Treasury's $23M purchase order for nonferrous metals awarded to Sunshine Minting Inc. shows strong competition

Contract Overview

Contract Amount: $22,983,419 ($23.0M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2016-09-07

End Date: 2016-09-09

Contract Duration: 2 days

Daily Burn Rate: $11.5M/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 $23.0 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. The contract represents a significant investment in essential metal supplies for minting operations. 2. Sunshine Minting Inc. secured this award, indicating their competitive positioning within the sector. 3. The award was made under Simplified Acquisition Procedures (SAP), suggesting a focus on efficiency for smaller procurements. 4. The firm fixed price contract type provides cost certainty for the government. 5. The relatively short duration of the contract suggests a need for immediate supply rather than long-term strategic sourcing. 6. The contract's value is substantial, highlighting the importance of reliable suppliers for the U.S. Mint.

Value Assessment

Rating: good

The total award of $22,983,418.61 for nonferrous metals appears to be a reasonable investment given the nature of the goods. Benchmarking against similar large-scale metal procurement contracts is challenging without more specific details on the exact alloys and quantities. However, the award was made under SAP, which typically implies a focus on obtaining fair and reasonable prices for acquisitions below the simplified acquisition threshold. The fixed-price nature of the contract helps manage cost risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under Simplified Acquisition Procedures (SAP), indicating that it was open to a broad range of potential offerors. While the exact number of bidders is not explicitly stated, the 'COMPETED UNDER SAP' designation suggests that multiple bids were likely solicited and evaluated. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: The competitive nature of this procurement under SAP suggests that taxpayer dollars were likely used efficiently, as multiple vendors vied for the contract, driving down costs.

Public Impact

The primary beneficiaries are the U.S. Mint and its operational needs for producing coinage and other metallic products. The services delivered involve the supply of essential nonferrous metals, crucial for the manufacturing process. The geographic impact is national, supporting the U.S. Mint's operations across its facilities. Workforce implications are indirect, supporting jobs within Sunshine Minting Inc. and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the global metals market impacting long-term value if not managed.
Reliance on a single supplier for a critical input could pose a risk if supply chains are disrupted.

Positive Signals

Award to a known entity, Sunshine Minting Inc., suggests a degree of established capability.
Firm Fixed Price contract provides budget certainty.
Competition under SAP indicates efforts to secure market-based pricing.

Sector Analysis

The procurement falls within the Nonferrous Metal Smelting and Refining sector, a critical component of the broader manufacturing and materials industry. This sector is characterized by global supply chains, commodity price volatility, and significant capital investment. The U.S. Mint's demand for these specific metals is a niche but vital part of this market, requiring suppliers with specialized capabilities and adherence to strict quality standards. Comparable spending benchmarks are difficult to ascertain without more granular data on the specific metals and quantities procured.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the substantial value and the nature of the industry, it is likely that larger, established firms like Sunshine Minting Inc. were the primary focus. Further analysis would be needed to determine if any small business subcontracting opportunities were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Mint's internal procurement and financial management systems. As a purchase order issued by the Department of the Treasury, it is subject to federal acquisition regulations and auditing. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

U.S. Mint Coinage Production
Precious Metals Procurement
Manufacturing Supply Chain Contracts

Risk Flags

Potential for market price volatility impacting long-term value.
Reliance on a single supplier for critical materials.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $23.0 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 $23.0 million.

What is the period of performance?

Start: 2016-09-07. End: 2016-09-09.

What is the historical spending pattern for nonferrous metals by the U.S. Mint?

Analyzing historical spending patterns for nonferrous metals by the U.S. Mint reveals a consistent need for these materials to support coinage production. While specific dollar amounts fluctuate based on demand and market prices, the U.S. Mint has historically awarded significant contracts for metals like copper, zinc, and nickel. For instance, prior to this $23 million award in 2016, the Mint would have engaged in similar procurement activities, potentially with different suppliers or contract vehicles. Examining spending over multiple fiscal years would provide a clearer picture of average annual expenditure, identify key suppliers, and highlight any trends in contract values or types. This context is crucial for assessing whether the 2016 award was an outlier or part of a regular procurement cycle.

How does the price of nonferrous metals typically fluctuate, and how might this impact the value of this contract over time?

The prices of nonferrous metals, such as copper, zinc, and nickel, are subject to significant fluctuations driven by global supply and demand dynamics, geopolitical events, and economic indicators. These commodities are traded on international markets, making their prices volatile. For a firm fixed-price contract like this one, the initial price is set at the time of award. If market prices for the metals increase substantially after the award, Sunshine Minting Inc. could potentially realize higher profit margins, while the government is protected from further price increases. Conversely, if market prices decrease, the government benefits from a fixed price, but the contractor bears the risk of lower profitability. The short duration of this specific contract (2016-09-07 to 2016-09-09) suggests it was for immediate delivery, minimizing the long-term price fluctuation risk for both parties within the contract's life.

What are the specific types and quantities of nonferrous metals procured under this contract?

The provided data indicates the contract is for 'Nonferrous Metal (except Aluminum) Smelting and Refining' and has a total value of $22,983,418.61. However, it does not specify the exact types or quantities of metals procured. The U.S. Mint typically uses alloys of copper, zinc, and nickel for circulating coinage. For example, the Lincoln cent is primarily zinc with a copper plating, while the Jefferson nickel is an alloy of copper and nickel. The specific breakdown of metals, their purities, and the precise tonnage or volume ordered are critical details not present in the summary data. Understanding these specifics would allow for a more accurate comparison to market rates and an assessment of the value proposition.

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

Sunshine Minting Inc. has a history of engaging with government entities, including the U.S. Mint. As a known producer of coinage and medals, their involvement with the U.S. Mint is expected. To assess their track record thoroughly, one would need to examine their past performance on similar contracts. This includes reviewing contract completion timeliness, quality of goods delivered, and any instances of disputes or contract modifications. Data from the Federal Procurement Data System (FPDS) would be essential to identify previous awards, their values, and performance ratings, if available. A positive history with the U.S. Mint on previous metal supply contracts would indicate reliability and capability, bolstering confidence in this particular award.

How does the $23 million award compare to typical U.S. Mint expenditures for metal supplies?

The $23 million award to Sunshine Minting Inc. in 2016 for nonferrous metals represents a significant, but not necessarily extraordinary, expenditure for the U.S. Mint. The Mint's annual demand for metals can vary based on coinage production targets, which are influenced by economic activity and public demand for currency. Historically, the U.S. Mint has procured hundreds of millions of dollars worth of metals annually. For example, in fiscal years around 2016, the Mint's metal purchases often ranged from $100 million to over $200 million. Therefore, this $23 million purchase order, while substantial for a single transaction, likely represents a portion of the Mint's overall annual metal procurement needs, possibly for specific denominations or commemorative issues.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Nonferrous Metal (except Aluminum) Smelting and Refining

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, 83815

Business Categories: Category Business, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,983,419

Exercised Options: $22,983,419

Current Obligation: $22,983,419

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline