PBGC awards $14.5M actuarial support contract to Milliman, Inc. for 3 years

Contract Overview

Contract Amount: $14,555,400 ($14.6M)

Contractor: Milliman, Inc.

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2023-01-01

End Date: 2026-12-31

Contract Duration: 1,460 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: LABOR HOURS

Sector: Other

Official Description: SFA ACTUARIAL SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $14.6 million to MILLIMAN, INC. for work described as: SFA ACTUARIAL SUPPORT Key points: 1. Contract provides essential actuarial services to the Pension Benefit Guaranty Corporation. 2. Milliman, Inc. is a well-established actuarial consulting firm. 3. The contract was awarded under full and open competition, suggesting a competitive process. 4. The duration of the contract is 3 years, indicating a medium-term need for these services. 5. The contract type is a definitive contract, typically used for services with defined requirements. 6. The contract is labor hour based, allowing flexibility in service delivery. 7. The contract value is $14.5 million over its term.

Value Assessment

Rating: good

The contract value of $14.5 million over three years for actuarial support appears reasonable given the specialized nature of the services. Benchmarking against similar contracts for actuarial consulting services for large government agencies would provide a more precise assessment. However, the absence of specific performance metrics or detailed cost breakdowns in the provided data makes a definitive value-for-money assessment challenging. The labor hour pricing structure allows for flexibility but requires careful monitoring to ensure cost efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of 7 bidders (implied by 'no': 7) suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and ensures that the government receives proposals from a range of capable firms, potentially leading to better pricing and service offerings.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among bidders.

Public Impact

The Pension Benefit Guaranty Corporation (PBGC) benefits directly through the provision of critical actuarial expertise. These services are essential for the PBGC's mission of protecting retirement security for millions of Americans. The contract supports the accurate valuation of pension plans and the management of PBGC's insurance program. The services indirectly benefit plan participants and beneficiaries by ensuring the financial stability of the PBGC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if labor hours are not managed effectively.
Dependence on a single contractor for critical actuarial functions.
Risk of scope creep if requirements are not clearly defined and managed.

Positive Signals

Award to an established firm with a track record in actuarial services.
Competitive bidding process likely secured favorable pricing.
Long-term contract provides stability for essential services.

Sector Analysis

This contract falls within the professional services sector, specifically management and administrative consulting. The market for actuarial services is specialized, with a limited number of firms possessing the necessary expertise and government contracting experience. The PBGC, as a federal agency, requires highly specialized actuarial support to manage its complex responsibilities in insuring defined benefit pension plans. Comparable spending in this niche would involve other federal agencies or large financial institutions requiring similar actuarial assessments.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. The primary contractor, Milliman, Inc., is a large business, and any subcontracting would be at their discretion.

Oversight & Accountability

Oversight for this contract would typically be managed by the Pension Benefit Guaranty Corporation's contracting officer and program managers. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to specific actuarial standards and reporting deadlines. Transparency is facilitated through the Federal Procurement Data System (FPDS) where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Employee Retirement System (FERS) Actuarial Services
Office of Personnel Management (OPM) Pension Benefit Analysis
Department of Labor - Employee Benefits Security Administration (EBSA)
Social Security Administration (SSA) Actuarial Studies

Risk Flags

Labor Hour Pricing: Requires diligent oversight to prevent cost overruns.
Contract Duration: Long-term nature necessitates careful performance monitoring.
Sole Source Potential: While competed now, future renewals could face sole-source risks if not managed proactively.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $14.6 million to MILLIMAN, INC.. SFA ACTUARIAL SUPPORT

Who is the contractor on this award?

The obligated recipient is MILLIMAN, INC..

Which agency awarded this contract?

Awarding agency: Pension Benefit Guaranty Corporation (Pension Benefit Guaranty Corporation).

What is the total obligated amount?

The obligated amount is $14.6 million.

What is the period of performance?

Start: 2023-01-01. End: 2026-12-31.

What is Milliman, Inc.'s track record with federal government contracts, particularly for actuarial services?

Milliman, Inc. has a significant history of performing actuarial and related consulting services for various government entities. While specific details of past performance on federal contracts are not provided in this data snippet, their status as a leading actuarial firm suggests extensive experience. A deeper dive into their contract history via FPDS or SAM.gov would reveal the types of agencies they have served, the scope of services provided, and their performance ratings on previous awards. This would offer insight into their reliability and capability in fulfilling the PBGC's requirements.

How does the $14.5 million contract value compare to similar actuarial support contracts awarded by federal agencies?

The $14.5 million contract value for three years of actuarial support from the PBGC is within a reasonable range for specialized government consulting services. However, a precise benchmark requires comparison with contracts of similar scope, duration, and complexity awarded to other federal agencies. Factors such as the number of plans assessed, the complexity of the actuarial models required, and the specific deliverables can significantly influence cost. Without access to detailed pricing structures and scope of work for comparable contracts, it's difficult to definitively state if this represents a premium or a discount, but the competitive award process suggests fair market value was sought.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential cost overruns due to the labor-hour pricing model if not managed diligently, and the risk of service disruption if the contractor fails to perform. Mitigation strategies likely involve robust contract oversight by the PBGC, including regular reviews of labor hours, performance monitoring against defined deliverables, and clear communication channels. The contract's three-year duration also presents a risk of vendor lock-in, though the competitive award process mitigates this to some extent by ensuring a fair selection initially. The PBGC would also have clauses for termination for default or convenience.

How effective is the PBGC's current actuarial support in managing its program responsibilities?

The effectiveness of the PBGC's current actuarial support is directly tied to the quality of services provided under this contract. Actuarial support is fundamental to the PBGC's mission, enabling accurate assessment of financial health, risk management, and informed decision-making regarding pension plan terminations and ongoing liabilities. The continued need for such services, as evidenced by this multi-year contract, suggests their ongoing importance and presumed effectiveness. Performance metrics within the contract, if available, would provide a more direct measure of effectiveness.

What are the historical spending patterns for actuarial support services at the PBGC?

Historical spending patterns for actuarial support at the PBGC would reveal trends in contract values, durations, and awarded vendors over time. This data, typically found in procurement databases like FPDS, would show if spending has increased or decreased, if the PBGC has consistently used the same contractors, or if there have been shifts in competition levels. Understanding these patterns can help identify potential efficiencies, areas of increasing cost, or changes in the agency's reliance on external actuarial expertise.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 16PBGC22R0007

Offers Received: 7

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 200 GREAT POND DR, WINDSOR, CT, 06095

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,565,400

Exercised Options: $14,555,400

Current Obligation: $14,555,400

Actual Outlays: $7,431,140

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline