[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        TUESDAY, MARCH 23, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
    Present: Senators Cochran, Stevens, Domenici, Byrd, Inouye, 
and Murray.
    Also present: Senator Reid.

                    DEPARTMENT OF HOMELAND SECURITY

STATEMENTS OF:
        HON. ADMIRAL THOMAS H. COLLINS, COMMANDANT, UNITED STATES COAST 
            GUARD
        ADMIRAL DAVID M. STONE, ACTING ADMINISTRATOR, TRANSPORTATION 
            SECURITY ADMINISTRATION

               OPENING STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. The committee hearing will please come to 
order.
    Today, we continue our review of the President's fiscal 
year 2005 budget request for the Department of Homeland 
Security, specifically, the programs and activities of the 
United States Coast Guard and the Transportation Security 
Administration. I am pleased to welcome to the hearing the 
Commandant of the United States Coast Guard, Admiral Thomas 
Collins, and the Acting Administrator of the Transportation 
Security Administration, Admiral David Stone.
    We appreciate you submitting copies of your statements in 
advance of the hearing. They will be made a part of the record, 
and we invite you to make any comments you think would be 
helpful to the Committee's understanding of the budget request.
    I am happy to yield to Senator Inouye and other Senators 
who may wish to make any opening statements.

                 STATEMENT OF SENATOR DANIEL K. INOUYE

    Senator Inouye. Thank you very much, Mr. Chairman.
    I look forward to the hearing today. I represent a state 
that relies more than any other state on the two agencies 
represented this morning. As an island state, we have a unique 
relationship with the Coast Guard. We enjoy the ocean year-
round for recreation and commercial fishing, and rely on it for 
transportation of more than 90 percent of our goods. And in 
Hawaii, we have a great appreciation for the search and rescue, 
navigation, fisheries management, and the environmental 
protection mission of the Coast Guard.
    Aviation is also a lifeline for my state. Our tourism-based 
economy is dependent on reliable and safe transportation of 
passengers to and from our shores. So I am so committed to 
working with both of these agencies to ensure that there are 
resources necessary to improve upon their performance, and help 
keep our traveling public and our transportation system safe, 
so I welcome the testimony of these two gentlemen.
    Senator Cochran. Admiral Collins, you may proceed.

                 STATEMENT OF ADMIRAL THOMAS H. COLLINS

    Admiral Collins. Good morning, Mr. Chairman, Senator 
Inouye. It is a privilege to be with you. Thank you for the 
opportunity to discuss the fiscal year 2005 budget request and 
the impact on the essential services we provide to the American 
public.
    The 2005 budget proposes a budget authority of $7.46 
billion, a 9 percent increase over fiscal year 2004. I am 
pleased to note that from fiscal years 2003 to 2005, our 
operating expense budget has grown over 51 percent. This growth 
supports the President's National Security Strategy for 
Homeland Security, and it supports the full range of Coast 
Guard missions.

        HIGHLIGHTS OF SERVICE TO THE NATION OVER THE PAST MONTH

    From my perspective, this budget growth is more than 
justified. We continue to apply our budget both effectively and 
efficiently, and often achieve extraordinary operational 
outcomes for the American people. I have been a part of the 
Coast Guard for 40 years now, and I continue to be amazed at 
the performance of our men and women every day. In fact, our 
operations just over the past month paint a clear and vivid 
picture of the scope and the national importance of the 
services we provide to the American public.
    We responded to the distress calls from the burning and 
sinking ship/tanker, Bow Mariner, just this month, 50 miles off 
shore. Our rescue swimmer deployed in 44-degree, oil-covered 
water to save six crewmen.
    Our search and rescue response capability was sustained, 
even though eighteen cutters, eight aircraft, and almost 
fourteen-hundred personnel deployed between the coast of Haiti 
and South Florida this month. And as conditions deteriorated in 
Haiti, Coast Guard cutters intercepted over a thousand 
Haitians, and safely repatriated them, thus fulfilling our 
President's mandate to repatriate Haitian migrants and present 
a deterrent to mass migration.
    This week, the Coast Guard cutter, Midget, on patrol in the 
Eastern Pacific, returning home to Puget Sound after this month 
seizing over 27,000 pounds of cocaine in three boardings, 
setting a record for the most cocaine seized by a cutter on a 
single patrol.
    Today, four 1410-foot cutters, two port security units, and 
477 people are currently providing critical support to 
operations in Iraq. And today, we have two polar ice breakers 
returning home after the most successful resupply of McMurdo 
Station in recent years. We were successful in implementing the 
requirements for the Maritime Transportation Security Act of 
2002 and will be ready to commence aggressive compliance 
oversight on July 1.
    These are just the highlights of our service to the Nation 
over this past month. The 2005 budget request provides the 
resources necessary for the Coast Guard to continue this high 
level of service to the American public. We have four 
priorities embedded in this budget.

             FOUR PRIORITIES EMBEDDED IN THE BUDGET REQUEST

    First, is to recapitalize our operational assets. Our 
greatest threat to mission performance continues to be that our 
aircraft, our boats, and cutters are aging, technologically 
obsolete, and require replacement and modernization. The 
integrated Deepwater system, or Deepwater, is the answer to 
these concerns.
    My second priority is to ensure consistent performance 
across all missions by ensuring the right force structure and 
the right set of capabilities. The 2005 budget adds capability 
and capacity to enable across-the-board mission performance, 
including operational funding for additional eleven patrol 
boats, these 87-foot patrol boats, and the transfer of five 
179-foot PC patrol boats from the Navy, and overall, adding 
over 1,300 people to our workforce in 2005.
    My third priority is to aggressively implement the 
comprehensive requirements of the Maritime Transportation 
Security Act of 2002. Over $100 million and 791 new personnel 
support this critical security initiative.
    My fourth priority reflected in the 2005 budget is to 
expand what we have been calling Maritime Domain Awareness. 
Expanding awareness of activities occurring in the maritime 
domain is critical to enhancing our performance across all 
mission areas. And we must identify and understand threats, 
disseminate timely information to our operational commanders 
and our homeland security partners in order to respond to 
terrorist attacks, drug smuggling, illegal migration, and so 
forth.
    Of course, the Coast Guard people make our operational 
excellence possible, and the successful operational tempo 
demonstrated over the last month is testimony to the skill and 
commitment of our personnel. They routinely put service to our 
Nation above all else, and they are my highest priority. And 
this budget request improves the quality of life of Coast Guard 
men and women, by providing a pay raise, and improving basic 
allowance for housing.
    Most importantly, through Deepwater, through Rescue 21, and 
other modernization efforts, our Coast Guard people will be 
provided with the quality equipment they deserve to do their 
job.

                           PREPARED STATEMENT

    Mr. Chairman, thank you for the opportunity to testify 
today, and I will be pleased to answer any questions that you 
may have.
    Senator Cochran. Thank you very much, Admiral Collins.
    [The statement follows:]

            Prepared Statement of Admiral Thomas H. Collins

    Introduction Good morning, Mr. Chairman and distinguished members 
of the Subcommittee. It is a pleasure to appear before you today to 
discuss the Coast Guard's fiscal year 2005 budget request, and its 
critical importance in your Coast Guard being able to deliver essential 
daily services to the American public.
    The Coast Guard's fiscal year 2005 budget proposes budget authority 
of $7.46 billion, a 9 percent increase over fiscal year 2004, and 
continues our effort to enhance capability and competencies to perform 
both safety and security missions. It supports the goals of the 
President's National Strategy for Homeland Security to prevent 
terrorist attacks, reduce our vulnerabilities, and minimize damage from 
attacks that do occur.
    Before I discuss our fiscal year 2005 budget, I would like to take 
a few moments to discuss some of our accomplishments during the past 
year. You deserve a quick report on how we have used the resources this 
Subcommittee has provided us in the past and I am proud of the results 
that Coast Guard men and women continue to deliver for the country. 
During fiscal year 2003, the Coast Guard:
  --Interdicted over 6,000 undocumented migrants attempting to 
        illegally enter the country by sea.
  --Prevented more than 136,800 pounds of cocaine, over 14,000 pounds 
        of marijuana and more than 800 pounds of hashish from reaching 
        U.S. shores.
  --Aggressively conducted more than 36,000 port security patrols, 
        including 3,600 air patrols, 8,000 security boardings and over 
        7,000 vessel escorts.
  --Deployed the largest contingent of Coast Guard personnel overseas 
        since the Vietnam War to support Operation Iraqi Freedom, 
        including 11 cutters, two shoreside support units, and over 
        1,200 personnel.
  --Saved the lives of nearly 5,100 mariners in distress and responded 
        to more than 31,500 calls for assistance.
  --Boarded more than 3,400 fishing vessels to enforce safety, 
        environmental and economic laws.
  --Mobilized 64 percent of our reserve force to enhance protection of 
        our ports, waterways and critical infrastructure during 
        heightened states of alert, and to support the Combatant 
        Commanders.
  --Kept critical shipping channels clear of ice in the Great Lakes and 
        New England ensuring the availability of critical energy 
        products.
  --Maintained more than 50,000 Federal aids to navigation along 25,000 
        miles of maritime transportation highways.
  --Responded to over 19,000 reports of water pollution or hazardous 
        material releases.
  --Completed the most difficult re-supply of McMurdo Station 
        (Antarctica) during Operation Deep Freeze in 40 years. USCGC 
        Polar Sea and USCGC Healy smashed through 50 miles of ice more 
        than 13-feet thick to enable U.S. scientists to continue their 
        studies of the Earth's climate.
    In addition, we have become a proud member of the Department of 
Homeland Security that consolidated 22 agencies and nearly 180,000 
employees. We are committed to working with our partner agencies as one 
team engaged in one fight, and I truly believe having one Department 
responsible for homeland security has made America more secure today. 
An example of this one team-one fight motto is very evident in the 
developing events in Haiti. Under the direction of the Secretary of 
Homeland Security, the Homeland Security Task Force--Southeast was 
stood-up as part of OPERATION ABLE SENTRY. Led by Coast Guard Rear 
Admiral Harvey Johnson, the task force is comprised of many agencies 
chartered to plan, prepare, and conduct migrant interdiction operations 
in the vicinity of Haiti due to the escalation of violence in that 
country and the threat of a mass exodus of undocumented migrants. In 
the first days of interdiction operations, the task force demonstrated 
impressive agility and synergy:
  --Coast Guard cutters, with Citizenship and Immigration Service (CIS) 
        asylum pre screening officers and interpreters aboard, 
        interdicted seven Haitian vessels with 1,076 undocumented 
        migrants,
  --Coast Guard and Immigration and Customs Enforcement (ICE) aircraft 
        patrolled the skies throughout the operating area,
  --Coast Guard, ICE, and Customs and Border Protection (CBP) boats 
        conducted coordinated patrols off the Florida coast,
  --Coast Guard and ICE conducted a coordinated boarding of a boat 
        suspected of being highjacked off the coast of Miami,
  --Coast Guard, CBP, ICE, and the Transportation Security 
        Administration command center, public affairs, and intelligence 
        staffs fully engaged,
  --Federal Emergency Management Agency (FEMA) deployed three 
        Information and Planning Specialists to the task force in 
        support of contingency planning.
    In addition, we have begun aggressively implementing the Maritime 
Transportation Security Act thanks in large part to a herculean inter-
agency effort. Final Rules were published in October 2003 and security 
plans from approximately 9,000 vessels and 3,200 facilities were due on 
December 31, 2003. To date, approximately 97 percent have been 
received. We will continue to aggressively pursue 100 percent 
compliance, and have instituted a phased implementation of penalties to 
ensure that all regulated facilities have implemented approved security 
plans by the 1 July 2004 deadline. We completed eleven port security 
assessments, and have established 43 Area Maritime Security Committees 
to provide enhanced planning, communication and response for our 
nation's ports. We have met with nearly sixty countries representing 
the vast majority of all shippers to the United States., reinforcing a 
commitment to the International Ship and Port Facilities Security 
(ISPS) code. We have commissioned additional Maritime Safety and 
Security Teams (MSSTs) and plan to have 13 teams by the end of CY 2004. 
We are installing an Automatic Identification System (AIS) network in 
nine coastal locations that have Vessel Traffic Services improving our 
awareness of the maritime domain, and are simultaneously designing a 
nationwide system.

The Need to Sustain Growth in fiscal year 2005
    Despite these accomplishments, there is still much to do. The last 
few weeks paint a clear and vivid picture of the breadth, scope and 
national importance of all Coast Guard missions. Rescue personnel from 
our mid-Atlantic units responded to the distress call from the burning 
and sinking Singaporean tanker Bow Mariner, and six crewmen were saved 
from 44-degree water. A Coast Guard cutter seized the entire catch from 
a fishing vessel off the New England coast for having twice the legal 
limit of lobster on board and more importantly having female egg 
bearing lobsters that a biologist indicated had been scrubbed of eggs. 
Our search and rescue and living marine resource response capability 
was sustained even as 15 cutters, 6 aircraft, and approximately 1,550 
personnel deployed south positioning from the coast of Haiti to the 
approaches to South Florida as part of Homeland Security Task Force-
Southeast, and interdicted 1,075 Haitian migrants. Simultaneously, we 
have four Patrol Boats, two Port Security Units, and 377 personnel 
deployed in support of operations in Iraq. As you can see, demand for 
Coast Guard resources continue to expand, while our ships and aircraft 
continue to age. The Coast Guard is the nation's lead Federal agency 
for maritime homeland security and marine safety. Critical new 
resources are required to establish a new level of maritime security 
while continuing to perform the full range of Coast Guard missions.
    The budget requests resources that are necessary for the Coast 
Guard to fulfill its responsibilities to the American public. For 
fiscal year 2005, my priorities are:
  --Recapitalize operational assets;
  --Enhance performance across all missions by leveraging Coast Guard 
        authorities, capabilities, competencies and partnerships;
  --Aggressively implement the comprehensive requirements of MTSA; and
  --Expand awareness of activities occurring in the maritime domain.

Recapitalize Operational Assets
    The Coast Guard's greatest threat to mission performance continues 
to be that our aircraft, boats and cutters are aging, technologically 
obsolete, and require replacement and modernization. The majority of 
these assets will reach the end of their service life by 2008, and have 
increasing operating and maintenance costs, which results in lost 
mission performance, mission effectiveness, unnecessary risks, and wear 
and tear on people. These assets are failing at an alarming rate. 
Recent asset failures and their subsequent impact on operational 
readiness exemplify the downward readiness spiral created by 
increasingly aging capital assets coupled with a more demanding 
operational tempo. Frankly, the existing system is failing in numerous 
areas and I am concerned that we are reaching a ``declining readiness 
spiral'' phenomenon. Deferred modernization results in reduced patrols 
and readiness, corresponding increased maintenance needs and higher 
total ownership costs. Recapitalization funds are then needed to keep 
old assets operating, which only defers modernization starting this 
declining cycle over again. The Coast Guard is faced with trading asset 
modernization funding toward legacy asset maintenance and capability to 
address immediate safety and reliability concerns. Some examples of why 
I am so concerned:
  --HH-65 Helicopter engine system casualties.--In-flight engine 
        partial power losses occurred at a rate of 63 per 100,000 
        flight hours in fiscal year 2003, and is significantly higher 
        so far in fiscal year 2004. This rate far exceeds the FAA 
        standard of one per 100,000 hours and the U.S. Navy Safety 
        Center guidelines of no more than 10 mishaps per 100,000 flight 
        hours. HH-65 helicopters are critical to Coast Guard operations 
        including ongoing efforts off the coast of Haiti.
  --110-foot Patrol Boats.--To date, 20 hull breaches requiring 
        emergency dry docks. One cutter required emergency dry dock for 
        hull breach only 14 weeks after a 10-month hull renewal project 
        that had cost $2 million. The 110-foot fleet is the high-speed 
        workhorse during migrant interdiction operations such as the 
        ongoing events in the vicinity of Haiti, and has repatriated 
        927 Haitian migrants thus far.
  --378-foot High Endurance Cutter.--3 out of total class of 12 ships 
        have recently missed operations due to unscheduled maintenance 
        to failing sub-systems. A 378-foot cutter is currently serving 
        as the on-scene command ship for Haitian operations.
    All three of these asset classes (HH-65, 110, 378) are currently 
supporting the Coast Guard missions such as migrant and drug 
interdiction operations, ports waterways and coastal security, 
fisheries enforcement, and search and rescue, and the Coast Guard 
continues to be successful in spite of casualties and readiness levels. 
This success comes through the extraordinary efforts of Coast Guard 
personnel, and I'm concerned about our ability to continue this 
performance in the future. Cocaine seizures to date in fiscal year 2004 
total 38.9 metric tons, nearly double last year's pace which yielded 
the second highest seizure total ever (62.1 metric tons). The threat of 
a mass migration from Haiti, coupled with the flow of illegal drugs and 
undocumented migrants from other countries towards the United States, 
highlights the value that the U.S. Coast Guard provides our nation.
    The Integrated Deepwater System (IDS) is the answer to these 
concerns and entails far more than the progressive replacement of our 
aging inventory. IDS is an integrated systems approach to upgrading 
existing legacy assets through a completely integrated and 
interoperable system. All of Deepwater's highly capable assets will be 
linked with modern command, control, communications, computers, 
intelligence, surveillance, and reconnaissance (C4ISR) architecture. 
The ability to link and network disparate platforms seamlessly over 
vast distances is an essential aspect to providing the Coast Guard the 
capability to detect and interdict potential threats prior to reaching 
our shores and ports. Deepwater assets are America's first line of 
defense to counter threats in the maritime domain, and thwart 
catastrophes to vulnerable infrastructure (oil rigs, deepwater 
channels, shipping). Funding for the Deepwater program is a critical 
investment in homeland safety and security and means a more secure 
United States of America.
    The Coast Guard's deepwater assets are not the only capital assets 
that desperately need replacement. The fiscal year 2005 budget also 
requests resources for:
  --Rescue 21 project, which will be the primary command and control 
        system to perform the functional tasks of detection, 
        classification, and command and control in the inland and 
        coastal zones for Search and Rescue. The existing National 
        Distress System is inadequate to meet the safety requirements 
        of growing marine traffic, and is not capable of meeting the 
        requirements of the International Convention for the Safety of 
        Life at Sea (SOLAS) treaty. Rescue 21 will expand existing 
        capability through greater area coverage, and improved 
        direction finding capability to enhance Coast Guard emergency 
        response;
  --Great Lakes Icebreaker, which is scheduled to replace USCGC 
        MACKINAW in 2006 after 57 years of continuous service;
  --Response Boat--Medium, which will replace the aging 41-foot Utility 
        Boat, and will meet mission requirements for search and rescue, 
        and emerging homeland security missions.

Enhance Mission Performance
    To enhance mission performance the Coast Guard must optimize its 
unique authorities, capability, competency, and partnerships; while 
gaining the capacity in each to complete our full range of missions. 
Due to the Coast Guard's multi-mission nature, resources provided will 
assist in the performance of all missions. New assets will be used to 
conduct fishery patrols and search and rescue cases as well as protect 
the Nation against terrorist attacks.
    Fiscal year 2005 budget initiatives that add capacity to enable 
mission performance include:
  --Operational funding for eleven 87-foot Coastal Patrol boats built 
        in 2004;
  --Operational funding for five 179-foot Patrol Coastals being 
        transferred to the Coast Guard from the Navy;
  --Safety configuration changes to the 47-foot Motor Life Boat, which 
        will allow crews to safely conduct missions in deteriorating 
        weather conditions.

Aggressively Implement the Maritime Transportation Security Act of 2002
    During the past year, the Coast Guard led the international 
maritime community in adopting a new international security regime 
requiring vessels and port facilities to develop security plans. This 
effort paralleled the requirements this committee helped establish 
through enactment of the Maritime Transportation Security Act (MTSA) of 
2002. These regulations require that United States ports, vessels, and 
facilities each have a plan to protect against terrorist attacks. 
Aggressive implementation of MTSA is essential if we are to maintain 
the security of our ports and waterways at acceptable levels. To 
implement and enforce these regulations, the Coast Guard has a 
recurring requirement to develop, review, approve, and ensure vessels 
and facilities are sustaining their own security responsibilities for 
all aspects of maritime security. Approximately 97 percent of required 
vessel and facilities have turned in security plans to date. We are 
issuing notices of violation to the 10 percent that missed the 
deadline, are starting the process of approving security plans, and 
have commenced training of Coast Guard personnel to complete on-site 
verification. Providing the Coast Guard with the resources necessary to 
undertake this implementation and enforcement effort is a key step 
toward enhanced port, vessel and facility security.

Maritime Domain Awareness
    Expanding awareness of activities occurring in the maritime domain 
is critical to enhancing Coast Guard performance in all mission areas. 
The U.S maritime jurisdiction is enormous, covering some 3.5 million 
square miles of ocean and 95,000 miles of coastline. In addition, the 
Coast Guard projects a defense-in-depth presence in other areas such as 
the Caribbean and eastern Pacific to deter, detect, and interdict drug 
and migrant smugglers. The Coast Guard operates at times and in places 
no United States forces operate. The ongoing events off the coast of 
Haiti highlight the need for a robust maritime domain awareness 
capability. The Coast Guard has minimal capability to monitor the 
activities occurring within this maritime zone without the presence of 
a cutter or aircraft. We must identify and understand threats, and 
disseminate timely information to our operational commanders and our 
homeland security partners in order to respond to emerging threats such 
as terrorist attacks, drug smuggling, illegal migration, location of 
distressed boaters, or illegal fishing before they reach our borders. 
An intelligence and warning system that detects indicators of potential 
terrorist activity before an attack occurs is necessary to take 
preemptive and protective action. We are currently installing Automatic 
Identification System (AIS) in our Vessel Traffic Service (VTS) ports, 
and are formalizing the operational requirements to award a contract 
for installation of a nationwide AIS network. $4 million is requested 
in fiscal year 2005 to continue this important project. This budget 
submission also includes 35 people to integrate all of our projects 
that provide maritime domain awareness (MDA), including AIS, Deepwater 
and Rescue 21, and these people will partner with the other Department 
of Homeland Security agencies, the Navy, and other entities to unite 
our joint efforts.

Conclusion
    Thank you for your support in the fiscal year 2004 Emergency 
Supplemental. Funding is ensuring Coast Guard forces remaining in Iraq 
are properly resourced for the rest of fiscal year 2004.
    None of what the Coast Guard has accomplished or is striving to 
achieve is possible without our people--the bedrock of our service. 
They routinely put their service above all else and I am convinced of 
their unwavering dedication to the security of this Nation and the 
safety of its citizens. They are our highest priority and most valuable 
resource.
    The Coast Guard's fiscal year 2005 budget request improves the 
quality of life for Coast Guard men and women and their families by 
providing a pay raise, and continuing improvements in Basic Allowance 
for Housing (BAH) reducing out-of-pocket expenses from 3.5 percent to 
zero, and gives them the equipment and assets that will allow them to 
best contribute their time and talents to the safety and security of 
our nation.
    I have asked every member of the Coast Guard to continue to focus 
intently and act boldly on the three elements of my direction: improve 
Readiness; practice good Stewardship; and enhance the growth, 
development and well being of our People. With this diligence we will 
fulfill our operational commitment to America and maintain our high 
standards of excellence.
    I look forward to working with you to that end.
    Thank you for the opportunity to testify before you today. I will 
be happy to answer any questions you may have.

    Senator Cochran. Admiral Stone, you may proceed with your 
opening statement.

                  STATEMENT OF ADMIRAL DAVID M. STONE

    Admiral Stone. Thank you, sir.
    Good morning, Mr. Chairman, Senator Byrd, and members of 
the Subcommittee. I am honored to appear before you this 
morning to discuss the President's fiscal year 2005 budget 
request for the Transportation Security Administration.
    First, I would like to take a moment to comment on the 
tragic bombings in Madrid and Moscow. We are closely examining 
these events so we may deter and prevent similar attacks in the 
United States. Over the last 2 years, the Department of 
Homeland Security has worked with Federal and State 
counterparts to bolster the security of rail and mass transit 
systems, conducting criticality assessments, coordinating 
information sharing, and improving training.
    Building on this foundation, yesterday, Secretary Ridge 
announced additional measures to further strengthen our rail 
and transit systems. We will develop a rapid-deployment mass 
transit canine program and continue to partner with local 
authorities to provide additional training and assistance for 
local canine teams.
    TSA will implement a pilot program to test the feasibility 
of screening luggage and carry-on bags to detect explosives at 
rail stations and aboard trains. Working with the Department, 
we will engage industry, and State and local partners to 
establish baseline security measures based on best practices, 
and we will expand security education and awareness programs. 
Security technologies will be examined for their potential 
application in the intermodal environment.

                    FISCAL YEAR 2005 BUDGET REQUEST

    Turning to the President's budget proposal for fiscal year 
2005, the $5.3 billion that is requested for TSA is $892 
million more than the fiscal year 2004 level. The significant 
portion of this funding would support and improve passenger and 
baggage screening operations at the Nation's airports, 
including $145 million to fully implement screening and 
training programs, and $86 million to provide technological 
support at passenger checkpoints.
    TSA is right sizing and stabilizing screening operations, 
investing more hiring authority with our Federal Security 
Directors to provide more flexibility in addressing staffing 
needs. Local hiring, local testing, and local training will be 
the keys to our future.
    We are assessing the expansion of contract screening; and 
to help us make these decisions, a thorough evaluation of the 
five private pilot programs is currently under way, with the 
results expected in April of this year.
    TSA's Federal Flight Deck Officer Program adds another 
important layer to our rings of aviation security. We are 
seeking $25 million to support and expand training for pilots 
who are volunteering to carry firearms to defend aircraft 
flight decks. In January, TSA began doubling the number of FFDO 
classes, and we plan to provide initial training and 
qualifications for thousands of FFDOs by the end of this fiscal 
year. We expect to conduct our first cargo FFDO prototype 
program next month.
    A total of $60 million is requested for the second-
generation Computer-Assisted Passenger Pre-Screening System, 
CAPPS II, in fiscal year 2005. Developed with the utmost 
concern for individual privacy rights, there is a pressing need 
to move forward with testing of CAPPS II. The current passenger 
pre-screening system operated by air carriers is clearly not 
adequate to address the asymmetric threats that confront us on 
a daily basis.
    To deny targets the opportunity to exploit our thriving air 
cargo system, TSA has developed an air cargo strategic plan 
within the $85 million requested for air cargo screening in 
fiscal year 2005. TSA is requesting $55 million for an 
aggressive R&D program to investigate technologies that will 
improve our ability to screen high-risk air cargo.

                           prepared statement

    In closing, I would like to thank you, Mr. Chairman, for 
your support, and that of the Subcommittee members. I look 
forward to answering your questions today.
    Senator Cochran. Thank you very much, Admiral Stone.
    [The statement follows:]

                Prepared Statement of of David M. Stone

    I am pleased to testify before the Subcommittee on the President's 
fiscal year 2005 budget request for the Transportation Security 
Administration (TSA). TSA's mission, to protect the Nation's 
transportation systems to ensure the freedom of movement for people and 
commerce, is completely aligned with the mission of the Department of 
Homeland Security (DHS), and our objectives fully support the 
Department's strategic goals.
    The tragic bombings of March 11 in Madrid, Spain, are a great 
concern to us all. Before I discuss the President's fiscal year 2005 
budget request for TSA, I want to assure the Subcommittee that DHS is 
supporting the investigation into the attacks with our international 
partners and monitoring the investigation to learn more about how these 
terrible attacks transpired. Although we have no specific indicators 
that terrorist groups are planning such attacks in the United States, 
DHS has reached out to state and local security, law enforcement, and 
transit and rail officials to ensure vigilance in light of these 
incidents.
    I want to assure you that DHS is devoting significant attention and 
resources on rail security across the Federal Government. Between 
fiscal year 2003 and this year, DHS will have provided $115 million to 
high-risk transit systems through the Urban Area Security Initiative 
(UASI) in the Office for Domestic Preparedness. The Budget proposes to 
double our total commitment to UASI, to $1.4 billion in fiscal year 
2005. Our partners in the Department of Transportation (DOT) stepped up 
inspection of rail lines and security requirements, and DOT is also 
assisting Amtrak implement improved security measures. Under the 
Budget, the Federal Transit Administration (FTA) will award nearly $4 
billion in grants to transit agencies, resources that can be used for 
security improvements.
    TSA is providing strong leadership in this effort and has the 
resources it needs under the request to do its part. Over the last 2 
years, DHS and DOT have worked with transit and rail operators to 
significantly improve security. TSA has worked with the Information 
Analysis and Infrastructure Protection Directorate and DOT's Federal 
Railroad Administration and FTA to conduct criticality assessments of 
rail and transit networks operating in high-density urban areas. As a 
result, we have better information to focus current and future security 
resources and transit systems are producing robust security and 
emergency preparedness plans. In addition, DHS is coordinating 
information and threat sharing through the Surface Transportation 
Information Sharing and Analysis Center (ISAC) managed by the 
Association of American Railroads, including deploying TSA personnel to 
the ISAC and hosting ISAC representatives at TSA's Transportation 
Security Coordination Center (TSCC) in Virginia. We have held numerous 
security exercises to bring together rail carriers, Federal and local 
first responders, and security experts, and have addressed potential 
gaps in antiterrorism training among rail personnel.
    I hope to work with the Subcommittee to continue to determine how 
best to strengthen rail and transit security within the resources 
levels of our request.

The President's fiscal year 2005 Budget Request for TSA
    The President's fiscal year 2005 budget request will support key 
initiatives to improve the effectiveness and efficiency of TSA's 
efforts to secure our Nation's transportation system. TSA's top 
priorities in fiscal year 2005 include:
  --Strengthening aviation security.--We will stabilize and enhance our 
        system-ofsystems approach to aviation security, measure and 
        improve screening performance, develop advanced screening 
        technology, and expand the Federal Flight Deck Officer program.
  --Upgrading access and inspection security.--TSA will continue to 
        develop and implement credentialing and background check 
        programs, continue to support local law enforcement at 
        airports, strengthen inspection, and enforce agency security 
        regulations.
  --Improving air cargo security.--In partnership with air carriers and 
        other stakeholders, TSA will continue to implement the range of 
        initiatives encompassed in its Air Cargo Strategic Plan.
  --Enhancing surface transportation security through intelligence, 
        stakeholder outreach, and integration.--TSA will work with our 
        colleagues in DHS and in the Department of Transportation to 
        assess the risk of terrorist attacks to all surface modes of 
        transportation and develop and implement security strategies to 
        thwart attacks while minimizing the impact on the flow of cargo 
        and mobility of passengers.
    The President's fiscal year 2005 Budget Request of $5.296 billion 
for TSA is dedicated to stabilizing and strengthening TSA's essential 
mission. This request is $892 million more than the adjusted enacted 
level for fiscal year 2004.

Strengthening Aviation Security
    The majority of TSA funding in fiscal year 2005 is requested to 
support and improve passenger and baggage screening operations at the 
Nation's airports, an essential layer in TSA's rings of aviation 
security. Today TSA is right-sizing and stabilizing screening 
operations based on security requirements and opportunities for 
increasing efficiencies in business processes so that at the end of 
fiscal year 2004 an appropriate mix of full-time and part-time 
personnel will represent no more than 45,000 full-time equivalents. 
Supporting and enhancing the effectiveness of screening operations 
requires a broad range of services and activities, from training and 
supplies to performance management systems, from management and 
headquarters support to human resources services and equipment 
maintenance. As part of our long-term plan for stabilizing our 
workforce, we are evolving to a business model that vests more hiring 
authority at the local level with our Federal Security Directors 
(FSDs). The original methods we used in centralizing recruitment, 
assessment, hiring, and training of screeners were necessary in the 
fastpaced environment to meet the original statutory deadlines. This 
centralized model is not the right fit for sustaining an existing 
workforce. This is a high priority item for TSA.
    Information and data on TSA performance are critical to our ability 
to make strategic decisions. TSA is implementing measures to assess 
performance, including TSA's Passenger Screening Effectiveness Index, 
Cost Per Passenger, Cost Per Bag, and Customer Service Index elements 
of the Screening Performance Indices. This information will be used to 
assess the impact of higher passenger volume on the effectiveness of 
our security operations and the public's level of satisfaction. TSA's 
Customer Satisfaction Index is based on feedback from passenger surveys 
at airports, polls, and traveler comments. TSA's score for all airports 
is 80 percent, indicating that overall, passengers are ``more than 
satisfied'' with their experience at passenger security checkpoints. 
Over 1.7 million passengers and 2 million bags are processed through 
airport checkpoints on a daily basis, yet average wait times are still 
low.
    For fiscal year 2005, the President's budget requests $2.424 
billion for 45,000 screener FTE and 1,210 terminal screening managers. 
At the requested level, funding will support screener salaries and 
management at all commercial airports. The screener workforce will be 
cross-trained to perform duties both as passenger and baggage 
screeners. Included in the requested level is $130 million for contract 
screening airports. This funding is based on an estimate of resources 
necessary to maintain the current five pilot project airports. However, 
actual funding needs for contract screening operations may vary 
depending on the current evaluation of contract screening, the 
program's future deployment and management structure, and other 
contract screening transitions at airports.
    A total of $145 million is requested in fiscal year 2005 to fully 
implement the passenger and baggage screening training programs 
critical to maintaining high skill levels in our screener workforce. 
This will support training for replacement screeners as well as support 
recurrent and advanced training to the entire screener workforce to 
meet and maintain proficiency and qualification standards. All 
passenger screeners must meet annual recertification standards, passing 
a Standard Operating Procedures Job Knowledge Test, an Image 
Certification Test, and a Practical Skills Demonstration, and achieve a 
fully successful performance rating. Recertification for 2003-2004 
began on October 1, 2003, and will be completed this month.
    As reported to this Subcommittee last fall, TSA recognizes that we 
must continually work to maintain and sharpen screener capabilities. 
TSA has made significant progress in implementing the Short-Term 
Screening Improvement Plan, a series of integrated interventions that 
include enhanced training and technology deployment, policy and process 
reengineering, increased support to the field, and increased covert 
testing.
    TSA uses its Special Operations Program to provide ongoing and 
immediate feedback to screeners, their supervisors, and TSA leadership 
on screener performance. The Special Operations Program's overall 
objectives are to test the security systems at the airports and to 
introduce difficult, real-life threat items to the screener workforce. 
Once covert testing is completed at a checkpoint, Special Operations 
teams conduct post-test reviews with available screeners to reenact the 
test and provide training.
    As part of the Short-Term Screening Improvement Plan, Special 
Operations teams have tested 68 airports between October 1, 2003, and 
February 1, 2004. Testing between October 1 and December 31, 2003, 
focused on increasing the number of airports tested for the first time, 
to establish a performance baseline. In January 2004, Special 
Operations teams began retesting airports to determine whether 
performance improved once the screening performance initiatives had 
been deployed. In January 2004, Special Operations teams retested 15 
airports, with 11 airports improving overall checkpoint performance an 
average of 21 percent.
    These overall covert checkpoint tests are also showing improvement 
in individual screener performance. Between September 2002 and February 
1, 2004, TSA conducted 1,227 checkpoint tests at 171 airports. 
Checkpoint test results have improved nearly 14 percent. During January 
2004 testing, the pass rate for two of the checkpoint tests was nearly 
90 percent or better.
    To maintain high levels of screener proficiency, TSA's screener 
improvement plan places a strong emphasis on recurrent screener 
training and supervisory training. Over 700 inert Modular Bomb Set (MBS 
II) and weapons training kits have been deployed to every airport in 
the country as an integral part of TSA's recurrent training for 
screeners, enabling them to see and touch the components of improvised 
explosive devices and weapons. TSA is also developing protocols to help 
FSDs conduct their own airport level screening testing. To blend 
nationally and locally developed training, TSA has established the 
``Excellence in Screener Performance'' video training series. The first 
two videos, ``Hand Held Metal Detector/Pat Down Search'' and ``X-ray 
Operator'' have been delivered to the field. Training videos on 
physical bag search and screening persons with disabilities are now in 
production. The third part of our recurrent training program is a 
series of web-based and computer-based screener training. Eight 
training products are in production, with the first due to the field in 
March 2004. From the standpoint of training delivery, our most 
significant accomplishment is the launching of our learning management 
system, the TSA Online Learning Center (OLC). The OLC makes available 
over 350 general training and development courses in addition to TSA 
specific training.
    Recognizing the need to provide our front line supervisors with the 
tools they need to manage effectively the screener workforce, we have 
sent more than 2,500 supervisors to introductory leadership training at 
the Graduate School, United States Department of Agriculture. We will 
continue to offer 10 sessions each week until all screening supervisors 
have received this training. We are currently adding a customized 
module to this training that includes airport-specific examples of 
leadership issues they might encounter.
    TSA also has begun training some of its senior screeners to 
recognize patterns of unusual or suspicious behavior. This additional 
skill set will further enhance aviation security.
    TSA promptly investigates significant security incidents as they 
are disclosed. Using teams of security specialists and investigators 
who recreate the security breach, vulnerabilities in the system are 
revealed, and TSA can immediately take corrective action. TSA has also 
forged a working relationship with other Federal law enforcement 
agencies and task forces when incidents require coordinated 
investigative activities.
    TSA's 158 FSDs form the backbone of security management and 
leadership at the Nation's airports. Our budget requests $284 million 
in fiscal year 2005 to support our FSDs and other airport security 
management and staff positions nationwide. In order to streamline the 
administrative operations at airports, larger airports have been 
designated as hubs, providing security direction, administrative 
support, and staff resources to smaller airports.
    In fiscal year 2005, TSA will continue the deployment of electronic 
explosive detection equipment at the Nation's airports and look for 
efficiencies to improve passenger and baggage screening. The total 
fiscal year 2005 discretionary funding request for explosives detection 
systems (EDS) and explosives trace detection (ETD) equipment purchase 
and installation is $150 million, with $250 million through the 
Aviation Security Capital Fund, for a total resource level of $400 
million. Vision 100--Century of Aviation Reauthorization Act (Vision 
100), Public Law 108-176, established the Aviation Security Capital 
Fund. The first $250 million of passenger fees authorized by the 
Aviation and Transportation Security Act, Public Law 107-71, will be 
deposited into this fund. Fund resources can be spent on projects to 
replace baggage conveyer systems related to aviation security, to 
reconfigure terminal baggage areas as needed to install EDS, to deploy 
EDS in airport terminals, and for other airport security capital 
improvement projects.
    TSA's EDS/ETD equipment purchase and installation program is the 
key to compliance with statutory requirements for full electronic 
screening of checked baggage. TSA purchases and installs this equipment 
through a variety of mechanisms, including congressionally authorized 
Letters of Intent (LOIs), which provide a partial reimbursement to 
airports for facility modifications required to install in-line EDS 
solutions. TSA has issued eight airport LOIs, covering 9 airports. TSA 
is also using resources to purchase and install EDS and ETD machines at 
airports outside the LOI process.
    The fiscal year 2005 budget request includes proposed language to 
maintain policies which guide the current program cost share and 
distribution of funding for LOIs, keeping the cost share at 75 percent 
for large airports and 90 percent for all other airports and overriding 
allocation formulas. TSA believes the current cost share is fair and 
equitable and that revised allocation formulas could potentially 
disrupt current LOI commitments and be detrimental to long-term 
security effectiveness.
    TSA is also requesting approximately $86 million to provide 
technological support at passenger checkpoints. This funding would 
support reconfiguration at a portion of the 34 remaining airports that 
would benefit from reconfiguration and provide $30 million for purchase 
of advanced checkpoint equipment. This funding also supports TSA's 
continuing implementation of the Threat Image Projection (TIP) program, 
an essential element of TSA's screening improvement program. TIP 
superimposes threat images on X-ray screens during actual operations 
and records whether or not screeners identify the threat object. 
Through a tremendous example of private-public partnership, a 
significantly enhanced 2,400-image Threat Image Projection (TIP) 
library was uploaded to every TIP Ready X-Ray (TRX) in the country 
during the height of winter holiday travel season without interrupting 
service. This new TIP image library replaces the much smaller 200-image 
library developed by the Federal Aviation Administration (FAA) with 
images that will continuously provide screeners exposure to the most 
current threats, including improvised explosive devices (IEDs). Now 100 
percent of checkpoint security lanes are equipped with TRXs with the 
2,400-image TIP library, providing real-time data on screener 
performance. Data is available quickly at the local level and reported 
to headquarters for aggregated analysis and monitoring. Through this 
combination of increased deployment of TRX machines and activation of 
the expanded TIP image library, we are able to collect and analyze 
significant amounts of performance data that has not been previously 
available. TIP is an excellent tool for evaluating the skills of each 
individual screener so that we can focus directly on areas needing 
skill improvement. By regularly exposing screeners to a variety of 
threat object images, TIP provides continuous on-the-job training and 
immediate feedback and remediation.
    TSA uses a wide range of interconnected information technology 
solutions to maximize its security efforts. In the past, collecting TIP 
data for analysis and reporting was a cumbersome task. Network 
connectivity to checkpoints will be the ultimate answer to efficient 
collection, analysis, and reporting of TIP data. This effort will 
provide the capability for continuous training, including real-time 
training on current threats; greater capacity for monitoring TIP 
performance; connectivity with checked baggage areas; and a foundation 
for planned implementations of additional administrative, surveillance, 
CAPPS II, and other security enhancements. TSA is requesting 
approximately $294 million in fiscal year 2005 to support its 
Information Technology Core, which will provide the telecommunications 
infrastructure support and services necessary for TSA to fully utilize 
TIP capabilities.
    The President's fiscal year 2005 budget includes a request for $49 
million for TSA applied Research and development (R&D) and $50 million 
for Next Generation EDS. Working closely with the DHS Science and 
Technology (S&T) Directorate, we have established an ambitious program 
to develop and deploy new security technologies and use technology to 
enhance human performance. Technology can help us make our screening 
operations more effective, more efficient, less time-consuming, and 
less costly. TSA operates a state-of-the-art research laboratory, the 
Transportation Security Laboratory (TSL), in Atlantic City, New Jersey. 
Several screening and other security technologies are under development 
at the TSL, including an explosives detection portal to determine if 
explosives are being carried on a passenger's person, document scanners 
to detect trace amounts of explosive materials on items such as 
boarding passes, and scanners for better screening of casts and 
prosthetic devices. We are also developing EDS for carry-on baggage and 
improving explosives detection technology for screening liquids.
    We are continuing work on the Next Generation of EDS for checked 
baggage screening to increase throughput capacity, improve detection 
capabilities, and lower false positive alarm rates. Simultaneously, we 
are collaborating with new and existing vendors to develop technologies 
that will enable us to detect explosives in smaller amounts than are 
currently established in our certification standard and that will 
occupy a smaller footprint at airports. We have piloted an on-screen 
alarm resolution protocol and will soon start the training that will 
enable our screeners to more closely examine an image without opening a 
traveler's luggage, resulting in clearing more false positive alarm 
images without a drop in detection proficiency. Within the Next 
Generation program, we are also looking at new applications of X-ray, 
electro-magnetic, and nuclear technologies to probe sealed containers 
for materials that pose a threat to aviation security.
    We are planning fiscal year 2005 R&D efforts to combine expanded 
technological capabilities in conjunction with sensor fusion 
development. Unfortunately, the restricted space at airports and other 
transportation facilities will not support continuing additions to the 
footprints of our screening areas. Therefore, we must design systems 
that will address multiple threats within very confined spaces. The 
challenge of moving new technology from the laboratory to the real 
world is significant.
    TSA's R&D program also focuses on developing standards for 
biometric systems through ongoing pilot programs and laboratory 
efforts. TSA's efforts in this arena are being coordinated with the US 
VISIT program office. Research in biometrics technologies continues to 
be applicable and useful in supporting several TSA initiatives such as 
the Transportation Workers Identification Credential (TWIC) program, 
the Registered Traveler program, infrastructure access control 
programs, and employee screening.
    TSA's Federal Flight Deck Officer (FFDO) program has now been in 
place for more than 1 year, adding another important layer to our rings 
of aviation security. The fiscal year 2005 budget proposes $25 million 
to support and continue expansion of FFDO training for pilots at the 
Federal Law Enforcement Training Center in Artesia, New Mexico. TSA 
developed and implemented this program in close cooperation with 
organizations representing airline pilots, such as the Air Line Pilots 
Association and the Coalition of Airline Pilots Associations. Pilots 
provided valuable insights to TSA during the formation of the FFDO 
program and many of their suggestions are reflected today in the 
initial qualifications, training, and standard operating procedures for 
FFDOs; and training location and support facilities. In January 2004, 
TSA began doubling the number of FFDO classes, and we plan to provide 
initial training and qualification for thousands of FFDOs by the end of 
this fiscal year. TSA has streamlined the process for pilots to become 
FFDOs. The selection process consists of an on-line application, an 
hour-long computerized assessment, an interview, and a background 
check. FFDO assessments are administered at over 200 locations 
throughout the United States, and more are being added. Classes are 
available continuously except during certain holidays.
    Pilots also must attend re-qualification sessions twice a year to 
ensure that they maintain a high level of proficiency and familiarity 
with program requirements. Ten private, state, and local government 
sites are available for self-scheduling of re-qualification training. 
Sites were selected in geographically diverse locations that would be 
convenient to pilots. As the numbers of FFDOs grows, TSA will expand 
the number of recurrent training sites to meet their needs.
    With the enactment of Vision 100, the FFDO program has been 
expanded to include cargo pilots and other flight deck crewmembers. TSA 
is examining modifications to the current FFDO curriculum and operating 
procedures to reflect the different environment in which cargo pilots 
operate. TSA initiated the on-line application process for cargo and 
other flight deck crewmembers in February 2004 and expects to conduct 
its first cargo FFDO prototype program this April.
    A total of $60 million is requested for fiscal year 2005 for the 
second generation Computer Assisted Passenger Pre-Screening System 
(CAPPS II). CAPPS II is a limited, automated prescreening system 
authorized by Congress that will become a critical element in TSA's 
system-of-systems approach to security. Developed with the utmost 
concern for individual privacy rights, CAPPS II will modernize the 
prescreening system currently implemented by the airlines. It will seek 
to authenticate travelers' identities and perform risk assessments to 
detect individuals who may pose a terrorist-related threat or who have 
outstanding Federal or state warrants for crimes of violence.
    Under CAPPS II, airlines will ask passengers for a slightly 
expanded amount of reservation information, including full name, date 
of birth, home address, and home telephone number. With this expanded 
information, the system will quickly verify the identity of the 
passenger using commercially available data and conduct a risk 
assessment leveraging current intelligence information. The overall 
process will result in a recommended screening level, categorized as no 
risk, unknown or elevated risk, or high risk. The commercially 
available data will not be viewed by government employees, and 
intelligence information will remain behind the government firewall. 
The entire prescreening process is expected to take as little as five 
seconds to complete.
    TSA is carefully reviewing the recent report on CAPPS II issued by 
the General Accounting Office (GAO) and working diligently to resolve 
all concerns. GAO generally concluded that in most areas that Congress 
asked them to review, our work on CAPPS II is not yet complete. DHS has 
generally concurred in GAO's findings, which in our view validates the 
fact that CAPPS II is a program still under development. As we resolve 
issues of access to data needed for testing CAPPS II, and the testing 
phase moves forward and results in a more mature system, we are 
confident of our ability to satisfy all of the questions that Congress 
posed.
    Vision 100 transferred the Alien Pilot Security Assessment Program 
from the Department of Justice to the Department of Homeland Security. 
The law requires that DHS conduct background checks on aliens seeking 
flight training at U.S. flight schools, stipulating that checks must be 
completed within 30 days. TSA is currently working with the Federal 
Bureau of Investigation to implement this program, and we estimate that 
as many as 70,000 background checks will be required each year. TSA is 
requesting funding for fiscal year 2005 at a level of $4.6 million, 
which we estimate could be recovered in fees.

Upgrading Access and Inspection Security
    The President's fiscal year 2005 budget requests $91.6 million in 
overall funding to strengthen security credential programs, with an 
estimated recovery of costs of $71.6 million in credential fees. This 
requested funding would support activities to develop the Registered 
Traveler program at a level of $15 million. TSA is analyzing whether a 
Registered Traveler program can effectively reduce the ``hassle 
factor'' in passenger and baggage screening without compromising 
aviation security. TSA envisions that a fully implemented Registered 
Traveler program would be voluntary in nature and could offer qualified 
participants an expedited travel experience. A comprehensive risk 
assessment would be conducted on Registered Traveler program applicants 
to determine their eligibility. TSA is working on a proposed strategy 
for implementing small-scale Registered Traveler pilot programs in 
fiscal year 2004, and requests $15 million to expand contract support 
and technology resources for the Registered Traveler program in fiscal 
year 2005. TSA will analyze the results of the pilot programs to 
determine the program's effects on security and customer service. TSA 
is also exploring technology solutions associated with non-intrusive 
positive identity verification at the passenger security checkpoint, 
such as biometrics, that would further expedite security clearance for 
registered travelers.
    In addition to the Registered Traveler program, requested funding 
for credential programs would support the Alien Pilot Security 
Assessment Program discussed above, the TWIC at a level of $50 million, 
the HAZMAT Driver License Endorsement Program at a level of $17 
million, and Credentialing Enterprise Start-up at $5 million. Because 
all Credentialing Enterprise programs involve the use of specific law 
enforcement and antiterrorist databases, TSA is developing a common 
platform of technology and contractor support to conduct appropriate 
background checks. Although each credentialing program may involve 
special requirements and adjudication, this common platform will 
realize economies of scale through shared resources such as systems 
equipment, database connectivity, contractor support space, and other 
start-up costs that will not be recovered through fees.
    We are developing a TWIC prototype and supporting measures to 
mitigate the threat of insider attacks to transportation 
infrastructure. During prototype, this credential will test the 
feasibility of bringing uniformity and consistency to the process of 
granting access to transportation workers entrusted to work in the most 
sensitive and secure areas of our national transportation system. The 
President's fiscal year 2005 request includes spending authority to 
begin implementing the TWIC concept within parameters that will be 
defined by the Administration after completion of the prototype 
assessment.
    TSA is requesting $120 million to support its contingent of 
regulatory compliance inspectors in fiscal year 2005. These inspectors 
ensure that airports, air carriers, and other regulated entities within 
the airport property are in compliance with all Federal security 
regulations. An additional $90 million will support reimbursements to 
state and local agencies providing law enforcement support for airport 
security checkpoints. An estimated 300 reimbursable agreements with 
state and local law enforcement agencies are necessary to provide the 
law enforcement support at levels deemed appropriate by TSA FSDs.
    The President's budget requests $17 million in fiscal year 2005 to 
support 354 K-9 units under the National Explosives Detection Canine 
Team program. TSA-certified canine teams perform a critical role in 
aviation security, performing multiple tasks throughout the entire 
airport environment, such as screening checked baggage, searching 
unattended bags, searching vehicles approaching terminals during 
increased threat levels, screening cargo on a limited basis, screening 
mail at certain pilot project locations, and responding to bomb 
threats. TSA helps local law enforcement agencies by procuring and 
training selected canines, training selected law enforcement officers, 
and by partially reimbursing agencies for costs.

Improving Air Cargo Security
    Each year, U.S. air carriers transport approximately 12.5 million 
tons of cargo. To deny terrorists the opportunity to exploit our 
thriving air cargo system, TSA has developed an Air Cargo Strategic 
Plan that calls for the focused deployment of tools, resources, and 
infrastructure that are available today, as well as creating a 
foundation for future improvements as technology and resources become 
available. For fiscal year 2005, a total of $85 million is requested 
for TSA's aviation cargo screening program.
    TSA has prohibited all ``unknown shipper'' cargo from flying aboard 
passenger carriers since September 11, 2001, thereby limiting cargo to 
packages from identifiable shippers under the TSA Known Shipper 
program. TSA is rolling out an automated Known Shipper database that 
will allow air carriers and indirect air carriers to verify immediately 
the status of a specific shipper.
    Under the Air Cargo Strategic Plan, TSA will establish a Cargo Pre-
Screening system that identifies which cargo should be considered 
``high-risk,'' and work with industry and other Federal agencies to 
ensure that 100 percent of high-risk cargo is inspected. We are also 
partnering with stakeholders to implement enhanced background checks on 
persons with access to cargo and new procedures for securing aircraft 
while they are on the ground. A Notice of Proposed Rulemaking is in 
development for enhanced screening of cargo on passenger aircraft, 
along with stronger security measures for Indirect Air Carriers and the 
establishment of a mandatory security program for all-cargo carriers. 
TSA and U.S. Customs and Border Protection are working together on air 
cargo initiatives through four established work groups, making plans 
for future collaboration, leveraging of existing programs, and sharing 
resources and technologies.
    Within the $85 million requested for air cargo screening in fiscal 
year 2005, TSA is requesting $55 million for an aggressive R&D program 
to investigate technologies that will improve our ability to screen 
physically high-risk air cargo. TSA will look at new technologies for 
screening large cargo, including pallets and containerized cargo. In 
January 2004, TSA issued a market survey requesting submissions and 
participation of vendors of commercial off-the-shelf explosives 
detection technology to support cargo inspection. A number of vendors 
have been tentatively selected for laboratory evaluation of their 
products against the current EDS certification criteria. We have issued 
a request for proposals (RFP) for potential inventors of explosives 
detection technology for the screening of containerized cargo and U.S. 
Mail to be transported on passenger aircraft. This RFP will lead to the 
award of R&D grants to assist in the development of promising 
technologies. At TSL, we are conducting a cargo characterization study 
to determine the feasibility of using currently deployed explosives 
detection technology (EDS and ETD) to screen cargo while new systems 
are under development.

Enhancing Surface Transportation Security Through Intelligence, 
        Stakeholder Outreach, and Integration
    For modes of transportation other than aviation, TSA is developing 
policies and programs to ensure proper coordination, integration, and 
information exchange among our Federal, state, and local partners in 
non-aviation modes of transportation and to unite disparate 
transportation systems under a single security strategy. Our goal in 
this regard is to ensure that efforts to provide security in non-
aviation modes are consistent, coordinated, and effective. As part of 
this effort, DHS will issue a National Transportation System Security 
Plan as part of its overall Critical Infrastructure Protection Plan, 
which is currently under development. We are providing Departmental 
leadership and guidance in this area, particularly with respect to 
modal security plans, to ensure that they are integrated into an 
effective concept of operations for management of the transportation 
sector's security. TSA's fiscal year 2005 request includes $24 million 
for personnel and operational resources dedicated to security in non-
aviation transportation modes and $17 million to support TSA's around-
the-clock TSCC, the same funding level as this year. The complex, 
interdependent land transportation environment is especially 
challenging. TSA will continue to assess the risk of terrorist attacks 
on non-aviation transportation modes, assess the need for standards and 
procedures to address those risks, and ensure compliance with 
established regulations and policies.
    This completes our highlights of key programs and initiatives for 
fiscal year 2005.
    TSA has achieved an unqualified audit opinion for fiscal year 2003, 
its third consecutive clean audit. In fiscal year 2004, TSA is striving 
to maintain its clean audit record and correct any internal control 
weaknesses noted in audit reports. With passenger and baggage screening 
rollouts complete and the transition to DHS behind us, TSA is well 
poised to continue implementing more efficient and effective financial 
management processes across the organization.
    In closing, I want to convey how proud I am of TSA's security 
screening workforce. They have carried out their responsibilities with 
diligence and professionalism in a dynamic environment. The reality of 
TSA's mission is that we must constantly be prepared to provide the 
best level of security we can within the resources we have been 
provided. The increased variety and sophistication of weapons and 
communication tools available to modern terrorists presents a 
significant challenge. We have seen all too vividly that successful 
terrorist attacks can disrupt the United States and global economies. 
With security strengthened and economic recovery underway, it is 
imperative that TSA accommodate expected growth in air travel in the 
years ahead. With preventive measures in place, the risk of terrorism 
is reduced, not eliminated. TSA will continue to identify and 
reevaluate threats and vulnerabilities and make decisions that both 
facilitate transportation and improve its security.
    I will be pleased to answer your questions.

    Senator Cochran. Before proceeding to questions, I am happy 
to yield to other Senators for any other opening statements 
they may have.
    Senator Byrd. Senator Murray.

                  STATEMENT OF SENATOR ROBERT C. BYRD

    Senator Byrd. Thank you very much, Mr. Chairman. I join in 
welcoming our two witnesses today. Two weeks ago, when 
Undersecretary Hutchinson testified before this Subcommittee, I 
stressed my concern that too many of the Department's efforts 
to secure the homeland rely on paper exercises, such as studies 
and certifications, rather than on the layered defense that the 
President and the Secretary often describe in their homeland 
security speeches.
    Both the Coast Guard and the Transportation Security 
Administration are on the front line of homeland defense, and I 
commend both of your organizations for your dedication to your 
missions. Regrettably, the President does not seek sufficient 
resources for either the Coast Guard or the Transportation 
Security Administration.
    According to your own testimony, Admiral Collins, Coast 
Guard assets, the ships, the planes, the helicopters that you 
rely on to protect Americans are failing at an alarming rate. 
In fact, you indicate that the Coast Guard assets are in a 
``declining readiness spiral'', and yet, according to the 
President's budget, the Coast Guard Deepwater program for 
upgrading and replacing those assets will take 22 years to 
complete. Twenty-two years. This is 2 years slower than the 
capital improvement program envisioned when Deepwater was 
conceived prior to the tragic events of September 11.
    I am also concerned that while you have increased mission 
hours for homeland security by 113 percent since 9/11, an 
increase that I fully support, your non-homeland security 
efforts, such as search and rescue, and fisheries enforcement 
have fallen by 26 percent.
    Admiral Stone, when Undersecretary Hutchinson testified 
before this Subcommittee, I said to him that I was concerned 
with the level of funding dedicated to non-aviation modes of 
transportation, such as rail security, bus security, port 
security. I questioned why the President was seeking no funding 
for securing our mass transit systems and was proposing a 62 
percent cut in port security grants.
    I stressed my objections to the Department's plan to shift 
responsibility for these programs out of TSA. I questioned why 
it was that the President's budget for the Transportation 
Security Administration was 97.3 percent for aviation security 
and 2.7 percent for security for other modes of transportation, 
such as rail security.
    I questioned the wisdom of putting too much of a focus on 
responding to the last terrorist attack and not preparing for a 
different kind of attack in the future, a future that may not 
be far away.
    Since that hearing, terrorists have struck again. This 
time, the terrorists killed over 200 innocent passengers on a 
commuter train in Madrid, Spain. Following the attack in 
Madrid, according to The Washington Post, the Department 
released a law enforcement advisory warning about the terrorist 
threat to our rail system here in America. It is saddening that 
it took another terrorist attack for the Administration to wake 
up to this threat.
    In January of 2003, I offered an amendment to provide $300 
million to State and local governments for securing mass 
transit systems. The White House opposed the amendment, and it 
was defeated. In April of 2003, I offered an amendment to add 
$50 million for this purpose. Once again, it was defeated.
    Being a persistent kind of fellow who comes from the mud 
hills and the clay hills of southern West Virginia, I offered 
another amendment for $57 million last July. Once again, the 
White House called the amendment wasteful spending, and the 
amendment was defeated.
    Over 14 million people travel by rail every day in this 
country, many more than travel by air. This is a glaring 
vulnerability. While I am not suggesting that we should 
establish a rail passenger screening system like the system we 
have at our airports, we clearly can do more to help our rail 
systems install chemical sensors, increase law enforcement 
presence, and improve public awareness.
    Frankly, Admiral Stone, Secretary Ridge's statement 
yesterday that we will use existing resources to do more long-
term research on technological solutions, share information, 
and distribute information on best practices just does not make 
the grade with me.
    The President is proposing to cut law enforcement grant 
programs by $732 million, including elimination of the COP's 
hiring program, and is also proposing to cut first responder 
funding by $733 million. He is proposing to cut Amtrak by $318 
million. Where, where, oh, where are State and local 
governments and Amtrak supposed to get the money to actually 
increase law enforcement at our train stations and on our 
trains?
    By any definition, the threat to U.S. citizens using our 
rail systems is imminent. Imminent. Not 10 years away. Not 25 
years away, but now. We need a clear plan that takes immediate 
steps to make our people safer. The approach announced by 
Secretary Ridge yesterday might make rail passengers safer in 
2024, just about the time that the Coast Guard finishes buying 
their ships and planes. Our citizens have a right to expect 
their government to respond when they are threatened. We should 
do more. We should do more. We should do more, and we should do 
it now. Thank you.
    Senator Cochran. Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you, Mr. Chairman.
    Admiral Collins and Admiral Stone, I want to join my 
colleagues in welcoming you. Today, you have a tremendous task 
before you, and I really want to thank you for your service. 
Both of your organizations have done a tremendous job, with 
limited resources, and what I believe is a lack of support from 
the White House in terms of securing our Nation's ports and 
cargo terminals. You should both be applauded for your efforts 
in addressing the security issues facing our country today.
    However, I remain concerned that the President's budget 
request does not go far enough to provide you with the funding 
and the tools necessary to get the job done. I often question 
whether we are giving you the resources to help you work 
smarter, or simply asking you to work harder. We need a 
coordinated plan for a nationwide port security regime, but it 
seems that despite your best efforts, securing our Nation's 
ports and cargo terminals is a back burner issue, something 
that, according to Secretary Ridge, the private sector should 
figure out.
    I am really concerned that the President's budget request, 
which would place 90 percent of the Administration's so-called 
Port Security Program under the Coast Guard, will take even 
more attention away from the Coast Guard's other missions.
    Admiral Collins, I am interested to hear how the Deepwater 
and the response boat programs, the programs that provide our 
men and women of the Coast Guard with the platforms they need, 
would progress within the President's budget numbers. And I am 
particularly interested in the status of the response boat 
small contract, which has already been awarded, as well as the 
status of the response boat medium contract, which is supposed 
to be awarded this year.
    We need to make sure that the Coast Guard has the ability 
to modernize its vessel and aircraft fleet, and I look forward 
to working with Admiral Collins and the rest of my colleagues 
to ensure that we fund these priorities responsibly.
    Admiral Stone, I'm interested in your perspective on the 
relationship between TSA, Customs, and the Coast Guard, more 
specifically, how this budget would help provide you with the 
tools to achieve a truly coordinated approach to protect our 
port facilities.
    I am concerned with reports about the lack of coordination 
within the Department of Homeland Security. It seems that TSA 
and Customs are merely coexisting within the cargo security 
area. Last week, I participated in an event celebrating the 
arrival of the first operations safe commerce container into 
the United States, and that is a TSA program. Unfortunately, 
instead of actively participating in this program, designed to 
test technologies, and prove best practices for private sector 
supply chain security, Customs is moving forward with RFPs for 
container security devices, without regard for the work already 
in progress in the TSA.
    So as I said earlier, we need to help you work smarter, not 
just harder. We need a coordinated port security regime to 
ensure the safe, efficient transport of cargo into the United 
States, as well as protecting people who live and work near our 
ports. It has to be a priority for this government.
    So Mr. Chairman, I will have more specific questions for 
our witnesses during the question and answer period. I thank 
both of you for being here today.
    Senator Reid. Mr. Chairman.
    Senator Cochran. The Senator from Nevada, Mr. Reid.
    Senator Reid. I am not a member of the Subcommittee, but I 
am, of course--I have a very short statement, and I would ask 
permission of the Chair to be allowed to----
    Senator Cochran. You may proceed, Senator.

                    STATEMENT OF SENATOR HARRY REID

    Senator Reid. Thank you very much, Mr. Chairman. Mr. 
Chairman, and especially members of the Subcommittee, Admiral, 
I have appreciated very much working with you. As you are 
aware, McCarran International Airport is the second, only to 
the Los Angeles International Airport, in the number of 
passengers that come through its security checkpoints. Only LA 
International has more people coming. You can go to Atlanta, 
and there are more people in the airport, but they are not 
leaving the airport, while in Las Vegas, they get out and then 
come back.
    This arises, of course, as I have indicated, because 
McCarran is a destination airport, unlike other large airports 
that serve as hubs, where passengers simply connect to another 
flight. I have been concerned, as you know, about the delays in 
TSA's screening of passengers at McCarran, which may cause harm 
to the economy in the Las Vegas region. But also we are 
concerned for what it does to not only Las Vegas, but points 
north, west, south, and east of there.
    This frustrates passengers, makes Las Vegas, by some, a 
less attractive choice for discretionary travel. These delays 
arise because of the lack of an adequate number of screening 
lanes at McCarran, as well as TSA security rules and procedures 
that were not optimized for McCarran Airport.
    To address these delays, there are more screening lanes 
being built into McCarran, and I think we can count on TSA to 
adequately staff them. In addition, and I appreciate this very 
much, TSA instituted a pilot program at McCarran to optimize 
screening rules and regulations during periods of heavy 
passenger flow, while maintaining the highest levels of 
passenger security and safety.
    It is my understanding that delays at McCarran have been 
reduced to 30 minutes, on average, in recent weeks, and that is 
good, because it was up to 3 hours on some occasions. Credit 
does go to TSA and your able Federal security director in Las 
Vegas, Jim Blair, who is always available to answer questions 
and be most helpful in many regards.
    So I want to thank you personally for your efforts. And I 
would like to ask how you think this pilot program is working 
from a TSA perspective and whether you have plans to expand its 
application to other airports. You do not need to answer that 
now. You can do that in writing to me, if you would, please.

                     AVIATION SECURITY CAPITAL FUND

    There is another issue that I would like to touch on. The 
FAA bill passed by Congress last year mandates that 90 percent 
of the cost of in-line screening systems at large airports were 
to be paid by the Federal Government through the Aviation 
Security Capital Fund. The language was definitely retroactive 
to large airports that had already received letters of intent 
for in-line screening systems. This was an increase from 75 
percent to 90 percent, and for McCarran, represents almost $19 
million. I note in TSA's fiscal year 2005 budget request for a 
Federal share of only 75 percent of these projects. This 
clearly was not the intent of Congress.
    So, again, I would ask, with the permission of the 
Chairman, that you respond to this in writing to all the 
committee at your earliest possible date. Is the Federal share 
cost 75 percent or 90 percent? By law, it is 90 percent. We 
want to make sure that you live by that.
    I would also ask, Chairman Cochran, if you would allow me 
to submit a question in writing and ask the panelists to 
respond to this at their earliest possible date.
    Senator Cochran. The Senator has that right, and we will be 
glad to make that a part of the hearing record.
    Senator Reid. Thank you very much.
    Senator Cochran. We would request the witnesses to respond 
in a timely fashion.

  IMPACT OF DETERIORATING SHIPS, COAST GUARD CUTTERS, HELICOPTERS AND 
     OTHER ASSETS ON COAST GUARD'S ABILITY TO CARRYOUT ITS MISSIONS

    Senator Cochran. Admiral Collins, I notice that you start 
off in your statement talking about the concerns you have about 
the deterioration of your ships, Coast Guard cutters, 
helicopters, and other assets that you need to carry out your 
missions and fulfill your responsibilities as part of the 
Department of Homeland Security, and also contributing to our 
Nation's defense. I know you have forces that have been 
deployed to the Persian Gulf region, and you also recently were 
called upon to deploy assets to Haiti, to the area, and to the 
approaches to South Florida, because of the activities in 
Haiti.
    Could you tell us to what extent this puts strain on the 
overall responsibility you have for other activities in 
maritime homeland security and marine safety? Were you able to 
maintain your vigilance here in the homeland area to carry out 
these missions as well?
    Admiral Collins. Mr. Chairman, I will be glad to answer 
that. I know that is clearly a concern of Senator Murray's as 
well, based on her opening comments and previous hearings, is 
how we balance across our missions when we have these surge 
operations.
    The good story is, we have the capacity to serve in the 
national interests for high-risk events on a temporary basis 
and surge back to normal lay-down of resources. I think that is 
a strength that we as a Service have because of our multi-
mission character and our flexibility. So that is a good-news 
story.
    The question is: How do we continue to service all those 
other missions as we surge to an orange alert condition, or a 
Haiti, and so forth? I think there are a couple of answers to 
that. One is we seek growth of our asset base where warranted. 
And as I mentioned in my opening statement, we have realized a 
51 percent increase in our operating expense budget, and we 
have added additional capacity to our force structure.
    If you look a the total number of hours available for 
boats, cutters, and so forth, in 2003, they increased over 39 
percent; and through 2005, there will be a net 68 percent 
increase in the total number of boats, aircraft, and ship hours 
available. And that is because additional resources have been 
added. So that is the good story.
    We still have OPTEMPO challenges and shortfalls and gaps to 
meet everything, to be 100 percent everywhere at one time, and 
we are not there yet.
    But I would have to note that our performance goals 
continue to be met across our missions. Let me just give you a 
couple of data points. Despite some pressures in the past year, 
orange alert and other conditions, we still maintain our SAR 
readiness posture, and met all our search and rescue standards. 
We saved 87.7 percent of mariners in distress, and our 
performance goal is 85 percent.
    We achieved a 97.1 percent compliance rate with fisheries 
enforcement. Our goal is 97 percent. We have reduced the 5 year 
average of collisions and groundings to a little over 1,500. 
Our goal is a little over 2,100, and so forth. The point I am 
making is that we have ensured we are meeting the highest risk 
and attending to our performance goals, even despite these 
pressures.
    Senator Cochran. I want to commend you for the service you 
are providing, and I think the evidence that you gave us in 
your statement about the seizure of cocaine on the West Coast 
is an example of your capability to continue to function at a 
high level of readiness and competence to help protect us from 
the ravages of the drug trade.

 INTERDICTION AND SEIZURE OF ASSETS OF DRUG SMUGGLERS ON THE HIGH SEAS 
            OFF THE COAST OF SOUTH AMERICA AND THE CARIBBEAN

    To what extent is the Coast Guard deploying assets in the 
region where the cocaine coming from? Are you able to interdict 
and seize assets of the drug smugglers on the high seas off the 
coast of South America or in the Caribbean?
    Admiral Collins. That is where most of our assets are 
provided to, or are deployed to Joint Interagency Task Force 
South, out of Key West, which is a DOD joint command capably 
lead by a Coast Guard flag officer, I might add. But a joint 
command that targets and deploys a multiplicity of assets, 
Coast Guard and others, puts metal on target, if you will, 
based on Intel.
    Most of the assets, all the CD assets almost exclusively, 
that we field, are allocated to Joint Interagency Task Force 
South for further deployment. And when we actually make the 
interdiction, then we take Operation Control back and do the 
boarding, do the arrest, and the seizure, and so forth. But we 
are primarily down in the deep Caribbean. That is where the 
greatest success is, off the West Coast of Colombia, off the 
north coast of Colombia, as far west and south as the Galupa 
Coast, and all the way up to the Gulf of Tijuanapeck, coming 
into the Mexico-Guatemalan border. And that is where we have 
had a lot of very, very good success, based on ever-increasing 
use of Intel, Intel-queued actions. And that is why the Midget 
was successful with 27,000 pounds of cocaine in three seizures 
coming back this week.
    So I think the interagency and the lay-down of forces has 
been getting better and better as we have learned more about 
this risk, about this threat.
    Senator Cochran. But it seems strong evidence of the 
success of interagency cooperation and another reason why the 
Department of Homeland Security was a step in the right 
direction to help protect the security and safety of the 
citizens of the United States from drugs, as well as from other 
acts of terror.

    SCHEDULE OF NEEDS FOR DEEPWATER AND REFURBISHING OF HELICOPTERS

    What can you tell us about the schedule that you would like 
to see us fund, as far as your Deepwater modernization effort 
and the refurbishing of helicopters that you say are now 
dangerous to operate and have caused safety problems out in the 
fleet?
    Admiral Collins. Clearly, the 2005 budget gives us a 
healthy funding profile, consistent with the plus-up that this 
subcommittee, and others in Congress provided last year, in 
2004. So we have a $678 million level, and that continues to 
pursue the larger components of the Deepwater. So I think in 
2005, the President's request will keep us on that momentum. It 
is about a 22-year time frame. My biggest concern is how we 
deal in the out-years, the total length of this project, as I 
am faced with deteriorating readiness, and that is the issue, 
Mr. Chairman.
    We are running our assets hard in the national interest. 
They are failing. They are failing at a sharper rate than we 
first projected when the project was shaped and designed. And 
so over the next several years, I am forced to make a tradeoff 
between fixing the existing system versus putting that same 
money into the replacement of those systems, and to keep 
current readiness, today's readiness live and well. I have no 
choice. I have to invest in those legacy systems to keep them 
going; and as we push out the modernization, it complicates 
that equation.
    So that is that downward spiral phenomena; and as you 
mentioned, it is particularly problematic, for the engine 
system and the HH-65 are key assets for us. And we have had to 
aggressively make decisions about re-engineering that platform 
and invest in the legacy systems to keep that readiness where 
it should be.
    Senator Cochran. Well, I am confident this committee is 
going to respond and provide the funds you need to move 
aggressively to restore the capability of these assets and 
build new systems for the future. We are just going to have to 
do it. I do not think we have any choice.

                 EFFECTIVENESS OF THE SCREENING PROCESS

    Admiral Stone, I know we are all concerned about the 
effectiveness of the screening processes we have in trying to 
help ensure the protection of the traveling public here in our 
homeland. The airports and airlines have received the greatest 
amount of attention. To what extent are you confident that the 
procedures you have in place and the systems that you have 
developed and are using now to protect the flying public, those 
using our airlines and airports, are succeeding?
    Admiral Stone. Senator, I am very confident that the layers 
of security that we have in place today are continuously 
improving, whether it is the growing size of our flight deck 
officer cadre of personnel that we have that we train each 
week, and graduate out of Artesia. In addition, our screening 
covert testing results indicate continuous improvement. And in 
a classified forum, we are keen to share that data, because we 
see progress being made as a result of our investment in 
training.
    We also have online now what is called TIP, the Threat 
Image Projection system, which is a file of about 2,400 images. 
And we can now go and see each individual screener, how they 
are doing. They have to punch in their pass code when they go 
up to the X-ray machine, and so we can pull up now, San 
Francisco-LAX, see what images in that file that are missed the 
most.
    So it also gives us an idea of where to refocus the 
training. It gives us a percentage of hits that the screener 
got on the image that came up. So this Threat Image Projection 
really allows us to now measure the individual screener 
performance, which is a very significant capability for us, and 
when combined with the covert testing results, allows us to 
better get our arms around the performance of our screener and 
gives us metrics in which to judge not only the screener but 
then the airport, and then trends throughout the country.
    So we are very excited about now having TIP online, about 
the improved scores on covert testing, and about the additional 
FFDOs going out each week out into the field. And so across the 
board on these layers, we see continuous improvement.

   LEVEL OF ATTENTION TO THE LIKELIHOOD OF THREATS TO OTHER MODES OF 
                             TRANSPORTATION

    Senator Cochran. There are, of course, other threats that 
we are aware. To the extent to which your intelligence shows 
the likelihood of threats to other modes of transportation, how 
would you assess that in terms of threat level? Are there other 
modes of transportation that you consider likely targets of 
terrorists that have your acute attention?
    Admiral Stone. Yes, sir. In December, we started intermodal 
operations Intel briefings. So each day now for an hour and a 
half, we spend our time, the senior leadership is, on 
intelligence and operations. I will just note that I have been 
tracking to find where we are spending our time at the TSA 
headquarters, in terms of meetings.
    And over half of our time is spent on operations, 
intermodal operations and intelligence, which is very pleasing 
to me, because I want the focus of our headquarter's effort to 
be on operations and Intel and connecting the dots in an 
intermodal setting, so at that morning operations intelligence 
briefing, we look at a whole range of threats, whether they be 
the input that we get from the Coast Guard, from the maritime 
perspective; or whether it be from our stakeholders in the land 
area.
    I will note that in December, one of the first people that 
I was introduced to and a briefing was set up with, was Mr. Ed 
Hamburger, the President of the American Association of 
Railroads; followed by Bill Milar, for public transit 
authorities; and Richard White, from the Washington Metro. 
These individuals I was able to meet in December, because of 
the importance, that right off the bat, I have an opportunity 
to understand from their perspective what their challenges 
were.
    So this operations Intel assessment that we have each day 
in which we review the intelligence for all intermodal 
operations, I think is reflective of our focus and a sense of 
urgency that we understand and are communicating with the field 
in all of these areas.
    I would say after the aviation threat, which our 
intelligence indicates the Al Qaeda interest in being able to 
use an aircraft as a weapon remains very high, that we are well 
aware that whether it be at our ports or at various land 
targets, that we have an intermodal responsibility at TSA to 
monitor those threats and then take appropriate action in 
coordination with other agencies.
    Senator Cochran. Before recognizing other senators for 
questions, I have noticed the presence of the distinguished 
Chairman of the full committee, Senator Stevens. Do you have 
any opening statement, Senator? We would be happy to have you 
do that.

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. As a matter of fact, Senator, I wish you 
would just enter my questions for the record and let me make 
one short comment.
    Admiral Collins, Admiral Stone, I do want to thank you for 
your recognition of the problems of Alaska. I note that we have 
an increase in the budget for $102 million for the Maritime 
Transportation Security Act of 2002. Of that amount, with half 
the coastline of the United States, $152,000 is going to be 
spent in Alaska to implement the Maritime Transportation 
Security Act of 2002.
    I am conscious of what you are doing, and I want to thank 
you for what you are doing, testing the Predator A at King 
Salmon and Predator B at Shimya. If those are capable 
technologies, they could probably be substituted for vessels 
and save the taxpayers of the United States a great deal of 
money, but at the same time have knowledge of what is going on 
along that enormous ocean border of ours.
    You have agreed to work with our people on maritime safety 
education. I thank you for that, because we are still losing a 
considerable number of our vessels, despite everything we have 
tried. And the cold water immersion education and the outreach 
to the people who are out there without any chance of rescue 
really is very important.
    I thank you also for transferring the cutter, Long Island, 
to Valdez, for its homeland security missions. We have come a 
long way, and I know you have a tremendous job. I am pleased to 
see that there is an increase for the Coast Guard's budget, a 
total of $7.5 billion, an increase of $490 million this year. 
And I want to join all of you gentlemen in supporting that. I 
wish it was more. Thank you very much.
    Senator Cochran. Thank you, Senator.
    Senator Byrd.

             PROPOSED MOVEMENT OF GRANT MONEY FROM TSAT-ODP

    Senator Byrd. On January 26th, Secretary Ridge announced 
his intention to consolidate a number of grant programs within 
the Offices of State and Local Government, Coordination and 
Preparedness. On February 25, Representative Sabo and I wrote, 
detailing our objections to moving TSA grants, such as port, 
rail, and bus security from TSA, as well as the emergency 
management grants from FEMA. House Homeland Security 
Appropriations Subcommittee Chairman Rogers sent a similar 
letter expressing his concern about moving the TSA grants.
    I reiterated my objections during our hearings with 
Secretary Ridge and Undersecretary Hutchinson, and I remain 
strongly concerned that moving the funds from TSA will result 
in a reduction of focus from your agency and the Department on 
non-aviation modes of transportation.
    That would be in direct contravention of the intent of 
Congress when it passed the Aviation and Transportation 
Security Act in November of 2001. That Act gives TSA the 
responsibility for security over all modes of transportation. 
Clearly, the Madrid train bombing should be a wake-up call to 
the need for TSA to focus on non-aviation security risks.
    Just 10 days ago, The Washington Post quoted from the 
Homeland Security Advisory, saying, ``Trains and rail stations 
remain potential targets for terrorist groups due to their 
reduced security in comparison to airports.'' That is a very 
significant statement. Let me read it again, this excerpt from 
The Washington Post, just 10 days ago, ``Trains and rail 
stations,'' that would include Amtrak, that would include MARC, 
``Trains and rail stations remain potential targets for 
terrorist groups due to their reduced security in comparison to 
airports.''
    America is clearly at risk of a terrorist attack to our 
rail and mass transit systems, our seaports, and other non-
aviation modes of transportation.
    Now, given the existing threat and the strong concerns that 
have been raised by members of Congress, are you reconsidering 
the proposed movement of these grants from TSA?
    Admiral Stone. Senator Byrd, I fully share and understand 
the sobering impact of Madrid and Moscow and what that means in 
terms of us being required to have a true sense of urgency 
about how we address these issues. The decision to move those 
responsibilities, in terms of the funding being consolidated at 
ODP, has been made very clear to us by the Department that the 
subject matter experts, of which TSA relies heavily on to 
ensure how the assessments are done and where that money goes, 
and our ability, therefore, to impact those decisions, will be 
maintained and that the subject matter experts will be part of 
the TSA workforce and that we will then be able to interface 
with ODP to ensure the proper decisions are made.
    Senator Byrd. I am trying to understand as to whether or 
not my question was answered. Are you saying you are 
reconsidering, or you are not?
    Admiral Stone. No, sir, we have received information from 
the Department that the subject matter experts that make those 
decisions on those monies will remain at the TSA; however, 
those monies will go to ODP, along with some staff that will 
administer those accounts. But that the decision to ensure that 
the people that are transferred to the ODP do not impact on our 
critical ability to be able to manage and assess those areas 
that those grants apply to.

                       UNOBLIGATED GRANTS FUNDING

    Senator Byrd. The fiscal year 2004 Homeland Security Act 
was signed into law on October 1, 2003; yet, in the intervening 
6 months, TSA has yet to obligate the $22 million that Congress 
appropriated for trucking industry grants, the $17 million 
Congress provided for Operation Safe Commerce, the $10 million 
Congress provided for bus security grants, the $7 million 
Congress provided for hazardous material grants, the $4 million 
Congress provided for nuclear detection and monitoring. 
Additionally, $50 million still remains unobligated from the 
funds Congress provided for port security grants.
    We are halfway through the fiscal year. Congress acted 
expeditiously to provide the Department with the funds and the 
flexibility to address real and pressing homeland security 
requirements. We have been at Code Orange 2 times since August.
    You work for the Department of Homeland Security. Explain 
why this business-as-usual and go-slow approach to your job is 
satisfactory.
    Admiral Stone. Senator, the approach of the Department with 
regard to the threat that we face has been, I believe, one that 
is reflective of a sense of understanding of the threat and an 
urgent need to ensure that operationally we are responding to 
that. The actual particulars on those individuals' monies and 
the time lines for how those are being distributed, I would 
like to get back to you, sir, for the record on that.
    Senator Byrd. Well now, what do you mean by what you just 
said, that you would like to get back for the record. What does 
that mean?
    Admiral Stone. I would like to make sure that I give you an 
answer on those each individual monies and what the time line 
is for them to be going out to the field.
    Senator Byrd. Very well. Now, you will do that for the 
record?
    Admiral Stone. Yes, sir.
    Senator Byrd. Mr. Chairman, what does that mean for us? 
Will we see the record on that before we mark up?
    Senator Cochran. Mr. Chairman, I am happy to join you in 
the request that the witness submit an answer to you directly, 
and we will also have a copy that will be printed in the record 
of the Committee's proceedings.

                            CAPPS II SYSTEM

    Senator Byrd. Very well. One of the concerns about the 
testing of the proposed CAPPS II system has been the lack of 
access to actual traveler data to test the system. Airlines 
have been reluctant to voluntarily provide data because of the 
very real concerns of privacy groups about how that data will 
be used. There is some speculation that the Department is 
planning to issue regulations to compel airlines to provide 
data for the purposes of testing.
    Can you confirm for the Subcommittee whether the Department 
is planning to compel airlines to provide data on travelers for 
the purposes of testing CAPPS II?
    Admiral Stone. Our plan right now, Senator, is to ensure 
that we meet all of the requirements that have been identified 
both by us and by other entities, such as the GAO, regarding 
privacy, oversight, and redress, and that currently is the 
focus of our effort. We have recently hired this past week a 
privacy officer for TSA. We have had a TSA nationwide privacy 
education week in order to ensure that the core beliefs of our 
agency are, indeed, shared throughout all of our employees.
    Our intent is to ensure that once the privacy redress and 
oversight measures are taken that we then work with the 
Department on ensuring that a notice of proposed rule-making is 
drafted and sent to the Department for review. And then 
following that would be our recommendation, our intent, once 
that notification goes out, so that the airlines and passengers 
know what would be forthcoming, then to move forward with a 
security directive for testing. So that would be the TSA 
intent, that sort of a process, through the Department.
    Senator Byrd. Of the funds requested for this program in 
the fiscal year 2005 budget request, what is requested solely 
for additional testing of the program, as opposed to 
implementation and operation of the system?
    Admiral Stone. For the funds that are proposed for fiscal 
year 2005 for the $60 million, the actual breakdown of what is 
for testing and what is for the actual operation of those 
airlines that have actually transitioned to the operational 
CAPPS II program, I would have to get that number exactly for 
you, sir, and I will do so.

                REWARDING OF DEEPWATER PRIME CONTRACTOR

    Senator Byrd. Very well. Admiral Collins, the Coast Guard's 
Deepwater program is a multi-billion dollar effort to modernize 
and replace its aging ships, aircraft, and communications 
systems. According to a recent report by the GAO, the Coast 
Guard does not have the capability to assess the performance of 
the program, and yet the Coast Guard awarded the prime 
contractors with a $4 million bonus for work accomplished in 
the first year of the contract.
    I am concerned that the Coast Guard is rewarding the prime 
contractor without first knowing if they are doing a good job. 
For instance, the very first Deepwater asset to be delivered, 
the 123-foot cutter, was delayed by 4 months. GAO reports that 
the schedule for the maritime patrol aircraft has slipped as 
well. Should we be rewarding this kind of performance with 
bonuses to the contractor?
    Admiral Collins. Currently, Senator, the GAO reviewed a lot 
of our management processes and procedures, and clearly, the 
focus on how we do award fees and how we deal with the systems 
integrated was part of that review, how we assess their 
performance and recognize their performance. We welcome those 
comments, obviously, from the GAO, and we are interested in 
continuing to refine our processes.
    We are addressing the processes for evaluating the 
contractor's performance. We did, in fact, evaluate five 
specific areas of performance during the first term. We 
followed very, very strict adherence to the Federal Acquisition 
Regulations. It was an overriding principle in this review.
    The contractor award fee score is, I would submit, much 
lower than typical industry and integrator's averages, if you 
look at averages for other type of contracts. We are confident 
that the award fee level was fair and represented an accurate 
assessment of the contractor's performance.
    Is there room for enhanced performance of both us and the 
contractor on this very, very complex project? Absolutely. We 
are working very, very hard to improve that performance, but I 
think in this particular case, it was done based upon a set of 
criteria. It was done fairly. It was done accurately. We had 
objective measures that were introduced into this awards fee 
process. We have a performance measurement plan. We have a 
balanced scorecard and all the other mechanisms that you use in 
this kind of thing. And we will continue to refine it, review 
it, assess it, and make it better as we go forward.
    Senator Byrd. Well, that is all well and good, but I think 
we--as you said, you can do better, and we should do better. I 
think we ought to take the GAO report seriously. This is an arm 
of the Congress. We are going to believe our agency, and we are 
going to expect better from you. So please be aware of this, 
and let us do better than this. This is the people's money. 
Your money. My money.
    Admiral Collins. Yes, sir.
    Senator Byrd. Their money. So try to do better. I have 
further questions. I will await my turn in the next round.
    Senator Cochran. Thank you, Senator.
    Senator Inouye.
    Senator Inouye. Thank you, Mr. Chairman.

         INCREASED REQUIREMENT FOR AIRLIFT CAPACITY SINCE 9/11

    The mission of the Coast Guard has expanded immensely since 
9/11. And since that time, thirteen maritime safety and 
security teams and eight port security units have been 
deployed. With these changes, has there been an increased 
requirement for airlift capacity?
    Admiral Collins. Yes, Senator, there is, and as you know, 
the Deepwater solution that was initially designed. And, of 
course, that is a 1998 requirement that the contractor's design 
to and bid on, in post-9/11. I think there is a re-evaluation 
needed to the strategic lift aspect that is embedded in our 
Deepwater solution.
    And we currently have a team looking at a revised baseline, 
performance baseline, for our fixed-wing fleet mix to service 
the lift requirement, because what is different in post-9/11 is 
that we have these maritime safety and security teams that you 
noted that require a strategic lift capability. We also need a 
move our use-of-force helicopters when we need to. We moved one 
up, incidentally, into Valdez in the last orange condition, 
from Jacksonville. We are moving our strike teams as well, so 
we see strategic lift as a very, very important part of the 
overall aviation and functionality embedded in the Coast Guard 
and for the Department, I might add.
    So we are going to be reviewing that operational baseline, 
Senator, and my expectations are that the C-130 aircraft, in 
particular, will figure materially in the ultimate re-
baselining of the requirement.

                   HC-130JS COMPARED TO THE HC-130HS

    Senator Inouye. Speaking of the HC-130J, pursuant to the 
fiscal year 2001 allotment, you received six HC-130Js. Now, how 
do they compare with the 130Hs?
    Admiral Collins. They are a wonderful piece of technology, 
Senator. They fly faster. They fly higher. They climb higher. 
They have digitized cockpits. It is the latest technology, 
versus the older technology. We have accepted all six, and we 
had some funding appropriated last year, $60 million, to do the 
engineering development and the missionization of those 
aircraft. By that I mean putting Coast Guard-peculiar sensor 
packages in so that they become true maritime patrol aircraft.
    Right now, they are strategic lift and not maritime patrol 
aircraft. So we are starting that process to put that 
capability in those C-130Js, utilizing that $60 million 
increment as a start.

                     MAKING PACIFIC FLEET ALL 130JS

    Senator Inouye. Would it make sense to make your Pacific 
Fleet all 130Js?
    Admiral Collins. That clearly is in consideration, sir. 
Hopefully, we will have greater clarity on that within a matter 
of a couple of months. Later in the early summer, we will have 
a redefined Fleet mix baseline for Deepwater. And it is going 
to have to look at strategic lift. You know the Pacific better 
than anyone, and you know the long sortie times that are 
required to do our business all through the Western Pacific and 
into the Bering Sea, and in the Southern Pacific, and in all of 
those places.
    So we have to take a very, very hard look at this Fleet mix 
and clearly how we deal with the C-130 Fleet, whether 
modernizing the H models or recommending additional J models 
will be part of that decision process, Senator.
    Senator Inouye. Thank you very much. I have several other 
questions, Mr. Chairman, I would like to submit to the Coast 
Guard, if I may.
    Senator Cochran. Thank you, Senator Inouye.

   BUDGET REQUEST FOR THE PURCHASE AND INSTALLATION OF AN EXPLOSIVE 
                            DETECTION SYSTEM

    Senator Inouye. If I may now ask Admiral Stone: The budget 
includes $400 million for the purchase and installation of an 
explosive detection system, the EDS machines. Letters of intent 
have been signed with eight airports, but it is my 
understanding that the $250 million requested for installation 
would only cover continued payment of existing LOIs. How many 
airports are on the list for installation, and under the 
current approach, how long would it take to install in-line EDS 
machines in the remaining airports on your list?
    Admiral Stone. Currently, sir, we have eight LOIs issued to 
cover nine airports, and for fiscal year 2004 and fiscal year 
2005, that is $800 million that has been apportioned for those 
nine airports in support of those eight LOIs. We have another 
list that we have gathered of airports that have requested 
Letters of Intent to cover their capacity and growth needs. 
That list is approximately 30 airports long.
    We are currently meeting with the AAAE and the ACI to find 
out if in fact that list is reflective of indeed those with the 
greatest need. So that list is being refined of outstanding 
airports that require LOIs to ensure it really encompasses the 
airports around the Nation that have the requirement, rather 
than have just those that have submitted the request.
    For instance, Chicago O'Hare is not on the list of airports 
that have an LOI pending. They have not submitted one, so we 
are reaching out with the AAAE and ACI to get that list 
corrected so that it reflects really the needs of the Nation, 
rather than just those who have submitted the LOI request.
    The $1.2 billion that we have in fiscal year 2004 and 
fiscal year 2005, of which $800 million covers the LOI process, 
leaves us about the $400 million to cover those airports that 
need EDSs installed in order to just remain 100 percent 
electronically capable. Thus, the 75/25 split allows us to keep 
those airports at 100 percent electronic. If in fact it was a 
90/10 split, then we have an issue that we will need to address 
regarding retaining compliance in fiscal year 2005.
    [The information follows:]

    We are currently assessing the structure and criteria of a long 
term program, and therefore do not have a cost estimate. Implementing 
EDS in-line systems at all airports is extremely costly and must be 
considered in light of all the other transportation security needs. 
While this multi-year effort progresses, TSA continues to use its LOI 
criteria, based on achieving and maintaining compliance with the 100 
percent electronic screening requirement at all airports, to determine 
where resources will be allocated. TSA is working with airports that 
will not be able to maintain compliance with the 100 percent electronic 
screening requirement because of increased passenger loads, increased 
and/or additional air carrier service, and/or airport terminal 
modifications and expansions. TSA also continues to evaluate situations 
where an in-line solution makes sense from the standpoint of security, 
efficiency, and reduced staffing needs.

    Senator Inouye. If you have to accelerate your program in 
the next 4 years, how much would it cost to cover all the 
airports on your list?
    Admiral Stone. I will have to get you a more concise 
number, but I would say it has been estimated to be somewhere 
in the area of $4 billion to $6 billion to meet the needs of 
those other airports across the Nation that have the LOI 
requirements.

          LIMIT ON FULL-TIME EQUIPMENT, BAGGAGE AND PERSONNEL

    Senator Inouye. At the present time, your agency operates 
on a limit of 45,000 full-time equipment, baggage, and 
personnel, but is this limitation a realistic one?
    Admiral Stone. Currently, we are once again partnering with 
the airports themselves on the issue of capacity, their 
projected capacity for next year and the year after. We have 
reached an agreement with the airports, as well as with the 
ATA, under the United States Civil Aviation Partnership, in 
which we will use a Boeing model. And the ATA, AAAE, ACI, and 
TSA have all agreed to use this model to look at our Nation's 
airports and come up with a figure that we think reflects the 
screening total requirements.
    Under the 45,000 cap that we are currently operating at 
right now, we do not have a clear picture of what that means at 
our Nation's airports because we still have not shaped 
ourselves properly. We still have some airports that are 
smaller airports with too many screeners there, and larger ones 
that have too few. So we need, internally at TSA, to make that 
adjustment here in the coming months to get a real view for 
what 45,000 FTE looks like.
    We are currently hiring screeners at those airports in 
particular that need screeners in order to meet compliance for 
100 percent electronic. We are currently at 43,600 FTE at TSA 
for our screening force. We are hiring up to 45,000, with the 
priority being those airports that need screeners to ensure 
compliance with congressional mandates.
    Senator Inouye. You have been hiring part-time employees 
and screeners. How are they working out?
    Admiral Stone. Currently, approximately 90 percent of our 
screening force is full time, and 10 percent are part-time 
screeners. However, because of our imbalance currently between 
small airports and larger airports, and the fact that we have 
not internally shaped ourselves correctly, what we have found 
out that those part-time screeners are having to work more 
hours than they signed up for. So we are pursuing this as a 
high-priority item to ensure that we get the right numbers at 
the right airports so we can have that efficiency and 
effectiveness that the airports, the airlines, and TSA all 
want.
    Senator Inouye. As you know, I travel quite a bit, going 
back and forth to Hawaii, and I must commend you and your team 
for a good job.
    Admiral Stone. Thank you, Senator.
    Senator Inouye. Thank you very much.
    Mr. Chairman, I have other questions I would like to----
    Senator Cochran. Thank you, Senator. We expect you to be 
able to be able to respond to those in a timely fashion 
directly to the Senator----
    Admiral Stone. Yes, sir.
    Senator Cochran [continuing]. And to this committee.
    Senator Murray.

                  IMBALANCE IN COAST GUARD SINCE 9/11

    Senator Murray. Thank you, Mr. Chairman.
    Admiral Collins, I understand that given the circumstances 
you believe the Coast Guard's mission is balanced responsibly. 
But according to the recent analysis, the Coast Guard mission 
hour analysis, it appears that since September 11th, the Coast 
Guard is spending about 50 percent less time on drug 
interdiction, environmental protection, and marine safety. And 
there have also been drastic reductions in the hours spent on 
search and rescue, aid to navigation, and enforcement of 
fisheries laws and treaties. At the same time, I see on our 
analysis that hours for homeland security has more than 
doubled. I think it is at 1,130 percent.
    I am really concerned that this additional budget pressure 
on you to focus on homeland security just asks the men and 
women under your charge to work harder in other areas. When do 
you see this trend subsiding?
    Admiral Collins. Obviously, if we go to an orange alert and 
there is additional pressure on. If there is an expeditionary 
war effort that is underway and we have additional pressures on 
our ports as we did in Liberty Shield last spring, then that is 
the priority of the Nation, to deal with that high-profile 
risk.
    So those are the kind of surges we have to deal with, and 
we are prepared to deal with them as an organization and still 
maintain an adequate profile to service the key issues, and 
meet the minimum standards across the board.
    I am very pleased that we have met all our search and 
rescue standards. We have met all our search and rescue 
performance goals.
    Senator Murray. I have. I realize that we did well last 
year, but I am really concerned--I want to ask you 
specifically, does this budget request allow you to return to 
your previous emphasis on the non-homeland security missions 
and at the same time do homeland security?
    Admiral Collins. By the end of 2005, compared to pre-9/11 
levels, we will have increased our total aircraft, cutter, and 
boat hours cumulatively by 68 percent from those previous 
levels. That is a growth in those resource hours----
    Senator Murray. That is our homeland security, correct?
    Admiral Collins. That is across--that is the total for 
all----
    Senator Murray. Does that include fisheries, search and 
rescue----
    Admiral Collins. That is everything. The total available, 
the total boat hours, the total aircraft hours, the total ship 
hours available, as compared to pre-9/11 averages, will go up 
by 68 percent. That is a very positive growth. That is 
reflective, as I mentioned earlier, in that our operation 
expense base went up 51 percent. That gives us greater capacity 
to deal with these surges.
    I do not know what is the normal any more, in terms of what 
is the fixed level. I would rather look at whether we are 
attaining performance, meeting the highest risks, meeting all 
our service responsibilities, and search and rescue standards, 
in particular.
    Here is a case in point: Counter-drugs. Counter-drugs, we 
were, last year, just a little bit, a scotch away, it is a 
technical term a scotch away from setting a record on the 
cocaine seized in the maritime, with fewer assets. Although we 
had a surge, the Liberty Shield, orange, and whatever, the 
seizure rate is up. Why? We are getting better about using 
Intel.
    We are partnering with coalition partners. We are using 
technology better, and we are coordinating interagency better. 
And all of those mean enhanced productivity. So there are ways 
to try to accommodate a particular operation tempo, pressures 
that we have, still get the performance the Nation needs.
    I would predict this year, I will go out on a limb, that we 
will seize over a hundred tons of cocaine this year, with less 
resources, because of the effectiveness of our partnering, and 
the use of Intel.
    Senator Murray. And I congratulate you on that, but I am 
particularly concerned about search and rescue, and marine 
safety, and some of the other areas that are out there. And we 
will be watching that very closely.

                         RESPONSE BOAT PROGRAM

    You have already been asked about some of the Deepwater 
programs and your ability to accelerate it. I am really 
concerned about the aging fleet of cutters and aircraft, as 
well as the status of the responsible program, and I appreciate 
your previous response. But could you provide the committee 
with an update regarding the response boat program and tell us 
whether we are on target to receive the 700 RBS vessels that we 
have previously contracted for and what the status of the RBS 
contract is?
    Admiral Collins. I will provide you with the response 
boats, small, if I could provide you a direct response, and I 
will give you a little matrix. It will show the flow of the 
acquisition, the dollars allocated, how many we are buying each 
year. But the short answer is, we are on schedule with it, and 
I will give you a complete breakdown year by year on it.
    Senator Murray. Okay. If you could submit that----
    Admiral Collins. It is a tremendous asset, by the way, and 
we are very, very pleased with that. Safe Boat is being a 
terrific contractor.
    The other issue, the response boat medium, as you know, we 
have three vessels that were designed and built and delivered 
to us. We are running them through their paces, through an 
evaluation process. And we will be prepared to make a down 
select and an award for a low-rate initial production, that is, 
the second quarter fiscal year 2005.
    Senator Murray. So a year from now.
    Admiral Collins. We will be ready to make an award and 
execute those funds that are in the 2005 request.
    Senator Murray. Okay.
    Admiral Collins. It will be six low-rate, initial 
production, boats that we will fund. We are very pleased, by 
the way, with all three candidates that we have. The good story 
is that all three have provided us with high-quality boats, so 
we will have great competition, as a good thing----
    Senator Murray. Good. We will look forward to that.
    Admiral Collins [continuing]. And we will have some good 
products to choose from.

                             PORT SECURITY

    Senator Murray. Okay. Good. Admiral Stone, as I mentioned 
in my opening statement, port security is really important. For 
me, it is a top priority, and it appears that we still have a 
lot of work to do when it comes to coordinating the Federal 
Government's efforts in this area. Can you help us understand 
how the various port security programs within the Department of 
Homeland Security interact and complement each other, and how 
this budget will help in that effort?
    Admiral Stone. Certainly. The Border and Transportation 
Security, under Under Secretary Hutchinson, both Commissioner 
Bonner and myself, and Admiral Collins' team worked very 
closely with BTS to ensure that we have a coordinated and 
integrated effort.
    For instance, the best practices that will be gleaned from 
Operation Safe Commerce with regard to locks, sensors, GPS 
systems, when they are gathered up, will be coordinated very 
closely with CBP, Commissioner Bonner's team, and also with the 
Coast Guard, to ensure that that sort of integrated approach, 
rather than a stove-piped one, in which those items are just 
taken and then put out as new policies. I think is critical to 
emphasize that we fully intend to take those best practices and 
have that sort of a process.
    Additionally, TSA, in partnership with the Coast Guard and 
CBP, with regard to port security, regularly coordinates the 
results of what the port captain has assessed down at the port 
as being those areas of vulnerabilities and risk to ensure that 
the port grant process reflects those needs. And then those 
monies are then apportioned as a result, in large part due to 
that coordinated effort of what the port captain on the scene 
has evaluated are his needs.
    [The information follows:]

                         Response Boat Program

    The RB-S represents a significant improvement in the Coast 
Guard's operational capability. Multi-Mission Stations, Marine 
Safety Offices, and Maritime Safety and Security Teams use the 
RB-S for a variety of missions. The boat is capable of 45 knots 
and can be armed with two machine guns, making it an ideal port 
security asset. However, its enclosed cabin and excellent sea-
keeping and maneuverability also lend it to being used on a 
full-range of Coast Guard missions.
    The first RB-S was delivered by Safe Boats International of 
Port Orchard, Washington in May 2002, specifically intended for 
homeland security use. By the end of fiscal year 2004, a total 
of 285 boats will be ordered to enhance the Coast Guard's 
homeland security capability and to recapitalize the Utility 
Boat-Light fleet. To date, 155 boats have been delivered. The 
Coast Guard is also analyzing how many of the 700 boats 
authorized under contract are operationally required for future 
purchases. The following table provides the number of boats 
ordered by fiscal year and the associated funding:

                          [Million of dollars]
------------------------------------------------------------------------
                                            Funding for      Number of
               Fiscal year                     boats       boats ordered
------------------------------------------------------------------------
2005 \1\................................            $8.2              40
2004....................................            27.0             139
2003....................................            15.2              84
2002....................................            10.9              62
------------------------------------------------------------------------
\1\ Based on fiscal year 2005 Budget Request.


    Admiral Stone. The TSA approach on the integrated 
intermodal information system, which is a system that we 
believe from point of shipment to point of destination provides 
visibility on an intermodal level for us to, therefore, 
coordinate with every partner that has to do with the security 
of cargo. And how, wherever that originates in the world and 
wherever it ends up in the United States, is another reflection 
of our intent to ensure that from a transportation sector point 
of view, all of our activities and how we monitor that are an 
integrated effort, fully partnered with the CBP, Coast Guard, 
and other organizations that are involved in monitoring those 
shipments as they enter the United States.
    So across the board, from an intermodal perspective, TSA, 
and I know that it is BPS's view, that that has to be the way 
to head if we are going to really be efficient and effective.
    Senator Murray. Well, as you know, Operation Safe Commerce 
is going to have a report by the end of this fiscal year that 
will detail some of the private sector methodology, best 
practices, and technology solutions. And I will be following 
that closely to make sure that the agencies use that 
information, because I think they have done a really good job 
of putting that together. So I will be working with you on 
that.

CONTINGENCY PLAN FOR THE FLOW OR COMMERCE DURING AN INCIDENT AT ONE OF 
                               OUR PORTS

    Let me ask you one other question, Admiral Stone, because 
after September 11th, everyone knows we grounded all of our 
aircraft for a number of days and saw devastating impacts on 
the air transportation industry. My state was impacted, 
obviously, with Boeing. All states were. But the shutdown of 
the West Coast ports last summer during the strike offered us 
kind of a glimpse of what would happen if we saw a similar 
shutdown at any of our seaports. That could cost our economy as 
much as a billion dollars a week.
    I would like to know from you what kind of contingency 
planning is happening within the Administration, and 
specifically, who is in charge of an incident and who is in 
charge of making sure the flow of commerce is not impeded 
should we have some kind of incident at one of our ports.
    Admiral Stone. TSA is charged with developing sector-
specific plans. And then in the area of maritime, for a port 
scenario that you mentioned, the Coast Guard would be lead in 
coordinating that effort from a maritime port point of view. 
But it is TSA's responsibility for the transportation sector to 
develop those plans. That is an ongoing effort with TSA and an 
item of priority as well as the daily coordination with the 
Coast Guard and other----
    Senator Murray. Are those contingency plans developed now, 
should something occur in one of our ports?
    Admiral Stone. The sector-specific plans are still a work 
in progress, and so the real-world events would be coordinated 
by TSA, much like we did during the last threat level orange 
when we had flights of interest, our coordination with the 
Department of Transportation on that was daily and immediate, 
via real-time communications on flights of interest. It would 
be our intent to do similarly in a real-world operation with 
the Coast Guard.
    Senator Murray. Admiral Collins.
    Admiral Collins. As you know, Senator, there is a family of 
planes that is required to be built as part of the MTSA.
    Senator Murray. Right.
    Admiral Collins. We are reviewing thousands, literally 
thousands of those for vessels and facilities, and those 
vessels and facilities. And there are overarching port security 
plans for each port, so over 40 of these. They are done 
collaboratively with the Area Maritime Security Committee.
    We are all major stakeholders in the port to provide an 
overarching plan to respond to contingencies and deal with 
security issues, not unlike the Oil Pollution Act of 1990 
requirement for area contingency plans for oil pollution 
response. The same thing is going to be done on the security 
basis.
    Those will be vetted in the other feeder, the government 
document is the port security assessment that has been done for 
each port. That is really the customer, that is, these 
committees and the captain of the port, so they can take those 
vulnerability assessments, along with threat assessments, and 
develop the appropriate plans and the contingency plans. And 
they will be embedded in each one of these captain of the port 
area plans, all to be completed, by the way, by the end of 
April, reviewed and approved, and in place by July 1 of this 
year.
    Senator Murray. That is all well and good, and I think you 
have done a marvelous job. The ports have done a really good 
job in responding to this. Mr. Chairman, what I am concerned 
about is the budget request. Admiral Collins testified, when 
was it, in the House last year that we would need $1.3 billion 
this year, and we have a $100 million budget request. So we are 
asking our ports to have these plans to be ready to go, and we 
are not funding them. I will have more conversations about 
this, Mr. Chairman, but I am deeply concerned about that.
    Senator Cochran. Thank you, Senator Murray. Senator 
Domenici.

                    FUNDING REAL NEEDS AND NOT WANTS

    Senator Domenici. Thank you very much, Mr. Chairman. First, 
I apologize for being late. I apologize to the witnesses.
    I would like to make a couple of observations and ask you 
to respond. It is not necessarily totally your problem, but I 
am unimpressed with the notion that everybody and every 
community of any size that makes noise will get help from the 
Department of Homeland Security.
    I would like to suggest to you that I do not believe we 
could ever afford to fund everybody that thinks they need a 
fire engine, everybody that thinks they need some 
transportation protection. But rather we have to conclude in 
some reasonable way, what is at risk and then help secure what 
is at risk.
    I do not know if you know. I am not sure that the committee 
members know, that well before this incident, Senators Lugar, 
Nunn, and Domenici put an amendment on the floor of the Senate, 
which passed overwhelmingly. It cost a lot of money, but it 
picked 120 cities, from experts, that needed first responder 
training. It did not pick 6,000. It picked 120.
    Now, might I ask first, Admiral Stone, because it is more 
relevant to you, and then with each hearing, I will ask all the 
way to the top, ``What do you do to evaluate people's concerns, 
versus the reality that we cannot do everything?'' There ought 
to be some way to cover real risks--strike that word--the most 
significant risks, rather than things that people think they 
need.
    Admiral Stone. Sir, I believe strongly, and we have this 
discussion almost every morning when an issue comes up at our 
operations and intelligence briefings, to look at an issue from 
a risk-based decision point of view, looking at three things: 
What is the threat? What is the criticality? And what is the 
vulnerability?
    Senator Domenici. What does ``criticality'' mean?
    Admiral Stone. The criticality? For instance, when the 
issue has come up about general aviation at Reagan Airport.
    Senator Domenici. Okay.
    Admiral Stone. What are the criticality of the assets 
involved in that particular decision? What is the 
vulnerability? There is a reduced reaction time. And then what 
is the threat? Do we believe that Al Qaeda has an interest, and 
terrorist organizations, in that particular modus operandi, to 
do us harm. So whether it has to do with general aviation at 
Reagan, that threat criticality and vulnerability, and then 
making a risk-based decision, I think, is key.
    Senator Domenici. So even though you are not the head of 
the whole department, you are telling me and this committee 
that you know enough to say to us, we are evaluating requests 
versus risk----
    Admiral Stone. Yes, sir.
    Senator Domenici [continuing]. All the time.
    Admiral Stone. Yes, sir.
    Senator Domenici. I might just say, fellow Senators, I have 
been observing and then trying to inquire when I see it, how 
groups rally and seek to impose, through political force, the 
needs of their organizations on the government. I do not think 
you ought to yield to that. I note the other day, and I love 
them, but the fire fighters had a big meeting. They wanted more 
things. I asked them the kinds of things they wanted, it became 
more obvious to me that there was a lot of the demand and the 
requests that just had to do with the fact that they wanted new 
equipment, not that they were at risk and needed new equipment. 
I see a difference. I do not see how we can fund the first, but 
we can the latter.
    If we are going to fund the first, we need a new program to 
say we are going to pay for the needs of the police and firemen 
of America. But that would not be related to this, it would 
seem to me. I could be wrong, and the Senate could say, yes, it 
does, because we do not know what is at risk, so we will cover 
everybody. But as of now, it is risk-oriented in terms of 
granting and assessing needs, and then funding them.
    Admiral Stone. Yes, sir, risk-based decision making is at 
the core of that decision process.

                 FLETC FACILITY AT ARTESIA, NEW MEXICO

    Senator Domenici. Okay. I thank you for that. I just have 
one parochial question, Mr. Chairman. I do not know if you 
know, Mr. Stone, some senators know, because I have been 
somewhat of an open advocate for a secondary FLETC facility 
that is now 12 years old in Artesia, New Mexico. You trained 
your air marshals there until 18 months ago, and then you got 
into an argument and you went to New Jersey.
    See, I do not win them all, Mr. Chairman, but I did not 
think it was a very good idea, and I still do not. I have 
talked to a lot of marshals, and it is interesting enough, 
though, the idea not to put it there, it was just too far away. 
The marshals that went there loved it. So I think it is a 
pretty good training facility.
    But now you have a new program, FFDO.
    Admiral Stone. Yes, sir.
    Senator Domenici. That is, Senator, if pilots want to carry 
arms, they ask, and they become volunteers to become trained so 
they can carry arms. Surprisingly, there are a lot of them, 
well, you might say a lot of them do not want to, but 
surprisingly, a lot of them do. We do not let them carry 
firearms just because they used to be deputy sheriff and know 
how to shoot a gun. They have to go through some pretty good 
training.
    Now, as I understand it, for the FFDO program the trainees 
are being trained at FLETC, Artesia----
    Admiral Stone. Yes, sir.
    Senator Domenici [continuing]. Is that correct?
    Admiral Stone. Yes, sir. The Federal Flight Deck Officer 
Program is the trainees at Artesia.
    Senator Domenici. Now, let me ask you, is the program 
effective and efficient, and what do you think about it?
    Admiral Stone. Extremely so. We are really proud of that 
program. The pilots themselves give us tremendously good 
feedback on the quality of the training in Artesia. Every week, 
we are graduating. We have a queue of folks that are in line to 
fill out all the quotas through the rest of this fiscal year. 
So we could not be more pleased with the quality of the 
training we see, the feedback from the pilots, and the extra 
level of security that that gives us today.
    Senator Domenici. From the standpoint of the Department, is 
this seen as something good, to go ahead and grant these pilots 
this permission and train them if that is what they want?
    Admiral Stone. It is my understanding, yes, sir. When I 
briefed this program up the chain into the Department, it is 
very well received as an additional layer that we are quite 
proud of.
    Senator Domenici. Could I ask, if you know this, what kind 
of feedback are you getting from the pilots with reference to 
this program in the event they have volunteered?
    Admiral Stone. The feedback on the critique sheets has all 
been superb training in Artesia, much better than I had 
thought, based on historical data for what they thought the 
course would be, now to come here and find out that it is top-
shelf training. So all of those critiques that we get back from 
the FFDO pilots have been very complimentary of the process.

                      FEDERAL AIR MARSHALS PROGRAM

    Senator Domenici. Let me shift gears now. A sister 
function, which is bigger in numbers and better known, is the 
marshal program, air marshals. Could you tell me, is that 
program working? Do you know what the morale is of those who 
are in that program? Are you having a significant and sustained 
mainstream or stream of applicants who want to do this?
    Admiral Stone. Sir, I am partnered with ICE, Mike Garcia, 
and his team, that now own the FAMs. However, since December, 
ICE and the Federal Air Marshal Program have sent one of their 
top people to sit in on every ops Intel brief, which we hold 
every day at TSA, so that connectivity and teamwork and 
partnership is reflected in everything that we do in aviation 
now. I think that is a real success story for us.
    From all the indications that I see, that program is being 
run very well. And it is very flexible when we get threat 
indications or we see things that come up, that we immediately 
want to reprogram a FAM to a particular flight. That happens 
instantaneously as a result of that operational focus that we 
have with the FAM, so I would give it high scores as well.
    Senator Domenici. Well, I understand they are paid well. 
There is no question that they make very good money, and they 
can thus afford the flexibility of sometimes working different 
hours and being shipped around when they were not expecting to. 
From talking to them, they understand that, but I have also 
been told that there are more quitting than one would expect 
for such a highly paid program. Is that true, and if so, do you 
know why?
    Admiral Stone. Sir, I do not have any visibility on that 
particular issue.
    Senator Domenici. Could you check that in some reasonable 
way and relate it to some comparable program with high pay like 
that, in terms of the staying power of the program and filling 
the vacancies. And also, are you at full capacity, and if not, 
why?
    Admiral Stone. Yes, sir, I will be happy to look into that.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Domenici. Admiral 
Collins, I noticed in the statement you submitted, in the part 
where you are talking about the need to recapitalize our 
operational assets, you point out that in your 110-foot patrol 
boats there have been 20 hull bridges requiring emergency dry 
docks.

  AVAILABLE NEW TECHNOLOGIES THAT COULD BE USED FOR REPLACEMENT COAST 
                             GUARD VESSELS

    I am wondering to what extent are new technologies 
available that could be used for replacement Coast Guard 
vessels that offer greater efficiencies or other benefits?
    Admiral Collins. Sir, first, let me give you a graphic 
example of one of those bridges. This is an out-plating from 
one of our recent 110s. You can see the corrosion, internal 
corrosion, and a fairly substantial hole. This is typical of a 
number of 110-foot cutters where failures were experienced. 
That, obviously, gives a sense of urgency about getting on with 
this patrol boat program.
    Of the technologies that we are attracted to, one is the 
composite technology. We are working with the Deepwater 
contractor on the surface side of the program. Northrup Grumman 
is exploring the use of a composite technology hull in 
particular for this fast-response cutter, which is this 110-
foot cutter replacement.
    It is attractive from two or three dimensions. Number one, 
lower life-cycle costs. The maintenance and the haul-out cycle 
are much more reduced. The life of the hull is much longer than 
a comparable steel or aluminum hull. So we are looking at it 
very, very eagerly and discussing with Northrup Grumman way 
ahead if, in fact, we do choose to pursue composite technology.
    Senator Cochran. Are there any existing ships that you know 
of that have this technology now and have demonstrated its 
capability?
    Admiral Collins. Yes, sir. One of the leading shipyards in 
the world in this technology is Kockums Shipyards, Karlskrona, 
Sweden. Northrup Grumman is partnering with Kockums Shipyards 
as their technical advisor, if you will, on moving ahead with 
this composite technology. They have built a number of 
minesweepers very successfully, and current frigate, the Visby 
class, which I had the opportunity to go aboard 6 or 7 months 
ago, to sort of kick the tires on this technology, if you will, 
very, very impressive technology. And because of Northrup 
Grumman partnering with one of the world's specialists and the 
use of this technology, it appears to be a very potent team, 
Senator.

                    AUTOMATIC IDENTIFICATION SYSTEM

    Senator Cochran. There is also an indication in your 
statement, in the section dealing with maritime domain 
awareness, where you say, ``An intelligence and warning system 
that detects indicators of potential terrorist activity before 
an attack occurs is necessary to take preemptive and protective 
action.'' You then go on to say you are currently installing an 
automatic identification system in your vessel traffic service 
ports and formalizing requirements to award a contract of a 
nationwide AIS network, the Automatic Identification System.
    Exactly how is that going to work? Is this a new technology 
that is envisioned, or is it something that you feel 
comfortable about moving forward? I notice you are requesting 
$4 million to continue this project. How is that money going to 
be spent?
    Admiral Collins. One approach is to embed AIS technology 
and all our nine VTSs around the country so there will be AID, 
or Automatic Identification System-based vessel traffic 
systems. That will all be completed by the end of this calendar 
year for all those systems. So we will have AIS-based.
    Also, another requirement for AIS is as a result of our 
initiatives with the International Maritime Organization, 
where, as you know, we pushed through an international standard 
for shipping successfully, the international ship and port 
security code, and also SOLAS, Safety of Life At Sea 
amendments, that require AIS on all in-bound commercial ships 
over 300 gross tons no later than 1 December 2004. These are 
transponders that identify position and location and other 
information. These AIS-equipped VTSs can take that signal.
    We also need to be able to receive those VHFM-communicated 
signals in other places beyond those ports. And we are looking 
at all kinds of different options to put AIS equipment on off-
shore platforms. As you well know, in the Mississippi, there 
are over 3,000 off-shore platforms. They could be a great 
location for those systems, so we have the coverage. It is a 
coverage issue. There is also the Rescue-21, which is the VHF 
high-sites that we are putting around the country, is to hang 
AIS systems off of those as well.
    So we are looking at all that infrastructure, trying to 
minimize the infrastructure burden by using existing locations 
and infrastructure in order to get the coverage we want. So we 
think it is a great way to go. We are optimistic about it.
    The other dimension of AIS is long-range tracking, the idea 
of how do you get long-range tracking, because this one is a 
short range. How do you get like over 2,000 miles type of range 
and reporting requirements? This is another program and 
initiative that we are running through IMO to establish it as a 
worldwide standard. We are looking at various options for long 
range.
    It gets complicated real quickly, Mr. Chairman, because it 
has a lot of moving parts, but we are taking a very 
comprehensive look at all of the pieces.

                               RESCUE 21

    Senator Cochran. One other modernization effort, I 
understand, is having some kind of identification system that 
shows the location so that you will not have to guess where the 
ship is.
    Admiral Collins. That is our Rescue 21 project, Senator, 
that is a fairly substantial feature of our capital request in 
2005. It has been in previous years. We are focused to build 
that system out by the 2006 time frame. That is the one that 
establishes high towers around the country and monitors VHF, 
FM, and other distress calls from emergencies at sea. It has 
digital recording capability, and direction-finding capability 
so we can hone in on the signal, fix the position, and take the 
search out of search and rescue. It is a very, very, very, I 
think, positive addition to our capability.

                  CAPPS II DEVELOPMENT AND DEPLOYMENT

    Senator Cochran. Thank you. Admiral Stone, we noticed that 
your request is $892 million more than the adjusted and enacted 
level for fiscal year 2004. And one of the additional requests 
this year that you are making is for a second-generation, 
computer-assisted passenger pre-screening system, the so-called 
CAPPS II.
    I know you envision this as a modern--more modern pre-
screening system than the one that is currently in use by the 
airlines. How soon do you think the TSA will be able to develop 
and deploy this system?
    Admiral Stone. We are confident that we will be able to get 
in place the privacy, redress, and oversight measures that we 
know are key to ensuring that we have the trust and confidence 
of the American people to put forth such a system that we think 
significantly enhances security. The time line for that is we 
hope to have in the spring, the NPRM, the Notice of Proposed 
Rule-making out, and approved within the Department, as well as 
the security directive that we need. So we are looking at being 
able to have the oversight, redress, and privacy pieces, and 
then forwarded to the Department this spring, the NPRM and the 
SD. At that point, the Department will review it and make the 
decision concerning forwarding for testing purposes.
    Once we have the approval to conduct testing, we envision 
that that process will be one in which we are going to want to 
test historical data. So we are going to want to give the 
airlines a couple of months to review the NPRM and the SD, and 
then we will go back and look at a historical month. This is 
our testing approach. So we are hopeful this summer that we 
would be able at some point to be able to conduct that sort of 
a test.

                  EXPEDITED REGISTERED TRAVEL PROGRAM

    Senator Cochran. I was encouraged to know that you are 
concerned about reducing the hassle factor in airports for 
passengers and baggage screening, and that you are considering 
a registered travel program to help accomplish this. Can you 
tell us when you think you might have an expedited program in 
place?
    Admiral Stone. We are very excited about getting a pilot 
going. That first step of actually doing a pilot and having a 
voluntary program where we are looking at groups of individuals 
that have volunteered, and then pairing that up with a 
biometric so that we can then verify that individual and be 
able to have a tailored process, either a dedicated lane, 
depending on the airport, so that we can facilitate the 
registered travelers through the checkpoint in a quicker 
manner. Our goal is in June, to be able to start that pilot and 
run it for about 90 days, and then glean the lessons from it 
with an eye towards continuing into 2005 with a more advanced 
program so that we can get on with the issue of registered 
traveler.

                       UNQUALIFIED AUDIT OPINION

    Senator Cochran. Finally, I think I should congratulate you 
for achieving an unqualified audit opinion for the last fiscal 
year. This is your third consecutive clean audit, I am advised, 
and you are maintaining a clean audit record and correcting 
control weaknesses that were noted in the audit reports. So I 
congratulate you for that.
    Admiral Stone. Thank you, Senator.
    Senator Cochran. Senator Byrd.

          NON-INTRUSIVE SCREENING OF PASSENGERS FOR EXPLOSIVES

    Senator Byrd. Admiral Stone, in December 2001, Richard Reed 
was prevented from exploding his improvised shoe bomb due to 
quick action on the part of the passengers and crew of an 
American Airline flight from Paris to Miami. In the intervening 
2 years, we appear to have increased the screening of checked 
baggage for explosives, but there appears to be little effort 
being made to enhance the screening of passengers themselves 
for hidden explosives.
    The technology and equipment exists to non-intrusively 
screen passengers for explosives. What is TSA doing to address 
this potential threat?
    Admiral Stone. Senator, I just stopped at our Atlantic City 
laboratory to review the explosive trace portal that is 
undergoing testing and certification. We firmly believe at TSA 
that we need to transform our checkpoints. The checkpoints that 
we have today, in the wake of 9/11, got the job done for us.
    The EDS systems that we have today, as well, were out there 
to ensure that we had an extra measure of protection. But now, 
in partnership with the Department of Homeland Security S&T 
Division, we started to review the entire aviation security 
role of TSA. Does the equipment match the threat, whether it be 
sheet explosives or any other potential threat? We are keen to 
ensure that we are investing and transforming our checkpoints 
to reflect the threats that we see coming down the road and 
experiencing today, rather than the box cutters that caused and 
the scenarios that caused 9/11.
    So our intent is to get that equipment certified, tested at 
Atlantic City, and then expedited out into our checkpoints to 
give us that explosive detection capability at our passenger 
checkpoints that you mentioned.
    Senator Byrd. How much of your fiscal year 2005 budget 
request is devoted to enhanced screening of passengers for 
explosives.
    Admiral Stone. We have, for our checkpoint modification, I 
think it is $44 million, or somewhere at $44 million or $46 
million for checkpoint enhancements, of which allows us to 
introduce to our checkpoints additional technologies.

 SECURITY PLANS REQUIRED UNDER THE MARITIME TRANSPORTATION SECURITY ACT

    Senator Byrd. To meet the requirements of the Maritime 
Transportation Security Act, vessel owners and port facility 
owners were required to submit security plans to the Coast 
Guard for review and approval by December 31, 2003. It was 
reported earlier this year that only one-half of all vessels 
and less than one-third of port facilities met the December 31 
deadline.
    According to your testimony, Admiral Collins, those numbers 
have improved dramatically. How many penalties have you levied 
against non-compliant companies?
    Admiral Collins. Senator, we have had about 97 percent of 
all the plans in, so we have really made some progress here 
over the past several months. Total number of notices of 
violations that were issued for the facility side of the plans 
were 63 notices of violation, and for the vessels, were 89 that 
have notices of violations for not meeting submittal 
requirements, Senator.
    But again, we have over 97 percent submitted this date. So 
we are confident that we are going to get all of them in and 
all of them reviewed and all of them approved, as appropriate, 
or adjusted as we go back and work with the submitter to ensure 
that they meet all the requirements of the rule and the law.
    Senator Byrd. Have there been corresponding penalties 
levied against non-compliant companies?
    Admiral Collins. I do not have the exact figures on that, 
Senator, with me today, but I will be glad to give you a prompt 
response on exactly the adjudication of those notices of 
violation.
    Senator Byrd. Very well. If you will, please. How many 
plans have you sent back for revisions? Would you supply that 
information also?
    Admiral Collins. I will provide you with that as well, sir, 
yes.
    [The information follows:]
 Security Plans Required Under the Maritime Transportation Security Act
    As of April 7, 2004, we have issued Notices of Violations (NOVs) to 
95 vessels and 66 facilities. Each of those violations was for failing 
to submit a completed security assessment and has a $10,000 civil 
penalty associated with it. Subsequently, we have issued civil 
penalties in the amount of $25,000 to four of these facilities for 
failing to submit a completed security plan (for a total fine of 
$35,000). These penalties were based on violations of 33 CFR Section 
104.410 for vessels and 33 CFR Section 105.410 for facilities.
    The security plan review and approval process consists of several 
distinct stages.
    For vessels there are two stages. Stage I review determines if a 
plan contains all critical elements outlined in the regulations, and 
Stage II review ensures that security measures specified in the plan 
adequately address the vulnerabilities which are identified in the 
security assessment. Vessel security plans receive final approval 
(Stage 2) from the Coast Guard Marine Safety Center in Washington, DC.
    For facilities there are three stages. Stage I and II review is 
parallel with the vessel Stage I and II, which are completed at the 
National Facility Plan Review Center in Kansas City, KS. Stage III 
consists of a final review that is completed and approved by the local 
Captain of the Port.
    All vessel and facility security plans through Stage II and Stage 
III have been completed.
    The Coast Guard has also issued a total of 157 Notices of Violation 
and civil penalties for failure to submit required security plans.

    Senator Byrd. What are you learning about the security 
needs of vessels and port facilities based on the plans that 
have been submitted?
    Admiral Collins. What we are learning is from the port 
security assessments in terms of vulnerabilities. As required, 
we are doing port security assessments for 55 of our major 
ports around the country. We will complete them all by the end 
of this calendar year, a lot of which is classified, by the 
way.
    But there are a lot of things that are coming out in that 
in terms of vulnerabilities. Generally, I will state, for 
example, underwater threats and how we are vulnerable in our 
ports for underwater threats is just an example of some of the 
things that we are finding in some of these assessments.
    These port security assessments will provide a lot of the 
solid information that we will use to craft these port-wide 
security plans that are also to be completed this spring. But 
all these assessments are sort of source documents to get a 
hold of the vulnerability end of the risk equation that Admiral 
Stone talked about and then match them up with a threat 
assessment as well and to have a complete picture of what gaps 
we need to fill.
    The other interesting thing, Senator, the purpose these 
serve is that when we do evaluate grant applications, that come 
in for port. We are sort of one of the expert witnesses that 
review those applications at the local level. We use all the 
vulnerability assessment we have done as a yardstick against 
which to measure this application as to whether it addresses a 
number of the gaps that have been identified in these 
assessments.
    So I think it is a good system that we have, and a 
comprehensive approach. And we are going to distill down the 
results of these port security assessments into a geographic 
information system display that is available for each one of 
our port security committees around the country so a ready file 
of information, very practical information that can be used by 
the port security including all the stakeholders in the port to 
make the right decisions about which risks and which gap to 
address first, second, and third.

                         PORT SECURITY FUNDING

    Senator Byrd. The Coast Guard estimates that $1.125 billion 
is needed in the first year and $5.4 billion over the next 10 
years for ports to comply with the Federal regulations that 
have been mandated by the Maritime Transportation Security Act. 
Until fiscal year 2005, the president never requested funding 
to help ports implement security improvements, as outlined in 
the MTSA, and his budget request for fiscal year 2005 is 62 
percent lower than the amount Congress provided last year.
    When Secretary Ridge testified before this subcommittee in 
February, he said that he believes port facility owners should 
bear most of the financial burden to harden security at our 
seaports. What evidence do you have that these owners are 
stepping up to the plate and investing their own resources in 
port security?
    Admiral Collins. Many of them have. Many of them have 
security plans already in place. Some of them are exercising 
those. They are aggressively pursuing grants, and use of grants 
to meet the terms and conditions of the new standards. Over 
$500 million, thanks, obviously, to the support of Congress in 
making those funds available. But over $500 million has been 
distributed to ports and port facilities to undertake some of 
this hardening, as you put it. There is $46 million within the 
2005 budget for additional source of grants for ports, and 
ports have the ability to also apply through ODP.
    The applications are reviewed by TSA, the Coast Guard, and 
other expert witnesses to also apply for higher levels of 
funding. There is over $3 billion worth of grant money that is 
included in the overall Department of Homeland Security budget. 
So there is $46 million dedicated and another ability to apply 
for that larger pot, a general pot of grant money as well.
    Senator Byrd. But the Administration is proposing to cut 
those grants by 62 percent. Why?
    Admiral Collins. I do not know exactly the way that final 
pot was determined, Senator. It is about $3.4 billion, as it 
stands now, submitted in the President's budget. Again, we do 
not administer the overall money. But as I recall, $8 billion 
overall has been given out in grant money by the Department of 
Homeland Security. I might look at Admiral Stone to confirm 
that number, but I believe it is $8 billion overall in the past 
2 years. And this represents another $3.5 billion, so a 
substantial amount of money, by anyone's accounting, that has 
been distributed to first responders and other requirements 
throughout the Department, including those port facilities.
    Senator Byrd. I am advised that that $8 billion is for 
first responders, not for port security.
    Admiral Collins. Again, over $500 million was allocated for 
ports and port facilities.
    Admiral Stone. Yes, sir, and with regard--Senator, may----
    Senator Byrd. Admiral Stone.
    Admiral Stone [continuing]. I help on that, or----
    Senator Byrd. Yes.

                      PORT SECURITY GRANT FUNDING

    Admiral Stone. The comment on the $46 million for fiscal 
year 2005 for port security grants is indeed reflective of the 
Department's view that the private sector needs to step up to 
the plate with regard to the security at our Nation's ports.
    Senator Byrd. Mr. Chairman, I hope there is some way we can 
get our arms around this question as to whether or not port 
facility owners are stepping up to the plate and investing 
their own resources in port security, as the secretary 
continues to advise as being the best way to solve this 
problem.
    We cannot seem to come to grips with it. The secretary says 
port facility owners need to provide this security, rather than 
the Federal Government, and yet we cannot seem to find out what 
port facility owners are doing.
    I have one more question. Do I have time to ask it, Mr. 
Chairman?
    Senator Cochran. Yes, sir, as long as Senator Inouye is not 
inconvenienced.
    Senator Byrd. Why do not I turn to Senator Inouye and let 
him ask----
    Senator Inouye. I have no questions.
    Senator Byrd If I have time, I will ask another. Thank you.

                        DEEPWATER BUDGET REQUEST

    The budget includes $678 million for Deepwater, the Coast 
Guard's program to modernize and replace its aging ships, 
aircraft, and communication systems. While this is a slight 
increase over the $668 million provided in fiscal year 2004, we 
believe that a significantly larger amount is needed to keep 
pace with the Coast Guard's homeland security mission 
requirements. It was conceived as a 20-year program, but the 
President's request only keeps the program on a 22-year 
schedule.
    Deepwater was conceived prior to the 9/11 attacks. The 
intention was to ensure that the Coast Guard had the assets to 
maintain its overall capabilities. Following September 11th, 
the Coast Guard's role in protecting the homeland increased 
dramatically, but the Deepwater program has not been adjusted.
    You state in your testimony that the Coast Guard's greatest 
threat to mission performance continues to be aging assets that 
are technologically obsolete. Why then are you only requesting 
enough funding to keep the Coast Guard on pace to complete 
Deepwater in 22 years when the majority of these assets will 
reach the end of their service life by 2008? Admiral Collins, 
please.
    Admiral Collins. Clearly, we are pleased with the continued 
support that we are getting from the Administration and from 
Congress on Deepwater. Obviously, it is a major initiative for 
us. We feel very, very important. The 2005 budget does keep 
most of the major pieces on track for Deepwater, and I think 
how fast we do Deepwater at this point probably falls in the 
out-year category to continue to consider the flow of assets. 
One year, of course, of funding does not continue the total 
flow. It is how you program these assets over time to get on 
the right time line.
    Again, as the operational commander, I am confronted with 
the dilemma to try to balance this number and try to balance it 
between legacy systems, or those old systems that are wearing 
out, and the new systems that have to replace them. And it is a 
dynamic process that we are going to have to collectively deal 
with.
    My apprehension, Senator, is that it is going in the wrong 
direction, that the readiness part, that downward spiral 
phenomena is something that concerns me as an operational 
commander, and the ability to deliver the services. So this is 
a tough question that we have to continue to address.
    Senator Byrd. Admiral, you have been a good soldier. You 
have been a good soldier. You are sticking to the 
Administration's request, but the Coast Guard submitted a 
budget request for over $1 billion to OMB for fiscal year 2005. 
You support the President's request, but I understand that you 
requested $1.1 billion to OMB for approval. What would the 
program time line be if your fiscal year 2005 Deepwater budget 
were $1.1 billion?
    Admiral Collins. That glide slope, Senator, of course, it 
is more than 1 year a program makes, but that glide slope, if 
it was funded at that kind of rate, would be basically a 15-
year program. And that is what that number, consistently 
applied, plus or minus a bit each year customized to the year 
over time, it would lead to a 15-year program.
    Homeland Security Act required the Department and the Coast 
Guard to submit a report to Congress on the feasibility of 
accelerating Deepwater. That report was sent last year. It was 
one of the first reports from the Department that identified 
the feasibility of accelerating.
    The requirement in the Act was to report on the feasibility 
and desirability of accelerating to a 10-year program and so 
forth.
    So that particular report is a matter of record. It has 
been sent to the House and the Senate, and it describes this 
particular course of action as well, Senator.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Byrd. Thank you, Senator Inouye, and thank you, Mr. 
Chairman. Thank you, Admiral Collins. Thank you, Admiral Stone. 
You are both good soldiers.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

          Questions Submitted to the United States Coast Guard

              Questions Submitted by Senator Thad Cochran

              INTEGRATED DEEPWATER SYSTEM (``DEEPWATER'')

    Question. The fiscal year 2005 budget request includes an increase 
of approximately $10 million, for a total of $678 million, for the 
Integrated Deepwater System initiative. Will the requested level of 
funding for fiscal year 2005 put the Deepwater program back on track to 
be completed within the original 20 year time-frame? If not, what level 
of funding would be necessary to achieve this goal?
    Answer. The fiscal year 2005 budget request does not put the 
Deepwater Program on track to be completed within a 20-year time frame. 
To complete the acquisition in 20 years, the Coast Guard estimates the 
Deepwater Program would require $795 million for fiscal year 2005, and 
assumes continued funding at this level adjusted for inflation.
    Question. The Coast Guard is revising the Deepwater program's 
Mission Needs Statement (MNS) to coincide with a post September 11th 
environment. What is the time line for the Department of Homeland 
Security to approve the revised MNS and what impact will the revised 
MNS have on Deepwater program costs and acquisition schedule?
    Answer. The Deepwater MNS has been revised and is under final 
review by Coast Guard leadership. Once complete, the MNS will be 
forwarded to the Department of Homeland Security for review and 
validation. A formal briefing before the Department's Joint 
Requirements Council (JRC) is scheduled for May 25, 2004.
    As approved by DHS, the Coast Guard will engage our Deepwater 
system integrator to determine the most economical implementation plan 
for those new requirements identified in the updated MNS. Some new 
requirements, particularly those that emphasize DHS and DOD 
interoperability, will potentially lead the system's integrator to 
select alternate sub-systems or components in order to achieve any new 
requirements.
    The Integrated Deepwater Systems acquisition strategy and solution 
remain sound. However, increased mission demands, legacy asset 
capability obsolescence, and deterioration in legacy asset materiel 
condition since 1998 have created a performance gap in both capability 
and capacity. The updated MNS is projected to help close this gap. The 
cost and schedule implications have not yet been determined. When new 
requirements are approved, total owner cost estimates and the out-year 
acquisition schedule will be modified as required.
    Question. The fiscal year 2005 budget request for the Maritime 
Patrol Aircraft (MPA) is $5.3 million, a decrease of approximately 
$19.6 million from the fiscal year 2004 enacted level. Why is there 
such a decrease for a program that was significantly funded in fiscal 
year 2004, for which there is a contract to purchase at least four 
aircraft? What impact will this proposed decrease have on the MPA 
program? Will decreased funding for the MPA program delay the delivery 
of these aircraft? What impact does this have on the Deepwater program 
in general?
    Answer. The Coast Guard is currently acquiring the CASA CN235-300M 
as the Deepwater medium range Maritime Patrol Aircraft (MPA). The Coast 
Guard does not have a contract to purchase four aircraft. The Coast 
Guard funded the acquisition of two MPA in fiscal year 2003 and a third 
in fiscal year 2004. The Coast Guard's fiscal year 2005 budget request 
funds the missionization of the third CASA aircraft. This 
missionization includes the logistic complement required for Full 
Operating Capability and partial spare parts used for the logistics 
system start up. Delivery of the first two MPAs is scheduled for 2006, 
with full operational capability in late 2006 or early 2007.
    The Coast Guard is working to align the Deepwater Program with the 
strategic goals and objectives of the Department of Homeland Security 
(DHS). The DHS Joint Requirements Council (JRC) reviewed DHS Aviation 
Requirements in January 2004 at their first meeting. DHS decisions on 
future aviation requirements will determine the exact mix of aircraft 
in the Deepwater plan, at which time the funding and delivery schedule 
will be adjusted, if necessary.
    Question. The fiscal year 2005 funding request for the Vertical 
Unmanned Air Vehicle (VUAV) is $43 million, to continue work that was 
funded in fiscal year 2004 on two VUAV's; however, the requested 
funding level is not sufficient to bring either of the two VUAV's into 
full operational capability. What level of funding would be necessary 
to make one, or both, of these VUAV's fully operational? If funding is 
limited, would it not be better to provide the funds required to bring 
one VUAV into full operation rather than to partially fund two VUAV's, 
as proposed in the budget?
    Answer. The $50 million in fiscal year 2004 provides for detailed 
design of the VUAV and culminates in VUAV critical design review. The 
$43 million in fiscal year 2005 is for production of 2 VUAVs and 
associated ground control stations including developmental and 
operational testing. However, the fiscal year 2004 & fiscal year 2005 
funding of $93 million gets the Coast Guard VUAVs that are at Initial 
Operating Capability (IOC). These VUAVs will not have the necessary 
equipment for air space de-confliction and secure data link, which is 
required for Full Operating Capability (FOC). The funding necessary to 
bring both VUAVs to FOC (includes equipment for air space de-
confliction and secure data link, associated Non-Recurring Engineering 
(NRE), and testing) is approximately $30 million. Bringing one VUAV to 
FOC is not cost efficient, as the cost drivers are the design work, NRE 
and testing, and not the production of the aircraft itself. 
Additionally, two aircraft are needed for IOC testing.
    Question. Re-engining of the HH-65 helicopter was initiated with 
funds appropriated in fiscal year 2004 for other aircraft programs 
within Deepwater. From which program lines have fiscal year 2004 funds 
been moved to address the re-engining of the HH-65? How much funding 
from each line has been reprogrammed? What impact does this shifting of 
funds have on those programs in fiscal year 2004? Are changes to the 
fiscal year 2005 budget request necessary to address the shortfalls in 
fiscal year 2004 funding for the programs from which funds were shifted 
for the HH-65 re-engining?
    Answer. The fiscal year 2004 Deepwater Appropriation has a $67.7 
million Program Planned Activities (PPA Line Item) for ``Air Other 
Contracts/Legacy Sustainment.'' The HH-65 re-engining is an aviation 
legacy asset sustainment project, so it was appropriately funded from 
the Air Other Contracts/Legacy Sustainment PPA and no reprogramming 
from other PPA line items occurred.
    Since the re-engining was not a planned sustainment project for 
fiscal year 2004, the following legacy asset sustainment projects 
previously planned for execution under the fiscal year 2004 Air Other 
Contracts/Legacy Sustainment PPA were deferred in order to fund the 
fiscal year 2004 portion of the HH-65 re-engining. These deferred 
projects include: HH-65 Landing Gear Replacement, HH-65 Integrated 
Radar/FLIR Upgrade, HH-65 Tail Rotor Recapitalization, HH-60 Integrated 
Radar/FLIR Upgrade, HH-60 Service Life Extension, C-130 APS-137 Search 
Radar Replacement, and C-130 Weather Radar Replacement. Additionally, 
HH-60 Avionics upgrade projects was funded at a level lower than 
planned due to the HH-65 re-engining.
    The aviation legacy sustainment projects deferred in fiscal year 
2004 will not require changes to the fiscal year 2005 budget to meet 
shortfalls. Because it is a safety and reliability concern, HH-65 re-
engining remains the highest aviation legacy priority in the fiscal 
year 2005 President's Budget. The aviation legacy asset projects 
deferred in fiscal year 2004 and fiscal year 2005 are necessary and 
will need to be funded in the future to ensure the sustainment of those 
aviation legacy assets until replaced by new IDS assets but do not have 
the immediacy of HH-65 re-engining.
    Question. The fiscal year 2005 budget request for the HH-65 re-
engining includes $75 million for approximately 25 aircraft. Will this 
complete the re-engining effort? If not, what level of funding is 
necessary to complete the re-engining of the Coast Guard's HH-65 fleet? 
What is the projected time-frame for completing this re-engining 
project?
    Answer. The $75 million in the fiscal year 2005 budget request will 
not complete the re-engining effort. Although the exact acquisition 
costs of the HH-65 re-engining will not be known until receipt of ICGS' 
proposal, the budgetary estimate is approximately $3 million per 
aircraft for a total estimated project cost of $288 million. The 25 
aircraft re-engined with fiscal year 2005 funds will bring the total 
number of re-engined aircraft to 41, with 52 remaining to be re-
engined. The required funding for the remaining 52 aircraft is 
approximately $156 million.
    By June 2004, the Coast Guard plans to issue a Delivery Task Order 
(DTO) for the identified solution. The planned implementation schedule 
will be included as part of the final DTO. The Coast Guard estimates 
the re-engining of the HH-65 fleet to take approximately 24 months.
    Question. Once the Coast Guard has modified the HH-65 helicopters 
and added more power to them, will all the safety and reliability 
problems be resolved and will you be able to take the restrictions off? 
If not, why not?
    Answer. The HH-65 re-engining project was designed to address the 
safety and reliability crisis arising from accelerating frequency of 
power loss circumstances and restore the HH-65's operational 
capability. The selected solution, the TurboMeca Ariel 2C2 is expected 
to provide the safety and reliability required for the HH-65's multi-
mission roles. Once the solution is fully implemented, the Coast Guard 
will be able to lift current operational restrictions.
    Question. What is the Coast Guard's logic in using the Integrated 
Coast Guard Systems for the replacement project? GAO reports that it 
might have been faster and cheaper had the Coast Guard conducted the 
acquisition. Could the Coast Guard have completed this project itself?
    Answer. The Coast Guard directed Integrated Coast Guard Systems 
(ICGS) to immediately re-engine the HH-65 after careful consideration 
of other procurement options for the following reasons:
  --The HH-65 is a Deepwater legacy asset. The Coast Guard hired ICGS 
        for the Deepwater project.
  --Part of the re-engining requirement for safety and reliability of 
        this Deepwater asset included maximizing operational 
        effectiveness of Integrated Deepwater systems while minimizing 
        total ownership cost impacts. ICGS was best suited to make that 
        determination.
  --The ICGS proposal was evaluated based upon cost, schedule and 
        performance.
  --The Coast Guard has the advantage of utilizing Deepwater's existing 
        management and measurement systems to track cost, schedule and 
        performance. The safety and reliability crisis dictated that 
        the Coast Guard employ the best method to execute the re-
        engining project. ICGS' corporate approach brings many talents 
        to the acquisition process (e.g. ability to negotiate volume 
        purchase or offer premiums to more expeditiously acquire 
        required stock of engines).
    While the Coast Guard is capable of completing the project, the 
risk associated with removing the HH-65 re-engining project from the 
existing contract with ICGS to effect the MCH conversion was deemed to 
be unacceptably high.
    Question. What is the relationship between the HH-65 replacement 
project and Deepwater? Can you provide us assurances that it won't be 
necessary to re-engine the HH-65 a third time?
    Answer. The Coast Guard has directed that a re-engining project be 
immediately initiated to restore the HH-65 to unrestricted safe and 
reliable operations. The project is designed to address the HH-65 
engine system, the engine and engine control systems, to remedy this 
safety and reliability crisis, and restore the HH-65's operational 
capability.
    The HH-65 re-engining project is a separate and distinct effort 
from the Deepwater Multi-mission Cutter Helicopter (MCH). In the long-
term, the Deepwater plan is still to convert the HH-65 to the Multi-
mission Cutter Helicopter (MCH). While power increases were not the 
focus of this acquisition, the engine chosen, while addressing the 
safety and reliability concerns, also has sufficient power margins to 
allow for that engine to be used in the continuation of the MCH. As 
such, another re-engining should not be necessary.
    Question. What appropriations are being used for the HH-65 
replacement project, and how will this spending affect future spending 
on helicopters for the Coast Guard?
    Answer. The fiscal year 2004 appropriation being used for the HH-65 
engine replacement project is the ``Air Other Contracts/Legacy 
Sustainment'' Program Project and Activities (PPA) line item. This PPA 
line item is also projected to fund re-engining in the fiscal year 2005 
President's budget request. The effect on future helicopter spending is 
that the price of the Multi-mission Cutter Helicopter (MCH) should 
decrease to reflect the fact that engine replacement will no longer be 
required when the HH-65 is converted to an MCH.
    Question. What is the relationship between the HH-65 replacement 
project, the future Multi-mission Cutter Helicopter acquisition, and 
Hitron?
    Answer. The HH-65 re-engining project is an effort to correct a 
safety and reliability concern that is separate and distinct from both 
the Deepwater Multi-mission Cutter Helicopter (MCH) conversion project 
and HITRON.
    The Coast Guard directed the Deepwater acquisition program's 
systems integrator, Integrated Coast Guard Systems (ICGS), a 
partnership of Lockheed Martin and Northrop Grumman, to take immediate 
and definitive action to re-engine the HH-65 fleet to ensure safe and 
reliable operations. In the long-term, the Deepwater plan is still to 
convert the HH-65 to the Multi-mission Cutter Helicopter (MCH). While 
power increases were not the focus of this acquisition, the engine 
chosen, while addressing the safety and reliability concerns, also has 
sufficient power margins to be used with the MCH. The HITRON Airborne 
use of force mission is currently not a Deepwater requirement. There 
is, however, the potential to include this requirement under future 
contract modifications. The Turbomeca engine meets the anticipated 
airborne use of force power requirements should these become part of 
the future MCH mission profile.
    Question. The fiscal year 2005 budget request includes $15 million 
for capability enhancements for HH-60 avionics for one aircraft. How 
many HH-60 aircraft are in the Coast Guard fleet? Does the Coast Guard 
intend to provide these capability enhancements for each HH-60? Is the 
anticipated cost $15 million per aircraft, or will this funding level 
decrease after the first avionics upgrade is completed?
    Answer. There are 42 HH-60 aircraft in the Coast Guard fleet, and 
the Coast Guard intends to provide these capability enhancements to the 
avionics suite of each HH-60. The $15 million request in fiscal year 
2005 is for Non-Recurring Engineering (NRE) work associated with the 
avionics upgrades and does not upgrade any aircraft. The total project 
cost to upgrade all 42 aircraft is estimated at $121 million. This 
amount includes: long lead material, NRE, production, and operational 
test and evaluation. The HH-65 re-engining project is the highest 
priority aviation legacy asset sustainment project. The HH-60 avionics 
upgrade may be deferred if these funds are required to meet an 
accelerated re-engining solution.
    Question. The fiscal year 2005 budget request includes $9 million 
for capability enhancements for HC-130 aircraft radar in one aircraft. 
How many HC-130 aircraft are in the Coast Guard fleet? Does the Coast 
Guard intend to provide these capability enhancements for each HC-130? 
Is the anticipated cost $9 million per aircraft, or will this funding 
level decrease after the first radar upgrade is completed?
    Answer. The Coast Guard currently has 27 total HC-130 ``Hercules'' 
aircraft, 22 of which are operational while 5 are storage or support 
aircraft. In addition, the Coast Guard recently acquired six HC-130J 
aircraft, which are not fully missionized. The $9 million in fiscal 
year 2005 will upgrade the radar on one HC-130H and will also pay for 
the Non-recurring Engineering and Operational Test and Evaluation of 
the first upgraded aircraft. Coast Guard does intend to provide these 
capability enhancements for each HC-130, once funding is available. The 
average unit cost is approximately $3 million.
    Question. Was the fiscal year 2004 funding for the National 
Security Cutter (NSC) sufficient to complete the first NSC, or will a 
portion of the fiscal year 2005 requested funding be needed for its 
completion? The fiscal year 2005 budget request for the NSC is $274.5 
million. Is this funding level sufficient to complete the first and 
second NSC? If not, what additional funding may be necessary for 
completion?
    Answer. The funding for the National Security Cutter (NSC) in 
fiscal years 2002 through 2004 is sufficient to achieve initial 
operating capability for the lead ship. The Coast Guard anticipates 
requesting additional funding in fiscal year 2006 to attain full 
operating capability. Based on current cost projections, the fiscal 
year 2005 budget of $274.5 million for the NSC will complete the second 
NSC through full operating capability.
    Question. The fiscal year 2005 budget request includes $5 million 
for the Offshore Patrol Cutter (OPC). Is this sufficient funding to 
complete the design for the OPC? If not, how much funding is needed for 
completion of the design phase? How much is needed to begin 
construction? When does the Coast Guard anticipate completion of the 
design, beginning construction, and delivery of the first OPC?
    Answer. The $5 million requested in fiscal year 2005 will be 
combined with the $20 million appropriated in fiscal year 2004 to 
continue the requirements analysis, risk assessment and composite 
component analysis associated with the design and development of the 
Offshore Patrol Cutter (OPC). Based on a current projected cost for the 
OPC lead ship of $330 million, completion of the design would require 
an additional $59 million and construction would require an additional 
$246 million. The originally proposed implementation plan included 
acquisition of the first OPC in 2012, but the Coast Guard accelerated 
the design of the OPC to mitigate the risk of the deteriorating 
condition of the Medium Endurance Cutter fleet. Once the design is 
complete and the projected costs are refined, a business case analysis 
will be conducted to determine the optimal time to start the OPC 
construction, factoring in the latest information on the deteriorating 
condition of the Medium Endurance Cutter fleet.
    Question. The fiscal year 2005 budget request includes $60 million 
for the 110-123 foot conversions and the Fast Response Cutter, but the 
request does not specify how much funding is needed for each activity. 
How many 110-123 foot conversions does the Coast Guard expect to 
achieve in fiscal year 2005? How much funding is needed per vessel to 
complete a conversion?
    Answer. The Deepwater Program is conducting an analysis to 
determine the appropriate number of 123-foot patrol boat conversions to 
complete prior to switching to the Fast Response Cutter. A decision is 
expected this fiscal year (2004), and the Business Case Analysis will 
be provided at that time. The unit cost for the 110-foot to 123-foot 
Patrol Boat conversion is approximately $8.2 million per asset.
    Question. The design phase of the Fast Response Cutter (FRC) was 
started in fiscal year 2003. Does the Coast Guard anticipate completion 
of the FRC design in fiscal year 2005? How much funding is necessary to 
complete the design of the FRC? What is the anticipated completion date 
for the design? When does the design phase end and construction begin?
    Answer. The Coast Guard anticipates completion of the Fast Response 
Cutter (FRC) design in fiscal year 2005. The Deepwater Program is 
conducting an analysis to determine the appropriate number of 123-foot 
patrol boat conversions to complete prior to switching to the FRC. A 
decision is expected in fiscal year 2004, and the Business Case 
Analysis (BCA) for accelerating the FRC and the number of 123 
conversions will be provided at that time. Construction could begin as 
soon as fiscal year 2006 if supported by the BCA.
    Question. The fiscal year 2005 budget request includes 
approximately $2.3 million for one Long Rand Interceptor (LRI) and 
three Short Range Prosecutor (SRP) small boats, but does not specify 
how much funding is needed for each. How much funding is necessary for 
one Long Range Interceptor? How much funding is necessary for three 
Short Range Prosecutors?
    Answer. In fiscal year 2005, approximately $1.37 million will 
acquire the three Short Range Prosecutor small boats, and $0.92 million 
will acquire the Long Range Interceptor lead boat.
    Question. The fiscal year 2005 budget request includes $12.5 
million for the surface capability sustainment and enhancement of the 
medium endurance cutter class. This request is an increase of 
approximately $5.5 million over the fiscal year 2004 funding level. 
Please explain this increase.
    Answer. This increase can be explained by the continuing 
deterioration of the legacy surface fleet and the subsequent need to 
recapitalize major subsystems to sustain their operability as projected 
within the Integrated Deepwater System. The $12.5 million for Surface 
Capability Sustainment/Enhancements in the fiscal year 2005 budget 
request will fund a Mission Effectiveness Project (MEP) for the Medium 
Endurance Cutter (WMEC) fleet. The equipment and machinery slated to be 
replaced (e.g., evaporator replacement; propulsion control system 
upgrade; oily water separator replacement; waste heat cooling system 
modifications; and renewal of auxiliary pumps) is geared towards 
extending the service life approximately 5-10 years and ensuring the 
WMECs will remain serviceable until they are retired.
    Question. Funding to begin the development and design phase of 
command, control, communications, computer, intelligence, surveillance 
and reconnaissance (C4ISR), increment 2, was provided in fiscal year 
2004. Will the funding request for fiscal year 2005 complete the 
development and design of C4ISR, increment 2? If not, how much 
additional funding would be required to complete this phase of 
development and design?
    Answer. The two C4ISR increments have two design phases. The first 
design phase is concept and preliminary design; the second design phase 
is detailed design and development. The funding provided in fiscal year 
2004 was for the detailed design and development for C4ISR Increment 1 
(the second of the two design phases for Increment 1). The funding 
requested in fiscal year 2005 is for concept and preliminary design for 
C4ISR Increment 2. In order to complete Increment 2, the detailed 
design and development portion must also be funded at approximately $30 
million.
    Questions. What is the division of program management 
responsibility between the Coast Guard and Integrated Coast Guard 
Systems (ICGS)? Is the Federal Government providing management funds to 
ICGS? How much of the total management cost does ICGS provide? What 
exactly is the fiscal year 2005 budget request of $45 million for 
systems engineering and integration? Are program management funds 
included within each Deepwater line item? If so, how is the Coast Guard 
certain that there are not any duplications in payment to ICGS?
    Answers. The Coast Guard is responsible for all Program Management 
including oversight of the contract with the prime contractor, which is 
the systems integrator in the Integrated Deepwater System (IDS) 
Program. The systems integrator, Integrated Coast Guard Systems, LC 
(ICGS) has the responsibility for Contract Management including the 
subcontractors that execute the contract.
    The Federal Government is providing Contract Management funds to 
ICGS, just as it does on all major acquisitions where a systems 
integrator is engaged to coordinate various subcontracted elements.
    Contract Management funds are provided to ICGS through the Systems 
Engineering and Integration delivery task order. The Coast Guard 
receives Program Management funding through the Government Program 
Management budget category. The division of the $83 million requested 
for these two budget items is approximately 54 percent for ICGS and 46 
percent for the Coast Guard. The $45 million budget request for Systems 
Engineering and Integration represents approximately 8 percent of the 
total contract value in fiscal year 2005, and approximately 6.6 percent 
of the Total Capital Acquisition. It must be emphasized that the 
Government Program Management and ICGS Contract Management are not the 
same thing.
    The fiscal year 2005 budget request for Systems Engineering and 
Integration provides for the following activities:
  --System of Systems Engineering including System Architecture 
        development, Operational Effectiveness analysis, Total 
        Ownership Cost management, and Enterprise level requirements 
        management.
  --Enterprise level System Integration
  --Enterprise level System Integrator Program Management
  --Quality Assurance
  --Integrated Product and Process Development
  --Integrated Master Schedule maintenance and management
  --Aviation, Surface Vessel, C4ISR, and Logistics System Integration 
        at the Enterprise level
  --Contract Management
    Delivery orders for each Deepwater asset include appropriate funds 
to execute the delivery order, just as in any other government 
acquisition. These funds would not typically be classified as Program 
Management.
    The Coast Guard ensures there is no duplication of payment by using 
detailed statements of work at both enterprise and individual asset 
levels to clearly distinguish between activities. Furthermore, ICGS' 
first tier subcontractors maintain and report via timekeeping and 
billing systems that are under the constant oversight of defense 
auditing agencies.
    Question. The fiscal year 2005 budget request includes $38 million 
for government program management. Does this request fully fund all 
program management costs? Are additional program management costs 
contained within other Deepwater line items? How many people does this 
funding request support? Is this enough to support all of the necessary 
personnel to manage the program properly?
    Answer. The $38 million for government program management combined 
with the government personnel (201 military and civilian positions) 
supporting the program (funded from the AC&I Personnel line item) meets 
the Deepwater government program management requirement in fiscal year 
2005. None of the other line items support government program 
management. Fifty percent, or $19 million, of the $38 million in 
government program management provides funding for the equivalent of 
approximately 124 contracted support personnel. The remaining 55 
percent provides funding for such items as modeling and simulation, 
operational test and evaluation, travel, training, studies, phones and 
other administrative support materials. The funding provided in the 
government program management line item and the Deepwater portion of 
the AC&I personnel line item will support the necessary personnel to 
properly manage the program at the requested funding level.

                GAO DEEPWATER PROGRAM MANAGEMENT REPORT

    Question. In 2001, GAO reported on risks facing the Coast Guard as 
it went forward on Deepwater. Just this month, GAO again reported on 
these same risks, in particular that key components the Coast Guard 
needs to effectively manage the program and provide adequate contractor 
oversight were either missing or not fully developed. What is the Coast 
Guard's response to these criticisms?
    Answer. The Coast Guard is dedicated to the continuous improvement 
of Deepwater, welcomes GAO's expertise and guidance, and has responded 
to these management concerns by developing a Plan of Action & 
Milestones (POAM) to correct deficiencies. As part of our 
``partnership'' with GAO we will regularly report back on the status of 
this POAM and seek their feedback.
    The specific quote in this month's GAO Report that references their 
audit of 2001 states, ``Concerns about the Coast Guard's ability to 
rely on competition as a means to control future costs contributed to 
GAO's description of the Deepwater program in 2001 as `risky.' Three 
years later, the Coast Guard has neither measured the extent of 
competition among suppliers of Deepwater assets nor held the system 
integrator accountable for taking steps to achieve competition.''
    The Coast Guard has placed particular emphasis on the ability to 
measure performance within the scope of the program. Over twenty 
measurement items have been defined and measured in the approximate 20 
months that ICGS has been under contract. Additional measures are in 
the process of being defined and measured. This effort continues to 
evolve as the program identifies measures and data sources and as the 
system components mature from design to production, fielding, and 
disposal.
    All of the Integrated Deepwater System items in the first 5 years 
of the contract were fully competed as part of the competition between 
the three industry consortiums led by Litton/Avondale Industries, 
Science Applications International Corporation, and Lockheed Martin 
Naval Electronics and Surveillance Systems. Going forward from contract 
award, the Deepwater Program has included Competition as a factor for 
determining if the contract should be approved for another term and how 
long that term should be. The measures for Competition being proposed 
for adoption include:
  --Percentage of awards competed;
  --Minimizing the number of teaming agreements;
  --Number of advertisements publicizing supplier registration;
  --Number of vendor outreach programs; and
  --Percentage of first tier subcontracts that incorporate the intent 
        of the Federal Acquisition Regulation clause 52-244.5 
        ``Competition in Subcontracting.''
    The Coast Guard's systems integrator, ICGS, has also adopted the 
Open Business Model, initially a Lockheed Martin philosophy, as an 
official policy for ensuring competition. The process ensures full, 
continuous, and open analysis of supplier alternatives throughout the 
program's execution.
  --This approach entails obtaining proposals/quotes from two or more 
        qualified suppliers, and then balancing the cost, quality and 
        delivery of the components after the qualified suppliers have 
        been identified to provide the required components. This model 
        provides the flexibility to capture commercial technology when 
        needed, and it is projected to provide better performance at 
        equal or lower cost.
  --The Open Business Model has been approved by the ICGS Board of 
        Directors and is applicable to all Deepwater transactions.
  --To enforce these regulations, ICGS has appointed a Competition 
        Advocate and Ombudsman tasked to draft implementation 
        procedures for regular reporting to ICGS.
  --Visits by the ICGS Competition Advocate are also planned with 
        Deepwater's industry partners to examine ``make/buy'' decisions 
        and competition practices.
    In addition to the issue of competition, the Coast Guard is 
diligently incorporating GAO's recommendations, as well as other best-
business practices, into its operating procedures. The Coast Guard is 
actively addressing those management practices not in place, and is 
improving and maturing processes for those that are already in 
existence. The following is a summary of recommendations by GAO for 
executive action and the Coast Guard's mitigation strategies:
  --Improve Deepwater program management--take the necessary steps to 
        make Integrated Product Teams (IPTs) effective; ensure adequate 
        staffing is addressed as outlined in the human capital plan 
        (HCP), and ensure operators and maintenance personnel are 
        prepared for the transition to new Deepwater assets.
    --We have clarified IPT roles and responsibilities over the past 20 
            months and are improving processes to attain full 
            competency for each IPT.
    --The personnel funding account did not allow for additional 
            personnel in fiscal year 2004. Several key military billets 
            have been civilianized and military personnel have been 
            brought onboard out of cycle.
    --The HCP will be updated and necessary training billets will be 
            budgeted in sync with the fiscal year 2006 budget cycle.
    --ICGS has recently added representatives at the key maintenance 
            and logistics sites to act as the POC for all maintenance 
            coordination issues.
  --Improve contractor accountability by improving award fee criteria, 
        award fee assessments, system integrator accountability for IPT 
        effectiveness in award fee determinations, Total Ownership Cost 
        (TOC) baseline measuring cost, and criteria for TOC baseline 
        adjustments.
    --We are addressing our processes for evaluating the contractor's 
            performance. Five specific areas of performance were 
            evaluated during the first term. Strict adherence to 
            Federal Acquisition Regulations (FAR) was an overriding 
            principle in all accounts.
    --The contractor award fee score is much lower than typical 
            industry averages. We are confident that the Award Fee 
            level was fair and represented an accurate assessment of 
            contractor performance.
    --Objective measures are being introduced into the award fee 
            process.
    --The Performance Measurement Plan, and in particular the Balanced 
            Scorecard (BSC) Strategy Map clearly articulate how the 
            objectives of the program's BSC identify input, process, 
            and output measures that provide leading indicators of 
            Operational Effectiveness, Total Ownership Cost, and 
            customer satisfaction. BSC metrics continually measure the 
            status of the program and allow for early course 
            corrections if required. Deepwater, as the largest 
            Performance-based acquisition in the Federal government is 
            firmly anchored to metrics and can demonstrate its value to 
            the taxpayer while meeting our customer's requirements.
    --The program has taken a proactive approach to contractor 
            assessment to ensure that course corrections and 
            adjustments can be made before the Award Term assessment in 
            year four, prior to the end of the first term. An 18-month 
            performance assessment was completed on February 23, and 
            approved on March 4.
  --Facilitate cost control through competition with system integrator 
        accountability for competition among second tier suppliers.
    --For subcontracts over $5 million, notification to the Coast Guard 
            is required, to include an evaluation of the alternatives 
            considered, if ICGS subcontracts out to Lockheed Martin 
            and/or Northrop Grumman.
    --The Open Business Model, initially a Lockheed Martin philosophy, 
            is now official ICGS policy and is applicable to all 
            Deepwater transactions. To ensure compliance, ICGS has 
            appointed a Competition Advocate and Ombudsman, who is 
            drafting implementation procedures for regular reporting to 
            ICGS and will examine Make/Buy and competition practices.
    --The program will put additional processes in place to ensure 
            competitive forces are being used to manage costs. An 
            annual independent third party review of transactions will 
            be conducted. The Agency Acquisition Executive will review 
            any subcontract over $5 million awarded to Lockheed Martin 
            or Northrop Grumman.
    --A review of ICGS' application of their Open Business Model vis a 
            vis accountability for ensuring competition will be 
            included in the Award Term Evaluation and measured 
            diligently as discussed earlier.
    Question. Similarly, GAO has reported that while competition is 
critical to controlling Deepwater program costs, the Coast Guard does 
not have a system to measure the extent of competition among suppliers 
of Deepwater assets nor has it held the system integrator responsible 
for taking steps to achieve competition. What is the Coast Guard's 
response to these criticisms?
    Answer. All of the Integrated Deepwater System nominated items in 
the first 5 years of the contract were fully competed as part of the 
competition between the three industry consortiums led by Litton/
Avondale Industries, Science Applications International Corporation, 
and Lockheed Martin Naval Electronics and Surveillance Systems. The 
Coast Guard, the DOT, and the Office of Federal Procurement Policy 
through review and approval of the Request for Proposal indicated that 
this was appropriate competition for the first award term.
    In the current phase of the Deepwater contract the Deepwater 
Program, based on GAO's recommendations, has now included competition 
as a factor for determining if the contract should be approved for 
another term and how long that term should be. The measures for 
competition being proposed for adoption include:
  --Percentage of awards competed;
  --Minimizing the number of teaming agreements;
  --Number of advertisements publicizing supplier registration;
  --Number of vendor outreach programs; and
  --Percentage of first tier subcontracts that incorporate the intent 
        of the Federal Acquisition Regulation clause 52-244.5 
        ``Competition in Subcontracting.''
    The Coast Guard's systems integrator, ICGS, has also adopted the 
Open Business Model, initially a Lockheed Martin philosophy, as an 
official policy for ensuring competition. The process ensures full, 
continuous, and open analysis of supplier alternatives throughout the 
program's execution.
  --This approach entails obtaining proposals/quotes from two or more 
        qualified suppliers, and then balancing the cost, quality and 
        delivery of the components after the qualified suppliers have 
        been identified to provide the required components. This model 
        provides the flexibility to capture commercial technology when 
        needed and it is projected to provide better performance at 
        equal or lower cost.
  --The Open Business Model has been approved by the ICGS Board of 
        Directors and is applicable to all Deepwater transactions.
  --To enforce these regulations, ICGS has appointed a Competition 
        Advocate and Ombudsman tasked to draft implementation 
        procedures for regular reporting to ICGS.
  --Visits by the ICGS Competition Advocate are also planned with 
        Deepwater's industry partners to examine ``make/buy'' decisions 
        and competition practices.

                          SMALL BOAT STATIONS

    Question. What challenges are small boat stations facing in 
balancing search and rescue requirements with new homeland security 
requirements?
    Answer. Broadly, the Coast Guard will continue seeking the 
appropriate balance among all its mission-programs while relentlessly 
pursuing our stated performance goals. In so doing, the Coast Guard 
will continue to focus not only on activity levels (hours), but also on 
achieving the desired outcomes for each Coast Guard mission. Our 
ability to achieve desired outcomes and performance goals have been 
significantly enhanced through improved technology, tactics and 
procedures making our activities that much more effective. Risk-based 
decision-making by local commanders will continue to be the primary 
driving factor behind the specific activity levels (hours) accrued in 
the course of Coast Guard operations.
    At the Station level, the biggest challenges in balancing search 
and rescue (SAR) and homeland security (HLS) requirements are training 
and maintaining the 68-hour workweek standard. There are two primary 
factors that will improve training while maintaining the 68-hour 
workweek standard at Stations: formal training programs and experienced 
command cadre. In fiscal year 2003 and fiscal year 2004, the President 
and Congress provided funding for the Coast Guard to improve both 
areas.
    Formal Training.--The Coast Guard's goal is to increase Boatswain 
Mate ``A'' school throughput by 50 percent over the next 4 years. We 
have also increased recurring proficiency requirements giving qualified 
boat crewmembers more opportunities to practice necessary skills. In 
addition, we have increased the throughput at our resident training 
centers for Small Boat Coxswains, Heavy Weather Coxswains, and Surfmen 
removing some of the training burden from the field units.
    These formal training opportunities provide a strong basic 
foundation for junior personnel. This strong foundation allows the 
command cadre to spend less time teaching basic fundamentals and more 
time teaching job specific tasks.
    Experienced Command Cadre.--The Coast Guard used many of the new 
billets provided by the President and Congress to upgrade senior 
command cadre billets. Additional support billets were also provided at 
both Stations and Groups to relieve the command cadre of administrative 
burdens. These actions were focused on improving management and 
leadership, and providing more time for the command cadre to conduct 
training. Once all of the new billets are filled this year and 
personnel are qualified in their assignments, we anticipate improved 
training and reductions in the average workweek.
    Question. What impact have the additional homeland security 
requirements had on the small boat stations' ability to meet other 
mission requirements, such as drug interdiction and fisheries 
enforcement?
    Answer. Immediately following 9/11, the Coast Guard surged 
resources for homeland security activities. Over the past 2 years, the 
President and Congress have funded the Coast Guard with additional 
resources to address homeland security and all other mission 
requirements.
    As required by Congress, some of these initiatives supported 
Station-level staffing, training, boat standardization, and readiness 
for all missions. Other initiatives were geared specifically toward the 
search and rescue program. The Coast Guard will continue to monitor the 
operating tempo and workload at Stations, and we will work within the 
Administration if additional resources are necessary. We will also use 
all of the resources as intended by the Congress.
    Fishery Enforcement.--Stations continue to contribute significantly 
to the Coast Guard fishery enforcement mission. In fiscal year 2002, 
Stations conducted 974 fisheries enforcement boardings. In fiscal year 
2003, Stations conducted 1,313 fisheries enforcement boardings, a 35 
percent increase over fiscal year 2002 levels. These boardings 
contribute the Coast Guard's domestic fishery program goals.
    Counter-Drug Operations.--The Coast Guard's overall counter-drug 
strategy is to interdict drugs offshore, far from the U.S. border. 
Coast Guard Cutters and Aircraft are primarily used for conducting 
these offshore patrols, however, Stations continue to respond to both 
counter-drug and migrant incidents when necessary.
    Question. Given the increased operating tempo of small boat 
stations following September 11th, do stations have the resources--i.e. 
staff and boats--they need to fulfill all their mission needs? What 
additional resources, if any, are most needed?
    Answer. In fiscal year 2003 and fiscal year 2004, the President and 
Congress provided funding for Stations to maintain a high level of 
service in a busy operating environment. Funding was provided for the 
Coast Guard to add or upgrade over 900 billets at Stations and the 
training and support facilities that serve them. Additionally, over 
$5.5 million of Personal Protective Equipment was provided for Station 
personnel with earmark and supplemental funding. Over 200 Response 
Boat--Smalls were also funded increasing operational capability. As 
required by Congress, these initiatives supported Station-level 
staffing, training, and readiness for all mission areas.
    The President and Congress have also provided substantial funding 
since 9/11 specifically for homeland security. The Coast Guard has used 
some of this funding to purchase seventeen additional 87 foot Coastal 
Patrol boats, 13 Maritime Safety and Security Teams, and over 100 Sea 
Marshals. These new assets have helped reduce the high operating tempo 
observed at Stations immediately following 9/11. The President's fiscal 
year 2005 budget requests operating funds for five 179-foot Patrol 
Coastals providing additional resources to the Coast Guard.
    The Coast Guard will continue to monitor the operating tempo and 
workload at Stations, and we will work with the Administration if 
additional resources are necessary.
    Question. Inspector General reports have raised concerns about the 
lack of senior personnel available at boat stations in recent years to 
train new, or more junior personnel. As Coast Guard increases the 
number of new personnel assigned to stations in fiscal year 2004, what 
impact will this have on stations operations, including the ability of 
senior personnel to train less experienced staff?
    Answer. In fiscal year 2003 and fiscal year 2004, the Coast Guard 
addressed the impact of senior personnel having to train less 
experienced staff by upgrading many senior command cadre positions, 
providing additional administrative support to Stations, and assigning 
additional staff to Groups.
    These actions are focused on improving management and leadership, 
and reducing the administrative burden on the command cadre. In 
addition, we have increased the throughput at our resident training 
centers to remove some of the training burden from the field units. The 
Coast Guard continues assessing the impact of these changes to 
determine what actions, if any, are needed in the future.
    The following highlights specific training efforts discussed above:
  --Established one Ready Boat-Small Standardization (STAN)/Training 
        Team to improve training, professionalism and performance.
  --Added a dedicated course developer/writer/instructor to Training 
        Center Yorktown Coxswain ``C'' School.
  --Added Surfman Apprentices to the National Motor Life Boat School 
        (NMLBS) to reduce the training burden at surf stations and 
        increase the number of qualified Surfmen.
  --Added 41 FTP for Boatswain Mate (BM) `A' School throughput 
        increases.
  --Added 18 FTP for NMLB School Training throughput increases.
    Question. What steps has the Coast Guard taken to address the issue 
of its aging 41-foot utility boat fleet, which is reaching the end of 
its service life?
    Answer. The Coast Guard's fiscal year 2005 funding request includes 
$12 million to begin a limited production of six Response Boats-Medium 
(RB-M). The RB-M is the replacement for the aging 41-foot utility boat 
fleet. After initial limited production, the Coast Guard currently 
projects $140 million in additional funding needs for RB-M in the Five 
Year Capital Investment Plan, which accompanied the President's fiscal 
year 2005 Budget request for Coast Guard.
    Question. What progress has the Coast Guard made in standardizing 
its non-standard boat fleet?
    Answer. Since fiscal year 2002, the Coast Guard has ordered 255 
Response Boat--Smalls. A large majority of these boats were purchased 
to enhance the Coast Guard's maritime homeland security capability in 
critical ports; however, some have been purchased to replace non-
standard boats. By the end of fiscal year 2004, approximately 100 of 
the 350 total Non-Standard Boats will be replaced. We expect to replace 
approximately 12 percent per year thereafter until full replacement in 
fiscal year 2010.

                       PORT SECURITY ASSESSMENTS

    Question. Is the Coast Guard on track to complete the Port Security 
Assessments of the 55 most critical ports in the United States by the 
end of this calendar year? Are additional funds necessary to complete 
these assessments?
    Answer. The Coast Guard has conducted PSAs at 16 of the 55 top 
economically and militarily strategic U.S. ports. The remaining 39 port 
assessments are on schedule, funded and scheduled for completion in 
calendar year 2004.

               RESEARCH, DEVELOPMENT, TEST AND EVALUATION

    Question. Please explain the approximately $1.4 million decrease in 
requested funding for the Coast Guard's research, development, test and 
evaluation account?
    Answer. Prior year CG Research & Development (R&D) appropriations 
included project funds in addition to operating costs of the CG R&D 
Center at Avery Point, CT. The $13.5 million requested in the fiscal 
year 2005 Science and Technology (S&T) budget does not include any 
project funds; the request is intended to fund only facility and 
personnel (support and technical) costs at the CG R&D Center. This 
level is consistent with prior year costs and does not represent a 
decrease given its intent.
    The fiscal year 2004 enacted level of $14.9 million was a 
significant reduction from the fiscal year 2004 request of $22 million 
and prior year appropriations causing a fiscal year 2004 imbalance 
between support costs (facility and personnel) and project funding with 
only approximately $2 million available for fiscal year 2004 project 
support. The CG is working with S&T to restore a proper funding balance 
in fiscal year 2005 and beyond and to develop a project portfolio that 
supports the many maritime security needs as well as the CG's 
``traditional'' non-security mission-programs. Additional project 
funding will be critical to properly support mission needs and regain 
the R&D momentum lost in fiscal year 2004, particularly in areas such 
as Aquatic Nuisance Species and ballast water research. S&T and the CG 
have already agreed upon a base level of additional project funding in 
the amount of $5 million (for a total of $18.5 million) that will be 
targeted toward non-security related projects including maritime 
science and research.
    Question. Will this line item for Coast Guard research and 
development continue to be decreased in subsequent fiscal years until 
there is one lump-sum research and development account within Science 
and Technology for all of the agencies at the Department of Homeland 
Security?
    Answer. No. The Science and Technology Directorate (S&T) and Coast 
Guard (CG) are preparing a formal agreement that will detail the 
coordination and funding mechanisms for future CG Research & 
Development (R&D) capabilities. The foundation for that agreement is 
the consolidation of funding requested in the fiscal year 2005 budget 
($13.5 million). S&T and the CG have further agreed upon a base level 
of additional project funding in the amount of $5 million that will be 
specifically targeted toward non-security related projects including 
maritime science and research. This funding will support CG mission-
programs such as Marine Environmental Protection, Living Marine 
Resources, Search and Rescue, Aids to Navigation and Marine Safety. The 
specific projects in support of these mission-programs will be prepared 
annually for S&T concurrence.
    In addition to this $18.5 million in funding, the Coast Guard will 
submit security-related research requests through S&T for coordination 
across all portfolios and DHS components. The Coast Guard has submitted 
a maritime security R&D portfolio detailing approximately $50 million 
in vital maritime security research initiatives. This portfolio has 
been validated by S&T portfolio managers and will be considered in the 
development of future spending priorities and commitments from S&T. 
Project funding levels for CG and other DHS component requests will 
depend on the risk and cost associated with the project, effect on 
agency missions, linkage to S&T strategic objectives, and 
executability.
    Question. How will consolidating the research and development 
account into the Science and Technology Directorate affect the Coast 
Guard in general, in terms of control over research projects of 
particular interest to the Coast Guard and access to all ongoing 
research at the Department?
    Answer. Through its portfolio manager at S&T, the CG will have 
direct access to, and visibility of, all S&T research and initiatives. 
While funding will be provided through S&T, the CG will retain control 
of the projects in support of its non-Security mission programs. The 
integration of funding and effort will go far to minimize redundancy 
and maximize the effectiveness of Coast Guard R&D while ensuring that 
all Coast Guard mission requirements remain a key part of S&T planning 
and resource decisions.
    Question. How will this consolidation directly affect the Coast 
Guard Research and Development Center in Groton, Connecticut?
    Answer. Unrelated to the funding consolidation, the CG is working 
through the GSA to relocate its Research and Development Center from 
Groton to a nearby, although not yet identified, location in 
southeastern Connecticut. The lease for the current facility expires in 
fiscal year 2006 and cannot be renewed. Even if the current lease could 
be renewed, the existing facility is unsatisfactory (e.g. not meeting 
OSHA code requirements) for a variety of reasons and would not be 
renewed.
    Science & Technology (S&T) has no current plans to make other 
changes to the location or personnel staffing levels of the CG Research 
& Development (R&D) Center.

                         ALTERATION OF BRIDGES

    Question. Since the fiscal year 2004 funding did not complete the 
ongoing bridge projects, how does the Coast Guard intend to continue 
and begin to complete certain bridge projects without additional funds 
in fiscal year 2005?
    Answer. The Coast Guard's Alteration of Bridges request is zero in 
fiscal year 2005, because the three bridges currently under 
construction: the Florida Avenue Bridge in New Orleans, Louisiana; the 
Sidney Lanier Bridge in Brunswick, Georgia; and, the Limehouse Bridge, 
in Charleston County, South Carolina, are highway or combination 
highway/railroad bridges, and are eligible for funding from the Federal 
Highway Administration's Federal-Aid Highway program. Additionally, 
there are five bridge projects with completed designs for alteration: 
the Burlington Northern Santa Fe Bridge in Burlington, Iowa; the 
Burlington Northern Santa Fe Bridge in Fort Madison, Iowa; the Chelsea 
Street Bridge in Boston, Massachusetts; the EJ&E Bridge in Divine, 
Illinois; and, the CSXT (14 Mile) Bridge in Mobile, Alabama. These 
projects will not proceed to construction until approximately 75 
percent of the total estimated cost to alter the bridge is available.
    Question. If no additional funding is provided in fiscal year 2005 
for the Alteration of Bridges, what will happen to the ongoing bridge 
projects?
    Answer. Depending on construction progress and the rate at which 
billings are made against the projects, the funding for any one of 
three bridges currently under construction: the Florida Avenue Bridge 
in New Orleans, Louisiana; the Sidney Lanier Bridge in Brunswick, 
Georgia; and, the Limehouse Bridge, in Charleston County, South 
Carolina, may be depleted. At least 30 days prior to depletion of 
funds, the Coast Guard would give written notice to the bridge owner of 
such exhaustion of funds, consistent with the ``Order of Apportionment 
of Cost''. After receipt of such notice, the owner may continue the 
work with the understanding that no payment for such work will be made 
by the Coast Guard until additional Federal funds become available. If 
the owner elects not to bear the costs, the project would likely have 
to come to a halt, resulting in contract disruption, increased 
contractual costs, and the bridge potentially remaining a hazard to 
navigation.
    In addition, the remaining 11 bridges, for which an Order to Alter 
has been issued, will not proceed to the next phase of development. The 
following table provides a summary of the status of all active Truman-
Hobbs bridge alteration projects.



    Question. Could the Coast Guard be forced, by a court of law, to 
complete bridge projects which had been started because the bridges 
were deemed to be an obstruction to navigable waters by law?
    Answer. Although litigation is a possibility, the Coast Guard does 
not have authority to fund bridge alteration absent a specific 
appropriation from Congress. Therefore, the Coast Guard does not 
believe a court could force it to complete a bridge project, absent an 
appropriation. Also, the bridge owner cannot claim to have relied on 
the Coast Guard funding any amount of the project above the amount 
specified in the Order of Apportionment of Cost. The Order of 
Apportionment of Cost further states: ``Should it become apparent that 
appropriated funds will be exhausted before additional funds are made 
available, the Coast Guard will give at least 30 days written notice to 
the bridge owner of such exhaustion of funds.'' After receipt of such 
notice, the owner may continue with the work with the understanding 
that no payment for such work will be made by the Coast Guard until 
additional Federal funds become available. Since Congress placed the 
program under the Coast Guard's control in 1967, no bridge owner has 
filed a lawsuit to compel the Coast Guard to complete a bridge 
alteration project, because no project has been halted for lack of 
funding.

                             OIL PLATFORMS

    Question. How much does the Coast Guard spend each year conducting 
emergency medical evacuations of personnel from oil platforms located 
in the Gulf of Mexico? Does the energy industry share any of this cost? 
If not, at what point should the energy industry bear some of the cost 
and personnel burden to perform the medical evacuations of their 
employees?
    Answer. The Coast Guard is unable to determine how much it spends 
each year conducting emergency evacuations to oil platform employees. 
Many of the medical evacuations from oil platforms are persons injured 
aboard vessels and brought to nearby platforms for evacuation. The 
Coast Guard proposes this action when practicable, as it is often safer 
to land on the platform to load the patient for transport than it is to 
hoist the individual from a vessel, especially in poor sea conditions. 
The Coast Guard does not record medical evacuation information 
distinguishing between oil platform employees and persons injured at 
sea who were brought to the platform.
    Industry normally shares the cost when an injury occurs on an oil 
platform and an industry supported or procured commercial helicopter at 
the platform, or at a nearby platform, provides transportation to 
medical facilities ashore. If a commercial helicopter is not available, 
or is unable to fly due to poor weather conditions, the Coast Guard 
generally provides the medical evacuation.
    Medical evacuations from oil platforms make up a small percentage 
of cases in this region. In the past 12 months, the Coast Guard has 
conducted a total of 200 medical evacuations in that region, 13 of 
which were from oil platforms. A medical evacuation at sea is 
considered search and rescue, a traditional Coast Guard mission. The 
Coast Guard does not charge or accept charges for search and rescue.
    Lastly, on a purely voluntary basis, the oil platforms have allowed 
Coast Guard helicopter to refuel at their platforms, which greatly 
extends the range of the HH-65. This ``good Samaritan'' refueling 
ability pays huge dividends, making Coast Guard operations possible at 
much greater distance from shore.
    Question. Are any critical Coast Guard missions set-aside or 
overlooked in favor of medical evacuations from the oil platforms in 
the Gulf of Mexico? How many man hours are devoted to this task?
    Answer. No, there are no missions that are set-aside or overlooked 
in favor of medical evacuations from oil platforms. The Coast Guard 
performs a small number of medical evacuations from oil platforms. In 
the past year, only 13 of the 200 medical evacuations that occurred in 
this region were from oil platforms.
    In most cases, when an injury occurs on an oil platform an industry 
supported or procured commercial helicopter at either the platform or 
at a nearby platform provides the transportation to medical facilities 
ashore. However, in the event a commercial helicopter is not available, 
or poor weather conditions preclude the use of commercial helicopters, 
the Coast Guard will be contacted and will dispatch a resource to 
provide the medical evacuation depending upon the seriousness of the 
injury. A medical evacuation at sea is considered SAR and is a critical 
Coast Guard mission.
    The Coast Guard is unable to determine the man-hours devoted to 
evacuating oil platform employees. Many of the medical evacuations are 
persons injured aboard vessels and brought to nearby platforms for 
evacuation. The Coast Guard proposes this action when practicable, as 
it is often safer to land on the platform to load the patient for 
transport than it is to hoist the individual from a vessel, especially 
in poor sea conditions. The Coast Guard does note record medical 
evacuation information distinguishing between oil platform employees 
and persons injured at sea who were brought to the platform.
    Lastly, on a purely voluntary basis, the oil platforms have allowed 
Coast Guard helicopter to refuel at their platforms, which greatly 
extends the range of the HH-65. This ``good Samaritan'' refueling 
ability pays huge dividends, making Coast Guard operations possible at 
much greater distance from shore.

            GULF COAST MARITIME DOMAIN AWARENESS INITIATIVE

    Question. There is a concern in the Gulf of Mexico with Maritime 
Domain Awareness, as well as the need for developing a Common Operating 
Picture for offshore energy facility security and protection of key 
port and critical infrastructure. What are the Coast Guard's plans to 
help address this concern?
    Answer. The Coast Guard will install Automatic Identification 
System (AIS) sensors on platforms that span the Gulf of Mexico from 
Port Isabel to Mobile, AL. Partnerships will be created with the 
platform owners to begin collecting AIS data by the end of fiscal year 
2004. Plans for the second phase of this project include adding radar 
and ancillary sensors. All sensor data will be integrated into the 
Common Operational Picture (COP) that will be displayed at the Eighth 
District Command Center in New Orleans, the Joint Harbor Operations 
Centers, and Sector Command Centers along the Gulf Coast.
    Further technological enhancements already planned to improve 
interoperability and coordination include Rescue 21, implementation of 
the Global Maritime Distress and Safety System (GMDSS), and the Ship 
Security Alert System.
    Partnerships and teaming efforts are in place to create a community 
of stakeholders with resources to help prevent security incidents in 
ports and around platforms. Working through the Area Maritime Security 
Committee (AMSC), a part of the Gulf Security Committee, we are 
improving communication among offshore platform operators and the Coast 
Guard. Outreach efforts with Homeland Security and Homeland Defense 
partners to create coordinated response procedures are being devised.
    Question. Does the Coast Guard support using existing technologies, 
such as the Navy's Littoral Surveillance System, to demonstrate 
potential dual use Homeland Security applications to help support the 
mission?
    Answer. The Coast Guard fully supports using existing technologies 
to expand Maritime Domain Awareness where appropriate. We are 
evaluating several existing technologies to expand MDA, including the 
Littoral Surveillance System (LSS). Other systems under review include 
Network Centric Collaborative Targeting (NCCT) and Global Network-
Centric Surveillance and Targeting (GNCST).
    Part of the Coast Guard's MDA effort includes the development and 
fielding of a Common Operational Picture (COP). The COP operates with 
the Global Command and Control System--Joint architecture. Any systems 
adopted for homeland security, must be interoperable and compatible 
with this architecture.
    Overall, the LSS provides limited capability when compared to other 
systems and it is not currently compatible with the Global Command and 
Control System-Joint Architecture. There are other systems that provide 
greater capability, such as, the planned Gulf of Mexico project (which 
includes a NCCT component) and the Hawkeye system that provide port 
surveillance and tracking functionality. The Coast Guard is partnering 
with the Office of Naval Research to work on these initiatives.
                                 ______
                                 

               Questions Submitted by Senator Ted Stevens

    Question. The Trans-Alaska Pipeline System provides 20 percent of 
the Nation's domestic crude oil and 48 percent of the West Coast fuel 
supply through the Port of Valdez. Does the Coast Guard have adequate 
armed helicopter surveillance to protect the vessels moving through the 
Prince William Sound? If the Coast Guard is intends to arm MH-60 
helicopters with M-240 machine guns and sniper rifles, how will this be 
achieved without negatively impacting the missions that these assets 
are performing?
    Answer. The Coast Guard does not currently have armed helicopter 
surveillance of vessels moving through Prince William Sound. The Coast 
Guard conducted a surge operation, during a period of increased 
national threat (orange) to the Homeland, to protect tankers moving 
thru Prince William Sound (PWS) and in and out of Valdez, AK. The Coast 
Guard deployed a MH-68 Helicopter Interdiction Tactical Squadron 
(HITRON) helicopter to CG Air Facility Cordova. This short-term 
deployment was in response to validated intelligence and not to an 
increase in the national threat level.
    The Coast Guard is also taking additional measures to protect 
vessels transiting Price William Sound. Since 9/11/01, three response 
boats have been located to Valdez. In August of 2003, the cutter LONG 
ISLAND was relocated from San Diego, CA to Valdez, AK. Additionally, a 
Marine Safety and Security Team will be established in Anchorage later 
this year.
    The Coast Guard's long-term plan is to add Airborne Use of Force 
(AUF) capability to all organic helicopters. Arming HH-60 helicopters 
doesn't detract from their ability to conduct all USCG missions. 
Rather, it provides Coast Guard operational Commanders an additional 
capability to counter imminent homeland security threats that currently 
does not exist in the service's main-stream helicopter fleet.
    Question. Alaska is slated to receive a Maritime Safety and 
Security Team (MSST) by the end of fiscal year 2004. Will this team 
require armed helicopter support for its missions?
    Answer. Currently there are no plans for mandating that the 
Maritime Safety and Security Team (MSST) have dedicated armed 
helicopter support to perform their missions. The Coast Guard 
recognizes the inherent advantage of Airborne Use of Force (AUF) and is 
exploring this in conjunction with the development of enhanced law 
enforcement counter terrorism capabilities. The Coast Guard requests 
$1.8 million for armed helicopters in fiscal year 2005 to begin 
prototyping AUF aboard the HH60J helicopters in Cape Cod, MA. The 
intent is to arm all Coast Guard helicopters in the future. The HH65 
helicopter will require upgraded engine power to accommodate the 
increased weigh of AUF weapons and armor, which should be accomplished 
coincident to a safety and reliability upgrade of the powertrain over 
the next 18-24 months. The HH-60J has sufficient power margins to 
execute the AUF mission now. HH60J units are located strategically 
throughout the United States, including Kodiak and Sitka, Alaska.
    Question. What steps is the Coast Guard taking to ensure that 
necessary support facilities are available for the forward deployment 
of C-130s to Shemya, Galena, or Cold Bay during the high threat season 
along the MBL?
    Answer. The Coast Guard regularly deploys C-130 aircraft to Shemya 
and Galena for Maritime Boundary Line (MBL) and High Seas Drift Net 
(HSDN) enforcement patrols. Similarly, HH-60 aircraft deploy to Cold 
Bay for Bering Sea Crab for Search and Rescue (SAR) standby. These 
airfields are also used periodically outside these deployments. All 
three airfields are vital to mission performance.
    The Coast Guard has found the facilities to be adequate over the 
last several years. During regular deployments to these airfields, 
Coast Guard aircrews evaluate the support facilities and work with the 
air facility directly to address these issues. Prior to deploying, 
facility assessments are conducted ensuring all requirements are met 
for the upcoming deployment.
    Question. The City of Valdez is currently in the process of 
completing a feasibility study for constructing a new harbor basin. 
Does the Coast Guard have shore side infrastructure needs that should 
be incorporated into the City of Valdez's plan?
    Answer. The Coast Guard has shore side and waterfront 
infrastructure needs in Valdez for small boat forces and the USCGC LONG 
ISLAND; a 110-foot patrol boat. The Coast Guard is currently evaluating 
shore infrastructure alternatives at Valdez to meet current and 
projected needs including construction on existing Coast Guard 
property, as well as possible integration into the City of Valdez 
Harbor Basin Project should the City of Valdez decide that a new harbor 
basin is feasible. The Coast Guard will consider the timeliness and 
overall cost of the various alternatives and related impacts to current 
and projected Coast Guard missions prior to deciding on a preferred 
alternative.
    Question. The fiscal year 2005 Homeland Security budget request 
provides $152,000 to begin implementation of the Maritime 
Transportation Security Act of 2002 (MTSA) in Alaska. Will the Coast 
Guard's implementation of the MTSA require commercial fishing vessels 
and other vessels over 65 feet to purchase Automatic Identification 
System equipment?
    Answer. Yes. Automatic Identification System (AIS) equipment will 
eventually be required onboard commercial vessels greater than 65 feet 
in length with the exception of passenger vessels certified to carry 
less than 151 passengers-for-hire (they will not be required to carry 
AIS). AIS will also be required onboard towing vessels of 26 feet or 
more in length and more than 600 horsepower, in commercial service, 
while navigating in a Vessel Traffic Service (VTS) area. With the 
exception of fishing vessels greater than 65-feet in length, the above 
vessels will be required to have AIS equipment not later than December 
31, 2004. Fishing vessels greater than 65 feet in length will not be 
required to carry the AIS equipment until December 31, 2005.
    Question. The fiscal year 2005 budget for Homeland Security 
transfers the Coast Guard's research and development funding to the 
Science and Technology Directorate. The fiscal year 2005 budget 
proposes to reduce Coast Guard RDT&E to $13,500,000, a reduction of 
$1,400,000 from fiscal year 2004 enacted levels. What impact will this 
reduction and transfer have on the Coast Guard's ability to develop new 
technologies to help maintain traditional missions in accordance with 
Section 888 of the Homeland Security Act?
    Answer. The Science and Technology Directorate (S&T) and CG are 
preparing a formal agreement that will detail the coordination and 
funding mechanisms for CG R&D capabilities in fiscal year 2005 and 
beyond. The foundation for that agreement will be the consolidation of 
funding requested in the fiscal year 2005 budget. For fiscal year 2005, 
the CG R&D center facility, personnel and maintenance expenses will be 
funded through S&T in the amount of $13.5 million. In addition, S&T and 
the CG have agreed upon a base level of additional project funding in 
the amount of $5 million that will be specifically targeted to support 
``traditional'' CG mission-programs such as Marine Environmental 
Protection, Living Marine Resources, Search and Rescue, Aids to 
Navigation and Marine Safety. The specific projects in support of these 
mission-programs will be prepared annually for S&T concurrence.
    In addition to this $18.5 million in funding, the Coast Guard will 
submit security-related research requests through S&T for coordination 
across all portfolios and DHS components. The Coast Guard has submitted 
a maritime security R&D portfolio detailing approximately $50 million 
in vital maritime security research initiatives. S&T portfolio managers 
have validated this portfolio. While not yet funded, it will be 
considered in the development of future spending priorities and 
commitments from S&T.
    Provided that CG mission requirements totaling $18.5 million are 
adequately addressed and funded, the integration of funding and effort 
within S&T will go far to minimize redundancy and maximize the 
effectiveness of CG R&D while ensuring that all CG mission 
requirements, as outlined in Section 888 of the Homeland Security Act, 
remain a key part of S&T planning and resource decisions.
                                 ______
                                 

             Questions Submitted by Senator Robert C. Byrd

                             MISSION HOURS

    Question. Based on the most recent quarterly report on mission 
hours, the Coast Guard continues to dedicate less time to traditional 
missions compared to pre-September 11, 2001 levels. However, the Coast 
Guard continues to meet or exceed performance goals in those areas. 
What are the reasons for maintaining or exceeding performance standards 
in non-homeland security mission areas when mission hours dedicated to 
those areas have decreased since September 11, 2001? Please include 
specific technology that has improved performance, improved 
intelligence mechanisms, and efforts to partner with other Federal, 
State and local partners that have improved performance.
    Answer. Based on measurements in fiscal year 2003, the Coast Guard 
met its performance goals in each non-homeland security program area. 
In many mission program areas the Coast Guard is leveraging emerging 
technology, intelligence, and partnerships with other Federal, State 
and local governments to increase or maintain specific performance with 
fewer dedicated resource hours than historical standards. Specific 
examples include:
    Emerging Technologies.--Night Vision Goggles used by cutter, 
aircraft and maritime safety and security team personnel allow for safe 
operations and enhanced ability to detect objects in the water during 
nighttime Search and Rescue operations. Self Locating Datum Marker 
Buoys used in the search and rescue program provide up to date data 
that can be used to better determine where to begin a search. The Coast 
Guard intends for this technology to improve both search effectiveness 
and efficiency. Boarding officers and marine inspectors are using 
Personal Digital Assistants (PDAs) to conduct and record their work. 
The Coast Guard expects that using PDAs will reduce redundant paperwork 
and facilitate electronic database entries.
    Intelligence Improvements.--The placement of Field Intelligence 
Support Teams to provide tactical intelligence support to Coast Guard 
operational commanders by collecting and reporting suspicious or 
criminal activity, communicating with other agencies at the local 
level, and rapidly disseminating intelligence to the Captain of the 
Port other local commanders and the Coast Guard intelligence program. 
New Intelligence Centers were created in 2003; two Maritime 
Intelligence Fusion Centers have been sited in Atlantic and Pacific 
Areas. These centers increase collection and analytical capabilities 
enhancing the Coast Guard's ability to fuse intelligence from various 
sources and improve the timeliness and quality of theater-level 
intelligence support to Coat Guard operational forces. In 2001 the 
Coast Guard joined the United States Intelligence Community (IC), a 
federation of executive branch agencies and organizations that work 
separately and together in intelligence-gathering activities.
    Partnerships.--Interagency Flight Schedules--In Miami, the Coast 
Guard and the Immigration and Customs Enforcement office have developed 
a combined flight schedule to integrate patrol schedules and assets, 
which has led to less overlap in response efforts, saving time and 
resources for both agencies. This not only provides efficiencies to 
security patrols but also frees up Coast Guard assets for non-homeland 
security missions. Partnerships with organizations such as the U.S. 
Power Squadron and Boat United States enable the Coast Guard to 
distribute information on safe boating practices to the recreational 
boating public. These efforts also advocate for public boating 
education, which has been shown to lead to improved boating safety. The 
National Marine Fisheries Service is providing the Coast Guard access 
to their National Vessel Monitoring System (N-VMS) data, enabling the 
Coast Guard to better maintain surveillance of fishing fleets and 
respond to illegal activity. This partnership is allowing the Coast 
Guard to allocate enforcement resources more effectively.
    Question. The Commandant testified that with the budget increases 
received since fiscal year 2003 and with the increase included in the 
fiscal year 2005 request, the Coast Guard will be close to levels in 
place before September 11, 2001 in its traditional mission areas. Since 
the Coast Guard is already meeting or exceeding performance goals in 
traditional mission areas with less hours dedicated to those missions, 
is the Coast Guard adjusting performance goals upward to accommodate 
for the additional hours that will be dedicated to those areas? If so, 
please be specific. If not, why?
    Answer. The Coast Guard will continue to seek the appropriate 
balance among all its mission-programs and relentlessly pursue our 
stated performance goals. The Coast Guard will continue to focus not 
only on activity levels (hours) but also on achieving the desired 
outcomes for each Coast Guard mission. Our ability to achieve desired 
outcomes and performance goals can be significantly enhanced through 
improved technology, tactics and procedures making our activities that 
much more effective. Risk-based decision-making by local commanders 
will continue to be the primary driving factor behind the specific 
activity levels (hours) accrued in the course of Coast Guard 
operations.
    The Coast Guard's fiscal year 2005-2009 budget request highlights 
improvements in performance targets for most of the Coast Guard's non-
homeland security missions, again driven by desired outcomes and not 
solely resource hours. For example:

----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year
                                 -------------------------------------------------------------------------------
                                       2005            2006            2007            2008            2009
----------------------------------------------------------------------------------------------------------------
SAR (percent)...................              86              87              87              87              88
Marine Environmental Protection.              40              40              38              37              35
Aton............................           1,831           1,748           1,664           1,600           1,535
----------------------------------------------------------------------------------------------------------------
SAR--Percent of mariners whose lives are in distress that are saved.
Marine Environmental Protection--Number of spills (>100 gallons) per 100 million.
Tons of Oils and Chemicals shipped.
Aton--5-year average number of collision, groundings, and allisions (striking a fixed object).

                         OPERATION NOBLE EAGLE

    Question. Since the attacks of September 11, 2001, the U.S. 
military has been providing domestic air support for homeland defense 
purposes. In public discussions, NORTHCOM General Ralph Eberhart said 
that the Department of Defense was reviewing whether there should be a 
similar function in place to support Coast Guard efforts in U.S. 
waters. Is such a plan being discussed with the Coast Guard and what 
benefits would be gained from U.S. military support?
    Answer. Collaboration continues to grow in the area of Maritime 
Domain Awareness. Several steps have been taken toward establishing a 
cohesive national strategy to achieve Maritime Domain Awareness, such 
as establishing a Navy-Coast Guard steering group and the co-sponsoring 
of an Assistant Secretary of Defense of Homeland Defense--DHS National 
Maritime Domain Awareness Summit scheduled for May 7, 2004. Maritime 
Domain Awareness is a mutual effort of the DHS, the DOD, and the entire 
Intelligence Community. Inherent to our increased awareness will be 
efforts to improve our national ability to respond to all threats in 
the maritime environment. Much work has been done to streamline the 
process of providing DOD assets to the Coast Guard when the situation 
warrants. These efforts are ongoing and have not yet been fully 
implemented. Also, an agreement that will allow Coast Guard forces to 
execute defense missions quickly is close to implementation. Both of 
these initiatives contribute to a growing integration of effort between 
the DHS and DOD. Together, NORTHCOM, the U.S. Navy, and the U.S. Coast 
Guard, Immigration and Customs Enforcement, Customs and Boarder 
Protection, and Transportation Security Administration are working 
collaboratively to fashion a more secure maritime environment for the 
nation.

                       SUPPORTING EFFORTS IN IRAQ

    Questions. The fiscal year 2004 supplemental appropriations act 
provided $80 million to the Coast Guard for continued operations in 
Iraq. The Coast Guard currently maintains four 110 foot patrol boats, a 
port security unit, and other support personnel for operations in Iraq. 
There are approximately 375 personnel dedicated to Operation Iraqi 
Freedom.
    What is the monthly cost to support and operate these assets? When 
will the $80 million provided in the fiscal year 2004 supplemental be 
depleted? The Secretary testified earlier this year that there will not 
be a supplemental spending request this year for the Department. Will 
the Coast Guard be able to cover operational expenses related to assets 
dedicated to Operation Iraqi Freedom in fiscal year 2004? If Coast 
Guard assets are needed to maintain support for Operation Iraqi Freedom 
in fiscal year 2005, what will the total cost be to operate and support 
those assets?
    Answer. The average monthly cost to support and operate Coast Guard 
Assets funded via the 2004 Emergency Supplemental Appropriation 
supporting the Global War on Terrorism is approximately $6.7 million 
per month.
    The $80 million provided to the Coast Guard in the fiscal year 2004 
Emergency Supplemental, via transfer from the Navy, will be completely 
obligated by September 30, 2004.
    The Coast Guard will be able to cover current operational expenses 
related to missions, assets and personnel dedicated to the Global War 
on Terrorism (including Operation Iraqi Freedom and Operation Enduring 
Freedom) in fiscal year 2004.
    At the current level of Coast Guard participation in term of assets 
and personnel requirements, the Coast Guard estimates it will cost 
between $95 million to $105 million to operate and support the Global 
War on Terrorism (including Operation IRAQI FREEDOM and Operation 
ENDURING FREEDOM) in fiscal year 2005. The Coast Guard is continuing to 
work with the Department of Defense and the Department of Homeland 
Security to further refine fiscal year 2005 mission tasking in support 
of the Global War on Terrorism and the overall resources required to 
support these operations.

                 DEEPWATER AWARDS TO PRIME CONTRACTORS

    Questions. According to a recent report by the General Accounting 
Office, the Coast Guard does not have the capability to assess the 
performance of the Deepwater program. Yet, the Coast Guard awarded the 
prime contractors with a $4.0 million bonus for work accomplished in 
the first year of the contract based on an 87 percent rating. The ICGS 
received this rating despite schedule delays, such as the delivery of 
the 123 foot cutter, which was delayed by 4 months. The schedule for 
the Maritime Patrol Aircraft has slipped as well.
    The Department of Defense recently renegotiated the contract for 
the USS Dwight D. Eisenhower so that the prime contractor will receive 
its bonus only if the project is completed on time and meets specified 
targets. (1) Would the Coast Guard be willing to consider this approach 
for the Deepwater contract? (2) What benefits do the taxpayers receive 
by awarding bonuses to the contractor before the work is completed and 
when specific targets have not been met? (3) What benefits do the 
taxpayers receive if the contractor receives performance bonuses only 
if the project is completed on time and meets specified targets?
    Answers. Would the Coast Guard be willing to consider this approach 
for the Deepwater Contract?
    Yes--in fact, Deepwater has adopted part of this approach already 
in the structure of the Award Term incentive. ICGS is only able to earn 
additional award term periods if deliveries are timely. For instance, 
in order to earn an additional 5 award term, they must receive a 
performance rating of ``excellent.'' Under the award term plan an 
``excellent'' rating is defined as: The Contractor's overall 
performance record strongly supports its ability to manage risks and 
actually deliver as planned.
    At this time, the award fee that is tied to certain Delivery Task 
Orders is being revised to focus more on schedule as compared to the 
earlier award fee criteria. One feature of this incentive for an award 
fee early in the contract to help reinforce the partnership approach, 
which has been identified as a ``Best Practice.'' To wait until the 
contract delivered a product before providing an incentive was judged 
as not keeping with the intent to build a partnership early on between 
industry and the government. The targets for the award fee that was 
cited in the GAO report was an annual award fee for System Engineering 
and Integration.
    (2) What benefit does the taxpayer receive by awarding bonuses to 
the contractor before the work is completed and when specific targets 
have not been met?
    Incentives for contractors serve many purposes. One purpose of 
incentives is to motivate the contractor to focus on contractor 
performance/behavior at critical times in the contract. One dimension 
of the IDS contract incentive approach is to focus on partnership 
between the Coast Guard and ICGS.
    (3) What benefit does the Taxpayer receive if the contractor 
receives performance bonuses only if the project is completed on time 
and meets specified targets?
    The benefit that the taxpayer receives is that the contactor 
receives incentives only if the project is completed on time and meets 
specified targets, is the best-case scenario. However, in a different 
scenario where the contractor is behind on schedule and cannot make up 
the time, this creates a situation where there is no additional 
incentive for the contractor to try to make the delay as short as 
possible. In this scenario, the contractor will, at the time, be 
working only to the exact letter of the contract specifications, not to 
the spirit of a partnership to reach mutually agreeable results. At 
that time, any situation in which the government has even partial 
responsibility will be seized on by the contractor to initiate a 
contract claim; a claim that could have potentially been avoided if an 
incentive was still in place. This is the reason that the IDS contract 
strategy contains two types of incentives:
  --Specific Short-Term Award Fee.--Results in a short-term (usually 1-
        year period) award fee. This provides a dollar amount award fee 
        based on an Award Fee Determination is usually targeted at very 
        specific performance for the period.
  --Long-Term Award Term.--Results in a longer term evaluation and in 
        the case of IDS, the term evaluation period is for the first 5 
        years and is determined during the last year. This incentive, 
        which if awarded, is for another award term from 1 to 5 years 
        allowing the contractor to keep performing under the contract 
        for the period of time awarded. The following four factors are 
        included in the Award Term Assessment:
  --Operational Effectiveness
  --Total Ownership Cost
  --Customer Satisfaction
  --Competition
    If deliveries occur late, that performance will be reflected in 
Total Ownership Coast and Customer Satisfaction. If specific targets 
are not met, then Operational Effectiveness and Customer Satisfaction 
will reflect that Performance.
    If there is a continuation of late deliveries, the Deepwater 
Program, which is measuring the schedule, will reflect that in it's 
Award Term Assessment and the Award Term could be adjusted accordingly; 
from zero to five additional years under the contract. Again, if ICGS 
complete all other assets on time and meets all required targets, the 
Award Term Assessment would reflect this overall performance and 
balance the achievement of the rest of the deliverables with these 
start up delays.
    By continuing both short and long-term incentives, along with 
robust performance measuring, Deepwater has the tools and methodology 
in place to appropriately manage this Performance Based Acquisition, 
yet respond to any changes in DHS priorities and changes in funding.
    With respect to GAO's comments, the following is provided:
  --GAO states the Coast Guard does not have the capability to assess 
        the performance of the Deepwater Program. The Coast Guard does 
        have the capability to assess performance. As stated in the GAO 
        report, the Coast Guard assessed the performance for the first 
        year to be 87 percent; since then we have documented and 
        evaluated ICGS' logistics system at 79 percent and their 
        service in providing HITRON at 90.6 percent. The process for 
        assessment does need improvement and more objectivity, which 
        the Coast Guard is currently implementing.
  --The award fee that was cited was for the first year's System 
        Engineering and Integration and was not for the 123-foot cutter 
        or the Maritime Patrol Aircraft.
  --Delaying any incentive until an approximate 20-year program is 
        complete would not allow the government to recoup the benefit 
        of having incentives consistently provided at smaller intervals 
        of time.

                          DEEPWATER MANAGEMENT

    Question. As GAO states in its recent report on the management of 
the Deepwater program, the two first tier subcontractors have sole 
responsibility for determining whether to hold competitions for 
Deepwater assets or to provide these assets themselves. The GAO said 
that the Coast Guard does not have the mechanism in place to hold the 
contractor accountable. What is the Coast Guard doing to ensure that 
future contract decisions are made on a competitive basis?
    Answer. The Deepwater Program, working with GAO, is now including 
additional competition factors for determining if the contract should 
be approved for another term and the length of a subsequent term. The 
measures for competition being proposed for adoption include:
  --Percentage of awards competed;
  --Minimizing the number of teaming agreements;
  --Number of advertisements publicizing supplier registration;
  --Number of vendor outreach programs; and
  --Percentage of first tier subcontracts that incorporate the intent 
        of the Federal Acquisition Regulation clause 52-244.5 
        ``Competition in Subcontracting.''
    The Coast Guard's systems integrator, ICGS, has also adopted the 
Open Business Model, initially a Lockheed Martin philosophy, as an 
official policy for ensuring competition. The process ensures full, 
continuous, and open analysis of supplier alternatives throughout the 
program's execution.
  --This approach entails obtaining proposals/quotes from two or more 
        qualified suppliers, and then balancing the cost, quality and 
        delivery of the components after the qualified suppliers have 
        been identified to provide the required components. This model 
        provides the flexibility to capture commercial technology when 
        needed, and it is projected to provide better performance at 
        equal or lower cost.
  --The Open Business Model has been approved by the ICGS Board of 
        Directors and is applicable to all Deepwater transactions.
  --To enforce these regulations, ICGS has appointed a Competition 
        Advocate and Ombudsman tasked to draft implementation 
        procedures for regular reporting to ICGS
  --Visits by the ICGS Competition Advocate are also planned with 
        Deepwater's industry partners to examine ``make/buy'' decisions 
        and competition practices.

                          DEEPWATER ESTIMATES

    Question. How much would be required in fiscal year 2005 to put the 
Deepwater program on track for completion in 20 years as originally 
planned? Please provide the outyear costs to meet a 20 year schedule. 
Provide estimates for completion in 15 years and 10 years as well.
    Answer. This is a complex, multi-variable equation, and as such 
developing comprehensive systems-wide analysis on various levels is 
challenging. The table below is based on an approximate total 
acquisition cost of the IDS project scoped out prior to 9/11 at 
approximately $12 billion (in 1998 dollars).

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Est. fiscal year 2005 funding level.............................          $1,892          $1,105            $795
Est. number of years............................................              10              15              20
Est. completion date............................................            2011            2016            2021
Notes:
----------------------------------------------------------------------------------------------------------------
The estimated number of years to complete represents a rough order of magnitude estimation. These estimates will
  be impacted by the materiel condition of legacy assets, deterioration trends, evolving Coast Guard missions/
  demands within DHS and fluctuation in funding over the life of the project.
The estimated completion date assumes funding begins in 2002 and ends in year depicted. Actual full
  implementation is approximately 2 years after end of procurement.
The estimated funding level for 20 and 15 years are in 2005 dollars and assume continued funding at this level
  adjusted for inflation.
The estimated funding level for 10 years is in 2005 dollars and assumes the cash flows as provided in the March
  07, 2003 Report to Congress on the feasibility of accelerating IDS.

    Question. For each asset planned to complete the Deepwater program, 
provide the total cost for each asset a functional description of the 
use of each asset, and the number of each asset the Coast Guard 
currently plans to acquire.
    Answer. A table is shown below which includes the number and 
projected unit cost for each major asset the Coast Guard plans to 
acquire through the Integrated Deepwater System acquisition program.

                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                     Average
                   Assets                       Lead Asset(s)    Lead Asset(s)  Projected Follow-  Follow-on Qty
                                               Projected Cost         Qty            on Cost
----------------------------------------------------------------------------------------------------------------
National Security Cutter (NSC) \1\..........            $475                 1            $265                 7
Offshore Patrol Cutter (OPC) \1\............             330                 1             175                24
Fast Response Cutter (FRC) \1\..............              78                 1              40                57
123 (110 to 123 Conversion).................              16.5               1               8.2          \2\ 48
Maritime Patrol Aircraft (MPA)..............             145                 2              33                33
Vertical Take-off & Landing Unmanned Air                 138                 2               5.3              66
 Vehicle (VUAV).............................
Multi-mission Cutter Helo (MCH).............              82                 1               6.2              92
Vertical Take-off & Landing Recovery &                   110                 2              15.0              32
 Surveillance Aircraft (VRS)................
High Altitude Endurance Unmanned Air Vehicle
 (HAE-UAV)..................................   In accordance with the original IDS implementation plan, the HAE-
                                                UAV will be leased starting in fiscal year 2016 using Operating
                                               Expense Funding based on the ICGS Implementation Plan. The lease
                                               will provide approximately 16,100 hours of surveillance per year
                                                 at an approximate cost of $4,000 per hour in fiscal year 2002
                                               dollars. The average annual cost per year is approximately $64.5
                                                             million in fiscal year 2002 dollars.
----------------------------------------------------------------------------------------------------------------
\1\ Includes DHS Capability for CBR (Chemical, Biological and Radiological) capability, interoperability with
  DHS and other Government Agencies (OGAs), selected counter measures and protection from certain terrorist
  weapons.
\2\ The number of 123 conversions will be decided based on the Business Case Analysis (BCA) currently underway
  on when to shift to the Fast Response Cutter (FRC).

    At full implementation, the Integrated Deepwater System comprises 
three classes of new cutters and their associated small boats, a 
combination of new and upgraded fixed-wing manned aircraft, a 
combination of new and upgraded helicopters, and both cutter-based and 
land-based unmanned air vehicles (UAVs). All of these highly capable 
assets will be linked with state-of-the-art Command, Control, 
Communications, Computers, Intelligence, Surveillance and 
Reconnaissance (C4ISR) systems, and will be supported by an integrated 
logistics regime. The following are functional descriptions of each 
asset listed above.
    Upon departure for patrol, each NSC and OPC will be outfitted with 
the small boat package and aviation detachment most appropriate for 
that particular patrol. These cutters will have the capability to 
deploy with two MCHs or four VTOL Unmanned Air Vehicles (VUAVs) or a 
combination of these. Additionally, the NSC and OPC will be able to 
land, launch, hangar, service, and replenish the VTOL Recovery and 
Surveillance (VRS) helicopter.
    Fast Response Cutters (FRCs) can be deployed independently in 
support of law enforcement, port security, search and rescue, and 
defense operations missions. Typical missions include near-shore 
fisheries, choke point interdiction, barrier patrols, and providing a 
show of presence in areas of concern.
    The 123-foot Patrol Boat is a modification of the 110-foot Island-
Class Patrol Boat. The renovation extends the length 13 feet to allow 
for the installation of a stern boat launch--enhancing small boat 
launch and recovery. The renovation includes a new superstructure and 
pilothouse, including a 360-degree bridge for increased visibility and 
a large increase in available deck space. The renovation also includes 
upgrades to the C4ISR suite to provide for increased capabilities in 
communications, detection and prosecution.
    The Multi-Mission Cutter Helicopter (MCH) is an upgraded version of 
the legacy short-range recovery helicopter, the HH-65. The HH-65 will 
undergo a Service Life Extension Plan (SLEP) that will yield a like-new 
aircraft. The MCH will assist in the missions of search and rescue, 
enforcement of laws and treaties, as well as maritime homeland security 
missions.
    The CASA CN 235-300M (Maritime Patrol Aircraft) is a transport and 
surveillance, fixed-wing aircraft that will be used to perform search 
and rescue missions, enforce laws and treaties including illegal drug 
interdiction, marine environmental protection, military readiness, and 
International Ice Patrol missions, as well as cargo and personnel 
transport. It can perform aerial delivery of search and rescue 
equipment such as rafts, pumps, and flares, and it can be used as an On 
Scene Commander platform.
    The AB-139 VRS (Vertical Take-off and Landing Recovery and 
Surveillance Aircraft) is proposed as the Integrated Deepwater System 
medium-range recovery aircraft, and would begin introduction in 2014. 
These helicopters will be used as medium range responders for offshore 
operations, and can provide shore-based aviation surveillance 
capability.
    The Bell HV-911 ``Eagle Eye'' Vertical Takeoff and Landing Unmanned 
Aerial Vehicle (VUAV) is a low maintenance shipboard deployable 
unmanned aircraft. The VUAV will allow the Coast Guard to extend the 
surveillance, classification and identification capability of its major 
cutters through its speed, range, and endurance. This asset will be 
used for maritime homeland security, search and rescue missions, 
enforcement of laws and treaties including illegal drug interdiction, 
marine environmental protection, and military preparedness.
    The proposed High Altitude Endurance Unmanned Air Vehicle (HAE-
UAV), Northrop Grumman's RQ-4A Global Hawk, will bring even further 
capability to the Coast Guard aviation solution. Providing an air 
solution that is built on speed and endurance, the HAE-UAV can get on-
site quickly with an air speed up to 400 knots. With its 12,500 
nautical mile range and 38 hour endurance combined with satellite and 
line-of-sight communication links to other air and surface platforms 
and operations centers ashore, the Global Hawk from a height of 65,000 
feet can use its high-resolution sensors to conduct surveillance and 
monitoring operations in adverse weather conditions, day or night, over 
an area about the size of Illinois in 24 hours. HAE-UAVs will possess 
the ability to transmit data and other imagery to shore-based Command 
and Control (C2) centers as part of the Common Operational Picture 
(COP).
    Question. Provide the total cost that will be required for prime 
contractor program management in fiscal year 2005 and over the life of 
the Deepwater contract.
    Answer. The table below provides enacted appropriation history for 
the Integrated Deepwater System (IDS) from fiscal year 2002 through 
fiscal year 2004, including Total Capital Acquisition and Systems 
Engineering and Integration (prime contractor program management). The 
table also provides the funding at the President's Budget for fiscal 
year 2005, and projections for the outyears until the acquisition is 
built out.

                        [In Millions of Dollars]
------------------------------------------------------------------------
                                                              System
               Fiscal year                 Total capital   engineering &
                                            acquisition     integration
------------------------------------------------------------------------
2002....................................           320.2            53.9
2003....................................           474.9            43.4
2004....................................           664.3            41.9
2005....................................           678.0            45.0
2006....................................       \1\ 688.8        \3\ 41.8
2007....................................       \1\ 700.6        \4\ 40.4
2008....................................       \1\ 713.2        \4\ 38.7
2009....................................       \1\ 726.0        \4\ 37.4
2010....................................       \2\ 739.8        \4\ 37.0
2011....................................       \2\ 753.9        \4\ 38.0
2012....................................       \2\ 768.2        \4\ 38.4
2013....................................       \2\ 782.8        \4\ 37.0
2014....................................       \2\ 797.7        \5\ 36.9
2015....................................       \2\ 812.8        \5\ 38.2
2016....................................       \2\ 828.2        \5\ 38.9
2017....................................       \2\ 844.0        \5\ 40.1
2018....................................       \2\ 860.0        \5\ 39.7
2019....................................       \2\ 876.4        \5\ 39.6
2020....................................       \2\ 893.0        \5\ 40.0
2021....................................       \2\ 910.0        \5\ 40.7
2022....................................       \2\ 927.3        \5\ 41.6
2023....................................       \2\ 944.9        \5\ 39.3
                                         -------------------------------
      Total.............................  ..............           887.9
------------------------------------------------------------------------
\1\ Then Year Dollars provided in the Coast Guard's Capital Investment
  Plan.
\2\ Then Year Dollars, based on the final year of Capital Investment
  Plan, inflated using a 1.9 percent inflation factor.
\3\ Systems Engineering & Integration amount based on proposal prices
  provided in June 2002.
\4\ Then Year Dollars based on Systems Engineering & Integration amount
  proposal prices provided in June 2002 and then inflated using OMB/USCG
  Non-pay Inflation.
\5\ Then Year Dollars based on Systems Engineering & Integration amount
  proposal prices provided in June 2002 and then inflated using a 1.9
  percent inflation factor from 2014 through 2023.

                         DEEPWATER PATROL BOATS

    Question. The Deepwater contract with the Integrated Coast Guard 
Systems (ICGS) calls for the modification and conversion of 49 110 foot 
patrol boats to 123 foot patrol boats. According to the Coast Guard, 
the number of 123 foot conversions may change based on an ongoing 
Business Case Analysis on when to shift to the Fast Response Cutter 
(FRC).
    What is the timeline to complete this analysis and how will it 
affect resources appropriated to date and requested in fiscal year 
2005?
    Answer. The Business Case Analysis on accelerating the acquisition 
of the Fast Response Cutter (FRC) is expected in fiscal year 2004. The 
results of the Business Case Analysis will not affect resources 
appropriated to date or requested for fiscal year 2005. The Coast Guard 
will use this analysis to assist in determining the appropriate number 
of 123-foot patrol boat conversions, while accelerating the FRC as 
appropriated in the IDS Patrol Boat Line item.

             SECURITY PLANS FOR VESSELS AND PORT FACILITIES

    Question. To meet the requirements of the Maritime Transportation 
and Security Act (MTSA), vessel owners and port facility owners were 
required to submit security plans to the Coast Guard for review and 
approval by December 31, 2003.
    How many vessel and port facility owners failed to submit a 
security plan? How many penalties have you levied against non-compliant 
companies? How many plans have you sent back for revisions? Based on 
the plans that have been submitted to the Coast Guard, what is being 
learned about the security needs of vessels and port facilities?
    Answer. As of April 7, 2004, the Coast Guard has issued Notices of 
Violation to 95 vessels and 66 facilities. Each of those violations was 
for failing to submit a completed security assessment and has a $10,000 
civil penalty associated with it. Subsequently, the Coast Guard has 
issued civil penalties in the amount of $25,000 (additional) to four of 
these facilities for failing to submit a completed security plan. These 
penalties were based on violations of 33 CFR Section 104.410 for 
vessels and 33 CFR Section 105.410 for facilities.
    The Coast Guard is following a three-step process to review and 
approve facility security plans. The first-step is a broad overview, 
the second-step is a detailed review, and the third-step is an on-site 
inspection. On-site inspections have just recently commenced. Plans may 
require revision during any stage of review or inspection.
    The Coast Guard is following a two-step process to review and 
approve vessel security plans. The two stages are similar to the first 
two stages used for facility plans, but there is no on-site inspection 
required. Also like facilities, vessel security plans may require 
revision during either stage of review.
    As of April 7, 2004, the Coast Guard had received 9,250 vessel 
security plans. Of the total vessel security plans received, 1,884 are 
being revised. The Coast Guard Marine Safety Center is currently 
engaging these vessel owner/operators to ensure these vessels meet the 
July 1, 2004 deadline.
    As of the same date, the National Plan Review Center had received 
3,181 facility security plans. Of the total facility security plans 
received, 383 are being revised. The Coast Guard National Plan Review 
Center is currently engaging these facility owners and/or operators to 
ensure these facilities meet the July 1, 2004, deadline.
    The Coast Guard has two concerns as plans are being reviewed: (1) 
Assessment Reports required to go forward with the plans are often too 
abbreviated and may require the COTP to read the entire assessment 
prior to going forward with approval; and (2) regulations do not 
require a layout of the facility which would help the plan reviewers. 
The latter issue can be worked around with overhead images and prior 
submissions from the facility that have layouts.
    Question. When Secretary Ridge testified before this subcommittee 
in February, he said that he believes port facility owners should bear 
most of the financial burden to harden security at our seaports. What 
evidence do you have that these owners are stepping up to the plate and 
investing their own resources in port security?
    Answer. The Federal Government is bearing most of the financial 
burden to harden security at our seaports. Department of Homeland 
Security spending on port security increases by $224 million (13 
percent) in the President's Budget, from $1,661 million in 2004 to 
$1,885 million in 2005. Within the 2005 total is $1,675 million for 
Coast Guard port, waterway, and coastal security activities, including 
over $100 million to implement the Maritime Transportation Security Act 
(MTSA). The DHS port security total also includes $164 million in U.S. 
Customs and Border Protection for the Container Security Initiative and 
the Customs Trade Partnership Against Terrorism, and $46 million in the 
Office for Domestic Preparedness for port security grants.
    Port facility owners must also do their share. The owners/operators 
of these regulated facilities realize that they must be fully compliant 
with approved facility security plans by July 1, 2004 or face 
suspension of operations. All indicators are that they are working hard 
in preparation to meet the enforcement date. As of March 23, 2004, 
3,205 facilities have submitted security plans to the National Plan 
Review Center in Kansas City, KS. This represents approximately 99 
percent of the facilities required to submit plans. In addition to 
preparing their plans, facility owner/operators are purchasing and 
installing physical security equipment and providing training to their 
personnel. Coast Guard inspectors are observing improved access control 
and personnel monitoring, fencing, security patrols, and signage during 
facility security spot checks conducted in conjunction with other 
required visits.

                    AUTOMATIC IDENTIFICATION SYSTEM

    Question. The Maritime Transportation Security Act, which President 
Bush signed on November 25, 2002, requires vessels entering U.S. ports 
to have an automatic identification system (AIS) on board by the end of 
2003 that will identify the ship, the size of the ship and the type of 
cargo on the ship when they arrive at U.S. ports. Congress appropriated 
$24 million in fiscal year 2004 to install towers at selected ports and 
to initiate a plan to create a nationwide system for all major 
seaports. Your fiscal year 2005 request includes only $4 million to 
continue this effort. The Coast Guard indicates that by the end of 
fiscal year 2004, only 9 seaports will be able to receive AIS signals 
from vessels entering our ports. Of the 9 seaports, how many will have 
full AIS coverage?
    Answer. By December 31, 2004, all nine ports will have full AIS 
capability installed as part of their Vessel Traffic Service (VTS) 
system:
  --New York
  --Houston/Galveston
  --San Francisco
  --Puget Sound (Seattle-Tacoma)
  --Prince William Sound (Valdez)
  --St. Marys River (Sault Ste. Marie, MI)
  --Berwick Bay (Louisiana)
  --Lower Mississippi River (New Orleans)
  --Los Angeles-Long Beach
    In addition, the Coast Guard is already operating basic (primarily 
receive-only) AIS installations in the following locations:
  --Miami and Florida Keys
  --Long Island Sound (Groton, CT)
  --Hampton Roads (Norfolk, VA)
    By the end of CY 2004, the Coast Guard intends to have established 
additional AIS capability (primarily receive-only, but possibly more 
robust) at additional locations nationwide. These sites will be 
determined based on a variety of criteria, including the expected 
density of AIS-equipped vessels in the area, existing command and 
control capability to put the data to use, compatibility and support 
for the more extensive and capable system currently in the planning 
stages, and coordination with other needs and assessments. These sites 
will include use of offshore NOAA and other buoys and may include some 
non-recurring investment in satellite capability. A more detailed plan 
will be available by June 2004.
    Question. The Coast Guard indicated that a contract award to 
implement a nation-wide system would be made by the end of fiscal year 
2004 or early fiscal year 2005. Is that information still accurate? If 
the $4 million requested in fiscal year 2005 were approved, how many 
additional ports would be outfitted with AIS technology?
    Answer. The Coast Guard is currently developing a nationwide 
implementation plan for AIS consistent with Coast Guard and Department 
of Homeland Security requirements associated with major systems 
acquisitions. We anticipate awarding a contract for this initiative in 
late fiscal year 2004 or early fiscal year 2005. In the meantime, we 
intend to deploy interim AIS capability in several ports during fiscal 
year 2004. By December 31, 2004, the following ports will have full AIS 
capability installed as part of their Vessel Traffic Service (VTS) 
system:
  --New York
  --Houston/Galveston
  --San Francisco
  --Puget Sound (Seattle-Tacoma)
  --Prince William Sound (Valdez)
  --St. Mary's River (Sault Ste. Marie, MI)
  --Berwick Bay (Louisiana)
  --Lower Mississippi River (New Orleans)
  --Los Angeles-Long Beach
    In addition, the Coast Guard is already operating basic (primarily 
receive-only) AIS installations in the following locations:
  --Miami and Florida Keys
  --Long Island Sound (Groton, CT)
  --Hampton Roads (Norfolk, VA)
    Interim sites will include use of offshore NOAA and other buoys and 
may include some non-recurring investment in satellite capability. A 
more detailed plan will be available by June 2004.
    The $4 million requested in fiscal year 2005 will be used to 
continue building out the nationwide AIS system. Once the Acquisition 
Project Baseline is developed, a total project cost estimate will be 
known and we will be able to provide an estimate of the number of 
additional ports that will be outfitted with AIS technology. It is 
important to note that each port will have unique requirements so there 
will be no standard AIS cost per port.

                         RESEARCH & DEVELOPMENT

    Question. Section 307 of the Homeland Security Act requires a joint 
agreement between the Under Secretary of the Science & Technology 
directorate and the Commandant on R&D spending for the Coast Guard. The 
Homeland Security Act specifies 10 percent of funding for the Homeland 
Security Advanced Research Projects be spent on Coast Guard related 
mission areas. Last year, the Committee was notified that the ``Coast 
Guard is working with DHS to develop processes and policy for 
compliance with Section 307 of the Homeland Security Act.'' Has a 
policy been developed to comply with Section 307 of the Act?
    Answer. No. Subsequent to the Coast Guard reply cited, DHS and CG 
legal counsel advised that without a specific (Homeland Security 
Advanced Research Project Agency) HSARPA appropriation, no funds are 
statutorily designated to be set aside for CG related mission areas as 
outlined in Section 307. Although the Homeland Security Act provides 
authorization to do so (Figure 1), there have been no funds 
appropriated specifically for HSARPA since enactment of the Homeland 
Security Act. HSARPA is not a line item in the S&T budget. Rather, 
funds have been appropriated toward a number of specific portfolios 
organized generally by threat. It has evolved into an execution means 
by which S&T will award competitive, merit-reviewed grants, cooperative 
agreements or contracts to public or private entities to meet S&T 
requirements.
    Nonetheless, the Science and Technology Directorate (S&T) and CG 
will develop a formal agreement that will detail the coordination and 
funding mechanisms for CG R&D capabilities in fiscal year 2005 and 
beyond. This agreement will not be limited to HSARPA but rather the 
interaction of the Coast Guard/Maritime portfolio with all the 
executing arms of S&T (e.g. HSARPA, Office of Research and Development 
(ORD), etc).

    ----------------------------------------------------------------

    ``(2) Authorization of Appropriations.--There are authorized to be 
appropriated $500,000,000 to the Fund for fiscal year 2003 and such 
sums as may be necessary thereafter.
    ``(3) Coast Guard.--Of the funds authorized to be appropriated 
under paragraph (2), not less than 10 percent of such funds for each 
fiscal year through fiscal year 2005 shall be authorized only for the 
Under Secretary, through joint agreement with the Commandant of the 
Coast Guard, to carry out research and development of improved ports, 
waterways and coastal security surveillance and perimeter protection 
capabilities for the purpose of minimizing the possibility that Coast 
Guard cutters aircraft, helicopters and personnel will be diverted from 
non-homeland security missions to the ports, waterways and coastal 
security mission.''

    ----------------------------------------------------------------

      Figure 1.--Excerpt from Section 307 of Homeland Security Act

    Question. For fiscal year 2005, the Department proposes to move 
funding for Coast Guard R&D to the Science & Technology (S&T) 
directorate. The S&T request includes $13.5 million to operate the 
Coast Guard's R&D Center in Groton, CT and an additional $5 million for 
R&D activities for a total of $18.5 million. In addition to this 
funding, how will the Coast Guard benefit from S&T research? What 
specific technologies are being explored to support the Coast Guard's 
mission?
    Answer. Through its portfolio manager at S&T, the CG will have 
direct access to, and visibility of, all S&T research and initiatives. 
The integration of funding and effort will go far to minimize 
redundancy and maximize the effectiveness of Coast Guard R&D while 
ensuring that all Coast Guard mission requirements remain a key part of 
S&T planning and resource decisions. For example, S&T has provided $7.1 
million of fiscal year 2003/2004 funds for support of a project in 
South Florida exploring communications, sensors, data fusion concepts, 
and modeling and simulation (Project Hawkeye). The integration of these 
technologies provides improved maritime security for Miami and Port 
Everglades while providing a rapid prototyping prelude to potential 
Coast Guard-wide installations.
    As stated, S&T has also agreed upon a base level of project funding 
of $5 million that will be specifically targeted toward non-security 
related projects including maritime science and research. This funding 
will be designed to support CG mission-programs such as Marine 
Environmental Protection, Living Marine Resources, Search and Rescue, 
Aids to Navigation and Marine Safety. The specific projects in support 
of these mission-programs will be prepared annually for S&T 
concurrence.
    In addition to the $18.5 million in funding cited, the Coast Guard 
will submit security-related research requests through S&T for 
coordination across all portfolios and DHS components. The Coast Guard 
has submitted a maritime security R&D portfolio detailing approximately 
$50 million in vital maritime security research initiatives. While not 
yet funded, this portfolio has been validated by S&T portfolio managers 
and will be considered in the development of future spending priorities 
and commitments from S&T. As the lead Federal agency for maritime 
security, the CG is being afforded an important role within S&T to 
construct and help prioritize research and development needs in the 
maritime domain.

                            HH-65 HELICOPTER

    Question. The Coast Guard is currently in the process of purchasing 
LTS-101-850 engines for the HH-65 to address safety, reliability, and 
engine power issues. This approach is intended to provide an interim 
solution to documented power failures. How many of the LTS-101-850 
engines have been purchased? How many of the LTS-101-850 engines are 
needed to provide the interim solution for the HH-65 before full 
reengineering is completed and what is the associated cost?
    Answer. To date, the Coast Guard has purchased 61 LTS-101-850 
engines at a cost of $5.9 million.
    The only reason to purchase additional 850 engines (38 at $4 
million) would be to provide an interim safety and reliability 
enhancement throughout the approximate 24-month duration of Integrated 
Coast Guard System's (ICGS) Turbomeca re-engining project. The LTS-101-
850 engine, while not equipped with electronic fuel controls, offers an 
additional margin of safety in an emergency situation. We owe our 
aircrews nothing less until the fleet is re-engined. Based upon current 
schedule projections, there is a 10-14 month ``underlap'' where the 
Coast Guard would directly benefit from the additional engines.
    These engines require long-lead time component purchases that must 
be accounted for in the procurement decision process. The Coast Guard, 
however, will wait until the completion of the current field evaluation 
and subsequent inspection of the LTS-101-850 engines that are installed 
on two Coast Guard Air Station Miami Helicopters. One helicopter has 
completed the initial 150 hour evaluation and is currently being 
inspected, while the second aircraft still has 36 hours of evaluation 
remaining prior to inspection. After completion of testing and 
inspection, the Coast Guard intends to re-evaluate the need for 
additional engines based upon the results and both LTS-101-850 and 
Turbomeca installation schedule updates
    Below is the latest draft installation schedule based on 
information from the new engine system selected manufacturer, 
Turbomeca. This schedule is not final. The Coast Guard is hopeful that 
the new engine installations move further to the ``left.''



    Question. At the same time, the Coast Guard recently announced the 
selection of Turbomecca to re-engine the HH-65. The Coast Guard 
estimates that this re-engining will cost $250 million over a 24 month 
period. Will this engine be compatible with the Deepwater Multi-Mission 
Cutter Helicopter or will another engine replacement be required?
    Answer. The Coast Guard has directed that a re-engining project be 
immediately initiated to restore the HH-65 to unrestricted safe and 
reliable operations. The project is designed to address the HH-65 
engine system, the engine and engine control systems, to remedy this 
safety and reliability crisis, and restore the HH-65's operational 
capability.
    The HH-65 re-engining project is a separate and distinct effort 
from the Deepwater Multi-mission Cutter Helicopter (MCH). In the long-
term, the Deepwater plan is still to convert the HH-65 to the Multi-
mission Cutter Helicopter (MCH). While power increases were not the 
focus of this acquisition, the engine chosen, while addressing the 
safety and reliability concerns, also has sufficient power margins to 
allow for that engine to be used in the continuation of the MCH.

                     HIGH INTEREST VESSEL BOARDINGS

    Question. U.S. Customs and Border Protection use an automated 
targeting system to identify shipments that pose a potential terrorist 
risk. It is unclear if this information is shared with the U.S. Coast 
Guard, which could be useful in identifying high interest vessels. Is 
this information being shared with the Coast Guard? If not, would this 
information be a useful tool for the Coast Guard to use?
    Answer. Yes, Automated Targeting System information is shared 
through an exchange of liaisons between the Coast Guard and the U.S. 
Customs and Border Protection's National Targeting Center (NTC). The 
Coast Guard's Intelligence Coordination Center (ICC) and the NTC have 
exchanged full-time liaisons to pass information each center develops 
about suspect ships, people, and cargoes. This has been a highly 
effective partnership and has given each center much greater visibility 
into specific maritime cases and concerns as they arise, resulting in 
better coordination of information flow and operational planning. ICC's 
COASTWATCH program (a partnership with the U.S. Navy's Office of Naval 
Intelligence) uses data collected via the ICC/NTC partnership, coupled 
with the information received through our 96-hour Advanced Notice of 
Arrival (ANOA) rules, intelligence, and other appropriate law 
enforcement information, to identify Vessels of Interest, providing 
crew, cargo, and vessel screening prior to a vessel's arrival in U.S. 
ports.
    At the local level, Vessels of Interest are factored into the 
decision making process to determine which vessels should be designated 
and or boarded as High Interest Vessels (HIVs). Additionally, because 
of the U.S. Coast Guard's solid working relationship with Customs and 
Border Protection (CBP), input provided by CBP at the local level is 
also considered when determining which vessels should be boarded as 
HIVs.
    The Coast Guard is incorporating an option into our 96-hour vessel 
ANOA requirements to permit the electronic submission of information 
(e-NOA). The Coast Guard and CBP have been working together to 
incorporate CBP's reporting requirements into the e-NOA system. This 
consolidated e-NOA system will include the capability to capture crew, 
passenger, cargo, and vessel arrival information for both agencies. It 
is anticipated that e-NOA will be operational by the summer of 2004. By 
allowing industry to submit Coast Guard and CBP reporting requirements 
together, DHS will enhance its information sharing capabilities, 
thereby significantly enhancing the processing and identification of 
security and safety risks posed by vessels entering U.S. ports.

                            SHORE FACILITIES

    Question. The Coast Guard's request for shore facility projects is 
$5 million in fiscal year 2005. According to the Coast Guard, $146 
million is needed on an annual basis for recapitalization needs to 
support shore facility assets valued at $7.2 billion. With such 
valuable assets, why does the Coast Guard continue to neglect shore 
facilities? Does the Coast Guard have a plan in place to address the 
needs of its shore infrastructure? Provide a list of projects in need 
of shore facility funding in priority order.
    Answer. The Coast Guard is deeply concerned about its entire 
infrastructure, including shore facilities. However, funding priority 
must be placed on recapitalization efforts of operational first 
response platforms such as Deepwater and Rescue 21. Shore facility 
sustainment will be managed by targeted maintenance practices, 
increased use of leased facilities, and ensuring shore infrastructure 
costs are included in major AC&I projects, such as Deepwater and the 
Great Lakes Icebreaker replacement. Increases in the Basic Allowance 
for Housing also help and reduce the need for Coast Guard owned housing 
projects. Additionally, the Coast Guard is pursuing Public-Private 
Venture housing opportunities authorized in the Maritime Transportation 
Security Act of 2002. Other Coast Guard initiatives currently being 
developed that will assist in being good stewards of shore facilities 
include enhanced real property authorities, such as the ability to 
sublease and outlease property, exchange and sell property, and dispose 
of excess property with sale proceeds being reinvested in the capital 
plant. The Coast Guard is on budget in fiscal year 2005 for $151 
million recurring OE shore facility maintenance costs and an additional 
$5 million for shore AC&I projects.
    Provided below is the budgeted Shore Facilities Requirements List 
(SFRL) for fiscal year 2005, followed by a backlog of listing of fiscal 
year 2005 unfunded projects. While the Coast Guard planning process 
addresses projects that require funding beyond fiscal year 2005, these 
projects have not been prioritized and are not included in the fiscal 
year 2005 SFRL attached.

   FUNDED SHORE FACILITIES REQUIREMENTS LIST (SFRL)--FISCAL YEAR 2005
------------------------------------------------------------------------
         BENEFITTING UNIT            PROJECT DESCRIPTION     EST (000)
------------------------------------------------------------------------
MAJOR AC&I: ISC Honolulu            Small Arms Range....          $1,600
SURVEY AND DESIGN: Various          Shore Operational &            1,000
                                     Support Projects.
MINOR AC&I: Various                 Minor Construction             1,600
                                     Projects.
WATERWAYS AND AIDS TO NAVIGATION:   Various Locations...             800
 Various
                                                         ---------------
      TOTAL.......................  ....................           5,000
------------------------------------------------------------------------


  UNFUNDED SHORE FACILITIES REQUIREMENTS LIST (SFRL)--FISCAL YEAR 2005
------------------------------------------------------------------------
         BENEFITTING UNIT            PROJECT DESCRIPTION     EST (000)
------------------------------------------------------------------------
MAJOR AC&I:
    ISC Kodiak, AK................  Consolidate Support           $8,500
                                     Facilities.
    AR&SC Elizabeth City, NC......  Consolidate                    6,300
                                     Facilities Phase I.
    Base Galveston, TX............  Rebuild Station/               6,400
                                     Waterfront.
    Group Woods Hole, MA..........  Replace ANT and                3,750
                                     Admin Building
                                     Phase I.
SURVEY AND DESIGN: Various          Shore Operational &            4,000
                                     Support Projects.
MINOR AC&I: Various                 Minor Construction             2,750
                                     Projects.
WATERWAYS AND AIDS TO NAVIGATION:   Various Locations...           4,200
 Various
COAST GUARD HOUSING:
    Cordova, AK...................  Replace Cordova                4,000
                                     Housing, Phase I.
    USCGA, New London, CT.........  Chase Hall Barracks           15,000
                                     Renovation Phase I.
                                                         ---------------
      TOTAL.......................  ....................          54,000
------------------------------------------------------------------------

       MARITIME TRANSPORTATION SECURITY ACT (MTSA) IMPLEMENTATION

    Question. The budget request includes $101.7 million for the 
implementation of the MTSA. What follow-on costs are necessary to meet 
the requirements of the MTSA (specify by fiscal year)?
    Answer. The fiscal year 2005 budget request is designed to bring 
MTSA implementation close to the annual recurring steady state for 
personnel, associated support funds, and contract resources. These 
resources will be used to address the permanent increase in workload 
associated with MTSA. This workload includes continued verification of 
domestic vessel and facility security requirements, a robust Port State 
Control program to ensure compliance with international security 
requirements, continuous updates and improvements to the National and 
Area Maritime Security plans, and the assessment of domestic and 
foreign ports for compliance. Additional follow-on costs of MTSA 
initiatives are $12.9 million in fiscal year 2006.
                                 ______
                                 

            Questions Submitted by Senator Daniel K. Inouye

                         NON-SECURITY MISSIONS

    Question. When the Coast Guard was moved to the Department of 
Homeland Security, Congress included a provision in the Homeland 
Security Act of 2002 to ensure that the Coast Guard continued to carry 
out its non-security missions. Section 888 of the Act states that the 
Secretary, ``may not substantially or significantly reduce the missions 
of the Coast Guard or the Coast Guard's capability to perform those 
missions, except as specified in subsequent Acts.''
    However, concern has been raised about the Coast Guard's ability to 
maintain its non-security missions as the hours ships and aircraft are 
used for these missions have not reached pre-September 11 levels. I was 
concerned by a report to the Congress that several of the districts, 
including Honolulu, have ``insufficient personnel'' for its search and 
rescue missions.
    It is my understanding that your performance measures were enhanced 
through the assistance of other agencies. In addition, certain 
performance goals are not reflective of the success of the maintenance 
of your effort. I do not find it helpful that the performance measure 
for compliance with domestic fisheries regulations is how many 
fisherman, of those reviewed, were found to be in compliance. If the 
Coast Guard interviewed one fisherman who was in compliance, the Coast 
Guard would have 100 percent performance on this measure.
    Can you tell me what you are doing to ensure that the non-security 
missions that are so critical to my state are being met and that the 
performance measures are a true reflection of your efforts?
    Answer. Based on all measurements completed to date, the Coast 
Guard met its performance goal in each non-homeland security mission-
program area including our goal for Search and Rescue for fiscal year 
2003. Program performance is the most important element of the Coast 
Guard Performance Management System. Program managers establish 
measures to accurately portray organizational performance. The measures 
are data-driven, fully documented, meaningful, and focus on outcomes. 
Using the performance measures, and with an emphasis toward improving 
effectiveness, the Coast Guard Commandant establishes long-term 
performance outcome targets that are linked to the strategic intent of 
the organization, including maintaining the balance between homeland 
security and non-homeland security missions. While the Coast Guard has 
been lauded in the past for its performance measurement efforts, it has 
recognized and acknowledged that limitations in these measures 
sometimes exist. The Coast Guard has been working with GAO through the 
recent audit examining the relationship between resources and results, 
and OMB through the Performance Assessment Rating Tool (PART) reviews, 
and other independent evaluation efforts to continually review and 
improve program measures' clarity and objectivity. Examples of measures 
that have recently been revised or are currently under review include:
    Several years ago, the Search and Rescue program was measured by 
the percent of persons in U.S. jurisdictional waters in distress that 
were saved, after the Coast Guard was notified. This measure was 
changed to include the percentage all persons in U.S. jurisdictional 
waters in distress, with no restriction on Coast Guard notification. 
This change occurred as program managers realized that communication 
improvements and other non-Search and Rescue safety programs were 
inputs to the measure of safety as well as that of a simple Search and 
Rescue response measure.
    Two years ago, the Short Range Aids to Navigation (AtoN) program 
was measured by the statistic of Short Range Aid availability. While 
this measure provided information on the percent of Coast Guard Aids to 
Navigation that were working properly and on-station, there was little 
connection to performance of these aids and benefit to the public. When 
this was brought to the Coast Guard's attention through an Office of 
Management and Budget (OMB), Performance Assessment Rating Tool (PART) 
review, a change was made to measure the AtoN program by the number of 
Collisions, Allisions and Groundings that occur in U.S. waterways.
    The illegal drug interdiction measure was recently refined to 
include not only cocaine seized by the Coast Guard but also to account 
for cocaine thrown overboard or destroyed by smugglers. This refined 
measure, which encompasses both the cocaine lost to the smuggler as 
Coast Guard assets draw near, causing the smugger to jettison, burn, 
and otherwise destroy their product, as well as the cocaine actually 
seized by the Coast Guard, will more accurately reflect counter-drug 
efforts and results.
    With regard to the concern expressed in the question regarding the 
domestic fisheries performance measure of a compliance rate; both the 
Coast Guard and OMB, through its PART review, believe this rate to be a 
sound measure. The observed compliance rate measure is the total number 
of Coast Guard domestic fishing vessel boardings minus the boardings 
that had significant violations divided by the total number of Coast 
Guard fishing vessel boardings. Only boardings that have a significant 
violation--a living marine resource violation that results in 
significant damage or impact to the fisheries resource, significant 
monetary advantage to the violator, or has high regional or national 
interest--are counted.
    Historically, domestic compliance rates, which are based on over 
3,000 boardings (post 9/11 statistic) annually, have been within the 
95-98 percent range and movement within this range is expected and 
mostly beyond CG control as economic and social factors other than 
enforcement presence motivates individuals to violate the law. As a 
result, a floor has been established at 97 percent observed compliance 
to evaluate if CG levels of enforcement are sufficient to ensure wide-
scale compliance with regulations.
    Historical data illustrates Coast Guard enforcement presence does 
in fact affect observed compliance rates and also that there is a delay 
between enforcement presence/absence and fisheries compliance rates. 
Although observed compliance rate will not perfectly indicate the 
actual industry-wide compliance rate, it should serve as a reasonable 
indicator of the actual compliance rate when enforcement resource 
effort is sufficient to make performance tracking possible.
    In regard to the comment concerning ``insufficient resources'' in 
Honolulu, the Coast Guard is careful to distinguish between mission 
performance measures and internal program standards put in place to 
ensure the long-term maintenance of our resources, including our most 
valuable asset, our people. As stated above the Coast Guard has 
successfully met all mission performance goals for the search and 
rescue mission. The Coast Guard has adequate resources to meet 
performance and on-scene response standards for search and rescue in 
Hawaii. However, the Coast Guard has recently adopted an internal 
program standard, driven by requirements set forth in MTSA 2002, 
requiring command center watchstanders responsible for search and 
rescue to limit their watch length to 12 hours in duration, except in 
emergency or unforeseen circumstances.
    The Coast Guard measures and reports quarterly to Congress on our 
ability to meet this standard. The Coast Guard has demonstrated 
incremental improvement in achieving this standard, however, routine 
personnel transfers and substantial training requirements for newly 
assigned personnel continue to challenge the Coast Guard's ability to 
meet the 12-hour standard at all times. The Coast Guard is reviewing 
the staffing standards for our command centers, and is developing 
recommendations to ensure our ability to meet and maintain a year-round 
capability to meet the 12-hour watch requirement.

                             PORT SECURITY

    Question. As part of the Maritime Transportation Security Act, 
9,000 vessels and 3,500 facilities were supposed to have filed security 
plans by December 31, 2004. It is my understanding that you have 
received 97 percent of the security plans and that more than half of 
them are in the second stage of review. Area security and contingency 
response plans must be completed by July 1, do you anticipate a similar 
compliance rate? How does the cost of implementation affect the 
adequacy of the security plans submitted? On December 30, 2002, the 
Coast Guard estimated the total cost of implementing security in our 
seaports at $7.2 billion over the next 10 years. Is that estimate still 
accurate and how much has been spent toward that total to date? The 
President's budget requests $46 million for Port Security Grants. Will 
that be sufficient to bring our vessels and facilities into compliance 
with the security plans?
    Answer. Each Federal Maritime Security Coordinator submitted an 
Area Maritime Security (AMS) Plan to the respective Coast Guard 
District Commander for initial review on April 1, 2004. In order to 
meet the entry-into-force date of the new International Ship and Port 
Facility Security (ISPS) Code and Safety of Life at Sea (SOLAS) 
amendments, the Coast Guard must review and approve all AMS plans by 
June 30, 2004 and communicate U.S. port compliance with the ISPS Code 
to the International Maritime Organization.
    In the final MTSA regulations, the Coast Guard estimated the 
industry cost for implementing Section 102 of the MTSA security 
requirements as approximately $1.5 billion in the first year, and $7.3 
billion over the next 10 years. The port security grants to date have 
provided approximately $500 million.
    The Coast Guard does not believe the cost of implementation 
affected the adequacy of the facility and vessel security plans 
submitted for review. The MTSA security regulations were specifically 
developed to be performance based in order to provide owners/operators 
the latitude to implement the most cost-effective security controls to 
meet their specific circumstances.
    The fiscal year 2005 Department of Homeland Security (DHS) budget 
proposes a significant increase for port security activities. Grants to 
facilities are a small part of DHS's total investment in port security. 
Department of Homeland Security spending on port security increases by 
$224 million (13 percent) in the President's Budget, from $1,661 
million in 2004 to $1,885 million in 2005. Within the 2005 total is 
$1,675 million for Coast Guard port, waterway, and coastal security 
activities, including over $100 million to implement MTSA. The DHS port 
security total also includes $164 million in U.S. Customs and Border 
Protection for the Container Security Initiative and the Customs Trade 
Partnership Against Terrorism, and $46 million in the Office for 
Domestic Preparedness for port security grants.

                                HC-130J

    Question. The Coast Guard has expanded its mission since September 
11, 2001 and has been transferred from the Department of Transportation 
to the Department of Homeland Security. Thirteen Maritime Safety and 
Security Teams and eight Port Security Units have been deployed. With 
these changes, has there been an increased requirement for airlift 
capacity?
    Answer. Yes. Since 9/11, the Coast Guard has redefined and expanded 
organic lift requirements. The Coast Guard must be capable of providing 
organic aviation transport of National Strike Force personnel and 
equipment within 6 hours and must be capable of providing aviation 
transport of MSSTs within 12 hours of notification. Ongoing efforts to 
expand the Deepwater contract to reflect post-9/11 mission requirements 
and DHS Aviation Council study efforts will shape our aviation heavy 
lift and transport capability.
    Question. Pursuant to funding provided in the fiscal year 2001 
Military Construction bill, the Coast Guard recently received delivery 
of the first of six HC-130J Super Hercules aircraft. Could you discuss 
with us those aircraft, the benefits to DHS, and the advantages of the 
new 130Js over the 130Hs currently in service? In your opinion, is the 
HC-130J, the best aircraft available to replace your aging air fleet?
    Answer. The HC-130J provides the USCG and DHS a modern long-range 
patrol and heavy lift aircraft that will remain in the DHS inventory 
well into the future. This capability will provide DHS the ability to 
provide heavy-lift through a variety of mission profiles, and will 
enable the Department to remain in the forefront of disaster response 
and Homeland Security missions. The HC-130J is a completely new 
aircraft enabling a substantially better level of performance. Even in 
their current unmissionized state, the C-130J provides a substantially 
greater heavy lift capability than the aging HC-130H. Missionization to 
full capability as maritime patrol aircraft is scheduled to begin in 
fiscal year 2004. The missionization suite was designed to reflect post 
9/11 mission requirements, and will be fully interoperable with DHS, 
DOD, and the Deepwater systems. Fully digitized and equipped with a 
contemporary electronics suite, the missionized HC-130J will fly faster 
and have greater range with a smaller crew. The legacy asset HC-130H is 
increasingly more expensive to maintain and will be costly to modernize 
to homeland security and Deepwater mission requirements. At Full 
Operational Capability (FOC), the HC-130J will meet all current DHS/
USCG long range maritime patrol and heavy airlift requirements.
    Question. The first six HC-130Js are planned to be based at the Air 
Station in Kodiak, Alaska. This would leave the Coast Guard with a mix 
of HC-130Js and Hs in your Pacific Fleet. What are the benefits of an 
all HC-130J Pacific Fleet?
    Answer. In the Pacific Area, C130s operate over some of the world's 
largest expanses of water in the most arduous weather conditions. In 
addition to the performance increases and modern replacement benefits, 
an all C-130J fleet in the Pacific Area would allow the Coast Guard to 
more rapidly grow an experienced operator cadre/community to operate 
and maintain this aircraft. Additionally, the service would benefit 
from reduced training costs, as some members would transfer from one C-
130J unit to another, eliminating qualification costs. Economies of 
scale would produce parts and logistics support savings as well.
    Question. What are your funding requirements to fully deploy and 
maintain the first six HC-130Js? Is that request contained in the 
President's budget?
    Answer. Total additional funding required to missionize and achieve 
Full Operational Capability (FOC) of HC-130Js by the end of fiscal year 
2007 is $187 million. A funding request for missionization and full 
system acquisition is not included in the President's budget.
                                 ______
                                 

           Questions Submitted by Senator Ernest F. Hollings

       OVERALL COAST GUARD BUDGET REQUEST ONLY 6 PERCENT INCREASE

    Question. The Commandant of the Coast Guard testified that the 
Coast Guard was on track to restore resources and performance of non-
security missions, such as search and rescue of stranded mariners, to 
pre-9/11 levels. However, a draft GAO report (non-public until mid-
March) finds that the resource hours dedicated to the search and rescue 
mission search & rescue is down 22 percent from pre 9/11 levels. The 
resource hours dedicated to many other non-security missions, such as 
fisheries enforcement, living marine resources, and drug interdiction, 
are all down as well.
    Does this budget really fund the Coast Guard at sufficient levels? 
The request is really only a 6 percent increase over what we enacted 
last year, if you include the supplementals. Why is Coast Guard getting 
so little of the increase when it has so many responsibilities related 
to security and non-security missions?
    Answer. Yes, the fiscal year 2005 budget request is sufficient to 
fund Coast Guard operations. A 6 percent increase is not a fair 
comparison since the fiscal year 2004 Coast Guard budget includes 
supplemental funding provided for Iraqi Freedom and Hurricane Isabel. 
Supplemental appropriations are for specific purposes and are non-
recurring. Therefore, the fiscal year 2005 Coast Guard budget would not 
reflect this funding.
    While the draft GAO report referenced in this question noted that 
that the resource hours for non-homeland security programs decreased, 
the report also had the following conclusion: ``The Coast Guard's 
performance results--measures used to track each program's annual 
progress--generally did not mirror the trends in resource use. Instead, 
results for programs GAO reviewed were generally stable or improved 
regardless of the resources applied, and nearly all of the programs 
that GAO reviewed met their performance targets.'' (Draft GAO-04-043, 
March 2004).
    Search and Rescue (SAR) is a demand driven mission. While resource 
hours for SAR are down, it is due to less distress calls than from lack 
of resource hours. Also from the GAO report: ``the search and rescue 
program's target for fiscal year 2003 was to save 85 percent of 
mariners in distress and the program achieved this goal by saving over 
87 percent of them.''
    While resource hours are an important measure, the Coast Guard 
relies on the judgment of the operation commander to apply available 
resources based on the risks in the relevant area of operations. This 
flexibility is critical to apply Coast Guard resources to the numerous 
missions mandated in Section 888 of the Homeland Security Act of 2002.
    Question. I am hearing reports that the Coast Guard's resource 
hours for most non-security missions are still down below pre 9/11 
levels. For example, I've heard that the search and rescue mission is 
down 22 percent from pre 9/11 levels. What can you tell me about that?
    Answer. The Coast Guard will continue seeking the appropriate 
balance among all its mission-programs while relentlessly pursuing our 
stated performance goals. In so doing, the Coast Guard will continue to 
focus not only on activity levels (hours), but also on achieving the 
desired outcomes from those levels. Our ability to achieve desired 
outcomes and performance goals have been significantly enhanced through 
improved technology, tactics and procedures making our activities that 
much more effective. Risk-based decision-making by local commanders 
will continue to be the primary driving factor behind the specific 
activity levels (hours) accrued in the course of Coast Guard 
operations.
    The number of resource hours utilized for search and rescue (SAR) 
decreased by 22 percent in fiscal year 2003 from a pre-9/11 average 
level. However, this decrease in resource hours was not indicative of a 
decrease in service or performance. SAR is a demand driven mission, and 
the Coast Guard continues to respond to all mariners in distress. In 
fiscal year 2003, the Coast Guard met its 85 percent SAR performance 
goal by saving 87 percent of all mariners in distress.
    The Coast Guard's SAR program is a system with a variety of 
components. Aircraft, cutters, and boats play a large role in the 
response system, but overall SAR performance is not based on resource 
hours alone. For example, maritime safety and prevention programs, 
technology advancements for the boating public, enhanced communication 
and tracking systems, and improved safety equipment are just a few of 
the initiatives that factor into the Coast Guard's SAR program.
                                 ______
                                 

            Questions Submitted by Senator Patrick J. Leahy

    Questions. The U.S. Coast Guard awarded General Dynamics Decision 
Systems a $611 million contract to replace its outdated communications 
system in a project titled Rescue 21. This is a massive Federal 
investment in our maritime communications infrastructure. The Rescue 21 
section of the Coast Guard's website, however, has not been updated 
since May 9, 2003, so it is very difficult for the American public to 
keep updated on the project's implementation process and schedule. 
Could you please give me a status update on the project? I understand 
there may be some questions about deficiencies in the design phase of 
the project. Does the Coast Guard have adequate oversight of the 
contractor and are financial controls in place to ensure that the 
public investment is protected? When does the Coast Guard plan to 
implement Rescue 21 on Lake Champlain and Lake Memphremagog to cover 
these important border entry points into the United States? The Coast 
Guard's mission on Lake Champlain can lead to simultaneous rescue calls 
at opposite ends of the lake. First responders often have to rely on 
either a Coast Guard helicopter from southern New England or a Vermont 
Army National Guard helicopter to support them on search and rescue 
missions. Both options take precious hours to implement and cut short 
the window of opportunity for a successful rescue. With the Coast Guard 
seeking a 9 percent increase in their budget this year, are there any 
plans to post a Coast Guard helicopter on Lake Champlain?
    Answers.

Status Update
    While conducting Formal Qualification Testing (FQT) in January 
2004, several significant software (SW) defects were discovered in 
functional areas such as archive/restore, fault management, channel 
performance, Group Command Centers/Station operations, vessels and 
voice quality that required performance fixes and retesting. An 
additional FQT test event was scheduled for March/April to retest 
defects discovered in January 2004.
    While conducting preliminary FQT testing in early March to prove 
that previous issues had been resolved, GDDS discovered a new defect 
that has a severe impact on the asset tracking functionality of the 
system. This defect was hidden by an earlier problem and revealed by 
the latest software fixes. GDDS is currently working with the equipment 
manufacturer to analyze the defect and identify appropriate corrective 
action. Until GDDS can fix this asset-tracking problem, the FQT 
regression testing is necessarily on hold.
    Consequently, Initial Operating Capability (IOC) and Full Operating 
Capability (FOC) schedules will be impacted by the technical issues and 
testing activities discussed. IOC will be delayed by approximately 1 
year (to Sep 2004), and the Coast Guard anticipates the project being 
45 percent complete by the end of 2005. Achieving FOC in 2006 is at 
risk and is still being evaluated. The Coast Guard and GDDS have formed 
a joint deployment team to streamline the regional deployment process 
and identify tasks that can be performed concurrently or more 
efficiently to complete the maximum number of regions by the end of 
2006. The deployment team is using the experience of the first 6 
regions to redefine processes and align activities to accelerate 
deployment. Future deployment dates of Rescue 21 will depend upon 
GDDS's ability to accelerate their work, deploy innovations and do 
parallel deployments as the system is built out.
    The Rescue 21 section of the Coast Guard's website was recently 
updated on April 9, 2004. IOC and Low Rate Initial Program (LRIP) 
region schedules were updated. Group schedule updates still pending.

Oversight
    The Coast Guard has 54 staff members dedicated to the Rescue 21 
project. Several of these staff members are dispersed throughout the 
United States to ensure appropriate oversight of the nationwide 
deployment.
    Additionally, the Coast Guard has agreements in place with the 
Space and Naval Warfare Systems Center, San Diego and U.S. Department 
of Commerce National Telecommunication Information Administration 
(NTIA)/ITS Institute for Telecommunication Sciences for technical/
quality assurance support and Booz Allen Hamilton for project 
management and administrative support.
    Finally, the Coast Guard has leveraged existing GSA contracts to 
award blanket purchase agreements to a public relations firm to assist 
with community/public outreach, an environmental consulting firm to 
ensure compliance with applicable environmental laws and regulations, 
and an information technology firm to ensure contractor performance 
metrics are properly developed, monitored and archived.

Financial Controls
    Approximately 80 percent of the costs associated with the Rescue 21 
deployment will be paid using fixed price delivery orders. These costs 
were established during the proposal evaluation phase of the project 
and are not expected to change. The remaining 20 percent of the work 
will be paid for using cost plus incentive fee delivery orders for 
which target prices were also established during the proposal 
evaluation phase. Incentive fee contract structures provide motivation 
for the contractor to remain within cost goals.

Lakes Champlain and Memphremagog
    Lake Champlain will receive Rescue 21 as part of the Activities New 
York deployment currently scheduled for 2005. Lake Memphremagog was not 
identified as part of the Rescue 21 operational requirement, and is not 
scheduled to receive Rescue 21.

Coast Guard Mission on Lake Champlain
    Coast Guard Station Burlington, located at Burlington, VT conducts 
search and rescue (SAR) on Lake Champlain and responds to approximately 
200-300 cases annually, mostly during a the peak season for 
recreational boaters between June through August. Lake Champlain's 
shoreline includes portions of Vermont, New York and Canada, and 
measures approximately 100 nautical miles (north and south) by eight 
nautical miles (east and west). The Coast Guard's small boat response 
station has 25 persons assigned for Coast Guard missions including 
search and rescue, and also maintains aids to navigation on the lake.
    Coast Guard aircraft from Air Station Cape Cod are capable of 
responding to search and rescue cases on Lake Champlain within the 
Coast Guard's SAR program standards. However, they do not normally do 
so because of the other resources nearby which can provide a quicker 
response. Considering the narrow characteristics of the lake and that 
there are a large number of local responders, including local police 
and fire departments in the cities surrounding the lake, and that 
helicopters from the New York State Police, the Air National Guard, and 
U.S. Customs & Border Protection agency provide search assistance, the 
Coast Guard does not presently have any plans to post an aircraft at 
Lake Champlain.
                                 ______
                                 

     Questions Submitted to Transportation Security Administration

              Questions Submitted by Senator Thad Cochran

                          FLIGHT CANCELLATIONS

    Question. The Department requested a number of international 
flights to be cancelled at the end of December and again in January due 
to intelligence of possible terrorist activity. The cancellations 
caused inconvenience and financial losses for airlines and passengers 
alike and some aviation organizations have publicly questioned the need 
to cancel flights without being made aware of what specific 
intelligence was uncovered.
    Do you feel the Department was justified in the cancellation of 
these flights based on intelligence indicating that commercial 
airliners continue to be at risk of highjackings?
    Answer. The decision to cancel flights was made by the foreign 
carriers and governments upon specific intelligence that warranted such 
action. DHS shared information with our foreign counterparts and 
foreign air carriers, which led to their decisions to cancel flights 
and/or implement enhanced security measures.
    Question. How would you describe the cooperation of commercial 
airliners in the request to cancel these flights?
    Answer. During the holiday period, DHS received specific 
information and shared it appropriately with French and British allies, 
resulting in their decisions to cancel these flights. DHS and our 
European allies continue to work in close collaboration to share best 
practices and enhance aviation security.
    Question. Are passenger manifests being provided in a timely 
fashion by the airlines to the Department of Homeland Security?
    Answer. Air carriers as a general rule are fully compliant with 
existing CBP requirements for advanced passenger information system 
(APIS) transmissions, which must be submitted after takeoff. However, 
to vet flights of interest over the holiday threat period, TSA required 
that, upon request, airlines provide DHS with passenger manifests a 
specified time in advance of departure. All such requests were 
generally accommodated, and DHS continues to work closely with both the 
State Department and foreign carriers to ensure that additional 
requests are accommodated appropriately.
    Question. With intelligence showing that terrorists have considered 
a dirty bomb or a chemical or biological weapon release on airliners, 
what precautions are in place at our Nation's airports to prevent a 
possible radiological, nuclear, chemical or biological attack on an 
aircraft?
    Answer. TSA believes that existing operating procedures and current 
technology in the area of explosives detection would enable TSA to 
detect and interdict such a threat. In addition, the Department of 
Homeland Security continues to fund an aggressive program to improve 
the technology capable of detecting and mitigating such threats. As you 
are aware, TSA is also working to replace its passenger prescreening 
system to improve our ability to detect and stop any terrorist 
attempting to board an aircraft, including one possessing 
unconventional weapons.
    Question. Secretary Ridge testified before this Committee that the 
Executive amendment which directed the airlines to place Federal air 
marshals on international flights should have more appropriately been 
sent through diplomatic channels first. What new protocols or 
procedures have since been implemented by the Transportation Security 
Administration to communicate through diplomatic channels in the event 
that future flights are determined to be at high risk of terrorist 
attack?
    Answer. The regulatory instrument that allows TSA to require 
additional security of foreign air carriers is an emergency amendment 
to the security program of the affected foreign air carrier. It is the 
regulated party, (i.e. the air carrier) which must be the recipient of 
that instrument. However, we are aware that issuance of emergency 
amendments alone does not provide enough information to the foreign 
authority (which may differ from country to country) responsible for 
air marshals or other security functions involved in an emergency 
amendment. To remedy this, TSA, under DHS leadership, will use 
diplomatic channels, particularly in cases requiring immediate action 
by foreign air carriers, to inform affected air carriers and the 
foreign authority of their respective government concurrently. TSA will 
work through the Department of State and the affected U.S. Embassies, 
which will, in turn, reach out to the appropriate foreign authority to 
ensure that the requirements of the emergency amendment are conveyed.

                             RAIL SECURITY

    Question. Under Secretary Hutchinson testified before this 
Committee previous to the terrorist train bombings in Madrid that the 
Transportation Security Administration is working with other Federal 
Departments and agencies within the Department of Homeland Security to 
secure various transportation sectors including rail. The Department of 
Homeland Security recently announced additional security initiatives to 
further reduce vulnerabilities to transit and rail systems.
    In light of the attacks that took place on light-rail, passenger 
trains in Spain recently can you further elaborate on the luggage 
screening pilot program announced recently to be carried out by the 
Department of Homeland Security and coordinated with Amtrack and the 
Federal Railroad Administration?
    Answer. TSA, AMTRAK, and Federal Railroad Administration have 
combined efforts to institute a passenger and carry-on baggage 
screening prototype for explosives in a rail environment known as the 
Transit and Rail Inspection Program (TRIP). Under this project, TSA 
will seek to determine the feasibility of screening in a passenger rail 
environment. TSA hopes that such a project will help identify measures 
that would permit an appropriate level of screening that reflects the 
individual characteristics of each type of passenger rail traffic. The 
pilot project leverages present and prototype technologies and will 
evaluate their feasibility in a rail environment. As the primary 
stakeholder, AMTRAK is immersed in the review and implementation of 
this project. This program is expected to commence by early May 2004.
    Question. What new technologies and screening concepts will be 
implemented?
    Will explosive detection systems and/or explosive trace detection 
which are used to screen luggage placed on airliners be used to screen 
luggage placed on trains?
    Answers. The pilot program will assess different types of screening 
equipment already in use or being tested today.
    Question. Will additional funding be requested by the 
Transportation Security Administration for the additional rail security 
measures announced yesterday either by a supplemental funding request 
or by budget amendment?
    Answer. TSA will fund the additional rail security initiatives that 
were recently announced from within its fiscal year 2004 appropriation 
for Maritime and Land Security. For fiscal year 2005, there are no 
plans to seek additional funding for rail security above what is 
included in the fiscal year 2005 President's Request.
    Question. Can you provide further detail on how the Transportation 
Security Administration is using the expertise of Information Analysis 
and Infrastructure Protection (IAIP) and Science and Technology (S&T) 
assistance to prevent a terrorist attack on our railways and also on 
our subway systems?
    Answer. TSA staff and its parent directorate, the Border and 
Transportation Security Directorate, work closely and collaborate on a 
daily basis with both S&T and the Information Analysis (IA) and the 
Infrastructure Protection (IP) Divisions of the IAIP Directorate, on 
issues related to rail and transit security. IA shares intelligence and 
threat analysis daily with all DHS entities and other relevant 
stakeholders. Since the Madrid bombings, DHS stood up a working group 
to develop operational Courses of Action (COAs). Members of this 
working group include representatives from BTS, TSA, IA, IP and the 
Department of Transportation.
    TSA has partnered with IP on several important issues in 
safeguarding our nation's critical infrastructure including working 
together to conduct vulnerability assessments and security reviews. 
Moreover, IP has invited TSA to participate in site assistance visits 
(SAV) to determine a baseline level of security for select elements of 
the nation's critical infrastructure. One current example involves a 
joint assessment of subway system ventilation shafts to determine 
vulnerability to chemical or biological attack. Additionally, TSA, in 
coordination with FRA, IP and industry representatives, is currently 
conducting an in-depth assessment of the District of Columbia rail 
corridor.
    TSA has been communicating its operational requirements to the 
Science and Technology (S&T) directorate. TSA has engaged S&T in an 
effort to help meet the more immediate R&D needs of screening 
passengers and their baggage in the rail and transit environment with 
relevant technologies sensitive to the operational concerns of 
throughput and high levels of detection.
    TSA works closely with IA and S&T to better understand and prevent 
terrorist attacks on our Nation's railroads. Our warning and 
information products are vetted with IA and S&T representatives to 
provide the best informed assessments possible. Additionally, vetting 
and strong analyst-to-analyst coordination ensure strong positive 
information sharing across the Department.
    Question. Have vulnerability assessments been completed by 
Information Analysis and Infrastructure Protection on high-density 
urban areas to target resources toward the railways greatest weaknesses 
or are these assessments still taking place?
    Answer. On May 14, 2003, the Department of Homeland Security 
awarded $65 million in Mass Transit Grants to help secure the 20 
highest risk transit systems in the United States based on ridership. 
The money may be used for the following: (1) the installation of 
physical barricades; (2) area monitoring systems such as video 
surveillance, motion detectors, thermal/IR imagery and chemical/
radiological material detections systems; (3) integrated communications 
systems; (4) prevention planning, training and exercises; and/or (5) 
operations activities conducted during ORANGE alert from January 2003 
through April 2003. New York City Transit received $26.7 million, 41 
percent of the $65 million. The Chicago Transit Authority, the second 
largest transit agency by ridership, received $5.1 million.
    On November 13, 2003, the Department of Homeland Security awarded 
another $53 million to the top 30 transit agencies with heavy rail, 
subway and commuter rail systems. A weighted average factoring both 
ridership and system route miles was used to determine the amounts 
received. Each qualifying system received no less than $800,000. Due to 
the previous allocation of funds to New York City Transit, the MTA 
subway system was capped at $10 Million, allowing for the allocation of 
more funds to other properties.
    The grants were administered by DHS's Office for Domestic 
Preparedness (ODP). TSA provided modal expertise to ODP on the 
allotment of this grant money to the mass transit industry.
    TSA is currently conducting an assessment of critical mass transit 
assets. The results will be used to identify locations for enhanced, 
facilitated assessments. To-date, TSA has performed an assessment on 
approximately 65 percent of critical subway assets. Approximately 30 
percent of light rail critical assets have been assessed. The 
criticality assessment of mass transit assets is scheduled for 
completion by July 2004.
    DHS has conducted Site Assist Visits (SAVs) of several rail 
stations in high-density urban areas, including New York's Penn Station 
and Grand Central Station and Washington D.C.'s Union Station. Teams of 
security experts, along with the owner/operator of the site, identifies 
vulnerabilities and suggest remediation actions. Thanks to these and 
other visits to rail facilities, we have compiled Common 
Characteristics and Vulnerability reports and Potential Indicators for 
Terrorist Attack reports (CV/PI) for railroad yards and railroad 
bridges and disseminated them to owners/operators, security planners, 
and law enforcement agencies. The Department has also funded a study of 
possible protective measures that can be applied to railcars 
transporting chemicals and recommendations are expected shortly. In 
addition we have received dozens of other rail and subway vulnerability 
assessments, including those for the 30 largest systems in the country 
and have included them in our database. We have also completed an 
assessment of a 15 mile DC corridor for HAZMAT rail shipment and are 
considering additional assessments in other major urban areas.

                               AIR CARGO

    Question. Congress provided $85 million for fiscal year 2004 for 
the Transportation Security Administration to hire additional screeners 
to inspect air cargo and for research and development of explosive 
detection systems in order to screen for explosives in air cargo, both 
the larger palletized cargo and the individual pallets, or individual 
boxes known as ``break bulk''.
    With the increase in air cargo security funding provided for fiscal 
year 2004, how many additional screeners have been hired to inspect air 
cargo to date, and when do you expect to be fully staffed?
    Answer. As of March 23, 2004, the funding provided in the 
Department of Homeland Security Appropriations Act, 2004 (Public Law 
108-90) enabled TSA to hire 100 new cargo inspectors. All 100 cargo 
inspector positions have been selected, and paperwork is being 
processed by TSA Human Resources. We anticipate extending job offers to 
these applicants and bringing them on board within the next 2 months.
    Question. What is the status of laboratory testing of commercial 
off-the-shelf explosive detection systems on air cargo?
    How has the current technology performed on break bulk cargo?
    When do you expect to issue a request for proposal for this 
technology, and when will a pilot program begin at selected airports?
    Answer. TSA, working with the air carriers, has screened cargo 
using Explosives Detection System (EDS) technology currently deployed 
at airports for checked baggage screening. TSA also issued a Market 
Survey for vendors of currently available explosives detection 
technology for break bulk cargo screening and is in the process of 
conducting a lab evaluation and pilot test for the equipment that has 
been offered by vendors for evaluation. The controlled study of 
suitability of use of the currently available EDS technology is 
scheduled to begin in June and will be completed by September 30. Once 
that study is completed, TSA will determine to what extent the 
technology is a feasible solution for some categories of cargo 
screening. TSA is planning on issuing an RFP in the third quarter of 
fiscal year 2004 to solicit additional vendors to participate in lab 
evaluations and airport pilots for break-bulk cargo screening.
    TSA has also issued an RFP for technology to screen containerized 
cargo and U.S. mail. TSA is currently evaluating the proposals 
submitted under that RFP and anticipates awarding grants for technology 
development in the fourth quarter of fiscal year 2004.
    Question. Can the Committee expect to receive by April 1, 2004, the 
report directing TSA to provide options to inspect air cargo, the 
associated costs, and timetable for pursuing technological solutions to 
allow for the most efficient and targeted inspections of cargo being 
carried on passenger aircraft?
    Answer. TSA has prepared the report to Congress covering potential 
technology solutions for cargo screening. Once review and coordination 
is completed through DHS, the report will be delivered to Congress.
    Question. What enhancements are being made to the current Known 
Shipper program to guarantee the safety of air cargo?
    Answer. Since 9/11, significant enhancements have been made to the 
Known Shipper program. The requirements for new shippers applying for 
Known Shipper status have been strengthened. In addition, methods for 
confirming the authenticity of established Known Shippers have been 
improved. In order to substantiate the legitimacy of known shippers 
further, air carriers have been required to conduct site visits of 
known shippers' facilities. Additionally, TSA is close to completing an 
automated Known Shipper Database, which will allow TSA to vet 
applicants to the program more thoroughly for legitimacy by comparing 
data submitted by applicants against terrorist watch lists, other 
government databases, and other publicly available information. 
Eventually, TSA's Known Shipper Database will be one part of a larger 
freight assessment database intended to target high risk cargo 
shipments for additional screening.
    Question. Would it currently be feasible to inspect 100 percent of 
all air cargo being placed on aircrafts, as proposed by some in 
Congress, and, in your opinion, how do you feel the flow of commerce 
would be affected if air cargo was restricted from being placed on 
aircraft unless 100 percent inspection of air cargo took place?
    Answer. It is neither feasible nor optimal to physically inspect 
100 percent of air cargo. The sheer volume of air cargo transported in 
the United States and limitations on available technology render the 
inspection of all air cargo infeasible without a significant negative 
impact on the operating capabilities of the transportation 
infrastructure of the United States and the national economy. 
Limitations of technology and infrastructure make physical screening of 
100 percent of air cargo impractical in terms of the flow-of-commerce. 
This would also be an ineffective use of homeland resources.
    TSA's goal is to ensure that all cargo is screened to determine 
risk and that 100 percent of high-risk cargo is inspected. TSA is 
aggressively pursuing next-generation technological solutions. 
Meanwhile, TSA is taking steps to implement measures outlined in the 
Air Cargo Strategic Plan and is doing everything possible to ensure 
that cargo going on planes is secure, including requiring random 
inspections of passenger air cargo, prohibiting the transport of cargo 
on passenger aircraft by unknown shippers, and increasing the number of 
TSA air cargo compliance inspectors.
    Question. To date, what has been learned of the pilot program 
conducted by the Transportation Security Administration, the United 
States Postal Service, and air carriers to assess the feasibility of 
using canine teams to screen certain classes of priority mail?
    Answer. In early 2002, TSA, the U.S. Postal Service (USPS) and the 
aviation industry agreed that additional security screening measures 
needed to be identified and developed before resuming transport of mail 
on passenger aircraft. We agreed that explosives detection 
effectiveness, throughput capacity, and costs associated with the 
screening were paramount considerations in identifying additional 
measures. Protecting the privacy of mail was also a critical factor in 
determining the least intrusive method to be used.
    In June 2002, TSA conducted operational tests and evaluations 
(OT&E) at six major airports with assistance from the USPS and airline 
industry. The purpose of these tests was to determine and demonstrate 
the ability of TSA-certified explosives detection canines to detect 
explosives in packages that simulated Express Mail and Priority Mail 
products and which were independently introduced into actual mail. We 
also wanted to compare the throughput capabilities of both X-Ray and 
canine resources under actual airline operational conditions.
    The results were successful. In November 2002, TSA established 
eleven major airport canine screening operations for priority mail 
exceeding a certain threshold through partnership agreements with the 
USPS and the airline industry. To date, over 17 billion packages have 
been successfully screened by TSA-certified explosives detection canine 
teams. Currently we are expanding our TSA Canine Pilot screening 
efforts into various cargo and mail equipment configurations. TSA is 
proceeding with OT&E in two phases:
  --Phase I tested various explosive targets/distracters that were 
        introduced into multiple cargo configurations at six major 
        airports. All testing was conducted under actual cargo 
        operations and various weather conditions. The OT&E is complete 
        and the preliminary results are promising. The final report is 
        due at the end of April 2004.
  --Phase II is tentatively scheduled to begin in May 2004 and to be 
        completed in July 2004. The tests will be conducted at six 
        major airports where we will expand explosives detection 
        investigation using multiple cargo airline containers, airline 
        ground support equipment and USPS rolling stock equipment 
        configurations under actual cargo/mail operations and 
        environments. Test results will be analyzed and recommendations 
        will be proposed to expand and streamline screening of cargo 
        and mail exceeding a certain threshold at other major airports 
        using TSA-certified explosives detection canine teams along 
        with other technologies for mail and cargo being transported on 
        passenger aircraft.

      COMPUTER ASSISTED PASSENGER PRE-SCREENING SYSTEM (CAPPS II)

    Question. The President's fiscal year 2005 budget requests a $25 
million increase for the Computer Assisted Passenger Pre-screening 
System (CAPPS II) currently being tested by the Transportation Security 
Administration. However, CAPPS II has been slow in developing because 
of delays in obtaining passenger data needed for testing due to privacy 
concerns by air carriers.
    How is the Department working with the airlines to alleviate 
privacy concerns in light of recent disclosures that air carriers have 
shared passenger records with other government agencies and private 
contractors without the passengers knowledge?
    Answer. Comprehensive privacy training--in-person, online, and via 
video, for all employees is underway and on track towards completion by 
the end of calendar year 2004. TSA has already completed an initial 
``privacy education week'' for all 55,000 employees that included live 
and video privacy training. Many other components of DHS already have 
systematic privacy education for employees--both upon hiring and 
annually thereafter. The DHS Chief Privacy Officer, assisted by a 
privacy compliance officer, has undertaken a DHS-wide review of 
internal education programs to ensure that all employees are aware of 
and tested on privacy practices and principles. The Privacy Office will 
report on the progress of this program in its annual report to Congress 
later this spring, and annually thereafter. Further, the DHS Chief 
Privacy Officer proposed the implementation of rules in the public and 
the private sector governing the use of private-sector data. The DHS 
Privacy Office has already begun work with numerous private-sector 
industry groups to facilitate that work. Organizations such as the U.S. 
Chamber of Commerce, the Council for Excellence in Government, the Air 
Transport Association, the Markle Foundation, and others, are all 
considering the evolution of public-private information partnerships. 
Further, the Department is reviewing the need for a department-wide 
Privacy Statement that would include principles for the use of private-
sector data. Again, many DHS components already have their own privacy 
statements. We look forward to publishing a DHS Privacy Statement later 
this summer.
    Question. When will the Department issue a security directive to 
mandate airlines to turn over passenger information to test the CAPPS 
II system?
    Answer. A timeframe for collection of passenger data for testing is 
still under review.
    Question. How can assurances be made to prevent identity theft by a 
potential terrorist intent on using legitimate individuals information 
to get around the CAPPS II background checks?
    Answer. While no system can be 100 percent effective in preventing 
identity theft, we believe that the CAPPS II system will represent a 
quantum leap forward in efforts to defeat this growing problem. CAPPS 
II will rely on an improved version of the best practices used by the 
banking and credit industries to combat identity theft and fraud.
    Where a legitimate identity is stolen, there is any number of 
indicia, including errors or inconsistencies in the information as 
transmitted by the thief, which could reveal the theft. Further, CAPPS 
II will make use of a database containing up-to-date information about 
stolen identities, which will further protect against terrorists who 
use this means to conceal themselves.
    Again, no system can be 100 percent effective, which is why CAPPS 
II will be part of a layered ``system of systems'' involving physical 
scrutiny, identity-based risk assessment, and other security 
precautions on aircraft and at airports.
    Question. Do you feel that such a funding increase is warranted for 
CAPPS II with the delays that have been faced to date?
    Answer. Yes, because we expect a new system to be put in place 
during fiscal year 2005, which will require an increase in resources.
    Question. The system currently operated by commercial airlines 
since 1996, CAPPS I, continues to have problems with ``false 
positives'' where passengers are erroneously delayed or prohibited from 
boarding their scheduled flights due to having a similar name with 
individuals that have been flagged by airlines as being a potential 
terrorist.
    With the problems faced in the current CAPPS I system, what method 
of redress will be implemented with CAPPS II to resolve complaints of 
passengers who believe they are erroneously selected for additional 
security?
    Answer. First, it is important to note that the ID authentication 
portion of the CAPPS II program under development is expected to reduce 
dramatically the percentage of individuals mistakenly flagged for 
automatic additional security screening. In the instances where 
individuals believe they have been mistakenly flagged under CAPPS II, 
TSA is committed to providing a fair, comprehensive, and customer-
friendly redress process. As part of the development of the CAPPS II 
system, we are designing a redress process to resolve complaints by 
passengers who assert that they have been incorrectly prescreened or 
consistently selected for enhanced screening. An essential part of the 
redress process is the establishment of the CAPPS II Passenger 
Advocate. The Passenger Advocate will act as a surrogate for passengers 
who, for security classification reasons, will not have access to all 
the information used by CAPPS II. When a passenger submits a complaint 
and provides the Government with permission to observe and monitor the 
results of the risk assessment during the complainant's future flights, 
TSA will work with other government agencies and commercial data 
providers to determine if the complaint is related to prescreening or 
due to another part of the screening process (e.g., random selection), 
and determine if selection by CAPPS II is related to data that may be 
appropriately corrected. Passengers will be afforded the opportunity to 
appeal these results to the TSA Privacy or Civil Rights Office and 
then, if warranted, to the DHS Privacy or Civil Rights Office. The 
redress program will be published and widely publicized before CAPPS II 
is implemented.
    Question. How does a passenger clear one's name if he or she 
continues to be flagged as a flight risk?
    Answer. Under the current system passengers may be required to 
undergo secondary screening or be subject to other additional security 
procedures due to random selection, CAPPS I selection, or the TSA-
administered No-Fly List. In addition, airlines may have their own 
criteria for singling out travelers distinct and independent of the 
current system. Since CAPPS I is administered by the airlines, TSA is 
only in a position to address passengers flagged as a flight risk based 
on the No-Fly List.
    The Transportation Security Administration (TSA) currently has 
established procedures within the Office of the Ombudsman to receive 
and resolve complaints by any passenger denied boarding because the 
individual's name appears on the No-Fly List. A traveler who contacts 
TSA regarding possible discrepancies within the current system is asked 
a series of questions to ascertain whether the issue is related to the 
No-Fly List. If it is related to the No-Fly List, the traveler submits 
a written description of the problems encountered and proof of 
identity. Upon receipt, TSA will determine whether there is any threat 
to aviation or national security that would prohibit the individual 
from flying. TSA may conduct a background check in making this 
determination. If the traveler is cleared to fly, air carriers and 
other appropriate parties will be notified. The TSA Office of the 
Ombudsman will forward a letter to notify the individual of the 
results.
    CAPPS II, if implemented, will improve this system considerably. 
CAPPS II will reduce the number of persons requiring additional 
screening by ending the use of outdated information and rules resident 
in the CAPPS I system. Further, by using risk analysis and identity 
authentication tools, CAPPS II should substantially reduce the number 
of travelers automatically selected for secondary screening.

                        RESEARCH AND DEVELOPMENT

    Question. The Congress made $154 million available for the 
Transportation Security Administration (TSA) to conduct research and 
development activities in an effort to improve current transportation 
sector security technology. Of the funds provided for fiscal year 2004, 
the Transportation Security Administration will target detection of 
chemical, biological, or similar threats and devices that could be 
released on or within an aircraft. With the testimony of Secretary 
Ridge before this Committee last month that the Department does not 
currently have the capability to screen for biological weapons that may 
be carried on board a commercial airliner, significant concern is 
warranted.
    Will the Transportation Security Laboratory conduct separate 
research on methods to detect chemical or biological weapons or will 
this research be coordinated with the Science and Technology (S&T) 
Directorate and the work carried out currently within that 
directorate's Biological Countermeasures Portfolio?
    Answer. TSA will be working closely with the S&T Directorate to 
identify technological solutions for screening to detect chemical and 
biological weapons. The TSA's Transportation Security Laboratory will 
play a critical role in identifying TSA's needs and specific 
operational considerations that must be taken into account as potential 
technologies are developed.
    Question. The Transportation Security Laboratory previously focused 
solely on the threat to civil aviation but has begun research and 
development on threats against cars and trucks by explosives.
    How will the Transportation Security Laboratory coordinate its 
research on transportation targets with the Science and Technology 
Directorate's High Explosives Portfolio?
    Answer. TSA has a strong working relationship with the S&T 
Directorate. We continue to meet with S&T personnel on a regular basis 
to discuss ongoing projects to ensure no duplication of efforts and to 
ensure projects undertaken are consistent with the overall goals of 
DHS.
    Question. Of the funds provided for fiscal year 2004, $45 million 
has been made available to develop next-generation Explosive Detection 
Systems (EDS) for the detection of explosive materials in passengers 
checked baggage.
    How has the research and development progressed to date to enhance 
the performance of existing Explosive Detection Systems that are 
currently deployed at airports and also with manufacturers of new 
technologies and when will these new technologies be ready for 
deployment in our nation's airports?
    Answer. Advances including reductions in false alarms, improved 
machine reliability, and reductions in operational expenditures have 
sufficiently matured where they will begin to be deployed by no later 
than next year based on currently-planned equipment deployments. 
capability, increased throughput, and reduce the size of EDS solutions. 
Some equipment will be best suited for smaller airports or checkpoints, 
while other equipment is being designed for in-line deployment.
    New technologies will be developed under TSA's Manhattan II 
project. TSA will be posting a request for information in the third 
quarter of fiscal year 2004. While TSA will explore the potential of 
all relevant technologies, we expect promising technologies to include 
the demonstration of novel x-ray sources, different geometry, and the 
development of multi-spectral detector arrays. Combined technologies 
may play a role, and nanotechnology may provide new elements for 
detection strategies.
    Question. Are there any new threat analyses that warrant a need to 
expand the criteria for certifying Explosive Detection Systems that are 
not currently included in the screening of passenger baggage?
    Answer. TSA continually evaluates its certification criteria for 
explosives detection technology to ensure both the types and amounts of 
explosives that the technology can identify are reflective of the 
threat. TSA has efforts underway to expand the types of explosives that 
can be identified, while also reducing the amount of explosives that 
would automatically trigger detection.
    Question. The Presidents fiscal year 2005 budget proposes to 
consolidate all research department-wide into the Science and 
Technology Directorate, except for the research carried out by the 
Transportation Security Administration's Laboratory. With the concern 
of carrying out research in a parallel manner do you believe it would 
best serve the Department if the Transportation Security Administration 
research and development activities were consolidated with the Science 
and Technology Directorate research activities?
    Answer. TSA believes that the constant demand for improved 
technology performance and the very specific detection capabilities 
needed to support TSA's mission requires that TSA have a highly 
specialized applied R&D program. As new weapons are developed, TSA must 
be able to meet its immediate operational needs by refining and 
enhancing current technologies to counter those threats and by 
identifying gaps to ensure R&D is well focused on continually improving 
capabilities. TSA must also be able to leverage its human factors 
efforts to identify methodologies, training and operational tools, and 
develop technology that will foster improved performance. TSA will 
continue to coordinate closely with the S&T to ensure that we can adapt 
to and address changing threats without duplicating S&T's efforts.
    Question. In the search for new technology to detect and prevent 
weapons and explosives from being carried onto airliners, the 
Transportation Security Administration is evaluating technologies to 
make the screening process more effective and less time-consuming. How 
has the research and piloting of new passenger checkpoint technologies, 
such as passenger body scanners and explosive trace detection portals, 
made promising advances in detecting explosives and/or biological or 
chemical weapons from being carried onto commercial airliners and when 
do you believe the piloting of these new technologies at airports will 
take place?
    Answer. TSA has developed a roadmap for the operational testing and 
evaluation of checkpoint technologies to improve TSA's ability to 
detect explosives being carried on persons and in carry-on baggage. 
Highlights from our Roadmap are as follows:
  --Explosives Detection Portals.--Continued development and pilot 
        deployment in the 3rd quarter of fiscal year 2004;
  --Document Scanners.--Continued development and pilot deployment in 
        the 2nd or 3rd quarter of fiscal year 2004;
  --Cast & Prosthetic Device Scanners.--Continued deployment and pilot 
        deployment in the 2nd quarter of fiscal year 2004;
  --Explosives Detection Systems (EDS) for carry-on baggage.--Define 
        performance metrics and solicit vendor participation 2nd or 3rd 
        quarter of fiscal year 2004;
  --Explosives Detection Technology for screening liquids.--Establish 
        the performance metrics for this technology and solicit vendors 
        of existing technologies to participate in an evaluation 
        against this qualification standard.

     LETTERS OF INTENT (LOI) FOR EXPLOSIVE DETECTION SYSTEM (EDS) 
                              INSTALLATION

    Question. The Congress has made available over $1.5 billion for the 
installation of explosive detection systems and the Letter of Intent 
(LOI) program to safeguard commercial airliners from a terrorist attack 
by explosives.
    What savings can be achieved on an airport-by-airport basis in 
personnel costs by installing Explosive Detection Systems ``in-line'' 
as opposed to terminal lobby protocols?
    Answer. The degree of costs vs. benefits will vary from airport to 
airport because of differing airport configurations. TSA is in the 
process of refining its return on investment analysis model at the same 
time that it is revising its staffing model. TSA will continue to 
assess the extent to which in-line systems benefit operational 
efficiency.
    Question. With the current cost share in place (90/10) and the 
President's budget request of $250 million, how many Letters of Intent 
does TSA intend on signing in fiscal year 2005?
    Answer. TSA currently expects that all resources will be utilized 
for currently-signed LOIs as well as other EDS integration activities. 
However, TSA will assess the need for additional in-line integration 
and resource availability on an ongoing basis.
    Question. How much of the $1.5 billion made available by Congress 
remains available for terminal modifications and what is the cost 
estimate to meet the necessary terminal modifications required at all 
commercial service airports across the country?
    Answer. The $1.488 billion appropriated in fiscal years 2002, 2003 
and 2004 has been used for the following requirements:
  --$828 million to cover facility modification and equipment 
        installation costs to meet the Congressional mandate to provide 
        for and conduct 100 percent screening of all checked baggage 
        for explosives at over 440 airports,
  --$259.4 million in support of the first eight completed Letters of 
        Intent (LOIs), including the 2 LOIs issued on February 15, 
        2004,
  --$20 million for contract support to complete various tasks 
        associated with the installation of explosives detection 
        systems (EDS) and explosives trace detection (ETD) equipment, 
        including site acceptance testing of EDS and ETD equipment at 
        the time of delivery from the vendors and once installed at an 
        airport, engineering and installation services from equipment 
        vendors, and administrative and technical support work,
  --$30 million to individual airports for completion of projects 
        associated with EDS/ETD equipment installation, including HVAC 
        installation, demolition work, and electrical work,
  --The remaining $350 million of the fiscal year 2004 installation 
        funding will be allocated for direct contracts between TSA and 
        individual airports for in-line EDS installations, with a 
        portion to be carried over into fiscal year 2005 to use along 
        with fiscal year 2005 funding to make fiscal year 2005 LOI 
        reimbursement payments for the 8 existing LOIs.
    Question. Will the agency fund terminal modifications at airports 
outside of the LOI process?
    Answer. At the current funding level, and applying the 75/25 cost 
share formula, TSA can support the following:
  --Reimbursement payments for the 8 existing LOIs;
  --Installation and multiplexing of EDS technology at the LOI 
        airports; and
  --EDS and ETD non-LOI installation work needed at 12 airports to 
        provide equipment capacity. The airports selected in this 
        category have a need for increased equipment capacity because 
        of increased passenger loads and airport terminal expansion 
        projects to support increases to air carrier service.
    Question. With so many needs and limited resources, how is the 
agency prioritizing on an airport-by-airport basis?
    Answer. TSA continues to use its prioritization factors to 
determine where limited resources will be allocated. TSA's first 
priority is to achieve compliance with the 100 percent electronic 
screening requirement at all airports. Simultaneously, TSA is working 
with airports that will not be able to maintain compliance with the 100 
percent electronic screening requirement because of increased passenger 
loads, increased and/or additional air carrier service, and/or airport 
terminal modifications and expansions.

                    PASSENGER AND BAGGAGE SCREENERS

    Question. In a report issued last month reviewing the 
Transportation Security Administration's process for conducting 
background checks on Federal passenger and baggage screeners, the 
Inspector General of the Department of Homeland Security made a list of 
twelve recommendations to the Administrator of the Transportation 
Security Administration to improve its management of the background 
check process for screeners. What procedures have been put into place 
to guarantee all passenger and baggage screeners that are currently 
employed and also individuals that are applying for a screening 
position have a full background check?
    Answer. TSA is aggressively implementing the Inspector General's 
(OIG) twelve recommendations. A significant part of our actions have 
been focused on ensuring that all screeners have had the necessary 
background checks and that all screener candidates receive a background 
check before they are hired.
    Processes are in place to ensure that all screener candidates are 
subject to a fingerprint based criminal history check that is 
successfully adjudicated BEFORE they are hired. In addition, prior to 
hiring, all screener candidates undergo a commercially conducted pre-
screen investigation that checks criminal history (based on an FBI 
fingerprint check and a check of local criminal histories), credit 
history and specific watch lists (TSA's No Fly and Selectee Lists). 
Successful adjudication of both the fingerprint check and the 
commercially conducted pre-screen investigation are absolute 
requirements before hiring takes place. After hiring, all new screeners 
undergo an Office of Personnel Management (OPM) Access National Agency 
Check and Inquiries (ANACI) investigation.
    This combination of background checks, both before and after 
hiring, provides the best available process to ensure security while 
maintaining a fully staffed screener workforce. The pre-employment 
checks (the fingerprint check and the commercially conducted pre-screen 
background check) take approximately 2-3 weeks to complete, thus 
allowing timely hiring of screeners. The OPM-conducted ANACI is more 
thorough but takes several months to complete; the ANACI provides a 
more in-depth review of a person's background which further mitigates 
security risk. TSA undertook a major effort in Q3/Q4 of fiscal year 
2003 to complete and adjudicate the required background checks 
(fingerprint, pre-employment and OPM ANACI) on all currently employed 
TSA screeners. Since then, all newly hired screeners have been subject 
to the processes and checks described above for screener candidates.
    Question. The Transportation Security Administration is currently 
in the process of an annual recertification of airport screeners to be 
completed by the end of this month.
    Can you explain the testing standards of the recertification 
process and what contractor oversight TSA is performing to ensure 
adequate testing the screeners for recertification is being carried 
out?
    Answer. The Aviation and Transportation Security Act (ATSA) 
requires that TSA shall conduct an annual proficiency review of each 
individual assigned screening duties.
    TSA completed the 2003/2004 re-certification process in March 2004 
for both Federal and private contract screeners. TSA is meeting this 
requirement through a national re-certification program for 
Transportation Security Screeners, Leads, and Supervisors. For the 
2003/2004 re-certification cycle (October 2003 through March 2004), the 
program consisted of a series of certification modules for either the 
Passenger/Dual Function (Passenger and Checked Baggage) or Checked 
Baggage screening function. The modules used were:
    Passenger/Dual Function Screeners:
  --Module 1.--Standard Operating Procedure (SOP) Job Knowledge Test, 
        (Screener and Supervisor versions)
  --Module 2.--X-Ray Image Interpretation Test, and
  --Module 3.--Practical Skills Demonstration
    Checked Baggage Screeners:
  --Module 1.--SOP Job Knowledge Test (Screener and Supervisor 
        versions) and
  --Module 3.--Practical Skills Demonstration
    In addition, a screener must have a ``meets standards'' for his/her 
annual Performance Rating by the FSD at his/her airport to be re-
certified.
    The national re-certification program's objective is to ensure that 
screeners demonstrated proficiency in the knowledge and skills that are 
critical to a screener's ability to provide world class security and 
world class service. As part of the development of this program, TSA 
employed a rigorous technical process to develop the assessment content 
and set proficiency requirements (i.e., passing scores) for each 
module. TSA implemented a valid and fair assessment process with the 
appropriate standards in place to certify that its screener workforce 
is proficient and capable of providing the security and service 
expected.
    Modules 1 and 2 were administered by local FSD staff (in most cases 
the airport Training Coordinator). Our training contractor, Lockheed 
Martin, administered Module 3. TSA government employees conducted 
quality assurance audits of the contractor throughout the re-
certification process and observed approximately 16 percent of the 
airports re-certification practical demonstrations.
    Question. Are the screeners being tested on TSA standard operating 
procedures and what is the pass/fail rate of the screeners that have 
been tested so far?
    Answer. Yes, screeners were tested on the standard operating 
procedures in Modules 1 (SOP knowledge test) and Module 3 (Practical 
skills demonstration). Less than 1 percent of the screeners failed 
fiscal year 2003-04 re-certification testing.
    Question. Congress limited the number of screeners employed by TSA 
to 45,000 full time-equivalents (FTE). Currently TSA is under that 
threshold and intends on hiring more screeners to comply with the 
45,000 cap. Do you believe that the 45,000 FTE limitation gives TSA an 
adequate number of screeners to carry out passenger and baggage 
screening?
    Answer. TSA is managing to keep the workforce under the 45,000 FTE 
level by creating a more flexible workforce. TSA is better coordinating 
airline schedules and passenger load with staffing needs, is increasing 
the proportion of part-time to full-time screeners, and is 
strategically using its mobile national screener force to meet seasonal 
fluctuations in workload. TSA expects to have a part-time screener 
workforce of close to 20 percent by the end of the current fiscal year. 
Part-time screeners create additional operational flexibility when 
scheduling screeners to satisfy varying levels of demand. As a result 
of reducing excess capacity at periods of lower demand, TSA is seeking 
to make more FTEs available to the system as a whole during peak 
periods.
    Question. Is the 10 minute passenger screening standard wait-time 
still in place or have new standards been implemented?
    Answer. TSA is committed to providing world-class customer service 
while ensuring freedom of movement for people and commerce by keeping 
our nation's transportation systems secure. We have done research, 
including focus groups, on customer satisfaction and devised a more 
robust methodology to assess the passenger experience, focusing not 
just on wait times, but on the totality of customers' interactions with 
the full range of screening processes. We have found that wait time is 
not a significant driver of the public's satisfaction with and 
confidence in TSA. In fact, most respondents in focus groups said that 
they would rather wait longer in line if security was better, and it is 
more important that the security process be thorough, attentive, and 
efficient than merely fast.
    In light of feedback from our research, TSA has developed a 
Customer Satisfaction Index for Aviation Operations (CSI-A). The CSI-A 
is comprised of results from passenger surveys conducted at airports, 
along with national poll results and complaints and compliments 
received by TSA. Passenger survey results display a high level of 
customer satisfaction, as 92 percent of the more than 15,000 
respondents indicated they were satisfied'' or ``very satisfied'' with 
their overall experience. National polls conducted by the Bureau of 
Transportation Statistics bi-monthly support these findings of customer 
satisfaction. Finally, airports show a downward trend in complaints 
relative to compliments.
    Nonetheless, TSA is committed to measuring wait time information at 
Federalized passenger checkpoints. In 2002, initial wait time data was 
collected at all 82 Category X and I airports (covering approximately 
95 percent of annual originating enplanements). Wait times at the 
remaining airports are predicted to be minimal, so we collect data from 
a sampling of Category II, III and IV airports in order to identify 
trends. We have found that most airports do meet the 10-minute standard 
most of the time. TSA will continue to collect wait time data at all 
major and a sampling of smaller airports to establish a good 
understanding of wait times, as well as how our service and staffing 
models impact wait times. We will continue to monitor wait times 
system-wide--by collecting data at all major airports for a 2-week 
period 3 times per year--to ensure that the same patterns hold over 
time.

                      REGISTERED TRAVELER PROGRAM

    Question. Congress provided $5 million for fiscal year 2004 for the 
Registered Traveler program to conduct a pilot program at selected 
domestic airports to expedite the security screening and check-in of 
passengers that voluntarily submit their personal data for a background 
check in order to be enrolled into a passenger registration and 
identity verification system.
    What has been accomplished to date on the Registered Traveler 
program with the funds provided by Congress? What do you intend to 
accomplish in the pilot program by the end of fiscal year 2004, and 
what enhancements do you propose with the requested increase of $10 
million for fiscal year 2005?
    Answer. Over the past year, TSA, in coordination with both internal 
and external stakeholders has developed a strategy for conducting a 
limited number of Registered Traveler (RT) Pilots in 2004 that will 
allow the Department to evaluate the merits of the program without 
disrupting airport operations or compromising security.
    TSA intends to conduct RT Pilots at a limited number of airports 
beginning in June 2004. The Pilot programs will assess improvements in 
security and enhancements in customer service for passengers. The 
pilots will last approximately 90 days. Results of these pilots will be 
analyzed beginning in October 2004 to determine the program's effect on 
security and service.
    Upon conclusion of the pilots, a determination will be made 
regarding best practices and necessary enhancements required for a 
larger implementation of the program. The fiscal year 2005 budget 
request includes $15 million for additional start-up costs, such as IT 
infrastructure and staffing for this program. TSA anticipates that 
future operational program costs for the Registered Traveler Program 
would be covered by fees incurred by participants. Thus, the Registered 
Traveler Program would be self-funded.
    Question. Will biometrics be the cornerstone of the Registered 
Traveler program or will is it be just one component being considered 
as the pilot program takes place?
    Answer. During the RT Pilot, TSA will assess biometric technology 
solutions to enhance identity verification capabilities at the 
passenger security checkpoint. These biometric tools will be tested in 
conjunction with business processes, including potential 
reconfiguration of lines and lanes, to develop a secure and expedited 
travel experience.
    Question. Do you see Registered Traveler as a precursory test for 
CAPPS II?
    Answer. The Registered Traveler Pilot Program is purely voluntary 
and will offer a secure and expedited travel experience for those who 
wish to participate. In addition to submitting personal data, RT 
participants will also be requested to submit biometrics (fingerprint 
and iris scan) that will not be components of the CAPPS II program. 
However, depending on the nature and structure of any deployable RT and 
CAPPS II program, there may be clear functional synergies and 
overlapping capability. TSA will work to ensure that these are 
identified and assessed.
    Question. In what airports will the pilot programs take place and 
how will travelers voluntarily sign up?
    Answer. Final decisions regarding specific locations for the 
Registered Traveler Pilot have not yet been made. TSA envisions that 
voluntary enrollment for the RT Pilot will likely take place at the 
designated airport locations.
   transportation security administration fiscal year 2004 shortfall
    Question. Does TSA have adequate funding for fiscal year 2004 or is 
it facing funding shortfalls in certain programs and activities?
    Answer. The fiscal year Homeland Security Appropriations Act was 
signed into law on October 1, 2003. In addition to these new 
appropriations, TSA has carryover funding from fiscal year 2003 that is 
available to be spent in fiscal year 2004. A spend plan has been 
developed for fiscal year 2004 that allows TSA to meet its requirements 
within available funding.
    Question. What specific funding shortfalls do you anticipate for 
fiscal year 2004?
    Answer. TSA anticipates that it will meet its fiscal year 2004 
requirements within available funding.
    Question. How do you intend to address the funding shortfall 
problems (better management and fiscal controls, a proposed 
reprogramming of TSA funds, or other funds provided to the Department 
from other programs and activities)?
    Answer. TSA has been working to improve its fiscal controls and 
management of the agency as it transforms itself from a start-up agency 
to a maturing organization. In fiscal year 2004, TSA is requesting 
$154.6 million in funding to be shifted among programs to meet emerging 
requirements.
    Question. If a reprogramming of funds will be necessary, when can 
we expect that proposal to be submitted to the Committee?
    Answer. The reprogramming was transmitted to Congress on April 23, 
2004.
    Question. Will an amendment to the fiscal year 2005 budget request, 
as submitted, be required in light of these shortfalls?
    Answer. The Administration does not intend to submit a fiscal year 
2005 budget amendment for TSA.
                                 ______
                                 

             Questions Submitted by Senator Robert C. Byrd

                         TSA: SECURITY CONTRACT

    Question. We recently received notification of a security contract 
for TSA facilities in Northern Virginia that totals a minimum of $5.3 
million a year for 5 years. That appears to be an extremely large 
amount of money to provide staff and equipment to screen people and 
their belongings as they enter the two facilities.
    Please justify for the record the number of security employees and 
types of equipment that your agency will be obtaining under this 
contract. If the response needs to be classified, please provide the 
subcommittee with an appropriately classified response.
    Answer. The contract security guard force at TSA Headquarters at 
Pentagon City and the Transportation Security Operations Center (TSOC) 
(formerly TSCC) in Chantilly, Virginia is responsible for protection of 
the facilities and for processing the entry of employees and visitors 
to both locations. The decision was made pursuant to guidance received 
from the Department of Homeland Security (DHS) and also to comply with 
the guidelines established by the Department of Justice (DOJ) in 1995, 
entitled ``Vulnerability Assessment of Federal Facilities.'' Security 
surveys and risk/threat assessments for both facilities confirmed the 
level of security required. Both facilities house Sensitive 
Compartmented Information Facilities (SCIF) within their space, as well 
as other sensitive critical assets. Director of Central Intelligence 
Directive (DCID) 6/9, effective 18 November 2002, requires an immediate 
security response to an alarm in this facility. (DCID 6/9; 3.1.2.1) 
Additional factors, including the fact that both facilities are 
operational 24 hours a day, 7 days per week and the ongoing threat 
environment, impacted the decision.
    The TSA Protective Security contract was solicited on a competitive 
basis among eight vendors. This acquisition was awarded utilizing those 
contractors from the General Service Administration's Federal Supply 
Schedule 98 (Law Enforcement--Security Facilities Management). Under 
these guidelines, a 5-year firm-fixed labor hour Blanket Purchase 
Agreement (BPA) was awarded. Each year, funded individual task orders 
will be written and ordered against the BPA. After conducting market 
research on the per hour cost for Security Guards in the DC Metro area, 
it was determined that a single contract with one security guard 
company managed by TSA would be the most cost effective. Among the 
eight vendors bidding for the contract, the one chosen was the less 
expensive of the two most qualified vendors, and the cost was well 
within the Washington area average.
    Under this contract, the security guard company will be providing 
personnel with weapons and uniforms, obtaining clearances for the 
guards, supplying associated security equipment and training for its 
personnel, and providing on-site supervision. Security personnel 
employed by the contractor to protect TSA's facilities are U.S. 
citizens, and many of them are armed or possess Secret Security 
Clearance, or both. The total man-hours worked by the Security Guard 
personnel at both TSA Headquarters and TSCC is approximately 4,000 
hours per week. Besides the screening of visitors and their belongings 
prior to entering TSA facilities, duties include providing escort for 
contractors, security for VIP visits, responding to alarms, patrolling 
the grounds and staffing the control center at both locations for 24 
hours, 7 days a week.

                  EXPLOSIVES DETECTION FOR PASSENGERS

    Question. In December, 2001, Richard Reid was prevented from 
exploding his improvised ``shoe bomb'' due to quick action on the part 
of the passengers and crew of an American Airlines flight from Paris to 
Miami. In the intervening 2 years, we appear to have increased the 
screening of checked baggage for explosives, but there appears to be 
little effort being made to enhance the screening of passengers 
themselves for hidden explosives.
    The technology and equipment exist to non-intrusively screen 
passengers for explosives. What is TSA doing to address this potential 
threat? How much of your fiscal year 2005 budget request is devoted to 
enhanced screening of passengers for explosives? Of the requested 
funds, how much are estimated to be used to procure the latest proven 
explosive detection portals?
    Answer. TSA has developed a roadmap for the operational testing and 
evaluation of checkpoint passenger screening technologies to improve 
TSA's ability to detect explosives being carried on persons and in 
carry-on baggage. Below is a list of the technologies to be pilot 
tested at airports and the timeframe in which that testing will be 
accomplished:
  --Explosives Detection Portals--continue development and pilot 
        deployment in the 3rd quarter of fiscal year 2004;
  --Document Scanners--continue development and pilot deployment in the 
        2nd or 3rd quarter of fiscal year 2004;
  --Cast & Prosthetic Device Scanners--continue development and pilot 
        deployment in the 2nd quarter of fiscal year 2004;
  --Explosives detection systems (EDS) for carry-on baggage--define 
        performance metrics and solicit vendor participation 2nd or 3rd 
        quarter of fiscal year 2004; and
  --Explosives detection technology for screening liquids--establish 
        the performance metrics for this technology and solicit vendors 
        of existing technologies to participate in an evaluation 
        against this qualification standard.

                    AIRPORT FUNDING FORMULA CHANGES

    Question. President Bush signed the FAA Reauthorization bill into 
law in December, 2003. That law mandates that the Federal government, 
through the TSA, cover 90 percent of the costs associated with airport 
security improvements including the installation of explosive detection 
devices. Less than two months later, however, the President submitted a 
budget to the Congress that would increase the burden on airports for 
meeting Federal security mandates. He proposes to change the amount of 
the Federally-covered expenses from 90 percent to only 75 percent. This 
appears to be yet another example of this Administration passing the 
security buck to someone else. In this case it is the airports and 
local taxpayer-funded airports. In other cases it is seaports or some 
other transportation entity.
    How can the Administration justify agreeing to fund 90 percent of 
airport security costs in December and then provide funding for only 75 
percent of the costs in February?
    Answer. The 75 percent Federal funding level has been a long 
established cost share formula with the aviation industry. Because 
industry shares security responsibilities with the Federal Government, 
and because airports and airlines receive efficiency benefits from in-
line systems, it is fair that they also share financial 
responsibilities at this level for installation of systems that will 
ease passenger flow and provide increased security levels at airports. 
Additionally at the 75 percent cost share related, TSA can use it 
allocated funding to support current LOI airports as well as those 
airports that have not received LOI but were additional equipment 
capacity is needed to accommodate increased passenger loads.

                      CARGO AND CONTAINER SECURITY

    Question. Two years ago, Congress created and funded Operation Safe 
Commerce. Late last year, the Bureau of Customs and Border Protection 
announced a ``smart container'' initiative. And just 2 weeks ago, the 
Homeland Security Advanced Research Projects Agency issued a 
solicitation for inexpensive container security technologies and 
offered up to $2 million towards that effort. It appears to me that 
there are too many cooks in this particular homeland security kitchen. 
Who is in charge of the security of shipping containers? Which agency 
is setting the standards and which one or ones is responsible for 
implementing them?
    Similarly, in regard to Operation Safe Commerce, what is TSA doing 
to set shipping security standards and how is TSA working with CBP in 
this effort? Once the various OSC shipping tests are completed and the 
reports submitted, who will be in charge of implementing the ``lessons 
learned'' and ensuring that they are implemented? Do you envision the 
establishment of national standards in this regard?
    Answer. Secretary Ridge delegated authority and responsibility for 
implementing the Maritime Transportation Security Act's Secure Systems 
of Transportation (SST) and performance standard sections to BTS.
    In order to ensure that international and domestic approaches to 
cargo security are coordinated and policies are consistent, under BTS 
leadership, a working group consisting of TSA, CBP, USCG and S&T 
personnel has been meeting regularly, and is conducting a gap analysis 
on existing cargo security and intelligence programs, coordinate 
existing containerized cargo security programs and R&D efforts to 
identify synergies and coordinate existing DHS component activities in 
the containerized cargo security environment.
    The goal of this effort is to ensure effective cargo security from 
point of origin to final destination. We will achieve this goal by 
leveraging existing legacy programs like CSI and CTPAT, adding 
enhancements, and setting minimum performance standards to close 
identified vulnerabilities. We will also apply lessons learned from 
Operation Safe Commerce and the SST interagency working group with CBP 
and USCG.

                AIRLINE PASSENGER SCREENING: WAIT TIMES

    Question. Last summer, my staff asked TSA personnel for information 
regarding wait times experienced by airline passengers at various 
airports. We are concerned that the cap on passenger screeners might be 
resulting in an increase in the time spent by passengers waiting in 
lines to be screened. My staff has renewed that request at regular 
intervals, and yet no information has been provided to them.
    Last week, my staff went to Seattle on subcommittee business and 
had meetings with TSA personnel at the Seattle-Tacoma Airport. They 
were informed that records are kept every half hour of wait times at 
the various checkpoints at SeaTac and that average wait time 
information is submitted to TSA headquarters. Why have your 
representatives been unable to provide my staff with the requested 
information? When can we expect to receive this information?
    Answer. Each month, TSA instructs approximately 26 U.S. airports to 
conduct a wait time study covering two consecutive weeks. These 
airports are selected according to geographical and size categories in 
order to allow TSA to extrapolate across the full range of airport 
diversity. All Category X and I airports--as well as select Category 
II, III and IV airports--will be chosen to collect data at least three 
times each over the course of the year. The monthly airport selections 
are balanced in order to provide consistent data for headquarters 
analysis.
    In March, the average wait time for the sample of 26 airports was 
3.1 minutes, with an average of 10.4 minutes at peak time. At Seattle, 
average wait time was 4.2 minutes and the average at peak time was 16.5 
minutes.

                             RAIL SECURITY

    Question. Current events such as the subway and rail bombings in 
Moscow and Madrid prove the point that we need an agency solely focused 
on protecting all modes of transportation. Congress created the 
Transportation Security Administration for just that purpose. In light 
of the Madrid bombings, has TSA developed a broader-based plan that 
would address the known threat to mass transit and rail security? Did 
TSA request additional fiscal year 2004 funds from the Department to 
assist in implementing this plan?
    Answer. In the months preceding the Madrid and Moscow incidents, 
DHS, in close coordination with our partners at the Department of 
Transportation (DOT), State and local governments, and transit and rail 
operators, took a number of steps to address vulnerabilities in the 
rail and transit systems to improve our security posture against such 
attacks. These efforts spanned the spectrum of security, from 
information sharing and awareness through prevention, response and 
recovery to a potential terrorist rail attack in the United States.
    On March 22, 2004, Secretary Ridge announced additional measures to 
strengthen security for our rail and transit systems. Most of these 
measures were low or no-cost items and procedures funded out of 
existing agency resources. DHS will build on many of the security 
measures recommended during the past 2 years for implementation to mass 
transit and passenger rail authorities by DHS, the Federal Transit 
Administration and the Federal Railroad Administration.
    Based on assessments from law enforcement and intelligence 
agencies, specific threat assessments and analysis, and the use of risk 
management principles, TSA continually evaluates, prioritizes and 
targets the use of available funds to reduce or eliminate the security 
threat.
    Question. What is TSA doing to more systemically address these 
threats rather than just reacting to them? Is TSA coordinating efforts 
in this regard with other agencies in the Department of Homeland 
Security?
    Answer. Ensuring that our nation's transportation systems are 
secure must be accomplished through effective partnering between 
appropriate Federal, State, local and private industry entities. We 
have consistently held that that this responsibility must involve the 
coordination of appropriate Federal, State, local and private industry 
partners, many of whom were already in the business of providing 
security for their particular piece of the transportation puzzle. TSA's 
main charge, both under ATSA and now as part of the DHS family, is to 
help coordinate these efforts under the guidance of the Secretary and 
the Under Secretary for Border and Transportation Security, identifying 
gaps and working with appropriate partners to ensure that existing 
security gaps are filled. However, other entities within both the 
Department and other agencies in the Federal Government have devoted 
considerable resources to securing modes of transportation other than 
aviation, including the Coast Guard and U.S. Customs and Border 
Protection for port, maritime and cargo security, the Information 
Analysis and Infrastructure Protection Directorate for critical 
infrastructures; the Office of Domestic Preparedness in transit 
security grants; DOT modal administrations; and State, local and 
private sector partners.
    TSA's efforts in non-aviation security over the past 2 years have 
focused on greater information sharing between industry and all levels 
of government, assessing vulnerabilities in non-aviation sectors to 
develop new security measures and plans, increasing training and public 
awareness campaigns, and providing greater assistance and funding for 
non-aviation security activities. In partnership with other component 
agencies of the Department of Homeland Security (DHS) and in 
coordination with the Department of Transportation (DOT), State, local 
and private sector partners, TSA will continue to leverage existing 
security initiatives, coordinate the development of national 
performance-based security standards and guidance; identify areas where 
regulations may be necessary to improve the security of passengers, 
cargo, conveyances, transportation facilities and infrastructures; and 
identify areas where better compliance with established regulations and 
policies can be achieved. TSA will work with DHS components, modal 
administrators within DOT, and its government and industry stakeholders 
to continue these efforts, establish best practices, develop security 
plans, assess security vulnerabilities, and identify needed security 
enhancements.

                              CANINE TEAMS

    Question. You mention in your testimony that you request $17 
million in fiscal year 2005 to support 354 canine teams. Your prepared 
statement on this funding seems solely focused on aviation security as 
it relates to K-9 teams. Yesterday, as part of his rail and transit 
security initiative, Secretary Ridge said that the Department will 
develop a rapid deployment Mass Transit K-9 program by using existing 
Homeland Security explosive K-9 resources.
    Once again, it appears that the Department is robbing Peter to pay 
Paul. It appears that you will be pulling K-9 teams away from airports 
and the protection of Federal buildings and using them for mass 
transit, thus degrading security in one transportation mode to begin 
beefing up security in another mode. By refusing to seek additional 
funds to address this very real threat it truly calls into question the 
seriousness of this Administration in its effort to secure the 
homeland.
    Does the initiative announced yesterday mean that you will be 
pulling existing K-9 teams away from protecting airports and Federal 
buildings to use them for rail and mass transit security? Did TSA 
request funds for the creation of new teams this fiscal year to address 
the threat to mass transit? Do you anticipate receiving any new 
resources this year for the creation of canine teams dedicated, 
trained, and certified for the rail environment? If the Department 
plans on waiting until the fiscal year 2005 Homeland Security 
appropriations bill is signed into law, I would caution that 
intelligence indicates the threat is imminent and the Department's 
track record on obligating grant funding is spotty at best.
    Answer. DHS will establish Rapid Response Teams (i.e., K-9 units) 
for rail and mass transit security through the Federal Protective 
Service (FPS). FPS will utilize dog team reasources from across the 
government. TSA will not be pulling canine units out of the airports 
unless, potentially, this is part of an action to respond to specific 
incidents or intelligence which warrants use of a Rapid Response Team. 
TSA will use its existing resources to provide dog team training 
assistance to transit operators

                         THE THREAT FROM HAMAS

    Question. On March 22, the so-called spiritual leader of Hamas, 
Sheik Ahmed Yassin, was assassinated in an attack authorized by Israeli 
Prime Minister Sharon. It was an attack about which the U.S. government 
apparently had no advance knowledge. However, as a result of the 
attack, Hamas has stated that it blames the United States and there are 
some reports that it plans to bring its reign of terror to U.S. shores.
    Not only was Sheik Yassin a spiritual leader, he was also known as 
the ``father of the suicide bomber''. I am deeply troubled that the 
``eye for an eye'' tactics of daily life in the Middle East may soon 
arrive here at home. We have already witnessed backpacks exploding and 
killing over 200 in Madrid. Based on the Secretary's statement of March 
22 and the threat advisories we have seen, I fear that it will not be 
long before suicide bombers begin detonating themselves in our public 
places, our sidewalk cafes, our buses, or our subways.
    What is the Department doing to prevent these types of suicide 
attacks in this country? Are there plans prepared to address this 
looming threat? Or does the Department just plan to wait for the 
inevitable attack and then respond?
    Answer. Suicide bombers usually look for crowded public locations 
(shops, restaurants, clubs, etc.) to detonate themselves for the sole 
purpose of killing and injuring as many people as possible. Public 
transportation targets in other parts of the world have been subjected 
to suicide bomber attacks, especially busses. Stopping suicide bombers 
intent on detonating themselves on or near a bus, ferry or other mass 
transit venue or terminal requires at minimum a multi-pronged approach 
that includes: (1) good intelligence and law enforcement response; (2) 
training operators to recognize the behavior patterns and mannerisms of 
suicide bombers; (3) and educating passengers to do the same. We also 
should explore physical inspection alternatives, as we are doing on a 
test basis in New Carrollton, Maryland. It is not clear, however, if 
this alternative is viable or effective.

                                  TWIC

    Question. The MTSA requires the creation of a national 
Transportation Worker Identification Credential (TWIC). Truck drivers, 
airport employees and all other individuals requiring access to secure 
transportation areas in the performance of their duties will be 
required to carry this credential. Please provide the Administration's 
views on the wisdom of using a centralized and existing card production 
facility for the production of the TWIC cards, including an evaluation 
of the associated costs and benefits. What is the status of the 
prototype project?
    Answer. During the development process, data, technical information 
and lessons learned were gathered from a wide range of sources 
including industry stakeholders and other Federal credentialing 
projects. The RFP for the TWIC Prototype Phase will be released in the 
immediate future. The proposed plan leverages the stakeholder 
relationships established over the past 24 months and during the 
Technology Evaluation Phase, as well as a partnership with the State of 
Florida for the network of deep-water ports. The goal of the prototype 
is to evaluate the full range of TWIC business processes within a 
representative operational environment. The plan includes facilities 
and workers from all transportation modes and is focused in three 
regions, Philadelphia-Wilmington, Los Angeles-Long Beach, and the 
Florida ports.
    Various card production options were evaluated within the context 
of system requirements. Centralized card production using existing 
Federal card production facilities that meet all of the system 
requirements was determined to be the most cost effective solution for 
the prototype phase. Key factors in the evaluation included: physical 
security and controlled access to the production process; secure supply 
chains for card stock and special security features (e.g. holograms, 
special inks, secret keys); standardization of training; and, economies 
of scale with high capacity production machines. Centralized card 
production will be further evaluated during the prototype, and the 
final evaluation report will include a detailed analysis on all card 
production options and a recommendation for DHS decision.

                          REGISTERED TRAVELER

    Question. Last week TSA announced its plan to begin a registered 
traveler program in which frequent airline travelers would pay a fee 
and be provided expedited processing at airport security checkpoints. 
Your budget request includes $15 million to ``expand contract support 
and technology resources''. Please describe the planned registration 
fee and the estimates of the total cost of the program. How much would 
the fee need to be increased to cover the proposed $15 million proposed 
expansion. How can the full cost of the program be recovered from 
business travelers and others who voluntarily join the program as 
opposed to passing on some of the costs associated with the program to 
all taxpayers?
    Answer. TSA intends to conduct RT pilots projects at a limited 
number of U.S. airports beginning in June 2004. The pilot programs will 
assess improvements in security and enhancements in customer service 
for participating passengers. The pilots will last approximately 90 
days. Results of these pilots will be analyzed beginning in October 
2004 to determine the program's effect on security and service.
    During the RT pilot, TSA will test technology in the form of 
biometric tools to enhance identity verification at the passenger 
screening checkpoint, in conjunction with business processes, including 
potential reconfiguration of select checkpoint lines and lanes. TSA 
will be testing a range of technology and operational variables. The RT 
pilots will monitor and assess possibilities for a secure and expedited 
travel experience for those who volunteer to participate in the 
program. The number of participants in the RT pilots will be capped at 
10,000 spread across a small number of airport locations. It is 
anticipated that this small RT pilot test will not have a detrimental 
effect on either those who do not volunteer or on the screener 
workforce. Upon conclusion of the pilots, determinations will be made 
regarding best practices and necessary enhancements required for a 
larger implementation of the program.
    The cost of the RT pilot programs will be funded by $5 million 
earmarked for the Registered Traveler program in the Homeland Security 
Appropriations Act, 2004 (Public Law 108-90). Contrary to what was 
reported in the media, TSA is not planning to charge a fee to 
passengers who participate in the 90-day RT pilots.
    TSA will await the results of the pilot program prior to making any 
decisions regarding the implementation of a Registered Traveler program 
in fiscal year 2005, including what costs would be incurred by those 
passengers who wish to participate in the voluntary program. TSA 
anticipates that future operational program costs for the Registered 
Traveler Program would be covered by fees incurred by participants. 
Thus, the Registered Traveler Program would become self-funded.

                             HOLLYWOOD JOB

    Question. I understand that TSA is looking to hire an individual to 
serve as a liaison to the Hollywood film and television industry and 
that the person would be paid at the GS-15 level. How many TSA 
screeners could be hired with the $136,000 that the GS-15 Hollywood 
liaison will be paid?
    Answer. Public Affairs utilized an open, funded position from one 
of its bureau offices to create the Director of Entertainment Liaison 
position to represent the entire Department. By taking an FTE from an 
office where reorganization had created efficiencies in workload, the 
position utilized those efficiencies to create a position with value 
added to the Department.
    The Entertainment Liaison Office is a necessary addition to the 
Office of Public Affairs. This person will work with television and 
movie producers to ensure that they do not take ``editorial license'' 
with Homeland Security matters that could provide the public with false 
impressions or inaccurate information. We spend a great deal of effort 
to educate people to help them to be better prepared for any possible 
disaster--natural or manmade. Millions of Americans get information 
through the entertainment industry. This position will help to ensure 
that these people get an accurate portrayal of the department's 
mission, policies, and activities, while proactively working to help 
the American public better identify DHS functions. The Entertainment 
Liaison office will guide the direction of documentaries and law 
enforcement ``reality'' shows to provide real information about how the 
country is better prepared today.
    This is not a unique position in government. Many other Federal 
agencies already utilize a liaison with the entertainment industry. The 
CIA has a Hollywood liaison, and the Department of Defense houses a 
large staff to serve the same function.
    This position hired at a salary level of $136,000 (GS-15) would be 
comparable to hiring approximately 3 TSA screeners (see breakout 
below.)

------------------------------------------------------------------------

------------------------------------------------------------------------
Base salary.............................................         $23,600
Locality pay (assumed Los Angeles area).................          +4,732
Benefits................................................          +8,260
Dual position training..................................          +3,130
                                                         ---------------
      Total.............................................         39,722
------------------------------------------------------------------------
$136,000/39,722=3.4 screeners.

                   MARITIME AND LAND: A LACK OF FOCUS

    Question. I remain strongly concerned that moving the funds from 
TSA will result in a diminishment of focus from your agency--and the 
Department--on non-aviation modes of transportation. That would be in 
direct contravention of the intent of Congress when it passed the 
Aviation and Transportation Security Act in November 2001. That Act 
gives TSA the responsibility for ``security in all modes of 
transportation.''
    During the hearing, you indicated that upon further reflection in 
regard to the movement of TSA's grant funds to ODP, the Department had 
determined that TSA's ``subject matter specialists/expertise'' would 
remain at TSA. Please confirm for the record that this statement is 
accurate. If this is not the case, please explain why and please tell 
the subcommittee when you learned that this would not be the case and 
from whom. Also, please provide the Subcommittee with the number of 
subject matter specialists TSA employs as of March 19, 2004, in the 
areas of mass transit, seaports, rail, trucking, and buses.
    Answer. It is anticipated that the Transportation Security 
Administration (TSA) will continue to provide operational expertise on 
the grant programs through participation in pre-award management 
functions. These include determination of eligibility and evaluation 
criteria, solicitation and application review procedures, selection 
recommendations and post award technical monitoring.
    As of April 21, 2004, the Transportation Security Administration 
(TSA) surface transportation (i.e., maritime and land) had 120, 
including 23 for rail and mass transit, and 14 for the maritime 
environment TSA is reorienting its subject matter expertise as roles 
and missions are better defined between itself and other DHS 
components. As TSA expands its activities on in rail and mass transit 
security, for example, we would expect to have additional subject 
matter experts and few in other areas where such experts exist in other 
DHS components.

                           CAPPS II--TESTING

    Question. Also, of the funds requested for this program in the 
fiscal year 2005 budget request, what is requested solely for 
additional testing of the program--as opposed to implementation and 
operation of the system?
    Answer. There are two components to the plan for CAPPS II testing: 
testing with historical PNR data and full system testing that will take 
place once connectivity is established with an airline to test with 
live data. TSA estimates the cost associated with completing system and 
performance testing at $5 million. This involves testing the system 
``end to end'' to validate the ability of the system to receive all of 
the different types of records from the airlines and post the results 
of the risk assessment on the boarding pass. Once system testing has 
been completed, performance testing is required to verify that the time 
required to complete each end-to-end transaction meets the system 
performance standards.

                           AIR CARGO SECURITY

    Question. On December 24th, 2003 six flights between Paris and Los 
Angeles were cancelled due to security concerns. In the week following 
the cancellation, U.S. officials ``significantly increased'' inspection 
of air cargo on foreign flights--a source of widespread concern as a 
potential mode of attack for terrorist.
    The vast majority of cargo carried on passenger aircraft still is 
not screened for potentially deadly threats. Their checked bags and 
carry-on luggage are screened--even their persons are submitted to 
oftentimes humiliating searches, but other forms of cargo carried in 
the belly of the plane are not. In fact, according to a September 2003 
report issued by the Congressional Research Service less than 5 percent 
of cargo placed on passenger airplanes is screened.
    The Aviation and Transportation Security Act requires that the 
agency ``provide for the screening of all passengers and property, 
including United States mail, cargo, carry-on and checked baggage, and 
other articles that will be carried aboard a passenger aircraft,'' yet 
TSA is primarily relying on an administrative process called the 
``known shipper program'' to meet this requirement instead of 
physically screening the cargo.
    Sadly--even after this Committee and this Congress added funds in 
last year's budget to enhance research and test methods of inspection 
for air cargo--your budget fails to provide increased funds to address 
this very real threat. Mr. Secretary, why have no funds above the $85 
million Congress provided in fiscal year 2004 been requested for fiscal 
year 2005? Does the Bush Administration believe that the threat to air 
cargo is not real?
    Answer. DHS is committed to a strong air cargo screening program 
and its request bears this out. The Administration's fiscal year 2005 
budget request represents a significant increase over the fiscal year 
2004 request, and is consistent with the additional funds appropriated 
last year by Congress in excess of the fiscal year 2004 request, which 
are being used to accelerate TSA's air cargo security program. TSA has 
already taken a number of significant steps to reduce vulnerabilities 
in this arena, including prohibiting cargo from unknown shippers, 
significantly increasing the number of physical inspections of air 
cargo on passenger and all cargo aircraft, increasing its air cargo 
inspections workforce, strengthening the criteria for consideration as 
a known shipper, automating the validation of known shippers and 
indirect air carriers, and expediting research and development efforts 
to identify potential new technological solutions for the inspection of 
air cargo on passenger aircraft. TSA is also working closely with CBP 
to develop a targeting tool which will permit effective identification 
of high risk cargo with the ultimate goal of requiring the inspection 
of all such high risk cargo.
    TSA is committed to a threat-based, risk-managed approach to air 
cargo security. The Air Cargo Strategic Plan outlines a layered 
security strategy that does not rely on any single solution, but 
rather, includes measures that secure critical elements of the entire 
air cargo supply chain, with the ultimate goal of assessing the 
relative risk of air cargo and then focus existing resources on 
inspecting 100 percent of cargo that is determined to be of higher 
risk. Among the layers within the cargo security system are the Known 
Shipper program, Indirect Air Carrier certification system, procedures 
to secure cargo during transport to the airport, training of air 
carrier and Indirect Air Carrier personnel, and screening directives 
established in November 2003. TSA has expanded the Known Shipper 
database by involving more companies and collecting more information. A 
key change to the Known Shipper program will be the full deployment of 
TSA's pilot Known Shipper Automated Database. TSA has already begun to 
implement this automated database and expects full deployment by the 
end of the calendar year. TSA is committed to advancing evolving ideas 
and concepts that can be analyzed and implemented to make the cargo 
security system even more secure. TSA is also aggressively pursuing 
next generation technological solutions that will allow us to enhance 
security for the entire air cargo supply chain.
    Question. The fiscal year 2004 Homeland Security Appropriations Act 
called for the hiring of 100 new inspectors to begin a more rigorous 
focus on air cargo security. We are now halfway into the fiscal year, 
but I understand that TSA has only offered positions to five people. 
Why has TSA made so little progress on this important program over the 
last 5 months? Is hiring air cargo security inspectors not a high 
priority for TSA?
    Answer. The funding provided in the Department of Homeland Security 
Appropriations Act, 2004 (Public Law 108-90) enabled TSA to hire 100 
new cargo inspectors. All 100 cargo inspector positions have been 
selected, and paperwork is being processed by TSA Human Resources. We 
anticipate extending job offers to these applicants and bringing them 
on board within the next 2 months.

                TSA: SLOW MOVEMENT OF APPROPRIATED FUNDS

    Question. The fiscal year 2004 Homeland Security Act was signed 
into law on October 1, 2003. Yet in the intervening six months, TSA has 
yet to obligate the $22 million Congress appropriated for trucking 
industry grants, the $17 million we provided for Operation Safe 
Commerce, the $10 million we provided for bus security grants, the $7 
million we provided for hazardous material grants, nor the $4 million 
we provided for nuclear detection and monitoring. Additionally, $50 
million still remains unobligated from the funds Congress provided for 
port security grants.
    Please respond for the record on when we can expect these funds to 
be obligated. The threat to these transportation modes is real and the 
delay in getting these funds out to the intended recipients does not 
lay with the Congress.
    Answer. In the coming months, TSA plans to request proposals for 
funding or announce awards for a number of programs. These include:
  --TSA anticipates issuing a Request for Applications (RFA) for both 
        the fourth round of Port Security Grants Program ($50 million 
        remaining from fiscal year 2004) and Intercity Bus Security 
        grants by late spring, 2004, with final awarding of grants 
        expected in late summer.
  --A fourth quarter fiscal year 2004 release of the RFA is anticipated 
        for both the Highway Watch Program and Operation Safe Commerce, 
        with final award anticipated in the fall.
  --TSA intends to announce Request for Proposals for the Truck 
        Tracking Project in early summer. Final award is anticipated in 
        early fall, 2004.
  --Award for Nuclear Detection and Monitoring is anticipated by mid-
        summer, 2004.

                     TSA FUNDING: ADEQUACY OF FEES

    Question. Your budget request for fiscal year 2005 assumes that you 
will receive $750 million in air carrier fees. The Congressional Budget 
Office estimates that only a total of $350 million of these fees is 
expected to be collected during the fiscal year. If that is correct, 
your budget request is already short by nearly $400 million. I 
understand that you have the authority administratively to require the 
collection of the total amount of $750 million of these fees. Do you 
intend to use that authority?
    If you do not intend to exercise your authority, this Committee 
certainly does not have the resources to fill that kind of a gap in 
funding. Will you be submitting a budget amendment to seek the 
additional $400 million? If you do intend to exercise this authority, 
please provide this Subcommittee with your schedule for announcing this 
change.
    Answer. The air carrier fee was established by Congress as a means 
to allow the Federal Government to offset some of the costs it assumed 
from the airlines when the responsibility for passenger and property 
screening shifted from those airlines to the Transportation Security 
Administration. The Aviation and Transportation Security Act set the 
maximum level of this fee at the cost that the airlines incurred for 
providing security screening in 2000.
    To assist TSA with determining what the airlines had spent on 
security screening prior to TSA assuming those functions, the agency 
required airlines to complete an extensive cost questionnaire on the 
costs the carriers incurred in 2000. Industry memorandums and 
Congressional testimony both pre and post 9/11 indicated that the 
airlines spent as much as $1 billion on security screening. Based on 
that information, TSA conservatively estimated that the industry's 
costs would be $750 million. However, the total reported by the airline 
industry through the cost questionnaires was around $350 million. 
Independent audits also could not validate the completeness of the 
industry's reported costs. As the air carrier fees are currently being 
paid based on the airline cost submissions, there is an approximately 
$400 million difference between fees being paid and costs originally 
reported by the industry.
    TSA is continuing to review the results of the audits and is 
working with the airlines to validate their cost data. Should the data 
be substantiated, TSA will consider the use of its administrative 
authority to allocate and obtain these fees. Other alternatives under 
consideration are the resubmission of the legislation proposed by the 
Administration early in the current Congress, as well as technical 
adjustments to TSA appropriations language that would mandate fee 
collections.

         INSUFFICIENT USE OF SCREENING EQUIPMENT--GAO TESTIMONY

    Question. On February 12, GAO's Director for Homeland Security and 
Justice, Cathleen Berrick, testified before the House Subcommittee on 
Aviation. In her testimony, she observed that while the TSA has made 
progress in its checked baggage processes, ``it continues to face 
challenges in attaining 100 percent screening using explosive detection 
systems 100 percent of the time.'' She notes that, ``Of the airports 
reporting that they were not screening 100 percent of checked baggage 
the number of consecutive days that they were not conducting this 
screening ranged between 1 to 371 days.''
    Rear Admiral Stone, what steps are you taking to remedy the 
deficiencies noted by the General Accounting Office? Is it the result 
of a lack of screeners, a lack of equipment, or a lack of sufficient 
funds to place the right number of screeners with the right equipment 
in the right locations?
    Answer. TSA is aggressively working to resolve both the equipment 
and staffing issues to ensure that we are able to conduct screening of 
100 percent of passengers' checked baggage for explosives at all U.S. 
airports. To that end, we are deploying additional equipment at five 
major airports and adding more than 1,400 baggage screeners to those 
airports where some baggage is screened through alternative methods 
allowed by law.
    During the next several months, TSA will also complete the 
development and deployment of a state-of-the-art modeling process that 
will define the staffing requirements, including those associated with 
baggage screening equipment, for each airport, as well as for the 
Agency as a whole.

                        TSA: INJURY AND ILLNESS

    Question. According to a Department of Labor study, workers at the 
Transportation Security Administration (TSA) suffered from more 
injuries and illnesses than employees at any other agency in the 
Federal Government last year. The TSA suffered more than 5 times as 
many job related injury and illness events as did their counterparts at 
other agencies. Nearly 20 percent of the 65,250 TSA employees at the 
time were hurt or sickened in the workplace last year, compared with 
only 3.7 percent of workers in the rest of the Federal Government. TSA 
employees were only 3.3 percent of the Federal workforce at the end of 
fiscal 2003. But their injuries and illnesses, 12,632 during that 
period, comprise more than 15 percent of all such incidents among 
government workers, according to the report.
    What are you doing to modify your screener training program to 
ensure that employees are protected from injuries in the work place? 
What thought, if any, has been given to using different equipment that 
might assist workers in screening baggage without the chance of serious 
injury?
    Answer. The Department of Labor reported that TSA had the highest 
injury and illness rate among Federal agencies in fiscal year 2003, 
measured by the number of employees injured filing claims with the 
Office of Worker's Compensation.
    About 70 percent of TSA's claims were related to baggage handling, 
which is very different than the work undertaken by most Federal 
agencies. TSA has compared its injury and illness rate with the rates 
found in private sector companies performing closely related 
activities, such as baggage and parcel handling, and found that the 
rates for that type of work were similar to TSA's experience.
    The high injury rate is partially attributable to the necessarily 
short time frame in which TSA was required to become operational. TSA's 
new baggage screening equipment had to be placed in airport space that 
was not designed to accommodate the equipment. Some operations must be 
performed in ergonomically unsuitable areas where there is insufficient 
space to perform safely repetitive baggage handling work. Eighty 
percent of claims related to baggage handling involved sprains and 
strains primarily to the back, but also to shoulders, knees and wrists.
    TSA is currently working to develop and promulgate a series of 
safety related training topics as part of the screener recurrent 
training program. A course on safe lifting techniques has already been 
fielded. Training media will include video and Web-based training. 
Specific courses in development include Bloodborne Pathogens Awareness, 
Hazard Communications, Materials Handling and Lock-out/Tag-out, General 
Safety, and Slips, Trips, and Falls. Safety Action Teams are being 
established at every airport and programs are underway to identify and 
train collateral duty safety and health representatives across the 
agency. Finally, TSA has initiated a program to conduct hazard 
assessments at all of its airports in order to identify additional 
areas where accident prevention actions are necessary.
    With the installation at some airports of new integrated baggage 
conveyor, in-line explosives detection systems, that greatly reduce 
manual baggage handling, some injury rates are already beginning to 
fall. In time, TSA anticipates that its efforts to field a 
comprehensive occupational safety and health program, establish a 
safety culture, train supervisors and employees, and make baggage 
handling system changes to minimize lifting, will result in significant 
improvement in TSA's injury rates.

                           LETTERS OF INTENT

    Question. In response to a question during the hearing, you 
indicated that upwards of 30 airports are seeking letters of intent 
(LOIs) with you. You also indicated that the Office of Management and 
Budget had limited the number of LOIs that you are able to enter into 
to eight. If your analysis of the 30 airports proves the validity of 
these requests, how much additional funding would be required to fund 
them?
    Answer. While numerous airports have expressed interest in LOI 
security funding TSA continues to use its LOI criteria, based on 
achieving and maintaining compliance with the 100 percent electronic 
screening requirement at all airports, to determine the allocation of 
resources. TSA is working with airports that will not be able to 
maintain compliance with the 100 percent electronic screening 
requirement because of increased passenger loads, increased and/or 
additional air carrier service, and/or airport terminal modifications 
and expansions. The President's Budget for fiscal year 2005 supports 
previously issued 8 LOIs for 9 airports, and assumes a 75/25 cost share 
formula as set forth in the Consolidated Appropriations Resolution, 
2003. TSA also supports airports that have not received an LOI, but 
where additional funding for equipment is needed to accommodate 
increased passenger loads and new air carrier service. TSA continues to 
evaluate situations where an in-line solution makes sense from the 
standpoint of security, efficiency, and reduced staffing needs.
                                 ______
                                 

            Questions Submitted by Senator Daniel K. Inouye

    Question. The budget request includes $400 million for the purchase 
and installation of Explosive Detection System (EDS) machines. Letters 
of Intent (LOI) have been signed with eight airports for the 
reimbursement of construction costs associated with the integration of 
the new EDS machines for in-line baggage screening. It is my 
understanding that the $250 million requested for installation would 
only cover continued payment of the existing LOIs.
    How many airports are on your list for installation, and under the 
current approach how long would it take to install in-line EDS machines 
at the remaining airports on your list? What would it cost over the 
next 4 years to accelerate the program and install in-line EDS machines 
at all the airports on your list?
    Answer. TSA continues to use its LOI criteria, based on achieving 
and maintaining compliance with the 100 percent electronic screening 
requirement at all airports, to determine where resources will be 
allocated. TSA is working with airports that will not be able to 
maintain compliance with the 100 percent electronic screening 
requirement because of increased passenger loads, increased and/or 
additional air carrier service, and/or airport terminal modifications 
and expansions. The President's Budget for fiscal year 2005 supports 
previously issued LOIs for 9 airports, and assumes a 75/25 cost share 
formula as set forth in the Consolidated Appropriations Resolution, 
2003. TSA also continues to evaluate situations where an in-line 
solution makes sense from the standpoint of security, efficiency, and 
reduced staffing needs.
    Question. TSA currently operates under a statutory limit of 45,000 
full-time equivalent baggage and personnel screening employees. How has 
this limitation affected your ability to serve the flying public and 
ensure short wait times? TSA is required by this limitation to hire 
significant numbers of part-time employees. Has it been difficult to 
hire and retain part-time employees for these screening positions?
    Answer. TSA is managing to keep the workforce under the 45,000 FTE 
level by creating a more flexible workforce. TSA is better coordinating 
airline schedules and passenger load with staffing needs, is increasing 
the proportion of part-time to full-time screeners, and is 
strategically using its mobile national screener force to meet seasonal 
fluctuations in workload. TSA now has in excess of 15 percent of its 
screener workforce as part-time screeners, and TSA expects to have a 
part-time screener workforce of close to 20 percent by the end of the 
current fiscal year. Part-time screeners create additional operational 
flexibility when scheduling screeners to satisfy varying levels of 
demand. As a result of reducing excess capacity at periods of lower 
demand, TSA is seeking to make more FTEs available to the system as a 
whole during peak periods.
    While TSA is highly conscious of customer service concerns, the 
security of the nation's transportation system will always be our top 
priority. Staffing standards, accordingly, should be determined based 
on the goal of achieving the appropriate balance between world class 
security and world class customer service in operating environments 
unique at each airport. Throughout the workforce transformation 
process, our screeners have continued to meet world class standards for 
effectiveness and customer service. They have kept wait time consistent 
with previous performance across the system, while providing a level of 
courtesy that received an 86-percent approval rating according to the 
most recent survey. TSA is proud of the professionalism and dedication 
that its screeners demonstrate every day in the performance of their 
duties.
    Question. Section 1012 of the USA PATRIOT Act requires a background 
investigation of holders of Commercial Driver's Licenses (CDL) who seek 
to carry hazardous materials (hazmat). States must provide biographical 
and criminal history information and fingerprints to TSA on CDL holders 
seeking a state hazmat endorsement. The deadline for states to comply 
has been moved from November 3, 2003 to April 1, 2004, and again to 
December 1. However, to date, the TSA has not provided the states with 
sufficient guidance, including technical standards for the collection 
of fingerprints, to implement fingerprint-based background checks. In 
addition, no funding has been made available to the states to implement 
this program.
    What steps has TSA taken to implement the requirements of Section 
1012 and what is TSA's timeline to provide guidance to the states on 
the process and standards for fingerprint collection and transmittal of 
fingerprints to TSA by the states and notification of qualification by 
TSA back to the states?
    Answer. TSA has been working with the FBI to establish the 
technical standards and processes for the collection and transmission 
of driver fingerprints. Once these processes are finalized, they will 
be transmitted to the States. We estimate that these standards and 
processes will be provided to the States over the course of the next 
month.
    On April 1, 2004, Secretary Ridge sent a letter to each Governor 
outlining the current status of the Hazmat Truck Driver Program. In 
that letter, Secretary Ridge asked each Governor to provide TSA a State 
Point of Contact (POC) for this Program to facilitate communications 
between TSA and other organizations involved in this process. All 
fingerprint standards and processes will be provided to the States 
through their respective POCs.
    TSA has also been working with the American Association of Motor 
Vehicle Administrators (AAMVA) to develop a system for the transmission 
of biographical data to TSA for use in the security threat assessment 
process, and the subsequent results notification to the appropriate 
State and Federal authorities. Initial information related to this 
initiative has already been provided to the States. Additional 
information related to this aspect of the program will be provided to 
the States through their POC.
    Question. Is funding included in your budget request, or the 
request of any other agency to help states defray the cost of complying 
with Section 1012?
    Answer. TSA has identified limited funding in fiscal year 2004 to 
support some of the necessary infrastructure to support the Hazmat 
Truck Driver Program. However, an effective partnership between the 
Federal Government, the States and industry is both necessary and is 
currently being forged to develop and fund start-up solutions on a 
State-by-State basis. Longer term, the Hazmat Truck Driver Program will 
be fee based and TSA envisions that fees will support the program in 
its entirety. We anticipate working with the States and industry to 
develop the details of a fee rule, which will be published later in CY 
2004.
    Question. When will TSA be ready to accept and process State 
submitted fingerprints of commercial drivers seeking a hazmat 
endorsement?
    Answer. TSA will be ready to accept and process State submitted 
fingerprints no later than January 31, 2005 in accordance with the 
existing final rule. However, we do anticipate a limited number of 
pilot States beginning to submit fingerprints beginning in fiscal year 
2005. Working with these pilot States will allow TSA to apply ``lessons 
learned'' during the pilot to systems and processes associated with the 
submission of fingerprints. We anticipate that this technique will 
facilitate a much smoother start-up for the vast majority of States.
    Question. The budget justification submitted by TSA includes 
detailed information about the numbers and types of items confiscated 
by TSA employees at airport security checkpoints. In the last year, TSA 
has intercepted more than 2.8 million prohibited items and arrested 700 
people. Can you help me put that in context and tell me how many how 
many passenger screenings were performed last year? Also, of the 700 
arrests, how many convictions have there been?
    Answer. TSA performed approximately 500 million passenger 
screenings last year. TSA's records in the period February, 2002-
February, 2004, show that 2,678 individuals were arrested for 
possessing a prohibited item that was discovered at a passenger 
screening checkpoint. The majority of arrests were made by State or 
local law enforcement agencies; only a small number were performed by 
Federal law enforcement authorities. The Department of Justice, along 
with State and local prosecuting authorities, are in a better position 
to ascertain the exact number of convictions.
                                 ______
                                 

           Questions Submitted by Senator Ernest F. Hollings

    Question. The budget for FTE's for full time positions was set at 
220 for the Transportation Security Administration's Maritime and Land 
Division, yet it is my understanding that to date, this Division is 
only operating with 160.
    You have a number of responsibilities, such as conducting criminal 
background checks, that are languishing. What is taking so long in 
hiring the remaining 60 Full Time Employee positions that, I understand 
are budgeted for the Transportation Security Administration's Maritime 
and Land Division but not yet hired?
    Answer. TSA is hiring to the level proposed in the fiscal year 2005 
President's Budget.
    Question. Right now, TSA has absolutely no staffing standards at 
airports. Wait times vary from nothing to hours, depending upon the 
airport. On March 9, 2004 the Washington Post said small airport 
security is no good and that you do not meet the 100 percent screening 
requirements of the law--yet, classified submissions by TSA continue to 
tell us that only a handful of airports have problems.
    You continue to support a cap on screeners, dooming the process to 
fail. When will you put in staffing standards that make senses (e.g., a 
maximum 10 minute wait that Secretary Mineta promised us)?
    Answer. TSA is managing to keep the workforce under the 45,000 FTE 
level by creating a more flexible workforce. TSA is working with air 
carries and airports to improve coordination of airline schedules and 
passenger loads with staffing needs, is increasing the proportion of 
part-time to full-time screeners, and is strategically using its mobile 
national screener force to meet seasonal fluctuations in workload. TSA 
expects to have a part-time screener workforce of close to 20 percent 
by the end of the current fiscal year. Part-time screeners create 
additional operational flexibility when scheduling screeners to satisfy 
varying levels of demand. As a result of reducing excess capacity at 
periods of lower demand, TSA is seeking to make more FTEs available to 
the system as a whole during peak periods.
    Throughout the workforce transformation process, our screeners have 
continued to meet world class standards for effectiveness and customer 
service. They have kept wait time consistent with previous performance 
across the system, while providing a level of courtesy that received an 
86-percent approval rating according to the most recent survey. Despite 
the dynamics in the workload, even during the holiday rush season and 
the recent Orange Threat Level period, our screeners have provided 
world class security and world class service for effectiveness, 
efficiency, and customer satisfaction. TSA is proud of the 
professionalism and dedication that its screeners demonstrate every day 
in the performance of their duties.
    Question. You also committed to putting in explosive detection 
systems--automated systems in line--when will that job be completed?
    Answer. TSA's top priority is security, and consequently, TSA will 
focus its available funds for EDS at those airports that require 
additional funding in order to comply with the requirement to conduct 
screening of all checked baggage using electronic means. Changes to 
passenger throughputs, terminal modifications, and airport expansions 
make fulfilling TSA's goal of 100 percent electronic baggage screening 
a constantly moving target. TSA balances many competing priorities for 
available funds and will continue to review its priorities to maximize 
the utilization of the funds available.
    Question. Airports are seeking long term letters of intent (LOI) 
from you to fund reconstruction for security projects. You gave out 
LOI's to 8 or 10 airports, but there are another 20 or so waiting. How 
much money do you need to get the job done this year? Miami, for 
example, is rebuilding the entire airport--a $4.8 billion project, that 
needs $200 million for security systems, but there is no money in your 
budget to meet that need.
    Answer. TSA continues to use its LOI criteria, based on achieving 
and maintaining compliance with the 100 percent electronic screening 
requirement at all airports, to determine where resources will be 
allocated. TSA is working with airports that will not be able to 
maintain compliance with the 100 percent electronic screening 
requirement because of increased passenger loads, increased and/or 
additional air carrier service, and/or airport terminal modifications 
and expansions. The President's Budget for fiscal year 2005 supports 
previously issued LOIs for 9 airports, and assumes a 75/25 cost share 
formula as set forth in the Consolidated Appropriations Resolution, 
2003. TSA also continues to evaluate situations where an in-line 
solution makes sense from the standpoint of security, efficiency, and 
reduced staffing needs.
                                 ______
                                 

            Questions Submitted by Senator Patrick J. Leahy

    Question. A recent GAO study concluded that the Computer-Assisted 
Passenger Prescreening System, or CAPPS II, is not ready for prime 
time. According to the report: ``The system as it currently exists 
offers only limited functionality in a simulated environment.'' I am 
concerned that the program's weaknesses may limit its effectiveness and 
it lacks sufficient protections for the civil liberties of ordinary, 
law-abiding travelers. I am also concerned by reports that the 
administration plans to force the airlines to hand over passenger data.
    Since I understand TSA plans to launch CAPPS II later this year and 
has requested a total of $60 million in fiscal year 2005 for further 
development of CAPPS II, I would like to know the following:
    How much has been spent by TSA on CAPPS II development in each 
fiscal year so far?
    Answer. Commitments/obligations on CAPPS II development to date 
(April 26, 2004) are as follows:

                        [In millions of dollars]
------------------------------------------------------------------------

------------------------------------------------------------------------
Fiscal year 2002 & 2003.................................            58.4
Fiscal year 2004 (to date)..............................            28.1
                                                         ---------------
      TOTAL.............................................            86.5
------------------------------------------------------------------------

    Question. How exactly does TSA plan to spend the additional $60 
million in the fiscal year 2005 budget request should it be 
appropriated by Congress?
    Answer. TSA intends to spend the $60 million in the following 
manner:

                        [In millions of dollars]
------------------------------------------------------------------------

------------------------------------------------------------------------
Facilities leases, Utilities and Maintenance............             3.3
IT and Telecommunication................................             5.2
Infrastructure support (security, FTEs, etc.)...........            10.8
CAPPS II Development and Operations.....................            40.7
------------------------------------------------------------------------

    Question. What is TSA doing to address the shortcomings and 
vulnerabilities of CAPPS II as described in the GAO study and outlined 
in the January 14, 2004, letter Senator Feingold and I sent to 
Secretary Ridge and copied you?
    Answer. As indicated in the GAO report itself, the primary problem 
faced by CAPPS II at the present time is the fact that we have not yet 
been able to begin testing with actual data. The absence of this data 
has hindered our ability to answer each of the answers sufficiently for 
GAO, which uses strict auditing review procedures standards, to certify 
that program development in those areas is complete. We are confident 
that each of the points raised in the GAO report will be answered to 
your satisfaction prior to implementation of the system.
    Question. According to recent reports, the airline industry has 
indicated a willingness to participate in CAPPS II, provided that TSA 
complies with seven privacy principles. Has TSA agreed to these privacy 
principles? If not, please explain.
    Answer. TSA has no disagreement with the seven Passenger Privacy 
Principles recently released by the Air Transport Association (ATA). 
The principles are consistent with the Fair Information Principles that 
TSA used to develop its privacy management program for CAPPS II and the 
building block for the agency's privacy policies and practices.
    Question. Presidential Directive 63 called for the creation of 
private sector Information Sharing and Analysis Centers to protect our 
critical infrastructures from terrorist attack. At the request of the 
U.S. Department of Transportation, the Surface Transportation 
Information Sharing and Analysis Center (ST-ISAC) was formed. The ST-
ISAC collects, analyzes, and distributes critical security and threat 
information from worldwide resources to protect its members' vital 
information and information technology systems from attack.
    Right now this valuable information is only available to paying 
members of the ST-ISAC. With the TSA seeking an $892 million funding 
increase for fiscal year 2005, why was funding not included in the TSA 
request to make the ST-ISAC information available to all public transit 
operators across the country--especially since most cannot afford new 
equipment and operators much less afford to subscribe to the ST-ISAC?
    Answer. DHS and TSA utilize numerous avenues for distributing and 
receiving information for the various transportation sectors. TSA's 
Transportation Security Operations Center (TSOC) receives information 
from ISACs as well as from multiple other sources. We provide 
information to the ISACs for distribution to their members since they 
have established communication methods with their members. 
Additionally, TSA is committed to establishing effective lines of 
communication to all stakeholders regardless of their membership with 
any particular ISAC. TSA is developing contacts lists for all of the 
non-ISAC stakeholders. As envisioned, all stakeholders would have 
access to general information. Specific persons would have access to 
sensitive information, provided they have signed non-disclosure 
agreements.
    Question. It has been reported that the Federal Government is 
spending $4.5 billion on aviation security this year but only $65 
million on rail security--even though 5 times more people take trains 
everyday than planes. The catastrophic Madrid bombings reflect that 
this reality is fraught with severe risks.
    Senator Hollings introduced a bill last week to allot $515 million 
for risk assessments and security improvements for our Nation's rail 
system. Unfortunately, he has introduced the bill twice before and it 
has gone nowhere.
    Last year a survey of transit agencies by the American Public 
Transportation Association (APTA) identified some $6 billion in unmet 
security needs that remain today.
    What is TSA's position on the $6 billion in unmet security needs 
described by APTA? And what does TSA expect to do to address those 
needs?
    Answer. Ensuring that our nation's transportation systems are 
secure must be accomplished through effective partnering between 
appropriate Federal, State, local and private industry entities. DHS is 
charged with responsibility for working to protect all modes of 
transportation, but it has consistently held that that this 
responsibility must be shared with Federal, State, local and private 
industry partners, many of whom were already in the business of 
providing security for their particular piece of the transportation 
puzzle. TSA's main charge, both under ATSA and now as part of the DHS 
family, is to help coordinate these efforts under the guidance of the 
Secretary and the Under Secretary for Border and Transportation 
Security, identifying gaps and working with appropriate partners to 
ensure that existing security gaps are filled.
    Recognizing this, the Department of Homeland Security (DHS) has 
requested substantial resources in fiscal year 2005 across the agencies 
within the Department involved with securing transportation modes other 
than aviation, including resources in the Coast Guard and CBP for ports 
and maritime security; in Customs and Border Protection (CBP) for cargo 
security; in Information Analysis and Infrastructure Protection (IAIP) 
for vulnerability assessments, intelligence, and infrastructure 
protection for all sectors including transportation; and in Emergency 
Preparedness & Response (EP&R) for emergency response to only name a 
few. In addition to working with other DHS components, TSA works 
closely with our sister Federal agencies outside of DHS to ensure that 
all government resources are maximized. For example, under the 
leadership of BTS and DHS, TSA is coordinating key standards-setting 
efforts in areas such as transit and rail security, and is working 
closely with modal administrations of the Department of Transportation 
to help leverage their existing resources and security efforts to 
accomplish security goals.
    Specifically, funds provided for transit and rail security in 
fiscal year 2003 and fiscal year 2004 total $215 million--$115 for 
transit security grants under the Urban Area Security Program, and $100 
million for upgrades to rail tunnels in the Northeast Corridor.
    Question. As you may know, law enforcement officials from New 
England and New York have been national leaders in establishing an 
initiative for cargo container security called Operation Safe Commerce 
Northeast (OSC Northeast.) OSC Northeast represents a comprehensive 
coalition of Federal agencies, State governments, and private sector 
businesses committed to the concept of enhancing border and 
international transportation security without impeding free trade and 
international commerce.
    The economy will face a grave disruption should a catastrophic 
event occur related to international trade corridors. We are very 
vulnerable along our Northern Border, and the OSC Northeast group would 
enhance the safety of cargo entering the United States through New 
England and Canadian ports. Therefore, I believe the TSA should better 
engage and utilize the resources of OSC Northeast.
    In light of administration's budget proposal to cut in half the $58 
million Operation Safe Commerce program--citing $28 million in unspent 
funds already approved by Congress for the program that may be 
redirected to overspending in other areas of TSA:
    Will TSA use some of these funds to expand the program to OSC 
Northeast since there are no restrictions on aiding just three ports in 
the second round of appropriations?
    Answer. First, it is important to note that TSA's final spend plan 
submission for fiscal year 2003 included all $58 million earmarked for 
Operation Safe Commerce. OSC Northeast was eligible to apply for OSC 
fiscal year 2002-03 funding through any of the three Load Centers, 
including the Port Authority of New York and New Jersey, but did not do 
so. OSC Northeast did apply for a port security grant, but its 
application was not selected. The OSC program is nearing completion. We 
expect to assess results starting this summer.
    Question. What steps are TSA taking to incorporate the efforts of 
OSC Northeast into our national port security strategy?
    Answer. The OSC Executive Steering Committee carefully reviewed the 
OSC Northeast report of November 2002. The review had a significant 
impact in guiding the current OSC efforts, including examination of 
security throughout entire supply chains, use of a systematic approach 
to container security (including multimodal activities), coordination 
with related initiatives, examination of costs and benefits of the 
selected solutions and the need for solutions to work for all modes of 
transportation.
                                 ______
                                 

                Question Submitted by Senator Harry Reid

               HAZARDOUS MATERIAL TRANSPORTATION FUNDING

    Question. Admiral Stone, the fiscal year 2004 Homeland Security 
appropriations law included $7 million for a hazardous material truck 
tracking program. The University of Nevada, Las Vegas is working with a 
national leader in truck tracking to establish a national center to 
track commercial trucks carrying hazardous material and has submitted a 
proposal to use a portion of this funding. When can we expect to hear 
about the allocation of the $7 million?
    Answer. The Transportation Security Administration (TSA) expects to 
solicit proposals on a competitive basis for the truck tracking 
initiative in the summer of 2004. All interested parties will be 
invited to submit proposals in response to this announcement.

                          SUBCOMMITTEE RECESS

    Senator Cochran. Admiral Collins and Admiral Stone, we 
appreciate very much your cooperation with our subcommittee. 
Our next hearing on the budget request for the Department of 
Homeland Security will be held on Tuesday, March 30, in this 
room, SD-124. At that time, the Commissioner of the Bureau of 
Customs and Border Protection, Robert Bonner; the Assistant 
Secretary of the Bureau of Immigration and Customs Enforcement, 
Michael Garcia; and the Director of the Bureau of Citizenship 
and Immigration Services, Eduardo Aguirre, will be here to 
discuss the budget for the programs and activities under their 
jurisdiction. Until then, the subcommittee stands in recess.
    [Whereupon, at 12 noon, Tuesday, March 23, the subcommittee 
was recessed, to reconvene at 10 a.m., Tuesday, March 30.]
