PBGC01-RP-15-0015_-_Q A's_Part_3.pdf

Solicitation PBGC01-RP-15-0015

Question and Answers Part Three

27. Is PBGC willing to select an advisor solely for Section 2 (Consulting Services) of the statement of work, which relates to secondary private equity market activity. Also, if you decided to proactively pursue a sale of the assets, would your advisor potentially select a sub-advisor to manage that process?

No, the PBGC will not select an advisor solely for Section 2 (Consulting Services).

Offerors must be able to provide all the services outlined in Section C, Statement of

Work, inclusive of Consulting Services. The PBGC will not be making multiple awards for elements of the Statement of Work. Offerors will be expected to manage the process pursuant to the sale of an asset. Sub-advising is permitted. Sub-

Advisors for the purposes of this contract will be considered subcontractors and are subject to terms of the Contract and are subject to flow down clauses. Reference the subcontractor definition in FAR 44.101.

28. Is the Pension Benefit Guaranty Corporation considering dividing the PBGC-Only, Commingled Master Trust One, and Commingled Master Trust Two pools amongst two or more vendors?

PBGC will not be awarding the contract to multiple vendors. As stated in Section 1a of the SOW, the PBGC-Only and Commingled Master Trust One portfolios will be assigned to the contractor at inception of the contract and PBGC may assign

Commingled Master Trust Two to the same vendor in the future.

29. Is there currently a third-party service provider performing the scope of work on behalf of

PBGC? If so, who is the current service provider and what is the current annual compensation structure and amount?

This is a follow-on requirement. The incumbent contractor is J.P. Morgan, contract

PBGC01-CT-12-0011. The contract was awarded in 2008, for a total of $15,120,000 which includes a base year plus 6 option years.

30. Given that the prescribed format for the price proposal includes only PBGC-Only and

Commingled Master Trust One, would the PBGC like any indication of proposed pricing for Commingled Master Trust Two if proposer is capable of providing services on this pool as well? If so, does the PBGC have any guidance on the preferred format for this pricing indication?

As noted in Section B, Pricing should be based on 163 partnerships and $249 million of market value. The pricing schedule outlined in Section B.1 will also apply to any additional partnerships assigned to the Contractor in the future, including, but not limited to, Commingled Master Trust Two, which may be added to the Contract after award.

31. As it relates to distributed stock management, please provide: (a)Indication of the size of current stock portfolio (number of companies, shares, value) (b) Current holdings and frequency of such distributions (schedule of historical stock distributions by distributed/sold date) (c)Rationale and method currently utilized in liquidating securities

(d) Measurement of successful performance (for example, target returns)

As of 11/30/14, the PBGC-Only portfolio held one company with approximately

5,300 common shares and approximately $300,000 in market value. The PBGC holds a minority interest in the Commingled Master Trust One portfolio and the majority owner selected a separate third party to manage the liquidation of the distributed securities. As such, the successful Offeror will only be responsible for monitoring the holdings and transactions within the Commingled Master Trust One portfolio and will not be commingling PBGC's interest or executing any transactions. As the PBGC is not currently considering transfer of Commingled

Master Trust Fund Two to the successful Offeror, details on that portfolio will not be provided. In total, with respect to commingling and executing liquidation, the successful Offeror will only be responsible for the PBGC-Only portfolio. The current sale methodology will not be disclosed as it is the incumbent's proprietary information.

32. Please describe any restrictions (amount, services) on subcontracting the services described in the RFP.

The restrictions for subcontracting are subject to the FAR requirements, reference

FAR 52.219-9 and 52.244-2 in Section I for additional information.

33. Section B.1, SCHEDULE B – PRICING SCHEDULE, Pages 6 – 14: The solicitation asks for pricing proposals for a one-year base period and nine one-year option periods beginning August 31, 2015. Each of the one-year sections refers specifically to 163 partnerships. The RFP contemplates up to three pools of partnerships aggregating 763 partnerships. For which pools of investments (“PBGC-Only” is 84 partnerships, “Commingled Master Trust One” is 79 partnerships, “Commingled Master Trust Two” is

600 partnerships) are responding contractors supposed to propose pricing?

Offerors should propose pricing for the PBGC-Only and Commingled Master Trust

One pools. The same pricing schedule would apply to Commingled Master Trust

Two should PBGC assign it to the Contractor.

34. (a) Should the Per-Partnership annual fee take into account a reduction in partnerships?

(b) Should the Asset Based fee calculation take into account a reduction in NAV?

(a &b) As outlined in Section B.1 of the Pricing Schedule, PBGC has provided pricing assumptions, which should be used by the Offerors in calculating pricing.

The Offeror’s total annual price per year of the contract as well as annual price per service will be used for price evaluation purposes only. The pricing assumptions provided by PBGC in the solicitation are not indicative of the work the Offerors can expect to receive on an annual basis under this contract. Only, the Offeror’s proposed unit price fixed rate for the optional services shall be incorporated into the final contract upon award. Additionally, the exact dates for the Period of

Performance will be determined at time of award. Due to the uncertainty of future terminated and trusteed plans and the makeup of assets within those plans, the

PBGC cannot definitively predict whether the inventory will increase or decrease from the current levels. Offerors should use their best judgment concerning this issue with respect to Price.

35. RE: Q3: We are still unclear on the role of State Street vs the Contractor. To clarify, can you let us know if

a) the custodian (State Street) is providing any accounting and/or recordkeeping services to PBGC? Yes

b) if the answer to a) is yes, then is the Custodian / Recordkeeper paid directly by

PBGC and hence the cost of the Custodian / Recordkeeper services should not be factored in to the our proposed fee for Portfolio Monitoring Services?

State Street Bank & Trust Company is paid directly by PBGC. Offerors should not factor in the cost of Custodian / Recordkeeper services in the proposed fee for Portfolio Monitoring Services.

36. RE: Q6b & Q6c: What is the difference between a GP and LP here? Our original question asked for the overlap between # of funds and # of GPs so not sure what LPs refers to and whether GP here refers to GP or # of funds?

GP refers to number of General Partners (GPs)

LP refers to number of limited partnership funds

37. In the Certifications, it requires that we certify we will have the data transferred from the existing provider to our systems within 60 days – how would you recommend answering this given there may be data integrity issues or other hold ups instigated by the existing provider out of our control such that we as the potential winning contractor may not be able to complete the transfer within 60 days despite reasonable best efforts to do so?

The Contractor must be able to complete the actions contemplated in Section 1.a of the SOW within 60 days of receiving historical fund data for the assigned portfolio from the PBGC or its contractor(s)/designee(s). PBGC recognizes that some aspects of the transition process are outside the control of the contractor. For example, it may take PBGC or its contractor(s)/designee(s) some time to collect all historical fund data, and such time would not count against the 60 transition period.