PBGC Spends $40.9M on Primary Paying Agent Services with State Street Corporation

Contract Overview

Contract Amount: $40,935,739 ($40.9M)

Contractor: State Street Corporation

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2023-04-01

End Date: 2027-03-31

Contract Duration: 1,460 days

Daily Burn Rate: $28.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRIMARY PAYING AGENT SERVICES

Place of Performance

Location: BOSTON, SUFFOLK County, MASSACHUSETTS, 02111

State: Massachusetts Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $40.9 million to STATE STREET CORPORATION for work described as: PRIMARY PAYING AGENT SERVICES Key points: 1. State Street Corporation secured a $40.9M contract for essential paying agent services. 2. The contract was awarded under full and open competition, suggesting market availability. 3. The firm fixed-price structure aims to control costs for the Pension Benefit Guaranty Corporation. 4. This service is critical for managing pension fund disbursements efficiently.

Value Assessment

Rating: good

The $40.9M award over four years appears reasonable given the scope of primary paying agent services. Benchmarking against similar large-scale financial administration contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded via full and open competition, this method likely fostered competitive pricing. The firm fixed-price contract ensures cost certainty for the government.

Taxpayer Impact: The competitive award process is expected to yield fair pricing, maximizing taxpayer value for essential financial services.

Public Impact

Ensures timely and accurate payment processing for pension beneficiaries. Maintains financial integrity and operational efficiency for the PBGC. Supports the PBGC's mission of protecting retirement benefits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition costs are high.
Reliance on a single vendor for critical payment operations.

Positive Signals

Competitive award process.
Firm fixed-price contract for cost control.
Long-term contract provides stability.

Sector Analysis

Financial services, specifically paying agent functions, are crucial for government agencies managing large sums and complex disbursement schedules. Spending benchmarks vary widely based on agency size and service complexity.

Small Business Impact

This contract was awarded to a large corporation, State Street, and does not appear to include specific provisions or set-asides for small businesses.

Oversight & Accountability

The Pension Benefit Guaranty Corporation is responsible for overseeing this contract to ensure State Street Corporation meets all performance requirements and financial obligations.

Related Government Programs

Payroll Services
Pension Benefit Guaranty Corporation Contracting
Pension Benefit Guaranty Corporation Programs

Risk Flags

Vendor concentration risk.
Potential for service disruptions.
Complexity of managing large-scale financial operations.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $40.9 million to STATE STREET CORPORATION. PRIMARY PAYING AGENT SERVICES

Who is the contractor on this award?

The obligated recipient is STATE STREET CORPORATION.

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 $40.9 million.

What is the period of performance?

Start: 2023-04-01. End: 2027-03-31.

What is the specific scope of 'primary paying agent services' covered by this contract?

Primary paying agent services typically encompass the disbursement of funds, including payroll, benefits, and other payments. This includes managing payment instructions, reconciling transactions, and providing reporting. For the PBGC, this likely involves processing pension payments to retirees, ensuring accuracy and timeliness.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators would likely include metrics such as payment accuracy rate, on-time disbursement percentage, transaction processing speed, and reporting timeliness. The contract likely specifies service level agreements (SLAs) that State Street must meet, with potential penalties for non-compliance.

How does the firm fixed-price structure mitigate risks associated with fluctuating market conditions for paying agent services?

The firm fixed-price structure shifts the risk of cost overruns to the contractor, State Street Corporation. This means the PBGC pays a predetermined price regardless of the contractor's actual costs. This provides budget certainty for the agency and incentivizes the contractor to manage its expenses efficiently.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Payroll 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: 16PBGC22R0008

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE LINCOLN STREET, BOSTON, MA, 02111

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

Financial Breakdown

Contract Ceiling: $106,935,489

Exercised Options: $40,935,739

Current Obligation: $40,935,739

Actual Outlays: $22,733,005

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline