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United States Government Accountability Office 
Report to Congressional Requesters 

November 2015          SCREENING
PARTNERSHIP
PROGRAM 
TSA Can Benefit from
Improved Cost
Estimates 

Accessible Version 



GAO-16-19




November 2015 
SCREENING PARTNERSHIP PROGRAM 
TSA Can Benefit from Improved Cost Estimates 
Highlights of GAO-16-19, a report to
congressional requesters 

Why GAO Did This Study 
What GAO Found 
The Transportation Security
Based on an analysis of TSA's cost estimating practices and methodology
Administration (TSA) screens
approximately 1.8 million passengers    developed in 2013 against best practices, TSA's cost estimates have some
and their property at our nation's       strengths, but also have limitations in four general characteristics needed to
airports every day to ensure, among    reflect a high-quality and reliable cost estimate. TSA's cost estimating practices
other things, that persons do not carry   reflect certain strengths, including a revised cost estimating methodology that
prohibited items into airport boarding    provides sufficient details for TSA staff to develop and document cost estimates.
areas or on flights. In 2004, TSA       However, limitations in each of the four characteristics of a high quality cost
created the Screening Partnership     estimate (comprehensive, well-documented, accurate, and credible) prevent
Program (SPP), allowing TSA-        TSA's estimates from being reliable. For example, TSA's cost estimates are not
regulated airports to apply to have      fully comprehensive because they include only the costs incurred by TSA to
screening of passengers and property   perform screening at an airport and not the total costs incurred by the federal
performed by private contractors. TSA   government such as retirement benefits and insurance. Further, TSA's estimates
develops cost estimates to determine    are not regularly updated to reflect changes to the program that could affect
what its costs would be to perform      costs and do not include an analysis that addresses the uncertainty inherent in
screening services at SPP airports.     cost estimates. A methodology that is more closely aligned with best practices for
These estimates provide a basis of     cost estimation can provide more reliable information. 
comparison for program and
procurement decisions.             While multiple congressional committees have sought improved information on
the cost effectiveness of the SPP to oversee the program, TSA has not reported
GAO was asked to review the SPP.
cost comparisons between federal and private screening at SPP airports to policy
This report addresses: (1) the extent to
makers. Since 2013, TSA has prepared comprehensive annual reports that
which TSA developed and reported
reliable cost estimates for providing     include, among other things, a comparison of actual private costs with estimated
screening services at SPP airports;     federal costs. According to TSA officials, they have not shared these reports with
and (2) how TSA uses cost estimates   Congress because they are developed for internal use. Although TSA has no
in selecting SPP contractors and the    standing requirement to report this information, doing so (such as on an annual
extent to which TSA monitors contract   basis), can better position policy makers to assess and understand the
values relative to its cost estimates.     effectiveness of the SPP program and its effects on federal costs. 
GAO compared TSA's cost estimates
TSA limits its selection of contractors to those who propose costs less than or
to best practices for developing federal
equal to TSA's estimated costs to perform the same services. However, once it
cost estimates, analyzed selection and
monitoring in the 13 contracts in which   has awarded a contract, TSA does not continually monitor the value of the
estimates were used, and interviewed   contract relative to its estimated costs throughout the contract period. TSA also
TSA and contractor officials.          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
What GAO Recommends    contractor's proposal to perform screening at an airport if the proposed cost
exceeds TSA's estimated costs to perform screening services at an airport, and
GAO recommends that TSA: (1) revise  will only further evaluate those proposals that are less than or equal to TSA's
it's 2013 cost estimating methodology   estimated costs. However, over the contract period, the value of the contract may
to conform to best practices; (2)        increase or decrease due to modifications that address changes to the work. For
provide cost comparisons to Congress   example, if an airport opens a new terminal, the contract might be modified to
on a regular basis; and (3) compare     accommodate the need to hire additional staff. Some of these changes may also
and update estimates when major     affect TSA's estimated costs for performing the services provided in the contract.
Therefore, continually monitoring how contract values compare to TSA's
changes to contract values occur. TSA
estimated costs, and ensuring the cost estimates are updated to correspond to
concurred with the recommendations. 
major changes in the program or contract, would provide program officials and
View GAO-16-19. For more information,
contact Jennifer Grover at (202) 512-7141 or    policymakers with more accurate information about the relative costs of operating
GroverJ@gao.gov.                   airports with federal and private screeners.
United States Government Accountability Office

Contents 

Letter                                                                                  1 
Background                                   5 
TSA's Cost Estimating Practices have Some Strengths, but
Estimates are Not Reliable and Cost Comparisons are Not
Reported to Policy Makers                           12 
TSA Has Determined that Contractor's Proposed Costs Should
Not Exceed TSA's Estimated Costs, But Does Not Compare
These Costs throughout the Contract                     20 
TSA Continues to Make and Implement Policy Changes that
Affect the SPP                                    30 
Conclusions                                     33 
Recommendations                             33 
Agency Comments and Our Evaluation                   34 
Appendix I: Objectives, Scope, and Methodology                                            37 
Appendix II: Best Practices for Developing High-Quality Cost Estimates and Summary Assessment             41 
Appendix III: Limited Risk and Uncertainty Analysis of the Transportation Security Administration's Cost Estimate   45 
Appendix IV: Comment from the Department of Homeland Security                               49 
Appendix V: GAO Contact and Staff Acknowledgments                                     52 
Appendix VI: Accessible Data                                                        53 
Agency Comment Letter                            53 
Data Tables                                     56 
Related GAO Products                                                          60 

Tables 
Table 1: The Characteristics of a High-Quality Cost Estimate        41 
Table 2: Summary Assessment of TSA Cost Estimates Compared
with Best Practices                              43 
Data table for Figure 2: Total Federal Costs for 13 Transportation
Security Administration (TSA) Screening Partnership
Program Airports                              56 
Data Table for Figure 4: Transportation Security Administration's
Cost Efficiency Number as Compared to Screening
Partnership Program Contract Award Prices            56 

Page i                               GAO-16-19 Screening Partnership Program

Figure 5: Confidence Level Results of the Transportation Security
Administration's (TSA) Cost Estimate of an Example
Airport                                          56 
Figures 
Figure 1: Airports Participating in the Screening Partnership
Program                                7 
Figure 2: Total Federal Costs for 13 Transportation Security
Administration (TSA) Screening Partnership Program
Airports                                       15 
Figure 3: Use of the Transportation Security Administration (TSA)
Cost Efficiency Number in the Procurement Process as of
September 2015                           23 
Figure 4: Transportation Security Administration's Cost Efficiency
Number as Compared to Screening Partnership Program
Contract Award Prices                          25 
Figure 5: Confidence Level Results of the Transportation Security
Administration's (TSA) Cost Estimate of an Example
Airport                                         47 

Abbreviations 
ATSA      Aviation and Transportation Security Act 
CFO      Office of the Chief Financial Officer 
DHS      Department of Homeland Security 
FAA     Federal Aviation Administration 
FTE       fulltime equivalent 
ID/IQ      Indefinite delivery/indefinite quantity 
SCA      Service Contract Act 
SPP      Screening Partnership Program 
TSA      Transportation Security Administration 
TSO      Transportation Security Officer 

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Page ii                                GAO-16-19 Screening Partnership Program

Letter 


441 G St. N.W. 
Washington, DC 20548 


November 16, 2015 
Congressional Requesters: 
The Department of Homeland Security's (DHS) Transportation Security
Administration (TSA) 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 Screening Partnership Program (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 As of June 2015, contractors
perform passenger and baggage screening services at 21 airports across
the country.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.
Since the program'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


1The 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. 
2There are 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. 
3Of the 21 airports, 7 have transitioned to private screeners since September 2014. One
additional airport has been accepted into the SPP but, as of September 2015, was
awaiting contract award. 

Page 1                            GAO-16-19 Screening Partnership Program





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. The
resulting numbers are used to estimate the cost to convert an airport from
federal to non-federal screeners or to convert an SPP airport back to
federal screeners and the expected operational costs. The 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. 
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. This report 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. 
To determine the extent to which TSA developed reliable cost estimates,
we compared TSA's cost estimation practices with leading best practices
identified in GAO's Cost Estimating and Assessment Guide, which
establishes a consistent methodology that is based on best practices and
that can be used across the federal government for developing,
managing, and evaluating cost estimates.5 The best practices in the guide

4See GAO, Aviation Security: TSA's Cost and Performance Study of Private-Sector Airport
Screening, GAO-09-27R (Washington, D.C.: Jan. 9, 2009) and GAO, 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, D.C.: Mar. 4,
2011). 
5GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and
Managing Capital Program Costs (Supersedes GAO-07-1134SP), GAO-09-3SP 
(Washington, D.C.: 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. 

Page 2                            GAO-16-19 Screening Partnership Program


are the basis for a high-quality, reliable cost estimate. Specifically, we
reviewed TSA's overall methodology and practices for developing SPP
cost estimates as well as the 13 official cost estimates that have been
used in the procurement process for individual airports and supporting
documents for each estimate.6 We interviewed TSA officials who are
responsible for developing and using the cost estimates to gain further
insight into the decisions and assumptions made during the development
of the cost estimates. We evaluated TSA's practices and cost estimates
to determine the extent to which they met or did not meet leading best
practices. To determine the extent to which TSA reports cost
comparisons between SPP and non-SPP airports to policy makers, we
reviewed TSA directives on SPP reporting and interviewed TSA program
officials.7 We also assessed TSA internal reporting guidance using GAO's
Standards for Internal Control in the Federal Government, which indicates
that management should externally communicate the necessary quality
information to achieve the entity's objectives.8 
To determine how TSA uses its cost estimates in selecting SPP
contractors, we reviewed 10 contracts representing 20 of the 22 airports
in the SPP at the time of our work. 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 due to an ongoing
dispute over TSA's award of the SPP contract and contract renegotiations
during the time of our review and (2) Punta Gorda Airport because the
contract award was pending at the time of our review.9 For each contract,

6TSA also provided unofficial cost estimates for eight airports that were awarded contracts
prior to the development of the current cost estimation methodology. We reviewed these
for context but did not include them in our analysis. 
7We did not assess other TSA communications to Congress, such as briefings. 
8GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 
(Washington, D.C.: Nov. 1999). 
9The ongoing dispute between TSA and the incumbent (now former) screening company
at Kansas City International Airport, who had performed screening services at the airport
since 2002, originated with TSA's April 2010 solicitation for screening services at the
airport and the incumbent's subsequent challenges to TSA's award of the contract to
another company. See Firstline Transportation Security, Inc. v. United States, 119 Fed. Cl.
116 (2014) (filed under seal November 13, 2014, and reissued for publication November
25, 2014). After the Court of Federal Claims upheld TSA's February 2014 award of the
contract to the new (non-incumbent) contractor, TSA began negotiations with the new and
incumbent contractors to transition screening services and restructure the contract, which
would have an impact on the total contract award amount. Due to these circumstances,
we excluded Kansas City International Airport from our analysis. 

Page 3                            GAO-16-19 Screening Partnership Program


we analyzed contract documents to identify where the cost estimates
were used or not used at various stages in the procurement process
including, among other stages, solicitation and contract award. We also
interviewed TSA headquarters officials knowledgeable about TSA's use
of cost estimates in the procurement process and reviewed TSA policy
documents regarding the use of the cost estimates in the procurement
process. To determine the extent to which TSA compares contractor
costs to TSA's estimated costs, we interviewed TSA officials to determine
whether cost estimates are updated based on changes to the contract
and whether cost estimates were considered when issuing contract
modifications. We also evaluated TSA's current process and practices
regarding monitoring of contract costs against leading best practices for
cost estimating that include comparing planned and actual performance 
against approved program baselines.10 Additionally, to determine the
extent to which changes can occur during the contract's period of
performance, we reviewed contract modifications that increased or
decreased the value of the contract from August 2009 to May 2015 for
contracts that were active during the time of our review. 
To determine how the SPP has changed since the beginning of fiscal
year 2014, we reviewed SPP policy documentation and other SPP
procurement documents, such as SPP contracts and requests for
proposals to understand TSA's procurement process. We reviewed TSA
and Department of Labor guidance regarding wages and interviewed TSA
acquisition and program officials knowledgeable about TSA's
procurement process to determine what procurement related changes
had occurred since the beginning of fiscal year 2014. We visited nine 
airports that had private screeners or were at various stages of preparing
for private screeners and spoke to SPP stakeholders at each airport,
including airport directors, contractors, TSA federal security directors and
federal screeners who had transitionedor were preparing for
transitionto obtain their perspectives on how SPP changes have
impacted airport operations. We selected SPP airport locations to visit
based on their proximity to other SPP airports and to provide a variety of
perspectives based on those airports time in the program. We also met
with each of the five private screening contractors with SPP contracts at
the time of our review and related industry associations to obtain their

10GAO-09-3SP. 


Page 4                            GAO-16-19 Screening Partnership Program

perspective on changes that have occurred in the program and their
experiences as participants in the procurement process. 
We conducted this performance audit from August 2014 to November
2015 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives. 
Background 
Program History and     On November 19, 2002, pursuant to the Aviation Transportation Security
Participants            Act (ATSA), TSA began a two year pilot program at five airports using
private screening companies to screen passengers and checked
baggage.11 In 2004, at the completion of the pilot program, and in
accordance with ATSA, TSA established the SPP, whereby any airport
authority, whether involved in the pilot or not, could request a transition
from federal screeners to private, contracted screeners.12 In general, the
SPP allows commercial airports an opportunity to "opt out" of federal
screening by applying to TSA to have private screeners perform
passenger and baggage screening functions, with a private screening
company (i.e., a contractor) assuming responsibility for the hiring,


11See Pub. L. No. 107-71,  108(a), 115 Stat. 597, 611-13 (2001); 49 U.S.C.  44919. The
pilot program was to assess the feasibility of having qualified private screening companies
provide airport security screening services in lieu of federal screeners at one airport from
each of TSA's security risk categories. One airport from each security risk category was
selected to participate: (1) San Francisco International Airportcategory X, (2) Kansas
City International Airportcategory I, (3) Greater Rochester International Airport
category II (now a category I airport), (4) Jackson Hole Airportcategory III, and (5)
Tupelo Regional Airportcategory IV. TSA classifies commercial airports in the United
States into one of five security risk categories (X, I, II, III, and IV) based on various factors,
such as the total number of takeoffs and landings annually, and other special security
considerations. In general, category X airports have the largest number of passenger
boardings, and category IV airports have the smallest. 
12See Pub. L. No. 107-71,  108(a), 115 Stat. at 611-13; 49 U.S.C.  44920, as amended. 


Page 5                            GAO-16-19 Screening Partnership Program

training, and management of the screening workforce.13 At airports with
private screeners, TSA continues to be responsible for overseeing airport
security operations and ensuring that the contractors provide effective
and efficient screening operations in a manner consistent with law,
regulation, and other TSA requirements.14 As shown in figure 1, as of July
2015, there are 21 airports operating with private screeners and an
additional airport awaiting contract award. 











13For purposes of this report, a commercial airport is any airport in the United States that
operates pursuant to a TSA-approved security program in accordance with 49 C.F.R. pt.
1542 and at which TSA performs or oversees the performance of screening services. 
14The SPP contractor's responsibilities include recruiting, assessing, and training
screening personnel to provide security screening functions in accordance with TSA
regulations, policies, and procedures. 


Page 6                            GAO-16-19 Screening Partnership Program

Figure 1: Airports Participating in the Screening Partnership Program 












Note: TSA classifies commercial airports in the United States into one of five security risk categories
(X, I, II, III, and IV) based on various factors, such as the total number of takeoffs and landings
annually, and other special security considerations. In general, category X airports have the largest
number of passenger boardings, and category IV airports have the smallest. 
TSA's Cost Estimates     When TSA compares the costs of private and federal screeners, TSA
estimates the costs that it would incur to have federal screeners operate
at an SPP airport in a given year. Past estimates have varied from stating
that federal screeners would be 17 percent less expensive than private
screeners in 2007 to less than 1 percent less expensive in 2013. In our
January 2009 report we evaluated the methods TSA used to compare the
estimated costs of federal screeners to private screeners. We found that
TSA's cost estimating methodology's design had some strengths, such as
recognizing that cost savings would be limited by the requirement that


Page 7                            GAO-16-19 Screening Partnership Program



private contractors must follow standard TSA protocols but we also found
limitations that could affect the validity and reliability of cost comparisons,
and its usefulness in informing future management decisions.15 
Accordingly, we recommended that if TSA planned to rely on its cost
comparison of federal and private screeners for future decision making,
the agency should update its analysis to address the limitations
identified.16 TSA generally concurred with our findings and
recommendation. In 2011, TSA officials provided an update on progress
in addressing these limitations. In our March 2011 report that assessed
TSA's actions, we found that TSA had taken stepssuch as adjusting its
cost estimates to account for overlapping contractor management and
support staff at SPP airportsto generally address several of the
methodological limitations related to costs, but needed to take additional
steps to address the remaining limitations.17 
In 2013, in response to the Federal Aviation Administration (FAA)
Modernization and Reform Act of 2012 (FAA Modernization Act), which,
among other things, required TSA to modify its process for evaluating
SPP applications, TSA developed a revised cost estimating methodology
to compare private and federal costs.18 The revised methodology is
intended to produce a consistent basis of comparison and to provide a
cost estimate that is used in annual internal reports to TSA leadership
comparing federal and private costs, in making decisions on whether to
transition from federal to private or private to federal screening, and to
inform the procurement process for private screening services.19 In a

15 GAO-09-27R. 

16Specifically, we identified seven limitations in TSA's methodology related to estimating
costs, such as underestimating costs to the government for non-SPP airports by not
including all costs associated with providing passenger and baggage screening services
and not accounting explicitly for uncertainty. 
17 GAO-11-375R. 
18See generally Pub. L. No. 112-95,  803, 126 Stat. 11, 135-36 (2012). Although the law
does not specifically require that TSA develop a cost estimation methodology, TSA
developed its methodology consistent with the statutory provision requiring that TSA
approve an application unless doing so would compromise security or be detrimental to
the cost efficiency or effectiveness of screening operations at the airport. See 49 U.S.C. 
44920(b)(2). 
19TSA's Methodology and Standards for Estimating and Comparing TSA Screening Costs
(June 30, 2014) outlines the methodology, standards, procedures, and reporting
mechanisms TSA uses for estimating the cost of security screening by federal screeners. 


Page 8                            GAO-16-19 Screening Partnership Program


2014 testimony, we found that TSA had taken steps to address certain
past limitations but was continuing to work on others, adjusting the
methodology as needed.20 In addition to using the single year estimates
for comparison purposes, TSA uses the estimates to develop a cost
efficiency number for use in SPP contract solicitations. In general, the
cost efficiency number is calculated based on the one year estimate of
what it would cost TSA to operate at an SPP airport adjusted for the
contract's five year period of performance, with certain additional
adjustments for transition costs, inflation, and other variables.21 
SPP Procurement Process TSA has a dedicated Office of Acquisitions for contracting screening
services at SPP airports and has established a policy that contracts will
be awarded within 12 months of a new airport's application.22 TSA's
procurement process follows the Federal Acquisition Regulation (FAR),
which provides uniform policies and procedures for acquisitions that
include guidelines for developing acquisition plans. 
Contract type: TSA has generally used firm-fixed price contracts in its
most recent SPP procurements. According to the FAR, a firm-fixed-price
contract is suitable for acquiring services when the specifications or
requirements are well-defined and the contracting officer can establish a
fair and reasonable price at the outset.23 Firm-fixed price contracts
establish the value of the contract for the entire term of the contract at
award, placing the risk of cost overruns upon the contractor and

20GAO, Screening Partnership Program: TSA has Improved Application Guidance and
Monitoring of Screener Performance, and Continues to Improve Cost Comparison
Methods, GAO-14-787T (Washington, D.C.: July 29, 2014). 
21TSA refers to its one year estimate as a cost estimate or a federal cost estimate. TSA
also refers to the adjusted estimate used for procurement as a cost efficiency number or a
federal cost estimate. For purposes of this report, we refer to the one year estimate as a
cost estimate and the adjusted estimate used for procurement purposes as a cost
efficiency number. 
22The explanatory statement accompanying the fiscal year 2015 Department of Homeland
Security (DHS) appropriations act establishes an expectation that TSA plan and manage
toward a 12-month timeline for awarding applicable contracts for each new airport. See
161 Cong. Rec. H281 (daily ed. Jan. 13, 2015) (accompanying Pub. L. No. 114-4, 129
Stat. 39 (2015)). See also H.R. Rpt. No. 113-481, 113th Cong. (2d Sess. 2013)
(accompanying H.R. 4903 and directing TSA to award applicable SPP contracts not later
than 12 months from the date of receipt of an airport's application). 
2348 C.F.R.  16.202-2. 


Page 9                            GAO-16-19 Screening Partnership Program

incentivizing the contractor to control costs.24 If contractor costs exceed
the contract award price, the contractor is generally not reimbursed for
the difference, although contract values can be increased or decreased in
certain situations, such as when there is a modification of the agreed
upon statement of work. Past SPP procurements have also used costreimbursable
contracts, which, according to the FAR, are suitable when
circumstances do not allow the agency to define its requirements
sufficiently to allow for a fixed-price type contract or uncertainties involved
in contract performance do not allow for an accurate estimate to use in a
fixed-price contract.25 Cost-reimbursable contracts allow for payment of
allowable incurred costs to the extent prescribed in the contract and
generally place the risks of cost overruns on the government. TSA
officials from the Office of Acquisition have stated that the agency
currently uses firm-fixed price contracts because the scope of work is
clearly defined but that other contract vehicles could be considered in the
future. 
Contractor evaluation and selection: When a new airport is accepted
into the SPP or an existing contract is renewed, TSA issues requests for
proposals to solicit competition from interested vendors. For SPP
contracts entered into prior to September 2015, TSA solicited and
awarded a separate contract every time a new airport was accepted into
the SPP. According to TSA officials, the agency plans to establish
indefinite delivery/indefinite quantity (ID/IQ) contracts with multiple
vendors who would subsequently compete for task orders to provide
services at individual airports. This change is described in more detail
later in the report. In the prior approach, TSA awarded the final contract to
the contractor whose proposal represented the best value based on a
trade-off analysis; according to TSA officials, they plan to award task
orders under the new approach using the same method.26 For current
SPP contracts, TSA determined the best value proposal based on the

2448 C.F.R.  16.202-1. 
2548 C.F.R.  16.302-2. 
26Best value is defined as the expected outcome of an acquisition that, in the
Government's estimation, provides the greatest overall benefit in response to the
requirement. 48 C.F.R.  2.101. A trade-off analysis considers, in addition to cost, other
factors related to technical capability, and is appropriate when it may be in the best
interest of the government to consider an award to other than the lowest priced proposal
or highest technically rated proposal. See 48 C.F.R.  15.101-1. 


Page 10                           GAO-16-19 Screening Partnership Program

evaluation factors described in the request for proposal relating to factors
such as cost and technical capability. TSA has included the following cost
and technical evaluation factors in previous SPP request for proposals:
(1) Cost Efficiency, (2) Operational Screening Management, (3) Program
Management, (4) Logistics and Training, (5) Transition, (6) Past
Performance, and (7) Price.27 
In evaluating contractor proposals, TSA conducted a trade-off analysis
based on the evaluation criteria and their relative order of importance
included in the request for proposal.28 As part of the trade-off analysis,
TSA evaluated the contractors' proposed prices to determine if they were
fair, reasonable, balanced, and in compliance with laws and regulations
regarding wages. For example, TSA may determine that a proposal price
is not fair and reasonable if the cost or price analysis indicates that it is
significantly over or understated. Contracting officers also determine
whether a contractor's total proposed price complies with applicable wage
requirements established in ATSAspecifically, that the private
screening company provides compensation and other benefits to their
private screeners that are not less than the level of compensation and
other benefits provided to federal screeners.29 Using this trade-off
process, TSA may award a SPP contract based on a proposal that is not
the lowest priced option or the highest rated technical proposal. 



27According to the FAR, agencies are responsible for defining evaluation factors for
awarding negotiated contracts. See 48 C.F.R.  15.304. The evaluation factors must be
tailored to the acquisition to represent key areas of importance and support meaningful
comparison among competing proposals. Id. All factors and significant sub factors are to
be included in the request for proposal with their relative importance, and the solicitation
must state whether all factors other than cost or price, when combined, are of more, less
or equal importance to cost or price. Id. 
28For past SPP contract selections, TSA has considered factor 1 as more important than
factor 2; factor 2 as more important than factor 3; factor 3 as more important than factor 4
and factor 5, individually; factor 4 and factor 5 as being of equal importance and more
important than factor 6; factor 7 as approximately equal to the combined technical factors
(2-6). 
29See 49 U.S.C.  44920(c). 


Page 11                           GAO-16-19 Screening Partnership Program


TSA's Cost
Estimating Practices
have Some
Strengths, but
Estimates are Not
Reliable and Cost
Comparisons are Not
Reported to Policy
Makers 
TSA's Cost Estimating    Based on an analysis of TSA's cost estimating practices and
Practices have Some     methodology developed in 2013 against best practices, TSA's cost
Strengths, but Limitations  estimates have some strengths, but also have limitations in four general
characteristics needed to reflect a high-quality and reliable cost estimate.
Prevent the Cost
According to TSA's documented methodology, TSA developed its cost
Estimates from Being     methodology approach to form the basis for comparing costs between
Reliable               federal and private screening at commercial airports and to create
accurate, reasonable, and defensible cost estimates.30 The TSA
methodology document states that these estimates are used in annual
internal reports comparing federal and private costs and in making
decisions on whether to transition from federal to private or private to
federal screening.31 According to GAO's Cost Estimating and Assessment
Guide, a cost estimate created using best practices exhibits four
characteristicscomprehensive, well documented, accurate, and
credible.32 If any of these characteristics are not substantially or fully met,
then the cost estimate does not reflect the characteristics of a high-quality

30TSA's Methodology and Standards for Estimating and Comparing TSA Screening Costs
(July 31, 2013). 
31While the estimates are also used to generate numbers used in the procurement
process (the cost efficiency number), our analysis discusses the strengths and limitations
of the process used to develop the one year estimate. 
32GAO's Cost Estimating and Assessment Guide (GAO-09-3SP) identifies four
characteristics of a high-quality, reliable cost estimate. Each characteristic is associated
with a specific set of best practices. See appendix II for additional details. 


Page 12                           GAO-16-19 Screening Partnership Program

estimate and cannot be considered reliable.33 Our analysis found that
TSA's cost estimating practices substantially met the criteria for two of the
four characteristicscomprehensive and well documented. Although
most of the best practices related to these characteristics were
addressed, which led to the overall assessment that the characteristic
was substantially met, key best practices, such as including all costs in
the estimate, remained incomplete. Also, for the two remaining
characteristicsaccuracy and credibilityTSA's cost estimating practices
partially met the criteria. Thus, limitations existed in all four characteristics
preventing the costs estimates from being reliable for, among other 
purposes, comparing the costs of private and federal screeners. Appendix
II provides greater detail on the four characteristics and our comparison of
the TSA cost estimates with specific best practices that constitute the four
GAO cost estimating characteristics. 
In general, TSA's cost estimating practices reflect certain strengths,
including a cost estimating methodology that provides sufficient details for
TSA staff to develop and document cost estimates. Our analysis of TSA's
methodology and cost estimating documents found strengths such as
including a step by step description of how the estimates were developed
and providing evidence that the cost estimates were reviewed and
accepted by management. Specifically, the methodology includes a
description of the various factors included in the cost estimates, the
assumptions related to each factor, and the reasoning behind each
factor's inclusion in the cost estimate. Also, the methodology includes the
same information for factors that are excluded from the cost estimate.
These strengths provide a basis on which TSA can develop its cost
estimates. 
However, as noted above, our analysis also found limitations in all four of
the characteristics which prevent the cost estimates from being
considered high-quality and reliable. Among these limitations, we
identified four practices that may specifically affect the estimates'

33Characteristics were assessed using the following scale: Fully meets: TSA provided
complete evidence that satisfies the entire criterion; Substantially meets: TSA provided
evidence that satisfies a large portion of the criterion; Partially meets: TSA provided
evidence that satisfies about half of the criterion; Minimally meets: TSA provided evidence
that satisfies a small portion of the criterion; Does not meet: TSA provided no evidence
that satisfies any of the criterion. See appendix II for more detail on our assessment. 


Page 13                           GAO-16-19 Screening Partnership Program

comprehensiveness, documentation, accuracy, and credibility.
Specifically, our comparison showed that: 
TSA cost estimates are not fully comprehensive. TSA's cost estimates
include only TSA's costs and not costs incurred by other federal
agencies. The resulting effect is that the cost estimating methodology
compares full private screening costs to costs incurred by TSA, and
not the total cost to the federal government. TSA refers to its costs as
"federal costs," which reflect costs that are lower than the total
expected cost to the federal government. TSA's cost methodology
document states that imputed costs such as retirement, corporate tax
adjustment and general liability insurance are to be calculated, but not
included in the final cost estimates since these costs do not impact
TSA's budget.34 Office of Management and Budget (OMB) guidance
in Circular A-76 provides that when developing a cost comparison,
government costs should account for the fully burdened cost to the
government.35 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.36 
Other federal costs are, on average, 9 percent of the total federal
costs (see figure 2). In addition, the percentage difference between
the estimates of TSA's costs and all federal costs (other federal costs

34Our analysis examined the reliability of the TSA cost estimates without the imputed costs
(other federal costs) since TSA does not include these costs in its official estimates. 
35For example, Office of Management and Budget (OMB) Circular A-76 (May 29, 2003,
revised) provides that when developing a cost comparison, government costs should
include, among other things the standard retirement cost factor to represent the
government's complete share of the weighted retirement cost. Circular A-76, however, is
specific to conducting competitions between public agencies and the private sector, which
does not directly pertain to SPP contracts, and the moratorium on executive agencies
conducting public private competitions under Circular A-76 or any other provision of law or
regulation, enacted through the Omnibus Appropriations Act, 2009, remains in effect. See
Pub. L. No. 111-8, div. D, tit. VII,  736, 123 Stat. 524, 689-90 (2009). TSA officials
nonetheless stated that it follows the guidance contained within Circular A-76 in its cost
estimation methodology. 
36According to TSA officials, official cost estimates were developed for use in the
procurement process after implementation of the FAA Modernization Act's SPP
provisions. While TSA provided examples of cost estimates for 21 SPP airports, we based
our analysis on the 6 cost estimates, representing 13 airports, identified by TSA as official
cost estimates. TSA also provided unofficial cost estimates for eight airports that were
awarded contracts prior to the development of the current cost estimation methodology.
We reviewed these for context but did not include them in our analysis. 


Page 14                           GAO-16-19 Screening Partnership Program

added to TSA costs) ranges from 7 to 17 percent for each of the 13
SPP airports. Officials in TSA's Office of the Chief Financial Officer
stated that they do not include the non-TSA costs in the estimates
because TSA is not appropriated funds for these costs and cannot
reprogram or transfer funds to compensate for such costs without
detrimentally affecting other critical security programs. Including other
federal costs in the estimates for informational purposes when
comparing costs in internal or external reporting can eliminate bias in
cost comparisons by ensuring that estimated government costs for
providing passenger and baggage screening services at SPP and
non-SPP airports are accurately represented, rather than
understated.37 
Figure 2: Total Federal Costs for 13 Transportation Security Administration (TSA)
Screening Partnership Program Airports 









TSA cost estimates include incomplete documentation. TSA's cost
estimate documentation does not always capture the source of the
data used to develop the estimate, the reliability of the data, and how

37The scope of this review did not evaluate whether other federal costs should be
absorbed by TSA. Our work emphasizes the effect of TSA reporting those costs when
evaluating the impact of the total cost to the federal government of screening services. 


Page 15                           GAO-16-19 Screening Partnership Program

the data were normalized.38 According to best practices, data are the
foundation of every cost estimate and how good the data are affects
the cost estimate's overall credibility. Depending on the data quality,
an estimate can range anywhere from a mere guess to a highly
defensible cost position. However, without appropriate background
knowledge about the source and reliability of the data, it cannot be
known with sufficient confidence whether the data collected can be
used directly or need to be modified. While total labor costs are the
largest driver in the cost estimate at, on average, 76 percent of the
estimated cost to the federal government, for the 13 SPP airports
reviewed, we found that not all of the TSA cost estimate
documentation included the source of the data, such as where the
labor rates used to develop the estimate came from. Since data can
be gathered from a variety of sources, such as actual private
contractor data or actual TSA payroll data, they are often in many
different forms and need to be adjusted before being used. As a
result, data normalization is often necessary so that the data are
consistent with other cost information. We found that neither the TSA
cost methodology document nor the cost estimate documentation
describe the process used to normalize the labor rates. TSA officials
stated that revising the methodology is an iterative process and it
modifies its approach, including potentially adding documentation, as
its process matures. By documenting the sources of all cost data used
to develop the cost estimates, TSA could better ensure the data are
reliable and consistent. 
TSA cost estimates are not regularly updated. TSA cost estimates are
not fully accurate because they are not regularly updated to reflect
significant changes in the program as called for by best practices. For
example, we found that TSA does not modify the cost estimates to
account for changes in the program that can affect screening costs,
such as the introduction of new screening equipment or the
construction of a new terminal at an airport. Although the TSA cost
methodology documentation is updated on an annual basis to reflect
changes to the methodology based on TSA and external
assessments, the cost estimates for existing contracts are not
updated. TSA officials stated that the estimates are developed once
an airport has applied to the program and are generally not revisited

38The purpose of data normalization (or cleansing) is to make a given data set consistent
with and comparable to other data used in the estimate. 


Page 16                           GAO-16-19 Screening Partnership Program

once contractors are selected. If the estimate is not updated when
changes affecting the program costs occur, it will be difficult to
analyze how changes such as introducing new processes or
equipment affect TSA's estimated cost for screening operations at an
airport. Furthermore, unless properly updated on a regular basis, the
cost estimate cannot provide accurate, ongoing information as a basis
for comparison with SPP contractor costs. 
TSA cost estimates do not sufficiently address the degree of
uncertainty inherent in the estimate. The cost estimates are partially
credible because they do not include a sensitivity analysis and the risk
and uncertainty analysis conducted skips important steps in the
process identified by best practices, such as not considering the
possible effect of risk factors unique to each airport.39 Best practices
call for a sensitivity analysis that examines the effects of changing one
assumption or variable at a time and a risk and uncertainty analysis
that provides a range of possible costs, based on changes to multiple
assumptions and variables at the same time.40 Our analysis of TSA's
cost estimates found that TSA did not conduct a formal sensitivity
analysis for each airport's cost estimate. Without a sensitivity analysis,
TSA's estimates do not incorporate an understanding of which
variables have the greatest effect on the cost estimate. This is
important because, without this information, TSA does not have
sufficient information on how the estimate may change as a result of
changes in key assumptions. Further, we found that TSA's approach
to risk and uncertainty analysis skips critical steps identified as best
practices and therefore the level of confidence for TSA's cost
estimates is unclear. For TSA management to make good decisions,
best practices state that the cost estimate must reflect the degree of
uncertainty, so that a level of confidence can be given about the
estimate. Since uncertainty cannot be avoided, best practices also
state that it is necessary to identify the cost elements that represent
the most risk and, if possible, cost estimators should quantify the risk,
including an assessment of how change in one cost element may

39According to GAO's Cost Guide, risk is the chance of loss or injury. In a situation that
includes favorable and unfavorable events, risk is the probability that an unfavorable event
will occur. Uncertainty is the indefiniteness about the outcome of a situation. It is assessed
in cost estimate models to estimate the risk (or probability) that a specific funding level will
be exceeded. 
40Assumptions represent a set of judgments about past, present, or future conditions
postulated as true in the absence of positive proof. 


Page 17                           GAO-16-19 Screening Partnership Program

affect others. TSA officials stated that the DHS Cost Analysis Division
under the Office of the Chief Financial Officer performs a risk and
uncertainty analysis on one elementfulltime equivalentsbecause it
makes up the largest proportion of costs in the SPP program. We
found that TSA's risk analysis does not follow best practices because
it does not account for statistical relationships between cost elements
nor does TSA's risk process provide decision makers with information
about the likelihood, or probability, that the point cost estimate is
achievable. A point estimate, by itself, provides no information about
the underlying uncertainty associated with the estimate. 
To further illustrate the importance of a risk and uncertainty analysis
and how this analysis can be incorporated into TSA's estimates, we
conducted a limited cost risk and uncertainty analysis for one SPP
airport which accounts for variability in wages, staffing, and attrition.
We found that TSA's cost estimate for the example airport, when
considering the limited risk and uncertainty factors, resulted in a 94.5
percent probability that the actual costs for this example will be less
than or equal to the cost estimate and a 5.5 percent chance that the
actual costs will be greater than the cost estimate. Our analysis
illustrates how a risk and uncertainty analysis that follows best
practices can better inform TSA and other decision makers as they
use the cost estimates. See appendix III for the results of this
analysis. 
TSA Does Not Report    While the cost effectiveness of the SPP has been a key issue for policy
Cost Comparisons      makers in overseeing the SPP, TSA does not report cost comparisons
between Federal and     between federal and private screening at SPP airports to policy makers.
Multiple congressional committees have sought this information as
Private Screening at SPP
demonstrated by their requests for evaluations of TSA's cost comparisons
Airports to Policy Makers   and methodology.41 TSA is currently directed to provide semiannual
reports to the Committees on Appropriations of the Senate and House of
Representatives that discuss the current status of the SPP, including the


41Since 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. 


Page 18                           GAO-16-19 Screening Partnership Program

processing of applications for participation in the SPP.42 However, our
assessment of these semiannual reports found that they do not include a
comparison of costs between federal and private screening at SPP
airports.43 Although TSA does not report to policy makers on cost
comparisons between federal and private screening at SPP airports and
has no standing requirement to do so, by reporting such information (such
as on an annual basis), policy makers may be better positioned to assess
and understand the effectiveness of the SPP program. Reporting such
cost comparisons would not require new data collection efforts, since TSA
currently collects and reports this information internally. Since 2007, TSA
has estimated the cost the federal government would incur at SPP
airports using a federal workforce. Since 2013, the SPP Program
Management Office (PMO) has prepared comprehensive annual internal
reports that include SPP cost and performance analyses, along with SPP
accomplishments and plans, and a comparison of actual private costs 
with estimated federal costs.44 TSA uses these cost comparisons to
ensure its compliance during the procurement process with all statutes
governing the SPP, and to satisfy an internal reporting requirement, but

42TSA began submitting these reports pursuant to the explanatory statement
accompanying the DHS's fiscal year 2014 appropriations act and continues to submit
them in accordance with the explanatory statement accompanying it's fiscal year 2015
appropriations act. See 161 Cong. Rec. H281 (daily ed. Jan. 13, 2015) (accompanying
Pub. L. No. 114-4, 129 Stat. 39 (2015)); 160 Cong. Rec. H931 (daily ed. Jan 15, 2014)
(accompanying Pub. L. No. 113-76, 128 Stat. 5 (2014)). Specifically, TSA is to report
semiannually on its execution of the SPP and processing of applications for participation.
The explanatory statement of the Senate accompanying the Department's fiscal year 2013
appropriations act had directed TSA to submit such reports on a quarterly basis. See 159
Cong. Rec. S1552 (daily ed. Mar. 11, 2013) (accompanying Pub. L. No. 113-6, 127 Stat.
198 (2013)). 
43The three semiannual reports TSA submitted pursuant to the explanatory statements ,
include: (1) Screening Partnership Program, Semi-Annual Report to Congress, FY 2014,
prepared by TSA (May 16, 2014); (2) Screening Partnership Program, Second Half, Fiscal
Year 2014, prepared by TSA (November 19, 2014); and (3) Screening Partnership
Program, First Half, Fiscal Year 2015, prepared by TSA (June 19, 2015). The explanatory
statements do not specifically direct TSA to include a comparison of costs between federal
and private screening at SPP airports in its semiannual reports. 
44The SPP Annual Report is provided to the TSA Office of Security Operations (OSO)
Assistant Administrator on an annual basis to ensure that the program is meeting all
statutory requirements and provides the costs and performance measurements for each of
the participating airports). This provides the Assistant Administrator with a detailed
overview of what the program has accomplished and how it is doing for a particular fiscal
year. 

Page 19                           GAO-16-19 Screening Partnership Program


does not use them for external reporting purposes.45 According to TSA
officials, none of the three SPP Annual Reports have been provided to
Congress because they are developed for internal use. Standards for
Internal Controls in the Federal Government states that, in addition to
internal communications, management should ensure there are adequate
means of communicating with, and obtaining information from, external
stakeholders that may have a significant impact on the agency achieving
its goals.46 Without such information, it will be difficult for Congress to
determine how screening costs compare at private and federal airports.
Providing cost comparison information to policy makers on a periodic
basis would better position policy makers to make informed decisions
about the SPP program. 
TSA Has Determined
that Contractor's
Proposed Costs
Should Not Exceed
TSA's Estimated
Costs, But Does Not
Compare These
Costs throughout the
Contract 
TSA Has Determined that  To implement the SPP program, in accordance with the FAA
a SPP Contractor's      Modernization Act, TSA has determined that it will not consider a
Proposed Costs Should   contractor's proposal if the proposed cost exceeds TSA's estimated costs
to perform screening services at an airport. Specifically, the statute under
Not Exceed TSA's
which TSA implements the SPP, as amended by the FAA Modernization
Estimated Costs        Act, provides that TSA must approve an airport operator's SPP
application if TSA determines that approval would not compromise

45TSA, Operations Directive (OD), OD-400-24.2: Annual Program Reporting for the
Screening Partnership Program (September 9, 2013). 
46GAO/AIMD-00-21.3.1. 


Page 20                           GAO-16-19 Screening Partnership Program

security or detrimentally affect the cost-efficiency or the effectiveness of
the screening of passengers or property at the airport.47 In accordance
with this provision, TSA's policy for awarding SPP contracts states that a
contract will only be awarded if the procurement process identifies a
qualified company at a price that does not exceed the estimated cost to
TSA for performing screening operations.48 In addition, TSA's policy
states that if the agency were to award contracts for above its estimated
costs, "TSA would be required to reduce funds for other security 
programs, which may have a detrimental impact on the performance of
other programs." For example, TSA officials stated that in the event TSA
awarded a contract for a SPP airport above its estimated costs, TSA
would need to take actions such as reducing federal screener staff and
administrative support at other federal airports to account for the cost
differential. 
TSA implements this policy in its procurement process when evaluating
proposals for SPP contracts by only considering contract proposals that
do not exceed TSA's estimate of what it would cost TSA to perform
screening services at the airport and, according to TSA officials, expects
to do so under its revised acquisition strategy.49 Under the process used
as of September 2015, once TSA identifies a need for a contract
meaning TSA has approved an application for a new airport to "opt out" or

47See 49 U.S.C.  44920(b)(2). 
48The conference report accompanying the FAA Modernization Act provides that in
determining the cost efficiency and effectiveness of an applicant's screening services,
TSA shall compare the annual costs to the federal government and related effectiveness
measures associated with screening services at SPP and non-SPP airports, applying the
relevant cost and performance metrics equally to the private and Federal screening
programs. See H.R. Rpt. No. 112-381, 158 Cong. Rec. H294 (daily ed. Feb. 1, 2012).
Subsequent reports of the appropriations committees, however, establish an expectation
that TSA disapprove any new contract application where privatized screening does not
currently exist if the annual cost of the contract exceeds the annual cost to TSA of
providing Federal screening services. See, e.g., Explanatory Statement of the Senate
accompanying the DHS Appropriations Act, 2013, 159 Cong. Rec. S1552 (daily ed. Mar.
11, 2013), but see, e.g., H.R. Rpt. No. 113-91, at 50 (May 29, 2013) (accompanying H.R.
2217) (directing TSA to cease disapproving any new SPP contract applications, awards or
renewals, based solely on their own determination that the annual cost of the SPP
contract exceeds the annual cost to TSA of providing Federal screening services). 
49If the total proposed price for the airport is not equal to or lower than the cost efficiency
number, the proposal is to be rated "unacceptable." A final "unacceptable" rating for cost
efficiency is to render the entire proposal for that airport unacceptable and the proposal
should not be considered by TSA for award. 


Page 21                           GAO-16-19 Screening Partnership Program

a current SPP contract's period of performance is concludingthe Office
of the Chief Financial Officer (CFO) calculates a cost efficiency number
for the airport.50 The cost efficiency number reflects the estimated costs if
TSA, itself, were to provide screening services throughout the duration of
the contractmost commonly the base year and four option years. TSA
calculates this cost efficiency number based on the one year cost
estimate derived from TSA's cost estimation methodology, which is
adjusted for inflation and to account for the period of performance of the
contract.51 In addition, the cost efficiency number incorporates costs
associated with transitioning screening services based on guidance from
OMB Circular A-76.52 As shown in figure 3, the cost efficiency number is
used throughout the beginning of the procurement process but not after
contract award. 






50TSA produces a cost efficiency number for an individual airport based on its cost
estimation methodology to estimate TSA's cost of performing screening operations. As
previously explained, this estimate does not include other federal costs including
retirement benefits, forgone corporate tax, and general liability insurance. 
51For the SPP contracts we reviewed, the period of performance consists of a base year
that includes a 3 or 4 month transition period, with 4 option years, consisting of 12 months
each. According to TSA officials, adjustments for inflation over the contract period of
performance are based on relevant OMB guidance. 
52Transition, as it occurs for the SPP program, is when "transition phase requirements
have been satisfied and the contractor begins security screening operations." Transition
can occur moving from TSA to contractor screeners, or moving from an incumbent
contractor to a new contractor. Transition cost considerations are calculated by TSA in
accordance with OMB Circular A-76, which establishes federal policy for the competition
of commercial activities. Based on the circular, TSA calculates 10 percent of the personnel
cost in a single year as consideration for transition costs. 


Page 22                           GAO-16-19 Screening Partnership Program

Figure 3: Use of the Transportation Security Administration (TSA) Cost Efficiency Number in the Procurement Process as of
September 2015 








TSA has included cost efficiency as an evaluation factor in its request for
proposals during the solicitation process and noted that contractor
proposal prices that exceed the cost efficiency number would not have
undergone additional consideration for award.53 Contractors were
required to provide price proposals for the base year of the contract that
includes a transition period, as well as four subsequent option years. For
purposes of comparing contractor price proposals with the cost efficiency
number, TSA considered the total period of performancegenerally five 

53During the evaluation process, TSA compares the contractor's proposed price excluding
optional contract line items to the cost efficiency number. Optional contract line items are
included to provide for additional operational requirements such as a short-term airport
pilot or surge tasks that relate to increased threat levels. According to TSA officials,
optional contract line items are incorporated into SPP contracts in case of an emergency
situation, but are cost reimbursable and not funded at the time of award. In addition, TSA
officials stated that as of August 2015, there has not been an emergency situation
requiring use of the optional contract line items. TSA officials noted that contractors are
not required to maintain their costs under the cost efficiency number established in the
request for proposal and contractors can ultimately be paid more than the original cost
estimate depending on circumstances. 


Page 23                           GAO-16-19 Screening Partnership Program

yearsassuming all options will be exercised. TSA has awarded 7 SPP
contracts covering 14 airports using the cost efficiency number as an
evaluation factor (see figure 4).54 As shown in figure 4, contract award
prices for 13 of these 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 to TSA's estimated costs. 










54In February 2014, TSA had also awarded the SPP contract for Kansas City International
Airport to a new, non-incumbent screening company using the cost efficiency number as
an evaluation factor. This contract award, already the subject of an ongoing dispute 
between TSA and the incumbent contractor, remained the subject of litigation at the time
of our review. See Firstline Transportation Security, Inc. v. United States, 119 Fed. Cl. 116
(2014) (filed under seal November 13, 2014, and reissued for publication November 25,
2014). The Court of Federal Claims ultimately upheld TSA's award of the contract to a
new screening company on November 13, 2014, after which TSA began negotiations with
the new and incumbent contractors to transition screening services and restructure the
contract which would have an impact on the total contract award amount. Due to these
circumstances, we excluded Kansas City International Airport from our comparison of the
cost efficiency number and the contract award price. 


Page 24                           GAO-16-19 Screening Partnership Program

Figure 4: Transportation Security Administration's Cost Efficiency Number as Compared to Screening Partnership Program
Contract Award Prices 












Note: Kansas City International Airport (MCI) is not included in our analysis because the contract
award was the subject of ongoing litigation and subsequent negotiations at the time of our review. 
This pattern raises the possibility of TSA realizing additional cost savings
should more airports decide to participate in the SPP. The difference
between contractor proposals relative to TSA estimated costs would likely
vary from airport to airport, but if the pattern of awarding contracts at a
value at or below TSA's estimated costs were to continue, the federal
government could potentially realize increased savings as a result of
more airports transitioning to the SPP. However, as we explain later in
this report, TSA does not collect the information necessary to determine
the relative cost of SPP screening and federal screening past the point of
contract award. Furthermore, even if TSA collected this type of
information for airports currently participating in the SPP, additional

Page 25                           GAO-16-19 Screening Partnership Program

analysis would be important to adequately address the full extent of
potential savings that could be achieved through the SPP. 
While TSA used the cost efficiency number as the first factor in selecting
which contractor proposals were acceptable for further evaluation, the
number was not used, nor intended to be used, to set the price of the
contract or to determine whether the proposed price of the contract was
fair and reasonable. Further, proposing the lowest price did not ensure
that a contractor's proposal was selected. The cost efficiency number
limited the amount a contractor could propose to be further considered for
award, but TSA awarded contracts on a best value basis using a trade-off
analysis.55 Using a tradeoff process allowed TSA to award contracts to
the offeror that represented the best valuewhich was not necessarily
the offeror that proposed the lowest price or the highest rated technical
proposal. The other factors that were considered in evaluating proposals
and were directly related to a contractor's costs and technical abilities
were: Operational Screening Management, Program Management, 
Logistics and Training, Transition, Past Performance, and Price.56 
TSA Does Not Monitor    According to TSA officials, TSA does not monitor contract values relative
Contract Values Relative   to TSA's cost efficiency number throughout the period of performance.
to its Estimated Costs, or   TSA officials also stated that TSA does not routinely update the estimate
of what it would cost TSA to perform the work throughout the life of an
Update the Estimated
SPP contract to account for potential changes that may occur. Generally,
Costs, Throughout the    TSA's requests for proposals for SPP contracts discussed that as a
Contract Period         guiding principle of the program, costs must be competitive and TSA
required contractors seeking to participate in the SPP to provide
screening services at a cost to TSA that is less than, or equal to the cost

55Best value is defined as the expected outcome of an acquisition that, in the
Government's estimation, provides the greatest overall benefit in response to the
requirement. 48 C.F.R.  2.101. A trade-off analysis is appropriate when it may be in the
best interest of the Government to consider an award to other than the lowest priced
proposal or highest technically rated proposal. See 48 C.F.R.  15.101-1. 
56According to the FAR, agencies are responsible for defining evaluation factors for
awarding negotiated contracts. See 48 C.F.R.  15.304. The evaluation factors must be
tailored to the acquisition to represent key areas of importance and support meaningful
comparison among competing proposals. Id. All factors and significant subfactors are to
be included in the request for proposal with their relative importance, and the solicitation
must state whether all factors other than costs or price, when combined are of more, less,
or equal importance to cost or price. Id. 


Page 26                           GAO-16-19 Screening Partnership Program


of TSA's screening operations at the airport. According to best practices,
cost estimates should be updated to reflect changes in requirements.57 
While TSA limited its further consideration of contractor proposals to
those that proposed prices equal to or less than TSA's estimated cost
efficiency numbers during the evaluation process, TSA officials told us
they do not routinely compare SPP contract values to TSA's current
estimated costs throughout the life of the contract. 
Additionally, TSA officials told us that estimated costs are not routinely
updated throughout the life of SPP contracts. TSA officials stated that
without updates, the cost estimate has limitations for estimating TSA's
expected costs over the five year period of performance because it is
based on data available prior to the issuance of the request for proposal.
According to TSA officials, the cost estimate and resulting cost efficiency
number do not take into consideration potential changes that may occur
over the contract period of performance. For example, TSA officials
stated that the estimate does not account for changes in staffing that may
occur because the estimate's methodology uses staffing data available at
the time of the request for proposal and assumes the same levels over a
five year period of performance. TSA officials noted that the cost estimate
also does not take into consideration changes that may occur at an
individual airport, such as frequent changes to flight schedules or the
opening of new terminals. TSA officials stated that they may update the
cost estimation methodology to account for these and other potential
changes, but they do not update the individual airport cost estimates
accordingly. As a result, over the period of performance for a five year
contract, the cost efficiency number used during the evaluation process
may be higher or lower than a more recent estimate of what TSA's
estimated costs would be. Updating the cost estimate, especially when
major changes to the program affect the contract value, can allow TSA to
validate their initial estimate and accurately determine how SPP contract
values have changed relative to TSA's cost estimates. 
TSA officials stated they currently have a process for issuing contract
modifications for changes at an airport that affect the contract value, such
as adding staff to operate new equipment. These modifications reflect
changes in the contract value, but TSA does not make corresponding
adjustments to its cost estimates to account for these modifications when

57GAO-09-3SP. 


Page 27                           GAO-16-19 Screening Partnership Program

there are major changes to the contract value. During the period of
performance, contract modifications may occur based on unanticipated
changes to requirements, some of which affect the value of the contract.58 
Contract modifications may occur, for example, when the contractor and
TSA's contracting officer have agreed that the requested change is not
within the original contract requirements.59 The following are examples of
recent contract modifications that resulted in increases or decreases to
the contract value: 
to include additional training requirements; 
to include technology changes, such as Advanced Imaging
Technology implementation that required additional staff60; 
to eliminate requirements, such as the removal of behavior detection
officers61; 
to make adjustments to screener compensation rates; and 
to accommodate the need for increased or decreased screening
services due to changes at the airport, such as the opening of a new
terminal or increase in flights scheduled. 
Contract modifications have varied in scope and cost. Some modifications
have been for relatively small amounts, such as additional training
requirements resulting in an increase of about $1,500. Other
modifications have led to major changes in the contract value such as
additional staff to operate Advanced Imaging Technology machines,
which increased an award amount by about $2.1 million. Although these

58See 48 C.F.R.  43.103 (describing the types of contract modifications). 
59According to the FAR, only contracting officers acting within the scope of their authority
are empowered to execute contract modifications on behalf of the Government. 48 C.F.R.
43.102(a). Contract modifications should be negotiated prior to execution, but if a
significant cost increase could result from a contract modification and time does not permit
negotiation of a price, at least a ceiling price shall be negotiated unless impractical. 48
C.F.R.  43.102(b). The FAR also authorizes unilateral modifications, signed only by the
agency's contracting officer, which may be used, for example, to make administrative
changes, such as a change in the paying office. See 48 C.F.R.  43.103(b). 
60Advanced Imaging Technology is a full body scanner used to screen passengers in the
nation's airports. 
61As part of TSA's Behavior Detection and Analysis program, designated officers carry out
their mission to identify persons who pose a risk to aviation security. In general, behavior
detection officers are to identify passenger behaviors indicative of stress, fear, or
deception and refer passengers meeting certain criteria for additional screening of their
persons and carry-on baggage. 


Page 28                           GAO-16-19 Screening Partnership Program

contract modifications have an effect on the value of the contract, TSA
officials stated that they do not make corresponding updates to TSA's
estimated costs to reflect these contract modifications. An updated cost
estimate reflecting major changes in costs as well as the current
requirements at an airport can better position TSA to develop a more
reliable cost efficiency number when the contract is re-competed and can
provide information to determine the extent to which cost savings may
have been achieved over the life of the contract. 
TSA has an internal reporting requirement for the SPP program that
requires the Program Office to produce an annual report that compares
private costs to federal costs for the preceding fiscal year, which could
offer an opportunity for TSA to monitor current private and federal costs at
each airport with a contract in place. However, based on our review of the
most recent annual report in 2015, the report is not designed for this type
of monitoring because it uses a methodology for estimating TSA's cost
that is different from the one TSA uses to calculate cost efficiency
numbers. Specifically, TSA officials stated that, for comparison purposes,
the estimates in the annual report assume that federal screeners are paid
the average federal rate with appropriate locality adjustments. In contrast,
the cost efficiency number used in the procurement process assumes that
TSA screeners are being paid salaries similar to the contractor rate. In
addition, TSA officials stated that the estimates in its annual report
include other federal costs for retirement benefits, forgone corporate tax,
and general liability insurance which are not included in the cost efficiency
number. Further, according to SPP officials, the contractor costs in the
annual report reflect contract modifications, but the estimated TSA costs 
do not because TSA does not have a process in place for updating the
estimates to include cost-related modifications. As described earlier, TSA
uses the cost efficiency number, in part, to ensure that proposed
contractor costs do not exceed TSA's estimated costs. Continually
comparing contractor costs relative to TSA's estimated costs, and
ensuring the cost estimates are updated to correspond to major changes
in the program or contract value, would provide program officials and
policymakers with more accurate information about the relative costs of
operating airports with federal and private screeners. 




Page 29                           GAO-16-19 Screening Partnership Program

TSA Continues to    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
Make and Implement  changing its contracting approach to awarding SPP contracts and is
Policy Changes that  changing how wage rate determinations are made for employees of SPP
contractors that perform screening services. In addition, TSA also
Affect the SPP       extended the time for a new contractor to complete the transition from
federal screeners to private screeners from 90 to 120 days. 
Change in contracting approach: 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.62 Contractors awarded ID/IQ contracts will be allowed to
compete for the award of task orders to perform screening at specific
airports. According to TSA procurement officials, the contracting
approach involves two steps to determine the contractor for a new SPP
airport and for existing SPP airports as current SPP contracts expire. The
first step is to consist of TSA awarding ID/IQ contracts to contractors
based on several evaluation factors.63 The second step is to compete
individual task orders among the ID/IQ holders and award individual task
orders for performing screening services at individual SPP airports to the
contractor whose proposal represents the best value to the government
for that airport.64 TSA officials noted that the contracting strategy will
shorten the evaluation period for awarding task orders because, once
TSA has awarded the ID/IQ contracts, TSA will not have to continually
evaluate each aspect of a contractor's capabilities at the task order level.
At the time of our review, TSA issued requests for proposals for the most
qualified contractors through the ID/IQ solicitation and concurrently
solicited offers for task orders for two SPP airportsCharles M. Schulz
Sonoma County Airport and San Francisco International Airport

62This type of contracting approach, called indefinite delivery/indefinite quantity (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. 
63Evaluation factors for the ID/IQ are: Transition and Workforce Management Approach;
Program Management and Team Organizational Approach; Logistics Management
Approach; Past Performance; and Price/Cost. 
64In accordance with the FAR, TSA is to provide each ID/IQ contract awardee fair
opportunity to compete for task orders, unless one of several enumerated exceptions
applies. See 48 C.F.R.  16.505(b). 


Page 30                           GAO-16-19 Screening Partnership Program

concurrently in September 2015. As part of the concurrent solicitations,
TSA required contractors to submit pricing and performance information
to determine the best qualified contractors for the ID/IQ contracts.
Contractors also had the option of submitting a proposal for one, both, or
neither of the airport task orders. 
Wage requirement change in SPP contracts: TSA is changing its
policy for how wage determinations are made for employees of SPP
contractors that perform screening services. TSA officials told us the SPP
program office is working with the Department of Labor to develop a wage
determination under the Service Contract Act (SCA) for private screeners
at SPP airports.65 Once the wage rate is finalized, TSA plans to
incorporate the wage determination into future SPP contracts. SCA wage
rate requirements in contracts act as a minimum wage and benefit
threshold that a contractor pays its employees. In September 2014, TSA
decided to incorporate two wage determination requirements for private
screeners in SPP contractsrate requirements under the SCA and in
accordance with ATSAand plans to require SPP contractors to pay the
higher applicable wage rate.66 According to TSA officials, SPP contractor
employees at San Francisco International Airport, the sole SPP airport
operating under a collective bargaining agreement, will have their wage
and benefits governed by the collective bargaining agreement. In the
event of a future task order awarded to a new contractor that is not party
to the current collective bargaining agreement, TSA officials stated that
the contractor would be obligated to honor the wage terms of the
collective bargaining agreement for one year. In subsequent years,
absent the negotiation of a new collective bargaining agreement, TSA
plans for the contract's minimum wage rate to be revised to reflect the
minimum wage rate under either ATSA or the Department of Labor's
wage determination. 

65Recipients of federal government contracts for services are subject to wage, hour,
benefits, and safety and health standards under the McNamara-O'Hara Service Contract
Act (SCA) of 1965, as amended, which specifies wage rate and other labor standards for
employees of contractors. See generally 29 C.F.R. pt. 4. 
66Prior to September 2014, TSA did not include the terms of the SCA in SPP contracts for
private screener wage and benefit compensation because, according to TSA, it viewed the
SCA as being in conflict with the subsequently enacted ATSA, which established a
baseline for determining compensation levels for private sector security screeners. See 49
U.S.C.  44920(c). 


Page 31                           GAO-16-19 Screening Partnership Program

Extension of the transition period: TSA has extended the time for a
new contractor to complete the transition from federal to private screeners
from 90 days to 120 days. TSA officials stated the transition period was
extended as the result of lessons learned from the transition of four
western Montana airports. According to TSA officials, the contractor at
these four airports experienced a low acceptance rate to its offer of
employment to screeners. During the transition period, TSA offered
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 screeners
employed 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 Montana airports told us
that it experienced a delay in obtaining the names and other human
resource informationsuch as background check informationof
screeners that planned to accept its offer of employment from TSA. 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. 
TSA included a 120 day transition period for each of the three contracts
awarded that followed the western Montana airport contract. According to
TSA officials, based on the experiences at the western Montana airports,
TSA anticipates fewer screeners accepting an SPP contractor's offer of
employment in the future. Accordingly, TSA included a 120 day transition
period for subsequent airports to allow more time for the contractor to
complete the necessary requirements to perform screening operations. 
The contractors that were awarded these contracts told us that 120 days
was a more reasonable time-frame and all three airports successfully
transitioned from federal screeners within the time specified in the
contract. TSA officials noted that while 120 days will be the default time
period for future airports transitioning to SPP, other factors such as the
size and geographic location of the airport will be taken into consideration
when determining the appropriate transition period. 


Page 32                           GAO-16-19 Screening Partnership Program

Conclusions        As TSA and policy makers such as Congress assess the cost
effectiveness of the SPP, reliable cost estimates are critical when 
comparing the costs that contractors incur in providing passenger and
baggage screening services at SPP airports to the estimated costs to the
federal government if it was to provide those services. TSA's 2013 cost
estimating methodology has some strengths, but it also has several
limitations that are not in line with best practices, preventing the resulting
estimates from being reliable. Addressing limitations in its cost estimating
methodology can provide better information to predict costs and make
informed decisions related to the SPP. Additionally, TSA develops
internal reports that compare the costs of contractors to the estimated
costs to the federal government, but does not provide similar information
to the Congress. Providing the reliable cost comparisons that multiple
congressional committees have sought can help ensure that decisions
that affect the program are being made with the best information
available. Further, TSA has developed a procurement process that 
prevents the agency from awarding a contract at a proposed price that is
more than TSA's estimated cost to do the work. While contractor costs
can change based on changes to the contract, TSA does not update its
estimates to reflect these changes and does not continually compare
contractor costs relative to its estimates. Routinely updating the estimates
and comparing them to updated contract values can provide TSA with a
basis to determine if contractor costs are remaining at or less than its
estimated costs throughout the duration of the contract. 
Recommendations   To ensure that TSA is developing reliable cost estimates to inform its
internal processes and external policy decisions and to ensure that TSA
is better positioned to re-compete and award SPP contracts as existing
contracts at an SPP airport near expiration, the TSA Administrator should: 
1.  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; 
2.  provide cost comparisons that conform to leading cost estimating best
practices to Congress on a regular basis; and 
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. 


Page 33                           GAO-16-19 Screening Partnership Program

Agency Comments  We provided a draft of this report to TSA for review and comment. In
written comments provided by TSA through DHS (reproduced in appendix
and Our Evaluation   IV) on October 26, 2015, TSA generally agreed with our findings and
concurred with each of our three recommendations. TSA also provided
technical comments which were incorporated as appropriate. 
In written comments, DHS and TSA recognized the need for improved
documentation and analysis to improve the credibility of existing
estimates as well as additional reporting of cost comparisons to Congress
and monitoring how contract values compare to estimates over the life of
the contract. TSA stated it will revise its 2013 cost estimating
methodology to more fully conform to leading best practices. Regarding
the recommendation that TSA provide cost comparisons to Congress that
conform to leading cost estimating best practices, TSA stated it plans to
use the existing SPP Semi-Annual Report for Congress to provide this
cost comparison beginning with the June 2016 report. To address the
recommendation that TSA continually monitor contract values compared
with TSA's estimated costs, including updating its cost estimates as
needed, TSA stated it will do this comparison on an annual basis, starting
with all new estimates after March 31, 2016. DHS stated that taking these
steps will allow DHS and TSA to better inform Congress on the matter of
cost efficiency and whether or not the program provides savings over the
life of the contract. 
DHS' written comments also noted that GAO's risk and uncertainty
analysis found a 94.5 percent probability that TSA's cost estimate was
less than or equal to actual costs and stated that it is likely that similarly
high probabilities exist for all cost estimates that use the same
methodology. However, the probabilities we found were based on a
limited risk and uncertainty analysis that did not incorporate all risk factors
since our analysis was conducted to provide an illustrative example of
how a risk and uncertainty analysis can provide better insight into a cost
estimate. Therefore, we did not determine what the probabilities would be
when the full set of risk factors are considered at our example airport or
other SPP airports. 

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from its 
issue date. At that time, we will send copies of this report to the Secretary
of Homeland Security and other interested parties. This report will also be
available at no charge on the GAO website at http://www.gao.gov. 

Page 34                           GAO-16-19 Screening Partnership Program


If you or your staff have any questions about this report, please contact
Jennifer Grover at (202) 512-7141 or GroverJ@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Key contributors to this report are
found in Appendix V. 


Jennifer Grover 
Director, Homeland Security and Justice 













Page 35                           GAO-16-19 Screening Partnership Program

List of Requesters 
The Honorable Jason Chaffetz 
Chairman 
Committee on Oversight and Government Reform 
House of Representatives 
The Honorable Michael T. McCaul 
Chairman 
Committee on Homeland Security 
House of Representatives 
The Honorable John Katko 
Chairman 
Subcommittee on Transportation Security 
Committee on Homeland Security 
House of Representatives 
The Honorable Scott Perry 
Chairman 
Subcommittee on Oversight and Management Efficiency 
Committee on Homeland Security 
House of Representatives 
The Honorable Jeff Duncan 
House of Representatives 
The Honorable Richard Hudson 
House of Representatives 






Page 36                           GAO-16-19 Screening Partnership Program



Appendix I: Objectives, Scope, andAppendix I: Objectives, Scope, andMethodology 
Methodology 
This report addresses: (1) the extent to which the Transportation Security
Administration (TSA) has developed and reported reliable cost estimates
for providing screening services for Screening Partnership Program
(SPP) airports; (2) how TSA uses cost estimates in selecting 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. 
To determine the extent to which TSA produced reliable cost estimates
for providing screening services at SPP airports in a manner that is
consistent with best practices, we compared TSA's cost estimates with
best practices identified in GAO's Cost Estimating and Assessment
Guide.1 This guide identifies best practices that represent work across the
federal government and are the basis for a high-quality, reliable cost
estimates that can be used across the federal government for developing,
managing, and evaluating cost estimates. First, we reviewed TSA's cost
estimating practices, including cost estimating guidanceTSA's
Methodology and Standards for Comparing TSA Screening Costs used
for developing SPP cost estimates.2 Second, we interviewed TSA officials
who are responsible for developing and using the cost estimates to gain
further insight into the decisions and assumptions made during the
development of the cost estimates. We concluded that the data obtained
from TSA's cost estimate documentation was sufficiently reliable for the
purposes of assessing how TSA's practices and methodology compares
to best practices. Third, we reviewed supporting documentation that TSA
provided for its cost estimates of 21 SPP identified airports6 official cost
estimates, representing 13 airports, and unofficial cost estimates for 8


1GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and
Managing Capital Program Costs (Supersedes GAO-07-1134SP), GAO-09-3SP 
(Washington, D.C.: 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 acquisition
program. The leading practices were developed in conjunction with government and
industry experts in the cost-estimating community. 
2This document, developed in 2013, outlines the methodology, standards, procedures,
and reporting mechanisms TSA uses for estimating the cost of security screening by
federal personnel for the purpose of awarding contracts to provide privatized screening at
airports participating in the SPP. This document also outlines the roles and responsibilities
of those creating and comparing costs. 


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Appendix I: Objectives, Scope, and
Methodology 



airports.3 Finally, we evaluated TSA's cost estimating documentation and
the 6 official cost estimates on the extent to which they met or did not
meet best practices. A cost estimate created using the best practices
exhibits four broad characteristicscomprehensive, well documented,
accurate, and credible. That is, each characteristic is associated with a
specific set of leading best practices. If any of these characteristics are
not substantially or fully met, then the cost estimate does not reflect the
characteristics of a high-quality estimate and cannot be considered
reliable.4 Appendix II provides a description of the characteristics of a
high-quality reliable cost estimate that served as the foundation of our
comparative analysis. We shared our analysis with TSA officials to review
and provide additional information, and we adjusted our analysis where
appropriate. As part of our comparison of TSA's cost estimates with best
practices, we reviewed documentation related to the source and reliability
of the data used to develop the cost estimates. To determine the extent to
which TSA reports cost comparisons between SPP and non-SPP airports
to policy makers, we reviewed TSA communications with Congress and
interviewed TSA program officials.5 We also assessed TSA internal
reporting guidance using GAO's standards for internal control in the
federal government.6 These standards indicate that management should
externally communicate the necessary quality information to achieve the
entity's objectives. 
To determine how TSA uses its cost estimates in selecting SPP
contractors, we reviewed 10 contracts representing 20 of the 22 airports
in the SPP at the time of our work. We selected all of the contracts that
were active at the time of our review, except two. We did not review the

3TSA also provided unofficial cost estimates for eight airports that were awarded contracts
prior to the development of the cost estimation methodology. We reviewed these for
context but did not include them in our analysis. 
4We established five descriptions for our assessments of best practices and cost estimate
characteristics: fully meets, substantially meets, partially meets, minimally meets, and
does not meet. We consider a characteristic to be fully met when the associated best
practices are completely satisfied, substantially met when a large portion of the associated
best practices are satisfied, partially met when about half of the best practices are
satisfied, minimally met when a small portion of best practices are satisfied, and not met
when none of the best practices are satisfied. 
5We did not assess other TSA communications to Congress, such as briefings. 
6GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 
(Washington, D.C.: November 1999). 


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Appendix I: Objectives, Scope, and
Methodology 



contracts for (1) Kansas City International Airport due to an ongoing
dispute over TSA's award of the SPP contract and contract renegotiations
during the time of our review and (2) Punta Gorda Airport because the
contract award was pending at the time of our review.7 For each contract,
we reviewed and analyzed contract documents related to source
selection and pricing to determine the use of cost estimates during the
procurement process. We also interviewed TSA headquarters officials
knowledgeable about TSA's use of cost estimates in the procurement
process. To determine the extent to which TSA monitors estimated costs
relative to contractor costs, we interviewed TSA Officials in the Program
Management Office, the Office of Acquisition and the Office of the Chief
Financial Officer to determine whether cost estimates are updated based
on changes to the contract and whether cost estimates were considered
when issuing contract modifications. We also evaluated TSA's current
process and practices regarding monitoring of contract costs against best
practices for cost estimating that include comparing planned and actual
performance against approved program baselines.8 We also reviewed 
contract modifications relating to cost increases or decreases from
August 2009 to May 2015. 
To determine how the SPP has changed since the beginning of fiscal
year 2014, we reviewed SPP policy documentation and other SPP
procurement documents, such as SPP contracts and requests for
proposals to understand TSA's procurement process. We reviewed TSA
and Department of Labor guidance regarding wages and interviewed TSA
acquisition and program officials knowledgeable about TSA's
procurement process changes to determine what procurement related
changes had occurred since the beginning of fiscal year 2014. We visited
nine airports that had private screeners or were at various stages of

7The ongoing dispute between TSA and the incumbent (now former) screening company
at Kansas City International Airport, who had performed screening services at the airport
since 2002, originated with TSA's April 2010 solicitation for screening services at the
airport and the incumbent's subsequent challenges to TSA's award of the contract to
another company. See Firstline Transportation Security, Inc. v. United States, 119 Fed. Cl.
116 (2014) (filed under seal November 13, 2014, and reissued for publication November
25, 2014). After the Court of Federal Claims upheld TSA's February 2014 award of the
contract to the new (non-incumbent) contractor, TSA began negotiations with the new and
incumbent contractors to transition screening services and restructure the contract, which
would have an impact on the total contract award amount. Due to these circumstances,
we excluded Kansas City International Airport from our analysis. 
8GAO-09-3SP. 


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Appendix I: Objectives, Scope, and
Methodology 



preparing for private screeners and spoke to SPP stakeholders at each
airport, including airport directors, contractors, TSA federal security
directors and federal screeners who had transitionedor were preparing
for transitionto obtain their perspectives on how SPP changes have
impacted airport operations. We selected the SPP airport locations to visit
based on their proximity to other SPP airports and to provide a variety of
perspectives based on their time in the program. We also met with each
of the five SPP contractors with contracts at the time of our review and
related industry associations to obtain their perspectives on changes that
have occurred in the program and their experiences as participants in the
procurement process. 
We conducted this performance audit from August 2014 to November
2015 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives. 










Page 40                           GAO-16-19 Screening Partnership Program



Appendix II: Best Practices for DevelopingAppendix II: Best Practices for DevelopingHigh-Quality Cost Estimates and Summary
Assessment 
High-Quality Cost Estimates and Summary 
Assessment 
The GAO Cost Estimating and Assessment Guide was developed to
establish a consistent methodology that is based on best practices and
that can be used across the federal government for developing,
managing, and evaluating capital program cost estimates.1 In developing
the Guide, our cost experts assessed measures consistently applied by
cost-estimating organizations throughout the federal government and
industry and considered best-practices for the development of reliable
cost estimates. We have summarized these best practices into four 
general characteristics for sound cost estimating, which include: well
documented, comprehensive, accurate, and credible. These
characteristics, described in table 1, enable management to use the cost
estimate for making informed decisions. 
Table 1: The Characteristics of a High-Quality Cost Estimate 
Characteristic      Best practice
Comprehensive      The cost estimate should include both government and contractor costs of the program over its full life cycle,
from inception of the program through design, development, deployment, and operation and maintenance to
retirement of the program. 
It should also completely define the program, reflect the current schedule, and be technically reasonable. 
Comprehensive cost estimates should be structured in sufficient detail to ensure that cost elements are
neither omitted nor double-counted. 
Specifically, the cost estimate should be based on a product-oriented work breakdown structure that allows a
program to track cost and schedule by defined deliverables, such as hardware or software components. 
Where information is limited and judgments must be made, the cost estimate should document all costinfluencing
ground rules and assumptions. 
Well documented     A good cost estimatewhile taking the form of a single numberis supported by detailed documentation that
describes how it was derived and how the expected funding will be spent in order to achieve a given
objective. 
The documentation should capture in writing such things as the source data used, the calculations performed
and their results, and the estimating methodology used to derive each element's cost. 
The cost estimate information should be captured in such a way that the data used to derive the estimate can
be traced back to and verified against their sources so that the estimate can be easily replicated and updated. 
The documentation should also discuss the technical baseline description and how the data were normalized. 
The documentation should include evidence that the cost estimate was reviewed and accepted by
management. 
Accurate          An estimate is accurate when it is based on an assessment of most likely costs; adjusted properly for
inflation; and contains few, if any, minor mistakes. 

1GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and
Managing Capital Program Costs (Supersedes GAO-07-1134SP), GAO-09-3SP 
(Washington, D.C.: March 2009). 


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Appendix II: Best Practices for Developing
High-Quality Cost Estimates and Summary
Assessment 



Characteristic      Best practice
In addition, a cost estimate should be updated regularly to reflect significant changes in the programsuch
as when schedules or other assumptions changeand actual costs, so that it is always reflecting current
status. 
During the update process, variances between planned and actual costs should be documented, explained,
and reviewed. 
Among other things, the estimate should be grounded in a historical record of cost estimating and actual
experiences on other comparable program. 
Credible           The cost estimate should discuss any limitations of the analysis because of uncertainty or biases surrounding
data or assumptions. 
Major assumptions should be varied, and other outcomes recomputed to determine how sensitive they are to
changes in the assumptions. 
Risk and uncertainty analysis should be performed to determine the level of risk associated with the estimate. 
The estimate's cost drivers should be cross-checked, and an independent cost estimate conducted by a
group outside the acquiring organization should be developed to determine whether other estimating methods
produce similar results. 
Source: GAO. | GAO 16 19 
The Department of Homeland Security's (DHS) Transportation Security
Administration (TSA) created federal cost estimates for the purpose of
comparing private and federal costs to provide security screening at
airports. We assessed the TSA cost estimates using the framework of the
four characteristicscomprehensive, well documented, accurate, and
credibleassociated with high-quality, reliable cost estimates. If any of
these characteristics are not substantially or fully met, then the cost
estimate does not reflect the characteristics of a high-quality estimate and
cannot be considered reliable.2 Our analysis of TSA's cost estimates
found that two of the four characteristics were not substantially or fully
met and therefore the estimates are not considered reliable. Specifically,
we determined that the cost estimates substantially met two and partially

2We established five descriptions for our assessments of best practices and cost estimate
characteristics: fully meets, substantially meets, partially meets, minimally meets, and
does not meet. We consider a characteristic to be fully met when the associated best
practices are completely satisfied, substantially met when a large portion of the associated
best practices are satisfied, partially met when about half of the best practices are
satisfied, minimally met when a small portion of best practices are satisfied, and not met
when none of the best practices are satisfied. We determined the overall assessment
rating by assigning each individual rating a number: Not Met = 1, Minimally Met = 2,
Partially Met =3, Substantially Met = 4, and Met = 5. Then, we took the average of the
individual assessment ratings to determine the overall rating for each of the four
characteristics. The resulting average becomes the Overall Assessment as follows: Not
Met = 1.0 to 1.4, Minimally Met = 1.5 to 2.4, Partially Met = 2.5 to 3.4, Substantially Met =
3.5 to 4.4 and Met = 4.5 to 5.0. Assessments were conducted by an individual analyst,
and then the results were independently traced and verified by a second analyst. 


Page 42                           GAO-16-19 Screening Partnership Program

Appendix II: Best Practices for Developing
High-Quality Cost Estimates and Summary
Assessment 



met two of the four characteristics. Table 2 provides greater detail on our
comparison of the estimate with best practices that constitute the four
cost-estimating characteristics. 
Table 2: Summary Assessment of TSA Cost Estimates Compared with Best Practices 
Overall                                                     Individual
Characteristic      assessment    Best practice                                          assessment 
Comprehensive   Substantially meets  The cost estimate includes all life cycle costs.                  Minimally meets 
The cost estimate completely defines the program, reflects the current     Substantially
schedule, and is technically reasonable.                         meets 
The cost estimate is product-oriented, traceable to the statement of       Substantially
work/objective, and at an appropriate level of detail to ensure that cost     meets 
elements are neither omitted nor double-counted. 
The estimate documents all cost-influencing ground rules and          Substantially
assumptions.                                         meets 
Well documented  Substantially meets  The documentation should capture the source data used, the reliability of  Partially meets 
the data, and how the data were normalized. 
The documentation describes in sufficient detail the calculations performed Fully Meets 
and the estimating methodology used to derive each element's cost. 
The documentation describes step by step how the estimate was        Substantially
developed so that a cost analyst unfamiliar with the program could       meets 
understand what was done and replicate it. 
The documentation discusses the technical baseline description and the   Partially meets 
data in the baseline is consistent with the estimate. 
The documentation provides evidence that the cost estimate was reviewed Substantially
and accepted by management.                            meets 
Accurate        Partially meets     The cost estimate results are unbiased, not overly conservative or       Partially meets 
optimistic and based on an assessment of most likely costs. 
The estimate has been adjusted properly for inflation.                 Partially meets 
The estimate contains few, if any, minor mistakes.                   Substantially
meets 
The cost estimate is regularly updated to reflect significant changes in the  Minimally meets 
program so that it is always reflecting current status. 
Variances between planned and actual costs are documented, explained,  Does not meet 
and reviewed. 
The estimate is based on a historical record of cost estimating and actual   Substantially
experiences from other comparable programs.                   meets 
Credible        Partially meets     The cost estimate includes a sensitivity analysis that identifies a range of   Minimally meets 
possible costs based on varying major assumptions, parameters, and data
inputs. 
A risk and uncertainty analysis was conducted that quantified the        Minimally meets 
imperfectly understood risks and identified the effects of changing key cost
driver assumptions and factors. 


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Appendix II: Best Practices for Developing
High-Quality Cost Estimates and Summary
Assessment 



Overall                                                     Individual
Characteristic     assessment   Best practice                                        assessment
Major cost elements were crossed checked to see whether results were   Minimally meets 
similar. 
An independent cost estimate was conducted by a group outside the     Substantially
acquiring organization to determine whether other estimating methods    meets 
produce similar results. 
= Fully meets  TSA provided complete evidence that satisfies the entire criterion 
= Substantially meets  TSA provided evidence that satisfies a large portion of the criterion 
= Partially meets  TSA provided evidence that satisfies about half of the criterion 
= Minimally meets  TSA provided evidence that satisfies a small portion of the criterion 
= Does not meet  TSA provided no evidence that satisfies any of the criterion 
Source: GAO analysis of cost estimating practices used by TSA. | GAO 16 19 


















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Appendix III: Limited Risk and UncertaintyAppendix III: Limited Risk and UncertaintyAnalysis of the Transportation Security
Administration's Cost Estimate 
Analysis of the Transportation Security 
Administration's Cost Estimate 
A best practice for producing a credible cost estimate that the
Transportation Security Administration (TSA) minimally met is conducting
a risk and uncertainty analysis as part of developing cost estimates for
the Screening Partnership Program (SPP). Specifically, TSA minimally
met this best practice because its process for identifying risk skips certain
steps, such as developing a probability distribution curve or the probability
associated with the point estimatethe best guess at the cost estimate,
given the underlying data. A point estimate, by itself, provides no
information about the underlying uncertainty other than that it is the value
chosen as most likely. However, a confidence interval provides a range of
possible costs based on a specified probability level.1 A risk and
uncertainty analysis is used to determine the level of confidence in a cost
estimate by quantifying the risk and uncertainty associated with the
estimate. Using this analysis, a cost estimator can model such effects as
program changes, providing the cost estimator with a known range of
potential costs. Having a range of costs around a point estimate is useful
to decision makers because it informs them on cost risks. 
In February 2015, we performed our own limited risk and uncertainty
analysis for one example SPP airport through which we developed a
probability distribution and analyzed the confidence level of the airport's
cost estimate. Using information from a probability distribution allows
management to quantify the confidence in achieving a program within a 
certain funding level. In addition, decision makers can use the probability
distribution to determine the amount of contingency reserves necessary
to mitigate the risk surrounding an estimate. Contingency reserves are
used to cover increased costs resulting from uncertainties, such as
incomplete requirements or technology uncertainty. To perform the
analysis, we used TSA's estimated cost data for one SPP airport and
written responses regarding the risk inputs provide by TSA. Our analysis
may illustrate how determining the confidence level as part of a risk and
uncertainty analysis that follows best practices may better inform TSA
and other decisions makers as they use the cost estimates in the SPP
procurement process. 

1For example, a program with a point estimate of $10 million could range in cost from $5
million to $15 million at the 95 percent confidence level. In addition, the probability
distribution, usually in the form of a cumulative distribution or an S curveshowing
alternative cost estimate probabilities and usually derived from a simulation such as Monte
Carlocan provide the decision maker with an estimate of the probability that the
program's cost will actually be at some value or lower. 


Page 45                           GAO-16-19 Screening Partnership Program



Appendix III: Limited Risk and Uncertainty
Analysis of the Transportation Security
Administration's Cost Estimate 



In conducting our analysis, we followed steps identified as best practices.2 
First, we determined the program's cost drivers and associated risks. We
chose to focus the risk inputs for our analysis on labor costs because
labor represents the majority of the costs that make up the cost estimate. 
These costs are for federal screeners, specifically the Expert
Transportation Security Officer (TSO), the Master TSO and TSO fulltime
equivalent (FTE) labor counts and labor rates.3 We also applied risk
around the attrition rate. We then modeled uncertainty with a probability
distribution that accounted for all possible cost outcomes according to the
probability that they will occur. A probability distribution provides useful
information, such as the boundaries of an outcome. We accounted for
correlation between cost elements and establish a numerical level
associated with the correlation between risk inputs we selected. We
established initial correlation factors based on written responses from
TSA and our interpretation of these responses.4 Based on our analysis
and TSA's written responses, we found that labor rates had a positive
correlation with each other and FTE counts and the attrition rate had no
correlation with the labor rates. The attrition rate had a high, negative
correlation with the FTE counts. A nominal correlation of 0.25 was used
for the FTE relationship to the other FTE labor categories in order to
avoid causing a cancellation of risk when both elements are positively
correlated. We then performed an uncertainty analysis using @RISK to

2GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and
Managing Capital Program Costs (Supersedes GAO-07-1134SP), GAO-09-3SP 
(Washington, D.C.: March 2009). The guide establishes seven steps for developing a
credible S curve of potential program costs: 1) determine the program cost drivers and
associated risks; 2) develop probability distributions to model various types of uncertainty;
3) account for correlation between cost elements to properly capture risk; 4) perform the
uncertainty analysis using a Monte Carlo simulation model; 5) identify the probability level
associated with the point estimate; 6) recommend sufficient contingency reserves; and 7)
allocate, phase, and convert a risk-adjusted cost estimate to then-year dollars and identify
high-risk elements to help in risk mitigation efforts. 
3In the context of these costs, a Transportation Security Officer (TSO) is a TSA-employed
(i.e. federal) screener. An Expert or Master TSO is a federal screener with supervisory or
management responsibilities. 
4We used the following scale to assess positive and negative correlation between cost
variables: Low: +/- 0.25; Medium: +/- 0.5 and High: +/- 0.75. Positive values are used to
assess positive correlation and negative values are used to assess negative correlation
between variables. We developed a matrix and checked those values with @Risk, a
Monte Carlo simulation model, which adjusted the matrix to reflect the relationships
inputted for the variables and their relationship with each other. 


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Appendix III: Limited Risk and Uncertainty
Analysis of the Transportation Security
Administration's Cost Estimate 



perform the Monte Carlo simulation. The Monte Carlo simulation
conducted a total of 10,000 iterations of the costs. 
The results of our analysis are displayed graphically in an S-Curve. We
chose to display our results on a cumulative probability distribution, or S- 
curve, in order to show what is known about the cost estimates'
confidence level. When identifying the probability distribution associated
with the cost estimate, we chose to present the findings at the 80 percent
confidence level.5 Figure 5 shows the results from our analysis and
indicates where TSA's cost estimate falls on the S-curve. 
Figure 5: Confidence Level Results of the Transportation Security Administration's (TSA) Cost Estimate of an Example
Airport 









Note: Our confidence level analysis was based on selected variables. Imputed costs were not
analyzed for risk. 
According to our analysis, TSA's $25.74 million cost estimate for the
example airport, when considering the limited risk and uncertainty factors,

5We chose the 80 percent confidence level for illustrative purposes only. It is up to
decision makers to choose which confidence level they wish to use. 


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Appendix III: Limited Risk and Uncertainty
Analysis of the Transportation Security
Administration's Cost Estimate 



resulted in an estimated 94.5 percent probability that the actual costs for
this example will be less than or equal to the cost estimate and a 5.5
percent chance that the actual costs will be greater than the cost
estimate. 
















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Appendix IV: Comment from the DepartmentAppendix IV: Comment from the Department ofHomeland Security 
of Homeland Security 








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Appendix IV: Comment from the Department of
Homeland Security 




























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Appendix IV: Comment from the Department of
Homeland Security 




























Page 51                           GAO-16-19 Screening Partnership Program


Appendix V: GAO Contact and StaffAppendix V: GAO Contact and StaffAcknowledgments 
Acknowledgments 

GAO Contact       Jennifer Grover at (202) 512-7141 or GroverJ@gao.gov 
Staff              In addition to the contact listed above, key contributors to this report were
Glenn Davis (Assistant Director), Charles Bausell, Amanda Goolden,
Acknowledgments    Kevin Heinz, Susan Hsu, Brandon Jones, Tyler Kent, Jason Lee, Jennifer
Leotta, Brian J. Lipman, Thomas Lombardi, and Amanda Miller. 















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Appendix VI: Accessible Data Appendix VI: Accessible Data 

Agency Comment
Letter 
Text of Appendix IV:
Comment from the
Department of Homeland
Security 
Page 1                 October 26, 2015 
Jennifer Grover 
Director, Homeland Security and Justice 
U.S. Government Accountability Office 441 G Street, NW 
Washington, DC 20548 
Re: Draft Report GA0-16-19, "SCREENING PARTNERSHIP PROGRAM:
TSA Can Benefit from Improved Cost Estimates" Dear Ms. Grover: 
Thank you for the opportunity to review and comment on this draft report.
The U.S. Department of Homeland Security (DHS) appreciates the U.S.
Government Accountability Office's (GAO's) work in planning and
conducting its review and issuing this report. 
The Department is pleased to note GAO's positive recognition of
improvements to the Transportation Security Administration's (TSA's) cost
estimating methodology since the previous audits conducted on this
subject in 2009 and 2011. GAO recognized the strengths of the
methodology and found its comprehensiveness and documentation
substantially met two of the four characteristics of a high quality and
reliable cost estimate. 
Though more work is still needed to demonstrate the credibility and
accuracy of the cost estimate, TSA was pleased to see that when
applying risk and uncertainty analysis to the existing methodology at a
sample airp01i, GAO found the estimate to have an exceptionally high
94.5 percent confidence interval. Since the same methodology is applied

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Appendix VI: Accessible Data 



consistently to all airport estimates, it is likely that similarly high
confidence intervals exist for all cost estimates that have been used for
the purpose of determining cost efficiency. 
Overall, this report reflects the continued refinement of TSA's cost
estimating methodology for airports participating in or applying to the
Screening Partnership Program (SPP). TSA concurs with the need for
improved documentation and analysis in 
Page 2                 order to improve the credibility of existing estimates, as well as additional
reporting on cost comparisons to Congress and monitoring how actual
contract values compare with estimates over the life of the contract.
Taking these steps will allow TSA, DHS, and GAO to better inform
Congress on the matter of cost efficiency and whether or not the program
provides savings over the life of the contract. 
The draft report contained three recommendations with which the
Department concurs. Specifically, GAO recommended that the TSA
Administrator: 
Recommendation 1: 
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. 
Response:
Concur. GAO specifically identified four areas of improvement that will
enhance the comprehensiveness, documentation, accuracy, and
credibility of the estimate. TSA's Office of Finance and Administration
(OFA), which maintains the cost estimating methodology, will implement
the necessary changes to more fully conform to leading cost estimating
best practices, while maintaining improvements made since the previous
GAO audits conducted on the same subject. Estimated Completion Date
(ECD): March 31, 2016. 
Recommendation 2: 
Provide cost comparisons that conform to leading cost estimating best
practices to Congress on a regular basis. 


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Appendix VI: Accessible Data 



Response:
Concur. TSA will utilize the existing vehicle of the SPP Semi-Annual
Report for Congress to provide this cost comparison, which will be
updated on an annual basis. TSA's Office of Security Operations (OSO)
SPP Division prepares this report; 
OFA will provide the cost comparison. ECD: April 30, 2016 (for inclusion
in the June 1, 2016, report). 
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. 
Response:
Concur. Beginning with all new estimates after March 31, 2016, on an
annual basis, TSA will compare actual expenditures for a given airport
contract to TSA's estimate for screening with Federal Transportation
Security Officers, with updates as necessary due to operational changes
at the airport that impact the cost estimate. TSA will then use this
information to provide a comparison of SPP actual costs and estimated
costs with Federal screeners. TSA's OFA, OSO, and Office of Acquisition
will work in concert to provide the necessary data and analysis to create
this annual update and comparison. ECD: March 31, 2017. 
Page 3                 Again, thank you for the opportunity to review and comment on this draft
report. Technical comments were previously provided under separate
cover. Please feel free to contact me if you have any questions. We look
forward to working with you in the future. 
Sincerely, 
Jim H. Crumpacker, CIA, CFE 
Director 
Departmental GAO-OIG Liaison Office 


Page 55                           GAO-16-19 Screening Partnership Program

Appendix VI: Accessible Data 


Data Tables        Data table for Figure 2: Total Federal Costs for 13 Transportation Security
Administration (TSA) Screening Partnership Program Airports 
Transportation Security Agency costs                      91% 
Other federal costs                                        9% 

Data Table for Figure 4: Transportation Security Administration's Cost Efficiency Number as Compared to Screening
Partnership Program Contract Award Prices 
Contract award price (in     Cost efficiency      Percentage
Airport                              millions)                 number            difference 
Orlando Sanford (SFB)                  23.7302                27.542            15 
Sarasota (SRQ)                      20.8947                25.0264           18 
Bozeman International Airport (BZN)          15.3024                 16.9746            10 
Glacier Park International Airport (GPI)          8.48676                  9.10206             7 
Bert Mooney Airport (BTM)                2.85822                 3.27371            14 
Portsmouth (PSM)                    2.49839                2.62737           5 
Roswell (ROW)                      2.34951               2.62061           11 
Sidney-Richland Regional Airport (SDY)        2.27636                 2.46275            8 
L.M. Clayton Airport (OLF)                  1.43492                  1.74366            19 
Havre City County Airport (HVR)             1.43486                 1.6665             15 
Dawnson Community Airport (GDV)          1.39754                1.58588           13 
Wokal Field/Glasgow International Airport (GGW)  1.36988                 1.47184            7 
West Yellowstone AIrport (WYS)             1.06177                1.08404            2 

Figure 5: Confidence Level Results of the Transportation Security Administration's
(TSA) Cost Estimate of an Example Airport 
Cost      Confidence
estimate    Level 
20.6        0.0001 
20.7        0.0001 
20.8        0.0001 
20.9        0.0001 
21         0.0001 
21.1        0.001 
21.2        0.001 
21.3        0.001 

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Appendix VI: Accessible Data 




Cost      Confidence
estimate    Level 
21.4        0.002 
21.5        0.002 
21.6        0.003 
21.7        0.003 
21.8        0.005 
21.9        0.007 
22         0.009 
22.1        0.012 
22.2        0.015 
22.3        0.019 
22.4        0.026 
22.5        0.033 
22.6        0.042 
22.7        0.051 
22.8        0.064 
22.9        0.077 
23         0.093 
23.1        0.111 
23.2        0.135 
23.3        0.159 
23.4        0.188 
23.5        0.22 
23.6        0.252 
23.7        0.287 
23.8        0.323 
23.9        0.359 
24         0.397 
24.1        0.441 
24.2        0.482 
24.3        0.525 
24.4        0.567 
24.5        0.61 
24.6        0.651 
24.7        0.69 
24.8        0.726 
24.9        0.759 


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Appendix VI: Accessible Data 




Cost      Confidence
estimate    Level
25         0.792 
25.1        0.819 
25.2        0.844 
25.3        0.87 
25.4        0.891 
25.5        0.91 
25.6        0.926 
25.7        0.94 
25.8        0.953 
25.9        0.962 
26         0.97 
26.1        0.976 
26.2        0.981 
26.3        0.985 
26.4        0.989 
26.5        0.992 
26.6        0.994 
26.7        0.996 
26.8        0.997 
26.9        0.998 
27         0.998 
27.1        0.999 
27.2        0.999 
27.3        1 
27.4        1 
27.5        1 
27.6        1 
27.7        1 
27.8        1 
27.9        1 
28         1 
28.1        1 
28.2        1 
28.3        1 
28.4        1 
28.5        1 


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Appendix VI: Accessible Data 




Cost      Confidence
estimate    Level
28.6        1 
28.7        1 
28.8        1 
28.9        1 
29         1 


















Page 59                           GAO-16-19 Screening Partnership Program






Related GAO Products Related GAO Products 

Screening Partnership Program: TSA has Improved Application Guidance
and Monitoring of Screener Performance, and Continues to Improve Cost
Comparison Methods. GAO-14-787T. Washington, D.C.: July 29, 2014. 
Screening Partnership Program: TSA Issued Application Guidance and
Developed a Mechanism to Monitor Private versus Federal Screener
Performance. GAO-14-269T. Washington, D.C.: January 14, 2014. 
Screening Partnership Program: TSA Should Issue More Guidance to
Airports and Monitor Private versus Federal Screener Performance.
GAO-13-208. Washington, D.C.: December 6, 2012. 
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, D.C.: March 4, 2011. 
Aviation Security: TSA's Cost and Performance Study of Private-Sector
Airport Screening. GAO-09-27R. Washington, D.C.: January 9, 2009. 










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