PSI Fee Change Goes Into Effect on January 1

[AggieMike88]

PSI Fee Change Goes Into Effect on January 1

Third-party testing centers, such as flight schools and FBOs, lose two-thirds of revenue from pilot knowledge exams.

This Flying Magazine Article details how the amount paid to testing centers will drop from $65 per exam to $22.00. The result is many places, such as FBO's, Flight Schools, and third party test centers, will no longer provide testing services.

https://www.flyingmag.com/psi-fee-change-goes-into-effect-on-january-1/

 

[Jeff Oslick]

This smells a lot like PSI trying to squeeze out the FBOs in favor of non-aviation test centers that they either own or conduct other PSI-run testing that are more willing to accept a lower payment structure due to higher volume. This is the FAA's fault for writing a contract that allowed this to happen. I wonder when the next rebid on this contract is due.

 

[Clip4]

For a test center you have to provide the space, internet connection, the computer equipment for the test, training for the proctor and the proctor before, during and after the test. $65 is a loss with the current labor market. $22 is a non-starter for small flight schools.

$22 won’t entice the large non aviation test centers because the margins are negative.

 

[Kenny Phillips]

For a test center you have to provide the space, internet connection, the computer equipment for the test, training for the proctor and the proctor before, during and after the test. $65 is a loss with the current labor market. $22 is a non-starter for small flight schools.

$22 won’t entice the large non aviation test centers because the margins are negative.

It would depend on how many seats you can fill. If you can run 240 tests per day, with regularity, you can do pretty well at $65, and likely less. But I never recall seeing the seats filled for any of my tests.

 

[Clip4]

It would depend on how many seats you can fill. If you can run 240 tests per day, with regularity, you can do pretty well at $65, and likely less. But I never recall seeing the seats filled for any of my tests.

There you go. You got the business model. Call PSI up and get onboard for the whooping return on your investment,

 

[kaiser]

They could be banking on FBOs using it as a loss leader.

 

[Brad Z]

I could see this breaking both ways...flight schools use it as a loss leader because they need a local testing center. Or they drop the testing and send candidates to another local testing center and rid themselves of the headache of having to maintain a testing center.

 

[kmacht]

Nobody was making money at $65 a person as there just aren't enough students on a daily basis in one location that need to take a test. The places that offer testing do so usually as a side to their main business (fbo, flight school, etc). It sucks that they will get paid less but it's unlikely to close places down or prevent others from starting up as they aren't doing it for the money from testing in the first place.

 

[Lindberg]

Is PSi the only testing company interested in offering these tests, or does it have a government-granted monopoly?

 

[Brad Z]

Is PSi the only testing company interested in offering these tests, or does it have a government-granted monopoly?

It wasn't originally a monopoly, but PSI (formerly CATS) bought out Lasergrade.

 

[Lindberg]

It wasn't originally a monopoly, but PSI (formerly CATS) bought out Lasergrade.

Could a different electronic testing provider get access from the FAA and start offering the tests if it wanted to?

 

[Jim K]

There used to be two companies doing it, then psi bought lasergrade. Faa writes the tests and the local provider proctors it, I can't see what psi does besides schedule the tests, and that process literally couldn't get any worse from my experience.

 

[Brad Z]

Could a different electronic testing provider get access from the FAA and start offering the tests if it wanted to?

It looks like a sole source contract with PSI, as of Jan 2020:

https://www.faa.gov/training_testing/testing/acts/media/acts_webinar_presentation.pdf

 

[Lindberg]

It looks like a sole source contract with PSI, as of Jan 2020:

https://www.faa.gov/training_testing/testing/acts/media/acts_webinar_presentation.pdf

Thanks for that. The FAA and government contracting, always good for a laugh!

The ACTS contract was comprehensive, awarded to PSI Services, LLC last year. The contract is to provide a best practices approach to enhance the quality of airman testing.

 

[Bob Noel]

"The contract is to provide a best practices approach to enhance the quality of airman testing."

I really hate buzzword bingo.

 

[robin ardoin]

"The contract is to provide a best practices approach to enhance organically the quality of sustainable airman testing."

I really hate buzzword bingo.

There….FIFY.

 

[Jeff Oslick]

"The contract is to provide a best practices approach to enhance the quality of airman testing."

I really hate buzzword bingo.

The process of writing government RFPs is akin to making legislation. It's ugly, and only those with a strong stomach should witness it.

 

[Initial Fix]

When do they rebid the contract? I did a quick search on Sam.gov )federal contract office) and didn’t see anything obvious. I’ll have to ping my contracts focal and see if she can find anything. Thus seems like a cash cow…. Errr. Opportunity

 

[Lindberg]

When do they rebid the contract? I did a quick search on Sam.gov )federal contract office) and didn’t see anything obvious. I’ll have to ping my contracts focal and see if she can find anything. Thus seems like a cash cow…. Errr. Opportunity

2030 if PSI gets all the extensions.

 

[write-stuff]

I wonder when the next rebid on this contract is due.

That will be a tough one. PSI has written all the testing software and owns it. No one else would be able to compete based on the costs they'd incur to rewrite everything from scratch. PSI is in the cat bird's seat and I doubt there is anything anyone can do about it.

 

[murphey]

Don’t know about PSI but many of the testing centers offer more than only FAA testing. Other DOT tests, for example.

 

[write-stuff]

And while we're on the topic of PSI and Knowledge Tests, you might want to take a look at this short article. It explains the vast changes we can expect in the format of FAA tests. One of the big ones is that the Knowledge Test Supplement is expected to go away entirely. No one will know the exact figures in advance since they will all be onscreen along with the questions. I personally confirmed this with an AFS 630 representative last year.

Knowledge Test Prep - Why Memorization is a Bad Idea - Gold Seal Online Ground School

 

[Tools]

Soooo… I contacted 630 to become an ODA to circumvent PSI, can’t even do that.

And PSI doesn’t want anyone to become a FAA AKT provider.

Another example of the FAA not abiding by regulation in favor of unwritten internal policy.

 

[Clip4]

And while we're on the topic of PSI and Knowledge Tests, you might want to take a look at this short article. It explains the vast changes we can expect in the format of FAA tests. One of the big ones is that the Knowledge Test Supplement is expected to go away entirely. No one will know the exact figures in advance since they will all be onscreen along with the questions. I personally confirmed this with an AFS 630 representative last year.

Knowledge Test Prep - Why Memorization is a Bad Idea - Gold Seal Online Ground School

This might be interesting. The applicant going to draw the lines to solve a performance graph chart on the monitor. This might represent a challenge for less computer savvy testers.

The fact still remains the thousands of questions in the test bank are not going to get an overhaul and diagrams representative of what the FAA is using will be produced based on memory of taking the test as Gleim and ASA will employ sketch artists to depict the memory of the testers.

 

[dmspilot]

And while we're on the topic of PSI and Knowledge Tests, you might want to take a look at this short article. It explains the vast changes we can expect in the format of FAA tests. One of the big ones is that the Knowledge Test Supplement is expected to go away entirely. No one will know the exact figures in advance since they will all be onscreen along with the questions. I personally confirmed this with an AFS 630 representative last year.

Knowledge Test Prep - Why Memorization is a Bad Idea - Gold Seal Online Ground School

That's great for accountability. The test and supplement are full of flaws. The FAA won't have to worry about fixing them anymore.

 

[write-stuff]

Don't shoot me. I'm just the piano player.

 

[AggieMike88]

Don't shoot me. I'm just the piano player.

Comment reminds me of the piano player from the movie Eldorado. About 2m45s into this cli

 

[E.W.]

Typical government absurdity. PSI is allowed to decide how much their competitors get to keep from each test. PSI gets to keep the entire $175 and they have decided that their competitors now get to keep $22. The article doesn't say what happens to the other $153? Presumably PSI keeps it for doing nothing. I don't know why PSI doesn't just change the number to $1 that their competitors are allowed to keep.

All this malfeasance is caused by the FAA forcibly meddling in aviation.

 

[flyingron]

It would depend on how many seats you can fill. If you can run 240 tests per day, with regularity, you can do pretty well at $65, and likely less. But I never recall seeing the seats filled for any of my tests.

You don't even need to run that many FAA tests in a day. If you're amortizing your proctor load and facility costs against a bunch of different government and quasigovernmental testing you do better. The example is like Pearson who does some Coast Guard testing here as well as things like HVAC refrigerant certification, some wine industry certification tests, etc...

 

[Brad Z]

The testing side of the house is completely foreign to me, but I suspect that at 150,000 tests per year, FAA knowledge tests are still relatively small potatoes for PSI. Further, there aren't many other competitors in this industry. Accordingly, I don't think the FAA had a lot of leverage in dictating how much testing centers would be compensated for their efforts. The cost of the integration with the FAA is completely bourn by PSI and amortized over the length of the contract. I guess it had to be worth their while.

That said, $23m a year to integrate with IACRA and do online scheduling is not a bad return.

 

[Lindberg]

Typical government absurdity. PSI is allowed to decide how much their competitors get to keep from each test. PSI gets to keep the entire $175 and they have decided that their competitors now get to keep $22. The article doesn't say what happens to the other $153? Presumably PSI keeps it for doing nothing. I don't know why PSI doesn't just change the number to $1 that their competitors are allowed to keep.

All this malfeasance is caused by the FAA forcibly meddling in aviation.

They aren't competitors, they're vendors. And if the compensation is insufficient, they can stop offering PSI exams.

 

[Jeff Oslick]

That said, $23m a year to integrate with IACRA and do online scheduling is not a bad return.

I think when I took my PP written 30 years ago and my IA and CP tests 20 years ago, it was something on the order of $50-60 (probably more like $35 for the private) to take the tests with CATTS. That the cost is now 3x more than that is borderline criminal.

 

[Brad Z]

I think when I took my PP written 30 years ago and my IA and CP tests 20 years ago, it was something on the order of $50-60 (probably more like $35 for the private) to take the tests with CATTS. That the cost is now 3x more than that is borderline criminal.

It was $60 in 1993, $90 in 2003, and $150 in 2014. Not sure that's a criminal rate of increase.

 

[Jeff Oslick]

It was $60 in 1993, $90 in 2003, and $150 in 2014. Not sure that's a criminal rate of increase.

Ok, memory was off a bit. The cost of the technology to implement the testing has gone down in 30 years, and the changes to the testing are very small increments. The most expensive cost is the testing center and the proctoring of the exam, which is exactly what PSI is shafting the testing the centers out of. I take annual online refresher training with exams for my work that cost $40/year, with content that is updated every year to about the same amount of revisions that an AKT would require. The difference is the supervision of the exam. PSI needs to be audited by the government.

 

[E.W.]

The schools in question aren't vendors because they do not sell PSI's testing service. They don't send customers to PSI, they provide their own testing service.
They are in fact competitors because if you take your test with Joe's Flight School you aren't taking it at PSI. Whatever money the flight school keeps is money PSI does not get to keep.

They aren't competitors, they're vendors. And if the compensation is insufficient, they can stop offering PSI exams.

 

[Lindberg]

Ok, memory was off a bit. The cost of the technology to implement the testing has gone down in 30 years, and the changes to the testing are very small increments. The most expensive cost is the testing center and the proctoring of the exam, which is exactly what PSI is shafting the testing the centers out of. I take annual online refresher training with exams for my work that cost $40/year, with content that is updated every year to about the same amount of revisions that an AKT would require. The difference is the supervision of the exam. PSI needs to be audited by the government.

What does being audited have to do with it? Does the contract limit what they can charge? According to the info Brad linked above, the contract didn't cost the FAA. And PSI has taken on responsibility for all maintenance and development of new tests and technology. That's not free and PSI is compensated only in testing fees.

 

[Jeff Oslick]

What does being audited have to do with it? Does the contract limit what they can charge? According to the info Brad linked above, the contract didn't cost the FAA. And PSI has taken on responsibility for all maintenance and development of new tests and technology. That's not free and PSI is compensated only in testing fees.

There are a host of Federal Acquisition Regulations (the other FARs) that are in play with any government contract.

 

[Lindberg]

There are a host of Federal Acquisition Regulations (the other FARs) that are in play with any government contract.

Which are they violating?

 

[WDD]

My written for Commercial a few weeks back was $175.

They could raise the rates, but then they'd look bad. So take profit away from the testing sites makes the FBO and schools look bad if they drop them. Yeah, cold hearted calculation there.

As far as the test questions spontaneously changing to get around test memorization, that could be problematic. Yeah, Industrial Psychology major here reaching back to my test reliability, accuracy, and predicability training. There is a reason why standardized tests need to be, well standardized. If the test questions keep changing, then you don't really have reliable data to build your grading curve. A person get's an 85, someone else a 70. Can't tell how much of that difference was because the questions were different.

 

[TCABM]

… Yeah, Industrial Psychology major here reaching back to my test reliability, accuracy, and predicability training. There is a reason why standardized tests need to be, well standardized...

From an L&D perspective, a lot goes into test design and validation. So much so that most people have no idea.