TSA awards human resources contract to California agency

The Transportation Security Administration this week announced it has awarded a five-year, $554 million contract to a California government agency to handle recruitment and hiring processes for security screeners and other personnel.

The contract, worth $108.3 million in the first year, was awarded to CPS Human Resource Services, a government agency that is jointly run by the California State Personnel Board and several local governments in and outside California. The award marks a unique arrangement in federal contracting history. While federal agencies routinely contract with one another for services, few have awarded service contracts to state or local agencies.

TSA also awarded a five-year, $214 million contract to New York-based consulting firm Accenture, which will handle TSA's day-to-day human resources administration, such as personnel recordkeeping and processing. Accenture's contract is worth $65 million in the first year.

The work under the two contracts was handled last year by NCS Pearson, a Minneapolis-based firm. NCS Pearson bid on the contracts but lost. The company successfully hired about 60,000 employees for TSA last year, but sources close to the work said NCS Pearson was beset by performance problems and complaints from applicants.

The recruitment contract is a coup for CPS, which had only $14.3 million in revenue in 2001. Accenture, which had $11.6 billion in revenue last year, also bid on the recruitment and hiring contract. Other companies that bid for the work include Chicago-based Aon Corp.; Vienna, Va.-based Resource Consultants Inc.; IBM Federal in Fairfax, Va.; and Avue Technologies of Tacoma, Wash.

TSA's contracts also represent a new way of getting human resources work done in the federal government. Typically, agencies have kept much of their human resources work in-house. It has been performed by government workers trained in the ins and outs of Uncle Sam's complicated personnel rules. TSA is keeping only a small group of in-house officials to oversee human resources policy, outsourcing the vast majority of human resources work.

Congress created TSA in 2001 following the Sept. 11 attacks, ordering its leaders to build an agency from scratch to defend the nation's airliners and other transportation modes from future attacks.

CPS, based in Sacramento, Calif., is officially known as a "joint powers authority," operating as an independent agency and reporting to state and local officials, much like independent transit authorities across the country operate. The head of the board of directors is David Hill, human resources director for the city of Anaheim, Calif. Walter Vaughn, executive director of the California State Personnel Board, is also a board member.

The contract to CPS raises questions about public-private competition, said Stan Soloway, president of the Professional Services Council, an Arlington, Va.-based contractors association. "As a matter of philosophy, one has to wonder what a state organization is doing bidding on national work," Soloway said.