Loren Data Corp.

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COMMERCE BUSINESS DAILY ISSUE OF DECEMBER 6,1999 PSA#2489

Social Security Administration, Deputy Commissioner for Finance, Assessment and Management, Office of Acquisition and Grants, 1710 Gwynn Oak Avenue, Baltimore, MD, 21207-5279

70 -- SOFTWARE TO BUILD STATISTICAL MODELS SOL Reference-Number-00-1201 POC Jerry Burton, Contract Specialist, Phone 4109659487, Fax 4109659560, Email jerry.burton@ssa.gov -- Jerry Burton, Contract Specialist, Phone 4109659487, Fax 4109659560, Email jerry.burton@ssa.gov WEB: Visit this URL for the latest information about this, http://www.eps.gov/cgi-bin/WebObjects/EPS?ACode=R&;ProjID=Reference-Num ber-00-1201&LocID=2422. E-MAIL: Jerry Burton, jerry.burton@ssa.gov. The Social Security Administration (SSA) intends to procure modifications of a statistical model software package that was acquired through license from the Employee Benefit Research Institute (EBRI). The license authorizes use of the EBRI/SSASIM2/Simulation Software (hereinafter referred to as the "software") to produce a macroeconomic policy simulation model of SSA's Old Age and Survivors Insurance (OASI) and Disability Insurance (DI) programs. Policy Simulation Group, Inc., Washington, DC, is the only known source with authority and expertise to modify the "software" as SSA requires. Any other vendor claiming to have requisite authority and expertise to modify the "software" must submit verifiable information that supports such assertion. Conversely, any other vendor that can provide comparable commercial off-the-shelf-(COTS) software must submit verifiable information (i.e., product literature, customer references, and product price) on the relevant capabilities and support for such COTS software. Any suggested COTS software package must be accessible to SSA for at least five (5) years, cost less than $90,000, and satisfy the following requirements: A. Simulate the impact of policy changes to SSA's Trust Funds, particularly projecting actuarial balances using a similar methodology to that used by the Office of the Chief Actuary. The model will be used to estimate the effects of policy changes on individuals and the economy and as a comparison for program cost projections made by the Office of the Chief Actuary. Below are listed the various elements we require. 1. Activity One: We need a model that can produce 75-year actuarial cost projections (from baseline data _such as age-gender earnings and gross domestic product -- - that is obtained for year 1998) under alternative calculations. First, the 75-year summarized cost and income rates of the OASI and DI trust funds should be able to be added in the model to produce 75-year OASDI actuarial balances. Second, an alternative calculation should be available that literally combines the two Trust Funds (OASI and DI) into a third, theoretical OASDI Trust Fund to produce 75-year actuarial balances. In addition, upon trust fund exhaustion, two alternative discount rate assumptions should be available: (1) rates based on the return that would be realized given the Trust Fund asset allocation policy for that year and (2) rates based on the assumption that an exhausted Trust Fund will simply borrow at the Treasury bond rate from the Treasury's general fund. 2. Activity Two: The recent conference held jointly by the Boston College Center for Retirement Research and the Michigan Retirement Research Center (both funded by the Social Security Administration) discussed the Modeling in the Near-Term (MINT) model_s stylized lifetime earnings profiles for nine men and nine women, which were developed by Barry Bosworth of the Brookings Institution. We are seeking a model that can be used to specify these eighteen individuals by birth cohort and to simulate a wide variety of OASI program experience statistics for each of them (including the effects of their being married under different policies). The COTS package must allow model to accept a weighting probability for each individual and combine the eighteen individual statistics into an overall (population-like) statistic. The COTS model must be able to run in a stochastic-assumption mode and/or an endogenous-growth mode. The macrosimulation model will also need an embedded cohort model, which uses standard dynamic microsimulation methods with a small, unrepresentative sample of individuals. The cohort model should be embedded inside the macroeconomic model in the sense that the macroeconomic model determines the macroeconomic and demographic environment within which individual lives are simulated. 3. Activity Three: The COTS macroeconomic model must produce estimates of program income and cost for both OASI and DI and must be able to simulate OASI and DI benefits for individuals and families. Responses to this announcement must be received within fifteen (15) days after this publication date and should refer to synopsis number Posted 12/02/99 (D-SN405088). (0336)

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