PBGC Spends $27.8M on Portfolio Management with Pacific Investment Management Company LLC
Contract Overview
Contract Amount: $27,863,470 ($27.9M)
Contractor: Pacific Investment Management Company LLC
Awarding Agency: Pension Benefit Guaranty Corporation
Start Date: 2002-01-01
End Date: 2009-09-30
Contract Duration: 2,829 days
Daily Burn Rate: $9.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Financial Services
Official Description: FINANCIAL SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005
Plain-Language Summary
Pension Benefit Guaranty Corporation obligated $27.9 million to PACIFIC INVESTMENT MANAGEMENT COMPANY LLC for work described as: FINANCIAL SERVICES Key points: 1. Significant contract value of $27.8 million awarded. 2. Pacific Investment Management Company LLC is the sole awardee. 3. Contract duration is over 7 years, indicating long-term engagement. 4. The service falls under Portfolio Management within the Financial Services sector.
Value Assessment
Rating: fair
The contract value of $27.8 million over 7 years suggests a substantial investment in portfolio management services. Benchmarking against similar contracts for large-scale pension fund management would be necessary to fully assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the specific pricing structure and its effectiveness in achieving optimal value for the government are not detailed.
Taxpayer Impact: Taxpayer funds are utilized for pension fund management, aiming to secure benefits for participants. The efficiency of this spending directly impacts the long-term financial health of the pension system.
Public Impact
Ensures management of assets for the Pension Benefit Guaranty Corporation's pension plans. Supports the financial stability and operational efficiency of the PBGC. Potential impact on the retirement security of individuals covered by PBGC-insured plans.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed performance metrics.
- Long contract duration may reduce flexibility.
- Potential for cost overruns if not managed tightly.
Positive Signals
- Awarded through full and open competition.
- Experienced contractor in investment management.
- Fixed-price contract provides cost certainty.
Sector Analysis
The Financial Services sector encompasses a wide range of activities, including investment management. Spending in this area by government agencies like PBGC is crucial for managing assets and ensuring financial obligations are met.
Small Business Impact
This contract does not appear to involve small business participation, as the awardee is a large firm and the contract type is firm fixed price, suggesting a direct service provision.
Oversight & Accountability
Oversight by the Pension Benefit Guaranty Corporation is critical to ensure the contractor meets performance standards and manages assets effectively. Regular reviews and audits are essential for accountability.
Related Government Programs
- Portfolio Management
- Pension Benefit Guaranty Corporation Contracting
- Pension Benefit Guaranty Corporation Programs
Risk Flags
- Contract duration
- Lack of performance metrics
- Potential for market volatility impact
- Sole awardee without clear justification for lack of competition
Tags
portfolio-management, pension-benefit-guaranty-corporation, dc, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Pension Benefit Guaranty Corporation awarded $27.9 million to PACIFIC INVESTMENT MANAGEMENT COMPANY LLC. FINANCIAL SERVICES
Who is the contractor on this award?
The obligated recipient is PACIFIC INVESTMENT MANAGEMENT COMPANY LLC.
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 $27.9 million.
What is the period of performance?
Start: 2002-01-01. End: 2009-09-30.
How does the performance of Pacific Investment Management Company LLC compare to industry benchmarks for similar pension fund management contracts?
Assessing performance against industry benchmarks requires access to specific metrics such as investment returns, risk-adjusted performance, and adherence to investment policies. Without this data, it's difficult to definitively state how well the contractor is performing relative to peers. The PBGC's oversight should include such comparative analysis to ensure optimal value.
What are the key risks associated with a long-term, firm-fixed-price contract for portfolio management?
Key risks include the contractor potentially becoming complacent or less innovative over time, and the government being locked into a potentially suboptimal price if market conditions change significantly. There's also a risk that the fixed price may not adequately cover unforeseen complexities or market volatility, potentially leading to disputes or reduced service quality if not carefully managed.
What is the direct impact of this contract on the effectiveness of the PBGC's mission to protect pension benefits?
This contract is directly tied to the PBGC's effectiveness by ensuring professional management of its investment portfolio. Effective management contributes to the financial health of the PBGC, enabling it to meet its obligations to participants in failed pension plans. Poor performance could strain PBGC resources and potentially impact its ability to guarantee benefits.
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
Parent Company: Aviva Towarzystwo Ubezpieczen NA Zycie S a (UEI: 320311889)
Address: 840 NEWPORT CENTER DR, NEWPORT BEACH, CA, 47
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $28,593,384
Exercised Options: $28,593,384
Current Obligation: $27,863,470
Timeline
Start Date: 2002-01-01
Current End Date: 2009-09-30
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2009-12-10
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