U.S. Department of Labor, Procurement Services Center, 200 Constitution Ave, NW, Room N-5416, Washington, DC 20210

R -- ACTUARIAL SERVICES, TO INCLUDE "EX ANTE" FORCAST ANALYSIS SOL RFP L/A 97-38 POC Phyllis R. McMeekin, Contracting Officer, (202) 219-6445. The Department has a requirement supportive of the Office of Workers' Compensation Programs for actuarial studies to estimate the Panama Canal Commission's (PCC's) expected liability for workplace injuries under the Federal Employees Compensation Act (FECA) as of December 31, 1999. The Department of Labor has assumed responsibility for administration of the FECA for employees of the PCC, and a fund has been established to provide for meeting PCC's obligations to pay FECA entitlements to its employees. The PCC will make regular deposits into the fund to cover continuing FECA costs after the PCC is dissolved on December 31, 1999. Annual studies have been conducted by William M. Mercer, Inc., under contract with the PCC for the years 1993 through 1995, and under contract to the DOL for 1996. Legislation pending before the U.S. Congress is expected to allow for only one more actuarial study for PCC, to be completed by March 31, 1998. Also during the DOL analysis of the FY 1996 Mercer study, it was determined that an "ex ante" forecast analysis of total error by error component, and an analysis applying "Theil's U-inequality coefficient" providing a statistical decomposition of the total forecast error would be required to assess the accuracy of the estimated future workers' compensation. This analysis is especially critical as it is likely that this will be the last study to be done to establish the final funding level for the PCC Compensation Fund. This fund will have a benefit payment stream extending to the year 2065, and any shortfall will be borne by the American taxpayer; thus an accurate actuarial estimate is essential to reduce this risk. The estimated cost of the final study is $38,000, and an option year will be included in the event that the pending legislation does not succeed. Because the "ex ante" and "Theil's U-inequality coefficient" analysis can only be done by a company that has enough PCC data points (history acquired by model use over several years) in their actuarial model to allow for such analysis, a procurement directed back to William M. Mercer, Inc. is contemplated. No solicitation document is available. (0150)

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