Smaller_Asset_Managers_Pilot_Program_-__Industry_Question_and_Answers_(Solicitation)__Part_2r.pdf

Smaller Asset Managers Pilot Program – US Core Fixed Income

Solicitation No. PBGC01-RP-15-0025

Industry Questions and Answers

Question 50: We seek a bit of clarification on the following statement. “The firm has or will acquire within six months of contract award an ERISA fidelity bond, with the PBGC as a loss payee, in the minimum amount of $1,000,000.00 and no deductible. The bond shall cover, at a minimum, losses due to dishonest or fraudulent acts by the contractor.* (Proof of the existence of such fidelity bond or the ability to qualify for one).”

The point of clarification is that we have various policies including what we refer to internally as an “ERISA bond”, which covers our own 401(k). It strikes us that is not the coverage that is being asked. We also have additionally various other types of insurance such as (i) fiduciary institutions bond, (ii) fiduciary liability bond, excess fiduciary liability bond, and directors and officers (D&O) coverage. Some guidance on the parameters of the ERISA fidelity bond mentioned above would be helpful in us giving a targeted response.

Answer 50: Please refer to the amended Statement of Work and Attachment I posted on

FedBizOpps on July 9, 2015. As stated in the Attachment I, Mandatory E: “The offeror shall have or acquire within six months of contract award an ERISA fidelity bond, with the PBGC as a loss payee, in the amount of $1,000,000.00 and no deductible.” Therefore, proof of the existence of such a fidelity bond or proof of the ability to qualify for one is necessary to meet the minimum requirements. For example, a letter from a surety company or reinsurer stating that the firm could acquire such a fidelity bond would be sufficient to pass the mandatory. PBGC will not negotiate the minimum requirements that are included in the solicitation. Upon submitting a proposal, if a firm is determined to not meet the requirements, it will not be considered. PBGC will not make any exceptions to the minimum requirements.

Question 51: We were hoping to gain some clarification regarding the outstanding RFP for the

Smaller Asset Managers Pilot Program. Specifically, there is language in 52.222-26 (Equal

Opportunity) Subsection 2 that states “The Contractor shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color religion, sex or national origin.”

Does this language signify the necessity of having a formal Affirmative Action program in place or is a policy of non-discriminatory employment practices sufficient? Also, regarding 52.222-26

(Equal Opportunity For Veterans) subsection (b) & 52.222-26 (Equal Opportunity For Workers

With Disabilities) subsection (a), would non-discriminatory employment practices for Veterans and Workers With Disabilities be sufficient or is a formal Affirmative Action program required?

Answer 51: PBGC encourages that you to seek independent legal counsel in reference to these clauses.

Question 52: Also, regarding section 52.219-8 (Utilization of Small Business Concerns), is the use of external brokers to trade in the underlying securities for the portfolio deemed to be the legal or functional equivalent of sub-contracting?

Answer 52: “Subcontractors” shall mean a person or entity that is engaged, via a “Subcontract,” to provide services solely as a result of this contract (and that Contractor’s service providers, which provide services to all of the Contractor’s clients, are not and shall not be considered to be subcontractors). A subcontractor relationship would require the contractor to flow down the FAR and PBGC clauses.

Question 53: Is there an accompanying Excel spreadsheet that goes with the attached PDF or is it the asset manager’s responsibility to create and format all of the required spreadsheets?

Answer 53: There are sample templates for the portions of the solicitation requiring quantitative data. Please use those samples templates as a guide to create and format your responses.