[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




 
       TSA OVERSIGHT: EXAMINING THE SCREENING PARTNERSHIP PROGRAM

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 14, 2014

                               __________

                           Serial No. 113-95

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

                 Subcommittee on Government Operations

                    JOHN L. MICA, Florida, Chairman
TIM WALBERG, Michigan                GERALD E. CONNOLLY, Virginia 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
THOMAS MASSIE, Kentucky              MARK POCAN, Wisconsin
MARK MEADOWS, North Carolina


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on January 14, 2014.................................     1

                               WITNESSES

Mr. Kelly C. Hoggan, Assistant Administrator for Security 
  Operations, Transportation Security Administration
    Oral Statement...............................................     8
    Written Statement............................................    10
Mr. Mark Bell, Acting Deputy Inspector General for Audits, U.S. 
  Department of Homeland Security, Office of the Inspector 
  General
    Oral Statement...............................................    15
    Written Statement............................................    17
Ms. Jennifer Grover, Acting Director, Homeland Security and 
  Justice, Government Accountability Office
    Oral Statement...............................................    26
    Written Statement............................................    28

                                APPENDIX

The Hon. John Mica, a Member of Congress from the State of 
  Florida, Opening Statement.....................................    58
Questions for Mr. Bell submitted by Rep. Connolly................    60


       TSA OVERSIGHT: EXAMINING THE SCREENING PARTNERSHIP PROGRAM

                              ----------                              


                       Tuesday, January 14, 2014,

                  House of Representatives,
             Subcommittee on Government Operations,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:08 a.m. in 
room 2154, Rayburn House Office Building, the Honorable John L. 
Mica [chairman of the subcommittee], presiding.
    Present: Representatives Mica, Turner, Amash, Meadows and 
Connolly.
    Staff Present: Will L. Boyington, Majority Press Assistant; 
Daniel Bucheli, Majority Assistant Clerk; John Cuaderes, 
Majority Deputy Staff Director; Linda Good, Majority Chief 
Clerk; Mitchell S. Kominsky, Majority Counsel; Eric Cho, 
Majority Detailee; Jaron Bourke, Minority Director of 
Administration; Devon Hill, Minority Research Assistant; and 
Julia Krieger, Minority New Media Press Secretary.
    Mr. Mica. Good morning, everyone.
    Welcome to the Subcommittee on Government Operations' 
hearing this morning. The title of today's hearing is ``TSA 
Oversight: Examining the Screening Partnership Program.''
    We are pleased to have several members join us today.
    The order of business will be, first of all, we will have 
opening statements from any of the members attending. I will 
recognize Mr. Connolly in just a few minutes. Then we will turn 
to our panel of witnesses. We will hear from them and then go 
through a series of questions to the panel and witnesses who 
are participating today.
    Mr. Issa always starts off with a colloquy that states how 
important our responsibility is which is to conduct oversight. 
We are the stewards of taxpayer dollars. We created these 
programs through legislation like TSA and from time to time, we 
have a responsibility to conduct oversight to make certain they 
are run as efficiently, economically and effectively as 
possible. That is the purpose of our being here today.
    I have an opening statement the staff wrote and will insert 
that as part of the record.
    Mr. Mica. I wrote my own at 3:00 a.m. this morning. It is a 
bit different but I had some time to think about it and I 
thought I would give my commentary.
    First, I would say to Mr. Connolly, Mr. Meadows and the 
staff, in the last few weeks TSA has been fairly cooperative 
and provided us with more information than we received in the 
past, and I appreciate the working relationship.
    Other than that, the reason we are here is, as I mentioned 
to Mr. Meadows and Mr. Connolly, I was one of the people who 
helped create TSA. I actually picked the name myself and with 
other members of Congress, we enacted the legislation pretty 
rapidly after the events of 9/11. President Bush wanted the 
legislation on his desk by Thanksgiving and we did deliver it.
    The country had been hit by the most significant terrorist 
attack since probably World War II when they struck us at Pearl 
Harbor. We needed to act, we needed an effective transportation 
security operation, and we tried to do that.
    We made some mistakes and have tried to correct them. We 
have worked with a number of administrators and some 
outstanding people. I remember Michael Jackson, for example. We 
also lost jurisdiction for sometime. We started in 
Transportation and shifted the TSA over to Homeland Security. I 
think part of the problem is that it is an agency with 200,000 
and some personnel. Combining 22 agencies and make it work does 
not always work well.
    That being said, when we started to change the way we 
screen passengers, we never intended TSA to operate aviation 
passenger screening forever. As a compromise, we set up five 
initial airports with private screening under federal 
supervision.
    Let me say at this conjuncture, I have never advocated 
going back to having the airlines do that or take away the 
government's responsibility. I think it is important that we 
maintain that. If you analyze the events of 2001 and the 
terrorist attack, it was the government that failed, not the 
private screening.
    The government failed for several years to put in place 
standards for screening. The government failed for several 
years to put in rules governing what could be taken on a plane. 
For example, box cutters were not prohibited at that time, all 
of which led to the events of September 11.
    When we set up the screening program, we had all federal 
screening for most of the airports. For the first two years, we 
initially created five airports, one in each size category, 
with private screening under federal supervision. We tested the 
performance of the two models after some two years and the GAO, 
which independently looked at them, came up with a report. The 
report said that private screening under federal supervision 
performed statistically significantly better--not my words, 
their words.
    After that, as TSA saw applications for privatization, they 
began a campaign to make certain that airports did not opt out. 
They had a very hostile attitude toward taking that option 
which intimidated some of the airports right up to several 
years ago when one of my airports, the Sanford Airport, said 
they had enough of the way TSA was operating and wanted to opt 
out.
    I got a call from the airport director who said he was 
never so disgusted. They tried to intimidate him, they were 
rude, offensive and threatening which prompted me to get re-
engaged. Here we are today as a result of TSA's action, not 
mine.
    I worked with other members when we passed the FAA 
reauthorization bill. President Obama signed it into law 
February two years ago next month. In that bill we went from 
the language in the original law that said an airport can 
submit an application to opt out and TSA may accept it to 
language which said ``TSA shall accept the application to opt 
out.'' Members of Congress, like myself and others, were 
frustrated with what was going on.
    That was two years ago. Here we are at this oversight 
hearing this morning. Basically what happened in those two 
years is TSA has performed a clever, slow roll out of 
implementation of the provisions we requested. In fact, the 
January 2013 TSA report, ``Screening Partnership Annual 
Report,'' says none of the three major goals towards 
implementing private screening were completed. That is their 
report, all top priorities and none of them were met.
    As a result of this hearing, my airport which has been 
waiting now some two years finally got notification on Friday 
or some time soon that they are moving forward with an RFP 
which is almost two years later. That is not what we intended 
and that is not why we are here.
    I might also say for the record that the United States is 
now one of the very few western countries with an all Federal 
passenger screening system. Bulgaria, Romania and Poland are a 
few of the western states that keep an all government force in 
place. Almost every other nation, including those hit hard by 
terrorist threats--Israel and the U.K.--use private screening 
under federal supervision which is the model we anticipated 
would be in place by now.
    Unfortunately, TSA is both regulator, administrator, 
operator, auditor and contractor. That creates a conflict and 
there have been recent articles saying that model needs to be 
changed. I believe that TSA should set the rules, conduct the 
audits and get out of the personnel business.
    The agency has grown from 16,500 screeners after 9/11 to 
66,000 employees, 51,000 screeners and 15,000 administrative 
personnel. The personnel work hard and there are some very 
dedicated screeners and employees. They make, on average, 
$38,000 apiece. We spend $1.1 billion on 15,000 administrators 
and spend $1.9 billion on the rest of the 51,000 personnel. 
Something is wrong in those numbers.
    We only have about 457 airports. If you have 15,000 
administrators--do the math--that means you have 30 
administrators for every airport in the country. Thirty-five 
airports handle 75 percent of the passengers. There obviously 
is something wrong in our distribution of administration 
funding.
    Also, most of the reports--I have just a few of them here--
also prompted us to put into law the requirement they shall 
accept the application. In the past, when we had TSA perform a 
review of the cost of screening, private screening versus all 
federal screening, they cooked the books and did not include 
elements of costs that should be applied and tried to tell 
folks they cost more than the all federal program which defies 
logic. GAO came back and said they did cook the books.
    One of the considerations we did put in the law was we 
should look at cost. They used that provision to slow roll and 
are not being transparent. Again, that is regrettable.
    In most areas dealing with private screening partnership, 
they have unfortunately acted arbitrarily. The acquisition and 
contract process has been a disaster. We have ended up in court 
and some of the awards have been delayed.
    I was talking with Mr. Moran on the way over here and he 
talked about the delays at Dulles and some of the other 
airports and how they were having trouble recruiting people. 
You may know the history of recruitment in the Washington area 
by advertising for personnel on the top of pizza boxes or 
advertisements above discount gas pumps.
    The retention, particularly in the metropolitan area, 
continues to be a problem. The solution for dealing with having 
people on the job, the national screening force and other costs 
incurred, as studies have all shown, continues to be a huge 
problem.
    I will not get into all of the reports that have criticized 
TSA but as we know we have had horrible experience with 
acquisition of personnel, retention and training but also have 
had fiascos with purchase of the puffers for hundreds of 
millions of dollars and ended up destroying them and most 
recently taking out half a billion dollars' worth of 
backscatter equipment from the airport. Staff should track and 
see where those have gone.
    These are not my reports. We have had reports on the 
Behavior Detection Program which recommends stopping that 
program because it is ineffective.
    Today's focus is primarily on the Screening Partnership 
Program and trying to make that work. I will be introducing 
legislation sometime in the next month which will require all 
TSA to opt out all airports within 24 months of the President 
signing the bill and all airports have the model we intended--
to get TSA out of the personnel and human resources business 
and into the security and intelligence business.
    Even though we passed the law and said you must accept 
these applications, almost none have actually moved forward. 
Again, that is a slow roll purposely to ignore the intent of 
Congress.
    I am also concerned that I have reports that the Screening 
Partnership Office in TSA is in disarray, that the major 
knowledgeable people have left and I think we may want to look 
at moving the contracting from TSA for the screening services 
to an agency like GSA which routinely does this.
    We have private screening under federal supervision for our 
nuclear facilities, for our defense facilities and for a host 
of very sensitive operating positions. Yet, we have a disaster 
in a program intended to be crafted quite differently.
    Those are some of my long opening comments. I have a bit 
more history than some of the other members but I wanted to 
share with you how we got to this stage and this oversight.
    I have also asked staff from the Appropriations Committee 
to attend this hearing and staff from the authorizing committee 
because we can conduct oversight but they control the money and 
the policy. I am expecting them to also act so that we get to 
where Congress intended us to be on this issue.
    Mr. Connolly.
    Mr. Connolly. Thank you so much, Chairman Mica. Thank you 
for holding today's oversight hearing on the Transportation 
Security Administration's Screening Partnership Program.
    Following September 11, Congress established TSA to 
safeguard our Nation's commercial aviation transportation 
system. Today, TSA is responsible for screening airline 
passengers and baggage at more than 450 airports throughout the 
United States.
    In 2004, TSA created the SPP to enable commercial airport 
operators to apply to forego federal screeners in favor of 
qualified private sector screening contractors that meet 
federal standards and who operate under federal oversight.
    There are currently 14 airports where passenger screening 
is performed by private contractors and 6 additional airports 
awaiting contract awards, which I understand will be announced 
later this year. Of these 20 airports, nearly half are small 
airports located in the State of Montana.
    In 2012, the Government Accountability Office performed and 
assessment of the performance of SPP airports. While the 
details of that analysis remain classified, GAO did find that 
some SPP airports perform slightly above the national average 
on some measures, while others perform slightly below.
    GAO also recommended in this report that TSA develop a 
mechanism to monitor performance of private screeners versus 
federal screeners. TSA concurred with the recommendation and 
has begun the long overdue process of evaluating private sector 
screening performance to ensure air travel remains secure.
    Although the detailed results of these assessments are 
sensitive or classified, I nonetheless look forward to hearing 
what is being done to correct sub par performance where 
identified.
    Proponents of the expanding the SPP program assert that 
private screeners improve efficiency and reduce costs compared 
to federal screeners. However, TSA's cost estimates have found 
the opposite concluding that private screening costs are 
generally between three to nine percent higher than federal 
screening.
    In light of that discrepancy between cost saving claims and 
certainly the Chairman's legitimate concerns over the validity 
of the cost estimate methodology, I am interested in examining 
the matter closely to ensure that Congress and TSA utilize the 
most accurate performance and cost data available so that we 
can be properly informed about oversight, operations and the 
possibility of future legislation.
    It is no secret that debates over TSA often elicit strong 
reactions from members and the public alike, often stemming 
from anecdotal yet very real instances of inconvenience and 
perceived poor customer service. Mr. Hoggan, I shared with you 
my own unhappy anecdotal experience most recently.
    Security is our main focus but it cannot be our only focus. 
Given the fact we are interacting with the public to the tune 
of millions and millions and millions of passengers, it seems 
to me that some emphasis on training of proper customer 
interaction is very important. It is important how we treat the 
American citizen and it is important how we treat our foreign 
guests. Both deserve dignity at an airport.
    It is a stressful enough situation for the passenger. It is 
also stressful for the TSA because they have an awesome 
responsibility. We do sympathize with that and we respect it 
but we also need to respect the passengers we are asking to 
cooperate. When we mistreat them by barking orders at them as 
if they are cattle, not people, we actually diminish the spirit 
of cooperation and do not enhance it.
    As I indicated to you privately before this hearing, Mr. 
Hoggan, I do not understand why that cannot be a simple matter 
of training. I do not understand how hard it is to teach people 
to make sure you use the words ``please'' and ``thank you'' 
when interacting with our public and show that basic respect.
    In my experience this last weekend--going out and I took 
the redeye back--I encountered 20 barked orders but never once 
the world ``please'' with any of the TSA people I encountered--
take that off, move over there, back up, put your hands up, 
take your shoes off. Not once was the word ``please'' used.
    That lack of courtesy shows a lack of respect for the 
public with whom you are dealing, a public that is unbelievably 
tolerant of how it is being treated. Maybe that has something 
to do with the culture of airports these days where many 
American airlines seem actually to resent having customers and 
that lack of respect has become part of the culture of air 
travel.
    When we represent the Federal Government or are overseeing 
private sector entities taking over some of these 
responsibilities, we have to show a respect for the public 
understanding their cooperation is essential to our mission. I 
do not think it is a trivial issue. I do not think it is a nice 
thing to do if we have time. I think it is integral to the 
mission of security.
    If I cannot get assurances that we are going to take that 
seriously and redouble our efforts to make sure TSA agents or 
the private sector analogs are properly trained in how to deal 
in customer service and show respect for the public we are 
serving, then we will have to do something legislatively about 
it. I am going to insist and I know I will not have any 
resistance on the other side of the aisle on that.
    I am going to use this hearing today, Mr. Hoggan, to get 
some assurance from you because I have had it. I think a lot of 
the public has had it. There is no excuse for it. We have to 
take it seriously.
    I am doubly grateful for this hearing because this is one 
of my pet peeves. I have mentioned it many times over the five 
years have been on this job. I see no improvement at all in my 
own experience in the airports.
    If necessary, one thing we might do since my colleagues, 
unlike me--I live here, I do not have to travel as Mr. Bell 
knows--but my colleagues are on a plane at least twice a week 
going home and coming back. If we do not get some satisfaction, 
I am going to use my colleagues as a filter. Tell us about your 
experience and by the way, let us encourage the public to tell 
a member of Congress. We will feed it all to you, Mr. Hoggan, 
so then you will have to deal with it because we will make a 
big issue of it.
    Either we deal with this and respect the public we are 
serving, understanding we have a stressful mission--by the way, 
enormous respect goes to TSA, to you, Mr. Hoggan, and your 
colleagues, for the fact that thank God, we have not had a 
recurrence of 9/11.
    Cumbersome though it is, uncomfortable, stressful, we have 
been focused properly on the mission and so far, thank God, it 
has worked. That does not mean we cannot make the process 
better and as I said, create a framework that fosters more 
cooperation, willingness and understanding from the public, not 
less.
    Forgive the lecture but you can see I have enormous 
frustration with the experience I see the public experiencing. 
We have to do something about it. I hope we can do it 
collaboratively, I hope we do not have to do it legislatively. 
It is not really a complicated issue, but I can tell you what I 
witness the public going through is unacceptable behavior by 
federal civil servants.
    I am one too and I do not like seeing my government 
represented that way with so many millions of the public who 
interact with these systems as they go to travel.
    That is my plea and also it is going to be my insistence.
    Thank you all for being here and I look forward to hearing 
your testimony.
    Thank you, Mr. Chairman, for holding this hearing.
    Mr. Mica. Thank you, Mr. Connolly.
    Now to our Vice Chairman, Mr. Meadows.
    Mr. Meadows. Thank you, Mr. Chairman, for holding this 
hearing and thanks to each of you for coming. I will be very, 
very brief.
    Mr. Connolly has said it well. I guess part of the 
frustration you are hearing is that there is no federal agency 
that really is representative of the Federal Government to the 
vast majority of people where they actually come in contact 
with a federal employee other than TSA. You really are the face 
of the Federal Government. Your efficiencies or inefficiencies, 
your manners or lack thereof is a broad brush approach.
    I think you have many very dedicated, capable, fine public 
servants. I appreciate the fact that we have safety, but as Mr. 
Connolly so eloquently put it, what happens is I get more 
complaints about TSA's efficiency but more importantly their 
rude behavior and how they treat passengers than almost 
anything else.
    I challenge you to look from a customer service perspective 
on how we can effectively change this because if not, there 
will be great bipartisan support to find a private sector. We 
are talking about that partnership today but there will be 
great bipartisan support to find a private sector, more 
customer friendly way of doing it.
    I do that in the spirit of saying the responsibility you 
have is great in terms of the viability long term of your 
particular agency.
    I want to apologize because I am going to have to step out 
and be back and forth. I have a Transportation and 
Infrastructure hearing this morning going on right now for the 
highway bill but I will be back and forth.
    Thank each of you. I yield back, Mr. Chairman.
    Mr. Mica. I thank the gentleman.
    Now we will turn to our panel of witnesses. Today we have 
three witnesses. We have Mr. Kelly Hoggan, Assistant 
Administrator for Security Operations, TSA; Mr. Mark Bell, 
Acting Deputy Inspector General for Audits, U.S. Department of 
Homeland Security, Office of the Inspector General; and Ms. 
Jennifer Grover, Acting Director, Homeland Security and 
Justice, Government Accountability Office.
    I would like to welcome all of our witnesses. I am not sure 
if you have been before us before but if you have a lengthy 
statement or some documentation you would like to be included 
in the record as part of the hearing, you can request that 
through the Chair or a member.
    This is also an investigative subcommittee of Congress and 
we do swear our witnesses. Please stand and raise your right 
hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Mica. Thank you.
    Let the record reflect that the witnesses answered in the 
affirmative.
    As a matter of business, members may have seven days to 
submit opening statements for the record.
    Mr. Connolly, I would like to keep the record open for two 
weeks because I think we are going to have additional 
questions. Without objection, we will take members' statements 
for seven days and keep the record open for addressing 
additional questions to our witnesses over the next several 
weeks.
    With that, we will recognize and welcome Kelly C. Hoggan, 
Assistant Administrator for Security Operations of TSA. Welcome 
and you are recognized.

                       WITNESS STATEMENTS

                  STATEMENT OF KELLY C. HOGGAN

    Mr. Hoggan. Chairman Mica, Ranking Member Connolly and 
members of the subcommittee, I am pleased to appear before you 
today to discuss the Transportation Security Administration's 
Screening Partnership Program, SPP.
    I am the Assistant Administrator for Security Operations at 
GSA and have been in this position for eight months. I have 
served in a variety of leadership roles in TSA since 2004.
    Prior to joining TSA, I worked in the airline industry for 
18 years. My experience covers many areas at TSA and airline 
operations including staffing allocation, resource management, 
technology development and capabilities and international 
aviation.
    Congress, through the Aviation and Transportation Security 
Act, established TSA and required the establishment of pilot 
programs under which airports may apply to utilize private 
sector rather TSA employees to conduct front line screening.
    As directed by ATSA, TSA selected five airports to 
participate in the pilot program representing five risk 
categories. SPP grew out of this pilot program which ended in 
2004. Today, out of approximately 450 commercial service 
airports, 14 have contractors performing screening, including 
the original five pilot airports.
    Of those 14 airports, 7 fall within the smallest 
classification meaning they emplane between 2,500 and 10,000 
passengers a year. These 14 airports represent approximately 
four percent of the passenger screening positions across the 
system.
    Applications from six additional airports have been 
approved and are currently in the contract solicitation 
process. I would note that since passage of the FAA 
Modernization and Reform Act of 2012, all SPP applications 
received have been approved within the 120 day time limit. Once 
approved for admission to SPP, contract solicitation and 
selection are completed in accordance with federal acquisition 
regulations.
    Over the past eight months in my position as Assistant 
Administrator for Security Operations I have taken steps to 
further streamline application processing, improve the level of 
experience and expertise assigned to the SPP Office and in 
collaboration with my counterparts in the Office of 
Acquisitions to establish a 12-month timeline goal for 
application receipt and contract award.
    For airport operators interested in SPP, the TSA website 
includes the SPP application itself, an overview of the 
application process and contact information for appropriate TSA 
staff. TSA also utilizes the Federal Business Opportunities 
website to communicate with a wide range of vendors.
    For instance, TSA advertised and held an SPP industry day 
on January 10, 2014. This event provided an overview of the 
program, the acquisitions process and provided a forum for 
questions and answers to the industry.
    I believe the steps taken have strengthened the program and 
made the program and application process more transparent to 
interested parties.
    Thank you for the opportunity to appear here today. I will 
be happy to answer any questions.
    [Prepared statement of Mr. Hoggan follows:]

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    Mr. Mica. Thank you. We will hold questions until we have 
heard from all witnesses.
    We will hear from Mr. Mark Bell next. He is the Acting 
Deputy Inspector General for Audits at the U.S. Department of 
Homeland Security, Office of the Inspector General. Welcome and 
you are recognized.

                     STATEMENT OF MARK BELL

    Mr. Bell. Good morning, Chairman Mica, Ranking Member 
Connolly and members of the subcommittee.
    Thank you for inviting me here today to testify on TSA's 
Screening Partnership Program, known as SPP. My testimony will 
focus on the results of our audit of this program which we 
published in June 2013.
    We performed this audit in response to a request from 
Senators Roy Blunt and Bob Corker who had concerns about TSA's 
management of SPP and the procurement process at Kansas City 
International Airport.
    In this program, TSA first reviews an airport's application 
to participate and then if approved, procures private screening 
services. At the time of our audit, 16 airports were in SPP. 
Since that time, two airports have opted out, which means 14 
are now participating. TSA has accepted 6 more airports but has 
not yet awarded screening contracts.
    We determined that although TSA administered SPP according 
to federal law, it could improve its program administration. 
Specifically, TSA did not adequately document its evaluation of 
applications in its procurement decisions, did not always use 
accurate information to determine program eligibility and did 
not verify the accuracy of data used in its procurement 
decisions.
    As a result, TSA risked making incorrect decisions on SPP 
applications, not selecting the best contractor and may have 
missed opportunities to save money.
    Until Congress passed the FAA Modernization and Reform Act 
of 2012, TSA had no criteria to use when considering 
applications to join the program. The 2012 Act including 
requirements for approving applications, a timeline for 
decisions and a requirement to report to applicants and 
Congress about rejected applications.
    TSA complied with the Act's requirements in approving five 
applications submitted after its passage but some documents 
related to its decisions including incorrect cost estimates and 
other documents are not finalized.
    We also identified missing details and inaccuracies in 
documents supporting four of the five SPP procurement decisions 
made between January 2011 and August 2012. For example, four 
procurement files contained a similar short paragraph noting 
the Source Selection Authority's decision and two of the eight 
cost estimates had slight a difference in labor hours and 
overtime rates.
    In September 2011, a federal court concluded that TSA did 
not document its independent analysis of an SPP contract for 
Kansas City International Airport. Following this, TSA took 
steps to ensure it fully documented its proposal analysis, its 
decision rationale and the Source Selection Authority's 
independence.
    It also began to require documented support for its final 
selection decisions. We reviewed the decision documentation for 
a subsequent contract and confirmed that it included the 
necessary details.
    Under the 2012 Act, TSA must also consider cost efficiency 
in deciding on an airport's admission into the program, but TSA 
reported that none of the four applications approved since the 
Act's passage had reached the cost evaluation phase, so we were 
unable to determine TSA's compliance with this requirement.
    However, in January 2013, the TSA Administrator directed 
that cost efficiency be evaluated when deciding on continued 
participation. TSA was also working on a methodology to 
estimate the cost of converting SPP airports back to TSA 
employee screening, but it had not yet determined the cost for 
any airport currently in the program.
    In our audit, we also noted that TSA's screening cost 
estimates differed so they did not provide a consistent basis 
for deciding program participation.
    As a result of our audit, we recommended that TSA fully 
document its decisions on program applications and procurements 
and that it use relevant and accurate information in 
determining eligibility in approving participation. TSA 
concurred with both recommendations.
    We closed the first recommendation because TSA had already 
begun issuing policies and reminders and started revising the 
application process. We considered our second recommendation to 
be resolved because TSA is working to improve application 
document review and cost estimates. The recommendation remains 
open pending documented support of these actions.
    Mr. Chairman, this concludes my prepared statement. I 
welcome any questions you or other members of the subcommittee 
may have.
    [Prepared statement of Mr. Bell follows:]

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    Mr. Mica. Thank you again, Mr. Bell. We will defer 
questions.
    We will hear next from our final witness, Jennifer Grover, 
Acting Director, Homeland Security and Justice, GAO. Welcome 
and you are recognized.

                  STATEMENT OF JENNIFER GROVER

    Ms. Grover. Good morning, Chairman Mica, Ranking Member 
Connolly and other members and staff.
    I am pleased to be here today to discuss TSA's 
implementation and oversight of the Screening Partnership 
Program.
    The Screening Partnership Program, SPP, provides airports a 
private alternative to federal screeners. As others have 
already noted, of the Nation's 450 or so commercial airports, 
14 participate in SPP and another 16 are waiting in the wings 
for TSA to complete the contractor procurement process.
    A year ago, GAO found weaknesses in TSA's implementation 
and oversight of SPP. Regarding implementation, we found that 
TSA was not providing clear guidance to airports on how to 
apply to SPP. This is important to ensure that all airports 
have a full and fair opportunity to participate.
    Specifically, we found that TSA offered online FAQ's but 
little else. Airports told us that they needed help with 
several issues such as understanding whether or not they were 
good candidates for the program, how to complete the 
applications and specific guidance about what cost information 
they were required to submit.
    Industry representatives echoed those concerns noting that 
airports were reluctant to invest in the application process 
when they were unsure about how they would be evaluated.
    Since then, consistent with our recommendations, TSA has 
posted additional guidance on its website including examples of 
helpful information that previous applicants provided, 
information about how applications would be assessed and 
clarification about the requirements for submitting cost 
information.
    Regarding oversight, we found that TSA did not evaluate the 
relative performance of federal and private screeners. This is 
important because private screeners must provide a level of 
service and protection that is equal to or greater than that 
provided by federal screeners. Therefore, we recommended that 
TSA regularly monitor SPP performance compared to the 
performance of federal screeners.
    Specifically, we found that TSA used a scorecard 
performance system to regularly assess screeners on numerous 
performance measures at every airport. The result is a point in 
time snapshot of performance at that airport relative to its 
goals and national averages but not a comparison to all of the 
airports in its category.
    To address the question of comparative performance, GAO 
reviewed several years of performance data for the then 16 SPP 
airports on foreign measures. We found that private screeners 
did slightly better than federal screeners on some measures and 
slightly worse on others. However, we could not attribute the 
differences in performance entirely to the use of private or 
federal screeners due to other factors that can affect 
performance.
    Since then, TSA issued its first SPP annual report which, 
consistent with our recommendations, includes comparative 
performance information for each SPP airport relative to other 
airports in its category. TSA also began verifying annually 
that the level of screening services provided by private 
airports is equal to or greater than the level that would be 
provided by federal screeners.
    We are pleased that TSA's changes address our 
recommendations on SPP. These changes also may help TSA in 
making future improvements to the program. For example, with 
greater clarity and transparency in the application process, 
additional airports may be encouraged to apply.
    Greater clarity and transparency may also help ensure that 
the application process is carried out in a uniform and 
consistent manner.
    With the new comparative performance information, TSA may 
be better equipped to identify best practices as well as to 
identify specific SPP airports that require additional 
attention to improved performance.
    Finally, a better understanding of how well SPP airports 
operate could inform future decision-making about the program.
    Chairman Mica, Ranking Member Connolly, thank you for the 
opportunity to testify this morning and I look forward to your 
questions.
    [Prepared statement of Ms. Grover follows:]

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    Mr. Mica. Thank you. We will start with some questions.
    Mr. Hoggan, it is now two years in February since the 
President signed the bill that said TSA shall accept these 
applications. How many airports have you accepted applications 
for since then?
    Mr. Hoggan. There were two, Sarasota-Bradenton and Sanford-
Orlando; four that were in Montana, Boozman.
    Mr. Mica. As I told the Ranking Member, the decision on 
Sanford was to put out an RFP last week. It has taken two years 
to put out an RFP?
    Mr. Hoggan. Yes, sir.
    Mr. Mica. That is not acceptable. That is a slow roll, 
dragging your feet as I described in the beginning. Congress 
said you shall accept these.
    The other thing we have is the question of cost. Again I go 
back to some of the initial costs we looked at. Currently, you 
have 51,000 screeners?
    Mr. Hoggan. I have 48,000 screeners from a D-ban, part-
time, TSO to an I-ban transportation security manager.
    Mr. Mica. But we have 66,000 employees. I don't know if you 
have 20,000 administrators--that would floor me--but it is 
estimated you have about 15,000 administrative positions.
    Mr. Hoggan. I don't have 15,000. TSA, by my understanding 
and allocations, has under 10,000, closer to 9,000.
    Mr. Mica. We will go with your 9,000 figure. We have 450 
airports divided by two. That is an average of 20 
administrative positions for every airport in the country. Some 
of these airports have two and three flights a day and just a 
handful of passengers.
    Mr. Hoggan. Out of the approximately 454 airports I have 
right now, I have little over 2,100 administrative staff at the 
airports. The rest in that allocation include the surface, 
cargo, aviation inspectors.
    Mr. Mica. I will give you an anecdotal experience at 
Orlando where we pay on average, across the board, $38,000 for 
screening personnel?
    Mr. Hoggan. The exact average.
    Mr. Mica. That is the information we got from you all.
    I am leaving on one of the concourses and one of the 
employees takes me aside and says, see those four TSA 
employees, they are all making in the range of $100,000 sitting 
on their butts. That is not efficient operations. That is 
paying these people what amounts to almost minimum wage. We 
still have in the very large airports very significant 
turnover--not only in the large airports, you have some 
airports in the Midwest where you have a boom right now--the 
difficulty of finding personnel and you are sending in people.
    We have the cost of sending in people for the national 
screening force. They send them in, put them up in hotels, pay 
them per diem--the screeners they have to employ to fill those 
positions. The whole thing, if you add up the cost, there is 
absolutely no way it can be more cost effective to run the 
model you currently are operating.
    Can we put up one of the slides. We went to Quebec City. To 
be fair, we did emplanements. We got Rochester, one of the 
original SPP airports. You still have 16 personnel there making 
$80,000-$100,000 apiece. In Quebec City, they have one federal 
person, probably UD2 if you use that to calculate. Again I see 
the same thing.
    At San Francisco, one of the original SPP airports, you 
have 84 TSA personnel and you are spending $16 million, 
$190,000 on average for those personnel. Not all that cost, to 
be fair, is personnel cost in San Francisco, but it is very 
similar. I used San Francisco and Toronto because Toronto has 
huge international traffic in addition to San Francisco. Again, 
you have 84 personnel at that airport and huge personnel costs.
    I could go on through this. Your smaller airports, even 
Jackson Hole, which has been private, the airport does its 
screening, and you have six personnel. Some of those personnel 
may cover some other airports at a cost of $763,000. Are you 
counting this in your cost of the SPP operation?
    Mr. Hoggan. For clarification, the numbers in San 
Francisco, I know that was 2010 and in 2013, it was 64.
    However, in the federal cost estimate we used, we take the 
fully loaded cost for the FSD and staff. There are certain 
positions which will stay in the federal government domain even 
in an SPP, as you well know, as relates to compliance 
inspectors and coronation centers and certain positions inside 
the FSD staff.
    When we look at an airport and look at their model between 
federal and private, the difference between the fully loaded 
that we calculate with federal and what we have with the 
private SPP, there is an incremental difference between the 
two. The difference is put into the federal cost estimate with 
the FTE allocations and the total cost to support the contract 
work at a manageable level.
    The net is exactly the same between the two, whether it is 
the federal or whether it is federal and the SPP contractor.
    Mr. Mica. Again, you calculate some of those costs. You 
could dismantle a great deal of your Washington personnel if 
you have the private sector. Most of our costs in some of these 
operations are personnel.
    Mr. Hoggan. Absolutely correct.
    Mr. Mica. Again, there is no discounting for the number of 
personnel you do not need when you have a private operation. 
There are models all over. I used Canada. I would be glad to 
take you to the UK or Israel--again, highly impacted terrorist 
threat. Yet we go on with the most expensive model with people 
in some of these positions.
    The other thing is we may need to get you out of this whole 
contracting business. You are one of the few agencies that does 
contract for these services. We may look at moving that over to 
GSA and have them look at the contract.
    Again, you can conduct oversight and audit and set the 
rules and regulations. I have no problem with the Federal 
Government setting standards. That is what they failed to do on 
9/11 and that is what they need to responsibly continue to do 
and audit the performance.
    If the private screening is not working as well in some 
instances, you get rid of them or it is corrected, but you 
cannot tell me for a minute that it costs less for the Federal 
Government to do this.
    I was also telling Mr. Connolly one of the things private 
screening has done is actually pay the screeners more--you are 
aware of that--in some instances to retain them?
    Mr. Hoggan. Perhaps they need to pay the commensurate 
amount.
    Mr. Mica. First, the conversion to private screening, now 
we still have 16 waiting.
    Mr. Hoggan. Six, sir.
    Mr. Mica. She said 16.
    Mr. Hoggan. I know she did. I would have to talk with her. 
I have six.
    Ms. Grover. I apologize, six.
    Mr. Mica. If you have six waiting and have had several drop 
out, the intimidation program is very effective. Now I 
understand people who ask to opt out are also given old 
equipment and also harassed.
    Mr. Hoggan. That is not true, sir.
    Mr. Mica. I know it is true. Do not tell me it is not true 
because I know it is true. I know also that they are the last 
for service of some of that equipment, for answers from TSA 
which never come. I met with all the screening companies and 
found out some of the things you do.
    Where airlines change and come into an airport, you do not 
allow a reasonable means of changing out the terms of the 
contract. You are one of the few to put some caps on the way 
you do and do not have a cooperative method of adjusting the 
contract for additional responsibilities that are incurred.
    Some airlines are new and some service airports but I am 
just telling you what we are learning about your operations. 
Again, we have several models you can look at.
    One of the questions I also have is we have asked on 
several occasions to disclose some of your operating costs. I 
was given information that is termed procurement sensitive?
    Mr. Hoggan. Correct.
    Mr. Mica. I intend to release some of this information at 
some time to those who are going to compete. We are going to 
have to sit down and decide what is going to be disclosed so 
that those who are competing have a transparent and open 
process to know what your costs are and what they have to 
compete against. I am just giving you advance warning.
    Mr. Hoggan. I would appreciate the opportunity to have that 
discussion with you about procurement sensitive information. I 
will have our legislative office work with you on that.
    Mr. Mica. Because I want them to be able to compete 
honestly but they cannot do that unless they get honest answers 
and the public should be able to see your exact costs.
    Mr. Hoggan. I believe we have our exact costs.
    Mr. Mica. And what they are going to have to compete for 
now that you have set caps.
    We are looking again and I appreciate your cooperation. 
This is the first time we have gotten some of the information. 
We are trying to decipher what costs should be attributed to 
TSA as far as the federal screening and what costs should be 
attributed to private screening under federal supervision so we 
get a very clear picture.
    The mandate by Congress was pretty clear. It should not 
take two years to get this moving, which it has done.
    I will come back. Let me go to Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman, and thank you to all 
of our panelists for being here.
    Mr. Hoggan, in looking at the omnibus continuing 
resolution, which we anticipate we will be voting on tomorrow, 
it cuts $336 million from DHS' budget, mostly for TSA, and it 
caps the number of screeners at 46,000. If I heard you 
correctly, you said right now you have about 48,000?
    Mr. Hoggan. Yes, sir, but that also includes transportation 
security managers and supervisors. They are in the same PPA 
count but they are not screening officers.
    Mr. Connolly. You could live with this cap?
    Mr. Hoggan. I live with whatever my administrator 
submitted.
    Mr. Connolly. How disruptive are these limits or cuts from 
your point of view in terms of your ability to fulfill your 
mission?
    Mr. Hoggan. I will be able to fulfill my job at the level 
the Administrator supported.
    Mr. Connolly. You will?
    Mr. Hoggan. Yes.
    Mr. Connolly. Could you walk us through, I would like to 
better understand the process of hiring, career fulfillment and 
so forth. How do we recruit someone to be a TSA screener?
    Mr. Hoggan. A multitude of ways. The primary way is posting 
on USA Jobs in the different locales where we have the 
vacancies. We end up having job fairs and opportunities at some 
locations where security directors come in, other locations it 
is staff and we give a pre-employment overview of what the job 
entails to ensure people understand it is a very difficult job.
    As you stated, we interact with 1.8 million passengers a 
day and screen 1.2 million bags a day. Over the course of a 
year that is a long period of time. It is a very, very 
demanding job. As I have said in town halls when I travel the 
Nation, it is the most difficult job in the Federal Government 
because they have to be on their game for everything they have 
to do in the security effectiveness environment all the time 
while at the same time providing the customer service and 
interaction with the American traveling public and our foreign 
guests, as you said.
    It is a difficult job. We do a lot of previews, we do some 
job fairs and we have information on USA Jobs and other means 
as well.
    Mr. Connolly. You do background checks?
    Mr. Hoggan. Absolutely.
    Mr. Connolly. Once you have made a job offer to someone, 
what kind of training do they go through for the job?
    Mr. Hoggan. You have initial OJT training, initial new hire 
training over 80 hours and then you have OJT or on the job 
training for an additional 40 hours. That is for a basic 
officer, entry level. There is additional training provided for 
unique types of equipment that you would use as well. That is 
incremental on top of that.
    Mr. Connolly. The basic orientation is a combination of 120 
hours?
    Mr. Hoggan. Yes, sir.
    Mr. Connolly. Is customer service part of that training?
    Mr. Hoggan. Yes, sir, it is. Customer service is an initial 
part of the training. It is also in recurrent training. I will 
commit to you that I will do a review and double the efforts 
for that interaction.
    For the record, I also want to satisfy some of your 
questions. Recently, based on directions from our Deputy 
Administrator--I think it had to do with some questions 
Chairman Mica had and some others at the last hearing--we have 
instituted integrity training across the enterprise at TSA. 
There are situations and samples in there as relates to service 
training.
    We have also instituted leadership training for anyone who 
manages any employees inside of TSA. They are required to have 
specific leadership training. That service training was in 
there as well.
    I would also say for the record that currently today we are 
averaging about 35 percent of the traveling public on any given 
day, well over half a million individuals that come through our 
aviation system are going through TSA pre-check. As a matter of 
fact, the Administrator and the Secretary for Homeland Security 
are at Dulles right now talking about a TSA enrollment site.
    That changes the perspective of our passengers as well, as 
well as the interaction of the officers when you have a 
passenger go through pre-check as opposed to standard 
screening. We believe that will also change and have a dramatic 
effect on interaction with the traveling public.
    Mr. Connolly. Every member of Congress is in the customer 
service business. I have been in public life and elective life 
19 years. I always say all of my constituents are wonderful. 
Some are more wonderful than others. We experience what you 
experience. People are not all the same. Some people are very 
cooperative and some people can be less so.
    While you are trying to do your job to make sure everyone 
is secure in that airplane when they get on it and nothing gets 
through, you also have to deal with the vagaries of different 
personalities in very large numbers of people. It is a huge 
challenge. I am sure if I had the responsibility there would be 
a sense of great stress.
    I still think it is not an either/or proposition. I still 
think we can have high quality customer service and 
satisfaction with also top notch fulfillment of our mission. 
The two are not incompatible. In fact, they are compatible.
    As I indicated, I happen to believe that the less pleasant 
the experience because we do not get customer service right in 
our interactions with the public we serve, I actually think it 
contributes to less cooperation, resentment and a desire 
frankly not to cooperate.
    We do not want that. We want people understanding our 
mission. As I said, I have been amazed since 9/11 at the level 
of tolerance and acceptance by the public because they get the 
tradeoff, but I think we can improve on that tradeoff. I think 
we have to do that.
    There is no excuse for someone barking orders continuously 
at the public at any airport in America who is an employee of 
the Federal Government or a contractor for the Federal 
Government.
    Mr. Hoggan. I would agree.
    Mr. Connolly. I would lose my job if I treated the public 
that way, and rightfully so. My staff would be fired if I found 
they treated my public that way. We need to hold ourselves to 
that standard. I fear it is beyond anecdotal.
    The Chairman has referenced turnover in TSA. Could you 
comment a bit about that? What is it and do you think that it 
is too high and there are things we could do to try to 
ameliorate that?
    Mr. Hoggan. Too high is a unique definition. I know the 
attrition rate today as well as last year is lower than it was 
three, four, five or six years ago.
    Mr. Connolly. What is that attrition rate?
    Mr. Hoggan. I think a lot of it has to do with the 
professionalism we are building. There are full time positions 
in the TSA.
    Mr. Connolly. What is your annual attrition rate?
    Mr. Hoggan. It is through calculation right now. I do not 
want to say the exact number because it is being worked but 
somewhere between the 12 and 13 range is my understanding how 
we finished fiscal year 2013, part-time rates higher than full-
time rates.
    Mr. Connolly. Are there things you have learned from that 
to try to get that down, to try to improve on retention and 
higher job satisfaction? It is not an easy job.
    Mr. Hoggan. No, it is not an easy job. As Chairman Mica 
said and talked about the average wage, whether in Orlando 
Airport or other locations, the transportation security 
officers are some of the lowest paid federal employees in the 
government. We need to work harder to see what we can do about 
salaries.
    I think a lot of it has to do with flexibility and 
scheduling and opportunities for career advancement, future 
development and growth, not only inside the TSA but also inside 
the Federal Government.
    Mr. Connolly. Mr. Chairman, I do not wish to impose on my 
time.
    Mr. Mica. Go right ahead. It is just the two of us right 
now.
    Mr. Connolly. If it is all right with you, I will finish.
    Mr. Mica. Yes, go ahead.
    Mr. Connolly. Thank you so, much.
    Ms. Grover, this may be a logical thing, but I would like 
to look at the turnover/retention issue. In terms of best 
practices, what do we know that we could do or should do, 
including here in Congress, to try to help Mr. Hoggan and his 
mission of higher retention and higher job satisfaction for 
people in very stressful jobs? Did you look at that all?
    I would like to see some comparison and I am sure the 
Chairman would also. How does it compare with other federal 
agencies? I would assume, given the nature of the stress of the 
job, you are actually going to have higher turnover in TSA than 
in some other parts of the federal enterprise. I think that is 
to be expected.
    Are things we could do to make it more satisfying to 
improve job satisfaction and lower some of that turnover and 
help Mr. Hoggan in terms of retention? Has GAO looked at that, 
especially in comparison with either other federal entities or 
the private sector?
    Ms. Grover. In our work last year on SPP, we were 
interested in being able to compare workforce performance 
measures for the SPP versus the non-SPP airports. That is 
things like attrition and injury rates and so on.
    What we found is that TSA has data they collect for all of 
the airports that use federal screeners but at the time we did 
our work, TSA did not give the contractors specific 
instructions about how to define, measure and collect the same 
data.
    The contractors were providing TSA with information about 
attrition but we found that TSA had no assurances that the data 
was comparable. We were not able to do a comparison of 
attrition at the SPP airports versus the non-SPP airports. One 
first step would be to make sure they had comparable attrition 
data across all of the airports.
    Mr. Connolly. Yes, fair enough. I am also interested in the 
broader subject, not just comparing the SPP with non-SPP, but 
generally this whole area of screening with say a large 
corporate entity. If you are a large corporation with 20,000 
employees, what is the expected turnover that you would 
absolutely expect, just normal turnover every year?
    Corporations do monitor that because that tells them 
something about what is going on in the work environment and 
what they need to do to retain. It cost a lot more money to 
recruit a new employee, train that employee--that is why I 
asked Mr. Hoggan about the process. To lose that employee costs 
you a lot of money. It is cheaper to retain that employee.
    What do we need to do to do that? How does it compare in a 
stressful job, not easy, constantly dealing with the public 
versus other lines of work--Mr. Hoggan, an acceptable turnover 
given the nature of the work, maybe 13 percent a year.
    If we find that it is 18 percent then we have a problem. We 
all would agree we have a problem because 13 is what we are 
expecting. If we are below 13, then we are doing something 
right. That tells us something too and we want to do more of 
that.
    I think we will need you to help us look at other 
benchmarks as a management tool so that we can monitor what is 
happening in TSA and the SPPs and so can Mr. Hoggan, as a 
useful management tool. I commend that to you.
    Mr. Bell, have you looked at that at all?
    Mr. Bell. That is not something we have looked at.
    Mr. Connolly. One of the things the Chairman brought up and 
I brought up in my opening statement was there seems to be some 
difference in terms of cost estimate methodology. If I 
understand TSA correctly, their finding is that SPPs tend to 
cost about three to nine percent more than TSA itself.
    There are others--I think the Chairman among them--who 
would argue that the SPPs actually save money and do not cost 
more.
    Could you comment on methodology and the discrepancy in 
cost estimates, Ms. Grover? I think GAO did look at that?
    Ms. Grover. Yes, sir, we did. We looked at TSA's cost 
estimating methodology back in 2009 and 2011. When we did our 
last report on this, TSA did indeed show a discrepancy of three 
percent between the cost of running SPP and non-SPP airports.
    However, at the time, we did not have confidence in the 
three percent figure because one of the issues that was still 
unresolved at that time was the question of uncertainty in the 
underlying estimate and underlying assumptions going into the 
estimate.
    Whenever you build an estimated cost, you have to make a 
series of assumptions that underlie it. Ideally what you want 
is a range around your point estimate so that policymakers have 
a good understanding of the level of confidence in the point 
estimate, so the actual difference in cost could have been 
three percent but it could have been eight percent or it could 
have been negative two percent--in other words that it was 
actually less expensive to run airports with private screeners.
    Until TSA has a good understanding of the level of 
uncertainty feeding into their assumptions and how that plays 
out with the range around their point estimate, I think there 
is still some question about the relative cost.
    Mr. Connolly. This, to me, is a very critical question that 
has to be resolved because we cannot deal with different 
assumptions about how to get at a cost estimate. We have to 
have a methodology we all buy into so that we can then have one 
set of numbers, not a competing set of numbers.
    Otherwise, how can Congress or the Administration make 
informed decisions about which is better in a given 
circumstance--going the SPP route or going the TSA route--if we 
cannot even agree that it saves or costs money? How can we pass 
another bill mandating further privatization on the risk that 
we may get it wrong, that the assumption we are making, that 
privatization is always good and always saves money, is wrong?
    I am a big believer that these decisions have to be made on 
a pragmatic basis, not a theological basis. Privatization is 
not intrinsically good or bad and neither is federal 
employment. It is a matter of what works. Part of what works is 
how much does it cost and what is the quality we are getting.
    It seems to me this is a very critical question. Again, GAO 
can be very helpful in helping us get to the bottom of a 
methodology we all buy into.
    Mr. Bell, did you want to comment on that?
    Mr. Bell. I agree with your comments. We did not go into 
testing the cost methodology, similar concerns that GAO had 
that we did not have faith in the underlying methodology and 
did not have enough information to audit to make a good 
conclusion. I know that is something I know TSA is working on. 
Our second recommendation is coming up with solid cost 
estimates. We are still waiting for that documentation to take 
look and see if they have actually done that.
    Mr. Connolly. Mr. Hoggan, I assume you would agree with the 
principle that we need one methodology we all agree on so we 
can have one set of accurate cost estimates to make informed 
decisions?
    Mr. Hoggan. Absolutely, we do. It is my understanding with 
our federal cost estimates, we have taken all the 
recommendations from both GAO and the IG and put them inside to 
come up with that.
    I know there is a large conversation or a difference of 
opinion as it relates to imputed cost as relates to additional 
employee benefits, whether life insurance or retirement, 
corporate tax credit or liability insurance, but those are 
costs that TSA is not allocated for and are outside of our 
appropriations.
    I know the Chairman has expressed concern with that 
fundamental difference and I am sure that will come up again. 
Not being a finance manager, and with the folks from the 
Appropriations staff here, I can only spend money that has been 
appropriated to me. That would be outside my appropriations.
    Mr. Connolly. I represent the third largest number of 
federal employees in the United States in my district and 
probably represent the largest number of federal contract 
employees in the United States. I deal with this issue all the 
time about in-sourcing or out-sourcing. I absolutely insist it 
not be done theologically. One is not better than the other. It 
is a matter of circumstance and what is the best outcome for 
the taxpayer.
    Often the private sector will complain that the Federal 
Government often does not--you used the term ``fully loaded 
costs,'' but sometimes the private sector feels that when the 
Federal Government gets in the business of comparing the 
private sector to the public sector, it does not hold itself to 
the same standard to which it holds the private sector--fully 
loaded costs.
    Trying to get our arms around this in an accurate way I 
think is essential if we are going to make informed decisions 
moving forward.
    I thank you for your indulgence, Mr. Chairman. The Chairman 
talked about maybe what we need to do in contracting for SPP is 
get TSA out of the contracting business and give it to GSA. Do 
you have any opinion about that, Ms. Grover, from GAO's point 
of view?
    Ms. Grover. GAO has not done any work specifically 
examining that issue, sir. We would be happy in the future to 
do a broad review of the current construct of the way that TSA 
operations are being run; examine the question of conflict of 
interest and whether it exists under the current arrangement; 
and what implications that might have for cost or efficiency.
    Mr. Connolly. You have looked at TSA's performance as a 
contracting agency?
    Ms. Grover. Yes, sir.
    Mr. Connolly. And?
    Ms. Grover. They have a system set up where they meet 
monthly with each of their contractors and look at their 
performance based on a very broad series of measures. They have 
systems in place to follow up in any areas where they see 
concerns or discrepancies.
    One of the things we pointed out in the past is that at the 
time of our review, they were maintaining all of those monthly 
records on paper. We encouraged them to consider putting them 
into electronic format to allow better contractor oversight 
over time.
    Mr. Connolly. Mr. Hoggan, my final question, to give you a 
chance to comment, is from your point of view, would TSA be 
alleviated of the burden if we were to transfer all contracting 
responsibility to GSA or would that just complicate your life?
    Mr. Hoggan. I believe it would complicate my life. The 
acquisitions process we have in TSA, I think we will see going 
forward, satisfies the requirements of the SPP office.
    Mr. Connolly. Thank you.
    Mr. Chairman, again, thank you so much for your indulgence.
    Mr. Mica. Thank you, Mr. Ranking Member, too. We got these 
figures from TSA. They spent $1.1 billion on administrative 
staff and $1.9 billion on their screening staff. I do not know 
if that $46,000 or $51,000 is in their 66,000 total.
    Mr. Hoggan, how many administrative personnel do you have 
in TSA in Washington, D.C.?
    Mr. Hoggan. My understanding is we have just under, 
headquarters staff and all, about 4,000; 2,500 in headquarters.
    Mr. Mica. Just under 4,000--3,986, making $103,000, nothing 
because I think people who live in the D.C. area need a good 
wage.
    Mr. Hoggan. There are 2,500 employees at headquarters 
roughly.
    Mr. Mica. I helped envision TSA with other members of 
Congress. Not in our wildest imagination did we ever think you 
would get to 66,000. You are bigger than the United States 
Coast Guard and I think six departments of government. You are 
at $103,000. If we divided this by half, we get $51,000 to 
8,000 screeners, you might get a bit better performance.
    They have 9,656 administrators in the field. They are 
making $80,000 on average. Again, I want people to have a 
living wage. This is not about wages. I think we should keep 
them high for retention purposes, whether they are private or 
federal.
    This is not about union membership and I told you that. San 
Francisco had unions, private screening under federal 
supervision, long before the all federal. It is not about 
getting cheap labor. It is actually paying people. We spent 
over $1 billion on training and more than half the people who 
were trained have left.
    We compared Los Angeles with San Francisco on the training 
costs which we got access to and it was $11,000 more per 
employee, that is what I was talking about, for federal 
screeners compared to the SPP screeners' training.
    I am glad to hear you have the integrity training going on. 
That is only after meltdowns. I do not want to go through the 
sordid history of even my own airport, Orlando, where it was on 
national television, the folks ripping off passengers. I am 
glad to see you are taking steps on that.
    When Mr. Pistole came in I sat with him and he promised me 
a risk-based system. How many Americans have had records of 
being airline passengers have ever been involved in a terrorist 
act?
    Mr. Hoggan. How many passengers?
    Mr. Mica. How many Americans that have been passengers with 
a flying record have ever been involved in a terrorist act?
    Mr. Hoggan. I would have to pull the records.
    Mr. Mica. There are none. I can give you the list.
    Mr. Hoggan. Are you asking U.S. or international?
    Mr. Mica. I can give you the people who have been involved 
in terrorist acts. Richard Reid is one of the few Anglo names. 
He was Jamaican and English. You have had the shoe bomber. We 
had the Kenyan. Most of the events start in another country. At 
one time we had--it was a classified number--just a handful of 
people, looking at people coming into the United States. 
However, 99.9 percent of Americans have never caused a problem.
    Now we are getting to where you are telling the committee 
that we have pre-check for what percentage?
    Mr. Hoggan. Approximately 35 percent.
    Mr. Mica. It should be 95 or 99 percent. When Mr. Mineta 
was Secretary, we set this up. We set up a system where it was 
15 minutes from curb to the plane. At the time, the 
Administrator was Michael Jackson. I am telling you that is the 
way this should operate.
    If you come to Orlando or Sanford Airport, what is going on 
is almost criminal to American citizens with the way they are 
treated. You just heard from the Ranking Member. He does not 
fly as much. He just drives across the 14th Street Bridge, but 
I fly all the time. I see what we are doing to Americans who 
pose no risk.
    Now I see finally the mess we have created, the lanes, you 
have a clear lane, you have a pre-check lane. It used to be you 
go through quickly and now pre-check is almost worse than the 
other lanes. They have known crew member lanes. The poor 
bastard public is there with their kids.
    The other day I saw them patting down a gentleman and if he 
posed a risk, dear, God. This is the mess we have created along 
with the expensive uniforms, the badges and the intimidation. 
We tried to get this shifted to what we intended, private 
screening under federal supervision, with the Federal 
Government playing the appropriate role, conducting the 
intelligence, setting the security standards, changing things 
out.
    You could go down to Orlando and probably let 90 percent of 
the people go through if you had a risk-based system with no 
hassle and screen them. Mr. Pistole has failed to put in place 
a risk-based system. Now you are telling me you are going to 
have 35 percent in pre-check. I can tell you that you are not 
ready for it out there.
    The other thing I find out talking to the screening people 
is they have been the innovators. I know they are the 
innovators because I watched the transition. Probably some of 
the things I did to help TSA--almost all of the innovations I 
took from San Francisco and some of the other models from the 
private screeners--but they were allowed to innovate to 
actually process people efficiently and effectively. I saw the 
results. They performed statistically significantly better.
    I know what happens now--this new evaluation, the tip offs 
and all of that stuff to tilt the scales. I followed this from 
the very beginning but I am telling you that in fact this needs 
to be converted out to a risk-based system.
    The thing I passed three times in law and we put in the FAA 
bill, we tweaked it a little and now they are using it as an 
excuse to further delay, it is over ten years to have 
identification with a biometric measure, a hard copy and a 
pilot, for example.
    The TWIC card, they wrote us and said they cannot get a 
reader, so we spent $1 billion probably on TWIC cards that you 
have to use a driver's license. I do not know where we end 
this.
    I will tell you what is coming. As you heard here today, 
the frustration is bipartisan. How many people do you have in 
your SPP office now?
    Mr. Hoggan. I have 10 people right now.
    Mr. Mica. You may need a whole lot more because I think I 
will get the support. I may not get it done this year but I 
will get it done within the next year. Mark my words. It took 
me a while to get the change in the language which you are now 
slow rolling, but I will get the language that within a certain 
amount of time, you get out of the screening business, you set 
the rules, conduct the audits and so forth. I will get the 
support to do it one way or the other. If you cannot handle it, 
we will put it in GSA and they will handle it as a contracting 
thing.
    We also need to get you out of the equipment business. You 
cannot maintain, you cannot acquire the acquisition when you 
buy the puffers and they have to be destroyed so spend a couple 
million dollars. The back scatter equipment staff, I want to do 
investigate where we are on that. We spent half a billion on 
that. They have been removed.
    You deployed the RF Wave, millimeter wave screening which 
was never supposed to be used as primary screening, never, 
never. You have people up there, little old ladies and people 
who pose no risk and you are using that equipment on them and 
then patting them down. Come on, guys. It is just unbelievable. 
That was another half a billion dollar acquisition--a quarter 
of a billion split between a couple. It cost half a billion to 
install because they can do it the most expensive way.
    I need to even get you out of that business, acquisition of 
equipment, acquisition of services because you cannot do it. It 
is nothing against you personally. You have been there eight 
months.
    Mr. Hoggan. I have been in this position as Assistant 
Administrator for Security Operations for eight months. I have 
been at TSA since November 2004.
    Mr. Mica. I am told that the SPP Office is in disarray as 
far as its leadership.
    Mr. Hoggan. I disagree.
    Mr. Mica. I am just told that people who deal with them 
cannot get an answer and also movement of personnel.
    We have a host of questions, some of them technical in 
nature. I want to know what you have done with these 
applications, some of them approved back in January 2012 for 
your six airports, two approved in June 2012, two in August 
2012, one in May 2013 and we still do not have these done after 
we passed the law.
    The slow rolling is not going to work. I am probably going 
to let you stew in your juice a little bit longer but I can 
tell you that folks are getting fed up with the whole thing. 
There is support for a dramatic redo.
    If we could move people after 9/11 through in 15 minutes, 
having had that risk at that point, here we are 10 or 12 years 
later, and I now aviation is still a target, but we are holding 
millions of Americans hostage and they are not getting proper 
screening at the most efficient and effective cost.
    Take that message back to Mr. Pistole. I will give it to 
him personally. I do have more questions and we will submit 
them for the record.
    Mr. Connolly, is there anything else?
    Mr. Connolly. Not at this time, Mr. Chairman.
    Mr. Mica. Do you notice a little frustration? I get 
frustrated sometimes. I think together we can make it work 
better. I am embarrassed that I created the thing and now it 
has gone awry at great expense and inconvenience.
    Security is incredibly important. We still are at risk and 
I believe they will use aviation again to come after us, but I 
do not think the current structure is geared to deal with that. 
Everything we have done is in reaction. Take off your shoes was 
the liquids. It is all reactive. Pretty soon we will be going 
through there naked and that has to be an ugly sight for some 
of us.
    Mr. Connolly. That is when I stop flying, Mr. Chairman.
    Mr. Mica. I thank Mr. Hoggan, Mr. Bell and Ms. Grover for 
your work and your cooperation.
    There being no further business before the subcommittee, 
this hearing is adjourned.
    [Whereupon, at 11:38 a.m., the subcommittee was adjourned.]


                                APPENDIX

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