State Street Corporation awarded $32.9M contract for Trust, Fiduciary, and Custody Activities by Pension Benefit Guaranty Corporation

Contract Overview

Contract Amount: $32,893,852 ($32.9M)

Contractor: State Street Corporation

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2014-10-01

End Date: 2025-08-22

Contract Duration: 3,978 days

Daily Burn Rate: $8.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $32.9 million to STATE STREET CORPORATION for work described as: IGF::CT::IGF Key points: 1. Contract value of $32.9M over its period of performance. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. Contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Performance period spans from October 1, 2014, to August 22, 2025. 5. The contract is for Trust, Fiduciary, and Custody Activities. 6. The contracting agency is the Pension Benefit Guaranty Corporation. 7. The contractor is State Street Corporation.

Value Assessment

Rating: good

The contract value of $32.9 million for trust, fiduciary, and custody services over approximately 10 years appears reasonable given the scope of services for a federal agency like the Pension Benefit Guaranty Corporation. Benchmarking against similar contracts for financial services provided to federal entities would offer a more precise value-for-money assessment. The firm fixed-price structure suggests that the pricing was determined upfront and is intended to remain stable, which can be advantageous for budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for these specialized financial services. While more bidders could potentially drive prices lower, three bidders indicate that the market is not overly concentrated and that the agency sought competitive proposals.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple firms to offer their best pricing and services, leading to potentially lower costs and better quality outcomes.

Public Impact

The Pension Benefit Guaranty Corporation benefits from these services, ensuring the proper management of trust, fiduciary, and custody activities. These services are critical for the financial stability and operational integrity of the PBGC's pension insurance programs. The contract supports financial sector jobs, particularly in areas related to trust and custody services. The geographic impact is primarily centered around the contractor's operational locations and the agency's headquarters in Washington D.C.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition to a new provider is complex or costly.
Reliance on a single contractor for critical financial operations could pose a risk if performance issues arise.

Positive Signals

Firm Fixed Price contract structure provides cost certainty for the agency.
Long-term contract (over 10 years) suggests a stable and reliable relationship, potentially leading to efficiencies.
Awarded through full and open competition, indicating a competitive process was utilized.

Sector Analysis

The financial services sector, particularly trust, fiduciary, and custody services, is a critical component of the broader financial industry. Federal agencies often require specialized services for managing assets, pensions, and other financial instruments. Spending in this area is driven by the need for secure, compliant, and efficient financial operations. Comparable spending benchmarks would involve analyzing other large federal contracts for similar financial management services across agencies like the Department of Treasury or the Office of Management and Budget.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of trust, fiduciary, and custody services, it is common for large financial institutions to be the primary bidders. There is no explicit information provided regarding subcontracting plans with small businesses, which could be an area for further inquiry to ensure small business participation.

Oversight & Accountability

The Pension Benefit Guaranty Corporation, as a federal agency, is subject to various oversight mechanisms. Contract performance is typically monitored by agency contracting officers and program managers. Inspector General oversight may also apply to ensure the integrity and efficiency of the contract. Transparency is generally maintained through contract databases like FPDS-NG, where basic contract information is publicly available.

Related Government Programs

Federal Retirement Benefits
Pension Fund Management
Financial Services for Government Agencies
Custodial Services Contracts
Fiduciary Services Contracts

Risk Flags

Long contract duration may limit flexibility.
Reliance on a single provider for critical financial services.

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $32.9 million to STATE STREET CORPORATION. IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is STATE STREET CORPORATION.

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 $32.9 million.

What is the period of performance?

Start: 2014-10-01. End: 2025-08-22.

What is the historical spending trend for Trust, Fiduciary, and Custody Activities by the Pension Benefit Guaranty Corporation?

Analyzing historical spending for Trust, Fiduciary, and Custody Activities by the Pension Benefit Guaranty Corporation (PBGC) requires examining contract awards over multiple fiscal years. While the provided data focuses on a single contract awarded to State Street Corporation with a total value of $32.9 million and a performance period from October 1, 2014, to August 22, 2025, it represents a significant portion of their spending in this category during its active period. To understand the trend, one would need to look at prior contracts for similar services, their values, durations, and the contractors involved. For instance, were there previous contracts with State Street or other providers? Were the values significantly different? Was the competition level consistent? Without access to a comprehensive historical database of PBGC's contracts for these specific services, it's challenging to establish a definitive spending trend. However, the longevity and substantial value of this current contract suggest a consistent need and potentially stable spending in this area over the past decade.

How does the pricing of this contract compare to similar financial services contracts awarded to other federal agencies?

Comparing the pricing of this $32.9 million contract for Trust, Fiduciary, and Custody Activities to similar financial services contracts awarded to other federal agencies is complex without detailed service level agreements and specific performance metrics. However, the firm fixed-price nature of this contract with State Street Corporation, spanning over 10 years, suggests a negotiated rate that aims for cost certainty. To benchmark effectively, one would need to identify contracts with comparable scope (e.g., custody of pension assets, fiduciary services) awarded by agencies of similar size and financial complexity, such as the Department of Labor's Employee Benefits Security Administration or other large pension funds. Factors like the volume of assets under management, the complexity of investment portfolios, reporting requirements, and regulatory compliance needs significantly influence pricing. A preliminary assessment suggests that for a long-term, comprehensive financial services agreement of this magnitude, the pricing is likely competitive, especially given the full and open competition that was conducted.

What are the key performance indicators (KPIs) used to evaluate State Street Corporation's performance under this contract?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) for State Street Corporation's performance under this contract. However, for Trust, Fiduciary, and Custody Activities, typical KPIs would likely revolve around accuracy in transaction processing, timeliness of reporting, adherence to regulatory compliance standards, security of assets, and responsiveness to inquiries. For fiduciary services, adherence to fiduciary duties and prudent investment management principles would be paramount. For custody services, metrics such as the accuracy of asset reconciliation, settlement rates, and the security of physical and digital assets would be critical. The Pension Benefit Guaranty Corporation would have established specific service level agreements (SLAs) within the contract that outline these performance expectations and the metrics used to measure them. Failure to meet these KPIs could result in penalties or impact future contract renewals.

What is the track record of State Street Corporation in handling federal government contracts for financial services?

State Street Corporation has a significant track record in handling federal government contracts for financial services. As a major global financial services provider, they routinely engage with government entities, including various federal agencies, to offer a wide range of services such as custody, accounting, fund administration, and investment management. Their experience often includes managing large, complex portfolios and ensuring compliance with stringent government regulations. While this specific contract with the Pension Benefit Guaranty Corporation (PBGC) is for $32.9 million over approximately 10 years, it is indicative of their capacity to manage substantial federal financial operations. A thorough review of their past performance on similar federal contracts, including any past performance evaluations or awards, would provide a more detailed understanding of their reliability and effectiveness in serving government clients.

What are the potential risks associated with relying on a single contractor for critical trust and custody services?

Relying on a single contractor, such as State Street Corporation in this case, for critical trust and custody services presents several potential risks. Firstly, there's the risk of vendor lock-in, where the complexity and cost of transitioning to a new provider could make it difficult for the Pension Benefit Guaranty Corporation (PBGC) to switch contractors even if performance is subpar or pricing becomes uncompetitive. Secondly, operational disruptions at the contractor's end, such as system failures, cyberattacks, or financial instability, could directly impact the PBGC's ability to manage its assets and fulfill its fiduciary responsibilities. Thirdly, a lack of ongoing competition might reduce the incentive for the incumbent contractor to innovate or offer cost efficiencies over the long term. To mitigate these risks, robust contract management, regular performance reviews, contingency planning, and clear exit strategies are essential.

Industry Classification

NAICS: Finance and Insurance › Other Financial Investment Activities › Trust, Fiduciary, and Custody Activities

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-14-0007

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 LINCOLN ST, BOSTON, MA, 02111

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

Financial Breakdown

Contract Ceiling: $63,966,633

Exercised Options: $63,966,633

Current Obligation: $32,893,852

Actual Outlays: $12,188,329

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline