Report to the Chairman, Subcommittee 

on Aviation, Committee on 

Transportation and Infrastructure, 

House of Representatives 

United States Government Accountability Office

GAO

November 2004 AVIATION SECURITY

Preliminary 

Observations on TSA's 

Progress to Allow 

Airports to Use 

Private Passenger and 

Baggage Screening 

Services 

GAO-05-126 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-126.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cathleen A. 

Berrick at (202) 512-8777 or 

berrickc@gao.gov. 

Highlights of GAO-05-126, a report to the 

Chairman, Subcommittee on Aviation, 

Committee on Transportation and 

Infrastructure, House of Representatives 

November 2004

AVIATION SECURITY

Preliminary Observations on TSA’s 

Progress to Allow Airports to Use Private 

Passenger and Baggage Screeners 

As of November 2004, TSA has completed or is developing key policies and 

procedures for the opt-out program. Specifically, TSA has completed and 

released guidelines for determining how and when private screening 

contractors will be evaluated and selected to participate in the opt-out 

program. TSA also has released supplemental information for evaluating 

potential contractors, such as their financial capabilities. TSA also has 

prepared a draft technical statement of work for the private screening 

contractors operating at the five airports that participated in the pilot 

program, which is to serve as a basis for contractors seeking to serve other 

airports. In addition, TSA has developed, or is currently developing, internal 

guidance for managing the opt-out program, such as a transition plan for 

helping airports to move from federal to private screeners. TSA expects to 

complete the remaining policies and procedures by mid-2005. 

TSA is taking steps to communicate with stakeholders about the opt-out 

program by developing informational guidance and soliciting information 

and suggestions from them. For instance, since releasing initial summary 

guidance about the program in June 2004, TSA has posted an opt-out 

program application for airport operators that asks, among other things, the 

primary reason for wanting to participate in the opt-out program and the 

preferred timeline for transitioning to private screening operations. TSA also 

has posted lists of frequently asked questions and answers on its Web site, in 

response to questions from stakeholders about the airport application and 

contracting process. However, some airport operators, private screening 

contractors, and aviation industry representatives told GAO that they need 

additional information about how much leeway airports and contractors 

would have to manage the program, liability protection, and costs related to 

participating in the opt-out program. 

TSA is developing performance measures both to assess the screening 

performance of airports that will participate in the opt-out program and 

individual contractors performing the screening services, but specific 

performance measures have not been finalized. TSA said measures for the 

opt-out program will be based on measures already developed by an 

independent consulting firm for the five airports that participated in the 

opt-out pilot program. These measures include how well screeners detect 

test threat objects, such as guns and knives, during screening operations. 

TSA is also developing performance measures to evaluate how well private 

screening contractors comply with the terms of their contracts, which will 

become part of a quality assurance plan. TSA expects to implement 

contractor-related performance measures in mid-2005, as contracts are being 

awarded. 

A draft of this report was provided to TSA. TSA officials generally agreed 

with our findings and provided technical comments that have been 

incorporated as appropriate. 

Beginning on November 19, 2004, 

the Transportation Security 

Administration (TSA) is required by 

law to begin allowing commercial 

airports to apply to use private 

contractors to screen passengers 

and checked baggage. A federal 

workforce has performed this work 

since November 2002, in response 

to a congressional mandate that the 

federal government take over 

screening services after the 

terrorist attacks of September 11, 

2001. A 2-year pilot program at five 

airports testing the effectiveness of 

private sector screening in a postSeptember 11 environment 

concluded on November 18, 2004. 

This report contains GAO’s 

preliminary observations related to 

TSA’s progress in developing a 

private screening program that 

allows airports to apply to opt out 

of using federal screeners. GAO 

assessed: (1) the status of TSA’s 

efforts to develop policies and 

procedures for the opt-out 

program, including operational 

plans and guidelines for selecting 

airports and contractors that may 

participate; (2) guidance about the 

opt-out program that TSA has 

provided to airport operators and 

private contractors, or plans to 

develop, and how the information 

is communicated; and (3) TSA’s 

efforts to develop performance 

measures for evaluating the opt-out 

program and contractor 

performance. 
Page i GAO-05-126 Aviation Security 

Letter 1

Results in Brief 3 

Background 5 

TSA Is Finalizing Policies and Procedures Governing the Opt-Out 

Program 9 

TSA Is Taking Steps to Communicate with Stakeholders about the 

Opt-Out Program, but Some Say Additional Information Is 

Needed 13 

TSA Is Developing Performance Measures for the Opt-Out 

Program, but More Work Remains To Be Done 18 

Agency Comments and Our Evaluation 19 

Appendix I Scope and Methodology 20 

Figure 

Figure 1: Timeline for Implementation of Selected Steps in the OptOut Program 4 

Abbreviations

ATSA Aviation and Transportation Security Act 

DHS Department of Homeland Security 

FAQ frequently asked questions 

FSD federal security director 

TIP threat image projection 

TSA Transportation Security Administration 

Contents 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-05-126 Aviation Security 

November 19, 2004 

The Honorable John L. Mica 

Chairman 

Subcommittee on Aviation 

Committee on Transportation and Infrastructure 

House of Representatives 

Dear Mr. Chairman: 

In an effort to improve aviation security after the terrorist attacks of 

September 11, 2001, the newly created Transportation Security 

Administration (TSA) was charged by Congress with, among other things, 

creating a federal workforce to assume the job of conducting passenger 

and checked baggage screening at commercial airports—work that had 

been performed by the private sector. The federalized workforce was to be 

in place by November 2002. At the same time, TSA was required by Section 

108 of the Aviation and Transportation Security Act (ATSA) to conduct a 

2-year Private Screening Pilot program. The mission of the pilot, as defined 

by TSA, was to test the effectiveness of using private screening 

contractors in a post-September 11 environment.1

 The pilot concluded on 

November 18, 2004. 

Using the pilot program as a starting point, ATSA requires TSA to begin 

allowing airports to apply to opt out of using federal screeners in favor of 

private contractors beginning on November 19, 2004. Consistent with 

ATSA, TSA plans to begin receiving applications for this Screening 

Partnership Program (known as the opt-out program) on that date. TSA 

plans to begin selecting in early 2005 airports that can opt out, as well as 

selecting contractors that will conduct private passenger and checked 

baggage screening. TSA plans to begin transitioning selected airports to 

private screening operations later in 2005. 

This report contains our preliminary observations related to TSA’s 

progress in developing the opt-out program. Specifically, we assessed 

(1) the status of TSA’s efforts to develop policies and procedures for the 

 1

The term “private screening contractor” pertains to any company that currently provides, 

or plans to provide, passenger and baggage screening services. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-126 Aviation Security 

opt-out program, including operational plans and guidelines for selecting 

airports and contractors that may participate; (2) guidance about the optout program that TSA has provided to stakeholders,2

 or plans to develop, 

and how the information is communicated; and (3) TSA’s efforts to 

develop performance measures for evaluating the opt-out program and 

contractor performance. 

We plan to continue our evaluation of the opt-out program as TSA further 

develops and implements the program. 

To address our objectives, we reviewed documentation related to TSA’s 

opt-out program and pilot program and interviewed various officials. We 

analyzed TSA documents related to the opt-out program, including 

program guidance developed for airports. We reviewed an independent 

consulting study prepared for TSA that evaluated the pilot program. We 

interviewed officials from two aviation associations—the American 

Association of Airport Executives and the Airports Council International. 

We attended an aviation security conference in September 2004, where 

TSA officials and some airport operators discussed planning for the optout program, and we reviewed staff notes from two congressional 

subcommittee-sponsored roundtables on the program. We also reviewed 

ATSA provisions related to the opt-out program and related GAO reports. 

In addition, we conducted telephone interviews with the operators of 

randomly selected commercial airports from each of the five security risk 

categories—X, I, II, III, and IV.3

 We interviewed the airport operators of 4 

to 6 airports in each category, for a total of 26 interviews (one official per 

airport). We also conducted telephone interviews with officials from 6 

private security contractors that we were able to contact from a listing of 

10 contractors. The listing included private security contractors that 

expressed an interest in providing passenger and checked baggage 

screening services. Because of the small sample size, the results of our 

interviews with airport operators and contractors cannot be generalized. 

TSA released significant details on its opt-out program guidance after our 

interviews; therefore, the interviewees’ responses were based only on the 

 2

Stakeholders for the opt-out program include airport operators and private screening 

contractors, among others. 

3

TSA classifies the over 400 commercial airports in the United States into one of five 

airport security categories (X, I, II, III, and IV) based on various factors, such as the total 

number of take-offs and landings annually, the extent to which passengers are screened at 

the airport, and other special security considerations. In general, category X airports have 

the largest number of passenger boardings and category IV airports have the smallest. 
Page 3 GAO-05-126 Aviation Security 

information TSA had released at that point. Additional information on our 

scope and methodology is contained in appendix I. We conducted our 

work between September and November 2004 in accordance with 

generally accepted government auditing standards. 

As of November 2004, TSA has completed or is developing key policies 

and procedures for the opt-out program. TSA has completed and released 

guidelines for determining how and when private screening contractors 

will be evaluated and selected to participate in the opt-out program. The 

contractor selection process is to take place in three phases between 

November 2004 and May 2005, which is when TSA expects to award 

contracts. As part of Phase I, TSA has released a presolicitation notice in 

accordance with standard government contracting practices, as well as 

supplemental information on what is expected of potential contractors 

with respect to financial capabilities and other areas. TSA also has 

prepared a draft technical statement of work for the private screening 

contractors that participated in the opt-out pilot program, which is to 

serve as a basis for contractors seeking to serve other airports. In addition, 

TSA has developed, or is currently developing, internal guidance for 

managing the opt-out program, including an activity-based cost study that 

reviews screening costs at privately and federally screened airports; a 

transition plan; and a draft communications plan defining roles and 

responsibilities of key stakeholders. 

TSA is taking steps to communicate with stakeholders about the opt-out 

program by developing informational guidance and soliciting information 

and suggestions from them. For instance, since releasing initial summary 

guidance about the program in June 2004, TSA posted an opt-out program 

application for airport operators that asks, among other things, the 

primary reason for wanting to participate in the opt-out program and the 

preferred timeline for transitioning to private screening operations. TSA 

also has posted lists of frequently asked questions and answers on its Web 

site, in response to questions from stakeholders about the airport 

application and contracting process. However, some airport operators, 

private screening contractors, and aviation industry representatives told 

us they still need additional information from TSA about operational 

flexibilities (how much leeway airports and contractors would have to 

manage the program), liability protection, and costs related to 

participating in the opt-out program. For example, both airport operators 

and private screening contractors cited the need for additional information 

on whether and to what extent they would be liable in the event that a 

Results in Brief 
Page 4 GAO-05-126 Aviation Security 

privately contracted screener should fail to detect a threat object that 

leads to a terrorist incident. 

TSA is developing performance measures to both assess the screening 

performance of airports that will participate in the opt-out program and 

individual contractors performing the screening services, but specific 

performance measures have not been finalized. TSA said measures for the 

opt-out program will be based on measures already developed by an 

independent consulting firm for the five airports that participated in the 

opt-out pilot program. These measures include how well screeners detect 

test threat objects, such as guns and knives, during screening operations. 

TSA is also developing performance measures to evaluate how well 

private screening contractors comply with the terms of their contracts, 

which will become part of a quality assurance plan. TSA expects to 

implement the contractor-related performance measures in mid-2005, as 

contracts are being awarded. 

Figure 1 presents a timeline of TSA’s key milestone for implementing the 

opt-out program and awarding contracts to private screening contractors. 

Figure 1: Timeline for Implementation of Selected Steps in the Opt-Out Program 

TSA received a draft of this report and generally agreed with our findings. 

We incorporated TSA’s technical comments where appropriate. 

 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June............

TSA to reopen 

opt-out program 

application cycle

TSA to begin accepting 

opt-out program 

applications

TSA posted on its 

Web site criteria for 

selecting private 

screening contractors

TSA posted 

FAQs on 

Web site

Opt-out pilot 

program begins

Independent 

evaluation of pilot 

program completed

TSA posted program 

guidance on Web site 

and distributes to 

airport associations

TSA issued additional 

guidance for evaluating 

private contractors

2002 2003 2004 2005

Source: GAO analysis of TSA data.

TSA to finalize 

most internal optout program 

guidance

TSA to award 

contracts to private 

screening contractors

Airports to begin 

transition to private 

screeners

TSA to develop list of 

qualified private screening 

contractors after 

application review process
Page 5 GAO-05-126 Aviation Security 

Section 108 of ATSA (Pub. L. No. 107-71) required TSA to establish a 

program permitting the more than 400 commercial airports using federal 

passenger and checked baggage screeners to apply to use private, rather 

than federal screeners. Beginning on November 19, 2004, all commercial 

airports with federal security screening will be eligible to apply to opt-out 

of using federal screeners. In addition to assessing airport applications for 

using private screeners, TSA will select qualified private screening 

contractors to conduct screening (including airports that seek to apply to 

be private contractor screening companies), which meets ATSA’s and 

TSA’s requirements. Nongovernmental employees, such as airport 

directors or their representatives, would be able to participate as advisors 

in the selection process, as long as the airport is not participating as a 

qualified screening company. ATSA requires private screeners selected to 

handle screening to meet the same hiring and training qualifications as 

federal screeners. ATSA also mandated that the private screeners’ pay and 

benefit levels should be not less than their federal counterparts. 

Furthermore, ATSA required that the contractor companies be owned and 

controlled by U.S. citizens. 

ATSA also required TSA to establish a 2-year pilot program using qualified 

private contractors to screen passengers and checked baggage at not more 

than one airport from each security category. TSA selected five airports to 

participate in the pilot program. The private passenger and checked 

baggage screening contractors selected for the pilot program had to 

comply with federal passenger and checked baggage screening standard 

operating procedures. 

In order to obtain an objective evaluation of the pilot program, TSA 

retained the services of an independent consulting firm. The consultants 

were charged with developing an evaluation methodology; conducting 

performance evaluations and comparisons between the five participating 

pilot program airports and federally screened airports; and developing a 

process to help TSA determine if a private screening company can meet 

ATSA’s performance standard for the opt-out program, which is to provide 

a level of screening services and protection equal to or better than that 

provided by federal screeners. The consultants found that, in general, the 

private screening contractors met ATSA’s performance standard. 

However, the consultants cautioned that the findings must be viewed in 

light of several key factors. For example, the consultants reported that the 

small number of pilot airports seriously limited the program’s usefulness 

Background 

Opt-Out Provision of 

ATSA 
Page 6 GAO-05-126 Aviation Security 

as a true scientific pilot and the ability of the findings to be generalizable 

to apply to future privately screened airports. Additionally, the 

performance data available for review and analysis were limited, 

according to the consultants. 

Outside of the pilot program, any commercial airport may apply to opt out 

beginning on November 19, 2004. In accordance with ATSA, an airport 

operator may submit to TSA an application to have the screening of 

passengers and checked baggage at an airport be carried out by the 

screening personnel of a qualified private screening company, under a 

contract entered into with TSA. TSA will make the final approval of any 

application submitted and reserves the right to consider airport-specific 

threat intelligence and an airport’s record of compliance with security 

regulations and security requirements to determine the timing of the 

transition to private screening. TSA may also impose a delay on when an 

airport can transition to private screening based on such factors as peak 

travel season and the total cost of providing screening services at an 

airport. The five airports selected to participate in the pilot program have 

decided to continue using private screeners and will not have to apply for 

the opt-out program beginning in November 2004. 

TSA created a program office in October 2004 to provide financial 

oversight, ongoing operational support, communications, and transition 

planning for airports that apply to opt out of using federal screeners. This 

office was allocated 12 full-time-equivalent staff and, as of November 4, 

2004, had 10 full-time staff on board. TSA plans to fund the opt-out 

program from the same budget line items as federal screening operations 

in order to provide flexibility on the number of airports that can 

participate in the program. The costs for contracts with private screening 

companies are to be funded by the cost of the federal operations that are 

being displaced. The conference report accompanying the fiscal year 

2005 Department of Homeland Security Appropriations Act (H.R. Conf. 

Rep. No. 108-774) allocated appropriations of $2.424 billion to cover 

personnel, compensation, and benefits for passenger and checked baggage 

screeners and to cover screeners at the five pilot airports. This allocation 

represents an increase of more than $200 million over the fiscal year 

2004 enacted level of $2.2 billion. According to TSA, this increase is 

necessary to fully fund compensation and benefits at the identified staffing 

levels. The requested level of funding will support screener salaries and 

management at all commercial airports, whether federalized or privatized. 

Also, the conference report allocated just under $130 million for the five 

pilot airports, an increase from $119 million in fiscal year 2004. This 

Opt-Out Program Staffing 

and Budgeting 
Page 7 GAO-05-126 Aviation Security 

funding is based on an estimate of resources necessary to maintain 

screening at the current five pilot airports. 

TSA issued its first written guidance for the opt-out program in June 

2004, in an effort to provide airport operators and the aviation community 

with information to gauge their level of interest in applying to participate 

in the program. The guidance, posted on TSA’s Web site and distributed to 

airport associations, provides information in three broad areas: legislative 

requirements, program planning approach, and guidance on key issues. A 

summary of the guidance follows. 

TSA’s guidance addresses ATSA legislative requirements, including how 

applications from qualified private screening contractors would be 

approved by applying the statutory standards of ATSA, including the level 

of screening services and protection provided at the airport, and that 

private contractor companies be owned and controlled by U.S. citizens. 

TSA’s guidance also included information for airports on how TSA’s 

screening pilot program was conducted, how the pilot program was 

evaluated by a private consulting organization, and suggested program 

improvements made by the consultants. 

The guidance discussed program structure, including costs. The guidance 

notes, for instance, that federal and contract screeners would be funded 

from the same pool of money and that costs for airports enrolled in the 

program would be determined based on current federal screener 

operations and TSA’s activity-based cost studies that estimate costs of 

running an airport’s screening operations. TSA’s guidance states that these 

cost studies would ensure that proposed costs by potential contractors are 

in line with federal estimates. The guidance also states that airport 

security screeners do not have the right to strike, whether TSA or a private 

contractor employs them. 

ATSA directs TSA to receive applications from airports intending to apply 

to opt out beginning November 19, 2004. The guidance states that TSA 

intends to close the application period within 3 weeks of that time and will 

re-open the application cycle in November 2005. The guidance states that 

because ATSA does not identify specific criteria by which TSA is to 

evaluate the airport application, TSA is currently developing and reviewing 

potential specific criteria for determining which airports will be approved 

and the sequence for their transition from federal to private screeners. The 

guidance notes that TSA reserves the right to consider participation in the 

program in light of an airport’s record of compliance on security 

regulations and requirements. 

TSA’s June 2004 Guidance 

Describes Program 

Requirements 

ATSA Legislative Requirements 

Program Planning Approach 

Guidance on Key Issues 
Page 8 GAO-05-126 Aviation Security 

TSA outlines three steps related to selecting contractors to perform 

screening services: (1) TSA submits requests for information to the 

aviation industry requesting input on acquisition issues, qualification 

criteria, and information contractors would need as part of a proposal 

process; (2) TSA develops a qualified vendors list4

 to facilitate the vendor 

selection process; and (3) TSA selects a private contractor to provide 

screening services in airports selected for the screening partnership 

program. 

The guidance describes the roles and responsibilities of all major 

stakeholders, including airport directors and federal security directors 

(FSDs).5

 TSA envisions both FSDs and airport authority as having 

“important roles” in the selection of the private contractor. The technical 

aspects of each private contractor’s screener contract will be managed 

locally by the FSDs. TSA will set performance measurement standards and 

each contractor will implement the standards. TSA seeks to give private 

contractors “a significant amount” of operational control in such areas as 

assessment and screener technical training, scheduling, recurrent training, 

and administrative functions.6

TSA said it would take “necessary steps” to enable FSDs and private 

contractors to implement operational flexibilities, including conducting 

recruiting, assessment, and screener technical training at the local level 

while ensuring that national standards are met and within TSA’s 

parameters.7

 TSA is also in the process of developing a performance 

measurement approach for the opt-out program and contractors. TSA is 

considering several types of performance measures related to security 

effectiveness, customer service, and cost. Specific measures and baselines 

have not been finalized. 

 4

TSA uses the term “vendor” here in lieu of “contractor,” but both terms refer to any private 

entity that undertakes passenger and baggage screening. TSA uses the term “contractor” 

throughout its June 2004 guidance. 

5

FSDs are responsible for providing day-to-day operational direction for federal security at 

airports. Additionally, FSDs are the ranking TSA authority responsible for the leadership 

and coordination of TSA security activities at airports. 

6

The assessment process for screener candidates consists of testing and interviews, among 

other things. 

7

TSA’s draft technical statement of work, issued after the June 2004 guidance, describes 

some operational flexibility, including screener applicant assessment, credentialing, and 

training that will be provided to private contractors in the pilot program. 
Page 9 GAO-05-126 Aviation Security 

In late October 2004, TSA finalized and publicly released guidelines 

providing criteria for determining how and when private screening 

contractors will be evaluated and selected to participate in the opt-out 

program. Any contractor that meets TSA and ATSA criteria (such as 

owned and controlled by U.S. citizens) may apply to the program. While 

TSA does not require companies seeking to become screening contractors 

to have prior experience in the business, such experience is preferred. 

Because TSA does not know how many airports will apply to participate in 

the opt-out program in 2004, the agency cannot yet determine how many 

private contractors may be hired to perform screening services. The 

contractor-selection process involves three phases, to be completed 

between November 2004 and May 2005. The phases and key milestones 

included in the guidelines are as follows: 

Phase I: Develop qualified offeror list (November 2004-January 2005). 

• Offerors seeking to be pre-qualified by TSA as potential contractors 

must meet TSA and ATSA requirements (including owned and 

controlled by U.S. citizens and ability to provide screening services at a 

level equal to or greater than that provided by the federal government). 

• Offerors must agree to provide compensation and benefits at a level 

that is not less than that provided by the federal government to the 

federal screener workforce. 

• Offerors must agree to abide by TSA’s workforce transition rules, 

including compliance with priority employment rules for TSA’s federal 

employees displaced by privatization. 

Phase II: Develop qualified vendor list (February 2005). 

• TSA issues request for proposal to contractors pre-qualified under 

Phase I. 

• TSA will develop a qualified vendor list based on this population. 

TSA Is Finalizing 

Policies and 

Procedures Governing 

the Opt-Out Program 

TSA Has Developed 

Criteria for Qualifying 

Private Contractors, with 

Additional Information 

under Development 
Page 10 GAO-05-126 Aviation Security 

• Offerors will be required to present technical and cost capabilities. 

• Qualified offerors will be selected based on ability to provide service in 

a given geographical region. 

• Contractor proposals will not be evaluated until TSA determines how 

many airports have applied to the opt-out program. 

Phase III: TSA awards contracts to private screening contractors (May 

2005). 

TSA will award competitive task orders, or contracts, based on cost/price 

analysis, among other things. TSA reserves the right to proceed with other 

alternatives for contractor selection as appropriate. 

TSA initiated Phase I on November 5, 2004, by posting a presolicitation 

notice on www.fedbizopps.gov, in accordance with standard government 

contracting practices. Contractors have until November 29, 2004, to 

provide the information, such as financial capabilities, requested in the 

presolicitation.8

 Concurrently, TSA publicly released a presolicitation 

synopsis for the opt-out program that supplements the October guidelines 

on contractor criteria. This document provides additional evaluation 

criteria on screener compensation and benefits, hiring preferences for 

displaced government employees, financial capabilities of contractors, and 

other areas. 

Five of six private screening contractors we interviewed prior to TSA’s 

release of the presolicitation synopsis identified that they wanted more 

information on workforce transition rules, which govern how federal 

screeners displaced by private screening contractors should be dealt with. 

The October guidelines also identified that contractors must abide by 

TSA’s workforce transition rules—but do not specify what the rules are. 

The presolicitation synopsis states that federal screeners must be given 

hiring preference, but no additional information is provided. All six private 

screening contractors said that they did not know how TSA will make its 

determination about whether the level of screening services and 

protection provided at the airport under the contract will be equal to or 

greater than the level that would be provided at the airport by the federal 

 8

TSA will not accept questions from contractors about the solicitation after November 15 

and indicated it may modify the solicitation based on questions raised by contractors. 
Page 11 GAO-05-126 Aviation Security 

government. TSA officials said they would use the information provided by 

contractors in response to the presolicitation notice to make this 

determination. 

In addition to the guidelines on criteria and the presolicitation synopsis, 

TSA prepared a draft statement of work for the contractors that 

participated in the opt-out pilot program and are continuing to provide 

screening services. This document describes technical requirements that 

private screening contractors must meet for performing screening 

operations, support, and administration.9

 According to TSA, the draft 

statement of work is meant to give potential private contractors an idea of 

the service requirements in the private screening pilot program, which are 

likely to be similar to those for the opt-out program. TSA posted the 

document on its opt-out Web site in early November 2004. 

The contractors we interviewed also sought information on whether 

contractors will be able to use the same companies TSA has relied on to 

assess screener candidates and conduct initial screener training. The draft 

statement of work prepared for contractors that participated in the pilot 

program addresses this issue and has been posted on TSA’s Web site for 

all interested parties to review. 

Finally, private screening contractors told us they do not have an industry 

trade association through which TSA can channel information about its 

program activities. Five of six private screening contractors we 

interviewed cited a need for a more direct line of communication between 

TSA and their organizations beyond TSA’s Web site. For example, some 

contractors suggested that TSA sponsor a forum specifically to address 

contractors’ issues about the opt-out program. In addition, it was 

suggested that TSA appoint a liaison, or point of contact, to help ensure 

that information is communicated to contractors in a timely fashion. 

 9

The statement of work includes five task areas covering the scope of services to be 

provided by the contractor, including human resources support services, training for 

screeners, screening services, management support and miscellaneous requirements, such 

as standards of conduct, uniforms, and maintenance, use and inventory of equipment, 

property and materials. 
Page 12 GAO-05-126 Aviation Security 

TSA developed draft procedures to document how opt-out program 

applications will be processed. These draft procedures—for internal use 

only—describe opt-out program parameters, a descriptive narrative of the 

application process, a matrix for each step in the process, an application 

template, sample notification letter template, an application checklist, and 

an application processing system template. TSA officials said that this 

approach is under review and expects the application procedures to be 

finalized in November 2004. 

TSA developed a draft activity-based cost study, which is also an internal 

document, not intended for public release. TSA plans to use the results of 

the study to explain how TSA will determine the unit cost of screening 

passengers in terms of the activities performed, review screening costs at 

both privately screened and federally screened airports in order to identify 

key cost drivers and best practices, and develop an efficient and 

repeatable data collection method for future studies. This study is 

currently under review within TSA. TSA expects to finalize this study later 

in November 2004. 

In addition, TSA developed a draft transition plan, which will serve as 

internal guidance for the agency and is not intended for public release. 

This is to be an operations plan designed to support TSA’s efforts to 

transition airports from federal to private screeners. The plan is to 

address, for example, TSA’s approach to giving federal screeners priority 

for employment with private screening contractors. In addition, this plan 

is to describe the roles and responsibilities of the TSA opt-out program 

office, FSD staff, and private screening contractors. Activities to be 

addressed in the plan include human resources, training, communication, 

logistics, performance measurement, and field support. TSA expects to 

refine the draft guide in December 2004 and plans to revise the plan on an 

ongoing basis as it gains more experience with the transition to private 

screening. 

A draft communications plan is also under development and remains in 

draft form. The purpose of this internal document is to reflect a strategy 

for communicating key program events and developments to both internal 

and external stakeholders. TSA told us the plan will contain information 

on roles and responsibilities of key stakeholders, among other things. The 

draft is undergoing final review within TSA. TSA has not set a date for 

finalizing this plan. 

TSA’s Internal Policies and 

Procedures for the Opt-Out 

Program Are under 

Development 
Page 13 GAO-05-126 Aviation Security 

In addition to the June 2004 initial guidance, statement of work for the 

pilot program contractors, and presolicitation synopsis, TSA has finalized 

other informational guidance for airport operators and private screening 

contractors. In October 2004, TSA posted the final version of its opt-out 

application form for airports seeking to apply. TSA will use the application 

to collect information on potential airports’ intentions regarding opting 

out. For instance, in addition to asking airports to provide basic 

information, such as point of contact, TSA seeks to learn whether airports 

want to be the qualifying contractor performing the screening services. 

TSA also asks airport officials to provide information on the airport 

authority’s primary reason for wanting to participate in the opt-out 

program, whether the airport has a preferred timeline for when the 

transition to private screening should occur, and to list scheduled 

activities that could interfere with the transition, such as peak travel 

season and major construction. 

TSA originally set a 3-week application window, from November 19, 2004, 

to December 10, 2004, for accepting application from airports interested in 

opting out of using federal screeners. However, based on input from 

stakeholders, TSA decided less than 1 month before the application cycle 

was to begin to extend the application deadline. As of November 15, 2004, 

TSA had not established a final deadline. 

Also, in October, TSA created an e-mail address to enable interested 

parties to submit questions and request additional information about how 

the opt-out program would be implemented. The goal of this effort was to 

provide supplemental guidance for stakeholders that reflected issues they 

wanted to know more about. A TSA official said the agency received 

approximately 100 e-mails between late August and early November. 

Based in part on these e-mails, in early September 2004, TSA developed 

TSA Is Taking Steps 

to Communicate with 

Stakeholders about 

the Opt-Out Program, 

but Some Say 

Additional 

Information Is 

Needed 

Stakeholders Seek 

Additional Information 

from TSA on Operational 

Flexibilities, Liability, and 

Cost Issues 
Page 14 GAO-05-126 Aviation Security 

and posted on its Web site an initial list of responses to frequently asked 

questions (FAQ). In early November 2004, TSA updated the FAQs to 

reflect three separate topics: questions for the overall program, questions 

about the airport application process, and questions about the contracting 

process. TSA plans to continue to update these lists as needed. Some of 

the information contained in the FAQs is new—that is, it is not addressed 

in the June 2004 written guidance. Some of TSA’s FAQ responses, 

however, restate the information in the written guidance, without 

additional elaboration. 

While these guidance documents have provided airport operators with 

information on the basic parameters and legislative requirements of the 

opt-out program, some airport operators, private screening contractors, 

and airport industry representatives told us TSA has not yet addressed all 

of their questions and concerns.10 The information that stakeholders told 

TSA and us that they needed falls into three categories: operational 

flexibility with respect to how much leeway airports and private screening 

contractors would have to manage the program; liability protection in the 

event that a screener fails to detect a threat object; and costs related to 

participating in the opt-out program. 

Eight of the 20 airport operators we interviewed who said they would not 

apply to opt out of using federal screeners in 2004 said that they needed 

additional information about the range of flexibility private screening 

contractors would be provided in terms of, for instance, their ability to 

deploy screeners where they are needed most at a given airport. Some 

airport industry representatives we spoke with raised operational 

flexibility as a concern as well. All of the private screening contractors we 

interviewed also said that they needed additional information on 

operational flexibilities, including 

• whether contractors could collaborate with airport management 

without having to involve TSA directly; 

 10Of the airport operators we interviewed, 20 of 26 said their airport would not apply to opt 

out this year, 5 were uncertain whether to apply for the 2004 cycle, and 1 said his airport 

planned to apply, but only for its international passenger terminal. Among the 20, 16 said 

they were satisfied with federal screeners or saw no benefit to opting out. Six of the airport 

operators we interviewed had not reviewed the initial June guidance. 

Operational Flexibility
Page 15 GAO-05-126 Aviation Security 

• whether they would have the flexibility to determine appropriate 

screener staffing levels at their airports and to assess screener 

candidates and hire screeners on an as needed basis;11 and 

• whether they could develop and/or deliver screener training. 

Among the questions e-mailed to TSA directly, some address operational 

flexibilities, such as screener staffing levels. For example, one of the 

questions pertained to whether an airport would be provided the same 

number of contract screeners as are currently authorized under the federal 

screener program. TSA responded in its FAQs that a qualified private 

contractor will determine the number of contract screeners needed and 

that TSA will provide guidelines for the contractors. TSA further noted 

that it is seeking to provide flexibility to the contractors to manage the 

operations as efficiently as possible and will look to them to identify 

possible efficiencies in areas such as scheduling and use of part-time 

employees as appropriate for the local airport. 

The independent consulting firm under contract to TSA suggested that 

TSA allow contractors serving the opt-out pilot program airports to assess 

screener candidates and conduct screener training as a means of allowing 

greater operational flexibilities. The consultants stated that greater 

operational flexibilities would enable a more robust comparison of private 

and federal screening operations. TSA officials said that they would permit 

pilot program airports to pursue both options beginning in November 

2004. 

A second issue raised by stakeholders, including airport industry 

representatives, pertained to liability—whether and to what extent 

airports and private screening contractors would be liable in the event that 

a privately contracted screener should fail to detect a threat object that 

leads to a terrorist incident or use of a weapon, or threat object, on board. 

Thirteen airport operators we interviewed cited concerns about liability. 

In addition, all of the private screening contractors we interviewed cited 

the need for additional guidance on liability protection. To address airport 

and industry officials’ questions about liability issues, FAQs directs site 

visitors to a Department of Homeland Security (DHS) Web site for 

 11Since the fiscal year 2004 DHS Appropriations Act (Pub. L. No.108-90), Congress has 

instituted a screener cap of 45,000 full-time equivalent screeners. One full-time equivalent is 

equal to 1 work year or 2,080 non-overtime hours. 

Liability Insurance 
Page 16 GAO-05-126 Aviation Security 

information on how to apply for liability protection under the SAFETY Act 

of 2002.12 The Web site, however, does not provide information on whether 

the SAFETY Act would cover private screening contractors that apply to 

the opt-out program. According to DHS officials, DHS has determined that 

the SAFETY Act will apply to private screening contractors in the opt-out 

program. DHS’s Office of SAFETY Act Implementation has been working 

with TSA to develop an expedited review process for SAFETY Act 

applications from private screening contractors and plans to post specific 

instructions for applicants on the SAFETY Act Web site. As of November 

15, 2004, this information had not been posted. Five of the screening 

contractors we interviewed said the issue of whether they would receive 

liability protection was important and would greatly affect whether they 

would participate in the program, if selected as a qualified contractor. Two 

of the contractors said that without liability protection, they would not 

participate in the program because it would be too risky, exposing them to 

potential lawsuits. TSA officials said that commercially available insurance 

is available and that under the current screening pilot program, each of the 

contract screening companies had procured some amount of liability 

insurance for terrorist activities. 

A third issue pertained to the costs of participating in the program. Ten of 

the 20 airport officials we spoke with that have decided not to apply to opt 

out in 2004 cited questions about costs of participating in the program, and 

in at least one case said they did not have enough cost-related information. 

Representatives from two airport industry associations also mentioned 

this issue. The FAQs address cost issues in the context of budgets for 

federal and private screeners. For example, one question asks whether, if 

federal budget appropriations are not made in a timely manner, TSA will 

still be able to fund the private screening contractor during that period of 

time. TSA’s response identified that it would fund screeners through a 

continuing budget resolution passed by Congress. In response to a 

question about whether budget limitations will apply to either federal or 

contracted screeners, TSA’s response reiterates what is already stated in 

the written guidance—that all funding for the opt-out program will come 

 12The Support Anti-terrorism by Fostering Effective Technologies (SAFETY) Act of 2002 

(Pub. L. No. 107-296) encourages the development and deployment of anti-terrorism 

technologies that will substantially enhance the protection of the nation. Specifically, the 

SAFETY Act creates certain liability limitations for “claims arising out of, relating to, or 

resulting from an act of terrorism” where qualified anti-terrorism technologies have been 

deployed. The Act extends certain liability protections to equipment, services, and other 

elements involved in preventing or deterring acts of terrorism. 

Costs of Participation 
Page 17 GAO-05-126 Aviation Security 

from the same budget line items as federal screening operations. No 

additional information is provided. 

Three private screening contractors we interviewed also cited a need for 

additional information on the requirement to provide at least equivalent 

compensation and benefits to screeners transitioning from federal to 

private screening contractors, as required by ATSA. The contractors said 

they did not know whether they would be required to offer dollar-fordollar parity for salaries and benefits or whether contractors must offer 

the same health care and other benefits that federal screeners receive. 

FAQs address this question in general terms, noting that private 

contractors will have “some flexibility in fashioning their compensation 

and benefits packages,” but do not elaborate further. TSA’s presolicitation 

includes a compensation and benefits certification form that private 

screening contractors applying to be on the qualified offeror list must 

complete. The applicant has to certify that it will propose and pay at least 

the minimum labor rate that is paid to screeners for every $1 of direct 

labor and that benefits will be not less than 44.75 percent—the current 

fringe benefits percentage as computed by TSA.13

In addition, TSA has interpreted ATSA to require qualified private 

screening companies to provide pay and benefits at a loaded cost (direct 

hour plus percentage cost of fringe benefits) that equals or exceeds the 

loaded cost of the pay and benefits provided to the federal government. 

According to TSA, this approach provides the contractor with flexibility to 

trade additional pay against other benefits, or to enhance certain benefits 

and reduce others; enables the contractor to determine and provide the 

best package necessary for the recruitment and retention of quality 

screeners; and increases flexibility while permitting recruitment and 

retention of quality screeners. 

 13If the applicant’s benefits are less than 44.75 percent, the applicant must certify that it will 

propose and pay at least the minimum labor rate that is paid to screeners and that 

adjustments will be made to the compensation and/or benefits prior to award so that the 

total compensation and other benefits will not be less than the compensation and other 

benefits provided to federal government personnel. The applicant must also explain how 

these adjustments will be made. 
Page 18 GAO-05-126 Aviation Security 

TSA is developing measures to assess the screening performance of 

airports that will participate in the opt-out program and individual 

contractors performing the screening services, but specific performance 

measures have not been finalized. In June 2004, TSA developed a draft of 

the performance measurement principles and actual measures that TSA is 

considering to measure the performance of the entire opt-out program and 

private screening operations. For example, TSA plans to measure the 

results of annual screener proficiency reviews, customer satisfaction and 

complaints, and screening costs. TSA may also evaluate the program in 

terms of how well screeners perform using the threat image projection 

(TIP) system to detect threat objects.14 (TIP projects images of threat 

objects on an x-ray screen during actual operations and records whether 

screeners identify threat objects.)15 These measures will be similar to those 

used by the independent consulting firm to compare the performance of 

private screening contractors operating at the five pilot program airports 

against federal screening services. TSA expects to complete a preliminary 

draft of a performance measurement plan later this month and to finalize 

this plan by February 2005. 

In addition to assessing how the performance of federal and private 

screening services compare, TSA is working to develop performance 

measures for evaluating how well private screening contractors comply 

with the terms of their contracts. TSA officials said that the opt-out 

program office is in the process of determining whether quantifiable 

measures are available, how to collect relevant data, and the best way to 

establish baseline measures. TSA expects to complete its data collection 

plan later this month and to complete the final plan by February 2005. 

 

The contractor-related performance measures TSA plans to develop are to 

be included in a quality assurance plan. This plan is an element in TSA’s 

draft statement of work specifically for the five airports that participated 

in the pilot program, which are continuing to use private screeners. The 

plan includes general information on how TSA will measure and assess 

their performance and how TSA will use the performance data to make 

decisions on performance awards, extension of contracts, and termination 

of contracts. Contractors may, for example, be evaluated—and their 

 14TIP scores may be used to measure the performance of private contract screeners at optout airports compared to their federally screened counterparts. 

15Once prompted, TIP identifies to the screener whether the threat is real and then records 

the screener’s performance in a database that could be analyzed for performance trends. 

TSA Is Developing 

Performance 

Measures for the OptOut Program, but 

More Work Remains 

To Be Done 
Page 19 GAO-05-126 Aviation Security 

contracts extended—based on their screeners' performance on TIP scores. 

TSA officials said that the measures included in the draft statement of 

work are not as sophisticated or rigorous as those that TSA will adopt in 

the future. TSA expects to implement these measures in mid-2005, as 

contracts are being awarded. 

We plan to continue to collect and analyze TSA documentation on the optout program and to follow-up with airports and private security 

contractors on their views of TSA’s development and implementation of 

the program. 

We provided a draft of this report to the Department of Homeland Security 

and the Transportation Security Administration for review and comment. 

The agencies generally agreed with our findings, and we incorporated their 

technical comments where appropriate. 

We are sending copies of this report to the Secretary of the Department of 

Homeland Security and interested congressional committees. We will also 

make copies available to others upon request. In addition, the report will 

be available at no charge on GAO’s Web site at http://www.gao.gov. 

If you have any questions about this report, or wish to discuss it further, 

please contact me at (202) 512-8777 or by e-mail at berrickc@gao.gov. Key 

contributors to this report were David Alexander, Amy Bernstein, Lisa 

Brown, Elizabeth Curda, Thomas Lombardi, Jobenia Odum, Lisa Shibata, 

Maria Strudwick, Nicole Volchko, and Nicolas Zitelli. 

Sincerely yours, 

Cathleen A. Berrick 

Director, Homeland Security and Justice Issues 

Agency Comments 

and Our Evaluation 
Appendix I: Scope and Methodology 

Page 20 GAO-05-126 Aviation Security 

Our preliminary observations are based on our review of documentation 

related to the Transportation Security Administration’s (TSA) Screening 

Partnership Program (opt-out program) and contract screening pilot 

program and interviews with various officials. We reviewed documents 

including: 

• all guidance-related materials TSA had developed to date for airports; 

• reports from an independent consulting study prepared for TSA that 

evaluated the contract screening pilot program and made suggested 

improvements to the program; 

• information from two congressional committee-sponsored roundtables 

on the program; 

• testimony at congressional hearings on the program; 

• provisions of the Aviation and Transportation Security Act; 

• our prior reports that addressed issues related to the opt-out program, 

including the performance of airport passenger and checked baggage 

screeners. 

In addition, we interviewed TSA headquarters officials, officials from two 

aviation associations—the American Association of Airport Executives 

and the Airports Council International and TSA’s private contractor that is 

assisting TSA in its development of the opt-out program. We conducted 

semistructured telephone interviews with the operators of 26 randomly 

selected commercial airports nationwide. The 26 airports were selected 

randomly from all airports in each of the five airport categories—X, I, II, 

III, and IV. Category X airports generally have the largest number of 

enplanements, and category IV airports have the smallest number. We 

interviewed one official at each of 4 to 6 airports in each category. 

Although the airports were selected randomly, because of the small 

sample size in each category the results of these interviews may not be 

generalized to other airports. We conducted telephone interviews with 

officials from 6 of 10 private security contractors selected from a listing of 

private security contractors that had expressed interest in the opt-out 

program. The listing of private security contractors that expressed interest 

in the opt-out program is included in Airport Security Report, (Potomac, 

MD: Air Safety Week), September 22, 2004, Volume 11, Number 19. The 

views and opinions of these contractors may not be representative of 

those of other contractors and, therefore, should not be generalized. TSA 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 21 GAO-05-126 Aviation Security 

released significant details on its opt-out program guidance after our 

interviews; therefore, the interviewees’ responses (airport operators’ and 

contractors’) were based only on the information TSA had released at that 

point. We conducted our work from September to November 2004 in 

accordance with generally accepted government auditing standards. 

Because our review is still ongoing, the results presented in this report are 

preliminary. 

To complete our work, we plan to continue to collect and analyze TSA 

documentation related to each of our three objectives and to follow-up 

with airports and private security contractors on their views of TSA’s 

development and implementation of the opt-out program. 

(440346) 
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