J.P. Morgan Investment Management Secures $5.56M Pension Fund Contract with PBGC
Contract Overview
Contract Amount: $5,562,058 ($5.6M)
Contractor: J. P. Morgan Investment Management Inc.
Awarding Agency: Pension Benefit Guaranty Corporation
Start Date: 2015-09-01
End Date: 2025-12-31
Contract Duration: 3,774 days
Daily Burn Rate: $1.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: IGF::CT::IGF
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10016
State: New York Government Spending
Plain-Language Summary
Pension Benefit Guaranty Corporation obligated $5.6 million to J. P. MORGAN INVESTMENT MANAGEMENT INC. for work described as: IGF::CT::IGF Key points: 1. Contract awarded to J.P. Morgan Investment Management Inc. for investment advice. 2. PBGC is the sole agency recipient, indicating a specific need. 3. The contract duration is over 9 years, suggesting a long-term requirement. 4. Fixed-price contract type aims to control costs. 5. No small business participation noted.
Value Assessment
Rating: fair
The contract value of $5.56M over nearly 10 years averages to approximately $556K annually. Without specific benchmarks for investment management services for pension funds of this size, it's difficult to definitively assess pricing. However, the fixed-price nature suggests an attempt to pre-determine costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. The fixed-price structure further supports cost control by shifting risk to the contractor.
Taxpayer Impact: The use of full and open competition and a fixed-price contract are positive indicators for taxpayer value, aiming to secure services at a reasonable cost.
Public Impact
Ensures continued management of PBGC's pension assets. Supports the financial stability of defined benefit pension plans. Potential impact on retirees if investment performance is suboptimal.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation.
- Long contract duration could lead to price drift if not managed.
Positive Signals
- Full and open competition.
- Fixed-price contract type.
- Long-term engagement ensures continuity of service.
Sector Analysis
This contract falls under financial services, specifically investment management for a government agency's pension fund. Benchmarks for such specialized services can vary widely based on fund size, complexity, and market conditions.
Small Business Impact
The data indicates no small business participation in this contract. This could be due to the specialized nature of investment management services or a lack of outreach to small businesses in this sector.
Oversight & Accountability
The Pension Benefit Guaranty Corporation (PBGC) is responsible for overseeing this contract. Standard government oversight procedures for contract performance and financial management would apply.
Related Government Programs
- Investment Advice
- Pension Benefit Guaranty Corporation Contracting
- Pension Benefit Guaranty Corporation Programs
Risk Flags
- Long contract duration.
- No small business participation.
- Potential for performance variability in investment returns.
- Reliance on a single large financial institution.
Tags
investment-advice, pension-benefit-guaranty-corporation, ny, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Pension Benefit Guaranty Corporation awarded $5.6 million to J. P. MORGAN INVESTMENT MANAGEMENT INC.. IGF::CT::IGF
Who is the contractor on this award?
The obligated recipient is J. P. MORGAN INVESTMENT MANAGEMENT INC..
Which agency awarded this contract?
Awarding agency: Pension Benefit Guaranty Corporation (Pension Benefit Guaranty Corporation).
What is the total obligated amount?
The obligated amount is $5.6 million.
What is the period of performance?
Start: 2015-09-01. End: 2025-12-31.
What is the benchmark cost for similar investment management services for pension funds of this size?
Determining a precise benchmark for investment management services is complex due to variations in fund size, asset allocation strategies, market volatility, and the specific expertise required. However, industry standards often involve a percentage of Assets Under Management (AUM) or a fixed fee structure. Without detailed information on PBGC's fund specifics, a direct comparison is challenging, but annual fees typically range from 0.1% to 1% of AUM for institutional investors.
What are the key performance indicators (KPIs) for this contract, and how is performance measured?
Key performance indicators for investment management contracts typically revolve around achieving specific investment return targets, managing risk within defined parameters (e.g., volatility, drawdown), and adhering to the investment strategy outlined in the contract. Performance is usually measured against relevant market benchmarks and the fund's actuarial assumptions. The contract likely includes clauses for regular reporting and performance reviews.
How does the fixed-price structure impact the contractor's incentive to optimize investment performance versus managing risk?
A firm fixed-price contract incentivizes the contractor to deliver the agreed-upon services within the set budget. For investment management, this means the contractor bears the risk of cost overruns. However, it can also create a tension between maximizing returns and minimizing risk to ensure profitability within the fixed price. The contract's specific terms and performance metrics are crucial in balancing these incentives.
Industry Classification
NAICS: Finance and Insurance › Other Financial Investment Activities › Investment Advice
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: PBGC01-RP-15-0015
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Jpmorgan Chase & CO.
Address: 270 PARK AVE FL 12, NEW YORK, NY, 10167
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $5,562,058
Exercised Options: $5,562,058
Current Obligation: $5,562,058
Actual Outlays: $782,500
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2015-09-01
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-12-17
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