Aviation Security: TSA Has Strengthened Efforts to Plan for the Optimal Deployment of Checked Baggage Screening Systems, but Funding Uncertainties Remain
Published: 2006-06-29T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Transportation Security Administration (TSA) has deployed two types of baggage screening equipment: explosive detection systems (EDS), which use X-rays to scan bags for explosives, and explosive trace detection systems (ETD), in which bags are swabbed to test for chemical traces of explosives. TSA considers screening with EDS to be superior to screening with ETD because EDS machines process more bags per hour and automatically detect explosives without direct human involvement. In March 2005, GAO reported that while TSA had made progress in deploying EDS and ETD machines, it had not conducted a systematic, prospective analysis of the optimal deployment of these machines to achieve long-term savings and enhanced efficiencies and security. GAO's testimony today updates our previous report and discusses TSA's (1) deployment of EDS and ETD systems and the identified benefits of in-line systems, and (2) planning for the optimal deployment of checked baggage screening systems and efforts to identify funding and financing options.
section_title: What GAO Found
paragraphs: Since its inception in November 2001 through June 2006, TSA has procured and installed about 1,600 EDS machines and 7,200 ETD machines to screen checked baggage for explosives at over 400 airports. However, initial deployment of EDS machines in a stand-alone mode--usually in airport lobbies--and ETD machines resulted in operational inefficiencies and security risks as compared with using EDS machines integrated in-line with airport baggage conveyor systems. For example, TSA's use of stand-alone EDS and ETD machines required a greater number of screeners and resulted in screening fewer bags for explosives each hour. In March 2005, we reported that at nine airports where TSA has agreed to help fund the installation of in-line EDS systems, TSA estimated that screening with in-line EDS machines could save the federal government about $1.3 billion over 7 years. In February 2006, TSA reported that many of the initial in-line EDS systems did not achieve the anticipated savings. However, recent improvements in the design of the in-line EDS systems and EDS screening technology now offer the opportunity for higher-performance and lower-cost screening systems. Finally, screening with in-line EDS systems may result in security benefits by reducing the need for TSA to use alternative screening procedures, such as screening with explosives detection canines and physical bag searches, which involve trade-offs in security effectiveness. TSA has begun to systematically plan for the optimal deployment of checked baggage screening systems, but resources have not been made available to fund the installation of in-line EDS systems on a large-scale basis. In February 2006, TSA released its strategic planning framework for checked baggage screening aimed at increasing security through deploying more EDS machines, lowering program life-cycle costs, minimizing impacts to TSA and airport and airline operations, and providing a flexible security infrastructure. As part of this effort, TSA identified the 25 airports that should first receive federal funding for the installation of in-line EDS systems, and the optimal checked baggage screening solutions for the 250 airports with the highest checked baggage volumes. In February 2006, TSA estimated that installing and operating the optimal checked baggage screening systems will cost about $22.4 billion over 20 years and reported that under current investment levels, installation of optimal baggage screening systems would not be completed until approximately 2024. TSA is collaborating with airport operators, airlines, and other key stakeholders to identify funding and cost sharing strategies and is focusing its research and development efforts on the next generation of EDS technology.

section_title: Letter
paragraphs: This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.
I appreciate the opportunity to participate in today’s hearing on the status  of the Transportation Security Administration’s (TSA) efforts to deploy  checked baggage screening technology to the nation’s commercial  airports, and to discuss our work in this area. As you know, after the  terrorist attacks of September 11, 2001, which highlighted the vulnerability  of U.S. aircraft to acts of terrorism, Congress passed and the President  signed into law, the Aviation and Transportation Security Act (ATSA),  creating the TSA and mandating, among other things, that all checked  baggage at U.S. airports be screened using explosive detection systems by  December 31, 2002. To meet this requirement, TSA deployed two types of  equipment to screen checked baggage for explosives: (1) explosives  detection systems (EDS) that use specialized X-rays to detect  characteristics of explosives that may be contained in baggage as it moves  along a conveyor belt and (2) explosive trace detection (ETD) systems,  whereby a Transportation Security Officer (TSO) swabs baggage and then  inserts the swab into the ETD machine, which in turn can detect chemical  residues that may indicate the presence of explosives within a bag.
In November 2002, Congress passed, and the President signed into law, the  Homeland Security Act of 2002, which, in effect, extended the deadline for  screening all checked baggage for explosives until December 31, 2003, for  airports at which TSA was unable to meet the earlier deadline established  by ATSA. In March 2005, we reported that largely because of shortages of  equipment and insufficient time to modify airports to accommodate EDS  machines, TSA had been unable, at certain airports, to meet the 2002  congressionally established deadline to screen all checked baggage for  explosives using explosive detection systems. We also reported that at  most smaller airports, where EDS machines are not installed, TSA screens  solely with ETD machines. Further we reported that while TSA had made  progress in deploying EDS and ETD machines, it had not conducted a  systematic, prospective analysis of the optimal deployment of these  machines to achieve long-term savings and enhanced efficiencies and  security. Finally, in February 2006, we reported that TSA considers  screening with EDS to be superior to screening with ETD because EDS  machines process more bags per hour and automatically detect explosives  without direct human involvement.
My testimony today updates the information we reported in March 2005,  and discusses (1) TSA’s deployment of EDS and ETD systems and the  identified benefits of installing in-line checked baggage screening systems  at airports and (2) TSA’s efforts to plan for and identify funding options for  the optimal deployment of EDS and ETD equipment, including in-line  checked baggage screening systems. My comments are based on issued  GAO reports and testimonies addressing TSA’s checked baggage screening  program and our review of TSA documents related to the deployment of  checked baggage screening systems, including TSA’s February 2006  strategic planning framework for its checked baggage screening program.  We conducted our work in accordance with generally accepted  government auditing standards. Appendix I contains a list of related GAO  products issued on TSA’s checked baggage screening program.
subsections: section_title: Background
paragraphs: Prior to the passage of ATSA in November 2001, only limited screening of  checked baggage for explosives occurred. When this screening took place,  air carriers had operational responsibility for conducting the screening,  while the Federal Aviation Administration (FAA) maintained oversight  responsibility. With the passage of ATSA, TSA assumed responsibility for  ensuring that all checked baggage is properly screened for explosives at  airports in the United States where screening is required, and for the  procurement, installation, and maintenance of explosive detection systems  used to screen checked baggage for explosives. Airport operators and air  carriers continued to be responsible for processing and transporting  passenger checked baggage from the check-in counter to the airplane.
Explosive detection systems used to screen checked baggage include EDS  and ETD machines. EDS machines, which cost between about $300,000  and $1.2 million each, use computer-aided tomography X-rays adapted  from the medical field to examine the objects inside baggage to  automatically recognize the characteristic signatures of threat explosives.  TSA has certified, procured, and deployed EDS machines made by three  manufacturers. ETD machines, which cost approximately $40,000 to  $50,000 each, work by detecting vapors and residues of explosives.  Because human operators collect samples by rubbing bags with swabs,  which are then chemically analyzed in the ETD machines to identify any  traces of explosive materials, the use of ETD is more labor-intensive and  subject to more human error than the automated process of using EDS  machines. ETD is used for both primary, or the initial, screening of  checked baggage, and secondary screening, which resolves alarms from  EDS machines that indicate the possible presence of explosives inside a  bag.
As we reported in March 2005, to initially deploy EDS and ETD equipment  to screen 100 percent of checked baggage for explosives, TSA  implemented interim airport lobby solutions and in-line EDS baggage  screening systems. The interim lobby solutions involved placing stand- alone EDS and ETD machines in the nation’s airports, most often in  airport lobbies or baggage makeup areas where baggage is sorted for  loading onto aircraft. For EDS in a stand-alone mode (not integrated with  an airport’s or air carrier’s baggage conveyor system) and ETD, TSA TSOs  are responsible for obtaining the passengers’ checked baggage from either  the passenger or the air carrier, lifting the bags onto and off of EDS  machines or ETD tables, using TSA protocols to appropriately screen the  bags, and returning the cleared bags to the air carriers to be loaded onto  departing aircraft. In addition to installing stand-alone EDS and ETD  machines in airport lobbies and baggage makeup areas, TSA collaborated  with some airport operators and air carriers to install integrated in-line  EDS baggage screening systems within their baggage conveyor systems.
In March 2005, we reported that TSA used most of its fiscal year 2002  through 2004 checked baggage screening program funding to design,  develop, and deploy interim lobby screening solutions rather than install  more permanent in-line EDS baggage screening systems. We also reported  that during our site visits to 22 category X, I, and II airports, we observed  that in most cases, TSA used stand-alone EDS machines and ETD  machines as the primary method for screening checked baggage.  Generally, this equipment was located in airport lobbies and in baggage  makeup areas. In addition, in our survey of 155 federal security directors,  we asked the directors to estimate, for the 263 airports included in the  survey, the approximate percentage of checked baggage that was screened  on or around February 29, 2004, using EDS, ETD, or other approved  alternatives for screening baggage such as screening with explosives  detection canines, and physical bag searches. As shown in table 1, the  directors reported that for 130 large to medium-sized airports in our  survey (21, 60, and 49 category X, I, and II airports, respectively), most of  the checked baggage was screened using stand-alone EDS or ETD  machines. On average, the percentage of checked baggage reported as  screened using EDS machines at airports with partial or full in-line EDS  capability ranged from 4 percent for category II airports to 11 percent for  category X airports. In addition, the directors reported that ETD machines  were used to screen checked baggage 93 to 99 percent of the time at  category III and IV airports, respectively.
section_title: The Deployment of Stand-alone Explosive Detection Systems Led to Operational Inefficiencies and Security Risks that In- Line Systems Could Address at Some Airports
subsections: section_title: Stand-alone Checked Baggage Screening Systems Created Operational Inefficiencies and Security Risks
paragraphs: Since its inception in November 2001 through June 22, 2006, TSA has  procured and installed about 1,600 EDS machines and about 7,200 ETD  machines to screen checked baggage for explosives at over 400  commercial airports. For the most part, TSA deployed EDS machines at  larger airports and ETD machines at smaller airports, resulting in primary  screening being conducted solely with ETD machines at over 300 airports.  TSA installed ETD machines instead of EDS for primary screening at these  airports because of the configuration of screening stations, the costs  associated with procuring EDS, and the low passenger volume at smaller  airports. Table 2 summarizes the location of EDS and ETD equipment at  the nation’s airports by airport category as of June 22, 2006.
Stand-alone EDS and ETD machines are both labor- and time-intensive to  operate since each bag must be physically carried to an EDS or ETD  machine for screening and then moved back to the baggage conveyor  system prior to being loaded onto an aircraft. With an in-line EDS system,  checked baggage is screened within an airport’s baggage conveyor system,  eliminating the need for a TSO or other personnel to physically transport  the baggage from the check-in point to the EDS machine for screening and  then to the airport baggage conveyor system. Further, according to TSA  officials, ETD machines and stand-alone EDS machines are less efficient in  the number of checked bags that can be screened per hour per machine  than are EDS machines that are integrated in-line with the airport baggage  conveyor systems. According to TSA estimates, the number of checked  bags screened per hour can more than double when EDS machines are  placed in-line versus being used in a stand-alone mode. Table 3 identifies  TSA’s estimates for bags screened per hour by EDS machines in stand- alone and in-line configurations and ETD machines.
section_title: In-Line Systems Have Efficiency, Safety, and Security Benefits
paragraphs: TSA has reported that in-line systems create significant efficiency benefits.  In January 2004, TSA, in support of its planning, budgeting, and acquisition  of security screening equipment, reported to the Office of Management  and Budget (OMB) that the efficiency benefits of in-line rather than stand- alone EDS were significant, particularly with regard to bags per hour  screened and the number of TSOs required to operate the equipment.  According to TSA officials, at that time, a typical lobby-based screening  unit consisting of a stand-alone EDS machine with three ETD machines  had a baggage throughput (bags screened per hour) of 376 bags per hour  with a staffing requirement of 19 TSOs. In contrast, TSA estimated that  approximately 425 bags per hour could be screened by an in-line EDS  machine with a staffing requirement of 4.25 TSOs.
In order to achieve the higher throughput rates and reduce the number of  TSOs needed to operate in-line baggage screening systems, TSA (1) uses a  screening procedure known as on-screen alarm resolution and   (2) networks multiple in-line EDS machines together, referred to as  multiplexing, so that the computer-generated images of bags from these  machines are sent to a central location where TSOs can monitor the  images of suspect bags centrally from several machines using the on- screen alarm resolution procedure. A TSA official estimated that the on- screen alarm resolution procedure with in-line EDS baggage screening  systems would enable TSA to reduce the number of bags requiring the  more labor-intensive secondary screening using ETD machines by 40 to   60 percent. In estimating the potential savings in staffing requirements,  TSA officials stated that they expect to achieve a 20 to 25 percent savings  because of reductions in the number of staff needed to screen bags using  ETD to resolve alarms from in-line EDS machines. According to TSA  officials, as of June 22, 2006, all airports with EDS equipment use on- screen alarm resolution protocols and 16 airports had networked in-line  systems.
In May 2004, TSA conducted a limited, retrospective cost-benefit analysis  at the nine airports that signed letter of intent (LOI) agreements and found  that significant savings and other benefits could be achieved through the  installation of these systems. This analysis was conducted to estimate  potential future cost savings and other benefits that could be achieved  from installing in-line systems instead of using stand-alone EDS systems.  We reported in March 2005 that, according to TSA’s analysis, in-line EDS  would reduce by 78 percent the number of TSA TSOs and supervisors  required to screen checked baggage at these nine airports, from 6,645 to  1,477 TSOs and supervisors. The actual number of TSOs and supervisor  positions that could be eliminated would be dependent on the individual  design and operating conditions at each airport. TSA estimated that in-line  baggage screening systems at these airports would save the federal  government about $1.3 billion compared with stand-alone EDS systems  and that TSA would recover its initial investment in a little over 1 year.  According to TSA’s analysis of the nine LOI airports, in-line cost savings  critically depend on how much an airport’s facilities have to be modified  to accommodate the in-line configuration. Savings also depend on TSA’s  costs to buy, install, and network the EDS machines; subsequent  maintenance costs; and the number of screeners needed to operate the  machines in-line instead of using stand-alone EDS systems. In its analysis,  TSA also found that a key factor driving many of these costs is  throughput—how many bags an in-line EDS system can screen per hour  compared with the rate for a stand-alone system. TSA’s analysis also  provided data to estimate the cost savings resulting from installing in-line  EDS checked baggage screening systems for each airport over the 7-year  period. According to TSA’s data, federal cost savings varied from about  $50 million to over $250 million at eight of the nine airports, while at one  airport, there was an estimated $90 million loss.
In February 2006, TSA reported that a saving of approximately $4.7 billion  could be realized over a period of 20 years by installing optimal checked  baggage screening systems at the 250 airports with the highest checked  baggage volumes. This savings represents the difference between TSA’s  compliance only strategy—which assumes minimum capital expenditures  and no additional investment in in-line systems in order to comply with the  mandate to screen all checked baggage using explosive detection  systems—and its preferred strategy, which is based on using optimal  checked baggage screening systems, including in-line EDS systems, for the  250 airports. TSA estimated that the compliance only strategy would cost  $27.05 billion and the preferred strategy would cost $22.39 billion over   20 years, creating a saving of $4.66 billion.
TSA reported that many of the initial in-line systems have produced a level  of TSO labor savings insufficient to offset up-front capital costs of  constructing the systems. According to TSA, the facility and baggage  handling system modification costs have been higher than expected, with  the nine airports with LOIs having incurred or projecting to incur up to   $6 million or more in infrastructure costs for every EDS machine required.  TSA stated that the keys to reducing future costs are establishing  guidelines outlining best practices and a set of efficient design choices,  and using newer EDS technology that best matches each optimally scaled  design solution. In February 2006, TSA reported that recent improvements  in the design of the in-line EDS checked baggage screening systems and  the EDS screening technology now offer the opportunity for higher- performance and lower-cost screening systems.
A safety benefit of in-line EDS systems is the potential to reduce on-the job  injuries. TSA reported that because procedures for using stand-alone EDS  and ETD machines require TSOs to lift heavy baggage onto and off of the  machines, the interim lobby screening solutions used by TSA led to  significant numbers of on-the-job injuries. Additionally, in responding to  our survey about 263 airports, numerous federal security directors  reported that on-the-job injuries related to lifting heavy baggage onto or  off the EDS and ETD machines were a significant concern at the airports  for which they were responsible. Specifically, these federal security  directors reported that on-the-job injuries caused by lifting heavy bags  onto and off of EDS machines were a significant concern at 65 airports,  and were a significant concern with the use of ETD machines at 110  airports. To reduce on-the-job injuries, TSA has provided training to TSOs  on proper lifting procedures. However, according to TSA officials, in-line  EDS screening systems would significantly reduce the need for TSOs to  handle baggage, thus further reducing the number of on-the-job injuries  being experienced by TSA TSOs.
Use of in-line EDS systems can also provide security benefits at airports  where they are installed by reducing congestion in airport lobbies and  reducing the need for TSA to use alternative screening procedures at  airports. During our site visits to 22 large and medium-sized airports,  several TSA, airport, and airline officials expressed concern regarding the  security risks caused by overcrowding due to ETD and stand-alone EDS  machines located in airport lobbies. The location of the equipment  resulted in less space available to accommodate passenger movement and  caused congestion due to passengers waiting in lines in public areas to  have their checked baggage screened. TSA headquarters officials reported  that large groups of people congregating in crowded airport lobbies  increases security risks by creating a potential target for terrorists. TSA  also reported that airports favor replacing stand-alone EDS machines with  in-line systems to mitigate the negative effects of increased congestion and  passenger processing times. TSA further reported that in-line systems are  more secure than stand-alone EDS machines because the baggage  screening is performed away from passengers who otherwise could  tamper with the baggage.
Another potential security benefit of in-line EDS systems is the reduction  of the need for TSA to use alternative screening procedures. In addition to  screening with standard procedures using EDS and ETD, which TSA had  determined to provide the most effective detection of explosives, TSA also  allows alternative screening procedures to be used when volumes of  baggage awaiting screening pose security vulnerabilities or when TSA  officials determine that there is a security risk associated with large  concentrations of passengers in an area. These alternative screening  procedures include the use of EDS and ETD machines in nonstandard  ways, and also include three procedures that do not use EDS or ETD— screening with explosives detection canines, physical bag searches, and  matching baggage to passenger manifests to confirm that the passenger  and his or her baggage are on the same plane. TSA’s use of alternative  screening procedures has involved trade-offs in security effectiveness.  However, the extent of the security trade-offs is not fully known because  TSA has not tested the effectiveness of alternative screening procedures in  an operational environment.
As part of our ongoing work on TSA’s use of alternative screening  procedures to screen checked baggage, we found that the superior  efficiency of screening with in-line EDS compared to screening with stand- alone EDS may have been a factor in reducing the need to use alternative  screening procedures at airports where in-line systems were installed.  After in-line EDS systems are installed and staffing reductions are  achieved, redistributing the screening positions to other airports with  staffing shortages may reduce airports’ need to use alternative screening  procedures. In addition to deploying more efficient checked baggage  screening systems, TSA is pursuing other mitigating actions to reduce the  need to use alternative screening procedures. These factors include  strengthening its coordination with groups such as tour operators,  deploying “optimization teams” to airports that were frequently using  alternative screening procedures to determine why the procedures were  being used so often and to suggest remedies; and deploying additional  EDS machines.
Although TSA officials have estimated that a low percentage of checked  baggage is currently screened using alternative screening procedures, in  February 2006 TSA reported that the use of alternative screening  procedures will increase at some airports because of rising passenger  traffic. TSA has projected that the number of originating domestic and  international passengers will rise by about 127 million passengers over  current levels by 2010. If TSA’s current estimate of an average of   0.76 checked bags per passenger were to remain constant through 2010,  TSA would be screening about 96 million more bags that it now screens.  This could increase airports’ need to rely on alternative screening  procedures in the future in the absence of additional or more efficient EDS  machines, including in-line EDS systems.
section_title: TSA Has Begun Systematically Planning for the Optimal Deployment of Checked Baggage Screening Systems, but It Continues to Face Funding Uncertainties
subsections: section_title: TSA Has Made Progress in Planning for the Optimal Deployment of Checked Baggage Screening Systems
paragraphs: TSA has made progress in its efforts to systematically plan for the optimal  deployment of checked baggage screening systems, but resources have not  been made available to fund these systems on a large-scale basis. In March  2005, we reported that while TSA has made progress in deploying EDS and  ETD machines, it had not conducted a systematic, prospective analysis of  the optimal deployment of these machines to achieve long-term savings  and enhanced efficiencies and security. We recommended that TSA  assess the feasibility, expected benefits, and cost to replace ETD machines  with stand-alone EDS machines for the primary screening of checked  baggage at those airports where in-line EDS systems would not be either  economically justified or justified for other reasons. In February 2006, in  response to our recommendation and a legislative requirement to submit a  schedule for expediting the installation and use of in-line systems and  replacement of ETD equipment with EDS machines,  TSA completed its  strategic planning framework for its checked baggage screening program.  This framework introduces a strategy intended to increase security  through deploying in-line and stand-alone EDS to as many airports as  practicable, lower life-cycle costs for the program, minimize impacts to  TSA and airport/airline operations, and provide a flexible security  infrastructure for accommodating growing airline traffic and potential new  threats.  The framework is an initial step in addressing the following  areas:    Optimized checked baggage screening solutions—finding the ideal  mix of higher-performance and lower-cost alternative screening  solutions for the 250 airports with the highest checked baggage  volumes;    Funding prioritization schedule by airport—identifying the top   25 airports that should first receive federal funding for projects  related to the installation of explosive detection systems based on  quantitative modeling of security, economic, and other factors;    Deployment strategy—developing a plan for the acquisition of next- generation EDS systems, the redeployment of existing EDS assets,  and investment in life-cycle extension programs;    EDS Life-Cycle Management Plan—structuring guidelines for EDS  research and development investment, procurement specifications  for next-generation EDS systems, and the redeployment of existing  EDS assets and investment in life-cycle extension programs that  minimize the cost of ownership of the EDS systems; and   Stakeholder collaboration plan—working with airport operators  and other key stakeholders to develop airport-specific screening  solutions, refine the nationwide EDS deployment strategy, and  investigate alternative funding programs that may allow for  innovative as well as non-federal sources of funding or financing,  including formulas for sharing costs among different government  entities and the private sector.
TSA said it is continuing its efforts in these areas as it works toward  completing a comprehensive strategic plan for its checked baggage  screening program. TSA expects to complete the strategic plan in early fall  2006.
While TSA has begun to conduct a systematic prospective analysis to  determine at which airports it could achieve long-term savings and  enhanced efficiencies and security by installing in-line systems or by  making greater use of stand-alone EDS machines in lieu of ETD machines,  resources have not been made available on a large-scale basis to fund  these systems. In-line baggage screening systems are capital-intensive  because they often require significant airport modifications, including  terminal reconfigurations, new conveyor belt systems, and electrical  upgrades. According to TSA, lessons learned from the first airports where  in-line systems were built identified that facilities and infrastructure  modifications accounted for up to 50 percent of the total cost of in-line  screening systems, and modifications and upgrades to the baggage  handing system typically accounted for another 25 percent of the total  cost. In February 2006, TSA estimated that the total cost of installing and  operating the optimal checked baggage screening systems, including in- line EDS machines, at the 250 airports is approximately $22.4 billion over  20 years, of which about $6 billion is for installation, life-cycle  replacement, existing committed funding, and equipment maintenance  costs. According to TSA officials, the estimated costs to install in-line  baggage screening systems would vary greatly from airport to airport  depending on the size of the airport and the extent of airport modifications  that would be required to install the system. In March 2005 we reported  that while we did not independently verify the estimates, officials from the  Airports Council International-North America and American Association  of Airport Executives estimated that project costs for in-line systems could  range from about $2 million for a category III airport to $250 million for a  category X airport.
TSA’s February 2006 strategic planning framework identified that because  many of the EDS and ETD machines were deployed in 2002 and 2003 to  comply with ATSA and subsequent deadlines for achieving the 100 percent  checked baggage screening mandate, a large share of the EDS machines  will incur life-cycle replacement obligations during the 2013 to 2014 time  period. Although TSA has not completed its efforts to develop a life-cycle  cost model, TSA’s February 2006 strategic planning framework identified  that a substantial funding requirement for EDS equipment life-cycle  replacement will compete with funding requirements for new in-line  systems in approximately 8 to 9 years. Further, in June 2006, as discussed  in the framework, TSA officials reported that if the top 25 airports do not  receive in-line checked baggage screening systems, they will require  additional screening equipment to be placed in airport lobbies and  additional TSO staffing in order to remain in compliance with the mandate  for screening all checked baggage using explosive detection systems.
section_title: TSA Is Collaborating with Key Stakeholders to Identify Funding and Financing Strategies for Installing Optimal Baggage Screening Systems
paragraphs: In March 2005, we reported that TSA and airport operators were relying on  several sources of funding to construct in-line checked baggage screening  systems. One source of funding airport operators used was FAA’s Airport  Improvement Program, which traditionally funds grants to maintain safe  and efficient airports. In fiscal years 2002 and 2003, 28 of the 53 airport  officials we interviewed reported that their airports either had constructed  or were planning to construct in-line systems relying on the Airport  Improvement Program as their sole source of federal funding. With Airport  Improvement Program funds no longer available after fiscal year 2003 for  this purpose, airports turned to other sources of federal funding to  construct in-line systems. The fiscal year 2003 Consolidated  Appropriations Resolution approved the use of LOIs as a vehicle to  leverage federal government and industry funding to support facility  modification costs for installing in-line EDS baggage screening systems.  Between June 2003 and February 2004, TSA issued eight LOIs to reimburse  nine airports for the installation of in-line EDS baggage screening systems  for a total cost of $957.1 million to the federal government over 4 years.  That cost represents 75 percent of the facility modification costs, with the  airport funding the remaining costs.  TSA also uses other transaction  agreements as an administrative vehicle to directly fund, with no long-term  commitments, airport operators for smaller in-line airport modification   Under these agreements, as implemented by TSA, the airport  projects.operator also provides a portion of the funding required for the  modification. As of June 2006, TSA reported that about $140 million had  been obligated for other transaction agreements for in-line EDS systems.   To fund the procurement and installation of explosive detection systems  in-line, TSA also uses annual appropriations and the $250 million  mandatory appropriation of the Aviation Security Capital Fund. For  example, in fiscal years 2005 and 2006, TSA received appropriations of  $175 million and $180 million, respectively, for the procurement of  explosive detection systems and received $45 million each year for the  installation of explosive detection systems. For fiscal year 2007, DHS  requested $91 million for the procurement of explosive detection systems  and $94 million for the installation of such systems. Of the $250 million  available through the Aviation Security Capital Fund, $125 million is  designated as priority funding for LOIs. The remaining $125 million is to be  allocated in accordance with a formula based upon the size of the airport  and risks to aviation security. Congress also authorized an additional  appropriation of $400 million per year through fiscal year 2007 for airport  security improvement projects that relate to the use of in-line EDS  systems. However, appropriations have not been made under this  authorization.
In July 2004, as part of this subcommittee’s hearing on TSA’s progress in  deploying in-line systems, TSA reported that there were nine in-line  systems in place and an additional nine were due to be completed by 2006.  In March 2005, we reported that 12 airports had operational in-line systems  airportwide or at a particular terminal or terminals. As of June 2006,   25 airports had operational in-line EDS systems and an additional   24 airports had in-line systems under development. Additionally, TSA  reported that it has received requests from an additional 50 airports either  seeking funding to construct in-line EDS systems or reimbursement for  already completed in-line systems. Table 4 provides information on the  status of in-line system deployment as of February 2006.
In a May 2006 meeting of the Aviation Security Advisory Committee, TSA  reported that under current investment levels, installation of optimal  checked baggage screening systems would not be completed until  approximately 2024. TSA further reported that unless investment is  accelerated, substantial investment will be needed to replace EDS and  ETD machines at the end of their life cycles and to refurbish suboptimal  systems. TSA is currently collaborating with airport operators, airlines,  and other key stakeholders to develop a cost-sharing study that identifies  funding and cost-sharing strategies for the installation of in-line baggage  screening systems. TSA plans to use the results of this study to finalize its  checked baggage screening program strategic plan, which TSA expects to  complete by early fall 2006. In its May 2006 report to the Aviation Security  Advisory Committee, TSA outlined financing options including leasing  equipment, sharing savings from in-line systems with airports, and  enhancing eligibility for the Passenger Facility Charge, LOIs, and tax  credit bonds. In this meeting, TSA reported that tax credit bonds had the  most potential support among stakeholders.
As TSA moves forward with planning for the deployment of checked  baggage screening systems and identifying funding and financing options,  it is also important for TSA to engage in planning to focus its research and  development efforts. To enhance checked baggage screening, TSA is  developing and testing next-generation EDS machines. According to TSA,  manufacturers have only marginally improved false alarm rates and  throughput capabilities of the equipment since the large-scale deployment  of EDS machines in 2002 and 2003. The maximum number of bags an EDS  machine can screen per hour is 500, which can be achieved only when the  machines are integrated in-line with the baggage conveyor system. New  EDS equipment was certified in 2005, including a smaller EDS machine  designed to replace ETD machines used for primary screening and an  upgraded large EDS machine. In September 2005, TSA entered into a   $24.8 million contract to purchase 72 smaller EDS machines to be installed  at 24 airports. The President’s fiscal year 2007 budget request for TSA  includes funding to support research and development for in-line EDS  machines that can operate at up to 900 bags per hour and employ new  threat detection concepts. In its February 2006 strategic framework for  checked baggage screening, TSA identified the development of high- throughput in-line EDS machines and lowering of EDS false alarm rates as  key areas for improving investment management of next-generation  technologies. TSA reported that these performance gains would be  feasible and available in the near term. TSA also reported that given that  the planning, design, and construction cycle for an in-line system can be   2 to 3 years, and these high-throughput and lower false alarm rate  technologies are anticipated to be deployable by about 2008, the agency is  recommending that all in-line planning and design efforts consider these  new technologies.
We reported in September 2004 that the Department of Homeland Security  (DHS) and TSA have made some progress in managing their transportation  security research and development programs according to applicable laws  and R&D best practices. However, we found that their efforts were  incomplete in several areas, including preparing strategic plans for R&D  efforts that contain measurable objectives, preparing and using risk  assessments to select and prioritize R&D projects, and coordinating with  stakeholders—a condition that increases the risk that their R&D resources  will not be effectively leveraged. We also found that TSA and DHS delayed  several key R&D projects and lacked both estimated deployment dates for  the vast majority of their R&D projects and adequate databases to  effectively manage their R&D portfolios. We recommended that DHS and  TSA (1) conduct some basic research in the transportation security area;  (2) complete their strategic planning and risk assessment efforts;   (3) develop a management information system that will provide accurate,  complete, current, and readily accessible project information for  monitoring and managing their R&D portfolios; and (4) develop a process  with the Department of Transportation to coordinate transportation  security R&D efforts and share this information with transportation  stakeholders. In June 2006, DHS reported several actions that it had taken  to address these recommendations, including coordinating with other  federal agencies to leverage their basic research, issuing a Science and  Technology Directorate Strategic Plan, implementing a program and  project management system to monitor program and project funding and  milestones, and establishing a memorandum of agreement that resulted in  the formation of a Mass Transit Technology Working Group to coordinate  efforts across agencies and to optimize resources. DHS also reported that  basic research has been limited because the majority of R&D funds have  been appropriated for countermeasures for specific threat areas. We will  examine these efforts to implement our recommendations as part of our  ongoing review of DHS’s and TSA’s airport checkpoint R&D program.
section_title: Concluding Observations
paragraphs: TSA has made progress in installing EDS and ETD systems at the nation’s  airports—mainly as part of interim lobby screening solutions—to provide  the capability to screen all checked baggage for explosives as mandated by  Congress. With the objective of initially fielding this equipment largely  accomplished, TSA has shifted its focus from equipping airports with  interim screening solutions to systematically planning for the more  optimal deployment of checked baggage screening systems.
TSA’s February 2006 strategic planning framework for the checked  baggage screening program is a positive step forward in systematically  planning for the more optimal deployment of checked baggage screening  systems. The completion of a strategic plan for checked baggage screening  by early fall 2006 should help TSA more fully determine whether expected  reduced staffing costs, higher baggage throughput, and increased safety  and security will in fact justify the significant up-front investment required  to install in-line baggage screening systems. TSA’s retrospective analysis  on nine airports installing in-line baggage screening systems with LOI  funds, while limited, estimated that cost savings could be achieved  through reduced staffing requirements for TSOs and increased baggage  throughput. Specifically, the analysis identified that using in-line systems  instead of stand-alone systems at these nine airports could save the federal  government about $1.3 billion over 7 years and that TSA’s initial  investment would be recovered in a little over 1 year. TSA also recently  estimated that a saving of approximately $4.7 billion could be realized over  a period of 20 years by installing optimal checked baggage screening  systems at the 250 airports with the highest checked baggage volumes.  However, TSA’s strategic planning framework identified that many of the  initial in-line systems have produced a level of savings insufficient to offset  up-front capital costs of acquiring and installing the systems. Nevertheless,  TSA reported that recent improvements in the design of the systems and  EDS screening technology now offer the opportunity for higher  performance and lower-cost screening systems.
In-line EDS baggage screening systems have efficiency, safety, and  security benefits that have been reported on extensively by Congress,  GAO, TSA, and aviation industry representatives. As part of its strategic  planning efforts, TSA has identified the top 25 airports that should first  receive federal funding for projects related to the installation of explosive  detection systems and also identified the ideal mix of higher-performance  and lower-cost alternative screening solutions for the 250 airports with the  highest checked baggage volumes. With this initial planning now  completed, a critical question that remains is how to fund and finance  these screening systems and who should pay for them. TSA is currently  working with airport and air carrier stakeholders to identify funding and  financing options, an effort that is due to be completed by early fall 2006.
As TSA works toward identifying funding and financing options, it will  also be important for the agency to sustain its R&D efforts and further  strengthen its R&D management and planning efforts. Researching and  developing technologies, such as higher-throughput EDS machines with  lower false alarm rates, should help TSA to improve the security and  efficiency of checked baggage screening.
Mr. Chairman, this concludes my statement. I would be pleased to answer  any questions that you or other members of the subcommittee have.
section_title: Contact Information
paragraphs: For further information on this testimony, please contact Cathleen A.  Berrick at (202) 512-3404 or berrickc@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this statement.
In addition to the contact named above, Kevin Copping, Katherine Davis,  Michele Fejfar, Thomas Lombardi, Allison Sands, and Maria Strudwick  made key contributions to this testimony.
section_title: Related GAO Products
paragraphs: Aviation Security: Enhancements Made in Passenger and Checked  Baggage Screening, but Challenges Remain. GAO-06-371T. Washington,  D.C.: April 4, 2006.
Aviation Security: Progress Made to Set Up Program Using Private- Sector Airport Screeners, but More Work Remains. GAO-06-166.  Washington, D.C.: March 31, 2006.
Aviation Security: TSA Management of Checked Baggage Screening  Procedures Could Be Improved. GAO-06-291SU. Washington, D.C.:  February 28, 2006.
Transportation Security Administration: More Clarity on the Authority  of Federal Security Directors Is Needed. GAO-05-935. Washington, D.C.:  September 23, 2005.
Aviation Security: Better Planning Needed to Optimize Deployment of  Checked Baggage Screening Systems. GAO-05-896T. Washington, D.C.:  July 13, 2005.
Aviation Security: Screener Training and Performance Measurement  Strengthened, but More Work Remains. GAO-05-457. Washington, D.C.:  May 2, 2005.
Aviation Security: Systematic Planning Needed to Optimize the  Deployment of Checked Baggage Screening Systems. GAO-05-365.  Washington, D.C.: March 15, 2005.
Transportation Security: Systematic Planning Needed to Optimize  Resources. GAO-05-357T. Washington, D.C.: February 15, 2005.
Aviation Security: Preliminary Observations on TSA’s Progress to Allow  Airports to Use Private Passenger and Baggage Screening Services.   GAO-05-126. Washington, D.C.: November 19, 2004.
Aviation Security: Private Screening Contractors Have Little Flexibility  to Implement Innovative Approaches. GAO-04-505T. Washington, D.C.:  April 22, 2004.
Aviation Security: Improvement Still Needed in Federal Aviation  Security Efforts. GAO-04-592T. Washington, D.C.: March 30, 2004.
Aviation Security: Challenges Exist in Stabilizing and Enhancing  Passenger and Baggage Screening Operations. GAO-04-440T. Washington,  D.C.: February 12, 2004.
Aviation Security: Efforts to Measure Effectiveness and Strengthen  Security Programs. GAO-04-285T. Washington, D.C.: November 20, 2003.
Aviation Security: Efforts to Measure Effectiveness and Address  Challenges. GAO-04-232T. Washington, D.C.: November 5, 2003.