[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
STAKEHOLDER PERSPECTIVES ON TSA ACQUISITION REFORM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
TRANSPORTATION SECURITY
of the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JULY 17, 2013
__________
Serial No. 113-26
__________
Printed for the use of the Committee on Homeland Security
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__________
COMMITTEE ON HOMELAND SECURITY
Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Peter T. King, New York Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Paul C. Broun, Georgia Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice Brian Higgins, New York
Chair Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania William R. Keating, Massachusetts
Jeff Duncan, South Carolina Ron Barber, Arizona
Tom Marino, Pennsylvania Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi Tulsi Gabbard, Hawaii
Lou Barletta, Pennsylvania Filemon Vela, Texas
Chris Stewart, Utah Steven A. Horsford, Nevada
Richard Hudson, North Carolina Eric Swalwell, California
Steve Daines, Montana
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Mark Sanford, South Carolina
Greg Hill, Chief of Staff
Michael Geffroy, Deputy Chief of Staff/Chief Counsel
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------
SUBCOMMITTEE ON TRANSPORTATION SECURITY
Richard Hudson, North Carolina, Chairman
Mike Rogers, Alabama Cedric L. Richmond, Louisiana,
Candice S. Miller, Michigan Ranking Member
Lou Barletta, Pennsylvania Sheila Jackson Lee, Texas
Susan W. Brooks, Indiana Eric Swalwell, California
Michael T. McCaul, Texas (ex Bennie G. Thompson, Mississippi
officio) (ex officio)
Amanda Parikh, Subcommittee Staff Director
Dennis Terry, Subcommittee Clerk
C O N T E N T S
----------
Page
Statements
The Honorable Richard Hudson, a Representative in Congress From
the State of North Carolina, and Chairman, Subcommittee on
Transportation Security:
Oral Statement................................................. 1
Prepared Statement............................................. 3
The Honorable Cedric L. Richmond, a Representative in Congress
From the State of Louisiana, and Ranking Member, Subcommittee
on Transportation Security:
Oral Statement................................................. 4
Prepared Statement............................................. 5
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security:
Oral Statement................................................. 6
Prepared Statement............................................. 7
Witnesses
Mr. Marc A. Pearl, President and CEO, Homeland Security & Defense
Business Council:
Oral Statement................................................. 8
Joint Prepared Statement....................................... 10
Ms. Shene Commodore, Government Contracts & Business Manager,
Intertek, Testifying on Behalf of the Security Industry
Association:
Oral Statement................................................. 14
Prepared Statement............................................. 16
Mr. Dolan P. Falconer, Jr., President and CEO, Scantech
Identification Beam Systems, LLC:
Oral Statement................................................. 19
Prepared Statement............................................. 20
STAKEHOLDER PERSPECTIVES ON TSA ACQUISITION REFORM
----------
Tuesday, July 17, 2013
U.S. House of Representatives,
Subcommittee on Transportation Security,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 10:03 a.m., in
Room 311, Cannon House Office Building, Hon. Richard Hudson
[Chairman of the subcommittee] presiding.
Present: Representatives Hudson, Rogers, Brooks, Richmond,
Jackson Lee, and Thompson.
Mr. Hudson. The Committee on Homeland Security Subcommittee
on Transportation Security will come to order. The subcommittee
is meeting today to hear testimony from the private sector on
TSA acquisition reform.
I recognize myself for an opening statement.
I would like to thank our witnesses for participating in
the hearing today. We know your time is valuable and we look
forward to hearing your testimony.
It is no secret that the Transportation Security
Administration has struggled with technology acquisition since
the agency was established after the terrorist attacks on 9/11
and it is fitting that today marks the seventh oversight
hearing that the Transportation Security Subcommittee has held
on TSA technology in the last 2 years alone.
We have discussed these issues with dozens of stakeholders,
TSA, Department of Homeland Security leadership, and subject
matter experts at the Government Accountability Office, the DHS
Office of Inspector General, and the Congressional Research
Service. What we have seen is very concerning.
For example, GAO and DHS IG have found through numerous
studies that TSA is not effectively implementing Government
best practices, such as establishing program baseline
requirements and conducting comprehensive analysis before it
acquires new security technologies. This has resulted in
acquisitions that have failed to meet performance objectives
and have wasted taxpayer dollars.
Additionally, private industry has expressed concern that
TSA does not accurately communicate mission needs, testing
plans, and long-term investment plans, which makes it difficult
for companies to invest their own money in research and
development.
With constructive input from these stakeholders as well as
the Chairman and Ranking Members, I plan to introduce
bipartisan legislation this week. Through a series of common-
sense reforms this bipartisan legislation would address a
fundamental problem: TSA's broken acquisition process.
We don't have to look far to know the process is broken:
Millions of dollars' worth of screening equipment locked in
warehouses; puffer machines deployed without adequate
operational testing; AIT body scanners deployed without
adequate privacy filters; companies with innovative products
that can't successfully navigate TSA's acquisition process; and
perhaps most detrimental of all, American taxpayers losing
confidence in the TSA's ability to execute its mission.
I appreciate the challenges that those at TSA face to
address the evolving threats that terrorists pose and believe
these incidents are not always the result of poor intentions at
TSA or industry failures, but instead are the consequences of
inadequate planning and a lack of transparency and
accountability for significant decisions. While some
improvements have been made at the Departmental level we simply
cannot risk perpetuating these mistakes, which is why I believe
legislation is needed to address this issue.
It is my goal for legislation to focus on four specific
areas of reform. No. 1, first it should require TSA to develop
a multi-year technology acquisition plan with input from its
stakeholders. This kind of planning will encourage industry
investment and serve as a fundamental foundation for future
technology acquisition programs. The private sector represents
an incredibly valuable partner in security and strategic
planning would strengthen that partnership tremendously.
No. 2, it should require TSA to conduct comprehensive
analysis for security-related technology acquisitions and
provide key information to Congress throughout the acquisition
process, including any cost overruns, delays, or technical
failures. Legislation will need to include early warning so
that Congress can see what is happening before critical
failures and react to help protect the taxpayer.
Third, it must require TSA to develop a system for
effectively tracking and managing equipment in inventory. In
May of this year the DHS IG reported that TSA does not have an
inventory management process that systematically deploys
equipment. The result is $185 million in equipment, including
some unusable or obsolete equipment, locked up in warehouse
storage units. This bill would help address this problem.
Finally, any legislation must require TSA to develop an
action plan for achieving previously established goals for
contracting with small and disadvantaged businesses. Small
businesses with innovative solutions are often unable to
penetrate the bureaucratic and costly process of Government
acquisition. The action plan required should introduce greater
accountability for meeting small business goals, an area that
TSA has agreed needs improvement.
The bipartisan piece of legislation I intend to introduce
is a reflection of the testimony, recommendations, and feedback
from subject matter experts that the subcommittee has received
thus far. I am eager to receive additional input from our panel
of industry stakeholders today so that we can continue to
strengthen and improve the bill as it moves through the
legislative process.
In addition, I continue to hope that Administrator Pistole
will move toward a more risk-based, passenger-friendly future
that protects our taxpayers' interest. We will continue to work
on these issues with Mr. Pistole and his team while recognizing
that TSA must comply with the Department of Homeland Security's
policies and directives for acquisition management. In many
cases our efforts are intended to codify existing DHS policies
and directives, not supplant or duplicate them.
Finally, I would like to personally acknowledge the work of
my predecessor, the gentleman from Alabama, Mr. Rogers, for all
of his insightful work on these issues and laying the
groundwork for these bipartisan reforms as Chairman of this
subcommittee during the 112th Congress.
[The statement of Chairman Hudson follows:]
Statement of Chairman Richard Hudson
July 17, 2013
It is no secret that the Transportation Security Administration,
TSA, has struggled with technology acquisition since the agency was
established after the terrorist attacks of 9/11, and it is fitting that
today marks the seventh oversight hearing the Transportation Security
Subcommittee has held on TSA technology in the last 2 years alone.
We've discussed these issues with dozens of stakeholders, TSA and
Department of Homeland Security leadership, and subject matter experts
at the Government Accountability Office, the DHS Office of Inspector
General, and the Congressional Research Service. What we've seen is
very concerning.
For example, GAO and the DHS IG have found, through numerous
studies, that TSA is not effectively implementing Government best
practices, such as establishing program baseline requirements and
conducting comprehensive analyses, before it acquires new security
technologies. This has resulted in acquisitions that have failed to
meet performance objectives and have wasted taxpayer dollars.
Additionally, private industry has expressed concern that TSA does
not accurately communicate mission needs, testing plans, and long-term
investment plans, which makes it difficult for companies to invest
their own money in research and development.
With constructive input from these stakeholders as well as the
Chairman and Ranking Members, I plan to introduce bipartisan
legislation this week.
Through a series of common-sense reforms, this bipartisan
legislation would address a fundamental problem--TSA's broken
acquisition process. We don't have to look far to know the process is
broken:
Millions of dollars' worth of screening equipment locked up
in warehouses;
Puffer machines deployed without adequate operational
testing;
AIT body scanners deployed without adequate privacy filters;
Companies with innovative products that can't successfully
navigate TSA's acquisition process;
And perhaps most detrimental of all: American taxpayers
losing confidence in TSA's ability to execute its mission.
I appreciate the challenges that those at TSA face to address the
evolving threat that terrorists pose and believe these incidents are
not always the result of poor intentions at TSA or industry failures,
but instead are the consequences of inadequate planning, and a lack of
transparency and accountability for significant decisions. While some
improvements have been made at the Departmental level, we simply cannot
risk perpetuating these mistakes, which is why I believe legislation is
needed to address this issue.
It is my goal for legislation to focus on four specific areas of
reform.
First, it should require TSA to develop a multi-year technology
acquisition plan, with input from stakeholders. This kind of planning
will encourage industry investment and serve as an important foundation
for future technology acquisition programs. The private sector
represents an incredibly valuable partner in security, and strategic
planning would strengthen that partnership tremendously.
Second, it should require TSA to conduct comprehensive analyses for
security-related technology acquisitions and provide key information to
Congress throughout the acquisition process, including any cost
overruns, delays, or technical failures. Legislation will need to
include early warning, so that Congress can see what's happening before
critical failures and react to help protect the taxpayer.
Third, it must require TSA to develop a system for effectively
tracking and managing equipment in inventory. In May of this year, the
DHS IG reported that TSA does not have an inventory management process
that systematically deploys equipment. The result is $185 million
dollars in equipment, including some unusable or obsolete equipment,
locked up in warehouse storage units. This bill would help address this
problem.
Finally, any legislation must require TSA to develop an action plan
for achieving previously established goals for contracting with small
and disadvantaged businesses. Small businesses with innovative
solutions are often unable to penetrate the bureaucratic and costly
process of Government acquisition. The action plan required should
introduce greater accountability for meeting small business goals, an
area that TSA has agreed needs improvement.
The bipartisan piece of legislation I intend to introduce is a
reflection of the testimony, recommendations, and feedback from subject
matter experts that the subcommittee has received thus far. I am eager
to receive additional input from our panel of industry stakeholders
today, so that we can continue to strengthen and improve the bill as it
moves through the legislative process.
In addition, I have confidence in Administrator Pistole's ability
to lead TSA toward a more risk-based, passenger-friendly future that
protects the taxpayer's interests. We will continue to work on these
issues with Mr. Pistole and his team, while recognizing that TSA must
comply with the Department of Homeland Security's policies and
directives for acquisition management. In many cases our efforts are
intended to codify existing DHS policies and directives, not supplant
or duplicate them.
Finally, I'd like to personally acknowledge the work of my
predecessor, the gentleman from Alabama, Mr. Rogers, for all of his
insightful work on these issues, and laying the groundwork for these
bipartisan reforms as Chairman of this subcommittee during the 112th
Congress.
Mr. Hudson. With that, I now recognize the Ranking Member
of the subcommittee, the gentleman from Louisiana, Mr.
Richmond, for his opening statement.
Mr. Richmond. Thank you, Mr. Chairman.
Thank you to the Ranking Member of the full committee, who
is the former Chairman, who also worked very diligently on
this.
Mr. Chairman, thank you for holding this important
stakeholder hearing on TSA acquisition practices.
Soliciting input from stakeholders is critical to
developing effective policies. Over the past several months we
have all emphasized this point to TSA time and time again. I am
pleased today that we are practicing what we preach.
Back in May we heard about the extensive challenges TSA
continues to face in developing, acquiring, and deploying
security-related technology. We also heard from TSA regarding
the agency's failure to meet its small business contracting
goals.
Today we have an opportunity to move beyond focusing on
past failings and to instead focus on how we can help get TSA
on the right track.
We all have the same goal. That is to ensure that TSA is a
prudent steward of the taxpayer dollars as it fosters the
development of new technologies that will support the agency's
mission.
To accomplish this, TSA must have a clear vision of its
long-term technology needs. It must work with industry to make
its vision a reality.
In addition to better long-term planning, TSA would benefit
from greater partnership with the innovative small businesses.
Today, far too often we see promising homeland security
technologies go undeveloped because the small business lacks
the capital to undertake the expensive and time-consuming
process of getting the technology tested. We should look at
whether there are some best practices elsewhere in the Federal
Government that could be employed here to address this major
barrier to working with TSA.
Broadly speaking, I look forward to hearing from each of
the witnesses present today on ways they believe TSA's
acquisition practices can be improved. Particularly, I look
forward to hearing how improvements can be made that foster
consistency and compliance with the Federal acquisition
regulations and Department-wide directives.
In TSA's short history we--we have seen, when it comes to
administrative matters, be they personnel or procurement, TSA
does not do novel well. That is why Congress acted to subject
TSA to the Federal acquisition regulation in 2007.
I do believe that technology acquisition by TSA is an area
ripe for more robust transparency and accountability.
Implementing such reforms would be beneficial for both
stakeholders and taxpayers alike.
Before yielding back, Mr. Chairman, I would like to commend
you on the bipartisan approach you have taken to the issue of
TSA acquisitions and potential reforms. Your willingness to
address issues regarding TSA's lackluster performance as it
relates to small business contracting is appreciated.
Again, I want to thank all of the witnesses who are here
today and I look forward to hearing your testimony.
With that, Mr. Chairman, I yield back.
[The statement of Ranking Member Richmond follows:]
Statement of Ranking Member Cedric L. Richmond
July 17, 2013
Thank you for holding this important stakeholder hearing on TSA's
acquisition practices. Soliciting input from stakeholders is critical
to developing effective policies. Over the past several months, we have
all emphasized this point to TSA time and again. I am pleased that
today we are practicing what we preach.
Back in May, we heard about the extensive challenges TSA continues
to face in developing, acquiring, and deploying security-related
technology. We also heard from TSA regarding the agency's failure to
meet its small business contracting goals. Today, we have the
opportunity to move beyond focusing on past failings and to instead
focus on how we can help get TSA on the right track.
We all have the same goal. That is, to ensure that TSA is a prudent
steward of the taxpayer dollars as it fosters the development of new
technologies that will support the agency's mission. To accomplish
this, TSA must have a clear vision of its long-term technology needs.
It must work with industry to make its vision a reality.
In addition to better long-term planning, TSA would benefit from
greater partnership with innovative small businesses.
Today, far too often we see promising homeland security
technologies go undeveloped because small businesses often lack the
capital to undertake the expensive and time-consuming process of
getting the technology tested.
We should look at whether there are some best practices elsewhere
in the Federal Government that could be employed here to address this
major barrier to working with TSA. Broadly speaking, I look forward to
hearing from each of the witnesses present today on ways they believe
TSA's acquisition practices can be improved.
Particularly, I look forward to hearing how improvements can be
made that foster consistency and compliance with Federal acquisition
regulations and Department-wide directives.
In TSA's short history, we've seen when it comes to administrative
matters--be they personnel or procurement--TSA does not do ``novel''
well.
That is why Congress acted to subject TSA to the Federal
Acquisition Regulation in 2007. I do believe that technology
acquisition by TSA is an area ripe for more robust transparency and
accountability. Implementing such reforms will be beneficial for both
stakeholders and taxpayers alike.
Before yielding back Mr. Chairman, I would like to commend you on
the bipartisan approach you have taken to the issue of TSA acquisitions
and potential reforms. Your willingness to address issues regarding
TSA's lackluster performance as it relates to small business
contracting is appreciated.
Mr. Hudson. I thank the gentleman. I thank you for your
comments. I appreciate the relationship we have had working in
a bipartisan way to move this forward.
Also, in recognizing Ranking Minority Member of the full
committee, the gentleman from Mississippi, Mr. Thompson, let me
also say I appreciate our working relationship and your
willingness to be a partner as we work to make these
improvements.
At this time, Mr. Thompson, I will recognize you for any
statement you may have.
Mr. Thompson. Thank you, Mr. Chairman.
Thank the witnesses for appearing here today.
Earlier this year the subcommittee continued its long-
standing tradition of conducting oversight of TSA's acquisition
practices when it held a hearing with representatives from TSA,
GAO, the DHS Inspector General, and the Department of Science
and Technology Directorate. The testimony received at the
hearing revealed that TSA continues to struggle to comply with
Federal regulations and Department-wide directives when
purchasing and deploying security-related technologies, does
not monitor and effectively deploy its existing inventory of
technology equipment, and comes up short when it comes to
contracting with small businesses.
Last year TSA spent $2.39 billion on goods and services.
With billions of taxpayers' dollars being spent by TSA every
year, the majority of which goes toward acquiring security-
related technologies, it is critical that every dollar be
accounted for and used to address known and emerging security
vulnerabilities.
To accomplish that TSA must set forth the technological
requirements for each acquisition, including what existing
capability gaps would be addressed. While this may sound like a
basic, common-sense task, it is one that, according to GAO, TSA
has repeatedly failed to conduct.
In fact, in 2009 GAO reported that TSA failed to conduct a
cost-benefit analysis prior to purchasing and deploying over
$100 million worth of AIT machines. Had TSA conducted such an
analysis and considered privacy concerns, approximately $40
million could have been saved. Certainly some of that money
could have been put to far better use by supporting promising
technologies developed by small businesses.
Wisely spending taxpayers' dollars on security-related
technologies also require a strategic vision. For too long TSA
has allowed the most recent security incident to drive an often
rushed effort to acquire and deploy new technologies. While the
agency needs the flexibility to respond to emerging threats,
such flexibility should not come at the expense of a long-term
vision.
I look forward to hearing from each of the witnesses about
how they believe TSA's acquisition practices can be improved.
Specifically, I am pleased that Mr. Falconer has joined us
today. His experience, I think, will be enlightening for the
Members of this committee.
I look forward to hearing from him also on how TSA can
improve its contracting performance as it relates to small
businesses. Small businesses play a key role in both job
creation and innovation. It is essential to both our economy
and security posture for TSA to effectively partner with small
businesses.
Before closing, I would like to acknowledge the bipartisan
approach the Chairman has taken to conducting oversight and
drafting legislation addressing TSA's acquisitions challenges.
Mr. Chairman, and I might add at this point that this whole
acquisition situation has been an on-going, never-ending saga
for those of us who have been on the committee a while, but
especially people who do this for a living. At some point we
are going to have to get our arms around it and just make it
work and make it happen, and I look forward to your legislation
as one of the opportunities for that to make it happen.
With that, Mr. Chairman, I yield back the balance of my
time.
[The statement of Ranking Member Thompson follows:]
Statement of Ranking Member Bennie G. Thompson
July 17, 2013
Earlier this year, the subcommittee continued its long-standing
tradition of conducting oversight of TSA's acquisition practices when
it held a hearing with representatives from TSA, GAO, the DHS Inspector
General, and the Department's Science and Technology Directorate.
The testimony received at that hearing revealed that TSA continues
to struggle to comply with Federal regulations and Department-wide
directives when purchasing and deploying security-related technologies,
does not monitor and effectively deploy its existing inventory of
technology equipment, and comes up short, when it comes to contracting
with small businesses.
Last year, TSA spent $2.39 billion on goods and services. With
billions of taxpayer dollars being spent by TSA every year, the
majority of which go toward acquiring security-related technologies, it
is critical that every dollar be accounted for and used to address
known and emerging security vulnerabilities.
To accomplish that, TSA must set forth the technological
requirements for each acquisition; including what existing capability
gap would be addressed. While this may sound like a basic, common-sense
task, it is one that, according to GAO, TSA has repeatedly failed to
conduct. In fact, in 2009, GAO reported that TSA failed to conduct a
cost-benefit analysis prior to purchasing and deploying over $100
million worth of AIT machines.
Had TSA conducted such an analysis, and considered privacy
concerns, approximately $40 million could have been saved. Certainly,
some of that money could have been put to far better use by supporting
promising technologies developed by small businesses.
Wisely spending taxpayer dollars on security-related technologies
also requires a strategic vision.
For too long, TSA has allowed the most recent security incident to
drive an often rushed effort to acquire and deploy new technologies.
While the agency needs the flexibility to respond to emerging threats,
such flexibility should not come at the expense of a long-term vision.
I look forward to hearing from each of the witnesses about how they
believe TSA's acquisition practices can be improved.
Specifically, I am pleased that Mr. Falconer has joined us today. I
look forward to hearing from him regarding how TSA can improve its
contracting performance as it relates to small businesses. Small
businesses play a key role in both job creation and innovation. It is
essential to both our economy and security posture for TSA to
effectively partner with small businesses.
Before closing, I would like to acknowledge the bipartisan approach
the Chairman has taken to conducting oversight and drafting legislation
addressing TSA's acquisition challenges. I look forward to continuing
to work with you to find ways to enhance TSA's performance in a manner
that bolsters Department-wide acquisition reforms.
Mr. Hudson. I thank you, Mr. Thompson, for your remarks.
Other Members of the committee are reminded that opening
statements may be submitted for the record.
But we are pleased today to have a distinguished panel of
witnesses with us.
Mr. Marc Pearl has served as the president and CEO of the
Homeland Security and Defense Business Council since 2008 and
represents the policy interests of the leading large, mid-size,
and small companies that provide homeland security technology,
product, and service solutions to our Nation.
Mr. Pearl previously served as general counsel and senior
vice president of Government affairs at the Information
Technology Association of America, and chief of staff and
legislative counsel to former U.S. Representative Dan Glickman
when the Congressman was Chairman of the House Intelligence
Committee.
We also have Ms. Shene Commodore, who is the Government
contracts and business manager with Intertek Testing Services,
where she leads the efforts in Government compliance and
business development responsibilities. She is testifying on
behalf of the Security Industry Association, the leading trade
association for electronic and physical security solution
providers.
Ms. Commodore is a certified professional contract manager
with over 20 years of experience providing acquisition support,
contract management, proposal assistance, marketing, and
financial auditing services to the Government and private
sector. Her experience includes proposal preparation for
General Services Administration, developing strategic
partnerships, creating the negotiating contracts, business
development, small business program development, and
acquisition training services.
Finally, Dr. Dolan Falconer is the co-founder and chief
executive officer of ScanTech Holdings, LLC, an electron beam
and X-ray technology small business. Dr. Falconer has 25 years
of nuclear industry experience in the management of engineering
projects for private industry and the Federal Government. Prior
to co-founding ScanTech, Dr. Falconer co-founded and served as
executive vice president of Parallax, an environmental and
nuclear engineering company, where he was instrumental in
growing the company from its start-up stage to having a
National presence with over 150 engineers, scientists, and
technicians.
The witnesses' full written statements will appear in the
record.
The Chairman now recognizes Mr. Pearl to testify.
STATEMENT OF MARC A. PEARL, PRESIDENT AND CEO, HOMELAND
SECURITY & DEFENSE BUSINESS COUNCIL
Mr. Pearl. Thank you.
Chairman Hudson, Ranking Member Richmond, Ranking Member
Thompson, and Congressman Rogers, thank you for the opportunity
for giving the Homeland Security and Defense Business Council
an opportunity to discuss industry's perspectives on TSA
acquisition reform. As a way of background, the council's
mission is to encourage a collaborative dialogue between
Government and industry, focusing on identifying the ways that
we can better work together to address our Nation's critical
homeland security needs, especially with regard to acquisition
process and technology development.
This subcommittee, as has been already stated, already
knows that TSA acquisition programs represent billions of
taxpayer dollars. Technology needs make up a significant part
of that annual budget and plays a critical role in TSA's
ability to accomplish its mission.
Unfortunately, as GAO reports point out, many of DHS's and
TSA's major acquisition programs often cost more than expected
and take longer to deploy than planned and/or deliver less
capability than promised.
To address these issues, the council recommends: First, the
continued use and development of open and transparent
communication forums that allow for early and on-going two-way
communication between industry and Government; and second, the
development of a long-term strategic technology investment
plan.
First, with regard to communication. Early engagement with
industry--early engagement--long before an RFI or an RFP is
needed, so that DHS and TSA can conduct market research; study
current technologies; understand what is possible, what is
practical; learn industry terminology; and more, most
importantly, define its requirements. Clearly-defined needs and
concise requirements, particularly those that contain metrics,
are critical factors in industry's ability to provide the
Government, in a timely and cost-effective manner, with the
technological capabilities that it needs.
DHS and TSA recognize this and are working to find new ways
to expand and deepen their engagement with industry. My written
testimony provides a number of recommendations of how this
progress can be continued into the future. Allow me an
opportunity to just mention a few.
They must continue to conduct face-to-face meetings and
create forums that allow discussions on general technology
needs and conceptual frameworks. They need to hold more, and
more focused, smaller industry days to become less reliant on
RFIs, which industry finds to be costly in terms of both time
and dollars. Last, consider the increased use of draft RFPs as
opposed to just putting forth an RFP.
With regard to the strategic technology investment plan:
DHS and TSA have made substantial progress in trying to
communicate their future priorities, direction, and thinking to
and with industry as a stakeholder. Strategic plans are a
helpful start but the current plans do not address technology
in depth. Congress should encourage them to take the planning
process a few steps further and develop a mid- to long-term
strategic technology investment plan.
The council urges this subcommittee and TSA to look at, for
example, NASA's 2012 strategic space technology investment plan
as a possible template. The NASA plan is effective because it
seeks to narrow the focus of the technology field and provides
guidance on technology investments over the next 4 years with
the context of a 20-year horizon.
Please understand that a strategic technology investment
plan is not a list of what the Government is going to buy in
the future, but it is rather a flexible document that can be
adapted if the risk profile dramatically changes. Most
importantly, this kind of plan provides industry with a
blueprint for the agency's future needs and thinking. It gives
both Government and industry the time to plan appropriately by
aligning financial and personnel resources towards addressing
the highest priority needs, which is providing the foundation
and a framework to achieve mission success.
Even if only some of the measures that I have discussed
today in both my oral and written testimony were to become part
of the overall acquisition process, the council and its members
strongly believes that they, together with the outreach efforts
that are being carried out by DHS that is already taking place,
will help TSA acquire the capabilities needed for mission
success that are timely, cost-effective, and accountable, in a
manner that encourages competition, innovation, and investment
by industry in the homeland security enterprise.
We very much appreciate the opportunity to provide the
collective perspectives of industry on TSA acquisition reform
and stand ready to answer any questions that you might have.
Thank you.
[The prepared statement of Mr. Pearl follows:]
Prepared Statement of Marc A. Pearl
July 17, 2013
Chairman Hudson, Ranking Member Richmond, and distinguished Members
of the subcommittee, I am Marc Pearl, president and CEO of the Homeland
Security & Defense Business Council (Council), a non-partisan, non-
profit organization that is made up of the leading large, mid-tier, and
small companies that provide homeland security and homeland defense
technology, product, and service solutions to our Nation, and more
specifically, as it relates to today's hearing, to TSA. We thank you
for giving us the opportunity to appear before you today to discuss
industry perspectives on TSA acquisition reform.
The Council sponsors and promotes programs and initiatives that
encourage a collaborative dialogue between industry and Government that
focuses on identifying ways we can better work together to address our
Nation's critical homeland security/homeland defense issues. Over the
past few years, we have, for example, worked closely with the DHS
Management and S&T Directorates on improving the acquisition process
and the process for developing and finding advanced technologies.
As the Members of this subcommittee already know, TSA acquisition
programs represent billions of taxpayer dollars in life-cycle costs and
support a wide range of aviation security missions and investments.
Technology needs make up a significant part of TSA's annual budget and
play a critical role in its ability to accomplish its mission. However,
as Government Accountability Office (GAO) reports continue to point
out, many of DHS and TSA's major acquisition programs often cost more
than expected, take longer to deploy than planned, or deliver less
capability than promised.
Industry and Government are striving for the same goal--for TSA
(and the entire homeland security enterprise) to acquire the
capabilities needed for mission success through processes that are
timely, cost-effective, accountable, and that encourage competition,
innovation, and investment in the homeland security marketplace. No one
can afford to have time, money, and resources wasted.
Members of the Council firmly believe that open, transparent, and
substantive communication, along with strong, on-going collaborations
between the Government and industry long before and throughout the
acquisition process is a critical aspect to achieving this goal and
addressing the GAO's concerns.
I do want to state unequivocally that DHS and TSA have truly begun
to recognize this need, and are working hard to find creative and
substantive ways to engage with industry--and not just with us in the
role of contractor. We applaud their efforts and many of the recent
changes that have occurred. In my testimony today, I would like to
highlight some of the success stories and also suggest constructive
ways that DHS, TSA, and Congress can continue the progress into the
future.
The Council believes the following actions will assist the process
of acquisition reform and ensure that TSA has the ability to acquire
innovative technologies in a cost-effective and efficient manner:
The development of a long-term strategic technology
investment plan and multi-year budget plans; and
Continued use and development of open and transparent
communication forums that allow for early and on-going two-way
communication between Government and industry.
In particular, we believe that communication between Government and
its industry partners can be improved through:
Forums that allow for discussions surrounding general needs
and conceptual frameworks sufficiently in advance of an
upcoming program or contract;
Smaller and more focused industry days;
Less reliance on Requests for Information (RFIs);
Increased use of draft Requests for Proposal (RFPs);
Creation of an Acquisition Timeline Model and Acquisition
Status Dashboard; and
Education of the TSA workforce on acceptable types of
Government/industry engagement.
I. DEVELOPMENT OF A MID- TO LONG-TERM STRATEGIC TECHNOLOGY INVESTMENT
PLAN AND MULTI-YEAR BUDGET PLANS
The communication of the Government's future technology needs,
vision, and intended direction is of critical importance to industry.
It should also be of equal importance to legislators that are conscious
of using tax dollars in an effective and efficient manner. Industry
does not have limitless resources to devote to the development and
testing of homeland security solutions. Particularly in the current
economic environment, no one wants to waste time and money building
speculative technologies or solutions that ``should'' or ``could'' be
incorporated into--in this case--our Nation's transportation security
efforts. In order to provide the solutions that TSA needs to
operationalize its mission, industry must have advance notice of the
need and an ability to provide long-range solutions to meet those
needs.
DHS and TSA have made substantial progress in trying to communicate
future priorities, direction, and thinking to industry through the use
of such vehicles as industry days, FedBizOps, and strategic planning
documents. We applaud the development of the 2012-2016 DHS Strategic
Plan and the 2013-2016 TSA Office of Security Capabilities Strategic
Plan. We are particularly appreciative of TSA's willingness to have
industry participate as a stakeholder in the planning process.
While these documents are an important part of the planning
process, they do not address technologies in depth. We strongly believe
that DHS must take the planning process a few steps further and develop
a mid- to long-term strategic technology investment plan.
We point to the 2012 Strategic Space Technology Investment Plan\1\
that NASA issued as a good example. The NASA plan was created after the
agency developed a series of technology roadmaps that defined its
future needs based upon the results of a gap analysis. The plan is
effective because it narrows the focus of the technology field and
gives guidance on technology investment over the next 4 years, and
within the context of a 20-year horizon.
---------------------------------------------------------------------------
\1\ See http://www.nasa.gov/offices/oct/home/sstip.html.
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For purposes of demonstrating what we believe is a potentially
useful template, and to assist the subcommittee in its deliberations,
we have summarized below the component parts and type of information
provided in NASA's plan:
The technology roadmap specifies 14 plans for developing
technologies in 14 areas over the next 20 years.
It prioritizes and divides its investment approach into
three levels of concentration.
Core Technologies (70%).--These are the most pressing
near-term technology investments necessary to accomplish
its mission.
Adjacent Technologies (20%).--These are additional high-
priority investments that would be needed over the next 4
years. These are technologies that will take more time to
development.
Complementary (10%).--These are the remaining needs from
the technology roadmap. They have limited immediate
relevance but they have the potential to bear relevance
over the next 20 years. These technologies may require some
investment now so that the capability will exist later.
The core, adjacent, and complementary technologies support
goals in a four-pillar framework. Each pillar includes three
components: (1) A strategic investment goal; (2) associated
capability objectives; and (3) technical challenge areas
underpinning those objectives.
The framework specifies the principles that will guide the
investment strategy and portfolio execution.
It includes a governance approach with frequent oversight
and allows for the updating of the plan on a biennial basis.
A strategic technology investment plan is not a list of what the
Government is going to buy in the future. Instead, it is a flexible
document that provides industry with a blueprint for the Government's
future needs and thinking. It also gives both the agency and industry
the time to plan appropriately by aligning financial and personnel
resources towards addressing the highest-priority needs. Any assistance
that Congress can provide in guiding the development of a long-term
strategic technology investment plan would go a long way in providing
the foundation and framework for all stakeholders to achieve mission
success.
While it is no doubt difficult to develop, particularly under the
current budget approval process, Congress and DHS could work together
more effectively to develop multi-year budget plans, or at least a
credible forecast of future investment activities at the time of an
annual budget justification. This would provide industry with a more
predictable homeland security acquisition environment, and a greater
level of certainty, which is needed to make multi-million dollar
technology investments and hiring decisions.
II. CONTINUED USE AND DEVELOPMENT OF OPEN AND TRANSPARENT COMMUNICATION
METHODS AND FORUMS THAT ALLOW FOR EARLY AND ON-GOING INFORMATION
EXCHANGE BETWEEN GOVERNMENT AND INDUSTRY
The Council has long stressed the need for the Government to engage
with industry prior to starting the procurement process. Early
engagement (long before the issuance of a RFP) is needed so that DHS
can conduct the appropriate market research, explore creative ways of
understanding existing and emerging technologies, learn industry
terminology, identify all of the potential companies that can provide
the technology, and determine the correct scope of the requirements
that best fit the existing vendor base.
Clearly-defined needs and concise requirements, particularly those
that contain metrics and differentiators, are critical factors in
industry's ability to provide the Government with the technological
capabilities it needs in a timely and cost-effective manner. If the
technical performance and testing requirements for technologies are not
measureable or clearly communicated to industry, it raises the
potential for an increased or lost cost of development, duplication of
effort, and a resulting product or technology that fails to meet the
Government's expectations. Industry input is essential to help define
and calibrate requirements to match objectives and achieve goals. The
more complex the procurement, the more critical the need for an open
information exchange.
DHS and TSA are working hard to conduct outreach to and collect
intelligent data from industry. Currently, there are a number of
methods used to gather and exchange information with industry,
including Industry Days, RFIs, Broad Agency Announcements (BAAs),
monthly webinars, FedBizOpps, DHS website announcements, one-on-one
vendor sessions, and outreach through industry associations, like the
Council.
It is important that DHS continue to use multiple forums for
communication. The Government needs to ensure it has forums that allow
for both one-on-one and group engagement. The Government also needs to
have the flexibility to balance group interactions so that it can have
productive communications with a manageable amount of people, as well
as the ability to reach out, request, and share information with a
broader audience, particularly those who do not reside in Washington,
DC. The latter is an important aspect to ensuring the Government is
viewed as open and transparent.
In this regard, the Council recommends six ways to expand and
improve current communication efforts before and during the acquisition
process:
1. Develop Forums That Allow for Discussions Surrounding General
Needs and Conceptual Frameworks Sufficiently in Advance of an Upcoming
Program or Contract.--This type of interaction in advance of a specific
procurement will enable the Government to gather the information needed
to help shape the desired outcome, better define and understand what is
actually needed, and determine what is economically reasonable and
technologically feasible. Here is a simple analogy to drive this point:
Without a conceptual discussion about what the Government needs
technology to do for them, they may prematurely define the need as a
mop or broom when what they really need is a Swiffer.
2. Conduct Smaller and More Focused Industry Days.--Industry
encourages the use of smaller and more focused industry days that
include breakout sessions that allow for interactive roundtable
discussions with the Government. These types of sessions are a more
valuable use of industry's time and manpower. By narrowing the focus of
an industry day, the Government can reduce the amount of people in
physical attendance and allow for more productive and interactive
engagement with the attendees. These sessions could be video-taped and
live-streamed over the internet to ensure Government transparency. Many
of the component parts of DHS, including TSA, have started to
incorporate breakout sessions into their industry days, and industry
reports they result in a better exchange of information.
3. Less Reliance on Requests for Information (RFIs).--Recently,
there has been a substantial increase in the use of RFIs to seek advice
and information from the private sector before a RFP is issued. While
RFIs are a valuable tool for communication when used in the appropriate
circumstance, they also have limitations. Government should not rely
too heavily on RFIs because industry is finding that they do not have
the time, money, and manpower to devote to them. Simply put, it
sometimes costs too much to provide a formal response, and it is
industry's experience that many of the responses to RFIs often ``sit on
the shelf'' and are not put to use.
4. Increase the Use of Draft Requests for Proposal (RFPs).--
Industry believes the Government would improve the outcome of contracts
if it increased the use of draft RFPs in advance of the final version.
By issuing a draft RFP, industry has an opportunity to comment and
raise issues that the Government should consider, particularly those
that relate to the design of the contract, the interpretation and
specificity of the requirements, the impact to industry, and potential
problems with the RFP that might impact cost, competition, or delivery.
5. Create an Acquisition Time Line Model and Acquisition Status
Dashboard.--The current procurement process takes too long, resulting
in increased costs and delays as well as causing detrimental impacts to
the homeland security mission. Currently, it can take a year to a year
and a half--often longer--from the time mission requirements are
published until contracts are in place to begin addressing those
requirements. We recommend that DHS establish an acquisition time line
model and set of best practice benchmarks or service-level agreements,
depending upon the appropriate terminology, by which it will execute
acquisitions. DHS leadership would need to manage to those time lines
and address and report any exceptions to those benchmarks.
Another way of improving the communication process would be to
develop a ``dashboard'' that shows industry the status of where the
Government is in the acquisition process in relation to defined
activities and milestones. This would save time and cut down on the
amount of questions between industry and Government about where things
stand in the process.
6. Educate the Workforce on Acceptable Government/Industry
Communication.--While there are numerous examples of Government
employees that are diligently working to reach out to industry, this is
not consistent across DHS or TSA. There have been a number of
situations where certain employees will not meet with or communicate
with industry due to fear that they are violating the Federal
Acquisition Regulation (FAR) or other ethics rules. It would be highly
beneficial for Congress to show its support and encouragement for
continued and responsible engagement between industry and Government.
We believe that more efforts to educate the DHS and TSA workforce on
the timing and manner in which they can engage with industry would help
address this problem.
III. RECENT SUCCESS STORIES OF GOVERNMENT/INDUSTRY ENGAGEMENT
It is important to point out to the subcommittee that there has
been tremendous progress with regards to DHS and TSA's willingness to
engage with industry and treat us as a valuable stakeholder in the
overall process and mission. We have seen numerous examples of the
Government engaging with industry outside of the acquisition process to
vet ideas and concepts, challenge and support Government thinking, and
provide valuable thought leadership. This interaction helps build and
strengthen the partnership and will improve DHS' ability to accomplish
its mission.
Please allow me to share some of the most recent examples of how
Government and industry have worked together to educate each other,
share best practices and lessons learned, and change behaviors that
occur during the acquisition process:
1. Acquisition Risk Management Seminar.--This past March, the
Council worked with the Management Directorate to host a 3-hour seminar
before more than 50 DHS contracting officers, acquisition specialists,
and program managers that focused on explaining how industry assesses
and mitigates risk in the acquisition process. The seminar was an
opportunity for Government to gain a better understanding of industry's
perspectives, as well as to understand how risk mitigation decisions
impact the bidding process and resulting outcome (in regards to cost,
delivery, quality, competitiveness, effectiveness, and efficiency). TSA
contracting officers took part in this seminar.
2. Mock Post-Award Debriefing Exercises.--The Management
Directorate has worked through a number of industry organizations to
create Mock Post-Award Debriefing Exercises for DHS contracting
officers. Subject matter experts from industry serve as role players
and engage with Government under a variety of scenarios that might
occur when the Government debriefs and furnishes the basis for
selection decisions and contract awards. The overarching goal of the
exercises is to help the Government learn to communicate the right
information with industry during the debriefing process. TSA officials
have taken part in these exercises.
3. Input an Cost Estimation And Schedule Management Policies.--Last
Spring, the Council worked with the Program Accountability and Risk
Management (PARM) program within the DHS Management Directorate to set
up a small practitioner work group made up of SMEs from Government and
industry to review and provide input on draft standards for cost
estimation and schedule management. The workgroup met twice to review
the language and suggest ways to strengthen the policy to achieve
intended objectives. The workgroup had valuable discussions about the
interpretation and impact of certain sections of the guidance and to
identify additional provisions that would be needed to ensure
compliance. Industry representatives were able to offer examples,
suggested language, and lessons learned based on their experience with
similar policies at other Federal agencies.
4. Input on the Technology Foraging Process.--Through a series of
small group sessions, SMEs from a number of Council member companies
met with representatives from the S&T Directorate to provide input on
the technology foraging process. The goal was to share industry's
experiences and suggest different ways that the Government could
identify and evaluate existing or developing technologies that could
support DHS mission needs.
5. Government/Industry Focus Groups.--TSA has developed a set of
focus groups with industry through the Washington Homeland Security
Roundtable. These sessions have focused on identifying methods and
processes by which TSA can effectively engage with industry on matters
related to acquisition.
CONCLUSION
We strongly believe that open, transparent, and substantive
communication, along with continuous engagement between the Government
and industry before and throughout the acquisition process is the key
to reforming the acquisition process. DHS and TSA recognize the need
and are succeeding in finding creative and unique ways of engaging with
industry. While much progress has been made, we have identified a
number of steps to continue the progress of acquisition reform into the
future.
We respectfully ask for your support in facilitating the following
actions:
Urge DHS overall and TSA in particular to develop a long-
term strategic technology investment plan and multi-year budget
plans; and
Encourage them to continue to use and develop open and
transparent communication forums that allow for early and on-
going two-way communication between Government and industry.
If these measures are built into the overall acquisition process,
the Council and its members believe that TSA (and the entire homeland
security enterprise) will acquire the capabilities needed for mission
success in a manner that is timely, cost-effective, accountable, and
that encourages competition, innovation, and investment in the homeland
security marketplace.
On behalf of the Homeland Security & Defense Business Council, I
appreciate the opportunity to provide the collective perspectives of
industry on TSA acquisition reform. The Council stands ready to answer
any additional questions you may have on these important issues.
Mr. Hudson. Thank you, Mr. Pearl.
The Chair recognizes Ms. Commodore to testify.
STATEMENT OF SHENE COMMODORE, GOVERNMENT CONTRACTS & BUSINESS
MANAGER, INTERTEK, TESTIFYING ON BEHALF OF THE SECURITY
INDUSTRY ASSOCIATION
Ms. Commodore. Good morning, Chairman Hudson, Ranking
Member Richmond----
Mr. Hudson. Is your button on there? You want to push the
talk button?
Ms. Commodore. Good morning, Chairman Hudson, Ranking
Member Richmond, and distinguished Members of the subcommittee.
Thank you very much for the opportunity to testify with you
today regarding Transportation Security Administration's
acquisition and procurement policies. My testimony today
reflects over 20 years of experience in the area of Federal
procurement, both from the Government and the private sectors,
and that also includes TSA's procurement process during this
time.
I am here representing Intertek Testing Services. This is a
Nationally-recognized testing laboratory whose history goes
back to Thomas Edison. But I am also here representing the
Security Industry Association, who has a membership of over 480
companies which currently develop, install, and integrate many
of the electronic security technologies in use by TSA today.
Intertek is a member of Security Industry Association and I
serve on the association's Government relations committee. It
is truly an honor to be here with you today representing these
two outstanding organizations.
Specific to Intertek's role in the security industry, we
test and certify products which help companies improve product
performance, gain efficiencies in logistics and manufacturing,
and also deter barriers to market. We also work with other
organizations to create test procedures and methods which
validate the compliance and validation of new technologies.
The issue before us is procurement reform with TSA, and
legislation that you have proposed, Chairman Hudson, is well
received by the industry. As someone who works daily with the
decisions made in Congress, the TSA, and several companies who
sell directly to TSA, I can tell you that this is a welcome
collaboration between Government and the industry.
Open dialogue is even more critical to continue innovative
growth in transportation technologies in order to protect our
Nation with limited funds. The aging workforce, experience
gaps, and the technology talent shortage are both global
industry and Government problems.
Contractors sometimes do not understand the requirements.
Additionally, the lack of industry best practices on the
Government side causes contracting staff to write unnecessary
task or requirements in the solicitations, which then drive
high acquisition costs. This can be prevented with more
collaboration between industry and Government and also lead to
additional Government savings.
There are four key areas which I believe TSA should focus
on to implement best practices in the procurement process. They
are the acquisition planning, test and evaluation, cost-benefit
analysis, and Government contract vehicles. While I will
discuss these in limited detail now, my written testimony goes
into greater detail.
The first item: Acquisition planning. I will start off by
saying there are three key phases to the Government contracting
cycle: The pre-award phase, the award phase, and the post-award
phase.
The greatest risk in this cycle for all parties, industry
and Government, is during the pre-award phase. It is,
therefore, increasingly important that more acquisition
planning takes place as early as possible.
By communicating with industry, Government can learn best
practices and gain a better understanding of the level of
effort required for completing task. This is the opportunity to
conduct market research prior to drafting requirements.
Therefore, it is also my belief that TSA should conduct more
requests for information and allow comments on draft
solicitations.
The next item: Test and evaluation. New initiatives should
be established with TSA regarding testing and evaluation
offices to contain costs so that we have verified equipment to
market faster to maintain the on-going safety of our Nation's
security. TSA should also limit testing requirements solely to
labs that actually write the requirements, because equivalent
testing can be done successfully through third-party
laboratories.
Regarding cost-benefit analysis, it is important that cost
and benefits are measurable, accurate, realistic, timely, and
beneficial. Contracting staff need to understand how to assess
the realism of the cost in terms of the contract requirements.
Last, Government contract vehicles. Government contract
vehicles will afford TSA a streamlined procurement approach.
Particularly with GSA, the contractors have already been
verified and approved at discounted prices. This can also save
TSA additional money.
Again, thank you for the invitation for the committee
today. On behalf of SIA and Intertek, we appreciate your
efforts in this area and I look forward to answering any
questions you may have.
[The prepared statement of Ms. Commodore follows:]
Prepared Statement of Shene Commodore
July 17, 2013
Good morning Chairman Hudson, Ranking Member Richmond, and
distinguished Members of the subcommittee. Thank you for the
opportunity to testify today about the Transportation Security
Administration's (TSA) acquisition and procurement policies and
practices.
This morning my testimony reflects more than 20 years of experience
in the area of Federal procurement and I have worked with TSA's
procurement process since that agency was established a little more
than 10 years ago.
I am here representing not only Intertek Testing Services, a
Nationally-recognized testing laboratory whose history goes back to the
days of Thomas Edison, but also the Security Industry Association,
whose more than 480 member companies develop, install, and integrate
many of the electronic security technologies purchased and in use by
the TSA. Intertek is a member of the Security Industry Association and
I serve on the association's Government relations committee.
It is truly an honor to sit here today, representing these two
outstanding organizations.
Specific to Intertek's role in the security industry, we test and
certify products, help customers improve performance, gain efficiencies
in manufacturing and logistics, overcome market constraints, and seek
to help our customers reduce risk. Intertek also develops test
procedures and methods to validate the compliance of the implementation
of new technologies.
As the industry leader with more than 35,000 people in 1,000
locations in over 100 countries, we can ensure that products meet
quality, health, environmental, safety, and social accountability
standards for virtually any market around the world. Additionally,
Intertek holds extensive global accreditations, recognitions, and
agreement and we have extensive knowledge and expertise in how to
overcome regulatory, market, and supply chain hurdles.
The issue before us is procurement reform at the TSA. The
legislation Chairman Hudson is proposing has been well-received by the
industry. As someone who works daily with the decisions made in
Congress, the TSA, and several companies who sell directly to the TSA,
I can tell you that collaboration with industry is always welcomed.
The aging workforce, experience gaps, and the technical talent
shortage are global industry and Government problems. Additionally,
since Congress has recognized the need for a professional acquisition
workforce by establishing education, training, and experience
requirements for entry into and advancement in the acquisition career
fields for Federal agencies, industry collaboration and open dialogue
is even more critical to continue innovative growth with transportation
technologies in order to protect our Nation with limited funds.
Contractors sometimes do not understand the requirements. Additionally,
the lack of understanding of industry practices leads to Government
contracting staff writing unnecessary tasks or tests requirements which
drive high costs in the acquisition. This can be prevented with more
collaboration between industry and Government and also lead to
additional Government savings. We commend your efforts to encourage
more communication and dialogue between Government and industry.
There are Four Key Areas TSA should consider when implementing best
practices to improve transparency with regard to technology acquisition
programs:
1. Acquisition Planning.--The Government contract cycle has three
main phases; pre-award, award, and post-award. The pre-award cycle
carries the most risks and is where acquisition planning takes place to
identify requirements and associated costs with Government estimates.
This is the opportunity to conduct market research and the best time to
have discussions with industry, prior to drafting requirements. By
communicating with industry, Government can learn best practices,
common trends, and gain a better understanding of the level of effort
required for completing tasks. TSA should conduct more requests for
information, sources sought, and allow comments on the draft statement
of work during the acquisition planning process. This will allow for a
better acquisition plan that includes requirements that are both easy
to understand and yield better pricing from prospective bidders. It is
during this time that TSA can also identify small businesses that may
be able to complete the work.
2. Test and Evaluation.--New initiatives should be established with
TSA testing and evaluation offices to contain costs and get products to
market faster to maintain the on-going safety of our Nation's
transportation system. Security products are needed for open-source and
closed-source areas. The testing of products validates a product's
safety and performance. Does the product function the way it is
supposed to? Is it durable? Is it safe? Will it last? Testing and
evaluation may include an assessment of a system, subsystem, or a
component of a complete system. Additionally, the earlier testing
begins in the process, the more chances for success of the product.
Testing and evaluation should also include design review analysis,
failure analysis, and corrosion analysis.
Test standards are written to instruct engineers on how to conduct
the proper test with specific test methods. Testing laboratories
purchase test standards to stay abreast of required test methods.
Accredited third-party testing laboratories like Intertek can test to
various standards, although they did not write the test standard. It is
important for contractors to know what information the agency would
like to obtain from the test results and how the test data will be used
in order to ensure the proper test method and how test equipment is
part of the test evaluation process. In some instances, the agency
requires test standards or specific test equipment where alternate test
methods or test equipment can be used to provide the same information
at different costs and time intervals. To ensure cost-effective, full
and open competition, TSA should not limit testing requirements solely
to companies that write the test standards, but include equivalent
testing certification marks which are allowed to test to a variety of
standards. By utilizing skilled testing laboratories other than those
that have developed the test standards, it ensures the external
validity (generalizability) of the test results. Product manufacturers
and developers will be able to get their products tested and certified
by more labs. TSA can then benefit from more thorough validation of
security products to get these technologies to market faster.
TSA recognizes the importance of getting products out faster and
has released Request for Information (RFI), Solicitation Number:
HSTS04-13-S-CT9999, Third-Party Testing to identify third-party testing
facilities capable of providing testing and evaluation certification
for Transportation Security Equipment (TSE). Original equipment
manufacturers (OEMs) of security devices would have their equipment
tested by commercial third-party testing organizations before they
brought their equipment to TSA to undergo its more formal test and
evaluation process. We believe this will streamline TSA's formal
qualification process and increase the likelihood of security products'
success and get them to market faster. TSA would also be able to gather
data which can then be used for cost-benefit analysis.
The formal TSA T&E process begins with entry into Developmental
Testing (DT) where product system and subsystems are assessed for their
ability to satisfy sought-after capabilities then assessed with Quality
Testing (QT). By requiring third-party testing and certification, TSA
can benefit from increased probability of quality security products
being ready for an acquisition decision. Businesses will also save time
and money because they are less likely to lose money retesting products
and increase the likelihood of their products passing TSA testing
requirements.
Third-party testing certification would allow the TSA T&E workforce
to save time therefore increasing their capacity to direct planning
efforts. TSA's test and evaluation organization can then focus more on
the operational test and system evaluation processes. These
efficiencies will also yield TSA more oversight needed to meet its
acquisition plan goals for security products by being able to provide
more management attention to product quality issues that may face the
greatest risks.
3. Cost-Benefit Analysis.--Cost-benefit analysis is critical to
budget planning and accurate forecasts of project cost estimates. In
conducting cost-benefit analysis, one must be knowledgeable about cost
realism and cost reasonableness. TSA procurement and program staff need
specific, measureable, attainable, realistic, timely cost-benefit
analysis guidelines for all major projects. Cost-benefit analysis
guides should address the key elements of costs analysis, how to
determine price reasonableness with emphasis placed on price analysis
techniques and their appropriateness under a variety of contracting/
procurement scenarios. Acquisition staff must understand the difference
between price analysis, cost analysis, and cost realism while also
being able to identify cost reasonableness based on the requirements.
It is important for those involved in acquisition planning and program
management to understand the meaning of cost realism and cost
reasonableness to generate and to develop more accurate independent
Government costs estimates. In accordance with the Federal Acquisition
Regulations (FAR) these terms are defined as the following:
Cost Realism Analysis (FAR 15.101, 15.401, and 15.404-1(d))
Cost Realism Analysis is the process of independently reviewing and
evaluating specific elements of each offeror's proposed cost estimate
to determine whether the estimated proposed cost elements:
Are realistic for the work to be performed;
Reflect a clear understanding of contract requirements; and
Are consistent with the unique methods of performances and
materials described in the offeror's technical proposal.
Based on the offeror evaluation criteria stated in the
solicitation, you can then use the results of your analysis in
selecting the offer that provides best value to the Government.
Cost Reasonableness, FAR 31.201-3--Determining Reasonableness
A cost is reasonable if, in its nature and amount, it does not
exceed that which would be incurred by a prudent person in the conduct
of competitive business. Costs cannot be deemed reasonable if they are
not allowable.
Cost-benefit analysis training should include detailed policy for
all of these criteria so that Government staff have the ability to
recognize unrealistic costs estimates. This will work to ensure the
creation of more realistic project costs so that TSA can operate within
budget. One common mistake among program and procurement staff is the
lack of understanding of how the contract requirements affect the level
of effort needed per tasks and related costs which can also be deterred
with cost-benefit analysis procedures.
It is imperative that cost-benefit data is maintained and reviewed
on an on-going basis. To prevent cost-benefit data limitations because
of the rapid change in technology; internal controls need to be
implemented to maintain, compare, and reconcile the data compiled from
annual forecasts and spending reports. Data should be maintained to
review and prepare an analysis based on actual spending and comparative
data to validate recommended acquisition program changes. The data will
also help validate the success of acquisition planning and forecasting.
Annual reports should include the identification of the staff which
contribute to the report as well as the data source and methods of the
data used. Each department should use the same methods to calculate
cost benefit data to ensure a fair and consistent analysis throughout
TSA with the use of reliable aggregate data.
4. Government Contract Vehicles--TSA should also consider using GSA
schedules. The General Services Administration reviews the technical
ability, management, and financial solvency of companies that want to
provide product and services to the Federal Government. Companies with
GSA schedules have already been vetted and the best price has already
been negotiated. This will save procurement lead time so that contracts
can be awarded faster and TSA will receive discounted rates by
qualified vendors. The following GSA Schedules could be beneficial to
TSA:
Schedule 70--General Purpose Commercial Information
Technology Equipment, Software, and Services;
Schedule 84--Total Solutions for Law Enforcement, Security,
Facility Management Systems, Fire, Rescue, Special Purpose
Clothing, Marine Craft and Emergency/Disaster Response;
Schedule 871--Professional Engineering Services;
Schedule 66--Scientific Equipment and Services.
Again, I would like to thank the committee for the invitation to be
here today. On behalf of the Security Industry Association and
Intertek, we appreciate your efforts in this area and I look forward to
any questions you may have.
Mr. Hudson. Thank you, Ms. Commodore.
The Chairman now recognizes Dr. Falconer to testify.
STATEMENT OF DOLAN P. FALCONER, JR., PRESIDENT AND CEO,
SCANTECH IDENTIFICATION BEAM SYSTEMS, LLC
Mr. Falconer. Okay. Good morning, Mr. Chairman, Ranking
Member, Ranking Member of the full committee, and distinguished
Members of the subcommittee.
My name is Dolan Falconer. I am founder, president, chief
executive officer, and vial-washer for ScanTech. Thank you for
inviting me to testify about my perspectives relative to TSA
acquisition reform, specifically how TSA can better tap into
the technology and innovations of small business.
The facts are clear: Small and innovative high-tech
companies have significant barriers to achieving qualification
and contracts for security screening technologies. Simply put,
it takes a long time, extensive resources, and a lot of capital
to successfully do business with TSA.
My company is based in Atlanta, Georgia and is 100 percent
privately funded. We are the leading innovator in advanced
technology X-ray systems. They are designed and designated
under the trade name SENTINEL and our systems are designed to
inspect carry-on luggage on aircraft.
SENTINEL is designed to meet TSA requirements for all of
the needs for the airline industry. We are currently one if not
the only small business that is in the process of qualifying
such a system within TSA.
SENTINEL has been certified by Underwriters Laboratory and
is currently at the TSA laboratory in the qualification
process. Reaching this point is a major accomplishment for a
small business and we are very proud that we have made it this
far and we haven't taken a nickel of Government or public money
to get here.
That said, it has been a long and arduous process for us,
which is par for small businesses within TSA. Let me explain
this to you.
We started the process in 2006 when TSA launched an effort
to find a screening technology that would solve the problems
with liquids on aircraft that we are all so familiar with. In
response to this opportunity we submitted a white paper
describing how we would solve the problem and address TSA's
needs.
We secured millions of dollars of private funding and began
the process of developing test beds and building several
prototypes in order to prove that we could do what we claimed
we could do, and eventually we became one of seven companies
selected by TSA to go into the qualification process for this
program. At this point we began to really realize how difficult
it would be to do business with TSA.
It has taken us 7 years to get to this point, to the
laboratory. But for a small business time is money. We have
spent $20 million to get to this point, all private funding. We
are not there yet. Time, more money, more time, more money. It
is very difficult to solve the problem within TSA.
At this point I was notified by our investors that they
were getting tired of the time line, and they have since told
us that they are looking at stopping funding because at the end
of this process there is no assurance that you are going to get
to a contract within the agency. That is okay for large
businesses. Large, multi-billion dollar nationals do a lot of
R&D. They have R&D budgets that they can move forward.
But as a small business we cannot do that. We have to have
an idea of where we are going. That currently does not exist
within the agency.
We made several recommendations in the areas that are
problematic. One is privately-funded R&D. It should not be
privately funded; there should be establishment of funding
mechanisms to do the R&D phase.
The requirement for Nationally-recognized third-party
certification in our program, which is U.L. certification. Why
would you get U.L. certification if the agency isn't going to
say they are going to buy your machine? That is a lot of money
and a lot of time.
Full and open competitions. This is very difficult for
small businesses. I am competing with the largest businesses in
the world in this sector.
Prior access to TSL. Without access you can't have the
information to meet the standards, and so it is a very
difficult process.
Security requirements--everyone knows it is a Catch-22.
Without a contract you can't get the security clearance;
without the security clearance you can't get the contract.
Finally, the unfunded qualification process, which is
lengthy, takes forever to get through, and without funding you
can't get there. So there is no funding support there.
There are bright spots. I have had a meeting with
Administrator Pistole. My recommendations were taken.
We believe that TSL is doing an exceptional job under Dr.
Susan Hallowell. She is an advocate. There is a readiness
review process that is in place that is there to help us get
through the qualification process, and I would like to give her
thanks for that publicly.
My written testimony includes a list of recommendations,
and I stand here to answer those recommendations here to the
committee.
[The prepared statement of Mr. Falconer follows:]
Prepared Statement of Dolan P. Falconer
July 17, 2013
Good morning Mr. Chairman, Ranking Member, and distinguished
Members of the subcommittee.
My name is Dolan Falconer and I am the founder, president, and
chief executive officer of ScanTech Identification Beam Systems. LLC.
Thank you for inviting me to testify today about my perspectives on
Transportation Security Administration (TSA) acquisition reform, and
specifically how TSA procurement and acquisition practices can be
improved to tap into the technology potential and innovations of U.S.
small businesses.
TSA faces particular challenges in obtaining the most effective and
efficient security technology to protect the traveling public and our
economy from evolving threats. Small and innovative high-technology
companies face a gauntlet of barriers to achieving Government
qualification and contracts for security screening technologies. Simply
put, it takes a long time, extensive resources, and a lot of capital to
successfully do business with TSA.
BACKGROUND
Based in Atlanta, GA, ScanTech is a 100% privately-funded, U.S.
small business and a leading innovator of Advanced Technology (AT) X-
ray inspection systems. ScanTech's X-ray inspection systems are
specifically designed to provide materially better and faster detection
of hazardous and contraband materials, thereby increasing processing
efficiency resulting in reduced costs, increased confidence, and
greater peace of mind for the traveling public.
Designated under the trademark SentinelTM (see attached
brochure), our systems are designed to specifically protect checkpoints
and inspect airline carry-on baggage. While nearly identical in overall
appearance to existing checkpoint scanners currently deployed at U.S.
airports, SentinelTM systems are anything but the same when
it comes to technology and capabilities. SentinelTM provides
improved imaging, better spatial recognition, and advanced material
discrimination algorithms to automatically differentiate and identify
explosives, flammable liquids, and other hazardous materials and
substances that may be hidden deep within screened baggage and
packages.
With a footprint very similar to traditional X-ray scanners,
SentinelTM systems can quickly be installed and easily
maintained at existing checkpoints without major infrastructure
modifications. In addition, once installed, SentinelTM
systems have built-in hardware and software upgrade capabilities that
negate the need to replace the entire system as technology improves and
threats evolve.
SentinelTM is specifically designed to meet TSA
requirements for the inspection of carry-on baggage, handbags, brief
cases, laptop computers, small parcels, and packages that pass through
airport checkpoints. Employing dual-energy, multi-view material
discrimination with proprietary Automatic Threat Identification and
Modular Threat Adaptation technology, SentinelTM provides a
significant advantage and superior threat reduction over traditional
and airport checkpoint X-ray systems.
ScanTech is currently one of, if not the only U.S. small business
in the process of qualifying such a system with TSA.
SentinelTM has already been certified by Underwriter's
Laboratory (UL) for Safety and Electromagnetic Compliance (EMC) and is
currently at the TSA Transportation Safety Laboratory (TSL) in Atlantic
City, New Jersey being prepared for the TSA AT Qualification Test.
Although we consider reaching this point in the TSA acquisition
process a major accomplishment, it has been a long and arduous process
and is indicative of the challenges that face small technology
businesses doing business with TSA.
Please let me explain further.
We began developing SentinelTM in 2006 when TSA launched
a search for new screening technology for carry-on baggage that could
detect threats like those that were to be used in an alleged plot to
blow up as many as 10 planes in mid-flight from the United Kingdom to
the United States using liquid explosive compounds brought on board in
carry-on luggage.
TSA invited interested companies to submit white papers for
consideration, and in response, ScanTech initiated the development of
SentinelTM, a four-plane platform architecture designed to
address specific deficiencies in the then-current technology. After
securing millions of dollars of private funding to support product
development and design and to build and test several test beds and
prototypes, ScanTech became one of seven companies and the only U.S.
small business down-selected by TSA to enter its new AT X-ray
qualification program.
It was at this point that the realities of doing high-technology
business with TSA as a U.S. small business and the challenges
associated with navigating the TSA procurement process became apparent
to me.
SMALL BUSINESS CHALLENGES
Let me explain:
Development of our next generation of X-ray screening technology
began 7 long years ago and has taken over $20 million of private equity
funding to reach this point. This is more time and money than most
small businesses can sustain without Federal funding support.
Several significant factors as described below combined to create a
nearly insurmountable barrier of time and money for small businesses.
Although these are specific to the technology channel we are pursuing
within TSA, I believe they are indicative of the challenges facing most
high-technology small businesses trying to do business with TSA:
1. Privately-Funded R&D.--When TSA initially identified the AT X-
ray acquisition requirement, no Federal funding was made
available to support R&D activities. As a result, all
ScanTech's R&D effort has been 100% privately funded. No
taxpayer dollars have been used. Unfortunately, most high-
technology small businesses cannot secure sufficient private
equity funding to support years of R&D required to bring
products to the technology readiness level required by TSA to
acquire a product.
2. Nationally Recognized Third-party Laboratory (NRTL)
Certification.--TSA required NRTL certification before
SentinelTM would be accepted for qualification
testing. As a result, SentinelTM was sent to the
Underwriter's Laboratory (UL) to meet the NRTL certification
requirement. NRTL certification prior to qualification testing
requires the investment of significant time and money before
confirmation that the technology meets TSA performance
standards and has a real path to eventual acquisition by TSA.
3. Full and Open Competition.--The AT X-ray acquisition was a full
and open competition. A small business set-aside provision was
not included for ScanTech to compete for. In addition to having
to compete directly against large business for this procurement
opportunity, the acquisition also contained several
requirements that indirectly precluded small businesses from
participating even in the full and open competition. For
example, vendors were required to provide TSA with five systems
for evaluation and testing at the vendor's cost. Delivering
five systems to TSA requires a significant commitment of
capital that most small business cannot support.
4. Prior Access To TSL.--Acceptance for qualification testing
required ScanTech to have access to data that could only be
acquired at TSL. As a result, small businesses must have access
to TSL prior to submitting a compliant data package for TSA
review and approval to proceed with qualification testing.
However, TSL is typically full with other mission elements that
take priority over scheduling small businesses for this data
collection.
5. Security Requirements.--Acceptance for qualification testing
required ScanTech to have access to Sensitive Security
Information (SSI) and National Security Information (NSI). As
such, small businesses must invest both time and money in
securing the clearances necessary to participate in the
acquisition process, however, clearances are only granted to
parties with a contract providing a need-to-know.
6. Unfunded Qualification Process.--The qualification process was
unfunded. ScanTech's investors have invested over $20 million
in reaching this point, but must commit even more private funds
to get through qualification. The Government should provide
funding assistance to small businesses that have taken a
technology to the point of qualification.
TSA COMMITMENT
On July 19, 2012, I met with the TSA administrator and the
assistant administrator for acquisitions to discuss these issues and
their associated impact on small businesses and to share our lessons
learned. During this meeting, we discussed the challenges associated
with small businesses not having the advantage of access, familiarity,
and previous contact with TSA technical staff. I emphasized the fact
that small businesses, especially those that have no previous
experience in dealing with Governmental procurement processes, are in
need of technical procurement assistance, especially in the case of
high-tech services or products, where knowledge of the processes and
procedures can mean the difference between survival and success or
failure. I presented the following recommendations following our
meeting:
1. Assign a subject matter expert to assist us and other small
businesses to quickly resolve technical questions and
requirements.
2. Assign a contract officer's technical representative (COTR)
earlier in the process to assist us and other small businesses
navigate the technical procurement process.
3. Conduct an advanced technical visit of our facility in Atlanta
by TSA technical management. TSA management had little or no
prior knowledge of ScanTech's technology or its capabilities
and an advanced visit would provide a baseline understanding of
our technology and its potential for addressing key threats and
vulnerabilities at the Nation's checkpoints.
I am happy to announce that our recommendations were not ignored
and have been implemented by TSA.
TRANSPORTATION SECURITY LABORATORY
In December 2012, ScanTech signed a Cooperative Research and
Development Agreement to enter TSL to access the explosive materials
required to proceed with data collection and qualification of our
SentinelTM system. TSL has established a Readiness
Assistance Program that is structured to assist vendors understand and
meet TSA technical standards and requirements and ScanTech has received
significant readiness assistance in preparing for TSA qualification
through this program.
Readiness assistance is fully supported and endorsed by the TSL
Director, Dr. Susan Hallowell. Dr. Hallowell is a leading advocate for
high-technology small businesses and has worked hard to ensure that we
are aware and informed of the requirements and processes necessary to
successfully maneuver through the qualification process.
Without Dr. Hallowell's stewardship and advocacy, we would still be
years away from qualification. I personally commend her efforts and
leadership in bringing small business innovation to the forefront of
TSL's mission to identify and vet new technologies.
TOP THREE RECOMMENDATIONS
Based on my experience from a small business perspective, I offer
my top 3 recommendations for TSA acquisition process changes to bring
more competition and innovation to the ever-evolving security market to
effectively and efficiently address emerging threats to homeland
security.
1. Change the culture to foster accelerated innovation through
small business participation. Acquisition regulations and
requirements are complex, confusing, and constantly changing
which is a big disadvantage to small businesses and newcomers
to Government work.
a. Elevate the role of the small-business advocate and define
specific and meaningful performance metrics (time- and
duration-oriented) that provide substantive benefits to
procuring and utilizing the best technology.
b. Change the acquisitions process to foster timely, cost-
efficient, and compliant qualification submittals, testing,
and proposals. Use parallel processes instead of sequential
processes. For example: Except for meeting the electrical
and radiation safety requirements, the other standards for
NRTL should be completed after accepted for testing at TSL.
Requiring the completion of all NRTL testing prior to
acceptance into TSL is a financial burden for a small
business and lengthens the process.
c. Revise the existing processes to be more nimble and responsive
to industry innovations and concerns. A simplified process
would reduce the delay between initial White Paper and
Qualification Data Package (QDP) submittals and acceptance,
and laboratory tests to demonstrate the innovative aspects
of needed technology (e.g. liquids and gels kept in bags).
d. Devise and mandate performance measures and incentives to align
the procurement and contracting process with objectives to
obtain and deploy the best technology in a faster, fairer
manner.
2. Ease the entry-level requirements for promising technologies.
Entry-level requirements are too high and rigorous to encourage the
development of new and promising technologies by small
businesses and newcomers to Government work.
a. Amend the extensive and rigorous qualification and testing
process for new and innovative technologies to allow and
encourage small business participation and their ability to
fairly compete against large or global companies. For
example: Security clearances serve as a barrier to entry.
Clearances are not granted unless the company has an
existing contract. A small business with innovative
technology may not have on-going Government contracts.
Assist and facilitate small businesses in obtaining the
necessary DD254 and get individuals cleared in a timely
manner once the technology White Paper is approved, to
allow necessary access to procurement and technical
information.
b. Add small-business and innovative technology set-asides for
technology procurement. The current passenger checkpoint
technology acquisition process is a Full/Open Competition
and does not provide a ``pre-investment model'' for small
business (i.e. includes requirements like a minimum of five
X-ray screening systems to gain entry into the program),
which requires significant finances and time. Small
business is unfairly expected to compete head-on with very
large, multi-billion dollar companies that have extensive
Government relationships and resources.
c. Allow involvement by the relevant program experts, along with
the contracting officer, for availability to the submitting
business to address the multitude of questions relating to
technical, process, and submittal issues. This provides
more timely responses and expedites the process by getting
not just direction but clarification and understanding of
the requirements and why they were formulated. For example:
Data Collection: provide a clear path to acquiring the
necessary testing data needed to complete the QDP. Small
businesses and newcomers to Government procurement
typically only have access to simulant explosives, not real
threats/explosives. A solution to this is to have the CRADA
``pre-approved'' upon acceptance of the White Paper, with a
testing slot guaranteed at the TSL. The qualified passenger
checkpoint Advanced Technology X-ray companies are all
large size, and have equipment deployed at TSL and TSIF.
d. Minimum Base Unit Requirements: TSA defines various ``levels''
of screening machines and associated requirements. The
base-level requirement has changed many times since 2009
and is constantly evolving with the lessons learned, future
considerations, and shifting threats. One section of the
TSA procurement specification lists an electronic diverter
for scanned bags as well as a bin return system. In
addition to the qualification requirements, a small
businesses are also expected to address logistics and
conveyors for acceptance into the TSL. The specification
should list ancillary equipment as ``optional''
capabilities to preclude an unnecessary barrier to entry,
with the just X-ray unit the base requirement. Threat
detection is the germane requirement, not the bin return
system, etc. This is an expensive and time-consuming
requirement that is not necessary to assessing promising
technologies.
3. Establish an effective small business engagement strategy.
Effective small business participation within the Federal
sector requires the full commitment and engagement of the
agency. Advocacy is a key component in all leading Government
small business utilization programs.
a. Assign a Government ``Sherpa'' for small businesses that request
assistance to serve as an informed point of contact for
learning available Government resources.
b. Establish a small business technology ombudsman that acts as a
problem finder and facilitator in navigating the
qualification, testing, and procurement processes and
requirements. For example: Most small businesses with new
and innovative solutions typically have no prior experience
or relationships within the specific TSA Programs and
Offices. To obtain information and get questions answered,
companies are not allowed to communicate directly with the
programs or lab, but are required to go through the
assigned Contracting Officer. This person is typically non-
technical and not a subject-matter expert, and does not
have the background or experience to address the issues and
questions. Also, the questions and requests for information
must be submitted in writing, with no allowance for
personal communication or meetings with staff associated
with the technology. This requirement does not foster new
and innovative technology businesses; it serves the
incumbent and large Government contractors who have access
and relations. Technical representatives should be
available to provide technical advice and clarifications.
Small businesses should have direct access to the subject-
matter experts to ensure that requirements and processes
are clearly understood.
c. Obtain recommendations from relevant industry associations and
their small business membership related to acquisition
plans and procurement methods. Does TSA have an industry
advisory group for procurement recommendations? High-level
TSA executives should be connected to the group with an
objective to measurably simplify and streamline the
process, for meeting the TSA mission's objectives that are
being thwarted by procurement practices.
SUMMARY
In summary, ScanTech offers a viable solution to one of TSA's most
difficult technical challenges and we have found a way to navigate the
arduous path before us, however, we still need your help! To date, we
have been 100% privately funded. However, our private equity investors
are now threatening to pull out, because of the uncertainty and time
line associated with qualifying the technology for TSA acquisition and
deployment. Small business funding in our sector would help ScanTech
and other high-technology small businesses achieve success in TSA.
Funding assistance would ensure that small business innovation is
available to further strengthen TSA and its critical missions.
Mr. Hudson. Thank you, Dr. Falconer.
We appreciate you all being here and offering this
testimony.
I now recognize myself for 5 minutes to ask questions.
We have heard over the last year or so that TSA is making
progress and encouraging--or engaging with the private sector.
However, it is one thing for TSA to listen to the private
sector's concerns and recommendations and quite another to
actually incorporate their feedback into a strategic
acquisition plan.
How confident are you--and I will open this up to any of
the three--that TSA considers private-sector recommendations
and concerns when planning for acquisitions?
Dr. Falconer, you touched on that a little bit. I don't
know if you want to start off?
Mr. Falconer. You can legislate an agency to do something.
On the ground it is a culture change.
We hear a lot in the agency about, how can I take the risk
of a small business, home-grown shops, of doing things? I will
tell you, the rest of the Government has figured it out.
DOD doesn't have a problem; DOE doesn't have the problem;
NASA. They have effective small business programs. It is
cultural. They understand that innovation comes from small
business and they facilitate programmatically the process of
getting that innovation to the playing field.
So I think the legislation is great. Reform is a starting
point. But without the full support of the agency you can't
affect cultural change. It is cultural change.
Mr. Hudson. Well, thank you.
Anyone else want to----
Ms. Commodore. Yes. I would like to add to that. I agree
with you, but in addition to that I think it is increasingly
important, considering the changes with the FAR and other
regulations, it is also imperative as part of that culture that
the acquisition staff is properly trained so that they will
know how to implement the information, take that feedback that
they have received from the industry, and turn that into useful
information so that they can implement the necessary changes.
Mr. Hudson. I appreciate that.
Actually, Mr. Pearl, I guess I will direct to you, what do
you think the value of having--you touched on this a little bit
in your testimony, but the value of having a multi-year
technology acquisition plan? Could you just maybe expound on
that a little bit, why that is so important to the private
sector?
Mr. Pearl. Well, I think it is important not just to the
private sector, Mr. Chairman, but it is important to the
Congress, it is important to the administration, and it is
important to the Nation. You cannot, for particularly in the
area of technology deployment, you cannot do it always in just
a real time and say, ``Okay, this is what we need today,'' and
that is the end of either the funding or the plan. Congress is
never going to give multi-year funding but they are going to,
in essence, approve the concepts of planning, and that is why
the acquisition kind of investment plan that we are talking
about will give everyone an equal playing field on which they
can develop, whether they are small business like Dr. Falconer
is talking about or whether they are the large businesses who
are bringing small businesses in.
It is all about going to and understanding what the metrics
are, what the needs are and requirements are in the long run.
You cannot always be--and I think, you know, Mr. Thompson
talked about it--you cannot continually be a reactive agency.
You cannot be a reactive Nation to only what is happening
today, particularly in the TSA arena.
We need to look forward with regard to what our general
disasters, incidents may be, whether it be bad people or
whether it be explosives, and then build your long-range
planning around that. So that--anything that gets us to this
kind of long-range thinking is, I think, helpful to all the
parties--not just industry, but to the Nation and to everyone
in between.
Ms. Commodore. May I add something to that, Mr. Chairman?
Mr. Hudson. Sure.
Ms. Commodore. The other advantage of the multi-year
planning, especially in terms of adding a cost-benefit analysis
factor to best practices, is so that you will have a baseline
established so that you can at least also begin to compare the
cost-benefit factors to that. That is increasingly important
because you should be--we should be assessing cost, we should
be assessing all the benefits, but we should also be assessing
the economic tradeoffs that we are receiving and benefiting
from the advancement in this technology.
All of that should be documented, as well.
Mr. Hudson. Well, thank you.
I have got a lot more questions but I am running out of
time, so if I am going to be fair and equitable to everyone on
the committee I need to call myself as well.
So at this point the Chairman now recognizes the Ranking
Minority Member of the subcommittee, gentleman from Louisiana,
Mr. Richmond, for any questions he may have.
Mr. Richmond. Thank you, Mr. Chairman.
Let me just start with, I think it is a quick question and
it would probably be for Ms. Commodore and Mr. Pearl: Both of
you all, I think, mentioned something that was close to
identical, and my question is whether you all are thinking the
same thing, one of which, I think, Ms. Commodore, you talked
about pre-award acquisition planning and, Mr. Pearl, you talked
about the draft RFP process.
If done correctly they both accomplish the same goal that
you all were mentioning, which is probably more communication
in the beginning about what they need and communication from
you all about--well, let me put it this way. They come out with
theory and you come out with what happens in reality and how it
really works and best ways to accomplish it. So that would be
consistent?
Ms. Commodore. That would be consistent. Also, to add to
that, part of the problem when the requirements aren't clear is
that we may, as industry in the testing, you know, laboratory,
as an expert you may not benefit from our expert advice because
we are only quoting and responding to what you asked instead of
what we know as experts should be quoted. I mean, there are
various different standards and subparts to that standards that
require different things and give you different results.
So the earlier that we are involved in the planning stage
so that we can work with you collaboratively as a partner,
helping you identify what kind of result you need and what
works best, then yes, the better it is in the long run, as
well.
Mr. Pearl. Mr. Richmond, I would only say that one of the
things that we have learned over the last few years in talking
with the components and talking with folks even at the
headquarters level and at the directorates is that the folks in
Government know only what they know. They don't know what they
don't know. If you only talk--and to be honest with you, if you
only talk to individual companies--and there are many of the
folks that go in technology and other components beyond TSA who
have said to me, ``Oh, I talk to 200 companies a year''--well,
if you are only getting the ear, whether it is of 10 companies,
of 20 companies, or 200 companies, you are getting what their
solution is and it may be a square peg going into a round hole.
That is why earlier on in the process, where Government
can, in essence, feel comfortable in communicating what its
general ideas are holistically, then we are not building a
square peg for what eventually becomes a round hole. We are, in
fact, building together not as adversaries but as partners in a
process that will lead to mission success.
So, as I think Ms. Commodore said, as we have said, even
long before the draft RFP, which is, ``We are going to do this
program,'' when the germination of an idea is going, when we
know what generally our general needs are, that is where you
get market research and what the standards are and what the
metrics might be so that everyone can be in lock step and we
are not building waste--and spending wasteful dollars.
Despite what Dr. Falconer says, large companies, mid-share
companies, and small companies all together can no longer
afford unlimited R&D projects. The basket ain't there anymore.
We all have to work together to make sure that what we are
working on research and development-wise is what the Nation
needs.
Mr. Richmond. Well, thank you. I am sure my office is
laughing because you just cited the motto in our office, which
is to know what you know, but more importantly, know what you
don't know and find some people that do know it.
Dr. Falconer, and Mr. Pearl just touched on the R&D aspect
of it, and you talk about the fact that you all raised all this
money and did all this research with no Federal assistance. I
guess my question is: I know it would be beneficial, but there
is no coordination in Department of Homeland Security or any of
this--with the, for example, the SBI or a program that could
actually give you all some help in terms of research and
development funding or ability to do research and development?
Mr. Falconer. Yes. There are initiatives that are going on
and there is currently closer cooperation with SBI on our
programs within the agency. They haven't gotten to the level of
some of the other agencies that have done this for a long time.
They are beginning to use it.
They just came out with a BAA 13-05 in my sector. It is the
beginning of a research and development process that was
funded. It is not SBIR but it is similar. It is a research and
development-funded thing by S&T, heavily coordinated with TSA
to get to an end point, and there are some efforts going there.
But a challenge for small businesses are that, you know,
TSA is big business and the SBIR funding levels are not very
large for what you are trying to get to within TSA, meaning
screening equipment. Those are high-dollar efforts. So SBIR
will get you a start, and there should be close collaboration
between the administration and the SBIR sources.
Mr. Richmond. Thank, Mr. Chairman. I see that I hit zero
just now so I was as efficient as you possibly can be. So with
that, I yield back.
Mr. Hudson. Your timing is impeccable.
The Chairman now recognizes the Ranking Member of the full
committee, the gentleman from Mississippi, Mr. Thompson, for
any questions he may have.
Mr. Thompson. Thank you very much.
As I indicated in my opening statement, we have talked
about this for quite a while. You know, DOD, NASA, they have
been at it a long time, and the notion that we have to reinvent
the wheel just because we have a new agency boggles me, because
by reinventing the wheel it absolutely costs taxpayers more. It
disadvantages small business opportunity because you have to
grow the model, and if you don't have the capacity or the
resource base to grow the model you kind of languish at the
bottom.
So with your experience, Mr. Pearl and Ms. Commodore, would
you see that as a reasonable suggestion for TSA more
specifically to start looking at what others do rather than
just trying to do it for you? You know, DOD--they buy a lot of
screening stuff already, some which we couldn't get that on the
domestic side but they had it in Iraq and Afghanistan deployed,
but we couldn't get TSA to deploy the same equipment here.
So what suggestions would you offer the committee to look
at how other Federal agencies do it?
Mr. Pearl. Well, I mean, I think that the question goes to
a bigger answer than just the subcommittee's work, and we have
talked about this with Chairman McCaul, we talked about it with
you, we have talked about it with many Members of the committee
in on-going dialogues over the years. Where you look to get
best practices may even be in your home base, and part of the
problem is is that not--the components don't always talk to one
another. So that is--they wouldn't even have to go out to, you
know, VA, or, you know, NASA or DOD; there are some best
practices that are being observed that you may even have seen
yourself in other subcommittee meetings and hearings where the
processes of acquisition and procurement are being kind of
pushed out.
That is why we are encouraged in the close relationships
and discussions and communications that we have conducted with
the under secretary of management, with the under secretary of
S&T, so the broader component of a kind of full, holistic
approach to what is going on.
I mean, I think--not to take anything away from the work of
this subcommittee and what this bill may do, but if we only
``solve the problem of TSA,'' we are playing Whac-a-Mole. You
know, we are solving a problem here and four others may pop up.
So what our overall arching concern is to make sure that
the program assessment and risk management, PARM, is going
forward, that the under secretary of management and the work
that we have done trying to teach people how to--that a debrief
is not about the protest but it is about how a business which
didn't get the contract can do better the next time. So that is
what we are trying to in essence work on so that the processes
of all of the Department are, in fact, sharing information.
Mr. Thompson. Thank you.
Ms. Commodore.
Ms. Commodore. What I would like to add to that, to also
benchmark from the other agencies. For example, for small
business goes to Department of Defense, they have them in
protege programs. Even with DHS and the EAGLE program, which
was for IT products and services, the acquisition staff really
needs to sit down and work together and identify these larger
contracts and the requirements and unbundle them and identify
requirements that could be set aside specifically for small
businesses.
Mr. Thompson. Thank you. That has been suggested, by the
way, from EAGLE 1 to EAGLE 2 and, you know, we just still
suggest it.
Dr. Falconer, from someone who has had a long-standing
relationship with TSA, did you see the goalpost moved as you
went along the way or was it clear from the beginning as a
small business what standards and things you had to meet if you
expected to do business in your area?
Mr. Falconer. Unfortunately, you know, standards
development was going on in parallel with my program, so the
standards evolved as we continued to move towards the goal
line, so it was never clear the end point. That is one of the
problems of funding is that it is just a long time.
So there are some ways that we can feed in our input into
that standards development process by having subject matter
experts come out into the field and basically come to small
businesses, see the innovation, and then feed it back. They
always go to the big guys and the big guys are stagnant.
Innovation comes in small business. You feed it into the
front of the standards development process. The standards
develop faster, you are able to anchor a goalpost, and now I
can kick the football through the goalpost. But I can't do it
when the goalpost keeps moving around, and that is one of the
major challenges to small business in this sector.
Mr. Thompson. Thank you.
Yield back.
Mr. Hudson. Thank you, Mr. Thompson.
The Chairman will now recognize other Members of the
committee for questions they may wish to ask the witnesses. In
accordance with our committee rules and practice I plan to
recognize Members who were present at the start of the hearing
by seniority on the subcommittee; those coming in later will be
recognized in the order of their arrival.
At this time I will recognize the gentleman from Alabama,
Mr. Rogers, for any questions he may have.
Mr. Rogers. Thank you, Mr. Chairman.
Mr. Pearl, you made reference in your opening statement
that you had three recommendations. One of them was to elevate
the role of the small business advocate. So is it your view
this SBIR is not achieving the goal of being a small business
advocate within TSA?
Mr. Pearl. I don't think that was in my testimony but we
have spoken to it before. The whole issue of--and that is
discussions that we have had with SBIR folks at S&T, as well,
that we need to make sure that they are bringing everybody in,
that mentoring programs are focused on, that in point of fact
that we encourage greater involvement, given the capabilities.
Not even the big businesses have the full capabilities that the
companies like Dr. Falconer's has.
So we are trying to figure out ways, both inside the DHS
process and outside the process, where we can bring these folks
together. We have had the person like Kevin Boshears in front
of our group to talk about how we can better make those
contracts towards partnership with the small businesses and, to
be honest with you, with the mid-tier, as well. They are left
out of the process, and so anybody who brings the capabilities
and the solutions to the table need to be heard from.
Mr. Rogers. In the last 2 years since this committee has
been working with you have you seen more communication on an
information basis from your membership with the Department
procurement and acquisition personnel?
Mr. Pearl. Absolutely. I mean, one of the things that I
cite in our written testimony is, for example, we were asked by
the Department--the Management Directorate--early this year to
run a risk management acquisition life cycle seminar and we had
about 50 or so program managers, contract officers not just
from TSA, but TSA was there--from Secret Service, from CBP,
from all of the component parts--coming together to kind of
talk through what we in industry are going through so that they
better understand the burden that we have in industry in terms
of meeting the needs.
Likewise, we have increased those kind of communications
across the board. We are working on these mock debriefings so
that the people that are running the debriefings understand
what industry is going through--small, mid-tier, and large--
across the board.
So I must tell you, under the leadership of the under
secretary of management, Rafael Borras, and Dr. Nayak is the
chief procurement officer, that communication and the message--
now, is it permeating all the way down to the components and
every component equally? I would not say so. But that is what
our goal is is to make sure that across the board that this
whole process works better to everyone's----
Mr. Rogers. Have they been, in these discussions, receptive
to this concept of an informal RFP?
Mr. Pearl. The draft RFP aspect is being discussed, and it
has been utilized by some of the components thus far. This is
not a brand new concept. When you jump right to the RFP and you
can't change that and you bid on the way it is wired doesn't
get you there, and so if you are not going to have a complete
RFI process or an early pre-process that Ms. Commodore was
talking about then at the very least let's have a draft RFP so
that we can, in essence, provide and fine tune. Not to link it
and not to have it driven by industry, but to say this is what
industry can deliver if you just make these kinds of changes
across the board.
So we are--this is a concept, in response to today's
hearing, that we checked out with our members and it was almost
unanimous that this is a process that we should consider, and
we will be talking with the Management Directorate about it.
Mr. Rogers. Okay.
Ms. Commodore, based on your knowledge, has TSA developed a
cost-benefit analysis for major acquisitions?
Ms. Commodore. Not one with all of the elements that I
think need to be there to truly be able to assess all of the
parameters now. And I----
Mr. Rogers. Has your association been involved in these
informal communications that Mr. Pearl has referenced with the
TSA--
Ms. Commodore. Yes. Several of our member companies have
and I have. For example, in January there was an industry day
for an RFI regarding third-party certification requirements for
OEM, and that is a good example of a collaboration process
early on to get requirements established.
If I might add, I think, you know, reviewing and commenting
on the draft solicitations and the RFI responses also go to
provide additional validation with the multi-year planning,
because, like Dr. Falconer here mentioned, the barriers to
entry and the timeliness, you know, that small businesses need
to get prepared and ramp up to being able to bid. So if there
are active, you know, clear requirements with these multi-year
plans that also allow small businesses to be able to assess the
kind of certifications or clearances they might need so that
when that time comes they will be able to bid.
Mr. Rogers. Okay.
My time is up, but, Dr. Falconer, when somebody does
recognize you again I hope you will visit this topic. I
understand there is $2 billion in DHS for grants--small
business grants--across the entire agency, not just TSA. I
would like for you to visit why you haven't been able to
participate in that, whenever somebody gets a chance to
recognize you.
I am sorry I went over. Yield back.
Mr. Hudson. I thank the gentleman.
At this point I--Chairman will recognize the gentlelady
from Indiana, Mrs. Brooks, for any questions she may have.
Mrs. Brooks. Thank you, Mr. Chairman.
I will yield a little bit of my time for Dr. Falconer to
answer Congressman Rogers' question.
Mr. Falconer. Great. Thank you.
Yes, there has been an increase in grant-directed monies
within DHS, and unfortunately, we have not received any of the
grant money and where we are going. I don't know whether it is
we are so mature now--grants are typically directed towards the
R&D sector.
We are beyond R&D; we are in an acquisition cycle. Our
system is at TSL in the qualification process. It has its own
set of challenges to maintain the capacity to go through the
qualification process is where I am focused.
We entered the program in 2006. At that point in time I
don't think that grant structure was directed heavily towards
TSA. If you go back and look at some of the metrics there were
a lot of SBIR activity and some early BAA and looking at RFIs
around this nuclear issue of inserting a nuclear weapon. That
was DNDO and DHS, not specifically down to the TSA level, which
is looking at air traffic--the airline business.
Mrs. Brooks. Mr. Pearl, you mentioned in your testimony the
Government shouldn't rely too heavily on RFI process because
industry is finding they don't have the time, the money, the
man power to devote to it. Do you have any sense, on average,
how much it costs industry to submit an RFI? Have you heard
from your members? I mean, what is----
Mr. Pearl. I don't think there is a rule of thumb,
Congresswoman, but I think that the concept is that it--this
came through that if on a potential $10 million contract it
could cost $1 million in pre-expenses, in terms of what is
going on.
The issue is not that it is costly, it is that since an--
what has happened is generally--and this is not just a TSA-
specific issue--is that what happens is that an RFI is put out
there. We are requesting information. Please give us--for the
general concept. The companies put together the plans and
potentials and what is there and what they are asking for and
then it sits.
Mrs. Brooks. So----
Mr. Pearl. Whether you are a small business or whether you
are a mid-sized or a large, that may never turn into a
contract----
Mrs. Brooks. So are you saying, though, that TSA or the
other agencies are not responding to the RFIs and are not
commenting and critiquing them or asking follow up----
Mr. Pearl. In some instances. I mean, that is why before we
get even to the RFI process, if industry and Government can
talk through--whether it is through these small, more focused
industry days that we have been talking about or whether it is
just through even webinars, and we have been talking to them
about the--even at a time of sequestration when the monies are
very tight you could, in essence, put on webinars so that you
can reach out not just to the folks inside the beltway but to
the folks that are in Atlanta or Idaho or wherever.
So we are trying to work with them in developing creative
ways, given the cost constraints.
One of the things, I must tell you, that we talk about the
benefit analysis--the idea of an ROI doesn't really exist
within the Government, and so what we are trying to do is how
do you bring the best business practices holistically into the
Government so that you get a better return on your investment?
That is part of our discussions with them, as well.
Mrs. Brooks. Thank you.
Ms. Commodore, would you like to comment on those
opportunities and interaction--what is the most beneficial way?
Ms. Commodore. I would just like to say that I haven't--and
the companies that I usually deal with--haven't necessarily had
the same experiences as Mr. Pearl have in--has had in terms of
the requests for information. The clear distinction is that
normally with requests for information one of the best
practices that normally take place is there is some page
limitation. It is a very simple format of, you know, giving
some background about your company and how you might be able to
fulfill your need--fulfill the need in the requirement, and
just very brief. The plans aren't always required.
But I will say, depending on the information that is
requested in the RFI or the draft solicitation it could become
a cost issue, but that is not always the case.
Mrs. Brooks. Okay. Thank you.
Dr. Falconer, you have, in your testimony you talked about
the fact that when you met with TSA they have adopted some of
your suggestions in the past, and your list of suggested
changes, what would be at the top of your list at this point
that you would like to see TSA or others adopt?
Mr. Falconer. Unfortunately, they all combine together.
There is really no top one. But if I had to pick one to work on
first it is the issue with security clearances.
Because of the nature of the information, unless you have a
security clearance you can't understand the requirement. You
can't understand the requirement, you can't propose a solution.
But what happens is that we can't get the security
clearance unless we have a contract, so in some kind of way
there has to be a method in which to provide a security
clearance without a contract. Maybe it is through the simple
CRADA process--cooperative research and development process at
the laboratory--which will serve as a basis for requesting
security clearance so we can begin to see the classified
requirements and then modify our developments and meet the need
better for the agency.
Mrs. Brooks. Thank you very much.
I yield back.
Mr. Hudson. Thank the gentlelady.
At this point the Chairman will recognize the gentlelady
from Texas, Ms. Jackson Lee, for any questions she may have.
Ms. Jackson Lee. Let me thank the Chairman for this
hearing, along with the Ranking Member. I think this is
enormously important hearing and an important issue. Apologize
for my delay. Had a hearing on FISA in the Judiciary Committee
so I apologize, as well, for my departure.
But having lived with these issues for a long time, Mr.
Pearl, I think your insight, as I have gleaned from notes that
I have been receiving, is enormously important. So I would like
to get right to the issue of how do we fix this, because when
we are, in our constituency, we hear of so many patriots who
are interested in working with Homeland Security and also, not
only interested but have particular, precise technology that I
think is so important. When you look at the AIT machines, the
new technology, we know we are ready for newer technology even
though we have made a great progress from the antiquated
beginning that we had some few years ago.
But I have met with a number of individuals who want no
special favors; all they want is to know what the particulars
are and to be able to respond to it, and to also have the
Department have a sensitivity to the vastness of talent and
technology. So help me out in terms of what TSA can do to
foster greater innovation as relates to security-related
technologies. What precisely, if we were to close the hearing
today and want to hand them a bill of particulars, if you will,
what do we need to have in that bill of particulars for them to
begin reforming their process?
Mr. Pearl. Well, I mean, I have never been one to say,
``Let's just jump and pass legislation,'' in part because we
don't always get to go jump and pass legislation, in terms of
the way the Congressional process works----
Ms. Jackson Lee. It was a phrase of art. I was not talking
about a bill.
Mr. Pearl. No.
Ms. Jackson Lee. If we were to hand them a list----
Mr. Pearl. That is what I am responding to, because in some
cases legislation is necessary. In some cases Congress can play
a bully pulpit role, in terms of providing kind of guidance and
encouraging the Department to build on what it has done
already.
Part of our discussion, both with this committee and the
staff with the folks at the administration, has been a sense of
really better understanding best practices and better
understanding the lessons learned. I think that Mr. Thompson
responded to that in a way to say, ``We don't want to
continually try to reinvent the wheel.''
So part of our process has been, No. 1, let's get industry
at the table--not to drive the process but to inform the
process. So the Office of Security Capabilities, which was just
formed within TSA, has been having industry at the table. We
have been working with the Management Directorate. We have
seen, in many cases, the industry day with industry advisory
councils, so that the process is already there.
The encouraging aspect of what this subcommittee and what
this Congress can do I think will continue. So the bill of
particulars goes to what my testimony said. If early on in the
process we can better inform, we can get to the issue of
metrics and standards--if we can get to those points and
understand and we are talking on the same kind of technology
terminology and we don't continually just warehouse old
potentially obsolete or unnecessary--industry doesn't benefit
from that. Industry benefits when we stay ahead of the curve.
So those kinds of things. Better communication. Do not look
at--as industry as the adversary; look at industry as a
partner, as a cooperative, collaborative partner in the process
of meeting mission.
Ms. Jackson Lee. Thank you.
Ms. Commodore and Mr. Falconer, do you think we get a
better product when industry is engaged? I am not sure whether
the Security Industry Association, Ms. Commodore, that you are
representing, includes small businesses, minority- and women-
owned businesses--I am not sure of your membership--but if you
would say, No. 1, do we get a better product, meaning does the
Nation get a better product because we have engaged? But
secondarily, how do we get to those very small but technically
sophisticated with a lot to offer women- and minority-owned
businesses to Ms. Commodore and Mr. Falconer?
Ms. Commodore. Real quick thinking. I would say initially
that market assessment needs to be done where you are analyzing
the businesses that the manufacturers that actually make these
products so that you can assess who is--who is really out there
qualified at this point that can do the work. Then do a further
assessment with these additional vendors that are interested in
doing the work but are not currently prepared.
The next thing I would suggest, just as an example,
currently with GSA the schedule 84 for police equipment and
ballistics and hazard materials testing, there are 348 small
businesses. So there is a start right there.
Ms. Jackson Lee. I am sorry, schedule what?
Ms. Commodore. Schedule 84.
Ms. Jackson Lee. Thank you.
Mr. Hudson. Thank the gentlelady.
We will do a second round----
Ms. Jackson Lee. Can I get Mr. Falconer to just answer the
question?
Mr. Hudson. Sure. Absolutely.
Dr. Falconer, please go ahead?
Mr. Falconer. I will be brief.
I think it starts with the agency going outside the beltway
and visiting the small business and innovative businesses, and
looking and qualifying whether or not there is something there.
If there is something there there is probably an intermediary
step.
Before you get to a lab it is maybe hiring a third-party
test validation agency, getting one of the National labs to do
this for you under contract, and then have a test bed that the
small technology business can come in and do its thing and
validate that it is real, and then provide a supported gateway
into the laboratory, which is very busy, very crowded when you
are talking about National security, and only take the products
now where you have had some vetting.
That whole process doesn't exist. What happens is is that
currently you deal with the lab and the lab really doesn't have
time. It is only dealing with the same three or four
contractors it has always dealt with and that is a full-time
job for them, so it is no way to get to the table in order to
get that technical qualification, quantifying what you are
doing in order to move forward to final product design.
Ms. Jackson Lee. Thank you very much.
I yield back. Thank the Chairman and Ranking Member.
Mr. Hudson. Thank the gentlelady.
Thank the witnesses.
I will start the second round of questioning. I recognize
myself for 5 minutes.
I would like to go back to sort-of where I ended up my last
question, where we were talking about the strategic acquisition
plan and we talked about sort of the value of having that plan.
But I would like to pose to the panel, what do you think should
be included in such a plan? How would you structure? What is
important that we have in that multi-year plan to make it
successful?
Ms. Commodore. Initially with acquisition planning there
are also different steps to that. There are specific market
research criteria that needs to take place. I think the
additional steps that TSA could do besides the vendor lists
that are currently there, are to talk to some of the trade
associations and their members and find out, you know, what is
currently going on and what the industry trends are for that.
The next issue would be to evaluate how the services are
actually priced in the market to get a more realistic view of
how that can be done. A lot of times what happens in the
acquisitions, businesses, depending on the contract type and
the prices, they are assessing risk and they are making a
decision as to whether they are going to bid or not. So that is
the key requirement. That is the key thing that should
already--also be in there in addition to a quality assessment
surveillance plan that both parties can work from and be
measured with.
Mr. Hudson. Mr. Pearl.
Mr. Pearl. Mr. Chairman, I absolutely agree on the better
market research. I think that the requirements need to be clear
and concise with metrics. If it is loosey-goosey, if it is not,
if it is, you know, kind of amorphous, particularly in the area
of technology. We have seen it in services where they have been
more specific; we have seen it sometimes even in product, but
in the area of technology it has been rather amorphous.
Early on, and it goes back to what I have been saying and
what we reiterate--if there are conceptual meetings that are
held to better understand the capability the Government is
trying to acquire, I mean, that is ahead of even the cost-
benefit analysis. That is ahead of the return on investment. It
is, ``What mission are we trying to achieve? What are we trying
to get out of this?''
Then industry can then build to that as opposed to we
think--and that is what a lot of companies have done, and I
have seen that over the last 12 years. Companies say, ``I think
that what the Government needs is this,'' and then Government
doesn't know that it needs it, you know, and nothing goes.
We have been working with Science and Technology to have a
technology foraging process to try to move that out so that
more companies beyond the beltway are part of the process. So
small--again, small is absolutely essential. Small can be part
of a small business contract; small can be part of a large
business contract as a capable partner.
We need to have them reach out to as many folks as possible
who bring their requirements to the table.
Mr. Hudson. Great.
Dr. Falconer, would you like to----
Mr. Falconer. Briefly.
Trusted advisor, it is how the process has occurred. The
Government doesn't really know; they go to the trusted advisor,
who is usually an incumbent; an incumbent has spent millions--
hundreds of millions of dollars on a legacy platform. They want
to reuse that platform, so all of their advice is around trying
to reuse that platform.
You don't have room for innovation to make it to the table
because they are trusting that incumbent to give good direction
and move forward with a new standard so the standard is built
to the legacy platform whether it is better or not. There is no
assessment of how good--it is not statistically, quantitatively
determined that that adds value or causes a problem.
Mr. Hudson. Thank you. That is extremely helpful.
With the little time I have got left I wanted to go to this
issue that Ms. Commodore brought up of third-party testing. I
understand that it is common practice in private industry for
third-party labs to test against standards they did not write.
On the other hand, I understand the Federal Government prefers
to contract with testing labs that draft the standards against
which they will be testing.
Can you explain--I will start with Ms. Commodore--the
differences from your perspective?
Ms. Commodore. The third-party testing laboratories have to
be accredited, and in that accreditation the quality practices,
the equipment, the staff--all of it has to be assessed. The
additional benefit of this assessment and accreditation is that
these labs are assessed by U.S. and international standards.
None of these providers that conduct these audits on best
practices and quality have any kind of manufactural control or
managerial control over that assessment. So it also allows for
a more objective review of the testing standards and the
testing results.
Also, just to add to that, currently the EPA actually has--
is using third-party certification for their Energy Star
program, which includes over 40 different type of product
types. The EPA has--they are using third-party certification in
addition to some of the services for FAA. So it is taking
place.
Mr. Hudson. All right. Thank you for that.
My time is expired.
The Chairman will now recognize the Ranking Member of the
subcommittee, the gentleman from Louisiana, Mr. Richmond, for
any questions he may have.
Mr. Richmond. Thank you, Mr. Chairman.
Since we were talking about third-party testing, I guess
one of the questions I had--do you think it would be
beneficial--and, Ms. Commodore, you talked about it in life-
cycle cost estimates--do you think it would be beneficial to
have third parties do that testing for the--while making the
life-cycle cost estimates? I think the Coast Guard or some of
the other agencies use that, so would you make that as a
recommendation?
Ms. Commodore. Yes, I would make that as a recommendation
because part of the life-cycle cost analysis in the industry
during the testing--that, to us, is accelerated life testing.
Basically what we are doing is we are assessing the maintenance
cost, the possible wear and tear on the item, when it is likely
to tear and break at a specific time period.
So it goes a long way in not just assessing, you know, the
durability and the functionality of the equipment, but it also
goes to help validate the cost related to that.
Mr. Richmond. Mr. Falconer, you talked about I guess the
challenges in attempting to access data from the Transportation
Security Laboratory. I would like to ask you about the
consequences of it but I would assume they are real
consequences. Do you have a solution to the problem, or a
recommendation?
Mr. Falconer. Yes. It is in tiering. Everything in the lab
isn't Classified, so if you could tier the CRADA so you can
come in under a non-Classified CRADA first, get a little bit of
the information, go through the process, have a basis for
getting the security clearance, get it approved, that matches
your progression to a product with the approval of TSA, and
then you get your clearance and then you get a chance to go in
and actually get to the Classified data and then continue your
development process. I believe that is a workable solution
around the constraints of trying to get to the actual
analytical data that you need.
The challenge for everyone is that some of the information
and materials and things that you need to qualify your system,
they are only available in National Laboratory or TSL settings;
they are not available--I can't go to Walmart and pick it up
and take it back to my lab and do it. I have to have access to
that material, and that is the basic problem.
Mr. Richmond. I guess this is just a little bit off
subject, but I really appreciate the Chairman's hearing, and I
really appreciate the conversation that we are having today. I
guess my question would be: When you talk to TSA and you talk
to DHS and you give them this advice or you have this
conversation, what kind of feedback to you get, No. 1? No. 2,
do you think they are receptive or you starting to see
something happen that makes sense?
Because we can talk about it here in theory all day long
but if it is not moving something somewhere then we are wasting
our time and we are wasting your time and neither one of us
have much time to waste.
Mr. Falconer. I would like to answer that first, briefly.
It is simple for me. It is very difficult to compete
against a large business that has billions of dollars available
to do R&D. It has to, really for me to be successful, have a
small business set-aside component that puts me on par from the
start to get into the funding cycle.
So it is simple for me to know where this works. I just
look and see if there are any small business set-asides that
are provisions coming out of the acquisitions.
I can say that from--in my sector of what I do I have never
seen one. It has never come out of my sector. Agency-wide,
probably there has been some improvement in small business set-
aside constructed, and all of this is around debundling and
working hard to structure the acquisitions so that you can
bring not just small businesses--it is the innovation that you
want--to the table. You need to bring it out into the public
space.
Ms. Commodore. I would just add to that, part of the
challenge that we have had are the regulations--you know, the
FAR has been around for quite some time and then in addition to
that we have other related regulations that play a role in
these solicitations. So it goes much deeper than that, because
obviously, you know, businesses wouldn't be able to get any
kind of regulatory revisions in enough time to be able to bid
on a particular project.
Mr. Richmond. Well, I would just say this in the remaining
minutes that I have, and I think that it goes back to probably
what my grandmother used to say, which is where there is a will
there is a way, and I think the policy starts at the top, and
if we can't get it through the administration then it has to
come through this committee. So I really thank the Chairman for
his demonstration and public display of support for a new
procurement process and small businesses and really making the
statement that we want to see some changes, we think there is a
better, more common-sense way to do what you are doing, and we
expect that you will find a way because we have the will to
make it happen.
So with that, Mr. Chairman, I just want to thank you for
the legislation, thank you for the hearing, and thank the
witnesses for their time.
With that, I will yield back.
Mr. Hudson. Well, I thank the gentleman, and I thank you
for your comments. You know, it is very important to me that
this be a bipartisan process, that, you know, we are looking
for solutions. The American people sent us here to get
solutions and so that is why it is important to me that we work
together, put parties aside, put politics aside, and let's do
what is best for the American people.
I appreciate, Mr. Richmond, your working with me on this
and the process, and let's hope we can get something done here.
So thank you for that. Thank you for the comments.
At this time I will recognize the gentlelady from Indiana,
Mrs. Brooks, for any comments she may have.
Mrs. Brooks. Thank you, Mr. Chairman.
Mr. Hudson. Or questions.
Mrs. Brooks. Quick question to Dr. Falconer, and maybe to
the other panelists, because as you talk about what appears to
be a pretty cumbersome and when you say not a process focused
on ROI, I am concerned about that. I assume that many of the
companies that all of you work with--and obviously you are here
representing your own company--but other countries also have
security processes, particularly with air travel, and I am
curious whether or not other countries have far better
processes than our country has and if you might share with us
what some of your members or your own experiences with respect
to other countries that have a more efficient and a even maybe
as if not more scientific process--an innovative process to
bring new technologies to their air travel.
I don't know who would like to start off.
Maybe Dr. Falconer, I don't know if you have dealt with any
other countries?
Mr. Falconer. Let me just pick one example. That is the
European Civil Air Commission, which is the TSA of Europe. The
process for qualification is about a year. Same class of
systems that will go in their airports to do the same things in
our airports.
Our qualification system process is maybe three times that,
maybe four--depends on where you are----
Mrs. Brooks. So you are saying that to get the clearances
you have talked about and to be able to bid and get involved it
is about a year in Europe and 3 to 4 years here.
Mr. Falconer. Yes. Much faster. They took a little more
risk. Their process is very small business-friendly so they get
the innovation component, and they do a lot of collaboration
between the airline industry and the airport manager and the
technology company, so there is some shared risk and earlier
pilot deployments and collaboration to get the technology to
the forefront faster. The lab process is a little bit shorter
and they take a little more risk in different areas.
I think there is a strong collaboration between TSA and
ECAC at this point, and I think that some of that cross-
pollination is happening. They don't do everything right and we
don't. We just want to share and find a collaborative way and
merge some of the standards to get the same answer.
Mrs. Brooks. That is what I wanted to--was just going to
ask. So does the European Civil Air Commission work
collaboratively with TSA and I wonder if there are any other
countries or other areas of the world that your companies work
with that have a better experience in working with Government
on air travel?
Mr. Pearl. I wouldn't necessarily say better, but
different. In fact, I have been asked to speak at an airport
security conference that is going to be in Prague in the fall,
where there is going to be security officers from airports from
all over the world.
One of the problems has been, in point of fact, that I am
one of the few industry people that has been invited to be
participating. In essence, what we have seen in many instances
is that Europe doesn't recognize the kind of trusted advisor
role that industry can play; it is viewed as only as a
contractor, and that the ministers of many of the countries do
not--and this is not just TSA, this is at all levels of
Homeland Security--don't always see that industry brings a
sense of understanding, of knowledge, of best practices.
So what we are trying to build into the model is what the
council and other organizations are trying to do, which is if
Europe and some of the third-world countries that are
developing new airports--they are starting from the premise of
security, not from technology. The question that you were just
engaged in focused on, are they bringing the right
technologies?
Right now the issue should be, are they bringing in the
concept of security into the discussion of whatever it is,
whether it be maritime, whether it be aviation, whether it be
mass transportation? To a certain extent, as they are
developing new ways and modalities in the 21st Century they
are, in fact, embedding the concept of security, and that is
where it is been different, whereas in the United States we go
begrudgingly, ``Oh, I have to bring security into the
concept?''
You know, and so what we are trying to change, so in
essence, I am going over there to hear from them as much as
they are going to be hearing from the way, in essence, we are
doing it.
Mrs. Brooks. Thank you.
Ms. Commodore.
Ms. Commodore. I would just like to add that yes, there
is--Europe, as an example, even Australia--there is more of a
collaborative effort that takes place. They also tend to, in
some instances, in terms of best practices, have more detailed
requirements and procedures into, you know, how those changes
should be implemented and discussed.
Mrs. Brooks. Thank you.
My time is up and I thank you all for your ideas and for
your passion for making this, you know, industry and the
Government work in a much more collaborative approach. Thank
you.
Mr. Hudson. Thank the gentlelady.
I thank our witnesses for your excellent testimony today
and the Members for their questions.
The Members of this committee may have some additional
questions for the witnesses that we will ask you to respond to
these in writing. Without objection, committee stands
adjourned.
[Whereupon, at 11:25 a.m., the subcommittee was adjourned.]