Treasury's $23.6M Gold Purchase from Coins 'N Things Faces Scrutiny Over Long-Term Contract and Limited Competition
Contract Overview
Contract Amount: $23,607,648 ($23.6M)
Contractor: Coins 'N Things, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2011-06-10
End Date: 2030-05-30
Contract Duration: 6,929 days
Daily Burn Rate: $3.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RAW GOLD
Place of Performance
Location: BRIDGEWATER, PLYMOUTH County, MASSACHUSETTS, 02324
Plain-Language Summary
Department of the Treasury obligated $23.6 million to COINS 'N THINGS, INC. for work described as: RAW GOLD Key points: 1. Significant long-term contract value of $23.6 million for raw gold. 2. Competition appears limited despite 'Full and Open' designation, raising questions about price discovery. 3. Potential risk associated with locking in prices for gold over a 19-year period. 4. Spending falls within the 'Other' sector, lacking specific industry benchmarks for comparison.
Value Assessment
Rating: questionable
The contract's fixed price over a 19-year term makes it difficult to assess current value. Without clear benchmarks for raw gold procurement over such an extended period, it's hard to determine if the price is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While designated 'Full and Open Competition,' the nature of raw gold procurement and the long duration of the contract may have limited actual bidders. The fixed price agreement over nearly two decades could obscure true market price fluctuations.
Taxpayer Impact: Taxpayer funds are committed to a long-term gold purchase agreement. The effectiveness of this price discovery mechanism over 19 years is uncertain, potentially leading to overpayment or underpayment compared to market rates.
Public Impact
Long-term commitment of taxpayer funds for a commodity. Potential for price volatility in gold impacting the fixed contract. Questions about the effectiveness of competition for raw material procurement over extended periods.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (19 years)
- Fixed price for a volatile commodity
- Limited transparency on competition effectiveness
Positive Signals
- Established contract with a known vendor
- Potential for price stability if gold prices rise
Sector Analysis
This contract for raw gold falls under 'Other' sector spending. Benchmarking is difficult as it's not tied to a specific industry like IT or construction, and commodity prices fluctuate significantly.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement. Analysis of small business participation is not possible with the provided information.
Oversight & Accountability
The long-term nature of this contract warrants oversight to ensure continued value and adherence to terms. Regular reviews would be prudent to assess market alignment and vendor performance.
Related Government Programs
- Nonferrous Metal (except Copper and Aluminum) Rolling, Drawing, and Extruding
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Long contract duration (19 years)
- Fixed price for a volatile commodity
- Potential for limited effective competition
- Lack of clear value assessment due to long term
- Uncertainty of taxpayer benefit over contract life
Tags
nonferrous-metal-except-copper-and-alumi, department-of-the-treasury, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $23.6 million to COINS 'N THINGS, INC.. RAW GOLD
Who is the contractor on this award?
The obligated recipient is COINS 'N THINGS, 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 $23.6 million.
What is the period of performance?
Start: 2011-06-10. End: 2030-05-30.
What is the rationale behind a 19-year fixed-price contract for raw gold, and how does it align with market volatility?
The rationale for such a long-term, fixed-price contract for a volatile commodity like gold is unclear from the data. Typically, governments might use shorter-term contracts or hedging strategies to manage price fluctuations. A 19-year fixed price locks in costs but risks significant overpayment if gold prices fall or underpayment if they surge, potentially impacting the value proposition for taxpayers.
How can the 'Full and Open Competition' designation be reconciled with the potential for limited actual bidders on a long-term raw material contract?
The 'Full and Open Competition' designation suggests the opportunity was advertised broadly. However, the specialized nature of raw gold procurement and the commitment required for a 19-year contract might deter many potential bidders. This could lead to a situation where only a few specialized firms can realistically compete, potentially limiting the effectiveness of the competition in driving down prices.
What are the potential risks and benefits for taxpayers associated with this long-term fixed-price gold contract?
The primary risk for taxpayers is financial exposure to gold price volatility. If gold prices decrease significantly over the 19 years, the government could be overpaying. Conversely, if prices rise sharply, the government benefits from the locked-in lower price. The benefit lies in budget certainty for this specific expenditure, but it sacrifices potential savings from market downturns.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 350 BEDFORD ST STE 2, BRIDGEWATER, MA, 02324
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,607,648
Exercised Options: $23,607,648
Current Obligation: $23,607,648
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: TMHQ10C0044
IDV Type: IDC
Timeline
Start Date: 2011-06-10
Current End Date: 2030-05-30
Potential End Date: 2030-05-30 00:00:00
Last Modified: 2025-04-15
More Contracts from Coins 'N Things, Inc.
Other Department of the Treasury Contracts
- Advertising Services — $636.5M (True North Communications Inc)
- Cade 2 Ltis3 Covid-19 — $383.8M (Deloitte Consulting LLP)
- Establish a Broad Networking and Telecommunications Service Environment to Meet ITS Network Services (wide Area and Local Area Network), Voice Telecommunications Services, Audio/Video/Web Conferencing, and Cyber Requirements — $320.2M (AT&T Enterprises, LLC)
- THE Internal Revenue Service (IRS), Office of Information Technology Office, Issues This Order Under GSA Alliant 2 (unrestricted). Enterprise Case Management (ECM) Solution Integration Services — $305.5M (Booz Allen Hamilton Inc)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Verizon Business Network Services LLC)