CHECKED BAGGAGE 

SCREENING

TSA Has Deployed 

Optimal Systems at 

the Majority of TSARegulated Airports, 

but Could Strengthen 

Cost Estimates

Report to Congressional Requesters

April 2012

GAO-12-266

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-266, a report to 

congressional requesters 

April 2012 

CHECKED BAGGAGE SCREENING

TSA Has Deployed Optimal Systems at the Majority 

of TSA-Regulated Airports, but Could Strengthen 

Cost Estimates

Why GAO Did This Study

TSA’s EBSP, one of DHS’s largest 

acquisition programs, aims to improve 

security and lower program life cycle 

costs by optimizing checked baggage 

screening systems that best meet the 

needs of the nation’s airports. This 

includes, among other things, the 

integration of baggage screening 

equipment into baggage handling 

systems, referred to as in-line systems. 

Installing in-line systems typically 

requires airports to undertake costly 

facility modification projects, for which 

TSA will generally reimburse up to the 

applicable federal cost share. As 

requested, GAO examined (1) the 

status of TSA’s efforts to install optimal 

checked baggage screening systems 

in collaboration with airports, (2) how 

reducing the federal cost share for 

eligible airport modification projects 

from 90 percent to its previous level of 

75 percent would affect the amount 

that TSA pays for modifications, and 

(3) whether TSA’s methods for 

estimating and validating costs for the 

EBSP are consistent with best 

practices. GAO reviewed EBSP 

planning and status documents, 

compared TSA’s cost estimation 

approach against GAO best practices, 

and visited 10 airports selected in part 

based on the status of the EBSP 

optimization at these airports. Although 

the results from these visits are not 

generalizable, they provided insights 

into the program.

What GAO Recommends

GAO recommends that TSA ensure 

that its life cycle cost estimates 

conform to cost estimating best 

practices. DHS concurred with GAO’s

recommendation.

What GAO Found

The Transportation Security Administration’s (TSA) Electronic Baggage 

Screening Program (EBSP) reports that 76 percent of the airports (337 of 446) 

the agency regulates for security have a mix of in-line and stand-alone baggage 

screening configurations that best meet airport needs (i.e., optimal systems). 

However, only 36 percent (10 of 28) of the nation’s larger airports—based on 

factors such as the total number of takeoffs and landings annually—have 

complete optimal systems. This is because the larger airports generally need 

more complex in-line systems and often require a significant amount of airport 

infrastructure modification and construction. In August 2011, TSA shifted its 

focus from installing optimal baggage screening systems to replacing aging 

machines (recapitalization). However, TSA plans to continue to optimize systems 

during many of its recapitalization projects. 

Using TSA cost estimates, GAO estimates that reducing the portion of costs that 

TSA pays for facility modifications associated with the installation of optimal 

baggage screening systems, from 90 percent to 75 percent, would lower the 

federal government’s cost for airport modification projects it supports by roughly 

$300 million from fiscal year 2012 through fiscal year 2030. Officials from all 10 

airports with whom GAO spoke stated that airports benefit from the installation of 

integrated, in-line baggage screening systems. The primary benefit—cited by 

representatives from 9 of the airports GAO visited—is that passenger congestion 

is reduced by removing stand-alone machines from lobbies or ticketing areas. 

Other benefits cited by airports included a reduction in lost baggage and 

increased screening and passenger throughput. However, for a variety of 

reasons, representatives from 8 of 10 airports GAO visited opposed a reduction 

in the federal cost share for related airport modifications. 

TSA established cost estimates for the EBSP to help identify total program cost, 

recapitalization cost, and potential savings resulting from installing optimal 

systems, but its processes for developing these estimates do not fully comply 

with best practices. These include, among other things, ensuring that the 

estimates comprise all costs and are well documented. For example, TSA’s 

estimates were properly adjusted for inflation and were developed using relevant 

data, such as existing contracts for equipment purchases and maintenance 

costs. However, the estimates did not include all costs, for example, the costs 

associated with detecting all security threats, and many assumptions and 

methodologies underlying the cost model were not clearly documented. As 

highlighted in GAO’s past work, a high-quality, reliable cost estimation process 

provides a sound basis for making accurate and well-informed decisions about 

resource investments and budgets and thus is critical to the success of a 

program. Developing accurate cost estimates would help ensure that the 

program does not experience unanticipated cost growth and program funding 

needs resulting from future recapitalization and facility modification activities. In 

addition, TSA is working with the Department of Homeland Security (DHS) to 

develop an approved acquisition program baseline, which according to DHS 

guidance is the contract between program and departmental oversight officials 

for what will be delivered, how it will perform, and what it will cost. TSA expects 

the baseline to be approved in May 2012.

View GAO-12-266. For more information, 

contact Stephen M. Lord at (202) 512-4379 or 

lords@gao.gov. 
Page i GAO-12-266 Checked Baggage Screening 

Letter 1 

Background 8

TSA Has Made Progress in Deploying Optimal Checked Baggage 

Screening 17

Reducing the Federal Cost Share for Eligible Airport Facility 

Modification Projects Could Reduce TSA’s Costs 22

TSA’s Cost Estimation Processes Do Not Fully Comply with Best 

Practices, and TSA and DHS Are Working Together to Establish 

an Acquisition Program Baseline 26

Conclusions 34

Recommendation for Executive Action 34

Agency Comments and Our Evaluation 34

Appendix I Objectives, Scope, and Methodology 37

Appendix II Status of Implementation Efforts for TSA’s EBSP 42

Appendix III Our Evaluation of EBSP’s Cost Estimate Process 44

Appendix IV Comments from the Department of Homeland Security 46

Appendix V GAO Contact and Staff Acknowledgments 48

Tables

Table 1: Funding Available for the EBSP for Fiscal Years 2006 to 

2012 14

Table 2: GAO’s Assessment of TSA’s Method for Developing EBSP 

Life Cycle Cost Estimates 28

Table 3: Checked Baggage Configurations for TSA-Regulated 

Airports That Have Optimal Systems as of December 2011 42

Table 4: TSA-Regulated Airports with at Least One In-line System 

as of December 2011 42

Contents
Page ii GAO-12-266 Checked Baggage Screening 

Table 5: Numbers of In-line Systems and Stand-alone EDS and ETD 

Machines for TSA-Regulated Airports as of December 2011 43

Table 6: Summary Assessment of TSA’s Electronic Baggage 

Screening Program Cost Estimate Compared to Best 

Practices 44

Figures

Figure 1: Transportation Security Officer Removes Checked 

Baggage from Stand-alone EDS Machine 9

Figure 2: An ETD Machine Being Used to Manually Resolve a 

Suspect Item 10

Figure 3: A Checked Baggage Inspection System That Includes a 

Baggage Handling System with Three In-line EDS 

Machines 11

Figure 4: A Diagram of a Checked Baggage Inspection System and 

Three Levels of Screening 12

Figure 5: Baggage Screening Configurations at the 337 Airports 

with Optimal Systems 19

Figure 6: Number of Airports with Optimal Baggage Screening 

Systems Compared to All TSA-Regulated Airports 20

Figure 7: Age and Number of Deployed EDS Machines as of 

December 2011 22
Page iii GAO-12-266 Checked Baggage Screening 

Abbreviations

AIP Airport Improvement Program

ATSA Aviation and Transportation Security Act

CBRA Checked Baggage Resolution Area

DHS Department of Homeland Security

EBSP Electronic Baggage Screening Program 

EDS explosives detection system

ETD explosives trace detection

FAA Federal Aviation Administration

LCCE Life Cycle Cost Estimate

LOI letter of intent

OMB Office of Management and Budget

OSR On-Screen Resolution

OTA other transaction agreements

TSA Transportation Security Administration

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately.
Page 1 GAO-12-266 Checked Baggage Screening 

United States Government Accountability Office 

Washington, DC 20548

April 27, 2012

The Honorable John D. Rockefeller IV

Chairman

The Honorable Kay Bailey Hutchison

Ranking Member

Committee on Commerce, Science, and Transportation

United States Senate

The Honorable Susan M. Collins

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Jim DeMint

United States Senate

The Honorable Henry Johnson

House of Representatives

As demonstrated by the attempted attack of Northwest Airlines Flight 253 

from Amsterdam to Detroit on Christmas Day in 2009, commercial 

aviation continues to be a target of terrorist activity. The 1988 bombing of 

a U.S. airliner over Lockerbie, Scotland, further demonstrates that 

explosive devices placed in checked baggage have long been an area of 

concern. The Aviation and Transportation Security Act (ATSA), enacted 

on November 19, 2001, created the Transportation Security 

Administration (TSA), now a component of the Department of Homeland 

Security (DHS), and mandated, among other things, that it provide for the 

screening of all checked baggage using explosive detection systems.1

 

1 See Pub. L. No. 107-71, §§ 101(a), 110(b), 115 Stat. 597, 597-604, 614-16 (2001) 

(codified as amended at 49 U.S.C. §§ 114(a), 44901(d)). Pursuant to the Homeland 

Security Act of 2002, enacted on November 25, 2002, TSA transferred from the 

Department of Transportation to the newly formed DHS. See Pub. L. No. 107-296, §§ 101, 

403(2), 425, 116 Stat. 2135, 2142, 78, 85-86 (2002). 

To 

satisfy this mandate, TSA has deployed two types of screening 

equipment to airports in the United States where screening is required: 

(1) explosives detection systems (EDS), which use X-rays with computeraided imaging to automatically recognize the characteristic signatures of 

 
 

Page 2 GAO-12-266 Checked Baggage Screening 

threat explosives, and (2) explosives trace detection (ETD) machines, in 

which a human operator (baggage screener) uses chemical analysis to 

manually detect traces of explosive materials’ vapors and residue.

As amended, ATSA mandated that TSA provide for the screening of all 

checked baggage using EDS machines no later than December 31, 

2003.2

Pursuant to ATSA, providing for checked baggage screening is a federal 

responsibility, but airports must be capable of accommodating the 

screening systems to secure safe travel for the nation’s passengers. TSA 

collaborates with airports and airlines to determine the most appropriate 

screening configuration and install the systems that best fit the airports’ or 

airlines’ needs. Such optimal baggage screening systems may have a 

mix of detection systems (EDS or ETD) and configurations (in-line or 

stand-alone systems), depending on the airport’s needs, and may help 

streamline airport and TSA operations, reduce screening costs, and 

enhance security. However, in-line solutions may not be appropriate or 

cost effective in airports or terminals with fewer bags per week to screen. 

From fiscal years 2008 through 2011, TSA reported that it obligated 

To meet the 100 percent checked baggage screening 

requirement, TSA deployed screening equipment in a variety of 

temporary screening solutions, including EDS machines placed in standalone configurations in airport terminal lobbies, and solutions that relied 

on ETD machines for primary screening. According to TSA, these initial 

stand-alone EDS machines have higher operating costs and can screen 

fewer bags per hour than EDS machines that are integrated into a single, 

coordinated “in-line” baggage handling system. To improve the efficiency 

and effectiveness of baggage screening at airports, TSA’s Electronic 

Baggage Screening Program (EBSP) aims to, among other goals, (1) 

replace, reconfigure, and deploy equipment to increase throughput, 

system capacity, and effectiveness while reducing staffing requirements 

and airport lobby installations; (2) increase equipment reliability, reduce 

equipment downtime, and extend service life; and (3) achieve new 

capabilities to better detect changing terrorist threats.

 

2 See 49 U.S.C. § 44901(d). ATSA further provides that TSA must take all necessary 

action to ensure that all explosive detection systems deployed are fully utilized, and that if 

explosive detection equipment at an airport is unavailable, all checked baggage is 

screened by an alternative means authorized under the statute, see § 44901(d)-(e) 

(authorizing a bag match program, a manual search, search by canine explosive detection 

units in combination with other means, or other means or technology approved by the TSA 

Administrator, as alternative means to using explosive detection equipment). 
 

Page 3 GAO-12-266 Checked Baggage Screening 

approximately $1.9 billion to support airport facility modification projects

required to install more efficient optimal baggage screening systems, and 

estimates that it will obligate an additional $1.15 billion for this purpose 

through fiscal year 2030.3

TSA has generally supplemented the costs of airport facility modification 

projects necessary to install such optimal baggage screening systems by 

entering into reimbursable agreements with airports.

TSA has determined that manual ETD 

screening is an optimal configuration for the nation’s smaller airports at 

which TSA performs or oversees screening.

4

 

3 The $1.9 billion includes over $700 million made available to TSA in fiscal year 2009 

through the American Recovery and Reinvestment Act of 2009, see Pub. L. No. 111-5, 

123 Stat. 115, 163 (2009).

In general, an 

airport must be willing and financially capable of undertaking the facility 

modification project; TSA may not compel an airport to undertake such a 

project. Although TSA will procure and install the screening equipment, 

the airport, and not TSA, is ultimately responsible for any facility 

modification costs. Pursuant to a reimbursable agreement and subject to 

the availability of appropriations, however, TSA will generally reimburse 

an airport undertaking such a project at the applicable percentage of 

allowable project costs. According to TSA, since 2003, it has entered into 

12 letter of intent (LOI) agreements at the statutorily established federal 

cost shares of 75 or 90 percent and at least 150 other transaction 

agreements (OTA) at cost shares that have ranged from 50 to 100 

4 According to TSA’s Planning Guidelines and Design Standards for Checked Baggage 

Inspections Systems, version 4.1, September 15, 2011, the project sponsor is assumed to 

be an airport owner/operator or an airline (if the system is for an airline-owned terminal). 

Some of the key responsibilities of the project sponsor include initiation and execution of 

planning and design, application for TSA funding, initiation and execution of construction, 

as well as testing and commissioning of the checked baggage inspection system and 

operation and maintenance of the baggage handling system portion of the overall checked 

baggage inspection system. TSA is responsible for, among other things, developing the 

planning guidelines and design standards, working with airports and airlines to develop 

and review designs, providing the EDS and ETD screening equipment, and final approval 

of the checked baggage system. 
 

Page 4 GAO-12-266 Checked Baggage Screening 

percent.5

A foundation for making informed budget decisions for acquisition 

programs at DHS is the acquisition program baseline, which according to 

DHS’s guidance is its contract with a component, such as TSA, on a 

program’s critical costs, schedule, and program performance goals. 

Establishing such a baseline at the program start is important for defining 

its scope, assessing whether all life cycle costs are properly calculated, 

and measuring how well the program is meeting its goals. By tracking and 

measuring actual program performance against this baseline, 

management can be alerted to potential problems, such as cost growth or 

changing requirements, and has the ability to take early corrective action.

Currently, TSA enters into reimbursable agreements through 

which it generally funds 90 percent of the costs of modifying airports for 

the installation of an optimal system, with airports or airlines funding the 

remaining 10 percent of the projects’ cost.

You asked us to assess the EBSP’s current status, costs, and alternative 

cost sharing options. Accordingly, this report addresses the following 

questions:

• What is the status of TSA’s efforts to install optimal checked baggage 

screening systems in collaboration with airports?

• How would reducing the current federal cost share for eligible airport 

modification projects from 90 percent to its previous level of 75 

percent affect the amount that TSA pays for these modifications, and 

what benefits, if any, do airports report receiving from in-line baggage 

screening systems?

• To what extent are TSA’s cost estimation procedures consistent with 

best practices and is TSA’s acquisition baseline consistent with DHS 

guidance?

 

5 Pursuant to an LOI, TSA may commit to obligate from future budget authority an amount 

not to exceed the federal government’s share of a project’s cost for the purpose of 

reimbursing an airport or other responsible party that has undertaken an eligible airport 

facility improvement project. See, e.g., 49 U.S.C. § 44923(d). An LOI is subject to the 

availability of appropriations and does not constitute a binding commitment of federal 

funding. According to TSA, OTAs are administrative vehicles used by the agency to fund 

airport modification projects without undertaking a long-term commitment. OTAs take 

many forms and are generally not required to comply with federal laws and regulations 

that apply to contracts, grants, or cooperative agreements, and they enable the federal 

government and others entering into these agreements to freely negotiate provisions that 

are mutually agreeable. 
 

Page 5 GAO-12-266 Checked Baggage Screening 

To determine the status of TSA’s efforts to install optimal checked 

baggage screening systems, we obtained the most current data available 

from TSA as of December 2011 and January 2012 for the following: 1) on 

the current number of airports with at least one in-line system, 2) the 

number of airports that have optimal checked baggage screening 

systems, 3) and the number of operational in-line systems and EDS and 

ETD machines deployed to TSA-regulated airports. We reviewed 

documentation from TSA’s EBSP, including the EBSP strategic plans for 

fiscal years 2006, 2008, and 2009, and the 2011 EDS and ETD 

Recapitalization and Optimization Plan. 

To determine how reducing the current federal cost share for eligible 

airport facility modification projects may affect the amount that TSA pays 

for these modifications, we calculated estimates based on TSA’s August 

2011 projections of how much airport modifications will cost in the future. 

To estimate what cost shifts could occur in the future, we obtained TSA’s 

projections of its airport modification costs as stated in its final August 

2011 Life Cycle Cost Estimate (LCCE) report.6

We assessed the reliability of the various data TSA provided about 

airports, including the number of TSA-regulated airports (by category) and 

the numbers of airports with the different configurations of baggage 

screening (in-line or stand-alone) systems, and the investment and 

budget expenditure dollar values in the LOIs and OTAs by questioning 

cognizant TSA officials and obtaining documentation about these various 

We used TSA’s LCCE 

projections of airport modification costs for each fiscal year, 2012 through 

2030, and estimated the amount of expenditures for airport modifications 

that could be shifted from TSA to airports and airlines if the federal 

government’s cost share were reduced from the current 90 percent to 

previous federal cost share of 75 percent.

 

6 Life cycle costs are to be comprehensive, which includes all resources and associated 

cost elements required to develop, produce, deploy, and sustain a particular program from 

initial concept through operations, support, and disposal. Acquisition costs include costs 

for all supplies and services for a designated investment. 
 

Page 6 GAO-12-266 Checked Baggage Screening 

data.7

To assess the extent to which TSA’s cost estimation methods are 

consistent with best practices and how its acquisition program baseline 

efforts are consistent with DHS guidance, we analyzed the TSA August 

2011 LCCE for EBSP. We used best practices in GAO’s Cost Estimating 

and Assessment Guide to evaluate TSA’s estimating methodologies, 

assumptions, and results to assess whether the official cost estimates 

were comprehensive (i.e., include all costs), accurate, well documented, 

and credible.

We found these data to be sufficiently reliable for the purposes of 

our report.

8 We defined a characteristic of the LCCE as not met if the 

agency provided no evidence that satisfied any portion of the criterion, 

minimally met if the agency provided evidence that satisfied less than 

one-half of the criterion, partially met if the agency provided evidence that 

satisfied about one-half of the criterion, substantially met if the agency 

provided evidence that satisfied more than one-half of the criterion, and 

met if the agency provided complete evidence that satisfied the entire 

criterion. Our analyses examined TSA’s practices in developing its LCCE. 

Regarding the development of an acquisition program baseline, we 

examined the EBSP Acquisition Review Board decisions and relevant 

acquisition decision memos during the period 2005 through 2011, as well 

as other documentation related to DHS and TSA efforts to develop an 

acquisition program baseline.9

 

7 TSA classifies the over 400 commercial airports in the United States into one of five 

airport security categories (X, I, II, III, and IV) based on various factors, such as the total 

number of takeoffs and landings annually, the extent to which passengers are screened at 

the airport, and other special security considerations. In general, category X airports have 

the largest number of passenger boardings and category IV airports have the smallest.

We also interviewed TSA and DHS 

officials, including officials in the TSA Chief Financial Officer’s Office and 

DHS’s Program Accountability and Risk Management Office, to identify 

8 GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009).

9 DHS established the Acquisition Review Board as the department’s highest review body 

and charged it with reviewing and approving all programs at key milestone decision points 

that are above $300 million in life cycle costs. The Acquisition Review Board reviews 

provide an opportunity to determine a program’s readiness to proceed to the next life cycle 

phase. DHS’s Acquisition Management Directive 102-01 of January 2010 superseded 

similar interim directives, and requires the Acquisition Review Board chairperson to 

approve key acquisition documents critical to establishing the program, operational 

requirements, acquisition baseline, testing, and support.
 

Page 7 GAO-12-266 Checked Baggage Screening 

what procedures they have put in place to approve the acquisition 

program baseline.

To gain a better understanding of issues across all of our objectives, we 

conducted site visits to airports in California, New York, Massachusetts, 

Washington, D.C., and Florida to interview local airport officials, regional 

TSA officials, and airline representatives. To get a range of airports, we 

chose these airports based on the size of airport, type of checked 

baggage screening system installed, and whether the airport’s checked 

baggage screening system had been optimized. Because we selected a 

nonprobability sample of airports, the information we obtained from these 

interviews and visits cannot be generalized to all airports. However, we 

believe that observations obtained from these visits provided us with a 

greater understanding of airport officials’ perspectives on TSA’s 

collaboration with airports that seek to have optimal baggage screening 

systems installed and allowable costs reimbursed, as well as the 

perspective of local TSA officials. In addition, we interviewed officials from 

the largest industry associations, which represent airport executives, 

airports, and airlines (the American Association of Airport Executives, the 

Airports Council International North America, and the Air Transport 

Association). We also interviewed an official from the Association for 

Airline Passenger Rights. These results cannot be generalized to the 

entire industry but provided industry perspectives.

We conducted this performance audit from October 2010 through April 

2012 in accordance with generally accepted government auditing 

standards.10 Those standards require that we plan and perform the audit 

to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

 

10 We issued preliminary results for this work in 2011 and 2012 as part of GAO’s effort to 

identify opportunities that federal agencies or the Congress could consider for reducing 

the cost of government operations or enhancing revenue collections for the Treasury. See 

GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011), and 

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, 

Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington D.C.: Feb. 28, 

2012).
 

Page 8 GAO-12-266 Checked Baggage Screening 

With the passage of ATSA in November 2001, TSA assumed from the 

Federal Aviation Administration (FAA) responsibility for securing the 

nation’s civil aviation system. In accordance with ATSA, TSA is 

responsible for the procurement, installation, and maintenance of 

explosive detection systems, including EDS and ETD, used to screen 

checked baggage for explosives (see figs. 1 and 2) at TSA-regulated 

airports.11

 

11 “TSA-regulated airports” refers to all airports that implement TSA-approved security 

programs pursuant to 49 C.F.R. part 1542, which includes airports regularly serving air 

carrier operations regulated pursuant to 49 C.F.R. §§ 1544.101 and 1546.101 (what may 

be characterized as U.S and foreign-flagged commercial air carriers), and at which TSA 

performs or oversees the performance of screening activities.

EDS machines identify suspicious items or anomalies in 

checked baggage that could indicate the presence of explosives or 

detonation devices. At airports with EDS, EDS machines are generally 

employed for primary screening of checked baggage while ETD machines 

are used for secondary screening to help resolve questions raised by 

EDS screening. At airports without EDS, ETD machines are used as the 

primary method for screening checked baggage.

Background
 

Page 9 GAO-12-266 Checked Baggage Screening 

Figure 1: Transportation Security Officer Removes Checked Baggage from Standalone EDS Machine
 

Page 10 GAO-12-266 Checked Baggage Screening 

Figure 2: An ETD Machine Being Used to Manually Resolve a Suspect Item

TSA deploys EDS machines in stand-alone and in-line configurations. In 

a stand-alone configuration, checked baggage is manually loaded and 

unloaded by screeners (see fig. 1).12

 

12 The term screeners refers to both transportation security officers, who are TSA 

employees, and to private sector screeners employed by companies under contract to 

TSA and who carry out the screening function with TSA oversight at airports participating 

in TSA’s Screening Partnership Program. See 49 U.S.C. §§ 44901(a), 44920.

In contrast, an in-line configuration 

integrates EDS machines with a baggage handling system—a conveyor 

system that transports and sorts baggage from the ticket counter through 

the baggage screening system. (See fig. 3, which shows an in-line 

configuration with three EDS machines.) 
 

Page 11 GAO-12-266 Checked Baggage Screening 

Figure 3: A Checked Baggage Inspection System That Includes a Baggage Handling 

System with Three In-line EDS Machines

Generally, an in-line checked baggage inspection system employs three 

levels of screening (see fig. 4). EDS machines perform automated (Level 

1) screening. If the EDS machine is unable to clear a bag, it sends an 

alarm to a screener who performs a secondary (Level 2) inspection 

known as On-Screen Resolution by reviewing an image of the contents of 

the bag via computer monitor. If the screener cannot resolve the alarm 

using on-screen resolution tools, the bag goes to the Checked Baggage 

Resolution Area (Level 3) where another screener will perform manual 

inspection of the bag assisted by an ETD machine.
 

Page 12 GAO-12-266 Checked Baggage Screening 

Figure 4: A Diagram of a Checked Baggage Inspection System and Three Levels of Screening

TSA officials stated that deployment of an integrated, centralized in-line 

system of EDS machines can enhance security, increase screening 

efficiencies, and lower screening costs by, among other things, reducing 

the number of screeners needed to conduct baggage screening and 

reducing work-related injuries caused by lifting heavy bags. Installing an 

in-line system can require modification of an airport terminal, including 

removal of the existing system, installation of a new baggage handling 

system and EDS machines, and the use of an interim solution to screen 
 

Page 13 GAO-12-266 Checked Baggage Screening 

checked baggage while the in-line system is built. TSA estimates that 

depending on the size and complexity of an in-line project, installing an inline system can take one to four years at larger (category X and I) 

airports.

In 2005, we reported that although TSA made substantial progress in 

installing EDS machines, the agency had not conducted a systematic, 

prospective analysis to determine which airports could achieve long-term 

savings and improve efficiencies and security by installing in-line systems 

or, where in-line systems may not be economically justifiable, by making 

greater use of stand-alone EDS rather than relying on the labor-intensive 

and less efficient ETD screening processes.13

In March 2011, we reported that by continuing to replace or modify older 

baggage screening systems with more efficient solutions, including in-line 

screening systems, TSA could continue to eliminate baggage screener 

positions.

We recommended that 

TSA systematically evaluate baggage screening needs at airports, 

including identifying and prioritizing the airports where the benefits—such 

as cost savings of screening operations and improved security—of 

replacing stand-alone baggage screening machines with in-line systems 

are likely to exceed the costs of the systems. TSA concurred and in 

response released its Strategic Planning Framework in February 2006, 

which identified and prioritized airports based on an analysis of several 

factors, including security risk and the amount of estimated cost savings.

14

In July 2011, we reported on TSA’s efforts to enhance explosives 

detection requirements for checked baggage screening technologies and 

efforts to ensure that newly acquired and currently deployed explosives 

detection technologies meet the enhanced requirements.

TSA agreed that the deployment of more efficient systems 

offers potential personnel cost savings to the federal government.

15

 

13 GAO, Aviation Security: Systematic Planning Needed to Optimize the Deployment of 

Checked Baggage Screening Systems, 

We 

recommended that TSA, among other things, develop a plan to ensure 

that new machines, as well as those machines currently deployed in 

GAO-05-365 (Washington, D.C.: Mar. 15, 2005).

14 GAO-11-318SP. 

15 GAO, Aviation Security: TSA Has Enhanced Its Explosives Detection Requirements for 

Checked Baggage, but Additional Screening Actions Are Needed, GAO-11-740 

(Washington, D.C.: July 11, 2011).
 

Page 14 GAO-12-266 Checked Baggage Screening 

airports, will be operated at the levels in established requirements and we 

recommended that TSA develop a reliable schedule for the EBSP. DHS 

concurred with these recommendations and has initiated actions to 

implement them.

In February 2012, we reported that we continue to believe that TSA might 

achieve savings in screening personnel costs by continuing to replace or 

modify older checked baggage screening systems with more efficient 

solutions, including in-line screening systems, to the extent possible.16

Since fiscal year 2006, about $6.8 billion has been made available to TSA 

for activities related to checked baggage screening (see table 1), making 

the EBSP one of DHS’s largest acquisition programs.

TSA reported that since the issuance of GAO’s 2011 report, it had 

replaced 60 stand-alone checked baggage screening machines with more 

efficient in-line screening systems.

Table 1: Funding Available for the EBSP for Fiscal Years 2006 to 2012 

Dollars in millions

Year FY06 FY07 FY08 FY09 FY10 FY11 FY12 Total

EBSP funding $670 a $1,036 $771 $1,542 $1,294 $781 $732 $6,826

Source: TSA.

a

Amounts available as reported by TSA for activities related to EBSP planning, procurement, 

installation (including facility modification), and maintenance and utilities. These amounts do not 

include other related costs, such as the cost of screening personnel. Each fiscal year includes $250 

million from the Aviation Security Capital Fund (see 49 U.S.C. § 44923) as well as supplemental 

appropriations, including over $700 million made available to TSA in fiscal year 2009 through the 

American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. at 163. Although 

TSA reports $732 million in funding available for the EBSP in fiscal year 2012, the Department of 

Homeland Security Appropriations Act, 2012, appropriated approximately $543 million for explosive 

detection systems that with the $250 million from the Aviation Security Capital Fund, amounts to 

approximately $793 million made available in fiscal year 2012. See Pub. L. No. 112-74, Div. D, 125 

Stat. 786, 950-51 (2011). 

Following the terrorist attacks of September 11, 2001, and the enactment 

of ATSA, airports relied upon various sources of funding to support 

security-related capital improvement projects. For example, as enacted, 

ATSA authorized the use of Airport Improvement Program (AIP) funds for 

 

16 GAO, Follow-up on 2011 Report: Status of Actions Taken to Reduce Duplication, 

Overlap, and Fragmentation, Save Tax Dollars, and Enhance Revenue, GAO-12-453SP 

(Washington, D.C.: Feb. 28, 2012). 

Cost Share Option for 

Funding Airport 

Modifications
 

Page 15 GAO-12-266 Checked Baggage Screening 

projects to support the installation of explosive detection systems.17

Subsequently enacted statutes, such as the Vision 100—Century of 

Aviation Reauthorization Act (Vision 100), however, either limited or 

precluded the use of AIP to fund projects related to the installation of inline systems.18 TSA, which is solely responsible for procuring and 

deploying equipment to screen checked baggage for explosives, also 

provides funding in support of related facility modifications. The 

Consolidated Appropriations Resolution, 2003, first authorized the use of 

LOIs by TSA for airport facility modification projects related to the 

installation of in-line baggage screening systems.19

From fiscal years 2003 through 2007, TSA entered into 8 LOI agreements 

covering 9 airports.

Although not a 

binding commitment of federal funding, LOIs are agreements providing 

that TSA will reimburse airports or airlines for a specified percentage of 

an eligible project’s cost, subject to the availability of appropriations. This 

in turn enables an airport to proceed with a project because the airport 

and any investors are aware that the agreed-upon percentage of 

allowable costs will likely be reimbursed. The airport or airline is 

responsible for its share of the total funding needed to complete the 

project and generally must be capable of funding the project in its entirety.

20

 

17 See Pub. L. No. 107-71, § 119(a)(1), 115 Stat. at 628 (amending 49 U.S.C. § 47102(3)) 

to authorize use of AIP funding for any required security-related activities after September 

11, 2001). During fiscal years 2002 and 2003, six airports used AIP grants to fund facility 

modification projects related to installing in-line EDS screening processes. 

Pursuant to the law then in effect, these LOI 

agreements provided for a 75 percent federal cost share of allowable 

18 See Pub. L. No. 108-176, §§ 142, 159(b), 117 Stat. 2490, 2503, 2510-11 (2003) 

(amending 49 U.S.C. § 47102(3) to limit the availability of AIP funds for security-related 

projects). Subsequent prohibitions on the use of AIP funds for projects related to the 

installation of in-line EDS machines may be found in FAA’s annual appropriations statutes 

beginning in fiscal year 2004. See, e.g., Pub. L. No. 108-199, 118 Stat. 3, 283; Pub. L. No. 

108-447, 118 Stat. 2809, 3203 (2004); and Pub. L. No. 112-55, 125 Stat. 552, 648 (2011).

19 See Pub. L. No. 108-7, § 367, 117 Stat. 11, 423-24 (2003) (authorizing TSA to enter into 

LOIs to replace baggage conveyor systems or to reconfigure terminal baggage areas to 

install explosive detection systems if the project would increase security or improve airport 

efficiencies without lessening security).

20 TSA entered into one LOI agreement that covered Los Angeles International Airport and 

Ontario International Airport, both of which are operated by Los Angeles World Airports.
 

Page 16 GAO-12-266 Checked Baggage Screening 

project costs.21 Beginning in fiscal year 2008 and in accordance with 

Vision 100, any LOI entered into by TSA was to reflect a 90 percent 

federal cost share.22 Since 2008, TSA has entered into 4 more LOIs at a 

90 percent federal cost share. As of December 13, 2011, TSA reported 

that its net cumulative obligations for all 12 LOIs were $1.46 billion. TSA 

also uses OTAs to support airport facility modification projects related to 

the installation of checked baggage screening equipment. TSA describes 

OTAs, which have become the primary administrative vehicles through 

which TSA financially supports such projects, generally as single-year 

reimbursable agreements (in contrast to the multiyear LOI agreements). 

According to TSA, OTAs take many forms and are generally not required 

to comply with federal laws and regulations that apply to contracts or 

cooperative agreements, such as the Federal Acquisitions Regulations, 

thus enabling the parties to negotiate provisions that are mutually 

agreeable. According to TSA, the federal cost share applied to OTAs may 

be negotiated, but since fiscal year 2008 TSA has generally followed the 

federal cost share applicable to LOIs. As of the end of fiscal year 2011, 

TSA had used at least 150 OTAs to support airport facility modifications 

related to the installation of in-line systems. According to TSA, these 

OTAs have reflected federal cost shares ranging from 50 to100 percent. 

As of December 13, 2011, TSA reported that its net cumulative 

obligations for all OTAs were $1.74 billion.

 

21 The 75 percent federal cost share only applied to projects at medium and large hub 

airports; a 90 percent federal cost share applied to projects at any other airport. See Pub. 

L. No. 108-7, § 367(e), 117 Stat. at 424. A “medium hub airport” is a commercial service 

airport with at least 0.25 percent but less than 1.0 percent of passenger boardings based 

on the prior calendar year, while a “large hub airport” is a commercial service airport with 

at least 1.0 percent of passenger boardings. 49 U.S.C. § 47102(10), (12). Small and nonhub airports are commercial service airports with at least .05 percent but less than 0.25 

percent, and less than 0.05 percent of passenger boardings, respectively. § 47102 (13), 

(23). A “commercial service airport” is a public airport in a state that the Secretary of 

Transportation determines has at least 2,500 passenger boardings each year and is 

receiving scheduled passenger aircraft service. See § 47102(7).

22 See 49 U.S.C. § 44923(e) (providing that the federal share for projects at medium or 

large hub airports would be 90 percent and 95 percent for projects at any other airports). 

Notwithstanding Vision 100, which was enacted in December 2003, the fiscal years 2005 

through 2007 DHS appropriations acts maintained the 75 percent federal cost share for 

projects under any LOI. See, e.g., Pub. L. No. 109-295, 120 Stat. 1355, 1362-63 (2006).
 

Page 17 GAO-12-266 Checked Baggage Screening 

TSA reports that 337 of 446 airports (76 percent) the agency regulates for 

security have optimal baggage screening systems. The remaining 109 of 

446 airports (24 percent) do not yet have optimal baggage screening 

systems in all screening areas.23 To be considered an airport with an 

optimal baggage screening system, as TSA considers it and as we define 

it for purposes of this report, an airport must have completed installation 

and activation of the in-line or stand-alone systems that best fits the 

airport’s screening needs without relying on temporary stand-alone 

systems.24

 

23 Airports that do not have optimal solutions in place include those with in-line systems 

under construction and that are not yet screening checked baggage, and those that, for 

example, continue to rely on temporary stand-alone technology in the lobby. According to 

TSA, all TSA-regulated airports, regardless of whether they have an optimal solution, 

remain capable of screening 100 percent of checked baggage for explosives using EDS or 

ETD machines.

Thus, an airport with an optimal baggage screening system 

may have a mix of explosive detection systems (EDS or ETD) and 

configurations (in-line or stand-alone systems), depending on the airport’s 

needs. TSA officials told us that they plan to deploy equipment for an 

additional 201 in-line systems in the future, which will include the 

24 According to TSA officials, although an airport will not be considered as having an 

optimal baggage screening system if it relies on temporary stand-alone systems for 

screening checked baggage, some exceptions exist. For example, temporary stand-alone 

systems could be installed at airports for testing, special events, or other needs, without 

affecting the airport’s status related to having an optimal baggage screening system. 

TSA Has Made 

Progress in Deploying 

Optimal Checked 

Baggage Screening

TSA Has Collaborated with 

Airports to Install Optimal 

Baggage Screening 

Systems at 76 Percent of 

TSA-Regulated Airports
 

Page 18 GAO-12-266 Checked Baggage Screening 

purchase of an estimated 685 new EDS machines for installation at 

airports that are not screening with optimal configurations.25

TSA aims to complete its efforts to deploy optimal screening systems by

using EDS machines as the primary means for screening checked 

baggage at all category X, I, II, and III airports while continuing to use 

ETD machines as the primary means at category IV airports.26

Additionally, TSA plans to deploy EDS machines in in-line configurations 

at all category X and I airports and in-line or stand-alone configurations at 

category II and III airports. At each of the 10 airports we visited, we 

observed distinct checked baggage screening needs, based on an 

airport’s terminal configuration and the number of passenger boardings. 

We discussed an airport’s willingness and financial ability to pay for 

facility modifications required to install in-line systems. For each of these 

airports, officials and engineers provided documentation (for example, 

drawings and blueprints) on distinct facility modification projects to 

accommodate baggage screening system upgrades. According to airport 

officials, TSA and airport officials work together to determine the most 

appropriate baggage screening configuration based on an airport’s 

needs. Of the 337 airports where baggage screening systems are optimal 

and no longer using temporary solutions, 55 airports use EDS in-line 

systems exclusively for their primary checked baggage screening needs, 

while 92 airports use EDS stand-alone machines only, and 167 use ETD 

systems exclusively. The remaining 23 airports have a mix of systems.27

 

25 Data are based on the most current numbers available as of December 2011. TSA 

officials told us that the accuracy of this estimate at any given time depends on an 

airport’s willingness and financial readiness. Additionally, TSA officials stated that this 

estimate is based on several assumptions and constraints that may affect the number of 

new in-line systems deployed in the future, including (1) number of new terminals, terminal 

renovations, or other capital projects at airports; (2) changing cost assumptions; and (3) if 

an airport is added to, removed from, or changed on the list of TSA-regulated airports. As 

of December 2011, TSA had installed 1,933 stand-alone EDS machines, 4,819 ETD 

machines, and 261 in-line systems among the 446 TSA-regulated airports (see app. II for 

further details). 

26 TSA has a goal of deploying EDS machines for primary screening at all category X, I, II, 

and III airports with a minimum peak throughput of 1,500 bags per week. Where this 

throughput requirement is not met, primary ETD screening is more cost effective and will 

be allowed. Currently, as shown in app. II, table 4, 30 category III airports have ETD 

machines for their primary baggage screening, while 20 category IV airports have some 

form of EDS screening. 

27 Data are based on the most current numbers available as of December 2011. Airports 

that use EDS machines also use ETD machines to assist in resolving alarmed bags. 
 

Page 19 GAO-12-266 Checked Baggage Screening 

See figure 5 for additional details on airport screening configurations. 

Also, see appendix II for more details on the status of efforts to optimize 

checked baggage screening systems.

Figure 5: Baggage Screening Configurations at the 337 Airports with Optimal 

Systems

Note: Percentages do not add to 100 percent because of rounding. 

Of the 337 airports with optimal baggage screening systems, larger 

airports were less likely to have completed optimal solutions than smaller 

airports.28 Specifically, 36 percent (10 of 28) of the category X airports 

and 49 percent (28 of 57) of the category I airports were considered to 

have optimal solutions, whereas 60 percent (46 of 77) of the category II 

airports, 76 percent (96 of 127) of the category III airports, and all of the 

157 of the category IV airports were considered to be optimally 

configured, as shown in figure 6.29

 

28 Data are based on the most current numbers available as of December 2011. TSA also 

tracks airports that have begun installing optimal systems but whose systems are not yet 

complete. 

According to TSA and airport officials, 

29 In addition to the 10 category X airports with optimal systems in all screening areas, 

TSA reports that 15 others have optimal systems in some screening areas. 
 

Page 20 GAO-12-266 Checked Baggage Screening 

this is because the larger airports generally need to install more complex 

in-line systems, which are more time and resource intensive to install and 

often require a significant amount of airport infrastructure modification and 

construction, while the smaller airports, particularly the category IV 

airports that rely on the smaller ETD machines, require far less time and 

resources to install these systems. Moreover, TSA officials stated that the 

in-line systems that best meet the screening needs of larger airports take 

longer to plan and build because of the added complexity and scale of the 

upgrades and the coordination required among multiple stakeholders.

Figure 6: Number of Airports with Optimal Baggage Screening Systems Compared 

to All TSA-Regulated Airports 
 

Page 21 GAO-12-266 Checked Baggage Screening 

TSA anticipates that in the next 5 years about 60 percent (1,153 of 1,933) 

of the EDS machines will reach the end of their useful life of about 10 

years and will need to be replaced, as shown in figure 7.30 As a result, to 

ensure that 100 percent of checked bags continue to be screened as 

required by ATSA, TSA revised its focus from replacing stand-alone EDS 

in airport lobbies with in-line systems to replacing its aging fleet of EDS

and ETD machines, a process it calls recapitalization. However, TSA 

reported that it will continue to collaborate with airports or airlines to install 

optimal in-line systems if it coincides with efforts to recapitalize aging 

EDS machines or if the existing in-line systems do not meet current TSA 

standards. In August 2011, TSA issued its EDS and ETD Recapitalization 

and Optimization Plan, which establishes the method and criteria for 

prioritizing when and how EBSP recapitalization and optimization will 

occur. The plan notes that many in-line recapitalization projects will 

include an optimization component. For example, a number of early inline screening systems are likely to require optimization, among other 

things, to improve performance, increase efficiency, and reduce operating 

costs. At one airport we visited with an early in-line system, we observed 

a baggage handling system that needed to be replaced because it had 

sharp curves and steep grades that led to an excessive number of errors 

and jams.31

 

30 Data are based on the most current numbers available as of December 2011. In 

addition to age, TSA considers a variety of factors to decide which machines to replace 

first, such as repair rate and downtime.

The airport was involved in TSA’s recapitalization pilot 

program, and airport officials anticipated TSA supporting the optimization 

of this system as part of recapitalization.

31 TSA is also replacing and modernizing aging ETD machines at all TSA-regulated 

airports. TSA’s EDS and ETD Recapitalization and Optimization Plan notes that because 

of the significant number of ETDs deployed during the initial TSA rollout in 2002 and 2003, 

many of those units have reached or will exceed the 8 years of service in fiscal years 2010 

and 2011 and are now due to be recapitalized. According to the recapitalization plan, 

because of the high volume, it was not possible to recapitalize all the ETDs at the 8-year 

mark in 2010 and 2011. As necessary, TSA will focus on replacing poorly performing units 

first. 

TSA Has Shifted Its Focus 

to Replacing Aging 

Machines
 

Page 22 GAO-12-266 Checked Baggage Screening 

Figure 7: Age and Number of Deployed EDS Machines as of December 2011

Consistent with current law, TSA enters into reimbursable agreements 

through which it generally funds 90 percent of the cost of an eligible 

airport facility modification project to support the installation of an optimal 

system, with an airport or airline funding the remaining 10 percent of the 

Reducing the Federal 

Cost Share for 

Eligible Airport 

Facility Modification 

Projects Could 

Reduce TSA’s Costs

Reducing the Federal Cost 

Share
 

Page 23 GAO-12-266 Checked Baggage Screening 

project’s cost.32 If the federal cost share for airport facility modification 

projects is reduced, TSA may be able to use available funding to install a 

greater number of optimal solutions than currently anticipated. From fiscal 

year 2003 through fiscal year 2007, in accordance with law then in effect, 

TSA entered into LOIs at a 75 percent federal cost share.33 Looking 

forward, we used TSA’s projections of airport modification costs for each 

fiscal year, 2012 through 2030, as presented in its latest LCCE, and 

estimated the amount of expenditures for airport modifications that could 

be shifted from TSA to airports if the federal government’s cost share 

were reduced from the current 90 percent to 75 percent. As discussed 

later in this report, we found that TSA’s LCCE data are of questionable 

reliability for a precise estimate. However, the data can serve to provide a 

rough indication of how much TSA could save if the cost share were 

adjusted. Thus, we estimate that if the federal cost share for such projects 

returned to the 75 percent TSA applied to many of the reimbursable 

agreements it entered into prior to fiscal year 2008, rather than the 

current federal share of 90 percent, TSA’s anticipated expenditures for 

these modifications would be roughly $300 million less through fiscal year 

2030.34

TSA had previously determined that assigning costs among industry 

stakeholders and the nation as a whole is difficult because operational 

 

32 TSA uses LOIs and OTAs to support facility modification projects related to checked 

baggage screening. In general, LOIs are multiyear but nonbinding agreements through 

which TSA agrees, subject to the availability of appropriations, to reimburse an airport or 

other responsible party for a percentage of allowable airport facility modification costs. 

See 49 U.S.C. § 44923(d). OTAs, as described by TSA, are generally single-year 

reimbursable agreements used by TSA to fund airport facility modification projects without 

the long-term commitment associated with LOIs. 

33 TSA has used OTAs more regularly than LOIs to fund such projects. TSA is able to 

negotiate OTA cost shares, and has used cost shares as low as 50 percent and as high 

as 100 percent. TSA began implementing a business practice in fiscal year 2008 that 

applies the same cost share rates to OTAs as are statutorily required for LOIs.

34 Based on the level of modification costs currently projected in TSA’s LCCE estimate, 

we calculated that TSA could save $339 million through fiscal year 2030. To estimate the 

decrease in TSA’s payments for airport modification costs (and the corresponding 

increase in those costs paid by airports and, in a few cases, airlines), we totaled the 

airport modification costs for the life of the program, fiscal years 2012 through 2030, as 

identified in TSA’s LCCE. We then estimated what TSA’s expenditures would be if it pays 

75 percent of these costs. All estimates are in 2011 dollars, based on the discount rate 

(3.9 percent) that TSA applied in its September 2011 analysis of alternatives submission 

to the Office of Management and Budget (OMB). 
 

Page 24 GAO-12-266 Checked Baggage Screening 

improvements to the baggage handling systems and national security 

benefits are difficult to quantify. This, in turn, makes it difficult to develop a 

cost share formula that would allow TSA to allocate costs in proportion to 

benefits. Consistent with the Intelligence Reform and Terrorism 

Prevention Act of 2004, TSA commissioned the 2006 Baggage Screening 

Investment Study Working Group to prepare a report for the Aviation 

Security Advisory Committee, which examined what an appropriate 

federal government/airport cost share should be for the installation of 

checked baggage screening equipment.35

Representatives of all 10 airports we visited told us that they benefit from 

the installation of integrated, in-line baggage screening systems.

Specifically,

The working group, which 

consisted of over 60 members representing, among others, TSA, FAA, 

airports, airlines, designers of baggage handling systems, and financial 

institutions, were unable to develop a consensus on an appropriate cost 

share formula, in large part because of the difficulties of measuring 

benefits, differing views on the federal responsibility for funding capital 

investments related to baggage screening, and the competing demands 

on the federal budget. As a result, potential cost share options were not 

submitted to the Congress as part of DHS’s fiscal year 2006 budget

submission.

• officials from 9 of the 10 airports cited the reduction of passenger 

congestion in airport terminals because stand-alone EDS machines 

were removed from the lobby or ticketing areas,

• officials from half of the airports noted that in-line systems reduce the 

number of lost or stolen bags by creating a streamlined process for 

moving checked baggage directly from where baggage is checked by 

the passenger and airline to the aircraft, and

• officials from 3 of 10 airports noted that in-line systems facilitate 

airport growth.

 

35 See Pub. L. No. 108-458, § 4019(d), 118 Stat. 3638, 3722 (2004). The Aviation 

Security Advisory Committee is composed of private sector organizations representing 

key constituencies affected by aviation security requirements, including, among others, 

law enforcement, aviation consumer groups, airport operators, airline management, airline 

labor, and airline security equipment manufacturers. Its mission is to examine areas of 

civil aviation security as tasked by TSA with the aim of developing recommendations for 

improving civil aviation security methods, equipment, and procedures. 

Airport Officials 

Acknowledge Benefits 

from In-line Systems but 

Oppose Increasing Their 

Cost Share
 

Page 25 GAO-12-266 Checked Baggage Screening 

However, for various reasons, officials representing 8 of the 10 airports 

opposed a reduction in the federal cost share that would increase 

airports’ share of modifications costs.36

• Assuming a larger share of airport modification costs would pose 

hardships because of current fiscal or funding constraints.

Specifically, officials from half of 

the airports stated the following four concerns:

• Airports incur additional (that is, nonallowable) costs that are 

necessary to building an in-line system, but which TSA will not 

reimburse. Examples of the nonallowable costs the airports cited 

include the costs of designing an in-line system and constructing 

rooms in which screeners manually screen bags that have not 

previously been cleared.37 As a result, officials from 5 of the 10 

airports we spoke with told us that after necessary, but nonallowable, 

costs were included, the airports were already paying for more than 

10 percent of the modification costs associated with in-line systems.38

• Airports have a backlog of capital projects or would rather fund 

projects that will produce additional revenue, such as parking garages 

or larger areas for concessions, than projects that are related to TSA’s 

security responsibilities.

• TSA will be the primary beneficiary of in-line baggage screening 

systems because the integration and consolidation of these systems 

will enable TSA to reduce the number of baggage screeners and 

provide TSA with other operational efficiencies.

 

36 Two airports had no comments.

37 TSA’s guidance to project sponsors has been evolving. As explained in TSA’s Planning 

Guidelines and Design Standards for Checked Baggage Inspection Systems, v. 4.1, app. 

F, TSA will provide reimbursement for up to the agreed-upon percentage of allowable 

costs; the document also lists the reimbursable and nonreimbursable costs. For example, 

TSA does not reimburse costs associated with the building shell or exterior enclosure. 

TSA does not reimburse the cost of construction of terminal expansions, whether 

necessary to support TSA operations or for other purposes. TSA also does not support 

costs related to the construction of new or replacement terminal buildings and 

infrastructure unless such construction is proven to be cost-beneficial to TSA. 

38 TSA officials told us that provided a design OTA is in place between TSA and the 

airport when design commences, TSA does pay for allowable costs. However, TSA 

agreed that an airport’s cost share for the overall project may be higher if the design 

includes unallowable costs or if the airport began design activities prior to having an OTA 

in place with TSA.
 

Page 26 GAO-12-266 Checked Baggage Screening 

TSA’s August 25, 2011, life cycle cost estimate identified a total program 

cost for EBSP of $49.2 billion through fiscal year 2030.39 The $49.2 billion 

includes $2.65 billion for EBSP program operation and management; 

$11.03 billion for capital costs, including, among other things, 

recapitalization and facility modifications for optimization; $14.89 billion 

for operations and maintenance of equipment; $18.42 billion for screener 

salaries; and $2.22 billion for research and development and other 

miscellaneous related costs.40 Additionally, TSA officials reported that the

program is expected to provide life cycle cost savings of $537 million.41

 

39 Costs are in then-year dollars and include costs to the federal government, airports, and 

airlines. 

However, we found that the cost estimates are of questionable reliability 

for a precise estimate. TSA continues to revise its life cycle cost 

estimates. For example, its August 2011 EBSP life cycle cost estimate 

report stated that new requirements, including recapitalization and 

40 An LCCE encompasses all past (or sunk), present, and future costs for every aspect of 

the program, regardless of funding source. TSA officials noted that some of these costs, 

such as screener salaries, are EBSP related but are not paid for by the EBSP.

41 This total is based on life cycle cost savings as submitted in OMB Exhibit 300 for EBSP. 

TSA’s EBSP net cost savings estimate is in present value dollars and based on the DHS 

alternative analysis presented in Exhibit 300, which was completed in August 2011 and 

submitted to OMB. The preferred alternative—a combination of upgrading and 

recapitalizing checked baggage screening equipment—was estimated to cost $537 million 

less than the baseline option—an approach where no additional investment is made in 

optimized systems and equipment is recapitalized as needed.

TSA’s Cost Estimation 

Processes Do Not 

Fully Comply with 

Best Practices, and 

TSA and DHS Are 

Working Together to 

Establish an 

Acquisition Program 

Baseline

TSA Estimates That the 

EBSP Will Cost Close to 

$50 Billion through 2030
 

Page 27 GAO-12-266 Checked Baggage Screening 

upgrading the efficiency of early in-line systems, will likely lead to a gap 

between anticipated program needs and anticipated funding during fiscal 

years 2012 to 2017, totaling up to $436 million. However, in December 

2011 TSA officials told us the DHS Acquisition Review Board had 

requested that TSA revise the EBSP funding plans and projections to 

more accurately reflect current budget constraints and reduced funding 

available for the program.42 According to TSA officials, they plan to 

complete the revised EBSP planning estimates and funding projections to 

help eliminate the potential funding gap before the next Acquisition 

Review Board meeting in May 2012. EBSP senior program officials 

explained that TSA will address the potential funding gap by 

(1) controlling the costs associated with engineering initiatives and 

improvements in technology performance, (2) delaying funding of some 

new in-line systems and recapitalization projects, and (3) extending the 

useful life of equipment beyond 10 years in cases where replacement 

could be delayed.

Although TSA’s methods for developing its LCCE reflect features of best 

practices, its methods do not fully adhere to these practices. As 

highlighted in our past work, a high-quality, reliable cost estimation 

process provides a sound basis for making accurate and well-informed 

decisions about resource investments, budgets, assessments of 

progress, and accountability for results and thus is critical to the success 

of a program.43 According to the Office of Management and Budget 

(OMB), federal agencies must maintain current and well-documented 

estimates of program costs, and these estimates must encompass the 

program’s full life cycle.44

 

42 The Acquisition Review Board reviews provide an opportunity to determine a program’s 

readiness to proceed to the next life cycle phase. The directive also requires the 

Acquisition Review Board chairperson to approve key acquisition documents critical to 

establishing the program, operational requirements, acquisition baseline, and document 

testing and support plans.

Without such an estimate, agencies are at 

increased risk of making poorly informed investment decisions, securing 

43 See GAO-09-3SP. 

44 OMB Circular No. A-11, Preparation, Submission, and Execution of the Budget; (August 

2011); OMB Circular No. A-130 Revised, Management of Federal Information Resources 

(August 2000); and OMB, Capital Programming Guide: Supplement to Office of 

Management and Budget Circular A-11: Planning, Budgeting, and Acquisition of Capital 

Assets (Washington, D.C.: August 2011). 

TSA’s Life Cycle Cost 

Estimates Are Not Fully 

Consistent with Best 

Practices for Reliable and 

Credible Estimates
 

Page 28 GAO-12-266 Checked Baggage Screening 

insufficient resources to effectively execute defined program plans and 

schedules, and experiencing program cost and schedule overruns and 

performance shortfalls. As highlighted in our Cost Estimating and 

Assessment Guide, a reliable cost estimate has four characteristics—it is 

comprehensive, well documented, accurate, and credible. We reviewed 

TSA’s cost estimation procedures for the EBSP and assessed the extent 

to which the agency met the four characteristics, as shown in table 2.

Table 2: GAO’s Assessment of TSA’s Method for Developing EBSP Life Cycle Cost Estimates

Characteristic Description Overall assessment

Comprehensive

a

A comprehensive cost estimate should include all government and contractor costs over 

the program’s full life cycle, provide sufficient detail to ensure that the cost elements are 

neither omitted nor double counted, and document all cost-influencing ground rules and 

assumptions.

Partially met

Well documented A well-documented cost estimate should capture in writing such things as the source and 

significance of the data used, the calculations performed and their results, and the 

rationale for choosing a particular estimating method or reference. A well-documented 

estimate can be easily reconstructed by an outside source and should be reviewed and 

accepted by management.

Partially met

Accurate An accurate cost estimate should be, among other things, based on historical data 

reflecting most likely costs, adjusted properly for inflation, and validated against an 

independent cost estimate. An accurate estimate should be updated regularly to reflect 

material changes in the program and actual cost experience on the program, and steps 

should be taken to minimize mathematical mistakes.

Partially met

Credible A credible cost estimate should discuss any limitations in the analysis caused by 

uncertainty or biases surrounding the data and assumptions. Major assumptions should 

be varied and other outcomes computed to determine how sensitive the estimate is to 

changes in the assumptions. Risk and uncertainty inherent in the estimate should be 

assessed and disclosed.

Minimally met

Source: GAO analysis based on the GAO Cost Estimating and Assessment Guide. 

a

We defined a characteristic as not met if the agency provided no evidence that satisfied any portion 

of the criterion, minimally met if the agency provided evidence that satisfied less than one-half of the 

criterion, partially net if the agency provided evidence that satisfied about one-half of the criterion, 

substantially met if the agency provided evidence that satisfied more than one-half of the criterion, 

and met if the agency provided complete evidence that satisfied the entire criterion. 

Our assessment showed that TSA’s EBSP estimates partially met three 

characteristics and minimally met one characteristic of a reliable cost 

estimate. Specifically, TSA’s cost estimate was as follows:

• Partially comprehensive because the estimate defines the program, 

reflects the current schedule, is technically reasonable, includes 

assumptions identified by a team of personnel and engineers, and 

provides risks related to detection standards. However, the cost 

estimate is not considered fully comprehensive because it does not 

incorporate costs associated with all security threats, lacks a detailed 
 

Page 29 GAO-12-266 Checked Baggage Screening 

product-oriented work breakdown structure that covers the entire 

scope of work, and lacks a single technical baseline. Without fully 

accounting for life cycle costs, management may have difficulty 

successfully planning program resource requirements and making 

wise decisions. Further, the program lacks a defined end date. A 

reasonable criterion is that the estimate capture at least 10 years of 

costs beyond the planned full operational capability date—the date at 

which optimal systems are fully deployed and operating at all 

locations. However, we cannot determine whether the time frame is 

sufficient because we have not received documentation to support the 

program’s official, planned full operational capability date. According 

to TSA, the EBSP does not have a defined end date for procurement 

because maintaining compliance with the 100 percent screening 

mandate established by ATSA requires TSA to continuously procure 

and replace equipment as it reaches the end of its useful life. TSA 

also believes that it is following DHS acquisition guidance outlined 

under the acquisition decision memorandum dated January 13, 2005, 

for estimating threshold dates. Nevertheless, the EBSP still lacks a 

defined, official full operational capability date, without which we can

neither determine whether the time frame used in the LCCE is 

sufficient nor verify that the life cycle cost estimate is fully 

comprehensive.

• Partially documented because TSA used relevant data to help 

develop the estimate. For example, TSA’s estimated price for the 

equipment is based on existing contracts for EBSP equipment 

purchases, maintenance costs, LOI agreements, and OTAs. TSA also 

provided narratives, briefings, and documents to describe the program 

requirements, purpose, technical characteristics, and acquisition 

strategy, and explained how calculations were performed. However, 

TSA did not adequately document many assumptions or 

methodologies underlying its cost model to the extent that would allow 

someone unfamiliar with the cost estimate, using only the available 

documentation, to easily re-create the estimate. For example, 

equipment purchase and hardware upgrade costs were based in part 

on estimates from engineers and contract specialists rather than 

historical or analogous data. Unless ground rules and assumptions 

are clearly documented, the cost estimate will not have a basis for 

areas of potential risk to be resolved. In addition, TSA also provided 

little or no evidence that the assumptions and methodologies 
 

Page 30 GAO-12-266 Checked Baggage Screening 

underlying the cost estimate were approved by management.45

• Partially accurate because while the estimate is properly adjusted for 

inflation, differences between planned and actual costs are not fully 

documented, explained, or reviewed. In addition, we cannot determine 

whether the cost estimate is unbiased—that is, neither overly 

conservative nor overly optimistic—because the program did not 

perform an uncertainty analysis that meets best practices. While TSA 

agreed that costs should be documented, it could not explain why the 

differences between planned and actual costs were not being fully 

documented, explained, or reviewed.

 TSA 

officials agreed that additional documentation could improve the 

outside reviewers’ ability to evaluate the estimate. According to TSA, 

the EBSP plans to follow DHS guidance to implement software 

dedicated to the estimation, documentation, and reporting of costs 

during all phases of the EBSP program life cycle to help address 

documentation concerns.

• Minimally credible because while TSA identified changes in cost for 

each scenario against the baseline and developed a limited risk 

analysis, TSA did not complete other relevant activities to ensure that 

the estimate accounts for bias and uncertainty. For example, the 

agency did not (1) document in detail the assumptions and 

parameters associated with its sensitivity analysis, such as detailed 

calculations on how each parameter was varied between its minimum 

and maximum values; (2) conduct a fully objective uncertainty 

analysis that derives the point estimate percentile rather than 

assumes it; (3) cross-check major cost elements to see whether 

results are similar; and (4) use an independent cost estimate to 

validate the cost estimate. Given the important role that an 

independent cost estimate provides in developing an objective and 

unbiased assessment of whether the program estimate can be 

achieved, developing and using an independent cost estimate would 

provide decision makers with insight into a program’s potential costs 

and reduce the risk of underfunding a program. TSA officials told us 

they did not perform a complete uncertainty analysis because it was 

too costly and time consuming. TSA officials concurred that an 

independent cost estimate was not done for the EBSP and agreed 

that completing an independent estimate would be helpful.

 

45 Among other things, TSA presented no evidence that a formal overview of the 

program’s technical foundation, time-phased life cycle cost estimate, ground rules and 

assumptions, estimating methodology, sensitivity analysis, or risk and uncertainty analysis 

were presented to and reviewed by management.
 

Page 31 GAO-12-266 Checked Baggage Screening 

Regarding the credibility of TSA’s estimates, our past work has shown 

that program cost estimates that are independently validated help 

improve the confidence that the estimate is credible, are needed for 

making timely and informed budget decisions, and help reduce the 

likelihood of unanticipated program cost growth.46 Our prior reviews of 

several DHS programs, including the EBSP, have also shown that if cost 

estimates are not validated in accordance with DHS acquisition 

management directive requirements at the start of an acquisition 

program, it is difficult to assess whether a program is being deployed 

within planned budgets.47 Further, DHS’s Acquisition Management 

Directive requires major program cost estimates to be validated early in 

the decision-making process, before programs can receive authorization 

for acquisition contracts at the DHS Acquisition Review Board meeting.48

However, we found that since 2008 the DHS Acquisition Review Board 

allowed the EBSP to proceed with acquisition contracts before the LCCE 

was independently validated by DHS, which is inconsistent with DHS 

policy.49

In May 2010, the DHS Cost Analysis Division reviewed the EBSP life 

cycle cost estimate and found that it needed more comprehensive data 

and that its accuracy could not be determined. As of December 2011, the 

 

46 An independent cost estimate is a comparison with the program estimate to determine 

whether it is accurate and realistic. According to our best practices, independent cost 

estimates that are validated are generally conducted by an organization outside the 

acquisition chain, using the same detailed technical information as the program estimate. 

See GAO-09-3SP. 

47 In addition, we previously reported that the EBSP faced recurring programwide costs in 

excess of the budget, and that program costs could grow significantly as cost estimates 

are revised to include new requirements. GAO-10-588SP. 

48 DHS Acquisition Management Directive 102-01, and DHS Acquisition 

Instruction/Guidebook, 102-01-001 (2008). Specifically, according to DHS guidance, cycle 

cost estimates are required to be validated before programs are approved for acquisition. 

49 According to DHS, the Director, Cost Analysis Division, located in the Office of the Chief 

Procurement Officer, serves as the focal point within DHS for cost analysis and estimating 

policy, process, and procedure. In November 2011, DHS officials stated that the Cost 

Analysis Division was reorganized and split into the Program Support and Risk Analysis 

Division. According to DHS officials, the process for the future oversight of cost estimates 

is unclear and is likely to be performed by the newly established Risk Analysis Division, 

which will include some key Cost Analysis Division staff. While DHS officials supported the 

former Cost Analysis Division’s positive assessment of the EBSP life cycle cost estimates, 

they also stated that DHS never completed a comprehensive independent cost estimate 

for the EBSP.
 

Page 32 GAO-12-266 Checked Baggage Screening 

estimate had not been independently validated by DHS.50 According to 

TSA, DHS guidance that required validation of cost estimates was not in 

place until November 2008. The interim DHS directive for LCCEs and 

validation was established in November 2008, and the Cost Analysis 

Division was designated the authority responsible for independent cost 

estimates on January 24, 2010. However, the DHS Acquisition Review 

Board did not request a validated LCCE until February 25, 2011. TSA 

officials also stated that since the program’s budget circumstances 

changed over time, the cost estimate needed to be revised to reflect a 

constrained budget for fiscal year 2013 and other program changes. For 

example, TSA officials stated that new requirements for the EBSP, 

particularly the shift in focus to recapitalization of the aging EDS and ETD 

fleet and upgrades to in-line baggage screening systems and threat 

detection levels, contributed to continued program cost growth and 

delayed efforts to validate the latest LCCEs. As a result, the federal 

government’s portion of the cost estimates for the EBSP has increased 

from approximately $20.5 billion in fiscal year 2010 to $25.4 billion in 

fiscal year 2011—a 24 percent increase.51

According to our 2009 Cost Estimating and Assessment Guide, endorsed 

by the OMB and DHS, cost estimates are integral to determining and 

communicating a realistic view of likely cost outcomes that can be used to 

plan the work necessary to develop, produce, and support a program.

TSA is currently working with 

DHS on the validation of the cost estimate for the next Acquisition Review 

Board meeting scheduled for May 2012.

52

 

50 The DHS guidance uses information in our GAO Cost Estimating and Assessment 

Guide as criteria to define a valid estimate as one that is well documented, 

comprehensive, accurate, and credible. DHS policy explains that cost estimates should be 

validated to ensure that the single best estimate is provided for all resources required to 

develop, acquire, field, sustain, and dispose of required capability over the program’s life 

cycle. According to DHS officials, a validated LCCE is one that is approved and reviewed 

by the former DHS Cost Analysis Division. 

Taking steps to ensure that its cost estimates for the EBSP conform to 

cost estimating best practices will help provide TSA with a sound basis for 

understanding how the program can be sustained in future years.

51 This amount is in then-year dollars in billions. These estimates are based on annual 

submissions to OMB (DHS Exhibit 300). These cost estimates represent only the historical 

and projected life cycle costs to the federal government for the EBSP, whereas the 

complete life cycle cost estimate of $49.2 billion includes significant additional costs for 

screener salaries, as well as the costs to industry.

52 GAO-09-3SP. 
 

Page 33 GAO-12-266 Checked Baggage Screening 

Another foundation for making informed budget decisions is the 

acquisition program baseline, which is to document a program’s critical 

cost elements, including acquisition costs and life cycle costs. According 

to DHS’s acquisition guidance, the program baseline is the contract 

between the program and departmental oversight officials and must be 

established at program start to document the program’s expected cost, 

deployment schedule, and technical performance. Establishing such a 

baseline at program start is important for defining the program’s scope, 

assessing whether all life cycle costs are properly calculated, and 

measuring how well the program is meeting its goals. As we have 

previously reported, establishing realistic original baseline estimates is 

important for minimizing the risks of poorly defined requirements and 

achieving better program outcomes.53 By tracking and measuring actual 

program performance against this formal baseline, management can be 

alerted to potential problems, such as cost growth or changing 

requirements, and has the ability to take early corrective action.54

However, since the inception of the program more than eight years ago, 

the EBSP has not had a DHS approved acquisition program baseline and 

DHS did not require TSA to complete an acquisition program baseline 

until November 2008. An approved baseline will provide DHS with 

additional assurances that TSA’s approach is appropriate and that the 

capabilities being pursued are worth the expected costs. DHS officials 

told us that several reorganizations of DHS offices responsible for 

approving the baseline and a lack of functional expertise within the 

agency contributed to further delays in approving the EBSP acquisition 

program baseline. According to TSA officials, they have twice submitted 

an acquisition program baseline to DHS for approval. In November 2009 

and February 2011, TSA requested approval of a program baseline, but 

according to DHS officials TSA did not have a fully developed life cycle 

cost estimate. In November 2011, DHS told TSA that it needed to revise 

the life cycle cost estimates as well as its procurement and deployment 

schedules to reflect budget constraints. DHS officials told us that they 

could not approve the acquisition program baseline as written because 

 

53 GAO-10-588SP. 

54 According to DHS Acquisition Management Directive 102-01, the baseline requirements 

must also include a threshold value that is the minimum acceptable value that in the user’s 

judgment, is necessary to satisfy the need. Failure to achieve a threshold would require 

creating a new baseline or termination of the program. For more information, see 

GAO-10-588SP. 

TSA and DHS Are Working 

to Develop an EBSP 

Acquisition Program 

Baseline
 

Page 34 GAO-12-266 Checked Baggage Screening 

TSA’s estimates were significantly over budget. TSA officials stated that 

TSA is currently working with DHS to amend the draft program baseline 

for approval. TSA officials stated that they plan to resubmit the revised 

acquisition program baseline before the next Acquisition Review Board 

meeting in May 2012. Establishing and approving a program baseline, as 

DHS and TSA currently plan to do for the EBSP, could help DHS assess 

the program’s progress in meeting its goals and achieve better program 

outcomes.

TSA’s EBSP is aimed at increasing airport screening efficiencies and 

addressing the continuing threat of explosives concealed in checked 

baggage, at a total estimated cost to the federal government and the 

private sector of close to $50 billion through fiscal year 2030.55 Given the 

size of the federal investment, it is vital that TSA ensures effective 

stewardship over these resources and conveys useful information to the 

Congress about the scope and cost of the program. However, the 

limitations we identified in TSA’s EBSP cost estimates raise questions 

about their reliability. Taking steps to ensure that its cost estimates meet 

the four characteristics for high-quality and reliable cost estimates would 

provide TSA with increased assurance about the reliability of the 

estimated total cost of the program and better position it to account for all 

resources and associated costs required to develop, implement, and 

sustain the EBSP.

In order to strengthen the credibility, comprehensiveness, and reliability of 

TSA’s cost estimates and related savings estimates for the EBSP, we 

recommend that the Administrator of TSA ensure that its life cycle cost 

estimates conform to cost estimating best practices.

On March 30, 2012, we provided a draft of this report to DHS for its 

review and comment. DHS provided written comments on April 19, 2012, 

which are reprinted in appendix IV. In its written comments, DHS 

concurred with our recommendation that TSA ensure that its life cycle 

 

55 This includes $2.65 billion for EBSP operation and management; $11.03 billion for 

capital costs, including, among other things, recapitalization and facility modifications for 

optimization; $14.89 billion for operations and maintenance of equipment; $18.42 billion 

for screener salaries; and $2.22 billion for miscellaneous related costs.

Conclusions

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 35 GAO-12-266 Checked Baggage Screening 

cost estimates conform to cost estimating best practices and discussed 

efforts under way to address it. DHS further acknowledged the 

importance of producing life cycle cost estimates that are comprehensive, 

well documented, accurate, and credible so that they can be used to 

support DHS funding and budget decisions. DHS also noted that after 

conducting an internal review, TSA is implementing a management 

directive that applies DHS guidance and the best practices from the GAO 

Cost Estimating and Assessment Guide. As part of this effort, TSA is 

(1) establishing a working group and executive board to review program 

cost estimates to validate whether the estimates are credible and 

affordable, (2) requiring all life cycle cost estimates to be approved by 

DHS to ensure consistency and quality across TSA programs, 

(3) purchasing and training its employees on specialized cost estimating 

software, and (4) initiating hiring actions to hire additional cost estimating 

personnel. TSA believes that this will institutionalize cost estimating best 

practices within the organization and ultimately allow TSA and the 

Department to make better-informed investment decisions. These are 

positive steps; however, additional time will be needed to assess whether 

they have been fully and consistently implemented in accordance with 

GAO best practices. 

We are sending copies of this report to the Secretary of Homeland 

Security, the Assistant Secretary of the Transportation Security 

Administration, and appropriate congressional committees. In addition, 

this report is available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-8777 or lords@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 
 

Page 36 GAO-12-266 Checked Baggage Screening 

of this report. GAO staff who made major contributions to this report are 

listed in appendix V.

Stephen M. Lord

Director

Homeland Security and Justice Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 37 GAO-12-266 Checked Baggage Screening 

We examined the Department of Homeland Security’s (DHS) 

Transportation Security Administration’s (TSA) operation of the Electronic 

Baggage Screening Program (EBSP) to assess the program’s current 

status, alternative cost sharing options, and cost estimates. Specifically, 

we addressed the following questions:

• What is the status of TSA’s efforts to install optimal checked baggage 

screening systems in collaboration with airports?

• How would reducing the current federal cost share for eligible airport 

modification projects from 90 percent to its previous level of 75 

percent affect the amount that TSA pays for these modifications, and 

what benefits, if any, do airports report receiving from in-line baggage 

screening systems?

• To what extent are TSA’s cost estimation procedures consistent with 

best practices and is TSA’s acquisition baseline consistent with DHS 

guidance?

To determine the status of TSA’s efforts to install optimal checked 

baggage screening systems, we obtained data as of December 2011 and 

January 2012 from TSA, such as the current number of airports with at 

least one in-line system, and the number of airports with optimal systems. 

We also obtained data on the number of airports configured exclusively 

with in-line screening, the number of airports configured with a mix in-line 

and stand-alone explosives detection systems (EDS), and the number of 

airports using only stand-alone EDS for the same time period. We also 

collected data on the overall number of operational in-line systems and 

EDS and explosives trace detection (ETD) machines as of December 

2011. We reviewed documentation from TSA’s EBSP, including the EBSP 

strategic plans for fiscal years 2006, 2008, and 2009, and the 2011 EDS 

and ETD Recapitalization and Optimization Plan. 

We assessed the reliability of the various data TSA provided about 

airports, including the number of TSA-regulated airports (by category) and 

the numbers of airports with the different configurations of baggage 

screening systems (in-line or stand-alone), and the investment and 

budget expenditure dollar values in the letters of intent and other 

transaction agreements by questioning cognizant TSA officials and 

obtaining extensive documentation about these various data. We found 

these data to be sufficiently reliable for the purposes of our report.

To determine how reducing the federal cost share from the current 90 

percent to the previous federal cost share of 75 percent for eligible airport 

modification projects may affect the amount that TSA pays for these 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 38 GAO-12-266 Checked Baggage Screening 

modifications, we calculated estimates based on TSA’s August 2011 

projections of how much airport modifications will cost in the future. These 

projections represent TSA’s best estimate for how much it will spend on 

airport modifications for in-line systems each year from fiscal years 2012 

through 2030. We also reviewed the reliability of the cost estimate by 

evaluating how well TSA followed best practices detailed in the GAO Cost 

Estimating and Assessment Guide (see below). While TSA’s process for 

estimating costs only partially meets the characteristics of a reliable cost 

estimate, the data can serve to provide a rough indication of how much 

could be saved by reducing the federal cost share for optimization. To 

assess how the installation of in-line baggage handling systems may 

benefit the airports that receive them, we visited a nonrandom sample of 

10 airports. We chose these airports based on the size of airport, type of 

checked baggage screening systems installed, and status of airport 

facility modification completion. We discussed cost share with officials at 

each airport representing the airport authority, tenant airlines, and TSA’s 

Federal Security Director. In addition, we interviewed officials from the 

largest industry associations that represent airport executives, airports 

and airlines (the American Association of Airport Executives, the Airports 

Council International North America, and the Air Transport Association). 

We also interviewed an official from of the Association for Airline 

Passenger Rights. In addition, we discussed potential benefits of 

optimization with aviation security experts. These results cannot be 

generalized to the entire industry, but did provide broader perspectives on 

the issues and costs associated with the EBSP.

To assess the extent to which TSA’s methods for estimating costs for 

EBSP are consistent with best practices and its acquisition program 

baseline is consistent with DHS guidance, we analyzed TSA’s most 

recent life cycle cost estimate and recapitalization report finalized in 

August 2011. Specifically, we used best practices in the GAO Cost 

Estimating and Assessment Guide to evaluate TSA’s estimating 

methodologies, assumptions, and results to assess whether the official 

cost estimates were comprehensive (i.e., includes all costs), accurate, 

well documented, and credible.1

 

1 GAO, Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Program Costs, 

Our Cost Estimating and Assessment 

Guide considers an estimate to be

GAO-09-3SP (Washington, D.C.: March 2009). 
Appendix I: Objectives, Scope, and 

Methodology

Page 39 GAO-12-266 Checked Baggage Screening 

• comprehensive if its level of detail ensures that all pertinent costs are 

included and no costs are double counted;

• accurate if it is not overly conservative, is based on an assessment of 

the most likely costs, and is adjusted properly for inflation;

• well documented if the estimate can be easily repeated or updated 

and can be traced to original sources through auditing; and

• credible if the estimate has been cross-checked with an independent 

cost estimate and a level of uncertainty associated with the estimate 

has been identified.

We also interviewed the TSA EBSP office’s cost estimating team and its 

consultants to obtain a detailed understanding of their methodology, the 

cost model, and data. In doing so, we interviewed cognizant program 

officials, including the Program Manager and cost analysis team, 

regarding their respective roles, responsibilities, and actions in developing 

the cost estimate, reviewing it, or both.

We examined data reliability of the cost estimate by doing the following:

• Obtaining cost estimates and reviewing how each major element was 

calculated with an emphasis on the basis for the estimate and 

strength and quality of the supporting documentation.

• Verifying that the parameters used to create each estimate were valid 

and applicable by comparing to available cost estimating references, 

posing questions to the cost estimators for clarification, and relying on 

other technical sources for cross-checking.

• Verifying that calculations were correct for each major element.

• Verifying that escalation was properly applied and elements rolled up 

accurately to the overall program cost estimate.

We reviewed TSA’s EBSP cost estimates to determine whether the 

characteristic was (1) not met if the agency provided no evidence that 

satisfied any portion of the criterion, (2) minimally met if the agency 

provided evidence that satisfied less than one-half of the criterion, 

(3) partially met if the agency provided evidence that satisfied about onehalf of the criterion, (4) substantially met if the agency provided evidence 

that satisfied more than one-half of the criterion, and (5) met if the agency 

provided complete evidence that satisfied the entire criterion. One analyst 

assigned a value ranging from 1 to 5 indicating the extent to which the 

agencies met each best practice and averaged the values for the 

practices that were associated with each characteristic. A second analyst 

independently verified the results. We also interviewed program officials 

from TSA and DHS responsible for each cost estimate about the 

estimate’s derivation. In doing so, we independently assessed the cost 
Appendix I: Objectives, Scope, and 

Methodology

Page 40 GAO-12-266 Checked Baggage Screening 

estimates for the current EBSP, as provided to us in August 2011, against 

our best practices.

To understand how TSA is working to make better informed budget 

decisions and complying with DHS guidance to develop an acquisition 

program baseline, we reviewed DHS guidance on acquisitions and 

documents related to TSA’s efforts to coordinate with DHS on developing 

an acquisition program baseline for EBSP, which DHS considers the 

contract between the program and departmental oversight officials to 

document the program’s expected cost, deployment schedule, and 

technical performance. We also reviewed EBSP Acquisition Review 

Board decisions and relevant acquisition decision memos during the

period 2005 through 2011. Additionally, we interviewed TSA and DHS 

officials, including officials in the TSA Chief Financial Officer’s office and 

DHS’s Program Accountability and Risk Management Office to identify 

what procedures have been put in place to approve the acquisition 

program baseline.

To gain a better understanding of issues across all of our objectives, 

including the development of optimal systems, status of implementation, 

funding challenges, impact of a change in the cost share formula at the 

airport level, and cost estimation, we conducted site visits to California, 

New York, Massachusetts, Washington, D.C., and Florida to interview 

local airport officials, regional TSA officials, and airline representatives.2

 

2 We visited the following airports: Ronald Reagan Washington National, Washington 

Dulles International, General Edward Lawrence Logan International, John F. Kennedy 

International, Miami International, Monterrey Peninsula, Mineta San Jose International, 

San Francisco International, Southwest Florida International, and Westchester County. 

To get a range of airports for our site visits, we made our selections 

based on the size of airport, type of checked baggage screening systems 

installed, and status of airport facility modification completion. We also 

considered recommendations from TSA and industry association officials 

about which airports to visit. Because we selected a nonprobability 

sample of airports, the information we obtained from these interviews and 

visits cannot be generalized to all airports. However, we believe that 

observations obtained from these visits provided us with a greater 

understanding of the airport officials’ perspectives. On these site visits, 

we interviewed airport, airline, and TSA officials responsible for financing, 

operating, and installing the checked baggage systems within their 

respective airports.
Appendix I: Objectives, Scope, and 

Methodology

Page 41 GAO-12-266 Checked Baggage Screening 

We conducted this performance audit from October 2010 through April 

2012 in accordance with generally accepted government auditing 

standards.3

 

3 We issued preliminary results for this work in 2011 and 2012 as part of GAO’s effort to 

identify opportunities that federal agencies or the Congress could consider for reducing 

the cost of government operations or enhancing revenue collections for the Treasury. See 

GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, 

Those standards require that we plan and perform the audit 

to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

GAO-11-318SP (Washington, D.C.: Mar. 1, 2011), and 

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, 

Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, D.C.: Feb. 28, 

2012).
Appendix II: Status of Implementation Efforts 

for TSA’s EBSP 

Page 42 GAO-12-266 Checked Baggage Screening 

TSA, through its EBSP, has deployed EDS and ETD machines in a 

variety of in-line and stand-alone configurations at airports to streamline 

airports and TSA operations, reduce screening costs, and enhance 

security. The following three tables provide information on the status of 

checked baggage screening systems. Table 3 highlights the different 

system configurations for airports that have optimal checked baggage 

systems by airport category. Table 4 shows the number of TSA-regulated 

airports with at least one in-line system. Table 5 provides the numbers of 

in-line systems and stand-alone EDS and ETD machines at TSAregulated airports.

Table 3: Checked Baggage Configurations for TSA-Regulated Airports That Have 

Optimal Systems as of December 2011

Number of airports (by airport 

category)

Types of checked baggage 

configurations X I II III IV Total

In-line screening only 8 25 12 9 1 55

Mix of EDS in-line and stand-alone 2 3 3 0 0 8 

EDS stand-alone only 0 0 31 56 5 92

Mix of stand-alone EDS and primary ETD 0 0 0 1 14 15

Primary ETD 0 0 0 30 137 167

Total 10 28 46 96 157 337

Source: TSA.

Table 4: TSA-Regulated Airports with at Least One In-line System as of December 

2011

Number of airports (by airport 

category)

X I II III IV Total

Number of TSA-regulated airports 28 57 77 127 157 446

Number of TSA-regulated airports with at 

least one in-line system

23 38 18 12 1 92

Source: TSA.

Appendix II: Status of Implementation 

Efforts for TSA’s EBSP
Appendix II: Status of Implementation Efforts 

for TSA’s EBSP

Page 43 GAO-12-266 Checked Baggage Screening 

Table 5: Numbers of In-line Systems and Stand-alone EDS and ETD Machines for 

TSA-Regulated Airports as of December 2011

Number of baggage screening 

configurations (by airport category)

Types of baggage screening 

configurations X I II III IV Total

In-line systems 133 a 88 27 12 1 261

In-line EDS 694 284 60 27 2 1,067

Stand-alone EDS 383 172 202 91 18 866

ETD machines 2,195 1,324 592 405 304 4,820

Source: TSA.

a

One in-line system may include one or more EDS machines. 
Appendix III: Our Evaluation of EBSP’s Cost 

Estimate Process 

Page 44 GAO-12-266 Checked Baggage Screening 

In determining that TSA’s processes for developing EBSP cost estimates 

do not fully comply with best practices, we evaluated TSA’s cost 

estimation methods against our 2009 Cost Estimating and Assessment 

Guide. (See table 6.) We applied the following scale across the four 

categories of best practices:

• Not met: TSA provided no evidence that satisfies any portion of the 

criterion.

• Minimally met: TSA provided evidence that satisfies less than one-half 

of the criterion.

• Partially met: TSA provided evidence that satisfies about one-half of 

the criterion.

• Substantially met: TSA provided evidence that satisfies more than 

one-half of the criterion.

• Met: TSA provided complete evidence that satisfies the entire 

criterion.

Table 6: Summary Assessment of TSA’s Electronic Baggage Screening Program Cost Estimate Compared to Best Practices 

Characteristic

Overall 

assessment Best practice

Individual 

assessment

Comprehensive Partially met The cost estimate includes all life cycle costs. Partially met

The cost estimate completely defines the program, reflects the current 

schedule, and is technically reasonable.

Partially met

The cost estimate work breakdown structure is product oriented, 

traceable to the statement of work/objective, and at an appropriate level 

of detail to ensure that cost elements are neither omitted nor double 

counted.

Partially met

The estimate documents all cost-influencing ground rules and 

assumptions. 

Partially met

Well documented Partially met The documentation should capture the source data used, the reliability 

of the data, and how the data were normalized.

Partially met

The documentation describes in sufficient detail the calculations 

performed and the estimating methodology used to derive each 

element’s cost.

Partially met

The documentation describes step-by-step how the estimate was 

developed so that a cost analyst unfamiliar with the program could 

understand what was done and replicate it.

Partially met

The documentation discusses the technical baseline description, and 

the data in the baseline are consistent with the estimate.

Substantially met

The documentation provides evidence that the cost estimate was 

reviewed and accepted by management.

Minimally met

Accurate Partially met The cost estimate results are unbiased, not overly conservative or 

optimistic and based on an assessment of most likely costs.

Partially met

The estimate has been adjusted properly for inflation. Met

Appendix III: Our Evaluation of EBSP’s Cost 

Estimate Process
Appendix III: Our Evaluation of EBSP’s Cost 

Estimate Process 

Page 45 GAO-12-266 Checked Baggage Screening 

Characteristic

Overall 

assessment Best practice

Individual 

assessment

The estimate contains few, if any, minor mistakes. Partially met

The cost estimate is regularly updated to reflect significant changes in 

the program so that it is always reflecting current status.

Partially met

Variances between planned and actual costs are documented, 

explained, and reviewed. 

Not met

The estimate is based on a historical record of cost estimating and 

actual experiences from other comparable programs. 

Partially met

Credible Minimally met The cost estimate includes a sensitivity analysis that identifies a range 

of possible costs based on varying major assumptions, parameters, and 

data inputs.

Partially met

A risk and uncertainty analysis was conducted that quantified the 

imperfectly understood risks and identified the effects of changing key 

cost driver assumptions and factors.

Partially met

Major cost elements were cross-checked to see whether results were 

similar.

Not met

An independent cost estimate was conducted by a group outside the 

acquiring organization to determine whether other estimating methods 

produce similar results.

Not met

Source: GAO analysis of TSA’s data.
Appendix IV: Comments from the Department 

of Homeland Security

Page 46 GAO-12-266 Checked Baggage Screening 

Appendix IV: Comments from the 

Department of Homeland Security 
Appendix IV: Comments from the Department 

of Homeland Security

Page 47 GAO-12-266 Checked Baggage Screening 
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 48 GAO-12-266 Checked Baggage Screening 

Stephen M. Lord, (202) 512-4379 or lords@gao.gov

In addition to the contact named above, Glenn Davis, Assistant Director, 

and Daniel Rodriguez, Analyst-in-Charge, managed this assignment. 

Wendy Dye, Daren Sweeney, and Yee Wong made major contributions to 

the planning and all other aspects of the work. David Alexander and 

Richard Hung assisted with design, methodology, and data reliability. 

Chuck Bausell and Jack Wang assisted with economic analysis. Jason 

Lee, Stacey Steele, and Karen Richey assisted with life cycle cost 

estimate analysis. Nathan Tranquilli assisted with acquisition and 

contracting issues. Linda Miller provided assistance in report preparation. 

Thomas Lombardi provided legal support.

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(440887)
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