How governments buy airport security and border systems

Four ways to pay for border systems

Border and airport security systems include passport scanners, biometric kiosks, screening machines, watchlist databases and the software that links them. Governments pay for them in a few common ways. Each one puts cost and risk in a different place ¹.

• Direct purchase: the state pays from its own budget and owns the system ¹³.
• Donor or development funding: a foreign government, the EU or an international body pays for part or all of it ^7,89.
• Public-private partnership or concession: a private company builds, finances or runs the system under a long contract ¹.
• User-fee funding: a charge on each passenger pays for the service, either to the state or to an operator ^1,11.

Direct purchase from the national budget

In a direct purchase the government defines what it needs, runs a tender and pays the supplier from public funds. The state carries the risk of delay and cost overrun ¹³.

The UK e-borders programme shows how large these risks can be. The National Audit Office reported on 3 December 2015 that the Home Office spent at least 830 million pounds on e-borders and its successor programmes between 2003 and 2015. The Home Office signed the main contract in November 2007 and ended it in July 2010, citing missed milestones. A legal dispute followed. It was settled in March 2015 with a payment of 150 million pounds to the contractor, plus 35 million pounds in legal costs. The NAO said the programme could not be regarded as value for money ¹³.

Donor and development partner funding

Many border systems are paid for in whole or part by outside funders. Inside the EU, the Integrated Border Management Fund has a budget of 7.39 billion euros for 2021 to 2027. Its Border Management and Visa Instrument supports border management and visa policy. Its Customs Control Equipment Instrument helps customs authorities buy and maintain items such as x-ray scanners and number plate readers ⁷.

International organisations deliver systems with donor money too. The International Organization for Migration supports a border management information system called MIDAS. It records traveller data at border posts. IOM handed over the system and computers at the Mchinji border post in Malawi as part of an EU-funded cross-border trade initiative ⁸. A July 2026 trade press report said Japan funded a MIDAS rollout in Côte d'Ivoire. The same report named deployments in Niger, Kenya, Uganda and Ghana ⁹.

Donor funding lowers the upfront cost to the receiving state. In the Malawi case IOM handed over the system and equipment once it was deployed ⁸. After a handover, running and maintenance costs fall on the receiving state.

Public-private partnerships and concessions

The World Bank's PPP Legal Resource Center describes three common contract types ¹.

Under a concession, a private firm gets a long-term right to run public assets, often for 25 to 30 years. Ownership stays with the government and the assets return to it at the end. The concessionaire usually earns money from users and pays a concession fee to the authority ¹.

Under build-operate-transfer (BOT), a private company finances, builds and runs a new facility for a set period, then hands it over. It usually earns its income from a single buyer such as a government. Payment often includes a minimum availability payment, and may come partly or fully from user tariffs ¹.

Under design-build-operate (DBO), the public sector owns and finances the assets. The private operator designs, builds and runs them to agreed standards ¹.

Ownership, financing and payment differ across these models ¹. In any border PPP the key questions are who owns the data and equipment, who carries the financial risk, and what happens when the contract ends.

When a passenger fee pays for security

Many security services are paid for by charges on tickets. In the United States, the September 11 Security Fee is 5.60 US dollars per one-way trip that starts at a US airport, capped at 11.20 dollars for a round trip. Airlines collect it and pass it to the Transportation Security Administration ¹¹.

In a concession model, the fee can go to the private operator instead of the state ¹. This links the contractor's income to passenger numbers. It moves the cost of the system from taxpayers to travellers.

ICAO sets global policy on airport charges in its Doc 9082. IATA, the airline trade body, summarises that policy as saying security charges must not recover more than the relevant costs. IATA says general state security functions such as national intelligence and counter-terrorism should not be charged to passengers. It calls for airlines to be consulted on charge levels and given financial information ¹².

Contracting out screening

Some governments set the rules and hire a company to do the work. Under the US Screening Partnership Program, TSA contracts security screening at commercial airports to qualified private companies. They work under federal oversight and must follow TSA screening procedures. TSA lists 21 commercial airports in the program ¹⁰.

Open tender, single source and security exemptions

The OECD Recommendation on Public Procurement says competitive procedures should be the standard method. Exceptions should be limited, pre-defined and justified when used ⁴.

Security buying has its own rules. In the EU, Directive 2009/81/EC covers defence and sensitive security contracts. Its recitals say it can extend to non-military security purchases such as border protection ². Article 13 excludes some contracts from the Directive, such as those that would force disclosure against a state's core security interests, intelligence contracts and government-to-government deals. Article 28 allows negotiation without a published notice in set cases. These include crisis or extreme urgency, and cases where technical reasons or exclusive rights mean only one firm can do the work ².

In the United States, the Federal Acquisition Regulation lets agencies skip full and open competition when disclosing their needs would harm national security. A classified contract does not qualify on that ground alone. Agencies must still ask for offers from as many sources as practicable and must justify the decision in writing ³.

Single-source awards are legal in the right conditions. They reduce price competition and public scrutiny. That is why procurement rules require a written reason ^3,4.

What good practice looks like

The OECD Recommendation sets 12 principles. They include transparency at every stage, integrity, access for firms of all sizes, e-procurement, risk management, and oversight with complaint routes. It calls for free online access to procurement information for all stakeholders ⁴.

The Open Contracting Data Standard, maintained by the Open Contracting Partnership, gives governments a common format for publishing data on every stage of a contract ⁵. The World Bank Group's 2015 Framework for Disclosure in Public-Private Partnerships offers a structure for proactively publishing PPP information ⁶.

• Publish the plan, tender notice, award and contract, using an open data format ^4,5.
• Limit single-source and secret awards to set legal grounds, with written reasons ^2,34.
• For PPPs and fee-funded deals, publish the fee level, contract length and who owns the data and equipment at the end ^1,6.
• Keep security charges tied to actual costs, with user consultation ¹².
• Let auditors and regulators review the contract after award ¹³.