Transportation Security Administration
Oversight of Explosive Detection Systems Maintenance Contracts Can Be Strengthened Gao ID: GAO-06-795 July 31, 2006Mandated to screen all checked baggage by using explosive detection systems at airports by December 31, 2003, the Transportation Security Administration (TSA) has deployed two types of screening equipment: explosive detection systems (EDS), which use computer-aided tomography X-rays to recognize explosives, and explosive trace detection (ETD) systems, which use chemical analysis to detect explosive residues. This report discusses (1) EDS and ETD maintenance costs, (2) factors that played a role in these costs, and (3) the extent to which TSA conducts oversight of maintenance contracts. GAO reviewed TSA's contract files and processes for reviewing contractor cost and performance data.
TSA obligated almost $470 million from fiscal years 2002 through 2005 for EDS and ETD maintenance, according to TSA budget documents. In fiscal year 2006, TSA estimates it will spend $199 million and has projected it will spend $234 million in fiscal year 2007. TSA was not able to provide GAO with data on the maintenance cost per machine before fiscal year 2005 because, according to TSA officials, its previous contract with Boeing to install and maintain EDS and ETD machines was not structured to capture these data. Several factors have played a role in EDS and ETD maintenance costs. According to a September 2004 Department of Homeland Security's Office of Inspector General report, TSA did not follow sound contracting practices in administering the contract with Boeing, and TSA paid provisional award fees totaling $44 million through December 2003 without any evaluation of Boeing's performance. TSA agreed to recover any excessive award fees paid to Boeing if TSA determined that such fees were not warranted. In responding to our draft report, DHS told us that TSA and Boeing had reached an agreement in principle on this matter and that documentation was in the approval process with closure anticipated in July 2006. Moreover, TSA did not develop life-cycle cost models before any of the maintenance contracts were executed and, as a result, TSA does not have a sound estimate of maintenance costs for all the years the machines are expected to be in operation. DHS also stated in its comments on our draft report that a TSA contractor expected to complete a prototype life-cycle cost model by September 2006 and that TSA anticipated that the EDS model would be completed 12 months after the prototype was approved. Without such an analysis, TSA may not be identifying cost efficiencies and making informed procurement decisions on future purchases of EDS and ETD machines and maintenance contracts. TSA has taken actions to control costs, such as entering into firm-fixed-price contracts for maintenance starting in March 2005, which have advantages to the government because price certainty is guaranteed. Further, TSA incorporated standard performance requirements in the contracts including metrics related to machine reliability and monthly performance reviews. For EDS contractors, TSA has specified that the full agreed price would be paid only if mean downtime (i.e., the number of hours a machine is out of service in a month divided by the number of times that machine is out of service per month) requirements are met. Although TSA has policies for monitoring contracts, TSA officials provided no evidence that they are reviewing required contractor-submitted performance data, such as mean downtime data. TSA officials told GAO that they perform such reviews, but do not document their activities because there are no TSA policies and procedures requiring them to do so. As a result, without adequate documentation, TSA does not have reasonable assurance that contractors are performing as required and that full payment is justified based on meeting mean downtime requirements.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-795, Transportation Security Administration: Oversight of Explosive Detection Systems Maintenance Contracts Can Be Strengthened
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GAO:
July 2006:
Report to Congressional Committees:
United States Government Accountability Office:
July 2006:
Transportation Security Administration:
Oversight of Explosive Detection Systems Maintenance Contracts Can Be
Strengthened:
TSA EDS Maintenance Costs:
GAO-06-795:
GAO Highlights:
Highlights of GAO-06-795, a report to Congressional Committees
Why GAO Did This Study:
Mandated to screen all checked baggage by using explosive detection
systems at airports by December 31, 2003, the Transportation Security
Administration (TSA) has deployed two types of screening equipment:
explosive detection systems (EDS), which use computer-aided tomography
X-rays to recognize explosives, and explosive trace detection (ETD)
systems, which use chemical analysis to detect explosive residues. This
report discusses (1) EDS and ETD maintenance costs, (2) factors that
played a role in these costs, and (3) the extent to which TSA conducts
oversight of maintenance contracts. GAO reviewed TSA‘s contract files
and processes for reviewing contractor cost and performance data.
What GAO Found:
TSA obligated almost $470 million from fiscal years 2002 through 2005
for EDS and ETD maintenance, according to TSA budget documents. In
fiscal year 2006, TSA estimates it will spend $199 million and has
projected it will spend $234 million in fiscal year 2007. TSA was not
able to provide GAO with data on the maintenance cost per machine
before fiscal year 2005 because, according to TSA officials, its
previous contract with Boeing to install and maintain EDS and ETD
machines was not structured to capture these data.
Several factors have played a role in EDS and ETD maintenance costs.
According to a September 2004 Department of Homeland Security‘s Office
of Inspector General report, TSA did not follow sound contracting
practices in administering the contract with Boeing, and TSA paid
provisional award fees totaling $44 million through December 2003
without any evaluation of Boeing‘s performance. TSA agreed to recover
any excessive award fees paid to Boeing if TSA determined that such
fees were not warranted. In responding to our draft report, DHS told us
that TSA and Boeing had reached an agreement in principle on this
matter and that documentation was in the approval process with closure
anticipated in July 2006. Moreover, TSA did not develop life-cycle cost
models before any of the maintenance contracts were executed and, as a
result, TSA does not have a sound estimate of maintenance costs for all
the years the machines are expected to be in operation. DHS also stated
in its comments on our draft report that a TSA contractor expected to
complete a prototype life-cycle cost model by September 2006 and that
TSA anticipated that the EDS model would be completed 12 months after
the prototype was approved. Without such an analysis, TSA may not be
identifying cost efficiencies and making informed procurement decisions
on future purchases of EDS and ETD machines and maintenance contracts.
TSA has taken actions to control costs, such as entering into firm-
fixed-price contracts for maintenance starting in March 2005, which
have advantages to the government because price certainty is
guaranteed. Further, TSA incorporated standard performance requirements
in the contracts including metrics related to machine reliability and
monthly performance reviews. For EDS contractors, TSA has specified
that the full agreed price would be paid only if mean downtime (i.e.,
the number of hours a machine is out of service in a month divided by
the number of times that machine is out of service per month)
requirements are met.
Although TSA has policies for monitoring contracts, TSA officials
provided no evidence that they are reviewing required contractor-
submitted performance data, such as mean downtime data. TSA officials
told GAO that they perform such reviews, but do not document their
activities because there are no TSA policies and procedures requiring
them to do so. As a result, without adequate documentation, TSA does
not have reasonable assurance that contractors are performing as
required and that full payment is justified based on meeting mean
downtime requirements.
What GAO Recommends:
GAO recommends that the Secretary of Homeland Security direct TSA to
(1) establish a timeline to close out the contract with Boeing Service
Company (Boeing) and report to congressional committees on actions to
recover any excessive fees awarded to Boeing, (2) establish a timeline
to complete the EDS life-cycle model, and (3) revise policies to
require documentation for monitoring EDS and ETD maintenance contracts.
The Department of Homeland Security concurred with GAO‘s
recommendations and described actions TSA had taken or planned to take
to implement them.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-795].
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:
Results:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Information for Congressional Committees:
Appendix II: Agency Comments:
Appendix III: GAO Contact and Staff Acknowledgements:
Tables:
Table 1: Number of EDS and ETD Machines and Annual Per-Machine
Maintenance Cost, Fiscal Year 2005 and Fiscal Year 2006:
Table 2: Mean Downtime Requirement for EDS Contractors, 2005 through
2009:
Figure:
Figure 1: EDS and ETD Machines Used by TSA to Screen Checked Baggage:
United States Government Accountability Office:
Washington, DC 20548:
July 31, 2006:
The Honorable Judd Gregg:
Chairman:
The Honorable Robert C. Byrd:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
United States Senate:
The Honorable Harold Rogers:
Chairman:
The Honorable Martin Olav Sabo:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
House of Representatives:
After the terrorist attacks of September 11, 2001, which highlighted
the vulnerability of U.S. aircraft to acts of terrorism, Congress
passed and the President signed into law the Aviation and
Transportation Security Act (ATSA), mandating, among other things, that
all checked baggage at U.S. airports be screened using explosive
detection systems by December 31, 2002.[Footnote 1] To meet this
requirement, the Transportation Security Administration (TSA) deployed
two types of equipment to screen checked baggage for explosives: (1)
explosive detection systems (EDS) that use specialized X-rays to detect
characteristics of explosives that may be contained in baggage as it
moves along a conveyor belt and (2) explosive trace detection (ETD)
machines, whereby an individual (i.e., a baggage screener, or
transportation security officer) swabs baggage and then inserts the
swab into the ETD machine, which in turn can detect chemical residues
that may indicate the presence of explosives within a bag.[Footnote 2]
Pursuant to ATSA, TSA assumed operational responsibility for conducting
the screening of checked baggage, which includes the procurement,
installation, and maintenance of EDS and ETD machines. By the end of
fiscal year 2006, TSA will have deployed over 1,400 EDS and 6,600 ETD
machines at baggage-screening locations in over 400 airports
nationwide, according to TSA budget documents. TSA has used contractors
to perform preventative and corrective maintenance on these EDS and ETD
machines.
House Conference Report 109-241, which accompanied the Department of
Homeland Security Appropriations Act, 2006 (Public Law 109-90) directed
that we report on the reasons for cost increases in maintaining TSA's
explosive detection systems, including TSA's contracting practices that
may have affected cost increases.[Footnote 3] With regard to this
requirement, on April 19, 2006, we provided you with information on the
results of our review (see app. I), which has been updated as
appropriate in this report. Subsequently, in May 2006, the House
Appropriations Committee stated in its report accompanying the
Department of Homeland Security Appropriations Bill for fiscal year
2007 its long-standing concerns about the increasing costs for EDS and
ETD maintenance and specifically, TSA's recovery of any excess award
fees from a previous EDS and ETD contractor.[Footnote 4] Further, the
report stated that TSA should submit a report to the House
Appropriations Committee on any actions it has taken to collect
excessive award fees, how much has been received to date, and specific
plans to obligate these collections.
This report addresses the following questions:
* What are the historical, current, and projected costs for the
maintenance of EDS and ETD machines?
* What factors played a role in EDS and ETD maintenance costs, and what
factors could affect future costs?
* What has TSA done to control EDS and ETD maintenance costs?
* To what extent does TSA oversee the performance of EDS and ETD
maintenance contractors?
To address our objectives, we reviewed TSA contract files and related
cost data, TSA processes for reviewing contract performance data,
budget documents for fiscal years 2003 through 2007, acquisition and
strategic plans, a Department of Homeland Security's Office of the
Inspector General (DHS OIG) report,[Footnote 5] GAO standards for
internal controls,[Footnote 6] and our previous work on TSA's
acquisition function.[Footnote 7] We interviewed TSA headquarters
officials, DHS OIG officials, and EDS and ETD contractor
representatives. For purposes of our review, we focused on amounts
obligated under contracts to maintain the machines. We did not review
TSA's negotiations for maintenance services or the process for awarding
contracts. Nor did we assess other direct or indirect costs that may
have been related to TSA or DHS employees engaged in contract
administration or other related items.
We performed our work from January 2006 through July 2006 in accordance
with generally accepted government auditing standards.
Results in Brief:
According to TSA budget documents, TSA obligated almost $470 million
from fiscal year 2002 through fiscal year 2005 for EDS and ETD
maintenance. In fiscal year 2006, TSA estimates it will spend $199
million and has projected it will spend $234 million in fiscal year
2007.[Footnote 8] TSA did not provide us with projections of EDS and
ETD maintenance costs beyond 2007. TSA officials told us that future
EDS and ETD maintenance costs will be influenced by the number, type,
quantity, and locations of machines necessary to support system
configurations at airports and on decisions related to the deployment
of new technologies and the refurbishment of existing equipment, among
other things. The current contracts have negotiated maintenance prices
per machine through March 2009, if TSA decides to exercise option years
in the contracts.
Different factors played a role in EDS and ETD maintenance costs.
According to a September 2004 DHS OIG report,[Footnote 9] TSA did not
follow sound contracting practices in administering the contract with
Boeing Service Company (Boeing) that was primarily for the installation
and maintenance of EDS and ETD machines from June 2002 through March
2005. According to DHS OIG officials, TSA's failure to control costs
under the Boeing contract contributed to increases in maintenance
costs. Among other things, the DHS OIG report stated that TSA has paid
provisional award fees totaling $44 million through December 2003
without any evaluation of Boeing's performance. In response to the DHS
OIG, TSA agreed to recover any excessive award fees paid to Boeing, if
TSA determined that such fees were not warranted. In responding to our
draft report, DHS told us that TSA and Boeing have reached an agreement
in principle on this matter and the documentation is in the approval
process with closure anticipated in July 2006. Moreover, TSA did not
develop life-cycle cost estimates before any of the maintenance
contracts were executed, and, as a result, TSA did not have a sound
estimate of maintenance costs for all the years the machines are
expected to be in operation. DHS also stated in its comments on our
draft report that a TSA contractor expects to complete a prototype life-
cycle cost model by September 2006 and that TSA anticipated that the
EDS model would be completed 12 months after the prototype was
approved. Without such an analysis, TSA may not be identifying cost
efficiencies and making informed procurement decisions on future
purchases of EDS and ETD machines and maintenance contracts.
TSA has taken several actions to control EDS and ETD maintenance costs,
such as entering into firm-fixed-price contracts starting in March
2005, which have certain advantages to the government because price
certainty is guaranteed. Also, TSA included several performance
requirements in the current contracts, including metrics related to
machine reliability, maintainability, and availability, and specific
cost data related to maintenance and repair, and required monthly
performance reviews. For EDS contractors, TSA also incorporated
provisions to specify that the full agreed price will be paid only if
mean downtime requirements[Footnote 10] are met.
Although TSA has policies for monitoring contracts, TSA officials
provided no evidence that they are reviewing required contractor-
submitted performance data, such a mean downtime data. TSA officials
told GAO that they perform such reviews, but do not document their
activities because there are not TSA policies and procedures requiring
them to do so. As a result, without adequate documentation, TSA does
not have reasonable assurance that contractors are performing as
required and that full payment is justified based on meeting mean
downtime requirements.
We are recommending that the Secretary of Homeland Security direct TSA
to establish a timeline to close out the Boeing contract and report to
congressional committees on its actions to recover any excessive fees
awarded to Boeing; establish a timeline for completing life-cycle cost
models for EDS, which TSA recently began; and revise policies and
procedures to require documentation of the monitoring of EDS and ETD
maintenance contracts to provide reasonable assurance that contractor
maintenance cost data and performance data are recorded and reported in
accordance with TSA contractual requirements and that self-reported
contractor mean downtime data are valid, reliable, and justify the full
payment of the contract amount.
We provided a draft of this report to DHS for review. DHS, in its
written comments, concurred with our findings and recommendations and
described actions that it has initiated or plans to take to address the
issues identified. For a reprint of DHS's comments, see appendix II.
Background:
With the passage of the Aviation and Transportation Security Act (ATSA)
in November 2001, TSA assumed from the Federal Aviation Administration
(FAA) the majority of the responsibility for civil aviation security,
including the commercial aviation system.[Footnote 11] ATSA required
that TSA screen 100 percent of checked baggage using explosive
detection systems by December 31, 2002. As it became apparent that
certain airports would not meet the December 2002 deadline, the
Homeland Security Act of 2002 in effect extended the deadline to
December 31, 2003, for noncompliant airports.[Footnote 12] Under ATSA,
TSA is responsible for the procurement, installation, and maintenance
of explosive detection systems used to screen checked baggage for
explosives. Airport operators and air carriers continued to be
responsible for processing and transporting passengers' checked baggage
from the check-in counter to the airplane.
Explosive detection systems include EDS and ETD machines (fig. 1). EDS
uses computer-aided tomography X-rays adapted from the medical field to
automatically recognize the characteristic signatures of threat
explosives. By taking the equivalent of hundreds of X-ray pictures of a
bag from different angles, EDS examines the objects inside of the
baggage to identify characteristic signatures of threat explosives. TSA
has certified, procured, and deployed EDS manufactured by three
companies--L-3 Communications Security and Detection Systems (L-3);
General Electric InVision, Inc.[Footnote 13] (GE InVision); and Reveal
Imaging Technologies, Inc. (Reveal). In general, EDS is used for
checked baggage screening. ETD machines work by detecting vapors and
residues of explosives. Human operators collect samples by rubbing bags
with swabs, which are then chemically analyzed in the ETD machine to
identify any traces of explosive materials. ETD machines are used for
both checked baggage and passenger carry-on baggage screening. TSA has
certified, procured, and deployed ETD machines from three
manufacturers, Thermo Electron Corporation, Smiths Detection, and
General Electric Company.
Figure 1: EDS and ETD Machines Used by TSA to Screen Checked Baggage:
[See PDF for image]
Source: GAO.
[End of figure]
TSA's EDS and ETD maintenance contracts provide for preventative and
corrective maintenance. Preventative maintenance includes scheduled
activities, such as changing filters or cleaning brushes, to increase
machine reliability and are performed monthly, quarterly, or yearly
based on the contractors' maintenance schedules. Corrective maintenance
includes actions performed to restore machines to operating condition
after failure, such as repairing the conveyer belt mechanism after a
bag jams the machine. TSA is responsible for EDS and ETD maintenance
costs after warranties on the machines expire.[Footnote 14]
From June 2002 through March 2005, Boeing was the prime contractor
primarily for the installation and maintenance of EDS and ETD machines
at over 400 U.S. airports. TSA officials stated that the Boeing
contract was awarded at a time when TSA was a new agency with many
demands and extremely tight schedules for meeting numerous
congressional mandates related to passenger and checked baggage
screening. The cost reimbursement contract[Footnote 15] entered into
with Boeing had been competitively bid and contained renewable options
through 2007. Boeing subcontracted for EDS maintenance through firm-
fixed-price contracts[Footnote 16] with the original EDS manufacturers,
GE InVision and L-3, which performed the maintenance on their
respective EDS. Boeing subcontracted for ETD maintenance through a firm-
fixed-price contract with Siemens. Consistent with language in the
fiscal year 2005 House Appropriations Committee report and due to TSA's
acknowledgment of Boeing's failure to control costs, TSA received DHS
authorization to negotiate new EDS and ETD maintenance contracts in
January 2005.
In March 2005, TSA signed firm-fixed-price contracts for EDS and ETD
maintenance. TSA awarded a competitively bid contract to Siemens to
provide maintenance for ETD machines. According to TSA, it negotiated
sole source contracts with L-3 and GE InVision for maintaining their
respective EDS because they are the original equipment manufacturers
and owners of the intellectual property rights of their respective EDS.
In September 2005, TSA awarded a competitively bid firm-fixed-price
contract to Reveal for both the procurement and maintenance of a
reduced size EDS.
Results:
TSA obligated almost $470 million from fiscal year 2002 through fiscal
year 2005 for EDS and ETD maintenance, according to TSA budget
documents. In fiscal year 2006, TSA estimates it will spend $199
million and has projected it will spend $234 million in fiscal year
2007.[Footnote 17] According to TSA officials, in fiscal year 2004, TSA
requested and received approval to reprogram about $32 million from
another account to EDS/ETD maintenance due to higher levels of
maintenance costs than expected. Similarly, in fiscal year 2005, TSA
requested and received approval to reprogram $25 million to fund the L-
3 contract and to close out the Boeing contract.[Footnote 18] TSA was
not able to provide us with data on the maintenance cost per machine
before fiscal year 2005 because, according to TSA officials, TSA's
previous contract with Boeing to maintain EDS and ETD machines was not
structured to capture these data. Table 1 identifies the maintenance
costs[Footnote 19] by type of EDS and ETD machine for fiscal years 2005
and 2006.
Table 1: Number of EDS and ETD Machines and Annual Per-Machine
Maintenance Cost, Fiscal Year 2005 and Fiscal Year 2006:
Type of machine: EDS: GE CTX 2500;
FY 2005[A]: Number of machines: 140;
FY 2005[A]: Cost per unit: $61,587;
FY 2006: Number of machines: 151;
FY 2006: Cost per unit: $ 63,590.
Type of machine: EDS: GE CTX 5500;
FY 2005[A]: Number of machines: 512;
FY 2005[A]: Cost per unit: 71,549; [Empty];
FY 2006: Number of machines: 547;
FY 2006: Cost per unit: 73,876.
Type of machine: EDS: GE CTX 9000;
FY 2005[A]: Number of machines: 172;
FY 2005[A]: Cost per unit: 93,286; [Empty];
FY 2006: Number of machines: 231;
FY 2006: Cost per unit: 96,320.
Type of machine: EDS: L-3 ex6000;
FY 2005[A]: Number of machines: 508;
FY 2005[A]: Cost per unit: 97,837; [Empty];
FY 2006: Number of machines: 550;
FY 2006: Cost per unit: 101,000.
Type of machine: EDS: Reveal CT-80[B];
FY 2005[A]: Number of machines: n/a;
FY 2005[A]: Cost per unit: n/a; [Empty];
FY 2006: Number of machines: 16;
FY 2006: Cost per unit: n/a.
Type of machine: ETD: Smiths Ionscan 400A;
FY 2005[A]: Number of machines: 241;
FY 2005[A]: Cost per unit: 10,525; [Empty];
FY 2006: Number of machines: 336;
FY 2006: Cost per unit: 10,974.
Type of machine: ETD: Smiths Ionscan 400AE;
FY 2005[A]: Number of machines: 5;
FY 2005[A]: Cost per unit: 10,525; [Empty];
FY 2006: Number of machines: 6;
FY 2006: Cost per unit: 10,974.
Type of machine: ETD: Smiths Ionscan 400B;
FY 2005[A]: Number of machines: 3,038;
FY 2005[A]: Cost per unit: 8,580; [Empty];
FY 2006: Number of machines: 3,035;
FY 2006: Cost per unit: 8,946.
Type of machine: ETD: Thermo EGIS 3000;
FY 2005[A]: Number of machines: 2;
FY 2005[A]: Cost per unit: 12,899; [Empty];
FY 2006: Number of machines: 2;
FY 2006: Cost per unit: 13,526.
Type of machine: ETD: Thermo EGIS II;
FY 2005[A]: Number of machines: 425;
FY 2005[A]: Cost per unit: 13,134; [Empty];
FY 2006: Number of machines: 545;
FY 2006: Cost per unit: 13,695.
Type of machine: ETD: GE Iontrack Itemiser-W;
FY 2005[A]: Number of machines: 2,302;
FY 2005[A]: Cost per unit: $ 7,727; [Empty];
FY 2006: Number of machines: 2,322;
FY 2006: Cost per unit: $ 8,057.
Source: TSA.
NOTE: Maintenance costs represent the negotiated prices in the
maintenance contracts for EDS and ETD machines.
[A] Fiscal year 2005 per-machine maintenance costs were in effect from
March through September 2005. TSA could not provide per-machine
maintenance costs before March 2005.
[B] Reveal's EDS machines were installed in fiscal year 2006 and were
still under the manufacturer's warranty.
[End of table]
TSA did not provide us with projections of EDS and ETD maintenance
costs beyond 2007. TSA officials told us that future costs will be
influenced by the number, type, quantity, and locations of machines
necessary to support system configurations at airports, such as the
extent to which EDS are integrated with airport baggage conveyor
systems or are operated in stand-alone modes. Further, TSA officials
told us that future EDS and ETD maintenance costs are dependent on
decisions related to the deployment of new technologies and the
refurbishment of existing equipment, among other things. The current
contracts would have negotiated maintenance prices per machine through
March 2009, if TSA decides to exercise option years in the contracts.
We identified different factors that have played a role in costs to
date and that will influence future maintenance costs for EDS and ETD
machines. According to a September 2004 DHS OIG report, TSA did not
follow sound contracting practices in administering the Boeing
contract, which was primarily for the installation and maintenance of
EDS and ETD machines.[Footnote 20] According to DHS OIG officials,
TSA's failure to control costs under the Boeing contract, including the
lack of sound contracting practices, contributed to increases in
maintenance costs. Among other things, the DHS OIG report stated that
TSA had paid provisional award fees totaling $44 million through
December 2003 without any evaluation of Boeing's performance.[Footnote
21] In response to the DHS OIG, TSA agreed to recover any excessive
award fees paid to Boeing, if TSA determined that such fees were not
warranted. In commenting on our draft report in July 2006, DHS stated
that TSA has conducted a contract reconciliation process to ensure that
no fees would be paid on costs that exceeded the target due to poor
contractor performance. Further, DHS stated that TSA and Boeing had
reached an agreement in principle on this matter and that the
documentation was in the approval process with closure anticipated in
July 2006. In its report accompanying the DHS Appropriations Bill for
fiscal year 2007, the House Appropriations Committee stated its need
for a report from TSA on any actions it has taken to collect excessive
award fees, how much of the fees have been received to date, and
specific plans to obligate these collections and cited TSA's plans to
use any cost recoveries to purchase and install additional EDS. These
actions were based on the committee's long-standing concerns about the
increasing costs for EDS and ETD maintenance.[Footnote 22] In addition
to matters related to the Boeing contract, TSA officials stated that
another factor contributing to cost increases were the larger than
expected number of machines that came out of warranty and their related
maintenance costs. According to TSA officials, they were not able to
determine the cost impact of these additional machines because the
Boeing contract was not structured to provide maintenance costs for
individual machines.
With regard to future EDS and ETD maintenance costs under firm-fixed-
price contracts, maintenance costs per machine will increase primarily
by an annual escalation factor in the contracts that takes into account
the employment cost index and the consumer price index,[Footnote 23] if
TSA decides to exercise contract options. In addition, future
maintenance costs may be affected by a range of factors, including the
number of machines deployed and out of warranty, conditions under which
machines operate, contractor performance requirements, the emergence of
new technologies or improved equipment, and alternative screening
strategies. Lastly, life-cycle cost estimates were not developed for
the Boeing, Siemens, L-3, and GE InVision contracts before the
maintenance contracts were executed, and, as a result, TSA did not have
a sound estimate of maintenance costs for all the years the machines
are expected to be in operation. In August 2005, TSA hired a contractor
to define parameters for a life-cycle cost model, among other things.
This contract states that TSA and the contractor will work together to
ensure that the full scope of work is planned, coordinated, and
executed according to approved schedules. In commenting on our draft
report in July 2006, DHS stated that the TSA contractor estimated
completing a prototype life-cycle cost model by September 2006.
Further, DHS stated that TSA's evaluation of the prototype would begin
immediately upon delivery and that full implementation of an EDS life-
cycle cost model would be completed within 12 months after the
prototype had been approved. According to a TSA official, the life-
cycle cost model would be useful in determining machine reliability and
maintainability and to inform future contract negotiations, such as
when to replace a machine versus continuing to repair it.
We identified several actions TSA has taken to control EDS and ETD
maintenance costs. First, TSA entered into firm-fixed-price contracts
starting in March 2005 with maintenance contractors, which offer TSA
certain advantages over cost reimbursement contracts because price
certainty is guaranteed for up to 5 years if TSA exercises options to
2009. Also, TSA included several performance requirements in the
Siemens, L-3, GE InVision, and Reveal contracts, including the
collection of metrics related to machine reliability, maintainability,
and availability[Footnote 24] and required specific cost data related
to maintenance and repair. TSA officials told us that these data will
assist them in monitoring the contractor performance as well as
informing future contract negotiations for equipment and maintenance.
These contracts also stipulate that maintenance contractors meet
monthly with TSA to review all pertinent technical schedules and cost
aspects of contracts. TSA also incorporated provisions in the L-3 and
GE InVision contracts to specify that the agreed price for maintaining
EDS would be paid only if the contractor performs within specified mean
downtime (MDT) requirements.[Footnote 25] Contractors submit monthly
invoices for 95 percent of the negotiated contract price for the month
and then submit a MDT report to justify the additional 5 percent.
Consequently, if the contractor fails to fulfill the MDT requirements,
it is penalized 5 percent of the negotiated monthly maintenance price.
As of February 2006, neither GE InVision nor L-3 had been penalized for
missing their MDT requirements. The allowable MDT is lowered from 2005
to subsequent renewable years in the contract, as shown in table 2.
Table 2: Mean Downtime Requirement for EDS Contractors, 2005 through
2009:
2005: 24 hours;
2006: 20 hours;
2007: 18 hours;
2008: 14 hours;
2009: 12 hours.
Source: TSA.
[End of table]
With regard to TSA's oversight of EDS and ETD contractor performance,
TSA's acquisition policies[Footnote 26] and GAO standards for internal
controls[Footnote 27] call for documenting transactions and other
significant events, such as monitoring contractor activities. The
failure of TSA to develop internal controls and performance measures
has been recognized by other GAO[Footnote 28] and DHS OIG
reviews.[Footnote 29] TSA has policies and procedures for monitoring
its contracts and has included contractor performance requirements in
the current EDS and ETD maintenance contracts. However, TSA officials
provided no evidence that they are reviewing maintenance cost data
provided by the contractor because they are not required to document
such activities. For example, even though TSA officials told us that
they are reviewing required contractor data, including actual
maintenance costs related to labor hours and costs associated with
replacing and shipping machine parts, they did not have any
documentation to support this. TSA officials told us that they have
begun to capture these data to assist them in any future contract
negotiations.
Further, TSA officials provided no evidence that performance data for
corrective and preventative maintenance required under contracts are
being reviewed. TSA officials told us that they perform such reviews,
but do not document their activities since there are no TSA policies or
procedures requiring them to do so. Therefore, TSA could not provide
assurance that contractors are complying with contract performance
requirements. For example, although TSA documents monthly meetings with
contractors to discuss performance data, TSA officials did not provide
evidence that they independently determine the reliability and validity
of data required by the contracts, such as mean time between failures
and mean time to repair, which are important to making informed
decisions about future purchases of EDS and ETD equipment and their
associated maintenance costs. Further, TSA officials provided no
evidence that they ensure that contractors are performing scheduled
preventative maintenance. TSA officials told us that they review the
contractor-submitted data to determine whether contractors are
fulfilling their contractual obligations, but do not document their
activities because there are no TSA policies or procedures to require
such documentation.
Additionally, for EDS contracts with possible financial penalties, TSA
officials told us that they review contractor-submitted mean downtime
data on a monthly basis to determine the reliability and validity of
the data and to determine whether contractors are meeting contract
provisions or should be penalized. However, TSA officials do not
document these activities because there are no TSA policies or
procedures requiring them to do so. As a result, without adequate
documentation, there is no assurance as to whether or not contractors
are meeting contract provisions or that TSA has ensured that it is
making appropriate payments for services provided.
Conclusions:
The cost of maintaining checked baggage-screening equipment has
increased as more EDS and ETD machines have been deployed and
warranties expire. TSA's move in March 2005 to firm-fixed-price
maintenance contracts for EDS and ETD maintenance was advantageous to
the government in that it helps control present and future maintenance
costs. Firm-fixed-price contracts also help ensure price certainty and
therefore are more predictable. However, unresolved issues remain with
the past contractor, specifically fees awarded to former contractor
Boeing that may have been excessive due to a lack of timely evaluation
of the contractor's performance. The House Appropriations Committee has
expressed concern about these unresolved issues; specifically, what
actions TSA has taken to recover these excessive fees, and the extent
to which any collections might impact future TSA obligations. Closing
out the Boeing contract is essential to resolving these issues. In
responding to our draft report, DHS stated that the completion of an
EDS life-cycle cost is over a year away. Absent such a life-cycle cost
model, TSA may not be identifying cost efficiencies and making informed
procurement decisions regarding the future purchase of EDS and ETD
machines and maintenance contracts. Further, TSA must provide evidence
of its reviews and analyses of contractor-submitted data and perform
analyses of contractor data to determine the reliability and validity
of the data and to provide assurance of compliance with contract
performance requirements and internal control standards. Without
stronger oversight, TSA will not have reasonable assurance that
contractors are performing as required and that full payment is
justified based on meeting mean downtime requirements.
Recommendations:
To help improve TSA's management of EDS and ETD maintenance costs and
strengthen oversight of contract performance, we recommend that the
Secretary of Homeland Security instruct the Assistant Secretary,
Transportation Security Administration, to take the following three
actions:
* establish a timeline to complete its evaluation and close out the
Boeing contract and report to congressional appropriations committees
on its actions, including any necessary analysis, to address the
Department of Homeland Security Office of Inspector General's
recommendation to recover any excessive fees awarded to Boeing Service
Company;
* establish a timeline for completing life-cycle cost models for EDS,
which TSA recently began; and:
* revise policies and procedures to require documentation of the
monitoring of EDS and ETD maintenance contracts to provide reasonable
assurance that:
* contractor maintenance cost data and performance data are recorded
and reported in accordance with TSA contractual requirements and:
* self-reported contractor mean downtime data are valid, reliable, and
justify the full payment of the contract amount.
Agency Comments and Our Evaluation:
We provided a draft of this report to DHS for its review and comment.
On July 24, 2006, we received written comments on the draft report.
DHS, in its written comments, concurred with our findings and
recommendations, and agreed that efforts to implement these
recommendations are essential to a successful explosive detection
systems program. DHS stated that it has initiated efforts to improve
TSA's management of EDS and ETD maintenance costs and strengthen
oversight of contract performance. Regarding our recommendation that
TSA establish a timeline to close out the Boeing contact and report to
congressional committees on its actions to recover any excessive fees,
DHS stated that TSA has conducted a contract reconciliation process to
ensure that no fees would be paid on costs that exceeded the target due
to poor contractor performance and that Boeing and TSA have reached an
agreement in principle on this matter and the documentation is in the
approval process with closure anticipated in July 2006. Regarding our
recommendation to establish a timeline for completing the EDS life-
cycle cost model, DHS stated that TSA expects to complete its prototype
evaluation in September 2006 and that the EDS life-cycle cost model
will be completed 12 months after the prototype has been approved.
Regarding our recommendation to revise TSA policies and procedures to
require documentation of its monitoring of EDS and ETD maintenance
contracts, DHS stated that a TSA contractor is developing automated
tools to perform multiple analyses of contractor-submitted data that
DHS said would allow TSA to accurately and efficiently certify the
contractors' performance against their contractual requirements and
would allow TSA to independently validate and verify maintenance and
cost data. The department's comments are reprinted in appendix II.
We will send copies of this report to the Secretary of Homeland
Security and the Assistant Secretary, Transportation Security
Administration, 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 or your staffs have any questions or need additional
information, please contact me at (202) 512-8777 or berrickc@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report are acknowledged in appendix III.
Signed by:
Cathleen A. Berrick:
Director, Homeland Security and Justice Issues:
[End of section]
Appendix I: Information for Congressional Committees:
Transportation Security Administration Explosive Detection Systems
Maintenance Costs:
Information for Congressional Committees April 19, 2006:
Introduction:
House Conference Report 109-241 which accompanied the Department of
Homeland Security Appropriations Act, 2006 (Public Law 109-90)[Footnote
30]-directed GAO to report on the reasons for cost increases in
maintaining TSA's explosive detection systems[Footnote 31], including
TSA's related contracting practices. In February 2006, a House
Appropriations staffer told us that this information would assist in
the committee's budget deliberations.
Objectives:
What are the historical, current, and projected costs for the
maintenance of explosive detection systems (EDS) and explosive trace
detection (ETD) machines?
What factors played a role in EDS and ETD maintenance costs and what
factors could affect future costs?
What has TSA done to control EDS and ETD maintenance costs?
To what extent does TSA oversee the performance of EDS and ETD
maintenance contractors?
Scope and Methodology:
To determine TSA costs to maintain EDS and ETD machines we:
* reviewed TSA contract files and budget documents for fiscal years
2003 through 2007, and:
* interviewed TSA headquarters officials, Department of Homeland
Security Office of the Inspector General (DHS OIG) officials, and EDS
and ETD contractor representatives. For purposes of our review, we
focused on the amounts obligated under contracts to maintain the
machines. We did not review TSA's negotiations for maintenance services
or the process for awarding contracts, nor did we assess other direct
or indirect costs related to TSA or DHS employees engaged in contract
administration or other related items.
To determine what factors played a role in maintenance costs and what
TSA has done to control costs, we:
* reviewed TSA contract files, acquisition and strategic plans, budget
documents, TSA processes for reviewing contract cost and performance
data, and a DHS OIG report[Footnote 32]; and:
* interviewed TSA headquarters officials, DHS OIG officials, and EDS
and ETD contractor representatives.
To determine the extent of TSA contract oversight, we:
* reviewed TSA contract files and processes for reviewing contract
performance data,
* interviewed TSA headquarters officials and EDS and ETD contractor
representatives, and
* reviewed GAO standards for internal controls[Footnote 33] and our
previous work on TSA's acquisition function[Footnote 34].
We performed our work from January 2006 through June 2006 in accordance
with generally accepted government auditing standards.
Results in Brief:
According to TSA budget documents, TSA has obligated almost $470
million from fiscal year 2002 through fiscal year 2005 for EDS and ETD
maintenance. In fiscal year 2006, TSA estimates it will spend $199
million and has projected it will spend $234 million in fiscal year
2007[Footnote 35].
* TSA was unable to provide us data on maintenance cost per machine
prior to fiscal year 2005 because, according to TSA officials, its
previous contract with Boeing Service Company (Boeing) to maintain EDS
and ETD machines was not structured to capture these data.
* TSA did not provide us with projections of EDS and ETD maintenance
costs beyond fiscal year 2007, although TSA has negotiated maintenance
prices per machine through fiscal year 2009.
Different factors have played a role in costs to date and will
influence future maintenance costs:
* According to the DHS OIG, TSA had awarded excessive fees under the
Boeing contract, which ran from June 2002 to March 2005. TSA agreed to
recover any excessive fees paid to Boeing, if TSA determines that such
fees are not warranted. However, as of April 2006, TSA had not yet
completed its evaluation of Boeing's performance and thus had not yet
determined if there are any fees to recover. TSA officials stated that
they did not know when TSA would make a final determination on this
matter.
* TSA officials stated that cost increases were due, in part, to the
larger than expected number of machines that came out of warranty.
* Lifecycle cost estimates were not developed for Boeing, or for
Siemens Maintenance Services (Siemens), L-3 Communications Security and
Detection Systems (L-3), and General Electric InVision, Inc. (GE
InVision), which also have maintenance contracts with TSA. However, in
August 2005, TSA contracted for the development of a lifecycle cost
model, including cost estimates, which TSA officials say will assist
them in managing future maintenance costs. In February 2006, the
contractor had begun work on the model, however, TSA did not know when
the model would be completed.
TSA's move to firm fixed price contracting in March 2005 provided
advantages over cost-reimbursement type contracts, such as price
certainty. Additionally, TSA included performance requirements in
contracts, including financial penalties in some contracts.
Although TSA has included contractor performance requirements in the
EDS and ETD maintenance contracts, some oversight issues remain. For
example, although TSA officials told us that they review the contractor-
submitted data to determine whether contractors are fulfilling their
contractual obligations, such as mean downtime data, they do not
document their activities because there are no TSA policies or
procedures to require such documentation. As a result, there is no
assurance as to whether or not contractors are meeting contract
provisions or should be penalized.
We are making three recommendations to the Secretary of Homeland
Security to help improve TSA's management of EDS and ETD maintenance
costs and oversight of contractor performance. We are recommending
that:
* TSA report to the congressional appropriations committees on its
actions, including any necessary analysis, to address the DHS OIG
recommendation to recover any excessive fees awarded to Boeing;
* TSA establish a timeline to complete lifecycle cost models for EDS
and ETD machines, which TSA recently began; and:
* TSA revise its polices and procedures to document its monitoring of
EDS and ETD maintenance contracts to provide reasonable assurance that
contractor performance data are recorded and reported in accordance
with TSA contractual requirements and self-reported contractor mean
downtime is valid, reliable and justify the full payment of the
contractor amount.
TSA reviewed these slides in their entirety and provided several
technical comments, which we incorporated as appropriate.
Background:
TSA was mandated to screen all checked baggage using explosive
detection systems at airports by December 31, 2003[Footnote 36].
Explosive Detection Systems (EDS) use computer-aided tomography x-rays
to recognize the characteristics of explosives. In general, EDS are
used for checked baggage screening.
Explosive Trace Detection (ETD) machines use chemical analysis to
detect traces of explosive material vapors or residues. ETD machines
are used for both passenger carry-on baggage and checked baggage
screening.
According to TSA budget documents, TSA will have deployed over 1,400
EDS and 6,600 ETD machines at baggage screening locations in over 400
airports nationwide by the end of fiscal year 2006.
TSA is responsible for the EDS and ETD maintenance costs after their
warranties expire[Footnote 37].
EDS and ETD maintenance includes preventative maintenance scheduled
activities to increase machine reliability that are performed monthly,
quarterly, and yearly based on the contractors' maintenance schedules
and corrective maintenance actions performed to restore machines to
operating condition after failure.
Background-TSA Cost Reimbursement Contract with Boeing:
From June 2002 through March 2005, Boeing was the prime contractor for
the installation and maintenance of EDS and ETD machines at over 400
U.S. airports. TSA officials stated that the Boeing contract was
awarded at a time when TSA was a new agency with many demands and
extremely tight schedules for meeting numerous congressional mandates
related to passenger and checked baggage screening. Boeing had a cost
reimbursement contract[Footnote 38] with TSA, which was competitively
bid and contained renewable options to 2007.
* Boeing subcontracted EDS maintenance through firm fixed price
contracts[Footnote 39] with the original EDS manufacturers, GE InVision
and L-3, which performed maintenance on their respective EDSs.
* Boeing subcontracted ETD maintenance through a firm fixed price
contract with Siemens.
* Consistent with language in the fiscal year 2005 DHS House
Appropriations Committee report and due to TSA's acknowledgment of
Boeing's failure to control costs, TSA received DHS authorization to
negotiate new EDS and ETD maintenance contracts in January 2005.
Background-TSA Firm Fixed Price Contracts with Siemens, L-3, and GE
InVision:
In March 2005, TSA signed firm fixed price contracts for EDS and ETD
maintenance.
* TSA awarded a competitively bid contract to Siemens to provide
maintenance for ETD machines.
* TSA negotiated sole source contracts with L-3 and GE InVision because
they are the original equipment manufacturers and owners of the
intellectual property of their respective EDS.
* TSA can exercise 4 1-year options on all three contracts through
March 2009.
In September 2005, TSA awarded a competitively bid firm fixed price
contract to Reveal Imaging Technologies, Inc., (Reveal) for both the
procurement and maintenance of a reduced-size EDS.
Historical, Current, and Projected Costs for EDS and ETD Maintenance:
EDS and ETD Maintenance Costs:
According to TSA budget documents, TSA has obligated almost $470
million for EDS and ETD maintenance from fiscal years 2002 through
2005.
Overall, costs for EDS and ETD maintenance grew from $14 million in
fiscal year 2002 to an estimated $199 million in fiscal year 2006. In
fiscal year 2007, TSA projects it will spend $234 million.
TSA was not able to provide us data on the maintenance cost per machine
prior to fiscal year 2005 because, according to TSA officials, its
previous contract with Boeing to maintain EDS and ETD machines was not
structured to capture these data.
According to TSA officials, in fiscal year 2004, TSA requested and
received approval to reprogram about $32 million due to higher levels
of maintenance costs than expected.
In fiscal year 2005, TSA requested and received approval to reprogram
$25 million to fund the L-3 contract ($16.6 million) and to closeout
the Boeing contract ($8.4 million), which has yet to be closed.
EDS and ETD Machine Maintenance Budget Amounts, Fiscal Years 2002
through 2007 (In millions):
Fiscal year: 2002[A];
Amount Requested: [Empty];
Appropriated(as revised): [Empty];
Prior year carry over: [Empty];
Re-programmed: [Empty];
Total available: [Empty];
Amount Obligated: 14.
Fiscal year: 2003;
Amount Requested: 75;
Appropriated(as revised): 75;
Prior year carry over: 25;
Re-programmed: [Empty];
Total available: 100;
Amount Obligated: 93.
Fiscal year: 2004;
Amount Requested: 100;
Appropriated(as revised): 75;
Prior year carry over: 61;
Re-programmed: 32;
Total available: 168;
Amount Obligated: 168.
Fiscal year: 2005;
Amount Requested: 205;
Appropriated(as revised): 175;
Prior year carry over: 5;
Re-programmed: 25;
Total available: 205;
Amount Obligated: 195.
Fiscal year: 2006[B];
Amount Requested: 200;
Appropriated(as revised): 199;
Prior year carry over: [Empty];
Re-programmed: [Empty];
Total available: 199;
Amount Obligated: 199.
Fiscal year: 2007;
Amount Requested: 234;
Appropriated(as revised): [Empty];
Prior year carry over: [Empty];
Re-programmed: [Empty];
Total available: [Empty];
Amount Obligated: [Empty].
Source: TSA.
Note: TSA's budgeted amounts for EDS and ETD maintenance include
utility costs for the operation of the machines. Such costs comprise
less than 10 percent of the total amounts budgeted for maintenance each
fiscal year. According to TSA, in fiscal year 2002 and fiscal year
2003, the amount for utilities was negligible. GAO did not
independently verify budget amounts.
[A] According to TSA officials, in fiscal year 2002, TSA was budgeted
approximately $527 million for EDS equipment installation and
maintenance, of which $14 million was expended for maintenance. TSA
carried forward fiscal year 2002 funding for EDS and ETD maintenance to
fiscal year 2003 and fiscal year 2004.
[B] Fiscal year 2006 obligations are estimated.
[End of table]
TSA officials did not provide us with projections of costs beyond 2007.
However, current contracts have negotiated maintenance prices per
machine through March 2009, if TSA decides to exercise option years in
the contracts.
Future EDS and ETD maintenance costs depend on decisions made as
outlined in a February 2006 TSA strategic planning framework for
screening checked baggage using EDS and ETD. Among other things, the
plan discusses options for the deployment of new technologies and
refurbishment of existing equipment.
Factors That Played a Role in EDS and ETD Maintenance Costs:
Factors That Played a Role in Maintenance Costs and Could Impact Future
Costs:
Different factors have played a role in costs to date and will
influence future maintenance costs for EDS and ETD machines:
According to a September 2004 DHS OIG report, TSA did not follow sound
contracting practices in administering the Boeing contract, which was
primarily for the installation and maintenance of EDS and ETD
machines[Footnote 40].
* Among other things, the DHS OIG found that TSA had paid provisional
award fees totaling $44 million through December 2003 without any
evaluation of Boeing's performance[Footnote 41].
* In response to the DHS OIG, TSA agreed to recover any excessive award
fees paid to Boeing if TSA determines that such fees are not warranted.
However as of April 2006, TSA had not yet completed its evaluation of
Boeing's performance and thus had not yet determined if there were any
fees to recover.
* TSA officials told us that they did not know when TSA would make a
final determination on this matter.
TSA officials stated that cost increases were also due to the larger
than expected number of machines that came out of warranty.
Under the current firm fixed price contracts, if TSA exercises 4 1-
year options through March 2009, maintenance costs per machine would
increase primarily by an annual escalation factor in the contracts that
takes into account the employment cost index and the consumer price
index[Footnote 42].
Future maintenance costs will be impacted by a range of factors,
including the number of machines deployed and out of warranty,
conditions under which machines operate, mean downtime requirements,
the emergence of new technologies or improved equipment, and
alternative screening strategies.
* TSA's February 2006 strategic plan framework for screening checked
baggage over the next 20 years discusses factors that may impact future
maintenance costs. For example, the framework discusses the
refurbishment of existing machines and the deployment of new
technologies, but does not outline the number of machines or specific
time frames for implementation. Additionally, the impact of these
strategies on future maintenance costs is unknown[Footnote 43].
* If no new equipment or maintenance providers emerge, TSA may pay a
premium in future sole source contracts where intellectual property
rights are involved. For example, because L-3 and GE InVision had
intellectual property rights on their machines, their maintenance
contracts were not bid competitively and therefore prices were not
subject to the benefits of market forces.
Lifecycle cost estimates were not developed for the Boeing, Siemens, L-
3, and GE contracts before the maintenance contracts were executed and,
as a result, TSA did not have a complete picture of all maintenance
costs. In August 2005, TSA hired a contractor to define parameters for
a lifecycle cost model. A TSA official told us that the contractor
began work on a lifecycle cost model for EDS in February 2006 and did
not know when the model would be completed.
TSA Actions to Control EDS and ETD Maintenance Cost Increases:
Firm fixed price contracts starting in March 2005 offer TSA certain
advantages over cost reimbursement type contracts:
* Price certainty is guaranteed for up to five years if TSA exercises
options to 2009.
* Siemens and Reveal contracts were competitively bid, although the GE
InVision and L-3 contracts were sole source contracts.
TSA did not provide per-unit maintenance costs prior to March 2005
because the Boeing contract was not structured to capture these data.
Number of EDS and ETD Machines and Annual Per Machine Maintenance Cost,
Fiscal Year 2005 and Fiscal Year 2006:
Type of machine: EDS: GE CTX 2500;
FY 2005[A]: Number of machines: 140;
FY 2005[A]: Cost per unit: $61,587;
FY 2006: Number of machines: 151;
FY 2006: Cost per unit: $ 63,590.
Type of machine: EDS: GE CTX 5500;
FY 2005[A]: Number of machines: 512;
FY 2005[A]: Cost per unit: 71,549; [Empty];
FY 2006: Number of machines: 547;
FY 2006: Cost per unit: 73,876.
Type of machine: EDS: GE CTX 9000;
FY 2005[A]: Number of machines: 172;
FY 2005[A]: Cost per unit: 93,286; [Empty];
FY 2006: Number of machines: 231;
FY 2006: Cost per unit: 96,320.
Type of machine: EDS: L-3 ex6000;
FY 2005[A]: Number of machines: 508;
FY 2005[A]: Cost per unit: 97,837; [Empty];
FY 2006: Number of machines: 550;
FY 2006: Cost per unit: 101,000.
Type of machine: EDS: Reveal CT-80[B];
FY 2005[A]: Number of machines: n/a;
FY 2005[A]: Cost per unit: n/a; [Empty];
FY 2006: Number of machines: 16;
FY 2006: Cost per unit: n/a.
Type of machine: ETD: Smiths Ionscan 400A;
FY 2005[A]: Number of machines: 241;
FY 2005[A]: Cost per unit: 10,525; [Empty];
FY 2006: Number of machines: 336;
FY 2006: Cost per unit: 10,974.
Type of machine: ETD: Smiths Ionscan 400AE;
FY 2005[A]: Number of machines: 5;
FY 2005[A]: Cost per unit: 10,525; [Empty];
FY 2006: Number of machines: 6;
FY 2006: Cost per unit: 10,974.
Type of machine: ETD: Smiths Ionscan 400B;
FY 2005[A]: Number of machines: 3,038;
FY 2005[A]: Cost per unit: 8,580; [Empty];
FY 2006: Number of machines: 3,035;
FY 2006: Cost per unit: 8,946.
Type of machine: ETD: Thermo EGIS 3000;
FY 2005[A]: Number of machines: 2;
FY 2005[A]: Cost per unit: 12,899; [Empty];
FY 2006: Number of machines: 2;
FY 2006: Cost per unit: 13,526.
Type of machine: ETD: Thermo EGIS II;
FY 2005[A]: Number of machines: 425;
FY 2005[A]: Cost per unit: 13,134; [Empty];
FY 2006: Number of machines: 545;
FY 2006: Cost per unit: 13,695.
Type of machine: ETD: GE Iontrack Itemiser-W;
FY 2005[A]: Number of machines: 2,302;
FY 2005[A]: Cost per unit: $ 7,727; [Empty];
FY 2006: Number of machines: 2,322;
FY 2006: Cost per unit: $ 8,057.
Source: TSA.
NOTE: Maintenance costs represent the negotiated prices in the
maintenance contracts for EDS and ETD machines.
[A] Fiscal year 2005 per-machine maintenance costs were in effect from
March through September 2005. TSA could not provide per machine
maintenance costs prior to March 2005.
[B] Reveal EDS were installed in fiscal year 2006 and were still under
the manufacturer's warranty.
[End of table]
TSA included several contractor performance requirements in the
Siemens, L-3, G E InVision, and Reveal contracts.
* Metrics related to Reliability, Maintainability, and Availability
(RMA) of the machines must be reported to TSA[Footnote 44].
* Specific cost data related to maintenance and repair must be reported
to TSA.
* Contractors are required to meet monthly with TSA to review all
pertinent technical, schedule, and cost aspects of the contract,
including an estimate of the work to be accomplished in the next month;
performance measurement information; and any current and anticipated
problems.
Provisions in the L-3 and GE InVision contracts specify that the agreed
price for maintaining EDS will be paid only if the contractor performs
within specified mean downtime (MDT) requirements.
* MDT is calculated by the number of hours a machine is out of service
in a month divided by the number of times that machine is out of
service per month[Footnote 45].
* Contractors submit monthly invoices for 95 percent of the negotiated
contract price for the month and then submit an MDT report to justify
the additional 5 percent. Consequently, if the contractor fails to
fulfill the MDT requirements, it is penalized 5 percent of the
negotiated monthly maintenance price.
* As of February 2006, neither GE InVision nor L-3 have been penalized
for missing their MDT.
* The allowable MDT is lowered from 2005 to subsequent renewable years
in the contract, as shown in the table below.
Mean Downtime Requirement for EDS Contractors, 2005 through 2009:
2005: 24 hours;
2006: 20 hours;
2007: 18 hours;
2008: 14 hours;
2009: 12 hours.
Source: TSA:
[End of Table]
TSA Oversight of EDS and ETD Contractor Performance:
TSA's acquisition policies[Footnote 45] and GAO's standards for
internal controls[Footnote 47] call for documenting transactions and
other significant events, such as monitoring contractor activities.
Although TSA has policies and procedures for monitoring their contracts
and TSA has included contractor performance requirements in the current
EDS and ETD maintenance contracts, some oversight issues remain. The
failure of TSA to develop internal controls and performance measures
has been recognized by other GAO and DHS OIG reviews[Footnote 48].
* TSA officials provided no evidence that they are reviewing
maintenance cost data provided by the contractor because they are not
required to document such activities. For example, even though TSA
officials told us they are reviewing required contractor data,
including actual maintenance costs related to labor hours, costs
associated with replacement parts, and the costs of shipping machine
parts, they did not have any documentation to support this. TSA
officials told us that they have begun to capture these data to assist
them in any future contract negotiations.
* TSA officials provided no evidence that performance data for
corrective and preventative maintenance required under the contract is
being reviewed. TSA officials told us that they perform such reviews,
but do not document their activities since there are no TSA policies or
procedures requiring them to do so. Therefore, TSA could not provide
assurance that contractors are complying with contract performance
requirements. For example, although TSA documents monthly meetings with
contractors to discuss performance data, TSA did not provide evidence
that it independently determines the reliability and validity of data
required by the contracts, such as mean time between failures and mean
time to repair, which are important to making informed decisions about
future purchases of EDS and ETD equipment and their associated
maintenance costs.
For EDS contracts with possible financial penalties, TSA officials told
us that they review contractor-submitted mean downtime data on a
monthly basis to determine the reliability and validity of the data and
to determine whether contractors are meeting contract provisions or
should be penalized. However, TSA officials said they do not document
these activities because there are no TSA policies or procedures to do
so.
As a result, without adequate documentation, there is no assurance on
whether contractors are meeting contract provisions that TSA has
ensured that it is making appropriate payments for services provided.
Conclusions:
TSA's move to firm fixed price maintenance contracts was advantageous
to the government in that it helps control present and future
maintenance costs. Firm fixed price contracts also help ensure price
certainty and therefore are more predictable.
Unresolved issues remain with the past contractor, specifically fees
awarded to former contractor Boeing that may have been excessive due to
a lack of timely evaluation of the contractor's performance.
Although TSA has begun to develop a lifecycle cost model in order to
control costs and negotiate future contracts, TSA has not set a
timeframe to complete this model. Without such a time frame, TSA may
not be identifying cost efficiencies and making informed procurement
decisions.
Further, TSA must provide evidence of its reviews and analyses of
contractor-submitted data and perform analyses of contractor data to
determine the reliability and validity of the data and to provide
assurance of contractor compliance with contract performance
requirements and internal control standards. Without stronger
oversight, TSA will not have reasonable assurance that contractors are
performing as required and that full payment is justified based on
meeting mean downtime requirements.
Recommendations:
To help improve TSA's management of EDS and ETD maintenance costs and
strengthen oversight of contract performance, we recommend that the
Secretary of Homeland Security instruct the Assistant Secretary,
Transportation Security Administration to take the following three
actions:
report to the congressional appropriations committees on its actions,
including any necessary analysis, to address the DHS OIG recommendation
to recover any excessive fees awarded to Boeing;
establish a time line for completing a lifecycle cost model for EDS,
which TSA recently began; and:
revise its policies and procedures to require documentation of its
monitoring of EDS and ETD maintenance contracts to provide reasonable
assurance that:
* contractor maintenance cost data and performance data are recorded
and reported in accordance with TSA contractual requirements and:
* self-reported contractor mean downtime data are valid, reliable, and
justify the full payment of the contract amount.
Agency Comments:
TSA reviewed these slides in their entirety and provided several
technical comments, which we incorporated as appropriate. TSA officials
told us that they are not making formal comments on our
recommendations.
[End of section]
Appendix II Agency Comments:
U.S. Department of Homeland Security:
Washington, DC 20528:
July 24, 2006:
Ms. Cathleen A. Berrick:
Director, Homeland Security and Justice Issues:
U.S. Government Accountability Office:
441 G Street, NW Washington, DC 20548:
Dear Ms. Berrick:
Thank you for the opportunity to comment on draft report GAO-06-795,
"Oversight of Explosive Detection Systems Maintenance Contracts Can Be
Strengthened." The Department of Homeland Security (DHS) concurs with
the recommendations, and appreciates the time and resources that GAO
has devoted to this important review. The findings of this report will
help improve TSA's management of Explosives Detection Systems (EDS) and
Explosives Trace Detection (ETD) maintenance costs and strengthen
oversight of contract performance. TSA believes that these
recommendations are essential to a successful EDS maintenance program
and has already initiated efforts in response to the recommendations
outlined in the audit. In addition, we have comments in a few areas.
In March 2005, TSA entered into firm fixed price contracts for
maintenance of EDS and ETD machines. This method of contracting is
highly advantageous to the government because price certainty is
guaranteed. Firm fixed price contracts help control present and future
maintenance costs and ensure that costs are more predictable. This
method of contracting will assist TSA in controlling costs. An
additional method for controlling cost is the life cycle cost model.
TSA has begun to develop a life cycle cost model in order to control
costs and negotiate future contracts. The life cycle cost model will be
used to determine machine reliability and maintainability and influence
future contract negotiations, such as when to replace a machine versus
continuing to repair it. The prototype Life Cycle Cost Model is
estimated to be completed by September 2006.
The report states that TSA was unable to provide GAO with data on the
per machine maintenance costs prior to fiscal year 2005. The Boeing
contract was not structured to capture this data. While the Boeing
contract did not require submission of data deliverables that
identified the costs per machine, TSA did receive cost data during the
course of the contract to support the negotiations and develop a follow-
on strategy.
Regarding the Boeing contract, TSA reaffirms that the total potential
fee was awarded to Boeing under a competitive environment and
determined it to be fair and reasonable for the work performed. The
requirement to deploy electronic screening equipment to 440+ airports
in an abbreviated timeframe set forth an extremely challenging
environment for the contractor. Cost, schedule, and performance
parameters were hurried and lacked significant definition. TSA does not
intend to seek reimbursement of fees associated with the total fee
percentage. TSA conducted a contract reconciliation process to ensure
that no fees would be paid on costs that exceeded the target due to
poor contractor performance (i.e. cost overrun). Boeing and TSA have
reached an agreement in principle on this matter and the documentation
is in the approval process with closure anticipated in July 2006.
Finally, TSA established contract performance requirements in March
2005 to evaluate and monitor contractor performance regarding EDS and
ETD maintenance. These requirements are included in the current
maintenance contracts with Siemens, L-3, GE InVision, and Reveal: 1)
metrics related to Reliability, Maintainability, and Availability (RMA)
of the machines must be reported to TSA; 2) specific cost data related
to maintenance and repair must be reported to TSA; 3) contractors are
required to meet monthly with TSA to review all pertinent technical,
schedule, and cost aspects of the contract, including an estimate of
the work to be accomplished in the next month, performance measurement
information, and any current and anticipated problems.
This information is stored in the RMA database which tracks RMA and
data requirements for all maintenance contracts. TSA is developing
automated tools to perform multiple analyses of maintenance data which
will allow TSA to spot and track cost and performance trends as they
occur. TSA's independent validation and verification of maintenance and
cost data will allow it to accurately and efficiently assess the
maintenance contractors' performance against contract requirements.
TSA appreciates your review of the EDS maintenance program and thanks
GAO for the thorough analysis and discussion that comprises this
report. We will continue to re-evaluate our processes in line with best
business practices and use the findings and recommendations of this
report as a reminder of the task before us.
The following represents our responses to the recommendations.
Recommendation 1: Establish a timeline to close out the Boeing contract
and report to congressional committees on its actions, including any
necessary analysis, to address the DHS OIG recommendation to recover
any excessive fees awarded to Boeing.
Concur. TSA awarded the total potential fee to Boeing under a
competitive environment determined to be fair and reasonable for the
work performed. The requirement to deploy electronic screening
equipment to 440+ airports in an abbreviated timeframe set forth an
extremely challenging environment for the contractor. Cost, schedule,
and performance parameters were hurried and lacked significant
definition. While the Boeing contract did not require submission of
data deliverables that identified the costs per machine, TSA did
receive cost data to support the negotiations and development of a
follow-on strategy. TSA does not intend to seek reimbursement of fees
associated with the total fee percentage. TSA conducted a contract
reconciliation process to ensure that no fees would be paid on costs
that exceeded the target due to poor contractor performance. Boeing and
TSA have reached an agreement in principle on this matter and the
documentation is in the approval process with closure anticipated in
July 2006.
Recommendation 2: Establish a timeline for completing the lifecycle
cost model for Explosive Detection Systems.
Concur. TSA has begun to develop a life cycle cost model in order to
control costs and negotiate future contracts. The life cycle cost model
will be used to determine machine reliability and maintainability and
inform future contract negotiations, such as when to replace a machine
versus continuing to repair it. The prototype Life Cycle Cost Model is
in development, with an estimated completion date of September 2006.
Prototype evaluation will begin immediately upon delivery. Full
implementation of an EDS Life Cycle Cost Model will be completed within
12 months after the prototype has been approved.
Recommendation 3: Revise the policies and procedures to require
documentation of its monitoring of EDS and ETD maintenance contracts to
provide reasonable assurance that contractor maintenance cost data and
performance data are recorded and reported in accordance with TSA
contractual requirements and self reported contractor mean downtime
data are valid, reliable, and justify the full payment of the contract
amount.
Concur. In March 2005, TSA established specific procedures, which are
included in all maintenance contracts, to evaluate and monitor
contractor performance with regard to EDS and ETD maintenance. There
are three specific contractor performance requirements that are
included in the Siemens, L-3, GE InVision, and Reveal contracts: 1)
metrics related to Reliability, Maintainability, and Availability (RMA)
of the machines must be reported to TSA; 2) specific cost data related
to maintenance and repair must be reported to TSA; 3) contractors are
required to meet monthly with TSA to review all pertinent technical,
schedule, and cost aspects of the contract, including an estimate of
the work to be accomplished in the next month, performance measurement
information, and any current and anticipated problems.
TSA established the RMA database, simply called RMA. This system tracks
RMA and data requirements for all maintenance contracts. In addition,
TSA has tasked its Integrated Logistics Support (ILS) contractor to
track and review all reporting and data deliveries from the maintenance
contractors. The ILS contractor has developed software tools for
tracking and managing all deliverable products, to include submission
dates and completeness of submission. The ILS contractor is developing
automated tools to perform multiple analyses of the digital data
delivered by the maintenance contractors, to include a visual dashboard
that will allow TSA to spot and track cost and performance trends as
they occur. This independent validation and verification of maintenance
and cost data will allow TSA to accurately and efficiently certify the
maintenance contractors' performance against their contract
requirements.
Thank you for the opportunity to review and provide comments to the
draft report.
Sincerely,
Signed by:
Steven J.Pecinovsky:
Director Departmental GAO/OIG Liaison Office:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgements:
GAO Contact:
Cathleen A. Berrick (202) 512-8777:
Staff Acknowledgements:
In addition to the individual names above, Charles Bausell, R. Rochelle
Burns, Glenn Davis, Katherine Davis, Michele Fejfar, Richard Hung,
Nancy Kawahara, Dawn Locke, Thomas Lombardi, Robert Martin, and William
Woods.
FOOTNOTES
[1] Aviation and Transportation Security Act, Pub. L. No. 107-71, §
110(b), 115 Stat. 597, 615 (2001). Section 425 of the subsequently
enacted Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat.
2135, 2185-86, in effect, extended this mandate to December 31, 2003.
See 49 U.S.C. § 44901(d).
[2] To satisfy the ATSA mandate, TSA interpreted the term explosive
detection system to include both explosive detection systems (EDS) and
explosive trace detection (ETD) machines.
[3] See H.R. Conf. Rep. No. 109-241, at 52 (2005).
[4] Department of Homeland Security Appropriations Act, 2007, H.R.
5441, 109th Cong. (2006); H.R. Rep. No. 109-476, tit. II, at 49-50
(2006).
[5] U.S. Department of Homeland Security, Office of Inspector General,
Evaluation of TSA's Contract for the Installation and Maintenance of
Explosive Detection Equipment at United States Airports, OIG-04-44
(Washington, D.C.: September 2004).
[6] GAO, Standards for Internal Control in the Federal Government, GAO/
AIMD-00-21.3.1 (Washington, D.C.: November 1999).
[7] GAO, Transportation Security Administration: High-Level Attention
Needed to Strengthen Acquisition Function, GAO-04-544 (Washington,
D.C.: May 2004).
[8] Amounts attributed to maintenance also include utility costs, such
as electricity, that generally amount to less than 10 percent of the
overall amount allocated for maintenance each fiscal year, according to
TSA officials. Further, TSA officials told us they could provide us
with amounts obligated for fiscal years 2005 and 2006, but could not
provide us with the amounts expended for this time period.
[9] OIG-04-44.
[10] Mean downtime is a performance requirement in EDS and ETD
maintenance contracts. Mean downtime is calculated by the number of
hours a machine is out of service in a month divided by the number of
times that machine is out of service per month. For example, if a
machine has a total downtime of 50 hours per month and is out of
service 5 times in that month, the MDT would be equal to 50 divided by
5, which is 10 hours.
[11] Pub. L. No. 107-71, § 101, 115 Stat. at 597. See 49 U.S.C. §
114(d).
[12] Pub. L. No. 107-296, § 425, 116 Stat. at 2185-86. See 49 U.S.C. §
44901(d).
[13] General Electric InVision, Inc. is an entity of General Electric
Company.
[14] A TSA official told us that typical EDS warranties are one year
and ETD warranties are for 2 years.
[15] Cost-reimbursement contracts provide for payment of allowable
incurred costs, to the extent prescribed in the contract. These
contracts establish an estimate of total cost for the purpose of
obligating funds and establishing a ceiling that the contractor may not
exceed (except at its own risk) without the approval of the contracting
officer.
[16] Firm-fixed-price contracts provide for a price that is not subject
to any adjustment on the basis of the contractor's cost experience in
performing the contract. This contract type places upon the contractor
maximum risk and full responsibility for all costs and resulting profit
and loss. It provides maximum incentive for the contractor to control
costs and perform effectively and imposes a minimum administrative
burden upon the contracting parties.
[17] Amounts attributed to maintenance also include utility costs, such
as electricity, that generally amount to less than 10 percent of the
overall amount allocated for maintenance each fiscal year, according to
TSA officials. Further, TSA officials told us they could provide us
with amounts obligated for fiscal years 2005 and 2006, but could not
provide us with the amounts expended for this time period.
[18] As of April 2006, the Boeing contract had yet to be closed out,
according to TSA officials.
[19] Represents the negotiated prices for the maintenance of EDS and
ETD machines.
[20] OIG-04-44.
[21] GAO has identified similar instances of agencies' failure to
properly use incentives in making award fees. See GAO, Defense
Acquisitions: DOD Has Paid Billions in Award and Incentive Fees
Regardless of Acquisition Outcomes, GAO-06-66 (Washington D.C.:
December 2005).
[22] See H.R. Rep. No. 109-479, at 49-50.
[23] For EDS contracts, future labor and material costs could not be
determined, so TSA negotiated an escalation factor to be used to
determine pricing for the contract option years. For the ETD contracts,
TSA determined after a review of cost data, that it would apply a 4
percent escalation factor to prices in the contract option years. The
employment cost index is a measure of the change in the cost of labor,
free from the influence of employment shifts among occupations and
industries. The consumer price index is a measure of the average change
in prices over time of goods and services purchased by households.
[24] Includes metrics such as mean time between failures (generally the
total time a machine is available to perform its required mission
divided by the number of failures over a given period of time) and
operational availability (generally the percentage of time, during
operational hours, that a machine is available to perform its required
mission). Such reliability, maintainability, and availability data are
standard and appropriate performance requirements for maintenance
contracts.
[25] As noted in footnote 10, mean downtime is a performance
requirement in EDS and ETD maintenance contracts. Mean downtime is
calculated by the number of hours a machine is out of service in a
month divided by the number of times that machine is out of service per
month. For example, if a machine has a total downtime of 50 hours per
month and is out of service 5 times in that month, the MDT would be
equal to 50 divided by 5, which is 10 hours.
[26] TSA uses the Federal Aviation Administration (FAA) Acquisition
Management System which, as adopted by TSA, requires contractors to act
on contractual quality assurance commitments and ensure that government
quality and reliability needs are met (FAA Acquisition Management
Policy 3.10.4.2).
[27] GAO/AIMD-00-21.3.1.
[28] GAO has identified contract surveillance issues in other agencies,
such as the Department of Defense. See GAO, Contract Management:
Opportunities to Improve Surveillance on Department of Defense Service
Contracts, GAO-05-274 (Washington, D.C.: March 2005).
[29] OIG-04-44.
[30] H. R. Conf. Rep. No. 109-241, at 52 (2005).
[31] TSA interprets the term explosive detection system to include both
explosive detection systems (EDS) and explosive trace detection (ETD)
machines.
[32] U.S. Department of Homeland Security, Office of Inspector General,
Evaluation of TSA's Contract for the Installation and Maintenance of
Explosive Detection Equipment at United States Airports, OIG-04-44
(Washington, D.C.: September 2004).
[33] GAO, Standards for Internal Control in the Federal Government,
GAO/ AIMD-00-21.3.1 (Washington, D.C.: November 1999).
[34] GAO, Transportation Security Administration: High-Level Attention
Needed to Strengthen Acquisition Function, GAO-04-544 (Washington,
D.C.: May 2004).
[35] Amounts attributed to maintenance also include utility costs, such
as electricity, that generally amount to less than 10 percent of the
overall amount allocated for maintenance each fiscal year, according to
TSA officials. Further, TSA officials could provide us with amounts
obligated for fiscal years 2005 and 2006, but could not provide us with
the amounts expended for this time period.
[36] The Aviation and Transportation Security Act, Pub. L. No. 107-71 §
110(b), 115 Stat. 597, 615 (2001) mandated, among other things, that
all checked baggage at U.S. airports be screened using explosive
detection systems by December 31, 2002. Section 425 of the subsequently
enacted Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat.
2135, 2185-86, in effect, extended this mandate to December 31, 2003.
See 49 U.S.C. § 44901(d).
[37] A TSA official told us that typical EDS warranties are for one
year and that ETD warranties are for 2 years.
[38] Cost reimbursement contracts provide for payment of allowable
incurred costs, to the extent prescribed in the contract. These
contracts establish an estimate of total cost for the purpose of
obligating funds and establishing a ceiling that the contractor may not
exceed (except at its own risk) without approval of the contracting
officer.
[39] Firm fixed price contracts provide for a price that is not subject
to any adjustment on the basis of the contractor's cost experience in
performing the contract. This contract type places upon contractor
maximum risk and full responsibility for all costs and resulting profit
and loss. It provides maximum incentive for the contractor to control
costs and perform effectively and imposes a minimum administrative
burden upon the contractinq parties.
[40] OIG-04-44.
[41] GAO has identified similar instances of agencies' failure to
properly use incentives in making award fees. See GAO, Defense
Acquisitions: DOD Has Paid Billions in Award and Incentive Fees
Regardless of Acquisition Outcomes, GAO-06-66 (Washington, D.C.:
December 2005).
[42] For EDS contracts, future labor and material costs could not be
determined, so TSA negotiated an escalation factor to be used to
determine pricing for the contract option years. For the ETD contracts,
TSA determined after a review of cost data, that it would apply a 4
percent escalation factor to prices in the contract option years. The
employment cost index is a measure of the 1 8 change in the cost of
labor, free from the influence of employment shifts among occupations
and industries. The consumer price index is a measure of the average
change in prices overtime of goods and services purchased by
households.
[43] TSA issued its strategic plan framework for screening checked
baggage using EDS and ETD machines in response to various congressional
mandates, congressional committee directives, and GAO recommendations.
[44] Includes metrics such as meantime between failures (generally the
total time a machine is available to perform its required mission
divided by the number 23 of failures over a given period of time) and
operational availability (generally the percentage of time, during
operational hours, that a machine is available to perform its required
mission. Such reliability, maintainability, and availability data are
standard and appropriate performance requirements for maintenance
contracts.
[45] For example, if a machine has a total downtime of 50 hours per
month and is out of service 5 times in that month, the MDT would be
equal to 50 divided by 5 which is 10 hours.
[46] TSA uses the Federal Aviation Administration (FAA) Acquisition
Management System which, as adopted by TSA, requires contractors to act
on contractual quality assurance commitments and ensure that government
quality and reliability needs are met (FAA Acquisition Management
Policy 3.10.4.2).
[47] GAO/AI M D-00-21.3.1. 2 6
[48] GAO has identified contract surveillance issues in other agencies,
such as the Department of Defense. See GAO, Contract Management:
Opportunities to Improve Surveillance on Department of Defense Service
Contracts, GAO-05-274 (Washington, D.C.: March 2005). See also OIG-04-
44.
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