B.04_TIB-2019-RFP-0004_-_02_with_amended_changes.pdf

PAGE 1 OF 1. REQUISITION NO.

2. CONTRACT NO. 3. AWARD/EFFECTIVE DATE 4. ORDER NO. 5. SOLICITATION NUMBER 6. SOLICITATION ISSUE DATE

a. NAME b. TELEPHONE NO. (No Collect Calls) 8. OFFER DUE DATE/LOCAL

TIME

9. ISSUED BY CODE 10. THIS ACQUISITION IS UNRESTRICTED OR SET ASIDE: % FOR:

SMALL BUSINESS

HUBZONE SMALL

BUSINESS

SERVICE-DISABLED

VETERAN-OWNED

SMALL BUSINESS

WOMEN-OWNED SMALL BUSINESS

(WOSB) ELIGIBLE UNDER THE WOMEN-OWNED

SMALL BUSINESS PROGRAM

EDWOSB

8(A)

NAICS:

SIZE STANDARD:

11. DELIVERY FOR FOB DESTINA-

TION UNLESS BLOCK IS

MARKED

SEE SCHEDULE

12. DISCOUNT TERMS

13a. THIS CONTRACT IS A

RATED ORDER UNDER

DPAS (15 CFR 700)

13b. RATING

14. METHOD OF SOLICITATION

RFQ IFB RFP

15. DELIVER TO CODE 16. ADMINISTERED BY CODE

17a. CONTRACTOR/OFFEROR CODE FACILITY CODE 18a. PAYMENT WILL BE MADE BY CODE

TELEPHONE NO. DUNS: DUNS+4:

PHONE: FAX:

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. 20. 21. 22. 23. 24.

ITEM NO. SCHEDULE OF SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

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

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

27a. SOLICITATION INCORPORATES BY REFERENCE FAR 52.212-1, 52.212-4. FAR 52.212-3 AND 52.212-5 ARE ATTACHED. ADDENDA ARE ARE NOT ATTACHED.

27b. CONTRACT/PURCHASE ORDER INCORPORATES BY REFERENCE FAR 52.212-4. FAR 52.212-5 IS ATTACHED. ADDENDA ARE ARE NOT ATTACHED

28. CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN _______________ 29. AWARD OF CONTRACT: REF. ___________________________________ OFFER COPIES TO ISSUING OFFICE. CONTRACTOR AGREES TO FURNISH AND DATED ________________________________. YOUR OFFER ON SOLICITATION DELIVER ALL ITEMS SET FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY (BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE ADDITIONAL SHEETS SUBJECT TO THE TERMS AND CONDITIONS SPECIFIED SET FORTH HEREIN IS ACCEPTED AS TO ITEMS:

30a. SIGNATURE OF OFFEROR/CONTRACTOR 31a. UNITED STATES OF AMERICA (SIGNATURE OF CONTRACTING OFFICER)

30b. NAME AND TITLE OF SIGNER (TYPE OR PRINT) 30c. DATE SIGNED 31b. NAME OF CONTRACTING OFFICER (TYPE OR PRINT) 31c. DATE SIGNED

AUTHORIZED FOR LOCAL REPRODUCTION (REV. 2/2012)

PREVIOUS EDITION IS NOT USABLE Prescribed by GSA - FAR (48 CFR) 53.212

7. FOR SOLICITATION

INFORMATION CALL:

STANDARD FORM 1449

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

SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS 62

PR-2019-STD-0456

TIB-2019-RFP-0004 - 02 05-31-2019

Matthew Hamilton 07-12-2019

4:30 EST

FRTIB

77 K Street NE, Suite 1000 Washington DC 20002

X

523999

Net 30

N/A

77 K Street, NE Suite 1000

See CONTINUATION Page

This Request for Proposals (RFP) is for professional investment management services, securities lending agency services, and custody and administrative services for the for the TSP's F, C, S, and I Funds in accordance with the Statement of Work beginning in Section C of this RFP.

Questions to this RFP are due Wednesday June 12, 2019 at 4:00 PM EST. After that time no further response will be made to additional questions or comments.

Proposal packages shall be received by the Agency via encrypted email ONLY, no later than 4:00 PM EST.

See CONTINUATION Page

X X

Monique Mitchell

RFP No. TIB-2019-RFP-0004 Investment Management – TSP Funds

Section B: Supplies or Services and Prices

B.1. Background

The Federal Retirement Investment Board (FRTIB or Agency) is an independent Federal government agency in the Executive Branch created by the Federal Employees’ Retirement System Act of 1986 (FERSA). The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal civilian employees and members of the uniformed services that offers its participants the same type of savings and tax benefits that many private corporations offer their employees under I.R.C.§401(k) plans. The TSP is the largest participant-directed defined contribution plan in the world. The mission of the FRTIB is to administer the TSP solely in the interest of the participants and beneficiaries.

The FRTIB is a self-funded agency with independent budgetary authority that receives no annual appropriations from Congress. FRTIB is not strictly bound to adhere to the Federal Acquisition Regulation (FAR). However, FRTIB procurements will largely adhere to the FAR, unless doing so might infringe upon the Agency’s fiduciary obligations under FERSA. FRTIB has adopted the FAR as its primary contracting policy and procedures for procuring its goods and services, with defined deviations tailored to the FRTIB’s unique role.

The Thrift Federal Acquisition Supplement (T-FAS) specifies when the Agency’s policies and practices deviate from the FAR. See link to T-FAS below.

https://www.frtib.gov/Procurement/DoingBusiness.html

B.2. Supplies or Services

The FRTIB intends to select two (2) Contractors to provide professional investment management services, securities lending agency services, and custody and administrative services for the TSP’s Fixed Income Index Investment Fund (F Fund), Common Stock Index Investment Fund (C Fund), Small Capitalization Stock Index Investment Fund (S Fund), and International Stock Index Investment Fund (I Fund) (Any reference hereafter to Funds or TSP Funds means the F Fund, C Fund, S Fund and I Fund collectively). This RFP identifies the two

(2) contractors as Contractor A and Contractor B.

Only two (2) contracts will be awarded for these services, one to Contractor A and one to Contractor B, and work shall be performed in accordance with all sections of this RFP and the resulting contract for each. Note that release of this RFP does not guarantee issuance of an award or awards.

Once chosen, Contractor A and Contractor B shall manage the following target market value percentages of each of the four (4) TSP Funds.

TSP Fund Name Contractor A target percentage

Contractor B target percentage

F Fund 80% 20% C Fund 90% 10% S Fund 80% 20% I Fund 80% 20%*

* If for reasons of local regulatory restrictions in emerging markets countries, and after working in good faith with Contractor(s), the FRTIB is unable to reach a satisfactory solution for Contractor B to gain appropriate exposure for tracking the MSCI ACWI ex‐U.S. IMI Index, the target allocation percentage of the I Fund for Contractor A will be reset to 100% and for Contractor B will be reset to 0.0%. FRTIB will have the sole right to final determination of the feasibility of establishing appropriate exposure.

The FRTIB will seek to maintain these target percentage allocations throughout the duration of the respective contracts, with the exception of circumstances as indicated in this RFP.

The Contractor will sign a contract with the FRTIB to provide services pertaining to the Funds. For clarity, each Contractor’s services shall be inclusive of the provision of investment management services, securities lending agency services, custody and administrative services, and all others enumerated in this RFP and the resulting contract. Remuneration for Contractor will neither be earned nor paid until Contractor has investment management discretion over Fund assets whose performance is being measured relative to the respective benchmarks. Fee calculations for assets of Funds under discretionary management by the Contractor may not begin at the same time;

rather, they will be subject to the timing of successful transition of assets as per the negotiated transition plan.

B.3. Contract Structure

B.3.1 – Contractor A

Contract Structure

CLIN

Contract Period

Description Quantity Unit Fee

Base Period

Investment Management, Securities Lending, and Custody and Administrative Services

0001A Base Period

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

0001B Base Period

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

0001C Base Period

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

0001D Base Period

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

Option Period 1

Investment Management

Securities Lending, and

Custody

1001A Option Period 1

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

1001B Option Period 1

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

1001C Option Period 1

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

1001D Option Period 1

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

Option Period 2

Investment Management, Securities Lending, and Custody and

2001A

Period 2

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

2001B Option Period 2

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

2001C

Period 2

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

2001D Option Period 2

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

Option Period 3

Investment Management, Securities Lending, and Custody and

3001A

Period 3

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

3001B Option Period 3

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

3001C Option Period 3

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

3001D Option Period 3

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule

Period 4

Investment Management, Securities Lending, and Custody and

4001A

Period 4

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

4001B Option Period 4

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

4001C Option Period 4

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

4001D Option Period 4

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule

B.3.2 – Contractor B

Contract Structure

CLIN

Contract Period

Description Quantity Unit Fee

Base Period

Investment Management, Securities Lending, and Custody and

0001A Base Period

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

0001B Base Period

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

0001C Base Period

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

0001D Base Period

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

Option Period 1

Investment Management

Securities Lending, and

Custody

1001A

Period 1

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

1001B Option Period 1

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule

1001C

Period 1

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

1001D Option Period 1

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

Option Period 2

Investment Management, Securities Lending, and Custody and

2001A

Period 2

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

2001B Option Period 2

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

2001C Option Period 2

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

2001D Option Period 2

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule

Period 3

Investment Management, Securities Lending, and Custody and

3001A

Period 3

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

3001B Option Period 3

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

3001C Option Period 3

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

3001D Option Period 3

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

Option Period 4

Investment Management, Securities Lending, and Custody and

4001A

Period 4

F Fund 24 Months

See Section J - Attachment 001: Pricing Schedule

4001B

Period 4

C Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

4001C Option Period 4

S Fund 24 Months

See Section J - Attachment 001: Pricing Schedule Sample Formats

4001D Option Period 4

I Fund 24 Months

See Section J - Attachment 001: Pricing Schedule

Section C: Descriptions and Specifications

C.1. Scope of Work

1. Mission

The FRTIB, created by the Federal Employees’ Retirement System Act of 1986, administers the TSP for Federal employees. The TSP is a defined contribution plan similar to 401(k) plans in the private sector.

2. Scope The Contractor shall receive and invest monies representing cash flows in a manner consistent with the specifications, terms, and conditions set forth in the Statement of Work (SOW) and contract awarded as a result of this RFP. The work to be performed under this SOW related to the Funds shall be inclusive of the provision of investment management services, securities lending agency services, custody and administrative services, and all others enumerated in this RFP and the resulting contract.

3. Statutory Requirements Title 5 of the United States Code, §§ 8438, 8472, and 8475, provides the major statutory requirements for TSP investments.

4. Definitions

a. Contractor

Use of the terms “Contractor,” “Contractors,” “Contractor A,” and “Contractor B” in this RFP and the contract is intended to apply collectively to the investment manager and any subcontractors or other entities, regardless of the affiliation with the manager, whom the manager may retain to provide the services described in this document, including custodian duties.

b. Thrift Savings Plan (TSP) The TSP, which is administered by the FRTIB, is a retirement plan similar to a 401(k) plan, offered to Federal employees. The following investment Funds are offered within the TSP. Each Fund is held as a separate account with the TSP as each Fund’s sole owner.

Fund Description/Benchmark

Government Securities Investment Fund (G Fund)

G Fund invests exclusively in a nonmarketable short-term U.S.

Treasury security that is specially issued to the TSP. The earnings consist entirely of interest income on the security. The G Fund interest rate calculation is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity and is reset monthly.

Fixed Income Index Investment Fund (F Fund)

Bloomberg Barclays U.S. Aggregate Bond Index

Common Stock Index Investment Fund (C Fund)

S&P 500 Index

Small Capitalization Stock Index Investment Fund (S Fund)

Dow Jones U.S. Completion Total Stock Market Index

International Stock Index Investment Fund (I Fund)

MSCI EAFE Index (to change to the MSCI ACWI ex-US IMI Index)

NOTE: Throughout this RFP, any reference to returns of the MSCI EAFE Index and the MSCI ACWI ex-US IMI Index is on a net of dividend withholding taxes basis as calculated by MSCI. The same shall apply to all international indices cited by Offerors in responses to the attached questionnaire.

In addition to the above Fund options, the TSP offers participants Lifecycle Funds options (L Funds) with predetermined investment mixes across major asset classes designed to meet participants’ investment objectives over various time horizons. There are currently five (5) L Funds that provide a range of target retirement dates. The L Funds invest exclusively in the G, F, C, S, and I Funds.

All of the TSP Funds are pre-notified funds, meaning participant orders are cut off at 12:00 noon ET, aggregated, and combined with other activity, resulting in investment orders that are placed with the index fund manager by 2pm ET for execution on that day. TSP orders will be settled on the next business day (T+1).

The Funds participate in securities lending. The cash collateral received against securities loans made from those Funds is invested in a pool that is primarily invested in the G Fund. The cutoff for G Fund transactions each business day is 1:30 PM, ET. That is, in order for the Agency to redeem cash collateral from the G Fund, the Agency must have notice by 1:30 PM one business day prior to the transfer. Similarly, for cash collateral to be deposited into the G Fund, the credit to the Agency’s Treasury account must be received by 1:30 PM ET, in order to be included in that day’s investment in the G Fund.

Note also that the G Fund on occasion has become unavailable for securities lending collateral reinvestment for periods of time when the U.S. Government has reached a debt ceiling impasse and begins exercising extraordinary measures in order to continue to fund the government’s business.

C.2. Summary of Requirements The Contractor shall:

1. Provide Investment Management Services for the TSP Funds

Accept responsibility as a fiduciary pursuant to § 8477 of Title 5 of the United

States Code for its acts and omissions in connection with the selection, purchase, investment, retention, management, and disposition of TSP assets and handle all fiduciary responsibilities described in § 8477 and § 8474 or other applicable laws related to the management or handling of financial assets. Award of this contract resulting from this RFP shall constitute an allocation by the Executive Director of certain responsibilities in accordance with § 2584.8477(e)-3(b) of title 29, Code of Federal Regulations. The Executive Director and the appropriate representative of the Contractor shall complete this allocation by affixing their signatures to Attachment 002.

Establish a daily-valued, unitized separate account vehicle, that accommodates daily cash flows, for each of the following four passively managed investment mandates:

i. F Fund separate account – a Bloomberg Barclays U.S. Aggregate Bond Index strategy,

ii. C Fund separate account – a Standard & Poor’s 500 Stock Index strategy,

iii. S Fund separate account – a Dow Jones U.S. Completion Total Stock Market Index strategy, and

iv. I Fund separate account – a MSCI EAFE Index strategy. Following I Fund benchmark transition, a MSCI ACWI ex-US IMI Index strategy in a separate account vehicle that accommodates daily cash flows.

Beginning with the date of receipt of first assets or cash, achieve, on a time-weighted basis, investment performance that closely tracks that of the underlying indices, as measured and published by the index providers. The FRTIB monitors tracking error relative to the index on a monthly basis.

Contractor shall secure appropriate licenses with index providers at Contractor’s cost for all indices, both permanent and transitional (for the I Fund). The Contractor shall note that returns are to be reported net of fees and expenses and will be subject to public disclosure at monthly FRTIB Board Meetings and as otherwise deemed necessary by the FRTIB.

Accommodate daily trade orders; orders will be pre-notified by 2:00 p.m. ET on the trade date, and settled the next business day (T+1).

Manage liquidity; the Contractor shall manage the assets so as to minimize tracking error to the index while also providing sufficient liquidity for daily cash flows. Historical TSP order information is provided in Section J, Attachments 003F, 003C, 003S, 003I,: TSP Funds Liquidity Analysis.

Execute all trades efficiently, with an emphasis on seeking best execution and compliance with fiduciary standards. Minimize trading costs, and upon request, provide an explanation of transactions incurring trading costs above the average trading costs associated with managing assets benchmarked to the respective index.

Notify the FRTIB of fair value pricing events the same business day as the day the events occur.

Vote all proxies and address all corporate actions in a manner which will result in maximum financial benefits to TSP participants and in accordance with fiduciary responsibilities.

Notify the FRTIB of material violations of laws and regulations and questionable ethics practices of broker-dealers and other counterparties with which the Contractor transacts on behalf of the TSP Funds for the purpose of gaining or reducing portfolio exposures, including for securities lending, within two business days of when Contractor becomes aware of such violations through public filings or media reporting. Materiality is reasonably determined by the Contractor’s designated client service contacts.

Disclose all potential and actual conflicts of interest as known and annually disclose all sources of firm revenue and all business relationships and affiliations.

Accept financial responsibility for errors found to be caused by the Contractor and make appropriate remedy such that the Funds and participants will be made whole. Contractor will not be held responsible for TSP costs related to administratively applying or reprocessing of financial solutions associated with Contractor errors.

Acknowledge or respond to all FRTIB inquiries by the close of business on the day received if received by the Contractor by noon on a business day;

otherwise, by noon of the following business day. In this case, times cited are in the Contractor’s time zone from which the FRTIB relationship is serviced.

2. Provide Custody and Administrative Services

The Contractor (which as defined in Section C.1.4.a can include subcontractors) shall provide separate account vehicles for the custody of the above portfolios and perform necessary administrative services relating to custody of the portfolios. The Contractor shall unitize the separate account vehicles for the purpose of reporting settled trade orders and balances.

Act as a depository and custodian holding all assets as received from FRTIB.

The Contractor shall hold such assets and provide services including fund administration, fund accounting, fund valuation net of all cost except Agency administrative costs, claiming of dividend tax rebates, the filing of claims on shareholder class action litigation and the processing of amounts thereby received, and “middle office services” such as trade confirmations and reconciliations.

Provide historical trade data retention services supportive of future class action claims on behalf of the TSP Funds.

Be responsible for establishing all accounts in non-U.S. domiciles as needed, at the Contractor’s expense, and for providing those same services that it provides for U.S. based accounts, as enumerated above.

Provide transition management services as discussed in Sections C.4. and C.5. of this Statement of Work.

as specified in C.2.1.

Engage an independent auditor, at the Contractor’s expense, to provide audited financial statements for each of the separate accounts.

3. Serve as a Securities Lending Agent

Lend securities in the separate account index fund portfolios managed on behalf of the TSP so as to generate additional income for the TSP Funds.

Manage a custom cash collateral reinvestment portfolio for the reinvestment of a portion of the cash collateral received against security loans.

Provide a solution that meets ongoing liquidity needs associated with cash collateral reinvestment activities, given the liquidity constraints of the G Fund.

Be responsible for all investment and operational activities relating to securities lending, including, but not limited to, approving counterparty borrowers, monitoring counterparty exposure, processing security recalls, etc.

Indemnify the TSP against all losses resulting from counterparty/borrower default.

Establish a list of eligible borrowers and their agents and a maximum amount that may be borrowed by each borrower. Conduct ongoing reviews of borrowers' qualifications.

Require that all loans of securities be collateralized by either cash or U.S.

Government securities.

Require competitive market levels of collateralization for domestic and international securities, including accrued income. Monitor collateral levels daily. Obtain additional collateral if mark-to-market values fall below acceptable levels.

Collect all interest, dividends, or other distributions with respect to all loaned securities.

To the extent TSP’s securities are lent to the Contractor’s affiliated entities, the Contractor shall have processes to ensure that loans made to such affiliates are in accordance with applicable laws and regulations, and are not economically disadvantageous to the TSP. The Contractor shall disclose the existence of any such loans to FRTIB within 30 days.

4. Transition the I Fund’s benchmark index—Contractor A only

Provide transition services to change the I Fund’s portfolio holdings to reflect an index strategy that tracks the MSCI ACWI ex-US IMI Index from an index strategy that tracks the MSCI EAFE Index within an agreed upon transition period over a predetermined number of stages between the FRTIB and investment manager.

Provide investment management services as enumerated in C.2.1 for the TSP I Fund during a period in which the portfolio will track an agreed upon custom transition benchmark over an agreed upon time period and an agreed upon number of stages as it transforms from the MSCI EAFE Index to the MSCI ACWI ex-U.S. IMI Index. Proposals for custom transition benchmarks will be assessed and a determination will be made by the Agency with the Contractor chosen for the majority manager position.

If for any reason the FRTIB determines that a custom transition benchmark is not needed, the requirement of managing to a custom transition benchmark will be disregarded.

Measure performance and provide attribution against the custom transition benchmark index over the transition period.

5. Access to Data and Contractor Personnel

Provide a primary point of contact to work with the FRTIB Contracting

Officer’s Representative (COR) for items required in the contract resulting from this RFP.

Provide a primary point of contact to work with the FRTIB Contracting Officer (CO) for contract related items or issues.

Provide FRTIB staff access to all senior investment personnel.

Provide the FRTIB’s auditor access to the firm’s personnel, operations, and records to perform the Agency’s annual financial audit and semiannual financial reviews. This includes providing direct confirmations requested by the independent auditor, audited financial statements, and other documents such as audit reports on internal controls.

Provide the Department of Labor, and its authorized contractor(s), access to the firm’s personnel, operations, and records to perform fiduciary compliance audit(s).

The FRTIB may require that Contractor personnel attend meetings in Washington, D.C. or other locations as required. Travel costs will not be reimbursed separately, rather the negotiated fees under the contract shall include all expenses including travel, lodging, and other allowable costs.

6. Disaster Recovery and Business Continuity Plans

The contractor (and any supporting subcontractors) shall have a Business Continuity Management System (BCMS), including Information Technology Disaster Recovery Plans, that meets a business continuity industry professional standard (e.g., ISO 22301, NIST SP 800-34r1, NFPA 1600,) specifying requirements to plan, establish, implement, operate, monitor, exercise and test, review, maintain and continually improve a documented management system to protect against, reduce the likelihood of occurrence, prepare for, respond to, and recover from disruptive incidents when they arise. The contractor’s BCMS shall be appropriate to its needs and meet FRTIB recovery requirements for critical business processes. The contractor shall notify FRTIB as soon as feasible about any disruptive incidents.

The contractor shall annually provide information on audit, assessment, or testing results that demonstrate whether the contractor’s BCMS conforms to: 1) FRTIB requirements and 2) the requirements of the applicable business continuity standards.

7. Service and Organizational Controls (SOC) Audits

The Contractor must ensure the existence of a comprehensive and up to date control environment for itself and its subcontractors/partners involved in this contract and make representations to the FRTIB. This representation is made by a SOC report. Contractor must annually perform a SOC 1 Type 2 audit. A registered independent auditing firm in good standing with Public Company Accounting Oversight Board will perform the audit. The Contractor will provide the:

Auditor’s SOC Report Auditor’s scope Description of controls Testing results and opinion Any recommendations and any required planned or completed corrective actions;

Contractor Corrective Actions (if applicable) Corrective action plans with committed delivery dates.

8. Personnel and Points of Contact

The Contractor shall provide skilled personnel required for the effective and efficient performance of the contract resulting from the RFP. The Contractor shall also designate both a primary point of contact that is available during normal business hours and an emergency point of contact that will be on-call during non-business hours in case of emergencies. These individuals may, but are not required to, be the same person.

C.3. Requirements for FRTIB Visits to the Contractor Site

At least annually, the FRTIB performs and documents a due diligence site visit at the Contractor site. The review topics shall include, but not be limited to, a discussion of the firm (e.g., firm status, firm-wide operational changes, new initiatives or new developments), investment staff review (personnel changes/realignments), process review (e.g., changes in strategy, enhancement of processes, and trading issues, if any), a review of Fund performance (e.g., performance relative to the appropriate benchmark), and a review of securities lending performance that includes a discussion of relevant developments. It is expected that each site visit agenda will also include one or more special topics reflective of initiatives, structural changes, or other matters deemed important by either the FRTIB or the Contractor.

The Contractor shall provide the FRTIB with data and site access for the purpose of due diligence visits.

C.4. Phase-In/Phase-Out Requirements Services under the contract resulting from this RFP are vital to the FRTIB and shall be continued without interruption. The Contractor shall comply with the following:

1. The Contractor shall exercise its best efforts and cooperation to effect an orderly and efficient transition during both the phase-in and phase-out phases (if applicable).

2. The Contractor shall, upon the Contracting Officer's written notice, (1) furnish phase-in services for up to 180 calendar days after award of the contract resulting from this RFP, and (2) negotiate in good faith a plan with the predecessor Contractor and the FRTIB to determine the nature and extent of phase-in services required. Phase-in services include, but are not limited to, development and execution of a plan for transition of asset management, securities lending, and custody and administrative services. The Contracting Officer reviews and provides approval to the plan. The Contractor shall provide sufficient experienced personnel during the phase-in period to ensure that the services called for by the contract resulting from this RFP are maintained at the required level of proficiency.

3. If the Contractor is not the successful offeror on an RFP subsequent to the contract which is awarded based on this RFP, then the Contractor shall, upon the Contracting Officer's written notice, (1) furnish phase-out services for up to 180 calendar days after the contract expires, and (2) negotiate in good faith a plan with a successor, or successors, and the FRTIB to determine the nature and extent of phase-out services required. Phase-out services include, but are not limited to, development and execution of a plan for transition of asset management, securities lending, and custody and administrative services. The plan shall specify a date for transferring responsibilities of work described in the plan. The Contracting Officer reviews and provides approval to the plan. The Contractor shall provide sufficient experienced personnel during the phase-out period to ensure that the services called for by the contract are maintained at the required level of proficiency. The Contractor shall allow as many personnel as practicable to remain on the job to help the successor(s) maintain the continuity and consistency of the services required by this agreement.

4. In the event of termination, the Contractor shall transfer the assets to a separate or commingled account on the books of the Contractor or to a separate or commingled account with another Contractor at the request of the FRTIB upon 30 days’ written notice.

5. In advance of receipt of the initial TSP assets, the Contractor shall participate in testing the process for transmission of the electronic data file containing the daily earnings. Such testing includes, but is not limited to, earnings for the offered Fund(s) based on hypothetical balances provided by the FRTIB, and provision of any technical assistance required to establish the electronic data link with the Agency’s recordkeeping system.

6. The Contractor shall accept the in-kind transfer of assets from the prior Contractor into the proposed account at no additional cost to the TSP.

7. The Contractor shall be responsible for all fees and costs associated with the preparation for transfer of assets, the transfer of assets and the establishment of accounts. Further, the Contractor shall be responsible for all costs related to operational errors involved in the transfer of assets. In the event of fault being indeterminate, the receiving Contractor or Contractors and the transferring Contractor agree to equal sharing of liability for all errors in processing the transfer of assets from one to the other(s).

8. The Contractor shall work with all independent agents or consultants authorized by the FRTIB to represent and assist the FRTIB with the process of seamlessly transitioning assets from one Contractor to another Contractor(s).

9. The Contractor shall obtain from the Department of Labor any required exemptions from prohibited transaction restrictions contained in FERSA (e.g., ability to utilize exchange traded funds), without charge to the TSP.

10. The Contractor shall provide information on any insurance policies that protect TSP assets against loss resulting from violations of fiduciary duty or errors and omissions. The Contractor shall provide information demonstrating compliance with the bonding requirements of § 8478 of Title 5 of the United States Code.

C.5. Targeted Allocations of Contractor A and Contracting B In addition to the foregoing in Section C.6 Phase-In/Phase-Out Requirements, the following shall apply with regard to the intended two-manager structure applied to each of the Funds:

1. Initial funding of Contractor A and Contractor B: Contractor shall provide transition management services until transition is complete for each Fund. There will be no performance holiday, meaning no period during which Fund performance is not expected to continue to track the Funds’ respective indices.

There will be no blackout period, meaning no period during which the Funds will be shielded from accepting subscriptions or funding redemptions.

Initial funding for the F Fund, the C Fund, and the S Fund will be made by 1) a one-time simultaneous in-kind transfer of securities and cash on as close to a pro-rata basis as is reasonably possible from the Funds’ current Contractor to Contractor A and to Contractor B or 2) depending on FRTIB’s and Contractors’ views of administrative ease, costs, and avoidance of operational errors, a sequential approach by Contractor and/or by Fund may be taken. Deviations from pro-rata transfer of assets may result if it is determined that an optimization, sampling, all cash, partial cash, schedule of cash transfers, or other approach may secure greater administrative ease and operational error avoidance for all parties while also protecting the interest of TSP participants (i.e. keeping costs low).

Initial funding for the I Fund to Contractor A will be made by a one-time in-kind transfer of all securities and cash to Contractor A from the existing Contractor.

Initial funding for the I Fund to Contractor B will be made by a one-time pro-rata transfer of securities and cash as practicable or a one-time transfer of USD $1 billion (greater, if agreeable) facilitated by the FRTIB from Contractor A to Contractor B. Such one-time transfer to Contractor B will occur only following Contractor A’s completion of the transition of the I Fund benchmark as described in section C.2.4 of the Statement of Work, but not later than 90 days following the completed transition of the benchmark. Subsequent to the transfer to Contractor B and as needed, Contractor B shall receive additional funding through cash flows resulting from positive net daily transactions (defined as participant and employer related transactions of all types and L Fund rebalancing transactions) until the target percentage is reached, estimated to be over a period of 6 months to not more than 12 months. Until the target percentage for Contractor B is reached for the I Fund, all negative net daily transactions shall be sourced from Contractor A. If deemed necessary, the FRTIB may further facilitate funding of Contractor B to target by scheduling redemptions from Contractor A and deposits to Contractor B. As above, deviations in the I Fund funding methodology may result if it is determined that an optimization, sampling, all cash or partial cash, schedule of cash transfers, or other approach may secure greater administrative ease and operational error avoidance for all parties while also protecting the interest of TSP participants (i.e. keeping costs low). Solutions related to local country restrictions will be considered as required.

Target percentages for the F, C, S, and I Funds will be considered reached when within 0.1%.

All decisions ultimately remain at the complete discretion of the FRTIB.

2. Deviation from target percentages: Once all target percentages are reached, the FRTIB will monitor the allocations to Contractor targets on at least a quarterly basis. Upon review and based on reaching a threshold of absolute 1% deviation from the target percentage allocation as determined by the FRTIB, the FRTIB will direct net daily transactions to bring Contractor allocations in line with target percentages by directing all positive net daily transactions to the Contractor requiring an increase in assets and sourcing all negative net daily transactions from the Contractor requiring a decrease in assets until target percentages are reached to within 0.1%. The FRTIB will provide notification of at least five business days prior to deviating from pro-rata allocation of net daily transactions in order to bring Contractor allocations in line with targets.

3. Allocation of daily net transactions: When Contractor allocations are deemed to be acceptably in line with targets, net daily transactions will be directed to the Contractors (or sourced from the Contractors as the case may be) on a pro-rata basis with their assigned target allocation percentages.

4. Periodic review: The FRTIB reviews the Contractors on a periodic basis for investment performance, securities lending performance, custody and administrative services, as well as other deliverables, but, not less than annually.

The FRTIB also periodically reviews statistical analysis of TSP net daily transactions, but, not less than every two years. As a result of either of the two reviews, the FRTIB may in its sole discretion, and without competitive re-bidding or consent from the Contractor, re-target percentages so that Contractor B will manage no more than 30% and no less than 10% of the assets of any one Fund.

Notwithstanding the foregoing, changes in target allocations are not expected during the Contract period. Adjustment to new targets will be made effective through the directing of net daily transactions, by directing all positive net daily transactions to the Contractor requiring an increase in assets and directing all negative net daily transactions from the Contractor requiring a decrease in assets. The FRTIB will provide notification of at least 30 calendar days prior to beginning re-targeting attributable to periodic performance and transactions reviews.

5. Termination of Contractor: The FRTIB may, for any reason with thirty days’ notice (earlier if deemed urgent), direct that the Contractor be terminated and that all TSP Funds under management with the Contractor be transferred to the discretion of the other Contractor. Transfer will occur as soon as practicable with the full assistance of the Contractor relinquishing discretion over assets, as outlined above in C.6. Phase-In/Phase-Out Requirements. Until the transition is completed or a successor Contractor found, the receiving Contractor shall be immediately responsible for all net daily transactions upon notice from the FRTIB.

If Contractor A is terminated, Contractor B shall assume management of 100% of each Fund’s assets without re-competition. Following Contractor B assuming management of 100% of each Fund’s assets, at the discretion of the FRTIB, a re-competition may be conducted to find a new Contractor to assume the majority or the minority position. Once established and funded, the two-Contractor structure will remain in place at the discretion of the FRTIB, but, no longer than the final date of the existing Contract with original Contractor B. If Contractor B is terminated, all assets will similarly transfer to Contractor A without re-competition. Following Contractor A assuming management of 100% of each Fund’s assets, at the discretion of the FRTIB, a re-competition may be conducted to find a new Contractor to assume the minority position. Once established and funded, the two-Contractor structure will remain in place at the discretion of the FRTIB, but, no longer than the final date of the Contract with original Contractor A.

6. Contractor suspension of operations: If for any reason either Contractor A or Contractor B experiences a suspension of operations such that it is unable to perform its duties under the contract, the other Contractor shall assume immediate full responsibility for all net daily transactions until the condition is resolved or it is determined that the Contractor experiencing the suspension should be terminated.

Section D: Packaging and Marking Not Applicable.

Section E: Inspection and Acceptance

The basis for acceptance shall be in compliance with the requirements set forth in the award of this contract. The Contracting Officer Representative (COR) will have the right to reject or require correction of any deficiencies found in deliverables. In the event of rejection of any deliverable, the Contractor will be notified in writing by the COR of the specific reasons the deliverable was rejected. If no comments from the COR are provided within ten (10) business days of receipt, the deliverable will be deemed to have been accepted by the Agency. Documents not approved by the FRTIB must be resubmitted with changes within 10 business days and the FRTIB will have another 10 business-day review period. If after the third submission the deliverable is unacceptable to FRTIB, the Program Manager, COR, and CO will meet to discuss corrective actions.

Section F: Performance/Deliverables

F.1. Period of Performance

The period of performance for this contract shall be a twenty-four-month Base Period from the effective award date with four (4) twenty-four-month Option Periods. This contract shall expire 120 months from award or at the end of the agreement period, whichever is earlier. Periods of performance are identified as follows:

• Base Period – Twenty-four (24) months from award

• Option Period 1 – Twenty-four (24) months from the end of Base Period

• Option Period 2 – Twenty-four (24) from the end of Option Period 1

• Option Period 3 – Twenty-four (24) from the end of Option Period 2

• Option Period 4 – Twenty-four (24) from the end of Option Period 3

F.2. Place of Performance

Work shall be performed at the Contractor’s facilities. The FRTIB may request that Contractor staff meet with FRTIB employees and board members. Access to the FRTIB Headquarters (77 K Street NE Washington, DC 20002) will be granted as needed based on mutually agreed upon times between the contractor and the FRTIB.

F.3. Deliverables The deliverable reports listed below shall be reviewed and updated every year to reflect changes in policies and procedures and any applicable regulatory guidance.

1. Daily Reports Daily Reports shall be submitted and include information as follows:

a. Provide, no later than 3:00 p.m. ET the next business day after each trade date, a statement of assets and transaction summary report. The asset statement shall be comprised of a summary of the cost and market value of the assets held in the separate account reported in terms of the number of units of the unitized separate account that are held, and their cost, current unit value and total market value. The transaction summary report detailing each trade shall include the number of units purchased or sold, unit value, and trading costs (including purchased/sold accrued interest where applicable) and trading cost per unit. The unit value shall reflect dividends and other income credited since the last trade.

b. Submit earnings for each separate account daily, electronically in a format provided by the FRTIB. Earnings are calculated as of each TSP business day. Total net earnings include capital gain or loss (net of trading costs), dividend income, securities lending income, any income from the cash account, or any other income. The daily earnings figures are to be transmitted as soon as available each business day, but no later than 6:00 p.m. ET. Procedures must be established for notifying the Agency and the TSP record keeper if the earnings figures are not transmitted by 6:00 p.m. ET.

c. Submit the market value of the assets as of the close of each TSP business day. The market value shall be reported in terms of the number of units held in the separate account and the current value of the units.

d. Provide the estimated income from securities lending activity each day by 6:00 a.m. ET the next morning.

e. Make available a daily report of securities lending collateral, identifying daily collateral required and pledged.

2. Monthly Reports Monthly Reports shall be submitted and include information as follows:

a. Provide investment activity reports that include, at a unitized level, all investment activity for the period: purchases and sales, with number of units, price, total cost/proceeds and realized gain or loss. This report must be available on a daily basis showing cumulative month to date activity.

b. Provide website access to detailed current and historical holdings and transactions on a security level basis on at least a monthly basis.

c. Provide investment performance tracking reports and attribution reports - Performance results shall be time-weighted rates of return for the separate account by month, calendar year to date, and for the last 12 months, presented with the corresponding benchmark returns and differences in period performance on the first business day after month end. The Contractor shall also provide 3, 5, and 10 year rates of return, if available.

The Contractor shall provide since inception and other period performance and attribution calculations as requested. Note that performance reporting shall be on a net of all fees, expenses, and trading costs basis. For clarity, this includes reporting performance after netting transaction costs resulting from L Fund rebalancing and participant and employer driven transactions communicated to the Contractor daily.

d. Provide a performance attribution report by month and year to date within 10 business days of each month end.

e. Provide the Agency with a report showing the characteristics of the portfolio at month end as compared to the benchmark.

f. Provide the Agency with a report of class action settlement activity, showing any class actions opened, any class actions settled and the settlement amounts.

g. Provide a monthly report that includes amount of assets on loan, utilization rate, revenue earned, total spread attributed to intrinsic or reinvestment spread, collateral levels, and borrower exposure.

h. Provide a monthly report on investment characteristics of securities lending collateral.

i. Provide a monthly report on securities lending activity and outstanding loans, including amounts by borrower.

j. Provide regular reporting demonstrating evidence that loans made to its affiliated entities were not economically disadvantageous to the TSP and that loans were made at rates comparable to the rates for loans of similar securities to non-affiliated entities and/or are in line with market rates for such loans.

k. Provide detailed bills covering all fees.

3. Quarterly Reports Quarterly Reports shall be submitted and include information as follows:

a. Provide a report prepared by an independent third party assessing the compliance of the Fund with the Contractor’s proxy voting policy/guidelines.

b. Provide a report of all derivatives exposures in the Fund.

c. If the firm is not publicly held, provide firm level quarterly financial statements that are audited and are prepared on an accrual basis of accounting by an independent certified public accountant licensed by the Contractor’s state of incorporation to perform such services.

d. Within 60 days of any quarter end, provide quarterly securities lending and investment Fund review, including performance relative to benchmark and attribution. Also include information related to a discussion of the firm, investment staff review, process review, and other information deemed pertinent, including special topics, if any. At the option of the FRTIB, the reviews may include a conference call to discuss the review, an in-person visit of the Contractor to the Agency premises, or a submission only of the review to the FRTIB via e-mail. An annual review made as part of an annual due diligence visit to the Contractor by FRTIB staff may, at the option of the

FRTIB, be combined with a…