Background

With the passage of ATSA in November 2001, TSA assumed from 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. 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 (see figs. 1  and 2). EDS machines 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 has certified, procured, and deployed EDS  machines manufactured by two companies. ETD machines work by  detecting vapors and residues of explosives. Human operators collect  samples by rubbing bags with swabs, which are chemically analyzed to  identify any traces of explosive materials. 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.
The operational processes for conducting screening of checked baggage  for explosives using ETD and EDS machines differ. Specifically, the ETD  screening process requires the screener to manually screen checked  baggage by (1) swabbing an area of, or item in, the checked bag and   (2) placing the swab in the ETD machine. The ETD machine then  evaluates the sample on the swab to detect trace amounts of explosive  residue. If these steps are not conducted correctly, the test may fail to  detect explosives that are present. Since the first steps of this process  require screeners to collect explosive particles, they are vulnerable to  human error. In contrast, when using EDS machines as the primary means  of detection, the screening is automated and the machine either alarms  indicating the possible presence of explosives or does not alarm without  screener involvement.
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. 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. While each in- line baggage screening system is unique, these systems generally operate  in a similar manner, as shown in figure 3. Typically, in-line systems involve  checked baggage undergoing automated screening while on a conveyor  belt that sorts and transports baggage to the proper location for its  ultimate loading onto an aircraft. During this automated process, all  checked baggage on the conveyor belt passes through EDS machines  where the bags are screened for explosives. If no explosives are detected  during this primary screening, the bag continues forward on the main  conveyor belt to be loaded onto the aircraft. If an EDS machine alarms,  indicating the possibility of explosives, TSA screeners, by reviewing  computer-generated images of the inside of the bag, attempt to determine  whether a suspect item is actually a threat. If the screener determines  that the suspect item is not a threat, the cleared bag continues on the  conveyor belt system to be loaded onto the aircraft. If the screener is  unable to make this determination, the bag is diverted from the main  conveyor belt into an area where it receives a secondary screening in  which the bag is opened and the contents of the bag are screened by a  screener using an ETD machine and physical inspection. If the bag  successfully clears secondary screening, it is placed on the main conveyor  belt system to be loaded onto the aircraft. If the bag tests positive for  explosives during secondary screening, TSA screeners are required to  notify the appropriate officials.
Both airports and the federal government have cooperated to jointly fund  the installation of in-line EDS baggage screening systems. The federal  government has used three funding mechanisms to modify airport  facilities to install in-line EDS systems—LOIs, other transaction  agreements, and Airport Improvement Program funds from the FAA. In  2003, Congress authorized TSA to issue LOIs for airport modifications  related to the installation of in-line 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. Congress initially mandated a  75 percent federal government cost-share for LOIs in February 2003, but in  December of that year it increased the cost-share to 90 percent. However,  the fiscal year 2005 DHS Appropriations Act subsequently re-established  the federal government cost-share at 75 percent for fiscal year 2005. Also,  the President’s fiscal year 2006 budget request for TSA proposes to  maintain the 75 percent federal government cost share for projects funded  by LOIs at large and medium airports.
TSA also uses other transaction agreements, which are administrative  vehicles used by TSA to directly fund airport operators engaged, or  planning to engage, in smaller in-line airport modification projects without  undertaking a long-term commitment. These transactions, which can take  many forms and are generally not required to comply with federal laws  and regulations that apply to contracts, grants, or cooperative agreements,  enable the federal government and others entering into these agreements  to freely negotiate provisions that are mutually agreeable.
In addition, airports have utilized Airport Improvement Program grants,  which are awarded by the Secretary of Transportation for airport planning  and development to maintain a safe and efficient nationwide system of  public airports and for limited aviation security purposes. Some airport  operators used the Airport Improvement Program in fiscal years 2002 and  2003 to fund facility modifications needed to accommodate installing in- line systems. However, provisions of ATSA and the Vision 100—Century of  Aviation Reauthorization Act (Vision 100), as well as fiscal years 2004 and  2005 appropriations language, have limited the future availability of the  Airport Improvement Program to fund in-line 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  obligated about $2.5 billion (93 percent) of the approximately $2.7 billion it  budgeted for fiscal years 2002 through 2004 for the procurement and  installation of EDS and ETD machines to screen checked baggage for  explosives and to modify airport facilities to accommodate this equipment.  Although TSA made significant progress in fielding this equipment, TSA  used most of the $2.5 billion to design, develop, and deploy interim lobby  screening solutions rather than install more permanent in-line EDS  baggage screening systems. TSA employed these as interim solutions in  order to meet the congressional deadline for screening all checked  baggage for explosives 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. TSA officials also  stated that they did not have time to conduct the planning needed or make  airport modifications required for longer-term and more streamlined  baggage screening operations. However, these interim lobby screening  solutions used by TSA resulted in operational inefficiencies and additional  security risks. Specifically, TSA’s use of stand-alone EDS and ETD  machines required a greater number of screener staff and resulted in  screening fewer bags for explosives per hour, as compared with using EDS  machines in-line with baggage conveyor systems. Also, screening with  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  officials also raised concerns about the possible security risks caused by  baggage screening equipment being located in airport lobbies—causing  overcrowding due to passengers waiting to have their bags screened.

		TSA Procured and Installed Explosive Detection Equipment and Modified Airports to Integrate this Equipment to Screen Checked Baggage for Explosives

TSA used most of the airport modification and equipment procurement  and installation funds to deploy interim lobby screening solutions at more  than 400 airports to provide the means for screening all checked baggage  for explosives as mandated by the Congress. As shown in table 1, the  Congress earmarked about $1.5 billion of the $2.7 billion budgeted amount  specifically to install EDS and ETD equipment, and to modify and prepare  airport facilities to incorporate the use of this equipment for screening  checked baggage for explosives. Congress earmarked and TSA budgeted  the remaining $1.2 billion for the procurement of EDS and ETD machines.
As of the end of fiscal year 2004, TSA used about one-half of the   $2.5 billion that it had obligated to modify airport facilities and to install  EDS and ETD machines, and the remaining half primarily to procure EDS  and ETD machines. As of September 30, 2004, TSA had obligated  approximately $1.3 billion of the approximately $1.5 billion that had been  earmarked for airport modifications and the installation of EDS and ETD  equipment. As shown in table 2, TSA had used about $885 million (about  68 percent) of these obligated funds for the general deployment and  installation of EDS and ETD equipment at various airports as part of  interim lobby solutions to quickly install checked baggage screening  equipment. Also included in this amount are funds that TSA used for  installing interim partial in-line baggage screening systems at some  airports. In general, these systems were for sections of an airport, were  not fully integrated into the airport’s baggage handling system, and most  often were temporary until a permanent in-line system could be installed.  For example, TSA awarded the Port of Seattle about $9 million for the  construction of interim partial in-line systems and modification of the   baggage handling systems serving four airlines at the Seattle-Tacoma  International Airport. These interim partial in-line systems, which are not  fully integrated with the baggage handling systems, will be replaced by  permanent in-line baggage screening systems that will be fully integrated  with the airport’s baggage handling systems by March 2007. Most of the  remaining airport modification and equipment installation obligations are  being used by TSA for work related to the permanent in-line integration of  EDS baggage screening equipment into airportwide or individual terminal  baggage conveyor systems at 33 airports. See appendix III for a listing of  the 33 airports having in-line baggage screening systems installed and the  source of TSA funding for the in-line systems.
TSA contracted with Boeing Service Company in June 2002 to be the  prime contractor for deploying EDS and ETD equipment at the nation’s  airports. This effort involved designing and implementing airport facility  modifications for EDS and ETD equipment, such as new construction,  infrastructure reinforcement, and modification of electrical systems  required to install the EDS and ETD equipment. Originally, the period of  performance for this contract was to expire on December 31, 2002.  However, TSA extended the contract’s period of performance in order for  Boeing to perform activities associated with installing interim lobby  solutions to help airports meet or to maintain compliance to screen   100 percent of checked baggage with explosive detection systems. These  contract extensions have resulted in a $486.3 million increase in TSA  obligations against this contract for work related to airport modifications  and EDS and ETD installation from $372.6 million in fiscal year 2002 to  $858.8 million as of September 30, 2004. Boeing had expended most   (98 percent) of these funds for interim lobby screening solutions.
As of September 30, 2004, TSA had obligated almost 100 percent of the  approximately $1.2 billion that had been budgeted or earmarked for  procurement of EDS and ETD machines. As shown in table 3, about   80 percent of these funds has been obligated for procuring EDS machines,  with most of the remaining funding being obligated for procuring ETD  machines.
Table 4 summarizes the location of EDS and ETD equipment at the  nation’s airports by airport category, based on a June 2004 TSA inventory  listing. The number of machines shown in table 4 includes EDS and ETD  machines procured by both TSA and FAA prior to and during the  establishment of TSA.

		TSA’s Initial Deployment of EDS and ETD Machines Resulted in Interim Solutions for Screening with Stand-alone Equipment Located Mainly in Airport Lobbies

Although TSA made significant progress in fielding EDS and ETD  equipment to the nation’s airports to screen checked baggage for  explosives, as mandated by Congress, TSA primarily used this equipment  as part of interim lobby solutions to screen checked baggage for  explosives, rather than the permanent integration of EDS machines in-line  with airport baggage conveyor systems. TSA fielded most of the EDS and  ETD machines needed to screen checked baggage for explosives to the  nation’s over 400 airports by the congressionally mandated date of  December 2003 (extended from the original deadline of December 2002),  despite limited time to deploy the equipment and some of the equipment  not being available when needed. In 1996, FAA, the organization then  responsible for the procurement of checked baggage screening equipment,  established a long-term goal of fielding explosive detection systems at all  airports within 18 years—by 2014. As of June 2002, we reported that FAA  had fielded 200 EDS and 200 ETD systems to 56 airports. In about two  and one-half years following the mandate to screen all checked baggage  for explosives, TSA’s deployment of equipment resulted in 1,228 EDS  machines and 7,146 ETD machines being available in over 400 airports, as  shown in table 4. Initially, EDS manufacturers were unable to produce and  deliver the number of machines needed by TSA, and TSA determined that  a mix of EDS and ETD technologies would provide an efficient and  effective means of passenger protection.
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. 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 5, 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.

		Interim Solutions Resulted in Operational Inefficiencies and Additional Security Risks

TSA’s interim solution of using stand-alone EDS and ETD machines as the  primary method to screen checked baggage for explosives led to  operational inefficiencies including (1) the increased use of screener staff,  (2) a lower baggage throughput rate per hour for screening baggage for  explosives, and (3) an increase in on-the-job injuries. Further, at many  airports, TSA’s placement of the minivan-sized stand-alone EDS machines  and ETD machines in airport lobbies at times resulted in passenger  crowding, which presented unsafe conditions and may have added  security risks for passengers and airport workers.
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 6, 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. According to a senior TSA  official in the Office of Security Technology, these throughput numbers  could change as TSA gains greater operational experience.
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.
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. 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, as shown in figure 4, 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.  However, airport operators and TSA have made limited progress in  installing in-line baggage screening systems on a large-scale basis because  sufficient resources have not been made available for the installation of  these capital-intensive systems. To install in-line systems, airport  operators and TSA work cooperatively, with airport operators responsible  for the baggage conveyor systems and utilities, and TSA responsible for  the EDS and ETD machines. Airport operators and TSA have also 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  systems. Most airports that have installed or are planning to install in-line  systems have relied on or plan to rely on some form of federal funding to  help install the systems. However, as of January 2005, TSA has not used  LOIs to fund the installation of in-line systems beyond nine airports.  Further, TSA has not determined the total cost of installing in-line EDS  baggage screening systems at airports determined to need these systems.  In addition, perspectives differ regarding the appropriate role of the  federal government and airport operators in funding these systems.

		Many Airports Have, Are Planning to Have, or Are Considering Installing In- line EDS Baggage Screening Systems

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 shown in figure 5, 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.
In addition to the expected benefits of reduced TSA screening personnel,  enhanced security, and increased baggage throughput, airport officials  anticipate that they will be able to streamline their airport   operations from installing in-line baggage screening systems. For example,  some airport and air carrier officials we interviewed anticipate that in-line  systems will result in less congestion at airline ticket counters by  removing stand-alone EDS and ETD machines from crowded airport  lobbies, thereby improving airline passenger flow and queuing in the  terminals by not forcing passengers to wait in long lines at ticket counters  to have their bags screened. Officials also believe that the installation of  in-line systems would allow for airport growth because in-line EDS  systems could screen checked baggage faster than stand-alone EDS and  ETD systems and could be upgraded to accommodate growth in airline  passenger traffic. Officials further stated that in-line systems would allow  them to retain greater control and autonomy of their baggage handling  systems by creating a streamlined process for moving checked baggage  directly from where baggage is checked to the aircraft.

		Total Costs of In-line EDS Baggage Screening Systems Are Unknown, and Federal Resources Have Not Been Made Available to Fund These Systems on a Large-Scale Basis

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.
Airport operators have relied on several sources of federal funding to help  pay for the planning and construction of in-line EDS baggage screening  systems. We interviewed airport officials from 53 airports that either have  or are in the process of planning or constructing in-line systems to  determine the extent to which they have relied on or plan to rely on  federal funding to install in-line systems. As shown in table 7, officials at  42 of the 53 airports we interviewed reported that they relied on the use of  federal funds from the FAA Airport Improvement Program and TSA to  help fund the planning and construction of these systems. However, there  was no readily available information that would allow us to determine to  what extent these 42 airports relied on or plan to rely on the use of federal  funds for constructing or planning their in-line systems. Only one of the 53  airports completed its in-line system without first receiving federal funds  for the project, while an additional 10 airports have started planning or  constructing their in-line systems without receiving federal assistance or a  commitment to receive federal assistance.
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. The fiscal year 2003 Consolidated  Appropriations Resolution 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.
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. 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. Table 8 identifies the nine  airports awarded LOI agreements, total project costs, and the cost-share  for the federal government and the airport.
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. 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. 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.
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. As shown in table 7, 28 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 Report That They Will Require Federal Funding to Install In-line EDS Baggage Screening Systems, but the Availability of this Funding Is Uncertain, and Perspectives Differ Regarding Funding Responsibilities of the Federal Government and the Aviation Industry

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. Despite this reported need, however, the  President’s fiscal year 2005 and 2006 budget requests do not provide, and  the fiscal year 2005 DHS Appropriations Act does not include, funding for  additional LOIs for in-line EDS baggage screening systems beyond the  eight already issued. Also, the availability of federal funds from the Airport  Improvement Program for future planning and construction of in-line  baggage screening systems is limited. In addition, perspectives differ  regarding the appropriate role of the federal government, airport  operators, and air carriers in funding these capital-intensive systems.
Officials at 28 of the 45 airports that we identified in figure 5 as planning or  constructing in-line baggage screening systems stated that they could not  or would not move forward with installing these systems without funding  support from TSA. Also, in our review of correspondence to TSA  regarding 26 airports’ interest in receiving LOIs, officials from half of the  26 airports stated that they would have to delay, suspend, or abandon their  plans for installing in-line systems until TSA committed to funding these  projects. According to TSA officials, the high cost of developing final  design plans for in-line systems has resulted in airports delaying plans to  install the systems until they are confident that TSA will be able to support  their funding needs.
Although airport officials stated that they will require federal funding to  install in-line systems—and TSA officials 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—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.  Vision 100, among other things, provided for the creation of the Aviation  Security Capital Fund to help pay for placing EDS machines in line with  airport baggage handling systems. However, according to OMB officials,  the President’s fiscal year 2005 budget request, which referred to the  Vision 100-mandated appropriation of $250 million for the Aviation  Security Capital Fund, only supported continued funding for the eight LOIs  that have already been issued and does not provide resources to support  new LOIs for funding the installation of in-line systems at additional  airports. Further, while the fiscal year 2005 DHS Appropriations Act  provides $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 provides no funds for new LOI agreements for in-line  system integration activities.
In addition, the availability of Airport Improvement Program funds for  airport security-related improvements, though expanded for a time, is  presently limited as a resource for the installation of in-line EDS baggage  screening systems. Following the events of September 11, ATSA  authorized the use of Airport Improvement Program funds for security- related enhancements through fiscal year 2002. ATSA also provided for the  use of Airport Improvement Program funds to replace airport baggage  handling systems and to reconfigure airport terminal baggage areas as  required to install explosive detection equipment, but Vision 100 amended  this provision to allow only a specific portion of Airport Improvement  Program funds to be used for this purpose after December 12, 2003.  Subsequent prohibitions found in the fiscal year 2004 Consolidated  Appropriations Act, enacted in January 2004, and again in the fiscal year  2005 Consolidated Appropriations Act, enacted in December 2004, prohibit  the use of Airport Improvement Program funds for activities related to the  installation of in-line explosive detection systems.
A 75 percent federal cost-share will apply to any project under an LOI for  fiscal year 2005. 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. 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.
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. 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.

	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

TSA has not conducted the 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. Although TSA  established criteria to prioritize airport eligibility for receiving LOI funds  for in-line EDS baggage screening systems, it has not conducted a  systematic, prospective analysis to determine at which airports it could  achieve long-term savings and enhanced security by installing in-line  systems rather than continue to rely on labor-intensive stand-alone EDS  and ETD machines to screen checked baggage for explosives. TSA’s  retrospective analysis of the nine airports that received LOIs identified the  potential for significant cost savings through the installation of in-line EDS  baggage screening systems and the merit of conducting prospective  analyses of other airports to provide information for future funding  decisions. Further, for airports where in-line systems may not be  economically justified because of the high cost of installing the systems,  TSA has not conducted an analysis to determine whether it could achieve  savings by making greater use of stand-alone EDS systems rather than  relying on the use of more labor-intensive ETD machines. OMB has  provided guidance for agencies to conduct these types of cost analyses to  help build a business case for funding their programs. Moreover, Congress  directed that TSA continue submitting plans for installing in-line baggage  screening systems. However, TSA has not yet provided Congress with all  of the information requested.

		TSA Applied Criteria to Award Initial LOIs to Fund In-line Systems but Has Not Systematically Determined Which Additional Airports Should Receive Future In-line Systems to Increase Efficiencies and Enhance Security

In October 2003, TSA reported to OMB criteria it used to prioritize airports  eligible to receive LOI funds to install in-line EDS baggage screening  systems. However, TSA did not systematically determine which airports  could achieve long-term savings and improved security by installing in-line  systems rather than continuing to rely on labor-intensive stand-alone EDS  and ETD machines to screen checked baggage for explosives.
The criteria TSA established for prioritizing airport participation in the LOI  program, as shown in figure 6, included airports that were not yet  conducting 100 percent screening of checked baggage with EDS or ETD,  and airports that would fall out of compliance with the requirement to  screen checked baggage with EDS or ETD at peak load times. In July 2004,  TSA officials reported that they had recently expanded these criteria to  take into account additional security benefits that an in-line baggage  screening system would provide an airport. Specifically, TSA officials  stated that they compared airport operational needs with identified  threats, based on information received from TSA’s Transportation Security  Intelligence Service, to consider security needs for specific airports. TSA  officials further reported that an airport’s circumstances, such as  passenger load increases or decreases, may change how it is prioritized,  given these criteria, and that an airport could qualify to receive LOI  funding based on more than one criterion.
TSA officials stated that they selected the first nine airports to receive  LOIs to fund in-line baggage screening systems because, in general, they  were the first to submit applications for an LOI, and they agreed to pay   25 percent of airport modification costs in accordance with the LOI  requirements. TSA officials also stated that the nine airports generally  met their criteria even though seven of the airports had received LOIs in  July and September 2003, before the TSA’s promulgation of the criteria in  October 2003.
In addition to the nine airports currently receiving LOI funds, TSA officials  stated that, based on their criteria, in July 2004, they identified   27 additional airports that are potential candidates for 22 future LOIs.  TSA officials stated that an in-line screening system at each of these  airports would provide enhanced security and efficiencies. More  important, officials stated that if the 27 airports did not receive an LOI to  install an in-line baggage system, these airports could fall out of  compliance with the requirement to screen 100 percent of checked  baggage using explosive detection systems during peak passenger traffic  load periods or because of passenger load increases or new air carrier  service—TSA’s second prioritization criterion shown in figure 6. Although  TSA officials asserted that in July 2004, 27 airports were good candidates  for in-line systems, they would not identify the 27 airports. TSA officials  also did not provide the analyses they conducted to determine that these  airports would fall out of compliance with the mandate to screen all  checked baggage using explosive detection systems or state why these  airports were more at risk than other airports for not complying with this  mandate. Rather, TSA officials stated that they identified these 27 airports  as good candidates for LOIs based on their day-to-day working knowledge  of airports and professional judgment about airport operations. TSA  officials were also unable to provide information on what the associated  costs, benefits, and time frames would be for installing in-line systems at  these 27 airports.
Although TSA developed criteria to use as a guide for determining which  airports should receive LOI funding for in-line EDS baggage screening  systems, TSA has not yet conducted 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. TSA  officials stated that they have 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 through March 2005 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. However, TSA officials could  not provide us with information on how they plan to use the results of the  effort in planning for the installation of in-line systems.
In October 2004, the conference report accompanying the 2005  Department of Homeland Security Appropriations Act directed that TSA  continue submitting quarterly reports on its plans for the installation of in- line baggage screening systems. However, TSA has not yet provided  Congress with all of the information requested. Specifically, the  conference report directed that TSA provide information describing,  among other things, the universe of airports that could benefit from an in- line EDS baggage screening system or other physical modifications; costs  associated with each airport’s project, along with a tentative timeline for  award and completion; and information reflecting the anticipated cost  savings—particularly personnel savings—that would be achieved through  the use of in-line checked baggage systems instead of ETD and stand-alone  EDS systems. TSA, directed to provide a report on September 1, 2003, and  every quarter thereafter, provided two reports to Congress. However, TSA  was asked to submit amended reports because the original reports lacked  the requested information. As of January 2005, TSA had not submitted the  amended reports or subsequent reports to Congress. The conference  report further directed TSA to develop a comprehensive plan for  expediting the installation of in-line EDS baggage screening systems,  including the formulation of detailed budget requirements to provide for  both equipment acquisition and the capital costs of installing these system  configurations at airports. In addition, the December 2004, Intelligence  Reform and Terrorism Prevention Act, among other things, directs TSA to  develop a schedule to expedite the installation of in-line explosive  detection systems.
According to TSA officials, TSA recently began to conduct an analysis of  alternatives to determine the best manner to acquire, deploy, and maintain  EDS and ETD equipment for screening checked baggage as part of the  Department of Homeland Security Investment Review process. However,  according to TSA officials who prepared the review, the Investment  Review Board review did not include a prioritization of which airports  should receive funding for in-line systems or an analysis of screening  needs at individual airports. TSA would not provide us with the baggage  screening program data and analysis that it provided to the Investment  Review Board for the review that occurred in late October 2004.

		The Installation of In-line EDS Baggage Screening Systems May Result in Significant Savings and Benefits

Although TSA has 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. 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 $1.3 billion compared with stand-alone EDS systems and that  TSA would recover its initial investment in a little over 1 year.  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. The  individual airport results are described in appendix IV.
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. 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. Appendix IV illustrates how  analyzing uncertainty in TSA’s cost estimates can help identify which cost  factors to focus on when determining the appropriateness of installing  EDS baggage screening systems for a particular airport.

		TSA Has Not Systematically Assessed Needs of Airports to Gain Efficiencies by Making Greater Use of Stand-alone EDS Systems

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 Systems and EDS Equipment, It Is Unclear How TSA May Make Use of New Technologies to Screen Checked Baggage for Explosives

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 Phoenix project. As part of this  project, 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 will pilot the machine in the field to  evaluate its operational efficiency. Also, the ARGUS program was initiated  in 1999 to develop EDS equipment that would cost less to build and  install—even though baggage throughput may be lower—in order to  provide a more uniform level of security using EDS machines at U.S.  airports. TSA’s Transportation Security Laboratory has certified three  varieties of these machines, though the machines have not been procured  and deployed at U.S. airports.

	Conclusions

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. The need for sound planning is also recognized by Congress  through the Intelligence Reform and Terrorism Prevention Act of 2004 and  through the fiscal year 2005 DHS Appropriations Act Conference Report,  which, among other things, directs TSA to develop a comprehensive plan  for expediting the installation of in-line explosive detection 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. We believe that without such analyses, and  without associated plans for the installation of in-line baggage screening  systems and replacing stand-alone EDS machines, TSA cannot ensure that  it is efficiently allocating its limited resources to maximize the  effectiveness of its checked baggage screening operations.
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. 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.
In addition to identifying the most optimal baggage screening solutions at  the nation’s airports, a systematic analysis of baggage screening  operations and solutions—including an estimate of savings that could be  achieved through the installation of in-line EDS baggage screening  systems—would assist the Administration and Congress in determining  the appropriate role of the federal government and aviation industry in  funding capital-intensive in-line baggage screening systems. By identifying  efficiencies that could be achieved for both TSA—such as savings  achieved through reduced TSA staffing needs for screeners—and the  airports and airlines—such as increased security due to less crowding in  airport lobbies and the faster processing of baggage and passengers—the  Administration and Congress would have information identifying the costs  and benefits of in-line baggage screening systems for all parties involved to  assist in determining an appropriate cost-share between the federal  government and aviation industry in funding these systems.

	Recommendations for Executive Action

In developing the comprehensive plan for installing in-line EDS baggage  screening systems, as directed by the fiscal year 2005 DHS Appropriation  Act Conference Report, and in satisfying the requirements set forth in the  Intelligence Reform and Terrorism Prevention Act of 2004, we recommend  that the Secretary of the Department of Homeland Security direct the  Administrator for the Transportation Security Administration to  systematically assess the costs and benefits of deploying in-line baggage  screening systems at airports that do not yet have in-line systems installed.  As part of this assessment, the Administrator should take the following  four actions:  identify and prioritize the airports where the benefits—in terms of cost  savings of baggage screening operations and improved security—of  replacing stand-alone baggage screening systems with in-line systems are  likely to exceed the costs of the systems, or the systems are needed to  address security risks or related factors;    consider the projected availability and costs of baggage screening  equipment being developed through research and development efforts;    estimate total funds needed to install in-line systems where appropriate,  including the federal funds needed given different assumptions regarding  the federal government and airport cost-shares for funding the in-line  systems; and   work collaboratively with airport operators, who are expected to share the  costs and benefits of in-line systems, to collect data and prepare the  analyses needed to develop plans for installing in-line systems.
We also recommend that the Administrator for the Transportation Security  Administration assess the feasibility, expected benefits, and costs of  replacing ETD machines with stand-alone EDS machines for primary  screening at those airports where in-line systems would not be either  economically justified or justified for other reasons. In conducting this  assessment, the Administrator should consider the projected availability  and costs for screening equipment being developed through research and  development efforts.
We also made a recommendation to DHS addressing TSA’s protocols for  screeners using ETD systems and associated screener training, which is  included in the restricted versions of this report.

	Agency Comments and Our Evaluation

We provided a draft of this report to DHS for review and comment. On  February 18, 2005, we received written comments on the draft report,  which are reproduced in appendix V. DHS generally concurred with our  findings and recommendations, and agreed that efforts to implement the  recommendations are critical to a successful checked baggage screening  deployment program. Regarding our recommendation that TSA  systematically assess the costs and benefits of deploying in-line baggage  screening systems at airports that do not yet have in-line systems installed,  DHS stated that TSA has initiated an analysis of deploying in-line checked  baggage screening systems and is in the process of formulating criteria to  use to identify those airports that would benefit from an in-line system.  According to DHS, TSA believes that it can focus on approximately 40  airports that handle anywhere from 60 to 80 percent of all checked  baggage nationwide. Once TSA officials have finalized the criteria and  determined those airports at which in-line systems should be installed,  they plan to conduct an airport-specific analysis to determine the  individual costs and operational benefits. We are encouraged that TSA is  proceeding with this analysis, which should provide a sound business case  to justify resource allocation decisions. It is important, however, that TSA  establish milestones and time frames for completing the analysis and  documenting and reporting the results, such that they are available in a  timely manner for DHS and congressional budget decisions.
Concerning our recommendation that TSA assess the feasibility, expected  benefits, and costs of replacing ETD machines with stand-alone EDS  machines for primary screening at those airports where in-line systems  would either not be economically justified or justified for other reasons,  DHS stated that TSA has started conducting an analysis of the airports that  rely on ETD machines as the primary checked baggage screening  technology to identify those airports that would benefit from replacing  ETDs with stand-alone EDS equipment. Again, we are pleased that TSA  officials are conducting this analysis, which should provide them with the  basis for optimizing the use of its EDS machines for screening checked  baggage. Further, DHS stated that TSA continues to review and refine the  protocols and training of all screening procedures including screening  checked baggage, and are in the process of implementing the  recommendations made by the DHS Inspector General regarding improved  screener training and other improvements for both the passenger and  checkpoint and checked baggage.
TSA also provided additional technical comments on our draft report,  which we have incorporated where appropriate.
We will send copies of the report to the Secretary of the Department of  Homeland Security, the TSA Administrator, and interested congressional  committees as appropriate. We will also make copies available to others  on request. In addition, the report will be available at no charge on GAO’s  Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at   (202) 512-3404, berrickc@gao.gov or Christine Fossett, Assistant Director  at (202) 512-2956, fossettc@gao.gov. Key contributors to this report are  listed in appendix VI.

Appendix I: Objectives, Scope, and Methodology

To assess efforts by the Transportation Security Administration (TSA) to  screen checked baggage for explosives using explosives detection system  (EDS) and explosives trace detection (ETD) equipment, we addressed the  following questions: (1) How did TSA use the funds it initially budgeted to  procure and install EDS and ETD systems and make associated airport  modifications, and what was the impact of the initial deployment of EDS  and ETD systems? (2) What actions are airports and TSA currently taking  to install automated in-line EDS baggage screening systems, and what are  the federal resources that have been made available to fund these  systems? (3) What actions, if any, is TSA taking to plan for the optimal  deployment of in-line baggage screening systems in order to ensure the  efficiency, cost effectiveness, and security of its checked baggage  screening operations?
To determine how TSA used its funding for procuring and installing EDS  and ETD systems and modifying airports, we obtained and analyzed  relevant legislation and appropriate budget documents, contracts, and  inventory reports from TSA related to checked baggage screening with  EDS and ETD machines. We interviewed TSA officials from the Office of  Budget and Performance, the Office of Acquisition, and TSA’s Security  Technology Deployment Office. We also obtained and reviewed funding  and contractual documents from these locations. To determine what  impact the initial deployment of EDS and ETD systems had on TSA and  airport operations, we conducted a literature search to obtain information  on the purpose and use of explosive detection screening equipment to  screen checked baggage at airports for explosives. This search identified  various TSA reports, Department of Homeland Security (DHS) Inspector  General reports, Congressional Research Service reports, and aviation  industry reports documenting TSA’s use of this equipment for screening  checked baggage. Also, we obtained and reviewed relevant documents  from TSA and interviewed TSA headquarters officials from TSA’s Office of  Aviation Operations, Office of Chief Counsel, Office of Technology  Deployment and Maintenance, and Office of Internal Affairs and Program  Review. This documentation included information on staffing  requirements and the number of bags per hour that can be screened by in- line EDS systems as compared with stand-alone EDS and ETD machines.  We also interviewed officials from TSA, air carriers, airports, explosive  detection systems equipment manufacturers, and airport industry  associations to obtain information regarding TSA’s efforts to improve  checked baggage screening operations using EDS machines. Although we  could not independently verify the reliability of all of this information, we  compared it with other supporting documents, when available, to  determine data consistency and reasonableness. Based on these efforts,  we believe the information we obtained is sufficiently reliable for this  report. Further, we reviewed the results from unannounced, undercover  covert testing of checked baggage screening operations conducted by  TSA’s Office of Internal Affairs and Program Review and questioned TSA  officials about the procedures used to ensure the reliability of the covert  test data. On the basis of their answers, we believe that the covert test data  are sufficiently reliable for the purposes of our review.
To address our second and third objectives—to determine what actions  airports and TSA are taking to develop in-line EDS baggage screening  systems and what resources are available for these systems; and to  determine what TSA is doing to optimally deploy these systems in order to  improve the efficiency, cost effectiveness, and security of its checked  baggage screening operations—we obtained briefings and other  documents related to the planned use and installation of in-line systems  and interviewed officials from the Office of Chief Counsel and the Office  of Security Technology. We also interviewed officials from the TSA’s  Transportation Security Laboratory in Atlantic City, New Jersey, to discuss  the agency’s efforts to examine future baggage screening technologies and  the certification process for EDS and ETD equipment. We also used  information related to checked baggage screening from a Web-based  survey of all 155 federal security directors about 263 of the airports under  their supervision. This survey is described below. We also followed up by  telephone with airport officials from 70 of those airports to obtain  additional information about their plans for in-line systems. These airports  were selected primarily based on the responses from the federal security  directors regarding whether the airport had or planned on installing in-line  EDS checked baggage screening systems. In addition, GAO’s Office of  General Counsel formally requested that TSA describe its means for  compliance with the baggage screening requirements of the Aviation and  Transportation Security Act and the Homeland Security Act of 2002, and  inquired how TSA would approach its letters of intent for funding in-line  checked baggage screening systems in light of changes mandated by the  Vision 100—Century of Aviation Reauthorization Act. Also, to assess  potential savings, we reviewed a 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, 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 report.
In addition, in addressing all three objectives, we conducted site visits and  a Web-based survey. Specifically, we conducted site visits at   22 airports (12 category X airports, 9 category I airports, and 1 category II  airport) to observe airport security baggage screening procedures and  discuss issues related to the baggage screening processes with TSA,  airport, and airline officials. We chose these airports on the basis of one or  more of the following factors: a large number of passenger boardings; the  existence of an operational in-line system; whether the airport had  received or requested TSA funding for an in-line system; whether the  airport had begun screening all checked baggage using EDS or ETD; and  the proximity to a larger airport being visited by GAO. The results from  our airport visits provide examples of checked baggage screening  operations and issues but cannot be generalized beyond the airports  visited because we did not use statistical sampling techniques in selecting  the airports. We administered a Web-based survey to all 155 federal  security directors who oversee security at each of the airports falling  under TSA’s jurisdiction. The questionnaire contained questions related to  the status of checked baggage screening operations and planning and  implementation of in-line EDS checked baggage screening systems. A GAO  survey specialist designed the questionnaire in combination with other  GAO staff knowledgeable about airport security issues. We conducted  pretest interviews with six federal security directors to ensure that the  questions were clear, concise, and comprehensive. In addition, TSA  managers and an independent GAO survey specialist reviewed the  questionnaire.
For this Web-based survey, each federal security director received one or  two airport-specific questionnaires to complete, depending on the number  of airports for which he or she was responsible. Where a federal security  director was responsible for more than two airports, we selected the first  airport based on the federal security director’s location and the second  airport to obtain a cross-section of all airports by size and geographic  distribution. In all, we requested information on 265 airports. However,  two airports were dropped from our initial selection because the airlines  serving these airports suspended operations and TSA employees were  redeployed to other airports. As a result, our sample size was reduced to  263 airports, which included all 21 category X airports,   60 category I airports, 49 category II airports, 73 category III airports, and  60 category IV airports. In that we did not use probability sampling  methods to select the sample of airports, we cannot generalize our  findings beyond the selected airports in these categories.
We conducted this Web-based survey from late March to mid-May 2004.  We received completed questionnaires from all 155 federal security  directors for all 263 separate airports for which we sought information for  a 100 percent response rate. We called selected survey respondents, or  other TSA officials designated to respond on the respondent’s behalf, to  obtain answers to key survey questions that may have been left blank, to  look into situations where instructions were not followed and to  investigate answers that looked suspicious or out of range. The survey  results are not subject to sampling errors because all federal security  directors were asked to participate in the survey and we did not use  probability sampling techniques to select specific airports. However, the  practical difficulties of conducting any survey may introduce errors,  commonly referred to as non-sampling errors. For example,  inconsistencies in how a particular question is interpreted, in the sources  of information that are available to respondents, or in how the data are  entered into a database or were analyzed can introduce unwanted  variability in the survey results. We took steps in the development of the  questionnaires, the data collection, and the data editing and analysis to  minimize these non-sampling errors. Also, in that these were Web-based  surveys whereby respondents entered their responses directly into our  database, data entry or transcription errors were possible. In addition, all  computer programs used to analyze the data were peer-reviewed and  verified to ensure that the syntax was written and executed correctly.
We performed our work from September 2003 through January 2005 in  accordance with generally accepted government auditing standards.  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 report.

Appendix II: Summary of Checked Baggage Screening Legislation

Appendix II: Summary of Checked Baggage  Screening Legislation Established the Transportation Security Administration (TSA) as the agency responsible  for security in all modes of transportation, including civil aviation   Appointed federal security managers to oversee the screening of passengers and  baggage at airports   Deployment of federal personnel to screen all passengers and baggage at airports  Mandated the screening of all checked baggage with explosive detection systems by  December 31, 2002, and authorized alternative means to screen checked baggage  (positive passenger bag match, manual search, canine search in combination with other  means, other technology approved by TSA) where explosive detections systems are  unavailable   Mandated the imposition of passenger security fees (and authorized the imposition of air  carrier fees, if necessary)
Homeland Security Act of 2002, Pub. L.  No. 107-296, 116 Stat. 2135 (Nov. 25,  2002)
Consolidated Appropriations  Resolution, 2003, Pub. L. No. 108-7, 117  Stat. 386 (Feb. 20, 2003)
Authorized $500 million for each of fiscal years 2003 through 2007 for TSA to issue letters  of intent (LOIs) to airports, with a government cost-share of 75 percent at airports with at  least 0.25 percent of total passenger boardings each at all airports (90 percent at any  other airport)
Intelligence Reform and Terrorism  Prevention Act of 2004, Pub. L. No.   108-458, 118 Stat. 3638 (Dec. 17, 2004)
Requires that TSA take action to expedite the installation and use of baggage screening  equipment and requires that TSA submit schedules to the Senate Committee on  Commerce, Science and Transportation and the House of Representatives Committee on  Transportation and Infrastructure for expediting the installation and use of in-line baggage  screening equipment that estimate the impact that such equipment, facility modification,  and baggage conveyor placement will have on staffing needs and levels related to  aviation security and for replacing trace detection equipment with explosive detection  system equipment as soon as practicable and where appropriate, within 180 days of  enactment  Requires the Secretary of Homeland Security, in consultation with air carriers, airport  operators, and other interested parties, to submit, in conjunction with its fiscal year 2006  budget proposal, a proposed formula for cost sharing among federal, state and local  governments and the private sector for the installation of in-line baggage screening  systems, recommendations for defraying the costs of in-line systems, and a review of  innovative financing approaches and possible cost savings associated with installing in- line systems at airports   Amends 49 U.S.C. § 44923(i) by increasing the authorized appropriations for each of  fiscal years 2005 through 2007 to $400 million  Allows for a reimbursement period under any LOI to extend for a maximum of 10 years  after issuance  Funding appropriated and other key provisions  2002 Emergency Supplemental  Appropriations Act for Recovery from and  Response to Terrorist Attacks on the  United States, Pub. L. No. 107-38, 115 Stat.  220 (Sept. 18, 2001)
Department of Transportation and Related  Agencies Appropriations Act, Pub. L. No.  107-87, 115 Stat. 833 (Dec. 18, 2001)
Department of Defense Emergency  Supplemental Appropriations for Recovery  from and Response to Terrorist Attacks on  the United States, 2002; Department of  Defense Appropriations Act, 2002, Pub. L.  No. 107-117, 115 Stat. 2230 (Jan. 10, 2002)
Funds to be obligated from amounts made available in Public Law 107-38:  $108.5 million to “FAA Facilities and Equipment” (available until Sept. 30, 2004) for  procurement and installation of explosive detection systems  $50 million to “FAA Research and Development” (available until Sept. 30, 2003), of  which H.R. Conf. Rep. No. 107-350 (2001) directed $2 million for a demonstration of  100 percent positive passenger bag match technology at DCA  2002 Supplemental Appropriations Act for  Further Recovery from and Response to  Terrorist Attacks on the United States, Pub.  L. No. 107-206, 116 Stat. 820 (Aug. 2, 2002)
Consolidated Appropriations Resolution,  2003, Pub. L. No. 108-7, 117 Stat. 386   (Feb. 20, 2003) $3.0379 billion (available until expended) for screening activities, of which H.R. Conf.  Rep. No. 108-10 (2003) directed $1.4159 billion for baggage screening activities:  The Resolution earmarked $265 million for the physical modification of commercial  service airports to install, and $174.5 million for the procurement of, checked baggage  explosive detection systems  The Conference Report directed $900 million for baggage screeners, $75 million for  detection equipment maintenance, and $1.4 million for a checked baggage data  system  $235 million (available until expended) for the physical modification of commercial  service airports to install checked baggage explosive detection systems  $1.3187 billion (available until expended) for baggage screening activities:  The act earmarked $250 million for physical modification of commercial service  airports to install, and $150 million for the procurement of, checked baggage  explosive detection systems.
Consolidated Appropriations Act, 2004,  Pub. L. No. 108-199, 118 Stat. 3 (Jan. 23,  2004)
Department of Homeland Security  Appropriations Act, 2005, Pub. L. No. 108- 334, 118 Stat. 1298 (Oct.18, 2004) $1.45246 billion (available until expended) for baggage screening activities:  The act earmarks $180 million for procurement of, and $45 million to install, checked  baggage explosive detection systems.
Consolidated Appropriations Act, 2005,  Pub. L. No. 108-447, 118 Stat. 2809 (Dec. 8,  2004)

Appendix III: Airports Receiving TSA Airport Modification and EDS/ETD Equipment Installation Funding for In-line Systems

Appendix IV: Analysis of TSA’s Cost Savings Estimates for In-line EDS Checked Baggage Screening Systems

TSA estimated that baggage screening operations at the nine airports  receiving letters of intent (LOIs) will result in a savings to the federal  government of $1.26 billion over 7 years—and would recover the initial  investment in 1.07 years—as a result of installing in-line rather than stand- alone EDS systems. To make these estimates, TSA made a variety of  assumptions about in-line and stand-alone EDS systems, including how  many bags can be processed per hour by both, how many screeners both  would need, and how much it would cost to purchase, install, and operate  these systems. In addition, TSA used data on how much it cost to modify  these nine airports to accommodate in-line systems. In considering the  accuracy of TSA’s estimates, uncertainties inherent in many of these  assumptions should be considered. TSA could have analyzed uncertainty  in their estimate by conducting sensitivity or other analyses to determine  how variations in these assumptions would change its estimate of cost  savings. Analyzing uncertainty in this way is consistent with best practices  for preparing benefit-cost analysis of government programs or projects  called for by OMB Circular A-94. Nonetheless, TSA’s cost model for these  nine airports offers insights about key factors likely to influence potential  cost savings at other airports.
To illustrate taking uncertainty into account, we conducted a Monte Carlo  analysis using TSA’s cost model. We found that TSA’s cost savings  estimate of $3.5 million per in-line EDS machine as compared to stand- alone could range from a loss of $1.6 million to a savings of $8.3 million  per machine using generalized assumptions about cost uncertainty in  TSA’s model. The most important source of uncertainty causing this wide  range in possible savings was the cost to modify an airport to  accommodate an in-line EDS system. Variation in modification costs  explained over 60 percent of the variation in potential cost savings from  in-line EDS as compared to stand-alone EDS. The next most important  variable, the number of bags per hour that in-line and stand-alone  machines can screen per hour, each accounted for about 15 percent of the  variation in cost savings. In this way, Monte Carlo analysis can offer  insights on factors to focus on when determining the appropriateness of  an in-line EDS baggage screening system for a particular airport.
The analysis provided by TSA aggregated the nine airports to present a  total estimate. Using TSA’s analysis, we were able to determine the results  for each of the nine airports. Figure 7 illustrates the variation in  modification costs at the nine airports TSA studied, ranging from over   $14 million per in-line EDS machine at Seattle to less than $2 million for  Boston and Dallas-Fort Worth. Figure 8, which shows the cost savings  from in-line EDS compared to stand-alone EDS, identifies that Seattle  could end up spending more for an in-line EDS system than from using  stand-alone EDS machines. Further, as shown in figure 9, at Seattle the  relatively large costs for upfront in-line EDS are not offset by the  estimated $48 million in operation and maintenance cost savings;  therefore, the in-line EDS system may be more costly than EDS stand- alone. By contrast, at Dallas-Fort Worth, the upfront costs of in-line EDS  are lower than for stand-alone EDS, and there is an estimated $252 million  in operation and maintenance cost savings. Therefore, the in-line EDS  system at Dallas-Fort Worth may be less costly than stand-alone EDS.

Appendix V: Comments from the Department of Homeland Security

Appendix VI: GAO Contacts and Staff Acknowledgments

	GAO Contacts

	Staff Acknowledgments

In addition to those named above, David Alexander, Leo Barbour,   Charles Bausell Jr., Kevin Copping, Katherine Davis, Kevin Dooley,   David Hooper, Lemuel Jackson, Stuart Kaufman, Noel Lance,   Thomas Lombardi, Jan Montgomery, Jobenia Odum, Jean Orland,   Keith Rhodes, Minette Richardson, and Mark Tremba were key  contributors to this report.

Glossary

TSA classifies the over 400 airports in the United States that require  screening into one of five categories (X, I, II, III, and IV) based on various  factors, such as the total number of take-offs and landings annually, the  extent to which passengers are screened at the airport, and other special  security considerations. In general, category X airports have the largest  number of passenger boardings and category IV airports have the smallest.  TSA periodically reviews airports in each category, and, if appropriate,  changes an airport’s categorization to reflect current operations.

	Airport Improvement Program

The Airport Improvement Program has provided federal grants since the  passage of the Airport and Airway Improvement Act of 1982, Pub. L. No.  97-248, 96 Stat. 324. Administered by the Federal Aviation Administration,  Airport Improvement Program grants have supported airport planning and  development. Grants are issued to maintain and enhance airport safety,  preserve existing airport infrastructure, and expand capacity and  efficiency throughout the airport system. Funds obligated for the Airport  Improvement Program are drawn from the Airport and Airway Trust Fund,  which is supported by user fees and fuel taxes.

	Checked baggage

An individual’s personal property offered to and accepted by an aircraft  operator for transport, which will be inaccessible to the individual during  flight.
A program is cost effective if, on the basis of life cycle cost analysis of  competing alternatives, it is determined to have the lowest costs  expressed in present value terms for a given amount of benefits. Cost- effectiveness analysis is appropriate whenever it is unnecessary or  impractical to consider the dollar value of the benefits provided by the  alternatives under consideration. This is the case whenever (1) each  alternative has the same annual benefits expressed in monetary terms; or  (2) each alternative has the same annual affects but dollar values cannot  be assigned to their benefits.

	Explosives Detection System (EDS)

A TSA certified automated device that has the ability to detect in checked  baggage, the amounts, types, and configurations of explosive material  specified by the TSA. An EDS machine uses computer-aided tomography  to automatically measure the density of objects in baggage to determine  whether the objects have the same density as explosives. The system  automatically triggers an alarm when objects with high densities  characteristic of explosives are detected.

	Explosives Trace Detection (ETD)

A device that has been certified by TSA for detecting explosive vapors and  residues on objects intended to be transported aboard an aircraft.  Explosives trace detection works by detecting vapors and residues of  explosives. Human operators collect samples by rubbing bags with swabs,  which are chemically analyzed to identify any traces of explosive  materials. ETD is used both for primary screening of baggage and  secondary screening to resolve alarms from EDS machines.

	Interim lobby solutions

Solutions employed by TSA to initially deploy explosive detection systems  to screen 100 percent of checked baggage for explosives, until more  permanent solutions could be designed and constructed. Efforts involved  designing and implementing facility modifications, such as new  construction, infrastructure reinforcement, and modification of electrical  systems required to install the EDS and ETD equipment; and developing  and administering equipment training for baggage screeners.
In-line system (also known  as integrated checked  baggage screening system  or integrated EDS system)
A baggage conveyor system with incorporated EDS machines. The EDS’s  baggage feed and output belts are directly connected to an airline’s or  airport’s baggage belt system. The checked baggage undergoes automated  screening in the EDS while on the conveyor belt system that sorts and  transports baggage to the proper location for its ultimate loading on an  aircraft. Baggage is introduced into the EDS without manual loading or  unloading by TSA screeners.

	Letters of intent (LOI)

The fiscal year 2003 Consolidated Appropriations Resolution, Pub. L. No.  108-7, 117 Stat. 11, authorized an LOI program for shared federal  government and aviation industry funding to support facility modification  costs associated with the installation of in-line EDS baggage screening  systems. The Vision 100—Century of Aviation Reauthorization Act, Pub. L.  No. 108-176, 117 Stat. 2490 (2003), also authorized the use of LOIs for this  purpose.

	Multiplex

EDS machines are networked together so that images from multiple EDS  machines can be sent to a centralized location where screeners can  resolve alarms by studying EDS generated images.
When an EDS machine alarms, indicating the possibility of explosives,  TSA screeners, by reviewing computer generated images of the inside of  the bag, attempt to determine whether or not a suspect item or items are  in fact explosive materials. If the screener is unable to make this  determination, the bag is diverted from the main conveyor belt into an  area where it receives a secondary screening by a screener with an ETD  machine.

	Other Transaction Agreements

Other transaction agreements are administrative vehicles used by TSA to  directly fund airport operators for smaller in-line airport modification  projects without undertaking a long-term commitment. These  transactions, which undertake many forms and are generally not required  to comply with Federal laws and regulations that apply to contracts,  grants, and/or cooperative agreements, enable the federal government and  others entering into these agreements to freely negotiate provisions that  are mutually agreeable.

	Positive passenger bag match

An alternative means of screening checked baggage, conducted by the  airline, which requires that the passenger be on the same aircraft as his or  her checked baggage.
EDS machines that are placed in terminal lobbies, curbside or in baggage  makeup areas, not integrated with baggage conveyor systems as part of in- line systems.

	Throughput

Bags screened per hour as a measure of efficiency.

Summary:
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 report assesses (1) TSA's use of budgeted funds to install 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 yield significant savings for the federal government. TSA further estimated that it could recover its initial investment in the in-line systems at these airports in a little over 1 year.