Treasury's $20.16M Gold Purchase from Mitsui & Co. in 2008 for Nonferrous Metal Rolling
Contract Overview
Contract Amount: $20,159,069 ($20.2M)
Contractor: Mitsui & CO. Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2008-09-29
End Date: 2008-10-03
Contract Duration: 4 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 $20.2 million to MITSUI & CO. PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. Significant expenditure on raw gold material, a volatile commodity. 2. Sole awardee Mitsui & Co. suggests potential concentration in sourcing. 3. Contract awarded in 2008, pre-dating current market dynamics. 4. The 'Nonferrous Metal Rolling, Drawing, and Extruding' NAICS code is broad for a raw material purchase.
Value Assessment
Rating: questionable
The contract value of $20.16M for raw gold is substantial. Without current market benchmarks for gold procurement by the Mint, assessing value for money is difficult. The price of gold fluctuates significantly, making historical comparisons challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition. However, the specific awardee, Mitsui & Co., is a major player in precious metals, and the nature of raw material sourcing might limit the practical number of competitive bidders.
Taxpayer Impact: Taxpayer funds were used for a significant purchase of a volatile commodity. The ultimate impact depends on the Mint's strategy for this gold and its subsequent use or sale.
Public Impact
Direct government expenditure on a precious metal commodity. Potential impact on gold market supply and demand, albeit likely small. Transparency of the procurement process for a high-value commodity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Commodity price volatility
- Limited competition for raw material sourcing
- Historical data from 2008 may not reflect current market conditions
Positive Signals
- Awarded under full and open competition
- Procurement by a specialized agency (US Mint)
Sector Analysis
The US Mint procures precious metals for coinage and other purposes. Spending benchmarks for raw gold material are highly variable due to market fluctuations. This contract falls under the broader category of raw material acquisition for manufacturing.
Small Business Impact
The data indicates the award went to Mitsui & Co. Precious Metals, Inc., a large corporation. There is no indication of small business participation in this specific contract award.
Oversight & Accountability
The contract was awarded by the Department of the Treasury to the United States Mint. Oversight would typically involve internal Treasury processes and potentially GAO reviews, especially given the value.
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 commodity price volatility
- Potential for limited effective competition in specialized markets
- Historical data from a decade ago
- Lack of detail on the specific use and disposition of the gold
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 $20.2 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 $20.2 million.
What is the period of performance?
Start: 2008-09-29. End: 2008-10-03.
What was the specific purpose of this raw gold material acquisition by the US Mint, and how did its price compare to the prevailing market rate at the time of award?
The specific purpose of the raw gold acquisition is not detailed in the provided data. However, the US Mint typically procures gold for the production of bullion and commemorative coins. Comparing the price to the market rate would require accessing historical gold spot prices for September 2008 and understanding any premiums or discounts associated with the specific transaction terms, which are not available here.
Given the 2008 award date and the volatility of gold prices, what is the assessed risk associated with the long-term value of this procurement for taxpayers?
The risk associated with the long-term value is concerning due to gold's inherent price volatility. If the gold was acquired at a peak or if its intended use was delayed, taxpayers could face losses if the market price declined significantly. Conversely, if the gold price appreciated substantially and was later sold or used advantageously, it could represent a gain. Without knowing the disposition of the gold, the long-term risk remains tied to market fluctuations.
How effective was the 'full and open competition' in ensuring the best possible price for this significant raw gold purchase, considering the specialized nature of the market?
While the contract was formally awarded under 'full and open competition,' the effectiveness in securing the best price is questionable for a specialized commodity like raw gold. The market for large quantities of precious metals may have limited participants capable of meeting the Mint's requirements. True price discovery effectiveness depends on the number and competitiveness of actual bidders, which isn't detailed, potentially allowing for less aggressive pricing than in a broader market.
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: $20,159,069
Exercised Options: $20,159,069
Current Obligation: $20,159,069
Parent Contract
Parent Award PIID: TMHQ06C0034
IDV Type: BOA
Timeline
Start Date: 2008-09-29
Current End Date: 2008-10-03
Potential End Date: 2008-10-03 00:00:00
Last Modified: 2014-02-23
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