Transportation Security Administration: Oversight of Explosive Detection Systems Maintenance Contracts Can Be Strengthened

In fiscal year 2006, we reviewed and reported on reasons for cost increases in maintaining the Transportation Security Administration's (TSA) explosive detection systems (EDS) and explosive trace detection (ETD) machines, including TSA's related contracting practices. We reported, among other things, that in order to improve TSA's management of EDS and ETD maintenance costs and strengthen oversight of contract performance, TSA should establish a timeline to complete its evaluation and close out the Boeing contract and report to congressional appropriations committees on its actions, including any necessary analysis, to address the Department of Homeland Security Office of Inspector General's recommendation to recover any excessive fees awarded to Boeing Service Company. In response to this recommendation, TSA reviewed the level of the fees awarded to Boeing under this contract. TSA obtained competition and evaluated the proposed award fee structure prior to awarding the contract. The award fee structure was determined reasonable based on the competition. TSA conducted award fee evaluations in accordance with the terms of the contract. TSA also conducted significant reviews of the contract and Boeing's performance, and determined that TSA did not pay excessive fees and that there were no unreasonable fees to recoup. TSA executed the modification that reflects the Government's evaluation of cost and fees on this contract. This information was reported to Congressional Appropriations committees in March 2007.

In fiscal year 2006, we reviewed and reported on reasons for cost increases in maintaining the Transportation Security Administration's (TSA) explosive detection systems (EDS) and explosive trace detection (ETD) machines, including TSA's related contracting practices. We reported, among other things, that in order to improve TSA's management of EDS and ETD maintenance costs and strengthen oversight of contract performance, TSA should establish a timeline for completing the lifecycle cost model for EDS, which TSA recently began. In response to this recommendation, TSA completed the life cycle prototype at the end of fiscal year 2006 with evaluation beginning immediately. Full implementation of the lifecycle cost model was completed in June 2007. This model, called the Integrated Deployment Model (IDM), is used to determine the life cycle costs of the entire EDS program, specifically the costs of deploying, operating and maintaining checked baggage screening solutions to all CAT X-III airports. The inputs will be validated and updated annually to determine the impact of new technologies and updated cost information. The most recent update occurred through the Baggage Screening Investment Study effort. The IDM output guides business case development and investment decisions.

In fiscal year 2006, we reviewed and reported on reasons for cost increases in maintaining the Transportation Security Administration's (TSA) explosive detection systems (EDS) and explosive trace detection (ETD) machines, including TSA's related contracting practices. We reported, among other things, that in order to improve TSA's management of EDS and ETD maintenance costs and strengthen oversight of contract performance, TSA should revise policies and procedures to require documentation of the monitoring of EDS and ETD maintenance contracts to provide reasonable assurance that (1) contractor maintenance cost data and performance data are recorded and reported in accordance with TSA contractual requirements, and (2) self-reported contractor mean downtime data are valid, reliable, and justify the full payment of the contract amount. In response to these concerns, TSA's Contracting Officer received, reviewed, and analyzed the Contract Data List Requirements (CDRLs) for maintenance cost data since the GAO audit of last year. In addition, the TSA contracted with a firm to conduct independent verification and validation (IV & V) of the self-reported maintenance data (e.g., Mean Down Time (MDT)). The IV&V contract completed its review of the Siemens maintenance contract MDT performance for FY2006 earlier this year, and validated the self-reported MDT data provided by Siemens. IV&V is ongoing for the L-3 and GE EDS maintenance contracts.