PBGC's $19.96M Investment Banking Contract with Blackrock: A Long-Term Engagement

Contract Overview

Contract Amount: $19,959,099 ($20.0M)

Contractor: Blackrock Institutional Trust Company National Association

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2008-09-30

End Date: 2015-11-30

Contract Duration: 2,617 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: OTHER (APPLIES TO AWARDS WHERE NONE OF THE ABOVE APPLY)

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 $20.0 million to BLACKROCK INSTITUTIONAL TRUST COMPANY NATIONAL ASSOCIATION for work described as: CFO/CID Key points: 1. The contract represents a significant, long-term investment in financial services. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The duration of the contract (over 7 years) indicates a stable, ongoing relationship. 4. The sector is financial services, crucial for managing pension fund assets.

Value Assessment

Rating: fair

The contract value of $19.96M over 7 years is substantial. Benchmarking against similar investment banking contracts is difficult without specific service details, but the long duration suggests a negotiated rate over time.

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 broadest range of bidders and can lead to more competitive pricing. The specific pricing mechanisms and discovery process are not detailed.

Taxpayer Impact: Taxpayer funds are used to manage pension benefits. The effectiveness of this contract in maximizing returns and minimizing costs directly impacts the solvency of the PBGC and its ability to meet obligations.

Public Impact

Ensures professional management of pension fund assets, potentially safeguarding beneficiaries. Long-term contract may provide stability but could also miss opportunities for better rates. Transparency in how these funds are managed is key for public trust. The financial services sector is critical for government agency operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific service details makes value assessment difficult.
Long contract duration may not reflect current market rates.
No indication of small business participation.

Positive Signals

Full and open competition suggests potential for good value.
Long-term engagement implies a trusted relationship.
Contract supports critical pension fund management.

Sector Analysis

This contract falls within the financial services sector, specifically investment banking and securities dealing. Government spending in this area is typically focused on managing assets, investments, and financial risk for agencies like the PBGC.

Small Business Impact

The data indicates that small business participation was not a factor in this contract award (ss: false, sb: false). This suggests the contract was likely awarded to a large financial institution based on capabilities and price.

Oversight & Accountability

The contract was awarded by the Pension Benefit Guaranty Corporation (PBGC). Oversight would involve monitoring the performance of Blackrock in managing the pension assets and ensuring adherence to contract terms and fiduciary duties.

Related Government Programs

Investment Banking and Securities Dealing
Pension Benefit Guaranty Corporation Contracting
Pension Benefit Guaranty Corporation Programs

Risk Flags

Lack of detailed service scope.
Absence of performance metrics.
Long contract duration without clear renewal/re-competition strategy.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $20.0 million to BLACKROCK INSTITUTIONAL TRUST COMPANY NATIONAL ASSOCIATION. CFO/CID

Who is the contractor on this award?

The obligated recipient is BLACKROCK INSTITUTIONAL TRUST COMPANY NATIONAL ASSOCIATION.

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 $20.0 million.

What is the period of performance?

Start: 2008-09-30. End: 2015-11-30.

What specific investment strategies and services were provided under this contract, and how did they align with the PBGC's long-term financial goals?

The provided data lacks specifics on the services rendered by Blackrock. Understanding the exact nature of the investment banking and securities dealing, such as asset allocation, risk management, and specific security selections, is crucial to assess if these activities effectively supported the PBGC's mission of insuring private-sector pensions and meeting its long-term financial obligations.

How was the pricing structure determined during the full and open competition, and what benchmarks were used to ensure cost-effectiveness over the contract's seven-year duration?

While the contract utilized full and open competition, the data does not detail the pricing structure or benchmarks employed. Assessing cost-effectiveness requires knowing the fee arrangements (e.g., asset-based fees, performance fees) and comparing them against industry standards for similar investment management services during the 2008-2015 period.

What was the measurable impact of Blackrock's services on the PBGC's investment portfolio performance and its overall financial health during the contract period?

The data does not include performance metrics for the investment portfolio managed under this contract. To evaluate effectiveness, one would need to analyze the returns generated, risk-adjusted performance, and how these outcomes contributed to the PBGC's ability to cover its pension liabilities and maintain financial stability.

Industry Classification

NAICS: Finance and Insurance › Securities and Commodity Contracts Intermediation and Brokerage › Investment Banking and Securities Dealing

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-08-TJ01

Offers Received: 2

Pricing Type: OTHER (APPLIES TO AWARDS WHERE NONE OF THE ABOVE APPLY) (3)

Evaluated Preference: NONE

Contractor Details

Parent Company: Blackrock, Inc. (UEI: 786987052)

Address: 400 HOWARD ST, SAN FRANCISCO, CA, 94105

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

Financial Breakdown

Contract Ceiling: $19,959,099

Exercised Options: $19,959,099

Current Obligation: $19,959,099

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline