Deloitte Consulting LLP awarded $24.5M contract for investment advice to Pension Benefit Guaranty Corporation

Contract Overview

Contract Amount: $24,519,936 ($24.5M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2007-06-18

End Date: 2012-06-14

Contract Duration: 1,823 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: Other

Official Description: FINANCIAL SERVICES

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 $24.5 million to DELOITTE CONSULTING LLP for work described as: FINANCIAL SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. Duration of 1823 days indicates a long-term need for these investment advisory services. 3. The contract was awarded to a single vendor, Deloitte Consulting LLP. 4. Services provided fall under the Financial Services sector. 5. The contract was awarded by the Pension Benefit Guaranty Corporation. 6. The contract type is 'Labor Hours', which can sometimes lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

Benchmarking the value for this specific contract is challenging without more granular data on the scope of investment advice provided. However, the total award amount of $24.5 million over approximately five years suggests a significant investment in external expertise. Comparing this to other government contracts for similar high-level financial advisory services would be necessary for a more precise value assessment. The 'Labor Hours' contract type also introduces a variable cost component that requires diligent oversight to ensure cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a moderate level of competition for this requirement. While two bidders are better than one, a higher number of bidders typically drives prices down further and increases the likelihood of securing the best value for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a more competitive bidding process, which can lead to better pricing and a wider range of innovative solutions.

Public Impact

The Pension Benefit Guaranty Corporation (PBGC) benefits from expert investment advice to manage its financial obligations. Services delivered include specialized investment strategy and portfolio management guidance. The geographic impact is primarily within the District of Columbia, where the PBGC is headquartered. The contract supports specialized financial analyst and investment professional roles within Deloitte Consulting LLP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Labor Hours contract type can lead to cost uncertainty if not closely monitored.
Limited number of bidders (2) may indicate potential for higher pricing than a more competitive scenario.

Positive Signals

Awarded through full and open competition, ensuring a fair process.
Long contract duration suggests a stable and ongoing need for these critical services.

Sector Analysis

This contract falls within the Financial Services sector, specifically focusing on investment advice and management. The market for government financial advisory services is competitive, with numerous firms offering specialized expertise. The PBGC's need for such services is driven by its mandate to protect retirement benefits, requiring sophisticated management of its investment portfolio. Comparable spending benchmarks would involve looking at other large federal agencies that manage significant investment assets.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of investment advice and the large contract value, it is likely that larger, established firms were the primary bidders. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Pension Benefit Guaranty Corporation's contracting officers and program managers. Accountability measures would be tied to the performance metrics outlined in the contract statement of work. Transparency is generally maintained through federal procurement databases, though specific performance details may be proprietary.

Related Government Programs

Investment Management Services
Financial Advisory Services
Pension Fund Management
Federal Retirement Benefits

Risk Flags

Labor Hours contract type requires close monitoring for cost control.
Limited competition may impact optimal pricing.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $24.5 million to DELOITTE CONSULTING LLP. FINANCIAL SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING 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 $24.5 million.

What is the period of performance?

Start: 2007-06-18. End: 2012-06-14.

What is the specific nature of the investment advice provided under this contract?

The provided data indicates the contract is for 'Investment Advice' (NAICS 523930) awarded to Deloitte Consulting LLP by the Pension Benefit Guaranty Corporation (PBGC). While the exact scope is not detailed, this typically involves strategic asset allocation, portfolio construction, risk management, performance evaluation, and market analysis to help the PBGC effectively manage its assets and meet its long-term pension obligations. The 'Labor Hours' contract type suggests that the vendor is compensated based on the time spent by their personnel performing these advisory functions.

How does the $24.5 million award compare to historical spending on investment advice by the PBGC?

Without access to historical PBGC spending data specifically on investment advice contracts, a direct comparison is not possible. However, the $24.5 million award over approximately five years (1823 days) represents a substantial commitment. To assess if this is higher or lower than historical spending, one would need to analyze previous contract awards for similar services by the PBGC, considering inflation and changes in the scope of services over time. This figure suggests a significant and ongoing reliance on external expertise for managing the PBGC's investment portfolio.

What are the key risks associated with a 'Labor Hours' contract for investment advice?

The primary risk with a 'Labor Hours' contract, especially for complex services like investment advice, is cost escalation. Since the contractor is paid based on the time spent, there's a potential for inefficiencies or scope creep that can drive up the total cost beyond initial estimates if not rigorously managed. For the PBGC, this means ensuring that the hours billed are directly related to the agreed-upon tasks and that the work is performed efficiently. Strong oversight, clear task definitions, and regular performance reviews are crucial to mitigate these risks and ensure value for money.

What is Deloitte Consulting LLP's track record with federal investment advisory contracts?

Deloitte Consulting LLP is a major federal contractor with extensive experience across various domains, including financial services and management consulting. While specific details on their track record solely for federal investment advisory contracts are not provided here, their general profile suggests they possess the necessary expertise and capacity. A deeper analysis would involve reviewing their past performance evaluations (e.g., CPARS) on similar federal contracts, their history of contract awards in this space, and any past performance issues or commendations to gauge their reliability and effectiveness.

How does the level of competition (2 bidders) impact the value received by the PBGC?

Having two bidders for this contract indicates a moderate level of competition. While full and open competition was utilized, a lower number of bidders compared to a scenario with many competitors might suggest that the pricing could be higher than if more firms vied for the contract. However, it does not automatically imply poor value. The PBGC would have evaluated the proposals based on both price and technical merit. The value received depends on whether the selected bid represented the best overall offering considering the expertise, proposed approach, and cost, even with limited competition.

Industry Classification

NAICS: Finance and Insurance › Other Financial Investment Activities › Investment Advice

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: PBGC01-RP-07-0001

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte LLP (UEI: 014127109)

Address: 12010 SUNSET HILLS RD STE 500, RESTON, VA, 11

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

Financial Breakdown

Contract Ceiling: $24,519,936

Exercised Options: $24,519,936

Current Obligation: $24,519,936

Timeline