5 Big Winners From TSA Security Rules

What is the price of security?

For the Transportation Security Administration, it comes at nearly $8.1 billion a year, its budget for Fiscal Year 2011.

The noble goal of keeping air travel safe from terrorist threat hasn’t meant critics of the agency formed shortly after the attacks of Sept. 11, 2001, have been silenced.

There are disgruntled travelers who rail against the “security theater” of taking off shoes and passing through X-ray machines. Airlines complain that they have suffered millions in lost customers and out-of-pocket expenses. Several airports are looking at the prospect of opting out of TSA agreements to pursue private security contractors that might save them money. A study by Cornell University even made the claim that traffic fatalities have risen since the hassle of air travel has pushed added motorists onto highways.

But amid the gripes and cost to airports, airlines and taxpayers, there are some who profit from the threat of terrorism and the efforts of the TSA.

Vendors  

Like any government bureaucracy, the TSA depends on billions of taxpayer dollars to fund its personnel and efforts. That has meant a gold rush of sorts among vendors large and small who provide the technology and expertise the agency requires. More than 21,000 contracts have been awarded since the agency was created.

Among the companies that have benefited from multimillion-dollar contracts since the TSA was founded in 2001 are Unisys (Stock Quote: UIS), Siemens (Stock Quote: SI), Lockheed Martin (Stock Quote: LMT), L-3 Communications (Stock Quote: LLL), Accenture (Stock Quote: ACN), Deloitte & Touche, General Electric (Stock Quote: GE), Northrop Grumman (Stock Quote: NOC), BearingPoint and IBM (Stock Quote: IBM).

Year by year, opportunities keep emerging for private enterprise to grab an even bigger piece of the pie.

Unfortunately — for taxpayers, at least — the agency may be spending money without proper oversight.

In March 2010, an audit by the Department of Homeland Security’s Office of the Inspector General flagged procedures in place to procure and oversee private contractors for 29 support service contracts totaling $662 million from the TSA’s Office of Security Technology. Reviewing the 13 highest-value of these contracts, the auditors found the agency “did not provide adequate management and oversight of acquisitions for support services for transportation security programs.”

“TSA did not have reasonable assurances that contractors were performing as required, that it contracted for the services it needed, that it received the services it paid for or that taxpayers received the best value for its tax dollars,” the report added.

An infamous example of the TSA wasting money via private contracts was the failed attempt to implement bomb-detecting “puffer machines.”

The devices were supposed to use a blast of air on travelers to dislodge and analyze particles that might indicate the possession or handling of explosives.

In 2004, the TSA loaded up on $30 million of the machines, buying 207 from General Electric and Smiths Detection. One catch: they didn’t work. Prone to dust-related malfunctions and false readings due to high humidity and the presence of jet fuel, the machines were discarded and are now collecting dust in storage facilities.

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