[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]








    ASSESSING TSA'S MANAGEMENT AND IMPLEMENTATION OF THE SCREENING 
                          PARTNERSHIP PROGRAM

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                        TRANSPORTATION SECURITY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 17, 2015

                               __________

                           Serial No. 114-44

                               __________

       Printed for the use of the Committee on Homeland Security
                                     



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                     

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                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Candice S. Miller, Michigan, Vice    James R. Langevin, Rhode Island
    Chair                            Brian Higgins, New York
Jeff Duncan, South Carolina          Cedric L. Richmond, Louisiana
Tom Marino, Pennsylvania             William R. Keating, Massachusetts
Lou Barletta, Pennsylvania           Donald M. Payne, Jr., New Jersey
Scott Perry, Pennsylvania            Filemon Vela, Texas
Curt Clawson, Florida                Bonnie Watson Coleman, New Jersey
John Katko, New York                 Kathleen M. Rice, New York
Will Hurd, Texas                     Norma J. Torres, California
Earl L. ``Buddy'' Carter, Georgia
Mark Walker, North Carolina
Barry Loudermilk, Georgia
Martha McSally, Arizona
John Ratcliffe, Texas
Daniel M. Donovan, Jr., New York
                   Brendan P. Shields, Staff Director
                    Joan V. O'Hara,  General Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

                SUBCOMMITTEE ON TRANSPORTATION SECURITY

                     John Katko, New York, Chairman
Mike Rogers, Alabama                 Kathleen M. Rice, New York
Earl L. ``Buddy'' Carter, Georgia    William R. Keating, Massachusetts
Mark Walker, North Carolina          Donald M. Payne, Jr., New Jersey
John Ratcliffe, Texas                Bennie G. Thompson, Mississippi 
Michael T. McCaul, Texas (ex             (ex officio)
    officio)
             Krista P. Harvey, Subcommittee Staff Director
                    Dennis Terry, Subcommittee Clerk
             Vacancy, Minority Subcommittee Staff Director
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable John Katko, a Representative in Congress From the 
  State of New York, and Chairman, Subcommittee on Transportation 
  Security:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Kathleen M. Rice, a Representative in Congress From 
  the State of New York, and Ranking Member, Subcommittee on 
  Transportation Security:
  Oral Statement.................................................     4
  Prepared Statement.............................................     5
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................     6
The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas:
  Prepared Statement.............................................     7

                               Witnesses

Ms. Jennifer Grover, Director, Homeland Security and Justice, 
  U.S. Government Accountability Office:
  Oral Statement.................................................     9
  Prepared Statement.............................................    10
Ms. Carolyn Dorgham, Director, Screening Partnership Program, 
  Office of Security Operations, Transportation Security 
  Administration, U.S. Department of Homeland Security:
  Oral Statement.................................................    14
  Prepared Statement.............................................    15

                             For the Record

The Honorable John Mica, a Representative in Congress From the 
  State of Florida:
  Article........................................................    27

                                Appendix

Questions From Ranking Member Thompson for Carolyn Dorgham.......    33

 
    ASSESSING TSA'S MANAGEMENT AND IMPLEMENTATION OF THE SCREENING 
                          PARTNERSHIP PROGRAM

                              ----------                              


                       Tuesday, November 17, 2015

             U.S. House of Representatives,
           Subcommittee on Transportation Security,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:08 p.m., in 
Room 311, Cannon House Office Building, Hon. John Katko 
[Chairman of the subcommittee] presiding.
    Present: Representatives Katko, Rogers, Walker, and Rice.
    Also present: Representatives Mica and Jackson Lee.
    Mr. Katko. The Committee on Homeland Security, Subcommittee 
on Transportation Security will come to order.
    I ask unanimous consent that the gentleman from Florida, 
Mr. Mica, be allowed to sit on the dais and participate in this 
hearing.
    Without objection, so ordered.
    The subcommittee is meeting today to examine the 
Transportation Security Administration's management and 
implementation of the Screening Partnership Program. I now 
recognize myself for an opening statement.
    I would like to welcome everyone to today's hearing to 
assess TSA's management and implementation of the Screening 
Partnership Program, or SPP for short. I am pleased to have 
once again Jennifer Grover, the director for homeland security 
and justice for the Government Accountability Office; and 
Carolyn Dorgham, the SPP director for TSA.
    If that is not enough acronyms in one sentence, I don't 
know what is.
    They are our witnesses for today's hearing.
    The hearing comes at a critical time for homeland security. 
Just before I came out, there was another incident on a 
jetliner where a woman tried to open up the back door of an 
airliner on the way to Boston. So it continues.
    As we all mourn the innocent victims of the horrific 
terrorist attacks in Paris, Egypt, and Lebanon, we must 
continue to pray for the victims' families and for all the 
first responders who put their own lives on the line every day.
    America and our allies must stand together to fight ISIS, 
their hateful ideology, and the violence it incites. As 
chairman of both the Foreign Fighter Task Force and this 
subcommittee, I am all too aware of the lengths to which ISIS 
will go to inflict terror. We must remain vigilant and 
recognize that ISIS is intent on inflicting harm on anyone who 
opposes their radical beliefs.
    As the story behind the Russian Metrojet plane unfolds, it 
is clear that the insider threat is real at airports. We must 
take steps to mitigate it both overseas and here at home.
    Earlier this month, the San Francisco Gate reported that 
three screeners at San Francisco Airport were arrested for 
taking money to allow drug smugglers to pass through security 
checkpoints with large amounts of cocaine in their baggage.
    In March, two other screeners at SFO were arrested and 
arraigned for taking bribes to allow smugglers to pass through 
checkpoints with methamphetamines. The SFO is one of 21 
airports in the United States that participate in the Screening 
Partnership Program, where screening operations are run by a 
private contractor.
    But these cases are not limited to SFO or to the privatized 
screening workforce. In 2012, four TSA screeners colluded with 
smugglers to allow drugs through checkpoints at LAX in exchange 
for cash payments. When screeners are taking bribes and turning 
a blind eye, terrorists can easily exploit this vulnerability 
and create catastrophic consequences.
    I point to something that happened earlier this year, where 
a case--a drug smuggling case in Dallas-Fort Worth revealed the 
fact that the employees that were bringing the drugs through 
unmanned checkpoints, using their SIDA cards, offered not only 
to take in drugs, but also offered to take in bombs. So the 
threat is real from both a screening standpoint and from the 
employee standpoint at airports.
    It is a systematic problem that we must deal with head-on 
or it will only be a matter of time before we hear a story 
about a screener or aviation worker in the United States 
intentionally allowing explosives or weapons to pass through 
security checkpoints.
    TSA must step up its oversight of both the Federal and 
private-sector employees responsible for screening, and other 
important jobs at our Nation's airports. The stakes are simply 
too high not to do so.
    The Aviation and Transportation Security Act of 2001 
required TSA to conduct a pilot program to evaluate the 
performance of private screening at airports. The pilot was 
conducted from 2002 to 2004 at 5 airports, including Rochester, 
New York, which is near my home town of Syracuse. The five 
airports that participated in the pilot program transitioned to 
SPP and since then the number of airports participating in SPP 
has grown to 21.
    Whether they are Federal workers or private contractors 
conducting screening at checkpoints, we must ensure that TSA is 
properly overseeing this workforce and guarding against 
potential threats, including those emanating from the screening 
workforce.
    We all want the best and most effective security 
safeguarding our Nation's airports. It is also incumbent upon 
us to ensure that taxpayer money is being spent judiciously, 
without sacrificing the scope or quality of security 
operations.
    However, without sufficient and reliable data from TSA, 
Congress is left to make important policy decisions based on 
assumptions rather than facts. This is not how we should be 
doing business. A lack of adequate information exists to 
measure the success of SPP versus non-SPP screening operations 
almost 12 years after the implementation of the program. That 
is simply unacceptable.
    For over 6 years, GAO reports have highlighted a lack of 
sufficient and reliable data to compare private versus Federal 
screener performance and costs--for 6 years. Today, GAO will 
testify on yet another report that found while TSA has made 
improvements to their cost-estimating calculations, there are 
still a number of shortcomings that need to be addressed.
    It concerns me that TSA has failed to adequately address 
this issue with a transparent and accurate cost assessment over 
6 years after concerns were initially raised. Furthermore, the 
recent termination of an SPP contract agreement in western 
Montana, only 1 year after the contract was awarded, is 
troubling. It raises questions about how TSA is evaluating 
contractor applications prior to award and the management of 
the workforce transition from non-SPP to SPP.
    I look forward to hearing from the GAO on what can be done 
to address some of these critical information gaps. I look 
forward to hearing from TSA on how they plan to address this 
issue in an effective and timely manner, and once and for all.
    Again, thank you both for being here today.
    [The statement of Chairman Katko follows:]
                    Statement of Chairman John Katko
                           November 17, 2015
    I would like to welcome everyone to today's hearing to assess TSA's 
management and implementation of the Screening Partnership Program, or 
SPP. I am pleased to have Jennifer Grover, the director for homeland 
security and justice for the Government Accountability Office, and 
Carolyn Dorgham, the SPP director for TSA, as our witnesses for this 
hearing.
    Today's hearing comes at a critical time for homeland security. As 
we all mourn the innocent victims of the horrific terrorist attacks in 
Paris, Egypt, and Lebanon, we must continue to pray for the victims' 
families and for all of the first responders who put their own lives on 
the line every day. America and our allies must stand together to fight 
ISIS, their hateful ideology, and the violence it incites.
    As Chairman of both the Foreign Fighter Task Force and this 
subcommittee, I am all too aware of the lengths which ISIS will go to 
inflict terror. We must remain vigilant, and recognize that ISIS is 
intent on inflicting harm on anyone who opposes their radical beliefs.
    As the story behind the Russian MetroJet plane unfolds, it is clear 
the insider threat is real and we must take steps to mitigate it, both 
overseas and here at home.
    Earlier this month, the San Francisco Gate reported that three 
screeners at San Francisco International Airport were arrested for 
taking money to allow drug smugglers to pass through security 
checkpoints with large amounts of cocaine in their baggage. In March, 
two other screeners at SFO were arrested and arraigned for taking 
bribes to allow smugglers to pass through checkpoints with 
methamphetamines. SFO is 1 of 21 airports in the United States that 
participate in the Screening Partnership program, where screening 
operations are run by a private contractor.
    But these cases are not limited to SFO or to the privatized 
screening workforce. In 2012, 4 TSA screeners colluded with smugglers 
to allow drugs through checkpoints at LAX in exchange for cash 
payments. When screeners are taking bribes and turning a blind eye, 
terrorists can exploit this vulnerability and create catastrophic 
consequences.
    This is a systemic problem that we must deal with head on or it 
will only be a matter of time before we hear a story about a screener 
or aviation worker in the United States intentionally allowing 
explosives or weapons to pass through security checkpoints. TSA must 
step up its oversight of both the Federal and private-sector employees 
responsible for screening and other important jobs at our Nation's 
airports. The stakes are too high not to.
    The Aviation and Transportation Security Act of 2001 (ATSA) 
required TSA to conduct a pilot program to evaluate the performance of 
private screening at airports. The pilot was conducted from 2002 to 
2004 at 5 airports, including Rochester airport, which is near my home 
town of Syracuse. The 5 airports that participated in the pilot program 
transitioned to SPP, and since then the number of airports 
participating in SPP has grown to 21.
    Whether there are Federal workers or private contractors conducting 
screening at security checkpoints, we must ensure that TSA is properly 
overseeing this workforce and guarding against potential threats, 
including those emanating from the screening workforce.
    We all want the best and most effective security safeguarding our 
Nation's airports. It is also incumbent upon us to ensure that taxpayer 
money is being spent judiciously without sacrificing the scope or 
quality of security operations. However, without sufficient and 
reliable data from TSA, Congress is left to make important policy 
decisions based on assumptions rather than facts. This is not how we 
should be doing business.
    A lack of adequate information exists to measure the success of SPP 
versus non-SPP screening operations almost 12 years after the 
implementation of the program. For over 6 years, GAO reports have 
highlighted a lack of sufficient and reliable data to compare private 
versus Federal screener performance and cost. Today, GAO will testify 
on yet another report that found while TSA has made improvements to 
their cost estimating calculations; there are still a number of 
shortcomings that need to be addressed. It concerns me that TSA has 
failed to adequately address this issue of a transparent and accurate 
cost estimate over 6 years after concerns were initially raised.
    Furthermore, the recent termination of a SPP contract agreement in 
western Montana only 1 year after the contract was awarded is 
troubling. It raises questions about how TSA is evaluating contractor 
applications prior to award and the management of the workforce 
transition from non-SPP to SPP.
    I look forward to hearing from the GAO on what can be done to 
address some of these critical information gaps, and I look forward to 
hearing from TSA on how they plan to address this issue in an effective 
and timely manner. Again, thank you both for being here today

    Mr. Katko. The Chair now recognizes the Ranking Minority 
Member of the subcommittee, the gentlewoman from New York, Miss 
Rice, for any statement she may have.
    Miss Rice. Thank you, Mr. Chairman. Thank you for convening 
this hearing.
    I would also like to thank the witnesses for being here to 
discuss how the Transportation Security Administration is 
managing and executing the Screening Partnership Program, as 
well as the Government Accountability Office's most recent 
report regarding the program.
    After the attacks on September 11, the Aviation and 
Transportation Security Act established the Transportation 
Security Administration as the Federal entity responsible for 
transportation security and the Federal screener workforce. 
This represented a pivot away from the pre-9/11 model, but it 
also included an amendment that led to the establishment of 
SPP, which gives airports the opportunity to opt out of Federal 
screening, and instead contract private companies to conduct 
security screening services under Federal oversight.
    We often hear in Congress that screening without TSOs will 
lead to a more pleasant and expedient travel experience, but 
this is simply not the case. When an airport opts out of 
Federal screening and begins to transition to private 
screeners, they recruit and, as we will hear today, in many 
cases depend on, the retention of TSOs who are given the right 
of first refusal for these positions.
    The airports enforce the same policies and procedures, 
hoping to retain the same personnel, who are often forced to 
choose between accepting the same job with less benefits, 
relocating to continue working for TSA, or finding other jobs. 
To coincide with this hearing, GAO released a report that 
compares the costs incurred by TSA to perform screening, to the 
costs associated with privatized screening.
    First, I believe that through this report, we will come to 
find that without certain changes, we cannot have a true 
comparison between the screening entities. I look forward to 
hearing Ms. Grover's testimony and thoughts on TSA's cost 
estimate methodology.
    Second, we have the example of four airports in Montana 
that opted out of Federal screening, but ultimately terminated 
the contracts because the vendor couldn't attract or retain 
staff levels to perform screening duties.
    So while these airports opted for private screening, in 
many instances they still had to rely on TSA's National 
deployment force to provide screening. That is obviously very 
concerning.
    I thank Ms. Dorgham for being here today, and I hope she 
will speak to those concerns and discuss the oversight that 
takes place at these airports that opt out of Federal 
screening.
    I am also eager to hear who pays for those TSA deployment 
forces and if those costs are included in TSA's cost estimates 
on the front end of the contracting process.
    Finally, before closing, I would like to acknowledge the 
horrific acts of terrorism that occurred in Paris on Friday. 
Those attacks, along with the explosion of a Metrojet in Egypt 
remind us that the threat of terrorism has not gone away. That 
threat is very real. It is constant and it is always evolving.
    TSOs play a critical role in confronting that threat. They 
serve on the front line of our Nation's airports screening 
millions of passengers daily, and I thank them for working to 
keep the traveling public safe.
    Mr. Chairman, thank you again for convening this hearing. I 
look forward to a productive dialogue today, as well as the 
follow-up hearing scheduled for December where we will be able 
to consider additional perspectives.
    I yield back the balance of my time.
    [The statement of Ranking Member Rice follows:]
               Statement of Ranking Member Kathleen Rice
                           November 17, 2015
    After the attacks on September 11, the Aviation and Transportation 
Security Act established the Transportation Security Administration as 
the Federal entity responsible for transportation security and a 
Federal screener workforce. This represented a pivot away from the pre-
9/11 model--but it also included an amendment that led to the 
establishment of SPP, which gives airports the opportunity to ``opt-
out'' of Federal screening and instead contract private companies to 
conduct security screening services under Federal oversight.
    We often hear in Congress that screening without TSOs will lead to 
a more pleasant and expedient travel experience. But this is simply not 
the case. When an airport opts out of Federal screening and begins to 
transition to private screeners, they recruit--and as we will hear 
today--in many cases DEPEND on the retention of TSOs, who are given the 
right of first refusal for these positions.
    The airports enforce the same policies and procedures, hoping to 
retain the same personnel, who are often forced to choose between 
accepting the same job with less benefits, relocating to continue 
working for TSA, or finding other jobs. To coincide with this hearing, 
GAO released a report that compares the costs incurred by TSA to 
perform screening to the costs associated with privatized screening.
    First, I believe that through this report, we will come to find 
that without certain changes, we cannot have a true comparison between 
the screening entities. I look forward to hearing Ms. Grover's 
testimony and thoughts on TSA's cost-estimate methodology.
    Second, we have the example of four airports in Montana that opted 
out of Federal screening, but ultimately terminated the contracts 
because the vendor couldn't attract or retain staff levels to perform 
screening duties. So, while these airports opted for private screening, 
in many instances they still had to rely on TSA's National deployment 
force to provide screening. That's very concerning.
    I thank Ms. Dorgham for being here today, and I hope she will speak 
to those concerns and discuss the oversight that takes place at these 
airports that opt out of Federal screening. I'm also eager to hear who 
pays for those TSA deployment forces, and if those costs are included 
in TSA's cost estimates on the front end of the contracting process.
    Finally, before closing, I would like to acknowledge the horrific 
acts of terrorism that occurred in Paris on Friday. Those attacks, 
along with the explosion of a Metrojet in Egypt, remind us that the 
threat of terrorism has not gone away. That threat is very real, it is 
constant, and it is always evolving.
    Transportation Security Officers play a critical role in 
confronting that threat. They serve on the front line of our Nation's 
airports, screening millions of passengers daily, and I thank them for 
working to keep the traveling public safe.
    Thank you again for convening this hearing. I look forward to a 
productive dialogue today, as well as the follow-up hearing scheduled 
for December, where we will be able to consider additional 
perspectives.

    Mr. Katko. Other Members are reminded that statements may 
be submitted for the record.
    [The statements of Ranking Member Thompson and Hon. Sheila 
Jackson Lee follow:]
             Statement of Ranking Member Bennie G. Thompson
                           November 17, 2015
    It is my understanding that this subcommittee will be holding a 
follow-up hearing to take testimony and question representatives of the 
workforce on their perspectives on the Screening Partnership Program.
    At the beginning of this hearing, the Government Accountability 
Office released a report requested by Members of the Majority regarding 
the Transportation Security Administration's use of cost estimates and 
how these estimates for the Federal Government to perform screening 
measure against costs incurred by private contractors to provide 
screening in the Nation's airports through the Screening Partnership 
Program.
    I look forward to Ms. Grover's testimony today, particularly on 
whether or not the statistics included in this estimation truly 
represent an apples-to-apples comparison of the costs to Federal 
screeners versus private screeners.
    I believe that there are a number of factors that can significantly 
alter these statistics.
    SPP allows airports the option of returning to the pre-9/11 model 
of using contract employees to screen passengers and baggage at our 
Nation's airports.
    Mr. Chairman, after the recent plane crash in Russia and the 
horrific attacks in Paris, both of which ISIL has claimed 
responsibility for, any facet of aviation security that mirrors a pre-
9/11 state should be strongly reconsidered.
    After 9/11 it was clear to the vast majority of Members of Congress 
and the Bush administration that transitioning to a Federal screener 
workforce was the right thing to do for the security of our Nation.
    Since the 9/11 terrorist attacks, there has not been a successful 
terrorist attack on our aviation system on U.S. soil.
    Despite that fact, there have been numerous calls from across the 
aisle to return to a workforce that is increasingly composed of 
contract screeners.
    Some claim that transitioning to a contract workforce results in 
more efficient and friendlier screeners, but there are no studies or 
information that back up this assertion.
    As I have said on numerous occasions, Transportation Security 
Officers perform a thankless job.
    These men and women, who go to work every day to ensure the safety 
of the traveling public, along with TSA practices and policies designed 
to do the same, are often ridiculed and singled out as the reason for 
unpleasant screening experiences.
    Members of the Majority will point to this as well as gaps in our 
aviation security screening identified by the Inspector General and GAO 
as the basis for needing to transition to a privatized screening 
workforce.
    However, what the public needs to know is that when an airport 
chooses to use contract screeners, the private company recruits the 
Federal workers. By law, privatized screeners follow the same screening 
protocols and procedures as Federal Transportation Security Officers.
    Moreover, the vendors who are awarded these screening contracts 
depend on the retention of Transportation Security Officers to carry 
out their contracts.
    For instance, in Montana, a contract was awarded to a vendor who 
assumed that it would be able to retain a significant portion of TSA's 
workforce in those airports to carry out screening functions.
    Citing various reasons, including the vast difference in benefits, 
these Transportation Security Officers decided not to transition to a 
contracted workforce, and instead decided to stay within the 
Transportation Security Administration and secure jobs in other 
airports.
    This contractor was in the predicament of not being able to attract 
the requisite number of employees required to conduct sufficient 
screening within these airports, and had to supplement their screeners 
with National Deployment Officers from the Transportation Security 
Administration.
    This incident raises many questions, including the oversight that 
is in place to ensure that contractors are able to perform under the 
terms of their contracts.
    I thank Ms. Dorgham for being here today, and look forward to her 
testimony on this subject.
    Finally, I would like to point out that many of the changes made to 
the law controlling for entry into the Screening Partnership Program in 
the FAA Modernization and Reform Act of 2012 were ill-informed and 
should be repealed.
    Chief among those is the provision allowing for subsidiaries of 
foreign-owned corporations to compete for and be awarded contracts for 
screening services.
    Earlier this Congress, I introduced the Aviation Screening 
Contractor Reform and Accountability Act, which would reinstate the law 
stipulating that a company could only get a contract for screening 
services if it was owned and controlled by a U.S. citizen.
                                 ______
                                 
               Statement of Honorable Sheila Jackson Lee
                           November 17, 2015
    Chairman Katko and Ranking Member Rice, I thank you both for the 
opportunity for the subcommittee to hear from today's witnesses on the 
topic of ``Assessing TSA's Management and Implementation of the 
Screening Partnership Program.'' I thank the Chair for allowing me to 
participate in today's hearing.
    As a senior Member of the Homeland Security Committee and former 
Chair of the Subcommittee on Transportation Security, I am a strong 
proponent of Transportation Security and see that mission as on-going.
    I thank today's witnesses:
   Ms. Jennifer A. Grover, the director of homeland security 
        and justice, at the Government Accountability Office (GAO); and
   Carolyn Dorgham, director, Screening Partnership Program, 
        Office of Security Operations, TSA.
    Today's hearing delves into the TSA's Screening Partnership Program 
(SPP), which is statutorily mandated to allow airports to ``opt-out'' 
of using the Federal passenger and baggage screening workforce and 
instead utilize contract screeners.
    Private-contract employees were on the job screening passenger 
baggage on September 11, 2001, when 19 hijackers boarded 4 flights 
crashing 3 of them into buildings and one into a field in Pennsylvania. 
I will never forget that day. On September 11, 2015, the Nation marked 
the 14th anniversary of the attacks that killed 2,977 men, women, and 
children. I stood on the East Front steps of the Capitol on September 
11, along with 150 Members of the House of Representatives and sang 
``God Bless America.''
    Eleven days after the September 11, 2001, terrorist attacks, 
Pennsylvania Governor Tom Ridge was appointed as the first director of 
the Office of Homeland Security in the White House.
    Congressional action following September 11, led to the Aviation 
and Transportation Security Act (ATSA), that was signed into law. That 
law gave the Federal Government direct responsibility for airport 
screening. The Transportation Security Administration is created to 
oversee security in all modes of travel.
    In November 2002, I was proud to join my colleagues in voting to 
create a Department of Homeland Security. As a Member of the House 
Committee on Homeland Security since its establishment, and Ranking 
Member of the Judiciary Subcommittee on Crime, Terrorism, and Homeland 
Security, today's hearing is of importance to me.
    The work of the TSA is a front-line Department of Homeland Security 
and it is not easy--it can in fact be very dangerous.
    Like many of my colleagues, I recall the shooting incident at LAX 
last year that killed Gerardo Hernandez, who became the first TSA 
officer killed in the line of duty; and the machete attack at the Louis 
Armstrong New Orleans International Airport earlier this year that 
resulted in injuries to Senior Transportation Security Officer Carol 
Richel.
    Each day, TSA processes an average of 1.7 million passengers at 
more than 450 airports across the Nation. In 2012, TSA screened 
637,582,122 passengers. The Bush International and the William P. Hobby 
Airports are essential hubs for domestic and international air travel 
for Houston and the region:
   Nearly 40 million passengers traveled through Bush 
        International Airport (IAH) and an additional 10 million 
        traveled through William P. Hobby (HOU);
   More than 650 daily departures occur at IAH;
   IAH is the 11th-busiest airport in the United States for 
        total passenger traffic;
   IAH has 12 all-cargo airlines handling more than 419,205 
        metric tons of cargo in 2012.
    I know that Congress has not done all that it could to make your 
work easier--sequestration, a Government shut-down, and a delay in 
fully funding the Department of Homeland Security was not in the 
security interest of the Nation.
    The DHS IG continues to stress TSA's poor responses to confront 
problems concerning passenger and baggage screening, access controls to 
secure areas, and employee misconduct. The OIG has produced 115 reports 
on TSA with hundreds of recommendations, many of which remain 
unresolved.
    In addition, to these reports:
   On May 6, 2015, the DHS OIG released a report claiming that 
        TSA does not properly manage the maintenance of its airport 
        screening equipment.
   On June 1, 2015 news media reported on alleged preliminary 
        findings from an on-going undercover DHS Inspector General 
        review.
   Essentially, Red Team auditors posing as passengers smuggled 
        mock explosives and banned weapons through checkpoints at 
        various U.S. airports. According to media reporting, TSA agents 
        failed 67 out of 70 tests or 96 percent of trials. It is 
        important to note that previous Red Teams investigations raised 
        similar concerns. This IG review is still on-going and the 
        report is to be released this fall.
    The traveling public's confidence in the security of our Nation's 
airports should not be shaken because of Federal Government planned and 
managed tests of airport security.
    The attacks in Paris last Friday and the continued uncertainty that 
the Nation faces regarding what terrorist may do next is something that 
as Members of this committee can understand. We cannot wait until the 
terrorists figure out a way past security before we act--because this 
would mean we have learned none of the lessons of September 11, 2001. 
We must commit ourselves to do everything possible to prevent another 
9/11 from ever occurring again.
    I am committed to ending sequestration and making sure that my 
colleagues in Congress comprehend the gravity of playing politics with 
security.
    My conclusion is that TSA should not be in the business of 
privatization of screening duties in spite of airport requests. The 
climate of terrorism today argues against privatization at all of TSA 
screening responsibilities.

    Mr. Katko. Our first witness is Ms. Jennifer Grover, who 
currently serves as the director of the homeland security and 
justice team at the Government Accountability Office. Her 
portfolio includes GAO reviews of TSA and the U.S. Coast Guard 
programs and operations. Ms. Grover joined the GAO in 1991. She 
has testified before this committee many times and she has done 
a highly competent job. We look forward to hearing your 
testimony again today.
    The Chair now recognizes Ms. Grover to testify.

 STATEMENT OF JENNIFER GROVER, DIRECTOR, HOMELAND SECURITY AND 
         JUSTICE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Grover. Good afternoon, Chairman Katko, Ranking Member 
Rice and other Members and staff. Thank you for the opportunity 
to discuss TSA's Screening Partnership Program today. My 
remarks are based on a GAO report being released today.
    Since SPP's inception, Congressional committees, industry 
stakeholders, and TSA have all sought information about how 
screening costs compare at airports with private and Federal 
screeners. To answer this question, TSA prepares estimates of 
what it would cost the agency to provide screening services at 
the SPP airports.
    We found that TSA's cost-estimating process has improved 
since our last review, in particular by providing a detailed 
methodology. However, important limitations still affect the 
reliability of TSA's estimates. For example, TSA's cost 
estimates are not complete because they only include the costs 
incurred by TSA to perform screening at an airport, and not 
total Federal costs such as retirement benefits and insurance. 
We found that these other Federal costs add another 9 percent 
on average to total screening costs for the 13 airports in our 
review.
    OMB guidance describes what should be included in estimates 
of Government costs. In this case, as in others, including all 
Federal costs would eliminate bias by ensuring that the 
estimated Government screening costs are accurately represented 
and not systematically understated.
    TSA also uses a modified version of these cost estimates as 
part of their process for selecting SPP contractors. 
Specifically, the estimates serve as a cap to ensure that no 
SPP contracts are awarded for more than what it would cost TSA 
to provide screening services. We found that contract awards 
for 13 recent SPP airports ranged from 2 to 19 percent less 
than TSA's estimated costs, with an average savings of 11 
percent.
    Now, keep in mind my previous point that TSA's estimated 
costs are about 9 percent less than total estimated Federal 
costs. Therefore, under this procurement process, the contract 
award value will always be no more than TSA's estimate and even 
lower than total estimated Federal costs.
    Does this mean that SPP airports cost less to run than 
airports with Federal screeners? We cannot answer that question 
because TSA does not continue to monitor the value of an SPP 
contract relative to TSA's estimated costs after the contract 
has been awarded.
    For example, although TSA monitors changes in the 
contractor cost over time, TSA doesn't update how its own 
estimated costs would change in response to new situations such 
as providing additional staff if an airport opens a new 
terminal.
    Continually monitoring how actual contract values compare 
to updated estimates of TSA's costs would provide program 
officials and policymakers with more accurate information about 
the relative costs of operating airports with private and 
Federal screeners.
    Finally, although Congressional committees have sought 
information on the cost effectiveness of the SPP, we found that 
TSA has not regularly reported cost comparisons to 
policymakers.
    Since 2013, TSA has prepared comprehensive annual reports 
that include a comparison of actual private costs with 
estimated Federal costs.
    According to TSA, they have not shared these reports with 
Congress because they are developed for internal use. We 
concluded that while TSA has no legal requirement to report 
this information, doing so such as on an annual basis would 
enable Congressional committees to assess the effectiveness of 
the SPP program and its effect on Federal costs.
    We have made several recommendations based on these 
findings: That TSA continue to improve its cost-estimating 
methods; continually monitor how contract values compare to 
TSA's estimated costs; and provide cost comparisons to Congress 
on a regular basis. TSA concurred with all of our 
recommendations and we will monitor TSA's progress toward their 
implementation.
    Chairman Katko, Ranking Member Rice, this concludes my 
remarks. I look forward to your questions.
    [The prepared statement of Ms. Grover follows:]
                 Prepared Statement of Jennifer Grover
                           November 17, 2015
                              gao-16-115t
    Chairman Katko, Ranking Member Rice, and Members of the 
subcommittee: I am pleased to be here today to discuss issues related 
to the Transportation Security Administration's (TSA) Screening 
Partnership Program (SPP). TSA, within the Department of Homeland 
Security (DHS), is responsible for screening the approximately 1.8 
million passengers and their property traveling through our Nation's 
airports every day to ensure, among other things, that persons do not 
carry prohibited items into airport sterile areas or on flights.\1\ In 
2004, TSA created the SPP, allowing commercial (i.e., TSA-regulated) 
airports an opportunity to apply to TSA to have the screening of 
passengers and property performed by TSA-approved qualified private-
screening contractors.\2\ Contractors perform passenger and baggage 
screening services at a total of 21 airports across the country, with 
the most recent airport beginning operations in June 2015.\3\ At each 
of the SPP airports, TSA continues to be responsible for overseeing 
screening operations, and the contractors must adhere to TSA's security 
standards, procedures, and requirements.
---------------------------------------------------------------------------
    \1\ The sterile area is the portion of an airport defined in an 
airport's security program that provides passengers access to boarding 
aircraft and to which access is generally controlled by TSA through the 
screening of persons and property. See 49 C.F.R. 1540.5.
    \2\ See 49 U.S.C.  44920. There were approximately 450 commercial 
airports as of September 2015. We refer to airports that are 
participating in the SPP as SPP airports and the screeners in those 
airports as private screeners. We refer to airports that do not 
participate in the SPP as non-SPP airports and the screeners at those 
airports as Federal screeners.
    \3\ Of the 21 airports, 7 have transitioned to private screeners 
since September 2014. One additional airport, Punta Gorda Airport, has 
been accepted into the SPP but, as of September 2015, was awaiting 
contract award.
---------------------------------------------------------------------------
    Since the SPP's inception, Congressional committees, industry 
stakeholders, and TSA have sought to determine how screening costs 
compare at airports with private and Federal (i.e., TSA-employed) 
screeners, and TSA does produce cost estimates that attempt to predict 
what it would cost the agency to provide passenger and baggage 
screening services at airports that have opted out or plan to opt out 
of Federal screening. Our previous work, including a January 2009 
briefing and a March 2011 update, raised concerns with TSA's 
methodology for developing its cost estimates.\4\ In 2013, TSA 
developed a revised methodology for developing cost estimates for each 
SPP airport that addressed some of the design limitations we previously 
cited. TSA's estimates are used to provide a basis of comparison in 
internal reports and as part of TSA's revised contracting strategy for 
selecting contractors at SPP airports, which incorporates the estimates 
in an effort to award contract values at or below what it would cost 
TSA to screen passengers and property at an airport.
---------------------------------------------------------------------------
    \4\ See GAO, Aviation Security: TSA's Cost and Performance Study of 
Private-Sector Airport Screening, GAO-09-27R (Washington, DC: Jan. 9, 
2009) and Aviation Security: TSA's Revised Cost Comparison Provides a 
More Reasonable Basis for Comparing the Costs of Private-Sector and TSA 
Screeners, GAO-11-375R (Washington, DC: Mar. 4, 2011).
---------------------------------------------------------------------------
    As additional airports consider applying to the SPP and as TSA 
continues to seek ways to improve its ability to compare the costs of 
private and Federal screeners, you asked that we examine TSA's approach 
to estimating costs, how these estimates are used in procuring 
screening services, and how TSA continues to adapt its SPP procurement 
policies and processes. My remarks today are based on our report, 
released at this hearing, entitled Screening Partnership Program: TSA 
Can Benefit from Improved Cost Estimates, which addresses: (1) The 
extent to which TSA has developed and reported reliable cost estimates 
for providing screening services for SPP airports, (2) how TSA uses 
cost estimates in selecting SPP contractors and the extent to which TSA 
monitors contractor costs relative to its cost estimates, and (3) how 
the SPP has changed since the beginning of fiscal year 2014.\5\
---------------------------------------------------------------------------
    \5\ GAO, Screening Partnership Program: TSA Can Benefit from 
Improved Cost Estimates, GAO-16-19 (Washington, DC: Nov. 16, 2015).
---------------------------------------------------------------------------
    For our November 2015 report, we compared TSA's cost estimation 
practices with leading best practices identified in GAO's Cost 
Estimating and Assessment Guide and assessed TSA internal reporting 
guidance using GAO's Standards for Internal Control in the Federal 
Government.\6\ We analyzed contracts representing 20 of the 22 airports 
in the SPP to identify where the cost estimates were used and whether 
cost estimates were updated based on changes to the contract.\7\ 
Additionally, we visited 9 airports that had private screeners or were 
preparing for private screeners and spoke to SPP stakeholders at each 
airport, including airport directors, contractors, TSA Federal security 
directors, and Federal screeners. We also met with each of the five 
private screening contractors with SPP contracts at the time of our 
review as well as TSA officials responsible for the program. More 
detailed information on our scope and methodology can be found in our 
November 2015 report. We conducted the work on which this statement is 
based in accordance with generally accepted Government auditing 
standards.
---------------------------------------------------------------------------
    \6\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices 
for Developing and Managing Capital Program Costs, GAO-09-3SP 
(Washington, DC: Mar. 2, 2009). The methodology outlined in this guide 
is a compilation of best practices that Federal cost-estimating 
organizations and industry use to develop and maintain reliable cost 
estimates throughout the life of a Government program. The best 
practices were developed in conjunction with Government and industry 
experts in the cost-estimating community. GAO, Standards for Internal 
Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, DC: 
November 1999).
    \7\ We selected all of the contracts that were active at the time 
of our review, except two. We did not review the contracts for: (1) 
Kansas City International Airport because of an on-going dispute over 
TSA's award of the SPP contract and contract renegotiations during the 
time of our review (see, e.g., Firstline Transportation Security v. 
United States, 119 Fed. Cl. 116 (2014)). and (2) Punta Gorda Airport 
because, as mentioned earlier, the contract award was pending at the 
time of our review.
---------------------------------------------------------------------------
                          tsa's cost estimates
    In our November 2015 report, we found that, based on an analysis of 
TSA's cost estimating practices and methodology developed in 2013 
compared against best practices, TSA's cost estimates have some 
strengths, but also have limitations in four general characteristics 
that best practices call for in a high-quality and reliable cost 
estimate.\8\ TSA's cost estimating practices reflect certain strengths, 
including a revised cost estimating methodology that provides 
sufficient details for TSA staff to develop and document cost 
estimates. However, limitations in each of the four characteristics of 
a high-quality cost estimate prevent TSA's estimates from being 
reliable. For example, TSA's cost estimates are not fully comprehensive 
because they include only the costs incurred by TSA to perform 
screening at an airport and not the total costs incurred by the Federal 
Government such as retirement benefits and insurance. As shown in 
figure 1, we found that by including TSA's estimates of these other 
Federal costs (i.e., costs not borne by TSA) for the 13 SPP airports 
for which TSA provided official cost estimates, TSA's cost estimates 
are, on average, 91 percent of the total Federal costs. In addition, 
the percentage difference between the estimates of TSA's costs and all 
Federal costs (other Federal costs added to TSA costs) ranges from 7 to 
17 percent for each of the 13 SPP airports.
---------------------------------------------------------------------------
    \8\ The four characteristics of a high-quality cost estimate are: 
Comprehensive, well-documented, accurate, and credible. See our 
November 2015 report, GAO-16-19, for more details.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Further, TSA's estimates are not regularly updated to reflect 
changes to the program that could affect costs and do not include an 
analysis that addresses the uncertainty inherent in cost estimates. We 
concluded that a methodology that is more closely aligned with best 
practices for cost estimation can provide more reliable information. We 
recommended that TSA ensure that the 2013 cost-estimating methodology 
used to compare screening costs at SPP and non-SPP airports is revised 
to more fully conform to leading cost-estimating best practices. TSA 
concurred with the recommendation and stated that it will implement the 
necessary changes. In addition, while multiple Congressional committees 
have sought improved information on the cost-effectiveness of the SPP 
to oversee the program, TSA has not reported cost comparisons between 
Federal and private screening at SPP airports to policy makers.\9\ 
Since 2013, TSA has prepared comprehensive annual reports that include, 
among other things, a comparison of actual private costs with estimated 
Federal costs. According to TSA officials, they have not shared these 
reports with Congress because they are developed for internal use. We 
concluded that although TSA has no standing requirement to report this 
information, doing so (such as on an annual basis) can better position 
policy makers to assess and understand the effectiveness of the SPP 
program and its effects on Federal costs. We recommended that TSA 
provide cost comparisons that conform to leading cost-estimating best 
practices to Congress on a regular basis. TSA concurred with the 
recommendation and stated that it plans to use its existing SPP Semi-
Annual Report for Congress to provide this cost comparison beginning 
with the June 2016 report.
---------------------------------------------------------------------------
    \9\ Since 2009, multiple Congressional committees have requested 
evaluations of TSA's SPP cost comparisons or use of its estimates from 
GAO, the DHS Inspector General, and independent studies.
---------------------------------------------------------------------------
        selection of contractors and monitoring contractor costs
    In our November 2015 report, we also reported that TSA limits its 
selection of contractors to those who propose costs less than or equal 
to TSA's estimated costs to perform the same services. However, once it 
has awarded a contract, TSA does not continually monitor the value of 
the contract relative to its estimated costs throughout the contract 
period. TSA also does not update its estimated costs to account for 
changes during the contract period that affect the estimates. TSA has 
determined that it will not consider a contractor's proposal to perform 
screening at an airport if the proposed cost exceeds its cost 
efficiency number--TSA's estimated costs to perform screening services 
at an airport--and will further evaluate only those proposals that are 
less than or equal to TSA's estimated costs. As shown in figure 2, 
contract award prices for 13 SPP airports ranged from 2 percent to 19 
percent less than TSA's estimated costs for conducting screening, as 
reflected in the cost efficiency number, with an average of 11 percent 
savings at award compared with TSA's estimated costs.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    However, over the contract period, the value of the contract may 
increase or decrease because of modifications that address changes to 
the work. For example, if an airport opens a new terminal, the contract 
might be modified to accommodate the need to hire additional staff. 
Some of these changes may also affect TSA's estimated costs for 
performing the services provided in the contract. Therefore, we 
concluded that continually monitoring how contract values compare with 
TSA's estimated costs, and ensuring the cost estimates are updated to 
correspond to major changes in the program or contract, would provide 
program officials and policy makers with more accurate information 
about the relative costs of operating airports with Federal and private 
screeners. We recommended that TSA continually monitor how contract 
values compare with TSA's estimated costs and, in doing so, update its 
cost estimates when changes to the program or the contract may result 
in a major change to contract values to ensure the comparison is 
current and accurate. TSA concurred with the recommendation and stated 
that it will compare actual contract expenditures to TSA estimates on 
an annual basis, with updates as necessary, starting with all-new 
estimates after March 31, 2016.
                       changes in the spp program
    In our November 2015 report, we found that since the beginning of 
fiscal year 2014, TSA has made and continues to make changes to the 
SPP. For example, TSA is in the process of changing its SPP contracting 
approach from awarding individual contracts for SPP airports, to 
awarding indefinite delivery/indefinite quantity (ID/IQ) contracts.\10\ 
Contractors awarded ID/IQ contracts will be allowed to compete for the 
award of task orders to perform screening at specific airports. TSA is 
also changing how wage rate determinations are made for employees of 
SPP contractors that perform screening services and have extended the 
time for a new contractor to complete the transition from Federal 
screeners to private screeners from 90 to 120 days.
---------------------------------------------------------------------------
    \10\ This type of contracting approach, called ID/IQ contracts, 
provides for an indefinite quantity of services, within stated limits, 
for a fixed period and are usually awarded for a base year and 
subsequent option years See 48 C.F.R.  16.50. Under an ID/IQ contract, 
the Government places task orders for services or requirements 
established in the contract.
---------------------------------------------------------------------------
    Chairman Katko, Ranking Member Rice, and Members of the 
subcommittee, this completes my prepared statement. I would be pleased 
to respond to any questions you or other Members of the subcommittee 
may have at this time.

    Mr. Katko. Thank you, Ms. Grover, for your testimony. We 
definitely appreciate your being here today.
    Our second witness is Ms. Carolyn Dorgham, who currently 
serves as director of the Screening Partnership Program at the 
Transportation Security Administration's Office of Security 
Administration.
    The Chair now recognizes Ms. Dorgham to testify.

 STATEMENT OF CAROLYN DORGHAM, DIRECTOR, SCREENING PARTNERSHIP 
PROGRAM, OFFICE OF SECURITY OPERATIONS, TRANSPORTATION SECURITY 
      ADMINISTRATION, U.S. DEPARTMENT OF HOMELAND SECURITY

    Ms. Dorgham. Good afternoon, Chairman Katko, Ranking Member 
Rice, and Members of the subcommittee.
    I am pleased to appear before you today to discuss the 
Transportation Security Administration's Screening Partnership 
Program, or SPP. The SPP is a voluntary program under which 
airports apply to transfer screening operations from Federal to 
qualified private security screening companies. Upon an 
airport's acceptance into the program, TSA selects a company to 
conduct screening services under contract with the Federal 
Government.
    These companies must comply with all TSA security screening 
procedures and TSA's Federal security directors oversee these 
contracted operations to ensure compliance.
    TSA maintains its responsibility for security regardless of 
whether screening is conducted by private or Federal employees. 
Twenty-one airports are currently participating in the SPP and 
one additional airport has been accepted into the program and 
is currently in the source selection phase.
    Current SPP airports screen approximately 32 million 
passengers per year, or 5 percent of the TSA annual passenger 
volume. The FAA Modernization and Reform Act of 2012 provided 
new requirements for the program, including standards for the 
SPP application, a time line for agency action on applications, 
and steps TSA must take if denying an application.
    Since passage of the FAA Act, 7 airports have applied to 
the SPP program. All 7 airports were approved within the 
required 120 days, and 6 airports have private screeners in 
place today. The FAA Act also requires TSA to ensure that 
approving an airport operator's application would not 
compromise the security or detrimentally affect the cost 
efficiency or effectiveness of the screening of passengers or 
property at the airport.
    In order to maintain cost efficiency as required by law, 
TSA includes the TSA cost estimate in all requests for 
proposal, and requires that cost proposals not exceed the TSA 
cost estimate. All offerers are evaluated on proposed costs as 
well as their ability to perform screening according to TSA 
standards.
    GAO recently completed an audit focused on TSA's cost 
estimates. TSA is pleased that GAO recognized the improvements 
in our cost methodology. TSA concurs with all three of GAO's 
recommendations and has already taken steps to address them.
    Our office of finance and administration is working to 
implement adjustments to our cost-estimating methodology based 
on GAO's recommendations. My office will include the cost 
comparison information in our semiannual Screening Partnership 
Program report to Congress so that our oversight committees 
have visibility on our estimates and program figures.
    Finally, TSA will compare on an annual basis, the actual 
contract expenditures for a given airport to TSA's estimate for 
screening with Federal officers. If an airport's SPP 
application meets all legal requirements and a qualified 
contractor is identified during the procurement process, TSA's 
goal for the SPP program is to award a contract within 1 year 
of receiving the application. Compared to Federal contracting 
practices, this is an aggressive goal. However, it reflects 
TSA's commitment to ensuring that airports opting for contract 
screeners can expediently transition from Federal to contract 
screening operations.
    Additionally, TSA recently began changing its SPP 
contracting approach. Rather than awarding individual 
contracts, we are now working to award an indefinite delivery, 
indefinite quantity, or ID/IQ contract. Awarding the ID/IQ will 
provide a pool of highly-qualified vendors that are capable of 
running screening operations in a cost-efficient manner. Not 
detrimental to security per statutory requirements.
    Successful offerors will then be able to compete for 
security screening services at specific airports through task 
orders. This new approach is expected to reduce procurement 
time lines for TSA while simultaneously streamlining the 
proposal process for industry.
    TSA provides information to vendors interested in 
participating through numerous resources. TSA utilizes the 
Federal business opportunities website to communicate with 
vendors on SPP-related topics, such as annual industry day, 
opportunities at TSA headquarters, and posting draft statements 
for work and requests for proposals that solicit vendor 
feedback.
    Additionally, TSA provides opportunities for industry days 
at airports which allow vendors to tour the airport, ask the 
airport specific questions concerning, for example, equipment 
requirements and airport layout. TSA also meets with vendors in 
other forums such as summits and roundtable discussions.
    My responsibility as the senior executive responsible for 
the SPP is to focus on its security, effectiveness, and 
efficiency. I work to achieve transparency and engagement with 
industry so that our qualified private partners have access to 
information that helps them achieve these same goals.
    I appreciate this committee's interest in the success of 
the program.
    Chairman Katko, Ranking Member Rice, Members of the 
committee, thank you again for the opportunity to appear before 
you today. I would be happy to answer any questions you may 
have.
    [The prepared statement of Ms. Dorgham follows:]
                 Prepared Statement of Carolyn Dorgham
                           November 17, 2015
    Chairman Katko, Ranking Member Rice, and Members of the 
subcommittee, I am pleased to appear before you today to discuss the 
Transportation Security Administration (TSA) Screening Partnership 
Program (SPP).
    TSA's mission is to protect the Nation's transportation systems to 
ensure freedom of movement for people and commerce. We do this by 
providing the most effective security in the most efficient way to 
reduce the likelihood of attacks such as those that happened on the 
morning of September 11, 2001, from occurring in the future. Our 
operations provide an annual screening of nearly 660 million passengers 
and nearly 2 billion carry-on and checked bags. Transportation Security 
Officers (TSOs) prevented 180,000 prohibited items from being carried 
on airplanes last year alone. While our mission remains challenging, 
our workforce is dedicated to the task of keeping the American public 
secure from terrorist attacks on transportation systems.
             screening partnership program (spp) background
    Congress established TSA through the Aviation and Transportation 
Security Act (ATSA) (Pub. L. 107-71), which designated passenger 
screening as a Federal responsibility. Included in ATSA was language 
authorizing a pilot program for privatized passenger screening at five 
airports of different sizes and risk categories. As part of the pilot, 
TSA entered into contracts with qualified private companies to conduct 
screening services with Federal oversight from TSA officials. 
Characteristics of the pilot included guidelines for private companies 
to maintain qualification standards set by TSA for Federal 
Transportation Security Officers (TSOs) and standards to provide 
personnel compensation and benefits at an equivalent level of those 
provided to their Federal employee counterparts.
    The Federal Aviation Administration (FAA) Modernization and Reform 
Act of 2012 (Pub. L. 112-95) provided guidelines for the program, 
including standards for an SPP application, a time line for agency 
action on applications, and steps TSA must take if denying an 
application. Under section 830, the statute also requires TSA to ensure 
that approving an airport operator's application would not compromise 
the security or detrimentally affect the cost-efficiency or the 
effectiveness of the screening of passengers or property at the airport 
(49 U.S.C. 44920(b)).
    TSA maintains overall responsibility for transportation security 
whether an airport operator has private or Federal employees conducting 
passenger screening operations. Federal Security Directors oversee the 
contracted security screening operations to ensure compliance with 
Federal security standards.
                       current spp participation
    The SPP is a voluntary program where airports apply to transfer 
screening operations at commercial airports from Federal to qualified 
private security screening companies. These companies run screening 
operations under Federal oversight and must comply with all TSA 
security screening procedures. Since the program began in 2004, 32 
airports have applied, including the original five pilot airports 
designated by ATSA. Twenty-one of those airports are currently 
participating in the SPP program. Of the 11 airports that have applied 
but are not currently participating in the program, one is in the 
source selection phase, and the remaining 10 have either discontinued 
commercial air service, were initially denied participation in the 
program and did not reapply after a change to the statute, or withdrew 
their applications prior to contract award.
    Current participant SPP airports represent screening of 
approximately 32 million passengers per year, or 5% of TSA's annual 
passenger volume. Eight of the 21 are ``Category IV'' airports meaning 
that they enplane between 2,500 and 10,000 passengers per year. The 
contract value for these 21 airports stands at approximately $723 
million over a 5-year period.
                        program accomplishments
    If the application meets all legal requirements and a qualified 
contractor is identified during the procurement process, TSA's goal for 
the SPP program is to award a contract within 1 year of receiving a new 
SPP application. Compared to general Federal Government contracting 
practices, this is an aggressive goal; however, it reflects TSA's 
commitment to ensure that airports opting for contract screeners can 
expeditiously transition from Federal to contract screening operations.
    Since passage of the FAA Modernization and Reform Act of 2012, 7 
airports have applied to the SPP program. All 7 airports were approved 
within the 120-day requirement for application approval, and currently 
have private screeners in place.
    TSA also instituted improvements in its SPP application process to 
facilitate meeting its aggressive 1-year goal to award a contract on a 
new application. Process improvements include a reduction in SPP 
application length from 5 pages to 2, as well as co-locating the 
program and acquisitions teams that participate in the application 
review process to enhance collaboration, and streamlining the 
application.
    Additionally, TSA recently began changing its SPP contracting 
approach. Rather than awarding individual contracts, we are now working 
to award an indefinite delivery/indefinite quantity (IDIQ) contract. 
Awarding the IDIQ will provide a pool of highly-qualified vendors that 
are capable of running screening operations in a cost-efficient manner 
not detrimental to security, per statutory requirements. Successful 
offerors will then be able to compete for security screening services 
at specific airports or groups of airports through task orders. This 
new contracting methodology is anticipated to reduce procurement 
processing time for TSA while simultaneously reducing the burden of 
preparation efforts on the vendor community.
                          industry engagement
    TSA provides information to vendors interested in participating 
through numerous resources. TSA utilizes the Federal Business 
Opportunities website to communicate with vendors on SPP-related topics 
such as annual Industry Day opportunities at TSA Headquarters, and 
posting draft statements of work (SOW) and Request for Proposals (RFPs) 
that solicit vendor feedback. Additionally, TSA provides opportunities 
for industry days at airports, which allow vendors to tour the airport 
and ask airport-specific questions concerning, for example, equipment 
requirements and the airport layout. TSA also meets with vendors in 
other forums, such as summits and roundtable discussions.
    Successful offerors for the ID/IQ must also participate in a TSA-
hosted Industry Conference in which all offerors are provided valuable 
information on screening requirements. In these conferences, vendors 
also have an opportunity to give TSA feedback on the RFP process. TSA 
uses this information to better refine its process, including adding 
any additional information to the RFP which might be helpful to 
vendors.
                          gao recommendations
    GAO recently completed an audit entitled ``Screening Partnership 
Program: TSA Can Benefit From Improved Cost Estimates'' (GAO-16-19), 
continuing its oversight from previous reports in 2009 and 2011. TSA is 
pleased that GAO recognized the improvements in our cost methodology, 
including our comprehensiveness and documentation. TSA continually 
refines our cost-estimating methodology for airports participating in 
or applying to the SPP. We agree with GAO that reliable cost estimates 
are critical, and addressing current limitations can help better 
predict costs as well as allow us to make informed decisions about 
program participants.
    Specifically, GAO recommended that TSA further revise our cost-
estimating methodology to more fully conform to leading best practices; 
providing cost comparisons to Congress on a regular basis; and 
continually monitoring how contract values compare to our estimated 
costs and updating them as necessary. TSA concurs with all of these 
recommendations and has already taken steps to address them. Our Office 
of Finance and Administration is working to implement adjustments to 
our cost-estimating methodology based on GAO's recommendations. My 
office will include the cost comparison information in our Semi-Annual 
Screening Partnership Program Report to Congress so that our oversight 
committees have visibility on our estimates and program figures. 
Finally, TSA will compare, on an annual basis, the actual expenditures 
for a given airport contract to TSA's estimate for screening with 
Federal Transportation Security Officers.
                               conclusion
    My responsibility as the senior executive responsible for the SPP 
program is to focus on its security, effectiveness, and efficiency. I 
work to achieve transparency and engagement with industry so that our 
qualified private partners in the SPP program have access to 
information that helps them to achieve these same goals. I appreciate 
this committee's interest in helping the program to be more successful.
    Chairman Katko, thank you again for the opportunity to appear here 
today. I would be happy to answer any questions you may have.

    Mr. Katko. Thank you Ms. Dorgham for your testimony. We 
appreciate you taking the time to be here. I now recognize 
myself for 5 minutes for questions.
    So, let's get right at it. In 2009 and 2011 GAO did 
reports--am I correct on this matter? In both reports they 
noticed and they noted strongly that TSA's cost estimates were 
not properly taking into account, some other costs associated 
with having the screeners.
    So until you have an appropriate cost estimate for both 
private screeners as well as the TSA screeners, you can't do a 
really good comparison because there are really two components. 
One is a cost estimate and one is a performance estimate. Those 
two have to be considered--they are intertwined.
    So, with that as a background, does TSA have internal 
figures at their disposal that give a true cost estimate for 
the screeners that work for TSA?
    Ms. Dorgham. So, what I would like to clarify is that the 
TSA cost estimate that is being published as part of the RFP 
reflects TSA's actual costs for screening at that airport. It 
does not include long-term retirement benefits because those 
are not included in TSA's annual appropriation, so we would 
have to absorb that difference in cost--the 9 percent 
difference in cost that GAO outlined in their report by 
reducing funds somewhere else, in another security program for 
instance.
    Which could be detrimental to security and it also would be 
creating a cost inefficiency because now we would be spending 
more on SPP screening at an airport than we would with TSA 
screeners.
    So, this is the reason why it is not in the TSA cost 
estimate. From a cost comparison perspective, we don't see any 
challenge with putting--including the long-term retirement 
costs for cost comparison purposes.
    Mr. Katko. Okay. Now, I am not an accountant, but that is a 
cost attributed--there is a cost attributed with each employee 
that is a screener at TSA for retirement just like there is a 
cost estimate for people in the SPP program for the private 
entities--whether or not they have retirement and all that is 
part of their cost estimate.
    So, how can we do an accurate cost comparison if you are 
not giving accurate figures? Now we are not telling you you 
have to shift funds or do whatever, we are just saying from a 
simple arithmetic standpoint--and I am not an accountant--but 
I, it seems pretty straight to me that you just tell--we have 
asked you since 2009 for the cost estimates associated per 
employee at TSA and you tell me that that 9 percent is the 
additional cost.
    Correct? That is part of the cost for TSA screener?
    Ms. Dorgham. The 9 percent is their long-term retirement 
benefits----
    Mr. Katko. It is a cost?
    Ms. Dorgham. It is a cost----
    Mr. Katko. Okay, okay. So we have--so that is a cost, we 
have got that. Now, on top of that, is there other Federal 
agencies or other Federal entities that cause additional cost 
to be on top of what we have already talked about here?
    So you have got the--published cost, plus the 9 percent for 
retirement cost. Is there more that other agencies incur in 
dealing with this program?
    Ms. Dorgham. No, sir. The 9 percent is the other Federal 
cost that other Federal agencies incur in long-term retirement 
benefits. The benefits that TSA provides its employees--it is 
Federal screeners when they are on Federal payroll, we pass on 
to the vendors as part of the TSA cost estimate.
    Mr. Katko. Okay. Now, there is--they do--Ms. Grover you 
mentioned that there is an average savings of 11 percent for 
having the--for the private screeners, is that correct?
    Ms. Grover. Yes, sir.
    Mr. Katko. Does that include the 9 percent that we are 
talking about or----
    Ms. Grover. No, sir.
    Mr. Katko. No, okay. So is that on--if you--is that 
something you should add on to that 11 percent cost savings 
figure?
    Ms. Grover. Well, to be clear, our recommendation was that 
TSA should be sure to include all Federal costs for the 
purposes of the cost estimate comparison, as you were 
mentioning in your statement earlier.
    Because it is critically important to understand an 
accurate apples-to-apples comparison of what it costs to 
provide screening services under the two scenarios.
    But, for the purposes of procurement, that is an entirely 
different matter. TSA has a great deal of discretion under 
Federal acquisition regulations and setting the cap at TSA cost 
is certainly consistent with the FAR.
    The other thing I would point out is that the fact that 
there have been multiple bids at that level and that most 
contracts have been carried out successfully, suggests that TSA 
is able to successfully compete contracts at the level of the 
TSA cap.
    Mr. Katko. So, is the only thing that is missing from the 
cost estimate this 9 percent retirement cost, or is there 
something else that is missing?
    Ms. Grover. It is retirement cost, it is liability 
insurance, and a little bit of forgone corporate tax revenues. 
But it adds up together to about 9 percent on average for the 
13 airports that we looked at. So there could be some variation 
if you look more broadly at other airports.
    But yes, that is about it.
    Mr. Katko. Okay, so. Okay. Alright. Well, I can keep going 
on this but I don't want to get too far over, so.
    Miss Rice, you are up next.
    Miss Rice. So it seems to me that the two main areas of 
concern when we are talking about screening and airport 
security are safety, right?
    The quality of the screening process, and the cost to the 
American taxpayer to ensure that we have a quality screening 
process.
    Would you both agree?
    Ms. Grover. Yes ma'am.
    Ms. Dorgham. Yes.
    Miss Rice. I think that regardless of what side of the 
aisle you are on, there is no--you can't put a dollar amount on 
quality screening and safety in the aviation industry here in 
this country. Especially in light of what happened 2 weeks ago. 
Would you all agree?
    Ms. Dorgham. Yes.
    Miss Rice. So is it accurate to say that those airports who 
have decided to go into the SPP and opt out and use private 
individuals, right, that they are relying on the TSO's who have 
been trained through their employment with the TSA. Is that 
true?
    Ms. Dorgham. So, I can answer that question. TSA provides 
the training. TSA bears program cost, we provide the equipment 
and the standard operating procedures. The private-screener 
workforce works for a qualified private company.
    So they are not TSA employees, but they are trained in the 
same manner.
    Miss Rice. Right, so I guess my question is, the biggest 
disparity between the different--you know, the TSA doing the 
screening or airports opting to do it--opting out, right? Is a 
benefit cost, right? Wages, benefits cost?
    Ms. Dorgham. So approximately--based on our cost estimates, 
76 to 85 percent of the overall TSA cost estimate is indirect 
wages and benefits and the like. Only--the remaining percentage 
is only for activities such as facility supplies and other 
costs.
    Miss Rice. So the majority is the difference in wages.
    Ms. Dorgham. Correct.
    Miss Rice. Okay. Would you both agree that there is a 
morale issue at TSA right now?
    Ms. Grover. The recent morale results for all of DHS are 
low, and TSA is low within DHS. Yes.
    Miss Rice. So paying people less who are in a position 
where they are literally securing the safety of other human 
beings might not be a good morale booster, is that----
    Ms. Grover. If I could just clarify, the private 
contractors are required to pay their screeners with 
compensation and benefits that are not less than what the 
Federal screeners receive.
    Miss Rice. So then just before, you said that there was a 
disparity in the benefits and the wages?
    Ms. Dorgham. So sometimes, it may appear as if there is a 
disparity because what we do or what we have historically done 
under ATSA, we establish wage rates for every screening 
category, and we pass that hourly wage rate, which is a 
composite of direct wage and fringe benefits, to the contractor 
or to the vendor.
    Sometimes--as long as the vendor meets this composite 
number, we are--we are good with that. We consider them 
compliant. So one vendor may give their employees more direct 
pay than fringe benefits or vice versa.
    So it may appear as if their benefits or their wages are 
being cut when, in reality, they are still receiving the same 
hourly wages. It is just a different distribution between 
direct pay and benefits.
    There is a second scenario where we--it may have the 
appearance as if the vendor is not passing on those benefits, 
is if the vendor, even though they are paying the same costs 
that the Federal Government incurs for a specific package, is 
not able to secure the same benefits. But this is how it 
appears as if they are not receiving the same wages.
    Miss Rice. Okay. Now the contract to the vendor in Montana 
was terminated apparently due to staffing issues. Is that 
correct, where the TSOs declined to stay on with a private 
vendor in Montana. Is that----
    Ms. Dorgham. The vendor in Montana was terminated because 
of their inability to conduct the screening of passengers and 
baggage as outlined under the terms and conditions of their 
contract, not necessarily just the staffing aspect.
    Miss Rice. Okay.
    Ms. Dorgham. The staffing issue just compounded the 
problem.
    Miss Rice. So is there any--has there been a study done to 
see what the differences in terms of airport, actual airport 
security between these two different operations?
    Ms. Grover. In 2012, GAO issued a report where we did a 
review of the performance at SPP airports and airports with 
Federal screeners, and in general, we found that the 
performance was about the same.
    In some areas, the Federal screeners did better, on some 
other different TSA tests, the SPP screeners did better. But it 
wasn't any significant overwhelming difference in one direction 
or another, so I would say for security effectiveness, 
performance seems to be about the same.
    Miss Rice. TSA obviously in both scenarios oversees----
    Ms. Dorgham. Correct.
    Miss Rice [continuing]. The implementation. I yield back. 
Thank you.
    Mr. Katko. Thank you. The Chair now recognizes Mr. Rogers 
for 5 minutes of questioning.
    Mr. Rogers. Thank you, Mr. Chairman. I agree with Miss 
Rice. We want to make sure that we have safe and secure 
passenger screening.
    So it is obvious from the testimony we have had that there 
is no discernible difference in the quality of screening. We 
have--the private contractors have to pay at least as much as 
the Government contractors.
    So Ms. Dorgham, why do you continue to drag your feet on 
getting accurate cost estimates when this has been brought to 
your attention in 2009 and again since then and not provide the 
documentation that GAO says that you should provide?
    Ms. Dorgham. So the good news is since 2012, with the 
passage of the FAA Modernization and Reform Act, we have made 
significant progress in improving our cost-estimating 
methodology. We have concurred with GAO's recommendations and 
we will on an annual basis start comparing the cost of Federal 
screening to the cost of private screening and provide those 
numbers in our semiannual report to oversight committees so 
that lawmakers can get a better understanding of the cost.
    Mr. Rogers. I don't understand--this is not rocket science. 
They told you in 2009 what was deficient about your cost 
estimate analysis and processes. Why couldn't you provide it 
before 2010, much less here we are in 2015? I don't understand.
    Ms. Grover just outlined the areas that were deficient. You 
said you agreed with them. Why does it take this long? Why 
hasn't it been done already? Do you not want the information to 
be out there?
    Ms. Dorgham. No, sir. We do have the information, we just 
didn't have a process for the comparison----
    Mr. Rogers. You didn't realize that benefits had to be 
calculated into it?
    Ms. Dorgham. Well, we will comply with the recommendations 
and we--I believe there was a misunderstanding in that the 
original requests were to include those benefits that TSA does 
not get as part of the appropriation in our actual estimate 
that we pass on and use as the ceiling contract. But there is 
no issue at all with using those for comparison purposes.
    Mr. Rogers. I think any reasonable person knows in order to 
get an accurate cost comparison, you have to factor in those 
costs.
    Ms. Grover, in the 2009 study, did y'all make the 
suggestion that those benefits had to be included in the cost 
estimate analysis?
    Ms. Grover. Yes, sir.
    Mr. Rogers. Did y'all also recommend at that time that this 
needed to be a continued review to be able to get a long-term 
comparison?
    Ms. Grover. No, sir. We didn't.
    Mr. Rogers. So that is a new recommendation.
    Ms. Grover. Yes, sir. That is new and it is particularly 
important given the new information about the discrepancies 
between the TSA estimated costs and the award values, because 
it is through the on-going updates of TSA's estimated costs 
that they will be able to determine whether there are 
differences in costs over the long term.
    Mr. Rogers. Good. Ms. Dorgham, you already testified you 
intend to comply. You agree with these recommendations and you 
intend to comply.
    Ms. Dorgham. We agree, sir. Yes.
    Mr. Rogers. So when will you be able to implement these new 
methodologies so that we will have the more accurate 
information?
    Ms. Dorgham. We have already started making the changes to 
the cost methodology that we currently--that was under review 
by GAO. We will provide in our next semi-annual report, mid-
2016, the first cost comparison information to Congress.
    There are multiple contracts that expire at different 
times, so by providing 2 reports a year, you will be able to 
see the cost comparisons on all contracts, regardless of when 
they expire.
    Mr. Rogers. Ms. Grover, is that the earliest that that 
should be expected?
    Ms. Grover. I think that sounds like a reasonable time 
frame, sir.
    Mr. Rogers. Ms. Dorgham, do you have a bias against SPP 
programs?
    Ms. Dorgham. I do not, sir.
    Mr. Rogers. Thank you. I yield back.
    Mr. Katko. Thank you. The Chair now recognizes Mr. Mica for 
5 minutes of questioning.
    Mr. Mica. Well, thank you, Mr. Chairman and Ranking Member.
    I think the Ranking Member, when she started, said there 
are two things that we want to determine here: One is 
performance. We have got to make certain the we have got the 
best performing screening process and security process out 
there. Then second, cost. That is what this is about.
    Unfortunately, TSA has done everything they can to thwart 
the private screening. Let's go back to performance. In 2012, 
you just said that, basically, looking at the two performance--
and they were basically about equal, isn't that correct, in 
performance?
    Ms. Grover. Yes, sir, that is what we found.
    Mr. Mica. We found that, too--now, let me say that at the 
end of when I was involved in setting this up, and we finished 
the--you testified about the finishing--after we had set up 
five airports with private screening under Federal 
supervision--it was San Francisco, Rochester, Tupelo, Kansas 
City, and the smallest one was Jackson Hole, Wyoming--which, 
actually, the airport does its own screening.
    We tested them after having them in operation--that was at 
the end of that period. The report I got back, which was a 
Classified report at the time, said that private screening 
under Federal supervision performed statistically significantly 
better. Okay?
    I assumed that from the beginning. I have sat in on 
numerous Classified reports. We have seen some leaks about 
performance. In 2007, we had 30,000 screeners, and the leak was 
75 percent failure rate. That is anecdotal from the press.
    Just recently, we saw, with 46,000 screeners, reported in 
the press, a failure rate of 95 percent. Some of you may have 
read that. So we have 46,000 screeners versus 30,000, and we 
have actually gotten worse in performance, which has been 
leaked.
    Okay. Now have you--were you involved in the Sanford 
request for privatization--Orlando Sanford airport, ma'am?
    Ms. Dorgham. I was not, sir.
    Mr. Mica. You were not. I would love to have as a witness 
the former director who requested in 2010 for private 
screening. TSA sent their goons down and intimidated this 
airport director--and they have done that around the country--
to force--to keep them from applying. He told me the pressure 
that was exerted.
    That is why I went back in 2012 and we changed the rules 
for this. From 2012, when we passed the law at the end of the 
FAA bill, to 2014, how many private applications did you 
approve?
    Ms. Dorgham. Seven.
    Mr. Mica. No. You approved none--2012 to just the beginning 
of--the end of 2013.
    Ms. Dorgham. So----
    Mr. Mica. There were none. I had you in the office--it took 
you 2 years to come up with this--you dragged your feet in the 
evaluation process and coming up with the terms. I can tell 
you, you had none.
    I threw you--I threw TSA out of the office when they told 
me that, and I will be glad to document that.
    The whole point is, here, is we have limited resources, and 
every study we have had--y'all--we just had--I have TSA 
oversight on my Transportation Subcommittee assignment. We just 
had a hearing at the full committee level, and the IG GAO came 
in and said almost every area, TSA is failing. Every area. 
Every layer. That is what they testified to us.
    They built a huge bureaucracy--do you still have 4,000 
people around Washington, DC, making, on average, $103,000 
apiece?
    Ms. Dorgham. I don't have that information.
    Mr. Mica. Yes, I am telling you it is close to that, unless 
you moved some people into other agencies to try to camouflage 
the figure. They have close to 15,000 administrative personnel 
in TSA. Did you know that?
    What I am talking about is getting the resources directed 
to where they should be: Private screening can be done. Didn't 
you just testify that it can be done anywhere from 2 to 19 
percent cheaper? Ms. Grover? What was the--just tell us the 
figures for the record one more time.
    Ms. Grover. Yes, 11 percent difference on average----
    Mr. Mica [continuing] On average.
    Ms. Grover [continuing]. At the time of award.
    Mr. Mica. Yes.
    Ms. Grover. So the question is still open about whether 
that will actually play out over the 5 years.
    Mr. Mica. It is not done at any cheaper wages or benefits. 
That is all baloney, okay? Because we require that. We require 
the standards. I have--we have looked at the airports and their 
performance. You should see the report we did on San Francisco, 
which is private, and Los Angeles.
    In recruitment, in training, in management, and every 
category, it costs more, and TSA did and an inept job at it. To 
support the thousands you have got here in Washington and 
across the country, and supporting this huge personnel 
bureaucracy, is not directing the resources towards what we 
need to do--is go after people who pose a risk.
    So we are one of a few countries in the world--on the 
Western Hemisphere--or in the Western world--not just 
hemisphere, Western world--that employs an all-Federal 
operation, where you do everything and none of it is done well.
    So my point here today is, making SPP work--it can work. We 
can use our resources and put them--right now, it should be 
intelligence, intelligence, intelligence. Connecting the dots, 
connecting the dots. TSA has failed almost every time in 
connecting the dots, and homeland security reports have 
verified that.
    Thank you, Mr. Chairman. I am ready for a second round when 
you are.
    Mr. Katko. Thank you, Mr. Mica. Yes, I think--I know we 
have votes coming up, but let's try and just honor a couple 
minutes per questioning for this round--maybe 2 or 3 minutes--
and then we will go from there.
    I have a couple follow-up questions. First of all, Ms. 
Grover, when a--in your reports, do you find that there was a 
problem with the bid--the way the private contractors' bids 
were being treated for the starting rates for their people that 
they were going to employ? It seemed to be some disparity 
between that and what is going on with TSA and how they pay 
their employees.
    Ms. Grover. No, sir. No--necessarily--problem with that. 
Just a note that TSA is moving towards a wage requirement 
change, where, in the future, there would be a comparison 
between the wage that would be calculated under the ATSA wage 
rate, compared to the services contract wage rate, and then the 
contractor would be required to pay whichever is higher.
    Mr. Katko. In doing your evaluation, did you do anything--
did you encounter any issues with respect to the ability of 
employees at TSA versus SPP employees to have flexibility and 
make modifications and then whether you were doing their 
business?
    I mean, who was more--was there one that was better at 
doing that than the other--at maybe making modifications to how 
employees are handled, or modifications to security procedures? 
If so, which one was seen to be more efficient?
    Ms. Grover. You know, the approach to security procedure 
should be exactly the same, because the SPP screeners are 
required to follow the TSA's SOPs, use the same equipment, and 
so on. The reason airports select SPP is because they often 
believe that they have prospects for better customer service.
    So we don't know very much about that. TSA has a test that 
they use, called PACE, which looks at some aspects of customer 
service, but I don't believe that there is a record of 
complaints for SPP airports versus Federal airports that would 
really illuminate that.
    Mr. Katko. Now, if I understand the testimony correctly 
from both of you, there is not a discernible difference, 
really, in the performance of the SPP screeners versus the TSA 
screeners. Is that basically correct?
    Ms. Grover. That is correct.
    Mr. Katko. Okay. Now--and if that is the case, and we are 
in this era of trying to save as much money as we can for the 
Government, and trying to make Government agencies as efficient 
as possible, do you--either one of you have an opinion based on 
the cost estimates, which one is--would be more cost efficient 
to use?
    Ms. Dorgham--Ms. Grover, you can go first, please.
    Ms. Grover. Well, in our report, we noted that, with an 11 
percent difference at the time of contract award, that it 
certainly raises questions about whether screening can be 
operated at less expense with private screeners.
    But that question has not been answered yet because it 
would have to be monitored over the life of the contract.
    Mr. Katko. Okay. Ms. Dorgham.
    Ms. Dorgham. I agree with Ms. Grover's assessment. We would 
have to wait for the life cycle of the contract to be over and 
compare every year the--both the Federal and the private 
screening cost to be able to come to a definite conclusion.
    Because if we look at the sample under study, it was 13 
airports out of the 21 that we currently have. So that is only 
8.7 percent of the SPP airports, and it is 0.4 or 0.5 percent 
of the overall TSA volume that we process.
    So it is, statistically, a small sample. But it would help 
if we allow the life cycle of the contract to conclude before 
we make any other conclusions. So I am hesitant to say it is 
more cost-efficient just because of the sample size.
    Mr. Katko. So how long do you think it would take to get 
for the life of the contract? How long are these contracts?
    Ms. Dorgham. So, it is a 1-year base contract, and 4 option 
years. Most of our contracts were awarded either last year or 
the year before, so we would be looking at 4 years.
    Mr. Katko. Is that accurate, Ms. Grover?
    Ms. Grover. Well, with every year, you will have additional 
information.
    Mr. Katko. Correct. Correct. I am not sure we have to wait 
5 years for that, but we do need a base sample, and we can't 
get the base sample until we get the actual cost--correct cost 
figures from TSA as to what the costs are for a TSA screener 
versus an SPP screener.
    Is that right?
    Ms. Grover. Well, I would look at it a little differently. 
I would look at it as two separate issues, because, on the one 
hand, you want to have an understanding of the cost comparison, 
but you already have what you need to begin looking at--
because, look, the contractors are bidding, actively bidding, 
on these contracts with the cap at TSA's costs.
    So that is a live concern already, and you already have 
what you need to begin monitoring that right now.
    Mr. Katko. Okay. Thank you. The Chair now recognizes Miss 
Rice for questioning.
    Miss Rice. But are you comparing apples to apples in that 
scenario because it doesn't seem like you are?
    Ms. Grover. So the contractors--so, right. It is a question 
of what are the contractors willing to accept to do that work. 
Then, you are right, if you wanted to understand what would be 
the total cost to the Federal Government at those airports, 
then you would need to have the total cost.
    Yes, ma'am, that is correct.
    Miss Rice. So we shouldn't sit here and act like these are 
accurate apples-to-apples, oranges-to-oranges comparisons 
because that really hinders us from getting to the heart of the 
issue, in my opinion.
    I would just like to talk about--comment on what Mr. Mica 
was talking about in terms of, there needs to be a focus now on 
intelligence. He said it three times--intelligence, 
intelligence, intelligence.
    I couldn't agree more. I think there was wide-spread 
agreement across the aisle post-9/11 that we wanted the Federal 
Government to be responsible for screening at our airports 
given the tragedies of 9/11.
    Unfortunately, for the TSA they were never empowered 
appropriately, so they are not for instance seen as a law 
enforcement agency and are not privy to a lot of the 
intelligence that other law enforcement agencies within the 
Federal Government are.
    So I think that if you want to talk about privatization, 
that is a great conversation to have. But I think that we 
should look at the way that we have hamstrung the TSA from the 
very beginning from its very inception, and really never 
allowed it to do what we needed it to do, which is all the 
explanation you need as to why the morale is so poor.
    So I just need to have--stop politicizing this and say it 
is either, you know, too much Government we have gotta 
privatized this. The Federal Government, you know, if 
everything has been happening over the last 2 weeks in the 
world is any indication, we have to put more resources and a 
higher premium on security of the homeland.
    You know, talking about these numbers when you are not 
talking apples-to-apples comparisons as a justification for 
privatization is not really a conversation that, you know, is 
appropriate. That is all. I yield back.
    Mr. Katko. Thank you. Mr. Mica, you are recognized for a 
few more moments of questioning, if you so choose.
    Mr. Mica. Thank you, Mr. Chairman.
    First, if you could--this is 2013 July 1. The headline says 
``Mica: TSA `Cooked the Books' To Inflate Screening Costs''--if 
you could put this article in the record, I think it would be 
appropriate at this juncture.
    Mr. Katko. Without objection, so ordered.
    [The information follows:]
             Article Submitted for the Record by Hon. Mica
       Mica: TSA ``cooked the books'' to inflate screening costs
The Hill, http://thehill.com/blogs/floor-action/house/308775-mica-tsa-
        cooked-the-books-to-inflate-screening-costs.
By Ramsey Cox, July 01, 2013, 07:02 p.m.
    Mica's comments were a response to a report Monday from the 
Department of Homeland Security's inspector general that Mica said 
showed that the TSA's cost analysis for the Screening Partnership 
Program (SPP) is ``flawed.''
    Mica said the TSA incorrectly inflated the cost of private 
screening operations, by more than $420,000 in one case.
    ``This is outrageous,'' Mica said. ``In this case, TSA's blatant 
disregard for private-federal screening has unfairly resulted in a 7 
percent increase in the cost of private screening operations compared 
to federal screening.''
    Mica said the security agency has also ``wasted'' taxpayer dollars 
by over hiring. It has 66,000 employees, including 15,000 
administrators and 51,000 screeners.
    ``This excessive TSA staffing at airports participating in the SPP 
has resulted in duplicative costs that have still not been factored 
into estimates,'' Mica said. ``It is unacceptable that taxpayer funds 
are wasted on such unnecessary duplication of efforts.''
    Mica, who serves on the House Transportation and Infrastructure 
Committee, said he would continue to try and rein in the ``out-of-
control agency'' by attaining a true cost differential between the all-
federal and private-federal screening models.

    Mr. Mica. Okay. Again this just goes on and on about 
playing with these figures, but unfortunately, it requires a 
huge number of personnel to operate TSA with an all Federal 
force.
    Thousands in Washington, tens of--10,000 out in the field. 
What I would like to do is get TSA out of that business.
    The private sector can screen and they do it well. They 
perform even better, I am absolutely convinced on the covert 
screening that I have seen and the reports I have had back. So 
it costs less.
    The other thing, too, is redirecting our resources. You 
have got thousands of people here in Washington, right ma'am?
    You have thousands of people here, we have got the reports. 
You could--you can agree with me.
    Ms. Dorgham. So I don't have the exact number, I 
apologize----
    Mr. Mica. How many are in your program? In the private 
program?
    Ms. Dorgham. Fourteen people including myself.
    Mr. Mica. Fourteen people. That is a huge bureaucracy, but 
you see how few it takes to operate that?
    Even dragging your feet. Now, again, what I would like to 
do is redirect those personnel and those dollars, connecting 
the dots. TSA needs to be in the security business and 
Government responsibility.
    We are going to lose this effort if we continue to put the 
money into a huge bureaucracy.
    You still will screen under--Federal Government conduct the 
audits, that the rules the regulations like you do.
    Isn't that what you think you do now, you set everything, 
right, for the private screeners?
    Ms. Dorgham. So we--the goal of the----
    Mr. Mica. You set the standards, right?
    Ms. Dorgham. We do set the standards
    Mr. Mica. The benefits and the pay and everything else as 
set at one level. Isn't that right, Ms. Grover?
    Ms. Grover. Yes, sir, TSA.
    Mr. Mica. It is. No one is trying to do anything less, but 
what you do is, you get rid of the bureaucracy. At Rochester 
how--which is a private airport under Federal supervision--how 
many personnel, TSA people do you have there?
    I can tell you, at one time you had 18. Many of them making 
between $80,000 and $100,000 to pack the books because you had 
a private-screening operation.
    I went to Canada and saw they had one Federal TSA 
equivalent, an oversight position, which we should have at the 
airport. But you pack the books, you pad the costs.
    You have 80 at San Francisco. Some are needed on 
international work and other work, which could also be assigned 
to private screeners while you get in the security business. 
Finding out who the hell poses a risk.
    You don't even have your watch list and your other things 
so that we can identify people totally coordinated.
    Are you aware of that ma'am? I mean, you probably are, you 
do run the SPP program.
    Ms. Dorgham. So what I----
    Mr. Mica. That is where the sources need to be or they will 
get us. You need to be vetting your personnel. We have got 
report after report, the ones that were just released, they are 
not vetting their people. They hired people in my district that 
my sheriff fired and they were hired as TSA people, and my 
sheriff was appalled at what they were doing. Hiring people 
that shouldn't be working at an airport.
    Vetting airport workers. We are going to see what happened 
in MetroJet, if that was an inside job. We have to--the people 
who are working at our airports need to be closely vetted. That 
is a Government responsibility.
    But you need to get out of this Mickey Mouse business, let 
someone else do the screening, set the standards, conduct the 
audits, and then get in to the Government security business and 
connect the dots.
    I am sorry, you are probably doing the best you can with 
the position you have. I don't mean to pick on you.
    Thank you for your report and the update of their cooking 
the books. This goes on and on and on, a year from now, 4 years 
from now, but nobody wants to change it.
    Thank you, I yield back Mr. Chairman.
    Mr. Katko. Well, I think that there is a desire to change 
it and that is why we are having his hearing today, and we are 
going to be having a follow-up hearing in January with some 
other people to come testify before the committee. Those being, 
namely some from the private sector as well.
    Is there anybody else? Any union representatives as well. 
So we can hear from their side of the story, too.
    But as I understand it now, we are really not too far apart 
from getting what we need for points of comparison. That being 
the--you know--the accurate cost estimates and we are going to 
have those within 6 months when your next report is issued, 
correct?
    Ms. Dorgham. That is correct.
    Mr. Katko. Okay. Then we are going to have at least within 
a year at the latest, a pretty darn good idea of a 1-year cycle 
on a contract of comparisons as well. So we are going to be 
able to really use that time to really do our homework.
    I asked Ms. Grover to do that, and Ms. Dorgham, as well. 
You are not on opposite sides of the fence, perhaps you can 
work together on this, and, you know, give an accurate think. 
Because what we basically want to is have TSA be the best it 
can be whatever iteration that is.
    We can't do it unless we have the accurate comparisons we 
need to do that. I--so I appreciate that, and I am not going to 
tolerate any more delays in getting the accurate cost 
estimates. So, yes.
    Now, Ms. Jackson Lee came in.
    We only get--they called votes, so we are going to have 
about 5 minutes, but we can recognize you for 5 minutes of 
testimony, if that is okay ma'am?
    Ms. Jackson Lee. I will give it a try--I am so sorry to 
be--
    Mr. Katko. Well, I know that you are a very hard worker, so 
I have no problem with that.
    Ms. Jackson Lee. Thank you, Mr. Chairman. I thank the 
Ranking Member as well. Let me say that I will try to be 
pointed on the issue. I think this is an important issue, Mr. 
Chairman.
    But as you well know, we have experienced enormous tragedy 
in Paris, France and part of the discussion, though, it was not 
train-related is the idea of screening, whether it is dealing 
with borders, dealing with transportation facilities.
    So I am--just want to raise a question of concern, Mr. 
Chairman, that may have been in another hearing, but I think it 
is timely, and let me thank the witnesses for your presence 
here.
    I think it is timely with respect to the employees of 
airports, which I understand, even now, I have chaired this 
committee before that there is a different process. There was 
not screening, there was badging. I would like to know, have we 
moved to the system of having the employees to be able to go 
through screening? Or are they able to enter an airport by way 
of the apron tarmac ID being shown, and just immediately being 
able to go on the tarmac and enter from the backside, which I 
call the apron of the airport?
    Ms. Dorgham. So I am not completely certain as to what we 
are doing in that regard from an SPP contractual perspective, 
all private screeners have to be vetted just like their Federal 
counterparts. They go through watch list matching and criminal 
background histories.
    We also conduct recurrent screening for them. Additionally, 
they are supposed to notify TSA immediately if there are any 
summons to court, or if there are any arrests, or any 
misconduct allegation and for the most part--the vendors have 
been very good at keeping us informed in that regard. So, they 
are vetted exactly like the Federal employees are vetted at the 
airport.
    Ms. Jackson Lee. But they are still vetted separately in a 
different process or under a different operation than those at 
the airports. That correct?
    Ms. Dorgham. I----
    Ms. Jackson Lee. Even though you say they are the same, but 
they are still under a different process, meaning they screen 
somewhere else. Use----
    Ms. Dorgham. I am not familiar with the airport's vetting 
process. From a TSA perspective, any contractor that is under 
contract, any employee under contract with TSA receives the 
same vetting as the Federal employees at that airport.
    Ms. Jackson Lee. So, at that airport, they go through the 
same exact screening?
    Ms. Dorgham. Correct.
    Ms. Jackson Lee. Okay. Am I able to get from, I think, Ms. 
Grover, an answer to my question about the knowledge of what 
you do with the individual worker that is coming through TSA 
screening?
    Are all workers screened regardless of where they might be 
posted in the airport, or is there a limitation?
    I am sensing that they are not all screened, so if I am 
working on the backside--the apron of the airport, am I just 
showing an ID and going through?
    Now, I realize that you make the point that anyone working 
at the airport is already vetted, and I raise this question on 
two points. I raise this question clearly in the backdrop of 
Paris. Again, I make it very clear that I know these were not 
transit-related. These were large-venue-related, these were 
people-related, this was a heinous tragedy.
    But since we know that the mode of--transportation modes 
are still the most attractive form of potential terrorism, as 
my time runs out, do we have an understanding of what happens 
on the backside of the airport?
    Then let me just refer you to a situation in Atlanta, where 
there was gun trafficking, and that is because workers were 
able to come on with a badge and not go through TSA screening. 
Can you comment on that, please?
    Ms. Dorgham. So, ma'am, the----
    Ms. Jackson Lee. No, I am asking--is this--I am asking the 
wrong person--Ms. Grover, I am asking you.
    Ms. Grover. Yes, ma'am.
    Ms. Jackson Lee. Thank you.
    Ms. Grover. I do not believe that all airport workers are 
screened at all checkpoints. I do know that TSA is making 
changes this year to reduce the number of employee access 
points, and to increase the frequency of random screening. But 
with respect to your specific question about employees working 
in the back parts of the airport----
    Ms. Jackson Lee. Right.
    Ms. Grover. They would have limited access to certain areas 
of the airport, and they wouldn't be able to access other areas 
without getting specific permission or being escorted.
    But beyond that, I would have to go back and do some 
additional research for you.
    Ms. Jackson Lee. No--okay, now, the Chairman has been kind, 
let me finish on this and pursue this later, Mr. Chairman. What 
I am saying that they can access the backside. I am not--I 
shouldn't say I am not interested, but I am not directing my 
questions to the point of whether or not they can be on the 
backside and then get to a lunch counter somewhere.
    I am interested in whether they are on the backside with 
just showing their ID and coming on, because if they are just 
showing their ID, they could have anything on their person that 
could be a dangerous contributor to terrorism on the backside 
of the airplane--I am sorry, the airport, which is where 
airplanes are.
    Mr. Katko. If I may add to that, we have had substantial 
hearings on this very issue of employee access controls, and it 
was the genesis of the Employee Access Control Act that passed 
the House and is now sitting in the Senate, hopefully going to 
pick up steam after what happened in Paris.
    But the fact remains--it is an absolute fact that employees 
get much less screening at airports than travelers do, and it 
is an absolute fact that the vast majority of times, 
employees--once they get inside with a badge--have access to 
secure areas of airports without additional screening. That is 
just a fact.
    Ms. Jackson Lee. I will end on that note. Did you have any 
response?
    Ms. Dorgham. I would be happy to go back and get you that 
information, but I do not have anything to add to the 
conversation, because I am not really clear on what is being 
done in that regard. Employee vetting is not under my purview, 
but I would be happy to get back with an answer.
    Ms. Jackson Lee. Thank you. Ms. Grover, GAO.
    Ms. Grover. No, ma'am. Nothing to add, thank you.
    Ms. Jackson Lee. Okay. Mr. Chairman, I want to thank you, 
and I would just make the point that the bill is making its way 
through the Congress. I think we have a new sensitivity and 
cause for urgency in light of what we are seeing and the 
creativity of a new form of terrorism.
    I say that it is scattered, it is unpredictable, which is 
what terrorism is, but it causes us to push on every aspect of 
security.
    I thank you for allowing me to sit on this.
    Mr. Katko. Well, I thank you for your hard work on Homeland 
Security Committee. There is no doubt that you work hard and 
you care. I couldn't possibly agree with you more. We are in a 
different State.
    As we are sitting here today, during this hearing, I just 
got word of another--vehicle laden with bombs found outside a 
soccer stadium in Germany 2 hours before the match.
    So the terror continues, the terror is increasing, and it 
is clear that we have to step up our game, and I agree with you 
about the Employee Access Bill, not just because I wrote it, 
but because it is--we have to plug that security gap. We have 
to continue to be vigilant.
    Homeland security is at the forefront of fighting the war 
on terror, and whether we like it or not, we don't have the 
luxury of time, and we need to move.
    Ms. Jackson Lee. Well, I am glad to have a fellow traveler, 
and this is a great committee, and I also want to say to the 
witnesses, we look forward to working with the administration. 
I know they are dedicated and committed to protecting the 
American people.
    Mr. Chairman, I yield back.
    Mr. Katko. Thank you, and I want to thank the witnesses. It 
is not always pleasant having to testify and take the fire for 
your agency, but, you know, that comes with the territory, and 
you know that when you sign up. I have been on that end as a 
prosecutor many a time, and I am on that end sometimes here.
    But, it doesn't mean that we are in any way diminishing the 
good work you do for your country, and we know you have the 
best intentions at heart, so we thank you for your testimony.
    I want to thank both witnesses for their testimony, and 
Members of for their questions. The Members of the committee 
may have some additional questions for the witnesses, and we 
will ask you to respond to these in writing.
    Persuant to committee rule VII(E), the hearing will be open 
for 10 days. I will say, I hope that we can all get the 
information we need in the next 6 months. We can put this issue 
to rest, and to make an educated decision on which way to go, 
if at all.
    If there is anything else you would like to offer, please 
do so in writing. We are going to have some additional 
questions for you that we are going to submit to both of you.
    Want to ask that you respond in a timely manner. Without 
objection, the subcommittee stands adjourned. Thank you both 
very much.
    [Whereupon, at 3:14 p.m., the subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

  Questions From Ranking Member Bennie G. Thompson for Jennifer Grover
    Question 1. Do we know whether TSA actually pays contractors less 
than the amount that it would cost TSA to provide screening at an 
airport?
    Answer. The Transportation Security Administration (TSA) does not 
collect information that would allow it to determine if it is actually 
paying contractors less than the amount that it would cost TSA to 
provide screening services at an airport throughout the life of the 
contract and its option years. As noted in our November 2015 report, 
TSA limits its selection of contractors to those who propose costs less 
than or equal to TSA's estimated costs to perform the same services.\1\ 
However, once it has awarded a contract, TSA does not continually 
monitor the value of the contract relative to its estimated costs 
throughout the contract period. TSA also does not update its estimated 
costs to account for changes during the contract period that affect the 
estimates. Over the contract period, the value of the contract may 
increase or decrease due to modifications that address changes to the 
work. For example, if an airport opens a new terminal, the contract 
might be modified to accommodate the need to hire additional staff. 
Some of these changes may also affect TSA's estimated costs for 
performing the services provided in the contract. Continually 
monitoring how contract values compare to TSA's estimated costs, and 
ensuring the cost estimates are updated to correspond to major changes 
in the program or contract, would provide TSA with more accurate 
information about the relative costs of operating airports with Federal 
and private screeners.
---------------------------------------------------------------------------
    \1\ GAO, Screening Partnership Program: TSA Can Benefit from 
Improved Cost Estimates, GAO-16-19 (Washington, DC: Nov. 16, 2015).
---------------------------------------------------------------------------
    Question 2. What are the strengths and limitations of TSA's method 
for estimating its screening costs at an airport?
    Answer. Based on an analysis of TSA's 2013 cost-estimating 
practices and methodology compared to best practices, our November 2015 
report concluded that TSA's cost estimates have some strengths, but 
also have limitations in 4 general characteristics needed to reflect a 
high-quality and reliable cost estimate.\2\ TSA's cost-estimating 
practices reflect certain strengths, including a revised cost-
estimating methodology that provides sufficient details for TSA staff 
to develop and document cost estimates. However, limitations in each of 
the 4 characteristics of a high-quality cost estimate (comprehensive, 
well-documented, accurate, and credible) prevent TSA's estimates from 
being reliable. For example, TSA's cost estimates are not fully 
comprehensive because they include only the costs incurred by TSA to 
perform screening at an airport and not the total costs incurred by the 
Federal Government such as retirement benefits and insurance. Further, 
TSA's estimates are not regularly updated to reflect changes to the 
program that could affect costs and do not include an analysis that 
addresses the uncertainty inherent in cost estimates. A methodology 
that is more closely aligned with best practices for cost estimation 
can provide more reliable information.
---------------------------------------------------------------------------
    \2\ GAO-16-19.
---------------------------------------------------------------------------
    Question 3. What's known about the relative performance of SPP and 
Federal screeners?
    Answer. In our December 2012 report, we analyzed screener 
performance data for 4 measures and found that while there were 
differences in performance between screeners at Screening Partnership 
Program (SPP) and non-SPP airports, those differences could not be 
exclusively attributed to the use of either Federal or private 
screeners.\3\ We selected these measures primarily based on our review 
of previous studies that compared screener performance of SPP and non-
SPP airports as well as on our interviews with aviation security 
subject-matter experts, including TSA's Federal Security Directors, SPP 
contractors, and airport and aviation industry stakeholders. We also 
selected performance measures for which TSA has, for the most part, 
consistently and systematically collected data from fiscal year 2009. 
On the basis of our analyses, we found that, generally, certain SPP 
airports performed slightly above the airport category and National 
averages for some measures, while others performed slightly below. For 
example, screeners at SPP airports performed above their respective 
airport category averages for recertification pass rates in the 
majority of instances, while the majority of SPP airports at which PACE 
evaluations occurred in 2011 performed below their airport category 
averages on their PACE evaluations.
---------------------------------------------------------------------------
    \3\ GAO, Screening Partnership Program: TSA Should Issue More 
Guidance to Airports and Monitor Private Versus Federal Screener 
Performance, GAO-13-208 (Washington, DC: Dec. 6, 2012). The measures we 
selected to compare screener performance at SPP and non-SPP airports 
were TIP detection rates, recertification pass rates, Aviation Security 
Assessment Program (ASAP) test results, and Presence, Advisement, 
Communication, and Execution (PACE) evaluation results.
---------------------------------------------------------------------------
    Question 4. Several years ago, GAO recommended that TSA provide 
guidance to airport operators about applying to the SPP. Has TSA done 
that?
    Answer. TSA has provided guidance as well as examples of the type 
of information TSA finds useful through its updated website. In 
December 2012, we found that TSA had developed some resources to assist 
applicants; however, it had not provided guidance on its application 
and approval process to assist airports with applying to the 
program.\4\ We then recommended that TSA develop guidance that clearly: 
(1) States the criteria and process that TSA is using to assess whether 
participation in the SPP would compromise security or detrimentally 
affect the cost-efficiency or the effectiveness of the screening of 
passengers or property at the airport; (2) states how TSA will obtain 
and analyze cost information regarding screening cost-efficiency and 
effectiveness and the implications of not responding to the related 
application questions; and (3) provides specific examples of additional 
information airports should consider providing to TSA to help assess an 
airport's suitability for SPP. TSA updated its SPP website in December 
2012 by providing: (1) General guidance to assist airports with 
completing the SPP application and (2) a description of the criteria 
and process the agency will use to assess airports' applications to 
participate in the SPP. While the guidance states that TSA has no 
specific expectations of the information an airport could provide that 
may be pertinent to its application, it provides some examples of 
information TSA has found useful and that airports could consider 
providing to TSA to help assess their suitability for the program. 
Further, the guidance, in combination with the description of the SPP 
application evaluation process, outlines how TSA will analyze and use 
cost information regarding screening cost efficiency and effectiveness. 
Airports are also informed in the guidance that providing cost 
information is optional and will not affect the application decision. 
The actions the agency has taken in response to this recommendation 
fully address the intent of the recommendation.
---------------------------------------------------------------------------
    \4\ GAO-13-208.
---------------------------------------------------------------------------
    Question 5. What are the strengths and limitations of TSA's method 
for estimating its screening costs at an airport?
    Answer. Please see the response to question 2.
    Question 6a. Ms. Grover, during your investigation, did you have a 
chance to evaluate the Montana West Airports?
    Answer. As part of our November 2015 report, we reviewed TSA's cost 
estimates and contracts from each of the 4 Western Montana airports.\5\ 
We also conducted on-site interviews with TSA officials, airport 
executives, and contractor officials at 3 of the 4 airports.\6\
---------------------------------------------------------------------------
    \5\ GAO-16-19.
    \6\ We interviewed officials at Glacier Park International, Bozeman 
Yellowstone International, and West Yellowstone airports.
---------------------------------------------------------------------------
    Question 6b. Is it true that the vendors who obtain these Screening 
Partnership Program contracts actually rely on specific percentages of 
TSOs remaining to work for the contractor?
    Answer. When vendors are awarded SPP contracts, they are required 
to first offer positions to qualified TSA-employed screeners--i.e., 
Transportation Screening Officers (TSO)--at the airport. According to 
contractor officials we interviewed, there is an expectation that they 
will retain some of the TSOs.
    Question 6c. As you are likely aware, the contract to the vendor in 
Montana, CSSI/Firstline, was terminated due to staffing issues. Are you 
aware of any particular reasons that the TSOs declined to stay on with 
the private vendor in Montana?
    Answer. As noted in our 2015 report, according to TSA officials, 
the contractor at the 4 Western Montana airports experienced a low 
acceptance rate to its offer of employment to existing TSA 
screeners.\7\ During the transition period, TSA offered its screeners 
at these airports the ability to transfer to a non-SPP airport and a 
$10,000 fixed relocation payment to facilitate the transfer. While TSA 
and the contractor initially anticipated 90 percent of the TSA 
screeners at the airports to accept employment offered by the 
contractor at the transitioning airport, only 50 percent did so. 
Contractor officials stated that they were unaware of the full extent 
of transfer opportunities and relocation payments available to the 
Federal screeners and attributed the lower acceptance of offers to 
TSA's transfer option. As a result, the contractor had to hire 
additional employees during the transition period which delayed the 
completion of other necessary tasks. TSA provided personnel to assist 
the contractor during the transition period to ensure screening 
operations continued during the transition period. The contractor 
providing screening services at the Western Montana airports told us 
that it experienced a delay in obtaining the names and other human 
resource information--such as background check information--from TSA on 
the screeners that planned to accept its offer of employment. The 
contractor stated that this delay affected the contractor's ability to 
hire and train additional employees needed to provide screening 
services at the airport.
---------------------------------------------------------------------------
    \7\ GAO-16-19.
---------------------------------------------------------------------------
    Question 6d. Do we know whether TSA actually pays contractors less 
than the amount that it would cost TSA to provide screening at an 
airport?
    Answer. Please see the response to question 1.
    Question 7a. Ms. Grover, according to the GAO report, TSA's cost 
estimates are, on average, 91 percent of the total Federal costs. 
Although it is not 100 percent:
    What is the composition of the percentage to the Federal Government 
that is not associated with the sole costs to TSA?
    Answer. As stated in our November 2015 report, for the 13 SPP 
airports for which TSA provided official cost estimates, TSA's cost 
estimates are, on average, 91 percent of the total Federal costs. Other 
Federal costs are, on average, 9 percent of the total Federal costs.\8\ 
The composition of the estimated 9 percent at the 13 airports is: 
Retirement Benefits, Pensions, and Insurance, 93 percent; General 
Liability Insurance, 6.7 percent; Corporate Tax Adjustments, .3 
percent.
---------------------------------------------------------------------------
    \8\ GAO-16-19.
---------------------------------------------------------------------------
    Question 7b. Do you think the unmentioned 9 percent would alter the 
cost estimates TSA uses for the procurement process?
    Answer. If TSA were to include the estimates of non-TSA costs in 
the cost-efficiency number it uses in the procurement process and 
evaluate only those proposals that are less than or equal to the 
Federal Government's total estimated costs (as opposed to only TSA's 
costs), the amount that contractors could propose would increase up to 
the amount of the non-TSA costs.
    Question 8. Ms. Grover, as I understand it, the cost estimates that 
TSA uses are simply a snapshot in time at the beginning of procurement, 
when the life of these contracts is usually 5 years.
    Because of this, are we truly able to do an apples-to-apples 
comparison on costs, given that there are numerous factors that could 
increase the amount of these contracts within that 5-year span?
    Answer. Please see the response to question 1.
  Questions From Ranking Member Bennie G. Thompson for Carolyn Dorgham
    Question 1a. Ms. Dorgham, in your testimony you stated that TSA 
concurs with all of the recommendations offered by GAO and has taken 
steps to address them.
    Could you please detail what steps TSA has taken specifically?
    Question 1b. Please provide a time line for which the 
recommendations will be completed.
    Answer. The Government Accountability Office (GAO) provided a total 
of 3 recommendations; the Transportation Security Administration (TSA) 
is taking the following steps to address the recommendations:
    Recommendation 1.--Ensure that the 2013 cost estimate methodology 
used to compare screening costs at SPP and non-SPP airports is revised 
to more fully conform to leading cost-estimating best practices.
    TSA Actions.--Additional documentation on the source of some data 
as well as its reliability and how it is normalized will be included in 
the methodology and individual estimate documentation as necessary. A 
sensitivity analysis and the risk and uncertainty analysis will now be 
created for each estimate used for the TSA Cost Estimate (TCE) and cost 
comparison. Lastly, GAO stated that imputed costs must be included for 
cost comparisons in order for them to be fully comprehensive, and this 
will be included in all cost comparisons. Estimated completion date is 
March 2016.
    Recommendation 2.--Provide cost comparisons that conform to leading 
cost estimating best practices to Congress on a regular basis.
    TSA Actions.--As GAO has recommended recalculating the TCE annually 
for all SPP airports, TSA will provide the imputed cost comparisons to 
the committee following completion in March 2016.
    Recommendation 3.--Continually monitor how contract values compare 
to TSA's estimated costs and, in doing so, update its cost estimates 
when changes to the program or the contract may result in a major 
change to contract values to ensure the comparison is current and 
accurate.
    TSA Actions.--TSA will now update the TCE on a recurring basis to 
incorporate modifications to the contract or other changes to screening 
procedures that may have affected the estimated or actual cost over the 
course of the performance period. Estimated completion date is March 
2016.
    Question 2. Does TSA's cost comparison of SPP and Federal screeners 
take into account use of the National Deployment Force?
    Answer. Yes, for current Screening Partnership Program airports, an 
assumption is made to the necessity of National Deployment Force (NDF) 
deployments based on historical experience, seasonal passenger demands, 
and location of airports. When calculating the costs for Federal 
screening, the Transportation Security Administration's National 
Deployment Office provides the actual costs for the NDF at that airport 
in the last 3 years; these costs are averaged and are included in the 
total cost of screening.
    Question 3. In the past, TSA described plans for an electronic 
system to collect and manage SPP data and SPP contractor activities. 
What's the status of this system, and to what extent does TSA use it to 
monitor SPP contracts?
    Answer. The Transportation Security Administration (TSA) uses an 
on-line database to collect relevant Screening Partnership Program data 
on a variety of areas including, but not limited to, coverage of 
required screening positions, results of procedural and administrative 
audits, daily incident reports, and other data demonstrating compliance 
with operational metrics. The data is reviewed by the TSA Contracting 
Officer's Representative and is discussed with TSA personnel at the 
airport (i.e., Technical Monitor, Transportation Security Managers, and 
Federal Security Director) and the contractors. This data is reviewed, 
at a minimum, on a monthly basis to ensure compliance with contract 
requirements.
    Question 4. Ms. Dorgham, according to Ms. Grover's testimony, TSA 
is changing how wage rate determinations are made for employees of SPP 
contractors that perform screening service.
    Could you please explain in detail this change?
    Answer. As a matter of policy, the Transportation Security 
Administration is now following the requirements of the Service 
Contract Act and as such will be incorporating the Department of Labor 
(DOL)-determined minimum wage requirements in all contracts for 
screening services. To be compliant with the Service Contract Act, 
contractors must pay employees no less than the DOL-established 
prevailing wage rates, which are determined annually by the DOL. 
Pursuant to the Aviation Transportation Security Act (ATSA), TSA also 
requires SPP contractors to compensate their screeners at a rate no 
less than the compensation of Federal screeners. TSA will be 
responsible for any additional costs associated with the annual 
increases in the DOL wage determinations that are greater than the 
minimal compensation of screeners as required by ATSA. Given that the 
DOL wage determinations were developed, in part, based on the ATSA 
labor rates, TSA does not expect any additional labor costs to be 
significant.
    Question 5. Ms. Dorgham, during the GAO investigation it was found 
that TSA's cost-estimating methodology is not fully comprehensive 
because it does not include the costs to all Federal entities. 
Specifically the cost estimates do not include retirement benefits and 
insurance.
    Can you explain why TSA does not include these factors in their 
methodology, as well as how the lack of inclusion affects the 
comparison made by the GAO?
    Answer. As dictated by the Federal Aviation Administration 
Modernization and Reform Act of 2012, the Transportation Security 
Administration (TSA) is required to determine the cost efficiency of a 
private screening contract proposal and only award such a contract if 
it would not detrimentally effect cost efficiency. TSA includes all 
costs directly attributed to screening operations, which include 
indirect costs such as TSA fringe benefits, headquarters overhead, 
airport administrative staff and supplies, hiring and recruitment 
costs, information technology support and other cost items.
    A cost factor excluded from this estimate is the imputed costs of 
TSA's screening operations, which fall outside of TSA's annual 
appropriations. For TSA's purposes these costs include 3 items: (1) The 
unfunded portion of potential future retirement cost liabilities; (2) 
corporate tax adjustment; and (3) consideration for general liability 
insurance. When a contract is awarded, TSA realigns funds from 
appropriate sources (such as the account that pays salaries and 
benefits for Federal screeners) into the Screening Partnership Program. 
If an estimate is built with costs not in TSA appropriations and a 
contract is awarded at that cost ceiling, the agency would have to 
reduce funding from another critical security program in order to fund 
these other Government costs.
    Question 6. Ms. Dorgham, in your testimony you stated that since 
the Screening Partnership Program's inception, only 32 airports have 
applied and currently 22 airports participate.
    Given the category composition of these airports, do you think this 
program is more beneficial to category 3 airports and below?
    Answer. Per the Aviation and Transportation Security Act (ATSA), 
airport authorities are given the authority to apply for the Screening 
Partnership Program (SPP) and ``opt-out'' of Federally-provided 
security screening services. Because participation in the SPP is a 
voluntary decision by the airport authority, TSA remains neutral with 
respect to the category of airports that opt-out as well as any 
perceived benefits it may have.
    Question 7. Ms. Dorgham, do you believe the size of the airports 
used within the GAO study have an effect on the percentage of savings 
found within the report?
    Answer. The passenger throughput of Screening Partnership Program 
(SPP) airports in the report represents a very small sample size 
(approximately 0.4 percent) of the entire Transportation Security 
Administration (TSA) passenger throughput in fiscal year 2015. Because 
the sample of airports is so small, definitive conclusions on the 
differences in cost between SPP and Federal airports cannot be 
reasonably determined.
    Question 8a. Ms. Dorgham, this year, we have seen instances in 
which Secretary Johnson orders security directives to be taken out by 
the Transportation Security Administration, such as those implemented 
following the leaked passenger screening report.
    Question 8b. When these directives are made, who implements them at 
SPP airports?
    Question 8c. Who incurs the costs of implementing these directives?
    Answer. When directives are made, the Transportation Security 
Administration (TSA) will issue a technical direction to the contractor 
and modify the contract to include the directive. Each directive and 
subsequent modification requires an analysis to determine if there is a 
change in cost due to the increase/decrease in level of effort. In 
cases where there is a change in cost, TSA will negotiate with each 
contractor to determine the cost impact and make appropriate 
modifications to increase or decrease the value of the contract. TSA 
provides oversight at the airports to ensure the directives are being 
implemented correctly and within the time frame as instructed by TSA.
    Question 9a. Ms. Dorgham, recently four airports in Montana had 
their contracts terminated due to decreasing staff levels, and as a 
result TSA's National Deployment Force had to step in to provide 
screening.
    Can you walk us through the termination of this contract?
    Answer. On August 11, 2015, the Transportation Security 
Administration (TSA) issued a ``Show Cause Letter'' to the contractor, 
CSSI/First Line, due to 6 main issues observed since they assumed the 
contract. These were: (1) Inadequate staffing levels at Bozeman 
International Airport and Glacier Park International Airport; (2) 
Failure to conduct mandatory maintenance on Government-Furnished 
Equipment; (3) Standard Operating Procedures violations; (4) Not 
meeting Acceptable Quality Levels; (5) Failure to maintain accurate 
documentation; and (6) Failure to obtain a DD Form 254, which sets out 
security requirements for contractor personnel.
    TSA received CSSI/First Line's response to TSA's Show Cause Letter 
on September 8, 2015. After careful review of the response, on 
September 24, 2015, TSA determined it was non-responsive, and decided 
to terminate the vendor's contract. On October 1, 2015, CSSI/FirstLine 
was presented with the termination letter, and on October 2, 2015, 
TSA's National Deployment Force (NDF) began screening operations at the 
four Montana airports.
    Question 9b. Who is responsible for paying for the National 
Deployment Force?
    Answer. TSA is reserving the right to hold the terminated 
contractor liable for administrative costs associated with the 
termination of the contract, including NDF and re-procurement costs.
    Question 9c. If the contractor is responsible for the costs, are 
considerations such as these included in TSA's cost estimate?
    Answer. Yes, for current Screening Partnership Program airports, an 
assumption is made to the necessity of NDF deployments based on 
historical experience, seasonal passenger demands, and location of 
airports. When calculating the costs for Federal screening, the 
Transportation Security Administration's National Deployment Office 
provides the actual costs for the NDF at that airport in the last 3 
years; these costs are averaged and are included in the total cost to 
screen.
    Question 10. Ms. Dorgham, the recent GAO report has noted accuracy 
as being one of TSA's limitations for the cost-estimate methodology; 
specifically TSA does not update their estimates for things such more 
staff for as a new terminal opening. TSA only provides point-in-time 
cost estimates.
    Please explain the reasoning for not updating the estimates.
    Answer. The Transportation Security Administration (TSA) Cost 
Estimate (TCE), used to determine the cost efficiency of a contract 
proposal at a point in time, will continue to represent TSA's 5-year 
``bid'' for conducting screening operations, and be created when a 
contract is re-competed or a new airport is applying to the Screening 
Partnership Program (SPP). However, as a result of the GAO report, TSA 
will now update the TCE on a recurring basis to incorporate 
modifications to the contract or other changes to screening procedures 
that may have affected the estimated or actual cost over the course of 
the performance period. This will allow TSA to evaluate and track the 
actual savings, if any, seen over the life of the contract.

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