Among its responsibilities, TSA must generally  ensure that all passengers and property are screened before being  transported on a commercial passenger aircraft. As we reported in 2016, Congress has granted other transaction authority  to 11 federal agencies. TSA’s OTA Policy

TSA’s Office of Contracting and Procurement established policy and  procedures for the use, award, and oversight of OTAs in 2011. This framework for awarding and overseeing OTAs is similar to those for  contracts. TSA Obligates Millions Annually through OTAs, Primarily to Reimburse for Costs Associated with TSA Security Programs

From fiscal years 2012 through 2016, TSA reported obligating millions  annually through OTAs, which amounted to at least $1.4 billion, or about  13 percent of its overall obligations during this time. See table 3 for TSA’s obligations on contracts and OTAs. TSA Primarily Uses OTAs to Reimburse Airports and Law Enforcement Agencies for the Costs Associated with Security Programs

From fiscal year 2012 to 2016 eight TSA programs used OTAs to meet a  variety of mission requirements. TSA uses OTAs to reimburse  airports for the allowable design and construction costs associated  with facility modifications needed for installing, updating, or replacing  in-line checked baggage screening systems. Other than the parking OTAs, TSA officials noted that the requirements  for the seven remaining programs that used OTAs from fiscal year 2012  to 2016 are ongoing and that TSA will continue to use OTAs for the same  purposes in fiscal year 2017 and beyond, contingent on available funding. Methods to Price and Monitor Selected OTAs Reviewed Varied, and TSA Has Taken Action to Strengthen Oversight

Our review of 29 OTAs awarded by 8 TSA programs from fiscal years  2012 through 2016 found that the methods used to determine price  reasonableness and monitor these OTAs varied based on the complexity  of the requirement. Nonetheless, TSA’s own  2015 internal compliance review found significant gaps in OTA  documentation and reporting. In response to these deficiencies, TSA has  taken action to strengthen oversight and compliance with its policy. For OTAs awarded by the Electronic Baggage Screening  Program where the requirements for infrastructure design and  construction can be complex, the program produces an independent  government cost estimate based on design drawings and specifications  from the airports which are required to follow TSA’s detailed guidance. Certain proposed costs in the contractor’s  bid were higher than TSA’s independent government cost estimate. The airport authority provided documentation verifying  electrical rates set by the local power authority that TSA’s contracting  officer used to determine fair and reasonable pricing. Appendix I: Summary of Key Areas for the Other Transaction Agreements GAO Reviewed

	Electronic Baggage Screening Program

Purpose: Reimburses airports for the allowable costs related to various  airport checked baggage screening projects including the design and  construction of checked baggage inline systems and the recapitalization  of existing inline systems. During the construction phase, the COR is to  monitor project schedule and scope through processes such as weekly  and monthly reporting. TSA rationale for using OTA: Participants are not traditional contracting  partners; most participants must contribute to the cost of providing law  enforcement officer support at the checkpoints; and the agreements do  not acquire property or services for the direct benefit or use of the  government.
Why GAO Did This Study

TSA is responsible for securing the nation's transportation systems and uses security technologies to screen airline passengers and their luggage to prevent prohibited items from being carried on commercial aircraft. TSA has special authority for using OTAs, which are not subject to certain federal contract laws and requirements. OTAs provide flexibility to help meet mission needs, but potentially carry the risk of reduced accountability and transparency.
GAO was asked to examine TSA's use of OTAs. This report addresses: (1) the extent and purposes of TSA's use of OTAs, and (2) how TSA ensures prices are reasonable and how it oversees OTAs.
To address TSA's use of OTAs, GAO analyzed data on OTA awards and obligations from the Federal Procurement Data System-Next Generation from fiscal years 2012 to 2016 (the most recent years for which data were available). GAO determined that data were sufficiently reliable to report on TSA's minimum use of OTAs. To examine how TSA prices and oversees OTAs, GAO selected a nongeneralizable sample of 29 OTAs from the 8 TSA programs that awarded them based on program size and OTA value. GAO reviewed relevant documentation, and interviewed contracting and program officials.

What GAO Found

During fiscal years 2012 through 2016, the Transportation Security Administration (TSA) awarded at least 1,039 other transaction agreements (OTA) and obligated at least $1.4 billion on them. These agreements, which are neither traditional contracts nor grants, were primarily used to reimburse airports and law enforcement agencies for the costs associated with TSA security programs. For example,
TSA awarded at least 109 OTAs and obligated at least $783 million from fiscal years 2012 through 2016 to reimburse airports for the allowable design and construction costs associated with installing, updating, or replacing checked baggage screening systems.
TSA also used OTAs for intelligence analysis and to offset the costs of providing canines for explosives detection, among other things.
TSA Used Other Transaction Agreements to Reimburse Airports for Design and Construction Costs Associated with Checked Baggage Screening Systems
For the selected 29 OTAs GAO reviewed, GAO found that the methods TSA used to determine price reasonableness varied depending on the complexity of the requirement. For example,
For complex design and construction projects, TSA compared independent government cost estimates with contractor bids. Certified program managers monitored project schedule and scope through site visits and status reports.
In contrast, TSA independently verified the rates set by the local power authority when reimbursing some airports for electricity costs to operate TSA screening equipment.
GAO also found that TSA has taken action to address prior lapses in oversight, resulting in improved compliance. In 2015, TSA identified significant gaps in OTA file documentation and data reported in the Federal Procurement Data System-Next Generation. TSA took action to address these deficiencies by (1) updating its policy, (2) requiring additional training for contracting officers, (3) instituting monthly data verification, and (4) monitoring compliance through quarterly reviews. GAO's analysis confirmed that the quality of the data had improved between fiscal year 2012 and 2016. Moreover, the 29 OTAs generally met key requirements of TSA's policy that GAO identified.

What GAO Recommends

GAO is not making any recommendations in this report.