Treasury's Mint Spends $20.7M on Silver Raw Material from Stonex Financial Ltd

Contract Overview

Contract Amount: $20,678,037 ($20.7M)

Contractor: Stonex Financial Ltd

Awarding Agency: Department of the Treasury

Start Date: 2024-12-16

End Date: 2024-12-23

Contract Duration: 7 days

Daily Burn Rate: $3.0M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SILVER RAW MATERIAL

Plain-Language Summary

Department of the Treasury obligated $20.7 million to STONEX FINANCIAL LTD for work described as: SILVER RAW MATERIAL Key points: 1. Significant expenditure on a key industrial commodity. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Risk is moderate, tied to commodity price fluctuations and supplier performance. 4. Sector is Nonferrous Metal Smelting and Refining, crucial for industrial processes.

Value Assessment

Rating: fair

The contract value of $20.7M for silver raw material appears substantial. Benchmarking against market prices for silver during the delivery period is necessary to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was utilized, which is a positive indicator for price discovery. However, the final price is dependent on market fluctuations for silver.

Taxpayer Impact: Taxpayer funds are used for acquiring essential raw materials. Competitive bidding aims to ensure efficient use of these funds.

Public Impact

Impacts the supply chain for precious metals used in various industries. Government's role in securing critical raw materials for national needs. Potential influence on market prices due to large procurement volumes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Commodity price volatility
Supplier delivery reliability

Positive Signals

Competitive bidding process
Clear delivery timeline

Sector Analysis

The Nonferrous Metal Smelting and Refining sector involves significant capital investment and market sensitivity. Government procurement in this area often relates to strategic reserves or industrial support.

Small Business Impact

No specific indication of small business involvement in this contract. Further analysis would be needed to determine if opportunities were missed.

Oversight & Accountability

The United States Mint is responsible for this procurement. Standard oversight procedures for government contracts should apply, including performance monitoring.

Related Government Programs

Nonferrous Metal (except Aluminum) Smelting and Refining
Department of the Treasury Contracting
United States Mint Programs

Risk Flags

Price volatility of silver
Supplier dependency
Market speculation impact
Geopolitical factors affecting commodity prices

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $20.7 million to STONEX FINANCIAL LTD. SILVER RAW MATERIAL

Who is the contractor on this award?

The obligated recipient is STONEX FINANCIAL LTD.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2024-12-16. End: 2024-12-23.

How does the final price compare to the benchmark price of silver during the contract period?

A thorough analysis would involve comparing the contracted price against the average market price of silver (e.g., COMEX futures) during the delivery window (December 16-23, 2024). This comparison is crucial for determining if the government secured a favorable rate and achieved value for money, considering the firm fixed-price nature of the contract.

What are the primary risks associated with this raw material procurement?

The primary risks include significant price volatility inherent in the silver market, which could lead to overpayment if prices fall post-contract. Additionally, supplier performance risks, such as delivery delays or quality issues from Stonex Financial Ltd., could impact the Mint's operations and downstream production.

How effectively does this procurement support the Mint's operational needs?

This procurement directly supports the United States Mint's operational needs by securing a critical raw material. The firm fixed-price contract and full and open competition suggest an effort to ensure predictable costs and competitive sourcing, thereby enhancing the effectiveness of acquiring necessary silver.

Industry Classification

NAICS: Manufacturing › Nonferrous Metal (except Aluminum) Production and Processing › Nonferrous Metal (except Aluminum) Smelting and Refining

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1ST FLOOR, LONDON

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, International Organization, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $20,678,037

Exercised Options: $20,678,037

Current Obligation: $20,678,037

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Parent Contract

Parent Award PIID: 2031JG21D00023

IDV Type: IDC

Timeline