Fixed_Income_Investment_Management_Services_(LDI)_RP-17-0014.pdf

RFQ IFB RFP

WOMEN-OWNED SMALL BUSINESS

(WOSB) ELIGIBLE UNDER THE WOMEN-OWNED

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS

OFFEROR TO COMPLETE BLOCKS 12, 17, 23, 24, & 30

1. REQUISITION NUMBER PAGE OF

2. CONTRACT NO. 3. AWARD/EFFECTIVE

DATE

4. ORDER NUMBER 5. SOLICITATION NUMBER 6. SOLICITATION ISSUE

DATE

7. FOR SOLICITATION

INFORMATION CALL:

a. NAME b. TELEPHONE NUMBER (No collect calls)

8. OFFER DUE DATE/

LOCAL TIME

9. ISSUED BY

13b. RATING

14. METHOD OF SOLICITATION

CODE

15. DELIVER TO 16. ADMINISTERED BY CODE

18a. PAYMENT WILL BE MADE BY CODEFACILITY

CODE

CODE

TELEPHONE NO.

17b. CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN

OFFER

18b. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18a UNLESS BLOCK

BELOW IS CHECKED

SEE ADDENDUM

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

(Use Reverse and/or Attach Additional Sheets as Necessary)

25. ACCOUNTING AND APPROPRIATION DATA 26. TOTAL AWARD AMOUNT (For Govt. Use Only)

28. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN

DELIVER ALL ITEMS SET FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY

ADDITIONAL SHEETS SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED

29. AWARD OF CONTRACT: REF.

DATE . YOUR OFFER ON SOLICITATION

(BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE

SET FORTH HEREIN, IS ACCEPTED AS TO ITEMS:

30a. SIGNATURE OF OFFEROR/CONTRACTOR

30b. NAME AND TITLE OF SIGNER (Type or print) 30c. DATE SIGNED

31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER)

31b. NAME OF CONTRACTING OFFICER (Type or print) 31c. DATE SIGNED

AUTHORIZED FOR LOCAL REPRODUCTION

PREVIOUS EDITION IS NOT USABLE

STANDARD FORM 1449 (REV. 2/2012)

Prescribed by GSA - FAR (48 CFR) 53.212

COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND

OFFER

13a. THIS CONTRACT IS A

RATED ORDER UNDER

DPAS (15 CFR 700)

11. DELIVERY FOR FOB DESTINA-

TION UNLESS BLOCK IS

MARKED

SEE SCHEDULE

12. DISCOUNT TERMS

ARE ARE NOT ATTACHED

ARE ARE NOT ATTACHED

27a. SOLICITATION INCORPORATES BY REFERENCE FAR 52.212-1, 52.212-4. FAR 52.212-3 AND 52.212-5 ARE ATTACHED. ADDENDA

27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-4. FAR 52.212-5 IS ATTACHED. ADDENDA

17a CONTRACTOR/

OFFEROR.

CODE

8 (A)

SIZE STANDARD:

NAICS:

% FOR:SET ASIDE:UNRESTRICTED OR

SERVICE-DISABLED

VETERAN-OWNED

SMALL BUSINESS

HUBZONE SMALL

BUSINESS

SMALL BUSINESS

10. THIS ACQUISITION IS

EDWOSB

SMALL BUSINESS PROGRAM

STANDARD FORM 1449 (REV. 2/2012) BACK

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

32a. QUANTITY IN COLUMN 21 HAS BEEN

RECEIVED INSPECTED ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:

41a. I CERTIFY THIS ACCOUNT IS CORRECT AND PROPER FOR PAYMENT

32b. SIGNATURE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32c. DATE

41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER 41c. DATE

42a. RECEIVED BY (Print)

42b. RECEIVED AT (Location)

42c. DATE REC'D (YY/MM/DD) 42d. TOTAL CONTAINERS

40. PAID BY

32d. PRINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32e. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE 32f. TELPHONE NUMBER OF AUTHORZED GOVERNMENT REPRESENTATIVE

32g. E-MAIL OF AUTHORIZED GOVERNMENT REPRESENTATIVE

33. SHIP NUMBER 34. VOUCHER NUMBER 35. AMOUNT VERIFIED

CORRECT FOR

PARTIAL FINAL

37. CHECK NUMBER

38. S/R ACCOUNT NO. 39. S/R VOUCHER NUMBER

36. PAYMENT

COMPLETE PARTIAL FINAL

SCHEDULE Continued

ITEM NO. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

PAGE 3 OF 100 PBGC01-RP-17-0014

The items below are used for PBGC internal funding purposes only. The official Contract Line Item Number (CLIN) schedule follows in Section B. The contractor shall invoice in accordance with the official CLIN schedule and with clause PBGC 52.232-7000, Submission of Invoices.

0001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

PR NUMBER: RQ-23-17-000052

Period of Performance: 10/01/2017 to 09/30/2018

1.00 LO

0002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2017 to 09/30/2018

1.00 LO

OPT

1001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2018 to 09/30/2019

1.00 LO

OPT

1002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2018 to 09/30/2019

1.00 LO

OPT

2001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2019 to 09/30/2020

1.00 LO

OPT

2002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2019 to 09/30/2020

1.00 LO

OPT

3001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2020 to 09/30/2021

1.00 LO

OPT

3002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

PAGE 4 OF 100 PBGC01-RP-17-0014

Period of Performance: 10/01/2020 to 09/30/2021

OPT

4001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2021 to 09/30/2022

1.00 LO

OPT

4002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2021 to 09/30/2022

1.00 LO

OPT

5001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2022 to 09/30/2023

1.00 LO

OPT

5002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2022 to 09/30/2023

1.00 LO

OPT

6001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2023 to 09/30/2024

1.00 LO

OPT

6002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2023 to 09/30/2024

1.00 LO

OPT

7001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2024 to 09/30/2025

1.00 LO

OPT

7002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2024 to 09/30/2025

1.00 LO

OPT

8001 1.00 LO

PAGE 5 OF 100 PBGC01-RP-17-0014

The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2025 to 09/30/2026

OPT

8002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2025 to 09/30/2026

1.00 LO

OPT

9001 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2026 to 09/30/2027

1.00 LO

OPT

9002 The contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, Statement of Work, and the CLIN schedule in Section B.

Period of Performance: 10/01/2026 to 09/30/2027

Table of Contents

PAGE 6 OF 100 PBGC01-RP-17-0014

SECTION B SUPPLIES OR SERVICES AND PRICES/COSTS

B. 1 Services and Prices

SECTION C DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C. 1 Statement of Work

SECTION D PACKAGING AND MARKING

D. 1 PBGC 52.247-7000 PACKAGING AND MARKING (JAN 2012)

SECTION E INSPECTION AND ACCEPTANCE

E. 1 PBGC 52.246-7000 INSPECTION AND ACCEPTANCE OF DELIVERABLES (JAN 2012)

SECTION F DELIVERIES OR PERFORMANCE

F. 1 Deliveries or Performance

SECTION G CONTRACT ADMINISTRATION DATA

G. 1 PBGC 52.201-7000 CONTRACTING OFFICER'S REPRESENTATIVE (JAN 2012)

G. 2 PBGC 52.232-7000 SUBMISSION OF INVOICES (JAN 2012)

SECTION H SPECIAL CONTRACT REQUIREMENTS

H. 1 PBGC 52.204-7000 MANAGEMENT AND RETENTION OF PBGC RECORDS (SEP 2014)

H. 2 PBGC 52.209-7000 HANDLING SENSITIVE INFORMATION (MAR 2016)

H. 3 PBGC 52.209-7001 ORGANIZATIONAL CONFLICTS OF INTEREST (OCT 2004)

H. 4 PBGC 52.237-7000 KEY PERSONNEL (MAR 2012)

H. 5 Key Personnel Qualifications

H. 6 PBGC 52.237-7001 EDUCATION AND EXPERIENCE QUALIFICATIONS (DEC 2014)

H. 7 PBGC 52.237-7002 FITNESS DETERMINATION (APR 2016)

H. 8 PBGC 52.239-7000 SECTION 508 ACCESSIBILITY STANDARDS (MAR 2016)

SECTION I CONTRACT CLAUSES

I. 1 52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

I. 2 52.202-1 DEFINITIONS (NOV 2013)

I. 3 52.203-3 GRATUITIES (APR 1984)

I. 4 52.209-7 INFORMATION REGARDING RESPONSIBILITY MATTERS (JULY 2013)

I. 5 52.212-4 CONTRACT TERMS AND CONDITIONS--COMMERCIAL ITEMS (MAY 2015)

I. 6 52.233-2 SERVICE OF PROTEST (SEP 2006)

I. 7 52.212-5 CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE ORDERS--

COMMERCIAL ITEMS (JAN 2017)

I. 8 52.217-8 OPTION TO EXTEND SERVICES (NOV 1999)

I. 9 52.217-9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000)

SECTION J LIST OF ATTACHMENTS

J. 1 List of Attachments

J. 2 Attachment 1 - Firm Level Mandatory Requirements

J. 3 Attachment 2-Product Level Mandatory Requirements

J. 4 Attachment 3 - Firm Level Questionnaire

J. 5 Attachment 5 - Product Level Questionnaire

SECTION K REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS

K. 1 52.212-3 I OFFEROR REPRESENTATIONS AND CERTIFICATIONS--COMMERCIAL ITEMS (DEC 2016)--

ALTERNATE I (MAR 2016)

Table of Contents

PAGE 7 OF 100 PBGC01-RP-17-0014

SECTION L INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

L. 1 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (FEB 1998)

L. 2 52.212-1 INSTRUCTIONS TO OFFERORS--COMMERCIAL ITEMS (OCT 2016)

L. 3 Instructions to Offerors

SECTION M EVALUATION FACTORS FOR AWARD

M. 1 Evaluation Factors

PAGE 8 OF 100 PBGC01-RP-17-0014

SECTION B

SUPPLIES OR SERVICES AND PRICES/COSTS

B. 1 Services and Prices

SECTION B

SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 DESCRIPTION OF SERVICES (AT CONTRACTOR SITE)

The Contractor shall provide the personnel, facilities, equipment, and other materials and services necessary to perform the effort described in Section C, the Statement of Work resulting from this Request for Proposal No. PBGC01-RP-17-0014. A Fixed Rate Variable Quantity contract will be awarded for this effort. The contractor’s proposal shall be incorporated by reference.

B.2 GENERAL DESCRIPTION

PBGC is seeking to obtain qualified, experienced, and highly competent contractors to provide active fixed income liability driven investing (LDI) investment management services for revolving fund and trust fund assets that will, over at least a full market cycle and at most throughout a full glide path cycle to full funding status, provide technical advisory services, investment execution services, and asset management services which will hedge either all or a portion of PBGC’s liabilities. The investment execution (management) services may be provided in multiple mandates or portfolios and may be designed to provide a total rate of return which exceeds the benchmark of the respective portfolio, consistent with appropriate levels of risk or to provide a close tracking of a designated liability benchmark.

B.3. PERIOD OF PERFORMANCE

PBGC anticipates the period of performance to be a twelve month base year plus (9) nine option years. The Contractor shall commence work immediately upon notice of award. The period of performance may be further sub-divided into multiple CLINs at the time of award. *Note: The actual dates of the Period of Performance will be entered at the time of award.

B.4 FEE SCHEDULE – LDI Fixed Income Fund Manager (Trust Fund Assets)

CLIN 0001 - BASE YEAR

Asset Based Fees _____% on first $____ million

_____% on next $____ million

PAGE 9 OF 100 PBGC01-RP-17-0014

_____% on balance

CLIN 1001 - OPTION YEAR 1

CLIN 2001 - OPTION YEAR 2

CLIN 3001 - OPTION YEAR 3

CLIN 4001 - OPTION YEAR 4

PAGE 10 OF 100 PBGC01-RP-17-0014

CLIN 5001 - OPTION YEAR 5

CLIN 6001 - OPTION YEAR 6

CLIN 7001 - OPTION YEAR 7

PAGE 11 OF 100 PBGC01-RP-17-0014

CLIN 8001 - OPTION YEAR 8

CLIN 9001 - OPTION YEAR 9

B.5 FEE SCHEDULE – LDI Fixed Income Manager (Revolving Fund Assets)

CLIN 0002 - BASE YEAR

PAGE 12 OF 100 PBGC01-RP-17-0014

CLIN 1002 - OPTION YEAR 1

CLIN 2002 - OPTION YEAR 2

CLIN 3002 - OPTION YEAR 3

CLIN 4002 - OPTION YEAR 4

PAGE 13 OF 100 PBGC01-RP-17-0014

CLIN 5002- OPTION YEAR 5

CLIN 6002 - OPTION YEAR 6

CLIN 7002 - OPTION YEAR 7

PAGE 14 OF 100 PBGC01-RP-17-0014

CLIN 8002 - OPTION YEAR 8

CLIN 9002 - OPTION YEAR 9

NOTE: The above fees for the Trust Funds and Revolving Fund are at annualized rates, but shall be calculated and payable on a quarterly basis and are based on PBGC’s custodian bank’s market value pro-rated for any period less than a quarter. The quarterly fee will be based on an average of the month end values within the quarter.

Trust Fund Assets:

LDI Multiple Mandates Bundled Fees

For trust fund assets LDI investment management services fees will be a single bundled fee for either a single or multiple LDI mandates/portfolios. An aggregate Assets Under Management (AUM) or all asset fee prices will be submitted. Aggregate AUM, or all asset bundled fee prices for LDI Multiple Mandate Managers will be evaluated based on a minimum of two products and a minimum AUM of $2.5 billion and a maximum AUM of $6 billion of trust fund assets. NOTE: This level of AUM is provided to allow consistency in the evaluation of price proposals. Actual investment amounts will vary at the discretion of the PBGC.

PAGE 15 OF 100 PBGC01-RP-17-0014

Revolving Fund assets:

LDI Multiple Mandates Bundled Fees

For revolving fund assets LDI investment management services fees will be a single bundled fee for either a single or multiple LDI mandates/portfolios. An aggregate AUM or all asset fee prices will be submitted. Aggregate AUM, or all asset bundled fee prices for LDI Multiple Mandate Managers will be evaluated based on a minimum of two products and a minimum AUM of $6 billion and a maximum AUM of $20 billion of revolving fund assets. NOTE: This level of AUM is provided to allow consistency in the evaluation of price proposals. Actual investment amounts will vary at the discretion of the PBGC.

PAGE 16 OF 100 PBGC01-RP-17-0014

SECTION C

DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C. 1 Statement of Work

SECTION C

STATEMENT OF WORK

I. INTRODUCTION

The Employee Retirement Income Security Act of 1974 (ERISA) established Pension Benefit Guaranty Corporation (PBGC) as a federal corporation to encourage the growth of defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep 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. PBGC, a wholly owned United States Government corporation, administers the insurance program and termination process for most private-sector defined benefit pension plans that are tax-qualified under the Internal Revenue Code. PBGC is headed by a Director who reports to a board of directors consisting of the Secretaries of Labor, Commerce, and Treasury, with the Secretary of Labor as Chairman. General tax revenues do not fund PBGC. PBGC collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives the assets of the pension plans it terminates.

PBGC maintains two separate investment funds. The Revolving Fund (valued at approximately $25 billion as of 09/30/2016) receives all premium payments and is invested solely in “book-entry” U.S. Government securities held at the U.S. Treasury.

The Trust Fund (valued at approximately $63 billion) receives assets from terminated plans.

Trust Fund assets can be more flexibly invested than Revolving Fund assets, such that possible asset classes include equities and investment grade debt obligation. However, both have the same investment objectives.

LDI Investment Management Services

The LDI investment manager (hereinafter referred to as contractor) shall provide active fixed income liability driven investing (LDI) investment management services for revolving fund and trust fund assets that will, over at least a full market cycle and at most throughout a full glide path cycle to a fully funded status, provide investment execution services which will hedge either all or a portion of PBGC’s liabilities. The investment execution (or management) services may be provided in multiple mandates or portfolios and may be designed to provide a total rate of return, which exceeds the benchmark of the respective portfolio, consistent with appropriate levels of risk or to provide a close tracking of a designated liability benchmark. The LDI investment manager shall also provide technical advisory services to design, evaluate, and monitor the LDI glide path program.

Currently, investments for the Revolving Fund assets shall be invested solely in “book-entry” U.S. Government securities. U.S. Treasury bills, notes, bonds, strips, and TIPS are permitted.

Derivatives are not permitted. PBGC seeks to hire an investment firm(s) to fill the role of advisor of the fixed income assets in the Revolving Fund. Portfolio trades (buys and sells) are communicated to and effected by PBGC’s Corporate Investment Department (CID). The market price is fixed and no custodian is involved, since these are not open market trades. The

PAGE 17 OF 100 PBGC01-RP-17-0014

combined limitations of Treasury-only issues, their book-entry transaction mechanism and the CID trade execution function apply only to the PBGC Revolving Fund assets. Therefore, low turnover cash bond index plus mandates are appropriate for the revolving fund mandates. PBGC expects the award allocations to range from a minimum of US $2 billion to a maximum of $25 billion for each manager selected, but makes no guarantees as to the size of any award. These allocations may change over time due to the investment results generated by the contractor and the needs of PBGC.

Unlike the Revolving Fund, where trades are implemented through PBGC’s Corporate Investment Department, the assets in the Trust Fund shall be actively managed by the investment firm. PBGC intends to add to its roster of fixed income managers in the Trust Fund. PBGC anticipates hiring multiple managers capable of managing fixed income assets across multiple fixed income LDI mandates or strategies as well as provide technical advisory services to design and monitor an LDI glide path process. Award allocations will vary based on the investment skill and ability of the managers to meet the needs of this contract. PBGC expects the award allocations to range from a minimum of US $250 million to a maximum of $7 billion for each manager selected, but makes no guarantees as to the size of any award. These allocations may change over time due to the investment results generated by the contractor and the needs of

PBGC.

Investments of Trust Fund assets for this mandate may include fixed income and derivative products that are obligations of both domestic (U.S.) and non-U.S. issuers. The contractor shall exercise best efforts to select securities suitable and appropriate to the PBGC's mission. Diligent effort shall be exercised to avoid the purchase of a security where the PBGC is likely to terminate the issuer’s underfunded pension plan.

II. SCOPE OF WORK

The contractor shall be responsible for providing Liability Driven Investing (LDI) investment management services including active investment management and related services for fixed income portfolios and technical advisory support services. The investment mandates or portfolios shall be invested in one or more of the five Trust Fund fixed income strategies and two Revolving Fund fixed income strategies and in one of the three major categories of LDI investment management services as outlined below1:

1) Active fixed income asset management for LDI mandates benchmarked against standard market indices, such as (but not limited to) Bloomberg/Barclays Long Government, Long Credit, Treasuries, TIPS and STRIPS indices or sub-components thereof and blends of these indices or sub-components thereof, will include;

Trust Fund Strategies:

• Treasuries (includes STRIPS)

• TIPS

• Long Duration Fixed Income

1 In the event of a Policy change that would allow Revolving Fund assets to be invested in the other LDI investment management strategies the scope of work would include these services, however, the contract(s) would be modified to include new pricing proposals.

PAGE 18 OF 100 PBGC01-RP-17-0014

Revolving Fund Strategies:

• Treasuries (includes STRIPS)

• TIPS

2) Active fixed income asset management of highly customized long duration mandates benchmarked to PBGC’s liabilities will include;

Trust Fund Strategies:

• LDI Custom Liabilities

3) Development and implementation of a completion portfolio mandate that effectively fills in the gaps in the liability hedge for PBGC, such as, a completion portfolio or overlay will include;

Trust Fund Strategies:

• Completion, Overlay and other LDI strategies

Objective

The investment objectives are to:

• Construct portfolios of fixed income assets to earn superior returns which exceed the portfolio benchmarks of these strategies and to provide a close tracking of the designated liability benchmark, consistent with the risk parameters outlined in the investment guidelines for the respective portfolios; and

• Develop, design, implement and monitor strategies that minimize the financial risk exposure arising from a mismatch of assets and liabilities and implements a de-risking strategy that will achieve a more predictable and improving funded ratio over time through to an anticipated fully funded status.

Activities

The contractor shall use a highly structured investment process which may incorporate, but is not limited to, the following elements in the investment decision making process:

• Establishing an interest rate forecast for short term and long term time periods

• Conducting yield curve analysis

• Determining the proper maturity and duration allocations

• Performing sector analysis and making sector investment decisions

• Conducting credit analysis of issuers

• Selecting securities within the realm of permissible investments described in the PBGC investment guidelines

The contractor shall evaluate potential investments using disciplined, thorough investment analysis and due diligence. Assets shall be managed with full discretion, in accordance with the policies, of PBGC, and the strategies and objectives mutually agreed upon between the contractor and PBGC. Investment guidelines will be negotiated between PBGC and the contractor subsequent to contract award. After the guidelines are negotiated, PBGC shall deliver them in final form to the contractor.

PAGE 19 OF 100 PBGC01-RP-17-0014

PBGC shall provide the Contractor, at an agreed upon frequency, PBGC’s Benefit Payout Projection for Single Employer Trusteed Plans. This benefit payout projection forecasts PBGC’s liability cash flows for trusteed plans and represent the liabilities which the contractor will analyze, evaluate and consider in the development of the designated investment strategy.

The contractor shall employ the investment philosophy, styles and strategies for which it was retained, unless otherwise directed by the PBGC. PBGC, under this contract and not separately priced, shall receive and have access to any of the contractor's internal or external investment, market and economic research training materials and support capabilities and services in the performance of PBGC's investment responsibilities. These materials and services do not include proprietary models or information unique to the contractor's investment process.

The contractor shall maintain close contact with PBGC’s Corporate Investments Department and serve as a resource of economic and investment information and research. The contractor shall keep PBGC fully informed of the rationale for investment decisions and changes in the portfolio under its management. Under this contract, PBGC, at its discretion, may utilize other investment advisory services offered by the contractor.

The contractor shall be responsible for immediate notification to the PBGC of significant changes in personnel, ownership, resources, or firm direction. The contractor shall discharge its duties under this contract solely in the interest of the PBGC with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims. Moreover, the contractor shall utilize best practices of the investment industry, such practices to include but not limited to the standards issued by the Chartered Financial Analyst Institute.

The contractor shall provide PBGC with immediate notification of any potential issue that could hinder the contractor’s ability to trade with full discretion on behalf of PBGC. The contractor shall maintain appropriate operational separation (i.e. a Chinese Wall) between trading and investment duties on behalf of PBGC portfolios and any engagement such as creditor committee representation which could affect the contractor’s full discretion to buy or sell in the marketplace.

The contractor shall work closely with PBGC’s custodian bank to facilitate the efficient and timely recording of purchases, sales and other activity, reconcile securities and cash balances and provide information necessary to calculate performance results. PBGC will delegate its proxy voting authority to the investment manager. The investment manager shall maintain records of its votes and report the results, at least annually, to PBGC.

Educational Conferences

Contractor shall provide up to six (6) slots in any educational conferences it may offer to clients as part of the normal contract cost. This opportunity would include the cost of related meals offered as part of the formal conference program. Non-training or non-educational activities

PAGE 20 OF 100 PBGC01-RP-17-0014

offered at the conference including, but not limited to, golf, fishing, tours, entertainment, etc., would not be included, as PBGC can neither pay for nor may individual employees accept these items. PBGC will pay the travel, lodging, per-diem, and other subsistence expenses (e.g., if meals are not offered to all attendees as part of the conference) for its employees who participate at such conferences. PBGC will advise the contractor of its acceptance or declination of slots offered at educational conferences.

Fidelity Bond and Insurance Coverage

The contractor shall have or acquire within 6 months of contract award a fidelity bond, with the PBGC as a loss payee, in the minimum amount of $5,000,000.00 with maximum deductible of $1,000,000.00. The bond shall cover, at a minimum, losses due to dishonest or fraudulent acts or omissions by the contractor. Proof of the existence of such fidelity bond shall be provided to PBGC immediately upon its acquisition and then annually thereafter.

The contractor shall have SEC-required (17g-1) fidelity bonds, or acquire within 6 months of contract award, errors and omissions coverage, and any other fiduciary coverage in the minimum amount of $10,000,000.00 with a maximum deductible of $1,000,000.00 per claim.

The policy shall cover, at a minimum, losses caused by errors, omissions, or negligent acts of the contractor. Proof of the existence of such policy shall be provided annually by the contractor.

Disaster Recovery

The Contractor shall have or develop and maintain a disaster recovery plan, which includes critical business operations, computer systems, and telecommunications. Such plan shall be tested and/or updated annually, as necessary. The contractor shall provide a copy of the annual test report to the PBGC within 30 calendar days of the completion of the test. A copy of the current and/or revised plan must be provided to PBGC within 60 calendar days of the completion of the revised plan.

The disaster recovery plan shall include, but not be limited to, the following:

1. Emergency response procedures, including:

a. Step-by step instructions identifying explicit techniques to be used for responding to various emergency situations;

b. Identification of disaster recovery teams; and

c. An organizational chart and list of key personnel responsible for performing the disaster recovery actions as well as the priority of duties and lines of authority.

2. Backup site activation procedures which identify:

a. Backup site location; and

b. Backup site activation processes.

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(If the backup site is operated by an organization other than by the Contractor, a copy of the Alternative Site Processing Agreement must be provided to the PBGC within 30 days after being added to the plan or at the same time as the contractor’s disaster recovery plan is revised, whichever is earlier. Backup site activation procedures must contain a list of key personnel and the recovery team(s) they support.)

3. Primary site recovery procedures, including:

a. Instructions for accomplishing salvage operations;

b. A replacement acquisition strategy for hardware, software, telecommunications, etc.;

c. Facility reconstruction plans; and

d. Identification of personnel supporting the primary site recovery and the team(s) they support.

4. Primary site reactivation/normalization, including:

a. Procedures to ensure a smooth transition from the alternative processing site to the primary site; and

b. A list of teams performing the various functions and the personnel assigned to those teams.

Deliverables/Reports

The contractor shall provide:

1. Preliminary monthly statements and reports, on or before the seventh business day following month end, which detail the following information:

a. Portfolio Comparison vs. the Benchmark Index – Results must include, but not be limited to, returns for the month, latest three months, calendar year to date, PBGC’s fiscal year to date (the fiscal year runs from October 1 through September 30), and since inception. As the performance history expands, returns for one year, two year, three, five, and ten year should be provided, when applicable.

b. Holdings Report

c. Investment Summary

d. Portfolio-level Characteristics

e. Performance Attribution

f. Economic and Market Commentary

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g. Derivatives Report - If the fund or separate account utilizes derivatives in the portfolio, provide a detailed report (report format supplied by PBGC)

h. Glide Path reporting including, but not limited to, the Plan’s funding ratio and funding ratio since inception, total assets, total liabilities, benchmarks, and asset allocation based on the underlying benchmarks.

2. Monthly holdings data, electronic copy format to be determined, as required for PBGC risk system, including detailed characteristics of securities. Provide details, as required, of OTC derivatives contracts to the Risk Management System vendor.

3. Quarterly statements and reports that detail the following information (due within thirty calendar days after quarter end):

a. Portfolio Comparison vs. the Benchmark Index – See 1a above.

b. Investment Summary

c. Portfolio-level Characteristics

d. Performance Attribution

e. Economic and Market Commentary

f. Contract Compliance Certification Report – detailing all non-compliance events throughout the quarter which violated the investment guidelines. If there are internal constraints that are not stipulated in the investment guidelines and were violated during the quarter, please provide those as well.

g. Guideline Compliance Status Report – detailing the status of all guideline risk parameters being monitored for compliance.

4. Annual statements and reports that detail the following information:

a. Evidence of fidelity bond and errors and omissions professional liability coverage, within 60 calendar days of renewal.

b. Revised Securities and Exchange Commission Form ADV Parts I and II, within 30 calendar days of revision, if an ADV is filed.

c. Policy on Creditors Committee participation and a record of those personnel who served on such committees where securities held in the PBGC portfolio were involved

d. Revised Ethics Policy (within 30 calendar days of revision).

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5. Other reports, research and publications as required by PBGC from time to time.

6. If required, an initial LDI glide path de-risking strategy design, execution and monitoring plan and at least annually a status report on the plan and any recommendations for improvements to the plan.

7. As requested or at least annually, Contractor shall analyze: 1) the liabilities and the benchmarks used in the LDI portfolios for the entire Plan; and 2) the liability hedging assets or investments in the investment program; and 3) the LDI glide path, hedge ratio, and funding ratio triggers.

Copies of all PBGC reports noted above must be provided to PBGC’s investment consultant.

The contractor may provide the above reports electronically and through secure online access to its website.

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SECTION D

PACKAGING AND MARKING

D. 1 PBGC 52.247-7000 PACKAGING AND MARKING (JAN 2012)

The Contractor is responsible for the cost of all packing, packaging and mailing in accordance with the best commercial practices. All information submitted to the Contracting Officer or the COR must be clearly marked with the company name, the PBGC contract number, and identification of the item.

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SECTION E

INSPECTION AND ACCEPTANCE

E. 1 PBGC 52.246-7000 INSPECTION AND ACCEPTANCE OF DELIVERABLES (JAN 2012)

All deliverable items are to be furnished to the Contracting Officer's Representative (COR) or to PBGC personnel designated by the COR to receive a specific deliverable.

PBGC's receipt of a deliverable does not constitute acceptance by the Government. Final acceptance of any reports or other deliverable items required under this contract will be made in writing and may only be made by the COR or Contracting Officer.

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SECTION F

DELIVERIES OR PERFORMANCE

F. 1 Deliveries or Performance

SECTION F

DELIVERIES OR PERFORMANCE

F.1 Place of Performance

The primary place of performance under this contract shall be at the Contractor’s site.

F.2 Place of Deliver

All contract deliverables must be delivered to the Contracting Officers Representative (COR) as identified in Section G of the Contract.

F.3 Period of Performance

PBGC anticipates the period of performance to be a twelve month base year plus (9) nine option years. It shall be effective on the date of the cognizant Contracting Officer’s signature, unless otherwise so noted. The Contractor shall commence work immediately upon notice of award

Base/Option Year Period-of-Performance Base Year: October 1, 2017 – September 30, 2018 Option Year One October 1, 2018 – September 30, 2019 Option Year Two October 1, 2019 – September 30, 2020 Option Year Three October 1, 2020 – September 30, 2021 Option Year Four October 1, 2021 – September 30, 2022 Option Year Five October 1, 2022 – September 30, 2023 Option Year Six October 1, 2023 – September 30, 2024 Option Year Seven October 1, 2024 – September 30, 2025 Option Year Eight October 1, 2025 – September 30, 2026 Option Year Nine October 1, 2026 – September 30, 2027

F.4 Contract Type

The Government anticipates the award of a firm fixed price contract. Please note that services provided under this commercial services contract are offered at a fixed rate based on a variable quantity.

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SECTION G

CONTRACT ADMINISTRATION DATA

G. 1 PBGC 52.201-7000 CONTRACTING OFFICER'S REPRESENTATIVE (JAN 2012)

The Contracting Officer's Representative (COR) is TBD who may be reached atTBD . The COR is authorized to assist in monitoring the work under this contract. The COR is responsible for the technical administration of the contract and technical liaison with the contractor.

The COR IS NOT authorized to change the scope of work or specifications as stated in the contract, to make any commitments or otherwise obligate the Government or authorize any changes which affect the contract price, delivery schedule, period of performance or other terms or conditions.

The Contracting Officer is the only individual who can legally commit or obligate the Government for the expenditure of public funds. The technical administration of this contract shall not be construed to authorize the revision of the terms and conditions of this contract. Any such revision shall be authorized in writing by the Contracting Officer.

The COR is authorized to review and recommend approval of:

(a) Technical matters not involving a change in scope, price, terms and conditions of the contract

(b) Progress reports

(c) Inspection and acceptance of services and deliverable products and

(d) Invoices.

The COR is not authorized to sign any contractual instruments or to direct any action that results in a change in the scope, price, terms or condition of the contract.

G. 2 PBGC 52.232-7000 SUBMISSION OF INVOICES (JAN 2012)

The Contractor shall submit invoices for items and/or services rendered by e-mail to:

InvoiceManager@pbgc.gov

All inquiries concerning payment should be directed to the General Accounting Branch at (202)326-4062 #0 or by e-mail: InvoiceManager@pbgc.gov

The Contractor must include the following information and/or attached documentation for the invoice to be considered proper. Invoices, which do not contain all the required information, may be returned to the vendor unpaid for correction and resubmission.

- Name and address of Contractor

- Invoice date and invoice number

- Purchase/Delivery Order Number

- Shipping and payment terms

- Name and address for Contractor official to whom payment is to be sent (must be same as that in the order or in a proper notice of assignment)

- Name, title, phone number and mailing and email address of person to notify in the event of an improper invoice

- Taxpayer Identification Number (TIN)

- Description, quantity, unit of measure, unit price and extended price of supplies delivered or services performed

- Expenditures and hours of effort expended by individual during the reporting period (if applicable).

- If applicable, for each invoice covering travel expenses incurred, mileage records and copies of receipts from actual transportation costs and accommodations shall be included as supportive material for each invoice.

NOTE: PBGC authorization must be obtained prior to incurring any travel expenses for which the Contractor requests reimbursement.

(End of Clause)

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SECTION H

SPECIAL CONTRACT REQUIREMENTS

H. 1 PBGC 52.204-7000 MANAGEMENT AND RETENTION OF PBGC RECORDS (SEP 2014)

1. Records defined: Records include all books, papers, maps, photographs, machine readable materials, or other documentary materials, regardless of physical form or characteristics, made or received by an agency of the United States Government under Federal law or in connection with the transaction of public business and preserved or appropriate for preservation by that agency or its legitimate successor as evidence of the organization, functions, policies, decisions, procedures, operations, or other activities of the Government or because of the informational value of data in them. 44 U.S.C. Section 3301. The contractors retention and management of records relating to the negotiation, management, and administration of this contract shall be governed by FAR Subpart 4.7, notwithstanding the requirements of this clause.

2. The Contractor shall treat all records as the property of PBGC for which PBGC shall have unlimited rights to use, dispose of, or disclose such data contained therein, unless otherwise indicated in this contract, as the agency determines to be in the public interest.

3. The Contractor agrees to comply with Federal and PBGC records management policies, specifically PBGC Records Management Interim Guidance, available at: http://www.pbgc.gov/docs/IM-15-03-RM.pdf. This guidance includes the preservation and management of all records created or received regardless of format, mode of transmission, or state of completion. PBGC may consider the Contractors adherence to proper records management practices during performance evaluations.

4. The Contractor may not dispose of, transfer, move, alter, or otherwise affect the condition and custody of records without the prior written consent of the Contracting Officer or the Contracting Officers Representative (COR). Willful and unlawful destruction, damage, or alienation of Federal records is subject to the fines and penalties imposed by 18 U.S.C. Section 2071.

5. Subcontractor Flow-down: The Contractor and any subcontractor(s) are required to abide by this clause and all applicable Federal and PBGC records management directives, policies, and guidance.

H. 2 PBGC 52.209-7000 HANDLING SENSITIVE INFORMATION (MAR 2016)

(a) To the extent that the work under this contract requires the prime contractor employee to be given access to sensitive information, including personally identifiable information (PII) and controlled unclassified information (CUI), the contractor shall take measures necessary to restrict access to and safeguard such information from unauthorized use and disclosure.

1. For purposes of this clause, PII refers to any information about an identifiable individual maintained by the Pension Benefit Guaranty Corporation (PBGC), including but not limited to an individual's employment, medical and financial history, educational background, and family information that can be used to identify or trace an individual's identity, such as an individual's name, social security number, date and place of birth, mother's maiden name, and biometric records.

2. Controlled unclassified information (CUI) is information that laws, regulations, or Government-wide policies require to have access, safeguarding or dissemination controls, but excluding classified information. For these purposes, CUI includes PBGC records, pension plan, and participant records as well as any other Government information related to work pursuant to this contract and agency information related to existing, proposed, or contemplated legal, policy, program, operational, or similar matters.

(b) For the purposes of this clause, a "prime contractor employee" shall include any officer, partner, employee, or agent of the prime contractor.

(c) The contractor is bound by section (m) of the Privacy Act, 5 U.S.C. 552a(m) and as such, is considered under the Privacy Act to be an employee of the PBGC. Accordingly, the contractor is subject to the criminal penalties of the Privacy Act, 5 U.S.C. 552a(i).

(d) The contractor agrees to maintain sensitive information in the strictest confidence. The contractor also agrees not to publish, reproduce, or otherwise divulge sensitive information in

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whole or in part, in any manner or form, nor to authorize or permit others to do so, taking such reasonable measures as are necessary to limit access to sensitive information to those employees and/ or subcontractors needing such information to perform the work required under this contract.

(e) The Contracting Officer's Representative (COR) may require the contractor to obtain the written agreement of any contractor or subcontractor employees permitted access to sensitive information whereby the employee agrees not to discuss, divulge or disclose any such information to any person or entity not directly concerned with performance of the contract work.

(f) If requested by the COR, the contractor shall sign an agreement with each company supplying sensitive information to the contractor under this contract whereby the contractor agrees not to discuss, divulge or disclose any such information to any person or entity not directly concerned with performance of the contract work. A copy of any such agreement shall be provided to the COR. The contractor also may be required to provide the COR with reports itemizing the sensitive information received from companies under this contract.

(g) The contractor shall not remove sensitive information, whether in paper or electronic format, from approved locations or electronic storage without the CO's prior approval. The contractor shall not disclose any sensitive information to subcontractors or other third parties unless specifically related to the contract work. The contractor shall not knowingly violate any statutory or regulatory restrictions against the disclosure of Government records.

(h) The contractor shall administer a monitoring process to ensure compliance with the provisions of this clause and agrees to notify PBGC immediately, in writing, in the event that the contractor determines or has reason to suspect a breach of any part of this clause. The contractor further agrees to notify PBGC immediately, in writing, of any request for access to information related to this contract received from any individual who is not a party to this contract. The contractor shall provide full access and cooperation to facilitate an investigation and resolution of any security incidents and when appropriate to the circumstances, shall implement immediate corrective actions to contain and prevent a recurrence. The contractor will designate and identify an individual who shall be responsible for the notifications required under this clause and who shall be responsible to receive responses from the COR or the PBGC Disclosure Officer.

(i) The contractor or subcontractor may be requested to remove from any further contract work any contract employee who improperly discloses sensitive information. The reason for the removal shall be documented in full for the Contracting Officer. The PBGC may terminate this contract for cause or default if the contractor fails to comply with the provisions of this clause and also may exercise any other rights and remedies provided by law or this contract, including criminal and civil penalties.

(j) Any request for information, including a request by an individual pertaining to that individual, shall be directed to PBGC's Disclosure Officer for processing under the appropriate statutory scheme.

Information shall be made available only at the discretion of PBGC's Disclosure Officer and subject to the Freedom of Information Act, 5 U.S.C. Sec. 552, as amended; the Privacy Act, 5 U.S.C. Sec. 552a, as amended; and any other applicable laws or regulations.

(k) This clause does not apply to information which has been released to the public by the PBGC or has become part of the public domain through no fault of the contractor. To avoid any implication that the contractor has disclosed sensitive information, the contractor must be able to demonstrate that the information was already in its possession at the time of receipt from the PBGC and was not acquired directly or indirectly from the Government, from other companies, or made available to the public by the contractor's breach of this clause.

(l) Within 30 days of contract completion, termination or expiration, the contractor shall return or destroy all copies of sensitive information, whether furnished by PBGC or created by the contractor or any subcontractor. The contractor's obligation to maintain confidentiality of all sensitive information shall continue after completion, termination or expiration of this contract.

(m) The contractor shall place the requirements contained in this clause in all subcontracts entered into pursuant to the contract where the subcontractor may have access to sensitive information. The contractor also agrees to enforce the requirements of this clause against any and all subcontractors under this contract.

H. 3 PBGC 52.209-7001 ORGANIZATIONAL CONFLICTS OF INTEREST (OCT 2004)

(a) Purpose. The purpose of this clause is to ensure that the contractor

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(1) is not biased because of its financial, contractual, organizational, or other interests which relate to the work under this contract, and

(2) does not obtain any unfair competitive advantage over other parties by virtue of its performance of…