Annual Privatization Report 2013

U.S. Airport Security

Subsection of Annual Privatization Report 2013: Air Transportation

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Introduction

There have been two major developments in U.S. airport security in 2012. One concerns the future of the program under which airports are allowed to outsource passenger and baggage screening to firms certified by the Transportation Security Administration (TSA). The other concerns the shift by the TSA toward a more risk-based approach to aviation security, with the launch of its PreCheck trusted traveler program.

Outsourced Passenger and Baggage Screening

When Congress enacted the Aviation & Transportation Security Act (ATSA) in November 2001, it reached a compromise between Senate and House approaches. The Senate bill called for complete “federalization” of airport screening, in which a new federal agency (the TSA) would take over passenger and baggage screening at all commercial airports, using a new federal workforce of well-trained people. The House bill called for replacing the former system (in which the FAA required airlines to hire screening firms for each airport concourse) with a new system in which the airports would be responsible for screening, which they would do under federal supervision, either with a workforce of their own (meeting federal training and performance standards) or via security contractors that met federal training and performance standards. The final bill was mostly the Senate’s approach, but permitted five airports to opt out by using TSA-certified security firms, with all other airports to be given this option after 2004.

All five original opt-out airports (including San Francisco and Kansas City) have been pleased with contract screening and have shown no inclination to shift to TSA screening. Several studies have shown that contract screening is more effective and less costly than TSA-provided screening. Until 2012, the only airports that had taken advantage of the post-2004 opt-out provision were small airports—either ones just beginning to offer scheduled air service at the level that requires airport screening or a few where TSA had difficulty matching its screener workforce levels to large seasonal variations in passenger traffic.

In late 2010, interest in outsourced screening rose considerably, due to concerns over TSA’s introduction of body scanners and pat-downs for primary (all-passengers) screening. But in January 2011, new TSA Administrator John Pistole rejected all pending applications for the Screening Partnership Program (SPP) and announced that no more airports could participate (other than the original five plus the dozen other small ones already in the program). In response, the Senate adopted an amendment to its pending FAA reauthorization bill to require TSA to accept applications and process them expeditiously, giving Congress the reason for any rejections. Rep. John Mica (R, FL) included similar provisions in the House bill, but 2011 ended without any action on FAA reauthorization. But when the FAA bill was finally enacted in February 2012, it included these provisions. And TSA announced that it would resume accepting applications. By fall 2012, TSA had approved preliminary applications from a number of airports in Montana, from Orlando-Sanford in Florida, and from Sacramento International in California. The latter is the largest by far of airports switching from TSA screening to outsourced screening under SPP.

In July 2012 the House Homeland Security Committee’s subcommittee on transportation security held a hearing on airport screening. In his testimony (available here), Reason Foundation’s Robert Poole called for further policy changes in the program. In the near term, he recommended that screening outsourcing shift to a more decentralized model, in which the airport itself would issue the request for proposal (RFP) for such screening and would be allowed to select the proposal it judged most cost-effective from among those submitted by TSA-certified screening companies. Currently, TSA first decides if it will permit the airport to opt out and, if so, TSA itself selects the contract firm and assigns it to the airport. In addition, the airport, not TSA, should manage the contract, under TSA’s overall aviation security oversight of the airport. Longer-term, Poole recommended that the TSA enabling legislation be changed to devolve the entire screening function to airports (under TSA regulatory oversight), in order to remove TSA’s built-in conflict of interest as both the principal provider of airport screening and the aviation security regulator. Subcommittee chair Rep. Mike Rogers (R, AL) has expressed interest in both ideas.

TSA’s PreCheck and other Risk-Based Screening

In early 2011, aviation industry organizations began pushing aggressively for TSA to create a risk-based Trusted Traveler program, under which certain air travelers could be pre-vetted as low-risk and receive expedited screening at the airport. This was a principal recommendation of the Blue Ribbon Panel for Aviation Security convened by the U.S. Travel Association. It was also championed on a global basis by the International Air Transport Association representing nearly all the world’s airports, and by the U.S. based Business Travel Coalition.

In response, TSA Administrator John Pistole began endorsing risk-based screening and a Trusted Traveler approach in speeches and interviews. By summer 2011, TSA announced it would be launching a pilot program before the end of the year, initially aimed at premium-level frequent flyers of selected airlines. Launched in fall 2011, the program is named PreCheck, and proved to be highly attractive to frequent flyers. TSA reviews the travel history of premium frequent flyers, and those accepted use a special checkpoint lane and expedited screening (no need to remove coat or shoes, or to remove liquids or laptop from carry-on bags). During 2012 TSA has continued to expand PreCheck, reaching its initial goal of having it in place for at least some airlines at 35 airports by the end of 2012. It also implemented expedited screening for airline crewmembers under its new CrewPass program, open initially only to cockpit crew but being expanded to cabin crew as well. PreCheck offers only a rudimentary check of applicants’ frequent flyer history, rather than the kind of serious FBI criminal history background check TSA requires of airport employees who have access to secure areas.

Two private firms, Alclear with its revived CLEAR program and Priva Technologies with its FlexPass, began offering revived Registered Traveler programs to airports in mid-2011. In exchange for paying an annual membership fee, air travelers receive a biometric ID card and can bypass checkpoint waiting lines, but must still go through regular screening. As of the end of 2012, CLEAR was available at five airports and FlexPass at two. But since neither program is allowed to offer a background check and therefore offer expedited screening, the value gained by paying an annual fee may not attract a very large membership.

In October 2012, Administrator Pistole told Bloomberg BusinessWeek that the agency plans to test using a private vendor to expand PreCheck beyond members of airline premium frequent flyer programs. If TSA is willing to include a real background check and biometric ID card in the expanded program, it will have the makings of a serious Trusted Traveler program.

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy





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