Treasury's $29M Raw Gold Material Purchase: Firm Fixed Price Contract Awarded to Toronto-Dominion Bank
Contract Overview
Contract Amount: $29,089,577 ($29.1M)
Contractor: THE Toronto-Dominion Bank
Awarding Agency: Department of the Treasury
Start Date: 2023-03-30
End Date: 2023-04-25
Contract Duration: 26 days
Daily Burn Rate: $1.1M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RAW GOLD MATERIAL
Plain-Language Summary
Department of the Treasury obligated $29.1 million to THE TORONTO-DOMINION BANK for work described as: RAW GOLD MATERIAL Key points: 1. Significant expenditure on raw gold material for the United States Mint. 2. Competition was full and open, suggesting a competitive bidding process. 3. The contract is a firm fixed price, providing cost certainty. 4. The sector involves wholesale of precious metals, aligning with the Mint's mission.
Value Assessment
Rating: fair
The contract value of $29,089,577.05 for raw gold material is substantial. Benchmarking against market prices for gold during the contract period would be necessary to fully assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes price discovery and competitive pricing.
Taxpayer Impact: Taxpayer funds are being used for the acquisition of essential raw materials for minting operations, which supports the production of coinage and bullion.
Public Impact
Ensures the supply of gold for U.S. Mint operations, potentially impacting coin and bullion availability. The large sum allocated could influence market dynamics for raw gold, though likely minimal given global scale. Transparency in the procurement process is maintained through full and open competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for price volatility in the gold market impacting the fixed price contract.
- Dependence on a single supplier for a critical raw material.
Positive Signals
- Firm fixed price contract provides budget certainty.
- Full and open competition suggests a fair market approach.
Sector Analysis
This contract falls within the 'Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers' sector. Spending in this area for government procurement is typically focused on materials for specific agency needs, like the U.S. Mint's operations.
Small Business Impact
The data does not indicate whether small businesses were involved in this procurement. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The United States Mint, as the procuring agency, is responsible for overseeing this contract. Standard government procurement regulations and oversight mechanisms would apply.
Related Government Programs
- Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers
- Department of the Treasury Contracting
- United States Mint Programs
Risk Flags
- Price volatility of gold commodity.
- Potential for overpayment if market prices decline.
- Dependence on the supplier's ability to deliver consistent quality.
- Limited contract duration may not cover long-term price hedging.
Tags
jewelry-watch-precious-stone-and-preciou, department-of-the-treasury, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $29.1 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 $29.1 million.
What is the period of performance?
Start: 2023-03-30. End: 2023-04-25.
What was the specific grade and form of raw gold material procured, and how does its price compare to prevailing market rates at the time of award?
The specific grade and form of raw gold material are not detailed in the provided data. A comprehensive value assessment would require comparing the contract price against the spot price of gold of equivalent purity and form (e.g., doré bars, refined gold) during the contract period (March-April 2023). Fluctuations in the gold market could mean the fixed price was either advantageous or disadvantageous.
What are the potential risks associated with a firm fixed price contract for a volatile commodity like gold?
A firm fixed price contract for gold carries the risk of the government overpaying if market prices decrease significantly after the contract is awarded. Conversely, the supplier assumes the risk of price increases, which could incentivize them to seek cost efficiencies or potentially impact future bidding if they perceive excessive risk. The duration of the contract also plays a role in this risk assessment.
How does this procurement contribute to the overall effectiveness of the United States Mint's operations?
This procurement is essential for the operational effectiveness of the United States Mint, as it directly supplies the primary raw material needed for producing gold coins, bullion, and potentially other gold-based products. Securing a sufficient and timely supply of gold ensures the Mint can meet its production targets and fulfill its mandate.
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: 4
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: $29,089,577
Exercised Options: $29,089,577
Current Obligation: $29,089,577
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
Start Date: 2023-03-30
Current End Date: 2023-04-25
Potential End Date: 2023-04-25 00:00:00
Last Modified: 2023-04-18
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