PGIM JOFOC Fully Executed.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

FOR OPEN MARKET ACQUISITIONS USING FAR 12.201-2 PROCEDURES

Identification Number (purchase request/solicitation number): TBD

1. Identification of the agency and contracting activity.

A. Agency: Pension Benefit Guaranty Corporation (PBGC)

B. Contracting activity: Procurement Department (PD)

C. Program Office: Corporate Investments Department (CID)

2. Nature and/or description of the action being approved.

This justification supports the award of a sole-source contract to prevent a lapse in critical fixed-income investment services while PBGC concludes a competitive source selection (ref.

Solicitation No. 16PBGC25R0062). As discussed in further detail under Section 5, this justification is not the result of a lack of advance planning by the agency. The Government projects awarding this contract in August 2026 using Fiscal Year 2026 funds.

3. A description of the supplies or services required to meet the agency’s needs, including the estimated value.

The contractor shall be responsible for providing active investment management and related services for fixed income portfolios. The investment objective is to construct portfolios of fixed income assets that earn superior returns which exceed the respective portfolio benchmarks of these strategies, consistent with the risk parameters outlined in the investment guidelines for the respective portfolios. The portfolios shall be invested in one or more of the four Trust Fund fixed income strategies: Core Fixed Income, Long Duration Fixed Income, Global Fixed Income, and Emerging Markets Debt.

The anticipated period of performance is six (6) months with an optional three (3)-month extension. The estimated contract cost if all options are exercised is approximately

4. An identification of the statutory authority permitting other than full and open competition.

The statutory authority permitting this action is 41 U.S.C. 3304(a)(1), as implemented by RFO FAR 6.103-1 (only one responsible source and no other services will satisfy agency requirements).

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

PGIM is the only contractor capable of performing these services because the Government would almost certainly be unable to competitively award a new contract to any other contractor in time to prevent a lapse in these critical services.

PBGC began planning a competitive acquisition to replace this contract in November 2024 – approximately 22 months before PBGC would exhaust all remaining optional periods under this contract. Although ordinarily this would have been sufficient time in which to plan the acquisition, solicit proposals, and negotiate new contracts, PBGC has encountered several unexpected delays that have extended this period. These delays resulted from critical personnel changes around the acquisition, an increase in data calls and contract modifications addressing the administration’s priorities, acquisition policy changes around the use of contractor advisory and assistance services, and the need to reopen the solicitation to ensure sufficient competition to award the desired number of contracts.

Currently, the agency is conducting technical evaluations of competitive proposals for the replacement contract. Thereafter, it intends to establish a competitive range, conduct in-person negotiations, evaluate final revised proposals, and award contracts in total to replace the existing contracts. PBGC believes it is highly improbable that it would be able to complete these tasks prior to expiration of this contract on October 1, 2026. Currently, PBGC estimates a March 2027 award month for these new contracts.

Moreover, PBGC requires a minimum overlapping “transition” period of at least three (3) months between contracts to ensure sufficient time for the parties to negotiate investment guidelines and for the contractors to code the guidelines into their systems and establish PBGC portfolios with broker-dealers. Therefore, even if PBGC were able to award the new contracts on September 30, 2026, this would not be adequate to ensure uninterrupted contract performance.

If a lapse were to occur, it would create significant impact on the agency’s mission. In particular, it would impair the agency’s ability to fulfill Mission Essential Function #2:

Manage Corporate Investments. PBGC relies on external investment managers for the management of its investments.

No other reasonable alternative is available to continue uninterrupted performance beyond September 30, 2026, as PBGC would be unable to manage this fixed-income portfolio without contractor support. These portfolios require regular oversight, trading, risk management, and compliance monitoring to mitigate operational, fiduciary, and market risk and protect the Government’s interests. Based on current planning for a March 2027 award date, a bridge contract allowing for up to nine (9) months of performance would give PBGC sufficient time to competitively award and transition to a new contract.

Based on the foregoing rationale, PGIM is the only contractor capable of satisfying the agency’s requirement for these services beginning September 30th, 2026.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.101(a) and, if not, which exception under 5.101(b) applies.

The Contracting Officer (CO) will publish the notices required by FAR 5.101.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

The CO will ensure that the anticipated cost of this contract will be fair and reasonable. In the absence of competition, the CO will seek first to establish price reasonableness by comparing proposed prices to historical prices paid for the same services, in accordance with RFO FAR 15.404-1(b)(2) and 15.404-1(c). If this method proves unsuccessful, the CO will utilize alternative means of price analysis.

8. A description of the market research conducted (see Part 10) and the results or a statement of the reason market research was not conducted.

PBGC conducted extensive market research in advance of releasing Solicitation No.

16PBGC25R0062. No additional market research has been conducted in support of this sole-source acquisition because the rationale for selecting this contractor is based exclusively on the estimated timeline for awarding the new, competitively awarded contract and the threat of the current contract lapsing. These factors are entirely independent of the market.

9. Provide a narrative of any other facts supporting the use of other than full and open competition, such as:

i. Procurement History:

a. Contract numbers and dates of the last several contracts for the same requirement.

PGIM

Contract no: PBGC01-CT-16-0015 PoP: 3/30/2016 – 9/30/2026

b. Competitive status of the actions listed above in 9.i.a.

Fully and openly competed.

c. If any prior contract for this requirement was accomplished using full and open competition, include a detailed explanation of the changed circumstances causing this action to now limit the sources.

There is insufficient time to complete the Fixed Income Investment Services source selection before the current contract ends on September 30, 2026. PBGC anticipates making the new award in or around March 2027. This contract will bridge the gap to that point.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

See Paragraph 6 for synopsis information. To date, no other sources have written to express interest in the acquisition.

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

Not applicable. There is healthy competition for this work, which PBGC recently sought and received under Solicitation No. 16PBGC25R0062, and will continue to seek going forward.

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