As in the original pilot program  contracts, the new contracts require private screening contractors to  adhere to several ATSA provisions, including that:  the level of screening services and protection provided at the airport  under the contract will be equal to or greater than the level that would  be provided at the airport by federal government personnel;  the private screening company be owned and controlled by a citizen of  the United States;  the private screening company, at a minimum, meet employment  standards, compensation and benefits rates, and performance  requirements that apply to federal screeners; and    all private screener candidates meet the same minimum qualifications  as federal screeners, including U.S. citizenship (or being a national of  the United States), high school diploma or equivalent, English  proficiency, and pass a criminal background check. Specifically, the  fiscal year 2006 DHS appropriations act shields airports from, among other  things, virtually all liability related to negligence or wrongdoing by private  screening contractors, their employees, or federal screeners. TSA has also taken steps to  clarify SPP roles and responsibilities between federal and private sectors,  but the four private screening contractors we interviewed still had  questions about the roles and responsibilities of TSA staff at the airports  they served. The contractors’  views about the hiring process were mixed. TSA Has Taken Steps to Clarify SPP Roles and Responsibilities between Federal and Private Sectors, but Questions about Division of Labor Remain

While TSA has defined the roles and responsibilities for FSDs, FSD staff,  and private screening contractors, among others, in its August 2005 SPP  transition plan, the details contained in this plan have not been  communicated to or shared with private screening contractors. TSA plans to shift more cost risk to contractors by competitively  awarding fixed-price-award fee contracts for screening services at the four  smallest airports that will participate in the SPP. TSA officials said they  also plan to competitively award fixed-price contracts for screening  services at larger airports, but will not do so for another 1 to 2 years— when they believe that screening costs at larger airports will be better  known. TSA Plans to Transition from Cost-Reimbursement to Fixed-Priced Contracts, but Stated That an Additional 1 to 2 Years Was Needed to Do So at Larger Airports

TSA expects that the SPP will operate at a cost that is competitive with  equivalent federal operations and will achieve cost-savings, where  possible. Specifically, over the last 3 years, TSA has awarded cost-reimbursement  contracts with an award fee component for screening services at four of  the five airports currently using private screeners. Despite TSA’s use of cost-savings as a basis for a portion of the award  fees, opportunities for government cost-savings may be limited in part  because under the cost-reimbursement contracts the government bears  most of the cost risk—the risk of paying more than it expected. In our November 2004 report, we stated that TSA had begun drafting  performance measures for this purpose. According to TSA, the five goals for the SPP  in the areas of security, customer service, costs, workforce management,  and innovation, are:    Ensure security. TSA officials stated that DHS must approve the draft performance goals,  measures, and targets before they can be finalized, but as of January 2006,  DHS had not yet done so, and had not set a deadline for doing so. Further, the draft measures and targets TSA developed for the SPP  will also be used by DHS to determine whether to award private screening  contractors certification status under the SAFETY Act. Until the SPP  measures and targets are finalized, DHS officials stated that they cannot  determine whether contractors will perform as intended—criteria that  must be satisfied before awarding certification status. Since then, TSA  has provided additional operational flexibilities to private screening  contractors, such as granting contractors and FSDs more input and  flexibility in the screener hiring process. However, DHS did not specify a  time frame for completing its review. Appendix I: Scope and Methodology

To assess the Transportation Security Administration’s (TSA) efforts to  implement the Screening Partnership Program (SPP), we analyzed (1) the  status of federal efforts to determine whether and to what extent liability  protection will be provided to private screening contractors and airports,  and actions taken on other stakeholder concerns related to participation  in the SPP; (2) how TSA has determined it will achieve cost-savings goals  for screener operations through the SPP, specifically through choice of  contract used and contract terms; and (3) TSA’s progress in developing  and implementing performance goals, measures, and targets to assess the  performance of the private screening contractors who will be participating  in the SPP.
Why GAO Did This Study

In November 2004, as required by law, the Transportation Security Administration (TSA) began allowing all commercial airports to apply to use private screeners in lieu of federal screeners as part of its Screening Partnership Program (SPP). GAO's prior work found that airports and potential private screening contractors had concerns about the SPP, including whether they would be liable in the event of a terrorist attack and how roles and responsibilities would be divided among TSA airport staff and private screening contractors. This report addresses TSA's efforts to (1) provide liability protection to private screening contractors and airports and address other SPP stakeholder concerns; (2) achieve cost-savings through the SPP; and (3) establish performance goals and measures for the SPP.

What GAO Found

DHS and Congress have begun to address whether liability protection may be offered to current and prospective private screening contractors and airports using private screeners. DHS has already provided some liability protection to three of the four current private screening contractors. However, DHS officials stated that they cannot provide additional coverage, which would render contractors virtually immune from all pertinent claims, because TSA has not finalized performance standards that would allow DHS to determine if contractors will perform as intended--a criterion that must be satisfied before providing such additional protection. Recently enacted legislation shields airports from virtually all liability resulting from the negligence or wrongdoing committed by a private screening company or its employees. TSA has also taken action to improve the screener hiring process by granting contractors and TSA airport officials more input and flexibility in the hiring process. Additionally, TSA has defined the roles and responsibilities for SPP stakeholders--TSA airport staff and private screening contractors, among others--in its August 2005 SPP transition plan. However, the details in this plan have not been shared with private screening contractors, and all four contractors we interviewed were unclear about TSA staff roles and responsibilities at the airports they served. TSA has stated that the SPP will operate at a cost that is competitive with equivalent federal operations and will achieve cost-savings where possible. Over the last 3 years, TSA has awarded cost-reimbursement contracts with an award fee component for screening services at four of the five airports currently using private screeners. The award fee is based, in part, on contractor cost-savings. However, opportunities for TSA cost-savings may be limited because under the cost-reimbursement contracts TSA bears most of the cost risk--the risk of paying more than it expected. TSA plans to shift more cost risk to contractors by competitively awarding fixed-price-award fee contracts for screening services at the four smallest airports that will participate in the SPP. TSA also plans to competitively award fixed-price contracts for screening services at larger airports, but stated that they cannot do so for up to 2 years--when officials believe that screening costs at larger airports will be better known. TSA has developed performance goals and has begun drafting related measures and targets to assess the performance of private screening contractors under the SPP in the areas of security, customer service, costs, workforce management, and innovation. For example, one of the measures would require contractors to ensure that new hires receive required training. TSA's related target for this measure is that 100 percent of new hires will complete required training. These same measures and targets will also be used by DHS to assess whether to award full liability coverage under the SAFETY Act. TSA officials stated that DHS must approve the draft performance measures and targets before they can be finalized. As of January 2006, DHS had not yet completed its review.