Treasury's Mint awards $28.7M for coinage metal, with a 5.1% price premium over benchmark

Contract Overview

Contract Amount: $28,703,954 ($28.7M)

Contractor: Wieland Rolled Products North America, LLC

Awarding Agency: Department of the Treasury

Start Date: 2022-07-11

End Date: 2022-09-05

Contract Duration: 56 days

Daily Burn Rate: $512.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE STRIP AND METAL FOR CIRCULATING COINAGE.

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40241

State: Kentucky Government Spending

Plain-Language Summary

Department of the Treasury obligated $28.7 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC for work described as: PROVIDE STRIP AND METAL FOR CIRCULATING COINAGE. Key points: 1. Contract awarded for essential coinage metal supply, supporting national currency production. 2. Competition was robust, suggesting fair market pricing for the materials. 3. Delivery order structure indicates a need for timely material provision. 4. Fixed-price contract limits cost escalation risks for the government. 5. Supplier is a specialized rolled products manufacturer, indicating sector expertise. 6. Geographic concentration of supplier in Kentucky may present minor supply chain risk.

Value Assessment

Rating: good

The contract's price appears reasonable given the specialized nature of the material and the competitive bidding process. The benchmark price of $5,125,710 suggests a price premium of approximately 5.1% for the awarded amount of $28,703,953.96. This premium is within acceptable ranges for specialized industrial materials, especially when considering the quality and specifications required for coinage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. The presence of two bids suggests a healthy level of competition for this requirement, which typically drives down prices and ensures the government receives competitive offers.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure the best possible price for essential coinage metals.

Public Impact

Benefits the United States Mint in its mission to produce circulating coinage. Ensures a consistent supply of essential metals for U.S. currency. Supports the manufacturing sector through the provision of raw materials. Indirectly benefits the public by ensuring the availability of coins for transactions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruption if the sole supplier faces operational issues.
Geographic concentration of the supplier in Kentucky could pose logistical challenges.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Fixed-price contract provides cost certainty.
Supplier is a specialized manufacturer with relevant expertise.

Sector Analysis

This contract falls within the broader metals and minerals manufacturing sector, specifically focusing on non-ferrous metal rolling and processing. The market for specialized coinage metals is relatively niche, with a limited number of suppliers capable of meeting the stringent quality and production standards required by mints. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of the material, but general industrial metal prices provide a baseline.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The primary contractor, Wieland Rolled Products North America, LLC, is a significant industrial entity, suggesting that the focus was on specialized manufacturing capabilities rather than small business participation for this specific award.

Oversight & Accountability

The contract is a delivery order under an existing agreement, likely subject to standard government procurement oversight. The Department of the Treasury and the United States Mint are responsible for ensuring compliance with contract terms. Transparency is maintained through public contract databases, and any significant issues would fall under the purview of the Treasury Inspector General.

Related Government Programs

Department of the Treasury Procurement
United States Mint Operations
Metals and Minerals Supply Chain
Circulating Coinage Production

Risk Flags

Supply Chain Concentration
Potential for Price Volatility (Mitigated by Fixed Price)

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $28.7 million to WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC. PROVIDE STRIP AND METAL FOR CIRCULATING COINAGE.

Who is the contractor on this award?

The obligated recipient is WIELAND ROLLED PRODUCTS NORTH AMERICA, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.7 million.

What is the period of performance?

Start: 2022-07-11. End: 2022-09-05.

What is the track record of Wieland Rolled Products North America, LLC with the federal government?

Wieland Rolled Products North America, LLC has a history of federal contracts, primarily with agencies like the Department of the Treasury (United States Mint) and the Department of Defense. Their awards typically relate to the supply of various metals, including copper and brass, often for manufacturing or production purposes. Analysis of their contract history reveals a pattern of securing awards through competitive bidding processes, suggesting a consistent ability to meet government specifications and pricing requirements. While specific performance metrics for past contracts are not detailed here, their continued engagement with federal agencies implies a generally satisfactory performance record in delivering required materials and services.

How does the awarded price compare to historical spending for similar materials by the U.S. Mint?

Comparing the awarded price of $28,703,953.96 for strip and metal for circulating coinage to historical spending requires access to detailed historical procurement data from the U.S. Mint. However, the provided benchmark price of $5,125,710 for a portion of the requirement suggests a significant price premium. Without knowing the exact quantity and specifications of the metal covered by the benchmark, a precise historical comparison is challenging. Generally, metal prices are subject to market fluctuations influenced by global supply, demand, and commodity markets. The fixed-price nature of this contract aims to mitigate future price volatility for the government. Further analysis would involve tracking the average price per pound or ton of similar copper alloys procured by the Mint over several fiscal years.

What are the primary risks associated with this contract and the supplier?

The primary risks associated with this contract include potential supply chain disruptions, given that Wieland Rolled Products North America, LLC is the sole awardee for this specific delivery order. If the supplier experiences production issues, labor strikes, or logistical problems, the timely delivery of essential metals for coinage could be jeopardized. The geographic concentration of the supplier in Kentucky could also present a risk if regional events impact transportation or operations. Furthermore, while the contract is fixed-price, unforeseen increases in raw material costs beyond market fluctuations could strain the supplier's profitability, potentially leading to future contract renegotiation requests or performance issues, although the fixed-price structure is designed to prevent this. The quality control of the metal is also critical; any deviation from specifications could lead to costly production errors at the Mint.

How effective is the U.S. Mint's procurement process in securing competitive pricing for raw materials?

The U.S. Mint's procurement process, as evidenced by this contract awarded under 'full and open competition,' appears generally effective in fostering competitive pricing for raw materials. The fact that two bids were received indicates that the market is sufficiently competitive to attract multiple qualified suppliers. Full and open competition is a standard best practice designed to maximize the number of potential bidders, thereby increasing the likelihood of receiving competitive offers and preventing price gouging. The benchmark price comparison, showing a modest premium, suggests that the competitive process yielded a price that, while not the absolute lowest possible, was deemed fair and reasonable within the market context. The Mint's reliance on established procurement regulations and procedures supports its ability to achieve value for taxpayer money in acquiring essential production inputs.

What is the typical duration and value of contracts for coinage metals?

Contracts for coinage metals can vary significantly in duration and value depending on the specific metal, quantity required, and the U.S. Mint's production forecasts. This particular contract is a delivery order with a duration of 56 days (from July 11, 2022, to September 5, 2022) and a value of $28.7 million. This suggests a need for a specific, relatively short-term supply of materials. Longer-term requirements might be met through indefinite-delivery/indefinite-quantity (IDIQ) contracts or multi-year agreements. The value of such contracts can range from millions to tens of millions of dollars annually, depending on the overall demand for coinage and the prevailing market prices for metals like copper, zinc, and nickel alloys. The U.S. Mint often procures these materials through competitive solicitations to ensure cost-effectiveness.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Copper Rolling, Drawing, Extruding, and Alloying

Product/Service Code: METAL BARS, SHEETS, SHAPES

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: 4801 OLYMPIA PARK PLZ STE 3500, LOUISVILLE, KY, 40241

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,703,954

Exercised Options: $28,703,954

Current Obligation: $28,703,954

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031JG18D00001

IDV Type: IDC

Timeline