Treasury Spends $56.8M on Raw Gold Material via Full and Open Competition

Contract Overview

Contract Amount: $56,855,022 ($56.9M)

Contractor: THE Toronto-Dominion Bank

Awarding Agency: Department of the Treasury

Start Date: 2022-09-28

End Date: 2022-10-14

Contract Duration: 16 days

Daily Burn Rate: $3.6M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RAW GOLD MATERIAL

Plain-Language Summary

Department of the Treasury obligated $56.9 million to THE TORONTO-DOMINION BANK for work described as: RAW GOLD MATERIAL Key points: 1. Significant expenditure on a key commodity. 2. Competition method suggests potential for competitive pricing. 3. Risk of price volatility inherent in gold markets. 4. Sector is essential for precious metals and financial markets.

Value Assessment

Rating: fair

The contract value is substantial, but without specific unit pricing or comparison data for raw gold material, a precise value assessment is difficult. The firm fixed price suggests cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was utilized, which typically fosters competitive bidding and can lead to better price discovery. The award was a delivery order, indicating it was part of a larger framework.

Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing the best possible price for the raw gold material.

Public Impact

Ensures supply of essential raw material for government operations. Market price fluctuations of gold directly impact contract cost. Transparency in procurement through full and open competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Gold price volatility
Supply chain disruptions for precious metals

Positive Signals

Competitive bidding process
Firm fixed price contract

Sector Analysis

This contract falls within the wholesale trade of precious metals. Spending benchmarks for raw material procurement can vary widely based on market conditions and quantity.

Small Business Impact

No specific information is provided regarding small business participation in this contract. The nature of raw gold material procurement may favor larger, specialized suppliers.

Oversight & Accountability

The contract was awarded via a delivery order under a larger procurement vehicle, suggesting existing oversight mechanisms. Further review would be needed to assess specific oversight for this order.

Related Government Programs

Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
Department of the Treasury Contracting
United States Mint Programs

Risk Flags

Commodity price volatility
Potential for supply chain disruptions
Lack of detailed unit cost data for granular analysis

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $56.9 million to THE TORONTO-DOMINION BANK. RAW GOLD MATERIAL

Who is the contractor on this award?

The obligated recipient is THE TORONTO-DOMINION BANK.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (United States Mint).

What is the total obligated amount?

The obligated amount is $56.9 million.

What is the period of performance?

Start: 2022-09-28. End: 2022-10-14.

What was the specific unit price of the raw gold material, and how does it compare to market rates at the time of award?

The provided data does not include the specific unit price for the raw gold material. To assess value, this information would need to be obtained and compared against prevailing market rates for gold of the specified purity and form during the contract period. This comparison is crucial for determining if the government secured a competitive price.

What are the primary risks associated with the price volatility of gold for this contract?

The primary risk is that the firm fixed price may not adequately account for significant upward swings in the global gold market between the contract award and delivery. If the market price of gold increases substantially, the government might be paying below the current market value, which could strain supplier relationships or lead to future price adjustments if not structured carefully. Conversely, a price drop benefits the government.

How effectively does the full and open competition method mitigate risks for this type of commodity procurement?

Full and open competition is effective in mitigating risks by allowing multiple potential suppliers to bid, theoretically driving down prices and increasing transparency. However, for highly volatile commodities like gold, the effectiveness is also dependent on the timing of the award relative to market cycles and the specific terms of the firm fixed price, which might not fully capture rapid price shifts.

Industry Classification

NAICS: Wholesale Trade › Miscellaneous Durable Goods Merchant Wholesalers › Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Toronto-Dominion Bank, the

Address: 66 WELLINGTON ST W 12TH FLR, TORONTO

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $56,855,022

Exercised Options: $56,855,022

Current Obligation: $56,855,022

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TMHQ13C0009

IDV Type: IDC

Timeline