Questions_and_Answers__-_FID_response_2.doc

Q&A - 2

1) We will be proposing 2 strategies - Global Emerging Debt and Emerging Local Currency Debt. Based on the excerpt below from Section L.2.3 (Volumes Description) on page 79, do we submit our 2 EMD strategies within the same binders (Volumes I, II, III & IV), separated by tabs?

Answer: Offerers under the Specialist Global and/or Emerging Market Debt Manager classification are limited to one product per strategy (Global or Emerging Market Debt) and a maximum of two products (1 Global, 1 Emerging Markets Debt).

2) Based on the instructions within the Scope of Work - specifically on page 31, the last page of Section B and page 86 in Section M.3 (both these references are copied below under the table) - we wish to clarify the requirements for the Fee Quotes. We understand the various instructions to mean that we complete the asset fees schedules starting with an initial tranche of $250 million. Is that correct?

Answer: A manager’s decision on individual cost tranches and their associated values shall be determined by the manager.

The AUM level of $250,000,000.00 per product should be used as a basis for the price quote to allow consistency in pricing.

3) In the first paragraph on page 76 (Section L.2.3), what do you mean by a signed solicitation document? Is it simply the proposed fees for the base year as well as the optional 9 additional years with an Authorized Signature at the end?

On Page 76, first paragraph, it states:

Offerors will submit a separate binder containing its Pricing Proposal. The Contracting/Pricing Volume shall consist of the signed solicitation document, the pricing identified in section B for the base year period of performance and all option year periods of performance, and all completed representations and certifications, as required.

Answer: The paragraph will be amended as follows:

Offerors will submit a separate binder containing its Pricing Proposal. The Pricing Volume shall consist of the pricing identified in section B for the base year period of performance and all option year periods of performance, and all completed representations and certifications, as required.

4) We have a question regarding the PBGC Fixed Income RFP (PBGC01-RP-15-0008). Could you please confirm if PBGC would be willing to accept a mutual fund vehicle for the emerging markets debt mandate; and therefore, allow the mutual fund’s guidelines to rule?

Answer: Only products that are available in a separate account and actively managed will be accepted as a qualifying product for this solicitation

5) I read that you are doing a search for High Yield Managers. With the impending interest rate hikes that will be occurring, would your plan consider proposals for Senior Floating Rate Bank Loans?

Answer: If a manager meets the firm level mandatory requirements as well as the product level mandatory requirements for at least 3 of the 5 distinct strategies as outlined in section L.2.1, a High Yield strategy will be considered, if it meets the Multiple Mandate Product Level Mandatory Requirements (High Yield Fixed Income) in Attachment 6.

6) Does the PBGC intend to respond to bidder inquires as they are submitted or respond to all inquiries after the question submission deadline of January 5, 2015?

Answer: All Questions will be answered in writing and provided to all vendors via posting on FedBizOpps, giving due regard to the proper protection of proprietary information. PBGC will make an effort to post questions and answers on FEDBIZOPPS promptly.

7) Does the PBGC anticipate requesting bidders to submit data as of December 31, 2014 in addition to the September 30, 2014 data as indicated in Technical Evaluation questionnaire?

Answer: The solicitation requires bidders to submit data as of September 30, 2014 as indicated in the Technical Evaluation questionnaire to qualify under this solicitation.

8) Forgive me if this is more of a confirmation than a question, but we would like to make sure we are accurately interpreting the RFP. We only qualify in our Core strategy but it is our understanding that we cannot submit only for Core. Just confirming that is accurate. We would love to work with the PBGC but also want to strictly follow the qualifications given we know that you will be inundated with responses (and questions).

Answer: To submit a Core strategy, a manager would need to meet the requirements for the Multiple Manager – Trust Fund classification as outlined in section L.2.1 of the solicitation.

9) Would the PBGC consider hiring a specialist manager in U.S. Government Agency Mortgages for this mandate? We have an extensive track record for over 20 years with the same Senior Manager and offer durations ranging from one year to Core.

Answer: The solicitation does not cover mandates specific to U.S. Government Agency Mortgages. Please refer to Section C Statement of Work, II. Scope of Work for the specific fixed income strategies covered in this solicitation.

10) I am reading this correctly that unless a manager has core competencies in at least 3 of the 5 fixed income sectors the PBGC is search for, the manager is excluded from the search. PENN Capital runs $5 billion in various High Yield strategies, but non in CFI, GFI, LDI or EMD. I would appreciate you guidance on this matter.

Answer: To submit a High Yield strategy, a manager would need to meet the requirements for the Multiple Manager – Trust Fund classification as outlined in section L.2.1 of the solicitation.

11) Our firm saw in the most recent FINDaily publication that the PBGC is running a RFP for several Fixed Income mandates. We would be very interested in responded but before we did wanted to inquire if you and the committee would be open to the Manager of Managers (MOM) investment process that our firm provides. If you are not familiar with the MOM, SEI is contracted as the investment manager using multiple sub-advisors where SEI has the discretion to make changes at the sub-advisor level. Please let me know if the committee would be open to this process.

Answer: Qualifying products need to be actively managed and must be available in a separate account to be considered for this solicitation. It should also be noted that sub-advisory in the management of the proposed product is not acceptable for this solicitation.

12) I was interested in submitting our firm to be considered for the core-fixed income searches being conducted by the PBGC, but wanted to clarify whether my firm is eligible for the search- As of 10/31/14 we have $1.3 billion in AUM, with around $750 million in our core fixed strategy. Our other fixed income offerings include Long, Intermediate and Short duration strategies. Can you please let me know whether we would be eligible when you have a moment?

Answer: To submit a Core strategy, a manager would need to meet the requirements for the Multiple Manager – Trust Fund classification as outlined in section L.2.1 of the solicitation.

13) Could you please clarify Section J - Attachment 5 (Multiple Mandate Product Level Mandatory Requirements – EM Debt Fixed Income) – in Part A, it states A. Qualifying product is available in a separate account format and actively managed against either:

i. the JPM Emerging Markets Bond Index (EMBI) Global Diversified (Hard Currency), the JPM Government Bond Index (GBI) – Emerging Markets Global Diversified (Local Currency), Does this mean the product should be managed against either or both of these benchmarks?

Answer: Either

14) Would the PBGC consider a Global Inflation Linked Bond strategy for the TIPS search?

Answer: As described in the Statement of Work, Revolving Fund Assets are solely invested in “book entry” U.S. Government securities held at the U.S. Treasury.

15) Has a contractor performed similar work to this for the government in the past? If available, please provide the incumbent contract number. If you are unable to provide a contract number, is it safe to assume this is a new requirement for the government?

Answer: This is a follow-on requirement. Managers are currently providing this function for the PBGC.

16) The mandatory requirements for Attachments 3, 4, 5, and 6 highlight several acceptable benchmarks, is there a rule as to which benchmark to use when calculating the information ratio for mandatory requirement G?

Answer: The information ratio and performance calculations should be run for the proposed qualifying product that meets qualifications A – G in attachments 3, 4, 5 and 6.

17) With regards to Item A in the mandatory requirements for Attachments 3 and 6, we are willing to run the strategy against the mandated benchmark. However, will you accept products that have historically been run against a different benchmark?

We will accept qualifying products that are currently run against one of the mandated benchmarks in Item A, however the mandate will need to be run against one of the two benchmarks indicated in item B.