United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Emerging 

Threats, Cybersecurity, and Science and 

Technology; Committee on Homeland 

Security; House of Representatives

COMBATING NUCLEAR 

SMUGGLING 

DHS’s Decision to Procure 

and Deploy the Next 

Generation of Radiation 

Detection Equipment Is Not 

Supported by Its CostBenefit Analysis 

Statement of Gene Aloise, Director 

Natural Resources and Environment 

For Release on Delivery

Expected at 2:00 p.m. EST 

Wednesday, March 14, 2007

 

GAO-07-581T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 14, 2007

COMBATING NUCLEAR SMUGGLING

DHS's Decision to Procure and Deploy 

the Next Generation of Radiation 

Detection Equipment Is Not Supported by 

Its Cost-Benefit Analysis 

Highlights of GAO-07-581T, a testimony 

before the Subcommittee on Emerging 

Threats, Cybersecurity, and Science and 

Technology; Committee on Homeland 

Security; House of Representatives 

The Department of Homeland

Security (DHS) is responsible for 

addressing the threat of nuclear 

smuggling. Radiation detection 

portal monitors are key elements in 

our national defenses against such

threats. DHS has sponsored R&D 

and testing activities to develop a 

“next generation” portal monitor,

known as the advanced

spectroscopic portal monitor. 

However, each one costs 6 times 

more than a current portal monitor. 

In March 2006, we recommended 

that DHS conduct a cost-benefit

analysis to determine whether the 

new portal monitors are worth the 

additional cost. In June 2006, DHS 

issued its analysis. In October

2006, we issued our report that 

assessed the DHS study. 

GAO’s statement, based on our 

October 2006 report, addresses 

whether DHS’s cost-benefit 

analysis provides an adequate basis 

for its decision to purchase and 

deploy the next generation portal 

monitors. 

What GAO Recommends

GAO’s October 2006 report

included two recommendations 

designed to improve the quality and 

comprehensiveness of the 

Department’s analysis. DHS

neither agreed nor disagreed with

our recommendations, but 

continued to support its analysis as 

a solid basis for buying and 

deploying the new generation of

radiation portal monitors. 

DHS’s cost-benefit analysis does not provide a sound analytical basis for its 

decision to purchase and deploy the new portal monitor technology. Our 

review of the analysis determined that it had the following problems: 

Regarding the performance of the portal monitors: 

• Instead of using the results of its own portal monitor tests conducted in 

2005, DHS assumed that the new portal monitor technology would 

correctly detect and identify highly enriched uranium (HEU) 95 percent 

of the time—a performance level that far exceeds the new technology’s 

current capabilities. 

• To determine the performance of the current generation of portal 

monitors in detecting HEU, DHS used data from limited tests carried out 

in 2004 that test officials concluded were unreliable for such purposes. 

• DHS’s analysis of the new technology portal monitors was incomplete 

because the analysis focused on identifying HEU, but did not fully 

consider how well the new portal monitor technology could correctly 

detect or identify other dangerous radiological or nuclear materials. 

Regarding cost estimates:

• In comparing the costs of the new and current technologies, the 

procurement costs of the current generation portal monitors were highly 

inflated because DHS assumed a unit cost of about $131,000. However, 

the contract price at the time of the analysis was about $55,000. 

According to officials who manage the contract, it was to expire and 

they expected portal monitor prices to increase, but not nearly as much 

as DHS assumed. 

• DHS stated that the primary benefit of deploying the new portal 

monitors is reducing unnecessary secondary inspections. However, 

DHS’s analysis does not fully estimate today’s baseline costs for 

secondary inspections, which makes it impossible to determine whether 

the use of the new portal monitors as currently planned, will result in 

significant cost savings for these inspections. 

• The new portal monitor contract price has exceeded DHS’s total cost 

estimate by about $200 million. The cost-benefit analysis shows the total 

cost for deploying both current and new portal monitors to be about $1 

billion. However, in July 2006, DHS announced that it had awarded 

contracts to develop and purchase up to $1.2 billion worth of the new 

portal monitors over 5 years. 

• DHS’s cost-benefit analysis omitted many factors that could affect the 

cost of new portal monitors, such as understating the life-cycle costs for 

operating and maintaining the equipment over time. 

 

For these reasons, DHS’s cost-benefit analysis does not meet the intent of 

our March 2006 report recommendation to fully assess the costs and benefits 

before purchasing any new equipment. 

www.gao.gov/cgi-bin/getrpt?GAO-07-581T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gene Aloise at 

(202) 512-3841 or aloisee@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to appear here today to discuss our assessment of the 

Department of Homeland Security’s (DHS) May 2006 cost-benefit analysis 

used to support the purchase and deployment of next generation radiation 

portal monitors.1 This is an important decision because, if procured, these 

new portal monitors will be considerably more expensive than the portal 

monitors in use today. Combating nuclear smuggling is one of our nation’s 

key national security objectives and the deployment of radiation detection 

equipment including portal monitors at U.S. ports of entry, including 

border crossings and domestic seaports, is an integral part of this system. 

DHS, through its Domestic Nuclear Detection Office (DNDO), is 

responsible for acquiring and supporting the deployment of radiation 

detection equipment, including portal monitors, within the United States.

The Pacific Northwest National Laboratory (PNNL), one of the 

Department of Energy’s (DOE) national laboratories, is under contract to 

manage the deployment of radiation detection equipment for DHS.2

 U.S. 

Customs and Border Protection (CBP) is responsible for screening cargo 

as it enters the nation at our borders, which includes operating radiation 

detection equipment to interdict dangerous nuclear and radiological 

materials. 

The radiation portal monitors in use today can detect the presence of 

radiation, but they cannot distinguish between types of radiological 

material. For example, they cannot tell the difference between harmless 

products that emit radiation, such as ceramic tile, and dangerous 

materials, such as highly enriched uranium (HEU), that could be used to 

construct a nuclear weapon. Generally, CBP’s standard procedures require 

incoming cargo to pass through one of these radiation portal monitors to 

screen for the presence of radiation. This “primary inspection” serves to 

alert CBP officers when a radioactive threat might be present. If there is a 

 1

GAO, Combating Nuclear Smuggling: DHS’s Cost-Benefit Analysis to Support the

Purchase of New Radiation Detection Portal Monitors Was Not Based on Available

Performance Data and Did Not Fully Evaluate All the Monitors’ Costs and Benefits, 

GAO-07-133R (Washington, D.C.: Oct. 17, 2006). GAO, Combating Nuclear Smuggling: 

DHS Has Made Progress Deploying Radiation Detection Equipment at U.S. Ports of 

Entry, but Concerns Remain, GAO-06-389 (Washington, D.C.: Mar. 22, 2006).

2

DOE manages the largest laboratory system of its kind in the world. The mission of DOE’s 

22 laboratories has evolved. Originally created to design and build atomic weapons, these 

laboratories have since expanded to conduct research in many disciplines – from highenergy physics to advanced computing. 

Page 1 GAO-07-581T 
potential threat, CBP procedures require a “secondary inspection.” To 

confirm the presence of radiation, this secondary inspection usually 

includes a second screening by a radiation portal monitor as well as a 

screening by CBP officers using radioactive isotope identification devices.

These handheld devices are used to differentiate between types of 

radioactive material to determine if the radiation being detected is 

dangerous. Both the radiation portal monitors and handheld devices are 

limited in their abilities to detect and identify nuclear material. 

DHS would like to improve the capabilities of its portal monitors so that 

they can perform the dual roles of detecting radiation and identifying 

radiological materials. In this regard, DHS has sponsored research, 

development, and testing activities designed to create the next generation 

of portal monitors capable of performing both functions. These new, 

advanced portals are known as advanced spectroscopic portals (ASPs). In 

July 2006, DHS awarded contracts to three vendors for developing the 

advanced spectroscopic portals’ capabilities. These awards were based 

mainly on performance tests conducted at DHS’s Nevada Test Site in 2005, 

where ten competing advanced spectroscopic vendors’ monitors were 

evaluated. At the same time, three current technology portal monitors 

were also tested. 

To ensure that DHS’s substantial investment in radiation detection 

technology yields the greatest possible level of detection capability at the 

lowest possible cost, in a March 2006 GAO report,3

 we recommended that

once the costs and capabilities of ASPs were well understood, and before 

any of the new equipment was purchased for deployment, the Secretary of 

DHS work with the Director of DNDO to analyze the costs and benefits of 

deploying ASPs. Further, we recommended that this analysis focus on 

determining whether any additional detection capability provided by the 

ASPs was worth the considerable additional costs. In response to our 

recommendation, DNDO issued its cost-benefit analysis in May 2006, and 

an updated, revised version in June 2006. According to senior agency 

officials, DNDO believes that the basic conclusions of its cost-benefit 

analysis show that the new advanced spectroscopic portal monitors are a 

sound investment for the U.S. government. 

 3

GAO, Combating Nuclear Smuggling: DHS Has Made Progress Deploying Radiation

Detection Equipment at U.S. Ports of Entry, but Concerns Remain, GAO-06-389 

(Washington, D.C.: Mar. 22, 2006). 

Page 2 GAO-07-581T 
Mr. Chairman, my remarks today focus on the cost-benefit analysis DNDO

used in support of its decision to purchase new ASP portal monitors. 

Specifically, I will discuss whether DNDO’s June 2006 cost-benefit analysis 

provides an adequate basis for the substantial investment that acquiring

and deploying ASPs will necessitate.

My testimony is based upon our October 2006 report that evaluated 

DNDO’s cost-benefit analysis.4

 The work for our report was done in 

accordance with generally accepted government auditing standards. 

In summary, DNDO’s 2006 cost-benefit analysis does not provide a sound 

analytical basis for its decision to purchase and deploy the new advanced

spectroscopic portal monitor technology. 

Regarding the performance of the portal monitors: 

• Instead of using the results of its performance tests conducted in 2005, 

DNDO’s analysis simply assumed that ASPs could detect highly enriched 

uranium 95 percent of the time, a performance level far exceeding the

capabilities of the new technology’s current demonstrated capabilities. 

The 2005 test results showed that the best of the three winning vendor 

monitors could only identify masked HEU5

 about 50 percent of the time.

• To determine the current generation of portal monitors’ performance in 

detecting HEU, DNDO used data from limited tests carried out in 2004 that 

test officials concluded was unreliable for such purposes. In their written 

report, test officials explicitly stated that the data were not indicative of 

how well current technology portal monitors might perform in the field 

particularly for detecting HEU. 

• DNDO’s analysis of the new technology portal monitors’ performance was 

deficient because it focused on detecting and identifying HEU, but did not 

fully consider other dangerous radiological or nuclear materials. DNDO 

should have assessed the ASPs’ abilities to detect several realistic threat 

materials. 

 4

GAO, Combating Nuclear Smuggling: DHS’s Cost-Benefit Analysis to Support the

Purchase of New Radiation Detection Portal Monitors Was Not Based on Available

Performance Data and Did Not Fully Evaluate All the Monitors’ Costs and Benefits, 

GAO-07-133R (Washington, D.C.: Oct. 17, 2006). 

5

“Masking” is an attempt to hide dangerous nuclear or radiological material by placing it 

with benign radiological sources. 

Page 3 GAO-07-581T 
Regarding cost estimates: 

• In comparing the costs of the new and current technologies, the 

procurement costs of the current generation portal monitors were highly 

inflated because DNDO assumed a unit cost of about $131,000, while the 

contract price at the time of the analysis was about $55,000. According to 

officials who manage the contract, it was to expire and while they 

expected portal monitor prices to increase, they did not believe the cost 

would be as much as the price used in DNDO’s analysis. 

• DNDO stated that the primary benefit of deploying the new portal 

monitors is reducing unnecessary secondary inspections. However, 

DNDO’s analysis did not fully estimate today’s baseline costs for 

secondary inspections, which makes it impossible to determine whether 

the use of the new portal monitors as currently planned will result in 

significant cost savings for these inspections. 

• The new portal monitor contract price has exceeded DNDO’s total cost 

estimate by about $200 million. The cost-benefit analysis shows the total 

cost for deploying both current and new portal monitors to be about $1 

billion. However, in July 2006, DHS announced that it had awarded 

contracts to develop and purchase up to $1.2 billion worth of the new 

portal monitors over 5 years. 

• DNDO’s cost-benefit analysis omitted many factors that could affect the 

cost of new portal monitors, such as understating the life-cycle costs for 

operating and maintaining the equipment over time. 

In general, DHS is responsible for providing radiation detection 

capabilities at U.S. ports of entry. Until April 2005, CBP managed this 

program. However, on April 15, 2005, the President directed the 

establishment of DNDO within DHS. DNDO’s duties include acquiring and 

supporting the deployment of radiation detection equipment, including 

portal monitors. CBP continues its traditional screening function at ports 

of entry to interdict dangerous nuclear and radiological materials through 

the use of radiation detection equipment. The SAFE Port Act of 2006 

formally authorizes DNDO’s creation and operation.

6

 PNNL manages the 

deployment of radiation detection equipment for DHS. 

Background 

 6

Pub. L. No. 109-347, tit. V, 120 Stat. 1884, 1932 (2006). 

Page 4 GAO-07-581T 
DHS’s program to deploy radiation detection equipment at U.S. ports of 

entry has two goals. The first is to use this equipment to screen all cargo, 

vehicles, and individuals coming into the United States. The second is to 

screen this traffic without delaying its movement into the nation. DHS’s 

current plans call for completing the deployment of radiation portal 

monitors at U.S. ports of entry by September 2013. The current technology 

portal monitors, known as plastic scintillators or PVTs, cost about $55,000 

per unit, while the advanced spectroscopic portal monitors, known as 

ASPs, will cost around $377,000 per unit.7

In July 2006, DHS announced that it had awarded contracts to three ASP 

vendors to further develop and purchase $1.2 billion worth of ASPs over 5 

years. Congress, however, provided that none of DNDO’s appropriated 

funds for systems acquisition could be obligated for full procurement of 

ASPs until the Secretary of DHS certifies through a report to the 

Committees on Appropriations for the Senate and House of 

Representatives that ASPs would result in a significant increase in 

operational effectiveness.8

 7

Prices include only equipment purchase. Installation costs are extra. 

8

Department of Homeland Security Appropriations Act for Fiscal Year 2007, Pub. L. No. 

109-295, tit. IV, 120 Stat. 1355, 1376 (2006). 

Page 5 GAO-07-581T 
DHS is developing new portal monitors, known as ASPs that, in addition to

detecting nuclear or radiological material, can also identify the type of

material. In 2005, DNDO conducted side-by-side testing at the Nevada Test 

Site (NTS)9

 on 10 ASP systems and 3 PVT systems developed by private 

sector companies, including the PVT systems currently deployed. DHS 

requested that the National Institutes of Standards and Technology (NIST) 

provide assistance by conducting an independent analysis of data acquired 

during the last phase of developmental testing of ASPs to help DHS 

determine the performance of ASP portal monitors being proposed by 

private sector companies. NIST compared the 10 ASP systems, and in June

2006 submitted a report to DHS on the results of that testing.10

Performance tests of ASPs showed that they did not meet DNDO’s main 

performance assumption in the cost-benefit analysis of correctly 

identifying HEU 95 percent of the time it passes through portal monitors. 

The 95 percent performance assumption included ASPs’ ability to both 

detect bare, or unmasked, HEU in a container and HEU masked in a 

container with a more benign radiological material.11 Based on NIST’s 

assessment of the performance data, the ASP prototypes (manufactured 

by the three companies that won DNDO’s recent ASP procurement 

contract) tested at NTS identified bare HEU only 70 to 88 percent of time.

Performance tests also showed that ASPs’ ability to identify masked HEU 

fell far short of meeting the 95 percent goal established for the cost-benefit 

analysis. According to DNDO, identifying masked HEU is the most difficult 

case to address. DOE officials told us that benign radiological materials 

could be used to hide the presence of HEU. NIST reported that the best 

ASP prototype DNDO tested in Nevada during 2005, and which won a 

procurement contract, was able to correctly identify masked HEU and 

depleted uranium (DU) only 53 percent of the time. Similarly, the ASP 

prototypes submitted by the other two companies that won DNDO ASP 

procurement contracts were able to identify masked HEU and DU only 45 

percent and 17 percent of the time. 

DNDO Ignored Its 

Own Performance 

Test Results and 

Instead Relied on the 

Potential 

Performance of New 

Portal Monitors and 

Unreliable Estimates 

of Current Equipment 

Performance 

 9

DHS and DOE are collaborating in building a new Radiological and Nuclear 

Countermeasures Test and Evaluation Complex at the Nevada Test Site to support the 

development, testing, acquisition, and deployment of radiation detection equipment. The 

facility is expected to become fully operational in early 2007. Currently, an interim facility 

at NTS is being used to test radiation detection equipment.

10NIST did not evaluate the PVTs or compare their performance to the performance of the 

ASPs.

11The ability to detect masked HEU is based on DOE guidance on performing the 

evaluation. 

Page 6 GAO-07-581T 
Despite these results, DNDO did not use the information from these tests 

in its cost-benefit analysis. Instead, DNDO officials told us that since the 

new portal monitors cannot meet the 95 percent detection goal, they relied 

on the assumption that they will reach that level of performance sometime 

in the future. DNDO officials asserted that the ASPs’ current performance 

levels would improve, but they provided no additional information as to 

how the 95 percent goal will be achieved or an estimate of when the 

technology would attain this level of performance. 

Moreover, DNDO’s cost-benefit analysis only considered the benefits of 

ASPs’ ability to detect and identify HEU and did not consider the ASPs’ 

ability to detect and identify other nuclear and radiological materials. The 

ability of an ASP to identify specific nuclear or radiological materials 

depends on whether the ASP contains software that is specific to those 

materials. In our view, a complete cost-benefit analysis would include an 

assessment of ASPs’ ability to detect and identify a variety of nuclear and 

radiological material, not just HEU. By excluding radiological and nuclear 

materials other than HEU, DNDO’s analysis did not consider the number 

of secondary inspections that would be related to these materials and 

hence it likely underestimated the costs of ASP use. Further, DNDO told

us the assumptions for the ability of ASP systems to detect and identify 

HEU 95 percent of the time came from the ASP performance 

specifications. However, we examined the performance specifications and 

found no specific requirement for detecting or identifying HEU with a 95 

percent probability.12 While there is a requirement in the performance 

specification for the identification for HEU and other special nuclear 

material, we found no associated probability of success in performing this 

function. 

DNDO’s cost-benefit analysis also may not accurately reflect the 

capabilities of PVTs to detect nuclear or radiological material. DNDO 

officials acknowledged that DNDO tested the performance of PVTs along 

with the ASPs in 2005, but did not use the results of these tests in its costbenefit analysis. According to these officials and NIST staff who assisted

in the testing, the PVT performance data were unusable because the PVTs’ 

background settings were not set properly. Consequently, DNDO officials 

 12The performance specifications contain a requirement for detecting, not identifying, 

californium-252 with a 95 percent probability. Californium-252 has similar radiological 

properties to HEU. In addition, the performance specifications contain a requirement for 

detecting, but not identifying, other radiological materials such as cobalt-57, cobalt-60, 

barium-133, cesium-137, and americium-241. 

Page 7 GAO-07-581T 
told us the analysis was based on the performance of PVT monitors that 

PNNL tested during 2004 in New York. However, the results from these 

field tests are not definitive because, as PNNL noted in its final report, the 

tests did not use HEU and, therefore, the results from the tests did not 

indicate how well PVT portal monitors would be able to detect HEU in the 

field.13 Moreover, the PVT portal monitors that PNNL used had only one 

radiation detection panel as opposed to the four-panel PVT monitors that 

DHS currently deploys at U.S. ports of entry. An expert at a national 

laboratory told us that larger surface areas are more likely to detect 

radiological or nuclear material. DNDO also stated that due to the nature 

of the testing at the Nevada Test Site, the tests did not provide the data 

needed for the cost-benefit analysis. According to DNDO officials, this 

data would come from analysis of the performance of fielded systems at 

U.S. ports-of-entry where the probability to detect threats could be 

compared to false alarm rates. 

DNDO’s director stated twice in testimony before the House Homeland 

Security Committee, Subcommittee on Prevention of Nuclear and 

Biological Attack—once on June 21, 2005, and again on May 26, 2006—that

the ASP and PVT portals would be evaluated against one another in 

“extensive high-fidelity” tests. In our view, the results of such testing are 

critical to any decision by DNDO to employ new technology, such as ASPs, 

that might help protect the nation from nuclear smuggling. According to

DNDO officials, new tests now underway at the DHS Nevada Test Site are 

comparing the performance of ASPs and PVTs side-by-side. 

 13Pacific Northwest National Laboratory, A Sensitivity Comparison of NaI and PVT Portal 

Monitors at a Land-Border Port-of-Entry, p. iii, November 2004. For Official Use Only.

Page 8 GAO-07-581T 
DNDO officials told us they did not follow the DHS guidelines for 

performing cost-benefit analyses in conducting their own cost-benefit 

analysis.14 These guidelines stipulate, among other things, that such studies 

should address all of the major costs and benefits that could have a 

material effect on DHS programs. However, DNDO’s analysis omitted 

many factors that could affect the cost of new radiation portal monitors. 

For example, DNDO officials told us that there are over 12 different types 

of ASP monitors, yet they only estimated the cost of cargo portal monitors 

that would be used at land border crossings. In reality, DNDO and CBP 

plan to deploy different types of ASPs that would have varying costs, such

as portal monitors at seaports which would have higher costs. 

Additionally, DNDO did not capture all the costs related to developing the 

different types of ASP monitors. In our view, developing realistic cost 

estimates should not be sacrificed in favor of simplicity. 

DNDO also underestimated the life-cycle costs for operations and 

maintenance for both PVT and ASP equipment over time. DNDO’s analysis 

assumed a 5-year life-cycle for both PVT and ASP equipment. However, 

DNDO officials told us that a 10-year life-cycle was a more reasonable 

expectation for PVT and ASP equipment. The analysis assumes that the 

annual maintenance costs for PVT and ASP monitors will each equal 10 

percent of their respective procurement costs. This means that 

maintenance costs for PVTs would be about $5,500 per year per unit based 

on a $55,000 purchase price and ASP maintenance costs would be about 

$38,000 per year per unit based on a $377,000 purchase price. Given the 

much higher maintenance costs for ASPs and the doubling of the life-cycle 

to 10 years, the long-term implications for these cost differences would be 

magnified. Consequently, DNDO’s analysis has not accounted for about 

$181 million in potential maintenance costs for ASPs alone. 

Furthermore, DNDO did not assess the likelihood that radiation detection 

equipment would either misidentify or fail to detect nuclear and 

radiological materials. Rather, DNDO’s cost-benefit analysis focuses on the 

ability of ASPs to reduce false alarms—alarms that indicate nuclear or 

radiological material is in a container when, in fact, the material is actually

non-threatening, such as ceramic tile. Reducing false alarms would reduce 

the number of secondary inspections of non-threatening nuclear and 

DNDO’s Cost-Benefit 

Analysis was 

Incomplete and Used 

Inflated Cost 

Estimates for PVT 

Equipment 

 14DHS, Capital Planning and Investment Control, Cost-Benefit Analysis (CBA) Guidebook 

2006, Version 2.0, February 2006. Traditional rules of performing cost-benefit analyses

include assessing the full life-cycle costs for operation and maintenance, and determining 

the level of confidence in cost data. 

Page 9 GAO-07-581T 
radiological materials and therefore the costs of those inspections. 

However, as required by DHS’s guide to performing cost-benefit analyses, 

DNDO’s analysis did not include all costs. In particular, the analysis did 

not include the potentially much bigger cost of “false negatives.” False 

negatives are instances in which a container possesses a threatening 

nuclear or radiological material, but the portal monitor either misidentifies 

the material as non-threatening or does not detect the material at all, thus 

allowing the material to enter the country. During the 2005 Nevada tests, 

the incidence of false negatives among the three vendors who received 

contracts ranged from about 45 percent to slightly more that 80 percent. 

This raises concerns because, as explained to us by a scientist at a national 

laboratory, at this level of performance, ASPs could conceivably 

misidentify HEU as a benign nuclear or radiological material or not detect 

it at all, particularly if the HEU is placed side by side with a nonthreatening material such as kitty litter. 

In recent testimonies before Congress, DNDO’s Director has cited the 

primary benefit of deploying ASP monitors as reducing unnecessary 

secondary inspections.15 DNDO’s cost-benefit analysis focused on 

measuring the benefits of ASP’s ability to reduce false alarms—alarms that 

indicate nuclear or radiological material is present when, in fact, it is not 

or such material is actually non-threatening. Reducing false alarms would 

reduce the number of secondary inspections of non-threatening nuclear

and radiological materials and therefore the costs of those inspections. 

Even on this point, however, DNDO’s analysis was flawed. For example, it

did not estimate the costs of secondary inspections as they are carried out 

today. DNDO’s analysis needs these baseline costs to compare alternatives 

because without them, it is impossible to determine whether the use of 

ASPs, as planned, will result in cost savings for secondary inspections. 

While we agree that facilitating commerce at U.S. ports of entry by 

reducing unnecessary secondary inspections is an important goal, we 

believe that the primary rationale for deploying portal monitors should be 

to protect the nation from nuclear and/or radiological attack. We found 

that DNDO’s analysis did not even attempt to measure the level—or 

value—of security afforded by portal monitors. 

 15Enlisting Foreign Cooperation in U.S. Efforts to Prevent Nuclear Smuggling: Hearing 

Before the House Committee on Homeland Security, Subcommittee on Prevention of 

Nuclear and Biological Attack, 109th Cong. (May 25, 2006)(statement of Mr. Vayl S. 

Oxford, Director, DNDO); Detecting Smuggled Nuclear Weapons, Hearing Before the 

Senate Judiciary Committee, Subcommittee on Terrorism, Technology, and Homeland

Security, 109th Cong. (July 27, 2006)(statement of Mr. Vayl S. Oxford, Director, DNDO). 

Page 10 GAO-07-581T 
In addition, the ASP contract award has exceeded DNDO’s estimate for 

total cost by about $200 million. The cost-benefit analysis shows the total 

cost for deploying PVT and ASP monitors to be about $1 billion, which 

covers all costs related to acquisition, design, maintenance, and physical

inspection over 5 years (for both PVT and ASP). However, in July 2006, 

DHS announced that it had awarded contracts to develop and purchase up

to $1.2 billion worth of ASP portal monitors over 5 years. Furthermore, the 

cost-benefit analysis underestimates total deployment costs and does not 

account for other major costs, such as physical inspections of cargo 

containers, an additional procurement of 442 new PVT monitors, 

installation and integration, and maintenance. 

Finally, DNDO overstated the purchase price of PVT monitors. Although 

DHS is currently paying an average of about $55,000 per monitor, DNDO’s 

cost-benefit analysis assumed the PVT would cost $130,959—the highest 

published manufacturers’ price for the government.16 According to DNDO’s 

Director, DNDO chose the highest published price because the current 

contract for portal monitors at that time was to expire, and the portal 

monitors will probably cost more in the future. However, the information 

DNDO provided us does not explain why DNDO assumes that the future 

price will be more than double what DHS was currently paying, as 

assumed in DNDO’s analysis. PNNL officials told us that the future price 

will almost certainly be lower than the price used in DNDO’s analysis. 

In conclusion, DNDO’s approach to the cost-benefit analysis omitted many 

factors that could affect the cost of new radiation portal monitors. For 

these reasons, DHS’s cost-benefit analysis does not meet the intent of our 

March 2006 report recommendation to fully assess the costs and benefits

before purchasing any new equipment. 

Mr. Chairman, this concludes my prepared statement. I would be happy to

respond to any questions that you or other members of the Subcommittee 

may have. 

 16DNDO, Cost Benefit Analysis for Next Generation Passive Radiation Detection of Cargo 

an the Nation’s Border Crossings, May 30, 2006. 

Page 11 GAO-07-581T 
For further information about this testimony, please contact me, Gene 

Aloise, at (202) 512-3841 or at aloisee@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this statement. John Delicath, Jim Shafer, and Eugene 

Wisnoski made key contributions to this statement. 

GAO Contact and 

Staff 

Acknowledgements 

Page 12 GAO-07-581T 
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