Fixed Income Investment Services (Amendment 2)

Questions & Answers / Clarifications

This document contains responses from the PBGC to industry feedback and questions regarding the Fixed Income Investment Services solicitation (16PBGC25R0062).

• Response Due Date: All Phase 1 materials are due by Friday, December 19th, 2025, at 9 AM. The "Inactive Date" is for SAM archival purposes only.
• Minimum AUM Threshold: The same firm-level AUM qualification requirements apply to both incumbents and non-incumbents. There is no exemption from the total firm AUM requirement; firms must meet both firm and product requirements.
• Product Qualifications:
  • Blended benchmarks are acceptable if they meet PBGC's definition.
  • For Credit strategies, AUM against any stated benchmarks can be combined to meet the requirement in Part B of the Product Qualifications Form. However, firms must choose one product to propose.
  • PBGC has no preference for credit or corporate benchmarks for its credit search.
  • Systematic investment strategies are not being sought in this RFP.
  • For Core Plus portfolios, 'plus' sectors are allowed, with specific limits negotiated post-award.
  • The Bloomberg Credit Index refers to the US index.
  • All data submitted must be as of 06/30/2025.
• Data Submission:
  • Table 12 in Attachment 8 requires data as of June 30, 2025, representing year-to-date returns.
  • For Table 12, "High," "Low," and "Difference" require the highest, lowest return, and their difference for each time period.
  • Only Table 1 in Attachment 8 is required for Phase 1 submissions.
  • Credit ratings for individual securities should use the middle rating of the NRSROs, with specific rules for two or one rating agencies. Moody's nomenclature is required.
  • German Bunds should be included in the "Treasuries" column in Table 8.
  • Net performance data in Table 11 should follow GIPS performance representation methodology.
  • Returns in Column D of Table 1 should be presented as percentage points, rounded to two decimal points. Information Ratios (IR) in Column H should also be rounded to two decimal points.
• Proposal Submission:
  • One cover letter is required per volume; Offeror Qualifications is a single volume regardless of the number of products proposed.
  • The Mercer NDA applies to Phase 1 if proposal information is protected and marked as confidential or proprietary. PBGC is not a signatory to the NDA; offerors should use the provided template or negotiate with Mercer.
  • Offeror exceptions to solicitation terms will not cause rejection in Phase 1 but may impact Phase 2 ratings.
  • A link to the firm's Form ADV on the SEC website is acceptable if the ADV is too large to email.
  • Unaudited quarterly earnings reports are acceptable for Part C of the Offeror Qualifications Form if dated as of 6/30/2025.
• Incumbents: Current fixed income managers invited to rebid include Allspring Global Investments, PIMCO, PGIM, Wellington Management, Goldman Sachs Asset Management, and MFS Investment Management.

These responses clarify requirements and submission details, impacting how bidders should prepare and submit their proposals for Phase 1.

Form / Attachment / Pricing Sheet

This document, "Attachment 6: Solicitation Phase 1 Forms (Amendment 1)", provides the required forms that offerors must complete and submit as part of Volume 1 – Offeror Qualifications for the Pension Benefit Guaranty Corporation's Fixed Income Investment Services opportunity. Offerors must convert these completed forms to PDF and include them in a zipped folder titled "Volume 1 Supporting Materials".

Offerors must submit at least three forms: the Offeror Qualifications Form and at least two, but no more than one from each category, of the following Product Qualifications Forms:

• Core Fixed Income
• Credit Fixed Income
• Global Fixed Income
• Emerging Market Debt Fixed Income

Offeror Qualifications Form requires:

• Confirmation of SEC registration as an investment advisor for at least five years as of 6/30/2025 (or disclosure of exemption), with supporting Form ADV Parts I and II or proxy documentation.
• Agreement to act as an ERISA fiduciary.
• Confirmation of at least $500,000,000,000.00 in fiduciary Assets Under Management (AUM) as of 6/30/2025, with supporting Firm Annual Report or published documentation.
• Confirmation of a positive net worth, with supporting CPA letter or audited financial statements.

Product Qualifications Forms (for each selected category) require:

• Confirmation that the product is actively managed against specified benchmarks and available in a separate account format.
• Management of at least $1,000,000,000.00 USD in the proposed product as of 06/30/2025 (fully discretionary assets only), with supporting GIPS performance tables or equivalent.
• Confirmation of no sub-advisor utilization.
• At least 5 years of live performance history as of 06/30/2025, with supporting GIPS compliant Performance Presentation.
• Compliance with GIPS standards, including verification.
• Calculation of a rolling 60-month Information Ratio (IR) average exceeding specific thresholds (0.60 for Core, 0.70 for Credit, 0.40 for Global, 0.50 for Emerging Markets Debt), using a defined methodology and provided in Attachment 8 – Data Table Templates.

Completing these forms accurately and submitting them with required supporting documentation is mandatory for proposal acceptance in Phase 1. Failure to meet the specified criteria or adhere to the submission instructions will disqualify the offeror for further consideration.

Form / Attachment / Pricing Sheet

This document, "Attachment 7: Solicitation Phase 2 Forms," provides several forms that offerors must complete and submit as part of their Technical Proposal (Volume 2). It also specifies requirements for supporting materials.

• Offeror Capability Form: Requires detailed information about the firm's history, ownership, capitalization, revenues, profit/loss, investment professionals' stake, significant developments, lines of business, assets under management (AUM) breakdown (including fixed income sub-sectors), claims history, financial statements (10-K, 10-Q, or audited/unaudited financials), credit ratings, business emphasis, senior management organization, biographies of direct reports, additional investment management capabilities, and advisory services.
• Firm Support Infrastructure and Operations: Requires data on total employees by discipline, and office locations, functions, and staffing.
• Firm-wide Risk Management: Inquiries about risk oversight officers, organizational structure, policies, risk measurement (fixed income investment and operational), risk management rules, policy review frequency, risk tracking systems, and counterparty risk procedures.
• Firm-wide Compliance: Requests details on the compliance team structure, ethics policy, employee training, compliance monitoring systems, client limitations monitoring (derivatives, leverage), and escalation procedures for guideline violations.
• Firm-wide Continuity of Operations (COOP): Asks about alternative work site plans, disaster recovery/COOP plans, testing frequency, and recent testing results.
• Firm-wide Trading: Covers broker/dealer status, trading practices with affiliated entities, trading process, dedicated trading staff, fixed income and derivative trader details, policies for best execution, trade allocation, side-by-side management, transaction cost management, fixed income trading capabilities (derivatives), trading platform details, trade allocation procedures, external trading system usage, automation of trade flow, market liquidity management, internal monitoring for price determination and order management, FX trading practices, due diligence for FX providers, competitive rate validation, FX provider ranking, trading error resolution policies, trader evaluation and incentives, and third-party trading efficacy evaluations.
• Firm-wide Back Office: Requires description of back-office operations, organizational chart, outsourced provider details (if applicable), biographies of key back-office personnel, systems used (proprietary/off-the-shelf), interaction of IT systems, portfolio pricing methods and sources, and experience providing data to commercial risk systems.
• Firm-wide Client Service: Asks for client service organizational chart, biographies of assigned personnel, availability for client meetings, approach to client service, client reporting capabilities, and on-line information/reporting capabilities.
• Firm Regulatory Compliance and Corporate Governance Framework: Requires indication of fiduciary classification, details on independent evaluations (SSAE 18), policy on trading blackout periods, examination/investigation history with regulatory authorities, regulatory entities and filings (if not SEC regulated), impact of other regulatory entities, business litigation history, potential conflicts of interest, and adoption of CFA Institute Code of Ethics.
• Product Attributes and Past Performance Form: Requires bidders to select product types (Core Fixed Income, Credit Fixed Income, Global Fixed Income, Emerging Markets Debt) and provide detailed information on investment philosophy, strategy, value proposition, unique competencies, performance in different market environments, idea generation, decision-making processes, research analyst roles, committee oversight, liquidity risk evaluation, portfolio monitoring, use of derivatives, leverage, currency management, shorting strategies, risk management techniques, portfolio tracking error, and steps to avoid investments in companies with contingent liabilities to PBGC.
• Professional Staff and Resources: Requires organizational charts, biographies of key personnel, committee structures, personnel changes, key person risk mitigation, succession plans, compensation and incentive programs, development of capabilities (in-house vs. acquisition), research capabilities structure, evaluation of research efforts, research staff organization, major research/technology initiatives, and external research sources.
• Investment Results: Requires historical data on product introduction, portfolio characteristics, quarterly returns, country allocations, expected tracking error and excess return, GIPS compliant composite performance, annual returns of best/worst accounts, and key risk statistics.
• Portfolio Stability and Growth: Requires details on Assets Under Management, major client accounts, and information on managing tax-exempt accounts. It also asks about potential product closure criteria.

Offerors must complete these forms accurately and thoroughly. The information provided will be used to evaluate the firm's capabilities, financial stability, operational infrastructure, risk management, compliance, and investment performance. Products proposed must align with those proposed in Phase 1. Completed forms are to be converted to PDF and included in Volume 2 – Technical Proposal, with supporting materials in a zipped folder. Failure to provide complete and accurate information may impact the evaluation of the proposal.

Amendment / Modification

This document, "Attachment 5 - Contract Clauses and Solicitation Provisions (Amendment 1)", contains updated contract clauses and solicitation provisions. Key changes include:

• Federal Anti-Discrimination Laws: The contractor must comply with applicable Federal anti-discrimination laws and certifies that it does not operate programs promoting DEI that violate these laws.
• Executive Order 11246 (Revocation): In accordance with a Presidential Executive Order, contractors are no longer required to complete associated representations or comply with clauses implementing Executive Order 11246 (e.g., FAR 52.222-26, FAR 52.212-5). However, for 90 days from the order date, Federal Contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.
• Updated FAR Clauses: Several FAR clauses have been updated with new dates, including:
  • FAR 52.204-7 System for Award Management (NOV 2024)
  • FAR 52.212-4 Contract Terms and Conditions - Commercial Products and Commercial Services (NOV 2023)
  • FAR 52.222-56 Certification Regarding Trafficking in Persons Compliance Plan (OCT 2025)
  • FAR 52.204-24 Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment (NOV 2021)
• FAR 52.204-24: This provision includes detailed definitions and prohibitions related to covered telecommunications equipment and services, including requirements for offerors to represent their use or non-use of such equipment and services, and to provide disclosures if applicable.
• FAR 52.209-7: This provision addresses information regarding responsibility matters, including definitions of administrative proceedings and federal contracts/grants, and requires offerors to disclose information related to past proceedings.
• FAR 52.212-1: This provision outlines instructions for offerors, including NAICS codes, submission requirements, and terms for offer acceptance.
• FAR 52.212-3: This provision covers offeror representations and certifications, including those related to small business concerns, veteran-owned businesses, and other categories.
• Various Other FAR Clauses: The document lists numerous other FAR clauses that are incorporated by reference, covering a wide range of topics such as subcontracting, ethics, labor standards, and trade agreements.

This amendment modifies or adds to various sections of the original solicitation, particularly concerning contract clauses, representations, and certifications. Specific FAR clauses are updated or included.

Offerors must review these updated clauses and provisions carefully to ensure their proposals accurately reflect current requirements, especially regarding representations and certifications related to telecommunications equipment, responsibility matters, and various small business categories. The inclusion of updated FAR clauses may impact compliance requirements for proposals.

Form / Attachment / Pricing Sheet

This document, "Attachment 4 - Fixed Income Pricing Template (Final).xlsx", is a pricing template provided to assist offerors in submitting their proposed rates and asset amounts for the opportunity. It is intended to standardize pricing submissions across all bidders.

• The template is structured by contract year (Base Year through Option Year 9).
• It includes sections for different product types: Core Product, Credit Product, Global Product, and Emerging Markets Debt Product.
• For each product type and contract year, offerors must fill in undiscounted rates (in basis points) and asset amounts (in dollars) for various tiers (e.g., 'on first...', 'on next...', 'on balance.').
• Offerors are encouraged to propose discounted rates in addition to standard rates.
• Space is provided for explanations of any proposed discounts. Offerors may add additional Excel tabs if the explanation alone is insufficient.

Bidders must use this template to detail their pricing structure. It requires careful completion of rates and asset amounts across different product categories and contract years. The template also provides an opportunity to offer discounts, which should be clearly explained. Accurate and complete submission using this template is crucial for proposal evaluation.

Solicitation / RFP / RFQ

This document provides instructions to offerors for the Pension Benefit Guaranty Corporation (PBGC) Fixed Income Investment Services solicitation. It supplements FAR 52.212-1 and outlines requirements for proposal submission and evaluation.

• Offerors must comply with FAR 52.212-1 and this addendum.

• Proposals must be clear, coherent, and address all aspects described.

• Offerors must propose a minimum of two and a maximum of four financial products from Core, Credit, Global, and/or Emerging Markets Debt categories.

• Specific forms must be completed for each proposed product based on the solicitation phase.

• Offerors must submit a cover letter with each proposal volume, including specific attestations and information.

• Representations and Certifications must be submitted via www.sam.gov, and potentially FAR 52.212-3.

• An OCI Risk Mitigation Plan is required only if offerors cannot certify the absence of actual or potential OCI risks.

• PBGC anticipates making up to seven (7) contract awards.

• Offerors must agree to hold prices firm for 270 days from the proposal receipt date for Volume 3 (Price Proposal).

• Proposals are due in three volumes:

  • Volume 1 – Offeror Qualifications: Due by the solicitation closing date.
  • Volume 2 – Technical Proposal: Approximately three weeks after Phase 1 notification.
  • Volume 3 – Price Proposal: Approximately 60 days after Volume 2 due date.

• Proposals should be submitted via PBGC Secure File Exchange or email.

• Offerors must be fully registered in SAM.gov by the Volume 3 submission deadline.

• PBGC may hold discussions (negotiations) with best-qualified offerors after Phase 2.

• A facility tour may be required following in-person discussions.

• Post-selection negotiations will occur for awardees.

• No specific set-aside information is provided in this document.

• Attachment 10 (PBGC Responses to Industry Feedback) and Attachment 11 (Industry Feedback) are referenced for industry questions.

• Attachment 9 (Mercer NDA Form) is required for offerors wishing to protect proposal data.

• Offerors must use specific formatting and labeling conventions for submitted documents and supporting materials.

Form / Attachment / Pricing Sheet

This document outlines the evaluation criteria and methodology that the Pension Benefit Guaranty Corporation (PBGC) will use to evaluate proposals for Fixed Income Investment Services. It details the basis for award, the factors considered, and the two-phase evaluation process.

• Basis for Award: Contracts will be awarded to responsible offerors whose proposals are most advantageous to the Government, considering price and other factors. PBGC may award more or fewer than the anticipated seven contracts.
• Evaluation Factors & Rating Methods:
  • Factor 1: Proposal Compliance (Pass/Fail)
  • Factor 2: Offeror Qualifications (Pass/Fail)
  • Factor 3: Offeror Capability (Confidence Rating)
  • Factor 4: Strength of Product Offering (Confidence Rating)
  • Factor 5: Price (Price Analysis)
• Importance of Factors: Factor 4 (Strength of Product Offering) is the most important. Non-price factors combined are significantly more important than price. Price becomes more important as proposals become technically comparable.
• Evaluation Phases:
  • Phase I (Pass/Fail): Assesses Proposal Compliance (Factor 1) and Offeror Qualifications (Factor 2). Offerors must meet minimum criteria to proceed.
  • Phase II (Technical & Price): Assesses Offeror Capability (Factor 3), Strength of Product Offering (Factor 4), and Price (Factor 5) for offerors who passed Phase I. A competitive range will be created.
• Negotiations: PBGC may invite offerors within the competitive range to participate in discussions.
• Incorporation of Proposals: PBGC reserves the right to incorporate portions of proposals into the final contract.
• Evaluation Support: A contractor (Mercer, Inc.) will assist with proposal analysis, with provisions for non-disclosure agreements (NDAs) for proprietary information.

This document is critical for bidders as it defines how their proposals will be evaluated. Understanding these criteria will help bidders tailor their proposals to meet PBGC's requirements, focusing on technical superiority, product strength, and competitive pricing. It also clarifies the multi-phase evaluation process and the potential for negotiations.

Statement of Work (SOW) / Performance Work Statement (PWS)

To seek fixed income investments that provide a total rate of return exceeding their respective benchmarks over a full market cycle, consistent with appropriate risk levels.

• Manage fixed income assets across multiple strategies within the Trust Fund.

• Provide active investment management and related services for fixed income portfolios.

• Strategies include: Core Fixed Income, Credit Fixed Income, Global Fixed Income, and Emerging Markets Debt.

• Award allocations are expected to range from $250 million to $3.0 billion per strategy.

• Contractors must select suitable securities, comply with PBGC's Investment Policy Statement (IPS), and avoid companies with underfunded pension plans likely to be terminated by PBGC.

• Estimated award in early calendar year 2027.

• Total potential contract length, including options, is 10 years.

• Work performed off-site at contractor's offices.

• Semi-annual virtual meetings and annual in-person due diligence meetings required.

• Contract Type: Fixed-rate, variable-quantity.

• Transition-In Period: Approximately three months post-award for guideline finalization and mandate funding.

• Transition-Out Period: Coordination for liquidation of investment mandate.

• Post-Award Conference and Periodic Progress Meetings required.

• Deliverables include monthly, quarterly, and annual reports on portfolio performance, holdings, market commentary, and compliance.

• Specific insurance requirements: Fidelity bond ($10M min), Errors & Omissions ($10M min), Cyber/Technology Liability ($5M min).

• Disaster Recovery Plan required, including testing and updates.

Form / Attachment / Pricing Sheet

This document is a Non-Disclosure Agreement (NDA) required for offerors to sign as part of solicitation #16PBGCXXXXXX. It establishes terms under which Mercer, Inc., assisting the Pension Benefit Guaranty Corporation (PBGC) with proposal analysis, will handle proprietary or confidential information submitted by offerors.

• Parties: Mercer, Inc. and the Offeror.
• Purpose: To protect offeror information from unauthorized use or disclosure by Mercer employees.
• Scope: Mercer will review and analyze proposal information and data, including proprietary or confidential markings.
• Offeror Consent: By signing, the offeror consents to Mercer's review and analysis of their proposal data.
• Execution: Mercer will countersign upon receipt and provide copies. The Contracting Officer will authorize proposal release to Mercer after confirmation of proper execution.
• Submission Contact: Neeraj Baxi, CFA, Partner at Mercer.

Bidders must execute this NDA and submit it to Mercer. Failure to do so will prevent Mercer from reviewing and analyzing their proposal, which may impact the evaluation process. This agreement ensures that sensitive proposal content shared with Mercer will be safeguarded according to specific terms.

Questions & Answers / Clarifications

This document contains responses from the PBGC to industry feedback and questions regarding a draft solicitation for Fixed Income Investment Services. It clarifies requirements, benchmarks, qualifications, and submission details.

• Offeror Qualifications: A minimum of $500 billion in Assets Under Management (AUM) is strictly required; no "Specialist" classification with lower AUM will be offered. International investment management experience is acceptable.
• Product Benchmarks: While some flexibility exists for Global Fixed Income (e.g., accepting unhedged versions of the Bloomberg Global Aggregate Index with a commitment to hedge if awarded), specific benchmarks are required for other products (e.g., Credit Fixed Income must use specified Bloomberg credit indices).
• AUM Requirements: The $1 billion threshold for GIPS composites can be met by combining AUM for composites benchmarked against the same index. The requirement for tax-exempt institutional accounts over $100 million has been removed.
• Proposal Submission: Offerors must submit at least two qualifying products. Each proposal may contain only one product per type, and only a single proposal is allowed per offeror. Evaluation places more weight on non-price factors.
• Data & Reporting: Performance data is typically evaluated on a gross-of-fee basis, though net-of-fee data can be submitted for compliance. Reporting does not require specific software, but adequate resources are expected.

Several clarifications and amendments to the solicitation language are noted, particularly regarding product qualifications, benchmark acceptance, and the removal of the tax-exempt client requirement. The evaluation criteria for the "Strength of Product Offering" have been clarified as the most important factor.