Treasury's $11.6M precious metals contract awarded to A-Mark Precious Metals, Inc. for 6 days

Contract Overview

Contract Amount: $11,624,228 ($11.6M)

Contractor: A-Mark Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2008-03-11

End Date: 2008-03-17

Contract Duration: 6 days

Daily Burn Rate: $1.9M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: OTHER (NONE OF THE ABOVE)

Sector: Other

Official Description: PROVIDE RAW GOLD MATERIAL

Place of Performance

Location: SANTA MONICA, LOS ANGELES County, CALIFORNIA, 90401

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $11.6 million to A-MARK PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. Contract value appears high for a very short duration, warranting scrutiny of unit pricing and necessity. 2. Limited competition dynamics are suggested by the short performance period and specific nature of the goods. 3. Risk indicators include the short performance window and potential for price volatility in precious metals markets. 4. Performance context is minimal due to the extremely brief contract duration, making assessment difficult. 5. Sector positioning is within the broader 'Other' category, likely related to government asset management or reserves.

Value Assessment

Rating: questionable

The contract value of $11.6 million for a 6-day period is exceptionally high on a per-diem basis. Without detailed breakdowns of the precious metals acquired and their specific purpose, it is difficult to benchmark against similar contracts. However, the rapid expenditure suggests a potential for overpayment if the quantity or pricing was not rigorously negotiated or if the need was not critically time-sensitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders could have participated. However, the extremely short duration (6 days) might have deterred many potential bidders or limited the scope of services they could offer. The presence of only two bidders, as indicated by the 'no' field, suggests that while competition was technically open, it may not have been robust in practice.

Taxpayer Impact: Taxpayers benefit from the competitive process, which theoretically drives down prices. However, the limited number of bidders and the short performance window raise questions about whether the government secured the best possible price for these valuable assets.

Public Impact

The primary beneficiaries are likely government entities requiring precious metals for specific, short-term needs, possibly related to reserve management or specialized projects. Services delivered involve the procurement of precious metals, the exact type and quantity of which are not specified. Geographic impact is likely national, as the United States Mint operates on a federal level. Workforce implications are minimal, as this appears to be a transactional procurement rather than a service contract requiring significant labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High dollar value for a very short performance period raises concerns about efficiency and potential overspending.
Limited competition, despite being 'full and open', suggests potential for suboptimal pricing.
Lack of detailed information on the specific precious metals procured makes value assessment challenging.
The short duration could indicate a rushed procurement, potentially increasing risks.

Positive Signals

Awarded under full and open competition, adhering to standard procurement principles.
The contractor, A-Mark Precious Metals, Inc., is a known entity in the precious metals market, suggesting some level of expertise.
The contract was awarded by the Department of the Treasury, a reputable federal agency.

Sector Analysis

This contract falls under the 'Other' category, but likely relates to the acquisition of physical commodities, specifically precious metals. The market for precious metals is global and subject to significant price fluctuations. Government procurement in this area typically involves managing strategic reserves or acquiring materials for specific minting operations. Benchmarking is difficult without knowing the exact metals and quantities, but large-scale acquisitions can represent significant portions of annual market supply.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from this specific award. The focus was on full and open competition, likely favoring larger, established suppliers in the precious metals market.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Treasury's internal controls and potentially the Treasury Inspector General. The short duration and transactional nature might limit the scope for ongoing performance oversight, with the primary focus likely being on the initial award and delivery verification. Transparency is moderate, as the award is publicly documented, but details on the specific metals and pricing are not readily available.

Related Government Programs

Department of the Treasury Procurement
United States Mint Operations
Government Asset Management
Precious Metals Market Transactions

Risk Flags

High Value, Short Duration
Limited Competition Indicated
Precious Metals Market Volatility
Lack of Specific Procurement Details

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $11.6 million to A-MARK PRECIOUS METALS, INC.. PROVIDE RAW GOLD MATERIAL

Who is the contractor on this award?

The obligated recipient is A-MARK PRECIOUS METALS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.6 million.

What is the period of performance?

Start: 2008-03-11. End: 2008-03-17.

What specific types and quantities of precious metals were procured under this contract, and how was their pricing determined?

The provided data does not specify the exact types (e.g., gold, silver, platinum) or quantities of precious metals purchased. The contract value of $11,624,227.80 for a 6-day period suggests a substantial acquisition. Pricing for precious metals is typically based on spot market rates at the time of transaction, plus a premium for fabrication, delivery, and potentially a dealer markup. Without more granular data, it's impossible to ascertain if the pricing was competitive or reflected fair market value. The short duration might imply a need for immediate delivery, potentially influencing the premium paid.

How does the per-unit cost of these precious metals compare to prevailing market rates during the contract period?

Benchmarking the per-unit cost is not feasible with the current data. To perform this comparison, we would need to know the specific metals (e.g., troy ounces of gold, silver), their purity, and the exact dates of acquisition within the March 11-17, 2008 period. Market prices for precious metals fluctuate daily, sometimes hourly. A thorough analysis would involve obtaining historical spot prices for the relevant metals and comparing them against the effective price per unit paid by the U.S. Mint, factoring in any premiums or discounts negotiated.

What was the specific operational need or justification for such a large and short-term procurement of precious metals?

The provided data does not detail the specific operational need. Given the awardee is A-Mark Precious Metals, Inc. and the contracting agency is the U.S. Mint, potential justifications could include: replenishing strategic reserves, acquiring materials for specific commemorative coin programs, or fulfilling an urgent, unforeseen requirement. The 6-day performance window suggests a time-critical demand. Further investigation into U.S. Mint operational requirements or Treasury directives during March 2008 would be necessary to understand the rationale.

What is A-Mark Precious Metals, Inc.'s track record with government contracts, particularly with the Department of the Treasury or U.S. Mint?

A-Mark Precious Metals, Inc. has a history of engaging in government contracts, including those involving the U.S. Mint. As a significant player in the precious metals market, their involvement in government procurement is not unusual. A comprehensive review would involve examining their past performance ratings, any past disputes or contract terminations, and the volume and nature of their previous awards from federal agencies. This specific contract, awarded in 2008, represents one data point in their broader contracting history.

Were there any risks identified during the procurement process, such as price volatility or supply chain disruptions, given the nature of precious metals?

The procurement of precious metals inherently carries risks related to price volatility and market fluctuations. During March 2008, global financial markets were experiencing significant turmoil, which could have impacted precious metal prices. While the data doesn't explicitly state identified risks, any responsible procurement process would have considered these factors. Mitigation strategies might have included locking in prices, securing supply agreements, or closely monitoring market conditions leading up to the transaction. The short duration could have been a strategy to minimize exposure to price swings.

How does this $11.6 million expenditure compare to the U.S. Mint's typical annual spending on precious metals procurement?

This $11.6 million expenditure for a 6-day period represents a significant outlay. To compare it to typical annual spending, one would need access to historical U.S. Mint budget and expenditure data for precious metals. The Mint procures vast quantities of gold, silver, and platinum for circulating coinage, bullion programs (like American Eagles), and commemorative coins. Annual spending can fluctuate significantly based on market prices and demand for bullion products. This single contract, while large, might be a fraction of the total annual spend or could represent a concentrated purchase for a specific initiative.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: OTHER (NONE OF THE ABOVE) (3)

Evaluated Preference: NONE

Contractor Details

Parent Company: Spectrum Group International Inc. (UEI: 806666475)

Address: 100 WILSHIRE BLVD FL 3, SANTA MONICA, CA, 36

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,624,228

Exercised Options: $11,624,228

Current Obligation: $11,624,228

Timeline