Tribal Energy: Opportunities Exist to Increase Federal Agencies' Use of the Tribal Preference Authority

Tribal lands hold considerable energy resources—oil, gas, coal, wind, solar, geothermal, and biomass. Tribal energy projects can help tribes fund programs and services that improve tribal members' quality of life. Federal agencies are large consumers of energy in the United States, spending about $6 billion in 2017 on energy for their facilities. Congress has provided a mechanism for agencies to support development and use of tribal energy by authorizing agencies to give preference to majority tribally owned suppliers when purchasing energy. GAO was asked to review federal efforts to use the preference.

This report examines, among other objectives, the extent to which GSA, DOD, and DOE have used the tribal energy preference. GAO reviewed available agency information on use of the preference and interviewed federal agency officials to understand how agencies would use the preference when entering into contracts with tribal suppliers.

None of the three primary federal agencies with authority to enter into energy contracts—the General Services Administration (GSA) and the Departments of Defense (DOD) and Energy (DOE)—have used the tribal energy preference since it was established in the Energy Policy Act of 2005 (EPACT05). The section of the act that includes the preference provides federal agencies with mechanisms that can support development and use of tribal energy resources. The mechanisms include grants to assist tribes in developing their energy resources and authorization for agencies to give preference to majority tribally owned sources in federal energy purchases, so long as they pay no more than prevailing market prices and obtain no less than prevailing market rate terms and conditions. According to DOE, tribal lands account for 2 percent of U.S. land but contain about 6.5 percent of all utility-scale U.S. renewable energy potential.

GSA, DOD, and DOE officials identified five instances in the past when a tribe bid for a federal energy contract, and the agencies did not use the preference in any of those instances. GSA awarded a contract to tribes in two of the instances. In the first instance, the tribe submitted the best bid. In the second, GSA officials attempted to use the preference by limiting the energy contract solicitation solely to tribal sources, according to a stakeholder that worked on the project, but the GSA Administrator expressed concern about limiting competition in that manner. GSA instead used the small business preference authority, through which the tribe ultimately won the contract. DOD and DOE received the other three bids, which did not lead to contracts because either the cost was too high or the bid was not needed by the agency, according to agency officials. Federal officials noted that use of the preference is discretionary. EPACT05, which says agencies “may give preference,” does not require use of the preference, and the Federal Acquisition Regulation does not specifically address the preference.

In November 2016, GAO reported that one reason federal agency officials cited for not using the preference was uncertainty about how to do so. GAO recommended that GSA develop guidance to clarify use of the preference across the federal government. GSA agreed that such guidance would be beneficial but stated that the Federal Acquisition Regulatory Council is the regulatory body empowered to address this issue. In April 2017, GSA presented the council with a business case on the issue. However, GSA officials told GAO that the council determined that the preference has limited application government-wide because it mainly affects GSA, DOD, and DOE, and that, accordingly, the council declined to issue regulations and recommended GSA consider nonregulatory paths. GSA then added the preference language to the form it will use if it delegates purchasing authority in the future.

In 2018, federal agency officials told GAO they were uncertain how to use the preference. According to GSA and DOD officials, other statutes that authorize agencies to apply preferences for acquisition of goods and services from specific sources include more specific requirements in their statutory language, making them easier to apply. GSA officials noted that the Small Business Act, as amended, contains specific requirements and measurable goals that increase contracts awarded to small businesses. DOD officials stated that the agency might use the tribal energy preference if EPACT05 had similar requirements.

To the extent that Congress wants to further encourage use of tribally owned energy sources, it should consider amending EPACT05 to provide more specific direction to federal agencies for implementing the tribal energy preference, to include consideration of additional incentives or requirements.

Development of energy resources can be vital for the livelihood, well- being, and long-term economic sustenance of some tribes and their  members, in part because energy development provides opportunities to  improve living conditions and decrease high levels of poverty. Tribal lands  have considerable mineral energy resources, such as oil, gas, and coal.  These lands also have resources with significant potential for the  development of renewable energy, such as wind, solar, geothermal, and  biomass. Tribes may seek opportunities to use these resources to provide  revenue for their government operations and social service programs,  create high-quality jobs, and increase access to reliable and affordable  energy for tribal buildings and individual homes. According to the  Department of the Interior, oil and gas resources are among the largest  revenue generators for tribal lands.

Tribes are also developing renewable energy projects that range from  facility- and community-scale production, such as rooftop solar panels or  a wind turbine to power a community center, to utility-scale production of  hundreds of megawatts of electricity. However, tribes pursuing utility- scale projects need a customer to purchase their power for such projects  to be economically feasible. According to the Department of Energy  (DOE), in fiscal year 2017, the government spent about $6 billion on  energy for roughly 3.2 billion square feet of buildings and facilities, with  the Department of Defense (DOD) accounting for over half of that  spending. By statute, the General Services Administration (GSA) has  primary authority for entering into energy contracts for federal agencies.

GSA has delegated this authority to DOD and DOE so that they may also  enter into energy contracts.

In a 2016 law, Congress noted that “through treaties, statutes, and  historical relations with Indian tribes, the United States has undertaken a  unique trust responsibility to protect and support Indian tribes and  Indians.” The Energy Policy Act of 2005 (EPACT05) includes several  mechanisms that can support tribes in developing their energy resources.  For example, the act provides for federal grants, loans, and technical  assistance to tribes and tribal energy resource development organizations  to carry out energy projects and to process, use, or develop tribal energy  resources. Furthermore, EPACT05 authorizes federal agencies and  departments to meet their own considerable energy needs by giving  preference to majority tribally owned energy suppliers, with certain  requirements, and provides an incentive for using renewable energy  produced on tribal lands. However, we found in November 2016 that no  agencies had used the tribal energy preference, partly because no  government-wide guidance existed on when and how federal agencies  should use the preference. We recommended that GSA develop such  guidance for contracting officials purchasing energy, as discussed later in  this report.

You asked us to provide information on federal energy purchases from  tribes and federal agency efforts to implement the tribal energy  preference. This report examines (1) potential limiting factors for federal  energy purchases from tribal sources, and suggestions for addressing  them, that federal officials, tribal representatives, and stakeholders have  identified; and (2) the extent to which GSA, DOD, and DOE have used  the tribal energy preference to meet federal energy needs.

To identify potential limiting factors associated with federal energy  purchases from tribal sources and suggestions to address those factors, we interviewed 22 officials who GSA, DOD, and DOE identified as  knowledgeable of their respective agencies’ energy purchases, and a  non-generalizable sample of five representatives of tribes or tribal entities  and eight other stakeholders using standard question sets. We selected  our sample of interviewees based on their knowledge of and experience  with tribal energy development, federal energy purchases, and tribal  interactions with federal agencies. Specifically, we selected  representatives of tribes that have sought partnership with the federal  government, have current utility-scale energy projects, or are working to  develop tribal energy projects, as well as representatives that other  interviewees recommended. In addition, we selected other stakeholders  to interview that worked with or assisted tribes with energy projects (e.g.  legal counsel, private energy developers). Information from tribal  representatives and stakeholders we interviewed presents a range of  informed views but cannot be generalized to other tribal representatives  or stakeholders.

To examine the extent to which GSA, DOD, and DOE have used the tribal  energy preference to meet federal energy needs, we reviewed available  agency information and interviewed agency officials concerning the use of  the preference since its establishment in 2005. We also reviewed the  status of our past recommendation to GSA to develop guidance on how  to use the preference, as well as any guidance available from other  agencies with purchasing authority. If an agency had guidance on how to  use the preference, we compared agency actions to communicate this  guidance with federal internal control standards for information and  communication. In addition, we interviewed agency officials to  understand how agencies would use the preference when entering into  federal energy contracts with tribal sources.

We conducted this performance audit from November 2017 to April 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

This section describes tribal energy resources, EPACT05, and federal  agencies’ authority and processes to purchase energy.

Tribal lands have untapped energy resources that, if developed, could  help to alleviate economic hardships among tribal populations. According  to DOE, while tribal lands account for only 2 percent of all U.S. land, tribal  land contains an estimated 50 percent of potential uranium reserves, 30  percent of coal reserves west of the Mississippi, and 20 percent of known  oil and gas reserves. Furthermore, DOE’s National Renewable Energy  Laboratory also reports that these tribal lands contain about 6.5 percent  of all utility-scale potential U.S. renewable energy resources. Ninety  percent of this potential renewable energy capacity is for solar energy.  According to the laboratory, tribal lands have the potential for over 6,000  gigawatts of utility-scale solar photovoltaic capacity. To put this in  perspective, a single gigawatt of power running at full capacity has  approximately enough energy potential to power over 800,000 homes.  However, 86 percent of tribal lands with energy potential are  undeveloped, according to DOE.

In July 2018, DOE announced the release of its Tribal Energy Atlas and  an accompanying report on the renewable energy potential on tribal  lands. The atlas, developed by the National Renewable Energy  Laboratory, is an interactive, web-based geospatial application that  provides information about energy resource potential on tribal lands (see  fig. 1). According to DOE, the atlas is the first of its kind; further, it is  available to tribal energy project planners, technicians, and investors to  assist with analyzing energy options on tribal lands.

Previously, DOE had identified multiple tribal lands with undeveloped  energy resources that could potentially meet DOD energy needs.  Specifically, in a May 2013 report, DOE identified 15 reservations that  had, among other things, the potential to meet DOD energy needs and  were near existing transmission lines that could be used to transport the  energy from the reservation to the installation. The report was based on  a DOE survey of DOD installations that could have an interest in  purchasing energy from tribal sources based on the tribes’ proximity to  the installations and the tribal energy sources’ potential to meet  installation energy needs, among other factors.

EPACT05 has several provisions related to tribal energy resource  development. As previously noted, one of these provisions authorizes  federal agencies to give preference to majority tribally owned energy  suppliers over other potential energy suppliers when purchasing energy.  More specifically, EPACT05 specifies that federal agencies “may” give  such a preference as long as the agencies do not pay more than  prevailing market prices or obtain less-than-prevailing-market terms and  conditions. In addition, EPACT05 doubles the credit that agencies receive  toward their mandated renewable energy goals if the renewable energy  that agencies contract for is produced on tribal lands.

GSA, DOD, and DOE Authorities and Processes for Entering into Federal Energy Contracts

As noted earlier, GSA has primary authority to enter into energy contracts  for federal agencies, and it has delegated this authority to DOD and DOE  as well, by regulation. In addition to these statutory and regulatory  authorities, the acquisition and supply of energy for federal agencies is  governed by the Federal Acquisition Regulation (FAR), which is issued  and maintained by the Federal Acquisition Regulatory Council (FAR  Council). The process GSA has prescribed for entering into federal  energy contracts varies by location, depending on market conditions and  state law. In traditional energy markets, retail customers such as GSA,  DOD, and DOE are typically required to contract with the local utility  operating in the area for energy. In deregulated markets, these  agencies publicly issue requests for proposals for energy, and energy  providers engage in a competitive bidding process for federal energy  contracts. Federal officials seeking to enter into energy contracts may  specify energy of certain types (for example, renewable sources may be  given priority) in the requests for proposals, and the energy contracts are  typically awarded to the best-value provider who meets the requirements  of the request for proposal.

Federal Officials, Tribal Representatives, and Stakeholders We Interviewed Identified Potential Limiting Factors and Suggestions for Federal Energy Purchases from Tribes

Federal officials, tribal representatives, and stakeholders we interviewed  identified a number of factors that have the potential to limit federal  government energy purchases from tribal sources, and they offered  suggestions to address some of these factors. The factors, which  sometimes overlapped, included requirements to purchase from  monopoly utilities, difficulty entering the market at the prevailing rate,  access to transmission infrastructure, access to capital, and technical  capacity.

Requirements to purchase from monopoly utilities. In traditional  regulated energy markets, retail customers, including federal agencies,  generally can only purchase energy from the local monopoly utility in that  region. According to officials from GSA, DOD, and DOE, this  requirement prevents agencies from purchasing from tribes. A  representative we interviewed from one tribal energy corporation  concurred with the agency officials’ assessment. That tribal energy  corporation currently sells energy in wholesale markets and is interested  in selling energy to federal agencies, but it has not succeeded in doing so  because agencies typically make purchases as retail, not wholesale,  customers, according to the tribal representative. Nonetheless,  according to the tribal representative, retail customers, including federal  agencies, may have the option to purchase electricity as wholesale  customers in traditional markets if the entity is large enough, which would  allow them to purchase from sources such as the tribal corporation.

GSA officials told us that purchasing energy as a wholesale customer  may not be in the best interest of the federal government, given the  associated technical requirements, including connecting to the grid in  ways GSA is not currently equipped for, and regulatory risk, such as  managing power in a way not required of retail customers. In particular,  GSA officials expressed concern about the regulatory requirements  associated with reselling any potential excess energy that may come with  a wholesale purchase. Additionally, DOE officials said there might be cost  considerations related to achieving and maintaining status as a wholesale  customer, as well as risks in giving up retail customer status, including the  loss of the utility’s obligation to service the agency’s facilities because it is  no longer a retail customer. In addition, according to DOE officials,  switching from retail to wholesale purchasing has historically presented  significant litigation risk, such as the utility challenging the legal and  technical basis for the government’s change from retail to wholesale  customer.

Difficulty entering the market at the prevailing rate. According to GSA  procurement guidance, the contracting process for public utility services  should obtain the best-value product for the government, which GSA  officials said typically awards the contract to the lowest-cost provider that  also meets technical requirements, potentially limiting federal agency  opportunities to purchase energy from tribes. In particular, tribes may find  it difficult to enter the energy market at competitive rates, according to  four federal officials and one stakeholder. For example, two DOE officials  provided examples of DOE receiving bids from tribes for federal energy  contracts but stated that both bids were unsuitable because their price  was higher than the market rate. One DOE official said that tribes  developing renewable energy projects would have to compete with lower- cost natural gas and hydroelectric energy, which could prevent tribes from  meeting the prevailing market rate. To help foster the success of such  tribal projects, one DOE official and one stakeholder suggested allowing  federal agencies to purchase energy from tribes at rates that exceed the  prevailing market rates.

However, some tribes have successfully entered the energy market and  have sold energy at competitive rates. For example, representatives we  interviewed from one tribe and a renewable energy development  corporation owned by several tribes said they anticipate that their current  or future projects will allow them to sell energy at competitive rates, and  at least two tribes have entered into contracts with the federal  government. Moreover, since the beginning of 2017, DOE has seen an  increased interest from tribes in renewable energy projects because the  price of renewable energy has become more competitive with other,  lower-cost forms of energy, according to DOE officials. As tribes develop  more renewable energy projects, there may be additional opportunities for  federal agencies to purchase from tribes, which will also help these  agencies meet federal renewable energy goals.

Access to transmission infrastructure. Lack of access to energy  transmission infrastructure may prevent tribes from transmitting their  energy off tribal lands, according to 10 federal officials, tribal  representatives, and stakeholders whom we interviewed. One DOE  official said the biggest challenge in contracting for energy with tribes can  be getting a physical connection to transmit power between the tribal  energy providers and a federal building. Federal officials from GSA and  DOE noted that there are few federal buildings close to tribal lands,  making transmission from those lands to federal buildings more complex  and expensive. A 2013 Edison Electric Institute report said that the cost of  new construction of overhead transmission lines can range from  $174,000 to $11 million per mile. DOE’s Tribal Energy Atlas may assist  tribes in overcoming this factor because it provides information on  existing infrastructure, including transmission lines, giving tribes access to  data they need to make informed decisions about their energy  development options. Further, tribes are not limited to developing energy  projects on their own lands, which can eliminate issues with proximity to  federal purchasers. For example, one tribe near San Diego partnered with  a private developer to build a wind farm in Illinois to sell energy to GSA.

The purchase was the largest wind energy purchase from a single source  in federal contracting history, according to GSA officials.

Access to capital. Tribal energy development may be hindered because  of difficulty obtaining access to capital, potentially limiting federal energy  purchases from tribes. For example, one industry official we interviewed  who worked with a tribe in the process of developing a wind farm on its  reservation said the tribe does not have the necessary capital to connect  to the local transmission infrastructure. As a result, it cannot provide  power beyond the reservation. Likewise, nine federal officials and  stakeholders whom we interviewed said securing financing for energy  development could be difficult for some tribes. To overcome this potential  limitation, one group of tribes combined their resources and formed a  multi-tribal power authority, which allowed them to raise the necessary  capital to take on a larger-scale project while maintaining tribal ownership  and creating jobs in the tribal communities. The multi-tribal authority plans  to develop one of the largest wind farms in the country and sell the  energy at a competitive price, according to representatives from a  renewable energy development corporation owned by several tribes.

Another option for tribes to address this limitation is tribes leasing their  land to private developers to operate and maintain energy projects,  thereby benefiting from their energy resources without having to raise the  capital needed to develop them but still receiving additional benefits for  the tribal community. For example, one tribal representative and one  stakeholder mentioned that training and educational programs for tribal  members could be part of these agreements between private developers  and tribes.

Technical capacity. Some tribes may not have the technical capacity to  develop their energy resources, which can also limit federal energy  purchases from tribal sources, according to tribal representatives and  stakeholders we interviewed. For example, one tribal representative and  four stakeholders we interviewed said that some tribes lack experience  with energy development, which potentially limits their ability to take on  large-scale projects that could meet federal energy needs. Two  stakeholders noted the importance of tribes having access to  professionals with experience in running energy development projects to  help overcome this potential limitation.

Federal agencies offer programs that could assist tribes with building  technical capacity. For example, the Department of the Interior provides  technical and financial assistance to tribes for the exploration,  development, and management of tribal energy resources. In addition,  DOE offers grants and education through webinars, forums, and  workshops. For example, DOE in August 2018 selected 15 tribal projects  to receive funding for developing their energy resources to reduce or  stabilize energy costs, as well as to increase energy security and  resilience on tribal lands. DOE has also provided technical assistance,  technology and market analysis, and capacity building for tribes, as well  as webinars on utility-scale energy development, fundamentals of energy  markets for tribes, and effective tribal project partnerships. However,  DOE’s efforts have focused primarily on reducing tribal energy costs and  assisting tribes in developing energy for use on reservations, rather than  on selling energy to outside sources, according to DOE officials.

GSA, DOD, and DOE Have Not Used the Tribal Energy Preference Since Its Establishment, and EPACT05 Is Not Specific about Its Use

Since the establishment of the tribal energy preference, GSA, DOD, and  DOE have not entered into an energy contract with a tribe using the  preference. The preference and other tribal energy resource development  provisions added in the tribal energy section of EPACT05 provide federal  agencies with mechanisms to support tribal energy development and use.  As noted previously, the section provided for grants to assist tribes in  developing their energy resources, authorization for federal agencies to  give preference to tribal energy sources when contracting for energy, and  double credit towards mandated renewable energy goals when federal  agencies contract for energy produced on tribal lands. GSA, DOD, and  DOE officials we interviewed identified five instances in the past when a  tribe bid on a federal energy contract, and agencies did not use the tribal  energy preference in any of these instances. Two of the instances led to  contracts with GSA because, in one of those instances, officials said that  the tribe submitted the best bid, and in the other, GSA used the small  business preference authority instead, as discussed further below. The  other three instances were bids to DOD and DOE; these instances did not  lead to contracts because either the cost was too high or the proposal  was unsolicited and not needed by the agency, according to agency  officials.

Officials from GSA and DOD noted that EPACT05 makes use of the  preference discretionary because it says that federal agencies “may give  preference” to a majority tribally owned energy source. Officials from  DOD said they cannot authorize agency officials to use the preference  without a policy or FAR requirement to use the preference. DOD officials  said they follow FAR regulations and guidance when implementing policy  and guidance for the agency, but the FAR has no provisions specifically  addressing the preference. Similarly, GSA officials told us they would be  hesitant to use the preference because they believe it limits competition  solely to tribal sources, which may not be in the best interest of the  federal government. GSA officials attempted to use the preference to limit  an energy contract solicitation solely to tribal sources in 2014, according  to a stakeholder that worked on the project, but the GSA Administrator  expressed concern about limiting competition in that manner. The  stakeholder noted that GSA instead decided to open the solicitation to  small businesses, and the tribe ultimately won the contract through the  small business preference authority.

When we reported on implementation of the tribal energy preference in  November 2016, we found that federal agencies had not used the  preference because of uncertainty about how to do so and lack of  guidance. Because GSA has primary energy purchasing authority for  the federal government, we recommended that GSA develop  implementing guidance to clarify how contracting officials across the  federal government should use the preference. GSA partially agreed with  the recommendation, stating that guidance would be beneficial, but GSA  officials stated that government-wide rulemaking from the FAR Council, of  which GSA is a member, is necessary to clarify how agencies should use  the preference. Subsequently, GSA officials told us that in April 2017,  GSA presented the FAR Council with a business case that included an  analysis of the problem we identified. After reviewing the business case,  the FAR Council determined the preference has limited application  government-wide. GSA officials told us that the FAR Council declined to  pursue regulatory changes to the FAR because, according to the council,  the preference only impacts agencies responsible for entering into federal  energy contracts, mainly GSA, DOD, and DOE. Further, the FAR Council  recommended that GSA consider nonregulatory paths, in keeping with  Executive Order 13771, which aims to reduce costs associated with  regulatory compliance. In response to the FAR Council’s  recommendation, GSA added the preference language from EPACT05 to  the form it uses to delegate purchasing authority to other federal agencies  that may seek this authority in the future.

As we reported in November 2016, DOE in 2013 issued agency-specific  guidance on use of the preference, such as for limiting competition to  qualified majority tribally owned suppliers for the purchase of renewable  energy and energy by-products. DOE distributed the tribal energy  preference guidance through a February 2013 acquisition letter.  However, in our interviews with officials responsible for purchasing  energy in nine DOE offices, we found that officials in five of these nine  offices were unaware of the DOE guidance or unaware of the preference.  DOE headquarters officials stated that the agency did not take further  action to communicate the guidance or ensure relevant officials were  aware of it after its initial distribution. Under federal standards for internal  control, management should internally communicate the necessary  quality information to achieve the entity’s objectives. According to DOE  documentation, the objectives of the guidance are to promote tribal  renewable energy development, reaffirm the federal government’s trust  responsibility to tribes, and reinforce key national policy objectives such  as the acquisition and use of clean energy products. DOE officials agreed  that officials responsible for purchasing energy should be aware of the  agency’s guidance and the preference. For example, officials from one  DOE office stated that its contracting officials are aware of the preference  because it has included the preference language in its requests for  proposals. By taking steps to communicate the guidance to all DOE  officials responsible for purchasing energy, DOE will be better positioned  to ensure that these officials are aware of the preference, which may  increase its use.

In addition, officials from GSA, DOD, and DOE who are responsible for  purchasing energy told us they are still uncertain about how they would  use the preference. For example, officials from GSA stated that they  would use the preference as a tiebreaker at a minimum, but they also  noted that ties are unlikely and they had not seen any ties in bids to  provide energy in the last 4 years. They also noted that they would rely on  GSA’s legal and acquisition policy offices for any instruction regarding  using the preference. Similarly, DOD officials responsible for energy  purchases stated they would have to consult with DOD’s acquisition  policy office, which stated that DOD does not have guidance and could  not authorize use of the preference without a requirement in the FAR, as  discussed previously. Likewise, DOE officials were unclear about how  they would use the preference, stating that they would use the preference  by awarding the energy contract to a tribe if the tribe had the lowest bid.  However, the agency would not need to use the preference in such  situations because the agency generally awards contracts to the lowest  bidder, according to DOE officials.

According to officials from GSA and DOD, other statutes that authorize  agencies to apply preferences for acquisition of goods and services from  specific sources include more specific requirements in their statutory  language, making the requirements easier to apply. For example, GSA  officials explained that the specific requirements and measurable goals  set under the Small Business Act, as amended, increases contracts  awarded to small businesses. In contrast, EPACT05’s tribal energy  provision does not contain analogous specific requirements for how  agencies should use the preference. DOD officials stated that the agency  would potentially pursue using the tribal energy preference if EPACT05  required a certain amount of energy contracts to go to tribes, similar to  the Small Business Act’s requirements for small businesses.

Energy resources on tribal lands present an opportunity for individual  tribes that pursue development of these resources to improve their  socioeconomic status by generating income, jobs, and associated  economic development. The federal government, as a significant energy  consumer, is in a position to support energy development on tribal lands.  Through EPACT05’s tribal energy resource development provisions,  including the tribal energy preference, Congress has provided federal  agencies with mechanisms for such support. GSA and DOE have taken  steps intended to promote use of the preference—GSA by adding the  preference language when delegating energy contracting authority in the  future, and DOE by issuing guidance. However, no federal agency has  used the preference since its establishment in 2005, in part because  EPACT05 does not require its use or include goals specifying how  agencies should use it. Further, officials we interviewed at GSA, DOD,  and DOE told us they were uncertain about how to use the preference.  Specific incentives or requirements for the use of the tribal energy  preference could help create additional opportunities for federal energy  purchases from tribes as they develop more renewable energy projects.

DOE’s issuance of agency-specific guidance for implementing the  preference is an important positive step. However, some DOE officials  responsible for purchasing energy were unaware of the DOE guidance.  By taking steps to communicate the guidance to all DOE officials  responsible for purchasing energy, DOE will be better positioned to  ensure that these officials are aware of the preference, which may  increase its use.

To the extent that Congress wants to further encourage federal agencies  to use tribal energy sources, it should consider amending the Energy  Policy Act of 2005 to provide more specific direction to federal agencies  for implementing the tribal energy preference, to include consideration of  additional incentives or requirements to use these energy sources.  (Matter for Consideration 1)

The Secretary of Energy should communicate DOE’s tribal energy  preference guidance to all DOE officials responsible for purchasing  energy. (Recommendation 1)

We provided a draft of this report for review and comment to DOE, DOD,  and GSA. In its written comments, reproduced in appendix I, DOE  concurred with our recommendation and outlined planned action to  implement it. Specifically, DOE plans to issue and disseminate a new  policy flash to its acquisition personnel to draw renewed attention to its  tribal energy preference guidance. DOD and GSA stated that they did not  have any comments.

As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Administrator of General Services, the  Secretary of Defense, the Secretary of Energy, and other interested  parties. In addition, the report will be available at no charge on the GAO  website at http://www.gao.gov.

If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our  Office of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff who made key contributions to this  report are listed in appendix II.

Appendix I: Comments from the Department of Energy

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the individual named above, Karla Springer (Assistant  Director), Andrew Moore (Analyst in Charge), Justin Bolivar, William  Gerard, Cindy Gilbert, Cynthia Norris, and Caroline Prado made key  contributions to this report.

Tribal lands hold considerable energy resources, such as oil, gas, coal, solar, and wind. Developing these resources can lead to income, jobs, and other economic benefits for tribes. In 2005, Congress authorized federal agencies to give preference to tribally-owned suppliers when buying energy.

However, we found no agency has used this preference. There are no use requirements or goals for the preference, and officials at the 3 primary energy-purchasing agencies were unsure how to use it.

We recommended that if Congress wants to further encourage federal use of tribally-owned energy, it should consider additional incentives or requirements.


VA Disability Exams: Opportunities Remain to Improve Oversight of Contracted Examiners

VBA has increased the use of contractors in conducting veterans' disability medical exams. From fiscal year 2012 through mid-September fiscal year 2019, VBA reported that the number of exams completed by contractors rose from about 178,000 to nearly 958,000, which is more than half of all exams completed to date in fiscal year 2019. The remaining exams were completed by medical providers from the Veterans Health Administration. According to VBA, its contracts are worth up to $6.8 billion over 10 years.

In light of issues GAO identified with VBA's oversight of contracted examiners in its October 2018 report (GAO-19-13), this testimony provides updates on VA's efforts to 1) improve its oversight of contracted examiners to ensure quality and timely exams and proper invoicing, and 2) ensure that examiners are properly trained.

The Veterans Benefits Administration (VBA) has not fully resolved issues regarding how it oversees the quality and timeliness of and invoicing for disability compensation medical exams that are completed by contracted examiners. VBA uses medical exam reports from both VHA and contract examiners to help determine if a veteran should receive disability benefits. GAO reported in October 2018 that VBA was behind in completing quality reviews of contracted exams and did not have accurate information on contractor timeliness. VBA's lack of quality and timeliness data hindered its oversight of contractors' performance. In 2018, GAO made recommendations for VBA to address these issues. VBA has begun to implement GAO's recommendations, but continued action is needed to:

Develop and implement a plan for using data from its new medical exam management system to (1) assess contractor timeliness, (2) monitor time spent correcting exams, and (3) verify proper exam invoicing. According to VBA, the agency has not fully implemented its plan for using this new system to resolve challenges with oversight of contractors' performance. For example, due to system issues, VBA has not been able to implement an automated invoicing system it planned to use to validate the accuracy of contractors' invoices. Further, VBA has not yet completed quarterly performance reviews of contracted exams under its new contracts, including any reports for fiscal year 2019. As a result, VBA still is unable to ensure that it is paying contractors the correct amounts based on its contract terms.

Monitor and assess aggregate performance data and trends over time to identify higher-level trends and program-wide challenges. VBA officials stated that as the agency makes improvements to the exam management system data it will be able to implement this recommendation, but officials could not provide a target completion date.

VBA has taken steps to address issues GAO identified with its oversight of contracted examiner training requirements but has not yet fully addressed them. Having properly trained examiners who can provide high quality exam reports is critical to ensuring that claims processors can make timely and accurate disability determinations for veterans. In 2018, GAO recommended that VBA improve its training oversight by:

Implementing a plan to verify that all contracted examiners have completed required training. In response, VBA began conducting random audits of training completed by contracted examiners, but it is still in the process of developing a centralized training system that will collect this information. Such a system could help ensure that contracted examiners complete training and, ultimately, conduct high-quality exams.

Collecting information from contractors or examiners on training and use this information to assess training and make improvements. VBA has since developed a feedback tool for examiners to complete following training and plans to use it to improve the training, where needed.

GAO made four recommendations in 2018, including that VBA (1) develop a plan for using its new data system to monitor contractors' quality and timeliness performance, (2) analyze overall program performance, (3) verify that contracted examiners complete required training, and (4) collect information to assess the effectiveness of that training. VA agreed with and initiated actions on all of these recommendations but has not yet fully implemented them.

I am pleased to be here today to provide an update since my testimony in  November 2018 on the Veterans Benefits Administration’s (VBA)  oversight of disability medical exam contractors. As you know, VBA  relies on medical evidence to help determine a veteran’s eligibility for  disability compensation. To obtain such evidence, VBA staff may request  that the veteran undergo a disability medical exam conducted by the  Veterans Health Administration (VHA), and VBA also contracts with  private firms to perform these exams. According to VBA, it has increased  its reliance on contractors to help avoid delays in the disability claims  process related to completion of these exams.

We previously reported that VBA needed to make improvements to its  oversight of contracted examiners, particularly given its increasing  reliance on them. For example, from fiscal year 2012 through mid- September 2019, the number of these exams completed by VBA  contractors more than quadrupled—from roughly 178,000 to almost  958,000, according to VBA. To date, in fiscal year 2019, contracted  examiners completed more than half of the 1.49 million disability medical  exams.

In 2018, VBA awarded 12 new contracts to conduct exams, worth up to  $6.8 billion over 10 years, to four firms to replace contracts that it  awarded in 2016 with updated provisions intended to help VBA improve  oversight of contracted examiners, according to VBA. According to its  Request for Proposals, VA expected the new contracts to cover  approximately 7.7 million exam requests in the United States over a 10- year period. VA reported that in fiscal year 2018 the agency spent over  $875 million on disability medical exams conducted by these VBA  contractors.

My remarks today are based on our October 2018 report on VBA’s  oversight of disability medical exam contractors and updates that we have  received from VA regarding the agency’s progress implementing our  recommendations for improving oversight of contracted examiners. This  testimony provides an update on VBA’s efforts to: (1) collect more timely  and accurate information on contractor quality and timeliness to better  evaluate contractors’ performance, ensure proper invoicing, and identify  program-wide challenges; and (2) ensure that all examiners have  completed required training and that the training adequately prepares  them to conduct high quality exams.

For our 2018 report, we reviewed and analyzed VBA data on the quality  and timeliness of exam reports completed from January 2017 to February  2018. We also reviewed relevant federal laws, regulations, relevant  provisions of selected versions of various contracts, and VA guidance.  We interviewed VA, VHA, and VBA officials; each of the five contractors  that performed exams under the 2016 contract; a private firm that  performs audits of VBA contracted examiners’ licenses; and three  national veterans service organizations. For this testimony, we  incorporated recent updates from VBA on the status of our  recommendations and obtained some information on the new contracts,  staffing levels, and exam management system updates in September  2019. More detailed information on our scope and methodology is  available in our issued report.

We conducted the work on which this statement is based in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives.

VA pays monthly disability compensation to veterans with service- connected disabilities according to the severity of the disability. VA’s  disability compensation claims process starts when a veteran submits a  claim to VA. A claims processor then reviews the claim and helps the  veteran gather the relevant evidence needed to evaluate the claim. Such  evidence includes the veteran’s military service records, medical exams,  and treatment records from VHA medical facilities and private medical  service providers. If necessary to provide support to substantiate a claim,  VA will also provide a medical exam for the veteran, either through a  provider at a VHA medical facility or through a VBA contractor. According  to VBA officials, VBA monitors a VHA facility’s capacity to conduct exams,  and in instances when the facility may not have capacity to conduct a  timely exam, VBA will send an exam request to one of its contractors  instead.

Once the contractor accepts the exam request from VBA, it assigns a  contracted examiner to conduct the exam and complete an exam report  designed to capture essential medical information for purposes of  determining entitlement to disability benefits. The contractors send the  completed report to VBA, which uses the information as part of the  evidence to evaluate the claim and determine whether the veteran is  eligible for benefits.

In 2016, VBA established an exam program office to manage and  oversee contractors, monitor their performance, and ensure that they  meet contract requirements. For example, in 2018 we reported that the  contracts require that contractors develop plans outlining how they will  ensure examiners are adequately trained. We also reported that  contractors are required to provide VBA with monthly exam status  reports, which include the number of canceled, rescheduled, and  completed exams, among other things. VBA also has an office dedicated  to completing quality reviews of contractors’ exam reports, which are  used to assess contractor performance.

VBA awarded new contracts in 2018, in part, because it wanted to update  performance measures for its contractors and to change how contractors  were assigned to each region throughout the country, according to  agency officials. For example, officials said that the agency restructured  the service areas in its contracts from five U.S. geographic districts to four  to balance the number of rural and urban areas contained in each region.  In doing so, they said that VBA’s goal was to distribute exams in rural  areas, where it can be more challenging to find examiners, more evenly  across all contractors.

Incomplete Information on Quality and Timeliness Continues to Affect VBA’s Oversight of Contractors’ Performance

VBA has not fully resolved issues in collecting information on contractors’  quality and timeliness, which continues to hinder its ability to oversee  contractor performance. We previously reported that VBA’s lack of  complete and accurate information on the quality and timeliness of exams  limited its oversight of contracted examiners and contributed to other  challenges in managing the contracts. For example, VBA officials had told  us that as of late June 2018, VBA was behind in completing quality  reviews for contracted exams that were completed in 2017, in part, due to  lack of staff to complete the quality reviews. Further, VBA officials had  acknowledged that they did not have accurate information on whether  contractors were completing veterans’ exams in a timely manner as  outlined in the contracts. We reported in 2018 that VBA measured  timeliness as the number of days between the date the contractor accepts  an exam request and the date the contractor initially sends the completed  exam report to VBA. However, we previously found that the exam  management system VBA used until spring 2018 did not retain the initial  exam completion date when VBA sent an initial exam report back to a  contractor for clarification or correction. In such cases, VBA’s system  maintained only the most recent date an exam report was sent back to  VBA. In such a situation, according to agency officials, VBA would not  always be able to accurately assess a contractor’s timeliness as outlined  in the contracts. Similar to our findings, the VA Office of Inspector  General’s June 2019 report on VBA’s oversight of contracted exam  cancellations also identified deficiencies due to staffing shortages and  exam management system limitations, among other reasons.

According to VBA officials in 2018, because VBA did not have complete  and accurate information on contractor performance, it could not carry out  key oversight activities. For example, VBA officials acknowledged that  they were unable to track exams that needed corrections or clarifications,  which we reported is needed to determine if VBA should reduce payment  to a contractor. In 2018, we reported that the contracts required that  contractors correct these exams within a certain number of days and bill  VBA for these exams at half price. However, we found that VBA’s lack of  complete and reliable information on insufficient exams hindered its ability  to ensure such requirements were met.

Further, in the absence of current and accurate quality and timeliness  information, we reported in 2018 that VBA officials told us that they had  not completed the quarterly reports that summarize how each contractor  performed. VBA’s delay in completing these reports meant that it had not  administered other provisions of the contracts. For example, we reported  in 2018 that the contracts stated that VBA could use performance data to  help determine how to allocate exams within specified areas in the United  States that have two contractors; in particular, VBA could decide to  allocate more exams to the contractor with higher performance results.  However, VBA did not have performance data on which it could base its  allocation of exams. Rather, the agency based allocation on contractor  workload. Further, we reported that the contracts outlined how VBA  could use performance data to administer financial incentives linked to  performance targets. However, due to the lack of performance  information, VA had not yet administered these incentives at the time of  our review in October 2018.

In our 2018 report, we recommended that VBA take steps to address the  oversight issues we identified by developing and implementing a plan for  using data from the new exam management system to accurately assess  contractor timeliness, monitor time spent correcting exams, and verify  proper exam invoicing.

VBA has taken steps to address issues with both the incomplete quality  information and inaccurate timeliness data. For example, to help resolve  the delays in completing quality reviews, VBA officials said in November  2018 that the agency had hired additional staff to assess quality of  contract exam reports. As of September 2019, officials said they have 16  out of 17 full-time positions filled in the quality review office because one  employee left and that they are in the hiring phase for the final position.  With the addition of quality review staff, officials stated that VBA is up-to- date on completing initial quality reviews. However, they said the agency  has not yet finalized any quality scores, or completed the quarterly  performance reports, under the new contracts. As such, according to  VBA, it has not yet administered financial incentives linked to  performance.

To address the inaccurate timeliness data, VBA officials stated that the  agency’s new exam management system, implemented in spring 2018,  was designed to capture information that would allow VBA to accurately  calculate contractor timeliness. Officials also said that VBA revised its  performance measures to help it more fully assess contractors’  performance. In its agency comment response to our draft report in  September 2018, VBA had a target completion date of December 2018  for implementing our recommendation. However, as of September 2019,  VBA reported that it has not been able to fully implement its plan for using  the new system to improve oversight of contractors and did not provide a  target completion date for fully implementing our recommendation. In  particular, VBA has not been able to implement an automated invoicing  system that it plans to use to validate the accuracy of contractors’  invoices nor can it reconcile historical data in the exam management  system. As a result, according to VBA, it still cannot ensure that it is  paying contractors the correct amounts based on the terms of the  contracts. According to VBA, the delay in implementation is, in part, a  result of having to fix technical issues with exam scheduling requests and  an ongoing effort involving multiple VA offices to align VBA’s systems with  those of multiple contractors. To address these issues, VBA stated that it  has completed testing of its invoice system with all of the contractors and  anticipates completing analysis of the results of those tests by October  2019 and will provide an updated target completion date at that time.

We also recommended that VBA regularly monitor and assess aggregate  performance data and trends over time to identify higher-level trends and  program-wide challenges. Without plans to conduct comprehensive  performance analyses, we stated that VBA is limited in its ability to  determine if the contract exam program is achieving its quality and  timeliness goals in a cost effective manner. VBA stated that as it makes  improvements to its exam management system data it will be able to  implement this recommendation, but did not provide a specific date. VBA  also noted that information collected in the new exam management  system has helped them to identify potential issues with the metrics that  they use to assess contractor performance and that the agency is in the  process of identifying the best way to analyze the data to make  improvements to the program.

VBA Has Not Finalized System to Verify All Training Has Been Completed

We previously reported that VBA relies on contractors to verify that their  examiners complete required VA training and that VBA did not have  information on whether the training effectively prepares examiners to  conduct high quality exams. Specifically, we noted that the contractors,  rather than VBA, access the contractor training systems to verify that  examiners have completed the required training before they are approved  to conduct exams. Further, VBA did not review contractors’ self-reported  training reports for accuracy or request supporting documentation, such  as training certificates, or solicit feedback from contracted examiners on  the effectiveness of training or suggestions for improvement.

Since VBA was without plans to verify completion of training, we noted  that VBA risked using contracted examiners who are unaware of the  agency’s process for conducting exams. This could lead to poor-quality  exams that need to be redone and, thus, delays for veterans. Similarly,  without information on the effectiveness of training, VBA may not know  whether additional training courses are needed. To address these  concerns, we recommended that VBA document and implement a plan  and processes to verify that contracted examiners have completed  required training and that it collect feedback on training for the purpose of  assessing its effectiveness and making improvements as needed.

As of July 2019, after VBA determined that none of its contractors were  comprehensive in reporting all examiners’ training, VBA reported that the  agency started conducting random audits of contractor training records.  Additionally, VBA said that contractors can submit feedback following the  completion of each VBA-developed training course and that it will use this  information to make improvements. However, VBA is still in the process  of developing a centralized training system to collect information on all  training completed by contracted examiners and to obtain participant  feedback on each course. VBA stated that it expects the system updates  that would allow it to verify that all examiners have completed required  training will be fully implement by the end of fiscal year 2020 and that it  will continue random audits until full implementation.

In conclusion, as VBA increasingly relies on contractors to perform  veterans’ disability compensation exams, it is important that the agency  ensures proper oversight of these contractors. Specifically, VBA needs to  ensure that (1) it has accurate and up-to-date information on individual  contractor performance to ensure veterans receive quality and timely  exams and that contractors are properly paid, as well as a mechanism to  asses overall performance of the contract; and (2) examiners are trained  to conduct these exams in a manner that results in accurate exam reports  that claims processors can use to make a disability ratings decision.  Without sustained oversight, VBA also runs the risk of causing undue  harm to veterans through delayed or inadequate exams.

Chair Luria, Ranking Member Bost, and Members of the Subcommittee,  this concludes my prepared statement. I would be happy to answer any  questions you or other members of the subcommittee may have at this  time.

For questions about this statement, please contact Elizabeth Curda,  Director, Education Workforce, and Income Security Issues at (202) 512- 7215 or curdae@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this  statement. In addition to the contact above, Nyree Ryder Tee (Assistant  Director); Justin Gordinas (Analyst-in-Charge); Alex Galuten; and Jessica  Orr made key contributions to this testimony. Other staff who made key  contributions to the report cited in the testimony are identified in the  source product.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

The Veterans Benefits Administration frequently uses contractors to conduct medical exams that veterans need for disability claims. According to VBA, contractors help it avoid delays in the claims process. VBA awarded exam contracts in 2018 that are worth up to $6.8 billion over 10 years.

In October 2018, we recommended that VBA improve its oversight of contracted examiners to ensure they offer high-quality, timely exams to veterans. Other recommendations included ensuring that examiner training is completed and effective.

This testimony addresses how VBA has initiated action on those recommendations but has yet to fully implement them.


FAA requires that only mechanics who are "certificated" by the FAA approve aircraft for return to service. Some stakeholders have expressed concern that retirements and attrition could adversely affect the capacity of this workforce to meet the growing demand for air travel, and that the mechanic curriculum is outdated.

The FAA Reauthorization Act of 2018 included provisions for GAO to examine the aviation workforce. This testimony examines (1) what federal data reveal about the characteristics of the aviation maintenance workforce, (2) how selected federal agencies and other key stakeholders provide support and coordinate to develop the skills of this workforce, and (3) FAA's progress in updating the curriculum and testing standards for mechanics. GAO analyzed FAA and BLS data; reviewed relevant federal laws and regulations; and interviewed selected federal agency, industry, and AMT school officials.

Federal data provide some information on the Federal Aviation Administration (FAA)-certificated aviation maintenance workforce, though certain data limitations exist. FAA maintains data on the number of individuals newly certificated each year, but less is known about how many certificated individuals exit the aviation industry each year and the extent of growing demand. A sufficient supply of certificated workers is critical for safety and to meet the growing demand for air travel. Bureau of Labor Statistics (BLS) data provide some information on pay and demand for aviation maintenance workers more broadly, but do not differentiate between FAA-certificated and non-certificated workers due to data collection challenges. Demographic data may also be useful for workforce analysis and planning. FAA data provide some demographic information on certificated mechanics and repairmen, such as age and sex, but the agency lacks data on race and ethnicity. According to GAO analysis of FAA data, the median age of the roughly 330,000 mechanics and repairmen FAA had certificated as of December 2018 was 54 years old and three percent were women.

Government agencies, educational institutions, and businesses coordinate to some extent in support of this workforce, but FAA does not routinely analyze, collect, or coordinate with other stakeholders on certain data related to workforce development. One of FAA's strategic objectives includes promoting the development of a robust, skilled aviation workforce, and the agency established a committee, in part, to explore ways to diversify this workforce; however, FAA is not currently positioned to understand whether its efforts are optimally targeted or effective. Without routinely analyzing its own data or leveraging others' data, FAA may not have certain information it needs to track or ensure progress toward its workforce development goals.

FAA has acknowledged that curriculum requirements for Aviation Maintenance Technician (AMT) schools and mechanic testing standards are outdated. Efforts to revise the decades-old curriculum requirements for AMT schools are ongoing and FAA officials told GAO that a final rule will be published some time toward the end of 2020. FAA officials indicated that the revised mechanic testing standards would likely be finalized after.

In its February 2020 report, GAO recommended that FAA use its existing data and coordinate with other federal agencies to identify and gather information to measure progress and target resources toward its goal of promoting a robust, qualified, and diverse aviation maintenance workforce. FAA agreed with the recommendation.

Thank you for the opportunity to discuss our work on the aviation  maintenance workforce. The FAA Reauthorization Act of 2018 included a  provision for us to examine different aspects of this workforce, including  how government, industry, and educational institutions coordinate to  support workforce growth. Each year, hundreds of millions of passengers  rely on airlines to get them safely to their destination, rendering public  confidence in safety critical to the aviation industry.

The Federal Aviation Administration (FAA) requires that only mechanics  who are “certificated” by the FAA approve aircraft for return to service. A  sufficient supply of qualified aviation maintenance workers, including FAA  certificated mechanics and repairmen, is necessary for repairing aircraft  and maintaining a safe and robust aviation system. Changes in aviation  industry technology are ongoing and are expected to continue at a rapid  pace, which has implications for the training of these workers. In addition,  FAA and the aviation industry anticipate that the demand for air travel will  grow in coming years. Federal and aviation industry stakeholders have  expressed concern over the capacity of the aviation maintenance  workforce to meet projected needs due to retirements, attrition, fleet  growth, and the growing demand for air travel. Yet federal data limitations  make it difficult to determine certain employment characteristics for this  workforce and the curriculum requirements for the aviation maintenance  technician (AMT) schools that train certificated mechanics are decades  old.

My testimony today is based on our report that issued last week, Aviation  Maintenance: Additional Coordination and Data Could Advance FAA  Efforts to Promote a Robust, Diverse Workforce. Accordingly, this  testimony addresses (1) what federal data reveal about the characteristics of the aviation maintenance workforce, (2) how selected  federal agencies and other key stakeholders provide support and  coordinate to develop the skills of this workforce, and (3) FAA’s progress  in updating the curriculum and testing standards for mechanics. We also  issued a report in 2014 that covered similar topics. In addition, we have  ongoing work on the aviation and aerospace workforce of the future,  which focuses on airline pilots, aerospace engineers, and aircraft  mechanics and includes information on worker supply and demand and  the potential effects of emerging technology on these professions.

To develop the findings and recommendation for our recently issued  report, we analyzed relevant FAA and Bureau of Labor Statistics (BLS)  data; interviewed agency officials from FAA and the Departments of  Labor (DOL), Education (Education), Defense (DOD), and Veterans  Affairs (VA) as well as key stakeholders including employers, AMT  schools, and industry associations; and reviewed relevant federal laws,  regulations, and FAA documents, such as FAA’s 2019-2022 strategic  plan. Additional information on our scope and methodology is available in  our report. Our work was performed in accordance with generally  accepted government auditing standards.

Different aviation industry employers have distinct workforce needs and  may require workers with specific skillsets depending on the type of work  performed. The workforce includes FAA-certificated mechanics and  repairmen, as well as non-certificated workers.

FAA-certificated mechanics inspect, service, and repair aircraft  bodies (airframe) and engines (powerplant), and only they can  approve an aircraft for return to service. It can take between 1 and 3  years to obtain the required education or training to become  certificated.

FAA-certificated repairmen service aircraft components and must  be recommended for certification by their employer to perform specific  tasks such as welding or painting. It can take more than a year to  obtain the required experience or training to become certificated. A  repairman certificate is only valid at the employer for which it was  issued.

Non-certificated aviation maintenance workers include individuals  who are supervised by certificated mechanics or repairmen in  performing repair work.

Federal Data Reveal Some Demographic and Employment Information on Certificated Mechanics and Repairmen

Existing federal data shed light on key workforce characteristics such as  the number of FAA-certificated mechanics and repairmen, their age, sex,  and education. Specifically:

As of December 2018, about 295,000 individuals held a mechanic  certificate and about 35,000 held a repairmen certificate.

The median age of FAA-certificated mechanics and repairmen was 54  years old, according to our analysis of FAA data.

Three percent of all aviation maintenance certificate holders were  women as of December 2018.

Attending AMT school was the most common pathway certificated  individuals used to qualify for the FAA tests to become mechanics.

Existing federal data also provide some information on employment  characteristics such as the supply of certificated workers. Specifically,  FAA certificated about 8,600 mechanics and repairmen on average each  year for 2014 through 2018 (see fig. 1). BLS data project an annual  average of 11,800 job openings in the United States from 2018-2028 for  aircraft mechanics and service technicians due to growth and replacement, which include job openings for certificated and non- certificated workers.

There are, however, certain limitations to existing federal data. For  example, neither FAA nor BLS collects data on the race or ethnicity of  certificated individuals. In addition, FAA officials said the number of  certificated individuals likely overestimates the number of them working in  the aviation industry. It is unknown how many of the approximately  330,000 certificate holders are retired, deceased, or working in other  industries. Furthermore, BLS data indicate 136,900 individuals were  employed in the aircraft mechanics and service technicians occupation in  2018, but it is not clear how many of those jobs were filled by FAA- certificated workers.

There are also limitations to determining employment characteristics such  as pay for certificated workers, specifically. BLS publishes some data on  pay for aircraft mechanics and service technicians, such as average  hourly and annual wages. However, the occupational classification  system BLS and other federal statistical agencies use for aircraft  mechanics and service technicians does not distinguish between FAA- certificated and non-certificated workers, making it difficult to determine  employment characteristics such as pay for certificated workers,  specifically. This is in part because workers are classified by the work  they perform and not necessarily by certification or education, according  to occupational classification system principles. BLS officials said they  collected wage and employment data for certificated workers separate  from non-certificated workers in employer surveys conducted between  2000 and 2012, but stopped collecting these data in part because  employers inconsistently reported them.

Employers we interviewed, including air carriers and repair stations, had  differing perspectives on potential growth in demand for aviation  maintenance workers; some said they were experiencing difficulty finding  enough workers to meet their needs, while others said they were not  experiencing difficulty. Employers we interviewed for our 2014 report also  expressed varying levels of difficulty filling vacancies and recruiting  individuals for certain aviation professions, including aviation  maintenance workers. Small and medium-sized employers in particular  cited some challenges to hiring due to the wage they offered. Some  stakeholders we interviewed for our recent report voiced concerns about  the potential for a labor shortage. In addition to these views, two of the  three selected labor market indicators (unemployment rate and wage  earnings) we reviewed from 2013 through 2018 were consistent with  difficulties in hiring aircraft mechanics and service technicians, while the  other indicator (employment) was not.

Government and Industry Programs Support the Workforce, but FAA Lacks Information That Could Advance Its Workforce Development Efforts

Several federal agencies such as DOD, DOL, VA, Education, and the  Department of Transportation administer grants or programs that support  individuals pursuing aviation maintenance careers or facilitate  coordination among different stakeholders to support them. For example:

DOD’s Military Services’ Credentialing Opportunities On-Line  (COOL) program. This program provides funding for service  members to obtain professional credentials related to their military  training and helps them translate their military experience into civilian  occupations.

DOL’s Registered Apprenticeship Program. DOL awards grants to  support Registered Apprenticeship Programs— employer-driven  training opportunities that combine on-the-job learning with related  classroom instruction. The program facilitates coordination among  different stakeholders such as industry, states, and educational  institutions to support apprenticeships and employment opportunities.

In addition, FAA established an Aviation Workforce Steering Committee in  February 2019, in part to coordinate efforts across FAA to address  various workforce related provisions included in the FAA Reauthorization  Act of 2018. Additional examples of federal grants or programs that  support this workforce can be found in our report. The report also  includes examples of states, industry employers, and AMT schools  coordinating or partnering to support the workforce including developing  career grants and military pathway programs.

Despite some of FAA’s recent efforts in support of this workforce, we  found that FAA does not routinely analyze, collect, or coordinate with  other stakeholders on certain data related to workforce development.

FAA’s strategic plan includes an objective on promoting the development  of a robust aviation workforce, and its Aviation Workforce Steering  Committee charter emphasizes providing diverse populations, including  youth, women, and minorities, with clear pathways into aviation careers to  expand the talent pool from which both government and industry may  recruit. However, neither the strategic plan nor the steering committee  charter provides specific information on how FAA plans to select and  measure any efforts it undertakes related to these objectives. Without  routinely analyzing its own data or leveraging others’ data, FAA may not  have certain information it needs to track or ensure progress toward its  workforce development goals.

We identified several areas in which improved data analysis, collection, or  coordination could assist FAA in measuring progress and understanding  how to target its resources in support of its workforce related objectives.  For example, FAA could use the demographic or pathway data it already  collects to identify patterns or relationships (such as the trend in female  certificate holders by pathway), which could be useful information as FAA  aims to increase opportunities for women to pursue aviation maintenance  careers. FAA could also use existing AMT school data (such as  enrollment or mechanic test pass-rate data) to analyze nationwide trends  or aggregate information across AMT schools to better understand the  AMT school pathway as a whole.

In our 2020 report that issued last week, we recommended that the  Aviation Workforce Steering Committee, as part of its ongoing efforts,  take steps to use existing FAA data and coordinate with other federal  agencies to identify and gather the information it needs to measure  progress and target resources toward its goal of promoting a robust,  qualified, and diverse aviation maintenance workforce. FAA agreed with  our recommendation.

Revisions to FAA’s Decades-Old Mechanic Curriculum Requirements and Its Mechanic Testing Standards Are Ongoing

Even as FAA’s strategic plan states the agency’s focus on promoting the  development of a skilled aviation maintenance workforce to integrate new  technologies, the agency has acknowledged that the current curriculum  requirements for AMT schools and mechanic testing standards are  outdated. FAA officials, employers, and AMT School officials we  interviewed said the current curriculum requirements do not emphasize  commonly used modern aircraft technologies, such as avionics and  composite materials. Over the years, FAA has attempted several times to  revise curriculum requirements for AMT schools through the rulemaking  process, and efforts to revise these requirements are ongoing through  this process. FAA is also currently updating the testing standards for  mechanics.

FAA officials have noted several challenges to updating the curriculum  requirements including competing demands at the department level and  the extent of comments FAA has received from stakeholders in response  to proposed changes. In October 2015, FAA published a notice of  proposed rulemaking (NPRM) with the stated goal of updating the existing  AMT school curriculum. FAA issued a supplemental NPRM in April 2019  that expanded the scope of the NPRM it issued in October 2015.  Comments on the supplemental NPRM were due in June 2019. As of  October 2019, FAA officials said they were in the process of reviewing the  comments. FAA officials told us that a final rule will be published some  time toward the end of 2020.

In a separate effort outside of the rulemaking process, FAA is currently  updating the testing standards for mechanics. FAA has acknowledged  that current mechanic testing standards are also outdated. As a result,  aviation stakeholders have stated the mechanic tests include outdated or  irrelevant questions. For example, the practical test may include projects  on wood airframes and fabric coverings, which are not common to  modern commercial aircraft.

An FAA official noted that any delay in finalizing the rule would likely  result in a corresponding delay to finalizing the testing standards.  Delaying the release of the updated mechanic testing standards could  result in the prolonged use of outdated or irrelevant questions on the  mechanic tests. FAA officials said that once finalized and implemented,  the updated curriculum requirements for AMT schools and the mechanic  testing standards for individuals should be mostly aligned.

Chairman Larsen, Ranking Member Graves, and members of the  Subcommittee, this completes my prepared remarks. I look forward to  answering any questions you may have.

If you or your staff have any questions about this statement, please  contact me at (202) 512-2834 or krauseh@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this statement. Individuals making key contributions to  this testimony were Betty Ward-Zukerman, Assistant Director, Vashun  Cole, Chelsa Gurkin, Ellie Klein, Meredith Moore, Justin Reed, Andrew  Von Ah, and Chris Woika.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

The Federal Aviation Administration requires aircraft be repaired and approved for flight by mechanics who are “certificated.” FAA oversees the certification process of these mechanics and of repairmen who fix aircraft parts. We testified about federal data on this workforce as well as government and industry programs that support these workers.

One of FAA’s goals is to promote the development of a robust and diverse workforce, but it doesn’t collect or analyze certain data to measure progress toward its goal.

We previously recommended that FAA make better use of existing data to measure this progress.