```

[House Report 113-275]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    113-275

======================================================================

 
             TRANSPORTATION SECURITY ACQUISITION REFORM ACT

                                _______
                                

 November 21, 2013.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. McCaul, from the Committee on Homeland Security, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2719]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security, to whom was referred 
the bill (H.R. 2719) to require the Transportation Security 
Administration to implement best practices and improve 
transparency with regard to technology acquisition programs, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     6
Hearings.........................................................     8
Committee Consideration..........................................     9
Committee Votes..................................................    12
Committee Oversight Findings.....................................    12
New Budget Authority, Entitlement Authority, and Tax Expenditures    12
Congressional Budget Office Estimate.............................    12
Statement of General Performance Goals and Objectives............    13
Duplicative Federal Programs.....................................    13
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................    13
Federal Mandates Statement.......................................    14
Preemption Clarification.........................................    14
Disclosure of Directed Rule Makings..............................    14
Advisory Committee Statement.....................................    14
Applicability to Legislative Branch..............................    14
Section-by-Section Analysis of the Legislation...................    14
Changes in Existing Law Made by the Bill, as Reported............    29
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Transportation Security Acquisition 
Reform Act''.

SEC. 2. FINDINGS.

  Congress finds the following:
          (1) The Transportation Security Administration (in this Act 
        referred to as ``TSA'') does not consistently implement 
        Department of Homeland Security policies and Government best 
        practices for acquisition and procurement.
          (2) TSA has not developed a multiyear technology investment 
        plan. As a result, TSA has underutilized innovation 
        opportunities within the private sector, including from small 
        businesses.
          (3) Due in part to the deficiencies referred to in paragraphs 
        (1) and (2), TSA has faced challenges in meeting key 
        performance requirements for several major acquisitions and 
        procurements, resulting in reduced security effectiveness and 
        wasted expenditures.

SEC. 3. TRANSPORTATION SECURITY ADMINISTRATION ACQUISITION REFORM.

  (a) In General.--Title XVI of the Homeland Security Act of 2002 (116 
Stat. 2312) is amended to read as follows:

                  ``TITLE XVI--TRANSPORTATION SECURITY

                    ``Subtitle A--General Provisions

``SEC. 1601. DEFINITIONS.

  ``In this title:
          ``(1) Administration.--The term `Administration' means the 
        Transportation Security Administration.
          ``(2) Administrator.--The term `Administrator' means the 
        Administrator of the Transportation Security Administration.
          ``(3) Security-related technology.--The term `security-
        related technology' means any technology that assists the 
        Administration in the prevention of, or defense against, 
        threats to United States transportation systems, including 
        threats to people, property, and information.

   ``Subtitle B--Transportation Security Administration Acquisition 
                              Improvements

``SEC. 1611. MULTIYEAR TECHNOLOGY INVESTMENT PLAN.

  ``(a) In General.--The Administrator--
          ``(1) not later than 180 days after the date of enactment of 
        the Transportation Security Acquisition Reform Act, shall 
        develop and transmit to Congress a strategic multiyear 
        technology investment plan, which may include a classified 
        addendum to report sensitive transportation security risks, 
        technology vulnerabilities, or other sensitive security 
        information; and
          ``(2) to the extent possible, shall publish such plan in an 
        unclassified format within the public domain.
  ``(b) Consultation.--The Administrator shall develop the multiyear 
technology investment plan in consultation with the Under Secretary for 
Management, the Chief Information Officer, and the Under Secretary for 
Science and Technology.
  ``(c) Approval.--The Secretary must have approved the multiyear 
technology investment plan before it is published under subsection 
(a)(2).
  ``(d) Contents of Plan.--The multiyear technology investment plan 
shall include the following:
          ``(1) An analysis of transportation security risks and the 
        associated technology gaps, including consideration of the most 
        recent Quadrennial Homeland Security Review under section 707.
          ``(2) A set of transportation security-related technology 
        acquisition needs that--
                  ``(A) is prioritized based on risk and gaps 
                identified under paragraph (1); and
                  ``(B) includes planned technology programs and 
                projects with defined objectives, goals, and measures.
          ``(3) An analysis of current trends in domestic and 
        international passenger travel.
          ``(4) An identification of currently deployed security-
        related technologies that are at or near the end of their 
        lifecycle.
          ``(5) An identification of test, evaluation, modeling, and 
        simulation capabilities that will be required to support the 
        acquisition of the security-related technologies to meet those 
        needs.
          ``(6) An identification of opportunities for public-private 
        partnerships, small and disadvantaged company participation, 
        intragovernment collaboration, university centers of 
        excellence, and national laboratory technology transfer.
          ``(7) An identification of the Administration's acquisition 
        workforce needs that will be required for the management of 
        planned security-related technology acquisitions, including 
        consideration of leveraging acquisition expertise of other 
        Federal agencies.
          ``(8) An identification of the security resources, including 
        information security resources, that will be required to 
        protect security-related technology from physical or cyber 
        theft, diversion, sabotage, or attack.
          ``(9) An identification of initiatives to streamline the 
        Administration's acquisition process and provide greater 
        predictability and clarity to small, medium, and large 
        businesses, including the timeline for testing and evaluation.
  ``(e) Leveraging the Private Sector.--To the extent possible, and in 
a manner that is consistent with fair and equitable practices, the plan 
shall--
          ``(1) leverage emerging technology trends and research and 
        development investment trends within the public and private 
        sectors;
          ``(2) incorporate feedback and input received from the 
        private sector through requests for information, industry days, 
        and other innovative means consistent with the Federal 
        Acquisition Regulation; and
          ``(3) leverage market research conducted by the Under 
        Secretary for Science and Technology to identify technologies 
        that exist or are in development that, with or without 
        adaptation, could be utilized to meet mission needs.
  ``(f) Disclosure.--The Administrator shall include with the plan 
required under this section a list of any nongovernment persons that 
contributed to the writing of the plan.
  ``(g) Update and Report.--Once every 2 years after the initial 
strategic plan is transmitted to Congress, the Administrator shall 
transmit to Congress an update of the plan and a report on the extent 
to which each security-related technology acquired by the 
Administration since the last issuance or update of the plan is 
consistent with the planned technology programs and projects identified 
under subsection (d)(2) for that technology.

``SEC. 1612. ACQUISITION JUSTIFICATION AND REPORTS.

  ``(a) Acquisition Justification.--Before the Administration 
implements any security-related technology acquisition, the 
Administrator shall, in accordance with the Department's policies and 
directives, conduct a comprehensive analysis to determine whether the 
acquisition is justified. The analysis shall include, but may not be 
limited to, the following:
          ``(1) An identification of the type and level of risk to 
        transportation security that would be addressed by such 
        technology acquisition.
          ``(2) An assessment of how the proposed acquisition aligns to 
        the multiyear technology investment plan developed under 
        section 1611.
          ``(3) A comparison of the total expected lifecycle cost 
        against the total expected quantitative and qualitative 
        benefits to transportation security.
          ``(4) An analysis of alternative security solutions to 
        determine if the proposed technology acquisition is the most 
        effective and cost-efficient solution based on cost-benefit 
        considerations.
          ``(5) An evaluation of the privacy and civil liberties 
        implications of the proposed acquisition, and a determination 
        that the proposed acquisition is consistent with fair 
        information practice principles issued by the Privacy Officer 
        of the Department. To the extent practicable, the evaluation 
        shall include consultation with organizations that advocate for 
        the protection of privacy and civil liberties.
          ``(6) Confirmation that there are no significant risks to 
        human health and safety posed by the proposed acquisition.
  ``(b) Reports and Certification to Congress.--
          ``(1) In general.--Not later than the end of the 30-day 
        period preceding the award by the Administration of a contract 
        for any security-related technology acquisition exceeding 
        $30,000,000, the Administrator shall submit to the Committee on 
        Homeland Security of the House of Representatives and the 
        Committee on Commerce, Science, and Transportation of the 
        Senate the results of the comprehensive acquisition analysis 
        required under this section and a certification by the 
        Administrator that the security benefits justify the contract 
        cost.
          ``(2) Extension due to imminent terrorist threat.--If there 
        is a known or suspected imminent threat to transportation 
        security, the Administrator may reduce the 30-day period under 
        paragraph (1) to 5 days in order to rapidly respond.
          ``(3) Notice to congress.--The Administrator shall provide 
        immediate notice of such imminent threat to the Committee on 
        Homeland Security of the House of Representatives and the 
        Committee on Commerce, Science, and Transportation of the 
        Senate.

``SEC. 1613. ACQUISITION BASELINE ESTABLISHMENT AND REPORTS.

  ``(a) Baseline Requirements.--
          ``(1) In general.--Before the Administration implements any 
        security-related technology acquisition, the appropriate 
        acquisition official of the Department shall establish and 
        document a set of formal baseline requirements.
          ``(2) Contents.--The baseline requirements shall--
                  ``(A) include the estimated costs (including 
                lifecycle costs), schedule, and performance milestones 
                for the planned duration of the acquisition; and
                  ``(B) identify the acquisition risks and a plan for 
                mitigating these risks.
          ``(3) Feasibility.--In establishing the performance 
        milestones under paragraph (2), the appropriate acquisition 
        official of the Department shall, to the extent possible and in 
        consultation with the Under Secretary for Science and 
        Technology, ensure that achieving these milestones is 
        technologically feasible.
          ``(4) Test and evaluation plan.--The Administrator, in 
        consultation with the Under Secretary for Science and 
        Technology, shall develop a test and evaluation plan that, at a 
        minimum, describes--
                  ``(A) the activities that will be required to assess 
                acquired technologies against the performance 
                milestones established under paragraph (2);
                  ``(B) the necessary and cost-effective combination of 
                laboratory testing, field testing, modeling, 
                simulation, and supporting analysis to ensure that such 
                technologies meet the Administration's mission needs; 
                and
                  ``(C) an efficient schedule to ensure that test and 
                evaluation activities are completed without undue 
                delay.
          ``(5) Verification and validation.--The appropriate 
        acquisition official of the Department--
                  ``(A) subject to subparagraph (B), shall utilize 
                independent reviewers to verify and validate the 
                performance milestones and cost estimates developed 
                under paragraph (2) for a security-related technology 
                that pursuant to section 1611(d)(2) has been identified 
                as a high priority need in the most recent multiyear 
                technology investment plan; and
                  ``(B) shall ensure that the utilization of 
                independent reviewers does not unduly delay the 
                schedule of any acquisition.
          ``(6) Streamlining access for interested vendors.--The 
        Administrator shall establish a streamlined process for an 
        interested vendor of a security-related technology to request 
        and receive appropriate access to the baseline requirements and 
        test and evaluation plans that are necessary for the vendor to 
        participate in the acquisitions process for such technology.
  ``(b) Review of Baseline Requirements and Deviation; Report to 
Congress.--
          ``(1) Review.--
                  ``(A) In general.--The appropriate acquisition 
                official of the Department shall review and assess each 
                implemented acquisition to determine if the acquisition 
                is meeting the baseline requirements established under 
                subsection (a).
                  ``(B) Test and evaluation assessment.--The review 
                shall include an assessment of whether the planned 
                testing and evaluation activities have been completed 
                and the results of such testing and evaluation 
                demonstrate that the performance milestones are 
                technologically feasible.
          ``(2) Report.--
                  ``(A) In general.--The Administrator shall report to 
                the Committee on Homeland Security of the House of 
                Representatives and the Committee on Commerce, Science, 
                and Transportation of the Senate the results of any 
                assessment that finds that--
                          ``(i) the actual or planned costs exceed the 
                        baseline costs by more than 10 percent;
                          ``(ii) the actual or planned schedule for 
                        delivery has been delayed by more than 180 
                        days; or
                          ``(iii) there is a failure to meet any 
                        performance milestone that directly impacts 
                        security effectiveness.
                  ``(B) Cause.--The report shall include the cause for 
                such excessive costs, delay, or failure, and a plan for 
                corrective action.
                  ``(C) Timeliness.--The report required under this 
                section shall be provided to the Committee on Homeland 
                Security of the House of Representatives and the 
                Committee on Commerce, Science, and Transportation of 
                the Senate no later than 30 days after identifying such 
                excessive costs, delay, or failure.

``SEC. 1614. INVENTORY UTILIZATION.

  ``(a) In General.--Before the procurement of additional quantities of 
equipment to fulfill a mission need, the Administrator shall, to the 
extent practicable, utilize any existing units in the Administration's 
inventory to meet that need.
  ``(b) Tracking of Inventory.--
          ``(1) Location.--The Administrator shall establish a process 
        for tracking the location of security-related equipment in such 
        inventory.
          ``(2) Utilization.--The Administrator shall--
                  ``(A) establish a process for tracking the 
                utilization status of security-related technology in 
                such inventory; and
                  ``(B) implement internal controls to ensure accurate 
                data on security-related technology utilization.
          ``(3) Quantity.--The Administrator shall establish a process 
        for tracking the quantity of security-related equipment in such 
        inventory.
  ``(c) Logistics Management.--
          ``(1) In general.--The Administrator shall establish 
        logistics principles for managing inventory in an effective and 
        efficient manner.
          ``(2) Limitation on just-in-time logistics.--The 
        Administrator may not use just-in-time logistics if doing so 
        would--
                  ``(A) inhibit necessary planning for large-scale 
                delivery of equipment to airports or other facilities; 
                or
                  ``(B) unduly diminish surge capacity for response to 
                a terrorist threat.

``SEC. 1615. SMALL BUSINESS CONTRACTING GOALS.

  ``Not later than 90 days after the date of enactment of the 
Transportation Security Acquisition Reform Act, and annually 
thereafter, the Administrator shall submit to the Committee on Homeland 
Security of the House of Representatives and the Committee on Commerce, 
Science, and Transportation of the Senate a report that includes the 
following:
          ``(1) A restatement of the Administration's published goals 
        for contracting with small businesses, including small and 
        disadvantaged businesses, and the Administration's performance 
        record with respect to meeting those goals during the preceding 
        fiscal year.
          ``(2) If such goals were not met, or the Administration's 
        performance was below the published goals of the Department, an 
        itemized list of challenges, including deviations from the 
        Administration's subcontracting plans and the extent to which 
        contract bundling was a factor, that contributed to the level 
        of performance during the preceding fiscal year.
          ``(3) An action plan, with benchmarks, for addressing each of 
        the challenges identified in paragraph (2), prepared after 
        consultation with the Secretary of Defense and the heads of 
        Federal departments and agencies that achieved their published 
        goals for prime contracting with small and minority owned 
        businesses, including small and disadvantaged businesses, in 
        prior fiscal years, to identify policies and procedures that 
        could be incorporated at the Administration in furtherance of 
        achieving the Administration's published goal for such 
        contracting.
          ``(4) The status of implementing such action plan that was 
        developed in the preceding fiscal year in accordance with 
        paragraph (3).

``SEC. 1616. CONSISTENCY WITH THE FEDERAL ACQUISITION REGULATION AND 
                    DEPARTMENTAL POLICIES AND DIRECTIVES.

  ``The Administrator shall execute responsibilities set forth in this 
subtitle in a manner consistent with, and not duplicative of, the 
Federal Acquisition Regulation and the Department's policies and 
directives.''.
  (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended by striking the items relating to title XVI and 
inserting the following:

                  ``TITLE XVI--TRANSPORTATION SECURITY

                    ``Subtitle A--General Provisions

``Sec. 1601. Definitions.

   ``Subtitle B--Transportation Security Administration Acquisition 
                              Improvements

``Sec. 1611. Multiyear technology investment plan.
``Sec. 1612. Acquisition justification and reports.
``Sec. 1613. Acquisition baseline establishment and reports.
``Sec. 1614. Inventory utilization.
``Sec. 1615. Small business contracting goals.
``Sec. 1616. Consistency with the Federal Acquisition Regulation and 
departmental policies and directives.''.

  (c) Prior Amendments Not Affected.--This section shall not be 
construed to affect any amendment made by title XVI of such Act as in 
effect before the date of enactment of this Act.

SEC. 4. GOVERNMENT ACCOUNTABILITY OFFICE REPORTS.

  (a) Implementation of Previous Recommendations.--Not later than 1 
year after the date of enactment of this Act, the Comptroller General 
of the United States shall assess and report to Congress on 
implementation by the Transportation Security Administration of 
recommendations regarding the acquisition of technology that were made 
by the Government Accountability Office before the date of enactment of 
this Act.
  (b) Implementation of Subtitle B of Title XVI.--Not later than 1 year 
after the date of enactment of this Act and 3 years thereafter, the 
Comptroller General of the United States shall evaluate and report to 
Congress the Transportation Security Administration's progress in 
implementing subtitle B of title XVI of the Homeland Security Act of 
2002 (116 Stat. 2312), as amended by this Act (including provisions 
added to such subtitle after the date of enactment of this Act), 
including any efficiencies, cost savings, or delays that have resulted 
from such implementation.

SEC. 5. REPORT ON FEASIBILITY OF INVENTORY TRACKING.

   Not later than 90 days after the date of enactment of this Act, the 
Administrator of the Transportation Security Administration shall 
report to Congress on the feasibility of tracking transportation 
security-related technology of the Administration through automated 
information and data capture technologies.

SEC. 6. GOVERNMENT ACCOUNTABILITY OFFICE REVIEW OF TSA'S TEST AND 
                    EVALUATION PROCESS.

  Not later than 1 year after the date of the enactment of this Act, 
the Comptroller General of the United States shall evaluate and report 
to Congress on the Transportation Security Administration's testing and 
evaluation activities related to security-related technologies. The 
report shall include--
          (1) information on the extent to which --
                  (A) the execution of such testing and evaluation 
                activities is aligned, temporally and otherwise, with 
                the Administration's acquisition needs, planned 
                procurements, and acquistions for technology programs 
                and projects; and
                  (B) the extent to which security-related technologies 
                that have been tested, evaluated, and certified for use 
                by the Administration are not procured by the 
                Administration, including information about why that 
                occurs; and
          (2) recommendations to--
                  (A) improve the efficiency and efficacy of such 
                testing and evaluation activities; and
                  (B) better align such testing and evaluation with the 
                acquisitions process.

SEC. 7. NO ADDITIONAL AUTHORIZATION OF APPROPRIATIONS.

  No additional funds are authorized to be appropriated to carry out 
this Act and the amendments made by this Act, and this Act and such 
amendments shall be carried out using amounts otherwise available for 
such purpose.

                          Purpose and Summary

    The purpose of H.R. 2719 is to require the Transportation 
Security Administration to implement best practices and improve 
transparency with regard to technology acquisition programs, 
and for other purposes.

                  Background and Need for Legislation

    The Department of Homeland Security (DHS), through the 
Transportation Security Administration (TSA), is responsible 
for the prevention of, and defense against threats to United 
States transportation systems. Such threats come in many forms 
and include threats to people, property, and information. The 
events of September 11, 2001 demonstrated that malevolent 
actions against U.S. transportation systems can have profound 
impacts on national security and economic vitality. It is 
therefore critical that TSA provide comprehensive, effective, 
and efficient security measures to address a broad spectrum of 
evolving threats. The Committee believes that this set of 
transportation security measures needs to be risked-based and 
implemented in a systematic, layered approach. Such a 
systematic approach includes the appropriate combination of 
security personnel, defensive barriers, and security-related 
technologies. The focus of this legislation is to provide a 
legislative framework for TSA's acquisition of security-related 
technologies in the context of systematic risk-based security.
    The TSA expends significant funds each year developing, 
purchasing, and maintaining transportation security-related 
technologies. For example, in Fiscal Year 2012, TSA spent more 
than $550 million on its explosives detection screening 
technologies and held over $3 billion in equipment inventories, 
deployed across all major U.S. airports and multiple storage 
locations. Due to the high cost of security technologies, and 
because they are an integral part of the traveling public's 
experience at checkpoints, much study has been devoted to this 
equipment and how it is deployed. Since being established, the 
Committee on Homeland Security has conducted extensive 
oversight on TSA acquisition challenges and received testimony 
and numerous briefings from TSA, DHS, the Government 
Accountability Office (GAO), the DHS Inspector General (DHS 
IG), and the private sector. Both GAO and DHS IG have reported 
that TSA is not effectively implementing Government best 
practices and DHS policy for acquiring new security 
capabilities. This has resulted in acquisitions that have 
failed to meet security performance objectives and/or wasted 
Federal funds. Additionally, the private sector has criticized 
TSA for failing to accurately communicate technology needs and 
long-term investment plans, making it difficult for industry to 
plan ahead and invest in the next generation of security-
related technologies.
    H.R. 2719, the Transportation Security Acquisition Reform 
Act, is bipartisan legislation developed from valuable input 
from stakeholders and subject matter experts across Government 
and industry. The Act introduces greater transparency and 
accountability for TSA spending decisions through a series of 
legislated reforms. The Act formally documents Congressional 
findings resulting from the Committee's extensive oversight on 
this topic. Furthermore, the Act codifies acquisition best-
practices that the Committee believes will result in more 
effective and efficient security-related technology 
acquisitions at TSA. The Act, which amends the Homeland 
Security Act of 2002 (Pub. L. 107-296), requires TSA to develop 
and share with the public, for the first time, a strategic, 
multi-year technology investment plan. The Act also requires 
TSA to share key information with Congress on technology 
acquisitions, including cost overruns, delays, or technical 
failures. Furthermore, the Act establishes principles for 
managing equipment in inventory to eliminate expensive storage 
of unusable or outdated technologies. Finally, in response to 
TSAs persistent failure to meet its small business contracting 
goals, the Act requires TSA to report on its goals for 
contracting with small businesses and directs the 
administration to consult with the Department of Defense and 
other agencies that meet their small business contracting 
goals. To inform continuing Congressional oversight, the Act 
requires that the Government Accountability Office conduct an 
initial and follow-on assessment of TSA's implementation of the 
provisions of this legislation.
    The Committee has received letters of support for H.R. 2719 
from: The U.S. Travel Association; Airports Council 
International-North America; the Security Industry 
Manufacturers Coalition; the General Aviation Manufacturers 
Association; and the Security Industry Association.

                                Hearings

    No hearings were held on H.R. 2719. However, the Committee 
held oversight hearings relating to programs contained within 
H.R. 2719, these hearings are listed below.

112th Congress
    On September 22, 2011, the Subcommittee on Transportation 
Security held a hearing entitled ``TSA Reform: Exploring 
Innovations in Technology Procurement to Stimulate Job 
Growth.'' The Subcommittee received testimony from Ms. Elaine 
C. Duke, President, Elaine Duke & Associates, LLC; Mr. Michael 
P. Jackson, President, Firebreak Partners, LLC; and Mr. Stephen 
M. Lord, Director, Homeland Security and Justice Issues, 
Government Accountability Office.
    On October 13, 2011, the Subcommittee on Transportation 
Security continued its hearing from September, receiving 
testimony from Mr. Marc A. Pearl, President and CEO, Homeland 
Security and Defense Business Council; Mr. Scott Boylan, Vice 
President and General Counsel, Safran Morpho Detection; and Mr. 
Guy Ben-Ari, Deputy Director, Defense-Industrial Initiatives 
Group, Fellow, International Security Program, Center for 
Strategic and International Studies.
    On November 3, 2011, the Subcommittee on Transportation 
Security held a hearing entitled ``TSA Reform: Exploring 
Innovations in Technology Procurement to Stimulate Job Growth, 
Part III.'' The Subcommittee received testimony from Dr. Nick 
Nayak, Chief Procurement Officer, Department of Homeland 
Security; Mr. Robin E. Kane, Assistant Administrator, Security 
Technology, Transportation Security Administration, Department 
of Homeland Security; Mr. Paul Benda, Chief of Staff, Director, 
Homeland Security Advanced Research Projects Agency, Department 
of Homeland Security, accompanied by Dr. Susan Hallowell, 
Director, Transportation Security Laboratory; and Mr. Charles 
K. Edwards, Acting Inspector General, Department of Homeland 
Security.
    On December 8, 2011, the Subcommittee on Transportation 
Security held a hearing entitled ``A Review of Passenger 
Screening Technology at U.S. Airports.'' The Subcommittee 
received testimony from Hon. John S. Pistole, Administrator, 
Transportation Security Administration, U.S. Department of 
Homeland Security; Ms. Gale D. Rossides, Deputy Administrator, 
Transportation Security Administration, U.S. Department of 
Homeland Security; Mr. Robin E. Kane, Assistant Administrator 
for Security Technology, Transportation Security 
Administration, U.S. Department of Homeland Security; Hon. 
Caryn Wagner, Under Secretary, Office of Intelligence and 
Analysis, U.S. Department of Homeland Security; Dr. Tara 
O'Toole, Under Secretary, Science and Technology Directorate, 
U.S. Department of Homeland Security; Dr. Cedric Sims, 
Executive Director, Office of Program Accountability and Risk 
Management, Management Directorate, Department of Homeland 
Security; Mr. Charles K. Edwards, Acting Inspector General, 
Office of Inspector General, U.S. Department of Homeland 
Security; Ms. Anne Richards, Assistant Inspector General for 
Audits, Office of Inspector General, U.S. Department of 
Homeland Security; and Mr. Stephen M. Lord, Director, Homeland 
Security and Justice Issues, Government Accountability Office.
    On June 19, 2012, the Subcommittee on Transportation 
Security held a hearing entitled, ``Is TSA's Planned Purchase 
of CAT/BPSS a Wise Use of Taxpayer Dollars?'' The Subcommittee 
received testimony from Mr. Kelly Hoggan, Assistant 
Administrator, Office of Security Capabilities, Transportation 
Security Administration and Mr. Steven M. Lord, Director, 
Homeland Security and Justice Issues, Government Accountability 
Office.
    On November 15, 2012, the Subcommittee on Transportation 
Security held a hearing entitled ``TSA's Recent Scanner 
Shuffle: Real Strategy or Wasteful Smokescreen?'' The 
Subcommittee received testimony from Mr. Jonathan Cantor, 
Acting Chief Privacy Officer, U.S. Department of Homeland 
Security; and Mr. John Sanders, Assistant Administrator, Office 
of Security Capabilities, Transportation Security 
Administration, Department of Homeland Security.

113th Congress
    The Subcommittee on Transportation Security held a hearing 
on May 8, 2013, entitled ``TSA Procurement Reform: Saving 
Taxpayer Dollars Through Smarter Spending Practices.'' The 
Subcommittee received testimony from Ms. Karen Shelton Waters, 
Assistant Administrator, Office of Acquisition, Transportation 
Security Administration, U.S. Department of Homeland Security; 
Mr. Paul Benda, Director, Advanced Research Projects Agency, 
Science & Technology Directorate, U.S. Department of Homeland 
Security; Mr. Stephen M. Lord, Director, Forensic Audits and 
Investigative Services, U.S. Government Accountability Office; 
and Mr. Charles K. Edwards, Deputy Inspector General, U.S. 
Department of Homeland Security.
    The Subcommittee on Transportation Security held a hearing 
on July 17, 2013, entitled ``Stakeholder Perspectives on TSA 
Acquisition Reform.'' The Subcommittee received testimony from 
Mr. Marc Pearl, President & CEO, Homeland Security & Defense 
Business Council; Ms. Shene Commodore, Government Contracts & 
Business Manager, Intertek, testifying on behalf of the 
Security Industry Association; and Mr. Dolan P. Falconer, Jr., 
Co-Founder, Chairman & General Manager, Scan Tech Holdings.

                        Committee Consideration

    The Committee on Homeland Security met on October 29, 2013, 
to consider H.R. 2719, and ordered the measure to be reported 
to the House with a favorable recommendation, amended, by voice 
vote. The Committee took the following actions:
    The following amendments were offered:

An Amendment in the Nature of a Substitute to H.R. 2719 offered 
by Mr. Hudson (#1); was AGREED TO, as amended, by voice vote.
     A unanimous consent request by Mr. McCaul to consider the 
Amendment in the Nature of a Substitute as base text for 
purposes of amendment was not objected to.

An amendment to the Amendment in the Nature of a Substitute to 
H.R. 2719 offered by Ms. Loretta Sanchez of California (#1A); 
was AGREED TO by voice vote.

     Page 14, line 18, before the period insert the following: ``, 
prepared after consultation with the Secretary of Defense and the heads 
of Federal departments and agencies that achieved their published goals 
for prime contracting with small and minority owned businesses, 
including small and disadvantaged businesses, in prior fiscal years, to 
identify policies and procedures that could be incorporated at the 
Administration in furtherance of achieving the Administration's 
published goal for such contracting''.

An amendment to the Amendment in the Nature of a Substitute to 
H.R. 2719 offered by Mr. Chaffetz (#1B); was AGREED TO by voice 
vote.

     Page 7, after line 23, insert the following: ``(6) Confirmation 
that there are no significant risks to human health and safety posed by 
the proposed acquisition.

An en bloc amendment to the Amendment in the Nature of a 
Substitute to H.R. 2719 offered by Ms. Jackson Lee (#1C); was 
AGREED TO by voice vote.

     Consisting of the following amendments:
     Page 7, line 23, after the period insert ``To the extent 
practicable, the evaluation shall include consultation with 
organizations that advocate for the protection of privacy and civil 
liberties.''.

     Page 15, line 15, in the section heading strike ``Report'' and 
insert ``Reports''.
     Page 15, after line 15, insert a new subsection entitled ``(a) 
Implementation of Previous Recommendations.''

     Page 16, after line 5, insert a new section entitled ``Sec. _. 
Report on Feasibility of Inventory Tracking.''

An en bloc amendment to the Amendment in the Nature of a 
Substitute to H.R. 2719 offered by Mr. Richmond (#1D); was 
AGREED TO by voice vote.

     Consisting of the following amendments:
     Page 13, strike lines 7 through 10 and insert a new subsection 
entitled ``(b) Tracking of Inventory.'';

     Page 16, after line 5, insert a new section entitled ``Sec. _. 
Government Accountability Office Review of TSA's Test and Evaluation 
Process.''

An amendment to the Amendment in the Nature of a Substitute to 
H.R. 2719 offered by Mr. Barber (#1E); was AGREED TO by voice 
vote.

     Page 16, line 5, before the period insert the following: ``, 
including any efficiencies, cost savings, or delays that have resulted 
from such implementation''.

An amendment to the Amendment in the Nature of a Substitute to 
H.R. 2719 offered by Mr. O'Rourke (#1F); was AGREED TO by voice 
vote.

     Page 14, line 14 after ``challenges'' insert `` , including 
deviations from the Administration's subcontracting plans and the 
extent to which contract bundling was a factor.''.

Subcommittee Consideration
    The Subcommittee on Transportation Security met on July 24, 
2013, to consider H.R. 2719, and ordered the measure to be 
forwarded to the Full Committee with a favorable 
recommendation, amended, by voice vote. The Subcommittee took 
the following actions:
    The following amendments were offered:
An Amendment in the Nature of a Substitute offered by Mr. 
Hudson (#1); was AGREED TO by voice vote.
     A unanimous consent request by Mr. Hudson to consider the 
Amendment in the Nature of a Substitute as base text for 
purposes of amendment was not objected to.
 An en bloc amendment to the Amendment in the Nature of a 
Substitute offered by Mr. Richmond (#1A); was AGREED TO by 
voice vote.

     Consisting of the following amendments:
     Page 5, strike ``and'' after the first semicolon at line 3, strike 
the period at line 7 and insert ``; and'', and after line 7 insert the 
following:
    ``(3) leverage market research conducted by the Under Secretary for 
Science and Technology to identify technologies that exist or are in 
development that, with or without adaptation, could be utilized to meet 
mission needs.''

     Page 9, after line 2, insert a new paragraph entitled ``(6) 
Streamlining Access For Interested Vendors.''

An amendment to the Amendment in the Nature of a Substitute 
offered by Mrs. Brooks of Indiana (#1B); was AGREED TO by voice 
vote.

     Page 4, after line 5, insert the following (and redesignate the 
subsequent paragraphs accordingly):
    ``(3) An analysis of current trends in domestic and international 
passenger travel.
    (4) An identification of currently deployed security-related 
technologies that are at or near the end of their lifecycle.

An en bloc amendment to the Amendment in the Nature of a 
Substitute offered by Mr. Swalwell of California (#1C); was 
AGREED TO by voice vote.

     Consisting of the following amendments:
     Page 4, after line 20, insert the following: ``(6) An 
identification of the security resources, including information 
security resources, that will be required to protect security-related 
technology from physical of cyber thefts, diversion, sabotage, or 
attack.''

     A unanimous consent request by Mr. Richmond to consider 
and adopt the following amendments was not objected to.
An amendment to the Amendment in the Nature of a Substitute 
filed for consideration on the amendment roster by Ms. Jackson 
Lee (#1D); was ADOPTED by a unanimous consent request by Mr. 
Richmond.

     Page 5, line 12, after ``Update' insert ``and Airport''.
     Page 5 line 14, before the period insert ``and a report on the 
extent to which each security-related technology acquired by the 
Administration since the last issuance or update of the plan is 
consistent with the acquisition roadmap required under subsection 
(d)(2) for that technology''.

An amendment to the Amendment in the Nature of a Substitute 
filed for consideration on the amendment roster by Ms. Jackson 
Lee (#1E); was ADOPTED by a unanimous consent request by Mr. 
Richmond.

     Page 6, beginning at line 11, strike ``A determination that the 
means of achieving such expected benefit to transportation security'' 
and insert ``An evaluation of the privacy and civil liberties 
implications of the proposed acquisition, and a determination that the 
proposed acquisition''.

An amendment to the Amendment in the Nature of a Substitute 
filed for consideration on the amendment roster by Ms. Jackson 
Lee (#1F); was ADOPTED by a unanimous consent request by Mr. 
Richmond.

     Page 8, beginning at line 23, strike paragraph (5) and insert a 
new paragraph entitled ``(5) Verification and Validation.''

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto.
    No recorded votes were requested during Committee 
consideration.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held oversight 
hearings and made findings that are reflected in this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
2719, the Transportation Security Acquisition Reform Act, would 
result in no new or increased budget authority, entitlement 
authority, or tax expenditures or revenues.

                  Congressional Budget Office Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                                                 November 21, 2013.
Hon. Michael McCaul,
Chairman, Committee on Homeland Security,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2719, the 
Transportation Security Acquisition Reform Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 2719--Transportation Security Acquisition Reform Act

    Based on information from the Department of Homeland 
Security (DHS) and the Government Accountability Office (GAO), 
CBO estimates that implementing H.R. 2719 would have no 
significant cost. Enacting H.R. 2719 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.R. 2719 would specify procedures for the Transportation 
Security Administration (TSA) to follow when planning, making, 
and evaluating acquisitions of security-related technology. The 
bill would require the agency to develop a multiyear investment 
plan to be transmitted to the Congress and updated every two 
years. The bill also would specify analyses and reports that 
TSA must complete to justify certain investments, evaluate the 
performance of technology acquired under the bill, and enhance 
its capacity to monitor and utilize existing inventories of 
security-related equipment. In addition, H.R. 2719 would direct 
GAO to review and report on issues related to TSA's policies 
for procuring security-related technology.
    According to DHS, the bill's requirements are largely 
consistent with existing DHS procurement policies that already 
apply to TSA. The legislation would not affect TSA's underlying 
mission or responsibilities, and CBO estimates that meeting new 
procedural requirements specified by H.R. 2719 would not impose 
any new significant costs on the agency. We also estimate that 
any increased costs to GAO to complete reports required under 
H.R. 2719 would be negligible, assuming the availability of 
appropriated funds.
    H.R. 2719 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Megan Carroll. 
This estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, H.R. 2719 contains the following 
general performance goals, and objectives, including outcome 
related goals and objectives authorized.
    The performance goals and objectives of H.R. 2719 are based 
on the development of a strategic multi-year technology 
investment plan to aid in the prevention of, and defense 
against threats to U.S. transportation systems. Upon 
establishing the multi-year investment plan, H.R. 2719 then 
requires TSA to make an objective and measurable determination 
that planned security-related technology acquisitions are 
appropriately justified. Once a specific technology acquisition 
has been appropriately justified, H.R. 2719 requires that TSA 
establish baseline goals and objectives, including the 
establishment of cost, schedule, and performance requirements 
of the acquisition. During acquisition of a justified security-
related technology, H.R. 2719 requires the Department to track 
and measure actual progress against the baseline goals and 
objectives, and report and respond to significant deviations. 
H.R. 2719 furthermore requires TSA to establish goals and 
objectives for inventory management and small business 
contracting. The reports to Congress from DHS, TSA, and GAO 
that are required by this Act will allow the Congress to hold 
the Department accountable for the success or failure of 
transportation security-related technology acquisitions.

                      Duplicative Federal Programs

    The Committee finds that H.R. 2719 does not contain any 
provision that establishes or reauthorizes a program known to 
be duplicative of another Federal program.

   Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    In compliance with rule XXI of the Rules of the House of 
Representatives, this bill, as reported, contains no 
Congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                        Preemption Clarification

    In compliance with section 423 of the Congressional Budget 
Act of 1974, requiring the report of any Committee on a bill or 
joint resolution to include a statement on the extent to which 
the bill or joint resolution is intended to preempt State, 
local, or Tribal law, the Committee finds that H.R. 2719 does 
not preempt any State, local, or Tribal law.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 2719 would require no 
directed rule makings.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Short title
    This section provides that the bill may be cited as the 
``Transportation Security Acquisition Reform Act.''

Sec. 2. Findings
    This section states three specific findings resulting from 
extensive Congressional oversight. These findings are described 
as follows:
    1. Congress finds that TSA has not consistently implemented 
DHS policies and Government best practices for acquisition. 
Applicable DHS policies include MD-102, HSAM-3007, and related 
DHS acquisition guidebooks. Government acquisition best 
practices are compiled and published at http://
www.acquisition.gov.
    Information received in numerous Committee hearings and 
briefings supports this finding. For example, in January 2012, 
GAO reported that TSA did not fully follow DHS acquisition 
policies when acquiring Advanced Imaging Technology (AIT), 
which resulted in DHS approving AIT deployment without full 
knowledge of TSA's revised technical specifications. Further, 
in April 2012, GAO found that TSA's methods for developing life 
cycle cost estimates for the Electronic Baggage Screening 
Program did not fully adhere to best practices for developing 
these estimates.
    2. Congress also finds that TSA has not developed a multi-
year technology investment plan and has underutilized 
opportunities to work collaboratively with the private sector.
    Stakeholders have consistently urged TSA to develop and 
share a multi-year investment plan to improve transparency and 
insight into future spending plans. To address this gap in 
planning, Congress directed TSA through the Consolidated and 
Further Continuing Appropriations Act of 2013 to provide a 
five-year investment plan that includes projected funding 
levels for the next five fiscal years for all passenger 
screening technology acquisitions. In addition, during the 
hearing entitled: ``TSA Reform: Exploring Innovations in 
Technology Procurement to Stimulate Job Growth, Part II,'' Mr. 
Marc Pearl testified that the Homeland Security & Defense 
Business Council strongly believes that TSA must strive to 
develop a mid- to long-term strategic acquisition plan and 
consider the possibility of multi-year budget plans. Further, a 
strategic acquisition plan would provide all interested 
companies with an insightful blueprint for Government's future 
needs, and give them the necessary time to align and focus 
financial and personnel resources towards addressing the 
highest priority needs.
    3. Lastly, Congress finds that TSA has faced challenges 
meeting key performance requirements for acquisitions and 
procurements, resulting in reduced security effectiveness and 
wasted expenditures. This issue was highlighted at the hearing 
entitled: ``TSA Procurement Reform: Saving Taxpayer Dollars 
Through Smarter Spending Practices.'' GAO witness, Mr. Stephen 
Lord, stated that GAO's prior work has found that realistic 
acquisition program baselines with stable requirements for 
cost, schedule, and performance are among the factors that are 
important to successful acquisitions delivering capabilities 
within cost and schedule. Further, program performance metrics 
for cost and schedule can provide useful indicators of the 
health of acquisition programs.
    Since its creation, TSA has completed several acquisitions 
that either did not result in the security benefits originally 
promised or were not implemented effectively. For example, in 
2006, TSA spent $29.6 million on 207 explosives trace portal 
(puffer) machines. The puffer machines represented the first 
deployment of a checkpoint technology whose development had 
been initiated by TSA. However, it turned out the machines had 
been inadequately tested and failed to work in dirty, humid 
airport environments. The machines were ultimately removed from 
service.
    In addition, in 2010, GAO reported that TSA had revised its 
explosive detection system (EDS) requirements to better address 
current threats, but only some of the EDS machines in TSA's 
fleet were configured to detect explosives at the required 
levels established in 2005. The remaining EDS machines were 
configured to detect explosives at 1998 levels. While TSA 
maintained that it was working toward phasing in the new 
requirements, some machines were in fact operating at pre-9/11 
levels, resulting in a potential security vulnerability.
    Further, as part of the FAA Modernization and Reform Act of 
2012 (Pub. L. 112-95), in January 2012, Congress mandated that 
all Advanced Imaging Technology (AIT) used to screen passengers 
had to be equipped with Automatic Target Recognition (ATR) 
software. ATR displays a computer generated, generic human 
image, which relieves certain passenger privacy concerns. While 
millimeter wave AIT machines have been equipped with ATR, ATR 
software for the backscatter units was never successfully 
tested. Subsequently, TSA ended its contract, the maker of the 
backscatter AITs and backscatter units were removed from 
airports. Each backscatter AIT machine cost TSA, and in turn, 
U.S. taxpayers $150,000. TSA had a total inventory of 246 
backscatter AIT machines, at a total cost of $36.9 million. 
While the contractor removed and stored all of the units at 
their own expense, TSA remained at a loss due to the fact that 
it was not able to utilize the machines for their entire life 
cycle.
    Based on these findings, the Committee believes that TSA, 
in collaboration with the Department and stakeholders, would 
greatly benefit from a reform of its security-related 
technology acquisition policies, procedures, practices, and 
culture. The Committee strongly encourages the Administration 
to identify, adopt, and implement a comprehensive set of 
acquisition reforms that will ultimately lead to more effective 
and efficient procurements. It is the belief of the Committee, 
supported by GAO recommendations, that TSA would most benefit 
from a legislative framework that is based on widely-accepted 
acquisition best-practices. As such, the legislative language 
in the following sections describes an acquisition framework 
that the Committee believes to be necessary for TSA to address 
the findings identified in this section. This framework is 
based in part on acquisition reforms legislated for the U.S. 
Coast Guard under 124 STAT. 2942; Pub. L. 111-281. The Coast 
Guard, through formal briefings with Committee Staff, indicated 
that such a legislative framework has resulted in more 
effective and efficient Coast Guard procurements.
    The Committee plans to continue to conduct oversight and 
monitor TSA's progress on acquisition reform. The Committee 
will consider additional acquisition reform legislation should 
such continuing oversight identify additional opportunities for 
improvement.

Sec. 3. Transportation Security Administration acquisition 
reform
    This section amends Title XVI of the Homeland Security Act 
of 2002 (116 Stat. 2312).

 1601. Definitions
    In this subsection, the terms ``Administration'' and 
``Administrator'' are defined in the context of the Department 
of Homeland Security's Transportation Security Administration 
(TSA).
    The term ``security-related technology'' is defined to 
clarify the scope of acquisitions that are covered under this 
legislation. It is the Committee's intent that the acquisition 
of any and all security-related technologies that meet this 
definition are subject to this legislation. It is the 
Committee's intent that security-related acquisitions that do 
not involve technology solutions, such as the procurement of 
personnel services, would not be subject to this legislation. 
However, since this legislation provides a framework that is 
based on widely-accepted acquisition best-practices, the 
Committee encourages the Department and TSA to apply these 
best-practices, where applicable, to the acquisition of all 
goods and services.

 1611. Multi-year technology investment plan

  (a) In general
    This subsection requires the Administrator to develop and 
report on a multi-year, strategic technology investment plan. 
The plan is intended to guide the overall direction of 
security-related technology acquisitions, and unclassified 
information shared with the public. A classified addendum for 
sensitive transportation security risks, technology 
vulnerability, etc. may be included. This report is due to 
Congress no later than 180 days after enactment of this Act and 
every 2 years thereafter.

  (b) Consultation
    This subsection requires the Administrator to consult with 
three Department officials during the development of the plan. 
Consultation with the Undersecretary for Management, who also 
serves as the Chief Acquisition Officer for the Department, 
enables TSA to achieve consistency with the Department's 
acquisition policies, directives, and procedures relevant to 
acquisition planning. Consultation with the Chief Information 
Officer will enable TSA to achieve consistency with the 
acquisition policies, directives and procedures for the 
acquisition of information technology and relevant cyber-
security assurance. Consultation with the Undersecretary for 
Science and Technology (S&T) is consistent with the roles and 
responsibilities of the Undersecretary as defined in Section 
300 of the Homeland Security Act of 2002. Specifically, 
consultation with the Undersecretary for S&T will help ensure 
that technology innovation, technology management best-
practices and test & evaluation aspects are being fully 
considered during the technology acquisition planning phase.

  (c) Approval
    This subsection requires that the Administrator seek the 
formal approval of the Secretary prior to publication of its 
report. It is the Committee's expectation that the Secretary, 
acting through the Chief Acquisition Officer, will require 
multiple DHS Components to produce similar multi-year 
technology investment plans. As such, the Committee encourages 
the Secretary to actively integrate these multi-year plans 
together to identify opportunities for cross-component 
leveraging, elimination of duplicative efforts, and systems 
integration. Furthermore, the multi-year plan will likely 
identify budgetary needs and gaps for out-year planned 
acquisitions, and the Secretary will need to integrate and 
prioritize these needs and gaps into the OMB budget planning 
process.

  (d) Contents of the plan
    In this subsection, the contents of the multi-year 
technology investment plan are prescribed. The contents 
prescribed herein are the minimum contents and it is the 
Committee's expectation that TSA will include additional 
content as necessary to enable effective multi-year planning. 
While the timeline of the plan is not specified in the 
legislation, the Committee strongly encourages TSA to cover 
near-term (e.g. 1-3 years), mid-term (e.g. 3-7 years), and 
long-term (e.g. 8 years and beyond) aspects in the plan. Based 
on significant testimony from stakeholders, GAO, and the DHS 
IG, the Committee believes that such a multi-year technology 
investment plan will enable the private sector to better plan 
and invest in their internal research and development 
activities.
    The multi-year plan is to include an analysis of 
transportation security risks and gaps. It is the Committee's 
intent that the plan is strategic in nature and derived from 
transportation security risks, needs, and gaps as currently 
known and projected into the future. The risk and gap analysis 
is to draw upon other relevant analyses conducted by the 
Federal Government, including the Quadrennial Homeland Security 
Review (QHSR).
    The multi-year plan is to include a prioritized set of 
planned technology programs and projects with clearly defined 
objectives, goals, and measures. These programs and projects 
should be derived from the risk and gap analysis in order to 
achieve an effective risk-based transportation security system. 
It is the Committee's expectation that adequate detail will be 
provided in these objectives, goals and measures to enable any 
interested technology vendor to plan well in advance. The 
Committee expects that near-term aspects of the plan will 
include activity-level details, whereas longer-term aspects 
will be more general in nature.
    The Committee notes that the requirements in this bill, 
including multi-year planning, only apply to TSA, and other 
departments and agencies that are listed herein. The Committee 
specifically directs that if TSA identifies a security gap 
onboard an aircraft and plans to procure a technology that 
would address such gap, nothing in this bill affects the 
responsibilities of the Federal Aviation Administration to 
ensure that safety standards are adhered to prior to the 
deployment of a security technology onboard any aircraft.
    The multi-year plan is to include an analysis of current 
trends in domestic or international passenger travel. These 
trends are especially important as specific passenger 
facilities may need to grow or shrink in the future depending 
on demand. A projection of such growth or shrinkage is 
necessary to adequately plan for the quantities and deployment 
locations of security-related equipment.
    The multi-year plan is to include an identification of 
currently deployed security-related technologies that are 
becoming outdated. The Committee strongly encourages TSA to 
timely identify such equipment and to make risk-informed 
decisions as to whether the equipment should be sustained, 
refreshed, or retired.
    The multi-year plan is to include an identification of 
test, evaluation, modeling, and simulation capabilities for 
supporting the technology programs and projects described under 
paragraph (a). The Committee believes that an early 
identification of these capabilities will help ensure that such 
capabilities are made available during the planned 
acquisitions. The Committee encourages TSA to look collectively 
at needed capabilities including those at TSA, DHS 
Transportation Security Laboratory, and third-party 
capabilities at universities, national laboratories, and 
independent private test facilities.
    The multi-year plan is to include an identification of 
opportunities for partnerships and collaboration with third 
parties. Given the significant interdependence between the 
public and private sectors in transportation security, the 
Committee strongly encourages the TSA to seek out and implement 
innovative opportunities for such partnerships and 
collaborations.
    The multi-year plan is to include an identification of 
acquisition workforce needs. The Committee believes that TSA 
and DHS need to continue to work closely together to improve 
the quality of TSA's professional acquisition workforce. The 
Committee also believes that TSA and DHS would greatly benefit 
by learning from, and in some cases directly utilizing, 
acquisition professionals from other parts of the Federal 
Government that have such expertise. While several branches of 
the Federal Government have acquisition expertise, the 
Committee notes that private sector stakeholders have cited the 
Department of Defense and the National Aeronautics and Space 
Administration (NASA) as having extensive expertise that could 
be appropriately leveraged.
    The multi-year plan is to include an identification of 
security resources required to protect security-related 
technology from physical or cyber theft, diversion, sabotage or 
attack. Acquired equipment will need to be properly protected, 
whether it is deployed at a facility or stored in a warehouse. 
The Committee believes that it is critically important to 
identify how such equipment will be secured and what security 
resources will be required. Security resources would include 
the appropriate combination of physical security, personnel 
security, information security, and other technical security 
means. The Committee strongly encourages TSA to use due 
diligence with regard to assessing and addressing cyber-
security aspects of all its acquired equipment.
    The multi-year plan is to include an identification of 
initiatives to streamline the acquisitions process and provide 
predictability and clarity for the private sector. The 
Committee understands that acquisition is not an exact science 
and requires the continuous evaluation and improvement of the 
underlying processes. The Committee also believes that such 
acquisition processes need to be sufficiently rigorous in order 
to lead to effective procurements. That said, such processes 
could become overly constraining and overly burdensome and 
become inefficient from a mission delivery perspective. The 
Committee therefore strongly encourages TSA, in collaboration 
with DHS and the private sector, to evaluate and appropriately 
streamline its acquisition processes.

  (e) Leveraging the private sector
    This subsection prescribes the elements of the multi-year 
plan for leveraging the private sector. Private sector 
leveraging is to be done to the greatest extent possible, as 
long as it does not create any unfair or inequitable advantage 
to specific vendors or specific segments of the private sector. 
The Committee's intent is that ``private sector'' encompasses 
small, medium, and large businesses, both for-profit, and non-
profit. The Committee believes that TSA has underutilized 
private sector leveraging and has been overly conservative in 
its interpretation of the Federal Acquisition Regulations (FAR) 
in this regard. Specifically, the Committee encourages TSA to 
conduct additional market research through proactive and 
extensive industry engagement. The Committee also encourages 
TSA, in collaboration with DHS, to educate its acquisition 
workforce on the private sector engagement that is possible 
within the context of the FAR. The Committee notes that such a 
``FAR myth-busting campaign'' has been highly effective at 
NASA, resulting in increased technological innovation through 
public-private partnering.
    The plan is to leverage emerging trends within the private 
and public sectors. Security technologies often advance 
rapidly, and the Committee believes that it is essential that 
TSA understand these trends in order to acquire the latest and 
most appropriate security solutions. The Committee encourages 
TSA to look at security technologies from other Government 
agencies and a broad cross-section of industry. Specifically, 
the Committee encourages TSA to consider security-related 
technologies that were developed for other security purposes 
but could be applied to transportation security.
    The plan is to incorporate feedback and input received from 
the private sector through a variety of communications 
mechanisms. The bill includes a requirement that TSA utilize 
innovative means for incorporating feedback and input from the 
private sector. The Committee notes that such innovative means 
could include social media, webinars, and workshops. The 
Committee strongly encourages TSA to proactively identify the 
range of technology solutions that could potentially be offered 
by the private sector well before committing to a specific 
vendor's proposed solution.
    The plan is to leverage market research conducted by the 
Undersecretary for Science and Technology. The Committee 
believes that the DHS Science and Technology Directorate, 
particularly within its Homeland Security Advanced Research 
Projects Agency (HSARPA), and within its national laboratory 
network, have significant technical expertise on emerging 
security-related technologies. The Committee encourages TSA to 
leverage S&T's expertise and objectively consider these 
potential emerging technologies well before committing to a 
specific technology solution.

  (f) Disclosure
    This subsection requires that all non-government persons 
involved in writing the plan are disclosed. The Committee 
believes that TSA needs to be fully transparent and identify 
all third-parties in order to avoid any appearance of 
conflicts-of-interest.

  (g) Update and report
    This subsection requires that the multi-year plan be 
updated and transmitted every two years. The subsection also 
requires that TSA include a report on whether or not recently 
acquired security-related technologies were consistent with the 
last issuance of the plan. The Committee believes that it is 
important that TSA implement the multi-year plan that it 
develops. The Committee also recognizes that plans can change 
due to unforeseen circumstances, and encourages TSA to actively 
update and republish the plan regularly as needed.

 1612. Acquisition justification and reports

  (a) Acquisition justification
    This subsection requires that TSA conduct an analysis prior 
to implementing an acquisition to demonstrate the justification 
of the acquisition. While the bill does not specify a timeline 
for such an analysis, the Committee encourages TSA to conduct 
this analysis as early as possible in the acquisition planning 
cycle. And while the bill does not specify the level of detail 
of the analysis, the Committee expects that TSA would tailor 
the level of detail based on the risk and complexity of the 
planned acquisition. Specifically, higher risk and/or higher 
complexity acquisitions are expected to require more 
justification analysis detail. The Committee strongly 
encourages TSA to collaborate with DHS and develop a scalable 
acquisition justification process that is both effective and 
efficient.
    The justification analysis is to include an identification 
of the type and level of risk to transportation security that a 
technology acquisition would address. The Committee strongly 
encourages that this risk analysis be conducted in the context 
of the multi-year plan and is based on an overall risk-based 
security systems architecture.
    The justification analysis is to include an assessment of 
how the acquisition aligns with the multi-year technology 
investment plan. The Committee believes that it is very 
important that TSA implement the multi-year plan that it 
develops. Recognizing that unforeseen circumstances may require 
a deviation from the plan, the Committee expects TSA to 
document the reason for such deviation so that the plan can be 
appropriately updated and communicated.
    The justification analysis is to include a comparison of 
lifecycle costs against total expected benefits to 
transportation security. The Committee believes, based on GAO 
testimony, that this ``cost-benefit'' analysis is of critical 
importance. Such cost-benefit analysis enables TSA to make 
objective decisions on whether or not to proceed with a planned 
acquisition. While the details of the cost-benefit analysis and 
lifecycle cost estimations are not prescribed in the bill, the 
Committee strongly encourages TSA to utilize best practices, 
such as those published by the GAO, when implementing this 
section of the bill.
    The justification analysis is to identify alternative 
security solutions to determine if such alternatives would 
result in a preferred mission outcome. Based on GAO testimony, 
the Committee believes that this ``analysis-of-alternatives'' 
(AOA), is of critical importance. Such an AOA enables TSA to 
make objective decisions on whether or not a specific 
technology solution is the best approach towards achieving 
risk-based security outcomes. When conducting this AOA, the 
Committee expects TSA to consider both technical and non-
technical means for addressing security gaps. The Committee 
believes that sometimes a security gap can be addressed with 
administrative means instead of through a security-related 
technology, and such alternative approaches need to be 
considered prior to committing to a specific acquisition.
    The justification is to include an evaluation of the 
privacy and civil liberties implications of the proposed 
acquisition and a determination that the proposed acquisition 
is consistent with Fair Information Practice Principles 
(FIPPs). The bill also requires that the evaluation include 
consultation with organizations that advocate for the 
protection of privacy and civil liberties to the extent 
practicable. The Committee strongly encourages TSA to 
collaborate with the DHS Privacy Officer and establish a 
process to ensure that privacy and civil liberties issues are 
addressed well in advance of deploying a security-related 
technology. Using TSA's Advanced Imaging Technology (AIT) as an 
example, the Committee notes that a lack of attention to 
privacy issues can lead to cost, schedule, and performance 
deficiencies during such acquisitions.
    The justification is to include confirmation that there are 
no significant risks to human health and safety posed by the 
proposed technology acquisition. This provision is derived from 
the Committee's oversight observations that TSA did not 
adequately consider, evaluate, and communicate the human health 
aspects of x-ray-based AIT machines. The Committee notes that 
TSA must follow applicable Federal rules and standards for 
health and safety as issued by other agencies such as the 
Environmental Protection Agency and the Occupational Safety and 
Health Administration. The Committee also notes that 
contractors developing technologies are also required to follow 
such applicable rules and standards. The Committee's intent of 
this provision is to direct TSA to include in its acquisition 
process a confirmation that applicable human and safety risks 
have been adequately addressed. The Committee strongly 
encourages TSA, in consultation with technology vendors and 
other Federal agencies, to identify any applicable health and 
safety risks, and develop a plan to mitigate and communicate 
risks, as appropriate. The Committee also strongly encourages 
TSA to consider and appropriately monitor health and safety 
risks throughout the full lifecycle of deployed equipment.

  (b) Reports and certification to Congress
    This subsection requires that TSA submit the results of its 
acquisition analysis to the relevant House and Senate 
committees for all planned acquisition contracts that exceed 
$30 million. This report is due at least 30 days prior to 
placing said contract, but the Committee encourages TSA to 
submit notification as early as possible in the acquisition 
planning process. Furthermore, the Administrator is to provide 
to the relevant House and Senate committees a certification 
that the security benefits justify the contract cost. The 
Committee expects this certification to derive from the cost-
benefit analysis required under this section.
    The purpose of this subsection is to provide transparency 
to the American public and enable effective Congressional 
oversight. The $30 million threshold was based on the 
Committee's analysis of historical TSA acquisitions and a 
determination that high-risk and/or high-complexity 
acquisitions tend to fall above this threshold. Furthermore, 
this threshold provides a reasonable balance between 
Congressional oversight needs and potentially burdensome 
reporting requirements. While the bill does not require TSA to 
notify Congress of acquisitions below this threshold, the 
Committee encourages TSA to provide Congressional notification 
of any acquisition, regardless of cost, if such notification 
would improve transparency to Congress, the American public, or 
the private sector. The Committee notes that TSA may continue 
to place contracts after providing notification and that this 
bill does not require formal Congressional approval for TSA to 
proceed.
    The Committee recognizes that the Congressional reporting 
requirements, while essential for increasing the transparency 
for the tax-paying public, could potentially lead to unintended 
consequences such as slowing down major acquisition programs. 
To address this concern, the Committee has held detailed 
discussions with both DHS and TSA, and the reporting thresholds 
and requirements herein will compliment, rather than duplicate, 
existing reporting processes within DHS and TSA. The Committee 
also believes that the legislative language offers sufficient 
flexibility so that TSA can tailor its Congressional reports to 
minimize additional administrative burdens. The Committee 
strongly encourages TSA to implement these new reporting 
requirements in a manner that does not unduly delay acquisition 
implementation. The Committee is committed to continue working 
with TSA to ensure that Congressional reporting remains 
mutually beneficial, timely, and value-added.
    The reporting requirement includes the ability for the 
Administrator to reduce the 30 day notification period to 5 
days should there be an imminent threat. The relevant House and 
Senate Committees are to receive immediate notice of such an 
imminent threat. It is the Committee's intent that a Member 
and/or Staff briefing, or appropriate written communication, 
would serve as an effective form of notification in the event 
of an imminent threat.

 1613. Acquisition baseline establishment and reports

  (a) Baseline requirements
    This subsection prescribes the set of baseline acquisition 
requirements that are set prior to implementing a specific 
security-related technology acquisition. These requirements are 
established and documented by the appropriate acquisition 
official of the Department. The Committee believes that 
formalization of such requirements should be performed at DHS 
rather than at TSA in order to achieve more objective outcomes. 
The Committee furthermore believes that the appropriate 
acquisition official will depend on the level of risk or 
complexity of a specific acquisition. As such, the appropriate 
acquisition official is expected to be the Department's Chief 
Acquisition Officer, or a designee.
    While the bill does not specify a timeline for such a 
baseline establishment, the Committee expects the Department 
and TSA to establish effective requirements as early as 
possible in the acquisition planning cycle. And while the bill 
does not specify the level of detail included in these 
requirements, the Committee expects that the Department and TSA 
would tailor the level of detail based on the risk and 
complexity of the planned acquisition. Specifically, higher 
risk and/or higher complexity acquisitions are expected to 
require more detailed requirements. The Committee strongly 
encourages TSA to collaborate with DHS and develop a scalable 
acquisition baseline requirements process that is both 
effective and efficient.
    The contents of the requirements are to address cost, 
schedule, and technical performance milestones. Based on 
extensive GAO testimony, the Committee believes that 
establishment and tracking of all three aspects is critical for 
mission success. The Committee strongly encourages DHS and TSA 
to utilize best practices, such as those published by the GAO, 
when estimating and establishing cost estimates and other key 
acquisition parameters. When establishing the baseline 
requirements, the Department, working with TSA, is also to 
identify acquisition risks and a plan for mitigating risks. The 
Committee believes that these risks simultaneously address cost 
risks, schedule risks, and technical performance risks, in the 
context of the transportation security objectives.
    The establishment of the baseline requirements is also to 
include efforts to ensure that the performance milestones are 
technologically feasible. This feasibility review is conducted 
in consultation with the Science and Technology Directorate, 
whose expertise in technology development brings additional 
objectivity to the requirements establishment process. The 
Committee strongly encourages the DHS S&T Directorate to use 
quantitative metrics, such as technology readiness levels, when 
assessing technological feasibility.
    The establishment of the baseline requirements is to 
include a test and evaluation plan. The plan is conducted in 
consultation with the Science and Technology Directorate. The 
minimum contents of the plan are prescribed in the bill and 
include: The set of activities required for assessing 
technologies against performance milestones; the appropriate 
combination of laboratory testing, field testing, modeling, 
simulation and supporting analysis; and the schedule for such 
test and evaluation activities.
    The Committee believes that test and evaluation is a 
critical aspect of all security-related technology 
acquisitions. Based on GAO testimony, several of TSA's 
technology acquisition projects failed to meet objectives due 
to inadequate test and evaluation; both in planning and in 
execution. The Committee believes that TSA has responded to 
GAO's recommendations and is starting to include an extensive 
set of test and evaluation activities during its major 
acquisitions. That said, the Committee has observed that TSA's 
most recent approach to test and evaluation is not very 
efficient. Specifically, the Committee observes that TSA 
executes many of its test and evaluation activities, including 
laboratory tests and field tests in a consecutive fashion. This 
series approach appears to have significantly extended the time 
it takes for TSA to accept new technologies and deploy them at 
checkpoints. The Committee encourages TSA to explore parallel 
approaches to shorten the test and evaluation schedules, while 
still retaining an effective technology evaluation against 
requirements. The Committee strongly encourages TSA, in 
collaboration with S&T and the private sector, to establish a 
test and evaluation process that is scalable, effective and 
efficient. The Committee strongly encourages TSA to share its 
test and evaluation plan with all stakeholders to increase 
transparency and improve industry's ability to budget and plan 
for testing, particularly small businesses that may not have as 
many resources at their disposal for continuous testing over 
several years.
    The establishment of baseline requirements is also to 
include verification and validation (V&V) activities. The bill 
requires that V&V activities be managed by the Department in 
order to lead to more objective outcomes. While the bill does 
not specify the level of detail included in these V&V 
activities, the Committee expects that the Department and TSA 
would tailor the level of detail based on the risk and 
complexity of the planned acquisition. Although the bill 
requires that only those acquisitions that are identified as 
highest priority undergo V&V, the Committee encourages DHS and 
TSA to consider use of V&V in any acquisition that is of high 
risk and/or high complexity. The Committee expects independent 
V&V to be conducted prior to officially establishing the 
baseline requirements, and to continue during implementation of 
the acquisition, as appropriate. In that manner, there would be 
periodic third-party assessment that the acquisition has a set 
of well-established requirements and that the implemented 
acquisition is meeting all those requirements. The Committee 
recognizes that V&V activities may add costs and/or time to the 
acquisition schedule, so the Committee encourages DHS and TSA 
to work together to establish a scalable, risk-based V&V 
process that is both effective and schedule efficient. For this 
reason, the bill requires that independent V&V not unduly delay 
the schedule of such security-related acquisitions.
    The establishment of baseline requirements also requires 
that TSA establish a streamlined process for the technology 
vendor community to obtain access to these requirements. The 
Committee believes that TSA needs to improve its transparency 
when communicating requirements to technology vendors, so that 
they can better plan for technology development. The Committee 
recognizes that some baseline requirements may contain 
sensitive security information and/or classified information. 
As such, the Committee expects TSA to establish a process that 
appropriately manages need-to-know aspects while balancing the 
need for transparency, open competition, and technology 
innovation. This is particularly important for small businesses 
that may not have staff with security clearances. Such 
companies may have a better product, but they are at a 
competitive disadvantage to companies that already have cleared 
staff who can review performance requirements--requirements 
that oftentimes are not technically ``classified'' but rather 
deemed ``sensitive'' by TSA.

  (b) Review of baseline requirements and deviation; reports to 
Congress
    This subsection requires that the Department review and 
assess each technology acquisition during its implementation to 
determine if the acquisition is meeting the documented baseline 
requirements. Although the time period is not prescribed in the 
bill, the Committee expects that acquisitions will be reviewed 
periodically, with higher risk and/or higher complexity 
acquisitions reviewed more frequently and in more depth. The 
Committee strongly encourages that during such reviews, cost, 
schedule, and performance aspects are assessed. The review of 
baseline requirements is to include an assessment that planned 
test and evaluation activities have been completed and the 
results demonstrate that performance milestones remain 
technologically feasible. The Committee expects that the 
outcome of such reviews will result in documented decisions 
that include: Continuation of the acquisition according to 
plan; corrective actions; a re-baseline of the acquisition; or 
a cancellation of the acquisition.
    The bill requires that TSA report to the appropriate House 
and Senate committees the result of any assessment that finds a 
significant deviation from baseline requirements. These 
significant deviations, referred to as an ``acquisition 
breach'', occur when TSA identifies that the cost, schedule, or 
performance thresholds exceed a prescribed threshold. These 
thresholds (e.g. 10 percent or 180 days) were determined from 
the Committee's analysis of historical TSA acquisitions and are 
believed to provide the appropriate balance between 
transparency, oversight, and efficient acquisition 
implementation. The Committee notes that these thresholds are 
similar to those required under law for other departments and 
agencies within the Federal Government and are consistent with 
current internal DHS policy. The bill further requires that the 
report of such an acquisition breach include the cause and 
corrective actions, and be delivered within 30 days of 
identifying such a breach. The Committee expects TSA and DHS to 
be fully transparent in reporting potential or actual breaches. 
The Committee also expects that such reports be provided 
through briefings or other appropriate written notifications.

 1614. Inventory utilization

  (a) In general
    This subsection requires TSA, to the extent practicable, to 
utilize applicable existing equipment in its inventory prior to 
procuring additional quantities of that equipment. In some 
cases, the Committee has observed that TSA stockpiles large 
quantities of screening equipment in warehouses. In other 
cases, the Committee has observed that TSA waits until it 
urgently needs the equipment at a specific checkpoint before 
placing a procurement contract. This inconsistent inventory 
management approach makes it difficult for vendors, airport 
operators, and security personnel to properly plan for the 
procurement, deployment, and implementation of security-related 
technologies. Therefore, the Committee strongly encourages TSA, 
in collaboration with DHS and private sector stakeholders, to 
establish a risk-based process for inventory management that is 
both effective and efficient.

  (b) Tracking of inventory
    This subsection requires TSA to establish a process for 
tracking the location, utilization status, and quantity of 
equipment in inventory, and to implement effective controls for 
utilizing its inventory. The Committee strongly encourages TSA 
to leverage and adopt inventory management tools that are based 
on best-practices. The Committee notes that GAO has published 
such inventory best practices. And the Committee notes that the 
Department of Defense has extensive inventory management tools 
that could be potentially leveraged for TSA's mission.
    For example, according to a report released by the 
Department of Homeland Security (DHS) Inspector General (OIG-
913-113), the Department cannot account for radio equipment. 
The report found that the Department has no reliable way to 
create an inventory of existing radio systems, and component-
level data is often inaccurate and incomplete. Specifically, 
TSA was unable to provide the name, description, or condition 
of radios or their batteries. The IG report also found that 
without significant reforms, significant funds could be wasted 
on current and future radio procurement programs.

  (c) Logistics management
    This subsection requires TSA to establish logistics 
principles for managing inventory in an effective and efficient 
manner. In particular, the Committee expects TSA to establish 
under what circumstances a ``just-in-time-delivery'' would be 
most appropriate and under what circumstances a ``deliver-to-
inventory'' approach would be preferred. For example, the bill 
limits the use of just-in-time logistics if doing so would 
inhibit planning for a large-scale deployment or would unduly 
diminish surge capacity for response to a terrorist threat.
    The Committee notes that in mid-2012, DHS established a 
policy that required TSA to deliver equipment directly to the 
airport destination so that TSA does not need to store units in 
warehouses. The Committee believes that the implementation of 
this policy did not adequately consider the fact that airport 
construction projects are typically multi-year efforts and TSA 
must order equipment well in advance to align to planned 
construction schedules. If a construction schedule slips, as 
they often do, TSA's ordering plan and delivery schedule for 
the equipment would need to be adjusted since the policy did 
not make accommodations for temporary warehousing. The 
Committee notes that during the procurement of Explosive 
Detection Systems (EDS) in December of 2012, TSA delayed the 
equipment deliveries within weeks of contractually determined 
schedules due to changes in airport project schedules. The 
Committee believes that last minute delivery schedule changes 
of this nature are extremely disruptive and costly in the short 
term and could ultimately jeopardize the industrial base and 
manufacturing supply chain in the long term. The Committee 
further believes that ``just-in-time'' logistics is not the 
best approach in all circumstances, particularly for low-volume 
or specialized equipment with long lead-times and few global 
customers. The Committee strongly encourages DHS and TSA to use 
its best judgment on when and where to apply various logistical 
approaches. The Committee believes that once TSA publishes a 
set of logistics principles, then their acquisition officials 
will be better educated on how to balance the use of various 
logistics options.

 1615. Small business contracting goals
    This section requires TSA to submit to the relevant House 
and Senate committees a report on its small business 
contracting goals. The report is due 90 days after enactment 
and annually thereafter. The Congressional intent of this 
section is to encourage TSA to manage its small business 
contracting in a manner that could potentially improve 
technology innovation during the acquisition process. The 
Committee encourages TSA to implement this section in 
consultation with the DHS Office of Small and Disadvantaged 
Business Utilization.
    The small business goals are required to be restated in the 
Congressional Report. And TSA's performance towards meeting 
those goals during the prior fiscal year are to be reported. 
The Committee believes that the small business goals need to be 
set so that they are credible, achievable, and lead to the 
desired outcome of improved innovation. The Committee 
recognizes that such goals may be set by the Department, or in 
some cases, by other Government entities. The Committee 
encourages TSA to strive to meet those goals, even when they 
are set by others. The Committee also recognizes that small 
businesses may not have adequate capabilities or expertise to 
directly deliver large quantities of complex security equipment 
to meet TSA's mission needs. The Committee believes that small 
businesses, when they partner with larger business, may 
increase their likelihood of introducing innovative ideas and 
technologies into the TSA security system. For that reason, the 
Committee strongly encourages TSA to track and report on small 
business subcontracting goals to complement their small 
business prime contracting goals.
    If TSA under achieves its stated small business contracting 
goals for a given year, then the bill requires that TSA report 
on the challenges that contributed to that underachievement, 
including whether deviations from the Administration's 
subcontracting plans or contract bundling were contributing 
factors. Additionally, the bill requires that TSA develop and 
report on an action plan for addressing those challenges. The 
Congressional Report is to include an action plan, with 
benchmarks, for addressing underachievement, which is to be 
developed following consultation with other relevant Federal 
agencies. The Committee recognizes that small business 
contracting is a complex policy issue, and encourages TSA to 
implement this section of the bill in a manner that leads to 
increased innovation while providing fairness of opportunity.

 1616. Consistency with the Federal Acquisition Regulation and 
Departmental policies and directives
    This section of the bill requires TSA to execute the 
provisions of Subtitle B in a manner consistent with, and not 
duplicative of, the Federal Acquisition Regulation (FAR) and 
DHS policies and directives. In conducting Congressional 
oversight on security-related technology acquisition at TSA, 
the Committee extensively researched the acquisition 
requirements to which TSA is already subject. The Committee 
notes that DHS and TSA are required by statute to follow the 
FAR, and the Committee believes that nothing in this bill 
supersedes nor duplicates applicable sections of the FAR.
    While TSA is required to follow DHS internal acquisition 
policy and directives, Congress has found, per Section 2, that 
TSA has not always consistently implemented these policies and 
directives. It is therefore the Committee's intent to codify 
into law, through this bill, those critical acquisition best-
practices with which DHS already requires TSA to comply. With 
the exception of the multi-year technology investment plan, the 
Committee believes that all the acquisition reforms prescribed 
in the bill are already a Departmental requirement for TSA, and 
therefore should not lead to any duplication or inconsistency. 
As of the writing of this report, the Committee understands 
that GAO has recommended that DHS broadly implement multi-year 
technology acquisition plans, and that TSA is in the process of 
developing such multi-year plans. Therefore, the Committee 
believes that all provisions of this bill are relatively 
straightforward for TSA to implement, and strongly encourages 
TSA to implement these provisions in a streamlined, effective 
manner.

Sec. 4. Government Accountability Office reports
    This section requires the GAO to evaluate and report on 
TSA's progress in implementing subtitle B of this bill. The 
evaluation and report are to include an identification of 
efficiencies, cost savings, or delays that have resulted from 
such implementation. The purpose of this section is to gather 
data and assess TSA's ongoing performance in acquiring 
security-related technologies. These GAO reports provide 
important input for continuing Congressional oversight and 
provide additional transparency for the American public.

Sec. 5. Report on feasibility of inventory tracking
    This section requires TSA to report to Congress on the 
feasibility of tracking its security-related technologies using 
automated information and data capture technologies.

Sec. 6. Government Accountability Office review of TSA's test 
and evaluation process
    This section requires the GAO to evaluate and report to 
Congress on the Transportation Security Administration's 
testing and evaluation activities related to security-related 
technologies. The report is to include information on the 
extent to which the execution of such testing and evaluation 
activities is aligned with TSA's acquisition needs, planned 
procurements, and acquisitions for technology programs and 
projects; the extent to which security-related technologies 
that have been tested, evaluated, and certified for use by TSA 
are not procured by TSA; and recommendations for how TSA can 
improve the efficiency and efficacy of such testing and 
evaluation activities and better align such testing and 
evaluation with the acquisitions process.
    The Committee has been informed by businesses both large 
and small that TSA's testing and evaluation process may be 
overly cumbersome and, as a result, drive participation in the 
marketplace down. While the Committee encourages a test and 
evaluation process that produces effective security-related 
technologies, it recognizes that such a process must be 
conducted in the most efficient and cost-effective way 
possible. The failure to do so will result in increased cost to 
taxpayers due to the lack of competition in the marketplace. 
The Committee believes this dynamic is especially true for 
small business that may have innovative security-related 
technologies capable of improving the passenger screening 
experience and security but lack the capital necessary to 
survive a test and evaluation process that may be unnecessarily 
cumbersome.

Sec. 7. No additional authorization of appropriations
    This section requires the provisions of this bill to be 
carried out using amounts otherwise available. The Committee 
believes that the reform provisions in this bill largely 
already exist in current Department policies and directives. As 
such, the Committee believes that TSA should appropriately 
absorb the minimal costs required to improve its acquisition 
performance, report to Congress, and increase its transparency. 
The Committee strongly encourages TSA to implement these 
provisions in a manner that leads to more effective and 
efficient acquisitions, thereby resulting in long-term Federal 
Government savings.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     HOMELAND SECURITY ACT OF 2002

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) * * *
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

     * * * * * * *

      [TITLE XVI--CORRECTIONS TO EXISTING LAW RELATING TO AIRLINE 
                         TRANSPORTATION SECURITY

[Sec. 1601. Retention of security sensitive information authority at 
          Department of Transportation.
[Sec. 1602. Increase in civil penalties.
[Sec. 1603. Allowing United States citizens and United States nationals 
          as screeners.]

                   TITLE XVI--TRANSPORTATION SECURITY

                     Subtitle A--General Provisions

Sec. 1601. Definitions.

     Subtitle B--Transportation Security Administration Acquisition 
                              Improvements

Sec. 1611. Multiyear technology investment plan.
Sec. 1612. Acquisition justification and reports.
Sec. 1613. Acquisition baseline establishment and reports.
Sec. 1614. Inventory utilization.
Sec. 1615. Small business contracting goals.
Sec. 1616. Consistency with the Federal Acquisition Regulation and 
          departmental policies and directives.
     * * * * * * *

      [TITLE XVI--CORRECTIONS TO EXISTING LAW RELATING TO AIRLINE 
                        TRANSPORTATION SECURITY

[SEC. 1601. RETENTION OF SECURITY SENSITIVE INFORMATION AUTHORITY AT 
                    DEPARTMENT OF TRANSPORTATION

  [(a) Section 40119 of title 49, United States Code, is 
amended--
          [(1) in subsection (a)--
                  [(A) by inserting ``and the Administrator of 
                the Federal Aviation Administration each'' 
                after ``for Security''; and
                  [(B) by striking ``criminal violence and 
                aircraft piracy'' and inserting ``criminal 
                violence, aircraft piracy, and terrorism and to 
                ensure security''; and
          [(2) in subsection (b)(1)--
                  [(A) by striking ``, the Under Secretary'' 
                and inserting ``and the establishment of a 
                Department of Homeland Security, the Secretary 
                of Transportation'';
                  [(B) by striking ``carrying out'' and all 
                that follows through ``if the Under Secretary'' 
                and inserting ``ensuring security under this 
                title if the Secretary of Transportation''; and
                  [(C) in subparagraph (C) by striking ``the 
                safety of passengers in transportation'' and 
                inserting ``transportation safety''.
  [(b) Section 114 of title 49, United States Code, is amended 
by adding at the end the following:
  [``(s) Nondisclosure of security activities
          [``(1) In general.--Notwithstanding section 552 of 
        title 5, the Under Secretary shall prescribe 
        regulations prohibiting the disclosure of information 
        obtained or developed in carrying out security under 
        authority of the Aviation and Transportation Security 
        Act (Public Law 107-71) or under chapter 449 of this 
        title if the Under Secretary decides that disclosing 
        the information would--
                  [``(A) be an unwarranted invasion of personal 
                privacy;
                  [``(B) reveal a trade secret or privileged or 
                confidential commercial or financial 
                information; or
                  [``(C) be detrimental to the security of 
                transportation.
          [``(2) Availability of information to congress.--
        Paragraph (1) does not authorize information to be 
        withheld from a committee of Congress authorized to 
        have the information.
          [``(3) Limitation on transferability of duties.--
        Except as otherwise provided by law, the Under 
        Secretary may not transfer a duty or power under this 
        subsection to another department, agency, or 
        instrumentality of the United States.''.

[SEC. 1602. INCREASE IN CIVIL PENALTIES

  [Section 46301(a) of title 49, United States Code, is amended 
by adding at the end the following:
          [``(8) Aviation security violations.--Notwithstanding 
        paragraphs (1) and (2) of this subsection, the maximum 
        civil penalty for violating chapter 449 or another 
        requirement under this title administered by the Under 
        Secretary of Transportation for Security shall be 
        $10,000; except that the maximum civil penalty shall be 
        $25,000 in the case of a person operating an aircraft 
        for the transportation of passengers or property for 
        compensation (except an individual serving as an 
        airman).''.

[SEC. 1603. ALLOWING UNITED STATES CITIZENS AND UNITED STATES NATIONALS 
                    AS SCREENERS

  [Section 44935(e)(2)(A)(ii) of title 49, United States Code, 
is amended by striking ``citizen of the United States'' and 
inserting ``citizen of the United States or a national of the 
United States, as defined in section 1101(a)(22) of the 
Immigration and Nationality Act (8 U.S.C. 1101(a)(22))''.]

                   TITLE XVI--TRANSPORTATION SECURITY

                     Subtitle A--General Provisions

SEC. 1601. DEFINITIONS.

  In this title:
          (1) Administration.--The term ``Administration'' 
        means the Transportation Security Administration.
          (2) Administrator.--The term ``Administrator'' means 
        the Administrator of the Transportation Security 
        Administration.
          (3) Security-related technology.--The term 
        ``security-related technology'' means any technology 
        that assists the Administration in the prevention of, 
        or defense against, threats to United States 
        transportation systems, including threats to people, 
        property, and information.

    Subtitle B--Transportation Security Administration Acquisition 
                              Improvements

SEC. 1611. MULTIYEAR TECHNOLOGY INVESTMENT PLAN.

  (a) In General.--The Administrator--
          (1) not later than 180 days after the date of 
        enactment of the Transportation Security Acquisition 
        Reform Act, shall develop and transmit to Congress a 
        strategic multiyear technology investment plan, which 
        may include a classified addendum to report sensitive 
        transportation security risks, technology 
        vulnerabilities, or other sensitive security 
        information; and
          (2) to the extent possible, shall publish such plan 
        in an unclassified format within the public domain.
  (b) Consultation.--The Administrator shall develop the 
multiyear technology investment plan in consultation with the 
Under Secretary for Management, the Chief Information Officer, 
and the Under Secretary for Science and Technology.
  (c) Approval.--The Secretary must have approved the multiyear 
technology investment plan before it is published under 
subsection (a)(2).
  (d) Contents of Plan.--The multiyear technology investment 
plan shall include the following:
          (1) An analysis of transportation security risks and 
        the associated technology gaps, including consideration 
        of the most recent Quadrennial Homeland Security Review 
        under section 707.
          (2) A set of transportation security-related 
        technology acquisition needs that--
                  (A) is prioritized based on risk and gaps 
                identified under paragraph (1); and
                  (B) includes planned technology programs and 
                projects with defined objectives, goals, and 
                measures.
          (3) An analysis of current trends in domestic and 
        international passenger travel.
          (4) An identification of currently deployed security-
        related technologies that are at or near the end of 
        their lifecycle.
          (5) An identification of test, evaluation, modeling, 
        and simulation capabilities that will be required to 
        support the acquisition of the security-related 
        technologies to meet those needs.
          (6) An identification of opportunities for public-
        private partnerships, small and disadvantaged company 
        participation, intragovernment collaboration, 
        university centers of excellence, and national 
        laboratory technology transfer.
          (7) An identification of the Administration's 
        acquisition workforce needs that will be required for 
        the management of planned security-related technology 
        acquisitions, including consideration of leveraging 
        acquisition expertise of other Federal agencies.
          (8) An identification of the security resources, 
        including information security resources, that will be 
        required to protect security-related technology from 
        physical or cyber theft, diversion, sabotage, or 
        attack.
          (9) An identification of initiatives to streamline 
        the Administration's acquisition process and provide 
        greater predictability and clarity to small, medium, 
        and large businesses, including the timeline for 
        testing and evaluation.
  (e) Leveraging the Private Sector.--To the extent possible, 
and in a manner that is consistent with fair and equitable 
practices, the plan shall--
          (1) leverage emerging technology trends and research 
        and development investment trends within the public and 
        private sectors;
          (2) incorporate feedback and input received from the 
        private sector through requests for information, 
        industry days, and other innovative means consistent 
        with the Federal Acquisition Regulation; and
          (3) leverage market research conducted by the Under 
        Secretary for Science and Technology to identify 
        technologies that exist or are in development that, 
        with or without adaptation, could be utilized to meet 
        mission needs.
  (f) Disclosure.--The Administrator shall include with the 
plan required under this section a list of any nongovernment 
persons that contributed to the writing of the plan.
  (g) Update and Report.--Once every 2 years after the initial 
strategic plan is transmitted to Congress, the Administrator 
shall transmit to Congress an update of the plan and a report 
on the extent to which each security-related technology 
acquired by the Administration since the last issuance or 
update of the plan is consistent with the planned technology 
programs and projects identified under subsection (d)(2) for 
that technology.

SEC. 1612. ACQUISITION JUSTIFICATION AND REPORTS.

  (a) Acquisition Justification.--Before the Administration 
implements any security-related technology acquisition, the 
Administrator shall, in accordance with the Department's 
policies and directives, conduct a comprehensive analysis to 
determine whether the acquisition is justified. The analysis 
shall include, but may not be limited to, the following:
          (1) An identification of the type and level of risk 
        to transportation security that would be addressed by 
        such technology acquisition.
          (2) An assessment of how the proposed acquisition 
        aligns to the multiyear technology investment plan 
        developed under section 1611.
          (3) A comparison of the total expected lifecycle cost 
        against the total expected quantitative and qualitative 
        benefits to transportation security.
          (4) An analysis of alternative security solutions to 
        determine if the proposed technology acquisition is the 
        most effective and cost-efficient solution based on 
        cost-benefit considerations.
          (5) An evaluation of the privacy and civil liberties 
        implications of the proposed acquisition, and a 
        determination that the proposed acquisition is 
        consistent with fair information practice principles 
        issued by the Privacy Officer of the Department. To the 
        extent practicable, the evaluation shall include 
        consultation with organizations that advocate for the 
        protection of privacy and civil liberties.
          (6) Confirmation that there are no significant risks 
        to human health and safety posed by the proposed 
        acquisition.
  (b) Reports and Certification to Congress.--
          (1) In general.--Not later than the end of the 30-day 
        period preceding the award by the Administration of a 
        contract for any security-related technology 
        acquisition exceeding $30,000,000, the Administrator 
        shall submit to the Committee on Homeland Security of 
        the House of Representatives and the Committee on 
        Commerce, Science, and Transportation of the Senate the 
        results of the comprehensive acquisition analysis 
        required under this section and a certification by the 
        Administrator that the security benefits justify the 
        contract cost.
          (2) Extension due to imminent terrorist threat.--If 
        there is a known or suspected imminent threat to 
        transportation security, the Administrator may reduce 
        the 30-day period under paragraph (1) to 5 days in 
        order to rapidly respond.
          (3) Notice to congress.--The Administrator shall 
        provide immediate notice of such imminent threat to the 
        Committee on Homeland Security of the House of 
        Representatives and the Committee on Commerce, Science, 
        and Transportation of the Senate.

SEC. 1613. ACQUISITION BASELINE ESTABLISHMENT AND REPORTS.

  (a) Baseline Requirements.--
          (1) In general.--Before the Administration implements 
        any security-related technology acquisition, the 
        appropriate acquisition official of the Department 
        shall establish and document a set of formal baseline 
        requirements.
          (2) Contents.--The baseline requirements shall--
                  (A) include the estimated costs (including 
                lifecycle costs), schedule, and performance 
                milestones for the planned duration of the 
                acquisition; and
                  (B) identify the acquisition risks and a plan 
                for mitigating these risks.
          (3) Feasibility.--In establishing the performance 
        milestones under paragraph (2), the appropriate 
        acquisition official of the Department shall, to the 
        extent possible and in consultation with the Under 
        Secretary for Science and Technology, ensure that 
        achieving these milestones is technologically feasible.
          (4) Test and evaluation plan.--The Administrator, in 
        consultation with the Under Secretary for Science and 
        Technology, shall develop a test and evaluation plan 
        that, at a minimum, describes--
                  (A) the activities that will be required to 
                assess acquired technologies against the 
                performance milestones established under 
                paragraph (2);
                  (B) the necessary and cost-effective 
                combination of laboratory testing, field 
                testing, modeling, simulation, and supporting 
                analysis to ensure that such technologies meet 
                the Administration's mission needs; and
                  (C) an efficient schedule to ensure that test 
                and evaluation activities are completed without 
                undue delay.
          (5) Verification and validation.--The appropriate 
        acquisition official of the Department--
                  (A) subject to subparagraph (B), shall 
                utilize independent reviewers to verify and 
                validate the performance milestones and cost 
                estimates developed under paragraph (2) for a 
                security-related technology that pursuant to 
                section 1611(d)(2) has been identified as a 
                high priority need in the most recent multiyear 
                technology investment plan; and
                  (B) shall ensure that the utilization of 
                independent reviewers does not unduly delay the 
                schedule of any acquisition.
          (6) Streamlining access for interested vendors.--The 
        Administrator shall establish a streamlined process for 
        an interested vendor of a security-related technology 
        to request and receive appropriate access to the 
        baseline requirements and test and evaluation plans 
        that are necessary for the vendor to participate in the 
        acquisitions process for such technology.
  (b) Review of Baseline Requirements and Deviation; Report to 
Congress.--
          (1) Review.--
                  (A) In general.--The appropriate acquisition 
                official of the Department shall review and 
                assess each implemented acquisition to 
                determine if the acquisition is meeting the 
                baseline requirements established under 
                subsection (a).
                  (B) Test and evaluation assessment.--The 
                review shall include an assessment of whether 
                the planned testing and evaluation activities 
                have been completed and the results of such 
                testing and evaluation demonstrate that the 
                performance milestones are technologically 
                feasible.
          (2) Report.--
                  (A) In general.--The Administrator shall 
                report to the Committee on Homeland Security of 
                the House of Representatives and the Committee 
                on Commerce, Science, and Transportation of the 
                Senate the results of any assessment that finds 
                that--
                          (i) the actual or planned costs 
                        exceed the baseline costs by more than 
                        10 percent;
                          (ii) the actual or planned schedule 
                        for delivery has been delayed by more 
                        than 180 days; or
                          (iii) there is a failure to meet any 
                        performance milestone that directly 
                        impacts security effectiveness.
                  (B) Cause.--The report shall include the 
                cause for such excessive costs, delay, or 
                failure, and a plan for corrective action.
                  (C) Timeliness.--The report required under 
                this section shall be provided to the Committee 
                on Homeland Security of the House of 
                Representatives and the Committee on Commerce, 
                Science, and Transportation of the Senate no 
                later than 30 days after identifying such 
                excessive costs, delay, or failure.

SEC. 1614. INVENTORY UTILIZATION.

  (a) In General.--Before the procurement of additional 
quantities of equipment to fulfill a mission need, the 
Administrator shall, to the extent practicable, utilize any 
existing units in the Administration's inventory to meet that 
need.
  (b) Tracking of Inventory.--
          (1) Location.--The Administrator shall establish a 
        process for tracking the location of security-related 
        equipment in such inventory.
          (2) Utilization.--The Administrator shall--
                  (A) establish a process for tracking the 
                utilization status of security-related 
                technology in such inventory; and
                  (B) implement internal controls to ensure 
                accurate data on security-related technology 
                utilization.
          (3) Quantity.--The Administrator shall establish a 
        process for tracking the quantity of security-related 
        equipment in such inventory.
  (c) Logistics Management.--
          (1) In general.--The Administrator shall establish 
        logistics principles for managing inventory in an 
        effective and efficient manner.
          (2) Limitation on just-in-time logistics.--The 
        Administrator may not use just-in-time logistics if 
        doing so would--
                  (A) inhibit necessary planning for large-
                scale delivery of equipment to airports or 
                other facilities; or
                  (B) unduly diminish surge capacity for 
                response to a terrorist threat.

SEC. 1615. SMALL BUSINESS CONTRACTING GOALS.

  Not later than 90 days after the date of enactment of the 
Transportation Security Acquisition Reform Act, and annually 
thereafter, the Administrator shall submit to the Committee on 
Homeland Security of the House of Representatives and the 
Committee on Commerce, Science, and Transportation of the 
Senate a report that includes the following:
          (1) A restatement of the Administration's published 
        goals for contracting with small businesses, including 
        small and disadvantaged businesses, and the 
        Administration's performance record with respect to 
        meeting those goals during the preceding fiscal year.
          (2) If such goals were not met, or the 
        Administration's performance was below the published 
        goals of the Department, an itemized list of 
        challenges, including deviations from the 
        Administration's subcontracting plans and the extent to 
        which contract bundling was a factor, that contributed 
        to the level of performance during the preceding fiscal 
        year.
          (3) An action plan, with benchmarks, for addressing 
        each of the challenges identified in paragraph (2), 
        prepared after consultation with the Secretary of 
        Defense and the heads of Federal departments and 
        agencies that achieved their published goals for prime 
        contracting with small and minority owned businesses, 
        including small and disadvantaged businesses, in prior 
        fiscal years, to identify policies and procedures that 
        could be incorporated at the Administration in 
        furtherance of achieving the Administration's published 
        goal for such contracting.
          (4) The status of implementing such action plan that 
        was developed in the preceding fiscal year in 
        accordance with paragraph (3).

SEC. 1616. CONSISTENCY WITH THE FEDERAL ACQUISITION REGULATION AND 
                    DEPARTMENTAL POLICIES AND DIRECTIVES.

  The Administrator shall execute responsibilities set forth in 
this subtitle in a manner consistent with, and not duplicative 
of, the Federal Acquisition Regulation and the Department's 
policies and directives.

           *       *       *       *       *       *       *

                                  

```