PBGC Urged to Strengthen Acquisition Planning for Actuarial Services

The Pension Benefit Guaranty Corporation (PBGC) should strengthen its acquisition planning in order to better support its actuarial support services, says the Office of the Inspector General (OIG) in a recent report. The PBGC’s Actuarial Services and Technology Department (ASTD) relies on actuarial contractors to help pay accurate benefits to participants in single-employer pension plans trusteed by the PBGC on time. 

Why This Matters

The OIG notes that the PBGC relies heavily on contractors and spends a large part of its budget on contracts that help enable it to fulfill its purpose—protecting the retirement income of millions of American workers. For instance, it says, in Fiscal Year (FY) 2020, the price tag was approximately $359 million. 

The ASTD relies on actuarial contractors to help pay and accurate benefits to participants in single-employer pension plans trusteed by PBGC on time. For current actuarial support services contracts, the OIG says, the PBGC awarded a multiple award Indefinite Delivery, Indefinite Quantity (IDIQ) contract to five contractors; it spent $81.9 million on the IDIQ.

The Findings 

The OIG conducted an evaluation of the PBGC’s compliance with applicable FAR and PBGC policies regarding acquisition planning, how it awarded contracts, and oversight of the actuarial support services, the IDIQ contract vehicle and selected task orders. The OIG focused on acquisition planning.

The OIG found that:

• The PBGC’s acquisition planning for actuarial support services did not meet its needs effectively, nor in a timely manner. 
• Delays in acquisition planning led the PBGC to extend previous contracts and award follow-on contracts on a sole-source basis. 
• Funds of $447,780 could have been spent in a better way than on a duplicative procurement support contract. 
• The initial FFP IDIQ task orders had poorly defined requirements and different amounts of work for the same price. 
• The new actuarial support services multiple award IDIQ contracts each contained different timeliness measures and did not have performance measures for the accuracy of contractors’ calculations of benefits and related liabilities.

Recommendations

The OIG made five recommendations. It suggests developing and implementing:

1. A tracking process for existing contracts to determine when to start acquisition planning, based on factors such as complexity, major changes to existing contracts, new requirements, RFIs and new contracts for acquisition planning support.

2. A mediation or escalation process to resolve disagreements during acquisition planning.

3. A process for proposed procurement support contracts to assess whether the proposed contract duplicates either existing procurement support contracts or the PBGC Procurement Department’s capacity and expertise.

4. A process during acquisition planning to identify performance areas that require measurable performance standards for contractors and any existing processes that could be incorporated into the contracts to measure performance.

5. Guidance for reviewing and revising QASPs proposed by offerors.

Results 

The OIG reports that PBGC management agreed with the recommendations in the report and agreed to take related corrective actions.