplified procedures. 3. Risk indicators include reliance on a single awardee for a significant value contract. 4. Performance context is tied to the United States Mint's operational needs for precious metals. 5. Sector positioning places this contract within the wholesale merchant sector for precious metals.

Value Assessment

Rating: fair

The contract value of $24.9 million for precious metals is substantial. Benchmarking against similar contracts is challenging without more detailed specifications of the precious metals and their intended use. However, the award under simplified acquisition procedures (SAP) suggests a focus on efficiency and potentially lower administrative overhead, which could contribute to value. The fixed-price nature of the award provides cost certainty for the government.

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 compared to full and open competition. While the exact number of bidders is not specified, SAP is generally used for purchases below the threshold for full and open competition, implying a potentially limited pool of interested parties.

Taxpayer Impact: The use of SAP may limit price discovery compared to broader competition, potentially impacting the best price achievable for taxpayers. However, it also allows for faster procurement, which can be beneficial if timely delivery of materials is critical.

Public Impact

The United States Mint benefits from a reliable supply of precious metals for its operations. Services delivered include the provision of raw materials essential for coin and medal production. Geographic impact is primarily national, supporting the Mint's operations across its facilities. Workforce implications are indirect, supporting jobs within the precious metals supply chain and at the Mint.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to SAP.
Reliance on a single supplier for critical materials.
Price fluctuations in precious metals markets could impact long-term value if not managed.

Positive Signals

Awarded to a single, established supplier.
Fixed-price contract provides cost predictability.
Procurement under SAP can lead to faster delivery.

Sector Analysis

This contract falls within the wholesale merchant sector for precious metals, a market characterized by global supply chains and fluctuating commodity prices. The United States Mint is a significant consumer of precious metals, and its procurement activities can influence market dynamics. Comparable spending benchmarks would depend on the specific types and quantities of precious metals procured, but the $24.9 million value indicates a substantial acquisition.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the value and nature of the goods procured (precious metals), it is likely that larger, specialized suppliers were targeted. Subcontracting opportunities for small businesses are not explicitly detailed but could exist within the supply chain for raw materials or related services if Sunshine Minting Inc. utilizes them.

Oversight & Accountability

Oversight is provided by the Department of the Treasury and the United States Mint. As this was a competed contract under SAP, standard procurement regulations and internal controls would apply. Transparency is facilitated by public contract databases, though detailed operational oversight specifics are not provided.

Related Government Programs

United States Mint Operations
Precious Metals Procurement
Government Supply Chain Management

Risk Flags

Simplified Acquisition Procedures may limit competition.
Short contract duration (8 days) may indicate urgent need or specific batch procurement.
Reliance on a single supplier for critical materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $24.9 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 $24.9 million.

What is the period of performance?

Start: 2011-09-07. End: 2011-09-15.

What specific types and quantities of precious metals were procured under this contract?

The provided data does not specify the exact types and quantities of precious metals procured. The contract is broadly categorized under 'Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers.' For a comprehensive understanding, further details on the material specifications (e.g., gold, silver, platinum purity and form) and the exact volumes required by the United States Mint would be necessary. This information is crucial for accurately assessing the value and appropriateness of the awarded price.

How does the awarded price of $24.9 million compare to market rates for similar precious metals during the contract period?

Directly comparing the $24.9 million award to precise market rates is challenging without knowing the specific precious metals, their quantities, and the exact delivery dates within the contract's short performance period (September 7, 2011, to September 15, 2011). However, the award was made under Simplified Acquisition Procedures (SAP), which are designed for smaller purchases and may not always yield the absolute lowest price compared to large-scale, long-term contracts negotiated under full and open competition. The fixed-price nature provides certainty, but market volatility in precious metals could mean the price was either favorable or unfavorable depending on the exact timing and market conditions.

What is Sunshine Minting Inc.'s track record with government contracts, particularly with the United States Mint?

Sunshine Minting Inc. has a history of supplying precious metals and related products. While this specific contract was for $24.9 million, their broader experience includes providing blanks, planchets, and other metallic goods to mints and government agencies. Their established presence in the industry suggests a capacity to fulfill such orders. A deeper dive into their contract performance history, including any past issues or commendations, would provide a more complete picture of their reliability and performance.

What were the primary risks associated with this contract, and how were they mitigated?

Key risks likely included price volatility of precious metals, potential supply chain disruptions, and ensuring the quality and purity of the materials. The mitigation strategies employed would typically involve careful contract negotiation, including fixed-price terms to cap government liability, clear quality assurance clauses, and potentially requiring supplier certifications. The short duration of the contract (8 days) also minimizes exposure to long-term market fluctuations and supply chain risks. The choice of a single, established supplier like Sunshine Minting Inc. could also be seen as a risk mitigation strategy if they are deemed highly reliable.

How does this contract fit into the overall spending patterns of the United States Mint for precious metals?

This $24.9 million contract represents a significant, albeit short-term, acquisition of precious metals by the United States Mint. Annual spending on precious metals can fluctuate considerably based on minting schedules for bullion coins, commemorative issues, and circulating coinage requiring precious metal components. Contracts of this magnitude are typical for acquiring substantial quantities of raw materials needed for production runs. Analyzing historical spending data would reveal if this contract aligns with typical procurement volumes and values for similar operational needs.

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: 3

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: $24,913,950

Exercised Options: $24,913,950

Current Obligation: $24,913,950

Timeline