Java applications are usually called by a startup script with a command like java $JAVA_ARGS $JAVA_OPTS -jar application.jar
Both variables are JVM options and they're both given to the application.
It is (unfortunately) not uncommon to have a list of 10 general options + 10 optimizations options so they're split across 2 variables for readability.
PermGen settings are considered garbage collector optimizations. They go in JAVA_OPTS. You should check that the jenkins script is using both variables as expected.