Treasury's $15M contract for base metal coinage provides essential materials for circulating currency

Contract Overview

Contract Amount: $15,070,165 ($15.1M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2008-01-30

End Date: 2012-09-30

Contract Duration: 1,705 days

Daily Burn Rate: $8.8K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: PROVIDE BASE METAL FOR CIRCULATING COINAGE.

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52404

State: Iowa Government Spending

Plain-Language Summary

Department of the Treasury obligated $15.1 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE BASE METAL FOR CIRCULATING COINAGE. Key points: 1. Contract ensures a stable supply of critical metals for U.S. coinage. 2. Competitive bidding process likely secured favorable pricing for the government. 3. Long-term contract duration suggests a predictable need for these materials. 4. Performance is tied to delivery of specific metal types for minting. 5. Sector positioning is within the critical materials supply chain for national currency. 6. Economic price adjustment clause may mitigate raw material cost volatility.

Value Assessment

Rating: good

The contract value of approximately $15 million over four years for base metal coinage appears reasonable given the essential nature of the materials supplied. Benchmarking against similar contracts for raw materials can be challenging due to market fluctuations and specific alloy requirements. However, the fixed-price with economic price adjustment structure suggests an effort to balance cost certainty with market realities, aiming for value by allowing for adjustments based on commodity prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a competitive delivery order process, indicating that multiple vendors had the opportunity to bid. The 'full-and-open' competition suggests a robust marketplace for these specialized rolled metal products. The presence of multiple bidders typically fosters price discovery and encourages vendors to offer competitive terms to secure the award, benefiting the government.

Taxpayer Impact: A competitive award process for essential coinage metals helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Benefits the U.S. Mint by providing the necessary raw materials for producing circulating coins. Ensures the availability of coins for everyday transactions across the United States. Supports the broader economy by facilitating commerce through a stable currency supply. Impacts the metals manufacturing sector through demand for specialized rolled products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if metal markets rise significantly.
Dependence on a single supplier for a critical national resource could pose a risk if supply chains are disrupted.

Positive Signals

Competitive bidding process likely secured favorable initial pricing.
Long contract duration indicates a stable and predictable supply chain.
Award to a known entity in the rolled products market suggests reliability.

Sector Analysis

The contract falls within the broader industrial sector of nonferrous metal rolling, drawing, and extruding. This sector is crucial for supplying raw materials to various industries, including manufacturing, construction, and in this case, government minting operations. The market for specialized metal alloys can be competitive, with pricing influenced by global commodity markets and production capacities. The U.S. Mint's demand represents a significant, albeit specialized, portion of the market for these specific base metals.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses mentioned. The primary contractor, WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC, is likely a larger entity. Therefore, the direct impact on the small business ecosystem may be limited unless the prime contractor engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Mint, a bureau within the Department of the Treasury. Accountability measures are embedded in the contract terms, including specifications for material quality and delivery schedules. Transparency is generally maintained through federal contract databases, though specific performance metrics and detailed oversight reports may not be publicly available.

Related Government Programs

U.S. Mint Coinage Production
Federal Procurement of Raw Materials
Metals Manufacturing and Supply Chain

Risk Flags

Potential supply chain disruption risk
Price volatility due to economic price adjustment clause

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $15.1 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE BASE METAL FOR CIRCULATING COINAGE.

Who is the contractor on this award?

The obligated recipient is WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (United States Mint).

What is the total obligated amount?

The obligated amount is $15.1 million.

What is the period of performance?

Start: 2008-01-30. End: 2012-09-30.

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

Historical spending data for base metals by the U.S. Mint reveals a consistent need for these materials to produce circulating coinage. Over the years, the Mint has engaged in numerous contracts, both competitive and sole-source, to procure metals like copper, nickel, zinc, and aluminum alloys. Spending fluctuates based on coinage demand, metal market prices, and the specific contract vehicles utilized. For instance, prior to this contract, the Mint would have had existing agreements for similar materials. Analyzing past contracts can show trends in pricing, supplier relationships, and the evolution of material specifications to meet production goals and cost-efficiency targets.

How does the pricing of this contract compare to market rates for nonferrous metals?

Comparing the pricing of this contract to prevailing market rates for nonferrous metals requires detailed analysis of the specific alloys and quantities involved, as well as the contract's economic price adjustment (EPA) clause. The EPA allows for adjustments based on commodity indices, meaning the final price paid could deviate from the initial fixed price. Generally, competitive bidding aims to secure prices at or below market rates. However, specialized alloys or stringent quality requirements can command premiums. Without access to the specific indices used in the EPA and the exact market prices at the time of award and throughout the contract period, a precise comparison is difficult. Nonetheless, the competitive nature of the award suggests an effort to achieve favorable market-based pricing.

What are the risks associated with relying on WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for coinage metals?

The primary risks associated with relying on WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC, or any single supplier for critical coinage metals, include supply chain disruptions, price volatility, and potential quality issues. A disruption could stem from the supplier's operational problems, geopolitical events affecting raw material sourcing, or transportation issues. While the contract has an EPA, significant price spikes could still impact the overall cost. Quality control is paramount; any deviation from specifications could halt minting operations. However, the company's established presence in the rolled products market suggests a degree of reliability and experience, mitigating some of these risks.

How effective is the competitive delivery order process in ensuring value for taxpayer money in this context?

The competitive delivery order (CDO) process is generally effective in ensuring value for taxpayer money when procuring standardized or readily available goods like base metals. By allowing multiple qualified vendors to bid, it fosters price competition, driving down costs. The U.S. Mint's use of CDO for this contract suggests that the market for these specific rolled metal products is sufficiently robust to support multiple bidders. This competition helps prevent overpayment and encourages suppliers to offer their best terms. The effectiveness is further enhanced when clear specifications and performance metrics are established, allowing for objective evaluation of bids and subsequent performance.

What is the typical duration for contracts of this nature, and how does this one compare?

Contracts for the supply of raw materials, especially those tied to government operations like coinage, often have durations ranging from one to five years. This is to ensure supply chain stability and allow for economies of scale in production and delivery. This specific contract, with an initial award date of January 30, 2008, and an end date of September 30, 2012, spans approximately four years and nine months (1705 days). This duration is well within the typical range and suggests a long-term, stable requirement for these base metals by the U.S. Mint, providing continuity for both the supplier and the agency.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: KPS Capital Partners, LP (UEI: 071159078)

Address: 427 N SHAMROCK ST, EAST ALTON, IL, 13

Business Categories: Category Business, Labor Surplus Area Firm, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $15,070,165

Exercised Options: $15,070,165

Current Obligation: $15,070,165

Parent Contract

Parent Award PIID: TMHQ08C0006

IDV Type: IDC

Timeline