[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
EXAMINING TSA'S MANAGEMENT OF THE SCREENING PARTNERSHIP PROGRAM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
TRANSPORTATION SECURITY
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JULY 29, 2014
__________
Serial No. 113-81
__________
Printed for the use of the Committee on Homeland Security
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.gpo.gov/fdsys/
__________
U.S. GOVERNMENT PUBLISHING OFFICE
92-898 PDF WASHINGTON : 2015
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON HOMELAND SECURITY
Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Peter T. King, New York Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Paul C. Broun, Georgia Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice Brian Higgins, New York
Chair Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania William R. Keating, Massachusetts
Jeff Duncan, South Carolina Ron Barber, Arizona
Tom Marino, Pennsylvania Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi Filemon Vela, Texas
Lou Barletta, Pennsylvania Eric Swalwell, California
Richard Hudson, North Carolina Vacancy
Steve Daines, Montana Vacancy
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Mark Sanford, South Carolina
Curtis Clawson, Florida
Brendan P. Shields, Staff Director
Joan O'Hara, Acting Chief Counsel
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------
SUBCOMMITTEE ON TRANSPORTATION SECURITY
Richard Hudson, North Carolina, Chairman
Mike Rogers, Alabama, Vice Chair Cedric L. Richmond, Louisiana
Candice S. Miller, Michigan Sheila Jackson Lee, Texas
Susan W. Brooks, Indiana Eric Swalwell, California
Mark Sanford, South Carolina Bennie G. Thompson, Mississippi
Michael T. McCaul, Texas (ex (ex officio)
officio)
Amanda Parikh, Subcommittee Staff Director
Dennis Terry, Subcommittee Clerk
Brian Turbyfill, Minority Subcommittee Staff Director
C O N T E N T S
----------
Page
STATEMENTS
The Honorable Richard Hudson, a Representative in Congress From
the State of North Carolina, and Chairman, Subcommittee on
Transportation Security:
Oral Statement................................................. 1
Prepared Statement............................................. 2
The Honorable Cedric L. Richmond, a Representative in Congress
From the State of Louisiana, and Ranking Member, Subcommittee
on Transportation Security:
Prepared Statement............................................. 5
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security:
Prepared Statement............................................. 6
WITNESSES
Panel I
Ms. Cindi Martin, C.M., Airport Director, Glacier Park
International Airport:
Oral Statement................................................. 6
Prepared Statement............................................. 9
Mr. Mark VanLoh, A.A.E., Aviation Department, Kansas City
International Airport:
Oral Statement................................................. 11
Prepared Statement............................................. 13
Mr. Steve Amitay, Esq., Executive Director/General Counsel,
National Association of Security Companies:
Oral Statement................................................. 15
Prepared Statement............................................. 17
Mr. J. David Cox, Sr., National President, American Federation of
Government Employees:
Oral Statement................................................. 30
Prepared Statement............................................. 31
Panel II
Mr. William Benner, Screening Partnership Program, Office of
Security Operations, Transportation Security Administration,
U.S. Department of Homeland Security:
Oral Statement................................................. 45
Prepared Statement............................................. 46
Ms. Jennifer A. Grover, Acting Director, Homeland Security and
Justice, Government Accountability Office:
Oral Statement................................................. 48
Prepared Statement............................................. 49
FOR THE RECORD
The Honorable Sheila Jackson Lee, a Representative in Congress
From the State of Texas:
Statement of John L. Martin, Airport Director, San Francisco
International Airport........................................ 62
Statement of Valarie Long, Executive Vice President, Service
Employees International Union (SEIU)......................... 63
EXAMINING TSA'S MANAGEMENT OF THE SCREENING PARTNERSHIP PROGRAM
----------
Tuesday, July 29, 2014
U.S. House of Representatives,
Subcommittee on Transportation Security,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 9:30 a.m., in
Room 311, Cannon House Office Building, Hon. Richard Hudson
[Chairman of the subcommittee] presiding.
Present: Representatives Hudson, Rogers, Miller, Brooks,
Sanford, McCaul, Jackson Lee, Thompson, and Swalwell.
Also present: Representative Daines.
Mr. Hudson. The Committee on Homeland Security,
Subcommittee on Transportation Security, will come to order.
The subcommittee is meeting today to hear testimony on
TSA's management of the Screening Partnership Program. I
recognize myself for an opening statement.
I would like to thank our witnesses for their participation
in this hearing. We know your time is valuable, and we
appreciate you taking the time to be here with us today.
The long-term success of TSA's Screening Partnership
Program is a priority for many Members of Congress and
stakeholders around the country who understand the private
sector is highly capable of providing efficient and effective
screening services.
Unfortunately, TSA's actions over the last few years seem
to demonstrate that it does not share this goal. This hearing
is an opportunity to examine the problems and current--that
currently exist with the program and encourage TSA to take
steps to enable more airports to choose private-sector
screening.
To be clear, this does not mean airports that participate
in SPP are opting out of robust Federal oversight and
regulations, which were severely lacking before 9/11. It means
opting to use qualified private vendors to carry out day-to-day
screening functions, which lets TSA concentrate on setting and
enforcing security standards.
Eighteen domestic airports currently participate in SPP.
The law requires that contract screeners meet the same
qualifications and receive commensurate pay and benefits to
their Federal counterparts. SPP is a voluntary program, and
airports must apply to participate.
Under the FAA Modernization and Reform Act of 2012, unless
an airport's participation in SPP would hurt security or drive
up costs, TSA must approve all new applications. This 2012
provision revived an otherwise lifeless SPP application process
after the TSA administrator announced he would not expand the
program unless there was a clear and substantive advantage to
do so.
While I have great respect for Administrator Pistole, as
far as I am concerned, there will always be at least three
clear and substantial advantages to privatized screening.
No. 1, the private sector operates more efficiently than
the Federal Government and can save precious taxpayer dollars.
No. 2, the private sector provides better consumer service,
which is severely lacking in many of our Nation's screening
checkpoints.
No. 3, while private screening--or with the private
screening, TSA can stop dealing with the time-consuming human
resources issues that come with managing a workforce of over
50,000 screeners.
This is not to imply that TSA has not made progress over
the last few years. Under Mr. Pistole's leadership, TSA is
becoming more risk-based and efficient through programs like
TSA PreCheck. However, PreCheck operates just as well at SPP
airports, including San Francisco International Airport, one of
the largest and busiest airports in the country.
There is no reason why SPP cannot be expanded to create
even greater efficiencies under a risk-based system. In order
to move forward with additional SPP airports in a constructive
manner, several concerns need to be addressed in the near term.
First, TSA has established a methodology for calculating
Federal cost estimates for each new SPP contract based on
requirements in the FAA Modernization Act, but that methodology
does not include Federal retirement benefits, which we know to
be a huge cost burden.
TSA is also using the average screener's salary for its
FCEs, but is allowing vendors to bid the minimum screener
salaries, which may be unsustainable and cause significant
issues in the long term.
Second, TSA's Screening Partnership Program office does not
conduct the level of outreach to airport operators as it
should. To that end, TSA must make immediate changes that would
include educating new airports on the benefits of SPP,
communicating early and often with airports that are
transitioning to SPP, and consulting the airport directors at
existing SPP airports when selecting vendors for initial awards
and contract recompetes.
These are simple, but crucial, changes, and the only
barrier to action is TSA's well-known resistance to expanding
SPP. I look forward to discussing these and many other issues
with our witnesses today to ensure the program is working and
prepared to expand to additional airports.
[The statement of Chairman Hudson follows:]
Statement of Chairman Richard Hudson
July 29, 2014
I would like to thank our witnesses for their participation in this
hearing. We know your time is valuable and we appreciate you taking the
time to be here today.
The long-term success of TSA's Screening Partnership Program (SPP)
is a priority for many Members of Congress and stakeholders around the
country who understand the private sector is highly capable of
providing efficient and effective screening services. Unfortunately,
TSA's actions over the last few years seem to demonstrate that it does
not share this goal. This hearing is an opportunity to examine the
problems that currently exist within the program and encourage TSA to
take steps to enable more airports to choose private-sector screening.
To be clear, this does not mean airports that participate in SPP
are opting-out of robust Federal oversight and regulations, which were
severely lacking before
9/11. It means opting to use qualified private vendors to carry out
day-to-day screening functions, which lets TSA concentrate on setting
and enforcing security standards.
Eighteen domestic airports currently participate in SPP. The law
requires that contract screeners meet the same qualifications and
receive commensurate pay and benefits to their Federal counterparts.
SPP is a voluntary program, and airports must apply to participate.
Under the FAA Modernization and Reform Act of 20l2, unless an airport's
participation in SPP would hurt security or drive up costs, TSA must
approve all new applications.
This 2012 provision revived an otherwise lifeless SPP application
process after the TSA administrator announced he would not expand the
program unless there was a clear and substantial advantage to do so.
While I have great respect for Administrator Pistole, as far as I
am concerned, there will always be at least three clear and substantial
advantages to privatized screening:
1. The private sector operates more efficiently than the Federal
Government and can save precious taxpayer dollars,
2. The private sector provides better customer service, which is
severely lacking at many of our Nation's screening checkpoints, and
3. With private screening, TSA can stop dealing with the time-
consuming human resources issues that come with managing a workforce of
over 50,000 screeners.
This is not to imply that TSA has not made any progress over the
last few years. Under Mr. Pistole's leadership, TSA is becoming more
risk-based and efficient through programs like TSA PreCheck. However,
PreCheck operates just as well at SPP airports, including San Francisco
International Airport, one of the largest and busiest airports in the
country. There is no reason why SPP cannot be expanded to create even
greater efficiencies under a risk-based system.
In order to move forward with additional SPP airports in a
constructive manner, several concerns needs to be addressed in the near
term:
First, TSA has established a methodology for calculating Federal
Cost Estimates (FCEs) for each new SPP contract based on requirements
in the FAA Modernization Act, but that methodology does not include
Federal retirement benefits, which we know to be a huge cost burden.
TSA is also using the average screener salary for its FCEs, but is
allowing vendors to bid the minimum screener salaries, which may be
unsustainable and cause significant issues in the long term.
Second, TSA's Screening Partnership Program Office does not conduct
the level of outreach to airport operators that it should. To that end,
TSA must make immediate changes that include:
Educating new airports on the benefits of SPP;
Communicating early and often with airports that are
transitioning to SPP;
Consulting airport directors at existing SPP airports when
selecting vendors for initial awards and contract re-competes.
These are simple but crucial changes, and the only barrier to
action is TSA's well-known resistance to expanding SPP. I look forward
to discussing these and many other issues with our witnesses today to
ensure the program is working and prepared to expand to additional
airports.
Mr. Hudson. At this point I would ask unanimous consent
that Mr. Daines, the gentleman from Montana, be permitted to
participate in today's hearing. Without objection, so ordered.
Our Ranking Member, the gentleman from Louisiana, Mr.
Richmond, is on his way, and I will recognize him for his
statement when he arrives.
In the mean time, I would first like to yield to the
gentleman from Montana, Mr. Daines, to introduce our first
witness today.
Mr. Daines. Thank you, Mr. Chairman. Thank you for hosting
this important hearing this morning. It is with great pleasure
that I get to sit in on this hearing and introduce a fellow
Montanan.
Cindi Martin is the director of Glacier Park International
Airport. With nearly 30 years of experience in aviation, she
has been a tremendous resource to my office on everything from
air traffic control towers to the TSA and scanners. She has a
proven record of success that the airport operations at Glacier
have steadily increased over the past several years.
Located 6 miles northeast of Kalispell, Montana, Glacier
Park International Airport is an important part of the aviation
industry that supports 19,000 jobs and creates more than $1.5
billion of economic growth in Montana.
Cindi has a bachelor's degree of science in professional
aeronautics in airport management from Embry-Riddle
Aeronautical University. Before becoming the airport director
in one of the most beautiful areas of the world--and I kid you
not. If you have not been to the Flathead and been up there
where Cindi manages her operation, it is indeed one of the most
beautiful places in America.
Prior to being the airport director in Montana, she managed
airports in Wyoming, Florida, California, and Washington, DC,
metro areas. Let's just say she has seen a lot of different
operations.
We are really grateful to have you in Montana and here at
this hearing this morning, Cindi.
Thank you.
Mr. Hudson. Thank you, Mr. Daines.
To continue introducing our distinguished panel today, Mr.
Mark VanLoh is the director of aviation for the Kansas City
Aviation Department. As director, Mr. VanLoh oversees all
aspects of the management, development, operation, and
maintenance of Kansas City International Airport.
Prior to his tenure in Kansas City, Mr. VanLoh served in
leadership positions at other airports, including president and
CEO of the Chattanooga Metropolitan Airport Authority and
commissioner of airports for Cleveland Hopkins International
Airport and Burke Lakefront Airport in Cleveland, Ohio.
Mr. Steve Amitay is executive director and general counsel
for the National Association of Security Companies, NASCO, the
Nation's largest contract security association. Mr. Amitay is
also the president of Amitay Consulting, a government affairs
firm in Washington, DC.
Since 2006, Mr. Amitay has led NASCO's efforts in working
with Congress, Federal agencies, and the GAO on programs,
legislation, and issues related to private security, in
general, and, specifically, the use of private security by the
Federal Government.
Mr. J. David Cox is the national president of the American
Federation of Government Employees, a position he was elected
to in 2012. AFGE is the largest Federal employee union,
representing 650,000 Federal and D.C. Government workers
Nation-wide and overseas.
AFGE provides its members with legal representation,
legislative advocacy, technical expertise, and informational
services. He also has ties to my home State in North Carolina.
So I appreciate all of you being here.
The witnesses' full written statements will appear in the
record.
Other Members are reminded that statements may be submitted
for the record.
[The statements of Ranking Member Richmond and Ranking
Member Thompson follow:]
Statement of Ranking Member Cedric L. Richmond
July 29, 2014
Thank you, Mr. Chairman.
Thank you for convening this hearing.
Today, we will have an opportunity to hear from both private-sector
and Government witnesses about the Transportation Security
Administration's Screening Partnership Program.
Regardless of our personal convictions about whether passenger and
baggage screening should be conducted by Federal or contract screeners,
we all have an interest in ensuring that TSA is operating the program
efficiently and in accordance with the law.
According to TSA, the agency has approved all applications from
airports opting to participate in the Screening Partnership Program
since changes to the controlling law were enacted in 2012.
While I understand and appreciate concerns about how long it has
taken TSA to solicit and award contracts for screening services
following the initial approval of applications, my concern about this
program is primarily focused on how the existing workforce is impacted.
Transportation Security Officers serve on the front lines of our
fight to protect our aviation sector.
Through no fault of their own, they are subject to being left
without a job or being forced to take a pay cut and lose benefits when
an airport decides to opt out of using Federal screeners. TSA's
decision to ignore the Department of Labor's determination that
prevailing wage requirements should apply to all SPP contracts only
compounds this problem.
I would humbly submit that TSA should stick to security policy and
allow the Department of Labor to interpret the applicability of labor
laws to Federal contracts.
By defying the Department of Labor on this issue, TSA is
encouraging a race to the bottom as it relates to wages for screeners
across the country.
This applies to both Federal screeners who work at airports that
may opt to participate in the SPP and those with contract screeners
already in place.
As contracts for screening services expire and new contracts are
bid on, companies with existing contracts will be at a distinct
disadvantage in submitting a competitive bid as it relates to cost.
I am hopeful that someone in the administration will step in, do
the right thing, and require TSA to include prevailing wage
requirements in SPP contracts.
Failing to do so will result in a return to the pre-9/11 system
where screeners were compensated at the bare minimum rate, fostering
rapid workforce turnover and an abundance of inexperienced screeners on
the front lines.
Protecting our aviation system should be a career option, not a
part-time, low-paying job.
I look forward to hearing from each of the witnesses before the
subcommittee today about their views on TSA's management of the
Screening Partnership Program.
Specifically, I am eager to hear the perspective of the front-line
workforce from AFGE national president Cox.
As the exclusive representative for Transportation Security
Officers, AFGE is uniquely positioned to understand the strains placed
on the workforce when an airport opts to transition to contract
screeners.
I am also looking forward to hearing from Ms. Grover about how TSA
has implemented the Government Accountability Office's recommendations
for improvements to the program.
Before yielding back, Mr. Chairman, I ask unanimous consent that
testimony provided to the committee by John L. Martin, airport director
of San Francisco International Airport, calling for TSA to comply with
the Service Contract Act (SCA) and honor the current collectively-
bargained rates of wages and benefits for its employees, be entered
into the record.
Additionally, I ask unanimous consent to enter into the record
testimony provided to the committee from Valarie Long, executive vice
president of the Service Employees International Union, which expresses
serious concern about the failure of TSA to comply with the Department
of Labor decision regarding the Service Contract Act and points to the
fundamental problems to public security that arise when employees--
whether Federal or contracted--are not adequately trained and
compensated.
Thank you, Mr. Chairman. I yield back the balance of my time.
______
Statement of Ranking Member Bennie G. Thompson
July 29, 2014
Thank you, Mr. Chairman.
And thank you for holding this hearing today.
I would also like to thank the witnesses for appearing before the
subcommittee to discuss the Transportation Security Administration's
Screening Partnership Program. The program at issue today, which
affords airports the opportunity to return to the pre-9/11 model of
using contract employees to screen passengers and baggage at our
Nation's airports, tends to evoke strong passion on both sides of the
aisle.
After 9/11 it was clear to the vast majority of Members of Congress
and the Bush administration that transitioning to a Federal screener
workforce was the right thing to do for the security of our Nation.
And, it worked. There has not been a successful attack against our
aviation system on U.S. soil since 9/11. Despite that fact, Republican
calls for returning to a contract screener workforce have increased in
recent years.
Indeed, in 2012, the platform adopted during the Republican
National Convention called for the private sector to take over airport
screening wherever feasible. Some on the other side of the aisle claim
that transitioning to a contract workforce results in more efficient
and friendlier screeners.
This claim simply does not stand up to scrutiny. What actually
happens when an airport chooses to use contract screeners is that the
very same Transportation Security Officers working at the airport are
recruited by the private screening company that is awarded the
contract.
One day they are Federal employees with the associated benefits and
employment protections and the next they are employees of a
corporation, likely headquartered in a far-away State, without the
security of a Federal pension in later years. How that could make the
screeners more effective, efficient, or friendly is beyond
comprehension.
I look forward to hearing what national president Cox has to say
about Transportation Security Officers that have recently been
recruited by the company that has been awarded the contract to conduct
screening services at four airports in Montana. I also look forward to
hearing from Mr. Cox about the strain placed on screeners when they are
informed that the airport they work at will be transitioning to a
contract screener workforce.
In 2012, the Government Accountability Office issued a report
highlighting deficiencies in TSA's management of the Screening
Partnership Program. I look forward to hearing from Ms. Grover on the
steps TSA has taken to improve the management of the program and
implement GAO's recommendations. Specifically, I will be interested in
understanding whether TSA is providing airports that inquire about the
program the information they need to make an informed decision about
whether and how to apply to the program.
As for Mr. Benner, I am deeply concerned with TSA's recent decision
to rebuke the Department of Labor and insist that the agency will not
include prevailing wage requirements in SPP contracts. The Department
of Labor directed TSA to include prevailing wage requirements in SPP
contracts in June of 2013. I will be interested in hearing from Mr.
Benner about why it took TSA over a year to respond to the Department
of Labor and why the agency continues to ignore the directive.
Finally, I would like to point out that many of the changes made to
the law controlling for entry into the Screening Partnership Program in
the FAA Modernization and Reform Act of 2012 were ill-informed and
should be repealed. Chief among those is the provision allowing for
subsidiaries of foreign-owned corporations to compete for and be
awarded contracts for screening services.
Earlier this Congress, I, along with Ranking Members Richmond and
Lowey introduced the Contract Screener Reform and Accountability Act
which would reinstate the law stipulating that a company could only get
a contract for screening services if it was owned and controlled by a
U.S. citizen.
With that Mr. Chairman, I yield back the balance of my time.
Mr. Hudson. The Chairman now recognizes Ms. Martin to
testify.
STATEMENT OF CINDI MARTIN, C.M., AIRPORT DIRECTOR, GLACIER PARK
INTERNATIONAL AIRPORT
Ms. Martin. Chairman Hudson, Mr. Daines, thank you very
much for the opportunity to share with the committee the
Flathead Municipal Airport Authority's experience with the TSA
Screening Partnership application and transition process.
The Authority owns and operates Glacier Park International
Airport, a Category 3 non-hub/GA airport located in northwest
Montana, 20 minutes from Glacier National Park. The airport is
one of 13 commercial service airports in Montana.
Currently there are five airports in eastern Montana with
essential air service that participate in the Screening
Partnership Program. To date, five additional Montana
commercial service airports have applied to the Screening
Partnership Program.
It is not a coincidence that most of the commercial service
airports in Montana have applied to the program. In September
and October 2007, TSA senior management came to Montana and
made personal visits to every commercial service airport in the
State to promote the Screening Partnership Program.
TSA management encouraged each airport to apply to the
program, citing the agency's desire to be relieved of the
transportation security officer human resources burden so that
the agency could concentrate on regulatory compliance and
oversight.
TSA's strong encouragement to apply to the program
dovetailed with the Airport Authority's serious concerns about
TSA's staffing levels and customer service at Glacier Park
International Airport.
Prior to the decision to apply to the program, the
airport's TSA staffing members had been reduced every year,
despite increasing passenger traffic. In the winter of 2007,
airport management was informed that the then-current staffing
level was again being reduced, this time by nearly half, from
30 to 17.
Additionally, airport management consistently received
complaints from the flying public about poor customer service
from TSOs and long wait times, and our incumbent air carriers
regularly complained about flight delays caused by slow TSA
baggage and passenger screening.
In the summer of 2007, the Airport Authority invested in an
expansion of the airport security checkpoint with the
expectation that some of the passenger screening efficiencies
would be realized, but these benefits did not materialize.
Numerous appeals by the Airport Authority to TSA headquarters
about staffing and customer service issues went unanswered.
Finally, in March 2008, after engaging Montana's
Congressional representatives, TSA headquarters informed the
airport that screener staffing at the airport was based on
specific data fed into the agency's staffing allocation model
based on October official airline guide data.
Although the airport receives year-round air service, we
experience a large seasonal spike in passenger traffic from
June through September. Passenger traffic from October through
May is significantly reduced. So using October OAG flight
schedules to plan for staffing at this airport is not
appropriate for determining staffing levels that include the
peak summer season.
Given these frustrating communications with TSA
headquarters, continued staffing problems and customer service
complaint issues, the Airport Authority began exploring the SPP
option in earnest.
Following considerable due diligence, the Airport Authority
became convinced that a private screening contractor could
better serve the flying public and our air carrier partners'
needs far better than TSA workforce could or would.
In October 2009, the Authority submitted its application to
participate in the Screening Partnership Program in accordance
with the standards in effect at the time, and then we waited.
On October 28, 2011, TSA leadership announced that TSA
would not expand the Screening Partnership Program because it
did not see a clear or substantial advantage to expanding the
program and that the pending applications from five airports
were denied.
Thus, without visiting, consulting, or communicating with
the Airport Authority or providing any substantive
justification for its decision, TSA summarily sent the Airport
Authority a letter denying our application.
Numerous appeals by the Airport Authority to TSA
headquarters and leadership inquiring about the new standard
and the metrics used to justify the denial of our application
went unanswered.
In the spring of 2012, TSA announced that there was a new
application and process for applying to the program. I
personally was contacted by the SPP office and encouraged to
submit a new application.
The instructions to TSA's new application form state that,
``Given the level of participation in the current program, and
in order to maximize TSA's effectiveness as a Federal
counterterrorism security agency, TSA is not inclined at this
time to expand the Screening Partnership Program unless there
are clear and substantial advantages to do so.''
The instructions go on to state that, ``Therefore, your
application must explain how private screening at your airport
will provide those clear and substantial advantages, while
maintaining our high standards and meeting the threats of today
and the future.''
Despite the fact that the airport never received an answer
as to the substantive--the specific substantive reasons the
first application was denied or even the substantive criteria
against which the new application would be measured, we applied
again on April 6, 2012.
At approximately the same time, three other airport--
Montana airports--reapplied to the Screening Partnership
Program: Bozeman, Butte, and West Yellowstone. Missoula
International Airport, whose application had been denied in
January 2011, did not reapply.
In October 2012, the four Montana airports were informed
that a request for proposal for SPP services at our airports
was being issued. The RFP was released on October 23, 2012,
with responses due on November 26, 2012.
In mid-January 2013, the Montana airports were informed
that the contract was being--award was being pushed back to
late February 2013. Initial indication of a contract award was
made by TSA to the four Montana airports in March 2013 and
then, without warning or explanation or--the solicitation was
canceled on April 17, 2013. There was no official reason
offered by TSA for the cancellation, nor were we given any time
line for the reissuance of an RFP.
On August 30, 2013, the four Montana airports were notified
that a second RFP for SPP services were being issued and that
responses were due by September 30, 2013. On November 13, 2013,
we were informed via email that the response date had been
pushed back to November 19, 2013.
Finally, on May 30, 2014, the four Montana airports that
had applied to SPP program were notified that an SPP contract
had been awarded effective June 1, 2014, and that the
transition to SPP contractor would occur within 90 days, that
is, by August 29, 2014, 4 years and 10 months after our first
application to the program.
Within days of the official notification of the award, the
SPP contractor was on site at our airport. While the transition
period has not been without a few hiccups, we are seeing light
at the end of what has been a very long tunnel.
The Authority's decision to apply for SPP was not made
lightly. It was made in the best interest of the flying public,
our air carrier partners, and the community. Despite the
frustrating length of time through the fits and starts of this
process and the lack of communication from TSA, we would do it
all again.
We believe in the Screening Partnership Program and firmly
believe that SPP is the right choice for Glacier Park
International Airport.
That concludes my prepared statement, Mr. Chairman. I would
be happy to answer any questions.
[The prepared statement of Ms. Martin follows:]
Prepared Statement of Cindi Martin
Chairman Hudson, Ranking Member Richmond, and Members of the
subcommittee: Thank you for the opportunity to share with the committee
the Flathead Municipal Airport Authority's experience with the TSA
Screening Partnership Program (SPP) application and transition process.
The Authority owns and operates Glacier Park International Airport, a
Category 3, non-hub/GA airport located in Northwest Montana--20 minutes
from Glacier National Park.
The airport is one of 13 commercial service airports in Montana.
Currently there are 5 airports in eastern Montana with essential air
service (EAS) that participate in the Screening Partnership Program
(SPP) and to-date 5 additional Montana commercial service airports have
applied to the Screening Partnership Program (SPP).
It is not a coincidence that most of the commercial service
airports in Montana have applied to the program.
In September and October of 2007, TSA senior management came to
Montana and made personal visits to every commercial service airport in
the State to promote the Screening Partnership Program. TSA management
encouraged each airport to apply to the Program, citing the agency's
desire to be relieved of the Transportation Security Officer (TSO)
human resources burden so that the agency could concentrate on
regulatory compliance and oversight.
TSA's strong encouragement to apply to the program dovetailed with
the Airport Authority's serious concerns about TSA staffing levels and
customer service at Glacier Park International Airport.
Prior to the decision to apply to the program, the airport's TSA
staffing numbers had been reduced every year, despite increasing
passenger traffic. And, in the winter of 2007, airport management was
informed that the then-current staffing level was again being reduced,
this time by nearly half--from 30 to 17. Additionally, airport
management consistently received complaints from the flying public
about poor customer service from TSOs and long wait times, and
incumbent air carriers regularly complained about flight delays caused
by slow TSA baggage and passenger screening.
In the summer of 2007, the Airport Authority invested in an
expansion of the airport's security checkpoint with the expectation
that some passenger screening efficiencies would be realized, but these
benefits did not materialize.
Numerous appeals by the Airport Authority to TSA headquarters about
staffing and customer service issues went unanswered. Finally in March
2008, after engaging Montana's Congressional representatives, TSA
headquarters informed the airport that screener staffing at the airport
was based upon specific data fed into the agency's Staffing Allocation
Model (SAM) based on October Official Airline Guide (OAG) data.
Although the airport receives year-round air carrier service, we
experience a large seasonal spike in passenger traffic from June
through September. Passenger traffic from October through May is
significantly reduced, and so using October OAG flight schedules to
plan for staffing at this airport is not appropriate for determining
staffing levels that include the peak summer season.
Given these frustrating communications with TSA headquarters,
continued staffing problems, and customer complaint issues, the Airport
Authority began exploring the SPP option in earnest. Following
considerable due diligence, the Airport Authority became convinced that
a private screening contractor could better serve the flying public and
our air carrier partners' needs far better than the TSA workforce could
or would.
the authority's spp application
In October 2009, the Authority submitted its application to
participate in the Screening Partnership Program in accordance with the
standards in effect at the time.
And then we waited.
On January 28, 2011, TSA leadership announced that TSA would not
expand the Screening Partnership Program, because it did not see a
clear or substantial advantage to expanding the program, and that the
pending applications from 5 airports were denied. Thus, without
visiting, consulting, or communicating with the Airport Authority, or
providing any substantive justification for its decision, TSA summarily
sent the Airport Authority a letter denying our application.
Numerous appeals by the Airport Authority to TSA headquarters and
leadership inquiring about the new standard and the metrics used to
justify the denial of our application went unanswered.
In the spring of 2012, TSA announced that there was a new
application and process for applying to the program. I was contacted by
the SPP office and encouraged to submit a new application.
The instructions to TSA's new application form state that ``Given
the level of participation in the current program, and in order to
maximize TSA's effectiveness as a Federal counterterrorism security
agency, TSA is not inclined at this time to expand the Screening
Partnership Program unless there are clear and substantial advantages
to do so.'' The instructions go on to state that ``Therefore, your
application must explain how private screening at your airport will
provide those clear and substantial advantages, while maintaining our
high standards and meeting the threats of today and the future.''
Despite the fact that the airport never received an answer as to
the specific substantive reasons its first application was denied--or
even the substantive criteria against which the new application would
be measured--we applied again, on April 6, 2012. At approximately the
same time, three other Montana airports re-applied to the Screening
Partnership Program--Bozeman, Butte, and West Yellowstone. The Missoula
International Airport, whose application had been denied in January
2011, did not reapply.
In October 2012, the four Montana airports were informed that a
Request for Proposal (RFP) for SPP services at our airports was being
issued. The RFP was released on October 23, 2012, with responses due on
November 26, 2012.
In mid-January 2013 the Montana airports were informed that the
contract award was being pushed back to late February 2013.
Initial indication of a contract award was made by TSA to the four
Montana airports in March 2013. And, then without warning or
explanation, the solicitation was canceled on April 17, 2013.
There was no official reason offered by TSA for the cancelation,
nor were we given a time line for the reissuance of an RFP.
On August 30, 2013 the four Montana airports were notified that a
second RFP for SPP services had been issued and that responses were due
by September 30, 2013.
On November 13, 2013 we were informed, via email, that the response
due date had been pushed back to November 19, 2013.
And, finally, on May 30, 2014, the four Montana airports that had
applied to the SPP program were notified that an SPP contract had been
awarded effective June 1, 2014, and, that the transition to the SPP
contractor would occur within 90 days--that is, by August 29, 2014.
Four years and 10 months after our first application to the
program.
Within days of the official notification of the award, the SPP
contractor was on-site at our airport. And while the transition period
has not been without a few hiccups, we are seeing light at the end of
what has been a very long tunnel.
The Authority's decision to apply for SPP was not made lightly--it
was made in the best interest of the flying public, our air carrier
partners and the community. And, despite the frustrating length of time
through the fits and starts of the process and the lack of
communication from TSA, we would do it all again. We believe in the
Screening Partnership Program, and firmly believe that SPP is right for
Glacier Park International Airport.
That concludes my prepared statement, Mr. Chairman. I would be
happy to answer any questions you or the other subcommittee Members may
have.
Mr. Hudson. Thank you, Ms. Martin.
The Chairman recognizes Mr. VanLoh to testify.
STATEMENT OF MARK VAN LOH, A.A.E., AVIATION DEPARTMENT, KANSAS
CITY INTERNATIONAL AIRPORT
Mr. VanLoh. Good morning, Mr. Chairman, and Members of the
Transportation Security Committee.
My name is Mark VanLoh. I am the director of aviation for
the city of Kansas City, Missouri. Thank you for inviting me to
appear today before you.
First I would like to describe Kansas City International
Airport. It is one of the country's major medium hubs and
serves approximately 10 million annual passengers. Though it
was designed in the late 1960s, it has three separate semi-
circular passenger terminals that are not connected.
The lack of a central concourse also creates the need for
multiple security screening locations and does not allow a
central screening checkpoint that is common with most modern
airports. Several hundred screeners at several checkpoints are
employed to perform passenger screening in Kansas City.
My testimony today addresses the Screening Partnership
Program based upon Kansas City's nearly 12 years of experience
in this program. Kansas City was selected by TSA in 2002 under
the pilot program, along with San Francisco, Rochester, Tupelo,
and Jackson Hole. It is a partnership that has worked extremely
well in Kansas City.
I have been an airport operator for 30 years and, in my
view, the Screening Partnership Program has provided a level of
screening services and security protection at least as good as
and, we think, better than that TSA would have provided using
Federal personnel, and it has done so with operational
efficiency and high levels of customer satisfaction.
My counterparts at other airports are often envious of our
service record and security, and I am always happy to brag
about it.
Often I am asked by the flying public what exactly does an
airport director do and what does my typical day consist of. It
is not spent on security, it is not spent on safety, and it is
not spent negotiating with airlines.
It is dealing with 500 employees and their personnel
issues, performance reviews, labor relations, grievance
hearings, disciplinary actions, family medical leave, random
drug screening reviews, and other personnel issues. I can't
imagine, with over 50,000 employees, what kind of time TSA
spends on these issues.
In my opinion, the majority of these efforts by TSA should
be focused on intelligence gathering to reduce the threat
against aviation and then issuing policy and procedures to
protect our industry, not on personnel issues.
At Kansas City, the SPP provider handles all of the
personnel issues, leaving TSA to oversee security. The operator
and overseer are different entities. This results in built-in
accountability and allows each to do what they can and should
do best.
The advantage of the SPP program can be summarized as
follows. Enhanced flexibility and efficiencies in personnel use
and deployment. Greater flexibility to respond to increased or
decreased service requirements at the checkpoints. Greater
flexibility to cross-train and cross-utilize employees not
subject to the Federal employee hiring freeze and employment
caps.
As an aside, during the recent sequestration, while other
airports with Federal staff were subject to Federal
regulations, we in Kansas City operated normally with no
disruptions.
More effective in dealing with non-performers. This may
sound a bit harsh and insensitive, but we all know that the job
requires an inordinate amount of attention and personnel
skills. Occasionally, an employee may be hired that shouldn't
be in that position.
We can all tell the screeners at airports that enjoy their
job and they are good at it. The SPP provider is able to make
changes with minimal disruption to the mission. A high degree
of customer service awareness is critical. We all want our
passengers to enjoy their time in our airports.
The private screening company has greater flexibility than
the Federal Government to redeploy screeners on short notice,
to reschedule screener shifts to and from off-hours, and to add
or delete security checkpoints on short notice.
It has been great from the beginning in Kansas City, but
lately it has caused me great concern, given the issues with
the rebidding of our contract.
We are now almost 4 years outside the expiration of the
recent contract in Kansas City. Even though the uncertainty of
not knowing if they will have a job after each holiday season,
our screeners have maintained a high level of service and
dedication.
It is my understanding that this solicitation is now in a
Court of Federal Claims court for the third time. The low
bidder selected by TSA included across-the-board pay cuts, as
well as cuts in hours, to all of our screeners now working in
Kansas City.
Meanwhile, TSA recently announced pay raises for Federal
screeners at other airports, but then selected this low bidder
in Kansas City based on this treatment of our existing
workforce.
Even with the contract award issues, I firmly believe the
program has worked well in Kansas City. There are a number of
areas in which I think the program could be improved. Mr.
Chairman, you mentioned a few of them.
TSA needs to be more flexible in its supervision of private
screening companies as to better foster improvements in
innovation. TSA should set minimum levels of security
standards, but give the private screeners the flexibility to
provide the screening in new and different and innovative and
creative ways.
However, as we understand it, TSA requires Federal and
private screeners to operate under the same procedures,
including centralization procedures for hiring and assessments
and coordination through their headquarters. I do not believe
the law requires a one-size-fits-all approach.
Second, the TSA should develop staffing resources based on
the operational requirements of each airport and not
arbitrarily system-wide based on staffing caps. Such an
approach would be more effective to account for the unique
requirements of each airport, including part-time and efficient
full-time screeners.
Again, one size doesn't fit all. For example, staffing
requirements at Kansas City International, which does not have
a single security checkpoint location, will be markedly
different than other requirements for other airports.
Third, there needs to be greater coordination with the
airport operator. More can be done to get the operator's input
in the operational procedures, staffing, and other critical
activities.
For example, in TSA's contested contract award that I
mentioned above, TSA recently chose to replace Kansas City's
long-time private screening company through the bid process,
yet, never asked us our input on the incumbent's prior
performance.
Fourth, the choice of screening company should be based
largely on technical capabilities and performance, not on cost.
Basing selection primarily on cost considerations will return
us to the poorly performing system pre-9/11 where contract
screeners who--lacked experience, critical skills, and
performance incentives. TSA needs to ensure that the selection
is truly a best value.
In conclusion, the Screening Partnership Program has worked
well in Kansas City. It has shown that private screeners under
the direct oversight of the TSA will perform excellent security
and customer service at reasonable costs.
Mr. Chairman, this concludes my prepared remarks. I would
be happy to address any questions you and the Members may have.
Thank you.
[The prepared statement of Mr. VanLoh follows:]
Prepared Statement of Mark VanLoh
July 29, 2014
Good afternoon, Mr. Chairman and Members of the Transportation
Security Subcommittee. My name is Mark VanLoh and I am the director of
aviation for the city of Kansas City, Missouri. Thank you for inviting
me to appear before you today to discuss the Airport Screener
Partnership Program.
First, I want to describe Kansas City International Airport. It is
one the country's major medium-hub airports and serves approximately 10
million annual passengers. Designed in the late 1960's, it has three
separate semi-circular passenger terminals that are not connected. The
lack of a central concourse also creates the need for multiple security
screening locations and does not allow for central security screening
that is common with more modern airports. Several hundred screeners at
several checkpoints are employed to perform passenger screening.
My testimony today addresses the Screener Partnership Program based
upon Kansas City's nearly 12 years of experience under the program
since it began in 2002.
Kansas City was selected by TSA in 2002 under the ``pilot program''
along with 4 other airports--San Francisco, Rochester, Tupelo, and
Jackson Hole.
It is a partnership that has worked extremely well at Kansas City.
I have been an airport operator for 30 years, and in my view the
Screening Partnership Program has provided a level of screening
services and security protection at least as good as, we think better
than, the levels that TSA would have provided using Federal personnel.
And, it has done so with operational efficiency and high levels of
customer satisfaction. My counterparts at other airports are often
envious of our record of service and security. I am always pleased to
brag about it.
Often I am asked by the public what an airport director does and on
what issue we spend the most time during a normal day. It is not
security or safety or airline negotiations but employee issues. With
500 employees, a considerable portion of the day consists of employee
performance reviews, labor relations/grievance hearings, disciplinary
actions, family medical leaves, random drug screening reviews, and
other personnel issues. I cannot imagine what amount of time is
consumed by TSA with over 50,000 employees. In my opinion, the majority
of efforts by the TSA should be focused on intelligence gathering to
reduce the threat against aviation and then issuing policy and
procedures to protect our industry not on personnel issues. At Kansas
City, the SPP provider handles all the personnel issues leaving TSA to
oversee security. The operator and overseer are different entities.
This results in built-in accountability and allows each do what they
can and should do best.
The advantages of the Screening Partnership Program can be
summarized as follows:
enhanced flexibility and efficiencies in personnel use and
deployment.
greater flexibility to respond to increased or decreased
service requirements.
greater flexibility to cross-train and cross-utilize
personnel.
not subject to Federal employee ``hiring freezes'' and
employment caps. As an aside, during the recent sequestration,
while other airports with Federal staff were subjected to
Federal restrictions, we at Kansas City operated normally with
no disruptions.
More effective in dealing with non-performers. This may
sound a bit insensitive but we all know that the job requires
an inordinate amount of attention and personal skills.
Occasionally an employee may be hired that probably shouldn't
be in that position. We can all tell the screeners that enjoy
their job and want to be there. The SPP provider is able to
make changes with minimal disruption to the mission. A high
degree of customer service awareness is critical. We all want
our passengers to enjoy their airport experience.
The private screening company has greater flexibility than the
Federal Government to re-deploy screeners on short notice, to
reschedule screener shifts to and from off-hours, and to add or delete
screening checkpoints on short notice.
Based on our nearly 12 years of experience under the private
screening program, I can report that the Screening Partnership Program
has been very effective in providing high-quality service to our
passengers at a level of security equal to, if not better than, the
level that would be provided at the airport using Federal Government
employees.
The SPP has been great for Kansas City from the beginning, but has
caused me great concern lately given the issues surrounding the rebid
of the contract. We are now almost 4 years outside the expiration of
the most recent contract. Even through the uncertainty of not knowing
if they will have a job after each holiday season, our screeners have
maintained their high level of service and dedication. It is my
understanding that this solicitation is now in the Court of Federal
Claims for the third time. The low bidder selected by TSA included
across-the-board pay cuts as well as cuts in hours to all screeners now
working at the airport. Meanwhile TSA recently announced pay raises for
Federal screeners at other airports but selected this low bidder in
Kansas City based on this treatment of our existing workforce.
Even with the contract award issues, I firmly believe the program
has worked well for Kansas City; there are a number of areas in which
the program could be improved.
First, TSA needs to be more flexible in its supervision of private-
screening companies so as to better foster improvements and innovation.
TSA should set minimum levels of security standards and operational
procedures, but give the private screeners the flexibility to provide
the security in new, different, innovative, and creative ways. However,
as we understand it, TSA requires Federal and private screeners to
operate under the same procedures, including centralized procedures for
screener hiring and assessments, and coordination or hiring through TSA
headquarters. I do not believe that the law requires a one-size-fits-
all approach.
Second, TSA should develop staffing resources based on the
operational requirements for each airport, not on arbitrary system-wide
staffing caps based on the National models it uses for the Federal
workforce. Such an approach would more effectively account for the
unique requirements of each airport, including part-time and efficient
full-time screener schedules. Again, one size doesn't fit all. For
example, staffing requirements for Kansas City International Airport,
which does not have a single central security location, will be
markedly different than the requirements for airports that have
centralized security screening facilities.
Third, there needs to be greater coordination with the airport
operator. More can be done to get the airport operator's input in the
operational procedures, staffing, and other critical activities. For
example in TSA's contested contract award that I mentioned above, TSA
recently chose to replace Kansas City's long-time private screening
company through the bid process, yet never asked Kansas City for our
input on the incumbent's prior performance.
Fourth, the choice of screening companies should be based largely
on technical capabilities and performance, not on cost. Basing
selection primarily on cost considerations we will return us to the
poorly performing system that existed pre-9/11 where contracts were
generally awarded to the lowest-cost bidder, manned by screeners who
lacked experience, critical skills, and performance incentives. TSA
needs to ensure that the selection is truly a ``best value''.
In conclusion, the Screening Partnership Program has worked well at
Kansas City International Airport. It has shown that private screeners
under the direct oversight of the TSA will perform excellent security
and customer service and at reasonable costs. Mr. Chairman, this
concludes my prepared remarks. I would be pleased to address any
questions you and the Members of the subcommittee may have.
Mr. Hudson. Thank you, Mr. VanLoh.
The Chairman will now recognize Mr. Amitay to testify.
STATEMENT OF STEVE AMITAY, ESQ., EXECUTIVE DIRECTOR/GENERAL
COUNSEL, NATIONAL ASSOCIATION OF SECURITY COMPANIES
Mr. Amitay. Thank you, Mr. Chairman.
Chairman Hudson, Congressman Daines, my name is Steve
Amitay, and I am executive director and general counsel to
NASCO, National Association of Security Companies.
Founded in 1972, NASCO is the Nation's largest contract
security trade association whose member companies employ more
than 300,000 armed and unarmed security officers across the
Nation.
More specifically, NASCO members are providing security and
screening services throughout the Federal Government for DHS
agencies, the CIA, the FBI, NASA, the Federal judiciary,
National labs and nuclear sites, and military installations,
and at U.S. airports through the TSA Screening Partnership
Program.
The subject of today's hearing is to examine TSA's
management of the now 12-year-old Screening Partnership
Program, if you count the 2 pilot years, which was created in
the Aviation Transportation Security Act, or ATSA, which also
stood up TSA.
However, despite its successful operation these past 12
years, as Mark has just noted, some still like to make the
uninformed base assertion that private screeners should not be
used at airports.
Well, putting aside that the use of private screeners
allows TSA to focus more on aviation security and less on
personnel management and putting aside that OMB does not
consider such screening services to be inherently Governmental
and putting aside that all cargo screening in the United States
is done by private companies under TSA oversight and putting
aside that virtually all other Western countries have
determined that private screening under Government oversight is
the most effective screening model, by law, SPP private
screeners must meet the same employment, proficiency, and
training requirements of Federal screeners and all the security
screening conducted by private screening companies must be done
in accordance with all TSA standard operating procedures and
operational directives related to screening functions.
No one has ever found that private screeners are not as
effective as Federal screeners. On the contrary, the limited
available evidence shows the opposite. As for cost, as with
many other services, the evidence is overwhelming that the
private sector is less costly.
While there are serious questions about TSA's
interpretation of the compensation requirement of ATSA, which
can lower private screener costs, I would like to note that
there are also some seriously false statements being made about
the compensation being offered as part of the current
conversion of several Montana airports from Federal screening
to the SPP.
First, the wages for those Federal screeners who remain
will not be changed. Second, the health plan being offered by
the contractor does indeed allow for screeners to use in-
network providers in Montana through the Blue Cross Blue Shield
system of State associations, thus making the plan competitive
and available.
Getting back to performance and cost comparisons, in the
fiscal year 2014 Consolidated Appropriations Act, TSA is
directed to fund an independent performance comparison that
shall include security effectiveness, cost, throughput, wait
times, management efficiencies, customer satisfaction, and
other elements.
NASCO relishes such an independent study and, if accurate
and comprehensive comparisons of the costs of all screeners to
the Federal Government between Federal and private is
conducted, NASCO believes private screeners would fare very,
very well.
NASCO would also like to see comparisons of attrition,
absenteeism, and injury rates, which are huge cost-drivers and
affect performance. The GAO has sought this, too. As GAO noted
in its 2013 report on TSA screener misconduct, of the 9,600
cases of misconduct from 2010 through 2012, the No. 1 category
accounting for 32 percent of the cases was attendance and
leave-related misconduct.
Private screening companies employ robust attendance
policies and other screener oversights that reduces
absenteeism, thereby decreasing cost and increasing
performance.
The program, though, does face serious obstacles as a
result of two incredibly questionable interpretations of
governing law by TSA.
First, TSA believes the Federal screening cost estimate, or
FCE, which sets the required cost-efficiency price ceiling for
private screening bids, only has to contain Federal screener
cost borne by TSA and not all the Federal or taxpayer cost.
Second, as to the requirement that private screener
compensation be ``no less than such Government personnel,''
here TSA believes that private screening companies do not have
to pay compensation to their screeners that is equivalent with
such Federal screeners, but only that they must pay screeners
the minimum or starting Federal screener wages.
How TSA believes that its contracts for screening services
are not subject to the Service Contract Act, even though all
other Federal agencies' screening and security services
contracts are subject to the SCA, is confounding. Both these
interpretations fly in the face of a plain reading of the
statute, the intent of Congress, and public security policy.
They are both major threats to the program that detrimentally
affect the acquisition and award process.
The first interpretation concerning the FCE creates
artificially low-bid ceilings, and the second concerning the
minimum pay requirements encourages unnecessary low bids. Such
a policy is not good for airports, screeners, companies, and
passengers, and, most of all, it is not at all justified under
the law.
As detailed in my written testimony, if TSA's FCEs are
accurate and the compensation requirement is enforced as
meaning equivalent compensation, there are still many cost
savings related to screener management and oversight and
scheduling administration and basic differences between the
private and public sector services world that enable private
companies to operate at a lower cost, including with a small
profit, but with at least the same required performance as
Federal screeners.
If TSA will not address the problems associated with these
issues, then Congress should step in as it did when TSA used
another questionable interpretation of the statutory language
related to the application approval process to improve--to
impede the program in the past.
Thank you.
[The prepared statement of Mr. Amitay follows:]
Prepared Statement of Steve Amitay
July 29, 2014
nasco and private security
NASCO is the Nation's largest contract security trade association,
whose member companies employ more than 300,000 security officers.
Across the Nation almost 2 million private security officers, both
contract and proprietary are at work protecting (and often screening
persons and bags) at Federal buildings, courthouses, military
installations, critical infrastructure facilities, businesses, schools,
and public areas. In addition, as the Screening Partnership Program
(SPP) has demonstrated, private companies are also effectively
providing passenger and baggage screening services to U.S. airports.
Formed in 1972, NASCO strives to increase awareness and understanding
among policy-makers, consumers, the media, and the general public of
the important role of private security in safeguarding persons and
property. At the same time, NASCO has been the leading advocate for
raising standards for the licensing of private security firms and the
registration, screening, and training of security officers. At every
level of government, NASCO has worked with legislators and officials to
put in place higher standards for companies and officers.
Over the past decade, NASCO has provided input to and worked with
Congress, GAO, Federal agencies and others on issues and programs
related to the use of contract security by Federal agencies. NASCO has
been involved with the SPP virtually since its inception and NASCO has
also been very active in working with Congress and the Federal
Protective Service (FPS) to strengthen the ``public-private
partnership'' that is the FPS Protective Security Officer Program which
utilizes approximately 13,500 contract security officers to protect
Federal building within the GSA portfolio.
background on the spp
After 9/11 Congress passed the Aviation and Transportation Security
Act (ATSA), which stood up TSA and authorized it to assume
responsibility for security in all modes of transportation, including
the creation of a Federal workforce to conduct passenger and baggage
screening at U.S. airports. However, Congress did not make a blanket
judgment that in going forward with more stringent airport screening
only a Federal workforce could provide effective screening. ATSA also
required TSA to conduct a pilot program with up to five airports, one
from each of the five ``airport security risk categories,'' where the
screening would be conducted by personnel from a qualified private
screening company chosen by TSA operating under strict Federal
standards, supervision, and oversight. At the conclusion of the
successful pilot in 2004, TSA created the ``Screening Partnership
Program'' which allows any airport to apply to ``opt out'' of using
Federal screeners and instead use a qualified private screening
selected and overseen by TSA.
Currently, there are 18 airports, including all five of the
airports in the original pilot program, in the SPP. By far the largest
in the program is San Francisco International Airport (SFO) in
California and the second largest is Kansas City International Airport
(KCI) in Missouri. It is expected that soon awards will be made for the
Orlando Sanford (SFB) and Sarasota (SRQ) airports in Florida, which
will be the largest airports in the program's history to transition
from Federal screeners to private screeners. (While SFO and MCI are
larger airports, since they were in the pilot program, they never had
Federal screeners). NASCO hopes that for Orlando Sanford and Sarasota
and any other airport joining the SPP, that the TSA will take the
necessary steps and actions needed to provide for a smooth transition
from Federal screeners to private screeners (many of whom will likely
make the transition to the private sector), and avoid causing problems
for the airport, the screeners, and travelers.
For a company to be ``qualified to provide screening services''
under the SPP, the company must only employ individuals ``who meet all
the requirements . . . applicable to Federal Government personnel who
perform screening services at airports.'' The company must ``provide
compensation and other benefits to such individuals that are not less
than the level of compensation and other benefits provided to such
Federal Government personnel.'' Finally, a private company can only
provide screening at an airport if TSA determines and certifies to
Congress that ``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 Federal Government
personnel.''\1\
---------------------------------------------------------------------------
\1\ Aviation Transportation and Security Act Section 108 49 USC
44920.
---------------------------------------------------------------------------
To reiterate, at SPP airports where private screening companies are
used it is required by law that: (1) The screeners at a minimum have
met the same employment screening, proficiency, and training
requirements of Federal screeners, (2) the screeners are provided
compensation and benefits at a level no less than such Federal
screeners, and (3) the level of screening services and protection
provided by the company must be equal to or greater than the level that
would be provided at the airport by Federal screeners.
TSA fully acknowledges that these requirements are being met. At a
January Congressional hearing on the SPP in the House Oversight and
Government Reform Subcommittee on Government Operations, Kelly Hoggan,
Assistant Administrator, Office of Security Operations for TSA
testified that ``These private-sector employees [SPP screeners] were,
and remain, subject to the qualification and compensation criteria of
Federal Transportation Security Officers (TSOs).''\2\ And on the TSA
website in the material on the SPP, TSA states, ``private screening
airports use the same technology and follow the same procedures as
Federal screening airports. Data from covert testing has confirmed that
the performance for Federal and privatized screening is
comparable.''\3\
---------------------------------------------------------------------------
\2\ Testimony of Kelly C. Hoggan, Asst. Administrator for Security
Operations House Oversight and Government Reform Hearing ``TSA
Oversight: Examining the Screening Partnership Program'' January 14,
2014 Serial Number 113-95.
\3\ TSA Website Screening Partnership Program FAQ's.
---------------------------------------------------------------------------
Therefore, when opponents of the program characterize the SPP as
``a return to the pre-9/11 screening workforce of low paid and poorly
trained non-Federal employees'' such criticisms are blatant falsehoods
and/or show a complete lack of understanding of how the SPP operates
and is governed.\4\
---------------------------------------------------------------------------
\4\ The TSO Voice; January 20, 2010, statement of former AFGE head
John Gage.
---------------------------------------------------------------------------
Furthermore, while equating present-day SPP private screeners to
pre-9/11 private screeners is specious comparison, the underlying
accusation that private screeners are to blame for the tragedy of 9/11
is also blatantly wrong. FAA regulations in place on 9/11 permitted the
weapons the terrorists used to take over the planes to be brought on
board, and the 9/11 Commission Report found that each security layer
relevant to hijackings--intelligence, passenger prescreening,
checkpoint screening, and on-board security--was seriously flawed prior
to 9/11.
In fact, over the past 12 years since airports have been using
private screeners under the pre-SPP pilot and the SPP there is
considerable evidence from covert testing results, GAO reports,
independent evaluations, reports from airport operators, anecdotal
information, and other sources that show that the public-private
partnership of utilizing private screeners under Federal regulation and
oversight is a superior and more cost-effective screening option for
airports than using Federal screeners.\5\
---------------------------------------------------------------------------
\5\ See, House Committee on Transportation and Infrastructure
Oversight and Investigations, Staff Report: TSA Ignores More Cost
Effective Screening Model, June 3, 2011.
---------------------------------------------------------------------------
issues and problems related to tsa's management of the spp
In the decade the SPP has been in operation, airports, and
screening companies have encountered a variety of obstacles, mis-steps,
and questionable statutory interpretations on the part of TSA that have
hindered the program. Some of these problems have been addressed by
Congress and/or TSA but others continue to impede the growth of the
program and even threaten the viability of the program.
As will be discussed in detail the two major issues impacting the
SPP are:
(1) TSA's questionable interpretation of the statutory language
that requires TSA to estimate the costs of Federal screening at an
airport (called the Federal Cost Estimate) to set a ``cost-efficiency''
price ceiling for private screening at that airport. TSA believes that
it only needs to consider Federal screener costs borne by TSA and its
budget, and not all the Federal (taxpayer costs) of Federal screening
at an airport. In addition, the accuracy of the costs that TSA uses in
calculating the FCE and doing Federal/private cost comparisons are an
issue.
(2) TSA's questionable interpretation of statutory language that
requires private screening companies provide screeners with
compensation ``no less than such Government personnel.'' Here, TSA
believes that the intent was not that screeners working for private
screening companies must receive equal (or better) compensation than
Federal screeners, but essentially the opposite, private screening
companies only are required to pay screeners the minimum/starting TSA
wages.
Both these interpretations fly in the face of a plain reading of
the statute, the intent of Congress, and good public safety and fiscal
policy. They are both major threats to the program. If TSA will not
address the problems associated with these issues, then Congress should
step in, as it did in the past, when TSA took it upon itself to impede
the program through a very questionable interpretation of the statutory
language related to the application approval process.
While many airports are content with their Federal screening force,
and Federal screeners by and large are performing their duties
satisfactorily, airport screening is not an inherently Government
function, nor is it a unique security function. Many Federal agencies,
including other DHS agencies, are efficiently and effectively using
contract security for screening and other security services.\6\ As will
be fully detailed, even when private screening companies are required
to provide equivalent compensation package of wages and benefits to
their screeners, and even accounting for profit, they can still be more
cost-efficient and more effective than Federal screeners.
---------------------------------------------------------------------------
\6\ Not including the military services, there are approximately
35,000 contract security officers deployed at Federal facilities. The
largest amount of contract security officers work for FPS (approx.
13,500), the United States Marshal Service (approx. 5,000), and the
Department of Energy (approx. 5,000). Other Federal agencies/
instrumentalities that use contact security include: IRS, NASA, FAA,
USDA, DOT, DOC, HHS, SSA, NARA, DOL, FDIC, U.S. Coast Guard, State,
DIA, NRC, Holocaust Museum, and Smithsonian. Federal agencies have
consistently and successfully utilized private security and screening
services at Level 4 and 5 secured facilities, DoD locations requiring
Top Secret and above clearances, the Department of Homeland Security
Headquarters, NASA launch sites, nuclear facilities, Federal Courts,
military installations, and FBI offices around the country.
---------------------------------------------------------------------------
spp application and rfp process
As alluded to above, one of the greatest obstacles that faced that
program that has now been resolved by Congress was TSA's former policy
on application approvals. From around 2009 to 2012 TSA had an unstated
and then stated policy to not approve new airports for the SPP unless
``a clear and substantial advantage to do so emerges in the future.''
While the justifications for this policy were unsubstantiated and the
policy seemed to contradict Congressional intent; nonetheless, it led
to 5 out 6 airport SPP applications being denied and/or held up for
years during that period. The policy was overruled by Congress with the
enactment of the 2012 FAA Modernization Act which required TSA to
approve an application within 60 days unless the approval would
``compromise security or detrimentally affect the cost-efficiency or
the effectiveness of the screening of passengers or property at the
airport.\7\ However, TSA's interpretation of this language, which added
the cost-efficiency element, created the follow-on problem mentioned
above and discussed later.
---------------------------------------------------------------------------
\7\ See Pub. L. No. 112-95, 830(a), 126 Stat. 11, 135 (2012)
(codified at 49 U.S.C. 44920(b)).
---------------------------------------------------------------------------
Currently, with the new application approval requirement in place
and with TSA taking other steps to improve the application process (as
recommended by Congress and GAO) the SPP application approval process
is no longer problematic.
TSA and the new SPP leadership are also to be commended for their
public commitment, made earlier this year, to award SPP contracts
within 1 year of an application being approved. This goal is evidently
in line with the wishes of Congress as in the House Report accompanying
the fiscal year 2015 DHS Appropriations Bill that was passed by the
House last month, the committee stated ``The time taken by TSA to
approve applications, issue contract solicitations, and make contract
awards is unacceptable. Accordingly, TSA is directed to award
applicable SPP contracts not later than 12 months from the date of
receipt of such airport applications.''\8\ Currently, TSA is slated to
make an award for Orlando Sanford Airport next month (26 months after
application approval) and to make an award for Sarasota Bradenton
Airport in September (17 months after application approval.) Obviously,
the next SPP application approved will put the 1-year time requirement
to the test.
---------------------------------------------------------------------------
\8\ H. Rept. 113-481--Department of Homeland Security
Appropriations Bill, 2015.
---------------------------------------------------------------------------
Unfortunately, the solicitation and award process for the past
several SPP RFP's have been plagued by problems involving questionable
provisions, unexplainable adjustments, improper evaluations, and other
issues--besides the underlying FCE and minimum pay issues--that have
caused serious confusion, delays, pre-award protests, and set up the
eventual awards for successful bid protests. These incidents raise
concerns about TSA's ability to manage the procurement process and its
commitment to the program.
TSA's handling of the SPP contract for Kansas City International
(MCI) is a prime example. Kansas City was an original pilot SPP airport
and in 2010 the airport's SPP contract was put out for bid. TSA made an
award but it was then successfully protested and voided in the U.S.
Court of Federal Claims in 2011. The Court found that TSA ``failed to
perform a best-value tradeoff analysis as required under the RFP; and
(2) that the SSA failed to exercise and document her independent
judgment in accordance with FAR 15.308.'' The TSA award was
``essentially made on a lowest-cost technically acceptable basis not
pursuant to the best-value determination required by the RFP.'' The
procurement errors were ``significant'' and the Court found the award
to be ``arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.''\9\
---------------------------------------------------------------------------
\9\ FirstLine Transportation Security Inc. v. United States, 100
Fed Cl. 359 (2011).
---------------------------------------------------------------------------
In 2012 TSA issued a new RFP for Kansas City. In the new RFP, TSA
included a small business participation ``goal'' of 40% of the total
contract value. In all past SPP RFP's that included a small business
participation goal the amount was a percentage of the sub-contracting
total not total contract value. The Federal Acquisition Regulations
(FAR) also reference small business goals in terms of a percentage of
total subcontracting dollars. This unusual and excessive set-aside
``goal'' seemed to violate the FAR, and also contracting laws which
require goals to be based on market research. More so, when TSA was
asked for the RFP record ``[i]s it the TSA's intent that all large
businesses [be] mandated to have, as a minimum, 40% small business
participation . . . as part of their overall bid?'' TSA answered in the
affirmative. And in other places too within the RFP the goal was
characterized as mandatory.\10\
---------------------------------------------------------------------------
\10\ Firstline Transportation Security, Inc v. U.S. USCFC NO. 12-
601 Nov 2012.
---------------------------------------------------------------------------
After the set-aside provision was challenged in court in a pre-bid
protest, TSA quickly changed its above mentioned answer to say the goal
was not mandatory. And while the Court said it ``agrees with Plaintiff
that the placement of this language under the heading of ``Compliance/
Responsiveness'' is in tension with TSA's otherwise abundantly clear
assertion that the 40 percent small business participation standard
constitutes a goal,'' the Court accepted TSA's word it would change
that language too.\11\
---------------------------------------------------------------------------
\11\ Ibid.
---------------------------------------------------------------------------
The Court then looked at the issue of the amount of the ``goal''
and while the Court upheld it as being legal, the Court stated, ``If
the Court were issuing this solicitation instead of this agency, it may
well have based the rather aggressive small business goals on more
robust market research, and it likely would have stated the goals as a
percentage of subcontracting dollars, as FAR Part 19 authorizes.''\12\
---------------------------------------------------------------------------
\12\ Ibid.
---------------------------------------------------------------------------
In the next open solicitation that TSA put out (Sanford) the small
business goal included was a percentage of subcontracting dollars (as
it had been in past RFP's), and not total contracting dollars. Again,
this example shows either sloppiness or a misunderstanding of the SPP
RFP process on the part of TSA and caused unnecessary delays and
litigation.
The Kansas City contract was finally awarded earlier this year, but
once again it has been protested in the U.S. Court of Federal Claims
where it is currently being litigated.
The Kansas City contract award has not been the only troubled SPP
award. In its June 2013 Report on the SPP, the DHS OIG found that
``From January 2011 to August 2012, TSA did not comply fully with
Federal Acquisition Regulation Section 15.308 when documenting its
decisions in awarding four SPP contracts. Specifically, in this time
period, TSA's documentation on proposal evaluations and decisions
related to these contract awards was missing details and included
inaccuracies. TSA did not formalize and implement procedures to ensure
that SPP procurements were fully documented, and it did not have
quality control procedures to verify the accuracy of data used for
contract decisions. As a result, TSA risks not selecting the best
contractor offer and not ensuring that it provides the best screening
services. In four of the five procurement files for contracts awarded
between January 2011 and August 2012, the rationale for TSA's final
decisions on contractor selection was not fully described in supporting
documentation.''\13\
---------------------------------------------------------------------------
\13\ DHS Office of Inspector General ``TSA Screening Partnership
Program'' OIG-13-99 June 2013.
---------------------------------------------------------------------------
One troubling theme in TSA's SPP procurement process that was
identified by the Court in the first rejected Kansas City award and is
an issue in the second protest, is TSA's conduct of a ``best value''
analysis. As stated in the first Kansas City award protest ruling, in a
``Best Value'' determination a Government agency must compare the
relative costs and benefits of the ``competing proposals, including
both price and non-price factors . . . ''\14\.
---------------------------------------------------------------------------
\14\ See Footnote 9.
---------------------------------------------------------------------------
In the second RFP for Kansas City, TSA stated that ``Security is
paramount'' and that ``security is always TSA's most important
objective'' and that ``security is a `non-negotiable' '' issue.\15\
However, while not doubting the ability of the winning company to
provide the level of screening services required by the contract, it is
worth noting that both Kansas City awards went to the lowest bid. This
is not surprising though given how TSA conduct its ``best value''
analysis. Obviously, if ``security is paramount'' and the ``most
important objective'' one would think that a company's record of
performance would be a considerable factor. However, in TSA's ``best
value analysis'' price is the single most important factor. Price alone
is equal to a combination of technical factors that include IN ORDER OF
IMPORTANCE: (1) Operational Screening Management; (2) Program
Management; (3) Logistics and Training; (4) Transition; and (5) Past
Performance. So ``Past Performance'' is the least important factor in
TSA's ``security is the most important objective'' best value analysis.
In addition, while Factors 1 through 4 above are evaluated and provided
an adjectival rating, past performance is rated on a pass/fail
basis.\16\
---------------------------------------------------------------------------
\15\ Airport Security Screening Services at MCI, Solicitation No.
HST S05-12-R-SPP038 July 2012.
\16\ Ibid. This evaluation analysis is the same in subsequent SPP
solicitations.
---------------------------------------------------------------------------
It is understandable that ``costs must be competitive'' and the
award cost-efficient for the Government. As discussed already and will
be further discussed, ATSA requires private screeners to be no more
expensive than the cost of Federal screeners, and so as threshold
matter, in order for a company's bid to considered, it must be lower
that than cost of using Federal screeners at the airport (which is the
FCE). However, once it is determined that bidders are under the FCE,
meaning they are less expensive than Federal screeners, and if
``security is paramount'' should price still trump all the technical
factors combined? It goes without saying that it is in the public's
best interest for TSA to properly award airport screening contracts
using a true ``best value'' analysis which places a premium on
performance capabilities as opposed making awards that are essentially
(as Court decisions have shown) being made on a ``low price technically
acceptable'' basis.
Other recent RFP issues include:
In the RFP for Sanford-Orlando 6 weeks after it was issued, TSA
amended the solicitation to add over 10,000 hours for Behavior
Detection Officer activities. However, in the Q&A for the solicitation,
TSA stated that BDO activities were ``not requirement of the
contract.'' It is estimated that the additional BDO hours added would
$15 million in contractor costs. Accordingly, it was expected that TSA
would also adjust the maximum bid amount (the FCE) to reflect the added
costs of the added BDO hours. However, in subsequent amendments to the
RFP, TSA stated that the FCE would remain ``unchanged'' and then
further explained ``there is no change to the FCE is because the BDO
level of effort is included in the original FCE as written in the
Request for Proposal (RFP).''\17\ That's some glaring omission!
---------------------------------------------------------------------------
\17\ Airport Security Screening Services at Orlando Sanford
International Solicitation No. HSTS05-SPP004 Airport (SFB). See
amendments 4, and 5.
---------------------------------------------------------------------------
tsa's interpretation of spp screener compensation requirement under
atsa
As noted in the introduction, ATSA requires that for a company to
be ``qualified to provide screening services,'' the company must
``provide compensation and other benefits to such individuals that are
not less than the level of compensation and other benefits provided to
such Federal Government personnel.'' Accordingly, in SPP RFP's under
the ``Compensation and Benefits'' clause TSA states that ``TSA has
interpreted the statute (ATSA) to require contract-screening companies
to provide pay and benefits at a loaded cost (direct hour plus
percentage cost of fringe benefits) to all screeners that equals or
exceeds the loaded cost of the pay and benefits provided by the Federal
Government. This approach: (1) Provides the contractor with flexibility
to trade additional pay against other benefits, or to enhance certain
benefits and reduce others; (2) enables the contractor to determine and
provide the best package necessary for the recruitment and retention of
quality private security screeners; and (3) increases flexibility while
permitting recruitment and retention of quality private security
screeners.''\18\ This interpretation seems plainly accurate--pay the
same to screeners as would be provided by the Federal Government. It
also recognizes the flexibility that the private sector has--which the
Federal Government does not have--to balance wages and benefits to
create a more a cost-efficient its labor force (which is discussed
later).
---------------------------------------------------------------------------
\18\ Ibid. See Clause H.6. Compensation and Other Benefits.
---------------------------------------------------------------------------
However, TSA then says in the ``Compensation and Benefits'' clause
``Therefore, the contractors shall provide at least the minimum loaded
wage rate'' (emphasis added).\19\ Minimum screener rate? Yes. For all
screeners? Yes. Regardless of the actual ``level of compensation and
other such benefits provided to such personnel?'' Yes.
---------------------------------------------------------------------------
\19\ Ibid.
---------------------------------------------------------------------------
Under TSA's interpretation of the above ATSA language, all
screeners, regardless of how long they have been on the job, can
receive the ``minimum rate'' or starting TSO rate in a new SPP
contract. Does TSA really believe that Congress intended, by using the
phrase ``not less than . . . such Federal Government personnel'' to
mean just not less than those TSA screeners who are making the minimum,
starting TSO wage? So Congress intended that a screener with 12 years
of experience could have his or her pay reduced to the starting
screener wage whenever a private screening company took over screening
at airport or when an existing SPP contract was re-awarded? Really?
In ATSA Congress mandated that the training of private screeners be
equal to Federal screeners. Congress mandated that the level of
screener performance be equal. And it seems logical and rational that
Congress also mandated that the level of pay be equal. Yet, TSA
believes Congress intended that the level of pay for private screeners,
regardless of experience, only needs to be the ``minimum rate.'' This
seems quite illogical and irrational.
One would think in that given the legislative history and intent
that sought to set up parallel/equivalent private and Federal screening
forces that less than ``such Federal Government personnel'' clearly
connotes parallel/equivalent pay for private and Federal screeners in
the same situation or level of experience. In a job that supports an
important homeland security mission and where ``security is always
TSA's most important objective'' and ``security is a `non-negotiable'
'' TSA indeed seems to be negotiating away security with this screener
pay requirement interpretation. Is this good public policy?
In other DHS agencies, such as the Federal Protective Service,
where contract security personnel, like Federal and private airport
screeners, are being successfully utilized to provide screening
services and serve the Department's homeland security mission, when a
new contractor takes over a contract the incumbent security officer
wages cannot be reduced. Contractors receive seniority lists that let
them know what they will have to pay in wages and benefits to the
screening force. Obviously keeping wages stable promotes retention,
retention of more experienced personnel, reduces turnover, and overall
helps maintain or increase performance in their security mission.
Conversely, if wages are cut it could promote instability, greater
turnover, and the loss of experienced personnel. Again, aside from it
being bad policy, a plain reading of the ATSA language and the intent
behind that language, clearly does not support TSA's interpretation.
When asked about the issue of screeners having to take a pay cut
with a new SPP contract, TSA stated that ``TSA only monitors minimum
salary requirements by means of the Compensation and Other Benefits
clause in the SPP contracts. Actual salaries and wages for employees
supporting a SPP contract are determined, as they are with all Federal
contracts, by direct negotiation between the company and the employee.
The Federal Government does not get involved in wages beyond ensuring
that the compensation rate meets the requirements of the Aviation
Transportation Security Act (Pub. L. 107-71).''\20\
---------------------------------------------------------------------------
\20\ Responses to Screening Partnership Program (SPP) Questions for
the Record Submitted by the House Committee on Appropriations
Subcommittee on Homeland Security, March 25, 2014.
---------------------------------------------------------------------------
Obviously, a company can still submit a bid for an SPP contract
that would pay screeners the equivalent of their Federal wages (with a
new airport) or the equivalent of their current wages (with an existing
SPP airport), and they are not required to bid starting screener wages.
However, given that Price is the most important consideration that TSA
uses in evaluating SPP bids, and the lowest bidders have been awarded
the recent SPP contracts, for a screening company to submit a bid that
provides ``full pay''/''equivalent pay'' seems to be a losing strategy.
By fostering a process where screeners, regardless of their
experience/performance, must take a pay cut when an airport goes SPP or
there is a new SPP contractor, TSA seems to have lost sight of its
security mission. Are not airport screeners ``front-line'' homeland
security personnel that play a vital role in transportation security?
Does not TSA value the work of airport screeners? A forced pay cut will
cause better performing and experienced screeners to leave and impact
morale and could ultimately affect performance. In addition, no private
company or the Federal Government has a surplus or alternative source
of screeners so keeping incumbent screeners is vital and saves on
training and hiring costs. Why is TSA trying to provide for security on
the cheap at SPP airports?
If private screening companies, like contract security companies
elsewhere in the Federal Government (and some companies are both), are
required to bid equivalent wages and not minimum wages, and then such
companies can beat the overall Federal screening cost number at an
airport as required, how is this not: (1) What ATSA intended; (2)
better for airports; (3) better for screeners; and (3) better for
security? TSA and the Federal Government are still saving money!
the federal cost estimate
TSA's definition and computation of the Federal Cost Estimate has
been the subject of much inspection and investigation and is directly
related to the ``debate'' as to whether the use of private screeners an
airport is less expensive than using Federal screener. As noted above,
the FCE was born out language in the 2012 FAA Modernization Act that
amended ATSA and mandated that TSA approve an airport's SPP
application, if ``the Under Secretary determines that the approval
would not compromise security or detrimentally affect the cost-
efficiency or the effectiveness of the screening of passengers or
property at the airport.''\21\ (Emphasis added). Accordingly, from a
plain reading of the statutory language, the FCE represents the total
Federal cost of using Federal screeners for ``screening of passengers
or property at the airport'' and sets a maximum bid limit for private
screening. It makes complete sense that if a private screening company
bid for screening at the airport is not equal to or lower to the
Federal costs, this would detrimentally affect the screening cost-
efficiency at the airport which would violate ATSA and the bid should
be considered unacceptable.
---------------------------------------------------------------------------
\21\ See Footnote 1.
---------------------------------------------------------------------------
However, as is clearly apparent, and as TSA now readily admits,
their computation of the FCE does not represent the complete/true cost
of Federal screeners at an airport. It only represents an estimate of
the costs to TSA, not the entire Federal Government (aka taxpayers). As
stated by TSA, ``In assessing cost-efficiency, TSA (only) compares
costs within its appropriation to private-sector costs. While TSA
computes imputed costs such as potential retirement it does not include
those costs as part of its cost comparison for efficiency those
prospective obligations are not are not provided in the agency's
appropriation.''\22\
---------------------------------------------------------------------------
\22\ DHS Response to Questions from House Homeland Security
Committee Chairman Michael McCaul, January 2014.
---------------------------------------------------------------------------
Of course besides retirement, there are worker's compensation,
legal, HR, administrative and other direct Federal (screener) costs
being paid by taxpayers through other Federal agencies for ``screening
of passengers or property'' at a Federalized airport. However,
according to TSA's interpretation of the law, Congress intended
``detrimentally affect cost-efficiency'' to just apply to TSA's costs.
For a short time, TSA could justify this interpretation of the law by
referencing the Report accompanying the fiscal year 2013 Continuing
Resolution where there was language that said TSA should not approve
new contract applications if ``the annual cost of the contract exceeds
the annual cost to TSA of providing Federal screening services.''\23\
Unfortunately for TSA, Report language is not statutory language, that
Report language expired after fiscal year 2013, and that language has
been thoroughly reputed in subsequent Appropriations Reports.
---------------------------------------------------------------------------
\23\ Explanatory Statement accompanying H.R. 933 Consolidated and
Further Continuing Appropriations Act, 2013 see page S1552.
---------------------------------------------------------------------------
In the Explanatory Statement for the fiscal year 2014 Consolidated
Appropriations Act, TSA was directed ``to implement generally accepted
accounting methodologies for cost and performance comparisons. As
detailed in the House report, this includes, but is not limited to,
comprehensive and accurate comparisons of Federal employee retirement
costs and the administrative overhead associated with Federal screening
services . . . With respect to TSA cost estimates, the study shall
include indirect costs as recommended by GAO (GAO-09-27R)''.\24\
---------------------------------------------------------------------------
\24\ Explanatory Statement on H.R. 3547, Consolidated
Appropriations Act, 2014, See Page H932.
---------------------------------------------------------------------------
This year the House's fiscal year 2015 DHS Appropriations Bill
Report language is even more stern stating that TSA's use of an ``FCE
that utilizes faulty methodology and ignores significant costs to the
Federal Government is unacceptable.''\25\ TSA also recently told the
House Appropriations Committee in responses to questions on how TSA
calculates its (TSA cost-only) FCE that ``TSA is able to account for
actual costs incurred for the majority of airport-specific costs.'' So
what airport-specific costs are not being accounted for? And TSA said
it is ``confident the methodology is accurately capturing the most
significant cost factors for Federal cost estimates.'' So what is not
capturing or not accurately capturing?\26\
---------------------------------------------------------------------------
\25\ House Report 113-481--DEPARTMENT OF HOMELAND SECURITY
APPROPRIATIONS BILL, 2015--Privatized Screening. ``Further, the
Committee remains concerned with TSA's use, as it is currently
construed, of a Federal Cost Estimate (FCE). Using a FCE that utilizes
faulty methodology and ignores significant costs to the Federal
Government is unacceptable. The Committee expects TSA to implement
generally accepted accounting methodologies for cost and performance
comparisons, as described in Public Law 113-76, which includes, but is
not limited to, proper, comprehensive, and accurate comparisons of
Federal employee retirement costs and the administrative overhead
associated with Federal screening services.''
\26\ See Footnote 20.
---------------------------------------------------------------------------
In TSA's last public iteration of a Federal-private cost comparison
in 2011--which was done after numerous corrective recommendations by
GAO--TSA alleged that private screeners were 3% more expensive.
However, even after making numerous changes to its cost-methodology at
the recommendation of GAO (which brought the TSA figure down from 17%
to 9% to 3%) GAO still said of that comparison ``we did not have
confidence in the 3% figure because one of the issues that was still
unresolved at that time was the question of uncertainty about the
underlying estimate and the underlying assumptions going into the
estimate.''\27\
---------------------------------------------------------------------------
\27\ Ms. Jennifer Grover, Homeland Security and Justice, Response
to a question at the January 14, 2014 Hearing of the Committee on
Government Reform Subcommittee on Government Operations ``TSA
Oversight: Examining the Screening Partnership Program. (See Footnote
2).
---------------------------------------------------------------------------
The DHS OIG has also found fault with TSA's cost comparisons. In a
2013 report on the SPP the OIG reviewed five contracts awarded between
January 2011 and August 2012 for eight airport. The OIG office said
``we reviewed two of eight cost estimates that TSA prepared for the
five procurements and identified discrepancies in both cost estimates.
Specifically, there were differences in labor hours and overtime rates.
Inaccurate cost estimates could affect TSA's evaluation of offerors. A
document included an incorrect figure, which resulted in a $162,057
overstatement of the cost to use private screeners. A document used to
compare the estimated cost of private screening to the estimated cost
of Federal screening showed TSA understated an estimate of the cost
savings of private screening by $423,572.''\28\
---------------------------------------------------------------------------
\28\ See Footnote 13.
---------------------------------------------------------------------------
Given that TSA readily admits it does consider all the non-TSA
costs associated with Federal screeners when it comes up with Federal
screener cost estimates, and given the lack of confidence and accuracy
even in those costs, and given the lack of confidence in TSA's cost-
comparison methodology, it is really disingenuous to say that TSA has
found the cost of private screeners to be more expensive that Federal
screeners. And, even with TSA only using an incomplete TSA-only FCE,
that may or may not even capture or capture accurately the TSA airport-
specific costs, because of the many cost-efficient and cost-saving
policies and practices that private screening companies utilize,
private screening companies are still able to beat the TSA's incomplete
FCE in SPP RFP's!
why private screening companies are more cost-efficient than the
federal government in providing airport screening
Even paying the same (equivalent) wages, private companies can beat
the total cost of screening relative to TSA's actual costs, and of
course, relative to total Federal costs. There are many reasons for
this greater cost-efficiency. First as mentioned above, TSA allows
contractors to provide pay and benefits at a loaded cost (direct hour
plus percentage cost of fringe benefits) and as TSA admits ``This
approach: (1) provides the contractor with flexibility to trade
additional pay against other benefits . . . that enables the contractor
to determine and provide the best package necessary for the recruitment
and retention of quality private security screeners.''\29\ Through this
flexibility on balancing wages and benefits, which the Federal
Government does not have with TSA screeners, contractors are able to
create incentives and disincentives for its workers that result in
better attendance, timeliness, performance which all can save money.
Take sick leave. When a screener calls in sick the usual response is to
have to pay another screener overtime to cover the shift. It can also
lead to lanes being opened late. To reduce such incidents private
companies can trade sick leave for increased wages. There are other
ways too for private employers to balance wages and benefits that will
increase cost-efficiency.
---------------------------------------------------------------------------
\29\ See Footnotes 17 and 18.
---------------------------------------------------------------------------
Another area where cost-efficiencies can be realized is by reducing
absenteeism. In a 2013 GAO Report on screener misconduct, of the 9,600
cases of employee misconduct investigated and adjudicated from fiscal
years 2010 through 2012, the No. 1 category that accounted for 32
percent of the cases was attendance and leave-related misconduct.\30\
This backed up a 2011 OPM finding that ``Attendance issues are among
the most common challenges for Federal supervisors.'' The OPM report
noted that ``Employees' failure to report to work as scheduled can have
a negative impact on an organization's ability to complete the
mission.'' (What is interesting is that there is no mention in the
Report of any ``negative impact'' of additional costs associated with
Federal employee absenteeism.)
---------------------------------------------------------------------------
\30\ GAO, TRANSPORTATION SECURITY.--TSA Could Strengthen Monitoring
of Allegations of Employee Misconduct, GAO-13-624, July 2013.
---------------------------------------------------------------------------
As private screening companies have to pay for absenteeism out of
their set contract amount they are very motivated prevent and
discourage absenteeism. As such, bonuses are provided for perfect
attendance and robust attendance policies are maintained. There is
little doubt that the punishment for an unexcused absence is greater in
the private sector than in the Federal sector. In addition, not only
does absenteeism cost money, but just one late screener can prevent the
``critical mass'' needed to open a check point which affects
performance. If during the ``morning rush'' at airport there are
screening lanes not being used, it is probably a result of an unexcused
or excused (call in sick) absence.
Another significant cost driver is injury rates and workers
compensation claims. While TSA does not bear the full cost of paying
Federal screener worker compensation claims, and has no incentive to
reduce or question those claims, again, it is the opposite with private
screening companies. Again, SPP companies must pay for all their
screener worker's compensation claims out of the fixed contract amount.
Accordingly, SPP companies employ a variety of methods to reduce,
mitigate, manage, and limit worker compensation claims. Companies use
pre-hire physical testing protocols coupled with other at-work
initiatives that minimize on-the-job injuries, and allow for faster
return to work and lower workers compensation rates.
To address widespread baggage screener injuries, one SPP company
created a non-certified position assigned only to lift bags for the
certified baggage screeners (significantly reducing screener injuries
and workers compensation costs). At a Federalized airport a new OPM job
classification would first be required for a solution. SPP companies
also employ full-time health and safety professionals on site to
investigate and study injuries and devise ways to mitigate them.
Reducing attrition is another way to save money. In terms of hiring
and retention of screeners, SPP companies do many things that TSA does
not or cannot do. In hiring screeners, SPP companies do their own local
recruiting and screen applicants before submitting them for the formal
TSA screening process. Even after a prospective screener passes the TSA
screening process, he or she can still go through a company interview
with supervisors before being hired. SPP companies will also provide
monetary and other incentives to retain screeners. At airports using
Federal screeners, screeners can show up for work, sight unseen already
hired. The additional steps that SPP companies apply to the recruitment
process results in more successful new hire completion rates and on-
going on-the-job success. SPP companies fully realize that a stable
workforce is more efficient, effective, and motivated. In the 2011
Report by the House Transportation and Infrastructure Committee on the
SPP, it was calculated that the turnover rate at the non-SPP LAX
airport was 13.8% compared to 8.7% at the SPP San Francisco (SFO)
airport.\31\
---------------------------------------------------------------------------
\31\ See Footnote 5.
---------------------------------------------------------------------------
How does TSA stack up with SPP companies in the areas of attrition,
absenteeism and injury rates? As GAO reported at the January 2014 OGR
GO Subcommittee hearing on the SPP it found out while doing its 2012
Report comparing Federal and private screener performance, that even
though contractors collect and report this information to the SPP PMO,
the TSA Office of Human Capital does not collect the data and TSA does
not require contractors to use the same human capital metrics as TSA,
and comparisons are not conducted.\32\ In a follow-up to this finding,
in a question for the record of the hearing, the Ranking Member of the
subcommittee, Gerry Connolly the DHS OIG if TSA planned to collect this
data ``in a consistent manner so that comparisons can be made between
airports?'' The Response was ``Cost and screening performance are the
two areas where the Transportation Security Administration (TSA)
compares the Screening Partnership Program (SPP) airports and non-SPP
airports. Metrics such as attrition, absenteeism, or injury rates are
not included as germane to the definitions of either cost or screening
performance and, thus, are not monitored on a consistent basis.''\33\
Maybe they should be. These human capital measures are huge cost
factors and a measure of an efficient and effective workforce.
---------------------------------------------------------------------------
\32\ Testimony of Jennifer Grover. See Footnote 2.
\33\ Question for the Record. See Footnote 2 (Page 65).
---------------------------------------------------------------------------
A major cost-saving advantage that SPP companies have over TSA is
in scheduling and managing its screener force which creates cost
savings compared to Federal screening. At Federally-screened airports,
the number of full-time and part-time screeners (actually FTE's) is
dictated to TSA airport directors by TSA headquarters. At SPP airports,
the SPP company site manager can schedule screeners as needed in order
to meet the contract requirement for total screener hours. As stated in
SPP RFP's ``The Contractor shall schedule their workforce in a manner
that meets demands for security screening and work closely with TSA
staff to satisfy all operational requirements in the contract.''\34\
This scheduling flexibility results in numerous cost efficiencies. For
instance, at most larger airports, the terminals are open for 20 hours.
Under TSA's staffing model, this would require two full-time screeners
at 8 hours per shift and one part-time screener for 4 hours to staff
the position, with all three screeners receiving fixed benefits. On the
other hand, at one SPP airport with such terminal operating hours, the
SPP company is able to schedule two screeners at two 10-hour shifts
reducing personnel and costs. TSA does not utilize such an option. SPP
companies also take steps that TSA does not to schedule breaks and
``relief'' more cost-efficiently.
---------------------------------------------------------------------------
\34\ See Footnote 17. Clause C.4.2.3 Scheduling.
---------------------------------------------------------------------------
SPP companies also use sophisticated airline industry-based
scheduling tools, which further efficiently schedule and manage
staffing in real time. In making their screening schedules companies
can make pinpoint adjustments using optimization software and airline
data. They have decision support systems that allow managers to be
proactive. Scheduling is also tied in directly with payroll, HR, and
training systems, which ensure full visibility of manpower resources.
For TSA, effective and efficient scheduling is a problem due to
centralization of the scheduling system and institutional
inflexibility. In 2008, the DHS Office of Inspector General found that
``TSA is overly reliant on the (National mobile) deployment force to
fill chronic staffing shortages at specific airports in lieu of more
cost effective strategies and solutions to handle screening
demands.''\35\
---------------------------------------------------------------------------
\35\ DHS Office of Inspector General, The Transportation Security
Administration's National Deployment Force (April 2008) (OIG-08-49).
---------------------------------------------------------------------------
All the above-mentioned cost-efficiency activities--reducing ``sick
leave'', reducing attendance/absentee rates, reducing and mitigating
injuries, efficient scheduling as well as efficient use of part-time
screeners--also all contribute to one of the greatest cost-savers:
Reducing screener overtime. Overtime costs are huge and it would great
to see an apples-to-apples comparison of TSA and SPP overtime costs.
While personnel and compensation costs represent by far the largest
screening cost area, and as discussed private companies are finding
cost efficiencies in this area, the largest relative cost-efficiencies
for the private sector over the Federal sector is in administration and
management functions that are not screener functions/positions. This
includes recruiting, on-boarding, certain training, administration of
payroll, administration of workplace injuries, administration of HR-
related employment matters (a big area), benefits administration, labor
relations, quality control inspections, staffing management, IT
support, accounting and budget management, and many more. While TSA
(and other Federal agencies supporting Federal screener) also do these
tasks, private companies are more experienced and motivated to save
costs in these areas and, like with scheduling, they utilize the most
efficient methods, technologies, and staff to accomplish these tasks.
In addition, private companies control the compensation paid to its
administrators. Also, the private sector is more cost-efficient in
handling legal settlements and disputes (as well as workplace injuries
as mentioned above). In April of this year, TSA just settled a case
that started in 2010 involving the harassment and humiliation of a
woman who, in accordance with TSA guidelines asked that her breast milk
not be X-rayed, but instead on two successive occasions was harassed
and humiliated by TSA screeners. It cost the Federal Government $75,000
and who know how many hours of legal work.\36\
---------------------------------------------------------------------------
\36\ http://www.dailybreeze.com/general-news/20140422/hermosa-
beach-mom-wins-settlement-from-tsa-over-airport-breast-feeding-
incident.
---------------------------------------------------------------------------
What motivates private companies to find cost efficiencies in their
screening operations and administration? First, constant competition
from other contractors forces companies to perform well, employ best
practices, reduce waste, and seek to constantly improve. Second, there
is profit. And if screening companies can, as required by ATSA,
``provide a level of screening services and protection equal to or
greater'' than TSA screeners using private screeners ``who meet all the
requirements . . . applicable to'' TSA screeners, and at the same time
make a profit, then what is the problem?
In addition, while seeking to find cost efficiencies in operations
and administration is one way to earn a profit, another way is through
better performance. At SPP airports, the screening operation is indeed
a business, and better performance is good for business both tangibly
(award fees) and intangibly (reputation and future business). SPP
company site mangers are very vested in hiring the right people,
monitoring performance, and striving for better-than-average
performance. Bonuses are provided based on merit, not simply seniority.
Employees are well aware that if they do not perform they could be out
of a job and a culture of cohesion and teamwork within the workforce
and peer expectations are encouraged. These employee performance and
cost-containment drivers (especially in the areas of absenteeism and
overtime as mentioned above) are not present in the Federal sector and
DHS (and TSA) are beset with its own host of employee performance and
motivation issues.\37\ At Federal airports, TSA headquarters sets
compensation for screeners and managers and screeners have no real
financial incentives to perform beyond the minimum requirements and
barring the commission of a crime or serious violation of standards,
Federal screeners and managers--like all Federal workers--have great
job security.\38\
---------------------------------------------------------------------------
\37\ In the December 2013 OPM Survey DHS ranked tied for the worst
out of 37 Federal agencies in ``Intrinsic Work Experience'' which
reflects the employees' feelings of motivation and competency relating
to their role in the workplace. 2013 Federal Employee Viewpoint Survey
Results; Employees Influencing Change; Governmentwide Management Report
United States Office of Personnel Management In a December 2012 Merit
Systems Protection Board Report, DHS ranked tied for 23rd out of 25
agencies in an employee motivation survey. Federal Employee Engagement:
The Motivating Potential of Job Characteristics and Rewards. A Report
to the President and the Congress of the United States by the U.S.
Merit Systems Protection Board, December 2012.
\38\ Dennis Cauchon ``Some federal workers more likely to die than
lose jobs'' USA TODAY, July 19, 2011.
---------------------------------------------------------------------------
tsa should not be both the regulator and operator of airport screening
One of the SPP's Guiding Principles is to ``Create a partnership
that leverages strengths of the private and public sectors: TSA
believes the SPP can only achieve its objectives if contract operators
and TSA work in close partnership, leveraging private sector
innovations and efficiencies with Government security oversight.''\39\
Amen. Such a cost-efficient partnership is how screening is conducted
at virtually every other industrialized/Western nation in the world. As
documented in the House T&I SPP Report, in other countries where the
danger of aviation terrorism is equally of great National concern
``Federal oversight of qualified private contract screeners has shown
to be effective all over the world (and) almost all Western countries
operate civil aviation security through the use of Federal oversight of
private contract screeners. Other than Romania, Poland, and Bulgaria,
the United States has the only Government in the Western world that
functions as the airport security operator, administrator, regulator,
and auditor.''\40\
---------------------------------------------------------------------------
\39\ See Footnote 17. Orlando-Sanford RFP. Section C--Statement of
Work, C.1 Introduction.
\40\ See Footnote 6.
---------------------------------------------------------------------------
There are sound policy and operational reasons for not wanting TSA
to be both the regulator and operator of airport screening. First, the
enormous task of managing the 55,000 or more TSA employees involved in
airport screening diverts and denigrates TSA's ability to focus on
critical transportation security-related functions such as setting
security standards, technology adoption, conducting risk management
analyses, performing oversight, enforcing standards and regulations,
analyzing intelligence, auditing screening operations, and doing more
to stop aviation-related terror before the terrorists get to the
airport. Second, as the entity both conducting the screening and
overseeing the screening, there are inherently greater risks of poor
screener performance going uncorrected or even worse being encouraged
or covered up by management.
In 2011, this latter concern came to full fruition where an
investigation at Hawaii's Honolulu International Airport uncovered a
massive on-going security breach involving improper (lack of) screening
of checked bags for explosives. About TSA workers at the airport were
fired and another 15 suspended including screeners, their supervisors,
and the Federal Security Director. The TSA screeners claimed they were
forced to abandon required screening practices because of TSA
management pressure.\41\ Could TSA managers at an SPP airport,
operating at ``arm's length'', be able to pressure a private screening
company to abandon required screening practices putting the company in
clear default of its entire contract? Not likely. The potential loss of
a contract and hundreds of jobs is a strong incentive for a company,
and everyone in the company, to make sure that all employees are
compliant with the requirements of the contract. At the Hawaii airport,
the malfeasant Federal screeners, managers, and security director were
simply replaced by other Federal employees.
---------------------------------------------------------------------------
\41\ http://www.hawaiinewsnow.com/story/19778673/homeland-security-
probes-unscreened-bags-in-hawaii.
---------------------------------------------------------------------------
TSA can and does provide effective oversight of private screening
services. Among the tools that TSA uses to track screener performance
are daily TSA manager reports, monthly Performance Management Reviews
calculated against challenging metrics, and twice-yearly award fee
reviews also calculated against challenging performance metrics. TSA
can be assured, and indeed constantly assures itself, that SPP
companies perform at a very high level.
federal v. private screener performance comparisons
As to the issue of accurate performance comparisons between Federal
screeners and private screeners, as noted earlier this year by GAO at a
House Oversight Subcommittee hearing, GAO said that when it did its
2012 report on screener performance, it found that ``while TSA had
conducted or commissioned prior reports comparing the performance of
SPP and non-SPP airports, TSA officials stated at the time that they
did not plan to conduct similar analyses in the future.\42\ Also, for
the screener performance data that GAO analyzed, while they found that
there were differences in performance between SPP and non-SPP airports,
and those differences could not be exclusively attributed to the use of
either Federal or private screeners.''\43\ Not particularly helpful.
---------------------------------------------------------------------------
\42\ Testimony of Jennifer Grover at January 2014 OGR GO SC hearing
referring to GAO Report ``SCREENING PARTNERSHIP PROGRAM: TSA Should
Issue More Guidance to Airports and Monitor Private versus Federal
Screener Performance'' December 2012, GAO-13-208.
\43\ Ibid.
---------------------------------------------------------------------------
GAO recommended that TSA develop a mechanism to develop to
regularly monitor private versus Federal screener performance and TSA
concurred with the recommendation. As a result, GAO reported at the
January 2014 hearing, in January 2013, TSA issued its first SPP Annual
Report covering fiscal year 2012, which ``compares the performance of
SPP airports with the average performance of airports in their
respective category, as well as the average performance for all
airports, for three performance measures: TIP detection rates,
recertification pass rates, and PACE evaluation results.''\44\ However,
GAO did not elaborate on the performance comparisons (either the
accuracy or results) nor is the SPP Annual Report in the public domain.
---------------------------------------------------------------------------
\44\ Ibid.
---------------------------------------------------------------------------
The lack of comparable performance or TSA's reluctance to share
performance data that it considers to Sensitive Security Information
(SSI) hinders the SPP. SPP companies believe that they would compare
quite favorably in the major performance metric with Federal screeners.
Airports interested in the SPP should be able to see the performance
data of SPP airports and TSA should share its monthly Office of
Security Operations Executive Scorecard with airport directors.
While the level of communication between SPP companies and local
TSA officials, program managers, and contracting officials remains
high, the flow of information from TSA headquarters to screening
companies, and airports, has diminished. The ability for the screening
companies, airports, and TSA to work together has been limited by a
lack of TSA sharing of important performance and service data and the
agency often taking a ``my way or the highway approach'' to doing
things. In addition, as TSA has become more secretive and guarded with
its information, a few years ago TSA also took a significant step to
limit the ability of SPP companies to share information. In SPP
contracts there is now a clause that prohibits the SPP company from
publicly disseminating ``publicity releases . . . in connection with or
referring to the contract'' or ``any information, oral or written,
concerning the results or conclusions made pursuant to the
performance'' of the contract ``without prior written consent of the
Contracting Officer.''\45\ This includes seminars, professional society
meeting/conferences and even requests for information from Congress.
Before this ``gag order'' was put in place, SPP companies were already
prohibited from releasing protected Government information under both
previous contract language and various Federal laws. Given the
broadness of this clause, SPP companies are now reticent to discuss
almost any aspect of their performance--including those type of ``good
news'' screener stories that TSA likes to publicize about Federal
screeners--with anyone without first receiving TSA's written
permission. This could severely restrict the amount of information
available to airports, Congress, and the public about the SPP.
---------------------------------------------------------------------------
\45\ TSA Clause H.5200.205.001 ``Publicity and Dissemination of
Contract Information''.
---------------------------------------------------------------------------
Better performance comparisons though could be on the way. In the
Report accompanying the fiscal year 2014 Consolidated Appropriations
Act, ``TSA is directed to allocate resources for an independent study
of the performance of Federalized compared to privatized screening. The
study shall include, but not be limited to, security effectiveness,
cost, throughput, wait times, management efficiencies, and customer
satisfaction.''\46\ As mentioned above, TSA was also directed to
``implement generally accepted accounting methodologies'' for its own
future cost and performance comparison, and also to implement past GAO
recommendations for comparing cost and performance. Of course, whether
TSA makes the relevant data available to the study investigators,
whether such data is accurate, whether such data is comparable, and
then in what form the results can be provided remain to be seen.
---------------------------------------------------------------------------
\46\ See Footnote 24.
---------------------------------------------------------------------------
The ``customer satisfaction'' comparisons should be quite
interesting. SPP companies realize the value of customer service and
they teach and reinforce customer service constantly. Treating
passengers politely is not only the right thing to do, but avoiding
incidents and maintaining a calmer passenger base makes it easier for
screeners and behavior detection officers to spot aberrant behavior.
Even with the difficult protocols, SPP screeners are taught to
implement them with customer service empathy. It is no surprise that
Kansas City International Airport, an SPP location earned the J.D.
Power and Associates award for highest customer satisfaction of all
medium-sized North American airports twice in recent years. That
airport's screening services as well as other SPP companies have
garnered much praise from their airport directors for customer service
and other innovations that have improved screening operations.\47\ For
those airports wanting to join the SPP, greater customer service and
greater accountability are major reasons. Said one airport official
whose airport had applied to the SPP, ``As we have documented, TSA
employees frequently have no concern for customer service. We feel that
participating in the SPP will increase screening efficiency and
flexibility and improve the customer service experience.''\48\
---------------------------------------------------------------------------
\47\ See Footnote 5. T&I SPP Report. Appendix 12 SPP Testimonials.
\48\ See Footnote 5. May 20, 2011 Letter to House T&I Committee
from Springfield-Branson National Airport.
---------------------------------------------------------------------------
At the January 2014 House hearing on the SPP, TSA was sharply
criticized for the continuing customer service failures of TSA
officers. Ranking Dem Jerry Connelly, in recounting an incident he saw
involving a Federal screener stated that ``there is no excuse that
someone barking orders continuously at the public at any airport in
America who is an employee of Federal Government . . . I'd lose my job
if I treated the public that way. And rightfully so. My staff would be
fired if I find that they treated my public that way. And we need to
hold ourselves to that standard. And so, I fear it's beyond
anecdotal.''\49\
---------------------------------------------------------------------------
\49\ See Footnote 2.
---------------------------------------------------------------------------
conclusion
Many airports are satisfied with their Federal screening force and
the ATSA language establishing the SPP in no way pushes or even
encourages airports to use private screening companies. However, it is
clear that Congress wanted airports to at least have a fair opportunity
to utilize private screening which by law has to be equal to or greater
in the level of security provided. From the experiences and lessons
learned in the SPP, and when considering a true cost comparison it is
clear that the use of private screening companies is viable and
effective option for airports, and a cost-efficient option for TSA and
the Federal Government. As TSA states, the SPP is about ``leveraging
private sector innovations and efficiencies with Government security
oversight.''\50\
---------------------------------------------------------------------------
\50\ See Footnote 39.
---------------------------------------------------------------------------
However, TSA's very questionable interpretations of SPP statutes,
its faulty RFP and award process, as well as other actions related to
the SPP is threatening the viability of program. While TSA's refusal to
use a Federal cost estimate that reflects the true cost to the Federal
Government is makes for an unfair comparison between Federal and
private screener costs and seems to go against ATSA, it is
understandable that TSA would not like to spend more of its budget on
private screeners than it spends on Federal screeners. However, even
with a TSA cost-only FCE, private screening companies, because of
greater flexibility and other cost-efficient reasons, can beat a TSA
cost-only Federal screening estimate. They can also beat the TSA cost-
only price if they have to pay screeners ``equivalent'' wages. Yet
TSA's dubious belief that ATSA only requires private screening
companies to bid (pay) minimum TSA screener wages, and TSA's focus on
price in its ``best value'' award analyzes, is setting up a situation
that will effectively mean every time an SPP contract awarded,
screeners will take a pay cut. This seems completely incongruous with
the mission of maintaining an effective screening force, it flies in
the face of how contract security personnel are treated by other DHS
agencies, and it will only create dissatisfied screeners and airports.
It is therefore unfortunate and indeed ironic that at a time with
unprecedented interest and emphasis on Government efficiency and
sustained and meaningful private-sector job growth, the TSA is choking
a successful public-private partnership program that is exceedingly
efficient, effective, and customer-focused. Far from ignoring the SPP,
in its mission to provide the best possible aviation security, the TSA
should be embracing it.
Mr. Hudson. Thank you, Mr. Amitay.
The Chairman will recognize Mr. Cox to testify.
STATEMENT OF J. DAVID COX, SR., NATIONAL PRESIDENT, AMERICAN
FEDERATION OF GOVERNMENT EMPLOYEES
Mr. Cox. Mr. Chairman, Members of the subcommittee, thank
you for the opportunity to testify today.
It is clear that the Screening Partnership Program, SPP,
does not improve aviation security and it does not save the
taxpayers money. Rather, SPP harms security, costs more, and
hurts the TSOs who bear the brunt of the outsourcing program.
Only security contractors benefit.
There is no demand for airports to privatize the work of
our Nation's TSOs. Although the 2012 FAA Modernization and
Reform Act made it easy for airports to apply to privatize
their TSA workforce, only a handful have done so. With the
exception of the Montana airports, over the past 2 years, only
three airports have asked TSA for permission to switch to
private screeners.
But that legislation left intact the requirement that SPP
contractors provide private screeners compensation and other
benefits that are not less than the level of compensation and
other benefits provided to TSOs. AFGE members at the four
Montana airports currently transitioning from Federal to
private have informed us this is definitely not the case.
The right of first refusal for a job with a private
contractor is not meaningful because, in Montana, it means a
significant cut in pay, benefits, and career development
opportunities. Even though CSSI FirstLine, the Montana
contractor, has promised to match TSOs' current pay, many have
chosen to uproot their lives and families to transfer to other
Federal airports, retire far earlier than they had planned, or
simply leave TSA rather than work for peanuts for the
contractor.
AFGE has confirmed that the benefits offered by FirstLine
are not equivalent to those provided by TSA.
The health insurance plan offered by the contractor is a
high-deductible health reimbursement account whose in-network
providers are in Tennessee, approximately 1,800 miles from
Montana. There are no in-State providers under the plan.
Premiums are higher and benefits are woefully inferior. TSA
offers 11 Nation-wide plans and 2 specific to Montana, and even
the most bare bones of these is far more generous to employees
than the contractor plan.
Other than vague statements that they are working on future
pension benefit, FirstLine offers no retirement benefit, no
defined benefit pension, no 401(k) savings plan, no profit-
sharing plan, no IRA, no employee stock ownership plan,
nothing. In short, FirstLine refuses to make even the smallest
gesture toward benefit equivalency that the statute demands.
AFGE strongly supports the Contract Screener Reform and
Accountability Act introduced by Ranking Member Bennie Thompson
and Representative Sheila Jackson Lee and Nita Lowey, long-
standing champions of our Nation's security and the TSO
workforce. Mr. Chairman, the TSOs' voices should not be lost in
this committee's discussion about SPP.
I would like to conclude my testimony by reading to you an
excerpt from an e-mail from one of our Montana TSO members.
``After 9/11, I wanted to do something to ensure that that
horror would never be repeated. So I became a screener at the
Bozeman airport in Montana.
``The SPP program leaves very little for a person of my
age. At age 58 and with almost 12 years of service with TSA, I
will be left with very little to show for it.
``When I looked into working for the private company, I
learned that FirstLine provides no retirement plan. I was told
that that would be up to me personally, no plan and no match by
the company. This is not comparable to TSA.
``Health benefits have decreased in a major way.
FirstLine's medical plan has an $8,000 deductible for a single
person and $11,000 deductible for a family. This deductible
would have to be met before any health care expenses would be
covered. This is not comparable to TSA.
``Transfer opportunities to other airports were limited,
but after living here since 1993, it is not a viable option.
Either my husband would have to leave his job of over 21 years
or I would have to leave my home and family.
``I am just a little old lady who has worked her entire
life to ensure the wellbeing of others. I believe I deserve
better from this from TSA.''
Mr. Chairman, I would really like to thank the subcommittee
for the opportunity to represent the TSO workforce at this
important hearing, and I would be happy to answer any
questions.
[The prepared statement of Mr. Cox follows:]
Prepared Statement of J. David Cox, Sr.
July 29, 2014
Mr. Chairman, Ranking Member Richmond, and Members of the
subcommittee: My name is J. David Cox, Sr., and I am the national
president of the American Federation of Government Employees, AFL-CIO
(AFGE). On behalf of the more than 670,000 Federal and District of
Columbia workers our union represents, including 45,000 Transportation
Security Officers (TSOs) working to provide safe and secure travel for
over 2 million passengers each day, I thank you for the opportunity to
testify today on the hearing entitled ``Examining TSA's Management of
the Screening Partnership Program (SPP).''
Oversight of TSA's management of the SPP must extend beyond the
ease with which contractors are approved for SPP contracts. It must
also include a close examination of the effect of the program on
aviation security and the TSO workforce. TSA SPP FAQs clearly state
that ``Federal and privatized screening have comparable performance,
and there is no measurement indicating there is a difference in
customer service.'' SPP decisions are not based on TSO performance at a
given airport. Private screeners follow the same standard operating
procedures and use the same equipment as Federal TSOs. The only
difference is that after privatization, the TSOs risk replacement by
workers lacking their training and on-the-job experience while all
Federal TSA management remains on the job. SPP does not exist to
further aviation security or save taxpayer money. TSOs, the front line
of aviation security, bear the brunt of an outsourcing program that
benefits no party involved except security contractors.
background
In the aftermath of the terrible events of September 11, 2001,
Congress quickly enacted the Aviation and Transportation Security Act
(ATSA) to correct the gaping holes in our Nation's security net made
apparent by the ability of the 9/11 hijackers to hijack planes in a
coordinated attack that killed over 2,900 people, and injured more than
6,700. Although al-Qaeda's violent, irrational hatred for the United
States was the root cause of the 9/11 tragedy, Congress pinpointed the
lack of a well-trained, experienced screening workforce receiving
adequate pay and benefits as one of the underlying issues that left our
country vulnerable to the worst act of aviation terrorism in history.
To resolve that issue, Congress Federalized screening duties in ATSA,
with the belief that improved training, pay, benefits, and working
conditions would lead to a stable workforce focused on security. TSA,
according to a March 30, 2005, Congressional Research Service report,
was given ``direct responsibility for passenger screening.'' The TSO
workforce AFGE represents proves every day that Congress made the right
decision in Federalizing screening duties.
The SPP runs counter to the National consensus that the screening
of passengers and baggage at our Nation's airports should be performed
by Federal employees to tighten the aviation security safety net. There
is no documentation of the superiority of private screeners to TSOs.
There are no cost savings. Airports seeking to escape TSA management
through SPP risk losing an experienced and trained screening workforce,
yet they will retain every single layer of expensive TSA management.
TSA's cost comparison analysis is opaque at best. Indeed, the current
SPP upends the lives and careers of an airport's TSO workforce, leave
the traveling public no safer, and provides no taxpayer savings.
It is important to note that changes to the SPP included in the FAA
Modernization and Reform Act of 2012 were never subject to the
Congressional debate and scrutiny applied to the decision to Federalize
aviation security. The provisions of the FAA Modernization and Reform
Act are so broad and so biased in favor of privatization that it could
unravel the aviation security safety net our country has worked so hard
to achieve if not modified by Congress.
there is no demand for spp
First, only 18 of the Nation's 457 commercial airports have
private-sector security screeners. That's less than 4 percent. Except
for San Francisco and four other airports that were part of the initial
SPP pilot program (Kansas City International Airport, Greater Rochester
International Airport, Jackson Hole Airport, and Tupelo Regional
Airport), the only airports to seek privatization have been small
airports in Iowa, New Mexico, Montana, Florida, and New Hampshire. A
representative hearing on SPP would include the directors of our
airports in New York, Chicago, Los Angeles, Miami, Denver, Atlanta,
Washington, DC, and every other major gateway that have chosen to work
with TSA and its National network of highly-qualified TSOs. None of
these airports has shown the slightest interest in privatization, yet
none is ever heard from in these hearings.
Second, despite legislation passed in 2012 making it easier for
airports to apply to privatize their TSA workforce, only a handful of
airports have applied to do so. Aside from Montana, over the last 2
years, only three airports--the small Orlando-Sanford and Sarasota
Bradenton airports in Florida and the airport in Portsmouth, NH, have
asked TSA for permission to make the switch to private screeners. The
lack of interest was noted by the GAO in December 2012. ``Airport
operators from 3 airports that have not applied to the SPP expressed no
interest in the SPP, and stated that they are generally satisfied with
the level of screening service provided by TSA,'' GAO said.
Third, when larger airports consider SPP and then learn the facts,
they stick with the TSOs. In 2013, the elected managers of Sacramento
International Airport agreed to consider a proposal by their airport
director to join SPP. But when they studied the facts of the situation,
and how it would affect their local screeners, the Sacramento Board of
Supervisors reversed its earlier decision and voted by a wide margin
against TSA privatization. One of the factors they considered in
Sacramento was precedent: No airport that large has made the switch
from public to private. Four small airports have made the switch; but
of these, only two, Roswell, NM, and Sioux Falls, IA, actually ``opted
out'' of TSA and joined SPP on their own. Roswell did so because it
wanted to hire locals at its remote location in eastern New Mexico.
Sioux Falls, according to a 2010 staff report prepared for the Colorado
Springs, CO, airport, had a director with an ``an anti-Federal
Government ideology'' who was ``looking for ways to keep Federal
screeners out of his airport.'' The other two airports that moved from
TSA to a private screener, Marathon, FL, and Sonoma, CA, did so at the
suggestion of TSA during the Bush administration. It's very clear from
this history that there is simply no demand from the airport community
at large to privatize the operations of the TSA, period.
So where does the interest come from? It's striking how little the
privatizers actually talk about security in their public discussion of
the issues. Companies like Firstline constantly talk about how SPP
provides them with ``flexibility'' to move employees around, but never
discuss the task of securing the American flying public. That's because
they are interested in profit, not security. And how do they make that
profit? They make it by paying lower wages and providing fewer and less
comprehensive benefits, such as health insurance and pensions. That
does nothing but line the pockets of contractors and deprives airport
security screeners of the living standards and financial security they
deserve.
Despite the fact that security is not improved by going private,
the Federal Government and U.S. taxpayers are forced to bear the costs
of any airport that shifts from Federal to private. Airports with a
troubled relationship with TSA find little resolution to their problem
by applying to SPP: The same TSA management, policies, and procedures
remain after privatization. The only new factor is a very inexperienced
workforce of private screeners.
spp leaves the tso workforce in a ``no win'' situation with few good
alternatives
TSA accepted the joint bid of CSSI/Firstline Security to provide
private screening at Bozeman, Bert Mooney, Glacier Park International,
and Yellowstone airports in Montana. Despite the security issues that
arise from the State's status as a border State, most of the commercial
air traffic in Montana is subject to private screening under the SPP.
The transition to SPP at the four Montana airports has provided AFGE a
clear view of the impact of privatization on incumbent TSOs at
privatized airports, as well as the workers contractors hire ``off the
street'' to work at those airports. It is important to note that SPP
contractors can only make a profit by manipulating the payroll. Federal
law requires SPP contractors to provide ``compensation and other
benefits'' to their employees ``that are not less than the level of
compensation and other benefits provided'' to TSOs. AFGE has documented
that this is simply not the case in Montana and we have reason to
believe it is not the case at other SPP airports around the country.
Our union has opposed the SPP since its inception. It is
inconsistent with ATSA's goal of Federalizing the process of screening
passengers and baggage. TSA has approved bids from contractors that
provide substantially lower pay and benefits those received by TSOs. It
also allows SPP contractors to deviate from the Staffing Allocation
Model (SAM) that applies to Federal airports. It is AFGE's position
that security contractors would be unable to show the ``cost
efficiencies'' required under the law, if not for TSA's permissive
allowance for lower pay, benefits that shift the cost to worker or are
virtually non-existent, and a lack of compliance with the SAM. The
table will be set for aviation security to devolve to pre-September 11
levels because the low pay and benefits will drive private screeners to
leave the security contractor for better-paying jobs with better
benefits.
Union members in Montana have informed us that CSSI/Firstline is
offering new hires starting salaries that are thousands of dollars
lower than TSA's starting rates, and that with regard to ``paid time
off,'' the contractor's allowances are drastically inferior to what is
provided to TSOs and other Federal employees. Federal employees with up
to 3 years of service earn 13 days of annual leave a year and 9 days of
sick leave. The contractor offers just 12 days total of combined ``paid
time off (PTO)'' for employees for the first 5 years of service.
Federal employees with more than 3 years but less than 15 years of
service earn 20 days of annual leave per year, and 9 days of sick
leave. The contractor provides 18 days of combined PTO for employees
with between 6 and 10 years of service. Federal employees and TSOs with
15 or more years of service earn 26 days of annual leave and 9 days of
sick leave; in contrast, the contractor offers a total of 19 days of
combined PTO for employees with 11 or more years of service.
Importantly, Federal TSOs and other Federal employees are given
credit for years of honorable military service in calculating their
eligibility for annual leave accrual. Thus, a TSO who has served his
country in the armed services for any amount of time (including both
active duty and active duty for training) will earn annual leave
according to tenure with includes his time served in the military.
Agencies also have the flexibility to provide service credit for prior
non-Federal/non-military service when determining a new employee's
annual leave accrual rates. This is an important management flexibility
that assists in recruitment, given the fact that Federal salaries lag
those in the private sector.
Federal TSOs are also eligible for leave sharing, leave transfer,
and carrying over up to 30 days of paid time off. They receive paid
``administrative'' time off to serve on a jury or to be a witness in a
legal proceeding. Federal employees are also entitled to take up to 3
days of funeral leave to arrange or attend the funeral of a close
relative who dies as a result of military service in a combat zone.
The health insurance benefit being offered by the contractor is
almost laughable as health insurance, but there is nothing funny about
how inferior it is to FEHBP's plans. Its value to the employee is far
below that of any of the 11 Nation-wide plans currently available to
TSOs in Montana, even the one ``high deductible'' plan from GEHA. The
contractor's plan is a high-deductible Health Reimbursement Account
plan, a type that is inferior even to the Health Savings Account Plans
available in the Federal Employees Health Benefits Program (FEHBP). And
to make matters worse, the contractor's plan's ``network'' of providers
are all in the State of Tennessee, approximately 1,800 miles from
Montana. Thus, participants would effectively be denied access to the
plan's network, and thereby be forced to pay the higher, out-of-network
costs unless they happened to be vacationing in Tennessee when a need
for health care arose.
The differences in the value of the health insurance benefit the
contractor is offering and what is currently available to TSOs who work
for TSA are enormous. We can begin our comparison by noting that the
contractor offers only one choice; FEHBP offers 11 choices in Nation-
wide plans and an additional two specific to Montana. The contractor
offers only a high-deductible plan with premiums of $54.39 a pay period
for individual coverage and $190.63 for family coverage. The Nation-
wide high-deductible FEHBP plan from GEHA costs TSOs $50.87 a pay
period for individual coverage and $116.18 for family coverage--a 40%
difference. But the differences in premiums are only the beginning.
Because preventive services are only covered ``in network'' in
Tennessee in the contractor's plan at 100% without the deductible,
participants would have to pay 50% after the deductible for all
preventive services--including children's and women's well care, annual
mammograms, cervical cancer screenings, prostate cancer screenings, and
immunizations. In contrast, the GEHA plan in FEHBP available to TSOs in
Montana pays 100% in network (with network providers in Montana
available) and 75% after the deductible out of network. Out-of-pocket
maximum for the contractor are $5,500 and $11,000 for individual and
family coverage in network in Tennessee--but in Montana, out of
network, the out-of-pocket maximum each year is $11,000 for individuals
and a whopping $22,000 for families. In contrast, the out-of-pocket
maximum for the GEHA high-deductible plan is $5,000 for individuals and
$10,000 for families.
Although there are many more differences, another important one is
that the GEHA high-deductible plan under FEHBP allows for a Health
Savings Account (HSA) or a Health Reimbursement Account (HRA) and the
contractor's plan allows only a HRA. HRAs offer a vastly inferior
economic benefit to the employee, because unlike HSAs, assets in an HRA
do not earn interest and are forfeited by the employee if he switches
health plans or leaves the job for reasons other than retirement. They
belong to the employer, not the employee. An employer uses an HRA to
pay for actual health care costs incurred by their employees. With an
HSA, employer contributions are made whether or not the costs are
incurred, and an employee gets to keep all unused HSA contributions
made by both themselves and their employer when they leave the job.
Indeed, because HRAs benefit only the employer, the ``Arrangement''
undermines the incentive systems on which high deductible plans are
based. The employee has far less incentive to minimize expenditures,
since the money belongs not to him, but rather to his boss.
This is not nearly an exhaustive description of the ways that the
contractor's health care plan is of inferior value to the employee as
compared to the high-deductible plan available to TSOs in Montana under
FEHBP. But it suffices to show how the contractor's plan does not
comport with the statutory requirement for a ``qualified private
screening company'' under 44920 of ATSA that benefits offered are
``not less than the level of compensation and other benefits'' provided
to TSOs. Of course, the benefits in FEHBP's high-deductible plan are
less generous than those in the other 10 plans made available to TSOs.
If one interprets the statutory language to mean the range of value of
the benefits, than the contractor's plan is of less value than the
least valuable FEHBP plan. TSOs in Montana now have the choice of the
GEHA plan, as well as the following additional Nation-wide plans:
(1) Blue Cross Blue Shield Standard Option
(2) Blue Cross Blue Shield Basic Option
(3) NALC
(4) GEHA Benefit Plan
(5) Mailhandlers Benefit Value Plan
(6) SAMBA
(7) Mailhandlers Standard
(8) APWU Health Plan
(9) Mailhandlers Benefit Plan Consumer Option
(10) NALC Value Option Plan
And two additional Montana plans:
(1) Aetna Healthfund HDHP for South/Southeast/Western Montana
(2) Aetna HealthFund CDHP and Value Plan, South/Southeast/Western
Mt. areas.
While it is difficult to quantify the economic value of choice
among 13 plans versus no choice, no one could describe an employer
offering only one choice as providing a benefit that is ``not less than
the level'' of benefit offered by the Federal Government.
Thus far, we conducted an apples-to-apples comparison of the
contractor's health insurance plan and the Government's worst plan,
even though the contractor's plan is clearly a rotten apple. But how
about comparing it to the best plan FEHBP has to offer TSAs--and by
``best'' I mean most popular: Blue Cross Blue Shield's Standard option,
the choice of over 60% of Federal employees.
COMPARISON OF CONTRACTOR HEALTH PLAN VS. FEHBP PLANS AVAILABLE TO TSOS AT TSA
----------------------------------------------------------------------------------------------------------------
Type of Coverage Contractor Contractor GEHA High GEHA High BCBS BCBS
----------------------------------- Plan** Plan** Deductible* Deductible* Standard* Standard*
-----------------------------------------------------------------------------
Biweekly Biweekly Biweekly Biweekly Biweekly Biweekly
Employee Employer Employee Employer Employee Employer
Premium Premium Premium Premium Premium Premium
----------------------------------------------------------------------------------------------------------------
Self Only......................... $54.39 n/a $50.87 $152.60 $87.82 $196.68
Self and Family................... 190.63 n/a 116.18 384.54 204.98 437.62
----------------------------------------------------------------------------------------------------------------
**CSSI Firstline Documents provided to AFGE.
*http://www.opm.gov/healthcare-insurance/healthcare/plan-information/premiums/2014/nonpostal-hmo.pdf.
As is clear from the above, the economic value of the health
insurance benefit, as measured by the employer cost for provision of
the benefit, shows clearly that the contractor's plan is inferior. We
know that the actuarial value of the benefits of both the contractor's
plan and the GEHA high-deductible plan are lower than the Blue Cross
Blue Shield Standard Option Plan. But we have shown that the GEHA plan
offers superior benefits, and although we do not know the contractor's
cost for the HRA/High Deductible plan, we know that it is far lower
than TSA's costs for either the GEHA or the BCBS plan, and thus does
not meet the standard in the statute.
The contractor appears not to provide any retirement benefit at
all. There is no mention of a pension plan: No 401(K) savings plan, no
profit-sharing plan, no simplified employee pension plan (SEP) or IRA,
no money purchase pension plan, no cash balance plan, no stock bonus
plan, and no employee stock ownership plan. In short, this employer
does not even make the smallest gesture toward the benefit equivalence
that the statute demands in the area of retirement income security.
Incumbent Montana TSOs report TSA management has been slow to
respond to their many questions about the transition to SPP and often
receive contradictory information. In comparison, TSA has held TSOs to
tight deadlines for life-altering decisions. Although the collective
bargaining agreement negotiated between AFGE and TSA includes a
provision that creates a permanent Voluntary Transfer Option, TSOs were
only given 10 calendar days to review a vacancy list (that did not
include all TSO job vacancies listed on USAJobs), pick five airports
and complete an on-line application. TSA failed to hold itself to the
same timely responses required of TSOs: TSOs report that their
airport's Human Resources (HR) offices provided delayed and
contradictory responses to questions. TSOs were told by HR offices that
they would not qualify for unemployment compensation because they were
entitled to ``Priority Placement'' with CSSI/Firstline. The so-called
``right'' of ``Priority Placement'' or ``Right of First Refusal'' is
qualified and unenforceable, and decisions regarding unemployment
compensation eligibility are made by the State of Montana, not TSA
employees. Long-term TSOs report that they were repeatedly told they
would not be eligible for severance pay if they separated from TSA,
would be penalized for early retirement, and would not receive
unemployment compensation.
congress should not limit its spp oversight to the treatment of
contractors
In their January 14, 2014 testimony before the Government
Operations Subcommittee of the Oversight and Government Reform
Committee, GAO confirmed that TSA has failed to track the performance
of contract screeners in the same manner that TSO performance is
endlessly scrutinized. The SPP screener attrition rates, covert testing
failures, TIP, and other performance measures are unknown to the
public. Just as the news media recently reported that an intoxicated
man impersonated a screener at the privatized San Francisco
International Airport and groped several female passengers, the public
was only made aware of covert test cheating and other security breaches
at SPP airports when reported by journalists. AFGE believes that much
of the negative public perception of TSOs by some members of the public
is fueled by the agency's rush to report unproven allegations against
TSOs while security contractors and their employees have never faced
the same level of relentless scrutiny. The Contract Screener Reform and
Accountability Act (H.R. 4115) provides the reform and transparency
program badly needs. The bill's sponsors, Homeland Security Ranking
Member Bennie Thompson, Committee Member Sheila Jackson Lee, and
Appropriations Committee Ranking Member Nita Lowey, have a history of
being champions of the TSO workforce, being fiercely committed to our
Nation's aviation security, and have long sought transparency and
accountability in the SPP. H.R. 4115 is a significant step in ensuring
all of aviation security, not just that which is performed by Federal
employees, receives the oversight necessary to protect the flying
public.
H.R. 4115 would make these significant improvements to the SPP
program:
Bans the subsidiaries of foreign-owned corporations from
obtaining SPP contracts.
Requires covert testing of contract screeners and penalizes
cheating on those tests;
Protects TSO jobs and benefits if a security contractor is
awarded a contract at their airport;
Protects those who disclose wrongdoing by private screening
companies;
Requires reporting of security breaches by private screening
companies; and
Ensures transparency by requiring a cost analysis of private
screening companies to be conducted by the Comptroller General.
The relevance of the Contract Screener Reform and Accountability
Act to the SPP, the TSO workforce, and aviation security cannot be
understated. H.R. 4115 should be passed by the House.
conclusion
A video of the checkpoint at Washington-Dulles International
Airport taken the morning of September 11, 2001 shows several hijackers
being allowed to pass by several private screeners even though they set
off metal detector alarms. We now know those men were allowed to board
American Airlines Flight 77 with ``utility knives'' that they would use
to kill innocent passengers and crew on-board the plane, and begin the
hijacking of that flight. No individual private screener is responsible
for the tragedy that occurred. However the country cannot turn a blind
eye to the circumstances that led to the ultimate aviation security
breach, including the issues raised by placing this important work in
the hands of private security contractors. Screening of passengers and
baggage remains inherently Governmental work that should remain with
the Federal TSO workforce.
Mr. Hudson. Thank you, Mr. Cox.
We appreciate all of you being here. I now recognize myself
for 5 minutes to ask questions.
Let me start, Ms. Martin, by saying it should never have
taken 5 years to be able to convert to private screeners and,
frankly, it is an unacceptable amount of time.
Nonetheless, I appreciate your perseverance because, like
you, I see benefits--substantial benefits of privatized
screening and, like you, I welcome the kind of efficiencies and
customer service improvements that the private sector brings to
bear in the airport environment.
Having gone through the process yourself, what advice would
you give other airports that are interested in the SPP program?
Ms. Martin. Barring any changes to the current process, I
would tell them to be prepared for a--the long haul. That is
the best I could tell them. Unfortunately, there just isn't--
aren't any guidelines where you could tell them where they
could find efficiencies.
If I may, if--I would tell them to outline a process with
TSA on the front end and then identify milestones along the way
and to have a point person that they can contact on a regular
basis for information about the process.
Mr. Hudson. I appreciate that.
Mr. VanLoh, would you like to respond to this question as
well?
Mr. VanLoh. I would agree with Ms. Martin. It is a long
haul. Fortunately, Kansas City was selected right out of the
box. If we had to go through this process--this onerous process
now with the changing environment in our city government, I am
not so sure we would be successful.
Mr. Hudson. That is troubling.
Mr. Amitay, in your testimony, you brought up that private
companies can bring increased levels of efficiency and
effectiveness to the security screening process.
Why is it that private screening companies are able to do
screening cheaper with same or better results, in your opinion?
Mr. Amitay. Well, I think, with private screening
companies, they just have--they are able to create incentives
and disincentives for the workers that result in better
attendance and timeliness and in performance, all of which can
save money.
A major cost-driver in any hourly operation is overtime
cost and being able to schedule more efficiently, being able to
staff more efficiently, having more robust attendance policies,
you know, as Mark mentioned, greater discipline.
That can all cut down on the personnel costs, which are the
major factor. But, also, with the--with the management
administrative costs, the ability of private sector to save
over the Federal sectors is astronomical.
You know, just take one issue such as leasing space at an
airport. You know, TSA, I think at San Francisco, they have got
some pretty prime space at the airport, whereas, the screening
company--you know, they are very cost-efficient in their
leasing. Private companies also greatly monitor workers'
compensation claims and try to reduce injury rates. Again, that
is another major cost-driver.
You know, TSA really doesn't have any incentive to lower
workers' compensation claims and, as I mentioned before with
absenteeism, that is a major problem at TSA. Those are huge
cost drivers.
Mr. Hudson. When you talk about costs, you know, one of the
constant frustrations I hear is that TSA is not counting all
the cost to the Federal Government, as you mentioned in your
testimony, including these retirement costs.
I mean, why is it important for us to include all that when
we are comparing the cost to the private sector?
Mr. Amitay. Well, I think, as the FAA Modernization Act
amendments to ATSA--they made a good point. They said that the
private screener should not detrimentally affect cost
efficiency as well as performance at an airport.
So, therefore, yes, the private screeners need to be as
costly or less than Federal screeners. But--so, therefore, the
Federal Government then will set a cost ceiling for the private
screeners at an airport, and this is the bid ceiling.
If the--if TSA is not including all the costs of Federal
screeners in that bid ceiling for private screening, well, then
the private screeners will necessarily have to bid lower than
what it costs the Federal Government.
Now, they are able to do that because of some of these cost
efficiencies I've mentioned, but it is making the bids
artificially lower than they need to be.
Mr. Hudson. Makes sense.
Well, my time is about to expire. So I don't want to abuse
my right. That limits my ability to gavel some of the others
down when they go over.
So at this time I will conclude my questions for the first
round and recognize the gentleman from Montana, Mr. Daines, for
any questions he may have.
Mr. Daines. Thanks, Mr. Chairman. I appreciate that.
Question for Ms. Martin: What is the overall level of
interaction that you have had with TSA's SPP office?
Ms. Martin. I am sorry. If you could repeat that.
Mr. Daines. What is the overall level of interaction you
have had with TSA's SPP office?
Ms. Martin. The level?
Mr. Daines. Uh-huh.
Ms. Martin. Little to none. You know, we--when we started
this process, we spoke with the folks in the SPP office
initially. We were told where to find the application on-line.
When we were first--took our application to the District of
Columbia the first time, we met with the SPP office, who
encouraged us to apply at that time so that they could lump it
in with the seven airports in eastern Montana. We chose, along
with the other airports in Montana, to hold our application.
After we brought our application and applied in 2009, there
was little to no interaction between the office except that
which we initiated, asking where things were in the process.
That has been pretty much the case through the entire process.
Mr. Daines. So I think your response to my--answers the
next question, but I will ask it anyway.
Would you say you are generally satisfied or dissatisfied
with the amount of information you received from TSA regarding
the SPP process?
Ms. Martin. I would say I was dissatisfied.
Mr. Daines. What improvements do you think could be made to
SPP that would make the process of applying as well as
transitioning to private screening easier for airports without
sacrificing the necessary security?
Ms. Martin. You know, the application process itself is
quite easy. I think there were a few questions on the
application that would be more telling. As they say, when you
have seen one airport, you have seen one airport. We all
differ.
Being able to identify the unique, perhaps, seasonality or
other things that happen at that airport, that would be
important in staffing. I think also then identifying the
process milestones so that an applicant knows exactly when
things are going to happen and at what point.
It would be lovely to be involved in the--in, actually, the
decision with regard to the final contractor to make certain
that those things which were proposed in the scope of work
actually do fit the needs of that airport.
If the process is going to continue to be a lengthy one--
things actually could have changed at that airport in terms of
seasonality or service, new carriers, what have you, that could
actually have changed the demand from when the SOP was--the RFP
was written and when it was actually awarded.
Mr. Daines. So, from your viewpoint, going through this
process--this nearly 5-year process, do you believe that
airports are discouraged from applying and participating in SPP
with the nature of the application and procurement process?
Were you encouraged or discouraged to go through that process?
Ms. Martin. You know, a number of the airport managers that
I have talked to that have heard our story say, ``Boy, I
wouldn't do that.'' So I believe that they are discouraged. I
think, if more people heard our story, they would be
discouraged.
Mr. Daines. Could you describe the general sentiment in the
airport community towards private screening, in general, if you
could?
Ms. Martin. I am sorry. Say that first part again.
Mr. Daines. Could you describe the general sentiment in the
airport community towards private screening, in general?
Ms. Martin. You know, I don't know that I can speak for all
of my counterparts at the other airports, but I think, by and
large, we all believe that it can be done.
Being a Federal employee doesn't make you impervious or
make you perfect that the same people are going to do the job
as for the private screener.
I think we are concerned more about the management and the
staffing, and we believe that the private screener can be
flexible and can manage that.
Mr. Daines. So I heard Mr. Cox's testimony as well just
talking about the Bozeman airport. In fact, that is my home
airport. I fly in and out of there every week. I live about 10
miles away from the airport.
What--what would you say in terms of kind-of the before and
after as it relates to employee satisfaction, as it relates to
the quality of the security now moving--transitioning to
private screening? What is your sense of the kind-of before and
after?
Ms. Martin. Well, since we haven't actually made the
transition, although roughly about 40 percent of our workforce
is going to be going over to the private screener, they seem to
be excited and happy. We haven't noticed any change in the
delivery of their job.
Those that are either deciding to leave the workforce
completely or move to other airports cite various reasons. But
I believe that the workforce that is staying is happy with the
transition.
Mr. Daines. Okay. Question for Mr. Amitay: What--I heard
some pretty strong statements from Mr. Cox there as it relates
to kind-of before and after there.
What has been your experience, No. 1? No. 2, in general,
how many different private screening companies compete for
these contracts typically?
Mr. Amitay. In terms of the competition, I don't have the
exact numbers. But I would say probably a half dozen offers are
under the FCE for a typical SPP contract. There hasn't been
that many of them.
You know, the Kansas City recompete and the Montana
solicitation were some of the two most recent. I know, also,
there is two in Florida. But it--there is a good deal of
competition.
Mr. Daines. Then maybe just contrasting maybe what your
experience has been--I heard Mr. Cox talk about the experience
in the Bozeman airport--what have you seen kind-of before and
after, perhaps, in your experience?
Mr. Amitay. Well, unfortunately, because of TSA's
management of the program, there has been very few, actually,
airports that have converted from Federal screeners to private
screeners.
Kansas City and San Francisco, the two largest airports
that use private screeners, were part of that original pilot
program. So, really, Montana--meaning that they never switched
from private--they never had Federal screeners.
So Montana is a little bit of a laboratory in terms of the
transition. So people are watching that, and we are hopeful
that, you know, it will be done effectively to benefit all the
parties involved.
Mr. Daines. Okay. Thank you.
Mr. Hudson. Thank you.
The Chairman now recognizes the gentleman from South
Carolina, Mr. Sanford, for any questions you may have.
Mr. Sanford. Thank you, Mr. Chairman.
I will quickly yield my time to you, sir, or to my
colleague from Montana, in the event he wants more time. I have
been at conference and, therefore, did not get to hear your
testimony.
I do have one just general question just on private
screening at large. It is my understanding that, basically, the
bulk of all Western countries use private screening. So, you
know, are there some best practices out there that you have
identified in other countries that are worth noting?
No. 2, you know, why is it--I remember at the time of 9/11
calling a couple of former colleagues up here and saying, ``If
this isn't a gut check, I don't know what is.''
I see a former colleague from Tennessee back there, in
fact.
You know, the idea of Federalizing 40,000 folks just seemed
to me a big jump without a lot of experimentation leading up to
it.
Why not more in the reverse, in terms of more
experimentation from the standpoint of using private
contractors in this particular regard?
I would love to hear a couple of your thoughts just at
large on that front.
Then I will yield to you, Mr. Chairman.
Mr. Amitay. Well, Congressman, I believe that the reason
why people utilize private screening in other countries is
because, first of all, the idea that the Government is both a
regulator and the operator is very a dangerous proposition
sometimes.
You know, as has been the case already with TSA, you know,
not to bring up bad stories, but, in Hawaii, it goes something
like 39 TSA people at the airport, including the Federal
security director and screeners and another--were fired and
another 17 were disciplined because of, really, a large-scale
concerted operation to not follow the proper required screening
procedures.
You know, when you have a--you know, when you have an
arm's-length relationship with TSA doing--setting the policies
and doing the regulation and then a private screening company
doing the operations, you know, that private screening company
is going to do what it is supposed to do because, also, it
realizes that, you know, it could lose that contract, it could
be debarred, or other punitive measures can be taken against it
so it won't be able to do it anymore. This doesn't exist in the
Federal screening world. So, you know, that--that is a major
consideration, I think, that other countries have.
In terms of best practices, you know, private screening
companies, they are constantly looking for best practices
because they constantly have to improve because they face
constant competition, you know, from other competitors. If they
don't employ best practices in terms of scheduling and
screening and in terms of screener oversight----
Mr. Sanford. I understand.
But are there two that you would recommend to the committee
worth noting or worth looking at either from the standpoint of
the company or from the standpoint of a country?
Mr. Amitay. I think everything is worth looking at, you
know, again, with the basic premise that, you know, TSA sets--
they set the security requirements. They set the standard
operating procedures.
But if there are innovative and effective and efficient
ways to meet those TSA security requirements, then they should
be allowed to be explored.
Mr. Sanford. I yield back, Mr. Chairman.
Mr. Hudson. Thank you, Mr. Sanford.
One of the issues that Mr. Cox raised was concerning to me,
just about the compensation equivalencies. You know, obviously,
I have had the opportunity in this job to meet a lot of TSOs.
There are a lot of heroic, patriotic Americans working for
TSA. You know, we certainly--you know, our concerns to find
efficiencies and a better way of doing things through SPPs does
not in any way reflect our opinion about these employees.
But I don't know if--Mr. Amitay, do you want to respond to
what Mr. Cox was saying about the situation in Montana where
this TSO is not apparently getting equivalent compensation and
benefits?
Mr. Amitay. Well, I think that there are some
misconceptions about exactly the compensation being offered to
the TSOs who are transitioning, you know.
I understand that those TSOs that are transitioning are
going to get the same hourly wages and that, yeah, the benefits
plan--it will be competitive. Will it be the exact benefits
plan the Federal Government offers? No.
But nobody in the private sector offers the exact benefits
plan the Federal Government does. It is just out-of-date.
Mr. Hudson. What about the concern about the health care
plan only being available in Tennessee?
Mr. Amitay. That is absolutely untrue. I--you know,
whatever evidence or proof you need that it is untrue I can
provide. I mean, that absolutely makes no sense.
You know, this is a Blue Cross Blue Shield plan and,
through Blue Cross Blue Shield--even though it might be
administered out of Tennessee or based through the Tennessee
plan, they have these reciprocity agreements through these Blue
Cross Blue Shield State associations.
So, therefore, you know, those Montana Blue Cross Blue
Shield, you know, providers, you know, are considered to be in-
house providers under a Tennessee Blue Cross Blue Shield plan.
Mr. Hudson. All right. Well, I appreciate that.
Mr. VanLoh, you talked about the contract award process you
are involved in now and is back in litigation and the concerns
that, because the standard is sort-of the minimum pay scale,
you have got a lot of employees who have been there maybe even
12 years now with the current contractor, and you expressed
some of the concerns you have with what that impact will have
on the workforce.
Do you want to elaborate on that a little bit?
Mr. VanLoh. Thank you, Mr. Chairman.
Well, that is absolutely true. When you have got a
screening supervision staff that may have been there for the
entire 12 years since 9/11, those senior--that senior
capability will be gone because the company that was the
apparent low bidder even low-bid the TSA's own estimate by far,
by several million dollars.
So, naturally, with a labor-intensive contract, the way you
are going to save is cutting salaries and hours of work. So
we--we see a mass migration of our senior-experience screeners
to other employment because of the cuts just to make the
contract work.
Mr. Hudson. Well, in the initial SPP contract, you were
able to give input in terms of vendor, is my understanding. Was
that not part of the process when you--when you are renewing
this or rebidding this?
Mr. VanLoh. I have been involved with two renewal contracts
since I have been in Kansas City 11 years. Usually, a 1- to 2-
day session where all the bidders come into town, we are not
part of that. We have no idea of who is actually bidding on the
contract. We are not asked about our incumbent on how they are
doing.
We get the letters from the public. TSA usually doesn't get
complaint letters. We do. So we know how we are performing. We
are not asked. Then we read about it on-line or in the papers
on who the low bidder is and the new contract award. That is
how the airport finds out.
Mr. Hudson. That doesn't seem to make sense to me,
especially, when you do a new SPP bid, the airport is allowed
to comment on it. I don't know why there wouldn't be input
allowed later when it actually would be more-informed comments,
in my opinion. So I appreciate that.
Mr. Sanford, are you interested in a second round?
Mr. Sanford. I defer to you right now.
Mr. Hudson. Okay. Well, in that case, I want to thank the
witnesses for your time and your testimony. I think this was
very informative. I appreciate you being here with us today.
At this time I will dismiss the first panel and call up the
second panel. Thank you.
I will now call the second panel. First, we have Mr.
William Benner, who currently serves as the director of the
Screening Partnership Program. He joined TSA in 2002 and has
served in numerous positions. Prior to joining TSA, Mr. Benner
spent 21 years as an army military police officer and public
affairs officer. In his final military assignment, Mr. Benner
served as a DOD liaison to the newly-created FBI
counterterrorism division, where he cultivated collaborative
relationships between DOD, FBI, and other Federal agencies.
Ms. Jennifer Grover is an acting director of GAO's Homeland
Security and Justice Team, leading a portfolio of work on
transportation security issues. Prior to this position, Ms.
Grover was an assistant director of GAO's health care team,
where she led reviews on a diverse range of health care-related
issues. Ms. Grover joined GAO in 1991.
The witnesses' full statements will appear in the record.
Thank you both for joining us. The Chairman now recognize Mr.
Benner to testify.
STATEMENT OF WILLIAM BENNER, SCREENING PARTNERSHIP PROGRAM,
OFFICE OF SECURITY OPERATIONS, TRANSPORTATION SECURITY
ADMINISTRATION, U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Benner. Chairman Hudson, Ranking Member Richmond, and
Members of the subcommittee. I am pleased to appear before you
today to discuss the TSA Screening Partnership Program. The SPP
is a voluntary program under which airports may apply to
utilize private-sector, rather than TSA employees to conduct
passenger screening.
Upon an airport's acceptance into the program, TSA selects
a company that meets statutory requirements to conduct
screening services under contract with the Federal Government.
Regardless of whether an airport has private or Federal
employees conducting passenger screening operations, TSA
maintains responsibility for transportation security.
SPP participation depends on interest from airport
operators. Eighteen airports are currently participating in SPP
and either have private contract screeners in place or are in
the process of transitioning to contract screeners.
These 18 airports represent approximately 4.5 percent of
TSA's annual passenger volume. Airport operators interested in
participating in the SPP may find the application on the TSA
website, along with an overview of the application process and
additional relevant information.
TSA also utilizes the Federal Business Opportunities
website to communicate with a wide range of vendors on SPP-
related topics. For example, TSA advertised and held an SPP-
specific industry day in January 2014, which was attended by
approximately 100 vendors. The industry day provided an
overview of the program's direction and goals, informed
industry of the acquisition process, and offered a forum for
obtaining feedback and insight into industry capabilities.
TSA has also met with vendors in other forums, such as the
National Association of Security Companies' annual Washington
Summit and the Washington Homeland Security Roundtable, both
held in June 2014.
The FAA Modernization and Reform Act of 2012 provided
standards for approval of an SPP application, a time line for
approving or denying applications, and specific actions to take
in the event an application is denied. Additionally, under the
act, the TSA administrator must determine that the approval
would not compromise the security or detrimentally effect the
cost efficiency or effectiveness of the screening of passengers
or property at the airport.
In order to maintain cost efficiency, as required by the
FAA authorization, TSA includes the Federal cost estimate of
the airport screening operations in all requests for proposals.
This practice demonstrates compliance with the law by ensuring
that all offerors are evaluated on proposed costs as well as
their ability to perform airport screening according to TSA
standards.
The methodology used to develop Federal cost estimates is
continually validated and refined to conform with changes to
the law, as well as to incorporate improvements resulting from
audits conducted by the GAO and the DHS Office of Inspector
General.
TSA's goal is to award a contract within 1 year of
receiving a new SPP application, assuming all legal
requirements are met, and a qualified contractor is identified
during the procurement process.
While this is an aggressive time line, given the Federal
Acquisition Regulation requirements, the goal is a reflection
of our commitment to ensure airports that choose to have
contract screeners can move expeditiously in that direction.
The first opportunity to meet that 1-year goal is with the
application we recently received from the Portsmouth
International Airport in June 2014. It is my responsibility as
the senior executive in charge of SPP to ensure the program is
managed with an appropriate focus on both cost and security. I
appreciate the work that the GAO and this committee have done
in partnering with us to achieve the goal.
Thank you for the opportunity to appear here today. I'll be
happy to answer your questions.
[The prepared statement of Mr. Benner follows:]
Prepared Statement of William Benner
July 29, 2014
Chairman Hudson, Ranking Member Richmond, and Members of the
subcommittee, I am pleased to appear before you today to discuss the
Transportation Security Administration (TSA) Screening Partnership
Program (SPP).
As you know, TSA is a high-performing counterterrorism agency
charged with facilitating and securing the travel of the nearly 1.8
million air passengers each day. Our workforce carries out the
important mission of protecting the transportation system to ensure
freedom of movement for people and commerce. TSA's security measures
comprise a multi-layered system that identifies, manages, and mitigates
risk. Combined, these layers form a strong, secure system designed to
deter and prevent terrorist attacks.
screening partnership program (spp) history
Congress, through the Aviation and Transportation Security Act
(ATSA) (Pub. L. 107-71), established TSA and determined that passenger
screening should be a predominantly Federal responsibility. ATSA also
authorized a pilot program for privatized passenger screening (see 49
U.S.C. 44919). TSA selected five airports to participate in the pilot
program, representing five airport security risk categories as defined
by the TSA administrator. Companies that met statutory qualifications
were then selected to conduct screening services under contract with
the Federal Government. Further, these private-sector employees are
required to maintain the qualification criteria of Federal
Transportation Security Officers (TSOs), and to receive compensation no
less than such Federal personnel. This provision was formalized into
the Screening Partnership Program after the 2-year pilot period
concluded.
The Federal Aviation Administration (FAA) Modernization and Reform
Act of 2012 (Pub. L. 112-95) amended 49 U.S.C. 44920 to provide
standards for approval of an SPP application, a time line for approving
or denying applications, and specific actions to take in the event an
application is denied. Additionally, the TSA administrator must
determine ``that the approval would not compromise the security or
detrimentally affect the cost-efficiency or the effectiveness of the
screening of passengers or property at the airport.''
The SPP is a voluntary program whereby airports may apply for SPP
status and employ private security companies to conduct airport
screening according to TSA standards. Participation depends on interest
from airport operators. Since the program began in 2004, 31 airports
have applied, including the original statutory 5 pilot airports. Of
those 31, 18 are currently participating in the SPP program, and either
have private contract screeners in place or are in the process of
transitioning to contract screeners. Of these 18 airports, 8 fall
within the smallest airport classification (Category IV--which means
they enplane between 2,500 and 10,000 passengers a year). The 18
airports currently participating in SPP represent approximately 28.9
million passengers per year, or 4.5% of TSA's annual passenger volume.
The cumulative contract value for these 18 airports is currently $661
million over a 5-year period.
Of the remaining 13 airports that have applied to the program, one
is currently in the application adjudication phase, two are in the
source selection phase, and the remaining 10 have either discontinued
commercial air service, have been denied, or have withdrawn their
applications prior to contract award.
Regardless of whether an airport has private or Federal employees
conducting passenger screening operations, TSA maintains overall
responsibility for transportation security. As new and emerging threats
are identified, we must be able to adapt and modify our procedures
quickly to protect the traveling public. Federal Security Directors
oversee the contracted security screening operations to ensure
compliance with Federal security standards throughout the aviation
network.
transparency and industry engagement
Airport operators interested in participating in the SPP, may find
the application on the TSA website along with an, an overview of the
application process, and additional information relevant to airport
operators contemplating participation. Additionally, the TSA website
provides a listing and map of SPP airports, recent news regarding SPP
(such as contract awards), links to Requests for Proposals (RFPs)
postings, and employment opportunities at SPP service providers. TSA
also utilizes the Federal Business Opportunities website to communicate
with a wide range of vendors on SPP-related topics. For example, TSA
advertised and held an SPP-specific Industry Day on January 10, 2014.
This meeting was attended by approximately 100 vendors and provided a
general overview of the program's direction and goals, informed
industry of the acquisition process, and also offered a forum for
obtaining feedback and insight into industry capabilities. TSA has also
met with vendors in other forums, such as the National Association of
Security Companies Annual Washington Summit and the Washington Homeland
Security Roundtable, both held in June 2014.
cost efficiency
In order to maintain cost efficiency as required by the FAA
authorization, restrain costs from exceeding those incurred by TSA for
Federal screening, and creating an unfunded requirement, the agency
includes the Federal cost estimate of the airport screening operation
in the RFP. This new practice demonstrates compliance with the law by
ensuring that bidders are evaluated on costs as well as their ability
to conduct airport screening according to TSA standards. Estimates are
developed in accordance with standard methodology using the most recent
and actual data from the airport. The methodology is continually
validated and refined to conform with changes to the law, as well as to
incorporate improvements resulting from audits conducted by the
Government Accountability Office (GAO) and the Department of Homeland
Security Office of the Inspector General (OIG).
program accomplishments
In his January 2014 testimony, TSA's assistant administrator for
the Office of Security Operations, Kelly Hoggan, stated that TSA's goal
is to award a contract within 1 year of receiving a new SPP
application, assuming all legal requirements are met and a qualified
contractor is identified during the procurement process. While this is
an aggressive time line given the requirements of the Federal
Acquisition Regulation, the goal is a reflection of our commitment to
ensure airports that choose to have contract screeners can move
expeditiously in that direction. The first opportunity to meet that 1-
year goal is with the application we recently received from Portsmouth
International Airport in June 2014.
Our programmatic efforts in recent months have been focused on
completing the procurement process for airport applications that have
already been approved. I am pleased to report that TSA awarded a
contract for four Montana airports, also known as Montana West, which
became effective on June 1, 2014. We are currently in the transition
phase for converting the screening operations at these airports from
Federal to contractor. Two more airports are nearing the end of the
procurement process: Orlando Sanford International Airport and Sarasota
Bradenton International Airport. TSA expects to award those contracts
in the coming months, assuming we identify a qualified vendor from the
procurement process.
TSA also closed out its remaining OIG recommendation to streamline
the SPP application review process. In closing the recommendation, we
instituted improvements in our processes for application review that
will facilitate meeting the aggressive 1-year goal to award a contract
on new applications. Process improvements include reducing the number
of offices required to review and provide data for application
decisions to only those essential to meet legislative requirements
(security and cost efficiency) and co-locating the program and
acquisitions teams that participate in the application review and
procurement functions to enhance collaboration in planning and
execution.
I would also like to mention that the Joint Statement of Managers
accompanying the fiscal year 2014 Appropriations directed TSA to
allocate resources for an independent study of the performance of
Federalized compared to privatized airports in a number of areas, to
include cost and security effectiveness. TSA awarded a contract in June
2014 to begin that study. We expect the contractor to publish the first
of two reports in November 2014. The first report directly answers the
Joint Statement of Managers and will be provided to GAO for review and
subsequent reporting to Congress. The second report, focused on
reviewing TSA's methodology for comparing performance and costs, will
be completed in March 2015.
conclusion
TSA strives to maximize security by keeping ahead of current
threats identified by intelligence and by maintaining security systems
that focus its resources on areas where they will yield the greatest
benefit. This is consistent with our risk-based approach to security
and critical in times of budget austerity. It is my responsibility as
the senior executive in charge of SPP to ensure that the program is
managed with an appropriate focus on cost and security. I appreciate
the work that the Government Accountability Office and this committee
have done in partnering with us to achieve this goal.
Thank you for the opportunity to appear here today. I will be happy
to answer your questions.
Mr. Hudson. Thank you, Mr. Benner.
The Chairman recognizes Ms. Grover to testify.
STATEMENT OF JENNIFER A. GROVER, ACTING DIRECTOR, HOMELAND
SECURITY AND JUSTICE, GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Grover. Good morning Chairman Hudson, other Members,
and staff. I am pleased to be here today to discuss TSA's
implementation and oversight of the Screening Partnership
Program.
My remarks today reflect the findings from GAO's previous
studies of SPP. We have recently started a new study to examine
TSA's current approach to comparing the cost of providing
screening services at SPP and non-SPP airports.
At the end of 2012, GAO found weaknesses, both in TSA's
implementation and in its oversight of SPP. First, regarding
implementation, we found that TSA was not providing airports
with clear guidance on how to apply to SPP. This is important
to ensure that all airports have a full and fair opportunity to
participate.
TSA offered on-line frequently asked questions, but little
else. Airports told us that they needed help with several
issues, such as understanding whether or not they were good
candidates, how to complete the application, and what type of
information that they were required to submit about costs.
Industry representatives echoed those concerns, noting that
airports didn't want to invest in the application process when
they were unsure about how they would be evaluated. But since
then, consistent with our recommendation, TSA has posted
additional guidance on its website, including examples of
helpful information submitted by previous applicants, details
about how applications will be assessed, and clarification
about the requirements for submitting cost information.
Second, regarding oversight, in 2012, we found that TSA did
not evaluate the relative performance of private and Federal
screeners. This is important because private screeners must be
providing a level of services and protection that is equal or
greater to that provided by the Federal screeners.
Therefore, we recommended that TSA regularly monitor
screener performance at the SPP airports compared to non-SPP
airports. At the time, they did have some performance
measurements in place. They used a scorecard performance system
to regularly assess screeners at every airport on numerous
performance measures, but the result from that was a point-in-
time snapshot of performance at that airport relative to its
goals and relative to National averages, but not a comparison
to the other airports in this category.
So, to address the question of comparative performance, GAO
reviewed several years of performance data for the then 16 SPP
airports on four different measures. We found that the private
screeners did slightly better than Federal screeners on some
measures and slightly worse on others.
Since then, TSA has started issuing its SPP annual reports,
which, consistent with our recommendation, include performance
data for each SPP airport relative to other airports in its
category.
We are pleased that TSA's changes address our
recommendations. These changes may assist TSA in making future
improvements to the program. For example, with greater clarity
and transparency in the application process, additional
airports may be encouraged to apply. It may also help ensure
that the application process is carried out in a consistent
manner. With the new comparative performance data, TSA may be
better-equipped to identify best practices, as well as to
identify SPP airports that require additional attention to
improve their performance.
Finally, one issue that remains unresolved is the question
of the relative cost of screening operations at SPP versus non-
SPP airports. Over the years, TSA has faced challenges in
accurately comparing these costs. In previous work, we noted
limitations in TSA's analysis, such as the need to analyze how
changes in their underlying assumptions would affect cost
estimates.
Since then, TSA has reported additional modifications to
its cost estimation methodology. In our newly-initiated study,
we will monitor TSA's progress in this area, and provide the
committee with updated information.
Thank you for the opportunity to testify this morning. I
look forward to your questions.
[The prepared statement of Ms. Grover follows:]
Prepared Statement of Jennifer A. Grover
gao highlights
Highlights of GAO-14-787T, a testimony before the Subcommittee on
Transportation Security, Committee on Homeland Security, House of
Representatives.
Why GAO Did This Study
TSA maintains a Federal workforce to screen passengers and baggage
at the majority of the Nation's commercial airports, but it also
oversees a workforce of private screeners at airports who participate
in the SPP. The SPP allows commercial airports to apply to have
screening performed by private screeners, who are to provide a level of
screening services and protection that equals or exceeds that of
Federal screeners.
This testimony addresses the extent to which TSA: (1) Provides
guidance to airport operators for the SPP application process, (2)
assesses and monitors the performance of private versus Federal
screeners, and (3) compares the costs of Federal and private screeners.
This statement is based on reports and a testimony GAO issued from
January 2009 through January 2014.
What GAO Recommends
GAO has made several recommendations since 2009 to improve SPP
operations and oversight, which GAO has since closed as implemented
based on TSA actions to address them.
screening partnership program.--tsa has improved application guidance
and monitoring of screener performance, and continues to improve cost
comparison methods
What GAO Found
Since GAO's December 2012 report on the Screening Partnership
Program (SPP), the Transportation Security Administration (TSA) has
developed guidance for airport operators applying to the SPP. In
December 2012, GAO found that TSA had not provided guidance to airport
operators on its SPP application and approval process, which had been
revised to reflect statutory requirements. Further, airport operators
GAO interviewed at the time identified difficulties in completing the
revised application, such as obtaining cost information requested in
the application. GAO recommended that TSA develop application guidance
and TSA concurred. In December 2012, TSA updated its SPP website with
general application guidance and a description of TSA's assessment
criteria and process. The new guidance addresses the intent of GAO's
recommendation.
TSA has also developed a mechanism to regularly monitor private
versus Federal screener performance. In December 2012, TSA officials
stated that they planned to assess overall screener performance across
all commercial airports instead of comparing the performance of SPP and
non-SPP airports as they had done previously. Also in December 2012,
GAO reported differences between the performance at SPP and non-SPP
airports based on screener performance data. In addition, GAO reported
that TSA's across-the-board mechanisms did not summarize information
for the SPP as a whole or across years, making it difficult to identify
changes in private screener performance. GAO concluded that monitoring
and comparing private and Federal screener performance were consistent
with the statutory provision authorizing TSA to contract with private
screening companies. As a result, GAO recommended that TSA develop a
mechanism to regularly do so. TSA concurred with the recommendation and
in January 2013, issued its SPP Annual Report, which provided an
analysis of private versus Federal screener performance. In September
2013, TSA provided internal guidance requiring that the report annually
verify that the level of screening services and protection provided at
SPP airports is equal to or greater than the level that would be
provided by Federal screeners. These actions address the intent of
GAO's recommendation.
TSA has faced challenges in accurately comparing the costs of
screening services at SPP and non-SPP airports. In 2007, TSA estimated
that SPP airports cost about 17 percent more to operate than airports
using Federal screeners. In January 2009, GAO noted strengths in TSA's
methodology, but also identified seven limitations that could affect
the accuracy and reliability of cost comparisons. GAO recommended that
TSA update its analysis to address the limitations. TSA generally
concurred with the recommendation. In March 2011, TSA described efforts
to address the limitations and a revised cost comparison estimating
that SPP airports would cost 3 percent more to operate in 2011 than
airports using Federal screeners. In March 2011, GAO found that TSA had
taken steps to address some of the limitations, but needed to take
additional actions. In July 2014, TSA officials stated that they are
continuing to make additional changes to the cost estimation
methodology and GAO is continuing to monitor TSA's progress in this
area through on-going work.
Chairman Hudson, Ranking Member Richmond, and Members of the
subcommittee: I appreciate the opportunity to discuss our work on the
Transportation Security Administration's (TSA) Screening Partnership
Program (SPP). TSA, a component of the Department of Homeland Security
(DHS), is responsible for ensuring the security of the traveling public
through, among other things, screening passengers traveling by aircraft
for explosives and other prohibited items. To fulfill this
responsibility, TSA maintains a Federal workforce of screeners at a
majority of the Nation's commercial airports, but also oversees a
smaller workforce of private screeners employed by companies under
contract to TSA at airports that participate in TSA's SPP.\1\ The SPP,
established in 2004 in accordance with provisions of the Aviation
Transportation Security Act (ATSA), allows commercial airports an
opportunity to ``opt out'' of Federal screening by applying to TSA to
have private screeners perform the screening function.\2\ At airports
with private screeners, the screening of passengers and baggage is
performed by private screening contractors selected and approved by
TSA; however, TSA continues to be responsible for overseeing airport
security operations and ensuring that the private contractors provide
effective and efficient screening operations in a manner consistent
with law and other TSA requirements at these airports.\3\ As of July
2014, there are currently 18 airports participating in the program, 14
of which are currently operating with contracted screeners and four of
which that have not yet transitioned to private screeners. Two
additional approved airports are awaiting the selection of a screening
contractor and one application is pending.\4\
---------------------------------------------------------------------------
\1\ For purposes of this report, a commercial airport is any
airport in the United States that operates pursuant to a TSA-approved
security program in accordance with 49 C.F.R. Pt. 1542 and at which TSA
performs or oversees the performance of screening services. There are
approximately 450 commercial airports as of July 2014. We refer to
airports that are participating in the SPP as SPP airports and the
screeners in those airports as private screeners. We refer to airports
not participating in the SPP as non-SPP airports and the screeners in
those airports as Federal screeners.
\2\ See Pub. L. No. 107-71, 108, 115 Stat. 597, 611-13 (2001)
(codified as amended at 49 U.S.C. 44919-20). TSA established the SPP
in 2004 after concluding a 2-year pilot program through which four
private screening companies performed screening operations at 5
commercial airports (one contractor served 2 airports).
\3\ The SPP contractor's responsibilities include recruiting,
assessing, and training screening personnel to provide security
screening functions in accordance with TSA regulations, policies, and
procedures. SPP contractors are also expected to take operational
direction from TSA to help ensure they meet the terms and conditions of
the contract.
\4\ In May 2014, TSA awarded contracts to 4 airports: Bert Mooney
Airport, Bozeman Yellowstone International Airport, Glacier Park
International Airport, and West Yellowstone Airport and in June 2014,
TSA received a new application for Portsmouth International Airport.
According to TSA, this application is in the adjudication phase with
the decision to be made no later than October 2014.
---------------------------------------------------------------------------
The standard by which TSA evaluates airport applications for
participation in the SPP has changed since the program's inception in
2004. First, in January 2011, the TSA administrator announced his
decision not to expand the SPP beyond the 16 airports that were
participating in the program at that time ``unless a clear and
substantial advantage to do so emerges in the future.'' In so doing,
the administrator cited his interest in helping the agency evolve into
a ``more agile, high-performing organization that can meet the security
threats of today and the future'' as the reason for his decision. Of
the 6 airports that submitted applications from March 2009 through
January 2012 and that were evaluated under the ``clear and substantial
advantage'' standard, TSA approved the application of 1 airport and
denied the applications of the other 5. Second, according to TSA
officials, the Federal Aviation Administration Modernization and Reform
Act of 2012 (FAA Modernization Act), enacted in February 2012, prompted
TSA to change the standard by which it evaluates SPP applications and
requires, among other things, that the TSA administrator approve an SPP
application submitted by an airport operator if the administrator
determines that the approval would not compromise security or
detrimentally affect the cost-efficiency or the effectiveness of the
screening of passengers or property at the airport.\5\
---------------------------------------------------------------------------
\5\ See Pub. L. No. 112-95, 830(a), 126 Stat. 11, 135 (2012)
(codified at 49 U.S.C. 44920(b)). The term airport operator means a
person that operates a ``commercial airport,'' as that term is used in
this report. See also 49 C.F.R. 1540.5 (defining the term ``airport
operator'').
---------------------------------------------------------------------------
My testimony today addresses the extent to which TSA: (1) Provides
guidance to airport operators for the SPP application process, (2)
assesses and monitors the performance of private versus Federal
screeners, and (3) compares the costs of private and Federal
operations. This statement is based on reports and a testimony we
issued from January 2009 to January 2014.\6\ Our March 2011 report was
based on our review of TSA's updated cost analysis, which was provided
in response to recommendations in our January 2009 report, as well as
discussions with agency officials. For our December 2012 report, among
other things we analyzed past and current SPP application forms and
instructions and interviewed airport operators, screeners, SPP
contractors, SPP applicants, TSA headquarters officials, and Federal
security directors (FSD).\7\ More detailed information on the scope and
methodology appears in our January 2009, March 2011, and December 2012
reports, and our January testimony. For the January 2014 testimony, we
obtained related documentation, such as the SPP Annual Report issued in
January 2013, and interviewed agency officials on progress made to
implement the recommendations from our December 2012 report related to
application guidance and monitoring of private versus Federal screener
performance.
---------------------------------------------------------------------------
\6\ GAO, Aviation Security: TSA's Cost and Performance Study of
Private-Sector Airport Screening, GAO-09-27R (Washington, DC: Jan. 9,
2009); Aviation Security: TSA's Revised Cost Comparison Provides a More
Reasonable Basis for Comparing the Costs of Private-Sector and TSA
Screeners GAO-11-375R (Washington, DC Mar. 4, 2011); Screening
Partnership Program: TSA Should Issue More Guidance to Airports and
Monitor Private Versus Federal Screener Performance, GAO-13-208
(Washington, DC: Dec. 6, 2012); and Screening Partnership Program: TSA
Issued Application Guidance and Developed a Mechanism to Monitor
Private Versus Federal Screener Performance, GAO-14-269T (Washington,
DC: Jan. 14, 2014).
\7\ FSDs are TSA officials that provide day-to-day operational
direction for security operations at the airports within their
jurisdiction, including those participating in the SPP.
---------------------------------------------------------------------------
We conducted the work on which this statement and the underlying
products are based in accordance with generally accepted Government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
background
On November 19, 2002, pursuant to ATSA, TSA began a 2-year pilot
program at 5 airports using private screening companies to screen
passengers and checked baggage.\8\ In 2004, at the completion of the
pilot program, and in accordance with ATSA, TSA established the SPP,
whereby any airport authority, whether involved in the pilot or not,
could request a transition from Federal screeners to private,
contracted screeners. All of the 5 pilot airports that applied were
approved to continue as part of the SPP, and since its establishment,
21 additional airport applications have been accepted by the SPP.\9\
---------------------------------------------------------------------------
\8\ See 49 U.S.C. 44919. The pilot program was to assess the
feasibility of having qualified private screening companies provide
airport security screening services in lieu of Federal screeners. The
following airports from each security risk category were selected to
participate: (1) San Francisco International Airport--Category X, (2)
Kansas City International Airport--Category I, (3) Greater Rochester
International Airport--Category II (now a Category I airport), (4)
Jackson Hole Airport--Category III, and (5) Tupelo Regional Airport--
Category IV. TSA classifies commercial airports in the United States
into one of five security risk categories (X, I, II, III, and IV) based
on various factors, such as the total number of takeoffs and landings
annually, and other special security considerations. In general,
Category X airports have the largest number of passenger boardings, and
Category IV airports have the smallest.
\9\ A total of 26 airports have been approved to participate in the
SPP since its inception in 2004, including the 18 airports currently
participating in the SPP (of which 4 airports have not yet transitioned
to private screening), and 2 airports approved for participation and
awaiting the selection of a screening contractor as of July 2014. Of
the remaining 6 approved airports, 4 airports had participated in the
SPP but left the program after commercial air service was discontinued
at the airport and 2 withdrew their applications after being approved.
For more information on the history of application to the SPP, see GAO-
13-208.
---------------------------------------------------------------------------
In March 2012, TSA revised the SPP application to reflect
requirements of the FAA Modernization Act, enacted in February
2012.\10\ Among other provisions, the act provides the following:
---------------------------------------------------------------------------
\10\ See generally Pub. L. No. 112-95, 803, 126 Stat. at 135-36.
---------------------------------------------------------------------------
Not later than 120 days after the date of receipt of an SPP
application submitted by an airport operator, the TSA
administrator must approve or deny the application.
The TSA administrator shall approve an application if
approval would not: (1) Compromise security, (2) detrimentally
affect the cost efficiency of the screening of passengers or
property at the airport, or (3) detrimentally affect the
effectiveness of the screening of passengers or property at the
airport.
Within 60 days of a denial, TSA must provide the airport
operator, as well as the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on Homeland
Security of the House of Representatives, a written report that
sets forth the findings that served as the basis of the denial,
the results of any cost or security analysis conducted in
considering the application, and recommendations on how the
airport operator can address the reasons for denial.
All commercial airports are eligible to apply to the SPP. To apply,
an airport operator must complete the SPP application and submit it to
the SPP Program Management Office (PMO), as well as to the FSD for its
airport. Figure 1 illustrates the SPP application process.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Although TSA provides all airports with the opportunity to apply
for participation in the SPP, authority to approve or deny the
application resides in the discretion of the TSA administrator.
According to TSA officials, in addition to the cost-efficiency and
effectiveness considerations mandated by FAA Modernization Act, there
are many other factors that are weighed in considering an airport's
application for SPP participation. For example, the potential impacts
of any upcoming projects at the airport are considered. Once an airport
is approved for SPP participation and a private screening contractor
has been selected by TSA, the contract screening workforce assumes
responsibility for screening passengers and their property and is
required to adhere to the same security regulations, standard operating
procedures, and other TSA security requirements followed by Federal
screeners at non-SPP airports.
tsa has developed program application guidance to help improve
transparency of its process and assist airports in completing their
applications
TSA has developed guidance to assist airport operators in
completing their SPP applications, as we recommended in December 2012.
Specifically, in December 2012, we reported that TSA had developed some
resources to assist SPP applicants, but it had not provided guidance on
its application and approval process to assist airports. As it was
originally implemented in 2004, the SPP application process required
only that an interested airport operator submit an application stating
its intention to opt out of Federal screening as well as its reasons
for wanting to do so. In 2011, TSA revised its SPP application to
reflect the ``clear and substantial advantage'' standard announced by
the administrator in January 2011. Specifically, TSA requested that the
applicant explain how private screening at the airport would provide a
clear and substantial advantage to TSA's security operations.\11\ At
that time, TSA did not provide written guidance to airports to assist
them in understanding what would constitute a ``clear and substantial
advantage to TSA security operations'' or TSA's basis for determining
whether an airport had met that standard.
---------------------------------------------------------------------------
\11\ For more on the specific wording of this and other questions
from the application, see GAO-13-208.
---------------------------------------------------------------------------
As previously noted, in March 2012 TSA again revised the SPP
application in accordance with provisions of the FAA Modernization Act,
which became law in February 2012. Among other things, the revised
application no longer included the ``clear and substantial advantage''
question, but instead included questions that requested applicants to
discuss how participating in the SPP would not compromise security at
the airport and to identify potential areas where cost savings or
efficiencies may be realized. In December 2012, we reported that while
TSA provided general instructions for filling out the SPP application
as well as responses to frequently asked questions (FAQ), the agency
had not issued guidance to assist airports with completing the revised
application or explained to airports how it would evaluate applications
given the changes brought about by the FAA Modernization Act. For
example, neither the application instructions nor the FAQs addressed
TSA's SPP application evaluation process or its basis for determining
whether an airport's entry into the SPP would compromise security or
affect cost efficiency and effectiveness.
Further, in December 2012, we found that airport operators who
completed the applications generally stated that they faced
difficulties in doing so and that additional guidance would have been
helpful.\12\ For example, one operator stated that he needed cost
information to help demonstrate that his airport's participation in the
SPP would not detrimentally affect the cost-efficiency of the screening
of passengers or property at the airport and that he believed not
presenting this information would be detrimental to his airport's
application. However, TSA officials at the time said that airports do
not need to provide this information to TSA because, as part of the
application evaluation process, TSA conducts a detailed cost analysis
using historical cost data from SPP and non-SPP airports. The absence
of cost and other information in an individual airport's application,
TSA officials noted, would not materially affect the TSA
administrator's decision on an SPP application.
---------------------------------------------------------------------------
\12\ For our December 2012 report, we interviewed four of the five
airport operators that applied to the SPP since TSA revised its
application after enactment of the FAA Modernization Act. All five of
the applications were subsequently approved by TSA. We reported that
three of the four operators we interviewed struggled to answer the
application questions related to the cost-efficiency of converting to
the SPP because they did not have data on Federal screening costs,
while the fourth airport operator did not need additional information
or guidance to respond to the question. Further, three of the four
airport operators we interviewed said that additional guidance would
have been helpful in completing the application and determining how TSA
evaluates the applications. See GAO-13-208 for more information.
---------------------------------------------------------------------------
Therefore, we reported in December 2012 that while TSA had approved
all applications submitted since enactment of the FAA Modernization
Act, it was hard to determine how many more airports, if any, would
have applied to the program had TSA provided application guidance and
information to improve transparency of the SPP application process.
Specifically, we reported that in the absence of such application
guidance and information, it may be difficult for airport officials to
evaluate whether their airports are good candidates for the SPP or
determine what criteria TSA uses to accept and approve airports' SPP
applications. We concluded that clear guidance for applying to the SPP
could improve the transparency of the application process and help
ensure that the existing application process is implemented in a
consistent and uniform manner. Thus, we recommended that TSA develop
guidance that clearly: (1) States the criteria and process that TSA is
using to assess whether participation in the SPP would compromise
security or detrimentally affect the cost efficiency or the
effectiveness of the screening of passengers or property at the
airport, (2) states how TSA will obtain and analyze cost information
regarding screening cost efficiency and effectiveness and the
implications of not responding to the related application questions,
and (3) provides specific examples of additional information airports
should consider providing to TSA to help assess an airport's
suitability for the SPP.
TSA concurred with our recommendation and, in January 2014, we
reported that TSA had taken actions to address it. Specifically, TSA
updated its SPP website in December 2012 by providing: (1) General
guidance to assist airports with completing the SPP application and (2)
a description of the criteria and process the agency will use to assess
airports' applications to participate in the SPP. While the guidance
states that TSA has no specific expectations of the information an
airport could provide that may be pertinent to its application, it
provides some examples of information TSA has found useful and that
airports could consider providing to TSA to help assess their
suitability for the program. Further, the guidance, in combination with
the description of the SPP application evaluation process, outlines how
TSA plans to analyze and use cost information regarding screening cost
efficiency and effectiveness. The guidance also states that providing
cost information is optional and that not providing such information
will not affect the application decision. As we reported in January
2014, these actions address the intent of our recommendation.
performance between spp and non-spp airports varied; tsa recently
developed a mechanism to monitor private versus federal screener
performance
In our December 2012 report, we analyzed screener performance data
for four measures and found that there were differences in performance
between SPP and non-SPP airports, and those differences could not be
exclusively attributed to the use of either Federal or private
screeners. The four measures we selected to compare screener
performance at SPP and non-SPP airports were Threat Image Projection
(TIP) detection rates; recertification pass rates; Aviation Security
Assessment Program (ASAP) test results; and Presence, Advisement,
Communication, and Execution (PACE) evaluation results (see Table 1).
For each of these four measures, we compared the performance of each of
the 16 airports then participating in the SPP with the average
performance for each airport's category (X, I, II, III, or IV), as well
as the National performance averages for all airports for fiscal years
2009 through 2011.\13\
---------------------------------------------------------------------------
\13\ Additional information on these performance measures and how
we selected them can be found in our December 2012 report. See GAO-13-
208.
TABLE 1.--PERFORMANCE MEASURES USED TO COMPARE SCREENER PERFORMANCE AT
SCREENING PARTNERSHIP PROGRAM (SPP) AND NON-SPP AIRPORTS, DECEMBER 2012
------------------------------------------------------------------------
Performance Measure Description
------------------------------------------------------------------------
Threat Image Projection (TIP) TIPs are fictional threat images (guns,
detection rates. knives, improvised explosive devices,
etc.) superimposed onto carry-on baggage
as it passes through the X-ray machine.
While screening carry-on baggage,
screeners identify that a potential
threat has been spotted by selecting a
``threat'' button. If the identified
image is a TIP, the X-ray machine
informs the screener that the threat was
fictional. Otherwise, a screener will
search the bag, as the threat object may
be real.
Recertification pass rates... In order to maintain their certification
to screen passengers and baggage, all
screeners (at both SPP and non-SPP
airports) must pass several
recertification tests on an annual
basis. These tests include assessments
of threat detection skills on carry-on
and checked baggage X-ray machines as
well as role-playing scenarios to assess
other job functions, such as physical
bag searches, pat-downs, and screening
passengers with disabilities.
Aviation Security Assessment ASAP tests are covert performance
Program (ASAP) tests results. assessments conducted at both screening
checkpoints and checked baggage
screening areas. Tests are implemented
locally by unrecognizable role players
who attempt to pass standard test items,
such as knives, guns, or simulated
improvised explosive devices, through
the screening checkpoints or checked
baggage screening areas.
Presence, Advisement, PACE evaluations are used to assess
Communication, and Execution screener performance on various elements
(PACE) evaluations. that may affect security and a
passenger's overall traveling
experience. PACE evaluators visit a
checkpoint covertly and assess the
screening personnel on a variety of
elements, such as whether the officers
provide comprehensive instruction and
engage passengers in a calm and
respectful manner when screening.
Because PACE evaluations began as a
baseline assessment program in fiscal
year 2011 and had been implemented only
at Category X, I, and II airports, our
analysis for this measure was limited to
the 6 SPP airports in those categories
during fiscal year 2011.\1\
------------------------------------------------------------------------
Source: GAO analysis of TSA information. GAO-14-787T.
\1\ The 6 Category X, I, and II SPP airports in fiscal year 2011 are San
Francisco International Airport (X), Kansas City International Airport
(I), Greater Rochester International Airport (I), Key West
International Airport (II), Joe Foss Field (II), and Jackson Hole
Airport (II).
As we reported in December 2012, on the basis of our analyses, we
found that, generally, screeners at certain SPP airports performed
slightly above the airport category and National averages for some
measures, while others performed slightly below. For example, at SPP
airports, screeners performed above their respective airport category
averages for recertification pass rates in the majority of instances,
while at the majority of SPP airports that took PACE evaluations in
2011, screeners performed below their airport category averages.\14\
For TIP detection rates, screeners at SPP airports performed above
their respective airport category averages in about half of the
instances. However, we also reported in December 2012 that the
differences we observed in private and Federal screener performance
cannot be entirely attributed to the type of screeners at an airport,
because, according to TSA officials and other subject-matter experts,
many factors, some of which cannot be controlled for, affect screener
performance. These factors include, but are not limited to, checkpoint
layout, airline schedules, seasonal changes in travel volume, and type
of traveler.
---------------------------------------------------------------------------
\14\ For recertification pass rates, the term ``instance'' means
performance by an airport during a particular year or fiscal year,
while for TIP detection rates, the term means performance by an airport
during a particular fiscal year for a specific type of screening
machine.
---------------------------------------------------------------------------
We also reported in December 2012 that TSA collects data on several
other performance measures but, for various reasons, the data cannot be
used to compare private and Federal screener performance for the
purposes of our review. For example, passenger wait time data could not
be used because we found that TSA's policy for collecting wait times
changed during the time period of our analyses and that these data were
not collected in a consistent manner across all airports.\15\ We also
considered reviewing human capital measures such as attrition,
absenteeism, and injury rates, but did not analyze these data because
TSA's Office of Human Capital does not collect these data for SPP
airports. We reported that while the contractors collect and report
this information to the SPP PMO, TSA does not validate the accuracy of
the self-reported data nor does it require contractors to use the same
human capital measures as TSA, and accordingly, differences may exist
in how the metrics are defined and how the data are collected.
Therefore, we found that TSA could not guarantee that a comparison of
SPP and non-SPP airports on these human capital metrics would be an
equal comparison.
---------------------------------------------------------------------------
\15\ TSA's policy for measuring wait time changed in March 2010.
Instead of collecting precise wait times every hour, TSA began only
recording instances in which the wait time was more than 20 or 30
minutes. Further, through our site visits conducted for the December
2012 report, we learned that TSA collects airports' wait time data in
different ways. For example, at some airports TSA calculates the wait
time from the end of the queue until the passenger reaches the travel
document checker podium; at other airports, TSA calculates the time
from the end of the line until the passenger passes through the
walkthrough metal detector or the Advanced Imaging Technology. See GAO-
13-208.
---------------------------------------------------------------------------
Moreover, in December 2012, we found that while TSA monitored
screener performance at all airports, the agency did not monitor
private screener performance separately from Federal screener
performance or conduct regular reviews comparing the performance of SPP
and non-SPP airports. Beginning in April 2012, TSA introduced a new set
of performance measures to assess screener performance at all airports
(both SPP and non-SPP) in its Office of Security Operations Executive
Scorecard (the Scorecard). Officials told us at the time of our
December 2012 review that they provided the Scorecard to FSDs every 2
weeks to assist the FSDs with tracking performance against stated goals
and with determining how performance of the airports under their
jurisdiction compared with National averages.\16\ According to TSA, the
10 measures used in the Scorecard were selected based on input from
FSDs and regional directors on the performance measures that most
adequately reflected screener and airport performance.\17\ Performance
measures in the Scorecard included the TIP detection rate and the
number of negative and positive customer contacts made to the TSA
Contact Center through e-mails or phone calls per 100,000 passengers
screened, among others.\18\
---------------------------------------------------------------------------
\16\ Although FSDs provide day-to-day operational direction for
security operations at the airports within their jurisdiction,
including those participating in the SPP, FSDs have responsibility for
overall security at SPP airports but do not have direct control over
workforce management. Rather, the SPP contractor is contractually
obligated to effectively and efficiently manage its screening
workforce.
\17\ Prior to the Scorecard, from 2006 through April 2012, FSDs
used three performance measures in the Management Objective Report
(MOR) to assess screener and airport performance. The MOR included
three measures that assessed screener performance, including TIP
detection rates, Advanced Imaging Technology checkpoint utilization,
and layered security effectiveness. For more on these performance
measures, see GAO-13-208.
\18\ The TSA Contact Center handles these customer contacts for all
of TSA, not only those related to passenger and baggage screening. For
more on the Scorecard performance measures, see GAO-13-208.
---------------------------------------------------------------------------
We also reported in December 2012 that TSA had conducted or
commissioned prior reports comparing the cost and performance of SPP
and non-SPP airports. For example, in 2004 and 2007, TSA commissioned
reports prepared by private consultants, while in 2008 the agency
issued its own report comparing the performance of SPP and non-SPP
airports.\19\ Generally, these reports found that SPP airports
performed at a level equal to or better than non-SPP airports. However,
TSA officials stated at the time that they did not plan to conduct
similar analyses in the future, and instead, they were using across-
the-board mechanisms of both private and Federal screeners, such as the
Scorecard, to assess screener performance across all commercial
airports.
---------------------------------------------------------------------------
\19\ Bearing Point, Inc., Private Screening Operations Performance
Evaluation Report (Apr. 16, 2004); Catapult Consultants, LLC, Private
Screening Operations: Business Case Analysis, Transportation Security
Administration, Screening Partnership Program (Arlington, Virginia:
Dec. 14, 2007); and TSA, A Report on SPP Airport Cost and Performance
Analysis and Comparison to Business Case Analysis Finding (Arlington,
Virginia: Feb. 1, 2008).
---------------------------------------------------------------------------
We found that in addition to using the Scorecard, TSA conducted
monthly contractor performance management reviews (PMR) at each SPP
airport to assess the contractor's performance against the standards
set in each SPP contract. The PMRs included 10 performance measures,
including some of the same measures included in the Scorecard, such as
TIP detection rates and recertification pass rates, for which TSA
establishes acceptable quality levels of performance. Failure to meet
the acceptable quality levels of performance could result in corrective
actions or termination of the contract.
However, in December 2012, we found that the Scorecard and PMR did
not provide a complete picture of screener performance at SPP airports
because, while both mechanisms provided a snapshot of private screener
performance at each SPP airport, this information was not summarized
for the SPP as a whole or across years, which made it difficult to
identify changes in performance. Further, neither the Scorecard nor the
PMR provided information on performance in prior years or controlled
for variables that TSA officials explained to us were important when
comparing private and Federal screener performance, such as the type of
X-ray machine used for TIP detection rates. We concluded that
monitoring private screener performance in comparison with Federal
screener performance was consistent with the statutory requirement that
TSA enter into a contract with a private screening company only if the
administrator determines and certifies to Congress that the level of
screening services and protection provided at an airport under a
contract will be equal to or greater than the level that would be
provided at the airport by Federal Government personnel.\20\ Therefore,
we recommended that TSA develop a mechanism to regularly monitor
private versus Federal screener performance, which would better
position the agency to know whether the level of screening services and
protection provided at SPP airports continues to be equal to or greater
than the level provided at non-SPP airports.
---------------------------------------------------------------------------
\20\ See 49 U.S.C. 44920(d) (providing further that private
screening companies must be owned and controlled by a citizen of the
United States, subject to a waiver of this requirement by the TSA
administrator in certain circumstances).
---------------------------------------------------------------------------
TSA concurred with the recommendation, and has taken actions to
address it. Specifically, in January 2013, TSA issued its first SPP
Annual Report. The report highlights the accomplishments of the SPP
during fiscal year 2012 and provides an overview and discussion of
private versus Federal screener cost and performance. The report also
describes the criteria TSA used to select certain performance measures
and reasons why other measures were not selected for its comparison of
private and Federal screener performance. The report compares the
performance of SPP airports with the average performance of airports in
their respective category, as well as the average performance for all
airports, for three performance measures: TIP detection rates,
recertification pass rates, and PACE evaluation results. Further, in
September 2013, the TSA assistant administrator for security operations
signed an operations directive that provides internal guidance for
preparing the SPP Annual Report, including the requirement that the SPP
PMO must annually verify that the level of screening services and
protection provided at SPP airports is equal to or greater than the
level that would be provided by Federal screeners. We believe that
these actions address the intent of our recommendation and should
better position TSA to determine whether the level of screening
services and protection provided at SPP airports continues to be equal
to or greater than the level provided at non-SPP airports. Further,
these actions could also assist TSA in identifying performance changes
that could lead to improvements in the program and inform decision
making regarding potential expansion of the SPP.
tsa continues to address limitations in the methodology for comparing
the costs of spp and non-spp screening services
TSA has faced challenges in accurately comparing the costs of
screening services at SPP and non-SPP airports. In 2007, TSA estimated
that SPP airports would cost about 17 percent more to operate than
airports using Federal screeners. In our January 2009 report we noted
strengths in the methodology's design, but also identified seven
limitations in TSA's methodology that could affect the accuracy and
reliability of cost comparisons, and its usefulness in informing future
management decisions.\21\ We recommended that if TSA planned to rely on
its comparison of cost and performance of SPP and non-SPP airports for
future decision making, the agency should update its analysis to
address the limitations we identified. TSA generally concurred with our
findings and recommendation. In March 2011, TSA provided us with an
update on the status of its efforts to address the limitations we cited
in our report, as well as a revised comparison of costs for screening
operations at SPP and non-SPP airports. This revised cost comparison
generally addressed three of the seven limitations and provided TSA
with a more reasonable basis for comparing the screening cost at SPP
and non-SPP airports. In the update, TSA estimated that SPP airports
would cost 3 percent more to operate in 2011 than airports using
Federal screeners. In March 2011, we found that TSA had also taken
actions that partially addressed the four remaining limitations related
to cost, but needed to take additional actions or provide additional
documentation. In July 2014, TSA officials stated they are continuing
to make additional changes to the cost estimation methodology and we
are continuing to monitor TSA's progress in this area through on-going
work.
---------------------------------------------------------------------------
\21\ TSA's study design: (1) Did not consider the impact of
overlapping administrative personnel on the costs of SPP airports; (2)
underestimated costs to the Government for non-SPP airports by not
including all costs associated with providing passenger and baggage
screening services; (3) included more uncertainty in the cost estimates
for non-SPP airports than for SPP airports, but did not account
explicitly for uncertainty, or analyze or report the effect of
uncertainty in its estimates; (4) did not include an analysis to
determine how changes in underlying assumptions would affect the size
of the estimate, and its cost comparison did not account for
differences in screening performance or analyze the costs associated
with a particular level of performance; (5) was based on data from a
single fiscal year (2007) with uncertainty in how representative the
costs for a single year may be; (6) did not ensure that cost data
collected were reliable and did not prepare documentation of its
costing methodology called for in Federal accounting standards; (7) and
did not document key assumptions and methods used in sufficient detail
to justify the reasonableness of costs. See GAO-09-27R.
---------------------------------------------------------------------------
Chairman Hudson, Ranking Member Richmond, and Members of the
subcommittee, this completes my prepared statement. I would be happy to
respond to any questions you may have at this time.
Mr. Hudson. Thank you, Ms. Grover.
We appreciate you both being here today.
I now recognize myself for 5 minutes to ask questions.
Mr. Benner, according to TSA's cost comparison of SPP
versus non-SPP airports last year, which one was less expensive
and by what percentage?
Mr. Benner. The overall average for last year, SPP airports
were approximately 2 percent less--0.2 percent less, excuse me,
than non-SPP airports. But I do want to mention, as Ms. Grover
mentioned, that there really is a point in time. That could
change between airport to airport, because some airports are a
little higher, some airports are a little lower. That also
could change year over year based on a number of different
variables, just as one example is as TSA on the Federal side is
reaping the benefits of the RBS program, it takes just a little
bit longer through contract modifications to reap the same
benefits on the SPP side of the house.
So, any given year, you are going to have a little bit of a
difference between the cost between SPP and non-SPP. If we had
a very static environment that we worked in, then the cost
would remain relatively the same cost comparison, but we don't,
we have a fluid environment.
Mr. Hudson. Can you explain the methodology and sort-of the
specific elements used to produce your cost comparison?
Mr. Benner. Are you talking about the FCEs, sir?
Mr. Hudson. Sure.
Mr. Benner. So included in the FCE are all the actual costs
at an airport and the benefits; so the actual wages at the
airport, the actual benefits at the airport, less those that
are not paid by TSA. For instance, TSA includes in its Federal
cost estimate the retirement cost that TSA actually pays into
the system.
What it does not include, however, are the unfunded
retirement liabilities that are not paid by TSA; they are
actually paid by OPM. So that entire Federal cost estimate does
include all costs for which TSA is appropriated funds in one
form or another for that particular airport.
Mr. Hudson. Well, do you agree if you are not adding the
retirement costs into the comparison that SPP airports actually
would be even more cost-effective than what the current
comparison seems to show?
Mr. Benner. Sir, not necessarily. Because what would happen
if we included--hypothetically, if we were to include the
unfunded retirement liability, and there are a couple other
minor imputed costs that we don't cover as well. We would
probably have to include those costs in the bottom line ATSA
rate, which is paid, for instance, that would increase that
ATSA rate as the floor that TSOs are actually paid so it would
also increase that. So the relative distance between the
ceiling and the floor would remain probably relatively stable.
Mr. Hudson. I might follow up with you on that later.
I want to get to the next question. I am sure you heard the
first panel. A lot of concerns were raised. Ultimately, it is
your responsibility to address the stakeholder concerns so I
want to give you an opportunity to respond to some of these.
Just to summarize, the airports were not being kept in the loop
during the contracting process was one. Companies were
frustrated with TSA's cost methodology, which we touched on
here. The process of awarding contracts takes far too long, and
there is skepticism about the validity of TSA's best-value
analysis of SPP proposals. How confident are you that TSA is
selecting the bast value proposal on evaluating SPP bids as
opposed to simply selecting the lowest price offer?
Mr. Benner. Is there a particular place you want me to
start there?
Mr. Hudson. Yeah, that was a lot. Starting with I guess
evaluating SPP bids.
Mr. Benner. If I might, Mr. Chairman, I did listen to the
comments of the previous panel, and I do have to say that being
in charge of the SPP program, having been in the position now
for 6\1/2\, 7 months, I kind of take it personally. I feel
badly if is there is a perception that the reason that folks
aren't participating in the program is because of something we
are doing wrong.
I think we have had a lot of improvements in the SPP
program, particularly within the last couple of years. Are we
perfect? Absolutely not. Are we getting better? I am convinced
we are. So, just as an example, since the FAA Modernization
Act, Congress has stipulated we had 120 days to approve an
application. What we have done within TSA, and I think our
administrator testified to this earlier and then our system
administrator in January of this year, that we have set our own
internal goal to process all the way from application to
contract award, assuming that we can find a qualified vendor
within 12 months.
That is a very aggressive time line, given the fact that we
have to follow all the requirements of the Federal Acquisition
Regulation, but I think it is a reflection of our commitment to
try to do this and do it right.
Some of the problems that we have had in the past, surely
some of them we have owned, and we have had some missteps. But
also some was calculated decisions based on if there was new
legislation that came out, and we felt--for instance, with the
FAA Modernization Act, that we weren't meeting the strict
requirements of the new legislation, then we decided to take a
pause, take those procurement actions that were actually out
there in the procurement phase, pull them back and make sure
that we were in compliance with the new legislation before we
put them back out again.
Sometimes this would take a year or 2 in order to turn
everything--turn all those procurements around and get them out
there again. I have a little bit different mind-set in that I
think that if we have a procurement action that is out there
and we have a slight change in legislation or there a slight
change in report via report from Congress, that the first thing
we should be doing is checking with Congress to say, do you
really want us to hold up or can we continue on with the
current methodology and then when we go to the next round of
procurements, integrate that?
That is actually what we did during for the 2014
appropriations report. We actually checked with the
appropriations staff to see if they wanted us to hold fast with
some of the guidance I had in the report or continue on with
the appropriations that we had on-going. The consensus was,
keep moving, but wait until the independent study is done, that
is on-going right now, and then make any necessary changes
after that. I am sorry, I hope that answered your question.
Mr. Hudson. I didn't give you enough time to answer it
completely. But I appreciate that very much.
My time has expired. At this point, I will recognize the
gentlelady from Texas, Ms. Jackson Lee, for any questions she
may have.
Ms. Jackson Lee. Mr. Chairman, thank you so very much and
thank you for this hearing, I thank my colleagues, and thank
Mr. Richmond as well, and to the witnesses to the previous
panel that I know is already gone. I am in the middle of
another hearing which I will have to depart for, but I know
this is very important.
I want to thank the two witnesses, Ms. Grover for her
testimony and Mr. Benner for his testimony.
Let me pursue the issue--you made a point so let me just
quickly raise the point. We really don't have a refined
assessment of whether the SPP program is less expensive. Is
that correct? We can't really stand on the table and bang on
the table and say, that is the case.
Mr. Benner. Ma'am, we have an assessment methodology that
we can compare SPP and non-SPP airports. What I was trying to
say is that we can't say that that difference between SPP and
non-SPP airports is going to remain the same year over year.
Ms. Jackson Lee. Right, and I understand that. What I am
saying is we could not make a declarative, firm, final
statement that one is less expensive than the other or the SPP
is less expensive than the other approach.
Mr. Benner. Correct.
Ms. Jackson Lee. Thank you very much.
I want to know, Mr. Benner, TSA recently sent a letter to
the Department of Labor stating that the agency was not
considering prevailing wage requirements in SPP contracts,
despite a directive of the Labor's wage and hour division
instructing TSA to do so. Will you now reassess that and
actually go back and look at requiring prevailing wages for
those workers?
Mr. Benner. Ma'am, I understand a letter went out a couple
of weeks ago. As recently as yesterday, there has been some
discussion within the Executive branch or a number of different
agencies involved to talk about the legal and policy--have a
legal and policy discussion concerning the relationship between
ATSA and SCA.
I think between Department of Homeland Security, Department
of Labor, and TSA, those discussions are on-going right now, so
it would be a little premature for me to have any declarative
statement at this point.
Ms. Jackson Lee. Well, let me try to help you out in
getting a more firm statement. There is a lot of discussions.
Is it your understanding that DHS, TSA is reconsidering a
decision that did not utilize prevailing wages with all the
discussions going on, and in actuality, those are discussions
that are now going on are to discuss the utilization of
prevailing wages?
Mr. Benner. Ma'am, I don't know that TSA and DHS are
reconsidering. I do know that there are discussions on-going,
and there will be a resolution at some point as to what the
position will be for the Executive branch.
Ms. Jackson Lee. Are you engaged in those discussions which
do not advocate for including the prevailing wage?
Mr. Benner. No, those discussions principally within TSA
are on-going between our Office of Acquisitions, which is
principally responsible for instituting the SCA, and our legal
department.
Ms. Jackson Lee. Okay. So can I understand from your
testimony that the issue utilizing the prevailing wage is now
being considered or discussed at this time?
Mr. Benner. It is being discussed, yes, ma'am.
Ms. Jackson Lee. Let me offer to say that I think that is a
very important point for the competency and quality of the
individuals. I've always raised the question of the adequacy of
privatizing the security of our airports, pre-9/11 and post-9/
11, and I know this is your responsibility, and I thank you for
the work you are doing.
This is not a critiquing of your work. It is to say to my
colleagues that I stand firm in opposition to privatizing and
you have made the record today by saying you cannot determine
whether there is any, if you will, cost savings at all. I would
never suggest that any airport is on the cheap, but if you
wanted to use that kind of language, and I am not going to use
that kind of language, you would make the argument that, why do
it that way, except for the fact that some airports have been
grandfathered in?
I accept the grandfathering. I want to make that very
clear. But going forward, I think you have all that you can
handle and that we should in fact be able to do it in a
different way.
Mr. Chairman, before I end, I would like to ask unanimous
consent that testimony provided to the committee by John L.
Martin, airport director of San Francisco International
Airport, calling for TSA to comply with the Service Contract
Act, SCA, and honor the current collectively bargaining rates
of wages and benefits for its employees, be entered into the
record. I ask unanimous consent.
Mr. Hudson. Without objection.
[The information follows:]
Statement of John L. Martin, Airport Director, San Francisco
International Airport
July 29, 2014
Thank you for the opportunity to provide written testimony
regarding the Transportation Security Administration's (TSA) management
of the Screening Partnership Program (SPP). San Francisco International
Airport (SFO) has been an ``opt out'' airport since 2002, when the
original airport pilot program authorized in the Aviation
Transportation Security Act (ATSA) was implemented.
In order to maintain the highest levels of safety and security, as
well as continuing with a stable and experienced workforce and
excellent customer service, SPP bid parameters for SFO should include
the following:
Honor current collective bargained rates of wages and
benefits.
Implement a Cost Plus Fixed Fee contract, the competition
for which would remove wages as a bid item and focus on the
qualifications of the management firm and its fees.
Twelve years since the ``opt-out'' program started, the TSA's
original private screening contractor, Covenant Aviation Security
(CAS), continues to provide screening services at SFO. Importantly, a
large percentage of the original starting screener workforce at SFO
continues to work for CAS under TSA supervision.
A core philosophy at SFO is teamwork and collaboration. From the
inception of the SPP there has been a partnership approach comprised of
TSA, CAS, SFO, and the union representing the workers, Service
Employees International Union (SEIU). This team has developed a strong
working relationship, creating a stable and secure workforce across all
airport operations, enhancing our ability to maintain a safe and secure
environment for the public and passengers. The dynamic environment of a
large hub airport like SFO is extremely complicated and the ability to
enhance teamwork and maintain a stable workforce through high retention
rates is a key to our collective success.
According to the recently-released Request for Information (RFI)
from TSA, the Agency plans to issue an RFP on August 14 of this year.
The contract for screening services at SFO will be for a 1-year term
with four 1-year options to extend. My primary concern is that the
contract will be a fixed price with a ``not to exceed ceiling'' which
may be based on TSA's entry-level minimum loaded wage rate factored for
San Francisco. This rate may be lower than both CAS's current starting
level rate and the average rate for the long-time employees who have
been on the job at SFO for many years.
This lower threshold may incentivize bidders to assume the lowest
available wage rate--the entry-level Federal screener rate. Our
preferred approach would be to remove the wage rates from the
competitive process and instead focus the selection on safety and
security qualifications. TSA could also focus on competitive management
fees.
Another troubling aspect of the RFP for screening services at SFO
is the contract term of 1 year with four 1-year options to extend which
could theoretically allow TSA to reset the wages and benefits several
times during the next 5 years. This creates instability in the
workforce and a strong element of uncertainty going forward. SFO is a
major international gateway hub and we seek out the most qualified,
skilled contractors available. It is essential that we create a stable
work environment to ensure safety and security.
Our concerns, particularly with respect to the wage rates, would be
addressed, in part, if the TSA followed the Service Contract Act (SCA).
The TSA, however, has concluded that under ATSA it has the authority to
establish wage rates for Federal screeners and is therefore exempt from
the SCA. The SCA generally applies to every contract entered into by
the Federal Government that has a principle purpose of furnishing
services in the United States through the use of service employees. The
SCA requires that Federal contracts include provisions setting forth
minimum monetary wages and fringe benefits for the service employees in
accordance with the prevailing rates for such employees in the
locality.
The incumbent provider CAS has negotiated a Collective Bargaining
Agreement (CBA) with SEIU, which would, in every other Federal service
contract, automatically trigger prevailing wage requirements. By not
following the SCA, the TSA would lower the wage and benefit rates which
are then factored into the ``not to exceed ceiling'' costs. This
interpretation of the ATSA could prohibit the incumbent and other
potential competitors from bidding on the RFP for screening services at
SFO as the CBA establishes wage and benefit rates higher than TSA's
entry-level wage and benefit packages.
This effort by TSA to restrain costs to the SPP program would
require the contract awarded in all likelihood to reduce the wages of
the current workforce by up to 15-20%. This loss of wages by the
current workforce would be disruptive, unfair, and difficult to manage.
To my knowledge, TSA is not attempting to re-set the wages of Federal
screeners at any other airport.
In closing, I urge the TSA to carefully consider the parameters
ofthe SPP RFP for SFO to ensure a stable and productive workforce by
honoring the current collective bargained rates of wages and benefits
and implementing a Cost Plus Fixed Fee contact, the competition for
which would remove wages as a bid item and focus on the qualifications
of the management firm and its fees.
We look forward to supporting TSA in this process.
Ms. Jackson Lee. I ask, additionally, Mr. Chairman, I ask
unanimous consent to enter into the record testimony provided
to the committee from Valarie Long, executive vice president of
Service Employees International Union, which expresses serious
concerns about the failure of TSA to comply with the Department
of Labor decision on service contracts and points to the
fundamental problem to public security that arises when
employees, Federal or contracted, are not adequately trained
and compensated. I ask unanimous consent.
Mr. Hudson. Without objection, so ordered.
[The information follows:]
Statement of Valarie Long, Executive Vice President, Service Employees
International Union (SEIU)
July 29, 2014
Thank you Chairman Hudson, Ranking Member Richmond, and Members of
the subcommittee for the opportunity to submit written testimony for
today's hearing examining the Transportation Security Administration's
(TSA) management of the Screening Partnership Program. My name is
Valarie Long, executive vice president of the Service Employees
International Union, representing more than 250,000 workers across
North America who clean, maintain, and provide security for commercial
office buildings, co-ops, and apartment buildings, as well as public
facilities like theaters, stadiums, and airports. I am pleased to
submit testimony on behalf of the more 1,100 private security screeners
at San Francisco International Airport (SFO), represented by SEIU-
United Service Workers West and employed by Covenant Aviation Security.
We are writing to share our serious concerns about TSA's failure to
abide by a Department of Labor ruling that the Service Contract Act
(SCA) applies to security contracts entered into as part of the
Screening Partnership Program, and to provide the subcommittee with
detailed information about the potential threat this decision may pose
to passengers and personnel at SFO. Our view has long been that whether
the work is performed by direct Federal employees or by contract
employees, screeners should be adequately trained and compensated to
ensure we retain their abilities to protect passengers and the public.
sfo: a partnership for quality
The private security screeners at SFO may wear different uniform
insignia than screeners employed by TSA, but these brave men and women
selflessly serve our country. They have been proud union members since
2000 when we helped launch SFO's Quality Standards Program (QSP), a
partnership between the city of San Francisco, the Airport Commission,
private contractors and unions representing SFO workers. QSP was
designed to improve safety and security at SFO as well as improve the
conditions of the SFO labor market, by establishing compensation,
recruitment, and training standards beyond those then-required by the
FAA, for a wide range of airport employees.\1\
---------------------------------------------------------------------------
\1\ Michael Reich, Peter Hall, and Ken Jacobs, ``Living Wages and
Economic Performance: The San Francisco Airport Model,'' Institute of
Industrial Relations, University of California, Berkeley, 2003, http://
laborcenter.berkeley.edu/livingwage/living_wage_performance.pdf.
---------------------------------------------------------------------------
Since its inception in 2000, QSP has succeeded in its goal of
producing a stable, experienced, quality screener workforce. Prior to
its launch, screeners' wages were low and the turnover rate among was
high. By 9/11, just 17 months after program implementation began in
April 2000--and at the moment when the rest of the world learned of the
tragic effects of low-road contracted-out screening--the annual
turnover rate of SFO security screeners plummeted from 110 percent in
1999 to about 25 percent.\2\ Turnover rates continued to decline; a
2003 study of security screeners at SFO found that the turnover rate
continued dropping to 18.7 percent.\3\ In addition to lower turnover
rates, airport employers at SFO reported improved overall work
performance (35%), better employee morale (47%), fewer disciplinary
issues (44%), and improved customer service (45%) in the first year of
the living wage law, a key feature of the QSP.\4\
---------------------------------------------------------------------------
\2\ Living Wages and Airport Security. Preliminary report. Michael
Reich, Peter Hall, Ken Jacobs, Institute of Labor and Employment.
University of California, Berkeley, September 20, 2001, p. 5. http://
www.irle.berkeley.edu/research/livingwage/air_sep01.pdf.
\3\ Living Wages and Economic Performance: The San Francisco
Airport Model. Michael Reich, Peter Hall, Ken Jacobs, Institute of
Industrial Relations at the University of California, Berkeley, March
2003; and Aviation Security: Long Standing Problems Impair Airport
Screeners' Performance. GAO. June 2000, p. 25.
\4\ Living Wages and Economic Performance: The San Francisco
Airport Model. Michael Reich, Peter Hall, Ken Jacobs, Institute of
Industrial Relations at the University of California, Berkeley, March
2003. http://www.irle.berkeley.edu/research/livingwage/sfo_mar03.pdf.
---------------------------------------------------------------------------
As a result of QSP, the SFO screener workforce has been recognized
for excellent performance, high morale--which reduces absenteeism and
increases willingness to adapt flexibly--and quality customer
service.\5\ According to researchers, ``[o]ne of the main advantages of
the SFO program is the breadth of its impact. By linking wage
improvements to training and accreditation programs, the program has
gone a long way to improving morale and performance across the entire
airport.''\6\
---------------------------------------------------------------------------
\5\ Michael Reich, Peter Hall, and Ken Jacobs, ``Living Wages and
Economic Performance: The San Francisco Airport Model,'' Institute of
Industrial Relations, University of California, Berkeley (2003). http:/
/www.irle.berkeley.edu/research/livingwage/sfo_mar03.pdf.
\6\ Living Wages and Airport Security. Preliminary report. Michael
Reich, Peter Hall, Ken Jacobs, Institute of Labor and Employment.
University of California, Berkeley, September 20, 2001, p. 6. http://
www.irle.berkeley.edu/research/livingwage/air_sep01.pdf.
---------------------------------------------------------------------------
In the years since 2000 screeners and their employers at SFO have
bargained collectively to improve wages, benefits, and working
conditions. Our current estimate of turnover among the full-time
screener workforce at SFO is 2.8 percent and average experience over
4.8 years. This compares to a turnover rate among full-time TSA
screeners of between 12 and 13 percent in 2013.\7\ Taken as a whole,
the workforce at SFO has 3,619 person-years of experience.
---------------------------------------------------------------------------
\7\ According to the testimony of Mr. Kelly Hoggan, Assistant
Administrator for Security Operations, TSA ``TSA Oversight: Examining
the Screening Partnership Program,'' House Committee on Oversight and
Government Reform, Subcommittee on Government Operations, January 14,
2015.
---------------------------------------------------------------------------
one screener's story
Euell Lim has served as a Transportation Security Officer (TSO) at
SFO since 2009, where he applies the security standards of the Federal
Government to properly screen passengers onto their flight. ``I follow
strict standard operating procedures,'' he says, ``as a passenger goes
through the security checkpoint, and to be able to provide customer
service which is very important.''
Learning the job has been a process, Euell says, ``like when you go
to school. We're not going to graduate in a week, a month, or a year .
. . It's a learning process and that takes time.'' There is ``a huge
gap between one who's experienced and one who's just starting. There
are mistakes that can be done if they're not trained properly, if
they're not attended to.'' Fortunately, Euell was ``blessed'' with a
great training mentor, a senior employee who ``was very attentive and
very specific and very detail-minded.'' And behind the mentor was a
good support system and a great training staff.
For Euell, the passengers are the beneficiaries of his training.
``There's a sense of security. There's a sense of respect. The way you
conduct yourself in a professional manner, done by proper training. You
earn the respect of the traveling public . . . And I think just to be
able to absorb that time with passengers and being able to have the
right positive experiences, can contribute to something more
constructive.''
Euell's hourly wage is $22.01, which allows him ``a little bit more
freedom than other people I'm aware of who work in the airport. I'm
able to pay off my credit card, my bills. I'm able to provide for my
son.'' His wage provides something intangible, but equally important,
``I'm almost forty and from my experiences in life, on the jobs I've
worked, and the hats that I've worn throughout my life, I feel that
earning a respectable wage and comfortable living is within everyone's
right to function in our society. Just to have a little bit of self-
respect, and to provide the respect for my family and children. Being a
part of what I do here, I feel I have a significant role in defending
and providing the dignity and respect for the coworkers that I have
grown to be accustomed to.''
Euell Lim bears testament to the palpable advances in the quality
of screening made at SFO over the last 15 years.
sfo's experienced workforce at risk as a result of tsa's failure to
comply with the service contract act
Unfortunately, we understand that TSA has held that the Service
Contract Act's (SCA) prevailing wage standards do not apply to private
security screening contracts, despite being directed to do by the
Department of Labor's Wage and Hour Division.\8\ The McNamara-O'Hara
Service Contract Act requires contractors and subcontractors performing
services on prime contracts in excess of $2,500 to pay service
employees in various classes no less than the wage rates and fringe
benefits found prevailing in the locality, or the rates (including
prospective increases) contained in a predecessor contractor's
collective bargaining agreement.\9\ At SFO this would mean that the
economic provisions of the CBA would continue, regardless of who wins a
contract to provide security screening services.
---------------------------------------------------------------------------
\8\ See Letter from Timothy J. Helm, Chief, Branch of Government
Contracts Enforcement, Division of Enforcement Policy and Procedures,
Wage and Hour Division, U.S. Department of Labor, to Francine Kerner,
Chief Counsel, Transportation Security Administration, June 6, 2013;
and Letter from Ronald B. Gallihugh, Head of the Contracting Activity,
Transportation Security Administration, to Timothy J. Helm, Chief,
Branch of Government Contracts Enforcement, Wage and Hour Division,
U.S. Department of Labor, July 3, 2014.
\9\ 41 U.S.C. 6703(1).
---------------------------------------------------------------------------
On June 6, 2013, the Department of Labor's Wage and Hour Division
issued an opinion that the Service Contract Act applies to all private
security screening contracts entered into by TSA, and directed TSA ``to
take all necessary steps to ensure the applicable contracts contain the
SCA's prevailing wage standards.''\10\ TSA responded earlier this month
that SCA standards do not apply.\11\
---------------------------------------------------------------------------
\10\ Letter from Timothy J. Helm, Chief, Branch of Government
Contracts Enforcement, Division of Enforcement Policy and Procedures,
Wage and Hour Division, U.S. Department of Labor, to Francine Kerner,
Chief Counsel, Transportation Security Administration, June 6, 2013.
\11\ TSA does accept SCA applicability to clerical staff associated
with SPP contracts. Under the Aviation and Transportation Security Act
of 2002 (ATSA). Letter from Ronald B. Gallihugh, Head of the
Contracting Activity, Transportation Security Administration, to
Timothy J. Helm, Chief, Branch of Government Contracts Enforcement,
Wage and Hour Division, U.S. Department of Labor, July 3, 2014.
---------------------------------------------------------------------------
TSA's failure to apply SCA standards to the security contracts at
SFO will erode the quality advancements made and significantly
undermine this highly-trained workforce. TSA's refusal to apply the SCA
will likely result in significant wage reductions for SFO screeners. In
the absence of SCA standards, and if a contractor follows TSA's
recommendation and bids at TSA minimum direct labor rates,\12\ wages
for virtually all screeners at SFO could be cut from 7% to as much as
27%. For example,
---------------------------------------------------------------------------
\12\ See, for example, ``Airport Security Screening Services at MCI
[Kansas City International Airport], Solicitation Number: HSTS05-12-R-
SPP038, Department of Homeland Security, Transportation Security
Administration, p. 81. For TSA recommendations to prospective bidders,
see: Amendment 3 Mod/Amendment: FINAL-MCI_QandA[1] Description:
Attached are the questions and answers submitted in response to HSTS05-
12-R-SPP038.
---------------------------------------------------------------------------
Lead Screeners and CTX 9000 Specialists, currently earning
$62,649.60 would suffer a nearly 27% cut ($16,748.61);
Beginning Screeners and CTX Operators, currently earning
$43,097.60 would suffer a 19% cut ($8,265.39);
Screeners and CTX Operators with 10 years or more longevity,
currently earning $47,507.20 would suffer a 26% cut
($12,674.99);
Behavior Detection Officers currently earning $49,316.80
would suffer a 7% wage cut ($3,415.81);
Of the 150 full-time employees who are at or above TSA's Pay
Band F:
108 have at least 2 years' experience.
Of these, 61 Lead Screeners and CTX 9000 Specialists have
10 years or more experience.
Of the 561 full-time employees at or above TSA's Pay Band D
for TSO:
521 have at least 3 years' experience.
Of these, 168 have 10 years or more experience.\13\
---------------------------------------------------------------------------
\13\ Methodological discussion: Wage Comparison.--(1) At SFO,
Covenant Aviation Security (CAS) employs SFO security workers in
specific CAS Titles and CAS Steps defined by collective bargaining
agreement (CBA). For each position held, the CAS Hourly wage rate was
multiplied by 2080 hours (TSA's standard for a non-leap year) to
produce the CAS Annual Wage. (2) TSA wages were calculated based on the
Wage Determination for Screeners (2012-07-23 TSA-MCI Solicitation 1
HSTS05-12-R-SPP038, p. 81). That is, the 2014 minimum annual direct
labor rates for Pay Band D and Pay Band F, respectively, adjusted for
Locality Pay (35.15%). Experience.--(1) CAS provided the number of
workers in each CAS Title and CAS Step, as defined by the CBA. In most
cases, the title and step define the minimum experience necessary to
hold that position. The years of experience defined by title and step
were multiplied by the number of persons holding that position to
produce CAS Full Time Experience, expressed in person-years. (a)
Because the CBA does not define steps between 3 and 10 years of
experience, the actual experience of SFO security screeners is likely
to be substantially higher. (b) For positions corresponding to TSA Pay
Band F (Lead Screener, CTX Lead, or CTX 9000 Specialist), even those
workers indicated as having zero (0) years of experience in that
position probably have substantial relevant experience. In general,
workers enter these positions after having experience in positions
corresponding to TSA Pay Band D (Screener or CTX Operator).
---------------------------------------------------------------------------
Ensuring SCA requirements apply to private screening contracts is
the best way to retain the high standards for screeners built at SFO.
However, if TSA is permitted to disregard the findings of the
Department of Labor that the Service Contract Act applies to private
screeners, prospective bidders could massively undercut the wages of
the screener workforce at SFO. And the largest cuts would fall
disproportionately on those workers--like Euell--with the most
experience. This is precisely the workforce TSA should strive to
retain.
Workers are profoundly wage-sensitive, and cuts of this magnitude
would be deeply painful--to themselves and to the passengers and public
whom they serve. These workers would have many employment options,
given their seniority and the prevailing wages elsewhere in San
Francisco's security industry; many would likely leave the job, taking
their critical skills and experience with them.
Such a massive loss of talent at SFO, as experienced officers leave
for employment elsewhere, could have a potentially catastrophic impact
on the quality of service. The importance of retaining quality
screeners was one of the 9/11 Commission's important findings. The
commission found that one potential hijacker was turned back as he
tried to enter the United States by an immigration inspector who relied
on intuitive experience to ask questions. ``Good people who have worked
in such jobs for a long time understand this phenomenon well,'' the
commission found,
``Other evidence we obtained confirmed the importance of letting
experienced gate agents or security screeners ask questions and use
their judgment. This is not an invitation to arbitrary exclusions. But
any effective system has to grant some scope, perhaps in a little extra
inspection or one more check, to the instincts and discretion of well-
trained human beings.''\14\
---------------------------------------------------------------------------
\14\ Report, National Commission on Terrorist Attacks Upon the
United States,'' July 22, 2004, p. 387.
---------------------------------------------------------------------------
The importance of experience was again demonstrated during the
November 1, 2013 attack at LAX which took the life of TSA Officer
Gerardo Hernandez. Two other officers were also shot by the
perpetrator, yet despite their wounds, continued to help people to
safety:\15\ Officer Tony Grigsby, a Master Behavior Detection Officer
(MBDO), started at TSA in 2004. Officer James Speer, a Master Security
Training Instructor, joined TSA in 2008.
---------------------------------------------------------------------------
\15\ See, ``Honoring Our Fallen TSO,'' November 8, 2013, posted by
Transportation Security Administration Administrator John Pistole.
---------------------------------------------------------------------------
Application of the Service Contract Act to the screener workforce,
which would require bidders to incorporate the wage rates and fringe
benefits contained in a predecessor contractor's collective bargaining
agreement, would be the most effective means to ensure the retention of
the experienced, quality private screener workforce at SFO.
conclusion
This workforce is the product of the deliberate decision made in
2000 by the city of San Francisco, the Airport Commission, and
representative unions to form the Quality Services Program. While it
took more than a decade to build it, the workforce could be destroyed
very rapidly. And it would be extremely difficult--if not impossible--
to recreate it. On behalf of the more than 1,100 security screeners at
SFO, I urge you to ensure that this dedicated, highly-trained, and
skilled workforce can continue to provide the safe and secure airport
experience on which passengers depend. I ask that you take every effort
to ensure that TSA and the Screening Partnership Program are in
compliance with the requirements of the Service Contract Act. Thank you
for the opportunity to submit written testimony on the Screening
Partnership Program and the continued successes at San Francisco
International Airport.
Ms. Jackson Lee. I thank the Chairman.
I thank the witnesses for your very important testimony.
I yield back, Mr. Chairman.
Mr. Hudson. I thank the gentlelady.
This time, the Chairman recognizes the gentleman from South
Carolina, Mr. Sanford, for any questions he may have.
Mr. Sanford. Thank you, Mr. Chairman.
It just strikes me that in analyzing any program, the
bottom line is in part driven by results. So if I could, just
in terms of giving broad, broad picture, with the SPP program,
what percentage of all airports out there are under Federal
contract versus private contract?
Mr. Benner. We have 18 airports that are under private
contract, out of 450 total airports.
Mr. Sanford. Yeah, but they may be minuscule in Montana
and--nothing against Montana, but with one employee. I mean,
how about overall employees?
Mr. Benner. We don't measure the SPP airports by number of
employees. But perhaps I can explain it by saying that about
4.5 percent of all passenger throughput through the U.S.
aviation system is through SPP airports. I think that's
probably a fair way to look at it.
Mr. Sanford. So that would be 4.5 percent of all airports,
but that may not take into consideration overall hours worked,
number of employees at those airports.
With most programs out there, if you said: Look, you know,
96 percent or 95 percent of it is being done one way and 5
percent is being done this other way, you would say well, it is
sort of a rounding error. You have three standard deviations in
the world of statistics, and you are still at sort of zero. So
it is sound of a rounding error for lack of a better term.
It just strikes me to the linchpin of the reason it is a
rounding error I think is in large part tied to what the
Chairman was just getting at in the cost differential. It still
seems to me that it is not a really robust competition given
the fact that you are taking out a lot of what any Federal
worker would rightfully consider the package of benefits that
go with Federal employment, and that is retirement and so
associated benefits. How can that be a real competition? I
think the numbers suggest it is not a real competition.
Mr. Benner. Well, through ATSA, as you know, there is a
minimum compensation level that is set. That is a threshold.
Above that, you have the FCE, which is the ceiling of which it
would cost----
Mr. Sanford. I understand. Why don't we do this, I would
like to get in written form submitted to the committee the
break-out on that front, because you have alluded to it with
the Chairman, and you are alluding to me now. Let's just go,
back of the envelope. You are a Federal worker, what if we just
took out your retirement benefits, what would you say?
Mr. Benner. The compensation package----
Mr. Sanford. No, I am asking what you would say, yea or
nay?
Mr. Benner. It depends on my particular situation. In my
case, you know, I have a spouse who has got a good compensation
package, so I could live with the wages. I think that is kind
of a flexibility actually that the contractors and vendors
actually have.
Mr. Sanford. How many real people, say, I will give up my
retirement pay, not going to worry about that, my spouse will
cover it, and we are not going worry about that package of
dollars I would otherwise get on a yearly--how many real-world
people say that?
Mr. Benner. But that is a flexibility that the vendors--the
contractors can actually have, is they can have more of a
variance in terms of what they offer is pieces of their
compensation package.
Mr. Sanford. I know, but it still leaves in place the
differential in a Federal worker not having accounted against
them, I am getting this package of benefits and I am going to
compete with the private worker who is going to--you are going
have offer 401(k) plans or whatever it might be.
So it still strikes me and I would love to get in written
form, because I am down to a minute and 16, a breakdown in your
eyes on that, because I still don't have any arms around it. I
don't think you fully explained it to the Chairman either.
Two other quick questions in my minute left, one is to the
GAO: In your study of performance, it still strikes me that
this, too, is an apples-and-oranges comparison. So I think we
have an apples-and-oranges phenomenon with regard to
compensation package that disadvantaged private vendors that
you end up in 95/5 split in terms of overall distribution of
folks employed.
But it still seems to me the same exists with the GAO
report because if you had a start-up, which in many of these
SPP programs are, and you are competing against a group of TSA
workers, some of who may have been employed for 10 or more
years, there would be a level of competency that would go with
those years of work, and those skills acquired, and you are
competing against folks who may not have as many years. So it
strikes me that while you said slightly better in some cases,
slightly worse than others. Did you extrapolate out the years
worked within those respective populations or no?
Ms. Grover. In the performance data, there is no
controlling for the difference in the years of experience.
Mr. Sanford. So then, I mean, most folks from a statistical
standpoint would say that is not really an apples-and-apples
comparison, and I see I am 15 seconds over.
You may have closing comments on that, and I thank you for
the time, Mr. Chairman.
Mr. Hudson. Ms. Grover, please feel free to answer.
Ms. Grover. The performance data does not show overarching
trends in difference in performance between SPP airports an
non-SPP airports. The SPP airports were stronger in some areas,
not as strong as others, but on the whole, they do seem to
perform at an equivalent level regardless of the number of
years of experience on the workforce.
I do think with regard to----
Mr. Sanford. Which if I might, and, I'm over on time and
will yield back, but then that would suggest to me that the
private vendors were doing that much better than the GAO report
even says, because you are competing with folks who, in many
cases, had many more years of work experience.
With that, I yield back, Mr. Chairman.
Mr. Hudson. Thank you.
At this time, the Chairman will recognize the gentleman
from Alabama, Mr. Rogers, for any questions that he might have.
Mr. Rogers. Ms. Grover, you talked about the comparative
study. I know initially you said it was a snapshot in time, but
then they accepted your recommendations to do it over a
different period of time. What period of time was that
subsequent review done?
Ms. Grover. Yes, sir, the first review looked at 2012, and
then the second one just came out looking at the data from
2013.
Mr. Rogers. So you do feel like those were long-enough
periods of time to get a pretty comfortable----
Ms. Grover. Uh-huh, what TSA is doing is they are trying to
look back, and they are seeing in general over this year, how
did SPP airports perform as a group, compared to non-SPP
airports sort-of by category.
Mr. Rogers. How many airports had SPP presence?
Ms. Grover. That would be 14 underway now with contracts up
and running.
Mr. Rogers. Are they all Category X airports?
Ms. Grover. No, sir. I believe one is Category X and the
rest are smaller.
Mr. Rogers. Okay. Now, I know you talked a little while ago
about folks being able to transfer over from TSA status to an
SPP program. When you have that happen, and this could be for
Mr. Benner, on average, how many employees choose to leave the
agency and go over to the private company when that happens,
when there is a transfer?
Mr. Benner. Yes, sir, the last time we actually did that,
you had a conversion from Federal to contractor, I believe was
actually back in 2007. So you got to go through a span of time
in order to get there.
We are in the process right now of transitioning to a
number of Montana airports. There are approximately give-or-
take 81 employees at four Montana airports. I don't know of the
final number that are going to be--that would be transferring,
but I would guess it would be around 50 percent, maybe slightly
more.
Mr. Rogers. Well, I have been on this committee for a very
long time, and one of the things that we have found with TSA is
a retention problem. Do we see that same retention problem by
the SPP programs?
Mr. Benner. Sir, I can't say that we do because we don't
track HR, human resource kinds of functions with the SPP
airports. That is one of the things that the vendor is actually
responsible for, is all the HR functions, attrition,
absenteeism, things like that, so we don't track that.
Mr. Rogers. The cost of the HR function, is that calculated
into your comparative of values or expenses with the two
programs? The administrative portion of what it costs to have a
Federal employee as opposed to just sending a check every month
to a contractor?
Mr. Benner. In the sense that when an airport goes SPP,
there is a review done of that particular airport to see what
support functions are being provided to that airport, and what
may no longer be necessary, given now we have gone to a
contract screener force.
Mr. Rogers. Well, that is not what I am getting at. My
point is this, if you have got Federal employees, like at
Reagan National, that are performing the TSA function, there
are some administrative expenses associated with that, other
than just their pay and their benefits package. That is you
have to have the infrastructure for the human resources to do
the hiring, the monitoring, the evaluation, you have to have a
payroll department to do that. You get my point. Were those
associated costs added into the cost of having a Federal
employee?
Mr. Benner. Yeah it is included as part of the FCE, the
Federal Cost Estimate. All those costs were included in there.
It is up to the contractor, of course, to decide how much he or
she wants to expand it.
Mr. Rogers. I recognized the contractor, you are writing a
check. That is the extent of your responsibility.
Mr. Benner. Yes, that is correct.
Mr. Rogers. Ms. Grover, TSA's original cost estimate stated
that cost of screening was 17 percent higher at SPP airports
than at non-SPP airports. Their updated 2011 estimated stated
that was closer to 3 percent. More recently they have said
there is barely any difference. What led to the difference in
these estimates? Was it that more broad review that you did, as
opposed to the snapshot in time? What accounts for that?
Ms. Grover. Well, the cost estimate is really all driven by
the assumptions that you are making. So, in the first 17
percent difference, that is when TSA was including only the
costs to TSA. Then GAO came in and said, you know, we have
concerns about these other costs are aren't being included. All
of the Federal financial accounting standards that tell us,
they tell us that whenever you are making a comparison of cost,
it really needs to be a full accounting for both costs on both
sides.
So TSA updated the estimate, including the total Federal
cost, and as a result, the difference between the SPP and the
non-SPP airports shrank to 3 percent. The current numbers--the
current estimate now is essentially the costs would be about
the same for this past year. But it is all driven by the
assumptions that you make.
So, for example, in the most recent SPP annual report, one
of the things that TSA talks about is how they recently learned
that attrition in the non-SPP airports was higher. As a result,
they had to increase the assumption of what their costs would
be for that. So this is one of the things that we will be
looking at in our study going forward and just trying to
understand how reasonable those assumptions are and how they
result in the cost differences and estimates.
Mr. Rogers. Well, it appears to me that the better you get
at looking at this, the more cost beneficial the SPP airports
are, the more you are able to focus on where the real costs are
in the Federal programs.
Thank you very much, a very good job. I appreciate you, and
I yield back.
Mr. Hudson. I thank the gentleman.
Without objection, I would like to do another round of
questions if that is okay with the witnesses.
Mr. Benner, on the previous panel, Mr. VanLoh testified
that during the rebid of the contract to Kansas City, TSA did
not request Kansas City airport's input on the incumbent's
prior performance before awarding the contract to a new private
bidder. I am just curious.
He also said that TSA chose the lowest bidder, despite
TSA's recently announcing pay increases for Federal screeners
at other airports. Is it standard practice for TSA to not
request the input the airport operator regarding the
performance of incumbent screening company during a rebid
contract?
Mr. Benner. The evaluation of vendors who propose a
contract--who propose to have a contract, they may submit a
number of different references and they also talk about their
past performance.
Certainly, we talked to the FSD. We expect the FSD, Federal
Security Directors, to be talking to the airports as well to
get feedback. In addition to that, we also look at various
Government-wide systems to see what the history of the vendor
is for potentially other contracts.
Mr. Hudson. Is there a formal process where the FSD is
tasked with communicating with airport directors-- because that
is the first time I have heard that.
Mr. Benner. No, there is not. We expect the FSD's to
interacting with their airport directors all the time. We
expect that of all our FSDs, not just the ones that have SPP
airports.
Mr. Hudson. It just seems to me to it would inform the
decision have more input from the airport operator, like the
FSD is there, it just seems the more information you could
have, the more transparency, the better decision that could be
made on that contract. Whether it is positive or negative about
the incumbent vendor, it just seems to me there ought to be
more of that in this process as an observation.
Mr. Brenner and Ms. Grover, do you think it would be viable
to hear from airport--do you think it would add value to have
more input from airport? I guess I will ask Ms. Grover what you
think, based on my comments and the question we just presented.
Ms. Grover. I think more input is always useful.
Mr. Hudson. Okay, gavel down, input is good.
Getting back to the question--I sort of ran through like 10
questions at you the last time. How confident are you that TSA
is selecting the best value proposal when evaluating the SPP
bids as opposed to simply taking the lowest bid offer?
Mr. Benner. I am glad you put it that way, sir, because we
do select the best value. That does not mean the lowest bid.
There is three general criteria that we use to evaluate: There
is a technical solution that the offeror provides; there is the
past performance; and then there is the cost. All those three
are actually evaluated.
Then you have different teams that actually evaluate each
of those. Then that goes to a source selection authority, who
then compares all those relative to each other and makes a
final selection.
In some cases, there is even another level, a source
selection evaluation board, which is in the case of--the last
time we went through MCI, there was another level of
observation there as well. So I am confident that we are
selecting the vendor who had the best proposal overall and
provides the best value to the Government. Does that mean that
it won't be protested? Absolutely not. Because any vendor can
obviously protest it, any time if they feel they have been
wronged or the process has been wronged, but I am confident in
the process that we use.
Mr. Hudson. Well, I don't want to inject myself into any
specific case or especially one that is in the courts now, but
an example of Kansas City, hearing the airport director talk
about the fact they have folks who have been there may be 12
years now, have a lot of experience whose compensation is
probably reflecting that. Then you have got the standard that
requires what the minimum level pay is. If you bring in a new
vendor--and I will say hypothetically, let's not talk about
Kansas City specifically--but if you were to bring in a new
vendor at that minimum pay level, TSA pay level, they couldn't
afford to retain these experienced workers that worked in these
same checkpoints who have this better experience. So, even if
you are selecting a new vendor, with all this information, you
are sort of precluding your best screeners from being able to
continue to be employed there by a different vendor.
I think on one hand, I am not sure we are taking into
account that experience level of that vendor. We kind-of
addressed that, but even if you then decide there is better
value of a new vendor, I have concerns that these minimum
standards mean we are not even going to be able to keep our
best screeners. There are sort of two questions here that as I
heard the testimony today and really concern me. I don't know
if you would like to address that or----
Mr. Benner. Well, again, I want to be clear on the ATSA
minimum that we actually set is actually the Federal equivalent
plus the locality pay. So that is a fairly robust minimum. But
you are absolutely correct, Mr. Chairman, that the difference
between that number there and the FCE at the very top gives the
vendor the latitude to design the compensation package that he
or she feels is best to run the screening operation of that
particular airport.
Now, on the flip side, if we were to require everybody to
get the exact same amount of pay that they had gotten, say, in
their previous job, whether they were Federal or whether they
were contractor, we have now moved the floor and the ceiling so
close together, if you will, that there would be many vendors
that could probably not compete or wouldn't want to compete
because the profit margin just wouldn't be there.
Mr. Hudson. I certainly understand that. That is kind-of my
concern. If you continue to look at it this way, I don't see
how an experienced vendor could ever get reissued their
contract because you are always going to have incentive for the
new vendor to always undershoot the number, and all they have
to do is hire an inexperienced staff and pay them lower to win
that contract.
It seems to me it would make more sense to have an average
to give flexibility to the vendors so they can make decisions
about how they are going to meet the cost rather than setting
this minimum floor that, again, is going to make it--I don't
see how any existing vendor is going to be able get renewed if
they have got someone willing to come in and undershoot them.
It seems we ought to be looking at averages, maybe, instead of
system as you described it.
Mr. Benner. Sir, if I may, I am afraid I am maybe not being
clear in how I am articulating this.
Mr. Hudson. I may be slow in hearing what you are saying.
Mr. Benner. I doubt that. I doubt that. So the FCE, the
Federal Cost Estimate, is actually based on the actual. So, in
other words, the entire pay that everybody is getting at that
particular airport, whether it is an SPP or it is Federal, is
actually taken into that Federal Cost Estimate. That becomes
the ceiling. So, theoretically, that vendor has the latitude to
pay all the way up to that. So they could hypothetically be
paid----
Mr. Hudson. But if they are trying to win a bid, they are
going to go as low as possible in order to get the business,
and so there is an incentive then to have--so if you are not
taking into account this bidding process the experience of the
current vendor, the input of the airport director of the
quality of that vendor, then I could start a fly-by-night
company and go in there and underbid and get the contract, but
I wouldn't be able to afford to pay any experienced screeners.
So I am just afraid there is a perverse incentive set-up that
penalizes you for being experienced and having good employees
you have retained, but it is an incentive for any upstart
company to come in and undershoot that. Again, I am not talking
any airport specifically. It is just that these issues made me
question the overall process.
Mr. Benner. May I respond?
Mr. Hudson. Sure, please.
Mr. Benner. So that would be I think entirely true, if in,
in fact, it was based only on low price. But you also in the
evaluation process have a technical proposal that needs to be
provided by a vendor, as well as past performance. So it
doesn't mean strictly someone who submits the low bid
automatically wins the contract.
Mr. Hudson. I certainly appreciate that. I would love to
have more discussions with you sort-of about the input from
when we do these--reissue these contracts and making sure we
are getting input from the airport directors and all sources. I
think my approach with Government is the more sunlight, the
more input, the more discussion, the better decisions are made.
I appreciate the time you have taken today to answer our
questions. I would ask that both of you be willing to respond
in writing to any questions the committee may want to submit. I
want to continue this discussion, because again, I do believe
in this program. I do believe private screening is more
efficient. I think it can be more effective. I think it is
where we need to go in the future as we try to deal with
continued threats in aviation security, as we try to address
those, giving the best deal to the taxpayers, best security to
the American people.
I believe the strength of this program is important. I want
to see it grow, but I want to work with you to make sure there
aren't structural concerns. I want to make sure there aren't
biases within TSA against this program. I think it is an
important component in our overall safety footprint. So it is
an issue that is very important to me and something I think we
need it continue to talk about and continue to work on. But I
thank both of you for being here today and your testimony in
this.
So, with that, the subcommittee stands adjourned.
[Whereupon, at 11:15 a.m., the subcommittee was adjourned.]
[all]