TSA could lose FAR exemption

Lawmakers want TSA to follow the same procurement rules that everyone else does

The Transportation Security Administration uses a nonstandard approach to buying products and services. Some lawmakers would like to see that practice end.

Legislators cited ballooning procurement spending as a primary reason they want TSA to follow the Federal Acquisition Regulation instead of the Acquisition Management System (AMS) rules it has used for years.

Legislators in both houses have introduced measures to end the agency’s use of AMS. Rep. Chris Carney (D-Penn.) and Sens. John Kerry (D-Mass.) and Olympia Snowe (R-Maine) sponsored a bill to address TSA’s procurement problems described during a recent hearing of the House Homeland Security Committee’s Management, Investigations and Oversight Subcommittee.

Carney introduced a separate bill, the TSA Procurement Reform Act of 2007, to require TSA to use the FAR. The senators attached their amendment to the Homeland Security Department’s fiscal 2008 appropriations bill.

Carney’s bill would create greater oversight of TSA’s procurement activities. The congressman cited several contracts awarded under AMS rules whose costs spiked during the terms of those contacts.

“Over the last several years, the TSA has awarded contracts filled with wasteful spending, including a contract to Boeing that jumped from $508 million to $1.2 billion and a contract to Pearson Government Solutions that first cost $104 million and skyrocketed to $741 million in less than one year,” Carney said in a statement.

The Federal Aviation Administration developed the AMS rules in the 1980s. Congress gave TSA the authority to use AMS in 2001. All other DHS agencies follow the FAR.

Rick Gunderson, TSA’s assistant administrator of acquisitions, said AMS rules are better suited to managing the procurement life cycle than the FAR. “AMS competitions can be more efficient than FAR competitions as the result of a multiple-screening process that identifies the most qualified offerors for further consideration,” he said.

AMS enables TSA and FAA to manage the procurement process and lets them focus on a few contractors rather than consider each potential company equally, regardless of the company’s staff size, monetary value and technological capabilities.

Gunderson said that approach saves government time and resources and lets industry “redirect its bid and proposal resources [to] realistic opportunities.”
However, industry officials say AMS creates an unfair bidding process.

“Companies should pursue the opportunities rather than have the government introduce them [to the companies] they want,” said Alan Chvotkin, Professional Services Council’s senior vice president and counsel.

Chvotkin said TSA does not use AMS exclusively. For example, it follows the FAR when it buys information technology equipment. TSA also uses the Coast Guard’s FAR-based procurement system to buy other goods and services.

“TSA is really a hybrid organization that uses other parts of the Homeland Security [Department] to procure their goods and services,” Chvotkin said. “There’s very little justification leaving [TSA] outside of DHS” for most procurement activities.

Meanwhile, FAA is seeking a contractor to perform an independent review of AMS to examine AMS’ value to stakeholders, its governance structure, best practices for using it and how the agency should proceed to streamline and re-engineer it.
“Proposals are due Aug. 20, and [a] contract award is expected by mid-September,” said Tammy Jones, FAA spokeswoman.

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