During the late 1960s and early 1970s, the government directed that all passengers and their carry-on baggage be screened for dangerous items before boarding a flight. As the volume of passengers requiring screening increased and an awareness of terrorists’ threats against the United States developed, a computerized system was implemented in 1998 to help identify passengers posing the greatest risk to a flight so that they could receive additional security attention. This system, known as CAPPS, is operated by air carriers in conjunction with their reservation systems. CAPPS enables air carriers to separate passengers into two categories: those who require additional security screening—termed “selectees”—and those who do not. Certain information contained in the passenger’s reservation is used by the system to perform an analysis against established rules and a government supplied “watch list” that contains the names of known or suspected terrorists. If the person is deemed to be a “selectee,” the boarding pass is encoded to indicate that additional security measures are required at the screening checkpoint. This system is currently used by most U.S. air carriers to prescreen passengers and prescreens an estimated 99 percent of passengers on domestic flights. For those passengers not prescreened by the system, certain air carriers manually prescreen their passengers using CAPPS criteria and the watch list. Following the events of September 11, 2001, Congress passed the Aviation and Transportation Security Act requiring that a computer-assisted passenger prescreening system be used to evaluate all passengers, TSA’s Office of National Risk Assessment has undertaken the development of a second-generation computer-assisted passenger prescreening system, known as CAPPS II. Unlike the current system that is operated by the air carriers, the government will operate CAPPS II. Further, it will perform different analyses and access more diverse data, including data from commercial and government databases, to classify passengers according to their level of risk. TSA program officials expect that CAPPS II will provide significant improvements over the existing system. First, they believe a centralized CAPPS II that will be owned and operated by the federal government will allow for more effective and efficient use of up-to-date intelligence information and make CAPPS II more capable of being modified in response to changing threats. Second, they also believe that CAPPS II will improve identity authentication and reduce the number of passengers who are falsely identified as needing additional security screening. Third, CAPPS II is expected to prescreen all passengers on flights either originating in or destined for the United States. Last, an additional expected benefit of the system is its ability to aggregate risk scores to identify higher-risk flights, airports, or geographic regions that may warrant additional aviation security measures. Key activities in the development of CAPPS II have been delayed, and TSA has not yet completed key system planning activities. TSA plans to develop CAPPS II in nine increments, with each increment providing increased functionality. (See app. I for a description of these increments.) As each increment is completed, TSA plans to conduct tests that would ensure the system meets the objectives of that increment before proceeding to the next increment. The development of CAPPS II began in March 2003 with increments 1 and 2 being completed in August and October 2003, respectively. However, TSA has not completely tested these initial two increments because it was unable to obtain the necessary passenger data for testing from air carriers. Air carriers have been reluctant to provide passenger data due to privacy concerns. Instead, the agency deferred completing these tests until increment 3. TSA is currently developing increment 3. However, due to the unavailability of passenger data needed for testing, TSA has delayed the completion of this increment from October 2003 until at least the latter part of this month and reduced the functionality that this increment is expected to achieve. Increment 3 was originally intended to provide a functioning system that could handle live passenger data from one air carrier in a test environment to demonstrate that the system can satisfy operational and functional requirements. However, TSA officials reported that they recently modified increment 3 to instead provide a functional application of the system in a simulated test environment that is not actively connected to an airline reservation system. Officials also said that they were uncertain when the testing that was deferred from increments 1 and 2 to increment 3 will be completed. TSA recognizes that system testing is a high-risk area and plans to further delay the implementation of the system to ensure that sufficient testing is completed. As a result, all succeeding increments of CAPPS II have been delayed, moving CAPPS II initial operating capability—the point at which the system will be ready to operate with one airline—from November 2003 to a date unknown. (See app. II for a timeline showing the original and revised schedule for CAPPS II increments.) Further, we found that TSA has not yet developed critical elements associated with sound project planning, including a plan for what specific functionality will be delivered, by when, and at what cost throughout the development of the system. Our work on similar systems and other best practice research have shown that the application of rigorous practices to the acquisition and development of information systems improves the likelihood of the systems’ success. In other words, the quality of information technology systems and services is governed largely by the quality of the processes involved in developing and acquiring the system. We have reported that the lack of such practices has contributed to cost, schedule, and performance problems for major system acquisition efforts. TSA established plans for the initial increments of the system, including requirements for increments 1 and 2 and costs and schedules for increments 1 through 4. However, officials lack a comprehensive plan identifying the specific functions that will be delivered during the remaining increments; for example, which government and commercial databases will be incorporated, the date when these functions will be delivered, and an estimated cost of the functions. In addition, TSA officials recently reported that the expected functionality to be achieved during early increments has been reduced, and officials are uncertain when CAPPS II will achieve initial operating capability. Project officials also said that because of testing delays, they are unable to plan for future increments with any certainty. By not completing these key system development planning activities, TSA runs the risk that CAPPS II will not provide the full functionality promised. Further, without a clear link between deliverables, cost, and schedule, it will be difficult to know what will be delivered and when in order to track development progress. Until project officials develop a plan that includes scheduled milestones and cost estimates for key deliverables, CAPPS II is at increased risk of not providing the promised functionality, not being fielded when planned, and being fielded at an increased cost. In reviewing CAPPS II, we found that TSA has not fully addressed seven of the eight issues identified by the Congress as key areas of interest related to the development and implementation of CAPPS II. Public Law 108-90 identified eight key issues that TSA must fully address before the system is deployed or implemented. These eight issues are establishing an internal oversight board, assessing the accuracy of databases, testing the system load capacity (stress testing) and demonstrating its efficacy and accuracy, installing operational safeguards to protect the system from abuse, installing security measures to protect the system from unauthorized access, establishing effective oversight of the system’s use and operations, addressing all privacy concerns, and creating a redress process for passengers to correct erroneous information. While TSA is in various stages of progress to address each of these issues, only the establishment of an internal oversight board to review the development of CAPPS II has been fully addressed. For the remaining issues, TSA program officials contend that their ongoing efforts will ultimately address each issue. However, due to system development delays, uncertainties regarding when passenger data will be obtained to test the system, and the need to finalize key policy decisions, officials were unable to identify a time frame for when all remaining issues will be fully addressed. The following briefly summarizes the status of TSA’s efforts to address each of the eight issues. Establishment of a CAPPS II oversight board has occurred. DHS created an oversight board—the Investment Review Board—to review the department’s largest capital asset programs. The Board reviewed CAPPS II in October 2003. Based on this review, the Board authorized TSA to proceed with the system’s development. However, DHA noted some areas that the program needed to address. These areas included addressing privacy and policy issues, coordinating with other stakeholders, and identifying program staffing requirements and costs, among others, and directed that these issues be addressed before the system proceeds to the next increment. Although DHS has the Board in place to provide internal oversight and monitoring for CAPPS II and other large capital investments, we recently reported that concerns exist regarding the timeliness of its future reviews. DHS officials acknowledged that the Board is having difficulty reviewing all of the critical departmental programs in a timely manner. As of January 2004, DHS had identified about 50 of the largest capital assets that would be subject to the Board’s review. As CAPPS II’s development proceeds, it will be important for the Board to oversee the program on a regular and thorough basis to provide needed oversight. In addition, on February 12, 2004, DHS announced its intentions to establish an external review board specifically for CAPPS II. This review board will be responsible for ensuring that (1) the privacy notice is being followed, (2) the appeal process is working effectively, and (3) the passenger information used by CAPPS II is adequately protected. However, in announcing the establishment of this review board, DHS did not set a date as to when the board will be activated or who would serve on the board. The accuracy of CAPPS II databases has not yet been determined. TSA has not yet determined the accuracy—or conversely, the error rate— of commercial and government databases that will be used by CAPPS II. Since consistent and compatible information on database accuracy is not available, TSA officials said that they will be developing and conducting their own tests to assess the overall accuracy of information contained in commercial and government databases.