[House Hearing, 113 Congress] [From the U.S. Government Publishing Office] TSA OVERSIGHT: EXAMINING THE SCREENING PARTNERSHIP PROGRAM ======================================================================= HEARING before the SUBCOMMITTEE ON GOVERNMENT OPERATIONS of the COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION __________ JANUARY 14, 2014 __________ Serial No. 113-95 __________ Printed for the use of the Committee on Oversight and Government Reform Available via the World Wide Web: http://www.fdsys.gov http://www.house.gov/reform U.S. GOVERNMENT PRINTING OFFICE 87-353 WASHINGTON : 2014 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, [email protected]. COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM DARRELL E. ISSA, California, Chairman JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland, MICHAEL R. TURNER, Ohio Ranking Minority Member JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of JIM JORDAN, Ohio Columbia JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts TIM WALBERG, Michigan WM. LACY CLAY, Missouri JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts JUSTIN AMASH, Michigan JIM COOPER, Tennessee PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT, TREY GOWDY, South Carolina Pennsylvania BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois DOC HASTINGS, Washington ROBIN L. KELLY, Illinois CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois ROB WOODALL, Georgia PETER WELCH, Vermont THOMAS MASSIE, Kentucky TONY CARDENAS, California DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico KERRY L. BENTIVOLIO, Michigan Vacancy RON DeSANTIS, Florida Lawrence J. Brady, Staff Director John D. Cuaderes, Deputy Staff Director Stephen Castor, General Counsel Linda A. Good, Chief Clerk David Rapallo, Minority Staff Director Subcommittee on Government Operations JOHN L. MICA, Florida, Chairman TIM WALBERG, Michigan GERALD E. CONNOLLY, Virginia MICHAEL R. TURNER, Ohio Ranking Minority Member JUSTIN AMASH, Michigan JIM COOPER, Tennessee THOMAS MASSIE, Kentucky MARK POCAN, Wisconsin MARK MEADOWS, North Carolina C O N T E N T S ---------- Page Hearing held on January 14, 2014................................. 1 WITNESSES Mr. Kelly C. Hoggan, Assistant Administrator for Security Operations, Transportation Security Administration Oral Statement............................................... 8 Written Statement............................................ 10 Mr. Mark Bell, Acting Deputy Inspector General for Audits, U.S. Department of Homeland Security, Office of the Inspector General Oral Statement............................................... 15 Written Statement............................................ 17 Ms. Jennifer Grover, Acting Director, Homeland Security and Justice, Government Accountability Office Oral Statement............................................... 26 Written Statement............................................ 28 APPENDIX The Hon. John Mica, a Member of Congress from the State of Florida, Opening Statement..................................... 58 Questions for Mr. Bell submitted by Rep. Connolly................ 60 TSA OVERSIGHT: EXAMINING THE SCREENING PARTNERSHIP PROGRAM ---------- Tuesday, January 14, 2014, House of Representatives, Subcommittee on Government Operations, Committee on Oversight and Government Reform, Washington, D.C. The subcommittee met, pursuant to notice, at 10:08 a.m. in room 2154, Rayburn House Office Building, the Honorable John L. Mica [chairman of the subcommittee], presiding. Present: Representatives Mica, Turner, Amash, Meadows and Connolly. Staff Present: Will L. Boyington, Majority Press Assistant; Daniel Bucheli, Majority Assistant Clerk; John Cuaderes, Majority Deputy Staff Director; Linda Good, Majority Chief Clerk; Mitchell S. Kominsky, Majority Counsel; Eric Cho, Majority Detailee; Jaron Bourke, Minority Director of Administration; Devon Hill, Minority Research Assistant; and Julia Krieger, Minority New Media Press Secretary. Mr. Mica. Good morning, everyone. Welcome to the Subcommittee on Government Operations' hearing this morning. The title of today's hearing is ``TSA Oversight: Examining the Screening Partnership Program.'' We are pleased to have several members join us today. The order of business will be, first of all, we will have opening statements from any of the members attending. I will recognize Mr. Connolly in just a few minutes. Then we will turn to our panel of witnesses. We will hear from them and then go through a series of questions to the panel and witnesses who are participating today. Mr. Issa always starts off with a colloquy that states how important our responsibility is which is to conduct oversight. We are the stewards of taxpayer dollars. We created these programs through legislation like TSA and from time to time, we have a responsibility to conduct oversight to make certain they are run as efficiently, economically and effectively as possible. That is the purpose of our being here today. I have an opening statement the staff wrote and will insert that as part of the record. Mr. Mica. I wrote my own at 3:00 a.m. this morning. It is a bit different but I had some time to think about it and I thought I would give my commentary. First, I would say to Mr. Connolly, Mr. Meadows and the staff, in the last few weeks TSA has been fairly cooperative and provided us with more information than we received in the past, and I appreciate the working relationship. Other than that, the reason we are here is, as I mentioned to Mr. Meadows and Mr. Connolly, I was one of the people who helped create TSA. I actually picked the name myself and with other members of Congress, we enacted the legislation pretty rapidly after the events of 9/11. President Bush wanted the legislation on his desk by Thanksgiving and we did deliver it. The country had been hit by the most significant terrorist attack since probably World War II when they struck us at Pearl Harbor. We needed to act, we needed an effective transportation security operation, and we tried to do that. We made some mistakes and have tried to correct them. We have worked with a number of administrators and some outstanding people. I remember Michael Jackson, for example. We also lost jurisdiction for sometime. We started in Transportation and shifted the TSA over to Homeland Security. I think part of the problem is that it is an agency with 200,000 and some personnel. Combining 22 agencies and make it work does not always work well. That being said, when we started to change the way we screen passengers, we never intended TSA to operate aviation passenger screening forever. As a compromise, we set up five initial airports with private screening under federal supervision. Let me say at this conjuncture, I have never advocated going back to having the airlines do that or take away the government's responsibility. I think it is important that we maintain that. If you analyze the events of 2001 and the terrorist attack, it was the government that failed, not the private screening. The government failed for several years to put in place standards for screening. The government failed for several years to put in rules governing what could be taken on a plane. For example, box cutters were not prohibited at that time, all of which led to the events of September 11. When we set up the screening program, we had all federal screening for most of the airports. For the first two years, we initially created five airports, one in each size category, with private screening under federal supervision. We tested the performance of the two models after some two years and the GAO, which independently looked at them, came up with a report. The report said that private screening under federal supervision performed statistically significantly better--not my words, their words. After that, as TSA saw applications for privatization, they began a campaign to make certain that airports did not opt out. They had a very hostile attitude toward taking that option which intimidated some of the airports right up to several years ago when one of my airports, the Sanford Airport, said they had enough of the way TSA was operating and wanted to opt out. I got a call from the airport director who said he was never so disgusted. They tried to intimidate him, they were rude, offensive and threatening which prompted me to get re- engaged. Here we are today as a result of TSA's action, not mine. I worked with other members when we passed the FAA reauthorization bill. President Obama signed it into law February two years ago next month. In that bill we went from the language in the original law that said an airport can submit an application to opt out and TSA may accept it to language which said ``TSA shall accept the application to opt out.'' Members of Congress, like myself and others, were frustrated with what was going on. That was two years ago. Here we are at this oversight hearing this morning. Basically what happened in those two years is TSA has performed a clever, slow roll out of implementation of the provisions we requested. In fact, the January 2013 TSA report, ``Screening Partnership Annual Report,'' says none of the three major goals towards implementing private screening were completed. That is their report, all top priorities and none of them were met. As a result of this hearing, my airport which has been waiting now some two years finally got notification on Friday or some time soon that they are moving forward with an RFP which is almost two years later. That is not what we intended and that is not why we are here. I might also say for the record that the United States is now one of the very few western countries with an all Federal passenger screening system. Bulgaria, Romania and Poland are a few of the western states that keep an all government force in place. Almost every other nation, including those hit hard by terrorist threats--Israel and the U.K.--use private screening under federal supervision which is the model we anticipated would be in place by now. Unfortunately, TSA is both regulator, administrator, operator, auditor and contractor. That creates a conflict and there have been recent articles saying that model needs to be changed. I believe that TSA should set the rules, conduct the audits and get out of the personnel business. The agency has grown from 16,500 screeners after 9/11 to 66,000 employees, 51,000 screeners and 15,000 administrative personnel. The personnel work hard and there are some very dedicated screeners and employees. They make, on average, $38,000 apiece. We spend $1.1 billion on 15,000 administrators and spend $1.9 billion on the rest of the 51,000 personnel. Something is wrong in those numbers. We only have about 457 airports. If you have 15,000 administrators--do the math--that means you have 30 administrators for every airport in the country. Thirty-five airports handle 75 percent of the passengers. There obviously is something wrong in our distribution of administration funding. Also, most of the reports--I have just a few of them here-- also prompted us to put into law the requirement they shall accept the application. In the past, when we had TSA perform a review of the cost of screening, private screening versus all federal screening, they cooked the books and did not include elements of costs that should be applied and tried to tell folks they cost more than the all federal program which defies logic. GAO came back and said they did cook the books. One of the considerations we did put in the law was we should look at cost. They used that provision to slow roll and are not being transparent. Again, that is regrettable. In most areas dealing with private screening partnership, they have unfortunately acted arbitrarily. The acquisition and contract process has been a disaster. We have ended up in court and some of the awards have been delayed. I was talking with Mr. Moran on the way over here and he talked about the delays at Dulles and some of the other airports and how they were having trouble recruiting people. You may know the history of recruitment in the Washington area by advertising for personnel on the top of pizza boxes or advertisements above discount gas pumps. The retention, particularly in the metropolitan area, continues to be a problem. The solution for dealing with having people on the job, the national screening force and other costs incurred, as studies have all shown, continues to be a huge problem. I will not get into all of the reports that have criticized TSA but as we know we have had horrible experience with acquisition of personnel, retention and training but also have had fiascos with purchase of the puffers for hundreds of millions of dollars and ended up destroying them and most recently taking out half a billion dollars' worth of backscatter equipment from the airport. Staff should track and see where those have gone. These are not my reports. We have had reports on the Behavior Detection Program which recommends stopping that program because it is ineffective. Today's focus is primarily on the Screening Partnership Program and trying to make that work. I will be introducing legislation sometime in the next month which will require all TSA to opt out all airports within 24 months of the President signing the bill and all airports have the model we intended-- to get TSA out of the personnel and human resources business and into the security and intelligence business. Even though we passed the law and said you must accept these applications, almost none have actually moved forward. Again, that is a slow roll purposely to ignore the intent of Congress. I am also concerned that I have reports that the Screening Partnership Office in TSA is in disarray, that the major knowledgeable people have left and I think we may want to look at moving the contracting from TSA for the screening services to an agency like GSA which routinely does this. We have private screening under federal supervision for our nuclear facilities, for our defense facilities and for a host of very sensitive operating positions. Yet, we have a disaster in a program intended to be crafted quite differently. Those are some of my long opening comments. I have a bit more history than some of the other members but I wanted to share with you how we got to this stage and this oversight. I have also asked staff from the Appropriations Committee to attend this hearing and staff from the authorizing committee because we can conduct oversight but they control the money and the policy. I am expecting them to also act so that we get to where Congress intended us to be on this issue. Mr. Connolly. Mr. Connolly. Thank you so much, Chairman Mica. Thank you for holding today's oversight hearing on the Transportation Security Administration's Screening Partnership Program. Following September 11, Congress established TSA to safeguard our Nation's commercial aviation transportation system. Today, TSA is responsible for screening airline passengers and baggage at more than 450 airports throughout the United States. In 2004, TSA created the SPP to enable commercial airport operators to apply to forego federal screeners in favor of qualified private sector screening contractors that meet federal standards and who operate under federal oversight. There are currently 14 airports where passenger screening is performed by private contractors and 6 additional airports awaiting contract awards, which I understand will be announced later this year. Of these 20 airports, nearly half are small airports located in the State of Montana. In 2012, the Government Accountability Office performed and assessment of the performance of SPP airports. While the details of that analysis remain classified, GAO did find that some SPP airports perform slightly above the national average on some measures, while others perform slightly below. GAO also recommended in this report that TSA develop a mechanism to monitor performance of private screeners versus federal screeners. TSA concurred with the recommendation and has begun the long overdue process of evaluating private sector screening performance to ensure air travel remains secure. Although the detailed results of these assessments are sensitive or classified, I nonetheless look forward to hearing what is being done to correct sub par performance where identified. Proponents of the expanding the SPP program assert that private screeners improve efficiency and reduce costs compared to federal screeners. However, TSA's cost estimates have found the opposite concluding that private screening costs are generally between three to nine percent higher than federal screening. In light of that discrepancy between cost saving claims and certainly the Chairman's legitimate concerns over the validity of the cost estimate methodology, I am interested in examining the matter closely to ensure that Congress and TSA utilize the most accurate performance and cost data available so that we can be properly informed about oversight, operations and the possibility of future legislation. It is no secret that debates over TSA often elicit strong reactions from members and the public alike, often stemming from anecdotal yet very real instances of inconvenience and perceived poor customer service. Mr. Hoggan, I shared with you my own unhappy anecdotal experience most recently. Security is our main focus but it cannot be our only focus. Given the fact we are interacting with the public to the tune of millions and millions and millions of passengers, it seems to me that some emphasis on training of proper customer interaction is very important. It is important how we treat the American citizen and it is important how we treat our foreign guests. Both deserve dignity at an airport. It is a stressful enough situation for the passenger. It is also stressful for the TSA because they have an awesome responsibility. We do sympathize with that and we respect it but we also need to respect the passengers we are asking to cooperate. When we mistreat them by barking orders at them as if they are cattle, not people, we actually diminish the spirit of cooperation and do not enhance it. As I indicated to you privately before this hearing, Mr. Hoggan, I do not understand why that cannot be a simple matter of training. I do not understand how hard it is to teach people to make sure you use the words ``please'' and ``thank you'' when interacting with our public and show that basic respect. In my experience this last weekend--going out and I took the redeye back--I encountered 20 barked orders but never once the world ``please'' with any of the TSA people I encountered-- take that off, move over there, back up, put your hands up, take your shoes off. Not once was the word ``please'' used. That lack of courtesy shows a lack of respect for the public with whom you are dealing, a public that is unbelievably tolerant of how it is being treated. Maybe that has something to do with the culture of airports these days where many American airlines seem actually to resent having customers and that lack of respect has become part of the culture of air travel. When we represent the Federal Government or are overseeing private sector entities taking over some of these responsibilities, we have to show a respect for the public understanding their cooperation is essential to our mission. I do not think it is a trivial issue. I do not think it is a nice thing to do if we have time. I think it is integral to the mission of security. If I cannot get assurances that we are going to take that seriously and redouble our efforts to make sure TSA agents or the private sector analogs are properly trained in how to deal in customer service and show respect for the public we are serving, then we will have to do something legislatively about it. I am going to insist and I know I will not have any resistance on the other side of the aisle on that. I am going to use this hearing today, Mr. Hoggan, to get some assurance from you because I have had it. I think a lot of the public has had it. There is no excuse for it. We have to take it seriously. I am doubly grateful for this hearing because this is one of my pet peeves. I have mentioned it many times over the five years have been on this job. I see no improvement at all in my own experience in the airports. If necessary, one thing we might do since my colleagues, unlike me--I live here, I do not have to travel as Mr. Bell knows--but my colleagues are on a plane at least twice a week going home and coming back. If we do not get some satisfaction, I am going to use my colleagues as a filter. Tell us about your experience and by the way, let us encourage the public to tell a member of Congress. We will feed it all to you, Mr. Hoggan, so then you will have to deal with it because we will make a big issue of it. Either we deal with this and respect the public we are serving, understanding we have a stressful mission--by the way, enormous respect goes to TSA, to you, Mr. Hoggan, and your colleagues, for the fact that thank God, we have not had a recurrence of 9/11. Cumbersome though it is, uncomfortable, stressful, we have been focused properly on the mission and so far, thank God, it has worked. That does not mean we cannot make the process better and as I said, create a framework that fosters more cooperation, willingness and understanding from the public, not less. Forgive the lecture but you can see I have enormous frustration with the experience I see the public experiencing. We have to do something about it. I hope we can do it collaboratively, I hope we do not have to do it legislatively. It is not really a complicated issue, but I can tell you what I witness the public going through is unacceptable behavior by federal civil servants. I am one too and I do not like seeing my government represented that way with so many millions of the public who interact with these systems as they go to travel. That is my plea and also it is going to be my insistence. Thank you all for being here and I look forward to hearing your testimony. Thank you, Mr. Chairman, for holding this hearing. Mr. Mica. Thank you, Mr. Connolly. Now to our Vice Chairman, Mr. Meadows. Mr. Meadows. Thank you, Mr. Chairman, for holding this hearing and thanks to each of you for coming. I will be very, very brief. Mr. Connolly has said it well. I guess part of the frustration you are hearing is that there is no federal agency that really is representative of the Federal Government to the vast majority of people where they actually come in contact with a federal employee other than TSA. You really are the face of the Federal Government. Your efficiencies or inefficiencies, your manners or lack thereof is a broad brush approach. I think you have many very dedicated, capable, fine public servants. I appreciate the fact that we have safety, but as Mr. Connolly so eloquently put it, what happens is I get more complaints about TSA's efficiency but more importantly their rude behavior and how they treat passengers than almost anything else. I challenge you to look from a customer service perspective on how we can effectively change this because if not, there will be great bipartisan support to find a private sector. We are talking about that partnership today but there will be great bipartisan support to find a private sector, more customer friendly way of doing it. I do that in the spirit of saying the responsibility you have is great in terms of the viability long term of your particular agency. I want to apologize because I am going to have to step out and be back and forth. I have a Transportation and Infrastructure hearing this morning going on right now for the highway bill but I will be back and forth. Thank each of you. I yield back, Mr. Chairman. Mr. Mica. I thank the gentleman. Now we will turn to our panel of witnesses. Today we have three witnesses. We have Mr. Kelly Hoggan, Assistant Administrator for Security Operations, TSA; Mr. Mark Bell, Acting Deputy Inspector General for Audits, U.S. Department of Homeland Security, Office of the Inspector General; and Ms. Jennifer Grover, Acting Director, Homeland Security and Justice, Government Accountability Office. I would like to welcome all of our witnesses. I am not sure if you have been before us before but if you have a lengthy statement or some documentation you would like to be included in the record as part of the hearing, you can request that through the Chair or a member. This is also an investigative subcommittee of Congress and we do swear our witnesses. Please stand and raise your right hand. Do you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth? [Witnesses respond in the affirmative.] Mr. Mica. Thank you. Let the record reflect that the witnesses answered in the affirmative. As a matter of business, members may have seven days to submit opening statements for the record. Mr. Connolly, I would like to keep the record open for two weeks because I think we are going to have additional questions. Without objection, we will take members' statements for seven days and keep the record open for addressing additional questions to our witnesses over the next several weeks. With that, we will recognize and welcome Kelly C. Hoggan, Assistant Administrator for Security Operations of TSA. Welcome and you are recognized. WITNESS STATEMENTS STATEMENT OF KELLY C. HOGGAN Mr. Hoggan. Chairman Mica, Ranking Member Connolly and members of the subcommittee, I am pleased to appear before you today to discuss the Transportation Security Administration's Screening Partnership Program, SPP. I am the Assistant Administrator for Security Operations at GSA and have been in this position for eight months. I have served in a variety of leadership roles in TSA since 2004. Prior to joining TSA, I worked in the airline industry for 18 years. My experience covers many areas at TSA and airline operations including staffing allocation, resource management, technology development and capabilities and international aviation. Congress, through the Aviation and Transportation Security Act, established TSA and required the establishment of pilot programs under which airports may apply to utilize private sector rather TSA employees to conduct front line screening. As directed by ATSA, TSA selected five airports to participate in the pilot program representing five risk categories. SPP grew out of this pilot program which ended in 2004. Today, out of approximately 450 commercial service airports, 14 have contractors performing screening, including the original five pilot airports. Of those 14 airports, 7 fall within the smallest classification meaning they emplane between 2,500 and 10,000 passengers a year. These 14 airports represent approximately four percent of the passenger screening positions across the system. Applications from six additional airports have been approved and are currently in the contract solicitation process. I would note that since passage of the FAA Modernization and Reform Act of 2012, all SPP applications received have been approved within the 120 day time limit. Once approved for admission to SPP, contract solicitation and selection are completed in accordance with federal acquisition regulations. Over the past eight months in my position as Assistant Administrator for Security Operations I have taken steps to further streamline application processing, improve the level of experience and expertise assigned to the SPP Office and in collaboration with my counterparts in the Office of Acquisitions to establish a 12-month timeline goal for application receipt and contract award. For airport operators interested in SPP, the TSA website includes the SPP application itself, an overview of the application process and contact information for appropriate TSA staff. TSA also utilizes the Federal Business Opportunities website to communicate with a wide range of vendors. For instance, TSA advertised and held an SPP industry day on January 10, 2014. This event provided an overview of the program, the acquisitions process and provided a forum for questions and answers to the industry. I believe the steps taken have strengthened the program and made the program and application process more transparent to interested parties. Thank you for the opportunity to appear here today. I will be happy to answer any questions. [Prepared statement of Mr. Hoggan follows:] [GRAPHIC] [TIFF OMITTED] T7353.001 [GRAPHIC] [TIFF OMITTED] T7353.002 [GRAPHIC] [TIFF OMITTED] T7353.003 [GRAPHIC] [TIFF OMITTED] T7353.004 [GRAPHIC] [TIFF OMITTED] T7353.005 Mr. Mica. Thank you. We will hold questions until we have heard from all witnesses. We will hear from Mr. Mark Bell next. He is the Acting Deputy Inspector General for Audits at the U.S. Department of Homeland Security, Office of the Inspector General. Welcome and you are recognized. STATEMENT OF MARK BELL Mr. Bell. Good morning, Chairman Mica, Ranking Member Connolly and members of the subcommittee. Thank you for inviting me here today to testify on TSA's Screening Partnership Program, known as SPP. My testimony will focus on the results of our audit of this program which we published in June 2013. We performed this audit in response to a request from Senators Roy Blunt and Bob Corker who had concerns about TSA's management of SPP and the procurement process at Kansas City International Airport. In this program, TSA first reviews an airport's application to participate and then if approved, procures private screening services. At the time of our audit, 16 airports were in SPP. Since that time, two airports have opted out, which means 14 are now participating. TSA has accepted 6 more airports but has not yet awarded screening contracts. We determined that although TSA administered SPP according to federal law, it could improve its program administration. Specifically, TSA did not adequately document its evaluation of applications in its procurement decisions, did not always use accurate information to determine program eligibility and did not verify the accuracy of data used in its procurement decisions. As a result, TSA risked making incorrect decisions on SPP applications, not selecting the best contractor and may have missed opportunities to save money. Until Congress passed the FAA Modernization and Reform Act of 2012, TSA had no criteria to use when considering applications to join the program. The 2012 Act including requirements for approving applications, a timeline for decisions and a requirement to report to applicants and Congress about rejected applications. TSA complied with the Act's requirements in approving five applications submitted after its passage but some documents related to its decisions including incorrect cost estimates and other documents are not finalized. We also identified missing details and inaccuracies in documents supporting four of the five SPP procurement decisions made between January 2011 and August 2012. For example, four procurement files contained a similar short paragraph noting the Source Selection Authority's decision and two of the eight cost estimates had slight a difference in labor hours and overtime rates. In September 2011, a federal court concluded that TSA did not document its independent analysis of an SPP contract for Kansas City International Airport. Following this, TSA took steps to ensure it fully documented its proposal analysis, its decision rationale and the Source Selection Authority's independence. It also began to require documented support for its final selection decisions. We reviewed the decision documentation for a subsequent contract and confirmed that it included the necessary details. Under the 2012 Act, TSA must also consider cost efficiency in deciding on an airport's admission into the program, but TSA reported that none of the four applications approved since the Act's passage had reached the cost evaluation phase, so we were unable to determine TSA's compliance with this requirement. However, in January 2013, the TSA Administrator directed that cost efficiency be evaluated when deciding on continued participation. TSA was also working on a methodology to estimate the cost of converting SPP airports back to TSA employee screening, but it had not yet determined the cost for any airport currently in the program. In our audit, we also noted that TSA's screening cost estimates differed so they did not provide a consistent basis for deciding program participation. As a result of our audit, we recommended that TSA fully document its decisions on program applications and procurements and that it use relevant and accurate information in determining eligibility in approving participation. TSA concurred with both recommendations. We closed the first recommendation because TSA had already begun issuing policies and reminders and started revising the application process. We considered our second recommendation to be resolved because TSA is working to improve application document review and cost estimates. The recommendation remains open pending documented support of these actions. Mr. Chairman, this concludes my prepared statement. I welcome any questions you or other members of the subcommittee may have. [Prepared statement of Mr. Bell follows:] [GRAPHIC] [TIFF OMITTED] T7353.006 [GRAPHIC] [TIFF OMITTED] T7353.007 [GRAPHIC] [TIFF OMITTED] T7353.008 [GRAPHIC] [TIFF OMITTED] T7353.009 [GRAPHIC] [TIFF OMITTED] T7353.010 [GRAPHIC] [TIFF OMITTED] T7353.011 [GRAPHIC] [TIFF OMITTED] T7353.012 [GRAPHIC] [TIFF OMITTED] T7353.013 [GRAPHIC] [TIFF OMITTED] T7353.014 Mr. Mica. Thank you again, Mr. Bell. We will defer questions. We will hear next from our final witness, Jennifer Grover, Acting Director, Homeland Security and Justice, GAO. Welcome and you are recognized. STATEMENT OF JENNIFER GROVER Ms. Grover. Good morning, Chairman Mica, Ranking Member Connolly and other members and staff. I am pleased to be here today to discuss TSA's implementation and oversight of the Screening Partnership Program. The Screening Partnership Program, SPP, provides airports a private alternative to federal screeners. As others have already noted, of the Nation's 450 or so commercial airports, 14 participate in SPP and another 16 are waiting in the wings for TSA to complete the contractor procurement process. A year ago, GAO found weaknesses in TSA's implementation and oversight of SPP. Regarding implementation, we found that TSA was not providing clear guidance to airports on how to apply to SPP. This is important to ensure that all airports have a full and fair opportunity to participate. Specifically, we found that TSA offered online FAQ's but little else. Airports told us that they needed help with several issues such as understanding whether or not they were good candidates for the program, how to complete the applications and specific guidance about what cost information they were required to submit. Industry representatives echoed those concerns noting that airports were reluctant to invest in the application process when they were unsure about how they would be evaluated. Since then, consistent with our recommendations, TSA has posted additional guidance on its website including examples of helpful information that previous applicants provided, information about how applications would be assessed and clarification about the requirements for submitting cost information. Regarding oversight, we found that TSA did not evaluate the relative performance of federal and private screeners. This is important because private screeners must provide a level of service and protection that is equal to or greater than that provided by federal screeners. Therefore, we recommended that TSA regularly monitor SPP performance compared to the performance of federal screeners. Specifically, we found that TSA used a scorecard performance system to regularly assess screeners on numerous performance measures at every airport. The result is a point in time snapshot of performance at that airport relative to its goals and national averages but not a comparison to all of the airports in its category. To address the question of comparative performance, GAO reviewed several years of performance data for the then 16 SPP airports on foreign measures. We found that private screeners did slightly better than federal screeners on some measures and slightly worse on others. However, we could not attribute the differences in performance entirely to the use of private or federal screeners due to other factors that can affect performance. Since then, TSA issued its first SPP annual report which, consistent with our recommendations, includes comparative performance information for each SPP airport relative to other airports in its category. TSA also began verifying annually that the level of screening services provided by private airports is equal to or greater than the level that would be provided by federal screeners. We are pleased that TSA's changes address our recommendations on SPP. These changes also may help TSA in making future improvements to the program. For example, with greater clarity and transparency in the application process, additional airports may be encouraged to apply. Greater clarity and transparency may also help ensure that the application process is carried out in a uniform and consistent manner. With the new comparative performance information, TSA may be better equipped to identify best practices as well as to identify specific SPP airports that require additional attention to improved performance. Finally, a better understanding of how well SPP airports operate could inform future decision-making about the program. Chairman Mica, Ranking Member Connolly, thank you for the opportunity to testify this morning and I look forward to your questions. [Prepared statement of Ms. Grover follows:] [GRAPHIC] [TIFF OMITTED] T7353.015 [GRAPHIC] [TIFF OMITTED] T7353.016 [GRAPHIC] [TIFF OMITTED] T7353.017 [GRAPHIC] [TIFF OMITTED] T7353.018 [GRAPHIC] [TIFF OMITTED] T7353.019 [GRAPHIC] [TIFF OMITTED] T7353.020 [GRAPHIC] [TIFF OMITTED] T7353.021 [GRAPHIC] [TIFF OMITTED] T7353.022 [GRAPHIC] [TIFF OMITTED] T7353.023 [GRAPHIC] [TIFF OMITTED] T7353.024 [GRAPHIC] [TIFF OMITTED] T7353.025 [GRAPHIC] [TIFF OMITTED] T7353.026 [GRAPHIC] [TIFF OMITTED] T7353.027 [GRAPHIC] [TIFF OMITTED] T7353.028 [GRAPHIC] [TIFF OMITTED] T7353.029 [GRAPHIC] [TIFF OMITTED] T7353.030 Mr. Mica. Thank you. We will start with some questions. Mr. Hoggan, it is now two years in February since the President signed the bill that said TSA shall accept these applications. How many airports have you accepted applications for since then? Mr. Hoggan. There were two, Sarasota-Bradenton and Sanford- Orlando; four that were in Montana, Boozman. Mr. Mica. As I told the Ranking Member, the decision on Sanford was to put out an RFP last week. It has taken two years to put out an RFP? Mr. Hoggan. Yes, sir. Mr. Mica. That is not acceptable. That is a slow roll, dragging your feet as I described in the beginning. Congress said you shall accept these. The other thing we have is the question of cost. Again I go back to some of the initial costs we looked at. Currently, you have 51,000 screeners? Mr. Hoggan. I have 48,000 screeners from a D-ban, part- time, TSO to an I-ban transportation security manager. Mr. Mica. But we have 66,000 employees. I don't know if you have 20,000 administrators--that would floor me--but it is estimated you have about 15,000 administrative positions. Mr. Hoggan. I don't have 15,000. TSA, by my understanding and allocations, has under 10,000, closer to 9,000. Mr. Mica. We will go with your 9,000 figure. We have 450 airports divided by two. That is an average of 20 administrative positions for every airport in the country. Some of these airports have two and three flights a day and just a handful of passengers. Mr. Hoggan. Out of the approximately 454 airports I have right now, I have little over 2,100 administrative staff at the airports. The rest in that allocation include the surface, cargo, aviation inspectors. Mr. Mica. I will give you an anecdotal experience at Orlando where we pay on average, across the board, $38,000 for screening personnel? Mr. Hoggan. The exact average. Mr. Mica. That is the information we got from you all. I am leaving on one of the concourses and one of the employees takes me aside and says, see those four TSA employees, they are all making in the range of $100,000 sitting on their butts. That is not efficient operations. That is paying these people what amounts to almost minimum wage. We still have in the very large airports very significant turnover--not only in the large airports, you have some airports in the Midwest where you have a boom right now--the difficulty of finding personnel and you are sending in people. We have the cost of sending in people for the national screening force. They send them in, put them up in hotels, pay them per diem--the screeners they have to employ to fill those positions. The whole thing, if you add up the cost, there is absolutely no way it can be more cost effective to run the model you currently are operating. Can we put up one of the slides. We went to Quebec City. To be fair, we did emplanements. We got Rochester, one of the original SPP airports. You still have 16 personnel there making $80,000-$100,000 apiece. In Quebec City, they have one federal person, probably UD2 if you use that to calculate. Again I see the same thing. At San Francisco, one of the original SPP airports, you have 84 TSA personnel and you are spending $16 million, $190,000 on average for those personnel. Not all that cost, to be fair, is personnel cost in San Francisco, but it is very similar. I used San Francisco and Toronto because Toronto has huge international traffic in addition to San Francisco. Again, you have 84 personnel at that airport and huge personnel costs. I could go on through this. Your smaller airports, even Jackson Hole, which has been private, the airport does its screening, and you have six personnel. Some of those personnel may cover some other airports at a cost of $763,000. Are you counting this in your cost of the SPP operation? Mr. Hoggan. For clarification, the numbers in San Francisco, I know that was 2010 and in 2013, it was 64. However, in the federal cost estimate we used, we take the fully loaded cost for the FSD and staff. There are certain positions which will stay in the federal government domain even in an SPP, as you well know, as relates to compliance inspectors and coronation centers and certain positions inside the FSD staff. When we look at an airport and look at their model between federal and private, the difference between the fully loaded that we calculate with federal and what we have with the private SPP, there is an incremental difference between the two. The difference is put into the federal cost estimate with the FTE allocations and the total cost to support the contract work at a manageable level. The net is exactly the same between the two, whether it is the federal or whether it is federal and the SPP contractor. Mr. Mica. Again, you calculate some of those costs. You could dismantle a great deal of your Washington personnel if you have the private sector. Most of our costs in some of these operations are personnel. Mr. Hoggan. Absolutely correct. Mr. Mica. Again, there is no discounting for the number of personnel you do not need when you have a private operation. There are models all over. I used Canada. I would be glad to take you to the UK or Israel--again, highly impacted terrorist threat. Yet we go on with the most expensive model with people in some of these positions. The other thing is we may need to get you out of this whole contracting business. You are one of the few agencies that does contract for these services. We may look at moving that over to GSA and have them look at the contract. Again, you can conduct oversight and audit and set the rules and regulations. I have no problem with the Federal Government setting standards. That is what they failed to do on 9/11 and that is what they need to responsibly continue to do and audit the performance. If the private screening is not working as well in some instances, you get rid of them or it is corrected, but you cannot tell me for a minute that it costs less for the Federal Government to do this. I was also telling Mr. Connolly one of the things private screening has done is actually pay the screeners more--you are aware of that--in some instances to retain them? Mr. Hoggan. Perhaps they need to pay the commensurate amount. Mr. Mica. First, the conversion to private screening, now we still have 16 waiting. Mr. Hoggan. Six, sir. Mr. Mica. She said 16. Mr. Hoggan. I know she did. I would have to talk with her. I have six. Ms. Grover. I apologize, six. Mr. Mica. If you have six waiting and have had several drop out, the intimidation program is very effective. Now I understand people who ask to opt out are also given old equipment and also harassed. Mr. Hoggan. That is not true, sir. Mr. Mica. I know it is true. Do not tell me it is not true because I know it is true. I know also that they are the last for service of some of that equipment, for answers from TSA which never come. I met with all the screening companies and found out some of the things you do. Where airlines change and come into an airport, you do not allow a reasonable means of changing out the terms of the contract. You are one of the few to put some caps on the way you do and do not have a cooperative method of adjusting the contract for additional responsibilities that are incurred. Some airlines are new and some service airports but I am just telling you what we are learning about your operations. Again, we have several models you can look at. One of the questions I also have is we have asked on several occasions to disclose some of your operating costs. I was given information that is termed procurement sensitive? Mr. Hoggan. Correct. Mr. Mica. I intend to release some of this information at some time to those who are going to compete. We are going to have to sit down and decide what is going to be disclosed so that those who are competing have a transparent and open process to know what your costs are and what they have to compete against. I am just giving you advance warning. Mr. Hoggan. I would appreciate the opportunity to have that discussion with you about procurement sensitive information. I will have our legislative office work with you on that. Mr. Mica. Because I want them to be able to compete honestly but they cannot do that unless they get honest answers and the public should be able to see your exact costs. Mr. Hoggan. I believe we have our exact costs. Mr. Mica. And what they are going to have to compete for now that you have set caps. We are looking again and I appreciate your cooperation. This is the first time we have gotten some of the information. We are trying to decipher what costs should be attributed to TSA as far as the federal screening and what costs should be attributed to private screening under federal supervision so we get a very clear picture. The mandate by Congress was pretty clear. It should not take two years to get this moving, which it has done. I will come back. Let me go to Mr. Connolly. Mr. Connolly. Thank you, Mr. Chairman, and thank you to all of our panelists for being here. Mr. Hoggan, in looking at the omnibus continuing resolution, which we anticipate we will be voting on tomorrow, it cuts $336 million from DHS' budget, mostly for TSA, and it caps the number of screeners at 46,000. If I heard you correctly, you said right now you have about 48,000? Mr. Hoggan. Yes, sir, but that also includes transportation security managers and supervisors. They are in the same PPA count but they are not screening officers. Mr. Connolly. You could live with this cap? Mr. Hoggan. I live with whatever my administrator submitted. Mr. Connolly. How disruptive are these limits or cuts from your point of view in terms of your ability to fulfill your mission? Mr. Hoggan. I will be able to fulfill my job at the level the Administrator supported. Mr. Connolly. You will? Mr. Hoggan. Yes. Mr. Connolly. Could you walk us through, I would like to better understand the process of hiring, career fulfillment and so forth. How do we recruit someone to be a TSA screener? Mr. Hoggan. A multitude of ways. The primary way is posting on USA Jobs in the different locales where we have the vacancies. We end up having job fairs and opportunities at some locations where security directors come in, other locations it is staff and we give a pre-employment overview of what the job entails to ensure people understand it is a very difficult job. As you stated, we interact with 1.8 million passengers a day and screen 1.2 million bags a day. Over the course of a year that is a long period of time. It is a very, very demanding job. As I have said in town halls when I travel the Nation, it is the most difficult job in the Federal Government because they have to be on their game for everything they have to do in the security effectiveness environment all the time while at the same time providing the customer service and interaction with the American traveling public and our foreign guests, as you said. It is a difficult job. We do a lot of previews, we do some job fairs and we have information on USA Jobs and other means as well. Mr. Connolly. You do background checks? Mr. Hoggan. Absolutely. Mr. Connolly. Once you have made a job offer to someone, what kind of training do they go through for the job? Mr. Hoggan. You have initial OJT training, initial new hire training over 80 hours and then you have OJT or on the job training for an additional 40 hours. That is for a basic officer, entry level. There is additional training provided for unique types of equipment that you would use as well. That is incremental on top of that. Mr. Connolly. The basic orientation is a combination of 120 hours? Mr. Hoggan. Yes, sir. Mr. Connolly. Is customer service part of that training? Mr. Hoggan. Yes, sir, it is. Customer service is an initial part of the training. It is also in recurrent training. I will commit to you that I will do a review and double the efforts for that interaction. For the record, I also want to satisfy some of your questions. Recently, based on directions from our Deputy Administrator--I think it had to do with some questions Chairman Mica had and some others at the last hearing--we have instituted integrity training across the enterprise at TSA. There are situations and samples in there as relates to service training. We have also instituted leadership training for anyone who manages any employees inside of TSA. They are required to have specific leadership training. That service training was in there as well. I would also say for the record that currently today we are averaging about 35 percent of the traveling public on any given day, well over half a million individuals that come through our aviation system are going through TSA pre-check. As a matter of fact, the Administrator and the Secretary for Homeland Security are at Dulles right now talking about a TSA enrollment site. That changes the perspective of our passengers as well, as well as the interaction of the officers when you have a passenger go through pre-check as opposed to standard screening. We believe that will also change and have a dramatic effect on interaction with the traveling public. Mr. Connolly. Every member of Congress is in the customer service business. I have been in public life and elective life 19 years. I always say all of my constituents are wonderful. Some are more wonderful than others. We experience what you experience. People are not all the same. Some people are very cooperative and some people can be less so. While you are trying to do your job to make sure everyone is secure in that airplane when they get on it and nothing gets through, you also have to deal with the vagaries of different personalities in very large numbers of people. It is a huge challenge. I am sure if I had the responsibility there would be a sense of great stress. I still think it is not an either/or proposition. I still think we can have high quality customer service and satisfaction with also top notch fulfillment of our mission. The two are not incompatible. In fact, they are compatible. As I indicated, I happen to believe that the less pleasant the experience because we do not get customer service right in our interactions with the public we serve, I actually think it contributes to less cooperation, resentment and a desire frankly not to cooperate. We do not want that. We want people understanding our mission. As I said, I have been amazed since 9/11 at the level of tolerance and acceptance by the public because they get the tradeoff, but I think we can improve on that tradeoff. I think we have to do that. There is no excuse for someone barking orders continuously at the public at any airport in America who is an employee of the Federal Government or a contractor for the Federal Government. Mr. Hoggan. I would agree. Mr. Connolly. I would lose my job if I treated the public that way, and rightfully so. My staff would be fired if I found they treated my public that way. We need to hold ourselves to that standard. I fear it is beyond anecdotal. The Chairman has referenced turnover in TSA. Could you comment a bit about that? What is it and do you think that it is too high and there are things we could do to try to ameliorate that? Mr. Hoggan. Too high is a unique definition. I know the attrition rate today as well as last year is lower than it was three, four, five or six years ago. Mr. Connolly. What is that attrition rate? Mr. Hoggan. I think a lot of it has to do with the professionalism we are building. There are full time positions in the TSA. Mr. Connolly. What is your annual attrition rate? Mr. Hoggan. It is through calculation right now. I do not want to say the exact number because it is being worked but somewhere between the 12 and 13 range is my understanding how we finished fiscal year 2013, part-time rates higher than full- time rates. Mr. Connolly. Are there things you have learned from that to try to get that down, to try to improve on retention and higher job satisfaction? It is not an easy job. Mr. Hoggan. No, it is not an easy job. As Chairman Mica said and talked about the average wage, whether in Orlando Airport or other locations, the transportation security officers are some of the lowest paid federal employees in the government. We need to work harder to see what we can do about salaries. I think a lot of it has to do with flexibility and scheduling and opportunities for career advancement, future development and growth, not only inside the TSA but also inside the Federal Government. Mr. Connolly. Mr. Chairman, I do not wish to impose on my time. Mr. Mica. Go right ahead. It is just the two of us right now. Mr. Connolly. If it is all right with you, I will finish. Mr. Mica. Yes, go ahead. Mr. Connolly. Thank you so, much. Ms. Grover, this may be a logical thing, but I would like to look at the turnover/retention issue. In terms of best practices, what do we know that we could do or should do, including here in Congress, to try to help Mr. Hoggan and his mission of higher retention and higher job satisfaction for people in very stressful jobs? Did you look at that all? I would like to see some comparison and I am sure the Chairman would also. How does it compare with other federal agencies? I would assume, given the nature of the stress of the job, you are actually going to have higher turnover in TSA than in some other parts of the federal enterprise. I think that is to be expected. Are things we could do to make it more satisfying to improve job satisfaction and lower some of that turnover and help Mr. Hoggan in terms of retention? Has GAO looked at that, especially in comparison with either other federal entities or the private sector? Ms. Grover. In our work last year on SPP, we were interested in being able to compare workforce performance measures for the SPP versus the non-SPP airports. That is things like attrition and injury rates and so on. What we found is that TSA has data they collect for all of the airports that use federal screeners but at the time we did our work, TSA did not give the contractors specific instructions about how to define, measure and collect the same data. The contractors were providing TSA with information about attrition but we found that TSA had no assurances that the data was comparable. We were not able to do a comparison of attrition at the SPP airports versus the non-SPP airports. One first step would be to make sure they had comparable attrition data across all of the airports. Mr. Connolly. Yes, fair enough. I am also interested in the broader subject, not just comparing the SPP with non-SPP, but generally this whole area of screening with say a large corporate entity. If you are a large corporation with 20,000 employees, what is the expected turnover that you would absolutely expect, just normal turnover every year? Corporations do monitor that because that tells them something about what is going on in the work environment and what they need to do to retain. It cost a lot more money to recruit a new employee, train that employee--that is why I asked Mr. Hoggan about the process. To lose that employee costs you a lot of money. It is cheaper to retain that employee. What do we need to do to do that? How does it compare in a stressful job, not easy, constantly dealing with the public versus other lines of work--Mr. Hoggan, an acceptable turnover given the nature of the work, maybe 13 percent a year. If we find that it is 18 percent then we have a problem. We all would agree we have a problem because 13 is what we are expecting. If we are below 13, then we are doing something right. That tells us something too and we want to do more of that. I think we will need you to help us look at other benchmarks as a management tool so that we can monitor what is happening in TSA and the SPPs and so can Mr. Hoggan, as a useful management tool. I commend that to you. Mr. Bell, have you looked at that at all? Mr. Bell. That is not something we have looked at. Mr. Connolly. One of the things the Chairman brought up and I brought up in my opening statement was there seems to be some difference in terms of cost estimate methodology. If I understand TSA correctly, their finding is that SPPs tend to cost about three to nine percent more than TSA itself. There are others--I think the Chairman among them--who would argue that the SPPs actually save money and do not cost more. Could you comment on methodology and the discrepancy in cost estimates, Ms. Grover? I think GAO did look at that? Ms. Grover. Yes, sir, we did. We looked at TSA's cost estimating methodology back in 2009 and 2011. When we did our last report on this, TSA did indeed show a discrepancy of three percent between the cost of running SPP and non-SPP airports. However, at the time, we did not have confidence in the three percent figure because one of the issues that was still unresolved at that time was the question of uncertainty in the underlying estimate and underlying assumptions going into the estimate. Whenever you build an estimated cost, you have to make a series of assumptions that underlie it. Ideally what you want is a range around your point estimate so that policymakers have a good understanding of the level of confidence in the point estimate, so the actual difference in cost could have been three percent but it could have been eight percent or it could have been negative two percent--in other words that it was actually less expensive to run airports with private screeners. Until TSA has a good understanding of the level of uncertainty feeding into their assumptions and how that plays out with the range around their point estimate, I think there is still some question about the relative cost. Mr. Connolly. This, to me, is a very critical question that has to be resolved because we cannot deal with different assumptions about how to get at a cost estimate. We have to have a methodology we all buy into so that we can then have one set of numbers, not a competing set of numbers. Otherwise, how can Congress or the Administration make informed decisions about which is better in a given circumstance--going the SPP route or going the TSA route--if we cannot even agree that it saves or costs money? How can we pass another bill mandating further privatization on the risk that we may get it wrong, that the assumption we are making, that privatization is always good and always saves money, is wrong? I am a big believer that these decisions have to be made on a pragmatic basis, not a theological basis. Privatization is not intrinsically good or bad and neither is federal employment. It is a matter of what works. Part of what works is how much does it cost and what is the quality we are getting. It seems to me this is a very critical question. Again, GAO can be very helpful in helping us get to the bottom of a methodology we all buy into. Mr. Bell, did you want to comment on that? Mr. Bell. I agree with your comments. We did not go into testing the cost methodology, similar concerns that GAO had that we did not have faith in the underlying methodology and did not have enough information to audit to make a good conclusion. I know that is something I know TSA is working on. Our second recommendation is coming up with solid cost estimates. We are still waiting for that documentation to take look and see if they have actually done that. Mr. Connolly. Mr. Hoggan, I assume you would agree with the principle that we need one methodology we all agree on so we can have one set of accurate cost estimates to make informed decisions? Mr. Hoggan. Absolutely, we do. It is my understanding with our federal cost estimates, we have taken all the recommendations from both GAO and the IG and put them inside to come up with that. I know there is a large conversation or a difference of opinion as it relates to imputed cost as relates to additional employee benefits, whether life insurance or retirement, corporate tax credit or liability insurance, but those are costs that TSA is not allocated for and are outside of our appropriations. I know the Chairman has expressed concern with that fundamental difference and I am sure that will come up again. Not being a finance manager, and with the folks from the Appropriations staff here, I can only spend money that has been appropriated to me. That would be outside my appropriations. Mr. Connolly. I represent the third largest number of federal employees in the United States in my district and probably represent the largest number of federal contract employees in the United States. I deal with this issue all the time about in-sourcing or out-sourcing. I absolutely insist it not be done theologically. One is not better than the other. It is a matter of circumstance and what is the best outcome for the taxpayer. Often the private sector will complain that the Federal Government often does not--you used the term ``fully loaded costs,'' but sometimes the private sector feels that when the Federal Government gets in the business of comparing the private sector to the public sector, it does not hold itself to the same standard to which it holds the private sector--fully loaded costs. Trying to get our arms around this in an accurate way I think is essential if we are going to make informed decisions moving forward. I thank you for your indulgence, Mr. Chairman. The Chairman talked about maybe what we need to do in contracting for SPP is get TSA out of the contracting business and give it to GSA. Do you have any opinion about that, Ms. Grover, from GAO's point of view? Ms. Grover. GAO has not done any work specifically examining that issue, sir. We would be happy in the future to do a broad review of the current construct of the way that TSA operations are being run; examine the question of conflict of interest and whether it exists under the current arrangement; and what implications that might have for cost or efficiency. Mr. Connolly. You have looked at TSA's performance as a contracting agency? Ms. Grover. Yes, sir. Mr. Connolly. And? Ms. Grover. They have a system set up where they meet monthly with each of their contractors and look at their performance based on a very broad series of measures. They have systems in place to follow up in any areas where they see concerns or discrepancies. One of the things we pointed out in the past is that at the time of our review, they were maintaining all of those monthly records on paper. We encouraged them to consider putting them into electronic format to allow better contractor oversight over time. Mr. Connolly. Mr. Hoggan, my final question, to give you a chance to comment, is from your point of view, would TSA be alleviated of the burden if we were to transfer all contracting responsibility to GSA or would that just complicate your life? Mr. Hoggan. I believe it would complicate my life. The acquisitions process we have in TSA, I think we will see going forward, satisfies the requirements of the SPP office. Mr. Connolly. Thank you. Mr. Chairman, again, thank you so much for your indulgence. Mr. Mica. Thank you, Mr. Ranking Member, too. We got these figures from TSA. They spent $1.1 billion on administrative staff and $1.9 billion on their screening staff. I do not know if that $46,000 or $51,000 is in their 66,000 total. Mr. Hoggan, how many administrative personnel do you have in TSA in Washington, D.C.? Mr. Hoggan. My understanding is we have just under, headquarters staff and all, about 4,000; 2,500 in headquarters. Mr. Mica. Just under 4,000--3,986, making $103,000, nothing because I think people who live in the D.C. area need a good wage. Mr. Hoggan. There are 2,500 employees at headquarters roughly. Mr. Mica. I helped envision TSA with other members of Congress. Not in our wildest imagination did we ever think you would get to 66,000. You are bigger than the United States Coast Guard and I think six departments of government. You are at $103,000. If we divided this by half, we get $51,000 to 8,000 screeners, you might get a bit better performance. They have 9,656 administrators in the field. They are making $80,000 on average. Again, I want people to have a living wage. This is not about wages. I think we should keep them high for retention purposes, whether they are private or federal. This is not about union membership and I told you that. San Francisco had unions, private screening under federal supervision, long before the all federal. It is not about getting cheap labor. It is actually paying people. We spent over $1 billion on training and more than half the people who were trained have left. We compared Los Angeles with San Francisco on the training costs which we got access to and it was $11,000 more per employee, that is what I was talking about, for federal screeners compared to the SPP screeners' training. I am glad to hear you have the integrity training going on. That is only after meltdowns. I do not want to go through the sordid history of even my own airport, Orlando, where it was on national television, the folks ripping off passengers. I am glad to see you are taking steps on that. When Mr. Pistole came in I sat with him and he promised me a risk-based system. How many Americans have had records of being airline passengers have ever been involved in a terrorist act? Mr. Hoggan. How many passengers? Mr. Mica. How many Americans that have been passengers with a flying record have ever been involved in a terrorist act? Mr. Hoggan. I would have to pull the records. Mr. Mica. There are none. I can give you the list. Mr. Hoggan. Are you asking U.S. or international? Mr. Mica. I can give you the people who have been involved in terrorist acts. Richard Reid is one of the few Anglo names. He was Jamaican and English. You have had the shoe bomber. We had the Kenyan. Most of the events start in another country. At one time we had--it was a classified number--just a handful of people, looking at people coming into the United States. However, 99.9 percent of Americans have never caused a problem. Now we are getting to where you are telling the committee that we have pre-check for what percentage? Mr. Hoggan. Approximately 35 percent. Mr. Mica. It should be 95 or 99 percent. When Mr. Mineta was Secretary, we set this up. We set up a system where it was 15 minutes from curb to the plane. At the time, the Administrator was Michael Jackson. I am telling you that is the way this should operate. If you come to Orlando or Sanford Airport, what is going on is almost criminal to American citizens with the way they are treated. You just heard from the Ranking Member. He does not fly as much. He just drives across the 14th Street Bridge, but I fly all the time. I see what we are doing to Americans who pose no risk. Now I see finally the mess we have created, the lanes, you have a clear lane, you have a pre-check lane. It used to be you go through quickly and now pre-check is almost worse than the other lanes. They have known crew member lanes. The poor bastard public is there with their kids. The other day I saw them patting down a gentleman and if he posed a risk, dear, God. This is the mess we have created along with the expensive uniforms, the badges and the intimidation. We tried to get this shifted to what we intended, private screening under federal supervision, with the Federal Government playing the appropriate role, conducting the intelligence, setting the security standards, changing things out. You could go down to Orlando and probably let 90 percent of the people go through if you had a risk-based system with no hassle and screen them. Mr. Pistole has failed to put in place a risk-based system. Now you are telling me you are going to have 35 percent in pre-check. I can tell you that you are not ready for it out there. The other thing I find out talking to the screening people is they have been the innovators. I know they are the innovators because I watched the transition. Probably some of the things I did to help TSA--almost all of the innovations I took from San Francisco and some of the other models from the private screeners--but they were allowed to innovate to actually process people efficiently and effectively. I saw the results. They performed statistically significantly better. I know what happens now--this new evaluation, the tip offs and all of that stuff to tilt the scales. I followed this from the very beginning but I am telling you that in fact this needs to be converted out to a risk-based system. The thing I passed three times in law and we put in the FAA bill, we tweaked it a little and now they are using it as an excuse to further delay, it is over ten years to have identification with a biometric measure, a hard copy and a pilot, for example. The TWIC card, they wrote us and said they cannot get a reader, so we spent $1 billion probably on TWIC cards that you have to use a driver's license. I do not know where we end this. I will tell you what is coming. As you heard here today, the frustration is bipartisan. How many people do you have in your SPP office now? Mr. Hoggan. I have 10 people right now. Mr. Mica. You may need a whole lot more because I think I will get the support. I may not get it done this year but I will get it done within the next year. Mark my words. It took me a while to get the change in the language which you are now slow rolling, but I will get the language that within a certain amount of time, you get out of the screening business, you set the rules, conduct the audits and so forth. I will get the support to do it one way or the other. If you cannot handle it, we will put it in GSA and they will handle it as a contracting thing. We also need to get you out of the equipment business. You cannot maintain, you cannot acquire the acquisition when you buy the puffers and they have to be destroyed so spend a couple million dollars. The back scatter equipment staff, I want to do investigate where we are on that. We spent half a billion on that. They have been removed. You deployed the RF Wave, millimeter wave screening which was never supposed to be used as primary screening, never, never. You have people up there, little old ladies and people who pose no risk and you are using that equipment on them and then patting them down. Come on, guys. It is just unbelievable. That was another half a billion dollar acquisition--a quarter of a billion split between a couple. It cost half a billion to install because they can do it the most expensive way. I need to even get you out of that business, acquisition of equipment, acquisition of services because you cannot do it. It is nothing against you personally. You have been there eight months. Mr. Hoggan. I have been in this position as Assistant Administrator for Security Operations for eight months. I have been at TSA since November 2004. Mr. Mica. I am told that the SPP Office is in disarray as far as its leadership. Mr. Hoggan. I disagree. Mr. Mica. I am just told that people who deal with them cannot get an answer and also movement of personnel. We have a host of questions, some of them technical in nature. I want to know what you have done with these applications, some of them approved back in January 2012 for your six airports, two approved in June 2012, two in August 2012, one in May 2013 and we still do not have these done after we passed the law. The slow rolling is not going to work. I am probably going to let you stew in your juice a little bit longer but I can tell you that folks are getting fed up with the whole thing. There is support for a dramatic redo. If we could move people after 9/11 through in 15 minutes, having had that risk at that point, here we are 10 or 12 years later, and I now aviation is still a target, but we are holding millions of Americans hostage and they are not getting proper screening at the most efficient and effective cost. Take that message back to Mr. Pistole. I will give it to him personally. I do have more questions and we will submit them for the record. Mr. Connolly, is there anything else? Mr. Connolly. Not at this time, Mr. Chairman. Mr. Mica. Do you notice a little frustration? I get frustrated sometimes. I think together we can make it work better. I am embarrassed that I created the thing and now it has gone awry at great expense and inconvenience. Security is incredibly important. We still are at risk and I believe they will use aviation again to come after us, but I do not think the current structure is geared to deal with that. Everything we have done is in reaction. Take off your shoes was the liquids. It is all reactive. Pretty soon we will be going through there naked and that has to be an ugly sight for some of us. Mr. Connolly. That is when I stop flying, Mr. Chairman. Mr. Mica. I thank Mr. Hoggan, Mr. Bell and Ms. Grover for your work and your cooperation. There being no further business before the subcommittee, this hearing is adjourned. [Whereupon, at 11:38 a.m., the subcommittee was adjourned.] APPENDIX ---------- Material Submitted for the Hearing Record [GRAPHIC] [TIFF OMITTED] T7353.031 [GRAPHIC] [TIFF OMITTED] T7353.032 [GRAPHIC] [TIFF OMITTED] T7353.033 [GRAPHIC] [TIFF OMITTED] T7353.034 [GRAPHIC] [TIFF OMITTED] T7353.035 [GRAPHIC] [TIFF OMITTED] T7353.036 [GRAPHIC] [TIFF OMITTED] T7353.037 [GRAPHIC] [TIFF OMITTED] T7353.038 [GRAPHIC] [TIFF OMITTED] T7353.039 [GRAPHIC] [TIFF OMITTED] T7353.040 [GRAPHIC] [TIFF OMITTED] T7353.041