PBGC awards $38.8M contract to Marathon Asset Management for portfolio management services
Contract Overview
Contract Amount: $38,856,016 ($38.9M)
Contractor: Marathon Asset Management LLP
Awarding Agency: Pension Benefit Guaranty Corporation
Start Date: 2010-04-19
End Date: 2017-04-18
Contract Duration: 2,556 days
Daily Burn Rate: $15.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 13
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: CFO/CID
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005
Plain-Language Summary
Pension Benefit Guaranty Corporation obligated $38.9 million to MARATHON ASSET MANAGEMENT LLP for work described as: CFO/CID Key points: 1. Marathon Asset Management LLP secured a significant contract for portfolio management. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract is substantial, spanning over 2500 days. 4. The firm fixed price contract type indicates a predictable cost structure for the government.
Value Assessment
Rating: fair
The contract value of $38.8 million over approximately 7 years results in an average annual value of around $5.5 million. Benchmarking this against similar portfolio management contracts is difficult without more specific service details, but the overall value appears moderate for the duration.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and allows the agency to select the best value offering.
Taxpayer Impact: Taxpayer funds are being used for portfolio management services, with the expectation of efficient and effective management of pension assets.
Public Impact
Ensures professional management of pension assets, potentially safeguarding retirement benefits. Competition in bidding can lead to cost savings for taxpayers. Long-term contract provides stability for service delivery. Transparency in awarding contracts through open competition builds public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration is long, potentially leading to vendor lock-in or reduced flexibility.
- Lack of specific performance metrics makes it hard to assess value for money.
- Potential for cost overruns if market conditions change significantly and the fixed price becomes unfavorable.
Positive Signals
- Awarded through full and open competition, maximizing potential for competitive pricing.
- Firm fixed price contract provides cost certainty.
- Experienced contractor likely selected based on qualifications.
Sector Analysis
The financial services sector, particularly asset and portfolio management, is crucial for government agencies managing large funds like pension benefits. Spending benchmarks vary widely based on fund size and complexity, but this contract represents a significant investment in specialized financial expertise.
Small Business Impact
The data indicates this contract was awarded to a large firm, Marathon Asset Management LLP. There is no explicit information suggesting opportunities for small businesses in this specific award, though subcontracting possibilities might exist.
Oversight & Accountability
The Pension Benefit Guaranty Corporation (PBGC) is responsible for overseeing this contract. Standard government oversight mechanisms would apply, including contract performance reviews and financial audits, to ensure accountability and proper use of funds.
Related Government Programs
- Portfolio Management
- Pension Benefit Guaranty Corporation Contracting
- Pension Benefit Guaranty Corporation Programs
Risk Flags
- Long contract duration may limit flexibility.
- Fixed price contract risk if market conditions change drastically.
- Lack of detailed performance metrics in summary data.
- Potential for vendor lock-in.
- No explicit small business participation noted.
Tags
portfolio-management, pension-benefit-guaranty-corporation, dc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Pension Benefit Guaranty Corporation awarded $38.9 million to MARATHON ASSET MANAGEMENT LLP. CFO/CID
Who is the contractor on this award?
The obligated recipient is MARATHON ASSET MANAGEMENT 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 $38.9 million.
What is the period of performance?
Start: 2010-04-19. End: 2017-04-18.
What specific portfolio management strategies are employed, and how do they align with the PBGC's risk tolerance and return objectives?
The specific portfolio management strategies employed by Marathon Asset Management LLP are not detailed in the provided data. However, for a government agency like the PBGC, strategies would typically focus on capital preservation, stable income generation, and long-term growth to meet pension obligations. Alignment with risk tolerance and return objectives would be a key performance indicator monitored throughout the contract's duration.
What are the key performance indicators (KPIs) used to measure the success of Marathon Asset Management LLP's portfolio management services?
Key performance indicators (KPIs) for portfolio management services typically include metrics such as investment returns against relevant benchmarks (e.g., S&P 500, bond indices), risk-adjusted returns (e.g., Sharpe ratio), tracking error, portfolio volatility, and adherence to investment policy statements. The PBGC would likely establish specific KPIs related to asset growth, income generation, and risk mitigation relevant to its mission.
How does the $38.8 million contract value compare to the total assets under management by the PBGC, and what is the implied management fee?
The provided data does not include the total assets under management (AUM) by the PBGC, making a direct comparison to the contract value difficult. The contract value represents the cost of services, not the total assets managed. To determine the implied management fee as a percentage of AUM, one would need the AUM figure and details on whether the $38.8 million covers all management fees or includes other costs.
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: 13
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5 UPPER ST MARTINS LANE, LONDON
Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations
Financial Breakdown
Contract Ceiling: $39,413,882
Exercised Options: $38,856,016
Current Obligation: $38,856,016
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2010-04-19
Current End Date: 2017-04-18
Potential End Date: 2017-04-18 00:00:00
Last Modified: 2017-07-27
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