PBGC Spends $15.5M on Portfolio Management Services from Wellington Management Company, LLP

Contract Overview

Contract Amount: $15,539,928 ($15.5M)

Contractor: Wellington Management Company, LLP

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2001-04-12

End Date: 2011-01-01

Contract Duration: 3,551 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CFO/CID

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $15.5 million to WELLINGTON MANAGEMENT COMPANY, LLP for work described as: CFO/CID Key points: 1. Significant contract value of $15.5 million over 10 years. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract spans a decade, indicating a long-term need for these services. 4. No small business participation noted, which could be a missed opportunity for economic diversity.

Value Assessment

Rating: fair

The contract value of $15.5 million over 10 years averages $1.55 million annually. Benchmarking against similar portfolio management contracts is difficult without more specific service details, but the duration suggests a stable, albeit potentially high, cost for consistent service.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically allows for the widest range of potential bidders and can lead to better price discovery. The use of this method suggests the agency sought competitive pricing.

Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing the best possible price for the required services.

Public Impact

Retiree benefits are indirectly supported by efficient management of pension fund assets. The long contract duration provides stability for the agency's financial operations. Transparency in government spending is maintained through the reporting of this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business participation.
Long contract duration may limit flexibility for future needs.

Positive Signals

Full and open competition utilized.
Firm fixed price contract provides cost certainty.

Sector Analysis

This contract falls under professional services, specifically financial and portfolio management. Spending in this sector often involves specialized expertise and can vary widely based on the complexity and scale of assets managed.

Small Business Impact

The data indicates that no small businesses were involved in this contract. This suggests that the primary awardee is a large firm, and opportunities for small business subcontracting may have been overlooked or were not applicable.

Oversight & Accountability

The contract was awarded by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. Oversight would typically involve contract performance monitoring and financial accountability measures to ensure the services meet the agency's needs and are cost-effective.

Related Government Programs

Portfolio Management
Pension Benefit Guaranty Corporation Contracting
Pension Benefit Guaranty Corporation Programs

Risk Flags

Long contract duration may reduce flexibility.
No small business participation.
Potential for cost overruns if market conditions change significantly.
Limited information on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $15.5 million to WELLINGTON MANAGEMENT COMPANY, LLP. CFO/CID

Who is the contractor on this award?

The obligated recipient is WELLINGTON MANAGEMENT COMPANY, LLP.

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 $15.5 million.

What is the period of performance?

Start: 2001-04-12. End: 2011-01-01.

What specific portfolio management services were procured, and how do they align with the PBGC's mission?

The contract was for portfolio management services, likely involving the investment and oversight of assets held by the Pension Benefit Guaranty Corporation. These services are crucial for ensuring the solvency and operational capacity of the PBGC, which guarantees pensions for private-sector workers in the event of employer bankruptcy. The specific services would detail the scope of investment strategies, risk management, and reporting required.

Given the 10-year duration, what mechanisms are in place to ensure the contract remains cost-effective and adaptable to market changes?

While a firm fixed price contract offers cost certainty, its 10-year duration necessitates mechanisms for adaptation. This could include periodic reviews, performance metrics, and potentially clauses for renegotiation if market conditions or agency needs drastically change. The initial full and open competition should have secured a competitive baseline price, but ongoing oversight is key to ensuring long-term value.

How does the PBGC assess the performance and effectiveness of Wellington Management Company, LLP in managing its portfolio?

The PBGC likely assesses performance through a combination of quantitative metrics (e.g., investment returns, risk-adjusted performance) and qualitative reviews (e.g., adherence to investment guidelines, reporting quality, responsiveness). Regular performance reports from the contractor, coupled with internal agency analysis and potentially third-party evaluations, would form the basis of effectiveness assessment.

Industry Classification

NAICS: Finance and Insurance › Other Financial Investment Activities › Portfolio Management

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 75 STATE ST STE 2018, BOSTON, MA, 90

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

Financial Breakdown

Contract Ceiling: $27,074,644

Exercised Options: $15,867,032

Current Obligation: $15,539,928

Timeline