Treasury's $91.5M industrial machinery contract awarded to Koenig & Bauer for banknote solutions

Contract Overview

Contract Amount: $91,554 ($91.6K)

Contractor: Koenig & Bauer Banknote Solutions SA

Awarding Agency: Department of the Treasury

Start Date: 2025-11-19

End Date: 2026-07-20

Contract Duration: 243 days

Daily Burn Rate: $377/day

Competition Type: NOT COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SUSI SPARE PARTS

Plain-Language Summary

Department of the Treasury obligated $91,554.1 to KOENIG & BAUER BANKNOTE SOLUTIONS SA for work described as: SUSI SPARE PARTS Key points: 1. Contract awarded via a non-competitive process, raising questions about potential cost savings. 2. The duration of 243 days suggests a focused scope, potentially for specific machinery needs. 3. The firm fixed-price contract type offers cost certainty for the government. 4. The machinery falls under 'All Other Industrial Machinery Manufacturing,' a broad category. 5. No small business set-aside was utilized, indicating potential missed opportunities for smaller firms.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar industrial machinery. The firm fixed-price nature provides cost certainty, but the lack of competition means there's no market-driven price discovery to assess if the $91.5 million represents a fair market value. Further analysis would require understanding the specific machinery and its criticality to the Bureau of Engraving and Printing's operations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under SAP (Simplified Acquisition Procedures), indicating it was likely procured through a sole-source justification. This means only one vendor, Koenig & Bauer Banknote Solutions SA, was solicited. The lack of competition limits the government's ability to explore alternative solutions or negotiate pricing based on multiple offers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in securing the best possible value.

Public Impact

The primary beneficiary is the Bureau of Engraving and Printing (BEP), which requires specialized industrial machinery for its operations. The contract will deliver essential equipment for the production of currency or related security documents. The geographic impact is localized to the BEP's facilities, likely in Washington D.C. or Fort Worth, Texas. The contract may have implications for a specialized manufacturing workforce skilled in operating and maintaining such machinery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing.
Sole-source procurement limits transparency and potential for cost savings.
Reliance on a single vendor could pose supply chain risks if issues arise with Koenig & Bauer.

Positive Signals

Firm fixed-price contract provides budget certainty.
Specialized nature of the machinery suggests a critical need for the BEP.
Koenig & Bauer is a known entity in banknote printing equipment.

Sector Analysis

The industrial machinery manufacturing sector is diverse, encompassing a wide range of equipment. This contract falls under 'All Other Industrial Machinery Manufacturing,' suggesting it's not a standard or mass-produced item. The market for specialized banknote printing machinery is likely concentrated among a few key global players, making sole-source or limited competition awards more common for highly specific needs.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it appear to involve significant subcontracting opportunities for small businesses based on the limited information. The nature of specialized industrial machinery often requires large, established manufacturers, which may inherently limit direct participation by small businesses in the prime contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's internal procurement and financial oversight mechanisms, as well as the Bureau of Engraving and Printing's program management. Given it's a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the non-competitive nature, and there is no explicit mention of an Inspector General's specific jurisdiction over this particular award, though the Treasury OIG generally oversees departmental spending.

Related Government Programs

Currency Production Equipment
Industrial Machinery Procurement
Government Printing Services
Bureau of Engraving and Printing Operations

Risk Flags

Sole-source procurement
Lack of competition
Potential for overpayment

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $91,554.1 to KOENIG & BAUER BANKNOTE SOLUTIONS SA. SUSI SPARE PARTS

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 $91,554.1.

What is the period of performance?

Start: 2025-11-19. End: 2026-07-20.

What is the specific type of industrial machinery being procured and its intended use by the Bureau of Engraving and Printing?

The data classifies this under 'All Other Industrial Machinery Manufacturing' and identifies the contractor as Koenig & Bauer Banknote Solutions SA, strongly suggesting the machinery is related to the production or processing of banknotes. The Bureau of Engraving and Printing (BEP) is responsible for designing and printing U.S. currency, postage stamps, and other security documents. Therefore, this contract likely pertains to specialized equipment essential for these high-security printing operations, such as printing presses, finishing machines, or inspection systems critical for maintaining the integrity and efficiency of currency production.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP,' which typically implies a sole-source justification was utilized. Common reasons for sole-source procurement include unique capabilities of a single contractor, urgent and compelling needs where only one source can fulfill the requirement in the necessary timeframe, or when the acquisition is for a follow-on effort to a previously competed contract where the original contractor possesses proprietary knowledge or specialized tooling. Without further details on the specific justification cited by the Department of the Treasury, it's presumed that Koenig & Bauer Banknote Solutions SA possesses unique qualifications or capabilities essential for this particular machinery acquisition that could not be met by other sources.

How does the $91.5 million contract value compare to historical spending on similar industrial machinery by the Bureau of Engraving and Printing or other federal agencies?

Direct comparison of the $91.5 million value is difficult without knowing the exact specifications of the machinery. However, large-scale industrial equipment, especially for specialized applications like banknote printing, can command significant costs. Historical data from agencies like the BEP or the Government Publishing Office (GPO) might show similar large-value procurements for printing presses or related capital equipment. For context, major capital equipment procurements across the federal government can range from tens to hundreds of millions of dollars, depending on the complexity, scale, and criticality of the asset. The sole-source nature of this award, however, means this figure hasn't been validated against market competition.

What are the potential risks associated with a sole-source award for critical industrial machinery?

The primary risk of a sole-source award is the potential for paying a higher price than would be achieved through competition. Without competing bids, the government lacks market leverage to negotiate the best possible price. Additionally, there's a risk of vendor lock-in, where the agency becomes heavily reliant on a single supplier for maintenance, parts, and future upgrades, potentially leading to escalating costs over the equipment's lifecycle. Another concern could be the availability of technical support or spare parts if the sole-source provider faces financial difficulties or changes its business strategy. This contract's duration of 243 days suggests a specific, potentially time-sensitive need, which might have contributed to the sole-source decision, but still carries these inherent risks.

What is Koenig & Bauer Banknote Solutions SA's track record with federal contracts, particularly with the Bureau of Engraving and Printing?

Koenig & Bauer Banknote Solutions SA is a known entity in the banknote printing industry, suggesting a specialized focus. While the provided data doesn't detail their full federal contract history, their involvement with the Bureau of Engraving and Printing (BEP) for industrial machinery implies a prior relationship or established capability relevant to the BEP's mission. Federal procurement databases would typically show past performance information, including contract awards, performance evaluations, and any disputes or claims. A positive track record with the BEP would lend some confidence to their ability to deliver on this contract, although the sole-source nature still warrants scrutiny regarding pricing and value.

Industry Classification

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

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Koenig & Bauer AG

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: $91,554

Exercised Options: $91,554

Current Obligation: $91,554

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2031ZA25D00010

IDV Type: IDC

Timeline