Treasury Spends $41M on Raw Silver from Sunshine Minting Inc. Under Competed SAP
Contract Overview
Contract Amount: $41,031,341 ($41.0M)
Contractor: Sunshine Minting Inc
Awarding Agency: Department of the Treasury
Start Date: 2012-09-18
End Date: 2012-09-21
Contract Duration: 3 days
Daily Burn Rate: $13.7M/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 $41.0 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Significant expenditure of $41M for raw silver. 2. Sunshine Minting Inc. is the sole awardee. 3. Contract competed under Simplified Acquisition Procedures (SAP). 4. Potential for price volatility in precious metals. 5. Sector is wholesale trade of precious metals.
Value Assessment
Rating: fair
The total award amount is $41,031,341.04. Without specific unit pricing or comparison data for raw silver from the same period, it's difficult to definitively assess if this price is competitive. However, the scale of the purchase suggests a need for careful price validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was competed under Simplified Acquisition Procedures (SAP), which typically involves less formal competition than full and open procedures. This method may limit the number of potential bidders and could impact the price discovery process, potentially leading to higher costs.
Taxpayer Impact: The $41M expenditure represents taxpayer funds allocated for acquiring raw silver. The effectiveness of the competition method in securing the best possible price directly impacts the overall value for taxpayers.
Public Impact
Taxpayers fund the acquisition of raw silver, a commodity with fluctuating market value. The United States Mint uses this silver for coinage or other products. The contract award to Sunshine Minting Inc. supports a business in the precious metals wholesale sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition due to SAP
- Price volatility of raw silver
- Lack of detailed cost breakdown
Positive Signals
- Awarded to a known entity (Sunshine Minting Inc.)
- Contract type is Firm Fixed Price, providing cost certainty
Sector Analysis
The sector involves wholesale trade of precious metals. Spending benchmarks for raw silver acquisition by government entities are not readily available, but this $41M award is substantial and likely represents a significant portion of the Mint's needs for the period.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement. SAP can sometimes be utilized for smaller procurements, but the total award value suggests it might be a large purchase within the SAP threshold, potentially limiting small business participation.
Oversight & Accountability
Oversight would involve ensuring the quality and quantity of the raw silver received matches the contract specifications and that the price paid aligns with market conditions at the time of purchase. The Firm Fixed Price contract provides some cost control.
Related Government Programs
- Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Price Volatility of Raw Silver
- Limited Competition Under SAP
- Lack of Detailed Quantity/Unit Price
- Potential for Supply Chain Issues
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 $41.0 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 $41.0 million.
What is the period of performance?
Start: 2012-09-18. End: 2012-09-21.
What was the market price of raw silver per ounce around September 2012, and how does it compare to the implied unit price in this contract?
The market price of silver fluctuated significantly in 2012, reaching highs above $30 per ounce in early spring and settling around $30-$35 per ounce in September. Without the exact quantity of silver purchased (only the dollar amount is provided), calculating an implied unit price is impossible. A detailed analysis would require the quantity to compare against market benchmarks and assess value for money.
What specific risks are associated with procuring raw silver, and how were they mitigated in this contract?
Key risks include price volatility, potential for supply chain disruptions, and quality control issues. The Firm Fixed Price contract mitigates some cost risk by locking in the price. However, the inherent market volatility of silver remains a significant concern. Mitigation for supply and quality would depend on the specific terms and inspection clauses within the contract, which are not detailed here.
How effective was the 'Competed Under SAP' approach in ensuring the best value for this $41M raw silver purchase?
The effectiveness is questionable without more information. Simplified Acquisition Procedures (SAP) are designed for efficiency but may not elicit the broadest competition, potentially impacting price discovery. While it secured an award to Sunshine Minting Inc. at a fixed price, a full and open competition might have yielded better pricing or terms, especially for such a substantial amount.
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: $41,031,341
Exercised Options: $41,031,341
Current Obligation: $41,031,341
Timeline
Start Date: 2012-09-18
Current End Date: 2012-09-21
Potential End Date: 2012-09-21 00:00:00
Last Modified: 2012-09-19
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