PBGC01-RP-09-0025.pdf

SOLICITATION, OFFER AND AWARD

1. This Contract is a Rated Order Under

DPAS (15 CFR 350)

Rating Page of pages 1 136

2. Contract No. 3. Solicitation No. 4. Solicitation Type 5. Date Issued 6. Requisition/Purchase No.

TBD PBGC01-RP-09-0025

Sealed Bid (IFB) 03/29/2010 RQ-35-09-000187 X Negotiated (RFP)

7. Issued By Code pd 8. Address Offer To (If other than item 7) Code

PENSION BENEFIT GUARANTY CORP

PROCUREMENT DEPARTMENT

1200 K ST NW, STE. 1090

WASHINGTON DC 20005-4026

NOTE: In sealed bid solicitations “offer” and “offeror” mean “bid” and “bidder”.

SOLICITATION

9. Sealed offers in original and 7 copies for furnishing the supplies or services in the Schedule will be received at the place s pecified in Item 8, or if handcarried, in the depository located in See Sec L until 10:00 am (hour) Eastern Local Time on April 29, 2010.

CAUTION – LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and conditions contained in this solicitation.

10. For Information Call:

A. Name B. Telephone No. (include area code) (NO COLLECT CALLS) Fiorela Kvalevog (202) 326-4000 ext. 3981 kvalevog.fiorela@pbgc.gov

11. TABLE OF CONTENTS

(x) Sec Description Page(s) (x) Sec Description Page(s) Part I – The Schedule Part II – Contract Clauses X A Solicitation/Contract Form 1 X I Contract Clauses 74 X B Supplies or Services and Prices/Costs 2 Part III – List of Documents, Exhibits and Other Attachments X C Description/Specs./Work Statement 10 J List of Attachments 82 X D Packaging and Marking 49 Part IV – Representations and Instructions X E Inspection and Acceptance 50 K Representations, Certifications and Other Statements of Offerors 93 X F Deliveries or Performance 51 X G Contract Administration Data 52 L Instr., Conds., and Notices to Offerors 117 X H Special Contract Requirements 54 M Evaluation Factors for Award 124

OFFER (Must be fully completed by offeror) NOTE: Item 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period.

12. In compliance with the above, the undersigned agrees, if this offer is accepted within _______________ calendar days (60 calendar days unless a different period is inserted by the offeror) from the data for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

13. Discount for Prompt Payment (See Section I, Clause No. 52.232-8)

10 Calendar Days 20 Calendar Days 30 Calendar Days _____ Calendar Days

14. Acknowledgment of Amendments The offeror acknowledges receipt of amendments to the SOLICITATION for offerors and related documents numbered and dated.

Amendment No. Date Amendment No. Date

15A. Name Code Facility 16. Name and Title of Person Authorized to Sign Offer (Type or print) and

Address of Offeror 15B. Telephone No. (Include area code) 15C. Check if Remittance Address is difference from above. Enter such address in Schedule.

17. Signature 18. Offer Date

(212) 297-3829

AWARD (To be completed by Government)

19. Accepted as to Items Numbered 20. Amount 21. Accounting and Appropriation $0.00

22. Authority for Using Other Than Full and Open Competition: 23. Submit Invoices to Address Shown in Item

10 U.S.C. 2304 (c)( ) 41 U.S.C. 253 (c)( ) (4 copies unless otherwise specified)

24. Administered By (If other than Item 7) Code Payment Will be Made By Code

26. Name of Contracting Officer (Type or print) 27. United States of America (Signature of Contracting Officer) 28. Award Date

IMPORTANT – Award will be made on this form, or on Standard Form 26, or by other authorized official written notice.

NSN 7540-01-152-8064

PREVIOUS EDITION NOT USABLE

33-134 STANDARD FORM 33 (Rev. 4-85) Prescribed by GSA – FAR (48 CFR) 52.214 (c)

PBGC01-RP-09-0025 2

B1. Type of Contract The contractor shall perform the required effort as an Indefinite Delivery Indefinite Quantity (IDIQ) contract. The agency will issue Firm Fixed-Price task orders for all Operations and Maintenance (O&M) and Cost-Plus-Fixed-Fee task orders for all Development, Modernization and Enhancement (DME) work. The work under all task orders shall be performed in accordance with the Statement of Objectives (SOO). Contractors shall propose a fixed fee and shall be paid its costs for its DME work on the BCV solution.

The combined total for O&M and DME work shall not exceed a maximum amount of $56 million in task order work during the five (5) year period of performance for this contract. The agency will issue a minimum amount of $100,000 per year in task order work. NAICS Code for this procurement is 541511 with Dollar Amount of $23 million.

B.2. PBGC-44-001 Other Direct Costs

Unless otherwise provided in individual task orders, the Contractor shall be reimbursed for the actual cost of other direct costs determined to be allowable in accordance with Part 31 of the Federal Acquisition Regulation and authorized by the Contracting Officer or his designee prior to the contractor incurring the charge. If Travel and Per Diem are authorized they will be reimbursed in accordance with the Federal Travel Regulation (FTR) in effect at the time the travel is authorized by PBGC. All travel requirements must be met using the most economical form of transportation available and must be scheduled sufficiently in advance to take advantage of offered discount rates unless waived by the Contracting Officer. You may find the FTR at http://policyworks.gov/org/main/mt/homepage/mtt/FTR/FTRHP.shtml

B.3. PBGC-16-003 Ceiling Price

It is anticipated that the total cost to the Government for performance of this contract shall not exceed the ceiling price set forth in Section B.1 for the Base Year Performance Period, and any Option Periods, and the contractor agrees to use its best efforts to perform the work specified in the schedule and all obligations under this contract within the ceiling price. If at any time the contractor has reason to believe that the hourly rate payments and material costs that will accrue in performing this contract in the succeeding 30 days, if added to all other payments and costs previously accrued, will exceed 85 percent of the ceiling price set forth in this clause, the contractor shall notify the Contracting Officer in writing, giving a revised estimate of the total price to the Government for performing this contract, with supporting reasons and documentation. If, at any time during the performance of this contract, the contractor has reason to believe the total price to the Government for performing this contract will be substantially greater or less than the stated ceiling price the contractor shall notify the Contracting Officer in writing, giving a revised estimate of the total price to the Government for performing this contract, with supporting reasons and documentation. If, at any time during the performance of this contract, the Government has reason to believe the work required in performing this contract will be substantially greater or less than the stated ceiling price, the Contracting Officer will so advise the contractor, giving the contractor the revised estimate of the total amount of effort to be required under this contract. The ceiling price for each contract period is shown in the clause entitled Price/Cost. The Government shall not be obligated to pay the contractor any amount in excess of the ceiling price, and the contractor will not be obligated to continue performance, if to do so would exceed the ceiling price, unless and until the Contracting Officer notifies the contractor in writing that the ceiling price has been increased and of

PBGC01-RP-09-0025 3

the new ceiling price of the contract. Once the Contracting Officer increases the ceiling price, any otherwise allowable hours and material costs incurred by the contractor which were in excess of the previous ceiling price before the increase shall be allowable to the same extent as if the hours had been expended or costs incurred after the increase in the ceiling price.

B.4. Price/Cost

A. Basic Cost and Price Information

The Offeror’s cost and pricing information will represent the Offeror’s understanding of the requirements in section C and the Offeror’s ability to perform those requirements successfully, efficiently and effectively. The evaluation of the Offeror’s cost and pricing information will be based on an analysis of the realism and completeness of the cost data, the conformity of the cost data to the Offeror’s technical data, and the proposed allocation of labor categories, labor hours and skill sets to the Contract’s requirements. Therefore, the Offeror’s cost and pricing information shall contain sufficient information to allow the Government to perform its analysis of the proposed cost or price of the work. All cost and pricing information should be cross-referenced to supporting documentation.

If the Government considers the Offeror’s proposed cost and pricing information to be unrealistic or incomplete, the Offeror may be requested to adjust its cost and pricing information accordingly.

Any inconsistency between promised performance and the cost and pricing information should be explained in the cost and pricing proposal. The burden of proof for cost credibility rests with the Offeror.

In regard to the Operations and Maintenance contract work, this information shall include the amounts of the basic elements of the proposed cost or price. These elements will include, as applicable, direct labor, fringe benefits, travel, materials, subcontracts, purchased parts, shipping, indirect costs and rate and profit.

B. The Development, Modernization and Enhancement Contract Work - Cost-Plus-Fixed-Fee

(CPFF)

For its contract work on the design, development and implementation of the BCV Solution, the contractor shall be reimbursed under a CPFF arrangement. To facilitate a CPFF contract, the Offeror’s cost and pricing information shall include substantially more detailed information than will be required for the Operations and Maintenance work. Moreover, to the extent that the Offeror bases its information on estimates, the Offeror shall identify the estimate, provide the rationale and methodology used in developing the estimate, including any judgmental factors used in projecting future costs, identify any known data sources, and address the timing, nature and extent of any material contingencies.

The Offeror shall include the following information in its cost and pricing information for the Base Year and each Option Year, as designated by each Contract Line Item (CLIN) in section B. The Offeror shall be permitted to increase labor rates by 2.5% for each Option Year.

1. The Offeror shall provide a breakdown of labor hours, rates and cost by appropriate labor category and furnish basis for estimates. For each labor category that does not

PBGC01-RP-09-0025 4

implicate a labor category occupied by Key Personnel, the Offeror shall include a brief description of the years of experience, education level and certifications appropriate to the category.

2. In providing labor costs, fringe benefits, overhead costs, general and administrative expenses each shall be indicated as separate line items, including the rate and/or method of calculating these costs.

3. Under a CPFF contract, the Offeror’s profit shall be captured in the Fixed Fee, as explained in paragraph C below.

4. To the extent possible, the Offeror shall provide a time-phased breakdown, e.g., monthly, quarterly, semi-annually, of the proposed labor categories and labor hours.

5. For other direct costs, the Offeror shall indicate all other allowable costs directly allocable to the performance of the contract work. Offerors may propose other direct costs (ODC) on a reimbursement basis.

6. For indirect costs, the Offeror shall indicate the method used in computing these costs and include cost breakdowns. If costs are based on an agreement, provide a copy of the agreement.

7. For subcontractor services, provide price analyses of all subcontractor proposals and include these analyses as part of the Offeror’s own price and cost submission.

Subcontractor analyses should include information addressing the degree of competition and the basis for establishing the reasonableness of price. Subcontractor cost or pricing data must be accurate, complete and current, and the Offeror shall be responsible for updating a prospective subcontractor’s data.

8. For the intended use of any off-the-shelf or proprietary software, the Offeror shall provide information on the Government’s rights to use the software and the Offeror’s intentions, if at all, for modifying the software in the performance of this Contract.

Moreover, the Offeror shall represent whether it has acquired or intends to acquire sufficient rights from any third-parties, including subcontractors, in order to deliver data to the Government with the rights necessary to allow the Government access and use of that data. Lastly, the Offeror shall be prepared to represent that it has acquired, or intends to acquire, sufficient rights to use any proprietary format of any database that the Offeror may use in the performance of this Contract.

9. If the Offeror has a software license agreement pertinent in any respect to this Contract, the Offeror shall provide a copy of that agreement. Under no circumstances, however, will this Contract give any Contractor the rights to use, release, reproduce, distribute, or publish any data, howsoever modified by the Contract, which pertains to pension plans or individual participants’ benefits, or any calculation of those benefits.

10. The Offeror shall list all other costs not included in the categories above and provide the basis for pricing.

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C. Fixed Fee

Because the Contractor will be reimbursed by the Government for its costs incurred in performing the Development, Modernization and Enhancement (DME) work under this Contract, the Contractor will earn its profit in the form of a fixed fee which the Contractor will earn through the quality of its performance of the contract work. The Offeror’s proposed Fixed Fee cannot exceed 10%.

1. A Fixed Fee of _________________________ (Offeror to insert a proposed fixed fee) shall be paid to the Contractor for performance of the Development, Modernization and Enhancement (DME) work completed under this Contract in accordance with FAR 52.232-32 concerning performance-based payments. There shall be no adjustment in the amount of the total available Fixed Fee by reason of differences between any estimate of costs for performance of the DME contract work and the actual performance costs of that work. The total amount of the Fixed Fee shall be applicable to the prime Contractor and its members in a joint venture or limited liability company, partnership or subcontractors identified and considered a part of the selection and award of this Contract.

2. Based on an annual evaluation of the Contractor’s overall performance, the total Fixed

Fee earned for his annual evaluation period shall be as follows:

OVERALL PERFORMANCE

ATTAINED

AVAILABLE FEE

EARNED

OUTSTANDING – Exceeds performance expectations 100% EXCELLENT – Meets performance expectations 90% GOOD – Meets most performance expectations 65% MARGINAL – Fails to meet performance expectations 0%

Performance expectations, including relative weights, and performance objectives upon which the Contractor shall be evaluated annually will be set forth in a performance evaluation and measurement plan. This plan shall be available to the Contractor after the award of this Contract.

3. If the Government exercises its right to proceed with an Option Year of contract performance, the Fixed Fee shall be subject to negotiations between the Government and the Contractor.

D. The Operations and Maintenance Contract Work – Firm Fixed Price

The Offeror shall provide the following information in regard to the costs of performing the Operations and Maintenance (O&M) requirements of this solicitation.

PBGC01-RP-09-0025 6

1. In regard to each Contract Line Item (CLIN), including all option years, the Offeror shall submit fixed, fully-loaded labor rates for each labor category. The term “fully-loaded rates” shall mean an hourly rate that includes the base labor rate, fringe benefits, overhead costs, general and administrative expenses and profit.

2. To the extent possible, the Offeror shall provide a time-phased breakdown, e.g., monthly, quarterly, semi-annually, of the proposed labor categories and labor hours.

3. For other direct costs, indicate all other allowable costs directly allocable to the performance of the contract work. Offerors may propose other direct costs (ODC) on a reimbursement basis.

4. For indirect costs, indicate the method used in computing these costs and include cost breakdowns. If costs are based on an agreement, provide a copy of the agreement.

5. For subcontractor services, provide price analyses of all subcontractor proposals and include these analyses as part of the Offeror’s own price and cost submission.

Subcontractor analyses should include information addressing the degree of competition and the basis for establishing the reasonableness of the price. Subcontractor cost or pricing data must be accurate, complete and current, and the Offeror shall be responsible for updating a prospective subcontractor’s data.

6. Under no circumstances will this Contract give any Contractor the rights to use, release, reproduce, distribute, or publish any data, howsoever modified by the Contract, which pertains to pension plans or individual participants’ benefits, or any calculation of those benefits.

7. List all other costs not included in the categories above and provide the basis for pricing.

NOTE: The PBGC intends to award a contract to only one Offeror. Therefore, all Offerors must address the DME and O&M work in its proposal. Offerors will not be allowed to bid only on the DME work or only on the O&M work.

B.5 Right to Examine Books and Other Data

The Offeror’s Cost and Pricing Information shall conclude with the following statement, signed and dated by a properly authorized representative of the Offeror:

This proposal reflects our estimates and/or actual costs as of this date and conforms with the instructions in FAR 15.403-5(b)(1). By submitting this proposal, we grant the Contracting Officer and authorized representatives the right to examine, at any time before award, those records, which include books, documents, accounting procedures and practices, and other data, regardless of type and form or whether such supporting information is specifically referenced or included in the proposal as the basis for pricing, that will permit an adequate evaluation of the proposed price.

PBGC01-RP-09-0025 7

B.6. Pricing Schedule

BASE YEAR

Period of Performance (12 months) 15 September 2010 – 14 September 2011

CLIN 0001 (DME CPFF) Benefit Calculation & Valuation Solution - Planning Phase 15 September 2010 – 14 February 2011 $_____________ (Offeror to enter total cost)

CLIN 0002 (DME CPFF) Benefit Calculation & Valuation Solution - Requirement & Design Phase 15 February 2011 – 14 September 2011 $_____________ (Offeror to enter total cost)

CLIN 0003 (O&M FFP) ACT/Archive 1 April 2011 – 14 September 2011

SUPPLIES/SERVICES QTY UNIT UNIT

PRICE

TOTAL

AMOUNT

The Contractor shall provide the services in accordance with Section C, Statement of Objective 6

MO

ODC

OPTION YEAR ONE

Period of Performance (12 months) 15 September 2011 – 14 September 2012

CLIN 1001 (DME CPFF) Benefit Calculation & Valuation Solution 15 September 2011 – 14 September 2012 $_____________ (Offeror to enter total cost)

CLIN 1002 (O&M FFP) ACT/Archive/Benefit Calculation & Valuation Solution 15 September 2011 – 14 September 2012

SUPPLIES/SERVICES QTY UNIT UNIT

PRICE

TOTAL

AMOUNT

The Contractor shall provide the services in accordance

Objective 1

OPTION YEAR TWO

Period of Performance (12 months) 15 September 2012 – 14 September 2013

CLIN 2001 (DME CPFF) Benefit Calculation & Valuation Solution

PBGC01-RP-09-0025 8

15 September 2012 – 14 September 2013 $_____________ (Offeror to enter cost)

CLIN 2002 (O&M FFP) ACT/Archive/Benefit Calculation & Valuation Solution 15 September 2012 – 14 September 2013

SUPPLIES/SERVICES QTY UNIT UNIT

PRICE

TOTAL

AMOUNT

The Contractor shall provide the services in accordance

OPTION YEAR THREE

Period of Performance (12 months) 15 September 2013 – 14 September 2014

CLIN 3001 (DME CPFF) Benefit Calculation & Valuation Solution 15 September 2013 – 14 September 2014 $_____________ (Offeror to enter total cost)

CLIN 3002 (O&M FFP) ACT/Archive/Benefit Calculation & Valuation Solution 15 September 2013 – 14 September 2014

SUPPLIES/SERVICES QTY UNIT UNIT

PRICE

TOTAL

AMOUNT

The Contractor shall provide the services in accordance

OPTION YEAR FOUR

Period of Performance (12 months) 15 September 2014 – 14 September 2015

CLIN 4001 (DME CPFF) Benefit Calculation & Valuation Solution 15 September 2014 – 14 September 2015 $_____________ (Offeror to enter cost)

CLIN 4002 (O&M FFP) ACT/Archive/Benefit Calculation & Valuation Solution 15 September 2014 – 14 September 2015

SUPPLIES/SERVICES QTY UNIT UNIT

PRICE

TOTAL

AMOUNT

The Contractor shall provide the services in accordance 1

PBGC01-RP-09-0025 9

Objective

MO $ $

B.7 Right to Examine Books and Other Data

The Offeror’s Business Proposal shall conclude with the following statement, signed and dated by a properly authorized representative of the Offeror:

This proposal reflects our estimates and/or actual costs as of this date and conforms with the instructions in FAR 15.403-5(b)(1). By submitting this proposal, we grant the Contracting Officer and authorized representatives the right to examine, at any time before award, those records, which include books, documents, accounting procedures and practices, and other data, regardless of type and form or whether such supporting information is specifically referenced or included in the proposal as the basis for pricing, that will permit an adequate evaluation of the proposed price.

PBGC01-RP-09-0025 10

C. Statement of Objectives for Benefit Calculation and Valuation (BCV) Solution

C.1 General Information

The Pension Benefit Guaranty Corporation is a federal corporation created by the Employee Retirement Income Security Act (ERISA) of 1974. PBGC currently protects the pensions of 44 million American workers and retirees in 30,330 private single-employer and multi-employer defined benefit pension plans. PBGC encourages the continuation and maintenance of private-sector defined benefit pension plans, provides timely and uninterrupted payment of pension benefits, and strives to maintain pension insurance premiums at a minimum.

Defined benefit pension plans promise to pay a specified monthly benefit at retirement, commonly based on salary and years on the job. When the sponsor of a covered plan cannot support the plan, the plan terminates and PBGC becomes its trustee. In the approximately 3,800 plans that have gone through this termination and trusteeship process, PBGC pays benefits to more than 630,000 retirees and beneficiaries and is responsible for over 550,000 additional participants who are not yet eligible to retire. Approximately 84% of retirees in terminated plans receive the full benefit amount they earned under their pension plan. The remaining 16% see an average 28% reduction in their benefits to the limits established by federal law. In the past five years, PBGC’s inventory of terminated plans has grown by an average of more than 117 new plans and 110,000 new participants and beneficiaries each year. Although the work load varies each year, the highest number of participants in trusteed pension plans in a year was 206,000.

PBGC's Director reports to a Board of Directors chaired by the Secretary of Labor. The secretaries of Treasury and Commerce are the other board members. PBGC is not funded by general tax revenues. Instead, PBGC is funded by insurance premiums collected from employers that sponsor insured pension plans, from assets acquired from terminated plans, and by investment income earned from those assets.

The Pension Insurance Data Book lists detailed statistics on PBGC program operations and benefit protections. More information about PBGC including its goals and objectives is available at www.pbgc.gov.

The Office of Information Technology (OIT) is responsible for PBGC's Information Technology program. OIT provides Information Technology (IT) and electronic communications services and support to PBGC; plans for, directs and coordinates the allocation of corporate resources for IT services, support and related activities; delivers IT business solutions driven by customer requirements; operates, maintains and safeguards PBGC business and infrastructure system; and oversees the acquisition of IT resources for

PBGC.

C.2 PBGC’s Unique Challenges

The mission of administering a large and growing number of terminated plans makes PBGC unique in the pension industry. Out of the sheer volume of terminated plans come complex http://www.pbgc.gov/workers-retirees/about-pbgc/content/page13363.html�

PBGC01-RP-09-0025 11

Newly Trusteed Plans by Fiscal Year

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

New Plans in ACT New Plans in Ariel and varied calculations of pension benefits, to which the ERISA benefit limitations are applied and plan assets are allocated to the six ERISA priority categories. These complexities are superimposed over unusual plan provisions spread across generations of predecessor plans – and these in turn correspond to different eras of legislation, regulation and policy affecting multiple groups of plan participants in differing ways. Ongoing changes to laws, regulations, policies and procedures further complicate the process.

Additionally, the calculations of pension benefits rely on a foundation of potentially incomplete, inconsistent or missing plan documents and participant data due to bankruptcies, abandoned plans, partially developed administration systems, imminent system shutdowns or inoperable software, paper files, old record collection systems, lack of electronic data, and limited availability of knowledgeable plan personnel. Nonetheless, ERISA requires a greater degree of accuracy for final Benefit Determinations in terminated plans than for the annual valuation of ongoing plans.

C.3 Work Inventory

PBGC issued more than one million Benefit Determination Letters in over 2,000 plans between 1993 and 2005 using the PBGC Actuarial Calculation Toolkit (ACT) or the similar DOS-based system from which ACT evolved. In these finalized plans, administrators continue to use ACT to re-calculate actual retirement benefits as participants become eligible to retire. In addition, several hundred finalized plans use benefit calculation software that pre-dates these systems.

Of the valuations that PBGC finalized in fiscal year 2006, almost all were processed in ACT, but most newly trusteed plans were started in Ariel (see “Newly Trusteed Plans” chart). As of the end of fiscal year 2007, almost all plans in estimated status were in Ariel. To date, PBGC has finalized approximately 190+ Ariel plans and only a few cases remain in process in Ariel. Due to the difficulty of creating an Ariel Benefit Estimation Tool (BET), portions of ACT continue to be used in most Ariel plans to calculate estimated benefits during the period before final Benefit Determinations are completed. Actuaries also use portions of ACT to estimate data and perform some of the more difficult intermediate calculations in Ariel plans. The results of these ACT calculations are loaded into Ariel during the Benefit Determination process in order to calculate the benefits. New plans are no longer being started in Ariel.

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C.4 Benefits Administration and Payment Department (BAPD)

BAPD is composed of eight Trusteeship Processing Divisions (TPD) and several support divisions.

C.4.1 BAPD Organizational Structure and Roles

C.4.1.1 Trusteeship Processing Divisions Each TPD has three primary categories of federal employees:

1. Auditors

2.

gather and audit all data necessary for Benefit Determinations. The data include participant data, plan documents, and information on plan assets.

Auditors have primary responsibility for auditing the Participant Database. In addition, they are involved in the Benefit Determination segment of the business process until the audits are completed and they have made the information available to the assigned Actuary to calculate benefits.

Actuaries

3.

analyze the plan documents and participant data. Actuaries program the valuation software to calculate plan benefits, adjust benefits which are in excess of PBGC limitations, prepare the plan valuation and associated reports, and produce the final Benefit Determinations. They also provide support in the appeals process.

Pension Analysts (PAs

) and their contractor counterparts at the Field Benefits Administration (FBA) offices carry out all the functions in the Benefit Administration segment of the business process. They also support the Benefit Determination segment by building the Participant Database with direction from the Auditor.

C.4.1.2 BAPD Support Divisions:

1. In the Operations and Actuarial Systems Division (OASD), Data Experts and their contractor counterparts Data Specialists support Auditors, Actuaries, PAs and FBAs in the areas of data acquisition, building the Participant Database and benefit calculation software usage. Integrators are Actuaries who specialize in Ariel. They support the TPD Actuaries by selecting parameters in Ariel. Business User Representatives liaise between software users throughout BAPD and personnel in the Office of Information Technology (OIT).

2. The Actuarial Services Division (ASD), headed by PBGC’s Chief Valuation Actuary, assists the TPDs in actuarial determinations and reviews actuarial valuations prepared within the TPDs. They create and maintain documentation surrounding technical actuarial policy and procedures. ASD personnel use the Integrated Present Value of Future Benefits System (IPVFB) to generate information for PBGC’s annual statements.

3. The Retirement Services Division (RSD) ensures that retirees receive monthly payments throughout the life of each plan. After Benefit Determinations are final and the appeal period has expired, RSD reviews the plan to ensure that the TPD has performed all required activities and then accepts responsibility for Benefit

PBGC01-RP-09-0025 13

Administration from the TPD. The plan is then in the “On-going Administration” phase. RSD is also responsible for the Customer Contact Center and the Document Management Center.

4. The Operations and Policy Support Staff (OPSS) conducts reviews and analyses of insurance operations and benefit payment matters, and provides operational input in the development of corporate policy, regulations and legislative changes.

OPSS maintains the BAPD Operating Policy Manual.

5. The Management Coordination Division (MCD) plans, organizes, coordinates, implements, and oversees BAPD staff activities involved in key management areas, which include audit/review response, budgeting, management controls, quality assurance, management improvement, performance management, and strategic planning.

6. The Organization Services and Staff Development (OSSD) provides organizational and staff support and oversees BAPD staff activities involved in key management support areas.

More information about the structure of PBGC is available at http://www.pbgc.gov/about/departments.html.

C.4.2 BAPD Business Process

BAPD has two business processes related to the management of trusteed plans: (1) Benefit Determination and (2) Benefit Administration.

C.4.2.1 Benefit Administration Functions

Benefit Administration functions ensure that participants’ day-to-day needs are met through the following activities:

1. Initial pension payroll setup

2. Estimated adjustment of benefits in pay-status in excess of PBGC limitations

3. Pension payroll

4. Address changes

5. Beneficiary changes

6. Benefit application and initiation of estimated benefit payments

7. Communication of final Benefit Determinations and adjustment of benefit amounts accordingly

8. Benefit application and initiation of the payment of final benefits to new retirees

9. Answering participant questions http://www.pbgc.gov/about/departments.html�

PBGC01-RP-09-0025 14

C.4.2.2 BAPD conducts Benefit Administration functions before (while plans are in “estimated status”) and after (while plans are in “final status”) it has completed the Benefit Determination functions defined below.

Benefit Determination functions include the process by which PBGC determines and values the benefits it will pay to participants and beneficiaries. For valuations completed between calendar years 2003 and 2007, the average time to finalize a valuation varied from 0.6 to 4.9 years with a 2.9-year participant-weighted average.

In those same years, the inventory of plans for which BAPD had not completed Benefit Determinations ranged from 268 plans to 371 plans.

There are four primary inputs used to calculate pension benefits:

1. Current and historical pension plan provisions, some of which may be missing

2. Current and historical participant data, which is often incomplete necessitating the use of estimated data or data that has not been verified

3. Plan assets and recoveries

4. PBGC regulations, practices and policies that govern how benefits are calculated under ERISA and the Pension Protection Act (PPA).

BAPD uses these inputs for the following purposes:

1. Calculating estimated benefits, using a Benefit Estimation Tool (BET) for

(1) newly eligible retirees and (2) retirees already in pay status who are receiving benefits in excess of the PBGC limitations. Before a BET is available, actuaries do these estimates manually.

2. Valuing the Plan: BAPD calculates the PBGC total liability for the plan after calculating final benefits at the individual level using the Date of Plan Termination (DOPT) and PBGC’s actuarial assumptions.

3. Producing Benefit Determinations (BDs), which inform each participant or beneficiary of his/her PBGC benefit. BAPD currently completes BDs in the two to six month period after finalizing the plan valuation.

4. Re-calculating Retirement Benefits: After the Actuary finalizes the plan valuation, the recalculation tool allows administrative staff to calculate retirement benefits for deferred participants at any requested retirement date.

PBGC01-RP-09-0025 15

C.4.3 Existing PBGC Benefit Calculation Systems

The new BCV Solution must replicate the strengths and overcome the weaknesses of the current systems: ACT/Archive and Ariel. An understanding of the existing benefit calculation systems and the processes surrounding each helps establish a baseline for assessing the suitability of a new system. The new contractor shall prepare an effective transition to the new BCV solution based on an understanding of the existing systems:

C.4.3.1 ACT

The Actuarial Calculation Toolkit (ACT) is a suite of applications developed within and owned by PBGC. Calculations are done on a client computer (not a server) employing plan-specific Excel formulas that use both hard-coded PBGC-specific Excel add-ins and standard Excel functions and operators. Both input and output data are stored in a plan-specific password-protected Access databases (input/ouput data are two MS Access databases with standard structures that are slightly different) located in the user’s home drive on the PBGC network.

Processing a plan in ACT involves the following steps:

1. The Actuary identifies data elements described in the plan documents (“Raw Data”).

2. The Auditor collects and consolidates the raw data using Leo into a Microsoft Access database (the “External Database”). For complex situations, a Data Specialist assists the Auditor.

3. The Auditor oversees manual data entry into the External Database for data available only on paper and later audits the completed database.

4. The team performs a PRISM Reconciliation to ensure that the External Database and the PBGC Enterprise Database agree as to the plan population and basic participant data. In addition, the team performs data validations on the External Database to identify problem data.

5. The External Database is loaded into MS Access (the “Valuation Database”) using a standard program.

6. The Actuary uses standard Excel functions and operators as well as PBGC-specific add-ins to perform the calculations and to estimate (using standard estimation techniques) or otherwise accommodate missing data. The results are stored in the Valuation Database.

7. Actuaries analyze and review the calculation results using customized plan-specific reports designed by the Actuary. The Actuary resolves remaining data problems and documents them.

8. The Actuary performs a final PRISM Reconciliation to ensure that the Valuation Database and the Enterprise Database agree as to the plan population and basic participant data.

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9. Actuaries review and approve the results of the ACT calculations and the plan-specific software and document them in the comprehensive Actuarial Case Report (a.k.a. “blue book”).

10. OASD archives the software so it is available to benefit administration staff (Pension Analysts and FBAs) and loads a small subset of the Valuation Database into the PBGC Enterprise Database (“ADT” process).

C.4.3.2 Ariel

Ariel is a parameter-based system developed, owned and maintained by an outside contractor. Access to Ariel is via an Application Service Provider (ASP) model. The system performs calculations on a server using internal, hard-coded algorithms (“core programming”) based on plan-specific parameter settings and participant data. Input data and parameter settings are stored in a SQL Server database. Processing a plan in Ariel involved the following steps:

1. The Actuary identified data elements described in the plan documents (“Raw Data”) as well as other required data elements necessary for Ariel to calculate benefits and begins to prepare the detailed Ariel Plan Analysis Document

(APAD).

2. The Auditor collected and consolidated the raw data using Leo into a Microsoft Access database (the “External Database”). For complex situations, a Data Specialist assisted the Auditor.

3. The Auditor oversaw manual data entry into the External Database for data available only on paper and later audited the completed database.

4. The Actuary used Excel to estimate missing data (using standard estimation techniques) and performed other calculations that Ariel could not accommodate, and the Data Specialist merged the results into the External Database.

5. The team performed a PRISM Reconciliation to ensure that the External Database and the PBGC Enterprise Database agreed as to the plan population and basic participant data. In addition, the team performed data validations on the External Database to identify problem data.

6. The Data Specialist derived additional Ariel-specific data elements and tested the loading of data from the External Database into Ariel.

7. The Data Specialist filtered, consolidated and analyzed the various Ariel data load outputs and error reports so that the team could correct the External Database.

8. The Data Specialist loaded the revised External Database into Ariel.

9. With the data in Ariel, an Integrator (an Actuary specializing in Ariel) was able to select and test the Ariel parameters in accordance with the APAD.

10. The Actuary and Integrator, using pre-programmed reports and other output templates, analyzed the calculation results.

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11. The Actuary and Integrator identified data and integration problems, and the team made the necessary modifications to the External Database and plan parameters. Once complete, the Data Specialist re-loaded the database to Ariel.

An analysis of the new calculation results may have led to further adjustments and re-loads.

12. If the team identified situations that required modifications to Ariel’s core programming to accommodate the plan, and the Change Control Board (CCB) approved, members of the team prepared test scenarios and participated in User Acceptance Testing for the next scheduled release of Ariel. If the CCB did not approve the change, the Actuary completed the necessary calculations outside of Ariel.

13. Actuaries reviewed and approved the results of the Ariel integration, calculations and Benefit Statements and documented the results in the comprehensive Actuarial Case Report (a.k.a. “blue book”).

14. OASD copied the final valuation data and results into the Ariel Production Dataset and made it available to the benefit administration staff (Pension Analysts and FBAs) and loaded a small subset of the Valuation Database to the PBGC Enterprise Database (“ADT” process).

C.5 Statement of Objectives

The objective of this procurement is to obtain a contractor to:

1. Design and develop a BCV solution that supports PBGC’s benefit administration and determination functions by estimating pension benefits, calculating plan liabilities, producing final benefit statements and re-calculating retirement benefits accurately, rapidly and at a reasonable cost while maintaining a high level of customer satisfaction as outlined in this statement of objectives.

2. Perform Operations and Maintenance of the existing PBGC suite of legacy applications (ACT/Archive).

Note: Operations and Maintenance shall not include Ariel.

3. Perform Operations and Maintenance of the new BCV Solution.

C.5.1 Design and Development of BCV Solution – Planning Phase

After award, this contract will proceed in phases. Phase One of the contract will constitute the planning phase where the selected contractor will have a period of time to study, analyze and understand PBGC’s IT and business environments as they pertain to the calculation of pension plan benefits and valuations. At the conclusion of the study period, PBGC expects to receive from the contractor three (3) different options regarding the design and development of the new BCV solution. The options could include, e.g., designing a new system or upgrading the existing systems and integrating the existing or other applications into the upgraded system.

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The contractor shall develop a phased development and implementation approach for each proposed option that will allow for incremental software releases to the business users to reduce overall project risk. In designing these options, the contractor shall consider the impact of following considerations on each proposed option:

Note: Hereinafter the options shall be referred to as “the new BCV solution”.

1. Existing benefit calculation applications as identified in this section C

2. Interfacing the new BCV solution with other agency applications

3. Migration of ACT/Archive Plans to the new BCV solution

4. Migration of Ariel Plans to the new BCV solution

5. Business and Technical requirements as listed below

6. Risks of each option

7. Time required to implement each of the options

8. Any process re-engineering of existing BAPD processes

Note: Business and technical dependencies among the above considerations also shall be considered.

At a time and place to be determined by the PBGC, the contractor shall present each option to PBGC for its selection and approval of one option. The presentation shall include a discussion by the contractor of its recommended phased approach for each proposed option. The phased approach shall allow for development by discrete task orders issued by PBGC as well as incremental software releases to the business users. The contractor also will discuss how each option addresses the eight considerations identified above with emphasis on the timing to develop each option and the contractor’s efforts to reduce overall project risk.

Based on the contractor’s presentation, PBGC will select an option and inform the contractor of its selection. Once the contractor is informed of the selected option, the contractor will be allowed a specific period of time to develop and submit to the Contracting Officer the following two deliverables in regard to the selected option:

1. Project Charter

2. Project Management Plan (PMP)

PBGC will approve and then subsequently review and revise the two documents as necessary in discussions with the contractor before the contractor begins drafting for each phase of the selected option the following two deliverables:

3. Detailed scope of work

4. Detailed, resource-loaded Work Breakdown Structure (WBS) compliant with ITSLCM and OMB requirements.

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C.5.2 Development, Modernization and Enhancements (DME) Requirements for New BCV Solution - Subsequent Phases

DME services generally include the customization of existing applications that provide for new, changed or deleted functionality, features or capabilities of the application. Changes are generally requested to improve software in response to PBGC’s business processes, user interface, technology advancements and industry mandates.

C.5.2.1 Scope of DME Requirements

The scope of the DME for the new BCV solution shall include a customized solution that would incorporate ACT/Archive, provide a base framework for modernization and major enhancements, and integration of existing legacy applications and new applications. It shall also include other activities that move the current benefit calculation systems to the target architecture necessary to support PBGC's strategic goals for customer service and the President’s Management Agenda.

C.5.2.1.1 Consolidation and Retirement of Legacy Applications

In order to support development, modernization and enhancements, the contractor shall consider the following legacy applications and tools for consolidation and retirement in the implementation of the new BCV Solution:

1. The Actuarial Calculation Toolkit (ACT)

a. The Actuarial Calculation Toolkit (ACT) is a collection of tools (listed below) used to calculate and value PBGC benefits.

b. The Valuation Spreadsheet Tool (ValTool) copies data from the Valuation Database into the Valuation Spreadsheet and copies the calculation results from the spreadsheet to the database.

c. The Excel Add-ins are hard-coded algorithms available within the spreadsheet.

d. The Actuary uses ACT Design to design Benefit Statements

e. PAs and FBAs use ACT Runtime to generate statements as participants retire.

f. The Actuary uses the DOPT Report System (DRS) to design customized Listings.

2. Archive

The Archive Access program is the permanent storage location of BAPD's valuation-related electronic files to include the benefit statement and recalculation program, memos, listings, actuarial valuation spreadsheets, standalone spreadsheets, etc. This program is accessed by Field Benefit Administration staff for the primary purpose of generating benefit statements and recalculations for plan participants. The “Archive Utility” program is the tool used by OASD to manage the archive (i.e. store the abovementioned

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electronic files in the Archive Access program and grant access to the Field Benefit Administration staff via the OASD developed MS-Access based “FBA Transfer Tool”).

More than 2,000 archived benefit recalculation programs (mostly ACT cases with a small number of Pre-ACT cases) must eventually be migrated to the new BCV solution. PBGC is open to alternatives proposed by the contractor regarding the disposition of the software through which users gain access to these programs (Archive Access and Archive Utility).

3. Payment Adjustment Calculation System (PACS) and Batch PACS

PACS is a web-based calculation tool with no interfaces to other PBGC systems. BAPD uses PACS to determine (1) the refund owed to underpaid participants, (2) the amount PBGC will recoup from overpaid participants, and (3) benefits payable under PBGC optional forms. PACS generates Benefit Statements and a Benefits Determination Letter (BDL) through the eALG application. BAPD staff images BDLs through the IPS Viewer.

PBGC subsequently developed “Batch PACS” to perform these calculations described above for large groups of participants. The primary input to Batch PACS is ledger data from both the PBGC Enterprise Database and (more problematically) the payment system(s) used by the prior paying agent between the Date of Plan Termination and the Plan Assumption (DOPT) date. OASD developed the ad hoc, MS-Access based “Batch PACS Data Load Tool” to partially automate the transfer of this data into the PACS database.

4. Leo

OASD developed the MS Access-based Leo tool to facilitate building the External Databases. Data Specialists load data from Outside Databases by either copying /pasting it from Excel or by creating MS Access queries. Other BAPD staff manually enters the remaining data through a data interface customized to the plan. Leo keeps a history of data changes, including a record of who made the changes. Auditors can easily tailor Leo to display only data elements relevant to a given plan, e.g. define a sample population and define filters to display only certain types of customers. Leo interacts directly with the PBGC Enterprise Database, allowing users to download participant and beneficiary information. It generates reports used in the PRISM Reconciliation process and performs validations that either prevent users from entering inconsistent data or identifies errors that must be corrected before the data can be loaded into Ariel or ACT.

5. Tools Related to Loading Valuation Data to the Enterprise Database

OASD developed several ad hoc tools for analyzing and formatting data from the Valuation Database in preparation for loading it into the Enterprise

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Database via the Spectrum/Genesis suite of tools (described below). The Plan MS Access Conversion Tool reformats data extracted from Ariel. For both ACT and Ariel cases, ADTv5 performs data validations and then formats the data for Spectrum/Genesis.