On October 6, 2008, the Department of the Treasury announced that it would seek the assistance of private entities to provide certain services required to implement the Troubled Asset Relief Program (“TARP”) created by the Emergency Economic Stabilization Act of 2008 (“Act”). See Emergency Economic Stabilization Act Offers Opportunities for Sellers, Contractors, and Purchasers (Oct. 6, 2008). Treasury’s announcement indicated it would use two mechanisms— procurement contracts and financial agent agreements (“FAAs”)—to acquire such services, and Treasury has quickly utilized both procedures.
On October 11, 2008, Treasury hired Ennis Knupp & Associates as an investment advisor to assist in evaluating potential asset managers and other vendors. Ennis Knupp will also help develop and maintain investment policies and guidelines and assist with the oversight of Treasury’s multiple asset managers. Treasury stated that it hired Ennis Knupp using a procurement contract under the Federal Acquisition Regulation (“FAR”) and that it solicited offers from only six firms given “compelling urgency to quickly establish the TARP.” The compelling urgency justification that Treasury employed was not the “urgent and compelling circumstances” provision in Section 107 of the Act that authorizes the Secretary of the Treasury to waive certain provisions of the FAR. Rather, Treasury used limited procurement procedures under the FAR’s long established “unusual and compelling urgency” exception to the Competition in Contracting Act requirements for full and open competition. Ennis Knupp’s contract has a performance period of one year.
In addition, Treasury has issued notices for the selection of financial agents for three types of services: whole loan asset management, securities management, and custodial services. See Treasury Initiates Selection of Financial Agents for Troubled Assets Relief Plan (Oct. 7, 2008). In its notices for these services, Treasury announced that any entity “designated to provide services pursuant to this notice, shall be a financial agent of the United States, and not a contractor. Neither this notice, nor the services sought by the Treasury, is a procurement subject to the Federal Acquisition Regulation.” On October 14, 2008, Treasury announced the selection of its first financial agent under the TARP, Bank of New York Mellon, to provide custodial and other infrastructure services. Treasury entered into a FAA with Bank of New York Mellon for an initial performance period of three years.