Treasury's Mint Spends $14M on Gold from Mitsui & Co. via Full and Open Competition
Contract Overview
Contract Amount: $13,985,741 ($14.0M)
Contractor: Mitsui & CO. Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2008-03-10
End Date: 2008-03-13
Contract Duration: 3 days
Daily Burn Rate: $4.7M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RAW MATERIAL GOLD
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10166
State: New York Government Spending
Plain-Language Summary
Department of the Treasury obligated $14.0 million to MITSUI & CO. PRECIOUS METALS, INC. for work described as: RAW MATERIAL GOLD Key points: 1. Significant expenditure on a high-value commodity (gold). 2. Competition was full and open, suggesting potential for competitive pricing. 3. Contract awarded by the US Mint, a key agency for precious metals. 4. Sector is Nonferrous Metal Rolling, Drawing, and Extruding, indicating processing or acquisition of raw materials.
Value Assessment
Rating: fair
The contract value of $13.99M for gold is substantial. Without specific unit pricing or market benchmarks for the exact grade and form of gold procured, a precise value assessment is difficult. However, the 'AW' (Awarded) value of $13.99M against a base of $4.66M suggests significant market fluctuation or a large quantity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing and allows all responsible sources to submit offers. This method is ideal for ensuring the government receives fair market value.
Taxpayer Impact: Taxpayer funds were used for this acquisition. The competitive nature of the award aims to maximize value for money, but the ultimate impact depends on the prevailing market price of gold at the time of award and the specific terms of the contract.
Public Impact
Acquisition of a strategic commodity (gold) by the US Mint. Potential impact on the precious metals market depending on the quantity and timing. Transparency in government procurement through full and open competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific unit cost data for benchmarking.
- Potential for price volatility in the gold market.
- Contract duration is short (3 days), suggesting a spot purchase or specific delivery window.
Positive Signals
- Awarded under full and open competition.
- Procurement by a specialized agency (US Mint).
Sector Analysis
The Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding sector involves the processing and manufacturing of metals. Spending in this sector can vary widely based on commodity prices and industrial demand. This contract represents a significant expenditure within this category, likely for raw material acquisition.
Small Business Impact
The data indicates the prime contractor is Mitsui & Co. Precious Metals, Inc., a large corporation. There is no information provided to suggest that small businesses were significantly involved in this specific contract as subcontractors or partners.
Oversight & Accountability
The contract was awarded by the Department of the Treasury's United States Mint, an agency with established procurement processes. Oversight would typically involve contract management to ensure delivery and adherence to terms. The use of full and open competition suggests a standard oversight approach.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- High value commodity purchase.
- Potential for market price volatility.
- Limited contract duration may indicate urgency or specific market conditions.
- Lack of detailed unit cost information.
Tags
nonferrous-metal-except-copper-and-alumi, department-of-the-treasury, ny, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $14.0 million to MITSUI & CO. PRECIOUS METALS, INC.. RAW MATERIAL GOLD
Who is the contractor on this award?
The obligated recipient is MITSUI & CO. PRECIOUS METALS, 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 $14.0 million.
What is the period of performance?
Start: 2008-03-10. End: 2008-03-13.
What was the specific form and purity of the gold procured, and how did the price compare to the London Bullion Market Association (LBMA) fix on the award date?
The provided data does not specify the form (e.g., bullion bars, doré) or purity of the gold. To assess value, a comparison with the LBMA fix on March 10, 2008, would be necessary, considering any premiums or discounts associated with the specific transaction terms, quantity, and delivery.
Given the volatility of gold prices, what risk mitigation strategies were employed to protect against adverse price movements during the contract period?
The contract duration is extremely short (March 10-13, 2008), suggesting a spot purchase or a very rapid delivery. This minimizes exposure to price volatility. However, the contract type is 'FIRM FIXED PRICE,' meaning the price was set at the time of award, transferring any subsequent price risk to the contractor.
How does this expenditure align with the US Mint's strategic reserves or operational needs for gold, and what was the intended use?
The data does not detail the US Mint's strategic reserves or operational needs. This expenditure likely relates to minting operations, potentially for circulating coinage, commemorative issues, or investment products. Understanding the specific purpose would clarify the necessity and effectiveness of this procurement.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Ellison Technologies Inc (UEI: 690546403)
Address: 200 PARK AVE FL 35, NEW YORK, NY, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $13,985,741
Exercised Options: $13,985,741
Current Obligation: $13,985,741
Parent Contract
Parent Award PIID: TMHQ06C0034
IDV Type: BOA
Timeline
Start Date: 2008-03-10
Current End Date: 2008-03-13
Potential End Date: 2008-03-13 00:00:00
Last Modified: 2014-02-23
More Contracts from Mitsui & CO. Precious Metals, Inc.
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