Treasury's $15M Gold Purchase from Mitsui & Co. for Nonferrous Metal Rolling in 2008
Contract Overview
Contract Amount: $14,999,393 ($15.0M)
Contractor: Mitsui & CO. Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2008-03-28
End Date: 2008-03-31
Contract Duration: 3 days
Daily Burn Rate: $5.0M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: OTHER (NONE OF THE ABOVE)
Sector: Other
Official Description: PROVIDE RAW GOLD MATERIAL
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 $15.0 million to MITSUI & CO. PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. The contract awarded $14,999,393.42 for raw gold material. 2. Competition was full and open, indicating a competitive bidding process. 3. The contract duration was short (3 days), suggesting an immediate need. 4. The sector is classified as 'Other (None of the Above)' for nonferrous metals.
Value Assessment
Rating: fair
The contract value of $15M for raw gold material is significant. Without specific unit pricing or comparison to market rates at the time, a precise value assessment is difficult. However, the full and open competition suggests an attempt to secure a fair market price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and promotes price discovery. This method is generally expected to yield competitive pricing.
Taxpayer Impact: The taxpayer impact is tied to the efficiency of the procurement process and whether the price paid for the gold represented good value for the government.
Public Impact
Government acquisition of precious metals can influence market dynamics. Transparency in large commodity purchases is crucial for public trust. The use of raw gold material by the Mint suggests its role in coinage or other official products.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Short contract duration may indicate urgency or specific project needs.
- Classification as 'Other' for a commodity like gold is unusual.
Positive Signals
- Full and open competition utilized.
- Awarded by the Department of the Treasury, a major federal agency.
Sector Analysis
The procurement falls under nonferrous metals, specifically raw gold material. While the sector is broad, the United States Mint's involvement suggests a focus on coinage or bullion production, where gold is a primary commodity.
Small Business Impact
The data indicates that the award went to Mitsui & Co. Precious Metals, Inc., a large corporation. There is no indication of small business participation or set-asides in this specific contract.
Oversight & Accountability
The Department of the Treasury, through the United States Mint, is responsible for this procurement. Standard federal procurement regulations and oversight mechanisms would apply to ensure accountability and proper use of funds.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Potential price volatility risk due to short contract duration.
- Lack of specific unit cost data for detailed value analysis.
- Classification as 'Other' for a well-defined commodity like gold.
- No clear indication of small business involvement.
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 $15.0 million to MITSUI & CO. PRECIOUS METALS, INC.. PROVIDE RAW GOLD MATERIAL
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 $15.0 million.
What is the period of performance?
Start: 2008-03-28. End: 2008-03-31.
What was the specific purpose of acquiring this raw gold material, and how did it align with the Mint's operational needs at the time?
The specific purpose of acquiring $15 million in raw gold material by the United States Mint in 2008 was likely for the production of gold bullion coins, such as American Eagles, or potentially for other numismatic products. The Mint's operations inherently require a steady supply of precious metals to meet market demand and fulfill its mandate of producing circulating coinage and precious metal products.
Given the short 3-day duration, what were the potential risks associated with price volatility for such a large gold purchase?
A short 3-day contract duration for a $15 million gold purchase presents significant price volatility risk. Gold prices can fluctuate rapidly due to market news, economic indicators, or geopolitical events. If the contract involved immediate delivery or payment, the government could have been exposed to unfavorable price movements occurring within that narrow window, potentially leading to overpayment compared to market rates just before or after the transaction.
How effective was the 'full and open competition' in ensuring the best possible price for the government, considering the commodity's market sensitivity?
The effectiveness of 'full and open competition' in securing the best price for $15 million in gold hinges on the specific terms of the contract and the market conditions during the bidding period. While this method maximizes potential bidders, the rapid nature of commodity markets means that the price discovered during the solicitation and award window might not perfectly reflect the absolute lowest possible price achievable if different timing or contract structures were employed. However, it generally provides a strong baseline for fair pricing.
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: 3
Pricing Type: OTHER (NONE OF THE ABOVE) (3)
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: $14,999,393
Exercised Options: $14,999,393
Current Obligation: $14,999,393
Parent Contract
Parent Award PIID: TMHQ06C0034
IDV Type: BOA
Timeline
Start Date: 2008-03-28
Current End Date: 2008-03-31
Potential End Date: 2008-03-31 00:00:00
Last Modified: 2014-02-23
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