Treasury's US Mint Spends $37M on Raw Gold Material via Full and Open Competition

Contract Overview

Contract Amount: $37,093,993 ($37.1M)

Contractor: THE Toronto-Dominion Bank

Awarding Agency: Department of the Treasury

Start Date: 2023-09-19

End Date: 2023-09-26

Contract Duration: 7 days

Daily Burn Rate: $5.3M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RAW GOLD MATERIAL (COMPLETE)

Plain-Language Summary

Department of the Treasury obligated $37.1 million to THE TORONTO-DOMINION BANK for work described as: RAW GOLD MATERIAL (COMPLETE) Key points: 1. Significant expenditure on a critical commodity for mint operations. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Risk associated with commodity price volatility and supply chain disruptions. 4. Sector context points to the precious metals wholesale industry.

Value Assessment

Rating: fair

The contract value of $37.1M for raw gold material is substantial. Benchmarking against market prices for gold during the contract period is necessary to assess value, but the firm fixed price suggests an attempt to lock in costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition is a positive sign for price discovery. It allows multiple suppliers to bid, theoretically driving down costs and ensuring fair market value.

Taxpayer Impact: Taxpayer funds are used for this procurement. The effectiveness of the competition in securing favorable pricing directly impacts the efficient use of these funds.

Public Impact

Ensures the US Mint has the necessary raw materials for coin and medal production. Supports the precious metals market through significant purchasing power. Potential impact on the price of gold due to large-scale acquisition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Commodity price volatility
Supply chain disruptions for precious metals

Positive Signals

Full and open competition
Firm fixed price contract

Sector Analysis

This contract falls within the wholesale trade of precious metals. Spending benchmarks for raw material acquisition by mints or similar government entities would be relevant for comparison.

Small Business Impact

The data indicates no specific set-aside for small businesses. The nature of raw gold material procurement typically involves large suppliers, potentially limiting small business participation.

Oversight & Accountability

The Department of the Treasury, specifically the United States Mint, is responsible for this procurement. Oversight would focus on adherence to procurement regulations and effective price negotiation.

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
Supply chain dependency
Potential for market manipulation
Limited visibility into contractor's sourcing

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $37.1 million to THE TORONTO-DOMINION BANK. RAW GOLD MATERIAL (COMPLETE)

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 $37.1 million.

What is the period of performance?

Start: 2023-09-19. End: 2023-09-26.

How does the contract price compare to prevailing market rates for raw gold during the specified period?

A detailed analysis would require comparing the contract's firm fixed price against daily or weekly spot prices for gold, adjusted for any purity or form specifications. This comparison is crucial to determine if the government secured a competitive rate and avoided overpayment, directly impacting the value for taxpayers.

What are the primary risks associated with the supply chain for this raw gold material?

Key risks include geopolitical instability in gold-producing regions, potential disruptions in mining or refining operations, transportation challenges, and fluctuations in global demand. The US Mint must have contingency plans to mitigate these risks and ensure a continuous supply for its operations.

To what extent does the firm fixed price mitigate the risk of cost overruns for the US Mint?

A firm fixed price contract shifts the cost risk to the contractor, protecting the government from unexpected price increases in the raw gold material. However, it may lead to a higher initial price compared to cost-reimbursement contracts if the contractor anticipates significant market volatility.

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: $37,093,993

Exercised Options: $37,093,993

Current Obligation: $37,093,993

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