Treasury's $16.5M nonferrous metal contract awarded to Mitsui & Co. for 7 days of service

Contract Overview

Contract Amount: $16,558,483 ($16.6M)

Contractor: Mitsui & CO. Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2008-09-05

End Date: 2008-09-12

Contract Duration: 7 days

Daily Burn Rate: $2.4M/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 $16.6 million to MITSUI & CO. PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. The contract value represents a significant expenditure for a short-duration service. 2. Competition dynamics for this specific metal commodity need further examination. 3. The contract's duration raises questions about long-term strategic sourcing. 4. Performance context is limited due to the short contract period. 5. This contract falls within the broader category of industrial materials procurement. 6. The awarded amount is substantial relative to the brief service period.

Value Assessment

Rating: questionable

The awarded amount of $16.5 million for a 7-day contract appears exceptionally high, especially considering the nature of nonferrous metal procurement. Benchmarking against similar short-term commodity contracts is difficult without more specific details on the metals and quantities involved. However, the cost per day is over $2.3 million, which warrants scrutiny for value for money. It is unclear if this price reflects market volatility, emergency needs, or a premium for rapid acquisition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the fact that only one award was made suggests that either Mitsui & Co. Precious Metals, Inc. was the sole responsive bidder, or their offer was significantly more advantageous than any other. The limited duration might have deterred broader participation.

Taxpayer Impact: While full and open competition is generally positive for taxpayers, the high value for a short period suggests potential inefficiencies or a lack of competitive pressure on pricing for this specific need.

Public Impact

The United States Mint benefits from the acquisition of necessary nonferrous metals. This contract supports the Mint's operational needs for coinage or other production. The geographic impact is primarily within New York, where the contractor is based. Workforce implications are likely internal to the contractor and the Mint's procurement team.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High cost for a very short service duration.
Lack of transparency on specific metal types and quantities procured.
Potential for overpayment given the brief engagement period.
Limited information on the necessity of such a large expenditure for 7 days.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Contractor is a known entity in the precious metals market.
Procurement by the United States Mint implies a critical operational need.

Sector Analysis

This contract falls within the industrial materials and metals sector, specifically focusing on nonferrous metals. The market for precious metals and other nonferrous commodities can be highly volatile, influenced by global supply and demand, geopolitical events, and speculation. The United States Mint, as a major consumer of metals for coinage, operates within this dynamic market. Comparable spending benchmarks are difficult to establish without knowing the exact composition and volume of metals procured.

Small Business Impact

The contract does not indicate any small business set-aside. Given the nature of precious metals procurement and the size of the award, it is unlikely that small businesses would be primary participants or subcontractors in this specific transaction. The focus appears to be on specialized suppliers capable of handling large-volume, high-value metal transactions.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's internal audit and compliance functions, as well as potentially the Government Accountability Office (GAO) if specific concerns are raised. Transparency is limited by the public availability of detailed contract justifications and performance reports for such short-term, high-value commodity buys.

Related Government Programs

Department of the Treasury Procurement
United States Mint Operations
Nonferrous Metal Procurement
Commodity Contracts

Risk Flags

High Cost Per Day
Short Contract Duration
Limited Scope Detail

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.6 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 $16.6 million.

What is the period of performance?

Start: 2008-09-05. End: 2008-09-12.

What specific nonferrous metals were procured under this contract, and in what quantities?

The provided data indicates the contract is for 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding' and was awarded to 'MITSUI & CO. PRECIOUS METALS, INC.' for $16,558,483.31. However, the specific types and exact quantities of metals are not detailed in the summary data. Given the contractor's name, it is highly probable that the procurement involved precious metals like gold, silver, platinum, or palladium, which are essential for certain U.S. Mint operations, such as bullion coin production or specialized commemorative items. Without further documentation, the precise composition and volume remain unspecified.

How does the $16.5 million cost compare to typical spending for similar short-term metal procurements by the U.S. Mint?

The $16.5 million expenditure for a mere 7-day contract is exceptionally high and raises significant questions about value for money. Typical U.S. Mint procurements, even for precious metals, are often structured over longer periods or involve more detailed specifications that allow for better cost comparison. A daily expenditure exceeding $2.3 million suggests either an emergency procurement, a highly volatile market condition for the specific metals, or a premium paid for speed and availability. Without access to historical data for comparable 7-day emergency metal buys or detailed market analysis for the specific metals at the time of award, it is difficult to provide a precise benchmark, but the cost appears disproportionate to the duration.

What were the key performance indicators (KPIs) or deliverables expected within the 7-day contract period?

The contract description 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding' suggests the service involved the processing or supply of specific forms of nonferrous metals. For a 7-day contract, the key performance indicators would likely focus on the timely delivery of the specified metal products meeting stringent quality standards (e.g., purity, dimensions, surface finish). Given the short duration, the primary deliverable is the successful completion of the rolling, drawing, or extruding process, or the delivery of the processed metals, within the specified week. The high value suggests a significant volume or complexity of the required metal processing or supply.

What is the track record of Mitsui & Co. Precious Metals, Inc. with the U.S. Mint or other federal agencies for similar procurements?

Mitsui & Co. Precious Metals, Inc. is a subsidiary of a major global trading and investment company, known for its extensive operations in the metals and mining sectors. While specific details of their past contracts with the U.S. Mint are not immediately available in the provided summary, their established presence in the precious metals market suggests they are a qualified supplier. Federal procurement databases would typically show a history of awards to such large corporations for commodity supplies. Their track record would likely involve numerous transactions, potentially including other government agencies requiring metals for various purposes, though the scale and nature of this specific $16.5M, 7-day contract might be unique.

Were there any identified risks associated with this contract, and how were they mitigated?

Potential risks for a contract involving high-value precious metals include price volatility, supply chain disruptions, quality control issues, and security concerns related to handling and transport. Given the short duration and high value, risks related to rapid price fluctuations and ensuring timely delivery of a large quantity of material would be paramount. Mitigation strategies likely involved pre-negotiated pricing mechanisms (if possible for such a short term), stringent quality assurance protocols, robust security measures for transit and storage, and potentially contingency plans for supplier default or delays. The 'full and open competition' aspect suggests that multiple bids were evaluated, potentially identifying and mitigating risks associated with a single source.

What is the strategic importance of this specific procurement to the U.S. Mint's overall operations?

The strategic importance of this procurement hinges on the specific role the procured nonferrous metals play in the U.S. Mint's operations. If these metals are critical for the production of circulating coinage, bullion, or commemorative coins that have high demand or are part of a planned production schedule, then ensuring their timely availability is strategically vital. A short-term, high-value contract might indicate a need to bridge a gap in supply, respond to an unexpected surge in demand, or fulfill a specific, time-sensitive production requirement. The U.S. Mint's mission includes producing and protecting the nation's coinage, making reliable access to raw materials a fundamental operational necessity.

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: $16,558,483

Exercised Options: $16,558,483

Current Obligation: $16,558,483

Parent Contract

Parent Award PIID: TMHQ06C0034

IDV Type: BOA

Timeline