transportation systems can be used as weapons themselves as was done on September 11, 2001. As we indicated in our June 2003 report on transportation security challenges, transportation experts, state and local governments, and industry representatives generally believe that investing in transportation security R&D is the federal government’s responsibility. After the September 11, 2001, terrorist attacks, Congress enacted legislation that resulted in changes in the federal organization and funding for transportation security R&D. In November 2001, the Aviation and Transportation Security Act created TSA within DOT and transferred the Federal Aviation Administration’s (FAA) aviation security R&D program to TSA. The act also required TSA to meet a December 31, 2002, deadline for deploying explosives detection systems to screen all checked baggage. One year later, the Homeland Security Act created DHS and transferred TSA from DOT to DHS. This legislation also transferred to DHS several other agencies that conducted transportation security R&D, including the U.S. Customs Service (now part of U.S. Customs and Border Protection) and the U.S. Secret Service from the Department of the Treasury and the U.S. Coast Guard from DOT. In addition, the Homeland Security Act extended the deadline for deploying new checked baggage screening equipment for certain airports to December 31, 2003, and transferred certain chemical and biological research programs that have potential transportation security applications from the Department of Defense and DOE to DHS. Although TSA and DHS have their own research facilities, most of their transportation security R&D is conducted by contractors. Figure 1 identifies major events in the establishment of TSA and DHS. Under the Aviation and Transportation Security Act, TSA is required to secure all modes of transportation; coordinate transportation security countermeasures with other federal accelerate the research, development, testing, and evaluation of explosives detection technology for checked baggage and of new technology to screen for threats in carry-on items and other items being loaded onto aircraft, including cargo, and on persons. TSA’s Office of Security Technologies is responsible for the research, development, testing, and deployment of security technology countermeasures employed to protect the transportation system against criminal and terrorist threats. It organizes its R&D projects according to the different approaches through which threats can reach a target, such as on a person; in carry-on items, vehicles, checked baggage, or cargo; or through access points at airports or at marine ports. The Office of Security Technologies operates the Transportation Security Laboratory, located in Atlantic City, New Jersey, which conducts transportation security R&D and tests products submitted by potential vendors for compliance with TSA standards. Although FAA’s aviation security R&D program was moved to TSA and TSA has since initiated R&D related to other modes of transportation, several DOT administrations conducted transportation security R&D before TSA was created and continue to do so. However, security is not the primary focus of DOT’s R&D programs. The Homeland Security Act brought 22 separate federal agencies under DHS’s umbrella and provided a framework for organizing DHS into five directorates, giving the Science and Technology Directorate responsibility for DHS’s research, development, testing, and evaluation activities and the Border and Transportation Security Directorate responsibility for security along the nation’s borders and in all modes of transportation. The act also requires TSA to remain a distinct entity within the Border and Transportation Security Directorate until November 25, 2004. Consequently, TSA’s R&D program office—the Office of Security Technologies—currently operates outside of DHS’s Science and Technology Directorate. Under the Homeland Security Act, DHS’s Information Analysis and Infrastructure Protection Directorate is required to prepare risk assessments of the nation’s key resources and critical infrastructure,which includes transportation. In addition, the Homeland Security Act requires the Science and Technology Directorate to coordinate with the appropriate executive branch agencies in developing and carrying out the science and technology agenda of the department to reduce duplication and identify unmet needs; accelerate the prototyping and development of technologies to address homeland security vulnerabilities; and coordinate and integrate all research, development, demonstration, testing, and evaluation activities of the department. engaging industry, academia, government, and other sectors in R&D, rapid prototyping, and technology transfer. The Office of Systems Engineering and Development takes technologies developed by the Office of Research and Development or HSARPA and prepares deployment strategies to transfer technologies to federal, state, and/or local government users. As the primary federal agencies responsible for enhancing the security of all modes of transportation, in fiscal year 2003, TSA spent about $21 million and DHS spent about $26 million on transportation security R&D projects; for fiscal year 2004, TSA and DHS have budgeted about $159 million and $88 million, respectively. In addition, DOT spent about $8 million on transportation security R&D projects in fiscal year 2003 and has budgeted about $31 million for fiscal year 2004. NASA did not fund any transportation security R&D projects in fiscal year 2003 but has budgeted about $18 million for aviation security R&D projects during fiscal year 2004. TSA and DHS were not able to estimate deployment dates for the vast majority of projects that they funded in fiscal years 2003 and 2004. Although TSA and DHS have not decided what additional projects they will fund in fiscal year 2005 and beyond, the President’s fiscal year 2005 budget requests $154 million for TSA’s R&D program and about $1 billion for the Science and Technology Directorate, which includes some transportation security R&D. Overall, members of our panel of transportation security and technology experts had mixed views about the reasonableness of the distribution of transportation security R&D projects by mode and raised questions about the types of projects that were funded and not funded by TSA and DHS. Overall, TSA increased its funding for transportation security R&D from $21 million in fiscal year 2003 to $159 million in fiscal year 2004, as shown in table 2. Although TSA is responsible for addressing the security needs of all modes of transportation, in fiscal year 2003, TSA spent about $17 million, or about 81 percent, of its R&D funding for projects related to aviation security. For fiscal year 2004, TSA has budgeted about $126 million on aviation security, or about 79 percent of its R&D budget. This increase reflects, in part, a $55 million appropriation for R&D related to air cargo screening. According to TSA, it has spent the majority of its R&D funding on aviation security because aviation was the greatest concern following the September 11, 2001, terrorist attacks and because Congress directed TSA to use R&D funding to enhance aviation security. In fiscal year 2004, TSA increased its budget for multimodal R&D projects from about $4 million in fiscal year 2003 to about $22 million. This increase is due, in part, to a $5.6 million increase for the Manhattan II project and about $6.4 million for development of a walk-through trace portal for detecting explosives on aviation, maritime, and rail passengers. In fiscal year 2004, TSA also increased its budget for rail security R&D projects from $169,000 in fiscal year 2003 to about $1.1 million. This increase reflects the $1.1 million that was budgeted for the Transit and Rail Inspection Pilot (TRIP).TSA also increased maritime security R&D funding from zero in fiscal year 2003 to about $9 million in fiscal year 2004; this increase is due, in part, to $3.6 million for a project to develop equipment to screen vehicles on ferries. Finally, TSA did not spend any money for highway, pipeline, or transit R&D projects. Several members of our panel of transportation security and technology experts commented that R&D for rail and transit security warrants additional funding. Congress is considering legislation to increase funding for these as well as other modes of transportation in fiscal year 2005. For example, the Rail Security Act, S. 2273, which has been passed by the Senate Committee on Commerce, Science, and Transportation, would authorize $50 million in each of fiscal years 2005 and 2006 for an R&D program for improving freight and intercity passenger rail security. computed tomography explosives detection system that is smaller and lighter than systems currently deployed in airport lobbies. The new system is intended to replace the systems currently placed in airport lobbies, including both larger, heavier explosives detection systems and explosives trace detection equipment. The smaller size of the system creates opportunities for TSA to transfer screening operations to other locations, such as airport check-in counters. TSA expects to certify this equipment later this year. TSA is also working with a contractor to integrate technologies, such as quadrupole resonance, with its existing explosives detection systems to improve processing speed and detection capability and to reduce false alarm rates and human resource requirements. Aviation Checkpoint: To address the limitations of its current metal detectors for screening passengers and of X-ray machines for screening carry-on baggage, TSA, in fiscal year 2003, obligated about $1 million and has budgeted $18 million for fiscal year 2004. For example, during the summer of 2004, TSA installed and began testing explosives trace detection portals at four airports and had scheduled to test the portal at a fifth airport in the near future. Passengers who enter a checkpoint lane with a trace portal machine will proceed through the metal detector while their carry-on baggage is being screened by X-ray. Each passenger will then be asked to step into the trace portal and to stand still for a few seconds while several quick puffs of air are released, as shown in figure 2. The portal will analyze the air for traces of explosives as the passenger walks through, and a computerized voice will tell the passenger when to exit the portal.