Question_and_Answers_Part_One_-_PBGC01-RP-15-0015.pdf

Solicitation PBGC01-RP-15-0015

Question and Answers Part One

PBGC anticipates issuing Part Two on or about Friday, January 30, 2015.

1. Is this a follow-on requirement. If so, would it be possible for you to provide the incumbent information?

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

#PBGC 01-CT-12-0011.

2. Is there a need for proponents to include small, minority or 8 (A) firms as subadvisors/subcontractors as part of their proposal?

There is no requirement for Offerors to include small, minority or 8(a) firms as subcontractors as part of its response. Please refer to FAR 52.219-8 for more information on the utilization of small businesses in Federal Contracting.

3. (a)Please clarify whether the winning Contractor would be expected to provide custody/accounting services of both the PBGC- Only and Commingled Master Trust One assets? (b) If not, who is expected to remain as the agents/service providers for each service? (c) If so, please clarify whether the fees associated with the above services are included or excluded from the fees paid for Portfolio Monitoring Services?

(a) PBGC's custodian is State Street Bank & Trust Company ("State Street") and is the custodian for the PBGC-Only Portfolio. A different firm serves as the custodian for Commingled Master Trust One, but PBGC's share of Commingled Master Trust

One is also reported on State Street's books. As stated in Section 4d, e and j of the

SOW, State Street is dependent on the reporting from the contractor. (b) A reconciliation process is, however, required each month between each of the two custodians and the contractor. Contractors should consider their role in this process when submitting their pricing.

(c) Not applicable

4. (a) Please clarify what, if any custom valuation services, are expected to be provided by the Contractor vs an existing third party that PBGC may already be working with? (b) If a third party is expected to continue to provide such valuation services, who are these providers? (c)Are these valuation services included in the fees paid for Portfolio

Monitoring Services or if those are outside of these fees? If outside, can they be expensed to PBGC for reimbursement?

(a) Custom valuation services would fall under the scope of SOW Section 3, Consulting Services, in the assessment of a potential secondary sale or transfer (e.g.

to assess a secondary sale) would fall under the scope of Consulting Services as outlined in the SOW. (b) The PBGC does not currently employ a third party valuation provider and does not anticipate the need for any custom valuation services as it primarily relies on general partner valuations with confirmations performed by the contractor. (c) Fees associated with Section 3 of the SOW, to include valuation services, are outside the fees paid for Portfolio Monitoring

Services. (d) Fees associated with Section 3, Consulting Services, such valuation services are billed as labor hours. Please see Section B, Pricing Schedule, and

Section B.3 for more detail.

5. Please clarify what, if any, travel expenses related to monitoring underlying GPs are included in the fees paid for Portfolio Monitoring Services or if those are outside of these fees? If outside, can they be expensed to PBGC for reimbursement?

The contractor that receives the award will be compensated per the fee schedule in

Section B. Travel expenses will not be separately reimbursed, therefore Offerors should take this into consideration when providing their fee schedule. Attending via video or teleconference is acceptable.

6. Overlap Analysis

(a) Please provide the names of the GPs in PBGC-Only and Master Trust One. (b)

Please provide the # of partnerships and # of GPs (each, a separate number) that overlap between PBGC-Only and Commingled Master Trust Two (e.g. TPG V in PBGC – Only and TPG V in Commingled Master Trust Two would represent an overlap). (c) Please provide same for between Commingled Master Trust One and Commingled Master Trust

Two.

a) The PBGC will not be releasing names of general partners, however, the successful Offeror will receive these names subsequent to executing the contract.

b) GP overlap: 19; LP overlap: 1

c) GP overlap: 13; LP overlap: 6

7. Weighting Analysis

(a) Please provide a # of partnerships and % weighting of the total $147m in value segmented by vintage year of the overall 84 partnerships for the PBGC-Only (b) Please provide same for Commingled Master Trust One for its total value of $102m.

a) As of 11/30/14, there are approximately 84 partnerships in the PBGC-Only portfolio. As of 11/30/14, approximate vintage year diversification may be found in

Annex A (see attached). Total may not sum to 100% due to rounding.

b) As of 11/30/14, there are approximately 79 partnerships in the Commingled

Master Trust One portfolio. As of 11/30/14, approximate vintage year diversification may be found in Annex B (see attached). Total may not sum to 100% due to rounding.

8. Run off Analysis

Please provide an estimated value by year for the next 5 calendar years of the PBGC

Only and Commingled Master Trust One based on any internal cash flow and distribution models. For instance, given how old the underlying vintages seem to be, and that most partnerships are in liquidation phase, what is the expected ending value as of 12/31/15, 12/31/16, 12/31/17, 12/31/18, 12/31/19?

In the absence of new terminated and trusteed plans with Private Market partnerships, the current inventory of partnerships and asset value is slated to roll off over time. However, 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.

Historically, the commingling of new Private Market partnerships is episodic and actual experience has shown that commingling one large plan can instantly increase the current portfolio by multiples.

Expected ending value:

as of 12/31/15: $151 million;

as of 12/31/16: $85 million;

as of 12/31/17: $27 million;

as of 12/31/18: $8 million;

as of 12/31/19: $1 million

9. What is the context behind the pending RFP? For what purpose are you seeking an advisor?

Please refer to the Statement of Work Section C of the solicitation posted on

FBO.gov for this procurement.

10. Are there real estate (specifically direct real estate), oil and gas, and timberland assets in the PBGC-Only and the Commingled Master Trust One pools. If so, what are the approximate percentages?

As of 11/30/14, the weightings based on latest market values in the PBGC-Only and

Commingled Master Trust One are as follows: Real Estate (12.7%); Oil & Gas

(3.1%); Timberland (5.7%). None of the assets within these categories are held directly by the PBGC.

11. If a firm has successfully completed the transition and management of third party assets previously but has less than $5 billion in private market assets, can it still be considered for the mandate?

During Phase 1, Offerors are required to provide answers to the Mandatory

Requirements (Attachment A) and supporting documentation. Offerors will only receive a “Pass” rating if the supporting documentation provides convincing evidence of how each Mandatory Requirement is met, including requirement D regarding the minimum asset level.

12. Would it be possible for PBGC to provide a listing of funds to be monitored?

The PBGC will only provide the detail on the underlying private equity partnerships to the successful Offeror subsequent to executing the contract.

13. Please describe the systems being used to manage the data currently. Is the data in a format that will allow for efficient conversion or upload (through CSV or other format)?

The current PBGC contractor utilizes a third party software system to monitor and track PBGC's holdings within the PBGC-Only and Commingled Master Trust One.

The PBGC receives monthly and quarterly reports in pdf and Excel format that primarily consists of reports from that system. Further, the current PBGC contractor provides certain reporting (such as data for inclusion in PBGC's investment risk management system) in CSV format. The PBGC believes that in the event of an award to an Offeror other than the incumbent, the incumbent will be able to provide the data in a format (e.g., CSV) to allow for an efficient conversion.

14. The description of the Offeror Validity Statement (L.19 on page 78) is contained within a section relevant to Phase 2, Volume 3 and Volume 1. Can you please specify exactly where the Offeror Validity Statement should be included (for example, should this be included in the Cover Letter submitted with Volume 1)? Should the Letter of Transmittal

(Section L.14 on page 76) be included in one of the Volumes or independent of the three

Volumes?

The Offeror Validity Statement should be inserted in the Cover Letter, which is separate and distinct from either of the Volumes.

15. The RFP skips from Section E to Section G (ie, does not include a Section F around page

29/30). Can you please confirm that we are not missing any information intended for inclusion?

There is no section F.

16. Does Section K: Representations, Certifications and Other Statements of Offerors (pages

60-70) need to be completed and returned along with the proposal? If required, can you please confirm if any sections of this form (for example the Buy American and other Free

Trade sections on pages 66-67) are not applicable to this RFP? Additionally, can you please specify in which Volume this form should be included?

Section K should be included in Volume 1 “Business/Price Proposal”. Offerors who are registered in System for Award Management (SAM) are only required to complete section (b) of FAR 52.212-3. Offerors who are not registered in SAM are required to complete paragraphs (c) through (p). The Buy American Act and Free

Trade Agreement provisions do not apply since this acquisition does not consist of the sale of supplies.

17. In order to demonstrate compliance with mandatory requirement G (E&O insurance policy and fidelity bond), is a table summarizing the coverage details sufficient or does the PBGC require a full copy of the relevant insurance policy and fidelity bond documents?

A summary of coverage is permissible as supporting documentation for Attachment

A, requirement G, however, it must be prepared by the insurance company.

18. Please confirm if the Standard Form 1449 (pages 1-3 of the RFP) be signed by the

Offeror and returned with the RFP? If so, can you please specify in which Volume this form should be included?

Standard Form 1449 must be signed and returned with your proposal. It should be included in in Volume 1 “Business/Price Proposal”.

19. The website for electronic submission (http://files.pbgc.gov) failed to load (error message: “this page can’t be displayed”) when attempted to access from multiple computers and via different browsers (Internet Explorer and Chrome). Can you please advise if there may be any known technical issues with the website or if there are any steps required to take for the website to load properly?

We are currently experiencing technical issues with the site. Please see Amendment

No. 1, posted on January 27, 2015. The new website for electronic submission is http://pbgc.leapfile.com See Section L.9 Electronic Submission for more information.

20. The solicitation and accompanying schedules and questionnaire are in Adobe Acrobat /

.pdf format; can you send us a native document in Microsoft Word / .doc format in order to facilitate responding to the various questions and filling out the schedules?

A Microsoft version of Attachment A, Attachment B, and Section B Pricing

Schedule was uploaded to FBO.gov on January 28, 2015.

21. Section C, Statement of Work, Section 1 Performance Objectives, Paragraph number 3, “Distributed Stock Management-Contractor Shall:”, Page 21: It is our firm’s policy generally to dispose of stock distributions upon receipt, as we do not consider ourselves to be a manager of public stock investments. Therefore, as publicly trade-able stock is distributed from the PBGC-owned portfolios of partnerships over time, we would dispose of such distributions (i.e., sell the stock) immediately rather than hold the investments until a later time. Would that policy and practice disqualify our firm from consideration for the proposed mandate?

The policy of immediately disposing of distributed stock would not disqualify a firm from consideration. The technical evaluation panel will evaluate in accordance with

Section M of the solicitation.

http://pbgc.leapfile.com/

Annex A

PBGC-Only Vintage Year Diversification

Vintage Year % of Market Value

1987 0.06

1995 0.11

1996 1.22

1997 0.28

1998 1.33

1999 14.54

2000 35.64

2001 10.37

2002 11.55

2003 13.00

2004 1.87

2005 0.03

2006 0.08

2007 5.60

2009 3.47

2011 0.50

2013 0.32

Annex B

Commingled Master Trust One Vintage Year Diversification

Vintage Year % of Market Value

1989 0.01

1990 6.58

1992 0.03

1993 0.00

1994 5.94

1995 0.08

1996 0.80

1997 9.95

1998 6.08

1999 1.75

2000 6.91

2001 17.26

2002 7.17

2003 1.00

2004 5.45

2005 25.79

2006 5.21