PBGC awards $32.6M contract for investment management services to Marathon Asset Management LLP
Contract Overview
Contract Amount: $32,568,974 ($32.6M)
Contractor: Marathon Asset Management LLP
Awarding Agency: Pension Benefit Guaranty Corporation
Start Date: 2017-03-31
End Date: 2022-03-30
Contract Duration: 1,825 days
Daily Burn Rate: $17.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 22
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: IGF::OT::IGF INVESTMENT MANAGEMENT SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024
Plain-Language Summary
Pension Benefit Guaranty Corporation obligated $32.6 million to MARATHON ASSET MANAGEMENT LLP for work described as: IGF::OT::IGF INVESTMENT MANAGEMENT SERVICES Key points: 1. The contract value is $32.6 million over 5 years. 2. Marathon Asset Management LLP is the sole awardee. 3. The contract type is Firm Fixed Price. 4. The NAICS code is 523920 (Portfolio Management).
Value Assessment
Rating: fair
The contract value of $32.6 million over five years for portfolio management services appears within a reasonable range for similar government contracts. Benchmarking against other large-scale asset management contracts would provide a clearer picture of its competitiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is generally expected to yield fair pricing and good value for the government.
Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure cost-effective services for managing pension assets.
Public Impact
Ensures professional management of pension assets, safeguarding retirement benefits. Supports the financial stability of the Pension Benefit Guaranty Corporation. Provides continuity in investment strategy and execution.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics in provided data.
- Potential for market volatility impacting investment returns.
- Dependence on a single contractor for critical financial services.
Positive Signals
- Awarded under full and open competition.
- Firm Fixed Price contract type provides cost certainty.
- Long-term contract (5 years) allows for stable management.
Sector Analysis
The financial services sector, particularly asset and portfolio management, is crucial for government agencies managing large funds. Benchmarks for similar contracts vary widely based on asset size, complexity, and market conditions.
Small Business Impact
The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if small business participation was sought or considered.
Oversight & Accountability
Oversight would typically involve regular performance reviews by the Pension Benefit Guaranty Corporation to ensure Marathon Asset Management LLP meets contractual obligations and performance standards.
Related Government Programs
- Portfolio Management
- Pension Benefit Guaranty Corporation Contracting
- Pension Benefit Guaranty Corporation Programs
Risk Flags
- Contract awarded to a single entity.
- Potential for over-reliance on one firm.
- Limited transparency on specific performance metrics.
- No indication of small business subcontracting.
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 $32.6 million to MARATHON ASSET MANAGEMENT LLP. IGF::OT::IGF INVESTMENT MANAGEMENT SERVICES
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 $32.6 million.
What is the period of performance?
Start: 2017-03-31. End: 2022-03-30.
What is the specific benchmark for portfolio management services of this scale and complexity within the federal government?
Benchmarking portfolio management services of this scale ($32.6M over 5 years) requires detailed comparison against contracts with similar asset classes, risk profiles, and management objectives. Federal agencies often use internal cost models or consult industry reports for comparable services. Without specific details on the assets managed, a precise benchmark is difficult, but the price appears reasonable for comprehensive management.
What are the key performance indicators (KPIs) used to evaluate Marathon Asset Management LLP's effectiveness?
Key performance indicators for portfolio management typically include investment return relative to benchmarks (e.g., S&P 500, relevant bond indices), risk-adjusted returns (Sharpe ratio), tracking error, and adherence to investment policy statements. The effectiveness is also measured by the contractor's responsiveness, reporting accuracy, and compliance with regulatory requirements.
How does the firm fixed price structure impact the government's ability to benefit from positive market performance?
A firm fixed price (FFP) contract provides cost certainty for the government, as the price is set regardless of the contractor's actual costs. However, with FFP, the contractor assumes the risk and reward of performance. If the investments perform exceptionally well, the contractor benefits, while the government's upside is limited to the agreed-upon management fee structure rather than a direct share of excess profits.
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-16-0019
Offers Received: 22
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5 UPPER ST MARTINS LANE, LONDON
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership
Financial Breakdown
Contract Ceiling: $79,205,000
Exercised Options: $33,314,527
Current Obligation: $32,568,974
Actual Outlays: $7,796,992
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-03-31
Current End Date: 2022-03-30
Potential End Date: 2022-03-30 00:00:00
Last Modified: 2023-10-05
More Contracts from Marathon Asset Management LLP
- Cfo/Cid — $38.9M (Pension Benefit Guaranty Corporation)
Other Pension Benefit Guaranty Corporation Contracts
- Field Office Support Services — $141.0M (Serco Inc)
- O&M and DM&E Work — $130.5M (Science Applications International Corporation)
- Portfolio Management Services — $117.6M (Pgim, Inc.)
- Portfolio Management Services — $112.4M (Pacific Investment Management Company LLC)
- This to IS to Improve Customer Service Scores Reported by a 3rd-Party Vendor WHO Completes a Quarterly Participant Caller Survey. PSD Seeks to Improve CX by Reducing the Number of Contacts & Paper Forms Customers Complete to Fulfill Requests — $95.8M (Serco Inc)