Department of Homeland Security
 

Transportation Security Administration’s Screening 


Partnership Program 


OIG-13-99 June 2013
 
 

 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security

Transportation Security Administration 

Anne L. Richards 

Assistant Inspector General for Audits 

 Washington, DC 20528 / www.oig.dhs.gov 

JUNE 20 2013 

MEMORANDUM FOR: 	 John W. Halinski 

Deputy Administrator 

FROM: 

SUBJECT: 	 Transportation Security Administration’s Screening Partnership 

Program 

Attached for your action is our final report, Transportation Security Administration’s 

Screening Partnership Program. We incorporated the formal comments from your office in 

the final report. 

The report contains two recommendations aimed at improving the Screening Partnership 

Program. Your office concurred with both recommendations. Based on information 

provided in your response to the draft report, we consider recommendation 1 closed and 

recommendation 2 resolved and open. Once your office has fully implemented 

recommendation 2, please submit a formal closeout letter to us within 30 days so that we 

may close the recommendation. The memorandum should be accompanied by evidence of 

completion of agreed-upon corrective actions and of the disposition of any monetary 

amounts. 

Consistent with our responsibility under the Inspector General Act, we are providing copies 

of our report to appropriate congressional committees with oversight and appropriation 

responsibility over the Department of Homeland Security. We will post the report on our 

website for public dissemination. 

Please call me with any questions, or your staff may contact John E. McCoy II, Deputy 

Assistant Inspector General for Audits, at (202) 254-4100. 

Attachment 
 

 

 

 

 

 

 

 

 

 

 

 

 

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Table of Contents 

Executive Summary ............................................................................................................ 1 


Background ........................................................................................................................ 2 


Results of Audit ................................................................................................................... 4 


SPP Application Process .......................................................................................... 4 


SPP Procurement Process ....................................................................................... 6 


Cost Considerations ................................................................................................ 7 


Recommendations ................................................................................................. 8 


Management Comments and OIG Analysis ........................................................... 8 


Appendixes 

Appendix A: Objectives, Scope, and Methodology ............................................ 10
 

Appendix B: Management Comments to the Draft Report ............................... 13
 

Appendix C: Senators’ Requests to DHS OIG ..................................................... 16 


Appendix D: Answers to Senators’ Other Concerns .......................................... 18
 

Appendix E: Application and Procurement Process ........................................... 20 


Appendix F: Roles, Responsibilities, and Activities ............................................ 21
 

Appendix G: Major Contributors to This Report ................................................ 22 


Appendix H: Report Distribution ........................................................................ 23 


Abbreviations 

ATSA Aviation and Transportation Security Act 

DHS Department of Homeland Security 

OIG Office of Inspector General 

PMO Program Management Office 

SPP Screening Partnership Program 

TSA Transportation Security Administration 
 

 

 

 

 

 

 

 

 

 

 

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Executive Summary 

We performed this audit in response to requests from Senator Roy Blunt (Missouri) and 

Senator Bob Corker (Tennessee). The Senators had concerns about the Transportation 

Security Administration’s (TSA) management of the Screening Partnership Program, as 

well as the procurement process at Kansas City International Airport. 

As of January 2013, 16 airports were participating in the Screening Partnership Program. 

Under the program, an airport operator may apply to use a private company to screen 

passengers and baggage rather than use Federal Government screening personnel. TSA 

reviews and approves applications to participate, awards contracts to private screening 

companies, and oversees the private screening workforce. We performed this audit to 

determine whether TSA administered the Screening Partnership Program in accordance 

with Federal regulations. 

Until 2011, TSA had no criteria when considering whether to approve airports’ 

applications to participate in the Screening Partnership Program. TSA administered the 

program in accordance with the FAA Modernization and Reform Act of 2012, but could 

improve aspects of its administration. Specifically, TSA’s files for its five most recent 

decisions to approve airports’ applications to participate included documents that had 

not been finalized, as well as documents with inaccurate information. In addition, TSA 

did not document the rationale used to decide on four of the five contracts awarded 

during 2011 and 2012. 

TSA had these issues because it did not develop and implement procedures to ensure 

that application evaluation and procurement decisions were adequately documented. 

The component also did not have quality assurance procedures to ensure that the most 

relevant and accurate information was used to determine eligibility and approve 

participation in the Screening Partnership Program. As a result, TSA risks making 

incorrect decisions on applications and procurements, and thus, may miss opportunities 

to save funds. 

We recommended that TSA expedite developing and implementing procedures to 

ensure that decisions on Screening Partnership Program applications and procurements 

are fully documented according to applicable Department and Federal guidance. We 

also recommended that TSA establish and implement quality assurance procedures to 

ensure that the most relevant and accurate information is used when determining 

eligibility and approving airports’ participation in the Screening Partnership Program. 

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Background 

In 2001, the Aviation and Transportation Security Act (ATSA) (P.L. 107-71) established 

the Screening Partnership Program (SPP). Under SPP, airports can apply to TSA to use 

personnel from private companies to screen passengers and baggage. In 2002, five 

airports began participating in a 2-year pilot program; they elected to transition into the 

permanent program in 2004. In the same year, TSA began accepting applications from 

other airports. 

In 2012, under the FAA Modernization and Reform Act of 2012 (P.L. 112-95), TSA was 

required to— 

Approve an application when determining that doing so would not compromise 

security or detrimentally affect the cost-efficiency or effectiveness of passenger 

and baggage screening at the airport; 

Decide on an application within 120 days of receipt; and 

Provide a written report to the applicant and Congress when rejecting an 

application, identifying why the application was rejected and recommending 

how to improve the application for future approval. 

Once an application is approved, TSA contracts with a qualified company to provide 

screening at the airport. According to ATSA, to enter into a contract, TSA must conclude 

and certify to Congress that the level of screening services and protection will be equal 

to or greater than the level that Federal screeners provide. TSA considers a private 

screening company qualified if the company’s screening personnel meet all ATSA 

requirements for Federal screening personnel. The company must provide at least the 

same level of compensation and benefits to its employees that Federal employees 

receive. 

TSA Federal Security Directors are responsible for overall airport security, provide 

oversight of screening operations, and ensure effective and efficient security operations. 

As of January 2013, TSA provided oversight for screening operations at 450 airports, 

including 16 airports participating in SPP. 

TSA developed a process to evaluate airports’ SPP applications and award contracts, 

which TSA senior management approved after we concluded our audit work. According 

to TSA Office of Security Operations personnel, the application process begins when the 

Program Management Office (PMO) receives the airport application. The TSA 

Integrated Project Team analyzes the application and advises the Office of Security 

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Operations Assistant Administrator on the effect of its acceptance on TSA’s Federal 

screening. 

The PMO’s estimate of the cost of using private screeners at the airport and an Office of 

Security Operations estimate for using Federal screeners are given to the Integrated 

Project Team to review. TSA management personnel receive and review both estimates 

before they are presented to the TSA Administrator, who uses them to decide whether 

to approve or reject applications. Once approved, the TSA Office of Acquisition begins 

the procurement process. When an application is rejected, the PMO informs the 

applicant and Congress about the reasons for rejection and how the applicant might 

improve the application. 

The procurement process includes solicitation, evaluation, selection, and contract 

award. During solicitation, TSA selects evaluation factors, develops a source selection 

plan, establishes evaluation standards, holds a pre-proposal conference, and visits and 

surveys sites. In evaluating proposals, evaluation teams independently review proposals 

and submit evaluation reports. 

Following evaluation, the TSA Source Selection Authority selects a screening company 

and provides a written selection decision to the contracting officer. Contract award 

documentation is then finalized and approved. Appendix E contains a flowchart of the 

application and procurement processes. Appendix F contains details on related roles, 

responsibilities, and activities. 

According to TSA records, from 2004 through 2008, 21 airports, including the 5 pilot 

program participants, applied to participate in SPP. TSA accepted 19 airports into SPP, 

and 2 airports withdrew their applications before final decisions were made. Of the 19 

airports accepted, 3 later withdrew from SPP when carriers discontinued service before 

the start of the contracts. During 2009 and 2010, five SPP applications were received, 

but none were approved. 

We performed this audit in response to requests from Senator Roy Blunt (Missouri) and 

Senator Bob Corker (Tennessee). The Senators had concerns about TSA’s management 

of SPP, as well as the procurement process at Kansas City International Airport. 

Appendix A contains our objectives, scope, and methodology. Appendix C contains 

copies of the Senators’ letters. Appendix D contains our responses to the Senators’ 

questions as presented in their letters and subsequent discussions that are not covered 

in the results section of the report. 

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Results of Audit 

Until 2011, TSA had no criteria when considering whether to approve airports’ 

applications to participate in SPP. TSA administered the program in accordance with the 

FAA Modernization and Reform Act of 2012, but could improve aspects of its 

administration. We reviewed TSA’s files associated with its five most recent decisions to 

approve SPP applications and identified documents that had not been finalized, as well 

as documents that contained inaccurate information. In addition, TSA did not document 

the rationale used to decide on four of the five contracts awarded during 2011 and 

2012. 

TSA had these issues because it did not develop and implement procedures to ensure 

adequate documentation of application evaluations and procurement decisions. The 

component also did not have quality assurance procedures to ensure that the most 

relevant and accurate information was used to determine eligibility and approve 

participation in SPP. As a result, TSA risks making incorrect decisions on applications 

and procurements, and thus may miss opportunities to save funds. 

SPP Application Process 

Prior to passage of the FAA Modernization and Reform Act of 2012 (2012 act) in 

February 2012, ATSA was in effect, and it did not include criteria for TSA in 

approving SPP applications; TSA could approve any SPP application submitted. 

Prior to the 2012 act, there were no criteria beyond defining a qualified private 

screening company and how private screeners would be compensated. TSA 

complied with the requirements of the 2012 act in approving the five SPP 

applications submitted after its passage. However, TSA did not ensure that 

documents related to decisions on these five applications were finalized and 

accurate. Because decision makers rely on the information in this 

documentation, it should be as accurate and complete as possible. 

From 2004 through 2008, TSA approved 19 SPP applications. During 2009 and 

2010, five SPP applications were received, but none were approved. In 2011, the 

TSA Administrator decided that the agency would no longer approve SPP 

applications unless airports demonstrated “a clear and substantial benefit” to 

the Federal Government. 

Since the 2012 act was passed, TSA approved five applications, two of which 

were submitted during 2009 and 2010, but indicated that actual program 

participation is conditional on TSA being able to retain private screening 

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providers for the airports that meet the act’s requirements of effective and cost-


efficient screening. As of January 2013, 16 airports were participating in SPP; 5
 

additional airports had been accepted into the program, but TSA indicated that it
 

had not yet awarded contracts for these 5 airports. 


We reviewed applications from the following five airports, which TSA approved 


since the passage of the 2012 act:
 

Orlando Sanford International Airport (Florida)
 

Sacramento International Airport (California)1
 

Glacier Park International Airport (Montana) 


Bert Mooney Airport (Montana) 


Bozeman Yellowstone International Airport (Montana)
 

TSA made the decisions on these applications within 120 days of receiving them, 


but TSA’s files included inaccurate documents.2

 For example, 14 of 25 


(56 percent) of the documents that TSA used to evaluate these five applications
 

were not finalized. We also identified errors in the documents. For example, we 


noted the following errors in two separate documents:
 

A document included an incorrect figure, which resulted in a $162,057 

overstatement of the cost to use private screeners. 

A document used to compare the estimated cost of private screening to 

the estimated cost of Federal screening showed TSA understated an 

estimate of the cost savings of private screening by $423,572. If the 

estimate had been correctly stated, the report would have shown a 

7 percent increase in maximum potential cost savings from using private 

screening compared to Federal screening. 

According to TSA, the errors may have resulted from using information from an 

earlier application file and not changing all of the required figures to reflect the 

analysis of the new applications. TSA did not have quality control procedures 

that required a second review of the data in application files to ensure that all 

required documentation was finalized and accurate. Although in these two 

cases TSA correctly approved the applications, there is still a risk that inaccurate 

estimates could lead to incorrect decisions. 

1

 After our audit work was completed, Sacramento International Airport withdrew its SPP application. 2

 Documentation reviewed included cost estimate briefings, integrated project team briefings, SPP 

application chair briefings, application determination briefings, and decision memorandums. 

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SPP Procurement Process
 

From January 2011 to August 2012, TSA did not comply fully with Federal 

Acquisition Regulation Section 15.308 when documenting its decisions in 

awarding four SPP contracts. Specifically, in this time period, TSA’s 

documentation on proposal evaluations and decisions related to these contract 

awards was missing details and included inaccuracies. TSA did not formalize and 

implement procedures to ensure that SPP procurements were fully documented, 

and it did not have quality control procedures to verify the accuracy of data used 

for contract decisions. As a result, TSA risks not selecting the best contractor 

offer and not ensuring that it provides the best screening services. 

In four of the five procurement files for contracts awarded between January 

2011 and August 2012, the rationale for TSA’s final decisions on contractor 

selection was not fully described in supporting documentation. The DHS source 

selection guide requires the Source Selection Authority to document its rationale 

separately. The guide further specifies the elements that files should include—a 

decision statement, a brief description of the product or service being procured, 

a brief description of the basis for the award, a list of competitive offerors, the 

rationale for business judgments and tradeoffs, and the reason that the selected 

offeror’s proposal is the best overall value to the Federal Government.3 

Rather than including all of this information, all four files contained a similar 

short paragraph noting the Source Selection Authority’s decision. For example, 

in the file for the contract awarded to the Kansas City International Airport, the 

final decision noted that the Source Selection Authority had completed an 

independent review and assessment of the technical and price reports, but did 

not include other details on the rationale for its decision. According to TSA, the 

files were missing documentation on the rationale for decisions because staff 

members believed that they had met Federal Acquisition Regulation 

requirements for final decision documentation. 

In September 2011, a Federal court ruled that TSA could not award a private 

screening contract to the contractor originally selected for the Kansas City 

International Airport, and it directed the component to cancel or amend the 

solicitation. The Federal court concluded that the TSA Source Selection 

Authority’s decision did not include documentation on its independent analysis. 

According to Federal Acquisition Regulation Section 15.308, the Source Selection 

3 A Practical Guide to Source Selection, Version 1.1, September 2008. 

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Authority may use reports and analyses prepared by others, but its decision shall 

represent its independent judgment. 

Following the 2011 ruling, TSA developed lessons learned to ensure full 

documentation of its proposal analysis and the rationale for its decisions, as well 

as the Source Selection Authority’s independence. Although at the time of our 

audit the lessons learned had not been formalized as policy, TSA began requiring 

additional documentation to support final source selection decisions. We 

reviewed documentation for a decision on a contract to provide screening for 

three airports and confirmed that it included details on the rationale for 

procurement decisions and on independent analysis. 

In reviewing the five contracts awarded between January 2011 and August 2012 

for eight airports, we noted data discrepancies in TSA’s proposal evaluation 

documentation.4

 In addition, we reviewed two of eight cost estimates that TSA 

prepared for the five procurements and identified discrepancies in both cost 

estimates. Specifically, there were differences in labor hours and overtime rates. 

Inaccurate cost estimates could affect TSA’s evaluation of offerors. 

Cost Considerations 

Under the 2012 act, TSA is required to consider cost efficiency in deciding on 

airports’ admission into SPP. However, we were unable to conclude whether 

TSA was properly considering cost because TSA reported that none of the four 

SPP applications approved and in progress since the act’s passage had 

progressed to the contract evaluation phase where cost would be evaluated. 

A January 13, 2013, memorandum approved by the TSA Administrator directed 

that cost efficiency be evaluated when deciding on an airport’s continued 

participation in SPP. TSA developed and continued to refine a methodology for 

estimating the cost of converting SPP airports back to screening with Federal TSA 

personnel, but had yet to perform the cost determination for any airport in SPP 

at that time. 

The cost estimates consider factors such as labor costs, attrition, real estate 

costs, and overhead, which are partially based on costs of using Federal 

personnel at two comparable airports. As TSA refines the cost estimates, the 

component continues to adjust factors that result in several different cost 

estimates, some of which indicate TSA employee screening would cost more and 

4

 One contract covered three airports; another contract covered two airports. 

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others in which the contracted screening would cost more. Because different 

factors may be added and removed from the cost estimates, they do not provide 

a consistent basis for making decisions on SPP participation. 

Conclusion 

Without improving aspects of its administration of SPP, TSA increases the risk of 

not selecting the best contractor to provide screening services. TSA’s 

administration of SPP includes in-depth examination of airport applications and 

private contractor offers, which requires detailed calculations and analysis in 

deciding whether to accept or reject applications and proposals. Therefore, TSA 

should ensure that this process provides decision makers with accurate 

information. 

Recommendations 

We recommend that the Transportation Security Administration Deputy 

Administrator: 

Recommendation #1: 

Expedite developing and implementing procedures to ensure that decisions on 

Screening Partnership Program applications and procurements are fully 

documented according to applicable Department and Federal guidance. 

Recommendation #2: 

Establish and implement quality assurance procedures to ensure that the most 

relevant and accurate information is used when determining eligibility and 

approving airports’ participation in the Screening Partnership Program. 

Management Comments and OIG Analysis 

TSA recognized the importance of the issues in this report and appreciated our 

efforts to identify improvements in SPP application review. The component 

noted that our recommendations reflect program enhancements since passage 

of the 2012 act, and that it had already made significant progress toward 

implementing our recommendations. 

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Recommendation #1: TSA concurred with the recommendation and revised and 

approved its application process on March 4, 2013. In December 2012, the TSA 

Office of Acquisition issued a policy letter, effective January 1, 2013, on Source 

Selection Authority appointment and business processes. The policy letter 

includes a requirement for an independent Source Selection Authority tradeoff 

analysis decision, with a reference to the DHS source selection guide. In January 

2013, TSA issued a policy reminder on source selection procedures, which 

reiterates that the Source Selection Authority must independently document its 

decision. According to the policy reminder, the Contracting Officer also needs to 

review in detail all source selection documents. 

OIG Analysis: We reviewed TSA’s corrective actions and confirmed that they 

satisfy the recommendation. TSA provided sufficient supporting 

documentation. We consider recommendation #1 to be resolved and closed. 

Recommendation #2: TSA concurred with recommendation #2. Early in fiscal 

year 2013, TSA began to improve quality assurance in application documents and 

completed part of the work in March 2013, when it finalized the revised 

application process. In the fall of 2012, the component began printing dates on 

Government cost estimates to track changes and versions over time more 

accurately. TSA expects to finalize a cost estimating process in 2013. The PMO is 

finalizing a review process, which it planned to complete in 2013, to ensure that 

all application documents are final and accurate before being used to reach a 

final determination. For all future procurements, the PMO will formally confirm 

or revise the TSA “cost efficiency number” 1 week prior to releasing the request 

for proposals. TSA expected to document and finalize this standard in 2013. 

OIG Analysis: TSA’s planned corrective actions are responsive to the 

recommendation. This recommendation will remain open and resolved until we 

receive documented support that the cost estimation process, the review 

process for all application documents, and the standard for documenting the 

“cost efficiency number” are finalized. 

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Appendix A 

Objectives, Scope, and Methodology 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was 

established by the Homeland Security Act of 2002 (Public Law 107-296) by amendment 

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the Department. 

Senators Roy Blunt and Bob Corker requested this audit because of concerns regarding 

TSA’s management of SPP. We determined whether TSA is administering the program 

in accordance with Federal regulations. 

We interviewed staff in the TSA Office of Acquisition and the SPP Management Office to 

develop an understanding of the processes and procedures involved in administering 

SPP. We reviewed relevant criteria, policies, and other guidance related to SPP 

procurement and application functions. We obtained and reviewed SPP application and 

procurement documentation at TSA headquarters. 

To determine whether TSA complied with applicable laws, regulations, and policies, we 

reviewed applications approved since passage of the FAA Modernization and Reform Act 

of 2012 (P.L. 112-95) in February 2012. The following airports were in this category: 

Orlando-Sanford International, Sacramento International, Glacier Park International, 

Bert Mooney, and Bozeman Yellowstone International. For the application process, we 

reviewed approved, rejected, and withdrawn applications, including the support 

documentation for all applications decided on since February 2012. Documentation 

included the Cost Estimate Briefing, Integrated Project Team Briefing, SPP Application 

Chair Briefing, Application Determination Briefing, and the Decision Memorandum. 

To determine whether TSA complied with applicable procurement laws, regulations, and 

policies, we reviewed both full and open competition and small business set-asides. We 

reviewed the San Francisco International Airport, Jackson Hole Airport, and Kansas City 

International Airport procurements for full and open competitions. We also reviewed 

the Charles M. Schulz-Sonoma County Airport, Joe Foss Field/Sioux Falls Regional 

Airport, Key West International Airport, Greater Rochester International Airport, and 

Tupelo Regional Airport procurements for small business set-asides. The team 

assessed TSA documentation related to price, technical, and past performance 

evaluations; Source Selection Evaluation Board and Source Selection Authority analyses; 

and other supporting documentation deemed necessary. 

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Using data provided by TSA, we identified all airports that applied for SPP, including the 

number of times each airport applied and the outcome of those applications. We 

identified timelines for TSA decisions. For the procurement process, we examined 

contract file documentation, and we reviewed documents pertaining to TSA analyses of 

private screening proposals under full and open competition and small business setasides. This documentation included the following: 

Consensus technical evaluations (evaluate technical strengths and weaknesses of 

proposals); 

Price costs (determine and ensure fair and reasonable pricing); 

Past performances (review and rate contractors’ prior service performance); 

Source Selection Evaluation Board tradeoff analyses and recommendations 

(explain, rank proposals, and make recommendations based on technical, price, 

and past performance evaluations); and 

Source Selection Authority independent analyses and decisions and business 

clearance memorandum reports (document contracting officers’ actions, 

analyses, and decisions on procurement actions). 

To verify and validate the figures and data calculated on the cost estimates prepared by 

the TSA SPP Program Office, we reviewed cost estimates for two airports. We verified 

the mathematical calculations and obtained some of the cost estimate source data to 

verify the figures used. Specifically, we obtained TSA’s Staffing Allocation Model 

spreadsheet to verify estimated staffing information on the cost estimates. We also 

obtained one airport’s contractor invoices for September 2009 and invoices from 

December 2009 to February 2010; we compared these invoices with the prepared cost 

estimate to determine whether burdened rates, such as overhead, general and 

administrative, overtime, and fringe rates, matched; and we noted any discrepancies. 

With a limited sample of invoices, we could not make a general conclusion on fringe rate 

differences. We were also unable to determine the base wage rates used for the cost 

estimate based on invoices obtained. 

Because of time constraints, we did not obtain contractor invoices for the second 

airport we tested. We also did not obtain source data for other cost estimate elements, 

so we were unable to verify some figures. We did not review source data on TSA 

assumptions for part- and full-time staff; breakdown of screener, lead screener, and 

supervisory screener labor categories; non-screener wage rates; and historical profit and 

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other direct costs. We did not make any judgments on TSA’s assumptions and source 

data used in preparing the cost estimates for the purposes of this audit. 

To verify ATSA wage rates in the cost estimates and the solicitation issued for three 

airports in April 2010, we obtained TSA's 2010 pay band chart and the 2010 Office of 

Personnel Management locality pay chart to independently calculate ATSA wage rates. 

To determine which factors contributed to or influenced airports’ decisions not to 

participate in SPP, we selected for interviews 25 airports that have never participated in 

the non-federalized screening model. We interviewed 23 airport officials—one official 

discontinued the interview and another did not respond to our interview request. To 

identify the number of airports that have never applied for non-federalized screening 

model, we separated airports whose SPP applications were accepted, pending, 

withdrawn, or rejected from TSA’s list of 446 airports. Given our new universe of 420 

airports, we judgmentally selected 25 airports, with five airports taken from each of 

TSA’s five designated airport categories.5 

We conducted this performance audit between July 2012 and January 2013 pursuant to 

the Inspector General Act of 1978, as amended, and according to generally accepted 

government auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based upon our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based upon our 

audit objectives. 

5 TSA classifies the Nation’s airports into one of five categories (X, I, II, III, and IV) based on various factors such as the 

number of annual takeoffs and landings. In general, Category X airports have the largest number of passengers 

boarding aircraft and Category IV airports have the smallest number. 

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Appendix B 

Management Comments to the Draft Report 

U.S, Ocpartmt;Jtt nf llamelan.4 S~urity 

SOl Souili 12th Stre&t 

Arlin.b>ton, VA 20~98 

. •"·"~>~ Transportation i 

• ) Security 

\:,,~ ... ~'t:~/ Administration 

NFOR!I.1ATION - .. . 

MEMORANDUM FOR: Anne L. Richards 

Assistant Inspector General tor Audits 

U.S. Department of Homeland Security (DHS) 

FROM: J.W. Halinskiail 

Deputy Admirkator 

SUBJECT: Respnnsc to Draft Report, Tramportation Security 

Administrmiorz's Screening Partnership Program, OIG 

Project No. 12-152-AUD-TSA 

This memorandum constitutes the Transportation Security Administration's (TSA) response to 

the DHS Office oflnspc<::tor General (OIG) draft report, Transportation Security 

Administration's Screening Partnership Progmm, OIG Project No. 12-152-AUD-TSA, April 

2013. 

Background 

'The OIG conducted this audit at the request of Senator Roy Blunt and Senator Bob Corker. The 

audit objective was to determine whether TSA is administering the program in accordance witl1 

Federal regulations. The OIG audit team conducted this performance audit trom July 2012 

through January 2013. 

The OIG found that TSA administered the Screening Partnership Program (SPP) in accordance 

with the Federal Aviation Administration (FAA) Modernization and Reform Act of 2012 (FAA 

Act). They also stated that TSA could improve some aspects of its processes. The OIG made 

two recommendations to improve TSA's administration nfthe program. 

Discussion 

Privatized screening is important to TSA · s mission. Private contractors at SPP airports screen 

more than 28 million people and 1heirbagg~ge annually, and TSA is grateful for the OIG's 

eftorts to examine and help improve the program. TSA appreciates the OIG's confirmation that 

the SPP is administered in accordance with the FAA Act, and thar TSA acted in accordance with 

its regulations and procedures. The OIG also reports that the SPP did not exceed its statutory 

authority or act improperly, unethically, or unlawfully. TSA is further pleased that OIG fotmd 

no conflict of interest associated with the 2011 SPP contract award at the Kansas City 

International Airport. 

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2 

TSA believes the SPP is a robust, effective, and well-run program, and the OIG's 

recommendations will help improve it The OIG's recommendations mirror the program's own 

enhancements in progress since the FAA Act became law. TSA cnhMcements include a revision 

of the original application process. The revision was completed in March 2013. Additionally, 

based on feedback from the audit team prior to the report's publication, the program began 

revising its internal procedures to include using multiple layers of review of application 

documents, such as cost estimates., to ensure they are accurate and complete pnor to a tormal 

decision by TSA leadership. 

The OIG reviewed all documentation concerning the applications received and approved since 

February 2012 and all SPP procurements dating back to 20l0. The OIG report states, "As a 

result [of not having quality assurance procedures), TSA risks making incorrect decisions on 

applications and procurements, and tim .. -; may miss opportunities to !\BVC funds." The oro 

concluded this after identifying documents that did not appear to be "finalized" due to an 

oversight that inadvertently led to the documents retaining "draft" and "pre-decisional'' 

markings. However, the doct1ments were final and the data were a;;curate. These markings did 

not increase the likelihood of poor decision-making by the Agency. It is worth noting tlmt while 

the O!G idcnti.ficd two "inaccurate cost figures in the application documents," both inaccuracies 

were for the same application, which was the first application adjudicated following the passage 

ofthe FAA Act. The calculations were correct but unfortunately mislabeled on the two 

supporting documents in question .. Most importantly, the cost figures in those documents when 

forwarded to TSA senior leadership were properly labeled and the nssociatcd decisions were not 

based on these calculations alone .. Although the mislabeling is regrettable, these errors did not 

lead TSA to miss "opporttmities to save funds." 

Regarding SPP procurements, OJG concluded, "From Junuary 2011 to August 2012, TSA did not 

fully comply with [Federal Acquisition Regulations (FAR)] part 15. 30S." While TSA maintains 

that all the procurements in question were compliant with the FAR requirements, TSA also 

acknowledges that documentation could have been more thorough. Additionally, the report 

states," ... the rationale for TSA's final decisions on contractor selection was not fully described 

in supporting documentation. The DHS source selection guide requires the Source Selection 

Authority lo drK:nment its rationale sepamtdy." TSA complied with procurement regulations, bu1 

may not have fully implemented a best practice as recommended by the guide. All SPP 

procurements now include a separately documented rationale by the selection authority. 

Conclusion 

TSA recognizes the important issues set forth in this report and appreciates OIG's efforts to 

identify areas to improve the SPP application review process. SignificMt progress has already 

been made tnward implementing the OIG recommendations. TSA values the OJG's 

acknowledgement that TSA is administering the SPP program in accordance with Federal 

regulations and welcomes the opportunity to improve this program. 

Attachment 

· ··--·········---··········--···········--······-·········--········-······--········-···········-·····-······----

www.oig.dhs.gov 14 OIG-13-99 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

U.S. Department of Homeland Security 

Transportatitm Security Administration (TSA) 

Response to OIG Draft Report 

Transportation Security A dmfnistration's Screening Partnership Program 

OIG Project No. 12·152·AUD·TSA 

Recommendation 1: Expedite developing and implementing procedures to ensure that 

decisions on Screening Partnership Program (SPP) applications and procurements are fully 

documented according to applicable Department and Federal guidance. 

TSA coneurs. To implement this recommendation, TSA revised and approved its application 

process on March 4, 2013. Federal Acquisition Regulations (FAR) Subpart 15.308 delineates 

requirements for source selection authority's (SSA) decisions. Additionally, the U.S. 

Department of Homeland Security (DHS) Source Selection Guide expa.11ds upon this requirement 

and provides further guidance on specific information to be included in an SSA decision. In 

December 2012, the TSA Offu;e of Acquisition (OA) issued a Policy Letter, (effective January 1, 

2013), regarding SSA Appointment and Business Processes. One portion of this Policy Letter 

denotes the requirement for an independent SSA trade-off analysis decision, with a refe-rence to 

the DHS Source Selection Guide. In addition to this Policy Letter, in January 2013, OA issued a 

Policy Reminder on Source Selection Procedures. Among other things, this policy reminder 

reiterates the requirements for the SSA to independently document their decision, as well as the 

need for the Contracting Off1cer to provide a detailed review of all source selection documents. 

Recommendation 2: Establish and implement quality assurance procedures to ensure that the 

most relevant and accurate information is used when detennining eligibility and approving 

airport~' participation in the Screening Partnership Program. 

TSA concurs. TSA began work on improving quality assurance in application documents early 

in fiscal year20!3. Part of this work was completed in March 2013, when the revised 

application process was finalized. The document capturing this process outlines the artifacts, 

locations, and naming conventions of all application documents. Additionally, TSA is in the 

process of establishing the following: 

• To ensure the quality of cost estimates, the SPP Program Management Office (PMO) 

began printing dates on Government costs estimates in the tall of 20 12 in order to 

better track changes and versions over time. 

• TSA expects to fmalize a cost estimating process by June 30, 2013. The process will 

describe in detail how cost estimates are created and how they will be reviewed. 

• The SPP PMO is finalizing a review prncess for all application documents to ensw·e 

they are final and accurate before being used to reach a final determination. This 

should be completed by May 31,2013. 

• For all future procurements, the SPP PMO will formally confirm or revise the TSA 

"cost efficiency" number used in any procurement one week prior to releasing ihe 

request for proposals. This standard is being documented and should be finalized by 

May 31 , 2013. 

www.oig.dhs.gov 15 OIG-13-99 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C 

Senators’ Requests to DHS OIG 

ROY BLUNT ... :;souR~ 

COM!.'tRCt: SOE-.c! )GO Ru!au SI.HAT1 (),.;a 8tAI'MQ AA1l TRA.~I .. TION WAUCJ~~~G•o-t. 

m .. DC m10..:so8 2'14 t.n, Umtrd eStates ,SrnJtr HUlfS A.'ID AOM flitSTRA TI()N 

WAS~1IN~, ... ON 20510 stu:cr COMMJm t 

Mareh 5, 2012 ON INTUI.ICU NCf 

Charles K. Edwards 

Acting Inspector General 

Department of llomeland Security 

245 Murray Drive, SW, Building 410 

Washington, DC 20528 

Dear Mr. t:.dwards 

I write to requ~t an investigation to determine whether the Transportation Security Administration (TSA) 

has acted outside itS own regulations and procedures, taken any actions that exceed its statutory authority, 

or has otherwise acted improperly, unethically. or unlawfully in its administration of the Screening 

Pannership Program (SPI'). 

Despite the demonstrated success ofSPP airports, TSA has never fully embraced the SPP. The TSA has 

recently taken a series of actions and made a number of decisions which have been detrimental to the SPP 

and seemingly arc outside the statutory discretion of the TSA. These factors, coupled with a general lack of 

transparency, raise trOubling questions that need to be answered. 

To that end, I am requesting that your investigation include possible improper pressure exerted by the 

TSA on airport officials to not "opt-out"' ofTSA security screening, TSA's arbitrary rejection of airport 

"opt-out" requests and onerous requirements on airports that wish to participate in the SPP. 

I also request that you investigate questionable actions regarding the TSA ·s procurement procedures 

relating to the SPP. This has come to my anention as result of the TSA ·s voided SPP contract award at 

Kansas City lntcmotional Airpon (MCI). In the federal judge·s ruling in which she voided the contract, 

she described the TSA 's actions as "arbitrary, capricious, an abuse of discretion, or otherwise not in 

accordance with law."' Of panicular interest in this case i the TSA Source Selection Evaluation Board's 

and Source Selection Authority"s apparent unwillingness to perform a proper "best-value tradeoff 

analysis."' A recent House ~lomeland Security Transportation Security Subcommittee hearing highlighted 

this issue and others that are of conccm within this contracting process. 

It is my hope that this inve.tigation will provide some much needed transparency and oversight into the 

TSA 's past, present, and furure decision-making. I appreciate your attention to these important matters, 

and look forward to fun her discussions, your subsequent review, and final response with regard to them. 

www.oig.dhs.gov 16 OIG-13-99 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

BOB CORKER 185 ::>ofo..,ol"l'ol 31-11 OrrKC DlJI 1..>1 '>10 

WACUI'NT( N, UC :t0b1U 

r--.ac CA1)7>4-:\~ 12021 21'8 0666 

United States ~cnatc R"'"""''"' H.H~..,."' MD UR8A..., AFF.fJR:i 

roi'UION nt: -ATJ{)I',IS 

May24,2012 

5P!:C Al COMMit H ( ON A.CINC 

Charles K. Edwards 

Acting Inspector General 

Dcpanmcnt ofHomclnnd Security 

245 Murray Drive, SW, Building 410 

Washington, DC 20528 

Dear Mr. Edwards. 

I am writing to formally join in Senator Olunt's request for an investigation by your otlice "to 

determine whether the Transportation Security Administration (TSA) has acted outside it~ own 

regulations and procedures, taken any actions that exceed its statutory authority, or has otherwise 

acted improperly, unethically, or unlawfully in its administration of the Screening Partnership 

Program (SPP).'' 

I am concerned that TSA has failed to tnke full advantage of its pa~tnership with the private 

sector as Congress intended to adopt and advance innovations in security a11d lllallagement best 

pntc tices. Rather, some ofTSA's actions have given the appearance that it seeks to downplay 

the e ffectiveness of its private screening partners in making contributions toward improving 

security, reducing costs, a11d cultivating positive relationships with our country's airport~ and 

passengers. TSA seemingly continues to rely on its flawed internal studies to support 

fundamenral management deLOisions, resisting full implementation of the Government 

Accountability Office's (GAO) recommendations for an accurate comparison of performance 

and cost between SPP and non-SPP nirport5. 

Additionally, I have significant concerns with TSA's procurement pruo.;euures relating to the SPP 

following a recent federal court ruling that voided TSA 's SPP contract award at Kansas City 

International Airport (MCij, fmding that the TSA's actions were "arhitmry, capricious, all abuse 

of discretion, or otherwise not in accordance with law." Of particular interest in this case is the 

TSA Source Selt:ction Evaluation Board's and Source Selection Authority's failure to perlorm a 

proper "bt:st-value tradeoff a11alysis.'' 

I expect that your investigation will provide needed transparency and oversight ofTSA's past 

procurement practices as well as pmdut:e important recommendations for future decisionmaking. My hope is thnt this investigation will be conduct<:d thoroughly and swiftly, and that the 

TSA will soon be in an improved position to award SPP ,;onlrat:ts that are in accordance with 

law. I appreciate your consideration of this request. 

Sincerely, 

www.oig.dhs.gov 17 OIG-13-99 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix D 

Answers to Senators’ Other Concerns 

Question 1: 

Did TSA act outside its own regulations and procedures or take any actions that exceed 

its statutory authority, or did it otherwise act improperly, unethically, or unlawfully in its 

administration of the SPP? 

Answer 1: 

No. In reviewing the SPP application and procurement documents and processes and 

interviewing appropriate personnel, we found no evidence that TSA acted outside its 

regulations and procedures; exceeded its statutory authority; or acted improperly, 

unethically, or unlawfully. 

Question 2: 

Identify whether TSA is not embracing the Screening Partnership Program by putting 

pressure on airport officials to not participate in the program. 

Answer 2: 

TSA met the intent of ATSA. The component implemented SPP and made it available to 

interested airports. TSA has not pressured airport officials to not participate in the SPP. 

We conducted telephone interviews with officials from 24 non-SPP airports, none of 

whom said they were pressured by TSA regarding the program. Specifically, officials at 

20 airports said that they were satisfied with TSA screening at their airports, two had no 

comment or were undecided, one airport was not interested in the SPP, and one airport 

planned to apply to the program. 

We reviewed documentation for the six airports whose applications to participate in SPP 

were rejected, including the four that subsequently resubmitted applications. The four 

airports that reapplied were subsequently accepted. Officials from the two airports that 

did not reapply said that TSA did not place undue pressure on them for this decision. 

Question 3: 

Did TSA take full advantage of SPP to advance innovations and best practices in security 

and management, as well as cultivate positive relationships between screeners and 

passengers at airports? 

Answer 3: 

Based on information provided by TSA, the component maintains a web-based tool 

called the IdeaFactory to collect information and suggestions from the workforce. SPP 

contractors can submit suggestions at the TSA website. The website terms leave it 

relatively unclear whether contractor suggestions through the website are desired. To 

better answer this question, we would need to have lengthy discussions with SPP 

participant airports and TSA officials to develop a more detailed understanding of the 

www.oig.dhs.gov 18 OIG-13-99 
 

 

 

 

 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

process; and to draw a more complete conclusion, we would need to review innovations 

previously submitted and rejected. Time constraints did not allow the audit team to 

hold such discussions or review previously submitted innovations. 

Question 4: 

Determine if TSA resisted implementing Government Accountability Office 

recommendations to accurately assess the costs of screening at SPP and non-SPP 

airports. 

Answer 4: 

We reviewed the preliminary work and plans for doing so, but could not answer this 

question until TSA finalizes the process. The component continues to update its SPP 

Cost Estimate used to compare actual costs for SPP contracts against the costs of 

federalized screening. 

Question 5: 

Determine TSA’s rationale to starting the Kansas City International Airport procurement 

process over. 

Answer 5: 

TSA decided to re-procure the solicitation because of the errors in the original Request 

for Proposals, which led to a Federal court ruling, as well as the length of time since the 

original proposal was issued by the component. 

According to the ruling, TSA could either amend the solicitation to correct the price 

evaluation scheme, notify the sole offerors about the amendment to the solicitation, 

and engage them in discussions; or re-procure the solicitation. 

Question 6: 

Identify any conflict of interest at Kansas City International Airport with a former TSA 

employee. 

Answer 6: 

We did not identify any conflict of interest. 

We examined TSA procurement files located at TSA headquarters, Office of Acquisitions. 

The files did not provide any evidence that the former TSA employee had any influence 

over the procurement. 

www.oig.dhs.gov 19 OIG-13-99 
 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix E 

Application and Procurement Processes 

Source: DHS OIG-generated based on TSA source documents. 

www.oig.dhs.gov 20 OIG-13-99 
 

 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix F 

Roles, Responsibilities, and Activities 

The Program Management Office (PMO) receives the airport application, confirms that it is complete, 

and advises the TSA Integrated Project Team of the application. 

The Integrated Project Team gathers data concerning the applicant airport, including estimates of the 

cost of converting the airport to private screening and of continuing to use Federal screeners, and briefs 

the SPP Application Committee Chair. 

The SPP Application Committee Chair briefs the TSA Senior Leadership Team on the application, including 

recommending whether to approve or reject the application. 

The TSA Administrator decides whether to approve the application, and the PMO advises the applicant of 

the Administrator’s decision. If the application is not approved, the PMO provides the applicant with a 

report that includes the reasons for rejection and recommendations for future application. TSA 

Legislative Affairs forwards copies of the report to appropriate congressional committees. 

The proposal selection process involves acquisition planning, pre-solicitation activities, issuing the 

solicitation, initial proposal evaluation, selecting a source, and awarding the contract. Acquisition 

planning entails conducting market research, determining the need for pre-solicitation or pre-proposal 

conferences, preparing an acquisition plan, and conducting an acquisition integrity briefing for team 

members. 

Pre-solicitation activities involve selecting evaluation factors, subfactors, and criteria; preparing a source 

selection plan; establishing evaluation standards; and preparing a solicitation. Soliciting industry consists 

of issuing the solicitation, holding a pre-proposal conference, and visiting sites or conducting surveys (if 

needed). Initial proposal evaluation entails receiving proposals, the evaluation team independently 

reviewing proposals, holding consensus meetings, and preparing and submitting initial evaluation 

reports. 

Source selection involves the Source Selection Authority deciding on a source and providing a written 

selection decision to the contracting officer. Contract award consists of finalizing and approving award 

documentation. 

Source: DHS OIG-generated based on TSA source documents. 

www.oig.dhs.gov 21 OIG-13-99 
 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix G 

Major Contributors to This Report 

Patrick O’Malley, Director 

Brad Mosher, Audit Manager 

Shawn Cosman, Auditor 

Ebenezer Jackson, Program Analyst 

John Jadick, Program Analyst 

Kristine Odina, Program Analyst 

Kelly Herberger, Communications Analyst 

Christine Haynes, Independent Referencer 

www.oig.dhs.gov 22 OIG-13-99 
 

 

 

 

 

 

 

 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix H 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Acting Chief Privacy Officer 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Transportation Security Administration 

Administrator 

Deputy Administrator 

Transportation Security Administration Audit Liaison 

Congress 

Congressional Oversight and Appropriations Committees, as appropriate 

www.oig.dhs.gov 23 OIG-13-99 
 

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