Goldman Sachs awarded $34.4M contract for portfolio management services by Pension Benefit Guaranty Corporation

Contract Overview

Contract Amount: $34,425,996 ($34.4M)

Contractor: Goldman Sachs Asset Management, L.P

Awarding Agency: Pension Benefit Guaranty Corporation

Start Date: 2016-04-01

End Date: 2026-09-28

Contract Duration: 3,832 days

Daily Burn Rate: $9.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 26

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF PORTFOLIO MANAGEMENT SERVICES

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 $34.4 million to GOLDMAN SACHS ASSET MANAGEMENT, L.P for work described as: IGF::CT::IGF PORTFOLIO MANAGEMENT SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration is substantial, spanning over 10 years. 3. The fixed-price contract type may offer cost certainty for the agency. 4. The agency's reliance on a single contractor for this service warrants attention. 5. Performance context is crucial given the long-term nature of the engagement. 6. Sector positioning within financial services and asset management is key.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific service details and comparable contract data. The firm fixed-price structure provides cost predictability for the Pension Benefit Guaranty Corporation. However, the total value over a decade suggests a significant investment, and ongoing monitoring of performance against cost will be essential to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 26 bids suggests a robust level of interest and competition for this requirement. This broad competition is generally favorable for price discovery and potentially achieving better terms.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer funds are used efficiently by driving down costs and encouraging high-quality service delivery.

Public Impact

The Pension Benefit Guaranty Corporation (PBGC) benefits from expert portfolio management services. Retirement security for participants in PBGC-insured pension plans is indirectly supported. Services are delivered primarily within the District of Columbia. The contract supports specialized financial services jobs within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in and reduced flexibility.
Reliance on a single firm for critical financial services poses concentration risk.
Potential for scope creep or cost overruns if not managed tightly over the long term.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract provides cost certainty for the agency.
The contractor is a well-established financial services firm with significant experience.

Sector Analysis

This contract falls within the financial services sector, specifically asset and portfolio management. The market for these services is highly competitive, with numerous firms offering specialized expertise. The Pension Benefit Guaranty Corporation's need for such services is driven by its mandate to manage assets related to pension insurance. Comparable spending benchmarks would typically be found within other large government agencies or institutional investors managing significant financial portfolios.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of portfolio management services and the size of the contract, it is likely that large, established financial institutions were the primary bidders. Subcontracting opportunities for small businesses are not explicitly detailed but could potentially exist for ancillary services if utilized by the prime contractor.

Oversight & Accountability

Oversight of this contract would primarily reside with the Pension Benefit Guaranty Corporation's contracting officers and program managers. Accountability measures would be defined within the contract's performance work statement and terms. Transparency is generally facilitated by the contract award process itself, though specific performance metrics and oversight reports may not be publicly available.

Related Government Programs

Investment Management Services
Financial Advisory Services
Asset Management Contracts
Government Pension Funds

Risk Flags

Long contract duration
Reliance on a single prime contractor for critical financial services

Frequently Asked Questions

What is this federal contract paying for?

Pension Benefit Guaranty Corporation awarded $34.4 million to GOLDMAN SACHS ASSET MANAGEMENT, L.P. IGF::CT::IGF PORTFOLIO MANAGEMENT SERVICES

Who is the contractor on this award?

The obligated recipient is GOLDMAN SACHS ASSET MANAGEMENT, L.P.

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 $34.4 million.

What is the period of performance?

Start: 2016-04-01. End: 2026-09-28.

What is the specific scope of 'Portfolio Management Services' under this contract?

The provided data indicates the contract is for 'IGF::CT::IGF PORTFOLIO MANAGEMENT SERVICES' awarded to GOLDMAN SACHS ASSET MANAGEMENT, L.P. by the Pension Benefit Guaranty Corporation (PBGC). While the exact scope is not detailed in the provided summary, portfolio management services typically involve the strategic oversight, investment, and management of a collection of financial assets. This can include asset allocation, security selection, risk management, performance monitoring, and reporting. For the PBGC, these services are likely crucial for managing the assets held to ensure the solvency of pension plans it insures. The specific services would be detailed in the contract's Performance Work Statement (PWS), outlining objectives, deliverables, and performance standards.

How does the $34.4 million total contract value compare to similar portfolio management contracts for federal agencies?

Comparing the $34.4 million total contract value for portfolio management services requires context regarding the duration and scope. This contract spans from April 1, 2016, to September 28, 2026 (over 10 years), with a total value of $34,425,995.60. This averages to approximately $3.4 million per year. Large federal agencies and government-sponsored enterprises often engage in significant asset management. For instance, the Department of Defense or the Treasury might have larger contracts due to the scale of assets managed. However, for an agency like the PBGC, which insures private-sector pension plans, this level of investment in expert management is substantial and reflects the complexity and value of the assets under its purview. Benchmarking would ideally involve comparing annual management fees as a percentage of Assets Under Management (AUM) across similar entities.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, in portfolio management contracts, typical KPIs often revolve around investment performance relative to a benchmark index (e.g., exceeding a specific market index return), risk-adjusted returns (e.g., Sharpe Ratio), adherence to investment guidelines and policies, timeliness and quality of reporting, and compliance with regulatory requirements. The Pension Benefit Guaranty Corporation would have established these KPIs within the contract's Performance Work Statement (PWS) to measure the effectiveness and efficiency of Goldman Sachs Asset Management's services and ensure alignment with the PBGC's fiduciary responsibilities.

What is the track record of Goldman Sachs Asset Management in managing federal government contracts?

Goldman Sachs Asset Management (GSAM) is a global leader in investment management, and while this specific contract is with the Pension Benefit Guaranty Corporation (PBGC), GSAM has a history of working with various institutional clients, which can include government entities or related organizations. Their track record generally involves managing large and complex portfolios across diverse asset classes. For federal government contracts specifically, GSAM would be subject to stringent oversight and reporting requirements. Information on their past performance on specific federal contracts, including any awards, penalties, or significant issues, would typically be available through federal procurement databases like SAM.gov or through agency-specific contract award announcements, though detailed performance reviews are often internal.

What are the potential risks associated with a sole-source or limited competition award for such a critical service?

This contract was awarded under 'Full and Open Competition' with 26 bids, so it is not a sole-source or limited competition award. Therefore, the risks typically associated with those types of awards (e.g., potentially higher prices due to lack of competition, limited innovation, reduced transparency) are mitigated in this instance. The competitive nature of the award process suggests that the PBGC sought the best value from a range of qualified providers. The primary risks for this contract, given its competitive award, would relate more to performance execution, market volatility affecting investment returns, and the long duration of the contract, rather than the procurement method itself.

How has historical spending on portfolio management services by the PBGC trended over time?

The provided data only details one specific contract awarded on April 1, 2016, with an end date of September 28, 2026. It does not offer historical spending trends for portfolio management services by the Pension Benefit Guaranty Corporation (PBGC) prior to this award or projections beyond its duration. To analyze historical spending trends, one would need access to PBGC's budget documents, contract databases (like FPDS or SAM.gov), and annual reports covering multiple fiscal years. This would allow for an examination of whether the PBGC has consistently used external asset managers, the volume of spending on such services, and how spending has fluctuated based on market conditions, agency needs, or changes in investment strategy.

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: PBGC01RP150008

Offers Received: 26

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Goldman Sachs Group Inc

Address: 200 WEST ST, NEW YORK, NY, 10282

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

Financial Breakdown

Contract Ceiling: $34,425,996

Exercised Options: $34,425,996

Current Obligation: $34,425,996

Actual Outlays: $12,941,136

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline