Treasury's $23.16M purchase order for nonferrous metals awarded to Sunshine Minting Inc

Contract Overview

Contract Amount: $23,162,979 ($23.2M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2016-09-20

End Date: 2016-09-22

Contract Duration: 2 days

Daily Burn Rate: $11.6M/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, 83815

State: Idaho Government Spending

Plain-Language Summary

Department of the Treasury obligated $23.2 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. The contract value represents a significant portion of the Mint's annual spending on raw materials. 2. Sunshine Minting Inc. has a history of supplying metals to government entities. 3. The fixed-price nature of the contract provides cost certainty for the government. 4. The short duration of the contract suggests a specific, immediate need for the materials. 5. The award was made under Simplified Acquisition Procedures, indicating a relatively small value for federal procurement. 6. The contract was competed, suggesting some level of market engagement.

Value Assessment

Rating: good

The total award of $23.16 million for nonferrous metals appears reasonable given the scale of operations for the United States Mint. Benchmarking against similar contracts for raw materials is challenging without more specific details on the exact alloys and quantities. However, the fixed-price nature of the purchase order helps to mitigate cost overruns. The contract value is substantial but falls within the typical range for bulk material procurement for a minting facility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under Simplified Acquisition Procedures (SAP), which generally implies that offers were solicited from multiple sources, though the specific number of bidders is not detailed. SAP is designed for procurements below certain thresholds, aiming for efficiency while still encouraging competition. The fact that it was competed suggests that the government sought competitive pricing and terms from qualified suppliers in the nonferrous metal market.

Taxpayer Impact: Competition under SAP, even if limited to a smaller pool of vendors, generally benefits taxpayers by driving down prices compared to non-competitive awards. It ensures that the government is not overpaying for essential materials.

Public Impact

The primary beneficiaries are the United States Mint and its operations, ensuring a supply of essential raw materials for coin and medal production. The services delivered are the provision of nonferrous metals, crucial for the manufacturing processes of the Mint. The geographic impact is primarily national, supporting the Mint's facilities across the United States. Workforce implications are indirect, supporting jobs within Sunshine Minting Inc. and its supply chain, as well as within the US Mint's manufacturing operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the raw metal market impacting the fixed price if market conditions change drastically.
Dependence on a single supplier for a critical input could pose a risk if the supplier faces production or delivery issues.

Positive Signals

The fixed-price contract provides budget certainty for the government.
The use of Simplified Acquisition Procedures suggests an efficient procurement process for a necessary good.
The award to an established company like Sunshine Minting Inc. indicates a level of confidence in their ability to deliver.

Sector Analysis

The nonferrous metal smelting and refining sector is a critical component of the industrial supply chain, providing essential materials for a wide range of manufacturing activities. The United States Mint is a significant consumer of these metals for producing currency and commemorative items. Spending in this sector by the government can fluctuate based on production needs and strategic material stockpiling. Comparable spending benchmarks would depend on the specific types and volumes of metals procured.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information about subcontracting requirements. As a purchase order likely awarded under SAP, the focus may have been on obtaining the best value from available sources rather than specific small business utilization goals. Further analysis would be needed to determine the extent of small business participation, if any.

Oversight & Accountability

Oversight for this purchase order would typically fall under the internal financial and operational controls of the Department of the Treasury and the United States Mint. Accountability measures would include ensuring the quality and quantity of delivered metals meet specifications and that payments are processed correctly. Transparency is generally maintained through public contract databases, although detailed operational oversight specifics are usually internal.

Related Government Programs

United States Mint Operations
Precious Metals Procurement
Manufacturing Raw Materials

Risk Flags

Potential for price volatility in raw materials market
Supplier dependency risk

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $23.2 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 $23.2 million.

What is the period of performance?

Start: 2016-09-20. End: 2016-09-22.

What is the historical spending pattern of the United States Mint for nonferrous metals?

Analyzing the historical spending patterns of the United States Mint for nonferrous metals requires access to detailed procurement data over several fiscal years. Generally, the Mint's spending on raw materials like copper, zinc, nickel, and precious metals (gold, silver) is directly tied to its production targets for circulating coinage, bullion, and commemorative medals. Factors influencing spending include the demand for currency, investor interest in precious metals, and the specific designs and compositions of coins being produced. The value of contracts can fluctuate significantly year-to-year based on these demand drivers and the prevailing market prices of the metals. For instance, periods of high demand for silver bullion would likely see increased spending in that category. Without specific historical data, it's difficult to provide precise figures, but the Mint consistently procures substantial quantities of metals annually to fulfill its mandate.

How does the price paid by the US Mint compare to market rates for similar nonferrous metals?

Determining if the price paid by the US Mint for nonferrous metals aligns with market rates requires a detailed comparison of the specific metal alloys, quantities, purity levels, and delivery terms against prevailing market indices and competitor bids at the time of award. The provided data indicates a fixed-price purchase order, which locks in the price at the time of agreement. Market rates for metals like copper, zinc, and nickel are subject to global supply and demand, geopolitical events, and currency exchange rates. The US Mint, as a large-volume buyer, may negotiate favorable pricing due to its scale. However, without the specific technical specifications of the metals procured and a direct comparison to contemporaneous market benchmarks (e.g., London Metal Exchange prices adjusted for specific alloys and delivery), a definitive value-for-money assessment on pricing is not possible from the available data alone. The fact that the contract was competed suggests an effort to secure competitive pricing.

What are the potential risks associated with relying on Sunshine Minting Inc. for this supply?

Potential risks associated with relying on Sunshine Minting Inc. for this supply include supplier-specific issues and broader market risks. Supplier-specific risks could involve production disruptions at Sunshine Minting Inc. due to equipment failure, labor disputes, or financial instability, which could lead to delivery delays or shortages. Quality control issues, where the supplied metals do not meet the stringent specifications required by the Mint, could also pose a risk, potentially impacting the quality of the final coinage. Broader market risks include significant price volatility in the nonferrous metals market. Since this is a fixed-price contract, if market prices surge unexpectedly, the supplier might face financial strain, potentially impacting their ability or willingness to fulfill the contract at the agreed-upon price, or it could indicate the government secured a favorable price if market prices have since fallen. Geopolitical events affecting global metal supply chains could also introduce risks.

What is the typical performance track record of Sunshine Minting Inc. with government contracts?

Sunshine Minting Inc. has a history of engaging with government contracts, particularly related to the production of coinage and medals. Their track record typically involves supplying metals and blanks to mints and other government entities. Performance is generally assessed based on adherence to contract specifications (quality, quantity, delivery timelines) and compliance with regulatory requirements. While specific performance metrics for every contract are not publicly detailed, their continued engagement in supplying government agencies suggests a generally satisfactory performance history. However, like any supplier, there could have been instances of minor deviations or challenges that were addressed through contract management processes. A comprehensive review would involve examining past performance evaluations and any documented disputes or corrective actions.

How does this contract fit into the broader context of US Mint's annual procurement needs?

This $23.16 million purchase order for nonferrous metals represents a significant, but likely not the entirety, of the US Mint's annual raw material procurement. The Mint requires vast quantities of metals like copper, zinc, nickel, and precious metals (gold, silver) to produce circulating coinage, bullion coins, medals, and other numismatic products. The specific nature of this contract (nonferrous metals, excluding aluminum) suggests it might be for specific alloys used in particular coin series or for general operational needs. Annual procurement needs are driven by factors such as the volume of circulating coinage required by the Federal Reserve, demand for bullion products from investors, and the production schedule for commemorative coins. This single contract, while substantial, would be one component of a larger, ongoing procurement strategy to ensure the continuous supply of materials necessary for the Mint's diverse operations throughout the year.

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: 2

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: $23,162,979

Exercised Options: $23,162,979

Current Obligation: $23,162,979

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline