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30–656 PDF 2007

AIRLINE PASSENGER BAGGAGE

SCREENING: TECHNOLOGY AND

AIRPORT DEPLOYMENT UPDATE

(109–86)

HEARING

BEFORE THE

SUBCOMMITTEE ON

AVIATION

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JUNE 29, 2006

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

JEAN SCHMIDT, Ohio

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

(II)
SUBCOMMITTEE ON AVIATION

JOHN L. MICA, Florida, Chairman

THOMAS E. PETRI, Wisconsin

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

ROBIN HAYES, North Carolina

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

CHARLES W. DENT, Pennsylvania

TED POE, Texas

JOHN R. ‘RANDY’ KUHL, JR., New York,

Vice-Chair

LYNN A. WESTMORELAND, Georgia

DON YOUNG, Alaska

(Ex Officio)

JERRY F. COSTELLO, Illinois

LEONARD L. BOSWELL, Iowa

PETER A. DEFAZIO, Oregon

ELEANOR HOLMES NORTON, District of

Columbia

CORRINE BROWN, Florida

EDDIE BERNICE JOHNSON, Texas

JUANITA MILLENDER-MCDONALD,

California

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

TIM HOLDEN, Pennsylvania

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

BEN CHANDLER, Kentucky

RUSS CARNAHAN, Missouri

JOHN T. SALAZAR, Colorado

NICK J. RAHALL II, West Virginia

BOB FILNER, California

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Baer, Susan M., General Manager, Newark Liberty International Airport ....... 8

Berrick, Cathleen A., Director, Homeland Security and Justice Issues, Government Accountability Office ............................................................................. 8

Britz, William W., Project Manager, Aviation Security Systems, Raytheon

Technical Services Company, LLC ..................................................................... 8

Cooke, Dennis, President, GE Security, Homeland Protection Division ............. 36

Ellenbogen, Michael, Chief Executive Officer, Reveal Imaging Technologies,

Inc. ......................................................................................................................... 8

Hauptli, Todd, Senior Vice President, Airport Legislative Alliance .................... 36

Null, Randy, Assistant Administrator for Operational Process and Technology, Transportation Security Administration ............................................... 8

Ripp, Thomas, President, Security and Detection Systems Division, L-3 Communications, Inc. .................................................................................................. 36

Wood, John W., Jr., President and Chief Executive Officer, Analogic Corporation ........................................................................................................................ 36

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri ......................................................................... 95

Costello, Hon. Jerry F., of Illinois .......................................................................... 96

Oberstar, Hon. James L., of Minnesota ................................................................. 116

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Baer, Susan M ......................................................................................................... 48

Berrick, Cathleen A. ................................................................................................ 60

Britz, William W ...................................................................................................... 89

Ellenbogen, Michael ................................................................................................ 99

Hauptli, Todd ........................................................................................................... 105

Null, Randy .............................................................................................................. 111

Ripp, Thomas ........................................................................................................... 120

Wood, John W., Jr ................................................................................................... 127

ADDITIONS TO THE RECORD

Kamen, Hershel I., Staff Vice President, Security and Regulatory Affairs,

Continental Airlines, Inc., statement ................................................................. 133

Parker, A. Louis, President and CEO, GE Security, statement .......................... 139

(1)

AIRLINE PASSENGER BAGGAGE SCREENING:

TECHNOLOGY AND AIRPORT DEPLOYMENT

UPDATE

Thursday, June 29, 2006

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON

AVIATION, WASHINGTON, D.C.

The committee met, pursuant to call, at 10:00 a.m., in room

2167, Rayburn House Office Building, the Hon. John L. Mica

[chairman of the committee] presiding.

Mr. MICA. Good morning. I would like to call this hearing of the

House Aviation Subcommittee to order. We have two panels, a

rather full schedule this morning.

The order of business will be opening statements by members

and then we will turn to our first panel. With that, I would like

to welcome everyone. The topic of today’s hearing is airline passenger baggage screening, and we are going to look at technology

and airport deployment and its current schedule, get an update.

This morning’s hearing, as I said, will focus on the Transportation Security Administration, TSA’s process, for certifying, testing and deploying and funding integrated in-line explosive detection systems for screening checked baggage. It has been just under

two years since this Subcommittee last considered this issue, and

some four and a half years since Congress passed the Aviation and

Transportation Security Act, which we helped author and establish

the TSA.

The Act set some very tight deadlines for screening 100 percent

of the checked baggage for explosives. The TSA’s first step was to

waste, unfortunately, $1 billion to contract for airport EDS installation designs, and unfortunately, most of those designs and plans

still sit on shelves, and many of those plans will never be used.

One of the things I intend to do as a result of this hearing is ask

the Inspector General in GAO to investigate and review this contract and what took place, what went wrong.

Now, some of all of this was done in a rush to meet Congressionally-mandated deadlines. And in that rush, TSA unfortunately created a hodgepodge of systems and we now have in place explosive

trace detection equipment at some airports, and we have standalone EDS machines at others, and various combinations. Even

more unfortunately, the vast majority of airports in the Country

are still in a state of disarray today. We still have crowded airport

lobbies, some of them packed with the variety of equipment and

procedures that I just mentioned. We have inconvenienced pas-
2

sengers and we have enormous headaches for airport operators and

also for airlines.

This patchwork system has also resulted in a small array of personnel costs with more baggage screeners, I think we are up to

16,800 just behind the scenes screening baggage out of a work

force, a small army of 45,000. We have increased on the job injury

rates, and huge worker compensation costs. As I said, we are looking at somewhere about 16,800 employees by TSA behind the

scenes, and unfortunately, we have seen in addition to the workers

comp rates, we have seen vacancy rates on average of 24 percent.

The Occupational Safety and Health Administration, OSHA, has

projected that more than 16 percent of TSA employees will report

a job related injury or illness by the end of fiscal year 2006. That

happens to be, as we understand it, the highest percentage in the

Federal Government. For 2007, the TSA has requested $20 million

in back payments to reimburse the Department of Labor for prior

workers compensation claims filed in just 2005. The 2007 budget

request also includes $55 million for workers compensation. That

is a 40 percent increase from the 2006 request.

Unfortunately, that picture is pretty grim, and it is also pretty

costly. The situation has even impacted the Nation’s Federal security directors, they have become completely overwhelmed by personnel matters.

Quite frankly, the TSA’s current baggage screening system continues to show no ability to adapt or keep pace with the everchanging demands of the aviation industry. That is where today we

come into the picture, trying to keep the planes and passengers

moving on time and their baggage with them.

At the same time that that patchwork system is getting bogged

down by its own efficiencies, there is in fact growing evidence that

it does not even afford us more effective security screening. The

whole purpose for this multi-billion dollar effort and huge army of

personnel is again good screening. And unfortunately, that isn’t the

case.

Testing by TSA and the Department of Homeland Security has

repeatedly demonstrated the advantage of fully integrated in-line

checked baggage EDS systems, especially at large airports. In-line

EDS systems have also proven to be highly efficient, extremely

cost-effective and more accurate, again, at the primary purpose for

all of this, the detection of dangerous items.

They also have a lower maintenance cost, require fewer screeners

and have less out of time service. TSA has estimated that at the

nine airports that received letters of intent, LOIs, the TSA will recover its initial investment in just over a year and will save $1.26

billion over seven years. These are some incredible figures.

The GAO has reported that in-line EDS systems at nine LOI airports they looked at would reduce the number of TSA personnel,

screeners and supervisors, by an astounding 78 percent. That could

mean a reduction in as many as 13,000 TSA baggage screeners,

saving millions, in fact billions of dollars.

Yet despite the mounting evidence in the two years since this

Subcommittee last held a hearing on this topic, the TSA reports

that only an additional 15 airports, for a total of 23 airports out

of 441 commercial airports, have converted to full in-line EDS sys-
3

tems. That sounds like a bad picture, but you have to remember

that there are 29 airports in this Country that handle 75 percent

of all passengers. Only nine have full in-line EDS systems. Of those

nine airports, eight funded the EDS projects on their own. That is

eight of the nine, funded them on their own, and received letters

of intent to be reimbursed by the TSA over a three to five year period. That is an absolutely dismal record for the Federal Government.

I am extremely disappointed with Congress, and I have to take

a lot of the responsibility in this, and also with the TSA for their

lack of progress in this program. We must examine the reasons for

delay. First, of course, funding remains an issue, and through fiscal

year 2006, Congress has appropriated a total of $3.851 billion for

EDS purchase and installation. Of those funds, however, no more

than half a billion of those dollars were used by TSA on the shortterm challenges associated with meeting the 100 percent baggage

screening deadline.

Just an aside, this is one reason why I tried to get that deadline

extended, and some people imposed the deadline. When we first debated this, we knew exactly what would happen as we put a hodgepodge system in place at great expense, using a huge army of personnel. And that is exactly what we have gotten, and very few

automated, good performing systems. In fiscal year 2007, the TSA requested $435 million for EDS pur- chase and installation. However, TSA plans to use only $156 million for EDS installations at the remaining 432 non-LOI airports.

Yet based on the strategic planning framework for the electronic

baggage screening program provided to Congress by TSA in February 2006, between $4 billion to $6 billion will be needed to

achieve the optimal EDS systems. We have right now a 2019

schedule.

The top 25 airports requiring EDS installation will cost approxi- mately $1.4 billion. Furthermore, according to the strategic plan

deployment model, approximately 200 airports still require some

form of in-line system. As a result of the lack of funding for installation of in-line EDS systems, airports are using a variety of funding mechanisms, alone sometimes and also in combination, to pay

for in-line system installation. They use airport improvement

funds, AIP money, other transactional agreements, OTAs, and with

the TSA, sometimes with their own revenue and sometimes using

passenger facility charges, or PFCs.

This funding dilemma has further complicated the already

hodgepodge EDS system TSA has put in place. I have said it before, and I am sure I will say it again, but TSA and OMB must

think outside the box and use modern financing tools available to

the Federal Government to leverage scarce dollars.

But the lack of progress is also attributable to the amount of

time it takes for TSA to certify, test, to conduct a pilot or demonstration project and also to deploy some of these systems. Despite the fact that a number of manufacturers are developing alternative technologies to complement the existing EDS systems, and

they are also experimenting with different system configurations,

progress in testing and deploying the innovations is frustrating and

any real progress made in research and development also lags be-
4

hind. We are going to hear, I have hauled in the folks where there

was a Reveal demo today, and we are going to hear a great example of a disaster in that corridor.

For instance, in September 2004, as part of Phase I of the Manhattan II project, TSA awarded ten cooperative agreements totaling

approximately $5.2 million for the development of new technologies. Phase I ended in December of 2005, yet after six months,

TSA has not provided any funding for Phase II.

Our research and development also to complete this certification

process, unfortunately is just as tedious. I am told that TSA technology certification process can take up to nine months to complete.

TSA also seems to get bogged down in piloting and demoing technology, but then fails to develop and issue minimum technology

standards that can be utilized by the security and aviation industries. TSA’s oversight and follow-through on some of their pilot programs has been absolutely disappointing.

Today, as I said, we are going to hear about the disastrous Reveal pilot program at Newark Liberty International Airport. My

goal in this is to review and analyze what went wrong at Newark.

I hope that this will provide a template for future TSA pilot programs to not repeat the same mistakes.

The bottom line is, our Nation’s aviation security system must

become smarter and more efficient. We absolutely must make better use of limited resources and come up with a more efficient and

speedy process for testing and certifying and deploying new security technologies. Continuing to follow the slow, jumbled and disconnected path taken by TSA in the last four and a half years is

no longer acceptable. It is providing a real drain on the system and

to the aviation industry. A patchwork approach will inevitably lead

to weaknesses in the system and possibly even disaster.

Long comments, but background necessary for this Subcommittee

and this hearing. I am pleased to yield at this time to the Ranking

Member.

Mr. COSTELLO. Mr. Chairman, thank you. And I thank you for

calling this hearing today.

I do have a lengthy statement that I will submit for the record.

We have two panels of witnesses here and I look froward to hearing from them. There are a number of problems associated with the

deployment of the various systems at our airports. Part of, I think

the blame can be shared by TSA, part of it can be shared by the

Administration, part of it can be shared by the Congress. Because

we often times talk about security priorities, but do not follow up

with the appropriation in order to purchase the equipment that is

needed and the personnel in order to carry out the job.

But with that, I will submit my statement for the record and

yield at this time the balance of my time for an opening statement

to Mr. Pascrell.

Mr. PASCRELL. Thank you, Mr. Chairman, Mr. Ranking Member.

I appreciate your decision to hold a hearing on the status of the

explosive detection systems for baggage at our Nation’s airports.

This issue has been of great concern, as you know, at Newark Liberty International Airport in New Jersey. The initial deployment

EDS machines are set up throughout lobbies and other common

areas in three terminals at Newark Airport. This has created,
5

charitably, an awkward system. It hurts efficiency at the airport,

the safety of the travelers in the lobbies. It is not the best way to

go about screening baggage.

However, Newark Airport has made the best of these initial circumstances. Given the limited physical capacity for expansion, the

airport has worked to improve the baggage screening system with

the best technology available. It is generally agreed that in-line

EDS machines are the gold standard for screening. However, to

retrofit many of the Nation’s older airports costs in the neighborhood of between $100 million and $200 million apiece. In fact, installation of an integrated, in-line EDS would require extensive terminal modifications. Some do not have the physical capacity nor

the infrastructure to support the changes.

So far, the Federal Government has not provided appropriate resources to facilitate in-line system implementation. It would seem

that this is against our own self-interest. According to the GAO, if

TSA were to fund in-line EDS systems at the nine airports with

which it has letters of intent agreements, the Federal Government

would recover its initial investment in just over one year and save

over $1.26 billion every seven years. The GAO has stated that very

clearly. This is an investor’s dream. But with $4 billion to $6 billion in

needs remaining, $435 million a year will not cut it. You can’t do

it. So we are only kidding ourselves. Why? We have not made this

a priority. Why? There are other priorities. Why? It is important

that Barry Bonds gets a $72,000 tax cut, and you know what I am

talking about.

You may shrug all you want, that is a fact of life. When everything is a priority, nothing is a priority. If this is going to be a priority, if we want to protect the customers, then we have to invest

the money.

Clearly, there is room for improvement. I am positive that this

Committee will continue to be a strong advocate of providing our

airports with the resources they need. I hope the appropriate officials here today are listening.

However, many airports have made the decision to move ahead

on their own, to better the inefficient and precarious hodgepodge

system created by the original placement of the EDS machines. In

Newark, the airport has gone about purchasing and installing 23

new EDS machines to form a system integrated with the checked

baggage system. Last year, as part of this upgrade, Newark participated in a TSA pilot program using the new technology. In the end,

this program was not successful. The reasons remain unclear.

I look forward to a vigorous discussion with our panel members

about the unfortunate outcome of this program. This is particularly

frustrating, Mr. Chairman, and I thank the Ranking Member for

yielding.

Mr. MICA. Thank you. And I hope you stay, Mr. Pascrell, to hear

about the whole Newark fiasco. Because it is not always how much

money we spend, it is how we spend it. Newark was to be our premier demonstration of new technology. That is one reason why I

asked them all to come here, because I have heard five or six different stories. And we are going to hear the whole truth and nothing but the truth today.
6

Mr. Ehlers.

Mr. EHLERS. Thank you. I will try to speak the truth and nothing

but the truth.

Thank you for having this hearing. It is a very important issue.

And putting it in the broader context, I think we have done rather

well overall across this Nation in dealing with aviation security.

That doesn’t mean it is good. It is just that we have so many good

targets in this Nation, because we live in a free and open society,

that we are never going to be able to reduce all the threats. We

can just try to handle them as best we can and try to prioritize.

I appreciate the work that has been done by all Government agencies trying to do that.

I am continually impressed, since I fly at least four flight segments a week, at how many, and I tend to have a devious mind,

I might add, a devious scientific mind. I am continually surprised

at how many weaknesses I identify in the system and how easily

I could devise ways to bypass the system and get contraband material on board. I will not share that with you or with anyone else.

It is bad enough having a devious mind without sharing it.

But it just illustrates the extent of the problem. We cannot make

aviation perfectly safe. We cannot make our ports perfectly safe.

But what we can do is make it difficult for anyone to do wrong.

And that is what I think we are beginning to do effectively. We

have a long way to go on the ports. We have a good start in aviation.

But having said that, then we get down to the Chairman’s concerns and my concerns as well. Are we doing it effectively, are we

doing it cost-effectively? And that is something where I think we

have fallen down in many areas. So I look forward with interest

to the testimony today.

With that I yield back.

Mr. MICA. I thank the gentleman.

Mr. Honda.

Mr. HONDA. Thank you, Mr. Chairman and Ranking Member

Costello, for scheduling this hearing, which is of enormous importance to Mineta San Jose International Airport and airports all

across this Country. It is good to see you, Dr. Null. I just want to

let you know parenthetically that TSA leadership at the airport is

great.

Properly securing our Nation’s airports is wrought with challenges that can only be addressed with adequate funding, innovative thinking and a strong Federal and local partnership. Following

the terrorist attacks of September 11th, I convened a blue ribbon

task force on aviation security and technology, comprised of aviation experts and also Silicon Valley executives. This task force

called together the brightest minds of Silicon Valley, the heart of

our technology revolution, to brainstorm about the future of aviation security.

In 2002, the task force issued a final report. Some of the recommendations in the report were taken up by TSA as pilot programs, including the use of GPS to track vehicles on the tarmac.

Other recommendations unfortunately have not been pursued for

reasons that I can’t understand at this time.
7

The task force placed great importance on providing strong security in a traveler-friendly manner. I am concerned that TSA, for financial or other management reasons, has not taken the same approach. Dr. Null is very familiar with San Jose Airport, and the

great strides the airport has made to improve the baggage screening process. That task has not been easy at at least one of the airport’s terminals, which was constructed to address the capacity

concerns of pre–9/11.

The airport and the city of San Jose have undertaken the task

of dramatically renovating and expanding the airport. They have

added an international arrival terminal and are in the process of

improving existing terminals. San Jose’s airport’s efforts have managed to keep the security process out of the terminal lobbies, resulting in a more efficient flow of the pedestrian traffic.

One of the airport’s top priorities will be secure Federal support

for an on-line screening system to improve their efficiency and

eliminate double handling of baggage. I understand that San Jose

is one of the top 24 airports in the Country being considered for

fiscal year 2007 funding to construct their system. I hope that TSA

will continue to work cooperative with San Jose airport as they

move forward into the construction phase of the new EDS system.

I thank you, Mr. Chairman, for this opportunity, and I yield

back.

Mr. MICA. Thank you. Are there any other opening statements?

OK. This morning I am going to swear in our witnesses. Would

you stand, please, raise your right hand.

[Witnesses sworn.]

Mr. MICA. Let’s for the record indicate that all the witnesses answered in the affirmative.

We take this matter pretty seriously. We don’t have the representative of Continental Airlines here. We do have a written

statement by Hershel Kamen. I ask unanimous consent that that

entire statement be entered into the record by Mr. Costello. Without objection, so ordered.

And we will also call that witness in, swear that witness under

oath and question that witness about, again, one of the pending

oversight issues that we are going to address.

With that, we have our first two witnesses. One is Mr. Randy

Null, he is the Assistant Administrator for Operational Process and

Technology of TSA. And then we have Ms. Cathleen A. Berrick, she

is the Director of Homeland Security and Justice Issues at the U.S.

Government Accountability Office.

We will hear first from Randy Null, with TSA. Welcome, and you

are recognized.
8

TESTIMONY OF RANDY NULL, ASSISTANT ADMINISTRATOR

FOR OPERATIONAL PROCESS AND TECHNOLOGY, TRANSPORTATION SECURITY ADMINISTRATION; CATHLEEN A.

BERRICK, DIRECTOR, HOMELAND SECURITY AND JUSTICE

ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE; MICHAEL

ELLENBOGEN, CHIEF EXECUTIVE OFFICER, REVEAL IMAGING TECHNOLOGIES, INC.; WILLIAM W. BRITZ, PROJECT

MANAGER, AVIATION SECURITY SYSTEMS, RAYTHEON TECHNICAL SERVICES COMPANY, LLC; SUSAN M. BAER, GENERAL

MANAGER, NEWARK LIBERTY INTERNATIONAL AIRPORT

Mr. NULL. Good morning, Mr. Chairman, Congressman Costello

and distinguished members of the Subcommittee. I am pleased to

have the opportunity to appear before you today on behalf of the

Transportation Security Administration, to provide you with an update on our electronic baggage screening program.

Since the initial deployment of TSA’s checked baggage screening

technologies, we have pushed hard for innovation and investment

intended to dramatically improve the system. Today, 51 airports

are either operational or deploying some form of advanced in-line

baggage screening systems. Additionally, TSA has certified two

new explosive detection systems and is testing others that if certified, will provide additional capabilities.

We continue to search for answers outside the box and ways to

better utilize existing technology and work in partnership with airports and airlines to address pressing needs, take advantage of special opportunities and develop innovative, cost-effective solutions

appropriate for unique operating circumstances. We have learned

valuable lessons in the last three years about the operational nature of advanced in-line explosive screening and adapted. Research

into both short-term and long-term technological solutions continues. Several vendors are developing equipment upgrades to increase the life span and efficiency of our current equipment.

Our long-term development strategy places an emphasis on developing EDS technologies that can process greater than 900 bags

per hour and employ revolutionary threat detection concepts to

lower false alarm rates. Laboratory results thus far indicate that

those are indeed achievable goals.

TSA continues to take action on several fronts to ensure that optimal sufficient screening solutions are provided to airports.

Through eight letters of intent, we have collaborated closely with

stakeholders at nine airports to develop, design and install advanced in-line baggage screening systems. Our funding commitment to the nine LOI airports runs through the end of fiscal year

2007, completing a Federal investment of almost $1 billion for facility modifications.

Furthermore, we have developed and relocated equipment to increase screening capacity, reduce worker injuries and increase

screening efficiency. Finally, when airport operators or tenants are

able to fund a significant portion of the expense necessary to build

an in-line system, either during new construction or renovation,

TSA has offered financial assistance through the use of other transactional agreements for smaller projects. Under these efforts, the

51 airports are either operational or are deploying some type of in-
9

line baggage screening system throughout an entire airport or on

a terminal basis.

In February of 2006, we delivered to the Congress a strategic

planning framework for the checked baggage screening program

that has already begun to influence our investment and deployment decisions. This framework details TSA’s long-term planning

philosophy for the development and implementation of optimal baggage screening solutions at the Nation’s top 250 airports. The goals

of the plan are straightforward: reduce total life cycle costs by deploying optimized and customized screening solutions; expand the

amount of baggage screened by EDS technology; develop and publish planning and design guidelines for in-line systems, incorporating lessons learned; accelerate and leverage next generation technology matched to those best practice designs; and work actively

with stakeholders to collaboratively manage and oversee the design

of optimally scaled screening systems.

Under this framework, TSA has prioritized airports based upon

projected passenger growth and estimates of peak capacity needs.

Using these estimates, we can make a general determination of the

optimal screening solution for each airport, taking into account reasonable assumptions of development in EDS technologies. These estimates have largely been completed, although they must continually be updated to reflect current operational conditions.

Use of these estimates is beginning to provide flexibility to deploy optimized solutions to airports based upon priority, with the

understanding that changes in operational conditions, as well as

increased stakeholder participation at a particular airport may

alter that listing.

A large component of the strategic plan is a specialized study on

alternative financing solutions. This cost sharing and investment

study required by the Intelligence Reform and Terrorism Prevention Act of 2004, and developed in coordination with aviation industry stakeholders, will be completed in the summer of 2006.

As you are aware, authorization of the Aviation Security Capital

Fund created by Vision 100, Century of Aviation Reauthorization

Act, expires in fiscal year 2007. The funds provided that the first

$250 million collected in passenger security fees is used to fund airport security improvement projects, to include checked baggage

screening projects. We support a three year extension of the fund

through fiscal year 2010, with the proviso that the allocation requirements contained in the fund and which are not specifically

tied to aviation security needs are eliminated.

Finally, as you are aware, the 100 days between Memorial Day

and Labor Day represents the busiest time at airports across the

Country. TSA expects to screen more than 200 million passengers

and their bags during this time. In light of this increase in passenger flow, TSA has taken aggressive actions to manage airport

conditions this summer by increasing our staffing through local hiring initiatives, deploying members of our national screener force to

support airports with passenger volume challenges and reconfiguring screening lanes at some airports to speed passenger floor.

Peak wait times have remained consistent with the average peak

wait times between 15 and 20 minutes and only sporadic instances

of wait times over 30 minutes. TSA is fully prepared for the sum-
10

mer travel season, and we are working with our industry partners

to ensure that the people have a positive travel experience.

Thank you for the opportunity to testify today, and I will be

pleased to respond to any questions.

Mr. MICA. We will hold questions and we will hear next from

Cathleen Berrick. She is with the Government Accountability Office. Welcome, and you are recognized.

Ms. BERRICK. Thank you, Mr. Chairman, Congressman Costello,

and members of the Subcommittee, for inviting GAO to discuss

TSA’s progress in planning for and deploying optimal checked baggage screening solutions at U.S. airports, including in-line baggage

screening systems.

The benefits of in-line systems are widely known and include a

significant reduction in transportation security officers, or screeners, needed to operate screening equipment, increased baggage

throughput, increased security and reductions in on the job injuries. In-line systems can also reduce the need for TSA to use alternative screening procedures, which involve security trade-offs and

are sometimes used when large volumes of bags or passenger

crowds create security vulnerabilities.

With the issuance of its strategic planning framework in February of this year, TSA has begun to systematically plan for the

optimal deployment of checked baggage screening systems, as we

previously recommended. In this framework, TSA identified the optimal screening solution for 250 airports with the highest checked

baggage volume. These screening solutions vary by airport and

range from fully automated, high speed in-line systems to standalone EDS and ETD equipment.

TSA also prioritized the top 25 airports that should first receive

Federal funding for in-line systems. TSA reported that if these airports do not receive in-line systems, they will require additional

screening equipment to be placed in airport lobbies and additional

screeners in order to continue to electronically screen 100 percent

of checked baggage.

Regarding potential savings from the installation of in-line systems, we reported in March 2005 that TSA estimated it could save

about $1.3 billion over seven years for nine airports that were constructing in-line systems. Since that time, TSA has determined

that many of the initial in-line systems have not produced level

screener savings sufficient to offset the up-front capital cost of constructing the systems. TSA believes that the keys to reducing future costs are establishing best practice design guidelines for inline systems and using newer EDS technology, both of which

should be available in the near-term.

Currently, TSA estimates that it can achieve a savings of about

$4.7 billion over 20 years for the 250 airports reviewed by installing optimal screening solutions, to include in-line systems. TSA

further estimates that it will cost $22.4 billion to install these solutions over this time frame. As you know, despite the benefits of inline systems, resources have not been made available to fund these

systems on a large-scale basis. TSA reported that under current investment levels, installation of the optimal screening solutions at

airports will not be completed until the year 2024.
11

TSA further reported that unless investment is accelerated, a

substantial funding requirement for replacing old EDS machines

will compete with funding needs for new in-line systems in about

eight to nine years. TSA is currently collaborating with airport operators, airlines and other key stakeholders, to identify funding

and cost-sharing strategies for the installation of in-line systems.

They expect to complete this effort by the fall of 2006.

Some of the financing options being considered include equipment leasing, sharing and savings from in-line systems with airports, enhancing the eligibility of passenger facility charges and tax

credit bonds. Due to the substantial efficiency and security benefits

that can be achieved, and the demands expected to be placed on existing screening systems due to protected airline traffic growth,

continuing partnerships between TSA and airport stakeholders will

be critical for the ultimate deployment of optimal screening solutions.

Mr. Chairman, this concludes my opening statement, and I will

be happy to respond to any questions.

Mr. MICA. OK. Here is what we are going to do. I have these

three other panelists with the Newark situation. We have heard

from TSA, and you have given us an update on what you are doing,

and GAO has reviewed what they are doing.

Part of the reason for this hearing was what we uncovered as the

disaster with our demonstration project, our pilot project at Newark. We have been buying this equipment, which is pretty expensive, L–3 or InVision equipment, at almost a million dollars a copy.

It is the size of a Volkswagen. Most of the members of the panel

have seen it. And it is expensive to integrate it into these in-line

systems, and Congress has balked at funding it.

So for several years we have tried to encourage certification, getting other competitors into bringing it into competition and lowering the cost. One company was Reveal, that spent at least a year,

I guess, getting certified, maybe longer, through the certification

process. Finally that was done a couple of years ago. They got their

certification.

We wanted to deploy it, because it was about a quarter of the

size, a quarter of the cost. A decision was made to acquire that.

Some of the airline industry and some of the large airports said

this was a solution, and it was important that we try installing it

at large airports, maybe a medium size airport in a smaller, independent use of the equipment, standalone use of the equipment.

One of the great hopes was to try it at Newark Airport, which is

one of our highest traffic areas. We were encouraged by Continental and others that this would be a solution.

The gentleman, we have one gentleman from Reveal, Michael

Ellenbogen, and then we have Mr. William Britz, with Raytheon.

Now, Reveal provided the equipment, Raytheon was hired by TSA

to do the installation of the system. And then we have Susan Baer,

with the airport. And the airport agreed to participate in this

project.

Now, why this is so important is again, because this was going

to be the hope of putting this less costly equipment in place. I

found out by accident that something had gone awry a few months

ago, went up and looked at it, had staff go up and look at it. Can
12

we put a slide up and show, this is what the vendor proposed. If

you see the counters, I guess the counters would be at the very bottom. The idea here would be to have very little lifting from the

counter where the bag is checked in, be put on a conveyor, and

then the three white slashes there are the Reveal machines. You

see one Reveal machine in a horizontal position.

So the agent would merely take it, it would get set by the passenger, actually down there, it would go on a conveyor belt, and

then the black lines are additional conveyor belts. This is a less

costly configuration than going in and gutting the insides of the

airport, putting these million dollar copies in there. This may seem

like a small point to some folks, but this is very important, that

we see how this works in larger airports, again, looking at less

cost. So this is what the vendor, I am told, recommended, the installation.

Can you go to the next slide? This is what we ended up at. This

isn’t a good slide, because it doesn’t show, if you see these two sort

of, they look like little torches here, are the conveyor belts, and actually, the counters are out in front. So the conveyor belts don’t

connect with the counters, and you have another piece of equipment off to the left. There was originally supposed to be five Reveal

pieces of equipment. We ended up with three.

What you don’t see off to the right is they ended up putting two

InVision 5500’s, the big equipment, off to the right in the configuration. Those are almost million dollar copies. So this is nothing

like the Reveal, the producer of the equipment envisioned, nothing

like Congress envisioned. It is an absolute disaster, in my opinion,

because we have no airport now with high volume showing how

this could possibly work.

It took about nine months to a year to get this in place. We will

hear exactly that period of time. And whatever money was spent.

So we have got the equipment certified, we spent this time on a

demo project that doesn’t demonstrate anything. And I got different

answers from different people. That is why I have asked these folks

to come in today.

Finally, just show the configuration. This is the way it is in the

lobby. Again, it makes me absolutely flip out when I see it, because

you see you actually have to lift up the bags and put them into the

machine. None of the equipment is put together, connected together, integrated. There is no integration whatsoever. And there

was supposed to be one spot for resolution in the original. That

would be where the machines are connected and networked together, and one spot for resolution where you would have one or

two people reading.

Instead, this requires one person to lift the bag and another one

to do resolution independent. I mean, again, I just completely lost

it when I saw this. This is just an unbelievable waste of time and

money. It is an incredible setback for us, nationally. This is an incredible setback for us nationally, because we have no demonstration of this technology and we are three years into the thing. It just

drives me out of my gourd.

So I sent staff up there, I have been up there, when I heard

about it. And we have had Homeland Security staff up there.
13

So this today is to figure out what went wrong, pardon my phraseology. But you can tell, this is one of the biggest frustrations, biggest fiascos I have ever seen. We need to find out what went

wrong.

So that lays the groundwork for the members on the panel, sorry

for taking this time, but I had to get everybody to understand the

importance of this, and then the mess that you see at Newark

International Airport. Did you want to comment at all? Then I am

going to hear from these three witnesses and we will get Continental’s folks later.

Mr. COSTELLO. Mr. Chairman, I would agree that it is a mess.

But I think there are reasons why that it is, and I——

Mr. MICA. We want to hear that.

Mr. COSTELLO.—have questions for our witnesses, not only I

think is there blame again to be shared by TSA, but I think by

Raytheon and by Reveal as well. I question really if this equipment

was the appropriate equipment to be placed at this facility, at this

airport. There are those who say that it probably will not work at

hub airports, but at mid-size airports is probably where it is best,

the CT–80 machines are best used.

And there is also some question about TSA may have in the contractual agreement that was executed by Reveal, maybe the expectations were set too high. Because we will hear from hopefully the

people at Reveal what they advertised the capacity of the CT–80,

how many bags per hour that they can throughput. I understand

the web site says that they can throughput somewhere around 100

bags per hour, where the contract required them to do 120 bags per

hour. There is a question, too, if the location at the airport, if there

was enough space physically to put five of these machines, physically in the space that was designated.

So there are a number of questions, and there is a lot of—I don’t

want members who may have to leave early to think, well, it is just

TSA’s fault or it is Raytheon’s fault or it is Reveal’s fault. It seems

to me that there is enough blame to go around. And we will get

into that when we get into questions.

Mr. MICA. Thank you for those excellent comments. Again, with

that introduction, I want to hear from Michael Ellenbogen, President and CEO from Reveal. You have heard some of the questions

raised here, all three witnesses. So we will hear from you first and

then we will go to the other witnesses. Thank you.

Mr. ELLENBOGEN. Mr. Chairman, you are not an easy act to follow, sir.

Members of the Committee, thank you very much for inviting me

to testify today. My name is Michael Ellenbogen, I am the founder

and President of Reveal Imaging Technologies.

Reveal is a three and a half year old, privately financed company. We designed the CT–80 to offer flexible options for checked

baggage screening. TSA funded much of the CT–80 development

and certified the system in December of 2004.

TSA’s certification is focused on detection and false alarm rates.

Newly developed systems, upgrades, features, et cetera, are then

tested by the TSA through their pilot program. The goal of the 30

day pilot program was to verify the CT–80’s operational performance, reliability, real world throughput and false alarm rates, as I
14

understand it. TSA identified three different airports—Newark,

JFK, and Gulfport, Biloxi, Mississippi—to test the CT–80’s operational characteristics after it was certified.

Eight systems were installed and tested last summer. And these

pilots were successful in demonstrating that the CT–80 is able to

operate reliably in both low and high throughput environments.

The successful pilot resulted in a procurement contract and an

order for 73 of the CT–80 systems.

Mr. Chairman, the CT–80 offers a variety of flexible installation

options for checked baggage screening at airports of different sizes.

We are actively working with TSA to demonstrate and deploy the

most cost-effective solutions possible, and I look forward to answering any questions you might have. Thank you.

Mr. MICA. Thank you. We will hear now from Mr. Britz.

Mr. BRITZ. Thank you, Mr. Chairman and members of the Subcommittee. My name is Bill Britz. I am a project manager for the

Aviation Security Systems for Raytheon Technical Services Company, LLC, who I will refer to in the rest of my document as RTSC.

RTSC is a solely-owned subsidiary of Raytheon Company.

Thank you for giving me the opportunity of testifying before the

Subcommittee today on RTSC’s role in the Reveal pilot project at

Newark International Airport. In the interest of time, the testimony I will give you today is an abridged version of the written

testimony previously submitted to the Subcommittee.

Under a competitive contract, RTSC provided a broad range of

engineering services, including project management, engineering

design, site preparation, installation supervision and data collection and analysis. Under my leadership, RTSC performed all these

services for the Reveal pilot project at Newark International Airport.

Stakeholders in the project included TSA, the Port Authority of

New York and New Jersey, Continental Airlines, Reveal Imaging

and RTSC. The goal of the project was to verify the capabilities of

integrating the Reveal machines, CT–80’s, into a baggage handling

system in a live airport environment. Up to this point, the Reveal

machines had been tested in two other pilot sites, Gulfport and

JFK, but only in a standalone configuration.

In the Reveal pilot sites, a trade-off was made on the number of

machines to test. Three machines were chosen because of the cost

and space constraints at Newark. Two machines of the three were

configured in an exit-integrated configuration and one in a more

expensive fully integrated configuration. The fully integrated configuration added an automatic storage conveyor, an in-feed conveyor, so that the Continental Airlines ticket agents could place

several bags on the storage conveyor at one time and the bags

could automatically feed into the machine when the machine was

ready to accept them. The addition of the storage conveyor increased the time the ticket agent could spend helping passengers

in check-in.

During the design phase, the pilot project, under other configurations were considered, including ones proposed by Reveal Imaging

and Continental Airlines. Ultimately the configurations that were

chosen for the project were those that allowed the project to meet

the goals at the lowest cost installation-wise.
15

The Reveal machines were installed around August 2005 and

were ready for use before the conveyors and control systems needed

for the integrated configurations were available. When this situation became clear, TSA decided to add a preliminary test phase to

the project in which the Reveal machines were first tested in a

standalone configuration. The standalone configuration ran from

August to October 2005, which included about 2,600 bags that were

scanned at the time. The integrated configuration ran from October

to November 2005, during which time 20,000 bags were scanned.

One concern that arose during the project was getting the Continental ticket agents to use the Reveal machines. Using the machines required the agents to take the additional responsibility of

moving and lifting the bags to the machines. Prior to the pilot

project, passengers were responsible for taking their bags over to

the large explosion detection systems, the CT–5500’s, located adjacent to ticket counters.

In summary, the Reveal project at Newark International Airport

was successful in validating the exit and fully integrated configurations in an operational environment, which until this point had not

been tested at any other Reveal pilot test sites. This is a significant

step forward in demonstrating the capabilities of the Reveal machine.

Mr. Chairman, I would like to thank the Subcommittee and you

for giving me the opportunity to testify. I would be pleased to answer any questions you may have or your members may have.

Thank you very much.

Mr. MICA. Thank you. And we will hear from our other witness,

which is Susan Baer with Newark Airport. You are welcome and

recognized.

Ms. BAER. Thank you. Chairman Mica, Congressman Pascrell,

and the other distinguished members of the Subcommittee, good

morning. I am Susan Baer, General Manager of Newark Liberty

International and Teterboro Airports for the Port Authority of New

York and New Jersey.

On behalf of the Port Authority, I would like to thank you for

calling this hearing and giving me the opportunity to testify today.

As an aside, thank you, Congressman Pascrell, for your comments

recognizing the hard work that we have done in cooperation with

the TSA and the airlines at Newark to improve our overall baggage

screening from a rocky beginning. It has certainly gotten much,

much better.

My comments will be brief, and I request that my entire statement be read into the record.

The Port Authority of New York and New Jersey is a bi-State

public authority that was created by our States with the consent

of Congress. Its mission on behalf of the States of New York and

New Jersey is to identify any critical transportation and infrastructure needs of the bi-State region and provide access to the rest of

the Nation and the world.

The role of the agency’s aviation department is to run four airports that are critical to the Nation’s trade, travel, commerce and

tourism: the rapidly growing global gateway, JFK; a major domestic and international hub, Newark Liberty International; the premier business airport, LaGuardia; and a vital corporate and gen-
16

eral aviation reliever, Teterboro; as well as an urban helipad, the

downtown Manhattan Heliport.

These facilities handle aircraft as diverse as a Piper Cub, a Sikorsky S–76, and the Boeing 747. They were used by nearly 100

million passengers in 2005, an increase of over 6 percent, making

our airport system the busiest in the Nation.

Newark is now leading this growth with almost 15 percent more

passengers using our airport so far this year. This activity produces

annually an astounding $62 billion in economic activity and directly and indirectly supports more than 375,000 jobs in the New

York-New Jersey metropolitan region.

The Port Authority and the TSA are joined together in a common

pursuit: exploring new territory and meeting difficult challenges to

provide the best possible security at our airports. Like all partnerships, to be successful, the parties need to agree on objectives,

share with each other our concerns and provide mutual support. To

cultivate and sustain our good relations with the TSA at New York

Liberty, as well as our other airports, we hold weekly conference

calls, conduct bi-weekly inspections, organize tabletop problem solving exercise and cross-train TSA and Port Authority staff in an effort to continue to improve communications and cooperation.

Now, as operator of one of the Nation’s busiest airport systems,

it is vital to us that the aviation screening system be responsive

to our increasing passenger and cargo traffic. It needs to be effective, customer-focused, performance-driven, risk-based and be given

adequate resources to fulfill its mission. We are concerned that at

a time when our passenger traffic is on the rise, TSA staffing strategies are still subject to a cap. Currently, the hard-working TSA

screeners at Newark are screening 40,000 bags per day.

The TSA continues to face enormous physical capacity challenges

at the airports, as passenger traffic rose rapidly. Some of our older

terminals, like those at the airports across the Country, there is

often a lack of adequate space for checkpoint and baggage screening. It is difficult and expensive to reconfigure existing facilities,

and sometimes it is just not possible to add security lanes without

undertaking expensive capital construction, a project that neither

the financially ailing airline industry nor we are well equipped to

undertake.

We also need to reconfigure bag rooms to provide for the installation of equipment that is currently located and still located in some

of our passenger terminal lobbies. We are doing just that in the

terminal we run at Newark with in-line screening in place by 2008

in Terminal B. But we need not look just to physical expansions

but also to embracing technology to achieve the same or better results. We strongly support the implementation of the Department

of Homeland Security Office of the Inspector General March 2005

audit findings that call for the greater deployment of technology.

As has been noted, Newark has served as the pilot airport, or one

of the pilot airports, for the Reveal baggage machines. The Port

Authority was not a partner in that pilot, but I know others on this

panel can speak to this project and its results. We were eager for

this test, and many others, because we firmly believe that the TSA

must test equipment at very busy O&D airports like Newark, to
17

ensure that new technology is up to the rigors of a system that is

at capacity much of the day and is expanding quickly.

The Port Authority, as I have noted, is committed to serving as

the DHS-TSA test bed for technology to enhance security. We have

participated in tests of biometric access control, vehicle tracking,

video situational awareness, radio frequency identification technology, cargo tracking, cargo radiation detection, ASDE–3 radar

use for perimeter surveillance and many more. We urge the Government’s continued investment in pilots of promising technology,

and ask the TSA to facilitate the exchange of information among

airports about the results and lessons learned from pilot tests.

Some technologies that can have demonstrable benefits to securing our airports are not so new, and it confounds us that resources

have not been made available. Our experience with costly terminal

evacuations due to breaches of security screening points has convinced us that closed circuit television surveillance of both the

screening points and the baggage rooms is a necessity. The costs

of terminal evacuations or delayed flights are enormous. One of the

ways to resolve issues at checkpoints is to go to the video tape. But

sadly, the TSA has not installed such surveillance, nor has it been

planned for the future.

We at the Port Authority are committed to CCTV and it is a commitment that is shared by our local TSA staff. As a result, the Port

Authority has begun to dedicate some of our capital resources to

begin installation of cameras in areas where we think it is appropriate.

Again, I would like to thank the Committee for this opportunity

to share some of our views. We look forward to working with the

Committee in the future on our shared goal of effective, customerfocused and performance driven risk-based security.

Mr. MICA. We want to thank you, and I want to thank the other

witnesses.

We have three votes. We will be back at 11:30, so take a breather. This Subcommittee will stand in recess until that time.

[Recess.]

Mr. MICA. The Subcommittee will come back to order.

We have heard now from all the panelists. We can get into questions. I will start with a few.

Let’s start with Reveal. I want to concentrate some on the Newark situation and then I have some more general questions.

Reveal, how long did it take to get your equipment certified?

Mr. ELLENBOGEN. The process took about nine months.

Mr. MICA. About nine months. And I have you were certified in

December of 2004, approximately?

Mr. ELLENBOGEN. Correct.

Mr. MICA. Did you all come up with the initial configuration, recommended configuration for the Newark installation?

Mr. ELLENBOGEN. I believe we may have.

Mr. MICA. This is your configuration here?

Mr. ELLENBOGEN. I believe so.

Mr. MICA. As I see it, it was to be networked and there was to

be one point of resolution, is that correct?

Mr. ELLENBOGEN. That was the intention of the design, yes.
18

Mr. MICA. OK. Now, you have been up to Newark and seen, of

course, the way it is installed. It doesn’t look anything like this.

And I talked to your folks and they said one of the reasons that

it doesn’t look like this is because TSA only allowed it three machines, so it is impossible to have this configuration. So that was

the first decision to influence the configuration we ended up with,

is that correct?

Mr. ELLENBOGEN. I know TSA allocated three machines. I believe

their intention, though, was really to test the operation of the

equipment as opposed to this particular configuration of the equipment.

Mr. MICA. But it would be impossible with three machines to do

this configuration. You did not do the installation, did you?

Mr. ELLENBOGEN. We did not.

Mr. MICA. So TSA did the installation, and Mr. Britz, you did the

installation. You were just, when you came, or Raytheon came into

this, there was a three-unit decision previously made, is that correct?

Mr. BRITZ. That is correct.

Mr. MICA. The space that they have in your first proposal probably isn’t any larger, I have been there, than what the space they

are now using with three Reveal pieces of equipment and two

InVision 5500, is that—I mean, the footprint is about the same,

isn’t it?

Mr. BRITZ. I will answer that. The CTX5500’s were put in over

a year ago, prior to the Reveal machines. So they were running as

the primary baggage screening machine.

Mr. MICA. That wasn’t my question. My question is the footprint

would be about the same as if we had five of these Reveals.

Mr. BRITZ. The five Reveal machines, from our point of view,

wouldn’t fit in this constraint, in the space there, as well as the

cost consideration.

Mr. MICA. But again, I could put this configuration, the original

recommended, in the same footprint that you have now, with the

two 5500’s?

Mr. BRITZ. I—you can get five machines in there, but there are

requirements that the five machines won’t fit in there.

Mr. MICA. You had two 5500’s sitting out on the right side. There

are three, now, you don’t see them here, do you?

Mr. BRITZ. They are in front of the ticket counter. They are not

even behind the ticket counters. They are way out in front.

Mr. MICA. They are off to this side, it would be in front of us.

But they take up a lot of space. They are at least three times as

big as Reveal, aren’t they, two, three times?

Mr. ELLENBOGEN. Approximately.

Mr. MICA. OK. So my point is, again, if you have 5500’s that are

taking up as much space, so we never got the configuration, TSA,

do you want to respond to why? Well, first of all, again, from our

standpoint, we have no place in the Country now where we have

a major airport, where we have Reveal installed in an integrated

fashion and to demonstrate its capability of this type of proposed

use. Is that correct, Mr. Null?
19

Mr. NULL. That is correct. The current installations are the Newark installation and JFK installation, which essentially integrate

the back end of the machine but not the front end of the machine.

Mr. MICA. We also had Continental Airlines, who said that this

was going to be a model, too, of using this newer, less costly—they

sat right at that table right in that area there, they are not here

today, and said that this was going to be tried at a larger airport,

in fact, one of their biggest hubs, and it would result in less cost,

less personnel.

With this configuration, Mr. Ellenbogen, the way I saw it, you

have to have one person to do the resolution and then one person

to handle and feed the bags, is that correct? Except at one point.

There is only one conveyor that is connected to the machine.

Mr. ELLENBOGEN. I believe that is the way TSA is operating

them today.

Mr. MICA. So this configuration requires two people at each machine. It was anticipated that actually the baggage handler and

possibly one person could serve a couple of the lanes, and making

certain that the, I said lanes, the conveyor belts, to make sure that

the bags went incorrectly. So you have to use twice as many personnel in this configuration, is that right, Mr. Ellenbogen?

Mr. ELLENBOGEN. I am not familiar enough with the installation

requirements.

Mr. MICA. Well, I am telling you, that is what they told me it

requires.

Mr. BRITZ. The number of resolution people required by how

many bags are alarmed. Normally in design, that is normally between 20 and 30 percent of the bags that we have to assume are

alarms. That drives how many people are in the resolution area.

If you have that many machines, if you have five machines, you

will have a lot more than one person doing resolution.

Mr. MICA. No question about it. But resolution, TSA resolution

on this was not at each machine. It obviously takes more at each

one with each machine. If we had had five and they did it in a halfbaked configuration, it would take five people, right? If it isn’t

networked and remote? And we do have that in-line, we have remote resolution, do we not?

Mr. NULL. We have remote resolution for the larger machines

today, the multi-plexing. This was a year ago when this went in,

and the reality is that we did not have the multi-plexing capability

in place at that point in time, which would have required five

TSOs, one at each of the machines, for resolution at that point.

Mr. MICA. So is your equipment, Mr. Costello said your equipment doesn’t have a high enough throughput rate. But with the

configuration and conveyor from the counter to the machine, is it

possible for an agent to do more than the machine’s capability?

What is your capability for throughput?

Mr. ELLENBOGEN. The system was certified at 80 bags an hour

originally. We currently have software going through recertification.

Mr. MICA. So it was certified by TSA at 80 bags an hour?

Mr. ELLENBOGEN. That is correct.
20

Mr. MICA. And everyone thought that that would be a good application, that an agent really couldn’t do many more bags than that

per hours with this configuration?

Mr. ELLENBOGEN. In the configuration that is currently being

shown, that would be sufficient to keep up with a couple of ticket

agents.

Mr. MICA. OK. So we use two times as much personnel. What

about the networking?

Mr. ELLENBOGEN. I think there might be a misunderstanding.

What we deliver, the product, the system and the software, it then

goes through TSA approval process. And at the time that this installation happened as part of the pilots, we had not yet been

through the complete approval process for all the multi-plexing and

the networking.

Mr. MICA. So there was no capability at that time?

Mr. ELLENBOGEN. It hadn’t been approved yet.

Mr. MICA. Did anybody from Reveal ask or Raytheon ask if that

was a feature that we wanted incorporated?

Mr. ELLENBOGEN. That was not a feature that we were testing

here or required to test at the site.

Mr. MICA. So TSA set the parameters, basically?

Mr. BRITZ. Because the machine wasn’t ready at the time for

that capability.

Mr. MICA. Is it capable now?

Mr. ELLENBOGEN. It is, yes.

Mr. MICA. Was this configuration just something pie in the sky

that your guys made up, or is it possible to have this configuration

work?

Mr. ELLENBOGEN. It is possible to have it work.

Mr. MICA. To have it networked and have remote resolution?

Mr. ELLENBOGEN. It is possible to have it work, networked, with

the remote resolution and these are some of the capabilities that

we needed to pass with TSA.

Mr. MICA. I see Mr. Null shaking his head affirmatively, yes.

Mr. NULL. Yes, sir. In fact, in Jackson Hole, we will be evaluating the full——

Mr. MICA. OK, Jackson Hole, Gulfport, Gulfport may be a nice

installation for that nice size. My problem is, I only have a handful

of our major airports that are completed with in-line expensive systems. This was a machine that cost a third less or whatever it is

and takes up less space. It has the potential for saving us billions

of dollars for installation at a large airport. That was the whole

reason for the Newark experiment. But I do not have, we do not

have that in place in any large airport.

Do you think we could try this at one airport to see if it is possible? And I am told the machine works very well. I heard the resolution is excellent, the imaging, all its capabilities meet or exceed

the L–3 and the InVision.

Mr. NULL. Mr. Chairman, the Jackson Hole implementation has

eight Reveal machines. So we will get a large enough sample to

evaluate the scalability of this system in a large airport.

Mr. MICA. Are you going to do it at one of the 29 big airports?

Or should we just say forget this, we will throw it away and that

is not a solution?
21

I mean, this takes billions of dollars, whether it is one point X

billion for his equipment and maybe his equipment won’t work. Or

it is going to take us multiple billions to go in and gut the bowels

of some of these major airports and put the big equipment in, inline system.

The worst part about all this, and most of this is classified, I

can’t speak to, is that the system that we have now in place, the

failure rate is just totally disastrous. The hand processing with

these 16,800 people, the results we have that have been made public, it is disastrous. Where you have the in-line systems, and we

have seen the results with the good equipment, the high-tech

equipment, it is just the opposite. And the whole purpose of this

isn’t to employ 16,800 people and have bags go through some process that is farcical. It is to actually achieve some detection of dangerous materials.

Well, I will go on. Let me just give a shot to Mr. Costello and

then we will get back.

Mr. COSTELLO. Thank you, Mr. Chairman. Let me follow up on

your comment about the success and failure rate, and it is classified, and we have had briefings. I do want to point out that while

it is unacceptable, let me say that I firmly believe that it is a far

better system than it was prior to 9/11. So I want to go on record

saying that and make sure that everyone understands that.

Mr. MICA. I am with you there, too.

Mr. COSTELLO. So let me go on. Dr. Null, I want to clarify a few

things here. It may not be important to everyone in the room, but

I think for the record we need to clarify some things. Number one,

did TSA ever agree to supply five CT–80’s at Newark for the pilot

program?

Mr. NULL. No, sir. No, we did not.

Mr. COSTELLO. And so without question, there was no agreement

to provide five machines?

Mr. NULL. Not following the analysis that we did on the required

throughput.

Mr. COSTELLO. OK. Mr. Britz, in follow-up to the Chairman’s

question about the space issue here, who chose the space for the

five machines? Number one, there was no agreement to provide

five CT–80’s. But space that they were going in, you were saying

from your perspective that the space was not adequate, did not

meet the regulations to place five machines in that space, is that

correct?

Mr. BRITZ. That is correct, in regard to the requirements of the

maintenance of the machines, the requirements of the controls that

are required for the machines, and the resolution space that is required between the machines, those machines are, as we feel, the

layout was too tight, and that they wouldn’t fit in the space.

Mr. COSTELLO. So you are saying that Continental chose a site

that was too small to accommodate all five CT–80’s, if five CT–80’s

were to be set up, is that right?

Mr. BRITZ. That is correct.

Mr. COSTELLO. Let me, Ms. Berrick, let me ask you, as the

Chairman pointed out correctly, and we all know that it has been

two years since TSA has been required to screen all checked bags,

using explosive detection systems, including EDS and ETD, one,
22

does TSA in fact check all bags using the explosive detection system, 100 percent of the time, just for the record?

Ms. BERRICK. The answer is no, TSA doesn’t electronically screen

100 percent of checked baggage, 100 percent of the time using EDS

and ETD. What I can say publicly is that the vast majority of the

time they are screening baggage with EDS and ETD, but there is

a small percentage of time that they use what they call alternative

screening procedures. Those are essentially procedures involving

the use of EDS and ETD in non-standard ways. It could be canine

explosive searches, it could be physically opening the bag and

searching its contents.

There are some trade-offs in security effectiveness with these

procedures that we have found. We have made some recommendations to TSA and their management of alternative screening procedures. One is that they conduct covert testing in an operational environment to get more data on how effective these procedures are.

And we also recommended that TSA strengthen their process for

monitoring the extent to which alternative screening procedures

are used, because we have found weaknesses in how that information is recorded.

Mr. COSTELLO. In order for TSA to meet the requirement, they

are mandated by the Congress to meet the requirement, what do

they need in order to comply, in terms of equipment and staff, in

your judgment?

Mr. NULL. Well, I think the issue that we face today is the fact

that there are always events that will occur that sort of exceed and

go beyond your normal operating capability. If equipment goes

down, then what would normally be able to cover a load, then we

have to respond and have some type of alternative procedures to

manage risk in that fashion.

I think our main challenge today is to be able to stay ahead of

the growth and to be able to preserve that level of coverage. We

do use, as Ms. Berrick had said, typically electronic screening, but

it uses protocols that are different in order to achieve higher

throughput. That is all based on security issues that may be generating because of bags piling up or safety issues.

Mr. COSTELLO. I have a few more questions for you, Dr. Null, but

the same question to you, Ms. Berrick.

Ms. BERRICK. Thank you. I would agree. TSA will always have

to use alternative screening procedures to some degree, because

equipment breaks down, there will be unforeseen events, there will

be some crowding. What would help in mitigating the use of that

is the deployment of these optimal screening solutions. TSA estimates that if they are not able to deploy these solutions that they

will have to field more EDS equipment and put it in airport lobbies, they will need more screeners.

Another factor that could help prevent the use of alternative

screening procedures, or not prevent it, but reduce it, is increased

technology, higher throughput, lower alarm rates. There are some

technologies that offer that and should be available within two to

three years.

Mr. COSTELLO. Dr. Null, according to TSA and GAO, the

throughput Reveal CT–80 screens about, or has the capacity to do

about 80 bags per hour. There is some confusion. We have TSA and
23

GAO saying 80 bags an hour, we have Reveal’s web site that says

that the equipment does 100 bags an hour. Apparently, I am informed that the contract on the pilot project at Newark required

Reveal to screen 120 bags per hour. Is that correct?

Mr. NULL. That is my understanding, sir.

Mr. COSTELLO. So TSA was requiring Reveal to screen 120 bags

per hours, knowing that the equipment could not screen 120 bags

per hour?

Mr. NULL. It certainly was our objective, as a part of the pilot,

to work with Reveal to get to that level. And we are continuing to

work with them in a number of changes and upgrades to both their

software as well as their hardware, to achieve that number.

Mr. COSTELLO. TSA has informed me that ‘‘a plan was in place

for Reveal to meet their contract. They have not, so a monetary

penalty is currently in place.’’ Is that correct?

Mr. NULL. That is correct.

Mr. COSTELLO. And what is the monetary penalty that has been

assessed against Reveal for its failure to comply?

Mr. NULL. I am sorry, sir, I don’t have that ready, so I will have

to get back with you on that exact value. Mr. Ellenbogen may have

the answer to that, but I don’t recall at this point.

Mr. COSTELLO. Can I ask you if Reveal knows?

Mr. ELLENBOGEN. Reveal knows.

[Laughter.]

Mr. COSTELLO. And?

Mr. ELLENBOGEN. I believe it is a 10 percent holdback on the

contract value. I just would like to clarify for the purpose of this

discussion, the pilots took the output of the Phoenix program,

which was the Reveal CT–80 at 80 bags an hour, to test its operational throughput. The pilot contract did not require 120 bags an

hour. There was not a throughput requirement on that pilot contract.

We then entered into a procurement contract in September, after

the pilots were done, a procurement contract we started shipping

against in December. During the course of that contract, we were

required to come up to 120 bags an hour. That software has been

delivered to the TSA, it is currently going through their approval

process, and has been for some time.

We are actively working with TSA to get that approved and deployed, so we can live up to our end of the contract requirement

and release the holdback.

Mr. COSTELLO. So back to my question, has there been a monetary penalty assessed against Reveal?

Mr. ELLENBOGEN. Not for the pilot program, no.

Mr. NULL. For the procurement side. I stand corrected. The 120

was in the procurement contract, rather than in the pilot contract.

That 10 percent holdback is on the procurement that we have underway with Reveal at this point.

Mr. COSTELLO. Let me ask you also, from Reveal’s standpoint, in

fiscal year 2005, the DHS appropriations conference report said

that Reveal’s CT–80 should be deployed particularly in medium

and small airports. Do you believe that the CT–80’s are better suited for the medium size to small airports, and not the major hub

airports in the Country today?
24

Mr. ELLENBOGEN. I believe the CT–80 is idea for medium to

small airports and for certain larger airports with particular requirements, we can help solve some of those challenging problems

with in-line screening options. And we are working with TSA to

demonstrate that capability.

Mr. COSTELLO. Dr. Null, would you want to comment on that, is

the CT–80 more appropriately used at small to medium or at large?

Mr. NULL. I think in terms of general deployment, medium and

small are the right sweet spot for that capability. I think at larger

airports, as you look at optimizing how you are going to do baggage

screening, there certainly will be locations where Reveal is a good

solution for a part of an overall solution, but not for large scale,

common infrastructure with high, high volumes.

Mr. COSTELLO. I have a few other questions, Mr. Chairman, but

my time is more than up. Hopefully we will come back with a second round.

Mr. MICA. Are there other members with questions? Mr. Pascrell.

Mr. PASCRELL. Mr. Null, if the capacity of the product was in

question, why did you choose to fund the project using this technology at one of the Nation’s most busy airports, busiest airport?

Mr. NULL. Well, sir, we had a specific application with the Continental location here. The reason, first of all, that we went from

five to three is that three would meet the capacity requirements of

that checkpoint environment. So we were really looking in this

pilot to do operational utility testing, to look at different configurations of the equipment. And we were not throughput constrained

by the equipment by going with the three.

Mr. PASCRELL. Who was responsible for the design of these machines?

Mr. NULL. The design was a cooperative design that was agreed

to by Continental, ourselves and Reveal.

Mr. PASCRELL. So you consulted with Continental Airlines and

Newark Airport in designing the machine?

Mr. NULL. Everybody signed off on the design, sir.

Mr. PASCRELL. They signed off on the design?

Mr. NULL. Yes, sir.

Mr. PASCRELL. So your answer to that question is yes?

Mr. NULL. Yes.

Mr. PASCRELL. Thank you very much.

I would like to talk about the GAO report, Ms. Berrick. A clarification. You say on page four of your testimony that TSA report

that, in May of this year, TSA report under current investment levels, I just want to make this clear in my mind, installation of optimal checked baggage screening systems would not be completed

until approximately 2024, given the cost of each of these machines,

if we continued to go on the same pace that we are going right now,

investing the same capital money, we would not complete this

project until 2024. Is that accurate?

Ms. BERRICK. That is correct. That is what TSA estimates.

Mr. PASCRELL. And then you said that the TSA is currently collaborating with airport operators, airlines, et cetera, in an effort,

that TSA expects to complete by early fall of 2006. So if there was

some cost sharing here, we are just talking about what is designed
25

right now, what is on the boards right now. If you want to do this

with all the airports, it will take us until 2024?

Ms. BERRICK. The estimate about 2024 is related specifically

under current investment levels, what has been appropriated. The

effort that is underway right now is TSA is partnering with airports and other stakeholders to try to identify some creative financing and alternative financing solutions. That effort, which is supposed to be completed in the fall, is supposed to put forth recommendations on how they can better fund and support the installation of these systems.

So hopefully the optimal screening solutions can be deployed before 2024.

Mr. PASCRELL. Because that doesn’t say much for the system we

are putting into effect, if we are going to have to wait until 2024,

luckily, in order that it be completed in the airports that we want

to do this.

Ms. BERRICK. It is really how much the up-front capital investment that is required to do——

Mr. PASCRELL. Well, let’s talk about the up-front capital. Where

is the money, give me general percentage numbers of where the

money is coming from.

Ms. BERRICK. There are a few sources. One is through the letter

of intent agreement. TSA awarded eight LOIs for nine airports,

which resulted in a funding obligation for the Federal Government

of about $950 million.

There is also the Airport Improvement Program, which is no

longer available to support the installation of in-line systems. Quite

a few airports did get in-line systems through the AIP funding.

TSA also uses a mechanism called Other Transaction Agreements, where they fund portions of in-line systems, usually for

smaller systems. So if you break that out, the Federal Government

spent about $950 million, or will through the end of next year,

through the LOI process. And they have spent about $350 million

through the Airport Improvement Program and Other Transaction

Agreements.

Mr. PASCRELL. And it is obvious that we are not going to get this

system anywhere near done unless there is capital investment from

the Federal Government.

Ms. BERRICK. The money will need to come from somewhere. And

that is why it is important——

Mr. PASCRELL. You know the budget for 2007, then, that has

been proposed by the Administration. Is there sufficient money in

there to continue the project to the degree that you and I and everyone else is talking about here?

Ms. BERRICK. I don’t know the extent to which the funding request would support TSA’s top 25 airports where they want to fund

in-line systems.

Mr. PASCRELL. Otherwise, the money has to come from the airlines and the airport?

Ms. BERRICK. That is right.

Mr. PASCRELL. And they are just jumping for joy to do that,

right?
26

Ms. BERRICK. Well, hopefully through this study that is going on

right now, there will be some recommendations coming forth on

how to more creatively finance these systems.

Mr. PASCRELL. Any time we hear study, particularly in terms of

the Department of Homeland Security or TSA, we are holding our

breath as to when it will be completed and what will it show in

the results. So I take you for full granted, and I accept the research

of the GAO. You do a terrific job, all of you do a terrific job in

terms of helping us in our oversight responsibilities.

Mr. Ellenbogen, given that your technology was designed for this

low throughput, what adjustments are needed, do you need to

make, to compensate for the high traffic at Newark Airport? And

what were your expectations for the performance of your technology in an integrated EDS system?

Mr. ELLENBOGEN. The system was intended as an alternative to

the large in-line approach. And with the configuration that you see

up on the screens now, there isn’t a requirement for high throughput. As we have described in the past, it is like a PC approach,

networked computing approach, as compared to a mainframe approach.

We are not claiming it is a panacea. It is not the only solution.

It is an alternative. It offers some flexibility. The original certification was at 80 bags an hour. We anticipate upcoming certification at approximately 110 to 120, going toward 140 bags an hour.

So we are increasing the throughput of the system to apply to different ways of deploying it to optimize its utility to TSA.

Mr. PASCRELL. You would agree with the Chairman’s analysis

and description of the convoluted system that now exists at Newark Airport? Do you agree with his description of what exists there

right now, or do you disagree with it?

Mr. ELLENBOGEN. I think what exists there now was designed for

the pilot application, to test the system’s reliability and operational

capability. I think it can be optimized.

Mr. PASCRELL. By?

Mr. ELLENBOGEN. I would have to sit down and work with TSA

to understand what the trade-offs might be.

Mr. PASCRELL. Let me ask a question, if I may, Mr. Chairman,

to Ms. Baer. It is my understanding that the Port Authority’s role

in the Reveal pilot project was not as partner, we heard that term

used very loosely in here, but it was mainly an administrative role.

Would you agree or disagree with that?

Ms. BAER. I would agree with that. While we have been partners

in some of the technology enhancements at the airport, in this one,

our only role was to do the kind of review that you would do if

someone wanted to put a piece of equipment in a lobby floor, to

make sure the floor could support it, that the electrical systems are

adequate, and that sort of review. So we did a review, but not of

the operation, just of the physical entities.

Mr. PASCRELL. So this separation of activities at Newark Airport,

we have to go through two processes. That is not acceptable to you,

is it? Or is it?

Ms. BAER. We always do those kinds of reviews, because as the

landlord of the airport, we need to ensure that the physical plant
27

of the airport maintains its integrity. So that kind of process we

would always do.

We are then often partners in technology applications, but not

necessarily. Some are more appropriate than others. We run a terminal, there it is more appropriate for us to be very involved.

Mr. PASCRELL. Let me tell you what my concern is, in conclusion.

And I have overstayed my welcome here, but let me take a shot

at this. My observation is this. The issue is the way Raytheon set

up the machines. They are not configured to be fully integrated. I

think that this is a simple conclusion.

Full integration was the whole point of the pilot project, that I

remember. So it seems that we got off on the wrong foot in the first

place. Why do you think Raytheon did this? Was it because of the

configuration of the airport? Was it limited space? Why?

Ms. BAER. I think I have to defer to Raytheon on that.

Mr. PASCRELL. Well, you were there.

Ms. BAER. I actually wasn’t there when this decision was made.

Mr. PASCRELL. Well, you should have been. My point is this. I am

looking at Newark Airport, this is what is on the table right now.

And I am wondering if we are trying to squeeze too much in a

small box. I don’t know how much Newark is capable of. We are

talking about a lot of jobs here. I want to make sure it is safe. We

are trying to do the best that we can, all of us here in this room.

We thank everybody for their service.

I am not so sure that, for instance, that this particular problem,

I can think of several others, is not reflective of an airport that is

trying to squeeze too much out of its assets and resources. I am not

so sure about that. I want it to grow. We can’t. There is no place

to put another runway. Everybody wants the land at Newark Airport. That is easy to say. We are backed up to Cleveland, for crying

out loud, making landings around 4:00, 5:00, 6:00 o’clock at night,

7:00 o’clock.

I just would ask you to take a look at that, so it is fair to everybody here, so that we are not simply kidding ourselves. We are

going to have to make some capital investments at Newark Airport

in order to expand the place, the area, where we can put any machines, correct?

Ms. BAER. Absolutely.

Mr. PASCRELL. Thank you, Mr. Chairman.

Mr. MICA. Mr. Honda.

Mr. HONDA. Thank you, Mr. Chairman. I have three quick questions. They are questions with San Jose Airport in mind. So you

can take the questions in that context.

There is about $156 million ultimately that would be available

in fiscal year 2007 for EDS installation at 9, 10, 11 airports. About

how many airports would you expect to fund in the coming year

and how does that compare against the number of high priority airports that will be ready to begin work next year?

Mr. NULL. Well, sir, first of all, the reason we only have 150 is

that it is the final year of the LOI payments. And then things

would free up later at the current level, if that were the case.

I think that it will depend very dramatically on what airports we

do. Now, we have got 25 airports that are the high priority. Those

will float, depending on the ability or the willingness of the particu-
28

lar airport to participate. So how far down we get will be somewhat

driven over the next few months of getting a better feel for who can

participate, who will be willing to participate and we will develop

our 2007 spending plan. So it is difficult, depending on whether it is a $14 million project or a $100 million project, that list will vary dramatically. We

should know that within the next few months.

Mr. HONDA. OK, then as TSA makes decisions on the allocation

of the 2007 EDS installation funds, exactly what criteria will you

be using and how significant are factors like construction readiness, integration into ongoing terminal renovation, or significant

local financial share of the project, as San Jose is?

Mr. NULL. Well, the first priorities are all about security and

safety. So we will look for those airports where we know that we

will have the most restricted capacity, where the growth will be

pushing us to the limit to maintain baggage screening. So those

will be at the top of the list. We also are looking for those airports

where we have the highest injury rates, and those have a level of

higher level of priority as well.

We have to be very opportunistic in how we manage that priority

list. And when we have airports that are ready to step up and

have, we can intercept a greenfield terminal or new airport, those

are important things for us, and we will shift the priorities based

on the ability to get that local funding and to intercept a construction project.

Mr. HONDA. OK. Some airports will have TSA-validated designs

for EDS installation, ready to begin construction by the end of this

year. If TSA is not using letters of intent to commit future funding,

how can those airports move forward without losing the possibility

of these 75 percent Federal reimbursement to which they would be

entitled, if they simply waited for another year or two? And is it

possible to enter into, I guess what you call the other transaction

agreements, or other agreement now, that protects their full reimbursement from future appropriations, assuming those appropriations ultimately are made?

Mr. NULL. Mr. Honda, that is exactly the cost study, sharing

study that we have underway right now with the airports and air

carriers. We are looking at a number of potential vehicles to

achieve funding levels similar to LOI shares. And those will all be

sort of put on the table here in the next few months.

So we are not going to leave anything off the table. We are going

to sort of put it all out there, look at what may be potential multiple vehicles for doing the funding and as a part of that study, we

are also making sure that we understand those airports who have

stepped up and invested early how they will play in that going forward as well.

Mr. HONDA. Well, San Jose is in that mix of 25?

Mr. NULL. Yes, sir.

Mr. HONDA. So how all these factors play together will determine

where San Jose may end up in terms of the lineup. It doesn’t sound

like there is a priority in terms of who is first, who is second. But

it is based upon a mixture of criteria.

Mr. NULL. Well, the top 25 are based on capacity and peak demands that we know we are going to hit over the next few years.
29

That will shuffle based on the availability of funds and willingness

of local airports. So where that is going to end up will be a result

of a number of discussions with different airports over the next few

months to see how that final shakeout will look.

Mr. HONDA. Thank you, Dr. Null.

Mr. MICA. Thank you.

I am going to ask a few questions and then yield to Mr. DeFazio

and others that have questions.

First of all, I have the record from Continental. Continental

worked with Reveal in November and December of 2004 to devise

a pilot plan. That pilot plan that is on the board there, that says

EWR. What does that stand for, Ms. Baer?

Ms. BAER. That is the designator for Newark Airport, EWR.

Mr. MICA. OK. That is not LAX, that is not Phoenix, it is not

Denver, it is not O’Hare. That was devised for Newark. Then it

says in February they met, it took them until, they had to wait

until February to meet with TSA to discuss the proposal. And then

somewhere, someone made a decision that they wouldn’t get, basically this plan was rejected, is that correct? Was there ever any

plan to use five machines, Mr. Ellenbogen? Was there any plan to

use five machines, or is that something you just dreamed up?

Mr. ELLENBOGEN. There was a lot of discussion with Continental

about how we could configure the systems.

Mr. MICA. Who did this plan? Did Continental do that plan? Did

the airport? Where did this plan—and there is more to this plan,

because there is a whole report. I have seen the report. I want a

copy of that report for the record. All I have got is that. Can you

provide me with that?

Mr. ELLENBOGEN. I am not sure which report you are referring

to, sir.

Mr. MICA. The rest of the details that go with this proposed configuration. This is for Newark Airport. Who has it? Do you have

one, Mr. Null?

Mr. NULL. I will certainly find out, and if we do we will supply

that.

Mr. MICA. I want the rest of the plan. Because this just didn’t

come out—and I don’t have Continental here, but I have the scenario of how this was developed. And then they went to TSA.

Somewhere, TSA made a decision, and I heard that, and it may

have been funding or something that they only received from Congress enough for eight machines. Is that correct?

Mr. NULL. The plan was to utilize eight machines for across the

three pilots. But that was not the reason for the three machine decision at Newark.

Mr. MICA. Well, somewhere—they sat down, here is the testimony, and I am going to have them in and swear them in, they

sat down and developed this configuration for a large airport. This

is all about a large airport.

You sat here and said that you believed that it may not be suited, or you said it would be suited only for medium and small?

Mr. NULL. And I think there will be situations——

Mr. MICA. Well, we will never know. We will never know. How

will we know? The whole purpose of this was to have in one place

at one large airport—we know it will work in small airports. We
30

know it probably will work in medium airports. The whole reason

for this, for having another vendor even qualified, and you were

qualified at—just for the record, where were you certified at, 80?

Mr. ELLENBOGEN. That is correct.

Mr. MICA. And you met that. TSA certified that, didn’t they? Did

you certify 80?

Mr. NULL. Yes, sir.

Mr. MICA. Yes, you did. So this is—don’t put a lot of mumbojumbo on the table here. You certified that you had the equipment

that would do that. And it was supposed to be installed in one airport, because this Congress is going to have to spend billions of dollars, billions of dollars. How much would it cost to change out your

entire system and put an in-line with a large InVision or L–3

equipment?

Ms. BAER. Throughout the entire airport?

Mr. MICA. Yes, throughout your entire airport.

Ms. BAER. Right now we have——

Mr. MICA. How much would it cost——

Ms. BAER.—59 EDS machines at the airport. Hundreds of millions of dollars.

Mr. MICA. Hundreds of millions of dollars.

Ms. BAER. Yes, it would.

Mr. MICA. And we encouraged the private sector to come up with

developing equipment that would be less costly. What is your, just

ballpark, a third of the cost of an L–3, is that right?

Mr. NULL. Yes, sir.

Mr. MICA. A third? OK. Just for the record. So we will never

know, and we have gone through this planning process, we have

gone through buying the equipment, we will never know how much

it is going to cost us. We have 3 major airports done out of the 29

that handle 75 percent of all our air passenger traffic. And Congress is trying to find a way to install efficient equipment? That is

just not acceptable to me.

Somewhere, and I think it is TSA, if I see TSA going after Reveal

in any way, and you are being awfully quiet, and I probably know

why, because you are put in the middle of all this. All you supplied

was the machines, is that right?

Mr. ELLENBOGEN. That is correct.

Mr. MICA. And you worked with them on this, whether you admit

it or not, you worked with them?

Mr. ELLENBOGEN. With Continental, yes.

Mr. MICA. With Continental, OK. And you got the contract from

them to install it the way they said, and they made the decision

for the three machines, right?

Mr. BRITZ. That is correct.

Mr. MICA. OK. And you provided the space. And don’t tell me

that equipment will not fit in that space. I will go out and walk

it with anybody here and some other folks. It will fit. And if you

can fit two 5500’s at the end and make the passengers walk

around, don’t tell me it won’t take as much space. You can fit it

in that blueprint.

So this is an absolute fiasco, a farce, it has set the entire Country

back and 20 some major airports, because we do not know today

whether this equipment in fact will work with that configuration.
31

You would think somebody would look at that, now, wouldn’t you,

and say, do we need to, now, you said that you didn’t have the ability to network this and do the remote resolution. But somebody

could look at it and say, that is the way it should be done, Mr.

Null, wouldn’t you say someone should have looked at that then

and said that?

Mr. NULL. Well, certainly once we get the multi-plexing system,

that will give us a lot more economies of scale and there will be

some big advantages. The challenge that we have here, sir, is the

fact that——

Mr. MICA. If anybody in TSA could just think of what we are trying to do, and put this together, in one location we could see if we

could save billions of dollars and have a system that would work.

But we may never know, because again, we have spent 18 months,

almost 2 years with this disaster.

I have to scoot, and besides that, I am losing my cool. But let

me yield to Mr. DeFazio. Mr. DeFazio, I will match you for emotion

on any day. Thank you.

[Laughter.]

Mr. DEFAZIO. It is the Italian, Mr. Chairman.

[Laughter.]

Mr. DEFAZIO. I have already vented for the week. So I may be

a little mellow today on other issues.

Generically, to Ms. Berrick, just broadly, we have confirmed

through ongoing analyses that an investment in EDS generally at

at least the 25 largest airports could have a payback, quite a short

payback period, to TSA in terms of savings, is that correct?

Ms. BERRICK. Right. TSA initially estimated that for the nine

LOI airports, they could recover the up-front investment in little

under a year. But there have been some lessons learned since those

systems were installed. TSA realized the need to develop best practice design guidelines for installing in-line systems. That would

help and make the process more efficient.

They also realize that better technology with increased throughput and lower alarm rates would help facilitate cost savings. They

are working right now on developing best practice design guidelines. There is some technology in the pike that will increase

throughput significantly.

So the common knowledge is that there are still significant savings that can be achieved, not only savings, but also security benefits through underlying systems. But initial estimates may have

been a little high. There have been a lot of lessons learned since

then. But still, the savings are significant.

Mr. DEFAZIO. Well, and from further reading your report, we expect the earlier generations of these machines apparently are going

to have a useful life of maybe 10 years. I don’t know about the

later ones. But let’s just say, let’s use 10 years. So for capital investment that has a 10 year expected life, perhaps within a third

of that time period, the Federal Government could recapture its investment in operating savings in terms of personnel and other attributable costs?

Ms. BERRICK. That is possible.
32

Mr. DEFAZIO. So if we were running Government like a business,

which the Republicans always tell us they want to do, we would

probably be thinking about making these investments.

So Mr. Null, I am curious, you said you are looking at other potential vehicles for funding. I am curious what you might recommend, because Chairman Mica and I have mulled this over at

great length. We tried to make a run on some Federal bonding and

we were turned down by OMB and others. We feel that the Federal

Government has an obligation to carry a substantial portion of the

cost of these machines, not the airports, not the airlines. We are

looking for some cost sharing, but not putting the whole bill on

them.

So can you give us a couple of hints about what these potential

vehicles might be?

Mr. NULL. I think as Ms. Berrick had indicated earlier in her discussion, there are a number of possible ways as far as service contracts, buy-leaseback options, potentially tax credit bonds, LOIs or

something that would still be put on the table and then what we

will have to understand and what are either the legislative or the

scoring issues that would have to be addressed in order for those

vehicles to be implemented.

So none of them are clean. So our challenge is to identify what

the options are and then understand what actions will have to be

taken in order to utilize those.

Mr. DEFAZIO. If we think this whole thing through and obviously

baggage is not the only place we have a problem, I have tremendous concerns about carry-on bags, passenger screening in terms of

explosives, and as the Chairman and I both said, two or three

years ago now, when the Chechen terrorists took down the planes

in Russia, this is probably our last wakeup call before somebody

does that here in the United States.

What do you think the economic cost, anybody up there, the economic cost to the United States of America would be if two or three

planes were blown out of the sky one day by terrorists? There were

two in Russia, let’s just be conservative and say two. Short-term,

total interruption of air service and all that, let’s say we decide a

week or 10 days we can put planes up again, with some new measures of security. What are we looking at in terms of, when we look

at how much it would cost to install this equipment? Anybody

think that the cost would be less than the cost of building up these

systems quickly?

I don’t think so. Neither do I.

I guess the question is, when we are looking at prevention of terrorist acts and tragedy, when we are going to kind of look at what

the potential downside is versus the annual scoring and/or that,

and buy-leasebacks. We have seen what happened with the Boeing

deal, not too great. Sometimes it is better for the Federal Government just to make the investment straightway up front. If we need

to borrow some money to make that kind of investment, looking at

the savings we are going to recoup, the benefits, the taxes that will

accrue, we should do it.

With that, we have a problem with back injuries, big problems

documented at TSA in terms of lost time, workers comp, injuries,

all that. We have already talked about the issue of potential sav-
33

ings. So I guess what I am puzzled about here is, when we look

at in-line systems, they will work some places. In some places they

have the room to do it.

But GSA says here that up to 50 percent of the cost is for facilities and infrastructure modifications. And I assume that is not a

worst case, that is an average? Because at some places, there isn’t

really any place to put them, right?

Mr. NULL. That is true.

Mr. DEFAZIO. So it could be considerably higher?

Mr. NULL. It can run considerably higher.

Mr. DEFAZIO. So I guess I am wondering why we wouldn’t perhaps revisit or put more effort into this dispersed idea. I am not

saying it is going to be most appropriate everywhere, but at an airport where the costs are going to be, where 75 or 80 percent of the

cost are going to be in modifying the facility versus the cost of the

equipment, why wouldn’t we put out a relatively small amount of

money to more adequately test in a proper configuration these sorts

of systems?

Because I am just thinking that a mixed system where we avoid

extraordinary costs at certain airports would be valuable. We always talk about, is it St. Louis, Jerry, that everybody has their

own gate and we have all the security scattered around?

Mr. NULL. It is Kansas City.

Mr. DEFAZIO. Kansas City, sorry. So every airport is a little bit

different, and it just seems to me we might want some more flexibility than trying to drive everybody toward the EDS, which we

know works great. I have been to San Francisco, I have been to

Heathrow and Manchester and seen those systems. They are great.

But they aren’t maybe the solution everywhere.

Do you think that this was a realistic test of the potential for dispersed technology, given the constraints on the number of machines we had? Do you think we disproved the possibility of doing

it this way, since we didn’t follow this original design, whoever created it?

Mr. NULL. First of all, as part of the strategic plan, we talk about

optimized systems, not only in-line systems. So we recognize that

these big central in-line systems are not the answer for every airport and we certainly would not propose that.

I don’t think that this pilot has done anything to eliminate the

possibility of utilizing this configuration in large airports. At the

time we were setting this pilot up, it was to prove the technology’s

reliability, our ability to integrate into the takeaway systems and

to match the throughput from the ticket counters to the capacity

that we put in place.

Mr. DEFAZIO. So then this isn’t a definitive test of whether or not

a dispersed technology, particularly using well designed dispersed

points, could possibly avoid a whole lot of structural costs and

delays in terms of terminal modifications and those sorts of things?

Mr. NULL. And in fact, the Jackson Hole implementation will

give us a fairly large scale test of integrated systems with multiplexing capability and allow us to project what would happen in a

much larger airport at the same time. Then we can look for future

possibilities where we would do that.
34

Mr. DEFAZIO. OK. So then this isn’t definitive. I think the Chairman fears that we are going to somehow, going to disregard this

possibility or this particular manufacturer because of the disappointments we had in this particular test. You don’t find it definitive and you are not making any sweeping conclusions that would

lead to that?

Mr. NULL. Not at all. We continue to work with Reveal on their

ongoing system improvements and changes and we feel that Reveal

is a critical part of one of the arrows in our quiver of how we are

going to deliver optimized systems in the future.

Mr. DEFAZIO. OK. Well, as I do to all of the Administration folks

who come before us on the Committee to talk about these issues,

and I do it both here and in Homeland Security, I just urge you

and/or your superiors to give us an honest assessment of what it

would cost, how are we going to get there and it should not be constrained by the people at OMB. We are big boys and girls here, you

give us a big bill, we can look at it and say, we can’t do that, you

will have to come up with something else. Or we are going to say,

yes, maybe it would be worth it to avoid what happened in the Soviet Union here in the United States, or Russia, excuse me. The Soviet Union doesn’t exist any more. You know, it would be worth

that cost, and we will figure out a way to find the money and borrow it. We are the ones who should make that decision. I hope it

doesn’t get backstopped. So I just would give you that counsel.

Thank you, Mr. Chairman.

Mr. KUHL. [Presiding] As you can see, the Chairman has regained his Kuhl. No pun on that.

[Laughter.]

Mr. KUHL. I will yield to Mr. Costello.

Mr. COSTELLO. Thank you, Mr. Chairman. I do have a few questions, but let me yield quickly for a quick question from Mr.

Pascrell.

Mr. PASCRELL. Thank you, gentleman from Illinois.

Mr. Britz, what adjustments did Raytheon have to make to the

integrated placement design after a normal six to nine month delay

and missing the peak travel time at Newark? And the second question is, what was the main cause of the delay?

Mr. BRITZ. The systems were ready. We were installing systems

at both JFK and Gulfport at the same time. We had to do the site

preparation at the site, which is running all kinds of conduits and

running power to all the machine areas. We had to get the design

ready for integration, which was getting control panels built, fabricated and installed. And as well as conveyor belts fabricated and

installed. That all took place over a period of time.

Mr. PASCRELL. Well, you know that before.

Mr. BRITZ. Yes, we did.

Mr. PASCRELL. Well, you still had a delay of six to nine months.

Mr. BRITZ. We installed the first machine in Newark in the August time frame and had it operational.

Mr. PASCRELL. This system was supposed to be ready in when,

exactly? When was this originally supposed to be in place?

Mr. BRITZ. I don’t think there was a fixed date of when it had

to be in place.

Mr. PASCRELL. There was no fixed date?
35

Mr. BRITZ. That I remember. I don’t know.

Mr. PASCRELL. For the record, that is what you are telling us?

Mr. BRITZ. I don’t have one in my notes right now.

Mr. PASCRELL. Well, then, how could it be delayed?

Mr. BRITZ. The project was initially slated to get done in the

summer. We finished the installation and had the first machine in

August and the second and third machines installed in August and

operational in August at a standalone configuration. We didn’t

delay the project in regards to the integration. We ran it as a

standalone configuration until the integration equipment was

ready and then we installed the integration equipment. And then

the machine was fully integrated and available for full integration

testing in October.

Mr. PASCRELL. Is the system at this day, at this point in time

operable?

Mr. BRITZ. I haven’t been involved with the project since then,

but I understand it is still running.

Mr. PASCRELL. Mr. Ellenbogen?

Mr. ELLENBOGEN. The system is being used every day to screen

bags, yes.

Mr. COSTELLO. Thank you.

Dr. Null, let me just ask a couple of questions again for the

record concerning the pilot at Newark. I understand that one of the

machines did have entry integration. One, is that correct?

Mr. NULL. That is correct. The machine that was servicing the

kiosks.

Mr. COSTELLO. And why didn’t all three of them have both entry

and exit integration?

Mr. NULL. Well, first of all, the machine with the entry integration services a number of kiosks. So there were multiple load

points that were all supplied to that single machine. The reason

that we did not integrate them into the ticket counter is because

of matching the speed of the ticket counter processing with the capacity of the equipment required only two more machines, not four

more machines.

So from a capital utilization standpoint, our cost per bag standpoint, we could achieve comparable throughput with only two machines rather than four machines. So that is why we did not integrate those machines.

Mr. COSTELLO. And what did it cost TSA to provide entry integration on the one machine?

Mr. NULL. It was approximately $400,000, somewhere a little

over that. And that is a very specialized belt to deal with, a 90 degree turn, which is why it is a little more expensive.

Mr. COSTELLO. And why weren’t the machines at Newark multiplexed?

Mr. NULL. We were at a stage where the software had not been

finalized through the approval process or through the testing process. So we were not able to multi-plex those over to a single resolution point.

Mr. COSTELLO. And who made that decision, TSA or Raytheon?

Mr. NULL. Oh, that is a joint issue between Reveal and TSA and

where they are at in their development process and where they are

through the testing process with TSA.
36

Mr. COSTELLO. Mr. Chairman, I have no further questions, but

I would like to give each of our witnesses the opportunity to make

a final comment, very brief comment at this time, if any of them

would care to.

Mr. KUHL. Do any of the panelists wish to make a final comment?

Mr. ELLENBOGEN. No, sir.

Mr. KUHL. Dr. Null?

Mr. NULL. No, sir.

Mr. KUHL. Mr. Britz? Ms. Baer?

Well, on behalf of the Chairman, thank you for coming and participating. I know the information that you have provided will be

helpful as we move ahead in this Subcommittee. So I appreciate

your coming and participating again.

And Mr. Ellenbogen, I think you are staying for the next panel.

A glutton for punishment, I guess. We understand that you have

already submitted your one written statement, so it will not be necessary for you to retestify. Thank you for coming. We appreciate it.

If we could, we will move on to the second panel. I would like

to move right along, because we are getting the preliminary signals

from the floor that there will be some upcoming votes in about an

hour, maybe shortly before that. So at this point, if Mr. Todd

Hauptli, Mr. John Wood, Mr. Louis Parker, Mr. Ellenbogen, you

can retain your position right there in the center, and Mr. Tom

Ripp, if they would like to take their positions.

Mr. Hauptli, I think I have it here that you are the Senior Vice

President of Airport Legislative Alliance, the American Association

of Airport Executives and Airports Council International-North

America. We appreciate your participating this afternoon. Mr. John

Wood, the Chief Executive Officer, Analogic Corporation. Mr. Louis

Parker, President and CEO of GE Security. And Mr. Tom Ripp,

who is the President of Security and Detection Systems, L–3 Communications Corporation.

Mr. Cooke, I don’t have a bio on you. If you could just give me

your allegiance at this point.

Mr. COOKE. Yes, I am sitting in for Mr. Parker. I am President

of GE Security’s Homeland Protection Division.

Mr. KUHL. OK, great, and welcome.

So to move right along, Mr. Hauptli, in accordance with the normal procedure, you have five minutes. We appreciate your participating.

TESTIMONY OF TODD HAUPTLI, SENIOR VICE PRESIDENT,

AIRPORT LEGISLATIVE ALLIANCE; JOHN W. WOOD, JR.,

PRESIDENT AND CHIEF EXECUTIVE OFFICER, ANALOGIC

CORPORATION; DENNIS COOKE, PRESIDENT, GE SECURITY,

HOMELAND PROTECTION DIVISION; THOMAS RIPP, PRESIDENT, SECURITY AND DETECTION SYSTEMS DIVISION, L–3

COMMUNICATIONS, INC.

Mr. HAUPTLI. Thank you, Vice Chairman Kuhl. And for the

record, I was laughing hard inside at your joke earlier.

[Laughter.]

Mr. HAUPTLI. I want to make one general observation and three

specific recommendations. The general observation, a number of
37

the points were already made this morning. Three hundred million

more passengers coming through the system within the next decade—today we are already leaving bags behind as planes are taking off, because they are not able to get through the screening process.

The Federal Government took this responsibility over and has frankly botched it. Two billion dollars has been spent on a $5 billion to $10 billion problem. And by TSA’s own admission, it is 2024

at the current spend rate before we get this problem solved, which

is completely unacceptable. The Federal budget process is getting

in the way of real life economics. As was pointed out earlier today,

anywhere from a year to three to four years is the payback period

for putting in-line systems in place. Yet we don’t have either the

will or the resources, and it is probably a combination of both, to

put these systems in place.

OK, for recommendations, three. One, we need to extend and expand on the current aviation security capital fund. The $250 million that is mandatory that is guaranteed is very helpful. This

Committee attempted to make that $500 million, and the Appropriations Committee bested you, unfortunately. We have to scramble every year and try to get crumbs on the table beyond that $250

million.

So that program, which terminates next year, needs to be extended and strengthened. And parenthetically, I would add for the

record, as we look to the FAA reauthorization bill next year, this

mandatory spending issue—the guaranteed funding—it shows you

how important it is to continue and strengthen the guaranteed

funding in Vision 100, to make sure that the capital programs of

the FAA are funded. Because otherwise they will be traded off

against other transportation needs.

Secondly, we need these creative financing solutions, whether it

is tax credit bonds, the letter of intent program or other mechanisms; the Federal Government is not doing its job on its own. And

the private sector is willing to step in and help in that regard. But

we need to have some meaningful programs that will work.

The TSA baggage screening investment study that Ms. Berrick

and Dr. Null talked about earlier, we may see something out of

that in the next few weeks. I would encourage this Committee to

push hard to make sure that that study receives appropriate attention in Congress rather than simply sit on a shelf at TSA.

And then finally, I think we need to modify the screening partnership program that is currently in place, to make that a more

meaningful option for airports. Specifically as it relates to the subject at hand today, we need somehow to be able to capture and utilize the personnel savings from putting in-line systems in place to

pay for both the initial capital investment and the debt service on

putting in-line systems in.

With that, I will yield back my time.

Mr. KUHL. Thank you.

Mr. Wood?

Mr. WOOD. Thank you. On behalf of Analogic, we appreciate the

chance to testify. I would like to touch on four programs.

There has been considerable discussion about the Government’s

very large investment in in-line EDS systems and working with our
38

partners, L–3 Communications, we have had a TSA approval of a

year ago for an upgrade for these systems. We provided about half

of them in U.S. use. This was certified at 600 bags per hour, which

I will point out is 6 to 8 times the throughput rate that preoccupied

the last panel, with a 25 percent improvement in false alarm rate.

It is multi-plexed, it is networked. It provides archived bag images

of every bag that goes on an airliner for a 48 hour period. Many

advancements.

We look forward to this being fielded. We are completing testing

of this in a networked version, actually finished standalone testing.

We have online networked testing underway at John Wayne Airport. We believe this is ready. And this will preserve and enhance

the TSA’s investment in these machines to make them continue to

operate online for years to come.

Moving to next generation, we have developed, with TSA support, an extra large bore machine, shown here, able to process

1,100 bags per hour. And although there is some debate as to

whether the Airbus Jumbo will be widely deployed, there is no debate over the fact that passenger throughput rates are climbing.

There is a need to process many more bags and larger bags. This

can handle a bag up to one meter by .6 meters, the largest

snowboards, golf clubs, as well as small cargo, and do this at a very

high rate in a very cost effective manner. And we expect to have

this at the Transportation Systems Laboratory for certification

early next year.

Our next challenge is to take the well proven CT Computer Tomography technique to the checkpoint, which I think everyone

would agree is primitive, and that we are using the same two-dimensional x-ray techniques that were developed over 30 years ago

for the hijacking crisis. Screeners are unable to find threats with

this and it is very time consuming. So we have developed Cobra.

It has several advantages. One, your laptop would not have to be

removed from a briefcase as a traveler. Much higher throughput

rate, 300 bags per hour.

And we tackled what we view as a very simple problem, and that

the bin handling by TSA employees. It seems ironic to us that

many TSA employees at checkpoints are not really participating in

the screening process, but they are hauling plastic tubs back and

forth. And a relatively straightforward bin retrieval system would

take care of this, in addition to providing a much higher quality

screening system. We had this system installed at Logan Airport,

screened 37,000 bags. There are many things that screeners at an

official TSA checkpoint missed, they were doing the best they

could. But with conventional, two-dimensional x-ray, you are limited in what you can do.

This can be integrated into a smart checkpoint, and we are working with others to incorporate information, say, from a personnel

screening system. Of course, there is talk of RFID tags, advanced

techniques. And we believe that we can make the screening process

much more pleasant for the traveler and provide a much more accurate screening process by using CT, so widely deployed and approved in checked baggage, and it is time to deploy that in carryon baggage. And we have a system to do that. A lot of extensive

field testing and going for certification again early next year.
39

Again, the previous panel had a lot of discussion about the secondary airports. And we would not suggest that in-line systems are

appropriate for all airports. In fact, we have been engaged with the

TSA to develop a version of our Cobra machine that would handle

the secondary airports, but do it at a much higher throughput rate

than the existing systems, namely, 300 to 350 bags per hour, a CT

based solution. It doesn’t occupy much floor space, it doesn’t have

to go behind the scenes. And in all of these systems, I would suggest that the issue that Chairman Mica raised, the 16,800 people

working in the back office, the over 40,000 screeners working combined, we offer the prospective of greatly reducing that by not requiring a screener to look at every single bag, but rather look at

only the alarmed bags and clear those.

So we have four programs underway. We would encourage Congress to provide TSA the funding to do the laboratory to bring

these not only to the operational readiness trials, but also to bring

those to implementation to provide better safety and a more economical approach to airline screening.

Thank you very much.

Mr. KUHL. Thank you, Mr. Wood.

Mr. Cooke?

Mr. COOKE. Thank you, Mr. Chairman, Congressman Costello

and members of the Subcommittee, for this opportunity to discuss

the current status and the future of checked baggage screening at

our Nation’s airports.

I will share with you GE Security’s perspectives on the current

deployment of EDS systems and how technology available today

needs to be more widely deployed to increase efficiency, quality and

security in air travel. Finally, I will discuss the need for research

and development that will result in technology that significantly increases both security and productivity for the future of baggage

screening.

Let’s start by describing the known problems in baggage screening today. This picture that we have up shows one of the many

standalone lobby-based EDS systems that we have at our Country’s

airports today. These lobby systems require manual handling of the

baggage. Their throughput is significantly lower than with in-line

EDS systems. And as you can see, the process can become quite

chaotic during peak load times.

The process is inefficient and can lead to flight delays or bags

missing planes. In fact, on a recent flight out of Washington Dulles,

a pilot came on and announced to the passengers that in fact the

flight would not have an on-time departure because over 3,000 bags

needed to be loaded on awaiting aircraft, and their aircraft was one

of those aircraft.

Flight delays due to inefficient bag screening was highlighted in

a 2005 Washington Post article, where a Lufthansa spokesman

said that it is not uncommon for an aircraft to wait 45 minutes to

an hour, waiting for the checked baggage to be loaded on. Just to

put that in perspective, the cost to an airline is estimated to be

$760 per minute for a wide body aircraft. That means $45,000 per

hour.
40

And then there is the additional cost of finding and delivering a

delayed bag. IATA and SITA’s WorldTracer service estimates that

the average cost to the airline is $100 per bag.

In addition, the manual loading and unloading of baggage contributes to an alarming rate that has been discussed at this Committee of injuries and associated workmen’s compensation claims

that the TSA is facing, which is the highest in the Federal Government. In 2007, the budget is $55 million, it is estimated, as discussed earlier. This is an increase of 40 percent in just one year.

Fortunately, the industry has a solution that has been discussed

for these problems, and that is in-line EDS systems. However, as

this map shows, that we have put up, several of the Nation’s top

airports do not have letters of intent for Federal funding to implement in-line EDS systems. These include airports in New York,

Washington, D.C. and Miami.

There has been some progress made. This is a picture of the

lobby at the San Francisco International Airport. After installing

the in-line EDS system, you can see how much the lobby was improved. It is dramatic. There is no longer a bottleneck for checked

bags or passengers.

After installing in-line EDS systems, San Francisco saw injury

claims for baggage screeners decline by 42 percent, and the total

cost for workmen’s compensation claims went down an amazing 77

percent. Just imagine if we had in-line systems at all of our major

airports throughout the Country what could happen.

Options for the future, let me transition and talk about that. The

problems are likely to escalate, driven by the increased

enplanements, which will further stress the inefficient processes

that we have in place today. The FAA projects that we will reach

1 billion enplanements in the U.S. by 2015. The current screening

systems will be overwhelmed long before this if we don’t act now

to fund the deployment of automated screening solutions.

There is no more space for additional people or machines in lobbies. Automated technologies for improved security with less real

estate and cost is the answer.

Finally, I would like to talk about technology development. Technology has progressed significantly in recent years, and is poised

to make great advances in the near future. Since GE last testified

before this Subcommittee in 2004, we have made a number of advancements. Each step in our technology road map is upgradeable

to ensure that your investments are not wasted.

We recently released the CTX9400, which is currently in TSA

certification. Its two major benefits include a projected 25 percent

relative reduction in false positives, and a 50 percent reduction in

shield alarms. And as you know, with shield alarms, they are the

hardest to resolve and require opening up of the bag. The release

of the CTX9800 is scheduled for 2008, and it will further increase

throughput and lower operational costs.

GE certified the first actual next generation EDS technology and

x-ray diffraction system which automates threat resolution. Broader leaps in EDS technology are being developed through the longer

range Manhattan II program. GE participates in this important

DHS R&D effort.
41

In summary, the future of checked baggage screening, passenger

checkpoints, rail, public transit and other security technology applications depends on investing in a development path that leads to

affordable, effective, non-intrusive security solutions. As air traffic

grows, the throbbing headache that we feel today is going to become a full-blown migraine. The pain will even be felt by smaller

airports due to the hub and spoke system that we have.

Eventually, another terrorist event or the crushing weight of an

inefficient system will force a less desirable reactive response. GE

stands ready to work with the U.S. Government and all stakeholders to increase security through effective and cost-saving technology.

Thank you, Mr. Chairman.

Mr. KUHL. Thank you, Mr. Cooke.

Mr. Ripp.

Mr. RIPP. Thank you, Mr. Chairman, members of the Committee.

I am very pleased to have this opportunity to appear before you

to discuss what we can do to improve passenger baggage screening.

As you know, since its certification by the FAA in 1998, L–3 has

been one of two suppliers to the TSA of high throughput explosive

detection systems. Since that time, we have deployed over 625 systems. We are the first to go into an in-line configuration at Boston’s

Logan Airport, and we are the first to develop a networking capability, enabling central screening operations, all the while providing

systems to the TSA for the lowest cost, lower by $300,000 versus

similar systems.

Rather than read my entire testimony, I would like to summarize

for you what I believe to be some of the key points. First, we need

to focus on detection and operational efficiency, which translates

into reduced overall cost to deploy and operate. If we continue to

deploy without an operational focus, the long-term costs of our Nation’s aviation security infrastructure will become an overwhelming

burden, which it already is.

Second, a simple review of the TSA budget clearly indicates the

problem areas, the people costs. The cost are high, I believe the

budget has greater than $2.5 billion next year, and it will continue

to grow unless security leverages the efficiency current technology

is capable of providing.

Third, we need to deploy more EDS systems for in-line installation. I think the number of airports with in-line EDS has been

talked about here at about 23. That leaves about 80 of our Nation’s

largest airports with inefficient standalone installations. Both the

TSA and the GAO have reported that in-line baggage screening

could reduce the dependence on TSA screeners by up to 78 percent.

The math is pretty simple. The sooner in-line EDS systems are implemented, the sooner the TSA can begin to save significant annual

recurring costs.

Fourth, currently deployed explosive detection systems are preferable to existing trace detection systems. Why? Trace detection is

slower, it is labor intensive and has poorer detection capability.

Again, as noted by the GAO, replacing trace detection equipment

with EDS units will increase security, increase throughput and reduce the number of screeners required.
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Fifth, save costs and increase the value of current assets by refurbishing the older, standalone units. Why do this? These systems

can be brought to as-new condition and be upgraded with the latest

software releases for approximately one half the cost of purchasing

a new EDS. If the TSA procures new systems for transition to the

more cost-effective in-line installations, the standalone systems can

then be refurbished and redeployed to those airports that are growing and require greater levels of capacity.

Sixth and lastly, focus development dollars on the deployment of

alternate technologies, which when added to the currently deployed

systems, offer very effective paths to increased detection capabilities with much lower false alarm rates. For the most part, next

generation development programs will focus on the introduction of

bigger and higher throughput machines. I believe these machines

will have a higher cost base and therefore a limited applicability

to the general airport market worldwide. Instead, work with industry to develop lower cost alternate technology which utilizes the existing platforms as its base. The result will be cheaper and far

more effective as we strive to provide more flexible capability.

The bottom line is we need to more widely deploy our current

technology to improve the overall level of airport security. If we

simply develop bigger, faster systems, which cannot be cost effectively deployed across the majority of our air travel system, we will

leave gaps that may be exploited. As an example of less than optimal approach to technology is our Nation’s checkpoints. Industry

continues to offer emerging technologies that when deployed, do little to improve overall detection and worse yet, slow down throughput. L–3 is creating and will pilot shortly an advanced checkpoint

solution, which incorporates multiple technologies for screening of

both passengers and their carry-on baggage.

We have simple goals. We want to accommodate 300 plus passengers per hour in a single system that reduces screener requirements at the checkpoint by 40 percent, all with improved detection.

This advanced checkpoint would screen both people and their

carry-on baggage at a targeted cost of little more than the carryon baggage screening systems currently under development.

I appreciate having this opportunity to share our views, and I

look forward to answering your questions.

Mr. KUHL. Thank you, Mr. Ripp.

Mr. Ellenbogen, given the four previous statements, did you have

anything you wanted to add before we go to questions?

Mr. ELLENBOGEN. All I wanted to add was that Reveal was also

one of TSA’s two selected partners to develop carry-on baggage inspection EDS systems, under their CAMBRIA program. We will be

delivering the first CT–80FX this fall, which will automatically

look for explosives and weapons in carry-on baggage.

We share the other witnesses’ desires to improve the overall performance of our checkpoints, while reducing labor and see that as

a great opportunity to do so as we move forward.

What we have learned over the last few years it that stakeholders must work together. There is great advantage to be had with

TSA, the airports, airlines and the manufacturers to work together

to optimize these systems. I don’t think we have taken advantage
43

of all those opportunities in the past. So I appreciate the opportunity to speak here today.

Mr. KUHL. Thank you.

Let me yield at this time to Mr. Costello.

Mr. COSTELLO. Thank you, Mr. Chairman.

Mr. Hauptli, let me ask you, you mentioned in your written testimony about a number of in-line financing alternatives, including

the reauthorization, as you mentioned in your testimony here, of

the Aviation Security Capital Fund. Is it your opinion that reauthorizing the capital fund is the best and simplest and most direct

alternative for financing the EDS?

Mr. HAUPTLI. Yes, sir, and it would be optimal if it could be increased.

Mr. COSTELLO. Very good. Other than providing more funding for

the in-line EDS, what are some of the other things? Is there anything else that you believe that TSA could do to get the EDS system installed?

Mr. HAUPTLI. What can TSA do to improve the installation process?

Mr. COSTELLO. Yes, other than money and financing, what does

TSA need to do in order to bring the EDS system online?

Mr. HAUPTLI. There aren’t that many problems in this area that

money can’t solve, Mr. Costello.

Mr. COSTELLO. So it is money?

Mr. HAUPTLI. It is mostly money, yes, sir, resources. Again, TSA

has tried, but they are within the Department of Homeland Security. The Department of Homeland Security is within the Administration. The Office of Management and Budget has put its heavy

boot on TSA and TSA hasn’t figured out a way to lift that off. So

the LOI process has been stifled and there are a lot of airports with

very much pent-up demand for systems that we are just short of

funding on.

Mr. COSTELLO. Mr. Wood, what is the cost of the AN6400 field

upgrade, and how much savings, in your opinion, would the TSA

realize by utilizing these upgrades?

Mr. WOOD. We estimate the cost of the kit, Mr. Costello, at

$150,000 and estimate the install cost at around $25,000. I think

the answer to your second question is more difficult, because for instance, we were certified, as I mentioned, at 600 bags per hour.

The question is, can the airport’s baggage handling system fully

take advantage of this capacity, does this allow increase or are they

maxed out for other reasons. And I think it will take some field

testing to see what this 25 percent in false alarm rate results in.

I would say one of the key advantages is networking or multiplexing. In other words, when an alarmed bag pops up in one EDS,

that bag will be displayed in the next available screen. An if onscreen resolution is permitted, then it moves along its way. So I

look forward to being able to answer that question more quantitatively.

Mr. COSTELLO. You mention in your testimony that contractual

and other issues have resulted in delaying the AN6400 upgrade at

John Wayne Airport. I wonder if you might elaborate on that.

Mr. WOOD. Yes, sir. As I mentioned, we have tested successfully

in a standalone operation at the Southwest counter at the Phoenix
44

Sky Harbor airport, but are looking forward to the TSA accelerating the implementation and the placement of a contract so that we

can get four of the machines in a networked application, because

well, as I mentioned, we were certified a year ago. We believe that,

we expect no glitches, no bugs in the operational testing. We are

ready to go. So as soon as the TSA is able to complete that testing,

we believe the Government budget provides perhaps for 60 of these

machines to be modified with a kit, and we understand that perhaps 150 to 200 are in in-line applications now and would greatly

benefit from this upgrade.

Mr. COSTELLO. When do you expect Analogic’s carry-on baggage

real-time assessment, Cobra and King Cobra, to be certified?

Mr. WOOD. Next spring. We began this development on our own

company’s money. As a result of close collaboration with the TSA,

we have modified it, the TSA is looking for new and additional

threats, as you know. So we have made quite a number of changes.

We have one of these devices at the laboratory as we speak. As I

mentioned, we have screened 37,000 bags at Boston Logan Airport,

and we would hope to pass the hurdle of formal certification testing

early next year.

Mr. COSTELLO. Will the King Cobra fit behind the ticket counter

like the Reveal CT–80?

Mr. WOOD. I believe it is somewhat bigger, three times the

throughput rate. And so one of these machines would accommodate

two or three of the existing x-ray machines, or the current version

of the Reveal machine. So I would suggest, sir, that you could find

a place to put it and have the same throughput rate without expanding the floor space requirements.

Mr. COSTELLO. Mr. Ripp, how many DX6000’s are in existence

right now, being used?

Mr. RIPP. We have close to over 700 systems installed worldwide.

Mr. COSTELLO. And how many are used here in the United

States?

Mr. RIPP. About 625 are installed in the United States.

Mr. COSTELLO. Very good. Mr. Chairman, that is all the questions that I have at this time, thank you.

Mr. KUHL. Thank you, Mr. Costello.

I don’t want Mr. Ellenbogen to feel left out, so I will start with

you. As you look back at your experience now, Mr. Ellenbogen, obviously you have had a little bit of trial and error through the process here of the implementation of this new kind of screening process, I am interested in what you think the Government should do

differently in that experience that you had. How can we make this

operation go smoother? I would just appreciate your thoughts.

Mr. ELLENBOGEN. I would say the amount of time that it takes

to go from submittal of a system into the certification and approval

process, followed by actual certification into what they call FAT&E,

which is first article acceptance, then into pilot, then into procurement. That cycle is long, to state it simply.

So streamlining that process would certainly help every supplier

at this table.

Mr. KUHL. Anything as it relates to you being a small business,

in your operation, that we could do differently that would make it

easier?
45

Mr. ELLENBOGEN. Nothing in particular about being a smaller

business. Reveal, we have been very pleased with the process we

have gone through with TSA. In the last six months, we have deployed more than 60 machines. We are shipping at a rate of a

dozen systems a month right now and they are going into the airports, they are being installed quickly and inexpensively, as advertised.

And we believe that TSA has moved this process along very

quickly. It is always too slow for a small company, but from a Government perspective, it has been lightning fast.

Mr. KUHL. I appreciate that.

Mr. Ripp, let me just follow up. You had talked a little bit about

refurbishment. I am interested from an economic standpoint what

you see as cost savings, if you can give me some sort of an example,

as we talk about taking some of the existing equipment out, refurbishing. What are we talking about as far as savings go, percentages if you have them, dollars if it is easier to explain it that way.

Mr. RIPP. Sure. We have estimated if we take a system out of

a standalone configuration, some of the ones that are in-line are

difficult to peel out of the conveyor belt systems in place. But the

standalones can be brought back, we believe we can upgrade those,

worst case, for about half the cost, which is about $450,000. Right

now we sell a new system for $880,000. So we estimate about half

the cost.

It is a mechanical upgrade, and it a software upgrade. It is important to note that software upgrades are available to also increase detection capability and lower false alarm rates now, which

we could include in equipment to reduce, again, screener content.

It is our thought that that equipment could then be redeployed

to the mid-size airports that where capacity requirements dictate

the need for a machine that can do, in standalone configuration,

let’s say 350 bags per hour, or in an in-line configuration, to 650.

I also want to note that there are smaller airports where they

hook up and connect to a very simple baggage handling system

where the cost is not the millions of dollars that we heard on the

earlier panels, but maybe $500,000 to $1 million just to hook up,

so that the system can be fed automatically.

Mr. KUHL. OK. Do you view essentially reselling the equipment,

then, after you refurbish it, to another airport?

Mr. RIPP. We would envision that the TSA would then redeploy

this equipment to airports that are heavily dependent upon trace

or want higher throughput EDS. We have not looked at the possibility of reselling the equipment off to another vendor.

One of the advantages of TSA is, of course, we could offer extending the warranties. And as was mentioned earlier, I believe, by one

of the members, using the assets that have already been purchased

wisely and extending their useful life.

Mr. KUHL. Good, thank you.

Mr. Cooke, a question, what do you think the biggest problem or

hurdle is relative to the implementation of the new technologies?

Mr. COOKE. You are thinking of in-line EDS in particular, Mr.

Chairman?

Mr. KUHL. That is what I am thinking, yes.
46

Mr. COOKE. I think frankly it is financing, it is leveraging the

dollars we talked about earlier. I mean, clearly, the bottleneck is

getting airports ready for the equipment and the economics are

staggering. So there has to be a way, and I know there is a working group looking at it, and we are participating, getting ideas

through our GE capital arm, at how to finance these in-line EDS

installations.

Mr. KUHL. So it is the finance side of it? That was Mr. Hauptli’s

comment, that there is not enough money out there for people really to make the conversion or the introduction of the equipment.

Mr. COOKE. I think the business case is compelling, as everybody

has talked about. It is execution now from a finance point of view.

And the appropriations dollars are just not there, so let’s look at

financing alternatives.

Mr. KUHL. Any thoughts, given your perspective, and maybe Mr.

Hauptli, you would like to jump in as a comment to Mr. Costello

about financing not being enough, you talked about the $250 million levels. Is $500 million enough, or is it going to take more than

that?

Mr. HAUPTLI. Sir, it is going to take more than that. Again, the

Federal Government has contributed $2 billion to this problem that

ranges, estimates range from it being anywhere between $4 billion

and $10 billion. So would we like to get it in billion dollar chunks?

You bet. But is half a billion dollars a year better than a quarter

of a billion dollars? It is a start.

Mr. KUHL. I guess my question really kind of goes to, OK, what

can you spend. We could appropriate, we do it every week, practically, another $10 billion here, or whatever, for whatever purpose

it may be. But often times, when we appropriate money, it just

can’t go out the door fast enough. So I guess the question, what I

am looking really for is what level is really a good level of anticipated ability to actually expend and acquire the equipment that is

necessary to process? It is like a bridge, you can only build it so

fast, or a building, you can only build it so fast. So you can only

spend the money so fast.

Mr. HAUPTLI. Mr. Kuhl, I would submit to you that the companies represented at this table would have no trouble whatsoever

ramping up to spend a billion dollars a year, and we could get this

done in 2 to 3 years, as opposed to the next 16 years, which is the

pace that we are currently on.

Mr. KUHL. OK. That is a great answer. That is what I was looking for.

Mr. Wood, do you want to chip in on that one?

Mr. WOOD. Yes, sir, I would.

Mr. KUHL. Notice that play on words there?

Mr. WOOD. Yes, thank you, very good.

[Laughter.]

Mr. WOOD. I will chip in. I would suggest that it is not necessarily new money being appropriated, but how the existing

money is being spent. I believe that the Government peaked or

began with 60,000 screeners shortly after 9/11, and it is now down

to a little over 40,000 consuming, I believe, still close to half of the

TSA’s budget. I think you have heard from panelists here the prospect of greatly reducing that by automating the process, in the case
47

of checkpoint, not looking at every single bag, sometimes with two

screeners, but only the alarmed bags. So I think if you consider the

life cycle costing concept, this equipment pays for itself in a very

orderly basis.

Mr. KUHL. OK, good.

Mr. Costello?

Mr. COSTELLO. No other questions, but I am sure the first panel

would have preferred you to be in the chair instead of Mr. Mica.

[Laughter.]

Mr. COSTELLO. Let me just thank the witnesses for being here

today. Mr. Chairman, I have no further questions. I am sure that

we will be revisiting this issue many times in the future.

Thank you.

Mr. KUHL. And gentlemen, on behalf of the Chairman, let me

thank you for your willingness to come and testify. Like Mr.

Costello said, this issue is not totally completed at this point. There

is a lot of issues and a lot of work to be done. We appreciate your

willingness to help us make the right decisions.

So thank you again for coming and your participation. This hearing is adjourned.

[Whereupon, at 1:20 p.m., the subcommittee was adjourned.]
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