Federal contract records, a state layoff notice and a rejected bid protest show how the Transportation Security Administration chose a new screening contractor for San Francisco International Airport, and what the Dec. 1 handoff means for 1,279 workers.
On Nov. 30, the Monday after the Thanksgiving holiday weekend, the company that has screened passengers and bags at San Francisco International Airport for more than two decades is scheduled to lay off 1,279 workers there. The next morning, a Virginia contractor takes over the checkpoints.
Federal records reviewed by The Inquirer point to a routine competition for one of the largest private screening contracts in the country, not a security failure or a policy change. The Transportation Security Administration found both bidders equally strong on every non-price factor, and the challenger’s price was about $24 million lower. The incumbent, Covenant Aviation Security, protested, and the Government Accountability Office rejected every ground of the challenge.
What happens to the people who staff the lanes is less clear. A layoff notice Covenant filed with California’s Employment Development Department lists 1,279 employees at the airport, effective Nov. 30. The incoming contractor, VMD Systems Integrators, has said it wants to keep good workers. An airport policy gives them a 90-day trial with the new employer. Neither amounts to a guarantee of a permanent job.
This account is built from federal spending records, the state layoff filing, the GAO’s docket and published summaries of its decision, and San Francisco airport and TSA program documents. It also draws on public statements the companies and the screeners’ union made to other news outlets in October.
Why SFO has private screeners at all
Most American travelers are screened by TSA’s own officers. San Francisco is one of about 20 airports in the agency’s Screening Partnership Program, which lets an airport ask to have screening done by a private company under federal contract and oversight. Charles M. Schulz–Sonoma County Airport in Santa Rosa is the other Northern California airport on the list.
The program is authorized by 49 U.S.C. § 44920. TSA describes it plainly: contract screeners follow every TSA procedure, pass the same background checks and medical standards as federal officers and train at the TSA Academy. The agency says the airport takes on no new role in running the checkpoints. Under the FAA Reauthorization Act of 2018, TSA must approve an airport’s application unless approval “would compromise security or detrimentally affect the cost-efficiency or the effectiveness of the screening.” Once a contract is in place, the contractor sets its own staffing levels.
SFO’s place in the program is unusual. According to GAO’s decision on the contract, it is the only airport TSA classifies as Category X, the agency’s highest-risk tier, that uses private screeners. Covenant has worked its checkpoints since the federal pilot began in 2002, SFGate reported in October.
The money
The current arrangement is TSA task order 70T05021F5900N002, issued under a program-wide contract vehicle to Covenant Aviation Security LLC of Naperville, Ill. USAspending.gov shows it was signed Feb. 5, 2021, competed with three offers and structured as fixed price with an award fee, meaning part of the contractor’s pay depends on TSA’s performance evaluations.
As of the latest records, TSA had obligated $789.9 million on the order and paid out $593.3 million. Bloomberg Law put the order’s value at about $803 million when it reported on the protest. Annual obligations rose from $65.8 million in the partial first year of 2021 to between $133 million and $166 million a year from 2022 through 2026.
The records also show how the order was stretched to cover the gap while the replacement was contested. In December 2025, TSA invoked a standard federal clause, FAR 52.217-8, that allows up to six more months of services, and obligated $13.7 million. In June 2026, a modification created two more option periods and funded one of them with $58.4 million. On Sept. 29, TSA exercised the final option “to extend the period of performance to 11/30/2026,” adding $14.2 million.
Two September modifications raised Covenant’s prices. One of them, worth $1.93 million, covered health care and wage increases under the screeners’ 2026 collective bargaining agreement. Another set the 2026 minimum compensation rates that TSA requires contractors to pay.
The ledger also includes small reductions labeled as unearned award fee: $41,000 in May 2025, $75,000 in July 2026 and $90,000 in August 2026. Those entries mean Covenant did not receive the full performance bonus available in some evaluation periods. The public records do not explain the evaluations behind them.
The replacement
The successor order, 70T05025F5900N012, went to VMD Systems Integrators LLC of Fairfax, Va. USAspending records it as firm fixed price, competed under solicitation 70T05025R5900N001 with three offers, and signed Sept. 19, 2025. Its potential end date is May 31, 2031.
So far only $1.77 million has been obligated; the public records do not break down what that money covers. Federal task orders generally record most of their obligations as each performance period is funded. A May 2026 modification “realigned” the order’s periods of performance, after the protest was resolved. A September modification set the 2026 minimum compensation rates for VMD’s workers, the same step TSA took on Covenant’s order.
Federal records list VMD as a minority-owned and woman-owned business, but not a small business. It is part of Xcelerate Solutions, and TSA’s program page lists it among the companies eligible for screening task orders. A VMD spokesperson, Marta Czarnecki, told SFGate that VMD is the largest contractor in the program, with operations at Kansas City, Atlantic City, Greater Rochester and eight Montana airports.
The protest
Covenant challenged the award at the GAO. The agency’s docket for case B-423995.2 shows the protest was filed Dec. 18, 2025, under the same solicitation number and was denied Feb. 12, 2026. GAO’s public decision file could not be retrieved for this article. Its findings are described here as summarized by Pub K Group, a government-contracts law publisher, which reviewed the decision in May.
According to that summary, TSA gave both companies its highest ratings on every non-price factor, and VMD’s price was nearly $24 million lower. Covenant argued that TSA should have penalized VMD because its past-performance references came from smaller airports. GAO said that requiring a reference of equal size to SFO would amount to an impossible standard. Covenant also objected that both firms received the same “high confidence” rating. GAO responded that agencies are not required to give an incumbent extra credit for its tenure.
Covenant’s most consequential argument for workers concerned price realism. It questioned whether VMD’s fringe benefit costs and blended overtime rates were realistic. GAO found that TSA had confirmed the proposed rates met the agency’s minimum compensation requirements and the federal labor standards for service contracts, and that this was enough. GAO also rejected Covenant’s claim that VMD should have priced non-labor costs such as insurance and leased space separately.
Finally, GAO upheld TSA’s best-value decision. The agency had written more than 15 pages of tradeoff analysis concluding that Covenant’s slight edge under two technical factors did not justify paying about $24 million more. Covenant was represented by Faegre Drinker, VMD by Arnold & Porter, and the government by Department of Homeland Security attorneys.
None of this establishes how VMD’s wages and benefits will compare with what Covenant’s workers earn now. GAO’s ruling means only that VMD’s proposed rates met the federal minimums. Covenant’s 2026 price adjustments for its union contract are a reminder that current pay is set through collective bargaining, not only by federal minimums.
The layoff notice
The state’s WARN Act report lists Covenant Aviation Security, LLC, with an address on Highway 101 in the airport’s 94128 ZIP code. It records a permanent layoff of 1,279 employees, noticed on Sept. 28 and effective Nov. 30. The notice came 63 days ahead of the effective date, a little more than the 60 days of notice that California’s WARN law requires.
That is the same day TSA’s last extension of Covenant’s order runs out. It falls the day after the Sunday following Thanksgiving, typically one of the heaviest travel days of the year, and the new contractor starts Dec. 1.
Covenant’s president, Michael Bolles, told SFGate that TSA awarded the contract “as part of their normal competition process.” Airport officials have said they do not expect the transition to disrupt screening, according to Aviation Pros.
What the airport’s retention rule does and doesn’t promise
San Francisco has a local rule for exactly this situation. The airport’s Worker Retention Policy, adopted by the Airport Commission as Resolution No. 24-0235 in November 2024, covers services performed by providers in the airport’s Quality Standards Program. That program expressly includes employees “directly involved in passenger and facility security,” including checkpoint screening. The retention policy leaves the final word on which services are covered to the airport director.
Where it applies, the policy requires the outgoing contractor to send the successor and the airport’s Strategy and Social Impact Office a list of covered employees within 10 days. A covered employee is a non-manager who has worked continuously for at least six months at 16 or more hours a week. The successor “shall retain, for a 90-day trial employment period, the covered employees of a predecessor.” Workers whose performance is satisfactory must then be offered continued employment, on the successor’s terms. Those judged unsatisfactory may be let go and referred to the airport’s employment office.
If the new contractor needs fewer workers, it must keep them by seniority within each job classification and maintain a preferential rehiring list. It may also bring in its own employees of six months or more who would otherwise be laid off. Disputes go to expedited binding arbitration.
The policy, then, guarantees a trial period, not a permanent job, and it does not set the wages or benefits the successor must offer. That depends on TSA’s minimum compensation rules and on whatever the new employer negotiates with the union.
The workers and the union
“We try our best to keep those employees that are good workers,” Ms. Czarnecki of VMD told SFGate. She added: “Nobody is guaranteed a job, but obviously it’s in everyone’s good interest to keep those employees there.” “We’ve already done fittings,” she said.
Sanjay Garla, the airports director for SEIU-United Service Workers West, which represents the screeners, told SFGate that the union was in “ongoing talks with VMD and have a written agreement with them concerning the retention of current Covenant employees that we expect they will honor.” The terms of that agreement have not been made public. One officer with more than 13 years at the checkpoints, Joe Grandov, told SFGate that workers wanted a contract in place by Dec. 1.
Who responded
The Inquirer emailed questions on Monday to the TSA’s press office, to SFO’s communications office, to VMD and to SEIU-United Service Workers West. None had responded by publication. Covenant’s account here is drawn from its president’s on-record remarks to SFGate.
The questions still open are narrow ones that the records do not answer: how many of the 1,279 workers VMD will hire, at what pay, and how many screeners it plans to staff at the checkpoints of the country’s highest-risk privately screened airport during the week after Thanksgiving.
Wendell Yamashiro covers business, technology, labor, trade and the Bay Area economy for Trade and Commerce. More from Wendell Yamashiro
