Treasury's Bureau of Engraving and Printing Awards $74.2M Contract for NS-LEPE Machines to Koenig & Bauer

Contract Overview

Contract Amount: $74,200,933 ($74.2M)

Contractor: Koenig & Bauer Banknote Solutions SA

Awarding Agency: Department of the Treasury

Start Date: 2025-06-06

End Date: 2035-05-29

Contract Duration: 3,644 days

Daily Burn Rate: $20.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TWO (2) NS-LEPE, ONE (1) FOR WCF AND ONE (1) FOR DCRF. OPTIONS FOR FIVE (5) ADDITIONAL NS-LEPE MACHINES MAY BE REQUESTED BY WRITTEN NOTICE AND SHALL BE DELIVERED TO THE BEP.

Plain-Language Summary

Department of the Treasury obligated $74.2 million to KOENIG & BAUER BANKNOTE SOLUTIONS SA for work described as: TWO (2) NS-LEPE, ONE (1) FOR WCF AND ONE (1) FOR DCRF. OPTIONS FOR FIVE (5) ADDITIONAL NS-LEPE MACHINES MAY BE REQUESTED BY WRITTEN NOTICE AND SHALL BE DELIVERED TO THE BEP. Key points: 1. The contract is for two NS-LEPE machines, with options for five more, totaling a potential $74.2 million. 2. Koenig & Bauer Banknote Solutions SA is the sole awardee, indicating a lack of competition. 3. The contract spans nearly 10 years, suggesting a long-term need for this specialized equipment. 4. The sector is 'All Other Industrial Machinery Manufacturing,' highlighting the specialized nature of the purchase.

Value Assessment

Rating: questionable

The contract value of $74.2 million for two specialized banknote printing machines appears high, especially considering the lack of competition. Benchmarking against similar specialized industrial machinery contracts is difficult without more specific data, but the price warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, suggesting a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition on this significant contract may result in taxpayers paying a premium for the NS-LEPE machines.

Public Impact

Ensures continued production of currency by the Bureau of Engraving and Printing. Potential for job security within the banknote printing industry. Taxpayers may be overpaying due to the sole-source nature of the award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Long contract duration (nearly 10 years) increases risk of cost overruns or obsolescence.
High contract value without clear justification for sole-sourcing.

Positive Signals

Ensures critical operational capability for the Bureau of Engraving and Printing.
Potential for advanced technology in banknote production.

Sector Analysis

The Bureau of Engraving and Printing operates in a highly specialized niche within industrial machinery manufacturing, focusing on banknote printing technology. Spending in this sector is often characterized by high barriers to entry and limited suppliers, making competitive bidding challenging.

Small Business Impact

The awardee, Koenig & Bauer Banknote Solutions SA, is not identified as a small business. There is no indication that small businesses were involved in this procurement, either as prime contractors or subcontractors.

Oversight & Accountability

The sole-source nature of this contract raises questions about the oversight applied to justify the lack of competition. Further review is needed to ensure the procurement process was robust and that taxpayer funds are being used efficiently.

Related Government Programs

All Other Industrial Machinery Manufacturing
Department of the Treasury Contracting
Bureau of Engraving and Printing Programs

Risk Flags

Sole-source award
High contract value
Long contract duration
Lack of small business participation
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $74.2 million to KOENIG & BAUER BANKNOTE SOLUTIONS SA. TWO (2) NS-LEPE, ONE (1) FOR WCF AND ONE (1) FOR DCRF. OPTIONS FOR FIVE (5) ADDITIONAL NS-LEPE MACHINES MAY BE REQUESTED BY WRITTEN NOTICE AND SHALL BE DELIVERED TO THE BEP.

Who is the contractor on this award?

The obligated recipient is KOENIG & BAUER BANKNOTE SOLUTIONS SA.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of Engraving and Printing).

What is the total obligated amount?

The obligated amount is $74.2 million.

What is the period of performance?

Start: 2025-06-06. End: 2035-05-29.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source award. A thorough justification for this approach should exist within the agency's procurement file, detailing why only Koenig & Bauer Banknote Solutions SA could meet the requirements. This justification should include market research demonstrating the lack of viable alternatives and a price reasonableness analysis to ensure the $74.2 million is fair, despite the absence of competitive bids.

What are the specific risks associated with acquiring specialized banknote printing equipment on a sole-source, long-term contract?

The primary risks include potential overpayment due to the lack of competitive pricing, and the possibility of technological obsolescence over the nearly 10-year contract duration. There's also a risk that the sole-source provider may not prioritize service or innovation as aggressively as they would under competitive pressure, potentially impacting the Bureau of Engraving and Printing's operational efficiency and long-term cost-effectiveness.

How does this contract contribute to the overall effectiveness and efficiency of the Bureau of Engraving and Printing's currency production?

This contract is crucial for maintaining and potentially upgrading the Bureau of Engraving and Printing's capacity to produce U.S. currency. The NS-LEPE machines likely represent advanced technology necessary for efficient, secure, and high-volume banknote printing. Assuming the machines perform as expected, they contribute directly to the agency's effectiveness in fulfilling its mandate, though the cost-effectiveness is questionable due to the procurement method.

Industry Classification

NAICS: Manufacturing › Industrial Machinery Manufacturing › All Other Industrial Machinery Manufacturing

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: KBA - Swiss Holding SA

Address: 347, LAUSANNE 22

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

Financial Breakdown

Contract Ceiling: $293,564,621

Exercised Options: $74,200,933

Current Obligation: $74,200,933

Actual Outlays: $14,679,200

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline