A Return to Private Security Screening at Airports?: Background and Issues Regarding the Opt-Out Provision of the Aviation and Transportation Security Act
Released: 2004-05-14T00:00:00

Background

A particularly interesting facet of the Aviation and Transportation Security Act (ATSA; P.L.107-71 ) is the security screening opt-out provision (Sec. 108) that allows airports, with the approvalof the Transportation Security Administration (TSA), to implement a system using private screenersin lieu of federal screeners to inspect airline passengers and baggage beginning in November 2004. Specifically, ATSA required the TSA to fully deploy a federal screening workforce within one yearafter enactment, and permits airports to opt out of the federal screening program two years thereafter. Therefore, airports will officially be eligible to opt out of the federal screening program on or afterNovember 19, 2004. What distinguishes the opt-out program is that it delegates the authority ofdeciding whether to pursue private screening to airport operators, but leaves the actual oversight andcontract monitoring responsibilities in the hands of the TSA.

The opt-out provision proposes a shared responsibility between the federal government,airport operators, and private screening firms, with specific roles and responsibilities for each to beformally defined in the TSA's implementation of this program. Private screening systems have beenin place at many European airports for some time and are generally regarded as being efficient andeffective. For example, the U.S. General Accounting Office (GAO) reported that airport operatorsare responsible for screening operations at airports in Belgium, France, and the UnitedKingdom. (1) At many ofthese locations, airports contract with screening companies to conduct screening operations, whilesome airports in the United Kingdom directly manage and conduct screening operations. However,successful implementation of the opt-out program in the United States is likely to be highlydependent on the specific policies and guidelines established by TSA to implement and manage theprogram. Consequently, the implementation of the opt-out provision of ATSA is likely to be ofconsiderable interest to Congress as it engages in oversight to assess whether the program achievesits intended objectives, or whether the program or its implementation should be modified throughrecommended policy changes or legislative action.

Screening contracts awarded under the opt-out provision would be determined by the TSAand federally managed by the TSA. Therefore, the opt-out program, as defined in ATSA, does noteliminate the federal responsibility for security screening at airports or place airport operators orairlines directly in charge of security screening contract oversight. Thus, the security screeningopt-out program is not a return to the operational structure for aviation security that existed beforethe passage of ATSA, where airlines were directly responsible for screening operations, nor is it aprogram that would place the responsibility for direct oversight of screening contracts in the handsof individual airport operators. Rather, the opt-out program establishes a federally funded andmanaged, contractor-operated framework for security screening at airports. Nonetheless, the opt-outprovision affords each airport operator the opportunity to assume an active role in deciding whetherprivate screening operations are suitable for a given airport and providing recommendations forprivate screening operations. In some cases, airports may elect to take an active role in privatescreening operations by directly employing screeners and managing screening activities. The opt-outprovision as defined in statute offers such flexibility in the implementation of private screeningoperations at each airport, leaving it up to TSA to decide if an airport's proposal for private screeningwill meet the desired objectives without compromising security. On the other hand, while airlinesare clearly major stakeholders in aviation security, their input or involvement in implementingprivate screening operations role is not specifically addressed in the provision, leaving it largely upto TSA to determine how airline input or involvement in the planning, decision-making, andimplementation of private screening operations will be handled.

Historical Overview of the Role of Airports, Airlines, and the Federal Government in Passenger Screening

The FAA first implemented domestic passenger security screening at airports in the UnitedStates in 1973, requiring that airlines conduct pre-board screening of passengers and their carry-onitems. The Air Transportation Security Act of 1974 ( P.L. 93-366 , 88 Stat. 409) specifically required the screening of all passengers and their carry-on baggage and required the FAA to submitsemiannual reports to Congress detailing the effectiveness of screening procedures. This policy ofscreening domestic passengers, as well as passengers on international flights, was implemented inresponse to the large number of hijackings on domestic flights in the United States during the 1960sand early 1970s. Between 1961 and 1972, 134 domestic flights had been hijacked in the UnitedStates, most destined for Cuba. (2) By the 1990s, incidents of air piracy were virtually nonexistent inthe United States.

Nonetheless, deficiencies in passenger pre-board screening practices had been identified inseveral Department of Transportation (DOT) Inspector General's investigations and GAOexaminations of airport security. (3) However, based on the precipitous decline in domestic acts of airpiracy after the implementation of passenger screening, the FAA and the airline industry generallyviewed pre-board screening as an effective deterrent against hijackings. While the existing policyand airline-operated system for screening passengers and their carry-on items was generally viewedfavorably by both the FAA and industry stakeholders, the growing threat of aircraft bombingsspurred significant policy debate over aviation security practices in the 1990s. Following the 1988bombing of Pan Am flight 103 over Lockerbie, Scotland, and other high-profile bombings of civilianairliners overseas, the threat of aircraft bombings was perceived to be the most significant andgrowing threat to aviation security and was the primary impetus behind efforts to revise aviationsecurity policy in the United States.

In response to increasing threat of terrorist acts against aircraft, Congress passed the AviationSecurity Improvement Act of 1990 ( P.L. 101-604 ). This comprehensive measure responded to thenational security risk of threats to aviation by increasing the FAA's role in aviation securityintelligence, and requiring the deployment of federal security managers to oversee airport securityat all Category X airports (4) and other airports where the FAA determined deployment of a federal security manager was neededto meet aviation security needs. The statutory duties of federal security managers included theoversight and enforcement of federal security requirements implemented by air carriers and airportoperators, including screening operations. However, the legislation did not address or alter theexisting system of airline-managed screening operations.

The Federal Aviation Authorization Act of 1996 ( P.L. 104-264 , 110 Stat. 3213) required theFAA to study and assess whether and, if so, how to transfer certain responsibilities, such aspassenger screening, from air carriers to either airport operators or the federal government or toprovide for shared responsibilities between air carriers on the one hand and airport operators or thefederal government on the other. During the ensuing debate, proposals to either federalize securityscreening operations or make airport operators responsible for security screening were both evaluatedbut were ultimately dismissed for a variety of reasons. (5)

From the perspective of airport operators at the time, placing airports in charge of screeningoperations introduced logistic complexities and diffusion of responsibility that they believed woulderode security and increase the risk of terrorist infiltration of the aviation system. In 1996, RichardMarchi, senior vice president for technical and environmental affairs for the Airports CouncilInternational - North America (ACI-NA), speaking for his organization and the AmericanAssociation of Airport Executives (AAAE), the two primary trade organizations representing airportsin the United States, summarized the airports' collective position on airport involvement in passengerscreening at the time, stating that:

By interposing another controlling entity -- an airportor federal employee -- into the midst of the check-in process continuity is lost, and the suspect personand/or their baggage would have the opportunity to evade security measures such as a positivepassenger/baggage match.... [Airline-managed screening] works because a single entity -- in thiscase, the airline -- is responsible for controlling all aspects of that passenger's screening process. Ifairport or federal government employees were to become responsible for effective screening ofsuspect passengers and/or baggage, they would multiply the number of points in the system wherethere must be a hand-off of responsibility and, in turn, multiply the number of opportunities for amiscue. (6)

Ultimately, the FAA elected to retain the system of airline-controlled screening operationswhile proposing increased federal involvement in research and acquisition of screening technologiessuch as explosive detection systems (EDS) and regulatory oversight of screening companies. Boththe airlines and the airports supported this evolutionary approach that maintained the status quo withregard to airline responsibility for conducting screening operations while increasing federalinvolvement in the deployment of screening technologies and oversight of screening operations.

Under the Federal Aviation Administration Reauthorization Act of 1996 ( P.L. 104-264 ), theFAA was directed to certify screening companies and develop uniform performance standards forscreening operations to increase federal oversight of these activities. However, the FAA was stillengaged in the rulemaking process to implement these certification standards when the terroristattacks of September 11, 2001 occurred. Thus, up until the terrorist attacks of September 11, 2001,and for about six months thereafter when the TSA assumed control over screening contracts, theairlines were responsible for the pre-board screening of passengers and their property. However,screening operations were typically carried out by private security firms under contracts with theairlines. Under this system, there was a lack of uniform standards for screening operations, therewere frequent incidents of poor job performance, and high turnover rates were commonplace amonglow-paying screener positions.

In 1999, there were 66 private screening companies providing airport screening at the nation'scommercial passenger airports. (7) Many of these contracts were on a month-to-month basis. Furthermore, at some larger airports, multiple contracts were in place at a single airport, withmultiple screening companies providing screening at security checkpoints in different parts of thepassenger terminal. In 2000, the FAA reported that the average hourly wage for airport screenerswas $5.75, and not all screeners received additional benefits. The FAA further noted that averageannual turnover rates for screeners exceeded 100% in many locations. Also, at that time, there wereno uniform standards for the selection, training, performance, and certification of private screeningcompanies and their employees. (8) Such standardization had been recommended by the White HouseCommission on Aviation Safety and Security, (9) and a requirement to certify screening companies and developuniform performance standards was included in the Federal Aviation Authorization Act of 1996( P.L. 104-848 ).

Five years later, when the terrorist attacks of September 11, 2001 occurred, the FAA wasmoving forward (10) --many argue much too slowly -- with plans to establish the required regulatory regime for certificationand oversight of screening companies. However, the terrorist attacks prompted the introduction andenactment of ATSA, which established a federal airport security screening force within the newlyestablished Transportation Security Administration (TSA).

During the 107th Congress, debate over the establishment of the TSA focused, in part, on theextent of federal involvement in screening operations. Whereas the House-proposed legislation( H.R. 3150 , S. 1447 Engrossed Amendment as Agreed to by House, 107thCongress) would have only required those supervising screening operations to be federal employees,the Senate bill ( S. 1447 , 107th Congress) proposed to establish a federal screeningworkforce within the Department of Justice. The conference substitute that became the cornerstoneof ATSA consisted of the establishment of the TSA and the requirement for the TSA to assumeexisting screening contracts and convert to a security screening workforce composed entirely offederal workers within one year.

During the debate over aviation security following September 11, 2001, airport managersneither advocated nor dismissed the possibility of airport-managed screening operations. Thisrepresented a shift in perspective on the part of the airports, which had previously viewed their roleas being limited to providing the physical space for airport operations and security of that physicalspace, but remaining at arm's length from the operational aspects of air transportation, including thepre-board screening of passengers. (11) Airports generally viewed their role in aviation security assignificantly increasing following September 11, 2001. Airports also recognized that this increasingresponsibility and accountability for implementation of airport security programs would require closecoordination and integration with the newly formed TSA, who would serve in a dual capacity as boththe overseer of airport security programs and the direct provider of security screening operationswithin the airport. Airport operators recognized the importance of a shared responsibility for airportsecurity between themselves and the TSA, as articulated in the following statement by CharlesBarclay, president of the American Association of Airport Executives (AAAE):

As we move forward, it is clear that the TSA can andshould do even more to turn to airports as a partner in the quest to develop and implementcost-effective solutions to security issues. Airports are at their very core public institutions andtherefore much different from the rest of the aviation industry, which is to a large extent driven bythe need to show profits. The primary mission of an airport is not to make money, but rather to servethe community and the national aviation system by encouraging competitive air service and ensuringa safe and secure environment for the public. As local governments, airports have always beenresponsible for the safety and security of their facilities and the people who use them. This willcontinue to be so, regardless of the roles assumed by the TSA. Since we share the same mission asthe TSA with regard to security, it is only appropriate that we develop a cooperative and coordinatedapproach to solving problems. (12)

While the airports advocated a stronger partnership between themselves and TSA, theairports never formally indicated that they wanted to take on a more active role in managing ordefining the nature of passenger screening operations. Nonetheless, ATSA, as enacted, provided forfuture airport involvement in security screening in a limited capacity involving sharedresponsibilities between the TSA and airport operators under the opt-out provision. ATSA alsoestablished a pilot program to assess private screening operations at five airports. Specifically,ATSA contained two separate provisions for the use of private screening companies at airports. Thefirst provision established a private screening pilot program at five airports. (13) The second provision wasthe opt-out provision, which specifies that two years after the federal screening force is fullydeployed, airports can begin submitting applications to the TSA requesting to use private screeningentities in place of federal screening operations. (14) Under this provision, it would ultimately be up to TSA toapprove such requests from airports on a case-by-case basis, oversee private screening operations,and monitor private screening contracts where they are deemed appropriate.

Airports' Perspective on the Opt-Out Provision

Because airport operators have the option to pursue private screening under the opt-outprogram, they have a significant vested interest in determining the potential costs and benefits ofdoing so. On the whole, airport operators are approaching the prospect of private screening underthe opt-out provision with cautious optimism. While the prospect of private screening appears tooffer some foreseeable benefits, the potential costs and implications of pursuing private screeningoperations are not yet fully understood, since no specific details of the program's implementationhave been provided by TSA to date.

The ACI-NA has indicated that more than 50 airports are participating in its initiative togather information and formulate input for the development of the opt-out program. It expects that20 to 30 of these airports, about 4% to 7% of all commercial airports with federal screeners, willpursue private screening options under the opt-out program as currently defined in law. (15) If airport concerns areaddressed in TSA's implementation plan or through legislation, ACI-NA thinks that the number ofairports looking to opt out could grow to 50 to 100 (roughly between 11% and 22% of airports withfederal screeners).

Research by the Reason Public Policy Institute suggests that interest among airports in privatescreening under the opt-out provision may be even higher. (16) In interviews with 19airport directors, they found that nine (47%) expressed interest in pursuing private screening, andanother five (26%) indicated that they may pursue privatizing screening depending on the specificdetails of the opt-out program developed by TSA. Of the five airport directors who did not expressan interest in the opt-out provision, three indicated that they believed the opt-out provision in ATSAwas too restrictive because it did not relinquish control of the security screening contracts from theTSA to the airport authority. These directors indicated that they might be interested in an opt-outprogram that gave them more direct control over security screening contracts.

The rationale for considering opting out of the federal screening program from theperspective of some airport operators largely reflects their concern over the impact of federalscreening operations on airport facilities and services as well as their perception of TSA'seffectiveness in addressing local airport factors relevant to passenger and baggage screeningoperations, security performance, and passenger service at the airport. This sentiment was reflectedin the concerns of George Doughty, executive director of the Lehigh Valley International Airport inAllentown, Pennsylvania, who was quoted as stating that "[t]he problem inherent in the federallycontrolled screening process is that you end up having a federal agency sitting in the middle of yourterminal, essentially answerable to nobody." (17) In the current environment of heightened terrorist threats andenhanced security measures, airports view themselves as major stakeholders in aviation securitypolicies, because these policies and the manner in which they are implemented have the potentialto significantly impact airport operations and passenger safety and service. These impacts, in turn,reflect upon the perception of the airport by air travelers. Airport operators indicating an interest inopting out of the TSA federal screening program and implementing private screening contracts attheir airports indicate four main objectives for doing so: (1) increasing the quality of airportscreening; (2) increasing flexibility to handle local factors affecting security requirements; (3)increasing the uniformity and consistency of security operations at the airport level; and (4)improving customer service. Airports hope that the opt-out program as implemented will addressthese goals, and the extent to which airports pursue private screening under the opt-out provision willlikely be indicative of how favorably they perceive the TSA's implementation plan for the opt-outprogram with regard to these objectives.

In general, most airports are currently taking a "wait and see" position, not committing to anyparticular course of action until more details of the implementation of the opt-out provision areprovided by the TSA. Currently, the details of the implementation plan are being developed but havenot been released by the TSA. The implementation plan is expected to be released by May 19, 2004,six months prior to the effective date of the opt-out provision.

A TSA-sponsored assessment of the ongoing private contractor pilot program in place at fiveairports found that, in general, there was no distinguishable difference in cost or performancebetween private screening contracts and federal screening operations. (18) Similarly, both theDepartment of Homeland Security (DHS) Inspector General and the GAO concluded that, based onlimited performance testing data, private screeners performed similarly to federal screeners. (19) The DHS InspectorGeneral, however, cautioned that these findings were insufficient to conclusively determine anydifferences between private screeners and federal screeners and suggested that the performance ofboth groups was below expectations, while the GAO concluded that the pilot program was notestablished in a manner that permits a meaningful assessment of any differences in performancebetween federal and private screening and the underlying reasons for these differences. Thesefindings are likely to be somewhat of a disappointment to airports that were hoping to obtainmeaningful data from the pilot study to assist them in determining whether private screeningoperations may be of benefit to them.

Officially, the ACI-NA has indicated that it supports an expanded opt-out provision. (20) The ACI-NA, along withthe AAAE, has identified four key issues to be addressed in implementing or potentially modifyingthe opt-out provision. (21) These include allowing for more direct control over screening operations; increasing flexibility inscheduling and deployment of screening personnel; resolving airport liability issues; and addressingfunding for private screening.

First, airports want sufficient flexibility in the implementation of the opt-out program so thatthey may choose to manage and conduct screening operations themselves, rather than throughcontracts with third-party private screening firms. The prospect of such an arrangement isparticularly appealing to smaller airports, which can increase staff flexibility if they have directcontrol over screening operations. For example, airports may be able to assign screeners to otherduties, such as airport perimeter patrols, during lulls in passenger traffic. Another option thatairports would like to be able to consider is a hybrid model where TSA screeners could besupplemented by private screeners during peak periods to meet needs for a more flexible workforce. It is unclear whether such an arrangement would be permissible under the existing opt-out program;however, it is not explicitly excluded in statute.

Along these same lines, the airports also want sufficient flexibility in scheduling anddeploying private screeners. Flexible scheduling could, for example, allow airports to adjust forlocal factors affecting passenger volume at checkpoints. Many believe that current scheduling ofTSA screeners is far from optimal, and screener deployment strategies are inefficient. This maylargely be due to TSA's difficulties in hiring and retaining part-time screeners and establishing theright balance of full-time and part-time screeners to staff screening positions. (22)

Third, airports have expressed significant concerns over the potential liability exposure ofan airport if it submits a proposal for private screening under the opt-out provision. Their concernis that, in the event of a security incident, the airport could be exposed to significant liability becauseof its decision to pursue private screening operations. While the direct oversight of private screeningwould be handled by the TSA, airports may have liability exposure because of their involvement inactively pursuing a private screening operation and, to some degree, making recommendationsregarding how that private screening operation is to be organized and implemented. While no formalproposal has been made, airports may recommend amending the opt-out provision or adopting someother statutory protection that would indemnify or limit the liability of airports whose privatescreening proposals are adopted and implemented by the TSA. Some airport officials have suggestedthat such protection is critical for their consideration of the opt-out program.

Finally, airports have expressed continuing concern over funding allocations for airportscreening. This issue extends beyond the opt-out provision to screening operations in general. However, exactly how private screening operations will be calculated into the allocation of securityscreening appropriations among airports remains to be determined. Airports are seeking an agreedupon index to determine funding allocations based on data such as numbers of origin and destinationpassengers, numbers of checked bags processed, and local factors such as an airport's physical layoutand the number of checkpoints and screening lanes. The index will also likely need to considerprojected growth in passenger demand at each airport and any specific airport projects that willsignificantly impact screening operations over the course of a fiscal year.

Some Possible Options for Congress

Besides addressing the concerns of airport operators through oversight of TSA'simplementation of the opt-out program and possible legislative action to further define the programand address the above mentioned issues raised by airports, Congress may engage in further debateover the merits of the opt-out provision. The fundamental issue regarding the degree of federalinvolvement in screening operations may re-emerge during this debate. Consequently, Congress maydebate options to repeal the opt-out provision or to amend the provision in a manner that would limitits applicability. On the other hand, Congress may consider options to expand or encourageparticipation in the opt-out program if it is believed that increased screening efficiency could berealized through private screening contracts without compromising the level of security provided byfederal screening operations.

Options for Maintaining a Federal Screener Workforce

A principal consideration in the debate over the opt-out provision, and more generally, thedebate over the appropriate federal role in aviation security, is the extent to which screeningactivities should be considered 'inherently governmental' functions to be carried out by federalemployees. While this issue was an implicit central theme in much of the debate over aviationsecurity following the terrorist attacks of September 11, 2001, it may be revisited by Congress inevaluating the merits of the opt-out provision.

The issue is related to ongoing debate over the appropriate federal role in critical aviationfunctions that affect safety as well as the security of the traveling public. Some members ofCongress advocated the need for direct government involvement in providing critical safety-relatedaviation functions during the debate over protecting air traffic controllers and other air traffic relatedfunctions from possible outsourcing to private entities. (23) In that case, the argument for federalized air traffic operationsfocused on the fact that air traffic controllers and other air traffic related functions provide safetycritical services that, in the opinion of some, are so intimately related to the public interest as tomandate performance by government personnel. However, the opposing viewpoint contends thatthe provision of air traffic services is a commercial enterprise and has been privatized in othercountries, including Canada, Australia, and several European countries, as well as on a limited basisin the United States under the federal contract tower program and at non-federal air traffic controltowers. Other safety critical workers in aviation such as pilots, flight attendants, aircraft dispatchers,and aircraft maintenance workers are also the employees of private entities whose safety-relatedactivities are regulated by the FAA at arms-length. Thus, numerous functions directly affecting thesafety and well-being of passengers are carried out by private entities making it possible to concludethat such activities may not necessarily be inherently governmental in nature.

In the current environment of heightened concern over threats to homeland security, airportscreening operations are considered by many to have a unique importance that is fundamentallylinked to national security objectives. In fact, one key argument for the federalization of airportscreening functions following the attacks of September 11, 2001 focused on the recognition by somethat screening activities had been elevated to a level of strategic importance for homeland security. That is, screening operations were seen as critical front line measures to prevent further terroristattacks against aviation assets and the traveling public, as well as, to protect citizens and propertyfrom additional suicide hijackings using aircraft as weapons of mass destruction. From theviewpoint of those advocating federalization of airport screening operations, screener positions areseen as having a critical role in homeland security that has been compared to the functions ofcustoms and immigration officers, particularly at larger airports. Among many, there is anexpectation that screening activities should be performed by government personnel. This sentimentappears to be reflected in public opinion. For example, one year after TSA assumed responsibilityfor screening, pollsters from Zogby International found that 69% of likely voters felt safer knowingthat the federal government has a trained professional screening workforce, and only 5% indicatedthat they now felt less safe. Of those polled, 47% indicated they would feel less safe if privatescreening companies, like those who conducted airport screening prior to September 11, 2001, wereused for baggage screening operations instead of the federal government under the opt-outprovision. (24)

Specific Office of Management and Budget (OMB) guidelines on identifying inherentlygovernmental functions includes among the characteristics of such functions activities thatsignificantly affect the life, liberty, or property of private persons. (25) While activities such asair traffic control and airport security screening may seemingly be eligible to be classified asinherently governmental activities based on consideration of the critical role they play in the safetyand security of the air traffic system and the protection of the traveling public and their property, thecurrent administration has maintained that such functions are not inherently governmental. Inkeeping with the current administration's agenda to encourage competitive sourcing whenappropriate, a stringent interpretation of what functions are considered inherently governmental hasbeen adopted. (26) Supporters of this viewpoint argue that this is also consistent with the fact that airport screeningoperations had been conducted by private entities in the past and are conducted by private firms atmany foreign airports.

From the Administration's standpoint, the determination that aviation security screeningfunctions are not inherently governmental has already been made and is consistent with the currentuse of private screeners under the private screening pilot program and the impending implementationof private screening operations under the opt-out provision of ATSA. Under the Federal ActivitiesInventory Reform (FAIR) Act ( P.L. 105-270 ), federal jobs considered commercial in nature mustbe listed on an annual inventory for each agency. (27) The federal security screener positions within the TSA arealready designated as being commercial in nature on this inventory, but are presently listed as beingexempt from public-private competition because of a statutory requirement that those jobs be carriedout by federal employees. As of November 19, 2004, that exemption will no longer be extended tosecurity screeners at airports seeking to use private screeners because of the opt-out provision inATSA. Therefore, a modification of existing statutes through legislation, either repealing ormodifying the opt-out provision, would be required if Congress determines that maintaining a federalforce of airport security screeners nationwide is in the best interest of aviation security.

While the debate over whether operational functions such as passenger screening and airtraffic control should be inherently governmental in nature is fundamentally linked to philosophicaldifferences in opinion regarding the appropriate role of the federal government in operational aspectsof aviation safety and security, there are two pragmatic considerations for evaluating whetherprivatizing screening operations are of potential benefit to the federal government. These twoconsiderations are: 1) the potential for cost savings, and 2) the elimination of conflicts of interest thatexist when the federal government serves as both a service provider and a regulator of that serviceas is the case currently in airport screening operations and air traffic control.

Privatization advocates often cite the conflicting role of government entities serving in thecapacity of both regulator and service provider as being inherently problematic from the standpointof accountability. (28) Airport security, they argue, may be compromised by the fact that the TSA, in its role as both theregulator and the provider of aviation security, is essentially self-regulating. As such, the TSA isseen as having an inherent conflict of interest that may prevent deficiencies in its operations frombeing properly identified and corrected. A similar line of reasoning has been used to bolster theargument for privatizing air traffic controllers and other air traffic related functions within the FAA.

Privatization advocates argue that TSA's long term role should be focused on the followingfunctions, leaving the day-to-day airport security operations in the hands of private security firms,as the opt-out program provides for:

Developing aviation security specifications;

Sponsoring aviation security research and development;

Coordinating intelligence sharing between federal agencies and the aviationcommunity; and

Conducting oversight and monitoring performance of a unified, airport-runsecurity system. (29)

However, a system of federal oversight over privately operated airport security system doesnot necessarily ensure better accountability of screening operations. The federal government's abilityto regulate and conduct oversight of private entities at arms-length has often been questioned, andadequate oversight is often resource intensive. For example, within aviation, deficiencies in theFAA's ability to provide adequate resources to oversee aircraft operators and maintenance repairstations has been identified in NTSB accident investigations (30) , Department ofTransportation Inspector General's findings (31) , and GAO (32) probes. These assessments have raised significant questionsregarding the adequacy of FAA inspector staffing levels and training.

Similar concerns over the FAA's ability to oversee security screening at airports were raisedwhen the FAA had oversight authority of airline-managed screening operations. (33) Also, the DOT Office ofthe Inspector General found TSA's financial oversight of private screening operations during thetransition from airline-managed screening to federal screening operations to be significantly lacking,leading to significant overcharges for screening functions and improper billing and time accountingby screening companies and their employees. (34) During this period, TSA was under pressure to meet a largenumber of mandates required under ATSA and did not have the resources to adequately monitor andaudit contractor operations. In response to these findings, the TSA contracted with the DefenseContract Management Agency and the Defense Contract Audit Agency for contract support andoversight of private screening contracts prior to the full deployment of federal screeners. Whilesimilar problems have not been observed with TSA's oversight of the pilot program contractoperations currently in place at 5 airports, the adequacy of TSA's capabilities to monitor and auditcontractor operations under the opt-out program may be an issue for congressional scrutiny.

This past experience indicates that developing a comprehensive plan for the oversight ofprivate screening contracts under the opt-out provision will be important if private screening optionsare to be effective. In addition to overseeing the development of TSA's oversight plan formonitoring contract screening operations, Congress may also debate whether or not screeningperformance can be assured under a system of federally-managed contract screening operations.

If Congress determines that it is in the best interest to retain a federal force of airportscreeners throughout the aviation system, then legislative action would be required to repeal theopt-out provision of ATSA. A concurrent resolution ( H.Con.Res. 275 ) was introducedin the House on September 9, 2003 by Representative Andrews. This resolution contains languageexpressing the sense of Congress that all airport screening functions should be continued to beperformed by federal employees. While this measure, if adopted, may encourage the TSA andairports to continue using federal screeners or discourage the pursuit of private screening options,it does not provide any statutory authority revoking or modifying the opt-out provision.

If it is believed that the opt-out program may be applicable only in specific situations,Congress may debate whether the opt-out provision should be statutorily limited in its scope. Congress may consider proposals specifically outlining the applicability of the program, andprohibiting outsourcing of screening operations outside of these defined applications. Congress mayalso consider proposals to establish stringent criteria for airports in order to be eligible foropting-out of the federal security screening program.

Options for Increasing Privatization of Screening Operations

On the other hand, if Congress determines that it is in the best interest for aviation securityto expand private screening options, it may do so in a variety of ways. One technique may be tooffer specific incentives for airports to elect private screening options in lieu of federal screeners. Another option that may be considered is increasing the statutory flexibility of the opt-out programthrough measures that would provide airports with more direct control over the management andoversight of security operations. Either of these options may work to increase the attractiveness ofthe opt-out program to airports. More aggressive options may include abandoning the opt-outprovision, which currently requires each airport to submit a proposal to TSA for establishing anon-federal screening system at their airport, and instead establishing a comprehensive system-wideprivatization program for airport screening at all commercial passenger airports. While no formalproposals to expand the federal screening opt-out provision of ATSA have be offered to date, suchoptions may be considered once further details of the opt-out program implementation are madeavailable.

One group of airports that may be able to utilize private screeners to implement passengerscreening where there currently is none are those airports with infrequent commercial flights usingsmall aircraft with 60 or fewer passenger seats. While ATSA specifically requires pre-boardscreening of all passengers on air carrier flights, TSA's interpretation of this requirement hasexempted certain airports that have a limited number of daily flights using these small commuteraircraft. Consequently, some of these airports do not currently have federal screeners. (35) At some of these airports, passengers and their property are not screened at all prior to boarding, and in other cases, airlineemployees may inspect carry-on items by hand. While these airports would seemingly benefit fromprivate screening operations as a means to put in place cost-effective physical screening ofpassengers and their property, it is unclear if these airports would be eligible to apply for privatescreening under the opt-out program since TSA has exempted them from federal screeningrequirements. Also, since funding for screening operations at these airports is currently notbudgeted, additional budget resources would be required to implement private screening, or for thatmatter federal screening, at these airports. Congress may debate whether to explicitly include theseairports without current federal screening operations among airports eligible for the private screeningprogram, and examine the costs needed to conduct private screening operations at these airportswhere federal screening is currently not budgeted for or implemented.

Another potential benefit of private screening operations is that increased flexibility instaffing may make it possible to screen some or all airport workers at airports where screening ofemployees with access to secured areas is currently not conducted. While the specific securityprocedures for airport workers vary from airport to airport and are detailed in each airports securityprogram, ATSA did not address the screening of airport workers and existing federal statutes do notrequire the screening of these individuals, even if they work in secured airport areas or have accessto aircraft. ATSA only requires that these individuals undergo a fingerprint-based criminal historyrecords check. Some Members of Congress have raised concerns over the practice at some airportsof allowing workers to bypass screening checkpoints and enter secured areas through employeeaccess points where they only have to show their airport worker identification. (36) Since there is no statutoryrequirement for screening of airport workers, airports could propose to use private contractors toscreen airport workers as part of their security program and could implement such procedures ifapproved to do so by the TSA. This could be done independent of the screening of passengers byprivate screening firms under the opt-out provision. However, the cost of implementing such aprogram, which is likely to come directly out of an airport's operating budget, would likely make thisoption unattractive to many airports. If airports are able to leverage funds for private screening underthe opt-out program through savings obtained from more flexible staffing of checkpoints, reducedoverhead costs, and so on, then airports may be able to carry out full or random screening of airportworkers with access to secured areas of the airport while minimizing the cost associated withscreening airport workers.

Another proposal that has been suggested by airport trade organizations is the use of acombined screening force consisting of both federal screeners and private screeners. (37) Under such a model,airports may elect to augment or supplement a core federal screening force with private screeners. Additional flexibility in scheduling private screeners may allow airports choosing such an option toaddress unique demand characteristics, such as high volumes of seasonal traffic, with part-time orseasonal screeners. While the opt-out provision does not appear to preclude such an arrangement,the TSA and airports may seek clarification from Congress whether a mixed-model of privatescreeners working alongside federal screeners is in keeping with the intent of the opt-out provision.

Additional Considerations for Congress

Airport Liability Risk. One issue raised byairports is their potential liability under the opt-out program. The question of liability remainsunclear and may need further clarification through legislation. In essence, an airport that requestsprivate screening would have an indirect role in implementation of private screening. The level ofdirect involvement of the airport authority would largely depend on the specific manner in which theopt-out program is implemented and the details of any specific proposal offered by a airport authorityunder the implementation framework established by the TSA. Some airports may seek minimalinvolvement, whereas other airports may want to directly manage screening operations.

While the degree of liability for screening failures may reflect the degree of directinvolvement that an airport has in screening operations, this may not necessarily be the case. Also,it is unclear whether simply requesting private screening under the opt-out program would introducea liability risk for an airport. This may depend, in part, on the level of specificity regarding privatescreening operations that will be required from airports by the TSA. A greater level of specificitymay expose airports to greater liability risk if details of the proposed program are implemented ancan be shown to have resulted in screening deficiencies. The extent of liability exposure of anairport operator under the opt-out program is somewhat speculative since few details of the programare available. However, airport operators are likely to weigh liability risk, as well as the availabilityand cost of insurance to guard against such risk, heavily in their decision whether to pursue privatescreening under the opt-out provision. Airports may seek specific liability protections fromCongress, although no formal proposals to amend the private screening opt-out provision to addressliability protection have been offered to date.

Exclusion of Foreign-Owned Security Firms. One concern over the opt-out program is the statutory requirement that security screening providersunder the provision be U.S. owned and operated firms. ATSA requires that private screening firmsbe owned and controlled by a citizen of the United States, so long as TSA is able to identify U.S.firms with the capability to carry out screening operations at those airports seeking private screening. This measure was presumably included in response to perceived inadequacies of airport screeningfirms identified in the aftermath of the September 11, 2001 attacks. Several of the largest airportsecurity firms in operation at the time were foreign controlled. (38) Consequently, these firmswould not be permitted to resume private screening operations under the opt-out provision.

The Reason Foundation concluded that the current array of U.S.-owned security firms, whichincludes three relatively large corporations and several smaller firms that once operated at five ormore large to medium sized airports, has the potential to provide screening at up to 10% ofcommercial passenger airports where federal screeners are deployed. (39) This capacity is likely tokeep up with demand for private screening at least over the short term as it will take some time forTSA to review each opt-out proposal and implement a transition plan at each airport. As the opt-outprogram evolves, it is likely that these existing U.S.-owned security firms would be able to growtheir capacity to meet demand, or new U.S.-owned entities could emerge.

However, there may be other reasons why Congress may reconsider the prohibition onforeign ownership of security screening entities under the opt-out provision. Some privatizationadvocates have criticized the restriction on foreign ownership as being inconsistent with free tradeprinciples and possibly with international trade agreements. (40) Advocates for removingthe ban on foreign participation in the opt-out program also point out that many of these securityfirms are located in countries that are close allies in the war on terrorism that pose no specificterrorist threat to the United States. Futhermore, many of these firms have extensive experience inaviation security that can be brought to bear in implementing private screening under the opt-outprovision. Consequently, some privatization advocates have proposed an option to amend theopt-out provision to allow participation by firms owned by nationals of U.S. allies in the war againstterrorism. (41)

Private Screener Employment Rights andBenefits. Both the opt-out provision and the security screening pilot programspecify that private screeners are to be compensated and provided with other benefits that are at leastequivalent to that received by federal screeners. However, some Members of Congress have raisedconcerns over apparent differences between benefits for most contract screeners in the private pilotscreening program and their federal counterparts. (42) Specifically, a defined-benefit pension plan, such as that offeredto federal screeners and other federal employees, in addition to participation in a 401(k) retirementprogram, is currently only offered at one of the five private screening pilot airports: Jackson Hole,Wyoming. At the other four private screening pilot airports, screeners are only eligible to participatein a 401(k) plan, and do not have a defined-benefit pension plan in addition to or in lieu of those401(k) programs. Some Members of Congress have asked the TSA to look into the specific benefitsoffered to private screeners to ensure that statutory obligations are being met, and if not, to correctany deficiencies.

Another issue that may be debated in Congress is the potential impact of organized labor andcollective bargaining activities on private screening operations. While collective bargaining rightsare given to most federal employees, TSA screeners may not join labor organizations or engage incollective bargaining activities. Title 5, U.S. Code, Â§ 7102 gives federal employees the right torepresent an organized labor group before entities of the U.S. government and engage in collectivebargaining with regard to employment conditions. The Homeland Security Act of 2002, inestablishing the Department of Homeland Security, established a new human resources managementsystem for the department to be more flexible and responsive to meeting unique homeland securityneeds. However, in defining this new system, statutory requirements specifically stated that thesystem shall "ensure that employees may organize, bargain collectively, and participate through labororganizations of their own choosing in decisions which affect them." (43) However, the TSA wasgiven broad authority under ATSA to develop standards for hiring and retaining screeners underTitle 49, U.S. Code , Â§114(e) that has been interpreted to include the right to make determinationsregarding screener participation in labor organizations.

The TSA determined that "mandatory collective bargaining is not compatible with theflexibility required to wage the war against terrorism" and, based on this assessment, issued an orderprecluding collective bargaining by TSA screeners. (44) This policy has been challenged in federal court in a suit filedwith the U.S. District Court for the District of Columbia by the American Federation of GovernmentEmployees (AFGE), a public employee union that has been trying to organize screeners at severalairports. (45) The courtruled in November that the Federal Labor Relations Authority (FLRA) had jurisdiction over thismatter. (46) The FLRAhad previously ruled that the prohibition against collective bargaining for federal screeners was legal. AFGE has filed an appeal with the U.S. Court of Appeals for the District of Columbia.

While a final determination as to whether federal screeners may join labor unions and engagein collective bargaining is presently a matter under review by the federal courts, the role oforganized labor in private screening operations under the opt-out program may be an issue ofparticular interest to Congress. The TSA does not have any apparent statutory authority to prohibitprivate screeners under the opt-out program from unionizing and engaging in collective bargainingpractices with their contract screening firm employers. Rather, the specific TSA authority to developstandards for hiring and retaining security screeners appears to apply only to federal screeningoperations.

The TSA's conclusion that the presence of organized labor and the need for collectivebargaining actions are incompatible with the need for a flexible screening workforce may conflictwith the possibility that private screeners could be unionized under the opt-out provision. The TSAmay seek legislative action from Congress to broaden its authority to include setting employmentstandards for private screeners as well as for federal screeners.

On the other hand, Congress may debate whether federal screeners, as well as privatescreeners, should be allowed to join unions and engage in collective bargaining as their privatescreening counterparts will presumably be able to do under current statute. This issue may rise tosignificance as the opt-out program evolves, particularly if morale and esprit de corps among federalscreeners declines because of a perceived imbalance in their employment rights compared to privatescreeners. The potential for such an effect may be heightened if combined screening forces areimplemented at some airports resulting in unionized private screeners working alongside federalscreeners who are prohibited from unionizing.

Evaluating the Ongoing Private Screening Pilot Program

In order to examine the relative cost and effectiveness of private screening, ATSA containeda provision establishing a pilot program using private screeners at five airports. Under the provision,one airport from each security risk category was selected from the pool of airports that had appliedto participate in the pilot program. The five airports selected are listed in Table 1 . These fiveairports, dubbed the "PP5" by TSA, have operated under TSA managed contracts for about the last1 Â½ years.

Table 1. Airports in the Security Screening PilotProgram

The TSA recently contracted with Bearing Point and Abt Associates to develop a comparative assessment technique and conduct a formal evaluation comparing airports in the privatescreening pilot program to airports with federal screeners. However, the implementation of theprivate screening program has not been without criticism. This criticism points to perceived flawsin the pilot program that may limit the conclusions that can be drawn from this ongoing evaluation.

First, the limited scope of the pilot program raises concern that inferences drawn fromcomparing these five airports to other airports under the federal screening system may not trulyrepresent differences between private screening contracts and federal screening operations, but maysimply reflect airport specific characteristics unique to the sites chosen for the pilot program. Fiveairports represent only about one percent of the total number of U.S. airports (currently 445) withscheduled passenger service where airport passenger screening is required, and the number oforiginating passengers at these five airports represent less than 4 percent of the nationwidetotal. (47) Furthermore,only one airport from each of the 5 airport security risk categories is represented in the pilot program. So, in essence, the sample size for evaluating the effectiveness of private screening is only one datapoint per risk category. Moreover, the selection of airports was not done randomly. Rather,selections were made from airport who voluntarily elected to apply for private screening under thepilot program. Therefore, there was no process to select a representative sample of airports forparticipation in the pilot program.

Because of the limited scope of the pilot program, observations and statistical conclusionsregarding the program are open to criticism regardless of what they indicate. As advocates forexpanding the pilot program have pointed out, findings from the current pilot program may beskewed by confounding local factors for a given airport or a given security contractor and may notbe representative of private screening operations in general. For this reason, an expanded pilotprogram, consisting of 5-10 percent of commercial passenger airports, was originally advocated asa means for providing a more meaningful basis for evaluating private screening programs. (48) However, as mandated,the pilot program consists of only 5 airports.

This is not to say that assessments of the pilot program airports cannot reveal valuableinsights and data to assist airports in identifying many of the pros and cons of private screeningoperations, and perhaps identify certain elements of private screening operations that may be usefulin developing proposals for participation in the opt-out program. The pilot program airports mayserve as insightful case studies for assessing private screening operations and comparing them tofederal screening operations. Also, to assuage some of the concerns over the potential for uniquelocal factors confounding conclusions about specific private screening operations at the pilotprogram airports, the TSA-sponsored comparison study has matched the 5 airports to those airportsusing federal screeners considered to be most similar in security related characteristics. (49)

The evaluation compared each of the five pilot program locations to 5 or 6 comparableairports where federal screeners are currently deployed. The comparison airports were selected fromairports in the same security risk category that had available performance data such as covert testingdata, and were selected based on their similarity to the pilot program airports on 15 variablesreflecting passenger volume at security screening checkpoints, security staffing levels, airportconfiguration, and equipment types for checked baggage screening. The pilot program locations andTSA screening locations used in the comparison study are listed in Table 2 .

Besides the small sample size, the pilot program, as implemented, has also been criticizedbecause of its perceived lack of differentiation from TSA's federal screening practices that wouldallow a more robust comparison of alternative practices that may improve the efficiency of screeningoperations or reduce costs. In its report on the Department of Homeland Security AppropriationsBill for 2004 ( H.Rept. 108-169 ), the House Appropriations Committee expressed its concern thatthe TSA required the five airports in the pilot program to follow virtually identical operatingprocedures to TSA's own federal workforce. The committee noted that these five airports arerequired to operate at staffing levels and compensate their personnel using TSA policies andprocedures, with little or no flexibility allowing for alternative scheduling or staffing models. Thecommittee noted that using this methodology will not give Congress an adequate basis for comparingthe cost and benefits of passenger screening by private security firms at these five airports to TSAscreening at other commercial passenger airports. The committee report directed the TSA to reviewthis policy, and recommended that they provide the contract screener pilot locations as muchoperational flexibility as possible so that a more comprehensive assessment of the advantages anddisadvantages of private screening approaches can be made.

Table 2. Pilot Program Airports and Comparison TSA ScreeningLocations

The TSA, in response, reiterated its policy of flexibility for new, innovative solutions to the existing private screening companies. (50) Examples of innovative solutions may include implementingnew scheduling software to better match staffing to passenger demand, or new training programs oncustomer service for screeners. However, the TSA maintains that the core security functions, suchas training and procedures for carrying out searches of passengers and property, must be standardizedacross the entire system, and these are not subject to modification at individual airports. TSA alsoreiterated its support for staffing initiatives such as split-shifts and reliance on part-time screenerswhen appropriate to better match staffing levels at security checkpoints to passenger demand. Oneexample of a procedure implemented at San Francisco International Airport (SFO) is the use ofskycaps with background checks to move checked baggage through the screening process, thuseliminating the need for screeners to handle the baggage thereby improving efficiency andthroughput.

Despite these efforts, the GAO concluded that the TSA provided private screeningcontractors in the pilot program with only limited operational flexibility. (51) In those limited instanceswhere private screening firms were given some latitude in operational aspects, practices adopted byprivate screening companies sometimes enabled them to achieve additional efficiency. Besides theaforementioned use of baggage handlers to improve the efficiency of baggage screening, the GAOalso noted the use of assessment centers to pre-screen screener applicants, and the selection ofscreening supervisors from within the screener workforce rather than from TSA hiring assessmentsas additional examples of flexible operational practices. Nonetheless, GAO concluded that the"TSA provided the screening contractors with little opportunity to demonstrate innovations, achieveefficiencies, and implement initiatives that go beyond the minimum requirement of [ATSA]." (52)

In general, the TSA-sponsored comparative evaluation of the PP5 program found few notabledifferences between private screening and federal screening. The evaluation compared privatescreening operations to federal screening operations in terms of effectiveness, cost, and customer andstakeholder impact. In terms of screening effectiveness, private screening was found to beessentially indistinguishable from federal screening. Private screening costs were found to be onpar with what federal screening would have been expected to cost had it been implemented insteadat the five pilot program airports. There was a slight trend indicating the private screening may bemore cost advantageous at larger airports like SFO and MCI and less cost effective at smallerairports like TUP. However, these results were within the margin of error and therefore wereinconclusive. Also, it is important to reiterate that only one airport per risk category was examinedin the pilot program, so airport unique characteristics affecting cost limit the ability to generalizethese findings. For example, the higher costs of private screening at TUP were largely attributableto the contractor operating with a screening staff that was larger than predicted for a federal operationusing information about staffing patterns at other Category IV airports. Finally, in terms of customersatisfaction and stakeholder impact, there were mixed results for the larger airports (SFO and MCI). Both of these airports had significantly shorter wait times than comparable airports with federalscreening. However, while overall customer satisfaction at SFO was better than at comparableairports with federal screeners, customer satisfaction at MCI was lower than at comparable airportswith federal screeners. Satisfaction data were not available for the Category II, III, and IV airports. There were no significant differences in the number of complaints between pilot program airportsand the comparison airports with federal screeners. Therefore, in general, the pilot programevaluation found little to distinguish private screening contacts from federal screening operations.

The failure of the evaluation to identify significant differences between the contract screeningoperations and federal screening operations significantly limits the usefulness of the pilot programto draw conclusions regarding the effectiveness, cost, and impact of private screening operations. The failure to identify differences could be attributable to a lack of sensitivity to detect differencesin the methods used to evaluate the program. Furthermore, in light of the aforementioned limitationsof the pilot program, namely its limited scope and the significant constraints imposed upon pilotprogram contractors that limited program flexibility, few, if any, conclusions can be drawn fromthese results. Furthermore, the ambiguous nature of these findings may result in inappropriateconclusions by either advocates for privatizing screening operations or advocates for maintaininga federal screening workforce.

On the one hand, advocates for privatizing screening operations may highlight the lack ofdemonstrated differences in performance between federal and private screeners as an indicator thatsecurity effectiveness will be maintained under private screening contracts. Privatization advocatesmay also point to selected customer and stakeholder impact metrics, such as decreased passengerwait times, to emphasize potential efficiency improvements at private screening airports. On theother hand, advocates for retaining a federal screening workforce may emphasize the lack ofdifferentiation between federal and private screening to argue that privatization is not necessary. That is, they may argue that given no foreseeable benefits in terms of performance, efficiency, orcost, privatizing screening operations is unnecessary and could cause unwanted interruptions andsecurity lapses during the transition phase. Neither position is supported by the results of the pilotstudy because the pilot study was largely inconclusive. Even in instances were conclusions couldbe drawn from the pilot study, these results are confounded by the limited scope and flexibility ofthe pilot program. The failure of the pilot program to develop adequate metrics and methodologiesfor comparing federal and private screening poses a significant challenge to the TSA to develop theframework for assessing screening operations under the opt-out program to meet the requirementsof ATSA in a manner that will be acceptable to Congress and legally defensible.

Comparing Federal and Private Screening Operations

The opt-out provision of ATSA requires the TSA to determine and certify that the level ofscreening services and protection provided by private screening entities meets or exceeds thatprovided by federal screeners. This mandate presents a significant challenge to TSA to develop andimplement standard metrics and methods of comparison that will be robust enough to detectperformance differences and serve as a legally defensible means of evaluating the performance ofprivate screening companies. Since no single metric or evaluation method is likely to provide acomplete analysis of screening service and performance, a protocol using multiple metrics andmethods of analysis will likely be needed. TSA is working toward developing such a protocol byintegrating screening effectiveness metrics into their Performance Management Information System(PMIS) and developing a screening performance index to assess screening performance at theindividual screener, airport, and system-wide levels of analysis. However, in November 2003, theGAO cautioned that, while the TSA has a number of methods to measure the effectiveness of itspassenger screening program at its disposal, none are being fully utilized. (53) Some of the principlescreening metrics available for assessing screener performance and analysis techniques are discussedbelow.

Metrics for Comparative Evaluations

Passenger Wait Times and Passenger Satisfaction. One of the principle reasons stated by airports for considering private screening under the opt-outprogram is to establish a security screening program that has greater flexibility to address localairport factors to better accommodate passenger demand characteristics. Throughput metrics atscreening checkpoints, while primarily a concern for meeting passenger expectation and minimizingthe so-called hassle factor associated with airport security screening, also has direct implications forairport security. Long queues at screening checkpoints may pose security risks. Long waits mayincrease the pressure and demand on screeners thereby increasingly the likelihood of human error,and also may result in large congregations of people awaiting screening that can themselves serveas terrorist targets.

It has been a stated goal of the DOT and the TSA to keep average passenger wait times atsecurity checkpoints to under 10 minutes. According to an August 2003 survey by the Bureau ofTransportation Statistics (BTS), the system-wide average wait time was 14 minutes (see Table 3 ). However, at individual airports, managers may place a greater emphasis on other indicators of theability to meet passenger demand at security checkpoints. For example, some airport managers maybe particularly interested in keeping virtually all wait times below a certain threshold, such as 30minutes, that may correlate highly with missed flights, passenger complaints, or high levels ofdissatisfaction among passengers. Therefore, airport managers may wish to examine data on 90thor 95th percentile wait times for example. The BTS data suggests that, at least system-wide, the 95thpercentile wait times are about 30 minutes, however these waits may be considerably longer atcertain airports.

Also, some airport operators may wish to keep wait times relatively constant, that is withoutmuch variation throughout the day and relatively constant across days to maximize the likelihoodthat passenger expectations will be met. Consequently, some airport managers may be interested inlooking at the variation in wait times as a function of time of day or day of the week. Thus variouscriteria for passenger throughput, which may vary from airport to airport based on local factors andairport priorities, may exist and cannot be discerned through a single throughput metric such as meanpassenger wait times. Mitigating local factors may have important effects on security screeningthroughput and includes variables such as average ticket counter wait times, as well as airport layout,which can affect transit times between the ticket counter and the security checkpoint, and betweenthe security checkpoint and enplaning gates.

Table 3. Wait Times at Airport Ticket Counters and ScreeningCheckpoints

Source: U.S. Department of Transportation, Bureau of Transportation Statistics.

Another factor that airports will likely consider significant in evaluating the potential benefitsof the opt-out program is the ability of the security screening program at the airport to meet growthin passenger demand. Over the past three years, demand for air travel has declined. However, recentprojections suggest that system-wide demand for air travel will surpass pre-September 11, 2001levels by 2005, and has already done so at some airports. (54) The ability to meet both current and future throughput demandat checkpoints will be an important consideration in implementing the pilot program. While airportoperators may look to the opt-out program as a means to increase screener staffing flexibility tobetter match the daily, weekly, and seasonal flux in passenger volume at screening checkpoints, theyhave expressed concerns over the possibility that the TSA may apply different methods for assessingscreener staffing requirements at airports with private screeners.

Screening Performance. One of the main criteriato be used by TSA in determining whether a private screening program may be implemented at anairport is whether that program can assure adequate performance. ATSA specifies that the TSA mustdetermine and certify to Congress that the level of screening and protection provided under contractwill be equal to or greater than the level that would be provided at the airport by federal screeners. However, gauging the effectiveness of screening operations at airports requires robust, validatedmetrics to assess comparative performance among airports.

In order to successfully implement the opt-out program, TSA will likely have to develop asystem for evaluating private screening firms that is legally defensible. In essence, the TSA willhave to demonstrate that they have the capability to measure and assess screening performance ina manner that will:

certify to Congress that screening operations at an airport with private screenersprovide at least equivalent security as federal screening operations; and

if TSA takes adverse action, such as termination of contract, against a privatescreening firm for failure to provide screening at a level equivalent to federal screening operations,be able to provide legally defensible data of screening performance to justify such anaction.

To accomplish this, TSA will likely have to develop means of evaluating screening performance atthe airport level that has the sensitivity and validity to meet these requirements. A variety ofscreening performance metrics are available. Some of these metrics are discussed briefly below andinclude data on confiscation of prohibited items at checkpoints, results of covert testing atcheckpoints, and the use of computer projected images of threat objects to test screener performanceusing x-ray equipment. While several metrics for evaluating screening operations are available, noneof the metrics alone are likely to be capable of providing a complete and thorough comparativeassessment of private screening operations. Therefore, it is likely that a composite assessment ofscreening operations using some or all of the metrics described below, and perhaps others, will beneeded to meet the requirements of ATSA to demonstrate that private screening operations are onpar with federal screening operations and provide legally defensible justification for any adverseactions against private screening entities.

Confiscation of Threat Objects. While the absolutenumber of threat objects confiscated at security screening checkpoints has been touted by TSA (55) , these statistics do notreflect the effectiveness of security measures in place. These metrics, on the other hand, illustratethe extent of the challenge faced by screeners and define the operational environment. These metricsare limited because they do not, and cannot, provide any indication regarding the relative rate ofdetection of threat objects at screening checkpoints since it is impossible to know how many of theseobjects may have passed through security checkpoints undetected. Also, because the number andtype of prohibited items has changed significantly over time it may not be possible to establishmeaningful comparisons for all types of threat objects. While evidence that hard to detect,well-concealed objects are being identified and confiscated does provide some indication ofscreening effectiveness, using this data to make meaningful comparisons over time or at differentairports is likely to be extremely difficult.

Covert Team Testing. Because covert tests topenetrate airport checkpoints with threat objects have changed over time in response to the need tomake these tests more realistic and comparable to methods terrorists may use to infiltrate thesecheckpoints, no direct comparisons can be made regarding the performance of private screeners priorto establishing the TSA and existing performance in today's aviation security environment. Prior toSeptember 11, 2001, the FAA relied heavily on the use of covert teams that they referred to as "RedTeams" to attempt to pass concealed threat objects through airport checkpoints.

Since establishing the TSA, covert testing has been conducted by the TSA's Office of InternalAffairs and Program Review (OIAPR). In November, 2003, the GAO noted that while over 700covert tests had been conducted at 92 commercial passenger airports since TSA assumedresponsibility for passenger screening in November 2002, only a small percentage of TSA screenershad been subject to a covert test. (56) Consequently, it is unclear whether the results of these tests arerepresentative of system-wide screener performance. It is likely that additional baseline data on theperformance of federal screeners subjected to covert testing will be needed before robustcomparisons between federal and private screeners can be made on the basis of covert testing. TheGAO reported that TSA planned to double its OIAPR staff this fiscal year and, correspondingly,plans to conduct twice as many covert tests this year. (57) More recent analyses of covert testing by the DHS Office ofInspector General characterized screener performance levels during these tests as poor. (58) While specific test resultsare considered security sensitive information, it has been reported that the current failure rates arecomparable to those observed in 1987 when screeners failed to detect about 20 percent of concealeditems during covert testing. (59) However, the TSA noted that the testing methods used at thattime was in no way comparable to current covert testing methods used by OIAPR.

In fact, a major challenge in using covert testing to evaluate relative performance of privatescreening to federal screening operations is that covert testing procedures are likely to evolve overtime in response to intelligence information gathered regarding new techniques for concealingweapons, new weapon types, and methods terrorists may employ to distract screeners. As testingmethods evolve over time, they no longer permit a direct comparison of performance from one testto another. That is, it would be impossible to conclude whether differences in test performance wereattributable to changes in test procedures or actual changes in screening performance. Thislimitation highlights a key tradeoff that must be considered in designing covert testing procedures,or implementing other screening assessment tools. This tradeoff is between implementing changesin evaluation procedures so that the operational relevance of those procedures can be maintained onthe one hand and maintaining consistency in the application of those procedures so that changes inperformance over time can be compared on the other.

Threat Image Projection. Threat Image Projection(TIP) provides the capability to overlay virtual, computer-generated, threat objects over x-ray imagesof passenger's screened property during normal screening operations. TIP was first fielded by theFAA in 1999. The FAA viewed TIP as an important tool for evaluating the performance of privatescreening companies and it was to be an integral part of the evaluation of private screeningcompanies under the FAA's proposal to certify those companies. That plan had not yet been widelyimplemented when the terrorist attacks of September 11, 2001 occurred. TIP, however, was in useat that time on a limited basis.

Following the terrorist attacks of September 11, 2001, TIP was discontinued as anoperational performance tool over concerns that screener responses to TIP images would increasedelays in a atmosphere of heightened security alert. TIP has now been reintroduced using a greatlyexpanded database of threat images said to be more representative of concealment tactics that maybe used by terrorists. (60) The TIP database, which consisted of about 200 images before September 11, 2001, now has 2,400images. (61) Like theFAA, the TSA has ambitious goals for TIP and sees it as an integral tool for evaluating screenerperformance. TIP is capable of providing valuable data on screener alertness and detectioncapabilities during on-the-job x-ray monitoring of carry-on items.

However, TIP is limited in its scope and provides data on only one aspect of screeningoperations. For example, TIP does not provide data on whether proper procedures were carried outonce a threat object was suspected and flagged by the x-ray screener, whether explosive tracedetection (ETD) systems were properly used to conduct secondary evaluations of suspectedexplosives, and so on. Also, TIP does not provide any data on the screening of passengersthemselves or their checked baggage; it only provides data on the screening of carry-on baggage.

Methods for Comparative Evaluations. Asmentioned before, the TSA is likely to face significant challenges in developing techniques toconduct comparative evaluations of private screening operations to ensure they provide the samelevel of security as federal screening operations. Besides developing a composite index that capturesall critical aspects of screening operations, the TSA faces the additional challenge of establishing arepresentative baseline of federal screening performance against which private screening operationscan be compared. There are essentially two ways that the TSA can compare private screeningoperations to demonstrate whether they provide security that is equal to or greater than the level ofsecurity that would be provided at the airport by federal screeners.

The first method is to conduct what statisticians refer to as time-series analyses. In atime-series analysis, screening performance at a specific airport could be examined and comparedfor the time period when federal screeners conducted screening and the time period after a privatescreening entity assumes screening responsibilities. Such an approach, however, can be problematic,because other aspects of screening or techniques for evaluating screening operations are likely tochange over time and may confound the comparison. For example, covert testing criteria maybecome more stringent, TIP imagery may become more complex, passenger volume at checkpointsmay increase, and so on. While mitigating factors such as these may be able to be identified, thedegree to which they impact metrics used to evaluate screening performance may be difficult toquantify.

The alternative approach is to compare screening operations at airports with private screeningto operations at comparable airports with federal screeners. This approach, sometimes referred toas a cross-sectional comparison, also has limitations. Regardless of how well airports are matchedbased on similarities, unique airport characteristics that may impact the evaluation of screenerperformance may skew the results of such a comparison. While some unique airport factorsaffecting security may be identifiable, others may be difficult to identify. For those factors that canbe identified, it will likely be difficult to quantify their impact on the aviation security performancemetrics used for comparison.

Because both time series and cross-sectional assessments of screener performance mayimpose certain limitations on the ability to draw inferences regarding the comparative performanceof private screeners compared to federal screeners, a combination of both techniques may be neededto provide the most robust capability for conducting comparative assessments of private screeningcontracts. Also, prior to the implementation of private screening operations, agreed upon policiesand protocols for collecting and comparing screening performance data will likely be needed. Theseprotocols will likely be needed as soon as possible in order to allow for collection of adequatebaseline data of federal screening operations. The TSA is progressing toward such a capability withthe development of a screening performance index that will provide system-wide metrics to evaluateand compare screener performance through TIP and covert testing results, unit costs for screeningpassengers and baggage, as well as customer satisfaction through assessments of survey andcomplaint data. (62) Theadequacy of TSA's procedures for comparing performance of private screening contracts to federalscreening operations is likely to be an enduring issue for congressional oversight duringimplementation of the opt-out program.

Assessing Comparative Costs and Allocating Funding

One of the main objectives of the security screening opt-out provision is to provide forincreased flexibility in work scheduling practices and deployment of security screening personneland resources that can more easily adapt to the dynamic nature of airport operations thereby resultingin reduced operating costs. The opt-out provision is constrained by statutory requirements thatprivate screeners be compensated with pay and benefits identical to that received by federalscreeners. Consequently, private entities will not be able to reduce unit labor costs compared tofederal screening operations. Therefore, any direct savings that will be realized through the opt outprogram will be derived from modifications to work scheduling practices, reduction of overheadcosts, and so on.

Two areas where private screening entities may look to reduce costs are through streamliningthe process of hiring screeners and implementing flexible scheduling practices. Flexible schedulingpractices of private screening entities are likely to rely heavily on the use of part-time screeners. However, the GAO reported that TSA has experienced difficulties in hiring new staff, particularlypart-time staff. These difficulties in recruiting and retaining part-time screeners appears to be mostacute in areas with tight labor markets, and high costs of living and commuting, which is generallycharacteristic of areas where the larger Category X and Category I airports are located. The GAOidentified airport location, lack of accessible and affordable parking or public transportation, andhigh living costs as the main factors contributing to TSA's inability to hire new staff, particularly parttime staff, at large Category X airports. Since the largest direct cost savings that can be achieved byimplementing private screening under the opt-out program is likely to be though efficient use ofpart-time staff and increased flexibility in staff scheduling, TSA's current difficulties in meetingstaffing needs suggest that doing so may be a significant challenge, especially at larger airports.

However, even if private screening operations under the opt-out provision cannot realizemeaningful savings in direct costs for aviation security, opt-out proposals may result in significantindirect savings, particularly to airports. Airports are likely to see merit in the opt-out program ifit can result in identifiable cost savings for the airport. One factor that airports may consider, forexample, is whether private screening operations can be conducted with reduced space demands. Reduced demands for physical space in the airport may translate to more space available for retailshops, restaurants, and other revenue-generating activities. Also, airports are likely to considerwhether private screening operations can improve passenger and baggage throughput which couldtranslate to adequately keeping pace with local growth in demand for air travel and improvingpassenger satisfaction with airport operations.

Increasing the efficiency of screening operations could increase public confidence andconsumer satisfaction with airport security thereby increasing the likelihood that they will chooseto take a flight from a particular airport or choose air travel over other transportation alternatives. Since, these indirect cost savings are most likely to benefit airports directly, they are likely to weighheavily in an airport's evaluation and ultimate decision whether to pursue a private screeningprogram.

In 2003, $30 million dollars were appropriated for third party screening contracts. Theseappropriations were made available in addition to an estimated $100 million dollars received incontract recoveries received by TSA that was made available for private screening contracts inFY2003. Based on this data, private screening contracts accounted for just under 5% of total TSAfunding available for system-wide passenger and baggage screening. In FY2004, screening pilotsat the five airports were appropriated a total of $119 million, representing about 3.81% of totalappropriations for passenger and baggage screening. These appropriations appear to be roughlyin-line with the proportion of system-wide screening operations they account for.

Originating passenger statistics actually show that appropriations for the pilot programairports may be slightly higher than expected, given the proportion of originating passengers at thesefive airports compared to the system-wide total. However, several airport specific factors mayaccount for this. The number of originating passenger is the primary factor for determining screenerworkforce at an airport. Based on TSA's modeling numbers for allocating federal screeners, thenumber of originating passengers at an airport has a correlation (63) of about 0.97 with thenumber of screeners allocated to that airport, indicating that this factor alone accounts for almost allof the difference between airports in terms of screener workforce and, in turn, operating costs forscreening functions. (64) Nonetheless, unique factors among the pilot program airports, such as airport layout, the number ofscreening lanes, and other unique logistic factors, may result in higher comparative costs that shouldbe considered when drawing conclusions about the relative cost of private screening compared tofederal screening. It is also important to note that some costs associated with administering andevaluating the pilot program may be included in the costs for private screening activities. Also, theabove discussion is based only on appropriated funding levels and does not reflect comparisons ofactual outlays for private screening compared to federal screening.

As part of the TSA contract to evaluate the private screening pilot program, Bearing Pointand Abt Associates provided a formal assessment of comparative costs by comparing actual costspaid for contract screening operations to estimated costs assuming that the pilot program airports hadinstead been staffed by federal screeners. Separate cost comparisons were developed for each of thefive pilot program airports and are presented in Table 4 .

In general, the cost assessment found that across the five pilot program airports, privatescreening costs were about 3.5% less than the estimated cost of federal screening. However, thedifference in cost at each of the airports was within the margin of error, so no specific conclusionscan be made regarding the relative costs of private screening compared to federal screening. Sincethere was a statutory mandate requiring the private screening companies in the pilot program toprovide wages and other compensation and benefits at a level that was at least equivalent to that offederal screeners, it would have been unlikely to observe any significant cost savings for privatescreening, especially since significant constraints were imposed on the program that limitedflexibility in: determining screener staffing levels; utilizing part-time personnel; and implementingother cost-saving innovations. (65)

Table 4. Cost Comparison at the Pilot ProgramAirports

($ millions)

Source: Bearing Point and Abt Associates, Inc. Private Screening Operations.

Note: Costs cover the 12-month period from December 2002 through November 2003.

In addition to performing the evaluation of screening operations at the five pilot programairports, the TSA has indicated that they are examining the OMB's guidelines for federal-commercialcost comparisons, often referred to as the A-76 process, to identify elements of that process that mayeffectively be incorporated into the evaluation process being developed for the security screeningopt-out program. However, the TSA maintains that the security screening opt-out program is notappropriately suited for extensive public-private cost comparison studies under the A-76 process. This is largely due to the constraints of the opt-out program that require private screening entitiesto provide compensation and other employment benefits to screening personnel at a level equal toor greater than that provided to federal screeners.

The TSA has also indicated that they are examining other federal contract programs suchas the FAA's contract tower program to assess best contracting practices that can be incorporated intothe security screening opt-out program. The FAA's contract tower program may provide someinteresting insights for private airport screening operations, however the extent to which desirableattributes of that program can be incorporated into the security screening opt out program is likelyto be significantly constrained. The FAA contract tower program has been able to achievesignificant cost savings as compared to similar federally operated non-radar air traffic control towers. Specifically, the DOT Office of the Inspector General found that contract towers were, on average,79% cheaper to operate compared to federal towers. (66) However, these cost savings have mostly been realized throughlower per unit labor costs and lower staffing levels at contract towers. By comparison, since thesecurity screening opt-out provision requires that compensation and benefits provided to privatescreeners be at least on par with that provided to federal screeners, any cost savings will likely haveto be realized through other means such as increased flexibility in work scheduling and extensiveuse of part-time screeners.

Unlike the FAA contract tower program where airports with low levels of activity and noradar operations have been specifically targeted for participation in the program, the securityscreening opt-out program is open to all airports regardless of passenger volume and security riskfactors. Also, unlike the contract tower program where determinations regarding which airportsshould have contract towers have been made by the federal government, under the security screeningopt-out program, it will be left up to individual airport operators and not the TSA to make the initialdecision to pursue private screening. As requested by the OMB, the TSA will not make any specificrecommendations regarding what airports or airport characteristics may be best suited for inclusionin the opt-out program. Rather, the TSA will only provide information, such as results of the pilotprogram evaluation, to airport operators for use in their evaluation of whether or not to apply forprivate screening operations under the opt-out provision.