Aviation Security
Better Planning Needed to Optimize Deployment of Checked Baggage Screening Systems Gao ID: GAO-05-896T July 13, 2005Mandated to screen all checked baggage using explosive detection systems at airports by December 31, 2003, the Transportation Security Administration (TSA) deployed two types of screening equipment: explosives detection systems (EDS), which use computer-aided tomography X-rays to recognize the characteristics of explosives, and explosives trace detection (ETD) systems, which use chemical analysis to detect traces of explosive material vapors or residues. This testimony discusses (1) TSA's deployment of EDS and ETD systems and the impact of initially deploying these systems, (2) TSA and airport actions to install EDS machines in-line with baggage conveyor systems, and the federal resources made available for this purpose, and (3) actions taken by TSA to optimally deploy checked baggage screening systems.
TSA has made substantial progress in installing EDS and ETD systems at the nation's more than 400 airports to provide the capability to screen all checked baggage using explosive detection systems, as mandated by Congress. However, in initially deploying EDS and ETD equipment, TSA placed stand-alone ETD and the minivan-sized EDS machines--mainly in airport lobbies--that were not integrated in-line with airport baggage conveyor systems. TSA officials stated that the agency's ability to initially install in-line systems was limited because of the high costs and the time required for airport modifications. These interim lobby solutions resulted in operational inefficiencies, including requiring a greater number of screeners, as compared with using EDS machines in-line with baggage conveyor systems. TSA and airport operators are taking actions to install in-line baggage screening systems to streamline airport and TSA operations, reduce screening costs, and enhance security. Eighty-six of the 130 airports we surveyed either have, are planning to have, or are considering installing full or partial in-line systems. However, resources have not been made available to fund these capital-intensive systems on a large-scale basis. Also, the overall costs of installing in-line baggage screening systems at each airport are unknown, the availability of future federal funding is uncertain, and perspectives differ regarding the appropriate role of the federal government, airport operators, and air carriers in funding these systems. TSA has not conducted a systematic, prospective analysis to determine at which airports it could achieve long-term savings and enhanced efficiencies and security by installing in-line systems or, where in-line systems may not be economically justified, by making greater use of stand-alone EDS systems rather than relying on the labor-intensive and less efficient ETD screening process. However, at nine airports where TSA has agreed to help fund the installation of in-line baggage screening systems, TSA conducted a retrospective cost-benefit analysis which showed that these in-line systems could save the federal government about $1 billion over 7 years. TSA further estimated that it could recover its initial investment in the in-line systems at these airports in a little over 1 year.
GAO-05-896T, Aviation Security: Better Planning Needed to Optimize Deployment of Checked Baggage Screening Systems
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Testimony Before the Subcommittee on Economic Security, Infrastructure
Protection, and Cybersecurity, Committee on Homeland Security, House of
Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:00p.m. EDT:
Wednesday, July 13, 2005:
Aviation Security:
Better Planning Needed to Optimize Deployment of Checked Baggage
Screening Systems:
Statement of Cathleen A. Berrick, Director, Homeland Security and
Justice:
GAO-05-896T:
GAO Highlights:
Highlights of GAO-05-896T, a testimony before the Subcommittee on
Economic Security, Infrastructure Protection, and Cybersecurity,
Committee on Homeland Security, House of Representatives:
Why GAO Did This Study:
Mandated to screen all checked baggage using explosive detection
systems at airports by December 31, 2003, the Transportation Security
Administration (TSA) deployed two types of screening equipment:
explosives detection systems (EDS), which use computer-aided tomography
X-rays to recognize the characteristics of explosives, and explosives
trace detection (ETD) systems, which use chemical analysis to detect
traces of explosive material vapors or residues. This testimony
discusses (1) TSA‘s deployment of EDS and ETD systems and the impact of
initially deploying these systems, (2) TSA and airport actions to
install EDS machines in-line with baggage conveyor systems, and the
federal resources made available for this purpose, and (3) actions
taken by TSA to optimally deploy checked baggage screening systems.
What GAO Found:
TSA has made substantial progress in installing EDS and ETD systems at
the nation‘s more than 400 airports to provide the capability to screen
all checked baggage using explosive detection systems, as mandated by
Congress. However, in initially deploying EDS and ETD equipment, TSA
placed stand-alone ETD and the minivan-sized EDS machines”mainly in
airport lobbies”that were not integrated in-line with airport baggage
conveyor systems. TSA officials stated that the agency‘s ability to
initially install in-line systems was limited because of the high costs
and the time required for airport modifications. These interim lobby
solutions resulted in operational inefficiencies, including requiring a
greater number of screeners, as compared with using EDS machines in-
line with baggage conveyor systems.
TSA and airport operators are taking actions to install in-line baggage
screening systems to streamline airport and TSA operations, reduce
screening costs, and enhance security. Eighty-six of the 130 airports
we surveyed either have, are planning to have, or are considering
installing full or partial in-line systems. However, resources have not
been made available to fund these capital-intensive systems on a large-
scale basis. Also, the overall costs of installing in-line baggage
screening systems at each airport are unknown, the availability of
future federal funding is uncertain, and perspectives differ regarding
the appropriate role of the federal government, airport operators, and
air carriers in funding these systems.
Moreover, TSA has not conducted a systematic, prospective analysis to
determine at which airports it could achieve long-term savings and
enhance efficiencies and security by installing in-line systems or,
where in-line systems may not be economically justified, by making
greater use of stand-alone EDS systems rather than relying on the labor-
intensive and less efficient ETD screening process. However, at nine
airports where TSA has agreed to help fund the installation of in-line
baggage screening systems, TSA conducted a retrospective cost-benefit
analysis which showed that these in-line systems could save the federal
government about $1.3 billion over 7 years. TSA further estimated that
it could recover its initial investment in the in-line systems at these
airports in a little over 1 year.
EDS and ETD Machines Used by TSA to Screen Checked Baggage:
[See PDF for image]
[End of figure]
What GAO Recommends:
In a prior report, GAO recommended that TSA systematically evaluate
baggage screening needs at airports, including identifying the costs
and benefits of installing in-line EDS systems or stand-alone EDS
machines in lieu of ETD machines, and prioritizing those airports where
TSA would benefit by such actions. DHS generally concurred with the
recommendations and described its corrective actions to address the
issues identified.
www.gao.gov/cgi-bin/getrpt?GAO-05-896T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Cathleen A. Berrick at
(202) 512-3404 or berrickc@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to participate in today's hearing on
leveraging technology to improve aviation security, and to discuss our
work on the Transportation Security Administration's (TSA) deployment
of checked baggage screening systems. After the terrorist attacks of
September 11, 2001, which highlighted the vulnerability of U.S.
aircraft to acts of terrorism, Congress passed and the President signed
into law the Aviation and Transportation Security Act (ATSA),
mandating, among other things, that all checked baggage at U.S.
airports be screened using explosive detection systems by December 31,
2002.[Footnote 1] To meet this requirement, the Transportation Security
Administration (TSA) deployed two types of equipment to screen checked
baggage for explosives: (1) explosives detection systems (EDS) that use
specialized x-rays to detect characteristics of explosives that may be
contained in baggage as it moves along a conveyor belt; and (2)
explosive trace detection (ETD) systems, whereby an individual (i.e., a
baggage screener) swabs baggage and then inserts the swab into the ETD
machine, which in turn can detect chemical residues that may indicate
the presence of explosives within a bag.
As we reported in February 2004, largely because of shortages of
equipment and insufficient time to modify airports to accommodate EDS
machines, TSA was unable, at certain airports, to meet the 2002
congressionally established deadline to screen all checked baggage for
explosives using EDS and ETD machines.[Footnote 2] Recognizing the
obstacles encountered by TSA, Congress passed, and the President signed
into law, the Homeland Security Act of 2002,[Footnote 3] which, in
effect, extended the deadline for screening all checked baggage for
explosives until December 31, 2003, for airports at which TSA was
unable to meet the earlier deadline established by ATSA. We also
reported that TSA fell short of fully satisfying the extended 2003
mandate and continued to face challenges in deploying and leveraging
screening equipment and technologies.
My testimony today discusses (1) TSA's initial deployment of EDS and
ETD systems and the impact of that deployment; (2) actions taken by
airports and TSA to install automated in-line EDS baggage screening
systems,[Footnote 4] and the key federal resources that have been made
available to fund these systems; and (3) TSA's actions to plan for the
optimal deployment of EDS and ETD equipment, including in-line checked
baggage screening systems, in order to ensure the efficiency, cost
effectiveness, and security of its checked baggage screening
operations.
My comments are based primarily on our March 15, 2005, report on our
assessment of TSA's checked baggage screening program.[Footnote 5] As
part of that assessment, we reviewed available documentation on TSA's
checked baggage screening program and interviewed officials from TSA,
air carriers, airports, EDS and ETD equipment manufacturers, and
airport industry associations to obtain information regarding TSA's
efforts to improve checked baggage screening operations using EDS and
ETD machines. We also visited 22 airports to observe baggage screening
procedures and discuss these procedures with TSA, airport, and airline
officials. In addition, we surveyed all 155 federal security
directors,[Footnote 6] who oversee federal security operations at one
or more airports in the United States where screening is required, to
obtain their perspectives on the implementation of checked baggage
screening operations at 263 airports under their supervision, and to
obtain information on these airports' plans regarding the incorporation
of EDS machines within the airports' baggage conveyor systems for
screening checked baggage for explosives.[Footnote 7]
Summary:
From its creation in November 2001 through September 2004, TSA procured
and placed about 1,200 EDS machines and about 6,000 ETD machines at
over 400 airports and modified airports for the installation of this
equipment. Although TSA made significant progress in fielding EDS and
ETD equipment to the nation's airports, TSA placed this equipment in a
stand-alone mode--usually in airport lobbies--to conduct the primary
screening of checked baggage for explosives, rather than integrating
EDS machines in-line with airports' baggage conveyor systems. TSA
officials stated that they used EDS machines in stand-alone mode and
ETD machines as an interim solution in order to meet the congressional
deadline for screening all checked baggage for explosives. Officials
stated that they employed these interim solutions because of the
significant costs required to install in-line systems and the need to
reconfigure many airports' baggage conveyor systems to accommodate the
equipment. These interim screening solutions led to operational
inefficiencies, including requiring a greater number of screeners and
screening fewer bags for explosives each hour, as compared with using
EDS machines in-line with baggage conveyor systems. Performing primary
screening using ETD machines, as is the case for more than 300
airports, is more labor intensive and less efficient than screening
using the EDS process. TSA's placement of stand-alone EDS and ETD
machines in airport lobbies also resulted in passenger crowding, which
presented unsafe conditions and may have added security risks for
passengers and airport workers. Certain information we obtained and
analyzed regarding explosive detection technologies and their
effectiveness in TSA's checked baggage screening operations are
classified or are considered by TSA to be sensitive security
information. Accordingly, the results of our review of this information
have been removed from this testimony.[Footnote 8]
TSA and airport operators are taking actions to install in-line EDS
baggage screening systems--to streamline airport and TSA operations,
reduce screening costs, and enhance security--but resources have not
been made available to fund these systems on a large-scale basis. Most
airports that have installed or are planning to install these capital-
intensive in-line systems have relied on or plan to rely on some form
of federal funding to help install the systems. Although TSA and
airports operators are taking actions to install in-line EDS baggage
screening systems, identifying the resources to fund the systems on a
large-scale basis continues to be a challenge. The issuance of letter
of intent (LOI) agreements--TSA's primary method for funding in-line
systems--has been limited to nine airports. An LOI, though not a
binding commitment of federal funding, represents an intent by TSA to
provide funds in future years if they are appropriated by Congress.
This in turn enables an airport to proceed with a project, such as
installing in-line baggage screening systems, because the airport and
investors are aware that allowable costs will likely be reimbursed.
However, TSA has not determined the total cost of installing in-line
EDS baggage screening systems at airports determined to need these
systems, the availability of funding for in-line systems is uncertain,
and perspectives differ regarding the appropriate role of the federal
government and airport operators in funding these systems.
At the time of our March 2005 report,[Footnote 9] TSA had not yet
completed a systematic analyses needed to plan for optimally deploying
EDS and ETD equipment--including installing in-line EDS baggage
screening systems or replacing ETD machines with stand-alone EDS
machines--at the nation's more than 400 airports to enhance security
and reduce TSA staffing requirements and long-term costs. Specifically,
TSA had not completed a prospective analysis to determine at which
airports it could achieve long-term savings and improved security
benefits by installing in-line baggage screening systems rather than
continuing to rely on labor-intensive stand-alone EDS and ETD machines
to screen checked baggage for explosives. TSA's retrospective cost-
benefit analysis conducted on the nine airports with signed LOI
agreements to install in-line screening systems found that significant
savings and other benefits, including reduced screener staffing
requirements and increased baggage throughput, may be achieved through
the installation of in-line systems. Also, for airports where in-line
systems may not be economically justified because of the high cost of
installing these systems, TSA has not conducted an analysis to
determine whether it could achieve savings and other benefits by making
greater use of stand-alone EDS systems rather than relying on the use
of less efficient and more labor-intensive ETD machines at these
airports.
Background:
With the passage of ATSA in November 2001, TSA assumed from the Federal
Aviation Administration (FAA) the majority of the responsibility for
securing the commercial aviation system. Under ATSA, TSA is responsible
for ensuring that all baggage is properly screened for explosives at
airports in the United States where screening is required, and for the
procurement, installation, and maintenance of explosive detection
systems used to screen checked baggage for explosives. ATSA required
that TSA screen 100 percent of checked baggage using explosive
detection systems by December 31, 2002. As it became apparent that
certain airports would not meet the December 2002 deadline to screen
100 percent of checked baggage for explosives, the Homeland Security
Act of 2002 in effect extended the deadline to December 31, 2003, for
noncompliant airports.[Footnote 10] Prior to the passage of ATSA in
November 2001, only limited screening of checked baggage for explosives
occurred. When this screening took place, air carriers had operational
responsibility for conducting the screening, while FAA maintained
oversight responsibility. With the passage of ATSA, TSA assumed
operational responsibility from air carriers for screening checked
baggage for explosives. Airport operators and air carriers continued to
be responsible for processing and transporting passenger checked
baggage from the check-in counter to the airplane.
Explosive detection systems include EDS and ETD machines. EDS machines,
which cost approximately $1 million each, use computer-aided tomography
X-rays adapted from the medical field to automatically recognize the
characteristic signatures of threat explosives. By taking the
equivalent of hundreds of X-ray pictures of a bag from different
angles, the EDS machine examines the objects inside of the baggage to
identify characteristic signatures of threat explosives. TSA certified,
procured, and deployed EDS machines manufactured by two companies, and
has recently certified a smaller, less costly EDS machine, which is
currently being operationally tested. ETD machines, which cost
approximately $40,000 each, work by detecting vapors and residues of
explosives. Because human operators collect samples by rubbing bags
with swabs, which are then chemically analyzed in the ETD machines to
identify any traces of explosive materials, the use of ETD is more
labor-intensive and subject to more human error than the automated
process of using EDS machines. ETD is used both for primary, or the
initial, screening of checked baggage, as well as secondary screening,
which resolves alarms from EDS machines that indicate the possible
presence of explosives inside a bag. TSA has certified, procured, and
deployed ETD machines from three manufacturers.
As we reported in February 2004, to initially deploy EDS and ETD
equipment to screen 100 percent of checked baggage for explosives, TSA
implemented interim airport lobby solutions and in-line EDS baggage
screening systems.[Footnote 11] The interim lobby solutions involved
placing stand-alone EDS and ETD machines in the nation's airports, most
often in airport lobbies or baggage makeup areas where baggage is
sorted for loading onto aircraft. For EDS in a stand-alone mode (not
integrated with airport's or air carrier's baggage conveyor system) and
ETD, TSA screeners are responsible for obtaining the passengers'
checked baggage from either the passenger or the air carrier, lifting
the bags onto and off of EDS machines or ETD tables, using TSA
protocols to appropriately screen the bags, and returning the cleared
bags to the air carriers to be loaded onto departing aircraft. In
addition to installing stand-alone EDS and ETD machines in airport
lobbies and baggage makeup areas, TSA collaborated with some airport
operators and air carriers to install integrated in-line EDS baggage
screening systems within their baggage conveyor systems.
TSA Equipped More than 400 Airports to Screen Checked Baggage for
Explosives, but the Initial Deployment Led to Operational
Inefficiencies, and Additional Security Risks:
Since its inception in November 2001 through September 2004, TSA used
its funds to procure and install about 1,200 EDS machines and about
6,000 ETD machines to screen checked baggage for explosives at over 400
airports and to modify airport facilities to accommodate this
equipment. For the most part, TSA deployed EDS machines at larger
airports and ETD machines at smaller airports, resulting in primary
screening being conducted solely with ETD machines at over 300
airports. Table 1 summarizes the location of EDS and ETD equipment at
the nation's airports by airport category,[Footnote 12] based on a June
2004 TSA inventory listing. The number of machines shown in table 1
includes EDS and ETD machines procured by both TSA and FAA prior to and
during the establishment of TSA.
Table 1: EDS and ETD Machines Deployed at U.S. Airports as of June
2004:
Airport category: X;
Number: Airports: 21;
Number: EDS machines: 679;
Number: ETD machines: 2,833.
Airport category: I;
Number: Airports: 61;
Number: EDS machines: 467;
Number: ETD machines: 2,401.
Airport category: II;
Number: Airports: 50;
Number: EDS machines: 71;
Number: ETD machines: 695.
Airport category: III;
Number: Airports: 124;
Number: EDS machines: 9;
Number: ETD machines: 744.
Airport category: IV;
Number: Airports: 190;
Number: EDS machines: 2;
Number: ETD machines: 473.
Airport category: Total;
Number: Airports: 446;
Number: EDS machines: 1,228;
Number: ETD machines: 7,146.
Source: GAO analysis of TSA data.
[End of table]
Although TSA made significant progress in fielding this equipment, TSA
used most of its fiscal years 2002 through 2004 funds for its checked
baggage screening program to design, develop, and deploy interim lobby
screening solutions rather than install more permanent in-line EDS
baggage screening systems. During our site visits to 22 category X, I,
and II airports, we observed that in most cases, TSA used stand-alone
EDS machines and ETD machines as the primary method for screening
checked baggage.[Footnote 13] Generally, this equipment was located in
airport lobbies and in baggage makeup areas. In addition, in our survey
of 155 federal security directors, we asked the directors to estimate,
for the 263 airports included in the survey, the approximate percentage
of checked baggage that was screened on or around February 29, 2004,
using EDS, ETD, or other approved alternatives for screening baggage
such as positive passenger bag match or canine searches. As shown in
table 2, the directors reported that for 130 large to medium-sized
airports in our survey (21, 60, and 49 category X, I, and II airports,
respectively), most of the checked baggage was screened using stand-
alone EDS or ETD machines. The average percentage of checked baggage
reported as screened using EDS machines at airports with partial or
full in-line EDS capability ranged from 4 percent for category II
airports to 11 percent for category X airports. In addition, the
directors reported that ETD machines were used to screen checked
baggage 93 to 99 percent of the time at category III and IV airports,
respectively.
Table 2: Average Percentage of Checked Baggage Reported as Screened
Using EDS, ETD, or Other Approved Method at 263 Airports on or around
February 29, 2004:
Number of airports;
Airport category: X: 21;
Airport category: I: 60;
Airport category: II: 49;
Airport category: III: 73;
Airport category: IV: 60;
Total: 263.
Percentage of checked baggage screened using: EDS (at airports with no
in-line EDS capability);
Airport category: X: 59;
Airport category: I: 59;
Airport category: II: 27;
Airport category: III: 6;
Airport category: IV: 0;
Total: 25.
Percentage of checked baggage screened using: EDS (at airports with
partial or airportwide in-line EDS capability);
Airport category: X: 11;
Airport category: I: 8;
Airport category: II: 4;
Airport category: III: 0;
Airport category: IV: 0;
Total: 3.
Total[A] EDS;
Airport category: X: 70;
Airport category: I: 67;
Airport category: II: 32;
Airport category: III: 6;
Airport category: IV: 0;
Total: 28.
ETD;
Airport category: X: 18;
Airport category: I: 33;
Airport category: II: 66;
Airport category: III: 93;
Airport category: IV: 99;
Total: 69.
Total[A] EDS and ETD;
Airport category: X: 88;
Airport category: I: 99;
Airport category: II: 98;
Airport category: III: 99;
Airport category: IV: 99;
Total: 98.
Other approved method;
Airport category: X: 12;
Airport category: I: 1;
Airport category: II: 2;
Airport category: III: 2;
Airport category: IV: 1;
Total: 2.
Total[A];
Airport category: X: 100;
Airport category: I: 100;
Airport category: II: 100;
Airport category: III: 100;
Airport category: IV: 100;
Total: 100.
Source: Analysis of GAO federal security director survey data.
[A] Percentages in totals may not add to 100 percent because of
rounding.
[End of table]
Stand-alone EDS and ETD machines are both labor-and time-intensive to
operate since each bag must be physically carried to an EDS or ETD
machine for screening and then moved back to the baggage conveyor
system prior to being loaded onto an aircraft. With an in-line EDS
system, checked baggage is screened within an airport's baggage
conveyor system, eliminating the need for a baggage screener or other
personnel to physically transport the baggage from the check-in point
to the EDS machine for screening and then to the airport baggage
conveyor system. Further, according to TSA officials, ETD machines and
stand-alone EDS machines are less efficient in the number of checked
bags that can be screened per hour per machine than are EDS machines
that are integrated in-line with the airport baggage conveyor systems.
As shown in table 3, as of October 2003, TSA estimated that the number
of checked bags screened per hour could more than double when EDS
machines were placed in-line versus being used in a stand-alone
mode.[Footnote 14]
Table 3: Bags Per Hour Screened by Stand-alone and In-line EDS Machines
and ETD Machines:
Type of equipment: EDS machines: N/A.
Type of equipment: CTX 2500--stand-alone only;
Bags per hour: Stand-alone: 120;
Bags per hour: In-line: NA.
Type of equipment: CTX 5500;
Bags per hour: Stand-alone: 180;
Bags per hour: In-line: 250.
Type of equipment: CTX 9000--in-line only;
Bags per hour: Stand-alone: NA;
Bags per hour: In-line: 425.
Type of equipment: L3 6000;
Bags per hour: Stand-alone: 180;
Bags per hour: In-line: 425.
Type of equipment: ETD machines--stand-alone only;
Bags per hour: Stand-alone: 36;
Bags per hour: In-line: NA.
Source: TSA.
NA: Not applicable.
[End of table]
In January 2004, TSA, in support of its planning, budgeting, and
acquisition of security screening equipment, reported to the Office of
Management and Budget (OMB) that the efficiency benefits of in-line
rather than stand-alone EDS are significant, particularly with regard
to bags per hour screened and the number of TSA screeners required to
operate the equipment. According to TSA officials, at that time, a
typical lobby-based screening unit consisting of a stand-alone EDS
machine with three ETD machines had a baggage throughput of 376 bags
per hour with a staffing requirement of 19 screeners. In contrast, TSA
estimated that approximately 425 bags per hour could be screened by in-
line EDS machines with a staffing requirement of 4.25 screeners.
In order to achieve the higher throughput rates and reduce the number
of screener staff needed to operate in-line baggage screening systems,
TSA (1) uses a screening procedure known as "on-screen alarm
resolution" and (2) networks multiple in-line EDS machines together,
referred to as "multiplexing," so that the computer-generated images of
bags from these machines are sent to a central location where TSA
screeners can monitor the images of suspect bags centrally from several
machines using the on-screen alarm resolution procedure. When an EDS
machine alarms, indicating the possibility that explosive material may
be contained in the bag, the on-screen alarm resolution procedure
allows screeners to examine computer-generated images of the inside of
a bag to determine if suspect items identified by the EDS machines are
in fact suspicious. If a screener, by viewing these images, is able to
determine that the suspect item or items identified by the EDS machine
are in fact harmless, the screener is allowed to clear the bag, and it
is sent to the airline baggage makeup area for loading onto the
aircraft. If the screener is not able to make the determination that
the bag does not contain suspicious objects, the bag is sent to a
secondary screening room where the bag is further examined by a
screener. In secondary screening, the screener opens the bag and
examines the suspect item or items, and usually swabs the items to
collect a sample for analysis using an ETD machine. TSA also uses this
on-screen alarm resolution procedure with stand-alone EDS
machines.[Footnote 15]
A TSA official estimated that the on-screen alarm resolution procedure
with in-line EDS baggage screening systems will enable TSA to reduce by
40 to 60 percent the number of bags requiring the more labor-intensive
secondary screening using ETD machines. In estimating the potential
savings in staffing requirements, TSA officials stated that they expect
to achieve a 20 to 25 percent savings because of reductions in the
number of staff needed to screen bags using ETD to resolve alarms from
in-line EDS machines.
TSA also reported that because procedures for using stand-alone EDS and
ETD machines require screeners to lift heavy baggage onto and off of
the machines, the interim lobby screening solutions used by TSA led to
significant numbers of on-the-job injuries.[Footnote 16] In addition,
in responding to our survey about 263 airports, numerous federal
security directors reported that on-the-job injuries related to lifting
heavy baggage onto or off the EDS and ETD machines were a significant
concern at the airports for which they were responsible. Specifically,
these federal security directors reported that on-the-job injuries
caused by lifting heavy bags onto and off of EDS machines were a
significant concern at 65 airports, and were a significant concern with
the use of ETD machines at 110 airports. To reduce on-the-job injuries,
TSA has provided training to screeners on proper lifting procedures.
However, according to TSA officials, in-line EDS screening systems
would significantly reduce the need for screeners to handle baggage,
thus further reducing the number of on-the-job injuries being
experienced by TSA baggage screeners.
In addition, during our site visits to 22 large and medium-sized
airports, several TSA, airport, and airline officials expressed concern
regarding the security risks caused by overcrowding due to ETD and
stand-alone EDS machines being located in airport lobbies. The location
of the equipment resulted in less space available to accommodate
passenger movement and caused congestion due to passengers having to
wait in lines in public areas to have their checked baggage screened.
TSA headquarters officials also reported that large groups of people
congregating in crowded airport lobbies increases security risks by
creating a potential target for terrorists. The TSA officials noted
that crowded airport lobbies have been the scenes of terrorist attacks
in the past. For example, in December 1985, four terrorists walked to
the El Al ticket counter at Rome's Leonardo DaVinci Airport and opened
fire with assault rifles and grenades, killing 13 and wounding 75. On
that same day, three terrorists killed three people and wounded 30
others at Vienna International Airport.
Airports and the Federal Government Are Taking Actions to Install In-
line Baggage Screening Systems, but Resources Have Not Been Made
Available to Fund These Systems on a Large-Scale Basis:
Airport operators and TSA are taking actions to install in-line EDS
baggage screening systems because of the expected benefits of these
systems. Our survey of federal security directors and interviews with
airport officials revealed that 86 of 130 category X, I, and II
airports (66 percent) included in our survey either have, are planning
to have, or are considering installing in-line EDS baggage screening
systems throughout or at a portion of their airports. As of July 2004,
12 airports had operational in-line systems airportwide or at a
particular terminal or terminals, and an additional 45 airports were
actively planning or constructing in-line systems. Our survey of
federal security directors further revealed that an additional 33 of
the 130 category X, I, and II airports we surveyed were considering
developing in-line systems.
While in-line EDS baggage screening systems have a number of potential
benefits, the total cost to install these systems is unknown, and
limited federal resources have been made available to fund these
systems on a large-scale basis. In-line baggage screening systems are
capital-intensive because they often require significant airport
modifications, including terminal reconfigurations, new conveyor belt
systems, and electrical upgrades. TSA has not determined the total cost
of installing in-line EDS baggage screening systems at airports that it
had determined need these systems to maintain compliance with the
congressional mandate to screen all checked baggage for explosives
using explosive detection systems, or to achieve more efficient and
streamlined checked baggage screening operations. However, TSA and
airport industry association officials have estimated that the total
cost of installing in-line systems is--a rough order-of-magnitude
estimate--from $3 billion to more than $5 billion. TSA officials stated
that they have not conducted a detailed analysis of the costs required
to install in-line EDS systems at airports because most of their
efforts have been focused on deploying and maintaining a sufficient
number of EDS and ETD machines to screen all checked baggage for
explosives. TSA officials further stated that the estimated costs to
install in-line baggage screening systems would vary greatly from
airport to airport depending on the size of the airport and the extent
of airport modifications that would be required to install the system.
While we did not independently verify the estimates, officials from the
Airports Council International-North America and American Association
of Airport Executives estimated that project costs for in-line systems
could range from about $2 million for a category III airport to $250
million for a category X airport.[Footnote 17]
TSA and airport operators are relying on LOI agreements as their
principal method for funding the modification of airport facilities to
incorporate in-line baggage screening systems.[Footnote 18] As of
January 2005, TSA had issued eight LOIs to reimburse nine airports for
the installation of in-line EDS baggage screening systems for a total
cost of $957.1 million to the federal government over 4 years. In
addition, TSA officials stated that as of July 2004, they had
identified 27 additional airports that they believe would benefit from
receiving LOIs for in-line systems because such systems are needed to
screen an increasing number of bags due to current or projected growth
in passenger traffic. TSA officials stated that without such systems,
these airports would not remain in compliance with the congressional
mandate to screen all checked baggage using EDS and ETD.[Footnote 19]
However, because TSA would not identify these 27 airports, we were
unable to determine whether these airports are among the 45 airports we
identified as in the process of planning or constructing in-line
systems.
TSA officials stated that they also use other transaction agreements as
an administrative vehicle to directly fund, with no long-term
commitments, airport operators for smaller in-line airport modification
projects.[Footnote 20] Under these agreements, as implemented by TSA,
the airport operator also provides a portion of the funding required
for the modification. As of September 30, 2004, TSA had negotiated
arrangements with eight airports to fund small permanent in-line
projects or portions of large permanent in-line projects using other
transaction agreements.[Footnote 21] These other transaction agreements
range from about $640,000 to help fund the conceptual design of an in-
line system for one terminal at the Dallas Fort-Worth airport to $37.5
million to help fund the design and construction of in-line systems and
modification of the baggage handling systems for two terminals at the
Chicago O'Hare International Airport. TSA officials stated that they
would continue to use other transaction agreements to help fund smaller
in-line projects.[Footnote 22]
Airport operators also used the FAA's Airport Improvement Program--
grants to maintain safe and efficient airports--in fiscal years 2002
and 2003 to help fund facility modifications needed to accommodate
installing in-line systems. Twenty-eight of 53 airports that reported
either having constructed or planning to construct in-line systems
relied on the Airport Improvement Program as their sole source of
federal funding.
Airport officials at over half of the 45 airports that we identified
are in the process of planning or constructing in-line systems stated
that they will require federal funding in order to complete the
planning and construction of these in-line systems. TSA officials also
reported that additional airports will require in-line systems to
maintain compliance with the congressional mandate to screen 100
percent of checked baggage for explosives. Despite this reported need,
TSA officials stated that they do not have sufficient resources in
their budget to fund additional LOIs beyond the eight LOIs that have
already been issued. The Vision 100--Century of Aviation
Reauthorization Act (Vision 100)[Footnote 23] provided for the creation
of the Aviation Security Capital Fund to help pay for, among other
things, placing EDS machines in line with airport baggage handling
systems.[Footnote 24] However, according to OMB officials, the
President's fiscal year 2005 budget request, which included the
Aviation Security Capital Fund's mandatory appropriation of $250
million, only supported continued funding for the eight LOIs that have
already been issued and did not provide resources to support new LOIs
for funding the installation of in-line systems at additional airports.
Further, while the fiscal year 2005 Department of Homeland Security
(DHS) Appropriations Act provided $45 million for installing explosive
detection systems in addition to the $250 million from the Aviation
Security Capital Fund, Congress directed, in the accompanying
conference report, that the $45 million be used to assist in the
continued funding of the existing eight LOIs. Further, the President's
fiscal year 2006 budget request for TSA provides approximately $240.5
million for the continued funding of the eight existing LOIs and does
not allocate any funding for new LOI agreements for in-line system
integration activities. The fiscal year 2006 Department of Homeland
Security appropriations bill passed by the House on May 17, 2005, and
the appropriations bill pending before the Senate include, among other
things $75 million and $14 million for installation of checked baggage
explosive detection systems, respectively. The committee reports
accompanying the House and Senate appropriations bills state that the
amounts included for installation are in addition to the $250 million
mandatory appropriation of the Aviation Security Capital Fund but do
not earmark these funds specifically for the installation of in-line
EDS systems.
In addition, perspectives differ regarding the appropriate role of the
federal government, airport operators, and air carriers in funding
these capital-intensive in-line EDS systems. Airport operators and TSA
have shared in the total costs--25 percent and 75 percent respectively
under LOI agreements, which have been TSA's primary method for funding
in-line EDS systems. A 75 percent federal cost-share will apply to any
project under an LOI for fiscal year 2005.[Footnote 25] Further, the
President's fiscal year 2006 budget request for TSA requests to
maintain the 75 percent federal government cost share for projects
funded by LOIs at large and medium airports. For fiscal year 2006
appropriations for DHS, both the Senate, in its pending appropriations
bill, and the House, in its committee report, also propose to maintain
the 75 percent federal cost share for LOIs. However, in testimony
before Congress, an aviation industry official expressed a different
perspective regarding the cost sharing between the federal government
and the aviation industry for installing in-line checked baggage
screening systems. Testifying in July 2004, the official said that
airports contend that the cost of installing in-line systems should be
met entirely by the federal government, given its direct responsibility
for screening checked baggage, as established by law, in light of the
national security imperative for doing so, and because of the economic
efficiencies of this strategy. Although the official stated that
airports have agreed to provide a local match of 10 percent of the cost
of installing in-line systems at medium and large airports, as
stipulated by Vision 100, he expressed opposition to the
administration's proposal, which was subsequently adopted by Congress
for fiscal year 2005, to reestablish the airport's cost-share at 25
percent.[Footnote 26]
In July 2004, the National Commission on Terrorist Attacks upon the
United States (the 9/11 Commission) also addressed the issue of the
federal government/airport cost-share for installing EDS in-line
baggage screening systems.[Footnote 27] Specifically, the commission
recommended that TSA expedite the installation of in-line systems and
that the aviation industry should pay its fair share of the costs
associated with installing these systems, since the industry will
derive many benefits from the systems. Although the 9/11 Commission
recommended that the aviation industry should pay its fair share of the
costs of installing in-line systems, the commission did not report what
it believed the fair share to be.[Footnote 28]
TSA Has Not Systematically Planned for the Optimal Deployment of
Checked Baggage Screening Equipment to Ensure the Efficient and Cost-
Effective Screening for Explosives while Enhancing Security Benefits:
At the time of our March 2005 report,[Footnote 29] TSA has not
completed a systematic, prospective analysis of individual airports or
groups of airports to determine at which airports installing in-line
EDS systems would be cost-effective in terms of reducing long-term
screening costs for the government and would improve security. Such an
analysis would enable TSA to determine at which airports it would be
most beneficial to invest limited federal resources for in-line systems
rather than continue to rely on the stand-alone EDS and ETD machines to
screen checked baggage for explosives, and it would be consistent with
best practices for preparing benefit-cost analysis of government
programs or projects called for by OMB Circular A-94.[Footnote 30] TSA
officials stated that they had not conducted the analyses related to
the installation of in-line systems at individual airports or groups of
airports because they have used available staff and funding to ensure
all airports have a sufficient number of EDS or ETD machines to meet
the congressional mandate to screen all checked baggage with explosive
detection systems. During the course of our review, in September 2004,
TSA contracted for services to develop methodologies and criteria for
assessing the effectiveness and suitability of airport screening
solutions requiring significant capital investment, such as those
projects associated with the LOI program. In July 2005, TSA officials
stated that TSA and DHS are reviewing a draft report from the study.
According to these officials, the study will provide TSA with a
strategic plan for its checked baggage screening program, including the
best screening solution for airports processing most of the airlines'
baggage volume, and the capital costs and staffing requirements for
each solution.
Although TSA had not conducted a systematic analysis of cost savings
and other benefits that could be derived from the installation of in-
line baggage screening systems, TSA's limited, retrospective cost-
benefit analysis of in-line projects at the nine airports with signed
LOI agreements found that significant savings and other benefits may be
achieved through the installation of these systems.[Footnote 31] This
analysis was conducted in May 2004--after the eight LOI agreements for
the nine airports were signed in July and September 2003 and February
2004--to estimate potential future cost savings and other benefits that
could be achieved from installing in-line systems instead of using
stand-alone EDS systems. TSA estimated that in-line baggage screening
systems at these airports would save the federal government about $1
billion[Footnote 32] compared with stand-alone EDS systems and that TSA
would recover its initial investment in a little over 1 year. [Footnote
33] TSA's analysis also provided data to estimate the cost savings for
each airport over the 7-year period. According to TSA's data, federal
cost savings varied from about $50 million to over $250 million at
eight of the nine airports, while at one airport, there was an
estimated $90 million loss.[Footnote 34]
According to TSA's analysis of the nine LOI airports, in-line cost
savings critically depend on how much an airport's facilities have to
be modified to accommodate the in-line configuration. Savings also
depend on TSA's costs to buy, install, and network the EDS machines;
subsequent maintenance cost; and the number of screeners needed to
operate the machines in-line instead of using stand-alone EDS systems.
In its analysis, TSA also found that a key factor driving many of these
costs is throughput--how many bags an in-line EDS system can screen per
hour compared with the rate for a stand-alone system. TSA used this
factor to determine how many stand-alone EDS machines could be replaced
by a single in-line EDS machine while achieving the same throughput.
According to TSA's analysis, in-line EDS would reduce by 78 percent the
number of TSA baggage screeners and supervisors required to screen
checked baggage at these nine airports, from 6,645 to 1,477 screeners
and supervisors. However, the actual number of TSA screeners and
supervisor positions that could be eliminated would be dependent on the
individual design and operating conditions at each airport.
TSA also reported that aside from increased efficiency and lower
overall costs, there were a number of qualitative benefits that in-line
systems would provide over stand-alone systems, including:
* fewer on-the-job injuries, since there is less lifting of baggage
when EDS machines are integrated into the airport's baggage conveyor
system;
* less lobby disruption because the stand-alone EDS and ETD machines
would be removed from airport lobbies; and:
* unbroken chain of custody of baggage because in-line systems are more
secure, since the baggage handling is performed away from passengers.
TSA's retrospective analysis of these nine airports indicates the
potential for cost savings through the installation of in-line EDS
baggage screening systems at other airports, and it provides insights
about key factors likely to influence potential cost savings from using
in-line systems at other airports. This analysis also indicates the
merit of conducting prospective analyses of other airports to provide
information for future federal government funding decisions as required
by the OMB guidance on cost-benefit analyses.[Footnote 35] This
guidance describes best practices for preparing benefit-cost analysis
of government programs or projects, one of which involves analyzing
uncertainty. Given the diversity of airport designs and operations,
TSA's analysis could be modified to account for uncertainties in the
values of some of the key factors, such as how much it will cost to
modify an airport to install an in-line system. Analyzing uncertainty
in this manner is consistent with OMB guidance.
TSA also has not systematically analyzed which airports could benefit
from the implementation of additional stand-alone EDS systems in lieu
of labor-intensive ETD systems at more than 300 airports that rely on
ETD machines, and where in-line EDS systems may not be appropriate or
cost-effective. More specifically, TSA has not prepared a plan that
prioritizes which airports should receive EDS machines (including
machines that become surplus because of the installation of in-line
systems) to balance short-term installation costs with future
operational savings. Furthermore, TSA has not yet determined the
potential long-term operating cost savings and the short-term costs of
installing the systems, which are important factors to consider in
conducting analyses to determine whether airports would benefit from
the installation of EDS machines. TSA officials said that they had not
yet had the opportunity to develop such analyses or plans, and they did
not believe that such an exercise would necessarily be an efficient use
of their resources, given the fluidity of baggage screening at various
airports.
There is potential for TSA to benefit from the introduction of smaller
stand-alone EDS machines--in terms of labor savings and added
efficiencies--at some of the more than 300 airports where TSA relies on
the use of ETD machines to screen checked baggage. Stand-alone EDS
machines are able to screen a greater number of bags in an hour than
the ETD used for primary screening while lessening reliance on
screeners during the screening process. For example, TSA's analysis
showed that an ETD machine can screen 36 bags per hour, while the stand-
alone EDS machines can screen 120 to 180 bags per hour. As a result, it
would take three to five ETD machines to screen the same number of bags
that one stand-alone EDS machine could process. In addition, greater
use of the stand-alone EDS machines could reduce staffing requirements.
For example, one stand-alone EDS machine would potentially require 6 to
14 fewer screeners than would be required to screen the same number of
bags at a screening station with three to five ETD machines. This
calculation is based on TSA estimates that 4.1 screeners are required
to support each primary screening ETD machine, while one stand-alone
EDS machine requires 6.75 screeners--including staff needed to operate
ETD machines required to provide secondary screening.
Without a plan for installing in-line EDS baggage screening systems,
and for using additional stand-alone EDS systems in place of ETD
machines at the nation's airports, it is unclear how TSA will make use
of new technologies for screening checked baggage for explosives, such
as the smaller and faster EDS machines that may become available
through TSA's research and development programs. For example, TSA is
working with private sector firms to enhance existing EDS systems and
develop new screening technologies through its research and development
(R&D) efforts. As part of these efforts, in fiscal year 2003, TSA spent
almost $2.4 million to develop a new computer-aided tomography
explosives detection system that is smaller and lighter than systems
currently deployed in airport lobbies. The new system is intended to
replace systems currently in use, including larger and heavier EDS
machines and ETD equipment. The smaller size of the system creates
opportunities for TSA to transfer screening operations to other
locations such as airport check-in counters. TSA certified this
equipment in December 2004 and is operationally testing the machine at
three airports to evaluate its operational efficiency.
TSA's checked baggage screening R&D efforts are part of a broader DHS
program focused on researching and developing technologies to detect,
prevent, and mitigate terrorist threats. In September 2004, we reported
that TSA and DHS have made some progress in managing transportation
security R&D programs according to applicable laws and R&D best
practices.[Footnote 36] However, we found that their efforts were
incomplete in several areas. For example, as of our September 2004
report, although both TSA and DHS had established processes to select
and prioritize R&D projects that include risk management principles,
they had not yet completed vulnerability and criticality assessments,
which we have identified as key elements of a risk management approach,
for all modes of transportation.[Footnote 37] In the absence of
completed risk assessments, TSA and DHS officials reported basing
funding decisions on other factors--such as available threat
intelligence, expert judgment, and information about past terrorist
incidents. However, TSA officials stated that they do not use formal
threat assessments to make R&D decisions. During our review, we also
found limited evidence of coordination between TSA and DHS, or between
these agencies and other federal agencies, such as the Department of
Transportation, and industry stakeholders. Without such coordination,
DHS raises the risk that its R&D resources will not be effectively
leveraged and that duplication may occur. We also found that although
many of TSA's R&D projects were in later phases of development, the
agency had not estimated deployment dates, without which managers do
not have information needed to plan, budget, and track the progress of
projects. We also found that TSA and DHS did not have adequate
databases to monitor and manage the spending of the hundreds of
millions of dollars that Congress had appropriated for R&D. In moving
forward, it will be important for DHS to resolve the these challenges
to help ensure that limited R&D recourses are focused on the areas of
greatest need.
Concluding Observations:
TSA has made substantial progress in installing EDS and ETD systems at
the nation's airports--mainly as part of interim lobby screening
solutions--to provide the capability to screen all checked baggage for
explosives, as mandated by Congress. With the objective of initially
fielding this equipment largely accomplished, TSA needs to shift its
focus from equipping airports with interim screening solutions to
systematically planning for the more optimal deployment of checked
baggage screening systems. Part of such planning should include
analyzing which airports should receive federal support for in-line EDS
baggage screening systems based on cost savings that could be achieved
from more effective and efficient baggage screening operations and on
other factors, including enhanced security. Also, for airports, where
in-line systems may not be economically justified because of high
investment costs, a cost effectiveness analysis could be used to
determine the benefits of additional stand-alone EDS machines to screen
checked baggage in place of the more labor-intensive ETD machines that
are currently being used at the more than 300 airports. In addition,
TSA should consider the costs and benefits of the new technologies
being developed through its research and development efforts, which
could provide smaller EDS machines that have the potential to reduce
the costs associated with installing in-line EDS baggage screening
systems or to replace ETD machines currently used as the primary method
for screening.
An analysis of airport baggage screening needs would also help enable
TSA to determine whether expected reduced staffing costs, higher
baggage throughput, and increased security would justify the
significant up-front investment required to install in-line baggage
screening. TSA's retrospective analysis of nine airports installing in-
line baggage screening systems with LOI funds, while limited,
demonstrated that cost savings could be achieved through reduced
staffing requirements for screeners and increased baggage throughput.
In fact, the analysis showed that using in-line systems instead of
stand-alone systems at these nine airports would save the federal
government about $1 billion over 7 years and that TSA's initial
investment would be recovered in a little over 1 year. However, this
analysis also showed that a cost savings may not be achieved for all
airports. In considering airports for in-line baggage screening systems
or the continued use of stand-alone EDS and ETD machines, a systematic
analysis of the costs and benefits of these systems would help TSA
justify the appropriate screening for a particular airport, and such
planning would help support funding requests by demonstrating enhanced
security, improved operational efficiencies, and cost savings to both
TSA and the affected airport.
To assist TSA in planning for the optimal deployment of checked baggage
screening systems, we recommended in our March 2005 report that TSA
systematically evaluate baggage screening needs at airports, including
the costs and benefits of installing in-line baggage screening systems
at airports that do not yet have in-line systems installed. DHS agreed
with our recommendation, stating that TSA has initiated an analysis of
deploying in-line EDS machines and is in the process of formulating
criteria to identify those airports that would benefit from an in-line
EDS system. DHS also stated that TSA has begun conducting an analysis
of the airports that rely heavily on ETD machines as the primary
checked baggage screening technology to identify those airports that
would benefit from augmenting ETDs with stand-alone EDS equipment.
Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions that you or other members of the Subcommittee have.
Contact Information:
For further information on this testimony, please contact Cathleen A.
Berrick at (202) 512-3404.
Individuals making key contributions to this testimony included Charles
Bausell, Amy Bernstein, Kevin Copping, Christine Fossett, David Hooper,
Noel Lance, Thomas Lombardi, and Alper Tunca.
FOOTNOTES
[1] Aviation and Transportation Security Act, Pub. L. No. 107-71, 115
Stat. 597 (2001).
[2] GAO, Aviation Security: Challenges Exist in Stabilizing and
Enhancing Passenger and Baggage Screening Operations, GAO-04-440T
(Washington, D.C.: February 12, 2004).
[3] Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135.
[4] In-line EDS checked baggage screening systems typically involve
checked baggage undergoing automated screening with EDS machines while
on a conveyor belt that sorts and transports baggage to the proper
location for its ultimate loading onto an aircraft.
[5] GAO, Aviation Security: Systematic Planning Needed to Optimize the
Deployment of Checked Baggage Screening Systems, GAO-05-365 (Washington
D.C.: March 15, 2005).
[6] A TSA federal security director oversees federal security
operations at one or more U.S. commercial airports and has operational
responsibility for the screening of passengers and checked baggage.
[7] Although we could not independently verify the reliability of all
of the information we obtained, we compared it with other supporting
documents, when available, to determine data consistency and
reasonableness. On the basis of these efforts, we believe the
information we obtained is sufficiently reliable for this testimony. A
detailed discussion of our scope and methodology is contained in
appendix I of our March 2005 report (GAO-05-365).
[8] We issued two additional reports detailing the results of our
review, which discuss results deemed to be classified or sensitive
security information. The report that contains classified and sensitive
security information is GAO, Aviation Security: Systematic Planning
Needed to Optimize the Deployment of Checked Baggage Screening Systems,
GAO-05-135C (Washington D.C.: February 4, 2005). The report containing
sensitive security information but not the classified information is
GAO, Aviation Security: Systematic Planning Needed to Optimize the
Deployment of Checked Baggage Screening Systems, GAO-05-302SU
(Washington D.C.: February 4, 2005).
[9] GAO-05-365.
[10] ATSA also authorized the use of alternative means to screen
checked baggage, such as positive passenger bag match (i.e., air
carriers determining whether the passenger is on the same aircraft as
the checked baggage), canine searches, and searches of bags by hand for
time periods when airports were not able to screen 100 percent of
checked baggage using explosive detection equipment.
[11] GAO-04-440T.
[12] TSA classifies the over 400 airports in the United States into one
of five categories--X, I, II, III, and IV. Generally, category X
airports have the largest number of passenger boardings, and category
IV airports have the smallest number.
[13] The 22 airports included 12 category X, 9 category I, and 1
category II airports.
[14] According to a senior TSA official in the Office of Security
Technology, these throughput numbers could change as TSA gains greater
operational experience. However, this data did not change between
October 2003 and May 2005.
[15] TSA began implementing the on-screen alarm resolution procedure in
May 2004 after pilot testing the procedure.
[16] TSA was unable to provide GAO with data on the on-the-job injuries
sustained during baggage screening operations.
[17] Joint Statement of David Z. Plavin, President, Airports Council
International-North America (ACI-NA) and Todd Hauptli, Sr. Executive
Vice President, American Association of Airport Executives (AAAE)
before the House Aviation Subcommittee Hearing on Passenger and Baggage
Screening Problems; February 12, 2004. GAO did not independently verify
cost figures provided in this testimony.
[18] The fiscal year 2003 Consolidated Appropriations Resolution, Pub.
L. No. 108-7, 117 Stat. 386, approved the use of LOIs as a vehicle to
leverage federal government and industry funding to support facility
modification costs for installing in-line EDS baggage screening
systems. When an LOI is established to provide multiyear funding for a
project, the airport operator is responsible for providing--up front--
the total funding needed to complete the project, even though the LOI
is not a binding commitment of federal funds. Work proceeds with the
understanding that TSA will, if sufficient funding is appropriated,
reimburse the airport operator for a percentage of the facility
modification costs, with the airport funding the remainder of the
costs. LOIs issued by TSA for in-line baggage screening systems provide
for reimbursement payments over a multiple year period, contingent upon
the appropriation of sufficient funding to cover such projects.
[19] TSA officials stated that the number of airports that could
benefit most from in-line checked baggage screening systems varies
depending on changing airport circumstances, such as adding new
terminals or an increased or decreased number of flights.
[20] Other transaction agreements are administrative vehicles used by
TSA to directly fund airport operators for smaller airport modification
projects without undertaking a long-term commitment. These transactions
take many forms; are generally not required to comply with federal laws
and regulations that apply to contracts, grants, or cooperative
agreements; and enable the federal government and others entering into
these agreements to freely negotiate provisions that are mutually
agreeable.
[21] The eight airports included four category X airports: Dallas Fort-
Worth International, Chicago O'Hare International, Detroit Metro Wayne
County, and San Francisco International; three category I airports:
Piedmont Triad International (North Carolina), Pittsburgh
International, and Sacramento International; and one category II
airport Harrisburg International (Pennsylvania). These eight airports
were among the 45 airports that we identified as being in the process
of planning or constructing in-line systems.
[22] TSA also used four other transaction agreements to fund work
related to interim solutions, three of these agreements were for
partial in-line systems that eventually were to be replaced by
permanent in-line systems.
[23] Vision 100--Century of Aviation Reauthorization Act, Pub. L. No.
108-176, 177 Stat. 2490 (2003).
[24] Vision 100 authorizes a $250 million mandatory appropriation for
the Aviation Security Capital Fund for each of fiscal years 2004
through 2007. Of that mandatory amount, the act designates $125 million
as priority funding to fulfill intentions to obligate under LOIs. In
fiscal year 2004, Congress provided $250 million for the physical
modification of airports to install checked baggage explosive detection
systems but did so separate from the Aviation Security Capital Fund
because a provision of that act precluded the use of funds to establish
the Fund in fiscal year 2004.
[25] The fiscal year 2003 Consolidated Appropriations Resolution
authorized TSA to issue LOIs for terminal modifications related to the
installation of in-line baggage screening systems and mandated that
each LOI provide for a 75 percent federal cost-share of the project's
cost, with the remaining 25 percent to be paid by the airport operator
at airports with at least 0.25 percent of the total number of passenger
boardings each year at all airports (and 90 percent for projects at all
other airports). Subsequently, Vision 100 instituted a 90 percent
federal cost-share of the project's cost, with the remaining 10 percent
to be paid by the airport operator at medium and large hub airports
(and 95 percent for projects at any other airport) though TSA continued
to operate at the 75 percent cost-share. The fiscal year 2005 DHS
Appropriations Act, Pub. L. No. 108-334, 118 Stat.1298, signed into law
in October 2004, reestablished the federal cost-share at 75 percent for
any medium or large hub airport during fiscal year 2005.
[26] TSA officials stated that the increased cost-share to 90 percent
as stipulated in Vision 100 would further constrain their ability to
fund future LOIs, as well as impact their ability to assist airports to
achieve and maintain compliance with the congressional mandate to
screen all checked baggage for explosives.
[27] The 9/11 Commission Report: Final Report of the National
Commission on Terrorist Attacks Upon the United States (Washington,
D.C.: July 2004).
[28] The Intelligence Reform and Terrorism Prevention Act of 2004, Pub.
L. No. 108-458, 118 Stat. 3638, enacted in December 2004, requires the
Secretary of Homeland Security to conduct a cost-sharing study that
must include, among other things, a proposed formula for cost sharing
among the federal, state, and local governments and the private sector
for projects to install in-line baggage screening equipment that
reflects the benefits that each such entity will derive from the
projects, including national security benefits and labor and other cost
savings.
[29] GAO-05-365.
[30] OMB Circular A-94 Guidelines and Discount Rates for Benefit-Cost
Analysis of Federal Programs, January 22, 2002. Agencies use this
guidance to support government decisions to initiate, review, or expand
programs that would result in measurable costs or benefits extending
for 3 or more years into the future.
[31] We reviewed the TSA cost model showing savings expected to be
achieved with in-line rather than stand-alone EDS equipment at nine
airports. We assessed the model's logic to ensure its completeness and
correctness of calculations. Also, as discussed in appendix IV of our
March 2005 report (GAO-05-365), we conducted a Monte Carlo simulation
to: (1) illustrate sensitivity of potential cost savings of replacing
stand-alone with in-line EDS systems to alternative values of key cost
drivers and (2) to explore the variability in the key factors used by
TSA in their model. Based on our review of TSA's cost model, we believe
that it is sufficiently reliable for the analyses we conducted and the
information included in this testimony.
[32] This figure refers to the net present value saved over 7 years if
received up front.
[33] For a basis of comparison, Office of Management and Budget
Circular A-94 stipulates using a 7 percent real discount rate to
compute the present value of cost savings. TSA used a 4 percent real
discount rate. Following Office of Management and Budget guidance, cost
savings are $1.14 billion. In addition, in TSA's analysis, the federal
government does not pay for $319 million, or 25 percent, of project
costs. Accounting for these costs to reflect total costs, as
recommended by Circular A-94, lowers overall savings to $820 million.
[34] The relatively large costs for upfront in-line EDS at one airport
are not offset by the modest amount of estimated operation and
maintenance cost savings; therefore, the in-line EDS system may be more
costly than EDS stand-alone. By contrast, at another airport the
upfront costs of in-line EDS are lower than for stand-alone EDS, and
there is a substantial amount of estimated operation and maintenance
cost savings. Therefore, the in-line EDS system this latter airport may
be less costly than stand-alone EDS.
[35] OMB Circular A-94.
[36] GAO, Transportation Security R&D: TSA and DHS Are Researching and
Developing Technologies, but Need to Improve R&D Management, GAO-04-890
(Washington, D.C.: Sept. 30, 2004).
[37] GAO, Homeland Security: Key Elements of a Risk Management
Approach, GAO-02-150T (Washington, D.C.: Oct. 12, 2001).
