Treasury's $25.6M Contract for Raw Silver Awarded to Sunshine Minting Inc. Under SAP
Contract Overview
Contract Amount: $25,599,425 ($25.6M)
Contractor: Sunshine Minting Inc
Awarding Agency: Department of the Treasury
Start Date: 2014-03-04
End Date: 2014-03-06
Contract Duration: 2 days
Daily Burn Rate: $12.8M/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, 83815
State: Idaho Government Spending
Plain-Language Summary
Department of the Treasury obligated $25.6 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Significant expenditure on raw silver highlights demand for precious metals in government operations. 2. Sunshine Minting Inc. secured the contract, indicating its competitive position in the precious metals market. 3. The contract's value presents a moderate financial risk, dependent on silver market volatility. 4. Spending falls within the 'Wholesalers' sector, with specific focus on precious metals.
Value Assessment
Rating: good
The contract value of $25.6 million for raw silver appears reasonable given the commodity's market price fluctuations. Benchmarking against similar bulk precious metal procurements would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was competed under SAP (Small Acquisition Procedures), suggesting a limited competition environment. This method may impact price discovery compared to full and open competition, potentially leading to less aggressive pricing.
Taxpayer Impact: Taxpayer funds are utilized for acquiring essential raw materials. The efficiency of the procurement process under SAP will influence the overall value for taxpayers.
Public Impact
Ensures supply of critical raw material for minting operations. Supports domestic precious metal supply chain. Potential impact on silver market prices due to large purchase volume. Transparency in procurement processes is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition due to SAP.
- Price volatility of silver commodity.
- Potential for price escalation if market conditions change.
Positive Signals
- Secured necessary raw materials.
- Awarded to a known supplier.
- Firm fixed price contract limits cost uncertainty.
Sector Analysis
This contract falls under the 'Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers' sector. Government spending in this area is typically driven by specific operational needs, such as coinage or bullion production, and benchmarks are difficult to establish due to the commodity-driven nature of the market.
Small Business Impact
The contract was awarded under SAP, which is often used for smaller acquisitions. Analysis does not indicate specific provisions or set-asides for small businesses in this particular award, suggesting larger entities likely participated.
Oversight & Accountability
Oversight would focus on contract performance, delivery schedules, and adherence to the firm fixed price. The Department of the Treasury's internal controls and the United States Mint's procurement policies would govern accountability for this acquisition.
Related Government Programs
- Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Potential for overpayment if silver prices decline.
- Limited competition may have reduced cost savings.
- Reliance on a single supplier for a critical commodity.
- Lack of transparency regarding SAP justification for large value.
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 $25.6 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 $25.6 million.
What is the period of performance?
Start: 2014-03-04. End: 2014-03-06.
What was the specific rationale for using SAP instead of full and open competition for a contract of this magnitude?
The rationale for using SAP (Small Acquisition Procedures) for a $25.6 million contract for raw silver is unusual. Typically, SAP is reserved for acquisitions below certain thresholds (e.g., $250,000). There might be specific regulatory exceptions or justifications related to the nature of the commodity or urgency that allowed for its use, requiring further investigation into the specific FAR clauses invoked.
How does the firm fixed price contract mitigate the risk associated with silver's market volatility?
A firm fixed price contract locks in the price at the time of award, regardless of subsequent market fluctuations. This shifts the risk of price increases entirely to the contractor, Sunshine Minting Inc. While this protects the government from paying more if silver prices rise, it could mean the government misses out on savings if prices fall significantly.
What is the effectiveness of awarding this contract to Sunshine Minting Inc. in ensuring the supply of raw silver for the United States Mint?
The effectiveness hinges on Sunshine Minting Inc.'s proven ability to supply the specified quantity and quality of raw silver within the contract period. Given they were awarded the contract, it implies they met the technical and capacity requirements. However, ongoing monitoring of their performance and market conditions is necessary to confirm sustained effectiveness.
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: $25,599,425
Exercised Options: $25,599,425
Current Obligation: $25,599,425
Timeline
Start Date: 2014-03-04
Current End Date: 2014-03-06
Potential End Date: 2014-03-06 00:00:00
Last Modified: 2014-03-04
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