Treasury's Mint Spends $16.5M on Raw Gold Material from Mitsui & Co
Contract Overview
Contract Amount: $16,529,377 ($16.5M)
Contractor: Mitsui & CO. Precious Metals, Inc.
Awarding Agency: Department of the Treasury
Start Date: 2010-03-12
End Date: 2010-03-19
Contract Duration: 7 days
Daily Burn Rate: $2.4M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
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 $16.5 million to MITSUI & CO. PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. Significant expenditure on a key commodity. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Risk is moderate, tied to commodity price fluctuations and supplier reliability. 4. Sector is materials procurement, crucial for mint operations.
Value Assessment
Rating: fair
The award amount of $16.5M for a 7-day contract is substantial. Without specific unit details or historical pricing, it's difficult to definitively assess value. However, the firm fixed price suggests a pre-determined cost.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. This method typically allows multiple bidders to submit proposals, driving down costs.
Taxpayer Impact: Taxpayer funds are used for procuring essential raw materials. Competitive bidding aims to ensure these funds are used efficiently, though the exact value for money is not explicitly detailed.
Public Impact
Ensures supply of precious metals for U.S. coinage. Impacts the cost of producing currency and investment products. Supports global commodity markets through significant procurement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Commodity price volatility
- Supplier concentration risk
- Short contract duration may limit long-term price benefits
Positive Signals
- Full and open competition
- Firm fixed price contract type
Sector Analysis
This procurement falls within the nonferrous metal processing sector, specifically for raw gold. Spending benchmarks for such raw material acquisitions are highly variable, dependent on market prices and quantities.
Small Business Impact
The data does not indicate whether small businesses were involved in this specific procurement. The prime contractor, Mitsui & Co., is a large multinational corporation.
Oversight & Accountability
The contract was awarded by the Department of the Treasury's United States Mint. Oversight would focus on contract compliance, delivery, and quality of the gold material.
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 dollar value award
- Reliance on commodity markets
- Short contract duration
- Potential for price volatility
- Single prime contractor
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 $16.5 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 $16.5 million.
What is the period of performance?
Start: 2010-03-12. End: 2010-03-19.
What was the specific quantity and purity of gold purchased, and how does the price per ounce compare to market rates at the time of award?
The provided data lacks specific details on the quantity and purity of the gold material. To assess value, a comparison of the per-ounce cost against prevailing market rates for gold of similar fineness during the March 2010 award period would be necessary. This would reveal if the $16.5 million expenditure represented a fair market price.
What are the potential risks associated with relying on a single supplier like Mitsui & Co. for such a large volume of raw gold?
Relying on a single supplier, even with full and open competition for the contract award, introduces risks. These include potential supply chain disruptions, price leverage by the supplier, and limited recourse if quality issues arise. Diversifying suppliers or securing long-term hedging strategies could mitigate these risks.
How effectively does this procurement strategy contribute to the Mint's overall mission of producing coinage and bullion?
This procurement is essential for the Mint's core mission. The firm fixed price and competitive award suggest an attempt at cost control. However, the short duration and lack of detailed cost breakdown make it difficult to fully assess the long-term effectiveness in ensuring a stable and cost-efficient supply of gold.
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: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
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: $16,529,377
Exercised Options: $16,529,377
Current Obligation: $16,529,377
Parent Contract
Parent Award PIID: TMHQ06C0034
IDV Type: BOA
Timeline
Start Date: 2010-03-12
Current End Date: 2010-03-19
Potential End Date: 2010-03-19 00:00:00
Last Modified: 2014-02-23
More Contracts from Mitsui & CO. Precious Metals, Inc.
- Gold — $22.6M (Department of the Treasury)
- Provide RAW Gold Material — $22.6M (Department of the Treasury)
- Provide RAW Gold Material — $20.2M (Department of the Treasury)
- Gold RAW Material — $19.7M (Department of the Treasury)
- Provide RAW Gold Material — $19.3M (Department of the Treasury)
View all Mitsui & CO. Precious Metals, Inc. federal contracts →
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