Treasury's $22.6M contract for nonferrous metals awarded to Mitsui & Co. for 8 days

Contract Overview

Contract Amount: $22,592,997 ($22.6M)

Contractor: Mitsui & CO. Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2009-12-16

End Date: 2009-12-24

Contract Duration: 8 days

Daily Burn Rate: $2.8M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 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 $22.6 million to MITSUI & CO. PRECIOUS METALS, INC. for work described as: GOLD Key points: 1. Contract value appears high for a short duration, suggesting potential for overpayment or a specific, high-value need. 2. The contract was awarded under full and open competition, indicating a broad market search. 3. A short performance period of 8 days raises questions about the necessity and urgency of the procurement. 4. The specific commodity, nonferrous metals, is critical for minting operations. 5. The award to a single entity, Mitsui & Co., warrants scrutiny regarding price reasonableness given the competition level. 6. The contract's fixed-price nature limits the government's exposure to cost overruns but requires careful initial pricing.

Value Assessment

Rating: questionable

The contract value of $22.6 million for an 8-day period is exceptionally high on a per-day basis. While specific market conditions for nonferrous metals can fluctuate, this rate suggests either a very large quantity of high-value material was required or the pricing may not be fully optimized. Benchmarking against similar short-term, high-value metal procurements would be necessary to definitively assess value for money. The fixed-price nature provides cost certainty, but the initial price point requires justification.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the award went to a single entity, Mitsui & Co. Precious Metals, Inc. The details of the bidding process, including the number of proposals received and the evaluation criteria, are not provided. A single award from a competitive process could indicate that only one bidder met all requirements, or that the pricing offered by the winner was significantly more advantageous.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially leading to lower costs for the government. However, the ultimate benefit depends on the number of bids received and the competitiveness of the winning offer.

Public Impact

The United States Mint benefits from the acquisition of essential nonferrous metals for its coinage production. The contract directly supports the Mint's operational capacity to produce currency. The geographic impact is primarily national, ensuring the supply chain for U.S. currency. Workforce implications are likely minimal for this specific procurement, as it focuses on material supply rather than direct labor services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extremely high cost per day raises concerns about potential overpricing or inefficient procurement strategy.
Short duration of the contract (8 days) is unusual for a procurement of this magnitude, suggesting potential urgency or a non-standard acquisition approach.
Lack of detail on the competitive bidding process makes it difficult to assess if the best possible price was achieved.
The specific commodity is critical, making supply chain risks a potential concern if not managed effectively.

Positive Signals

Awarded under full and open competition, which theoretically maximizes the potential for competitive pricing.
The use of a firm fixed-price contract provides cost certainty for the government.
The contractor, Mitsui & Co., is a known entity in the precious metals market, suggesting potential expertise.

Sector Analysis

This contract falls within the broader industrial sector of metals and metal products, specifically focusing on nonferrous metals. The market for such commodities is global and subject to significant price volatility based on supply, demand, and geopolitical factors. The United States Mint is a major consumer of precious and other metals for coinage. Comparable spending benchmarks would typically involve analyzing other government or large industrial procurements of similar metals over short, intensive periods.

Small Business Impact

The contract details indicate that small business participation was not a specific set-aside requirement (ss: false, sb: false). Therefore, the primary impact on small businesses would be indirect, through potential subcontracting opportunities if Mitsui & Co. chose to engage them. However, given the specialized nature of precious metals trading and the short duration, it is less likely that significant small business subcontracting occurred. The overall impact on the small business ecosystem for this specific contract is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Treasury and the United States Mint's contracting officers. As a procurement of precious metals, there may be additional internal controls and auditing procedures related to inventory management and financial reconciliation. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Transparency is facilitated by the public nature of contract awards, but detailed justifications for pricing and competition outcomes are not always readily available.

Related Government Programs

Gold Coin Production
Silver Coin Production
Precious Metals Procurement
Industrial Metals Supply Chain
U.S. Mint Operations

Risk Flags

High contract value for short duration
Potential for price volatility in precious metals market
Need for detailed justification of pricing and quantity

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $22.6 million to MITSUI & CO. PRECIOUS METALS, INC.. 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 $22.6 million.

What is the period of performance?

Start: 2009-12-16. End: 2009-12-24.

What was the specific type and quantity of nonferrous metals procured under this contract?

The provided data indicates the contract was for 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding' (ND: 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding'). However, the specific types (e.g., gold, silver, platinum) and quantities of metals are not detailed in the summary data. Given the contractor is 'MITSUI & CO. PRECIOUS METALS, INC.' and the agency is the 'United States Mint', it is highly probable that the metals procured were precious metals like gold, silver, or platinum, essential for coinage. The exact specifications would be found in the contract's statement of work or technical exhibits, which are not included in the provided data.

How does the $22.6 million contract value compare to typical annual spending on nonferrous metals by the U.S. Mint?

The provided data shows a contract value of $22,592,997.29 awarded on December 16, 2009, with an end date of December 24, 2009, making it an 8-day contract. This value is substantial for such a short period. To compare it to typical annual spending, one would need historical U.S. Mint procurement data for nonferrous metals. Without that context, it's difficult to ascertain if this represents a significant portion of annual needs or a one-time, urgent acquisition. However, the sheer amount for an 8-day period suggests it was either for a very large quantity or for extremely high-value materials, potentially including precious metals used in commemorative or bullion coins, in addition to circulating coinage.

What were the key evaluation criteria used in the full and open competition for this contract?

The provided data states the contract was awarded under 'FULL AND OPEN COMPETITION' (CT: 'FULL AND OPEN COMPETITION'). However, it does not specify the key evaluation criteria used to select Mitsui & Co. Precious Metals, Inc. Typically, for a full and open competition, evaluation criteria would include factors such as technical approach, past performance, management capability, and price. For a commodity like precious metals, price is often a dominant factor, but the specific weightings and requirements would be detailed in the solicitation (e.g., Request for Proposal or Invitation for Bid). The absence of this information prevents a full assessment of how the winning bid was determined to be the 'best value' or lowest price technically acceptable.

Are there any known performance issues or track record concerns with Mitsui & Co. Precious Metals, Inc. regarding government contracts?

The provided summary data does not include information on the contractor's performance history or any specific issues related to this or other government contracts. Mitsui & Co. Precious Metals, Inc. is a subsidiary of a large, established global trading company. A comprehensive review would require searching federal procurement databases (like SAM.gov or FPDS) for past performance records, contract awards, and any reported disputes, terminations, or quality issues associated with this specific entity. Without access to that detailed historical data, it's not possible to definitively assess their track record for government contracts.

What is the significance of the 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding' classification for the U.S. Mint?

The classification 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding' (ND: 'Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding') indicates the type of processing applied to the metals procured. For the U.S. Mint, this likely means the metals were supplied in a form suitable for further manufacturing into coin blanks. Rolling creates sheets, drawing forms wire or rods, and extruding pushes metal through a die to create specific shapes. These processes are fundamental steps in preparing raw metals for minting operations, ensuring they meet the precise specifications required for striking coins efficiently and consistently.

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

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: $22,592,997

Exercised Options: $22,592,997

Current Obligation: $22,592,997

Parent Contract

Parent Award PIID: TMHQ06C0034

IDV Type: BOA

Timeline