Accessible Version

SCREENING 

PARTNERSHIP 

PROGRAM

Improved Cost Estimates 

Can Enhance Program 

Decision Making

Statement of Jennifer Grover, Director, 

Homeland Security and Justice

Testimony 

Before the Subcommittee on 

Transportation Security, Committee on 

Homeland Security, House of 

Representatives

For Release on Delivery 

Expected at 2:00 p.m. ET

Tuesday, November 17, 2015

GAO-16-115T

United States Government Accountability Office
Letter

Chairman Katko, Ranking Member Rice, and Members of the 

Subcommittee

I am pleased to be here today to discuss issues related to the 

Transportation Security Administration’s (TSA) Screening Partnership 

Program (SPP). TSA, within the Department of Homeland Security 

(DHS), is responsible for screening the approximately 1.8 million 

passengers and their property traveling through our nation’s airports 

every day to ensure, among other things, that persons do not carry 

prohibited items into airport sterile areas or on flights.

Page 1 GAO-16-115T 

1

In 2004, TSA 

created the SPP, allowing commercial (i.e., TSA-regulated) airports an 

opportunity to apply to TSA to have the screening of passengers and 

property performed by TSA-approved qualified private-screening 

contractors.2 Contractors perform passenger and baggage screening 

services at a total of 21 airports across the country, with the most recent 

airport beginning operations in June 2015.

3 At each of the SPP airports, 

TSA continues to be responsible for overseeing screening operations, 

and the contractors must adhere to TSA’s security standards, procedures, 

and requirements. 

Since the SPP’s inception, congressional committees, industry 

stakeholders, and TSA have sought to determine how screening costs 

compare at airports with private and federal (i.e., TSA-employed) 

screeners, and TSA does produce cost estimates that attempt to predict 

what it would cost the agency to provide passenger and baggage 

screening services at airports that have opted out or plan to opt out of 

federal screening. Our previous work, including a January 2009 briefing 

and a March 2011 update, raised concerns with TSA’s methodology for 

 

1The sterile area is the portion of an airport defined in an airport’s security program that 

provides passengers access to boarding aircraft and to which access is generally 

controlled by TSA through the screening of persons and property. See 49 C.F.R. §1540.5.

2See 49 U.S.C. § 44920. There were approximately 450 commercial airports as of 

September 2015. We refer to airports that are participating in the SPP as SPP airports 

and the screeners in those airports as private screeners. We refer to airports that do not 

participate in the SPP as non-SPP airports and the screeners at those airports as federal 

screeners.

3Of the 21 airports, 7 have transitioned to private screeners since September 2014. One 

additional airport, Punta Gorda Airport, has been accepted into the SPP but, as of 

September 2015, was awaiting contract award.

Letter
developing its cost estimates.

Page 2 GAO-16-115T 

4

In 2013, TSA developed a revised 

methodology for developing cost estimates for each SPP airport that 

addressed some of the design limitations we previously cited. TSA’s 

estimates are used to provide a basis of comparison in internal reports 

and as part of TSA’s revised contracting strategy for selecting contractors 

at SPP airports, which incorporates the estimates in an effort to award 

contract values at or below what it would cost TSA to screen passengers 

and property at an airport.

As additional airports consider applying to the SPP and as TSA continues 

to seek ways to improve its ability to compare the costs of private and 

federal screeners, you asked that we examine TSA’s approach to 

estimating costs, how these estimates are used in procuring screening 

services, and how TSA continues to adapt its SPP procurement policies 

and processes. My remarks today are based on our report, released at 

this hearing, entitled Screening Partnership Program: TSA Can Benefit 

from Improved Cost Estimates, which addresses (1) the extent to which 

TSA has developed and reported reliable cost estimates for providing 

screening services for SPP airports, (2) how TSA uses cost estimates in 

selecting SPP contractors and the extent to which TSA monitors 

contractor costs relative to its cost estimates, and (3) how the SPP has 

changed since the beginning of fiscal year 2014.5

For our November 2015 report, we compared TSA’s cost estimation 

practices with leading best practices identified in GAO’s Cost Estimating 

and Assessment Guide and assessed TSA internal reporting guidance 

using GAO’s Standards for Internal Control in the Federal Government.

6

 

4See GAO, Aviation Security: TSA’s Cost and Performance Study of Private-Sector 

Airport Screening, GAO-09-27R (Washington, D.C.: Jan. 9, 2009). and Aviation Security: 

TSA’s Revised Cost Comparison Provides a More Reasonable Basis for Comparing the 

Costs of Private-Sector and TSA Screeners, GAO-11-375R (Washington, D.C.: Mar. 4, 

2011).

5GAO, Screening partnership Program: TSA Can Benefit from Improved Cost Estimates, 

GAO-16-19 (Washington, D.C.: Nov. 16, 2015).

6GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: Mar. 2, 2009). The 

methodology outlined in this guide is a compilation of best practices that federal costestimating organizations and industry use to develop and maintain reliable cost estimates 

throughout the life of a government program. The best practices were developed in 

conjunction with government and industry experts in the cost-estimating community. GAO, 

Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).
We analyzed contracts representing 20 of the 22 airports in the SPP to 

identify where the cost estimates were used and whether cost estimates 

were updated based on changes to the contract.

Page 3 GAO-16-115T 

7 Additionally, we visited 

nine airports that had private screeners or were preparing for private 

screeners and spoke to SPP stakeholders at each airport, including 

airport directors, contractors, TSA federal security directors, and federal 

screeners. We also met with each of the five private screening 

contractors with SPP contracts at the time of our review as well as TSA 

officials responsible for the program. More detailed information on our 

scope and methodology can be found in our November 2015 report. We 

conducted the work on which this statement is based in accordance with 

generally accepted government auditing standards.

In our November 2015 report, we found that, based on an analysis of 

TSA’s cost estimating practices and methodology developed in 2013 

compared against best practices, TSA’s cost estimates have some 

strengths, but also have limitations in four general characteristics that 

best practices call for in a high-quality and reliable cost estimate.8 TSA’s 

cost estimating practices reflect certain strengths, including a revised cost 

estimating methodology that provides sufficient details for TSA staff to 

develop and document cost estimates. However, limitations in each of the 

four characteristics of a high quality cost estimate prevent TSA’s 

estimates from being reliable. For example, TSA’s cost estimates are not 

fully comprehensive because they include only the costs incurred by TSA 

to perform screening at an airport and not the total costs incurred by the 

federal government such as retirement benefits and insurance. As shown 

in figure 1, we found that by including TSA’s estimates of these other 

federal costs (i.e., costs not borne by TSA) for the 13 SPP airports for 

which TSA provided official cost estimates, TSA’s cost estimates are, on 

average, 91 percent of the total federal costs. In addition, the percentage 

difference between the estimates of TSA’s costs and all federal costs 

 

7We selected all of the contracts that were active at the time of our review, except two. We 

did not review the contracts for (1) Kansas City International Airport because of an 

ongoing dispute over TSA’s award of the SPP contract and contract renegotiations during 

the time of our review (see, e.g., Firstline Transportation Security v. United States, 119 

Fed. Cl. 116 (2014)). and (2) Punta Gorda Airport because, as mentioned earlier, the 

contract award was pending at the time of our review.

8The four characteristics of a high quality cost estimate are: comprehensive, welldocumented, accurate, and credible. See our November 2015 report, GAO-16-19, for 

more details.

TSA’s Cost Estimates
(other federal costs added to TSA costs) ranges from 7 to 17 percent for 

each of the 13 SPP airports.

Figure 1: Total Federal Costs for 13 Transportation Security Administration 

Page 4 GAO-16-115T 

Screening Partnership Program Airports

Data Table for Figure 1: Total Federal Costs for 13 Transportation Security 

Administration Screening Partnership Program Airports

Category Percentage

Transportation Security Agency costs 91%

Other federal costs 9%

Further, TSA’s estimates are not regularly updated to reflect changes to 

the program that could affect costs and do not include an analysis that 

addresses the uncertainty inherent in cost estimates. We concluded that 

a methodology that is more closely aligned with best practices for cost 

estimation can provide more reliable information. We recommended that 

TSA ensure that the 2013 cost estimating methodology used to compare 

screening costs at SPP and non-SPP airports is revised to more fully 

conform to leading cost estimating best practices. TSA concurred with the 

recommendation and stated that it will implement the necessary changes. 

In addition, while multiple congressional committees have sought 

improved information on the cost effectiveness of the SPP to oversee the 

program, TSA has not reported cost comparisons between federal and 
private screening at SPP airports to policy-makers.

Page 5 GAO-16-115T 

9 Since 2013, TSA has 

prepared comprehensive annual reports that include, among other things, 

a comparison of actual private costs with estimated federal costs. 

According to TSA officials, they have not shared these reports with 

Congress because they are developed for internal use. We concluded 

that although TSA has no standing requirement to report this information, 

doing so (such as on an annual basis) can better position policy makers 

to assess and understand the effectiveness of the SPP program and its 

effects on federal costs. We recommended that TSA provide cost 

comparisons that conform to leading cost estimating best practices to 

Congress on a regular basis. TSA concurred with the recommendation 

and stated that it plans to use its existing SPP Semi-Annual Report for 

Congress to provide this cost comparison beginning with the June 2016 

report.

In our November 2015 report, we also reported that TSA limits its 

selection of contractors to those who propose costs less than or equal to 

TSA’s estimated costs to perform the same services. However, once it 

has awarded a contract, TSA does not continually monitor the value of 

the contract relative to its estimated costs throughout the contract period. 

TSA also does not update its estimated costs to account for changes 

during the contract period that affect the estimates. TSA has determined 

that it will not consider a contractor’s proposal to perform screening at an 

airport if the proposed cost exceeds its cost efficiency number—TSA’s 

estimated costs to perform screening services at an airport—and will 

further evaluate only those proposals that are less than or equal to TSA’s 

estimated costs. As shown in figure 2, contract award prices for 13 SPP 

airports ranged from 2 percent to 19 percent less than TSA’s estimated 

costs for conducting screening, as reflected in the cost efficiency number, 

with an average of 11 percent savings at award compared with TSA’s 

estimated costs.

 

9Since 2009, multiple congressional committees have requested evaluations of TSA’s 

SPP cost comparisons or use of its estimates from GAO, the DHS Inspector General, and 

independent studies.

Selection of 

Contractors and 

Monitoring Contractor 

Costs
Figure 2: Transportation Security Administration’s (TSA) Cost Efficiency Number as Compared with Screening Partnership 

Page 6 GAO-16-115T 

Program Contract Award Prices

Data table for Figure 2: Transportation Security Administration’s (TSA) Cost 

Efficiency Number as Compared with Screening Partnership Program Contract 

Award Prices

Airport

Contract 

award 

price (in 

millions)

Cost 

efficiency 

number

Percentage 

difference

Orlando Sanford (SFB) 23.7302 27.542 15

Sarasota (SRQ) 20.8947 25.0264 18

Bozeman International Airport (BZN) 15.3024 16.9746 10

Glacier Park International Airport (GPI) 8.48676 9.10206 7

Bert Mooney Airport (BTM) 2.85822 3.27371 14

Portsmouth (PSM) 2.49839 2.62737 5

Roswell (ROW) 2.34951 2.62061 11
Page 7 GAO-16-115T 

Airport

Contract 

award 

price (in 

millions)

Cost 

efficiency 

number

Percentage 

difference

Sidney-Richland Regional Airport (SDY) 2.27636 2.46275 8

L.M. Clayton Airport (OLF) 1.43492 1.74366 19

Havre City County Airport (HVR) 1.43486 1.6665 15

Dawnson Community Airport (GDV) 1.39754 1.58588 13

Wokal Field/Glasgow International Airport (GGW) 1.36988 1.47184 7

West Yellowstone AIrport (WYS) 1.06177 1.08404 2

However, over the contract period, the value of the contract may increase 

or decrease because of modifications that address changes to the work. 

For example, if an airport opens a new terminal, the contract might be 

modified to accommodate the need to hire additional staff. Some of these 

changes may also affect TSA’s estimated costs for performing the 

services provided in the contract. Therefore, we concluded that 

continually monitoring how contract values compare with TSA’s estimated 

costs, and ensuring the cost estimates are updated to correspond to 

major changes in the program or contract, would provide program officials 

and policymakers with more accurate information about the relative costs 

of operating airports with federal and private screeners. We 

recommended that TSA continually monitor how contract values compare 

with TSA’s estimated costs and, in doing so, update its cost estimates 

when changes to the program or the contract may result in a major 

change to contract values to ensure the comparison is current and 

accurate. TSA concurred with the recommendation and stated that it will 

compare actual contract expenditures to TSA estimates on an annual 

basis, with updates as necessary, starting with all new estimates after 

March 31, 2016.

In our November 2015 report, we found that since the beginning of fiscal 

year 2014, TSA has made and continues to make changes to the SPP. 

For example, TSA is in the process of changing its SPP contracting 

approach from awarding individual contracts for SPP airports, to awarding 

indefinite delivery/indefinite quantity (ID/IQ) contracts.10 Contractors 

 

10This type of contracting approach, called ID/IQ contracts, provides for an indefinite 

quantity of services, within stated limits, for a fixed period and are usually awarded for a 

base year and subsequent option years See 48 C.F.R. § 16.50. Under an ID/IQ contract, 

the government places task orders for services or requirements established in the 

contract.

Changes in the SPP 

Program
awarded ID/IQ contracts will be allowed to compete for the award of task 

orders to perform screening at specific airports. TSA is also changing how 

wage rate determinations are made for employees of SPP contractors 

that perform screening services and have extended the time for a new 

contractor to complete the transition from federal screeners to private 

screeners from 90 to 120 days.

Chairman Katko, Ranking Member Rice, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions you or other members of the 

subcommittee may have at this time.

For questions about this statement, please contact Jennifer Grover at 

(202) 512-7141 or GroverJ@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this statement. Glenn Davis, Assistant Director, and Kevin Heinz also 

made key contributions to this statement.

Page 8 GAO-16-115T 

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