PBGC's $14M Contract with Blackrock for Portfolio Management: A Decade-Long Engagement

Contract Overview

Contract Amount: $13,988,884 ($14.0M)

Contractor: Blackrock Institutional Trust Company National Association

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2015-11-01

End Date: 2025-12-15

Contract Duration: 3,697 days

Daily Burn Rate: $3.8K/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: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94105

State: California Government Spending

Plain-Language Summary

Pension Benefit Guaranty Corporation obligated $14.0 million to BLACKROCK INSTITUTIONAL TRUST COMPANY NATIONAL ASSOCIATION for work described as: IGF::CT::IGF Key points: 1. Significant 10-year contract value of $13.99M for portfolio management services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Potential risk associated with long-term contracts and reliance on a single provider. 4. Services fall under the 'Other' sector, lacking specific industry benchmarks.

Value Assessment

Rating: fair

The contract value of $13.99M over 10 years averages $1.4M annually. Without specific service details or comparable contracts, assessing value is difficult. However, for large-scale institutional portfolio management, this annual figure may be within a reasonable range.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating multiple bidders were likely considered. This method generally promotes price discovery and competitive pricing, though the specific impact on this contract's final price is not detailed.

Taxpayer Impact: Taxpayer funds are being used for pension benefit guarantees. The competitive award process aims to ensure efficient use of these funds, but long-term costs and performance will ultimately determine the true taxpayer impact.

Public Impact

Ensures continued management of pension assets, safeguarding benefits for participants. Long-term contract may offer stability but could limit flexibility in adapting to market changes. Transparency in contract award through open competition is a positive for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) may lead to vendor lock-in and reduced flexibility.
Lack of specific performance metrics makes it hard to assess ongoing value.
Potential for cost overruns if market conditions change significantly and contract terms are rigid.

Positive Signals

Awarded through full and open competition, promoting fairness and potentially better pricing.
Experienced contractor (Blackrock) suggests a high likelihood of competent service delivery.
Long-term nature provides stability for critical pension fund management.

Sector Analysis

Portfolio management services for pension funds are crucial for financial stability. Benchmarking is difficult as this falls under 'Other' rather than a specific industry sector with readily available cost data for similar government contracts.

Small Business Impact

The contract was awarded to Blackrock Institutional Trust Company National Association, a large financial institution. There is no indication that small businesses were involved as subcontractors or partners in this specific contract.

Oversight & Accountability

The contract is managed by the Pension Benefit Guaranty Corporation (PBGC). Oversight would typically involve monitoring performance, adherence to contract terms, and financial reporting to ensure accountability and effective service delivery.

Related Government Programs

Portfolio Management
Pension Benefit Guaranty Corporation Contracting
Pension Benefit Guaranty Corporation Programs

Risk Flags

Long-term contract duration (10 years)
Lack of detailed performance metrics
Potential for vendor lock-in
Limited sector-specific benchmarking data

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $14.0 million to BLACKROCK INSTITUTIONAL TRUST COMPANY NATIONAL ASSOCIATION. IGF::CT::IGF

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 $14.0 million.

What is the period of performance?

Start: 2015-11-01. End: 2025-12-15.

What is the specific scope of portfolio management services provided, and how does it align with the PBGC's mission to protect pension benefits?

The contract details are limited, but portfolio management typically involves investment strategy, asset allocation, risk management, and performance monitoring. For the PBGC, this would focus on managing assets to meet future pension obligations efficiently and securely, ensuring the agency can fulfill its guarantee responsibilities to participants of failed pension plans.

Given the 10-year duration, what mechanisms are in place to mitigate risks associated with market volatility and potential changes in investment strategy needs?

Long-term contracts often include clauses for periodic reviews, potential adjustments to strategy based on market conditions, and termination options under specific circumstances. The PBGC likely has internal review processes and may have negotiated flexibility within the contract to adapt to evolving financial landscapes and regulatory requirements.

How does the annual cost of $1.4M compare to industry benchmarks for managing institutional-level pension assets of this scale?

Without knowing the exact asset under management (AUM) and the specific services rendered, a precise benchmark is impossible. However, institutional asset management fees typically range from 0.1% to 1% of AUM, depending on complexity and scale. If the AUM is substantial, $1.4M annually could represent a competitive fee.

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

Solicitation ID: PBGC01-RP-15-0013

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Blackrock Inc

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

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

Financial Breakdown

Contract Ceiling: $13,988,884

Exercised Options: $13,988,884

Current Obligation: $13,988,884

Actual Outlays: $4,875,037

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline