Aviation Security
Preliminary Observations on TSA's Progress to Allow Airports to Use Private Passenger and Baggage Screening Services Gao ID: GAO-05-126 November 19, 2004Beginning on November 19, 2004, the Transportation Security Administration (TSA) is required by law to begin allowing commercial airports to apply to use private contractors to screen passengers and checked baggage. A federal workforce has performed this work since November 2002, in response to a congressional mandate that the federal government take over screening services after the terrorist attacks of September 11, 2001. A 2-year pilot program at five airports testing the effectiveness of private sector screening in a post-September 11 environment concluded on November 18, 2004. This report contains GAO's preliminary observations related to TSA's progress in developing a private-sector screening program that allows airports to apply to opt out of using federal screeners. GAO assessed: (1) the status of TSA's efforts to develop policies and procedures for the opt-out program, including operational plans and guidelines for selecting airports and contractors that may participate; (2) guidance about the opt-out program that TSA has provided to airport operators and other stakeholders, or plans to develop, and how the information is communicated; and (3) TSA's efforts to develop performance measures for evaluating the opt-out program and contractor performance.
As of November 2004, TSA has completed or is developing key policies and procedures for the opt-out program. Specifically, TSA has completed and released guidelines for determining how and when private screening contractors will be evaluated and selected to participate in the opt-out program. TSA also has released supplemental information for evaluating potential contractors, such as their financial capabilities. TSA also has prepared a draft technical statement of work for the private screening contractors operating at five pilot program airports, which is to serve as a basis for contractors seeking to serve other airports. In addition, TSA has developed, or is currently developing, internal guidance for managing the opt-out program, such as a transition plan for helping airports to move from federal to private screeners. TSA expects to complete the remaining policies and procedures by mid-2005. TSA is taking steps to communicate with stakeholders about the opt-out program by developing informational guidance and soliciting information and suggestions from them. For instance, since releasing initial summary guidance about the program in June 2004, TSA has posted an opt-out program application for airport operators that asks, among other things, the primary reason for wanting to participate in the opt-out program and the preferred timeline for transitioning to private screening operations. TSA also has posted lists of frequently asked questions and answers on its Web site, in response to questions from stakeholders about the airport application and contracting process. However, some airport operators, private screening contractors, and aviation industry representatives told GAO that they need additional information about how much leeway airports and contractors would have to manage the program, liability protection, and costs related to participating in the opt-out program. TSA is developing performance measures both to assess the screening performance of airports that will participate in the opt-out program and individual contractors performing the screening services, but specific performance measures have not been finalized. TSA said measures for the opt-out program will be based on measures already developed by an independent consulting firm for the five airports participating in the opt-out pilot program. These measures include how well screeners detect test threat objects, such as guns and knives, during screening operations. TSA is also developing performance measures to evaluate how well private screening contractors comply with the terms of their contracts, which will become part of a quality assurance plan. TSA expects to implement contractor-related performance measures in mid-2005, as contracts are being awarded. A draft of this report was provided to TSA. TSA officials generally agreed with our findings and provided technical comments that have been incorporated as appropriate.
GAO-05-126, Aviation Security: Preliminary Observations on TSA's Progress to Allow Airports to Use Private Passenger and Baggage Screening Services
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Report to the Chairman, Subcommittee on Aviation, Committee on
Transportation and Infrastructure, House of Representatives:
United States Government Accountability Office:
GAO:
November 2004:
Aviation Security:
Preliminary Observations on TSA's Progress to Allow Airports to Use
Private Passenger and Baggage Screening Services:
GAO-05-126:
GAO Highlights:
Highlights of GAO-05-126, a report to the Chairman, Subcommittee on
Aviation, Committee on Transportation and Infrastructure, House of
Representatives:
Why GAO Did This Study:
Beginning on November 19, 2004, the Transportation Security
Administration (TSA) is required by law to begin allowing commercial
airports to apply to use private contractors to screen passengers and
checked baggage. A federal workforce has performed this work since
November 2002, in response to a congressional mandate that the federal
government take over screening services after the terrorist attacks of
September 11, 2001. A 2-year pilot program at five airports testing the
effectiveness of private sector screening in a post-September 11
environment concluded on November 18, 2004.
This report contains GAO‘s preliminary observations related to TSA‘s
progress in developing a private screening program that allows airports
to apply to opt out of using federal screeners. GAO assessed: (1) the
status of TSA‘s efforts to develop policies and procedures for the opt-
out program, including operational plans and guidelines for selecting
airports and contractors that may participate; (2) guidance about the
opt-out program that TSA has provided to airport operators and private
contractors, or plans to develop, and how the information is
communicated; and (3) TSA‘s efforts to develop performance measures for
evaluating the opt-out program and contractor performance.
What GAO Found:
As of November 2004, TSA has completed or is developing key policies
and procedures for the opt-out program. Specifically, TSA has completed
and released guidelines for determining how and when private screening
contractors will be evaluated and selected to participate in the opt-
out program. TSA also has released supplemental information for
evaluating potential contractors, such as their financial capabilities.
TSA also has prepared a draft technical statement of work for the
private screening contractors operating at the five airports that
participated in the pilot program, which is to serve as a basis for
contractors seeking to serve other airports. In addition, TSA has
developed, or is currently developing, internal guidance for managing
the opt-out program, such as a transition plan for helping airports to
move from federal to private screeners. TSA expects to complete the
remaining policies and procedures by mid-2005.
TSA is taking steps to communicate with stakeholders about the opt-out
program by developing informational guidance and soliciting information
and suggestions from them. For instance, since releasing initial
summary guidance about the program in June 2004, TSA has posted an opt-
out program application for airport operators that asks, among other
things, the primary reason for wanting to participate in the opt-out
program and the preferred timeline for transitioning to private
screening operations. TSA also has posted lists of frequently asked
questions and answers on its Web site, in response to questions from
stakeholders about the airport application and contracting process.
However, some airport operators, private screening contractors, and
aviation industry representatives told GAO that they need additional
information about how much leeway airports and contractors would have
to manage the program, liability protection, and costs related to
participating in the opt-out program.
TSA is developing performance measures both to assess the screening
performance of airports that will participate in the opt-out program
and individual contractors performing the screening services, but
specific performance measures have not been finalized. TSA said
measures for the opt-out program will be based on measures already
developed by an independent consulting firm for the five airports that
participated in the opt-out pilot program. These measures include how
well screeners detect test threat objects, such as guns and knives,
during screening operations. TSA is also developing performance
measures to evaluate how well private screening contractors comply with
the terms of their contracts, which will become part of a quality
assurance plan. TSA expects to implement contractor-related performance
measures in mid-2005, as contracts are being awarded.
A draft of this report was provided to TSA. TSA officials generally
agreed with our findings and provided technical comments that have been
incorporated as appropriate.
www.gao.gov/cgi-bin/getrpt?GAO-05-126.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Cathleen A. Berrick at
(202) 512-8777 or berrickc@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
TSA Is Finalizing Policies and Procedures Governing the Opt-Out
Program:
TSA Is Taking Steps to Communicate with Stakeholders about the Opt-Out
Program, but Some Say Additional Information Is Needed:
TSA Is Developing Performance Measures for the Opt-Out Program, but
More Work Remains To Be Done:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Figure:
Figure 1: Timeline for Implementation of Selected Steps in the Opt-Out
Program:
Abbreviations:
ATSA: Aviation and Transportation Security Act:
DHS: Department of Homeland Security:
FAQ: frequently asked questions:
FSD: federal security director:
TIP: threat image projection:
TSA: Transportation Security Administration:
United States Government Accountability Office:
Washington, DC 20548:
November 19, 2004:
The Honorable John L. Mica:
Chairman:
Subcommittee on Aviation:
Committee on Transportation and Infrastructure:
House of Representatives:
Dear Mr. Chairman:
In an effort to improve aviation security after the terrorist attacks
of September 11, 2001, the newly created Transportation Security
Administration (TSA) was charged by Congress with, among other things,
creating a federal workforce to assume the job of conducting passenger
and checked baggage screening at commercial airports--work that had
been performed by the private sector. The federalized workforce was to
be in place by November 2002. At the same time, TSA was required by
Section 108 of the Aviation and Transportation Security Act (ATSA) to
conduct a 2-year Private Screening Pilot program. The mission of the
pilot, as defined by TSA, was to test the effectiveness of using
private screening contractors in a post-September 11
environment.[Footnote 1] The pilot concluded on November 18, 2004.
Using the pilot program as a starting point, ATSA requires TSA to begin
allowing airports to apply to opt out of using federal screeners in
favor of private contractors beginning on November 19, 2004. Consistent
with ATSA, TSA plans to begin receiving applications for this Screening
Partnership Program (known as the opt-out program) on that date. TSA
plans to begin selecting in early 2005 airports that can opt out, as
well as selecting contractors that will conduct private passenger and
checked baggage screening. TSA plans to begin transitioning selected
airports to private screening operations later in 2005.
This report contains our preliminary observations related to TSA's
progress in developing the opt-out program. Specifically, we assessed
(1) the status of TSA's efforts to develop policies and procedures for
the opt-out program, including operational plans and guidelines for
selecting airports and contractors that may participate; (2) guidance
about the opt-out program that TSA has provided to
stakeholders,[Footnote 2] or plans to develop, and how the information
is communicated; and (3) TSA's efforts to develop performance measures
for evaluating the opt-out program and contractor performance.
We plan to continue our evaluation of the opt-out program as TSA
further develops and implements the program.
To address our objectives, we reviewed documentation related to TSA's
opt-out program and pilot program and interviewed various officials. We
analyzed TSA documents related to the opt-out program, including
program guidance developed for airports. We reviewed an independent
consulting study prepared for TSA that evaluated the pilot program. We
interviewed officials from two aviation associations--the American
Association of Airport Executives and the Airports Council
International. We attended an aviation security conference in September
2004, where TSA officials and some airport operators discussed planning
for the opt-out program, and we reviewed staff notes from two
congressional subcommittee-sponsored roundtables on the program. We
also reviewed ATSA provisions related to the opt-out program and
related GAO reports. In addition, we conducted telephone interviews
with the operators of randomly selected commercial airports from each
of the five security risk categories--X, I, II, III, and IV.[Footnote
3] We interviewed the airport operators of 4 to 6 airports in each
category, for a total of 26 interviews (one official per airport). We
also conducted telephone interviews with officials from 6 private
security contractors that we were able to contact from a listing of 10
contractors. The listing included private security contractors that
expressed an interest in providing passenger and checked baggage
screening services. Because of the small sample size, the results of
our interviews with airport operators and contractors cannot be
generalized. TSA released significant details on its opt-out program
guidance after our interviews; therefore, the interviewees' responses
were based only on the information TSA had released at that point.
Additional information on our scope and methodology is contained in
appendix I. We conducted our work between September and November 2004
in accordance with generally accepted government auditing standards.
Results in Brief:
As of November 2004, TSA has completed or is developing key policies
and procedures for the opt-out program. TSA has completed and released
guidelines for determining how and when private screening contractors
will be evaluated and selected to participate in the opt-out program.
The contractor selection process is to take place in three phases
between November 2004 and May 2005, which is when TSA expects to award
contracts. As part of Phase I, TSA has released a presolicitation
notice in accordance with standard government contracting practices, as
well as supplemental information on what is expected of potential
contractors with respect to financial capabilities and other areas. TSA
also has prepared a draft technical statement of work for the private
screening contractors that participated in the opt-out pilot program,
which is to serve as a basis for contractors seeking to serve other
airports. In addition, TSA has developed, or is currently developing,
internal guidance for managing the opt-out program, including an
activity-based cost study that reviews screening costs at privately and
federally screened airports; a transition plan; and a draft
communications plan defining roles and responsibilities of key
stakeholders.
TSA is taking steps to communicate with stakeholders about the opt-out
program by developing informational guidance and soliciting information
and suggestions from them. For instance, since releasing initial
summary guidance about the program in June 2004, TSA posted an opt-out
program application for airport operators that asks, among other
things, the primary reason for wanting to participate in the opt-out
program and the preferred timeline for transitioning to private
screening operations. TSA also has posted lists of frequently asked
questions and answers on its Web site, in response to questions from
stakeholders about the airport application and contracting process.
However, some airport operators, private screening contractors, and
aviation industry representatives told us they still need additional
information from TSA about operational flexibilities (how much leeway
airports and contractors would have to manage the program), liability
protection, and costs related to participating in the opt-out program.
For example, both airport operators and private screening contractors
cited the need for additional information on whether and to what extent
they would be liable in the event that a privately contracted screener
should fail to detect a threat object that leads to a terrorist
incident.
TSA is developing performance measures to both assess the screening
performance of airports that will participate in the opt-out program
and individual contractors performing the screening services, but
specific performance measures have not been finalized. TSA said
measures for the opt-out program will be based on measures already
developed by an independent consulting firm for the five airports that
participated in the opt-out pilot program. These measures include how
well screeners detect test threat objects, such as guns and knives,
during screening operations. TSA is also developing performance
measures to evaluate how well private screening contractors comply with
the terms of their contracts, which will become part of a quality
assurance plan. TSA expects to implement the contractor-related
performance measures in mid-2005, as contracts are being awarded.
Figure 1 presents a timeline of TSA's key milestone for implementing
the opt-out program and awarding contracts to private screening
contractors.
Figure 1: Timeline for Implementation of Selected Steps in the Opt-Out
Program:
[See PDF for image]
[End of figure]
TSA received a draft of this report and generally agreed with our
findings. We incorporated TSA's technical comments where appropriate.
Background:
Opt-Out Provision of ATSA:
Section 108 of ATSA (Pub. L. No. 107-71) required TSA to establish a
program permitting the more than 400 commercial airports using federal
passenger and checked baggage screeners to apply to use private, rather
than federal screeners. Beginning on November 19, 2004, all commercial
airports with federal security screening will be eligible to apply to
opt-out of using federal screeners. In addition to assessing airport
applications for using private screeners, TSA will select qualified
private screening contractors to conduct screening (including airports
that seek to apply to be private contractor screening companies), which
meets ATSA's and TSA's requirements. Nongovernmental employees, such as
airport directors or their representatives, would be able to
participate as advisors in the selection process, as long as the
airport is not participating as a qualified screening company. ATSA
requires private screeners selected to handle screening to meet the
same hiring and training qualifications as federal screeners. ATSA also
mandated that the private screeners' pay and benefit levels should be
not less than their federal counterparts. Furthermore, ATSA required
that the contractor companies be owned and controlled by U.S. citizens.
ATSA also required TSA to establish a 2-year pilot program using
qualified private contractors to screen passengers and checked baggage
at not more than one airport from each security category. TSA selected
five airports to participate in the pilot program. The private
passenger and checked baggage screening contractors selected for the
pilot program had to comply with federal passenger and checked baggage
screening standard operating procedures.
In order to obtain an objective evaluation of the pilot program, TSA
retained the services of an independent consulting firm. The
consultants were charged with developing an evaluation methodology;
conducting performance evaluations and comparisons between the five
participating pilot program airports and federally screened airports;
and developing a process to help TSA determine if a private screening
company can meet ATSA's performance standard for the opt-out program,
which is to provide a level of screening services and protection equal
to or better than that provided by federal screeners. The consultants
found that, in general, the private screening contractors met ATSA's
performance standard. However, the consultants cautioned that the
findings must be viewed in light of several key factors. For example,
the consultants reported that the small number of pilot airports
seriously limited the program's usefulness as a true scientific pilot
and the ability of the findings to be generalizable to apply to future
privately screened airports. Additionally, the performance data
available for review and analysis were limited, according to the
consultants.
Outside of the pilot program, any commercial airport may apply to opt
out beginning on November 19, 2004. In accordance with ATSA, an airport
operator may submit to TSA an application to have the screening of
passengers and checked baggage at an airport be carried out by the
screening personnel of a qualified private screening company, under a
contract entered into with TSA. TSA will make the final approval of any
application submitted and reserves the right to consider airport-
specific threat intelligence and an airport's record of compliance with
security regulations and security requirements to determine the timing
of the transition to private screening. TSA may also impose a delay on
when an airport can transition to private screening based on such
factors as peak travel season and the total cost of providing screening
services at an airport. The five airports selected to participate in
the pilot program have decided to continue using private screeners and
will not have to apply for the opt-out program beginning in November
2004.
Opt-Out Program Staffing and Budgeting:
TSA created a program office in October 2004 to provide financial
oversight, ongoing operational support, communications, and transition
planning for airports that apply to opt out of using federal screeners.
This office was allocated 12 full-time-equivalent staff and, as of
November 4, 2004, had 10 full-time staff on board. TSA plans to fund
the opt-out program from the same budget line items as federal
screening operations in order to provide flexibility on the number of
airports that can participate in the program. The costs for contracts
with private screening companies are to be funded by the cost of the
federal operations that are being displaced. The conference report
accompanying the fiscal year 2005 Department of Homeland Security
Appropriations Act (H.R. Conf. Rep. No. 108-774) allocated
appropriations of $2.424 billion to cover personnel, compensation, and
benefits for passenger and checked baggage screeners and to cover
screeners at the five pilot airports. This allocation represents an
increase of more than $200 million over the fiscal year 2004 enacted
level of $2.2 billion. According to TSA, this increase is necessary to
fully fund compensation and benefits at the identified staffing levels.
The requested level of funding will support screener salaries and
management at all commercial airports, whether federalized or
privatized. Also, the conference report allocated just under $130
million for the five pilot airports, an increase from $119 million in
fiscal year 2004. This funding is based on an estimate of resources
necessary to maintain screening at the current five pilot airports.
TSA's June 2004 Guidance Describes Program Requirements:
TSA issued its first written guidance for the opt-out program in June
2004, in an effort to provide airport operators and the aviation
community with information to gauge their level of interest in applying
to participate in the program. The guidance, posted on TSA's Web site
and distributed to airport associations, provides information in three
broad areas: legislative requirements, program planning approach, and
guidance on key issues. A summary of the guidance follows.
ATSA Legislative Requirements:
TSA's guidance addresses ATSA legislative requirements, including how
applications from qualified private screening contractors would be
approved by applying the statutory standards of ATSA, including the
level of screening services and protection provided at the airport, and
that private contractor companies be owned and controlled by U.S.
citizens. TSA's guidance also included information for airports on how
TSA's screening pilot program was conducted, how the pilot program was
evaluated by a private consulting organization, and suggested program
improvements made by the consultants.
Program Planning Approach:
The guidance discussed program structure, including costs. The guidance
notes, for instance, that federal and contract screeners would be
funded from the same pool of money and that costs for airports enrolled
in the program would be determined based on current federal screener
operations and TSA's activity-based cost studies that estimate costs of
running an airport's screening operations. TSA's guidance states that
these cost studies would ensure that proposed costs by potential
contractors are in line with federal estimates. The guidance also
states that airport security screeners do not have the right to strike,
whether TSA or a private contractor employs them.
Guidance on Key Issues:
ATSA directs TSA to receive applications from airports intending to
apply to opt out beginning November 19, 2004. The guidance states that
TSA intends to close the application period within 3 weeks of that time
and will re-open the application cycle in November 2005. The guidance
states that because ATSA does not identify specific criteria by which
TSA is to evaluate the airport application, TSA is currently developing
and reviewing potential specific criteria for determining which
airports will be approved and the sequence for their transition from
federal to private screeners. The guidance notes that TSA reserves the
right to consider participation in the program in light of an airport's
record of compliance on security regulations and requirements.
TSA outlines three steps related to selecting contractors to perform
screening services: (1) TSA submits requests for information to the
aviation industry requesting input on acquisition issues, qualification
criteria, and information contractors would need as part of a proposal
process; (2) TSA develops a qualified vendors list[Footnote 4] to
facilitate the vendor selection process; and (3) TSA selects a private
contractor to provide screening services in airports selected for the
screening partnership program.
The guidance describes the roles and responsibilities of all major
stakeholders, including airport directors and federal security
directors (FSDs).[Footnote 5] TSA envisions both FSDs and airport
authority as having "important roles" in the selection of the private
contractor. The technical aspects of each private contractor's screener
contract will be managed locally by the FSDs. TSA will set performance
measurement standards and each contractor will implement the standards.
TSA seeks to give private contractors "a significant amount" of
operational control in such areas as assessment and screener technical
training, scheduling, recurrent training, and administrative
functions.[Footnote 6]
TSA said it would take "necessary steps" to enable FSDs and private
contractors to implement operational flexibilities, including
conducting recruiting, assessment, and screener technical training at
the local level while ensuring that national standards are met and
within TSA's parameters.[Footnote 7] TSA is also in the process of
developing a performance measurement approach for the opt-out program
and contractors. TSA is considering several types of performance
measures related to security effectiveness, customer service, and cost.
Specific measures and baselines have not been finalized.
TSA Is Finalizing Policies and Procedures Governing the Opt-Out
Program:
TSA Has Developed Criteria for Qualifying Private Contractors, with
Additional Information under Development:
In late October 2004, TSA finalized and publicly released guidelines
providing criteria for determining how and when private screening
contractors will be evaluated and selected to participate in the opt-
out program. Any contractor that meets TSA and ATSA criteria (such as
owned and controlled by U.S. citizens) may apply to the program. While
TSA does not require companies seeking to become screening contractors
to have prior experience in the business, such experience is preferred.
Because TSA does not know how many airports will apply to participate
in the opt-out program in 2004, the agency cannot yet determine how
many private contractors may be hired to perform screening services.
The contractor-selection process involves three phases, to be completed
between November 2004 and May 2005. The phases and key milestones
included in the guidelines are as follows:
Phase I: Develop qualified offeror list (November 2004-January 2005).
* Offerors seeking to be pre-qualified by TSA as potential contractors
must meet TSA and ATSA requirements (including owned and controlled by
U.S. citizens and ability to provide screening services at a level
equal to or greater than that provided by the federal government).
* Offerors must agree to provide compensation and benefits at a level
that is not less than that provided by the federal government to the
federal screener workforce.
* Offerors must agree to abide by TSA's workforce transition rules,
including compliance with priority employment rules for TSA's federal
employees displaced by privatization.
Phase II: Develop qualified vendor list (February 2005).
* TSA issues request for proposal to contractors pre-qualified under
Phase I.
* TSA will develop a qualified vendor list based on this population.
* Offerors will be required to present technical and cost capabilities.
* Qualified offerors will be selected based on ability to provide
service in a given geographical region.
* Contractor proposals will not be evaluated until TSA determines how
many airports have applied to the opt-out program.
Phase III: TSA awards contracts to private screening contractors (May
2005).
TSA will award competitive task orders, or contracts, based on cost/
price analysis, among other things. TSA reserves the right to proceed
with other alternatives for contractor selection as appropriate.
TSA initiated Phase I on November 5, 2004, by posting a presolicitation
notice on www.fedbizopps.gov, in accordance with standard government
contracting practices. Contractors have until November 29, 2004, to
provide the information, such as financial capabilities, requested in
the presolicitation.[Footnote 8] Concurrently, TSA publicly released a
presolicitation synopsis for the opt-out program that supplements the
October guidelines on contractor criteria. This document provides
additional evaluation criteria on screener compensation and benefits,
hiring preferences for displaced government employees, financial
capabilities of contractors, and other areas.
Five of six private screening contractors we interviewed prior to TSA's
release of the presolicitation synopsis identified that they wanted
more information on workforce transition rules, which govern how
federal screeners displaced by private screening contractors should be
dealt with. The October guidelines also identified that contractors
must abide by TSA's workforce transition rules--but do not specify what
the rules are. The presolicitation synopsis states that federal
screeners must be given hiring preference, but no additional
information is provided. All six private screening contractors said
that they did not know how TSA will make its determination about
whether the level of screening services and protection provided at the
airport under the contract will be equal to or greater than the level
that would be provided at the airport by the federal government. TSA
officials said they would use the information provided by contractors
in response to the presolicitation notice to make this determination.
In addition to the guidelines on criteria and the presolicitation
synopsis, TSA prepared a draft statement of work for the contractors
that participated in the opt-out pilot program and are continuing to
provide screening services. This document describes technical
requirements that private screening contractors must meet for
performing screening operations, support, and administration.[Footnote
9] According to TSA, the draft statement of work is meant to give
potential private contractors an idea of the service requirements in
the private screening pilot program, which are likely to be similar to
those for the opt-out program. TSA posted the document on its opt-out
Web site in early November 2004.
The contractors we interviewed also sought information on whether
contractors will be able to use the same companies TSA has relied on to
assess screener candidates and conduct initial screener training. The
draft statement of work prepared for contractors that participated in
the pilot program addresses this issue and has been posted on TSA's Web
site for all interested parties to review.
Finally, private screening contractors told us they do not have an
industry trade association through which TSA can channel information
about its program activities. Five of six private screening contractors
we interviewed cited a need for a more direct line of communication
between TSA and their organizations beyond TSA's Web site. For example,
some contractors suggested that TSA sponsor a forum specifically to
address contractors' issues about the opt-out program. In addition, it
was suggested that TSA appoint a liaison, or point of contact, to help
ensure that information is communicated to contractors in a timely
fashion.
TSA's Internal Policies and Procedures for the Opt-Out Program Are
under Development:
TSA developed draft procedures to document how opt-out program
applications will be processed. These draft procedures--for internal
use only--describe opt-out program parameters, a descriptive narrative
of the application process, a matrix for each step in the process, an
application template, sample notification letter template, an
application checklist, and an application processing system template.
TSA officials said that this approach is under review and expects the
application procedures to be finalized in November 2004.
TSA developed a draft activity-based cost study, which is also an
internal document, not intended for public release. TSA plans to use
the results of the study to explain how TSA will determine the unit
cost of screening passengers in terms of the activities performed,
review screening costs at both privately screened and federally
screened airports in order to identify key cost drivers and best
practices, and develop an efficient and repeatable data collection
method for future studies. This study is currently under review within
TSA. TSA expects to finalize this study later in November 2004.
In addition, TSA developed a draft transition plan, which will serve as
internal guidance for the agency and is not intended for public
release. This is to be an operations plan designed to support TSA's
efforts to transition airports from federal to private screeners. The
plan is to address, for example, TSA's approach to giving federal
screeners priority for employment with private screening contractors.
In addition, this plan is to describe the roles and responsibilities of
the TSA opt-out program office, FSD staff, and private screening
contractors. Activities to be addressed in the plan include human
resources, training, communication, logistics, performance
measurement, and field support. TSA expects to refine the draft guide
in December 2004 and plans to revise the plan on an ongoing basis as it
gains more experience with the transition to private screening.
A draft communications plan is also under development and remains in
draft form. The purpose of this internal document is to reflect a
strategy for communicating key program events and developments to both
internal and external stakeholders. TSA told us the plan will contain
information on roles and responsibilities of key stakeholders, among
other things. The draft is undergoing final review within TSA. TSA has
not set a date for finalizing this plan.
TSA Is Taking Steps to Communicate with Stakeholders about the Opt-Out
Program, but Some Say Additional Information Is Needed:
Stakeholders Seek Additional Information from TSA on Operational
Flexibilities, Liability, and Cost Issues:
In addition to the June 2004 initial guidance, statement of work for
the pilot program contractors, and presolicitation synopsis, TSA has
finalized other informational guidance for airport operators and
private screening contractors. In October 2004, TSA posted the final
version of its opt-out application form for airports seeking to apply.
TSA will use the application to collect information on potential
airports' intentions regarding opting out. For instance, in addition to
asking airports to provide basic information, such as point of contact,
TSA seeks to learn whether airports want to be the qualifying
contractor performing the screening services. TSA also asks airport
officials to provide information on the airport authority's primary
reason for wanting to participate in the opt-out program, whether the
airport has a preferred timeline for when the transition to private
screening should occur, and to list scheduled activities that could
interfere with the transition, such as peak travel season and major
construction.
TSA originally set a 3-week application window, from November 19, 2004,
to December 10, 2004, for accepting application from airports
interested in opting out of using federal screeners. However, based on
input from stakeholders, TSA decided less than 1 month before the
application cycle was to begin to extend the application deadline. As
of November 15, 2004, TSA had not established a final deadline.
Also, in October, TSA created an e-mail address to enable interested
parties to submit questions and request additional information about
how the opt-out program would be implemented. The goal of this effort
was to provide supplemental guidance for stakeholders that reflected
issues they wanted to know more about. A TSA official said the agency
received approximately 100 e-mails between late August and early
November. Based in part on these e-mails, in early September 2004, TSA
developed and posted on its Web site an initial list of responses to
frequently asked questions (FAQ). In early November 2004, TSA updated
the FAQs to reflect three separate topics: questions for the overall
program, questions about the airport application process, and questions
about the contracting process. TSA plans to continue to update these
lists as needed. Some of the information contained in the FAQs is new-
-that is, it is not addressed in the June 2004 written guidance. Some
of TSA's FAQ responses, however, restate the information in the written
guidance, without additional elaboration.
While these guidance documents have provided airport operators with
information on the basic parameters and legislative requirements of the
opt-out program, some airport operators, private screening contractors,
and airport industry representatives told us TSA has not yet addressed
all of their questions and concerns.[Footnote 10] The information that
stakeholders told TSA and us that they needed falls into three
categories: operational flexibility with respect to how much leeway
airports and private screening contractors would have to manage the
program; liability protection in the event that a screener fails to
detect a threat object; and costs related to participating in the opt-
out program.
Operational Flexibility:
Eight of the 20 airport operators we interviewed who said they would
not apply to opt out of using federal screeners in 2004 said that they
needed additional information about the range of flexibility private
screening contractors would be provided in terms of, for instance,
their ability to deploy screeners where they are needed most at a given
airport. Some airport industry representatives we spoke with raised
operational flexibility as a concern as well. All of the private
screening contractors we interviewed also said that they needed
additional information on operational flexibilities, including:
* whether contractors could collaborate with airport management without
having to involve TSA directly;
* whether they would have the flexibility to determine appropriate
screener staffing levels at their airports and to assess screener
candidates and hire screeners on an as needed basis;[Footnote 11] and:
* whether they could develop and/or deliver screener training.
Among the questions e-mailed to TSA directly, some address operational
flexibilities, such as screener staffing levels. For example, one of
the questions pertained to whether an airport would be provided the
same number of contract screeners as are currently authorized under the
federal screener program. TSA responded in its FAQs that a qualified
private contractor will determine the number of contract screeners
needed and that TSA will provide guidelines for the contractors. TSA
further noted that it is seeking to provide flexibility to the
contractors to manage the operations as efficiently as possible and
will look to them to identify possible efficiencies in areas such as
scheduling and use of part-time employees as appropriate for the local
airport.
The independent consulting firm under contract to TSA suggested that
TSA allow contractors serving the opt-out pilot program airports to
assess screener candidates and conduct screener training as a means of
allowing greater operational flexibilities. The consultants stated that
greater operational flexibilities would enable a more robust comparison
of private and federal screening operations. TSA officials said that
they would permit pilot program airports to pursue both options
beginning in November 2004.
Liability Insurance:
A second issue raised by stakeholders, including airport industry
representatives, pertained to liability--whether and to what extent
airports and private screening contractors would be liable in the event
that a privately contracted screener should fail to detect a threat
object that leads to a terrorist incident or use of a weapon, or threat
object, on board. Thirteen airport operators we interviewed cited
concerns about liability. In addition, all of the private screening
contractors we interviewed cited the need for additional guidance on
liability protection. To address airport and industry officials'
questions about liability issues, FAQs directs site visitors to a
Department of Homeland Security (DHS) Web site for information on how
to apply for liability protection under the SAFETY Act of
2002.[Footnote 12] The Web site, however, does not provide information
on whether the SAFETY Act would cover private screening contractors
that apply to the opt-out program. According to DHS officials, DHS has
determined that the SAFETY Act will apply to private screening
contractors in the opt-out program. DHS's Office of SAFETY Act
Implementation has been working with TSA to develop an expedited review
process for SAFETY Act applications from private screening contractors
and plans to post specific instructions for applicants on the SAFETY
Act Web site. As of November 15, 2004, this information had not been
posted. Five of the screening contractors we interviewed said the issue
of whether they would receive liability protection was important and
would greatly affect whether they would participate in the program, if
selected as a qualified contractor. Two of the contractors said that
without liability protection, they would not participate in the program
because it would be too risky, exposing them to potential lawsuits. TSA
officials said that commercially available insurance is available and
that under the current screening pilot program, each of the contract
screening companies had procured some amount of liability insurance for
terrorist activities.
Costs of Participation:
A third issue pertained to the costs of participating in the program.
Ten of the 20 airport officials we spoke with that have decided not to
apply to opt out in 2004 cited questions about costs of participating
in the program, and in at least one case said they did not have enough
cost-related information. Representatives from two airport industry
associations also mentioned this issue. The FAQs address cost issues in
the context of budgets for federal and private screeners. For example,
one question asks whether, if federal budget appropriations are not
made in a timely manner, TSA will still be able to fund the private
screening contractor during that period of time. TSA's response
identified that it would fund screeners through a continuing budget
resolution passed by Congress. In response to a question about whether
budget limitations will apply to either federal or contracted
screeners, TSA's response reiterates what is already stated in the
written guidance--that all funding for the opt-out program will come
from the same budget line items as federal screening operations. No
additional information is provided.
Three private screening contractors we interviewed also cited a need
for additional information on the requirement to provide at least
equivalent compensation and benefits to screeners transitioning from
federal to private screening contractors, as required by ATSA. The
contractors said they did not know whether they would be required to
offer dollar-for-dollar parity for salaries and benefits or whether
contractors must offer the same health care and other benefits that
federal screeners receive. FAQs address this question in general terms,
noting that private contractors will have "some flexibility in
fashioning their compensation and benefits packages," but do not
elaborate further. TSA's presolicitation includes a compensation and
benefits certification form that private screening contractors applying
to be on the qualified offeror list must complete. The applicant has to
certify that it will propose and pay at least the minimum labor rate
that is paid to screeners for every $1 of direct labor and that
benefits will be not less than 44.75 percent--the current fringe
benefits percentage as computed by TSA.[Footnote 13]
In addition, TSA has interpreted ATSA to require qualified private
screening companies to provide pay and benefits at a loaded cost
(direct hour plus percentage cost of fringe benefits) that equals or
exceeds the loaded cost of the pay and benefits provided to the federal
government. According to TSA, this approach provides the contractor
with flexibility to trade additional pay against other benefits, or to
enhance certain benefits and reduce others; enables the contractor to
determine and provide the best package necessary for the recruitment
and retention of quality screeners; and increases flexibility while
permitting recruitment and retention of quality screeners.
TSA Is Developing Performance Measures for the Opt-Out Program, but
More Work Remains To Be Done:
TSA is developing measures to assess the screening performance of
airports that will participate in the opt-out program and individual
contractors performing the screening services, but specific performance
measures have not been finalized. In June 2004, TSA developed a draft
of the performance measurement principles and actual measures that TSA
is considering to measure the performance of the entire opt-out program
and private screening operations. For example, TSA plans to measure
the results of annual screener proficiency reviews, customer
satisfaction and complaints, and screening costs. TSA may also evaluate
the program in terms of how well screeners perform using the threat
image projection (TIP) system to detect threat objects.[Footnote
14](TIP projects images of threat objects on an x-ray screen during
actual operations and records whether screeners identify threat
objects.)[Footnote 15] These measures will be similar to those used by
the independent consulting firm to compare the performance of private
screening contractors operating at the five pilot program airports
against federal screening services. TSA expects to complete a
preliminary draft of a performance measurement plan later this month
and to finalize this plan by February 2005.
In addition to assessing how the performance of federal and private
screening services compare, TSA is working to develop performance
measures for evaluating how well private screening contractors comply
with the terms of their contracts. TSA officials said that the opt-out
program office is in the process of determining whether quantifiable
measures are available, how to collect relevant data, and the best way
to establish baseline measures. TSA expects to complete its data
collection plan later this month and to complete the final plan by
February 2005.
The contractor-related performance measures TSA plans to develop are to
be included in a quality assurance plan. This plan is an element in
TSA's draft statement of work specifically for the five airports that
participated in the pilot program, which are continuing to use private
screeners. The plan includes general information on how TSA will
measure and assess their performance and how TSA will use the
performance data to make decisions on performance awards, extension of
contracts, and termination of contracts. Contractors may, for example,
be evaluated--and their contracts extended--based on their screeners'
performance on TIP scores. TSA officials said that the measures
included in the draft statement of work are not as sophisticated or
rigorous as those that TSA will adopt in the future. TSA expects to
implement these measures in mid-2005, as contracts are being awarded.
We plan to continue to collect and analyze TSA documentation on the
opt-out program and to follow-up with airports and private security
contractors on their views of TSA's development and implementation of
the program.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Homeland
Security and the Transportation Security Administration for review and
comment. The agencies generally agreed with our findings, and we
incorporated their technical comments where appropriate.
We are sending copies of this report to the Secretary of the Department
of Homeland Security and interested congressional committees. We will
also make copies available to others upon request. In addition, the
report will be available at no charge on GAO's Web site at http://
www.gao.gov.
If you have any questions about this report, or wish to discuss it
further, please contact me at (202) 512-8777 or by e-mail at
berrickc@gao.gov. Key contributors to this report were David Alexander,
Amy Bernstein, Lisa Brown, Elizabeth Curda, Thomas Lombardi, Jobenia
Odum, Lisa Shibata, Maria Strudwick, Nicole Volchko, and Nicolas
Zitelli.
Sincerely yours,
Signed by:
Cathleen A. Berrick:
Director, Homeland Security and Justice Issues:
[End of section]
Appendix I: Scope and Methodology:
Our preliminary observations are based on our review of documentation
related to the Transportation Security Administration's (TSA) Screening
Partnership Program (opt-out program) and contract screening pilot
program and interviews with various officials. We reviewed documents
including:
* all guidance-related materials TSA had developed to date for
airports;
* reports from an independent consulting study prepared for TSA that
evaluated the contract screening pilot program and made suggested
improvements to the program;
* information from two congressional committee-sponsored roundtables on
the program;
* testimony at congressional hearings on the program;
* provisions of the Aviation and Transportation Security Act;
* our prior reports that addressed issues related to the opt-out
program, including the performance of airport passenger and checked
baggage screeners.
In addition, we interviewed TSA headquarters officials, officials from
two aviation associations--the American Association of Airport
Executives and the Airports Council International and TSA's private
contractor that is assisting TSA in its development of the opt-out
program. We conducted semistructured telephone interviews with the
operators of 26 randomly selected commercial airports nationwide. The
26 airports were selected randomly from all airports in each of the
five airport categories--X, I, II, III, and IV. Category X airports
generally have the largest number of enplanements, and category IV
airports have the smallest number. We interviewed one official at each
of 4 to 6 airports in each category. Although the airports were
selected randomly, because of the small sample size in each category
the results of these interviews may not be generalized to other
airports. We conducted telephone interviews with officials from 6 of 10
private security contractors selected from a listing of private
security contractors that had expressed interest in the opt-out
program. The listing of private security contractors that expressed
interest in the opt-out program is included in Airport Security Report,
(Potomac, MD: Air Safety Week), September 22, 2004, Volume 11, Number
19. The views and opinions of these contractors may not be
representative of those of other contractors and, therefore, should not
be generalized. TSA released significant details on its opt-out program
guidance after our interviews; therefore, the interviewees' responses
(airport operators' and contractors') were based only on the
information TSA had released at that point. We conducted our work from
September to November 2004 in accordance with generally accepted
government auditing standards. Because our review is still ongoing, the
results presented in this report are preliminary.
To complete our work, we plan to continue to collect and analyze TSA
documentation related to each of our three objectives and to follow-up
with airports and private security contractors on their views of TSA's
development and implementation of the opt-out program.
FOOTNOTES
[1] The term "private screening contractor" pertains to any company
that currently provides, or plans to provide, passenger and baggage
screening services.
[2] Stakeholders for the opt-out program include airport operators and
private screening contractors, among others.
[3] TSA classifies the over 400 commercial airports in the United
States into one of five airport security categories (X, I, II, III, and
IV) based on various factors, such as the total number of take-offs and
landings annually, the extent to which passengers are screened at the
airport, and other special security considerations. In general,
category X airports have the largest number of passenger boardings and
category IV airports have the smallest.
[4] TSA uses the term "vendor" here in lieu of "contractor," but both
terms refer to any private entity that undertakes passenger and baggage
screening. TSA uses the term "contractor" throughout its June 2004
guidance.
[5] FSDs are responsible for providing day-to-day operational direction
for federal security at airports. Additionally, FSDs are the ranking
TSA authority responsible for the leadership and coordination of TSA
security activities at airports.
[6] The assessment process for screener candidates consists of testing
and interviews, among other things.
[7] TSA's draft technical statement of work, issued after the June 2004
guidance, describes some operational flexibility, including screener
applicant assessment, credentialing, and training that will be provided
to private contractors in the pilot program.
[8] TSA will not accept questions from contractors about the
solicitation after November 15 and indicated it may modify the
solicitation based on questions raised by contractors.
[9] The statement of work includes five task areas covering the scope
of services to be provided by the contractor, including human resources
support services, training for screeners, screening services,
management support and miscellaneous requirements, such as standards of
conduct, uniforms, and maintenance, use and inventory of equipment,
property and materials.
[10] Of the airport operators we interviewed, 20 of 26 said their
airport would not apply to opt out this year, 5 were uncertain whether
to apply for the 2004 cycle, and 1 said his airport planned to apply,
but only for its international passenger terminal. Among the 20, 16
said they were satisfied with federal screeners or saw no benefit to
opting out. Six of the airport operators we interviewed had not
reviewed the initial June guidance.
[11] Since the fiscal year 2004 DHS Appropriations Act (Pub. L. No.108-
90), Congress has instituted a screener cap of 45,000 full-time
equivalent screeners. One full-time equivalent is equal to 1 work year
or 2,080 non-overtime hours.
[12] The Support Anti-terrorism by Fostering Effective Technologies
(SAFETY) Act of 2002 (Pub. L. No. 107-296) encourages the development
and deployment of anti-terrorism technologies that will substantially
enhance the protection of the nation. Specifically, the SAFETY Act
creates certain liability limitations for "claims arising out of,
relating to, or resulting from an act of terrorism" where qualified
anti-terrorism technologies have been deployed. The Act extends certain
liability protections to equipment, services, and other elements
involved in preventing or deterring acts of terrorism.
[13] If the applicant's benefits are less than 44.75 percent, the
applicant must certify that it will propose and pay at least the
minimum labor rate that is paid to screeners and that adjustments will
be made to the compensation and/or benefits prior to award so that the
total compensation and other benefits will not be less than the
compensation and other benefits provided to federal government
personnel. The applicant must also explain how these adjustments will
be made.
[14] TIP scores may be used to measure the performance of private
contract screeners at opt-out airports compared to their federally
screened counterparts.
[15] Once prompted, TIP identifies to the screener whether the threat
is real and then records the screener's performance in a database that
could be analyzed for performance trends.
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