a

GAO

United States General Accounting Office

Report to Congressional Requesters

May 2004 TRANSPORTATION 

SECURITY 

ADMINISTRATION

High-Level Attention 

Needed to Strengthen 

Acquisition Function

GAO-04-544
www.gao.gov/cgi-bin/getrpt?GAO-04-544.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William T. 

Woods, (202) 512-8214, woodsw@gao.gov. 

Highlights of GAO-04-544, a report to 

congressional requesters 

May 2004

TRANSPORTATION SECURITY 

ADMINISTRATION 

High-Level Attention Needed to 

Strengthen Acquisition Function 

Since its inception, TSA has been focused on meeting an urgent mandate to 

deploy more than 55,000 airport passenger and baggage screening personnel 

and equipment to secure the nation’s airways. To do so, it created basic 

organizational and acquisition infrastructures. However, our review of TSA’s 

acquisition function and inspector general reports identified a number of 

challenges in each of the four areas we assessed. 

• Organizational alignment and leadership: TSA’s Office of Acquisition 

is at an organizational level too low to oversee the acquisition process, 

coordinate acquisition activities, and enforce acquisition policies 

effectively. The position of the office hinders its ability to help ensure 

that TSA follows acquisition processes that enable the agency to get the 

best value on goods and services. 

• Policies and processes: TSA’s acquisition policies and processes 

emphasize personal accountability, good judgment, justifiable business 

decisions, and integrated acquisition teams. However, effective 

implementation of TSA’s policies and processes has been hindered by 

several factors. For example, TSA has not effectively communicated its 

acquisition policies throughout the agency. TSA also lacks internal 

controls to identify and address implementation issues and performance 

measures to determine whether acquisition policies are achieving 

desired results. 

• Human capital: TSA risks an imbalance in the size and capabilities of its 

acquisition workforce that could diminish the performance of the 

acquisition function throughout the agency. TSA’s Office of Acquisition 

worked closely with the Department of Homeland Security to develop 

and begin implementing an acquisition workforce plan. However, TSA’s 

Human Resource Office, which is responsible for recruiting and hiring 

the acquisition workforce agencywide, did not participate in developing 

the acquisition workforce plan. Without input from the Human 

Resources Office, it is not clear that the workforce plan can be 

effectively implemented throughout the agency. In addition, the Office of 

Acquisition reports that it is having difficulty attracting, developing, and 

retaining a workforce with the acquisition knowledge and skills required 

to accomplish TSA’s mission. 

• Knowledge and information management: While TSA is participating in 

the Department of Homeland Security’s efforts to develop requirements 

for an enterprisewide solution, TSA does not currently have the strategic 

information needed to support effective acquisition management 

decisions. To manage on a day-to-day basis, program and acquisition 

managers are relying on data derived from informal, ad-hoc systems. 

TSA is in the process of adopting the Coast Guard’s procurement and 

financial systems as interim solutions until the Department of Homeland 

Security implements a departmentwide system. However, near-term 

improvement in acquisition outcomes will be difficult because TSA does 

not have the data needed to analyze and improve its acquisition 

processes. 

The Transportation Security 

Administration (TSA), within the 

Department of Homeland Security, 

was established to secure the 

nation’s transportation systems, 

beginning with commercial 

airports. To meet its mission, TSA 

has awarded over $8.5 billion in 

contracts since its creation in 2001. 

Spending on contracts accounted 

for 48 percent of TSA’s fiscal year 

2003 budget. 

Because of TSA’s reliance on 

contracts to carry out its mission, 

its acquisition infrastructure—

including oversight, policies and 

processes, acquisition workforce, 

and information about its 

acquisitions—is critical. GAO was 

asked to review TSA’s acquisition 

infrastructure to assess how well 

TSA is positioned to carry out its 

acquisition function. 

GAO is recommending that the 

Secretary of the Department of 

Homeland Security direct the 

Administrator of TSA to elevate the 

Office of Acquisition, develop 

adequate internal controls and 

performance measures to ensure 

effective policies and processes, 

and assess its current acquisition 

workforce and proposed 

knowledge management systems. 

In commenting on a draft of this 

report, the Department of 

Homeland Security generally 

concurred with this report and its 

recommendations and provided 

additional information. 
Page i GAO-04-544 Transportation Security Administration Acquisition 

Letter 1

Assessment Summary 3

Background 5

TSA’s Organizational Alignment and Leadership 7

TSA’s Acquisition Policies and Processes 10

TSA’s Human Capital Management 15

TSA’s Knowledge and Information Management 19

Conclusions 22

Recommendations for Executive Action 23

Agency Comments and Our Evaluation 23

Appendix I Scope and Methodology 26 

Appendix II Key Activities, Roles, and Responsibilities of Key 

Personnel Involved in TSA’s Acquisition Process 29 

Appendix III Inspector General Testimony and Reports 

Reviewed 31 

Appendix IV Contracts Reviewed 32 

Appendix V Comments from the Department of Homeland 

Security 34 

Tables 

Table 1: Key Personnel Involved in TSA’s Acquisition Function 29

Table 2: Department of Transportation Audit Reports on 

Contracting Issues at TSA 31

Table 3: Department of Homeland Security Audit Reports 

Reviewed That Include Contracting Issues at TSA 31

Contents 
Page ii GAO-04-544 Transportation Security Administration Acquisition 

Figures 

Figure 1: Timeline of TSA’s History 5

Figure 2: Organization of TSA 9

Figure 3: Key Activities in the Acquisition Process 29

Abbreviations 

FAA Federal Aviation Administration 

FAR Federal Acquisition Regulation 

TSA Transportation Security Administration 

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Page 1 GAO-04-544 Transportation Security Administration Acquisition 

May 28, 2004 

The Honorable Tom Davis 

Chairman 

The Honorable Henry A. Waxman 

Ranking Minority Member 

Committee on Government Reform 

House of Representatives 

The Honorable Don Young 

Chairman 

The Honorable James L. Oberstar 

Ranking Minority Member 

Committee on Transportation and Infrastructure 

House of Representatives 

The Honorable Martin Olav Sabo 

Ranking Minority Member 

Subcommittee on Homeland Security 

Committee on Appropriations 

House of Representatives 

Since its creation in November 2001, the Transportation Security 

Administration (TSA) has awarded more than $8.5 billion in contracts for 

goods and services used to secure the nation’s transportation systems.1

TSA currently has contracts to recruit, hire, train, and outfit passenger 

and baggage screeners, as well as contracts to develop and manufacture 

screening equipment and to provide the information technology needed 

to manage its day-to-day operations. TSA built its organization while 

simultaneously concentrating its resources on meeting tight deadlines for 

deploying more than 55,000 federal screeners to all of the nation’s 

commercial airports. 

Because of TSA’s significant reliance on contracts to carry out its mission, 

its acquisition infrastructure—including oversight mechanisms, policies 

and processes, acquisition workforce, and information systems—will in 

large part determine whether the agency succeeds in its mission. However, 

 1

 This figure reflects contract awards through fiscal year 2003. 

United States General Accounting Office 

Washington, DC 20548 
Page 2 GAO-04-544 Transportation Security Administration Acquisition 

the Inspectors General of the Departments of Transportation and 

Homeland Security—the two executive departments TSA has been a 

part of since it was created— have repeatedly criticized the agency’s 

management and oversight of its contracts.2

 As a result, you asked us 

to review TSA’s acquisition infrastructure to assess how well TSA is 

positioned to carry out its acquisition function. 

Based on our previous reviews of acquisition management issues 

governmentwide, at individual agencies, and at leading private sector 

firms, we have identified four broad areas that we believe are critical to 

the success of an acquisition organization: 

• Organizational alignment and leadership: The appropriate placement 

of the acquisition function within an agency can facilitate efficient and 

effective management of acquisition activities. In addition, agency leaders 

need to create a climate that fosters good acquisition practices. 

• Policies and processes: To facilitate effective planning, award, 

administration, and oversight of contracts, and to help ensure the best 

value on goods and services, the agency must have clear, consistent, and 

enforceable policies and processes. Internal controls and performance 

measures help to ensure that policies and processes are implemented and 

have the desired outcomes. 

• Human capital: Strategic workforce planning—including workforce and 

skills assessments and succession planning—is key to recruiting, training, 

and rewarding staff and ensuring the acquisition workforce has the skills 

needed to carry out their responsibilities effectively. 

• Knowledge and information management: To inform strategic decisions 

aimed at reducing costs, improving service levels, measuring compliance, 

and managing providers, the agency must have knowledge and 

information systems that can produce credible, reliable, and timely data. 

We assessed TSA’s acquisition infrastructure against what our previous 

work has shown to be best practices in these four areas. To do so, we 

reviewed agency directives, memorandums, and other documentation; 

interviewed agency officials; and analyzed agency systems and processes. 

To gain further insight into how TSA’s acquisition system is functioning, 

we also reviewed 21 judgmentally selected contract files. For more on our 

scope and methodology, see appendix I. 

 2

 See appendix III for a list of Inspector General reports on TSA acquisitions. 
Page 3 GAO-04-544 Transportation Security Administration Acquisition 

We conducted our review from July 2003 through March 2004 in 

accordance with generally accepted government auditing standards. 

Since its inception, TSA has been focused on meeting an urgent mandate3

to deploy more than 55,000 airport passenger and baggage screening 

personnel and equipment to secure the nation’s airways. To do so, it 

created basic organizational and acquisition infrastructures. To date, 

however, TSA has not developed an acquisition infrastructure that 

facilitates successful management and execution of acquisition activities, 

helps ensure that the agency acquires quality goods and services at 

reasonable prices, and supports informed decisions about acquisition 

strategy. Specifically, our review of TSA’s acquisition function and 

inspector general reports identified a number of challenges in each of the 

four areas we assessed. 

• Organizational alignment and leadership: TSA’s Office of Acquisition 

is at an organizational level too low to oversee the acquisition process, 

coordinate acquisition activities, and enforce acquisition policies 

effectively. The position of the office hinders its ability to help ensure that 

TSA follows the acquisition processes that enable the agency to get the 

best value on goods and services. Senior acquisition officials told us that 

the Office of Acquisition is not appropriately placed within TSA; however, 

TSA has not elevated the office to a position that would enable it to 

coordinate agencywide acquisition activities or enforce acquisition 

policies. 

• Policies and processes: Because TSA’s acquisition policies and processes 

emphasize personal accountability, good judgment, justifiable business 

decisions, and integrated acquisition teams, effective implementation of 

TSA’s policies and processes depends on clear communication, measures 

to evaluate performance, and incentives to reward good acquisition 

practices. Effective implementation of TSA’s policies and processes has 

been hindered, however, by several factors: (1) TSA has not effectively 

communicated its acquisition policies throughout the agency; (2) TSA 

 3

 The Aviation and Transportation Security Act (Pub. L. No. 107-71, Nov. 19, 2001) 

mandated that the Under Secretary of Transportation for Security (1) deploy at all airports 

in the United States where screening is required a sufficient number of personnel to 

conduct screening of all passengers and property no later than 1 year from enactment of 

the act, and (2) ensure that airports have sufficient explosive detection systems (or 

alternative means) to screen all checked baggage no later than December 31, 2002. The 

Homeland Security Act of 2002 (Pub. L. No. 107-296) authorized an extension of the 

deadline for explosive detection systems in certain circumstances until December 31, 2003. 

Assessment Summary 
Page 4 GAO-04-544 Transportation Security Administration Acquisition 

lacks internal controls to identify and address implementation issues and 

performance measures to determine whether TSA’s acquisition policies 

achieve desired outcomes; and (3) TSA’s deadline-driven culture fails to 

reinforce the importance of complying with policies. 

• Human capital: TSA risks an imbalance in the size and capabilities of its 

acquisition workforce that could diminish the performance of the 

acquisition function throughout the agency. TSA’s Office of Acquisition 

worked closely with the Department of Homeland Security to develop and 

begin implementing an acquisition workforce plan. However, TSA’s 

Human Resource Office, which is responsible for recruiting and hiring the 

acquisition workforce agencywide, did not participate in developing the 

acquisition workforce plan. Without input from the Human Resources 

Office, it is not clear that the workforce plan can be effectively 

implemented throughout the agency. In addition, the Office of Acquisition 

reports that it is having difficulty attracting, developing, and retaining a 

workforce with the acquisition knowledge and skills required to 

accomplish TSA’s mission. 

• Knowledge and information management: While TSA is participating in 

the Department of Homeland Security’s efforts to develop functional 

requirements for an enterprisewide solution that supports the 

department’s resource management functions—including procurement 

and finance—TSA does not currently have the strategic information 

needed to support effective acquisition management decisions. To manage 

on a day-to-day basis, program and acquisition managers are relying on 

data derived from informal, ad hoc systems—which are often out-of-date, 

incomplete, inaccurate, or otherwise unreliable. TSA is in the process of 

adopting the Coast Guard’s procurement and financial systems as interim 

solutions until the Department of Homeland Security implements 

departmentwide systems. However, near-term improvements to TSA’s 

acquisition outcomes will be difficult until TSA has critical financial and 

procurement information systems that allow decision makers to track 

spending, manage budgets, and collect detailed data on goods and 

services, suppliers, and spending patterns. 

We are making four recommendations to the Secretary of Homeland 

Security to help improve TSA’s acquisition capabilities by elevating the 

placement of TSA’s Office of Acquisition, developing adequate internal 

controls and performance measures, addressing the needs of the 

acquisition workforce, and assessing proposed knowledge management 

systems. In written comments on a draft of this report, the Department of 

Homeland Security generally concurred with our report and 

recommendations. They also provided additional information about 

various initiatives related to our recommendations. 
Page 5 GAO-04-544 Transportation Security Administration Acquisition 

Two months after the September 11, 2001, terrorist attacks, the President 

signed the Aviation and Transportation Security Act, establishing TSA as a 

new administration within the Department of Transportation responsible 

for securing the nation’s transportation systems.4

 In February 2002, TSA 

assumed responsibility for aviation screening, and by November 2002, the 

agency had deployed a federal security screener workforce in the nation’s 

429 commercial airports. In March 2003, TSA, along with 21 other 

agencies, began transferring to the Department of Homeland Security.5

Figure 1 shows the timeline of TSA’s brief history. 

Figure 1: Timeline of TSA’s History 

When TSA was established in November 2001, the agency had no 

personnel, no organizational structure, no policies and processes, and no 

legacy systems. To begin operating, TSA adopted some of the Department 

of Transportation’s infrastructure components, such as the financial 

 4

 Pub. L. No. 107-71. 

5

 The Department of Homeland Security was established in November 2002 under the 

Homeland Security Act (Pub. L. No. 107-296) to align and coordinate the nation’s efforts to 

secure the homeland from terrorism. 

Background 

11/19/02 

55,000 federal 

passenger and 

baggage 

screeners 

deployed 

03/01/03 

TSA joins 

Department 

of Homeland 

Security 

2/17/02 TSA 

assumes 

FAA’s civil 

aviation 

security 

function 

9/11/01 

terrorists 

attack 

11/19/01 

legislation 

enacted to 

create TSA

SOND J FMAM

2001 2002

JJA

2003

SONDJ FMAMJ J ASON

Source: GAO.
Page 6 GAO-04-544 Transportation Security Administration Acquisition 

management system, and developed others in-house, such as a 

procurement tracking system. In addition, the Aviation and Transportation 

Security Act directed TSA to adopt the Federal Aviation Administration’s 

(FAA) Acquisition Management System, 6

 which establishes policy, 

processes, and guidance for all aspects of the acquisition life cycle. The act 

gives TSA’s administrator the latitude to make modifications to FAA’s 

system as appropriate. Because FAA is, by law, generally exempt from 

federal acquisition laws as well as the Federal Acquisition Regulation 

(FAR),7 and TSA was directed to adopt FAA’s system, TSA is also exempt 

from these requirements. 

TSA has relied on contractors to accomplish much of its mission. In fiscal 

year 2002, TSA obligated more than $3.7 billion for goods and services 

procured under contracts awarded by TSA, FAA, and the Department of 

Transportation. TSA currently has contracts to manage human resource 

needs, including recruiting, hiring, training, and outfitting passenger and 

baggage screeners; develop and manufacture screening equipment; and 

provide the information technology systems the agency uses to manage its 

day-to-day operations. These contracts represent about 48 percent of 

TSA’s fiscal year 2003 budget. 

TSA’s large expenditures on goods and services have prompted reviews 

by the Inspectors General of the Departments of Transportation and 

Homeland Security, who found a lack of contractor oversight and 

significant cost overruns.8

 For example, in January 2004, the Department 

of Homeland Security Inspector General reported that inadequate 

contractor oversight contributed to TSA’s lack of timely background 

checks on screeners at airports. Specifically, inadequate oversight of 

contractors contributed to more than 500 boxes of background check 

documentation remaining unprocessed for months.9

 The Department of 

Transportation’s Inspector General also found that inadequate oversight 

and contracts without clearly defined deliverables caused the cost of 

 6

 This requirement is codified at 49 U.S.C. § 114(o) (Supp. I 2001). 

7

 The Federal Acquisition Regulation was established to provide uniform acquisition 

policies and procedures across the executive branch of the U.S. Government. The 

acquisition laws from which FAA is exempt are listed at 49 U.S.C. § 40110(d)(2) (2000). 

This statute also exempts FAA from the FAR, which implements these laws. 

8

 See appendix III for a list of inspector general testimony and reports on TSA acquisitions. 

9

 Department of Homeland Security, Inspector General, A Review of Background Checks 

for Federal Passenger and Baggage Screeners at Airports, OIG-04-08 (January 2004). 
Page 7 GAO-04-544 Transportation Security Administration Acquisition 

TSA’s initial contracts to balloon. For example, TSA’s initial human 

resource contract to recruit, screen, hire, and train screeners grew from 

$100 million to $700 million within 1 year.10

In late 2003, the Department of Homeland Security’s Inspector General 

cited integrating the procurement functions of the department’s 

component organizations as a major management challenge, adding that 

some of the procurement functions lacked important management 

controls.11 Despite TSA’s efforts to resolve initial problems, the Inspector 

General cited TSA as an example of an agency lacking procurement 

management controls. 

In a 2004 update to the previous year’s report on management challenges, 

the Inspector General’s Office reported that TSA was taking steps to 

address weaknesses in contract oversight, such as increasing the size of its 

contract management staff, devising policies and procedures that require 

adequate procurement planning, and arranging for the Defense Contract 

Audit Agency to perform over 130 contract audits and support contract 

administration. 

The appropriate placement of the acquisition function within an agency 

can facilitate efficient and effective management of acquisition activities. 

In our work on best practices, 12 we learned that leading companies 

elevated or expanded the role of the company’s acquisition organization; 

designated commodity managers to oversee key services; and made 

extensive use of cross-functional teams to help identify the company’s 

 10 Department of Homeland Security, Inspector General, Review of the Status of 

Department of Homeland Security Efforts to Address Its Major Management Challenges, 

OIG-04-21 (March 2004). 

11 Department of Homeland Security, Inspector General, Major Management Challenges 

Facing the Department of Homeland Security (December 31, 2003). 

12 U.S. General Accounting Office, Best Practices: Taking a Strategic Approach Could 

Improve DOD’s Acquisition of Services, GAO-02-230 (Washington, D.C.: Jan. 18, 2002). 

TSA’s Organizational 

Alignment and 

Leadership 

Best Practices 
Page 8 GAO-04-544 Transportation Security Administration Acquisition 

service needs, conduct market research, evaluate and select providers, and 

manage performance. To cut across traditional organizational boundaries 

that contributed to a fragmented approach to acquiring services, these 

companies generally restructured their procurement organizations, 

typically assigning them greater responsibility and authority for strategic 

planning, management, and oversight of the companies’ service spending. 

In making such changes, the companies acknowledged that acquisition is 

an important strategic function and that success in this area contributes to 

the accomplishment of company missions. These changes transformed the 

role of the purchasing unit from one focused on mission support to one 

that was strategically important to the company’s bottom line. 

Recent legislation recognizes the importance of placing the acquisition 

function at an appropriate level and mandates that most executive 

departments appoint a chief acquisition officer.13 This official will have the 

responsibility to monitor the performance of acquisition activities and 

programs; evaluate the performance of acquisition programs; increase the 

use of full and open competition; increase the use of performance-based 

contracting; establish clear lines of authority, accountability, and 

responsibility for acquisition decision making; manage the direction of the 

agency’s acquisition policies; advise the head of the executive agency 

regarding the appropriate business strategy to achieve the mission of the 

executive agency; and develop and maintain an acquisition career 

management program to ensure that there is an adequate acquisition 

workforce. 

TSA’s Office of Acquisition is at an organizational level too low to oversee 

the acquisition process, coordinate acquisition activities, and enforce 

acquisition policies effectively. As shown in figure 2, the Office of 

Acquisition is at a lower level than other key offices involved in the 

acquisition process. Its current position within the organizational structure 

essentially relegates acquisition to the status of one of many 

administrative functions. The placement of the Office of Acquisition 

hinders the ability of the office to oversee the acquisition process and to 

coordinate with other offices involved in that process—responsibilities 

that are particularly critical given that almost half of TSA’s budget is spent 

 13 Services Acquisition Reform Act of 2003, tit. XIV of the National Defense Authorization 

Act for fiscal year 2004, Pub. L. No. 108-136, § 1421, 117 Stat. 1663, 1666-67 (2003). TSA is 

not required to appoint a chief acquisition officer. 

Assessment 
Page 9 GAO-04-544 Transportation Security Administration Acquisition 

on acquisitions.14 This issue was also noted by senior acquisition officials 

who told us that the Office of Acquisition is not appropriately placed 

within TSA. Further, the Chief Support Systems Officer said that 

adjustments to the placement of the office might be worthy of 

consideration.15

Figure 2: Organization of TSA 

From its current position, the office has not been able to coordinate the 

agency’s acquisition activities or enforce acquisition policies throughout 

the agency. This has resulted in certain inefficiencies, as the following 

examples demonstrate: 

• Senior acquisition officials told us that some program offices within TSA 

bypass the Office of Acquisition at key points in the acquisition process or 

fail to consult the contracting officer early enough in the acquisition 

process—typically without consequence. For example, program offices 

have submitted purchase requests without allowing adequate time for 

planning, requiring the contracting officers to spend additional time on 

tasks such as rewriting the requirements or performing additional market 

research to ensure that the goods or services purchased satisfy the 

 14 TSA officials provided this figure but did not provide additional verification. 

15 The director of the Office of Acquisition’s position was elevated to Deputy Assistant 

Administrator for Acquisition before we began our audit. 

Chief Operating Officer Chief Support Systems Officer

Human Capital Officer

Aviation 

Operations

Maritime and 

Land Security

Security 

Intelligence

Operations 

Policy 

Finance and 

Administration

Information 

Technology 

Security 

Technology 

Internal Affairs 

and Program 

Review

Workforce 

Performance

and Training

Source: TSA.

Administrator

Deputy Administrator

Human 

Resources

Office of

Acquisition
Page 10 GAO-04-544 Transportation Security Administration Acquisition 

program offices’ needs. Had the program offices consulted with the Office 

of Acquisition earlier in the process, much of the additional work could 

have been avoided. 

• Different support offices involved in managing contracts for the airport 

screening function did not coordinate when contracting for airport 

screening equipment because, according to a senior operations official, 

TSA failed to ensure effective communication between the support offices. 

As a result, the number of personnel needed to operate the additional 

equipment was not sufficient once the equipment was installed. 

• Reports from the Inspectors Generals of the Department of Homeland 

Security and the Department of Transportation also noted that TSA’s 

program offices failed to plan for and coordinate contractor oversight. 

While TSA’s Office of Acquisition now requires program offices to have 

oversight plans in place before major contracts are awarded, the office 

does not have the means to ensure that oversight plans are actually 

implemented. 

• The lack of recognition of the importance of the acquisition function was 

also evident at a senior level of the organization. For example, an 

acquisition official told us that a representative from the Office of 

Acquisition was not initially consulted when senior TSA officials were 

developing strategies for responding to questions following congressional 

testimony on TSA’s acquisition problems. 

Implementing strategic acquisition decisions to achieve agencywide 

outcomes requires clear, transparent, and consistent policies and 

processes that govern the planning, award, administration, and oversight 

of acquisitions.16 Agency policies and processes, along with their rationale, 

need to be clearly communicated to all involved in the acquisition 

function. In addition, appropriate actions are needed to ensure acquisition 

personnel understand the organization’s acquisition policies and 

processes, as well as their roles and responsibilities in adhering to them. 

Appropriate internal controls to ensure that acquisition personnel follow 

 16 Policies provide guidance on how the procurement function should be managed, while 

processes outline the actions to be taken to implement the policies. 

TSA’s Acquisition 

Policies and 

Processes 

Best Practices 
Page 11 GAO-04-544 Transportation Security Administration Acquisition 

policies and processes, and performance measures to assess the 

effectiveness of policies and processes in achieving desired outcomes, also 

are needed. 

In our work on best practices, we learned that maintaining clear lines 

of communication among all organizations involved in the acquisition 

function, and using performance measures to evaluate acquisition 

processes, were critical to successfully implementing strategic approaches 

to acquisition. Leading companies also found that the use of metrics 

increased the likelihood that acquisition processes would be successfully 

implemented. Metrics can be used to assess an organization’s current 

performance level, identify the critical processes that require focused 

management attention, obtain the knowledge needed to set realistic goals 

for improvement, and document results over time. 

Since TSA was established, it has issued management directives, policy 

letters, and guidance on its acquisition policies and processes. These have 

been based on FAA policy and guidance for acquiring goods and services 

and on Department of Homeland Security directives. TSA’s policies and 

processes emphasize personal accountability, good judgment, justifiable 

business decisions, and integrated acquisition teams. However, the 

following examples indicate that several of these policies have not been 

effectively implemented.17

• Despite acquisition policies regarding contractor oversight, the 

Department of Homeland Security’s Inspector General reported that a lack 

of adequate oversight on TSA’s early contracts resulted in airline 

passenger screeners being allowed to begin work without completing a 

criminal history records check or to continue to work with adverse 

background checks. Some screeners who had been hired failed 

background checks, were determined to be ineligible, and were 

subsequently fired. 

• TSA also failed to implement policies and processes intended to ensure 

coordination of acquisition activities. TSA guidelines call for integrated 

product teams—which may include representatives from program, 

technical, finance, contracting, and legal offices—to coordinate key 

acquisition activities and to work together to make decisions throughout 

the acquisition process. According to TSA acquisition officials, however, 

 17 We were not able to assess all of the policies because of time constraints and the fact 

that some were still in draft at the time of our review. 

Assessment 
Page 12 GAO-04-544 Transportation Security Administration Acquisition 

such teams are often not formed, and there is currently no formal process 

for doing so. Without such teams, TSA risks having acquisition activities 

that are not well coordinated and key decisions that fail to take into 

account all essential considerations. 

TSA’s acquisition policies and processes have not been effectively 

communicated throughout the agency. The Office of Acquisition has 

implemented training initiatives in an attempt to educate key staff about 

their responsibilities, but officials across the agency told us that they or 

their staffs are unclear about their roles and responsibilities in the 

acquisition process. Because TSA’s personnel were hired from other 

agencies and from the private sector, which may have defined their roles 

and responsibilities differently, it is critical that personnel throughout TSA 

have a clear understanding of the agency’s acquisition policies and 

processes. Personnel must be properly trained in applying the flexibilities 

inherent in TSA’s acquisition policies to ensure fair and open competition 

and effective procurement practices. 

TSA lacks performance measures to determine whether its acquisition 

policies are achieving desired outcomes. TSA also lacks internal controls 

to identify and address implementation issues. Each office within TSA is 

responsible for developing its own performance measures. TSA’s Office of 

Acquisition has measures to track the number of contracts awarded and 

the amount of the awards, but does not have measures to assess how well 

personnel carry out acquisition activities, such as oversight. For example, 

TSA does not track the number of contracts awarded that include 

incentives for performance, such as performance-based contracts or 

contracts with fees based on different levels of performance.18 The Office 

of Acquisition is currently considering the use of customer satisfaction 

measures used by the U.S. Navy and the Department of Transportation to 

determine whether they would be suitable for measuring the office’s 

performance. TSA’s template for individual performance agreements 

attempts to tie individual goals to organizational goals. However, the 

template has no acquisition-specific goals. Supervisors may add 

acquisition-specific goals for individuals. Without such goals it may be 

difficult to hold individuals accountable for performance on acquisition 

activities. 

 18 Performance-based contracts are intended to ensure that required performance quality 

levels are achieved and that total payment is related to the degree that services performed 

meet contract standards. Performance-based contracts generally specify the objective to be 

achieved and allow the contractor to determine the best way to meet the objective. 
Page 13 GAO-04-544 Transportation Security Administration Acquisition 

TSA’s deadline-driven culture fails to reinforce the importance of 

compliance with policies. TSA officials acknowledged, and Inspector 

General reports and testimony confirmed, that TSA initially sacrificed cost 

concerns and disciplined acquisition practices in order to meet schedules. 

As a result, TSA created a culture that prioritized meeting deadlines at the 

expense of other acquisition goals. TSA’s initial deadlines for deploying its 

screener workforce were met. However, senior officials from multiple TSA 

offices told us that the agency has maintained its sense of urgency, and 

that program offices still expect acquisition functions to be accomplished 

quickly, even if the appropriate acquisition practices are not always 

followed. 

Our review of 21 contract files showed that TSA did not always use 

practices that help to ensure quality and cost efficiency. While some of the 

problems we identified in early contracts stemmed from shortcuts taken to 

meet urgent deadlines, the persistence of such problems suggests that TSA 

did not consistently follow disciplined acquisition practices. TSA’s policies 

require that the agency perform quality assurance, but several contract 

files we reviewed contained little evidence that contract oversight or 

quality assurance was performed. For example, the contract files for 

background investigations, baggage screening, and engineering and 

technical services contained no evidence of oversight or quality assurance 

plans. TSA’s policies also require that performance metrics be identified in 

the requirements of complex contracts. Our review of the contract files 

found that TSA failed to develop performance metrics for the contractor 

prior to award. Instead, TSA often asked the contractor to develop these 

plans or metrics after award. Because of problems with inadequate 

contractor oversight, however, TSA now requires that an oversight plan be 

in place prior to award. 

Several of the contract files we reviewed were cost reimbursement19 or 

time and materials20 contracts and did not contain evidence of government 

surveillance to ensure cost efficiency. Of the 21 contracts we reviewed, 6 

 19 In a cost-reimbursement contract, the government establishes a cost ceiling and assumes 

the cost risk, since the contractor will receive reimbursement for all reasonable, allocable, 

and allowable incurred costs. 

20 Time and materials contracts provide for the acquisition of supplies or of the actual 

services on the basis of direct labor hours at specified fixed hourly rates and materials at 

cost, plus handling costs where appropriate. 

Contract File Reviews 
Page 14 GAO-04-544 Transportation Security Administration Acquisition 

were awarded on a fixed-price basis, and 9 were awarded on a costreimbursable or time and materials basis, while 6 were a combination. 

Cost-reimbursement and time and materials contracts are generally only 

suitable when appropriate government surveillance during performance 

will provide reasonable assurance that efficient methods and effective cost 

controls are used. Frequent use of cost-reimbursement and time and 

materials contracts, coupled with the inspector generals’ findings that TSA 

failed to monitor its contracts, diminishes the assurance that efficient 

methods and cost controls are being used. 

TSA generally used single-source contracts judiciously for the contract 

files we reviewed. TSA’s policies, which encourage competition as the 

preferred method of contracting, state that use of single-source contracts 

is permitted when necessary to accomplish TSA’s mission and merely 

require that a rational basis for the decision be documented. 21 Of the 21 

contract files we reviewed, 3 were for single-source contracts.22 The 

remaining contracts were awarded using a variety of procurement 

methods, including use of existing government contracts, the Federal 

Supply Schedule, required government supply sources, and competitive 

procedures. In the 3 single-source contract awards we reviewed, the 

contract files contained justifications for using such noncompetitive 

procedures as required by TSA’s policies. The justifications for awarding 

contracts on a single-source basis varied. In one case, for example, the 

agency identified a need for additional office furniture to be integrated 

with furniture systems already installed at the work site. The justification 

stated that the furniture components were not interchangeable between 

manufacturers and that it would be more costly to hire a different 

contractor to perform follow-on work. (See appendix IV for a description 

of the other contracts we reviewed.) 

 21 In comparison, the Federal Acquisition Regulation, applicable to most other executive 

agencies, permits the use of other than full and open competition only for certain specified 

circumstances, which are: that only one responsible source and no other supplies or 

services will satisfy agency requirements; unusual and compelling urgency; industrial 

mobilization, engineering, developmental, or research capability, or expert services; 

international agreement; authorized or required by statute; national security; or public 

interest. The regulation also establishes the required content for each justification and 

requires approval of the justification at a level above the contracting officer for contracts 

above a certain dollar threshold. 

22 One file was for a contract awarded by FAA, not TSA—and was thus not included in 

our review. 
Page 15 GAO-04-544 Transportation Security Administration Acquisition 

A strategic human capital management approach enables an agency to 

recruit, develop, and retain the right number of personnel with the right 

skills to accomplish its mission effectively. Through our work on human 

capital management, we have found that high-performing organizations 

identify their current and future human capital needs and then develop 

acquisition workforce plans containing strategies—such as targeted 

investments in employees or recruiting and retention bonuses—to meet 

these needs.23 These plans enable the organization to address the critical 

skills and competencies needed to achieve results.24 Strategic human 

capital approaches need sufficient resources. Senior managers should 

devote adequate resources to recruiting, hiring, developing, rewarding, 

and retaining talented personnel.25 Succession planning is also needed to 

ensure that the workforce is composed of the right number of personnel 

with the necessary skills and qualifications to perform the acquisition 

function into the future. Changes in the required skill sets of the 

acquisition workforce, coupled with the prospect of a decline in 

experienced acquisition personnel throughout the government, make the 

need for acquisition workforce planning more significant. 

Industry and government experts alike recognize that having the right 

people with the right skills is key to making a successful transformation 

toward a more effective acquisition environment. Over the last decade, the 

emergence of several procurement trends, including a rise in services 

contracting, has created a need for acquisition workers with a much 

 23 In December 2003, we issued a report describing principles of human capital planning 

that contribute to effective strategic workforce plans. The five key principles strategic 

workforce planning should address include agencywide involvement in implementation of 

the plan; determination of critical skills and competencies; development of strategies to 

address gaps; building the capability needed to address administrative, educational, and 

other requirements; and monitoring and evaluating the agency’s progress towards its 

human capital goals. U.S. General Accounting Office, Human Capital: Key Principles for 

Effective Strategic Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003). 

24 U.S. General Accounting Office, High Risk Series: Strategic Human Capital 

Management, GAO-03-120 (Washington, D.C.: Jan, 2003). 

25 U.S. General Accounting Office, A Model of Strategic Human Capital Management, 

GAO-02-373SP (Washington, D.C.: Mar. 15, 2002). 

TSA’s Human Capital 

Management 

Best Practices 
Page 16 GAO-04-544 Transportation Security Administration Acquisition 

greater knowledge of market conditions, industry trends, and the technical 

details of the commodities and services they procure. 

TSA risks an imbalance in its acquisition workforce that could diminish 

the performance of the acquisition function throughout the agency. With 

almost half of TSA’s fiscal year 2003 budget devoted to acquisition, a 

qualified and trained workforce is critical to ensuring the efficiency of 

TSA’s acquisition activities. 

The Department of Homeland Security has developed a departmentwide 

acquisition workforce plan, and TSA began implementing it in February 

2004. The plan focuses on formalizing competencies and skill sets; 

establishing certification standards;26 and identifying training 

requirements, first for contracting specialists and then for acquisition 

professionals in other key career fields—including program management, 

financial management, engineering, and information technology.27

Subsequent phases of the plan include establishing career paths, targeting 

positions for recruitment, establishing mentoring programs, and creating a 

strategy for succession planning. 

TSA’s Office of Acquisition contributed significantly to the Department of 

Homeland Security’s acquisition workforce plan. However, TSA’s Office 

of Human Resources, which is responsible for recruiting and hiring and 

for succession planning throughout TSA—including the acquisition 

workforce, did not participate in developing the plan. Since there are many 

acquisition-related positions in offices throughout TSA, the involvement of 

key TSA personnel offices—particularly the Human Resources Office—is 

important to the success of the acquisition workforce plan. It is not yet 

clear how effective the acquisition workforce plan will be, given that an 

office responsible for key aspects of implementation did not participate in 

the plan’s development. 

 26 Certification refers to the formal process through which the Department of Homeland 

Security recognizes an individual for meeting the standards or achieving the competencies 

in an acquisition career field. 

27 The Department of Homeland Security’s draft management directive lists the following 

career fields as part of the acquisition workforce: Business, Cost-Estimating, and Financial 

Management; Contracting; Facilities Engineering; Industrial and/or Contract Property 

Management; Information Technology; Production, Quality, and Manufacturing; Program 

Management; and Purchasing and Procurement Technician. 

Assessment 
Page 17 GAO-04-544 Transportation Security Administration Acquisition 

In responding to a draft of this report, TSA officials commented 

that the Human Resources Office was unable to participate in 

departmentwide acquisition workforce planning because it has been 

facing critical day-to-day problems associated with supporting growth 

in the workforce throughout TSA. After functioning for just over 1 year, 

the office has hired a manager who will be working on their human capital 

strategic planning in conjunction with the overall departmental human 

capital planning effort. They also said that TSA is drafting a Human Capital 

Officer Strategy that will focus on identifying career paths for all 

occupations, including acquisitions and contracting. 

Effective implementation of the acquisition workforce plan is all the 

more important because acquisition officials face challenges in attaining 

sufficient staffing levels. Office of Acquisition officials are concerned that 

their staff of 61 is not adequate to support the mission. In January 2003, 

the Deputy Assistant Administrator of the Office of Acquisition conducted 

a study to determine appropriate staffing levels for TSA’s Office of 

Acquisition. This study assumed contract awards in excess of $4 billion 

per year,28 to estimate staffing requirements. Using three different 

benchmarks that attempted to estimate staffing needs based on total 

awarded value of contracts,29 the study concluded that the Office of 

Acquisition would require a staff of between 179 and 628 employees. We 

did not conduct an independent assessment of this TSA study to verify the 

validity of the study’s results. Further, the Office of Human Resources has 

not conducted similar studies to determine appropriate staffing levels for 

other acquisition professionals not assigned to the Office of Acquisition. 

TSA’s Office of Acquisition has been challenged in trying to maintain its 

existing acquisition workforce. According to TSA acquisition officials, 

attrition among its contracting workforce has been a problem. In the time 

period from March 2002 to December 2003, TSA’s Office of Acquisition 

experienced attrition of approximately 22 percent of its contracting 

workforce. To identify the causes for attrition, the Office of Acquisition 

began conducting exit interviews. According to acquisition officials, 

 28 This was the total value of contracts awarded in fiscal year 2002. 

29 The TSA benchmarking study cited three benchmarks—one developed by Acquisition 

Solutions, Inc.; another adopted by the Procurement Executives Council; and a third that 

was based on other civilian agencies’ contract obligations and staffing levels. These 

benchmarks took into consideration whether the contracting function was centralized, but 

did not take into consideration other factors, such as the types of contracts used. 
Page 18 GAO-04-544 Transportation Security Administration Acquisition 

attrition is a result of the heavy workload, as well as a lack of incentives, 

such as tuition reimbursement and performance awards.30 TSA’s human 

resource officials have not monitored the acquisition workforce 

throughout the agency to determine if there are similar troubles retaining 

acquisition professionals outside the Office of Acquisition. TSA’s human 

resources officials said they conducted a job satisfaction survey and plan 

to begin conducting exit interviews, but acknowledged that the survey and 

exit interviews would be concerned primarily with screener satisfaction. 

Efforts to hire acquisition professionals to work in the Office of 

Acquisition have been undercut by the limited number of qualified 

applicants and possible negative perceptions about TSA. According to TSA 

acquisition officials, there is a lack of applicants with adequate acquisition 

experience, and TSA is competing with other agencies that offer more 

generous benefits, such as tuition reimbursement and clear career tracks. 

TSA is authorized to use recruiting and retention incentives. However, 

according to officials, the agency has not provided funding for these types 

of incentives. Further, qualified applicants are difficult to recruit because 

TSA’s role within the Department of Homeland Security is not clearly 

understood and TSA has a reputation for long work hours. Human 

resources officials admitted that their focus is primarily on screeners, and 

they do not know whether other offices are experiencing similar 

difficulties hiring acquisition professionals. 

In addition, acquisition and training officials told us that training funds 

for the acquisition workforce are very limited. Training officials said that 

funds are sufficient for meeting federal training mandates; however, there 

are no additional training funds for further professional development. 

Acquisition officials told us that funding for training Office of Acquisition 

personnel is limited to $1,000 per year per employee—an amount that 

acquisition officials say is insufficient to train staff who came to TSA 

without prior contracting experience. The Office of Acquisition’s training 

funds do not cover training of other acquisition professionals outside 

this office. Without sufficient training funds, TSA is able to provide few 

professional development opportunities for the acquisition workforce—

limiting career growth. To address the most critical training needs for the 

acquisition workforce outside the Office of Acquisition—such as program 

 30 Although the agency did not provide funding for performance awards in fiscal year 2003, 

human resources officials stated that in fiscal year 2004 offices do have funds for 

performance awards. Agency officials told us that no funding had been made available for 

other retention incentives. 
Page 19 GAO-04-544 Transportation Security Administration Acquisition 

managers, contracting officers’ representatives, and technical monitors—

TSA’s Office of Acquisition has proactively developed workshops in-house. 

However, these workshops are not mandatory for the acquisition 

workforce. 

To make strategic, mission-focused acquisition decisions, organizations 

need knowledge and information management processes and systems that 

produce credible, reliable, and timely data about the goods and services 

acquired and the methods used to acquire them. Leading companies use 

procurement and financial management systems to gather and analyze 

data to identify opportunities to reduce costs, improve service levels, 

measure compliance and performance, and manage service providers. For 

example, organizations need integrated financial management systems 

that provide reliable, accurate, relevant, and timely financial data to help 

ensure dollars are well spent. Such data are needed to estimate and 

control program costs, support funding decisions, and oversee contract 

spending. Many leading organizations have already implemented an 

enterprisewide system to integrate financial and operating data to support 

both management decision-making and external reporting requirements. 

In a 1994 study of fundamental practices that led to performance 

improvements in leading private and public organizations, we reported 

that electronic business system initiatives must be focused on process 

improvements. Information systems that simply use technology to do the 

same work the same way, although faster, typically fail, or reach only a 

fraction of their potential.31 In May 2000, we reported that when developing 

new electronic business processes, it is important to ensure that current 

 31 U.S. General Accounting Office, Executive Guide: Improving Mission Performance 

Through Strategic Information Management and Technology, GAO/AIMD-94-115

(Washington, D.C.: May 1994). 

TSA’s Knowledge and 

Information 

Management 

Best Practices 
Page 20 GAO-04-544 Transportation Security Administration Acquisition 

business processes are working well before applying new technology.32 In 

fact, agency heads are required by statute to analyze an agency’s mission 

and revise mission-related and administrative processes, as appropriate, 

before making significant investment in information technology that is to 

be used in support of the performance of those missions.33 Not improving 

business processes prior to investing in new technology creates the risk of 

merely automating inefficient ways of doing business. 

While TSA is participating in the Department of Homeland Security’s 

efforts to develop functional requirements for an enterprisewide solution 

that supports the department’s resource management functions—

including finance and procurement,34 TSA does not currently have the 

strategic information needed to support effective acquisition management 

decisions. Near-term improvements to TSA’s acquisition outcomes will be 

difficult until TSA has critical knowledge management systems, such as 

financial and procurement information systems, that allow decision 

makers to track spending and manage budgets and collect detailed data on 

goods and services, suppliers, and spending patterns. Despite the fact that 

TSA lacks detailed information on the goods and services it purchases, 

some aggregate data is available. TSA is an active participant in the 

Department of Homeland Security’s strategic sourcing program, which is 

using the aggregate data to develop a strategy that will allow the 

department to leverage its buying for particular commodities. 

To manage on a day-to-day basis, inform acquisition decisions, and 

oversee contracts, program and acquisition managers are relying on data 

derived from informal, ad hoc systems—which are often out of date, 

incomplete, inaccurate, or otherwise unreliable. TSA’s Office of 

Acquisition is temporarily relying on an Access database developed inhouse to track manually entered procurement information and make 

acquisition decisions. However, the temporary database does not contain 

 32 U.S. General Accounting Office, Electronic Government: Federal Initiatives Are 

Evolving Rapidly But They Face Significant Challenges, GAO/T-AIMD/GGD-00-179

(Washington, D.C.: May 2000). 

33 40 U.S.C. § 11313(5) (formerly 40 U.S.C. § 1423(5)), as enacted and recodified by 

Pub. L. No. 107-217. This requirement was established by the Clinger-Cohen Act of 1996. 

34 These efforts are part of a larger effort by the Department of Homeland Security to 

develop an enterprise architecture that is intended to provide a roadmap for reforming 

mission operations of business functions and implementing standardized, nonduplicative, 

supporting information systems. 

Assessment 
Page 21 GAO-04-544 Transportation Security Administration Acquisition 

enough information to analyze purchases or measure the acquisition 

function’s performance. For example, a TSA official told us that when a 

congressional committee asked for a list of sole-source contracts, TSA 

officials had to compile the list manually, by asking contracting officers 

which contracts had been awarded on a sole-source basis, because this 

information was not in TSA’s database. Further, the database does not 

automatically track the status of a procurement request. Currently, 

program officials must contact the Office of Acquisition to determine the 

progress being made on a procurement request—relying on manually 

compiled paper files, which are frequently incomplete or inaccurate, to 

track the status of a purchase. TSA is now voluntarily reporting its 

contract actions to the Homeland Security Contract Information System, 

which feeds into the Federal Procurement Data System. This system can 

produce some aggregate data, but lacks detailed information on goods and 

services purchased. 

Until a departmentwide solution is developed, TSA’s Office of Acquisition 

is planning to adopt the Coast Guard’s procurement information system as 

a faster and more cost-efficient way of obtaining the basic capability to 

track purchase requests and write contracts.35 But TSA officials told us 

that, in its current configuration, the system does not have all the 

components necessary to enhance strategic acquisition decisions or 

enable effective evaluation and assessment of acquisition outcomes. 

An additional challenge to data collection and analysis is TSA’s financial 

management system. According to TSA officials, the agency’s current 

financial management system, run by the Department of Transportation, 

does not provide the information needed to track financial events, 

summarize financial information, or otherwise provide critical acquisitionrelated information. For example, because program offices do not have 

access to reliable financial information, program budget officials cannot 

certify funds availability to approve a procurement request. As a result, the 

Office of Finance must certify funds availability centrally. According to 

finance officials, the inability to track spending has also resulted in 

difficulties in processing invoices and procurement requests. 

 35 TSA’s Office of Strategic Management and Analysis has proposed a “business value 

analysis” study to identify best technology solutions to solve organizational business 

priorities. The study will consolidate the information requirements of the various 

organizational units within TSA so that these requirements can be prioritized based on 

shared, strategic, and agencywide business needs. However, TSA has not yet approved 

this plan. 
Page 22 GAO-04-544 Transportation Security Administration Acquisition 

Here too, while the department-level enterprise architecture effort is 

proceeding, TSA is in the process of adopting the Coast Guard’s financial 

management system, which TSA finance officials say is more user-friendly 

and provides better reporting capabilities and access than the system TSA 

currently uses. It is unclear, however, whether the Coast Guard’s financial 

management software will facilitate TSA’s financial accountability 

activities. Independent auditors gave the Department of Homeland 

Security’s financial statement a qualified balance sheet opinion based, for 

the most part, on problems with the Coast Guard’s financial statements. 

The Coast Guard was unable to provide sufficient documentation to 

support certain financial conditions prior to the completion of the audit.36

As a new agency, TSA was tasked to build an organization from the 

ground up to meet a critical and demanding mandate. TSA worked 

quickly to put a transportation security workforce in place, creating basic 

organizational and acquisition infrastructures and subordinating cost 

concerns and disciplined acquisition practices to meet deadlines. With the 

challenging initial mandate fulfilled, TSA has begun to build a permanent 

infrastructure. TSA now has the opportunity to build a model acquisition 

function based on best practices. The opportunity may be lost, however, if 

TSA fails to think strategically about the practices it uses to carry out its 

acquisition function. By assessing its existing organizational alignment, 

policies and processes, human capital approaches, and knowledge and 

information systems against a framework of best practices and in 

coordination with the Department of Homeland Security, TSA can identify 

weaknesses and risk areas to target for improvement. 

Attention from TSA’s leadership is needed to help TSA’s Office of 

Acquisition improve acquisition practices agencywide—focusing on all 

elements key to a successful acquisition program. Ensuring a strong 

workforce and developing well-built procurement and financial 

management systems, coupled with a strong message of compliance with 

 36 The auditors noted that it is “not uncommon for a large established agency such as the 

U.S. Coast Guard to require additional time to get its processes and systems in place to 

facilitate a financial statement audit.” The auditors also reported that, prior to their audit, 

the Coast Guard’s financial statements had never been audited on a stand-alone basis, nor 

had they been audited at the level of detail required by the Department of Homeland 

Security. U.S. Department of Homeland Security, Independent Auditors Report 

No. OIG-04-10. 

Conclusions 
Page 23 GAO-04-544 Transportation Security Administration Acquisition 

policies and processes and supported by performance measures, would 

demonstrate the agency’s commitment to effective acquisition practices. 

To help ensure that TSA receives the goods and services it needs at the 

best value to the government, we recommend that the Secretary of 

Homeland Security direct the Administrator of the Transportation Security 

Administration to take the following three actions: 

• Elevate the Office of Acquisition to an appropriate level within TSA to 

enable it to identify, analyze, prioritize, and coordinate agencywide 

acquisition needs. 

• Develop an adequate system of internal controls, performance measures, 

and incentives to ensure that policies and processes for ensuring efficient 

and effective acquisitions are implemented appropriately. 

• Direct the TSA Human Capital Office to do the following in coordination 

with key offices in the Department of Homeland Security: 

• assess TSA’s current acquisition workforce (as defined by the 

Department of Homeland Security) to determine the number, skills, 

and competencies of the workforce; 

• identify any gaps in the number, skills, and competencies of the current 

acquisition workforce; and 

• develop strategies to address any gaps identified, including plans to 

attract, retain, and train the workforce. 

We also recommend that the Secretary of Homeland Security ensure that 

its planned departmentwide knowledge management system provides TSA 

sufficient data and analytic capability to 

• measure and analyze spending activities and performance—and thereby 

highlight opportunities to reduce costs and improve service levels; 

• support effective oversight of acquisitions; and 

• facilitate the timely reporting of the agency’s acquisition activities and its 

compliance with acquisition policies and processes. 

In written comments on a draft of this report, the Department of 

Homeland Security generally concurred with our report and 

recommendations and stated that our identification of areas for 

improvement will help to develop the efficiency and effectiveness of 

TSA’s Office of Acquisition. In response to our recommendation to elevate 

the position of the Office of Acquisition, the department stated that the 

office has been elevated once before. We have acknowledged this in our 

report and note that the office was elevated before we began our review 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 
Page 24 GAO-04-544 Transportation Security Administration Acquisition 

of TSA’s acquisition function. Our review found that even after the office 

was elevated, it remained at an organizational level too low to oversee the 

acquisition process, coordinate acquisition activities, and enforce 

acquisition policies effectively. The department further noted that the 

Department of Homeland Security’s Chief Procurement Officer is on par 

with the Chief Financial Officer and Chief Information Officer, stating that 

TSA will consider this option along with others as it works toward 

improving the efficiency and effectiveness of its acquisition program. 

Whichever option is chosen, we maintain that the Office of Acquisition 

should be elevated to an appropriate level within TSA to enable it to 

identify, analyze, prioritize, and coordinate agencywide acquisition needs. 

The department also commented that its Office of Human Resources has 

only been functioning as a distinct office for a year and that after focusing 

on establishing policies, processes, and effective contract management 

services, it has hired a manager for planning. TSA has committed to 

providing a more proactive approach to all human capital planning. 

The department also noted that it is moving towards the enterprisewide 

implementation of Oracle Financials and Prism starting in October 2004, 

stating that the knowledge management tools recommended in the draft 

report will be available to provide TSA sufficient data and analytic 

capability to evaluate its processes, performance, and spending. Our 

report acknowledges that TSA will be using these Coast Guard 

procurement and financial systems; however, we maintain that these 

systems do not have all the components necessary to enhance strategic 

acquisition decisions or enable effective evaluation and assessment of 

acquisition outcomes. 

As requested by your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution of it until 30 days from 

the date of this letter. We will then send copies of this report to interested 

congressional committees, the Secretary of Homeland Security, and the 

Administrator of the Transportation Security Administration. We will 

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

be available at no charge on the GAO Web site at http://www.gao.gov. 
Page 25 GAO-04-544 Transportation Security Administration Acquisition 

If you or your staff have any questions regarding this report, please call me 

at (202) 512-4841 or Blake Ainsworth, Assistant Director, at (202) 512-4609. 

Other major contributors to this report were Lara Laufer, Gordon Lusby, 

William Petrick, Shannon Simpson, Karen Sloan, Adam Vodraska, and 

Kelli Ann Walther. 

William T. Woods 

Director, Acquisition 

 and Sourcing Management 
Appendix I: Scope and Methodology 

Page 26 GAO-04-544 Transportation Security Administration Acquisition 

To review how well TSA is positioned to carry out its acquisition function, 

we used GAO’s previous best practices work as our criteria. Our studies of 

best business practices show four interrelated elements—organizational 

alignment, policies and processes, human capital, and information 

management— that help to promote good acquisition outcomes. We used 

each of the elements to assess TSA’s acquisition function. 

To assess TSA’s acquisition function across the four elements, we 

interviewed senior agency officials, including the Chief Support Systems 

Officer and a representative for the Acting Chief Operating Officer. We 

also interviewed management and staff within the Office of Acquisition 

regarding acquisition policy and processes, contracting training, program 

support, and quality assurance. 

To assess how well the organization is aligned to facilitate the integration 

of the acquisition function throughout the agency, we reviewed TSA 

organizational charts, process flowcharts, and presentations by agency 

officials on key roles and responsibilities to understand how the 

acquisition process is integrated into TSA’s organization. To assess 

leadership commitment to good acquisition, we also reviewed TSA’s 

strategic plan and investment review board meeting agendas, minutes, and 

investment criteria. For an understanding of organizational alignment and 

coordination, we interviewed the Chief Support Systems Officer and a 

representative for the Acting Chief Operating Officer. To assess how well 

acquisition activities are coordinated and carried out throughout the 

agency, we interviewed Assistant Administrators of all major Operations 

offices—Aviation Operations, Maritime and Land Security, Security 

Intelligence, and Operations Policy—and Mission Support offices—

Finance and Administration, Human Resources, Information Technology, 

and Workforce Performance and Training. 

To determine TSA’s current policies and processes, we reviewed 

applicable laws and policies that granted TSA the flexibility to use and 

modify FAA’s system, and we also interviewed a member of TSA’s Legal 

Counsel. We analyzed FAA’s Acquisition Management System and 

reviewed TSA’s modified version of this guidance. To assess TSA’s 

progress towards developing and implementing policies and processes, we 

reviewed TSA and Department of Homeland Security memoranda, 

directives, internal newsletters, handbooks, quality assurance checklists, 

and policy documents. To analyze TSA’s effectiveness in implementing 

policies and processes, we interviewed Assistant Administrators for each 

of the Operations offices, as well as the Division Directors within the 

Office of Acquisition for each of the contracting support offices. 

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

Page 27 GAO-04-544 Transportation Security Administration Acquisition 

Additionally, we interviewed management and staff within the Office of 

Acquisition regarding acquisition policy and processes, program support, 

and quality assurance. 

To assess TSA’s effectiveness in hiring, developing, and retaining its 

acquisition workforce, we interviewed Office of Acquisition management 

and staff, the Director and staff of the Workforce Performance and 

Training Office, and two Assistant Administrators for Human Resources. 

We also interviewed the Department of Homeland Security’s Acquisition 

Workforce Manager regarding the department’s Acquisition Workforce 

Plan and TSA’s role in its development and implementation. We reviewed 

documents and spoke with agency officials about acquisition workforce 

training requirements, available courses, and means of tracking acquisition 

training and other workforce data. In addition, we reviewed studies on 

TSA’s acquisition workforce size, one of which was conducted by a 

contractor on behalf of TSA. 

To help us assess how effectively the existing TSA information 

management system enables the agency to track and manage its 

acquisition process and facilitate strategic decision-making, officials from 

the Office of Acquisitions, Assistant Administrators for each of the 

Operations offices, and Division Directors within the Office of Acquisition 

explained TSA’s existing and planned information systems and outlined 

their information needs. The same officials explained the capabilities of 

the information management systems to perform acquisition transactions 

in support of TSA’s mission. Office of Acquisition staff discussed their data 

entry and internal control processes and shared supporting documentation 

to help us understand their current systems. To assess the capabilities and 

limitations of the financial management system and financial management 

processes, we interviewed the Chief Financial Officer and Chief 

Technology Officer, as well as additional Finance and Administration staff. 

To determine how much knowledge and information is available and 

accessible to TSA management, we reviewed the Office of Acquisition’s 

procurement database, and Strategic Sourcing operations documents. To 

assess TSA’s plans for future information systems, we reviewed 

documentation describing the operations of TSA’s systems, proposals for 

planned initiatives, and summaries of existing challenges. A representative 

from the office of Strategic Management & Analysis provided insight about 

TSA’s strategic direction. 

To gain further insight into how TSA’s infrastructure affects its 

acquisitions, we judgmentally selected 40 contract files for review. Using 

TSA’s database of contracts, we identified four types of contract actions 
Appendix I: Scope and Methodology 

Page 28 GAO-04-544 Transportation Security Administration Acquisition 

from which to sample—new contracts, task and delivery orders, blanket 

purchase agreements, and purchase orders. In each category, we selected 

contracts based on award value. Nineteen of the 40 files were not available 

or removed from the sample for the following reasons: they were being 

closed out at a payment center, FAA awarded the contract rather than 

TSA, it represented a duplicate contract, it had already been reviewed by 

the Inspector General, they were actually interagency agreements, or it 

was being managed by the Defense Contract Management Agency. We 

reviewed the remaining 21 pre- and post-award contract files to assess key 

aspects of the acquisition process at TSA—such as requirements 

development, market research and analysis, acquisition planning, 

procurement method (including use of competitive procedures and singlesource contracting), and contract administration. 

We conducted our review from July 2003 through March 2004 in 

accordance with generally accepted government auditing standards. 
Appendix II: Key Activities, Roles, and 

Responsibilities of Key Personnel Involved in 

TSA’s Acquisition Process 

Page 29 GAO-04-544 Transportation Security Administration Acquisition 

Figure 3 shows key activities performed during TSA’s acquisition process. 

Figure 3: Key Activities in the Acquisition Process 

Table 1 identifies some of the major acquisition responsibilities associated 

with the roles of key personnel. 

Table 1: Key Personnel Involved in TSA’s Acquisition Function 

Office Role Responsibilitiesa

Program Manager Leads the planning phase of the process. Identifies the program needs and works 

through the investment review process to justify funding for the acquisition. Together 

with the Office of Budget, develops a budget for the acquisition. With assistance from 

the Contracting Officer, conducts market research; develops the technical 

requirements; and prepares a procurement request package containing, among other 

items, a statement of work and an acquisition plan. Obtains appropriate purchase 

request approvals. After solicitation, serves on evaluation panels and selects source for 

award. After award, the office is responsible for monitoring and reporting contractor 

performance. 

Contracting Officer’s 

Technical 

Representative 

(member of the 

program office) 

In the planning phase, supports the program manager in defining the requirement, 

conducting market research, and developing the acquisition strategy. 

After award, serves as a liaison between the government and contractor—monitors 

and reports on contractor performance to determine whether contract deliverables and 

contractor performance meet expectations. 

Program Office 

Program Resource 

Manager (May be the 

Program Manager or 

Contracting Officer’s 

Technical 

Representative) 

After award, ensures award documentation is correctly entered into the financial 

system and collaborates with the Office of Acquisition to ensure prompt payment of 

invoices. 

Throughout the process, monitors funds available, spending against the contract, 

financial status of the contract, funds obligated for acquisitions, and status of 

commitments. 

Appendix II: Key Activities, Roles, and 

Responsibilities of Key Personnel Involved in 

TSA’s Acquisition Process 

Planning and

Pre-solicitation

* Need Determiniation

* Market Research

* Procurement Request

* Analysis of Requirement

* Sourcing

Solicitation

and Award

* Solicitation

* Evaluation

* Award

Post-Award and

Administration

* Start-Up

* Quality Assurance

* Payment and 

 Accounting Closeout

* Exercise of Options

Contract

Modification

* Modification of contract

Source: GAO.
Appendix II: Key Activities, Roles, and 

Responsibilities of Key Personnel Involved in 

TSA’s Acquisition Process 

Page 30 GAO-04-544 Transportation Security Administration Acquisition 

Office Role Responsibilitiesa

Chief Acquisition 

Officer 

Throughout the acquisition cycle, provides leadership, vision, and direction to ensure 

the integrity of the acquisition function by developing effective relationships with key 

acquisition stakeholders. Also serves as the principle interface with the Department of 

Homeland Security and other agencies’ senior acquisition executives. 

In the planning phase, participates in investment review board decisions for TSA and 

the Department of Homeland Security. 

Office of 

Acquisition 

Contracting Officer Collaborates with program officials to advise on acquisition strategies and alternatives, 

and participates in acquisition planning. 

Participates in market research with the program office. 

Ensures that sufficient funds are available for the obligation. 

Prepares the solicitation document. 

Publicizes acquisitions. 

Issues and amends solicitations. 

Conducts negotiations with offerors, and awards and signs contracts for the 

government. 

Performs contract administration, including delegating certain functions to the assigned 

Contracting Officer’s Technical Representative. 

Assists in monitoring contractor performance where applicable. 

Terminates contracts. 

Chief Financial Officer Participates in investment review decisions to ensure that program plans are consistent 

with the budget. 

Office of Finance 

& Administration 

Office of Budget In the planning phase, certifies the availability of funds for procurement requests. (This 

is normally the responsibility of the program office; however, because timely budget 

information is not readily accessible from the financial system, the Office of Budget is 

performing this function.) 

Chief Counsel Counsel Primarily before award, responsible for interpreting and providing legal advice related 

to applicable acquisition laws and rules, and providing assistance regarding contract 

clauses and justifications for exceptions to applicable rules. 

Throughout the process, provides necessary legal assistance. 

Information 

Technology Office 

Chief Technology 

Officer 

Technology 

Specialists 

Before award of goods or services related to information technology, helps the program 

office to determine requirements, conduct market research, assess acquisition 

alternatives, and prepare statements of work and other pieces of the solicitation 

document. 

After award, may also assist in monitoring deliverables and contractor performance. 

For information technology systems, also develops, maintains, and facilitates 

implementation of information technology. 

 Small Business 

Program Manager 

In the planning and solicitation phases, reviews and approves purchase requests over 

$200,000 to facilitate small business acquisition initiatives that enable the agency to 

accomplish socioeconomic goals. 

Investment 

Review Board 

 Reviews and authorizes requests for funding. 

Source: GAO. 

a

 This is not an all-inclusive list of responsibilities for the role as indicated. 
Appendix III: Inspector General Testimony 

and Reports Reviewed 

Page 31 GAO-04-544 Transportation Security Administration Acquisition 

Table 2 shows the Department of Transportation Inspector General 

testimony and reports reviewed to identify issues associated with the 

contracting process at the TSA. 

Table 2: Department of Transportation Audit Reports on Contracting Issues at TSA 

Report number Title 

CC-2002-098 Key Issues Concerning Implementation of the Aviation and 

Transportation Security Act (Feb. 5, 2002) 

CC-2002-124 Key Budget Issues Facing the Transportation Security 

Administration (Apr. 17, 2002) 

CC-2002-180 Key Challenges Facing the Transportation Security Administration 

(Jun. 20, 2002) 

CC-2002-197 Progress in Implementing Provisions of the Aviation and 

Transportation Security Act (Jul. 23, 2002) 

CC-2002-203 Progress in Implementing Provisions of the Aviation and 

Transportation Security Act (Aug. 7, 2002) 

CC-2003-066 Aviation Security Costs, Transportation Security Administration 

(Feb. 5, 2003) 

FI-2003-025 Oversight of TSA Security Screener Contracts, TSA (Feb. 28, 2003)

PT-2003-012 Top Management Challenges (Jan. 21, 2003) 

QC-2003-016 Quality Control Review of TSA’s Audited FY2002 Financial 

Statements (Jan. 27, 2003) 

Source: GAO 

Table 3 shows the Department of Homeland Security Inspector General 

reports reviewed to identify problems associated with the contracting 

process at the Transportation Security Administration. 

Table 3: Department of Homeland Security Audit Reports Reviewed That Include 

Contracting Issues at TSA 

Report number Title 

None Major Management Challenges Facing the Department of 

Homeland Security (March 2003) 

None Major Management Challenges Facing the Department of 

Homeland Security (Dec. 31, 2003) 

OIG-04-08 A Review of Background Checks for Federal Passenger and 

Baggage Screeners at Airports (January 2004) 

OIG-04-21 Review of the Status of Department of Homeland Security Efforts 

to Address Its Major Management Challenges (March 2004) 

Source: GAO. 

Appendix III: Inspector General Testimony 

and Reports Reviewed 
Appendix IV: Contracts Reviewed 

Page 32 GAO-04-544 Transportation Security Administration Acquisition 

Vendor Requirement 

Contract award 

amount Procurement method 

Covenant Aviation Security, 

LLC 

Gate, checkpoint, and 

baggage screener 

services 

$71,270,476 Competed 

Cooperative Personnel 

Services 

Human resource services 

and supplies 

$553,579,473 Competed 

McNeil Technologies, Inc. Gate, checkpoint, and 

baggage screener 

services 

$7,911,363 Competed 

International Total Services, 

SMS 

Gate, checkpoint, and 

baggage screener 

services 

$29,297,371 Competed 

Garrett Metal Detectors, Inc. Metal detection equipment Not priced, various 

unit prices recorded

 Federal Supply Schedule 

Used qualified vendors lista

Accenture, LLP Human resource services 

and supplies 

$214,799,495 Competed 

Deloitte Consulting Development and support 

of TSA’s eGov operating 

platform 

$205,000,000 Federal Supply Schedule 

4 schedule vendors considered 

L3 Communications 

Corporation 

Explosive detection 

equipment 

$352,000,000 Used Qualified Vendors List from FAA 

Unisys Corporation Security technology 

systems integration 

$17,056,153 Used existing government contract 

Grant Thornton, LLP Accounting services $962,674 Federal Supply Schedule 

3 schedule vendors considered 

Global Distributors, Inc. Office components—filing 

cabinets and installation 

$22,365 Federal Supply Schedule 

Dozier Technologies Parts and labor for 

installation of office 

furniture 

$1,750,000 Noncompetitive award under SBA’s 8(a) 

programb

Maximus, Inc. Technology evaluation, 

analysis, and report of test 

results for identification 

credentials 

$3,776,377 Existing multiple award contract 

Evaluated 3 prime vendors 

Regus Business Center 

Corporation 

Temporary use of 

workstations and support 

services 

$1,260,000 Limited competition due to urgent and 

compelling need 

Contacted 3 vendors and analyzed quotes 

ManTech, MSM Security 

Services, Inc. 

Background investigations 

and reports 

$1,579,805 Federal Supply Schedule 

Contacted 4 schedule vendors Received 1 

response 

Planet Associates, Inc. Engineering and technical 

support services to 

develop an interim TSA 

property and asset 

management database 

$499,954 Single Source—cited “logical follow-on” as 

rational basis 

Appendix IV: Contracts Reviewed 
Appendix IV: Contracts Reviewed 

Page 33 GAO-04-544 Transportation Security Administration Acquisition 

Vendor Requirement 

Contract award 

amount Procurement method 

Kimball International Parts and labor for 

modification of existing 

furniture and installation of 

new furniture 

$462,039 Single Source—cited “only one responsible 

vendor” as rational basis 

Need to integrate with furniture systems 

already installed at worksite, and furniture 

components are not interchangeable among 

manufacturers 

Unicor Federal Prison 

Industries, Inc. 

Chairs and installation $308,000 Required government source of supplyc

Accenture, LLP Human resource services 

and supplies—reduce 

work backlogs that 

remained from the 

previous vendor 

$20,754,095 Single Source—cited “only one responsible 

source” as rational basis 

Vendor is only vendor that can eliminate 

backlog and format data to conform to 

current database without additional delay 

Wackenhut Corporation Baggage screening 

services at selected 

airports 

Undefinitized at 

$106,568,616

 Not awarded by TSA; awarded by FAA and 

later taken over by TSA 

GAO did not review FAA award 

Unisys Corporation Development and 

maintenance of IT 

infrastructure 

$23,300,000 Used existing government contract 

Source: GAO. 

a

 Orders placed against a General Services Administration multiple award schedule that use the 

required ordering procedures are considered to be issued using full and open competition. The policy 

of the FAA Acquisition Management System used by TSA permits placing orders against General 

Services Administration schedules for recurring products and services when it is determined to be in 

the best interest of the agency. 

b

 Section 8(a) of the Small Business Act (15 U.S.C. § 637(a)) established a program that authorizes 

the Small Business Administration to enter into all types of contracts with other agencies and let 

subcontracts for performing those contracts to firms eligible for program participation. These 

subcontractors are referred to as “8(a) contractors.” The purpose of the 8(a) program is to assist 

eligible small disadvantaged business concerns to compete in the economy through business 

development. The policy of the FAA Acquisition Management System used by TSA allows individual 

procurements to be noncompetitively awarded to 8(a) vendors when the anticipated total value of the 

procurement does not exceed a certain threshold ($3 million or, if assigned an industry classification, 

$5 million). 

c

 The policy of the FAA Acquisition Management System used by TSA is to continue to acquire 

products and services from required government supply sources, such as Federal Prison Industries. 
Appendix V: Comments from the Department 

of Homeland Security 

Page 34 GAO-04-544 Transportation Security Administration Acquisition 

Appendix V: Comments from the Department 

of Homeland Security 
Appendix V: Comments from the Department 

of Homeland Security 

Page 35 GAO-04-544 Transportation Security Administration Acquisition (120234) 
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