Treasury's Mint awarded $13.7M for precious metals, with A-Mark Precious Metals Inc. securing the deal

Contract Overview

Contract Amount: $13,713,357 ($13.7M)

Contractor: A-Mark Precious Metals, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2009-03-10

End Date: 2009-03-19

Contract Duration: 9 days

Daily Burn Rate: $1.5M/day

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

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 $13.7 million to A-MARK PRECIOUS METALS, INC. for work described as: PROVIDE RAW GOLD MATERIAL Key points: 1. The contract value of $13.7 million represents a significant investment in precious metals procurement. 2. A-Mark Precious Metals, Inc. has a substantial presence in the precious metals market. 3. The contract duration of 9 days suggests a rapid fulfillment requirement. 4. The fixed-price nature of the contract aims to control costs for the government. 5. The specific use of these precious metals by the U.S. Mint warrants further investigation into their application.

Value Assessment

Rating: fair

Benchmarking the value of $13.7 million for precious metals is challenging without specific details on the type and quantity of metals. However, given the scale, it appears to be a substantial procurement. The fixed-price contract suggests an attempt to manage cost certainty, but the value-for-money assessment depends heavily on the market price of the metals at the time of award and the specific requirements met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data does not specify the competition level for this contract. Without information on whether it was a full and open competition, a limited solicitation, or a sole-source award, it is difficult to assess the effectiveness of the procurement process in achieving competitive pricing. The number of bidders, if any, would be crucial for this analysis.

Taxpayer Impact: The level of competition directly impacts taxpayer value. Robust competition typically leads to lower prices, ensuring that taxpayer dollars are used more efficiently. Limited or no competition can result in higher costs.

Public Impact

The United States Mint is the primary beneficiary, likely using the precious metals for coinage, bullion, or other minting operations. The contract ensures the availability of essential materials for the Mint's production cycles. The geographic impact is primarily national, supporting the U.S. Mint's operations. Workforce implications are likely internal to the U.S. Mint and potentially the contractor, A-Mark Precious Metals, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the competition method raises concerns about potential overpayment.
The short contract duration might indicate an urgent need, potentially leading to less favorable pricing.
The specific type and purity of precious metals are not detailed, making it hard to verify market alignment.

Positive Signals

The award to a known entity, A-Mark Precious Metals, Inc., suggests a potentially reliable supplier.
The fixed-price contract structure provides a degree of cost predictability.
The contract supports a critical government function: the operation of the U.S. Mint.

Sector Analysis

The precious metals industry is a global market influenced by supply, demand, and geopolitical factors. The U.S. Mint is a significant consumer of precious metals for its various products. This contract fits within the broader category of raw material procurement for manufacturing, with specific benchmarks being the fluctuating market prices of gold, silver, platinum, and palladium.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award to A-Mark Precious Metals, Inc., a presumably established entity in the precious metals market, suggests it may not have been specifically targeted towards small businesses. Further analysis would be needed to confirm any subcontracting provisions.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Treasury and the U.S. Mint's internal procurement and financial management systems. Transparency regarding the award process and the specific terms of the contract would be key to assessing accountability. The Inspector General for the Department of the Treasury would have jurisdiction for audits and investigations.

Related Government Programs

U.S. Mint Bullion Coin Programs
Federal Gold Reserves
Strategic Materials Stockpile

Risk Flags

Lack of competition details
Unspecified material specifications
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $13.7 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 $13.7 million.

What is the period of performance?

Start: 2009-03-10. End: 2009-03-19.

What specific types and quantities of precious metals were procured under this contract?

The provided data does not specify the exact types (e.g., gold, silver, platinum) or quantities of precious metals purchased. The National Stock Number (NAICS code) '332999' indicates 'All Other Miscellaneous Fabricated Metal Product Manufacturing,' which is broad. Understanding the specific materials is crucial for a precise valuation and comparison to market rates. Without this detail, the $13.7 million figure represents a total expenditure rather than a cost per unit of a defined commodity.

How does the $13.7 million contract value compare to historical spending by the U.S. Mint for similar materials?

To compare this $13.7 million contract to historical spending, one would need to analyze past U.S. Mint procurement data for precious metals. This would involve identifying contracts with similar specifications (type, quantity, quality) and adjusting for inflation and market price fluctuations. The short 9-day duration of this contract might also suggest a specific, perhaps urgent, need that differs from longer-term supply agreements, making direct historical comparisons less straightforward without further context on the Mint's operational requirements at that time.

What is the track record of A-Mark Precious Metals, Inc. in fulfilling government contracts?

A-Mark Precious Metals, Inc. is a significant player in the precious metals market. Assessing their track record with government contracts would involve reviewing their past performance on federal awards, including timeliness, quality of goods/services, and adherence to contract terms. Information from sources like the Federal Procurement Data System (FPDS) or contract performance reports would be necessary to evaluate their reliability and past success rates in meeting government requirements, particularly for large-value procurements.

What risk indicators were present at the time of this contract award?

Without detailed information on the solicitation and award process, specific risk indicators are difficult to pinpoint. However, potential risks could include market volatility of precious metals prices, which can impact the value proposition even with a fixed-price contract if the market moves significantly post-award. The lack of specified competition level also presents a risk, as it could indicate a less competitive environment, potentially leading to suboptimal pricing for taxpayers. The short duration might also imply execution risks.

What was the intended use of these precious metals by the U.S. Mint?

The intended use of the precious metals procured under this $13.7 million contract by the U.S. Mint is not explicitly stated in the provided data. Typically, the U.S. Mint utilizes precious metals for the production of circulating coinage, commemorative coins, bullion coins (like American Eagles), and potentially for other investment products or reserves. The specific application would influence the required purity, form, and quantity of the metals, and thus the overall value and strategic importance of the procurement.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › All Other Miscellaneous Fabricated Metal Product Manufacturing

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

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: $13,713,357

Exercised Options: $13,713,357

Current Obligation: $13,713,357

Timeline