Treasury's $18.7M contract for precious metals awarded to Sunshine Minting Inc. under simplified acquisition procedures

Contract Overview

Contract Amount: $18,681,245 ($18.7M)

Contractor: Sunshine Minting Inc

Awarding Agency: Department of the Treasury

Start Date: 2010-12-07

End Date: 2010-12-09

Contract Duration: 2 days

Daily Burn Rate: $9.3M/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE RAW SILVER

Place of Performance

Location: COEUR D ALENE, KOOTENAI County, IDAHO, 83814

State: Idaho Government Spending

Plain-Language Summary

Department of the Treasury obligated $18.7 million to SUNSHINE MINTING INC for work described as: PROVIDE RAW SILVER Key points: 1. Contract awarded using simplified acquisition procedures, suggesting a focus on smaller value procurements. 2. The contract's value is significant within the context of specialized precious metal goods. 3. Sunshine Minting Inc. is the sole awardee, raising questions about the extent of competition. 4. The short duration of the contract (2 days) indicates a specific, likely immediate, need. 5. Awarded as a Firm Fixed Price contract, providing cost certainty for the government. 6. The contract falls under the "Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers" NAICS code.

Value Assessment

Rating: fair

The contract value of $18.7 million is substantial for a two-day duration, suggesting a high-value, specific need for precious metals. Benchmarking this against similar contracts is difficult without more context on the specific items procured. However, the award under simplified acquisition procedures might imply a price that was not subjected to the full rigor of large-scale competitive bidding, potentially impacting overall value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which typically involves fewer bidders and less extensive documentation than full and open competition. While the specific number of bidders is not detailed, SAP awards are generally not as competitive as larger procurements. This limited competition may have influenced the final price.

Taxpayer Impact: For taxpayers, limited competition under SAP can mean potentially higher prices compared to what might be achieved through a broader bidding process. However, it also allows for quicker acquisition of needed goods.

Public Impact

The primary beneficiary is the United States Mint, which likely received essential precious metal materials for its operations. The services delivered involve the provision of precious metals, crucial for minting coins and other products. The geographic impact is national, as the United States Mint operates across the country. Workforce implications are likely minimal for this specific contract, as it focuses on material supply rather than direct labor services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition under SAP could lead to suboptimal pricing.
The high dollar value for a very short duration warrants scrutiny of the specific need and pricing.
Lack of detailed competition information makes it hard to assess true market value.

Positive Signals

Awarded under Firm Fixed Price, providing cost certainty.
The United States Mint is a reputable agency with established procurement processes.
The contract was awarded to a single entity, potentially indicating a specialized supplier.

Sector Analysis

This contract falls within the broader precious metals and wholesale trade sector. The market for precious metals is global and subject to significant price volatility. The United States Mint is a major consumer of precious metals for coinage. Comparable spending benchmarks would depend heavily on the specific type and quantity of precious metals procured, but $18.7 million for a short-term supply is a notable transaction.

Small Business Impact

There is no indication that this contract involved small business set-asides. Given the nature of precious metal procurement and the value, it is unlikely that small businesses were the primary focus or recipients of subcontracting opportunities, unless they are specialized suppliers within the precious metals chain.

Oversight & Accountability

Oversight would primarily fall under the Department of the Treasury's internal audit and Inspector General functions. Transparency is facilitated by contract databases like FPDS, but the limited competition aspect means less public scrutiny compared to large-scale, full-and-open procurements. Accountability rests on the contracting officers ensuring fair and reasonable pricing and delivery.

Related Government Programs

United States Mint Coinage Production
Precious Metals Procurement
Treasury Department Supply Chain Management

Risk Flags

High contract value awarded under simplified acquisition procedures.
Limited competition may impact price discovery.
Short contract duration requires justification for the substantial award amount.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $18.7 million to SUNSHINE MINTING INC. PROVIDE RAW SILVER

Who is the contractor on this award?

The obligated recipient is SUNSHINE MINTING 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 $18.7 million.

What is the period of performance?

Start: 2010-12-07. End: 2010-12-09.

What specific precious metals were procured under this contract, and what was their intended use by the United States Mint?

The provided data does not specify the exact type of precious metals (e.g., gold, silver, platinum, palladium) or their precise intended use. However, given the awardee is Sunshine Minting Inc., a known producer of precious metal blanks and bullion, and the agency is the United States Mint, it is highly probable that these metals were intended for the production of circulating coinage, commemorative coins, or bullion products. The high value suggests a significant quantity or a specific high-value metal was acquired for a particular minting initiative or to replenish inventory.

How does the contract value of $18.7 million compare to typical annual spending by the US Mint on precious metals?

The US Mint's annual spending on precious metals can fluctuate significantly based on market prices and production demands. For instance, in fiscal year 2022, the Mint reported purchasing approximately $3.1 billion in metals. Therefore, an $18.7 million contract, while substantial in absolute terms, might represent a portion of the annual requirement or a specific, short-term procurement rather than the entirety of their annual metal needs. Without knowing the exact duration and scope beyond the two-day award period, a direct annual comparison is challenging, but it's likely a component of a larger, ongoing supply chain.

What is Sunshine Minting Inc.'s track record with the US government, particularly in supplying precious metals?

Sunshine Minting Inc. (SMI) has a history of contracts with the US government, including the US Mint. They are known for producing precious metal blanks, bullion, and related products. While this specific $18.7 million contract was awarded under simplified acquisition, SMI has likely participated in and won larger contracts over time. Their established presence in the precious metals industry suggests a capacity to meet the government's needs, though the specifics of their past performance on similar high-value contracts would require deeper data analysis.

Were there any specific risk indicators or mitigating factors associated with this contract award?

A key risk indicator is the limited competition under Simplified Acquisition Procedures (SAP) for a contract valued at $18.7 million. This raises concerns about whether the government secured the best possible price. Mitigating factors include the Firm Fixed Price (FFP) contract type, which caps the government's financial exposure. Additionally, the US Mint's experience in procuring precious metals and the potential specialization of Sunshine Minting Inc. might justify the award method if they are a uniquely qualified supplier for the specific items needed.

What does the 'COMPETED UNDER SAP' designation imply about the procurement process and potential cost savings?

The 'COMPETED UNDER SAP' designation means the contract was awarded using procedures for purchases below the simplified acquisition threshold (typically $250,000, though higher thresholds exist for certain agencies/situations). However, this contract is significantly above that standard threshold. This suggests either a specific exception applied, or the data might be slightly miscategorized, or it implies a competition among a limited number of pre-approved vendors or through a streamlined process. Generally, SAP aims for efficiency but may not achieve the same level of price competition or cost savings as full and open competition for larger value contracts.

Industry Classification

NAICS: Wholesale Trade › Miscellaneous Durable Goods Merchant Wholesalers › Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers

Product/Service Code: ORES, MINERALS AND PRIMARY PRODUCTS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7600 N MINERAL DR STE 700, COEUR D ALENE, ID, 01

Business Categories: Category Business, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,681,245

Exercised Options: $18,681,245

Current Obligation: $18,681,245

Timeline