    Aviation Security: Systematic Planning Needed to Optimize the
    Deployment of Checked Baggage Screening Systems (15-MAR-05,
    GAO-05-365).

    Mandated to screen all checked baggage using explosive detection
    systems at airports by December 31, 2003, the Transportation
    Security Administration (TSA) deployed two types of screening
    equipment: explosives detection systems (EDS), which use
    computer-aided tomography X-rays to recognize the characteristics
    of explosives, and explosives trace detection (ETD) systems,
    which use chemical analysis to detect traces of explosive
    material vapors or residues. This report assesses (1) TSA's use
    of budgeted funds to install EDS and ETD systems and the impact
    of initially deploying these systems, (2) TSA and airport actions
    to install EDS machines in-line with baggage conveyor systems,
    and the federal resources made available for this purpose, and
    (3) actions taken by TSA to optimally deploy checked baggage
    screening systems.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-05-365
        ACCNO:   A19377
      TITLE:     Aviation Security: Systematic Planning Needed to Optimize
    the Deployment of Checked Baggage Screening Systems
         DATE:   03/15/2005
      SUBJECT:   Airport security
    	     Airports
    	     Baggage (personal effects)
    	     Cost analysis
    	     Counterterrorism
    	     Explosives
    	     Financial analysis
    	     National preparedness
    	     Search and seizure
    	     Strategic planning
    	     Terrorism
    	     Homeland security
    	     FAA Airport Improvement Program
    	     TSA Federal Aviation Security Capital
    	     Fund

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    GAO-05-365

    United States Government Accountability Office

    GAO	Report to the Chairman, Subcommittee on Homeland Security, Committee
    on Appropriations, House of Representatives

    March 2005

    AVIATION SECURITY

        Systematic Planning Needed to Optimize the Deployment of Checked Baggage
                                   Screening Systems

    GAO-05-365

    [IMG]

    March 2005

    AVIATION SECURITY

    Systematic Planning Needed to Optimize the Deployment of Checked Baggage
    Screening Systems

                                     What GAO Found

    TSA has made substantial progress in installing EDS and ETD systems at the
    nation's more than 400 airports to provide the capability to screen all
    checked baggage using explosive detection systems, as mandated by
    Congress. However, in initially deploying EDS and ETD equipment, TSA
    placed stand-alone ETD and the minivan-sized EDS machines-mainly in
    airport lobbies-that were not integrated in-line with airport baggage
    conveyor systems. TSA officials stated that the agency's ability to
    initially install in-line systems was limited because of the high costs
    and the time required for airport modifications. These interim lobby
    solutions resulted in operational inefficiencies, including requiring a
    greater number of screeners, as compared with using EDS machines in-line
    with baggage conveyor systems.

    TSA and airport operators are taking actions to install in-line baggage
    screening systems to streamline airport and TSA operations, reduce
    screening costs, and enhance security. Eighty-six of the 130 airports we
    surveyed either have, are planning to have, or are considering installing
    full or partial in-line systems. However, resources have not been made
    available to fund these capital-intensive systems on a large-scale basis.
    Also, the overall costs of installing in-line baggage screening systems at
    each airport are unknown, the availability of future federal funding is
    uncertain, and perspectives differ regarding the appropriate role of the
    federal government, airport operators, and air carriers in funding these
    systems.

    Moreover, TSA has not conducted a systematic, prospective analysis to
    determine at which airports it could achieve long-term savings and enhance
    efficiencies and security by installing in-line systems or, where in-line
    systems may not be economically justified, by making greater use of
    standalone EDS systems rather than relying on the labor-intensive and less
    efficient ETD screening process. However, at nine airports where TSA has
    agreed to help fund the installation of in-line baggage screening systems,
    TSA conducted a retrospective cost-benefit analysis which showed that
    these in-line systems could yield significant savings for the federal
    government. TSA further estimated that it could recover its initial
    investment in the in-line systems at these airports in a little over 1
    year.

    EDS and ETD Machines Used by TSA to Screen Checked Baggage

                     United States Government Accountability Office

    Contents

    Letter

    Results in Brief
    Background
    TSA Equipped More than 400 Airports to Screen Checked Baggage

    for Explosives, but the Initial Deployment Led to Operational
    Inefficiencies, and Additional Security Risks

    Airports and the Federal Government Are Taking Actions to Install
    In-line Baggage Screening Systems, but Resources Have Not
    Been Made Available to Fund These Systems on a Large-Scale
    Basis

    TSA Has Not Systematically Planned for the Optimal Deployment
    of Checked Baggage Screening Equipment to Ensure the
    Efficient and Cost-Effective Screening for Explosives while
    Enhancing Security Benefits

    Conclusions
    Recommendations for Executive Action
    Agency Comments and Our Evaluation

                                           1

                                          3 6

    13

    26

    37 45 46 47

    Appendix I Objectives, Scope, and Methodology

    Appendix II	Summary of Checked Baggage Screening Legislation

    Appendix III	Airports Receiving TSA Airport Modification and EDS/ETD
    Equipment Installation Funding for In-line Systems

    Appendix IV	Analysis of TSA's Cost Savings Estimates for In-line
    EDS Checked Baggage Screening Systems 61

    Appendix V	Comments from the Department of Homeland
    Security 66

    Appendix VI GAO Contacts and Staff Acknowledgments 69

    GAO Contacts 69 Staff Acknowledgments 69

    Glossary

    Tables

    Table 1: Airport Modification, Procurement, and Installation Funding for
    EDS/ETD Equipment for Fiscal Years 20022004

            Table 2: Fiscal Year 2002-2004 Airport Modification and EDS/ETD
                   Installation Obligations as of September 30, 2004
             Table 3: Fiscal Year 2002-2004 EDS/ETD Procurement Obligations

    as of September 30, 2004 Table 4: EDS and ETD Machines Deployed at U.S.
    Airports as of June 2004

    Table 5: Average Percentage of Checked Baggage Reported as Screened Using
    EDS, ETD, or Other Approved Method at 263 Airports on or around February
    29, 2004

    Table 6: Bags Per Hour Screened by Stand-alone and In-line EDS Machines
    and ETD Machines

    Table 7: Source of Federal Funding Used for Airport Modification Planning
    and Construction of In-line EDS Systems as of July 2004

    Table 8: Airports Awarded LOIs

    Table 9: Highlights of Authorizations in Laws Related to Checked Baggage
    Screening in Aviation Transportation Security since the Terrorist Attacks
    of September 11, 2001

    Table 10: Highlights of Appropriations in Laws Related to Checked Baggage
    Screening in Aviation Transportation Security since the Terrorist Attacks
    of September 11, 2001

    Table 11: Listing of Airports Receiving Modification and EDS/ETD Equipment
    Installation Funding for Developing In-line EDS Baggage Screening Systems
    as of September 30, 2004

                                           15

                                           17

                                           19

                                           20

                                           22

                                           23

                                         31 32

                                           55

                                           57

                                           59

    Figures

    Figure 1: EDS Machine Used by TSA to Screen Checked Baggage 8 Figure 2:
    ETD Machine Used by TSA to Screen Checked Baggage 8

    Figure 3: In-line Checked Baggage Screening System 11 Figure 4: Crowded
    Airport Lobby with Stand-alone EDS Screening 26 Figure 5: Status of
    In-line EDS Systems for Category X, I, and II

    Airports Included in Survey of Federal Security Directors

    as of July 2004 28 Figure 6: TSA Criteria for Prioritizing Letters of
    Intent 38 Figure 7: Airport Modification Costs Per In-line EDS Machine at

    Nine Airports 63 Figure 8: Cost Savings from In-line EDS Systems Compared
    to Stand-alone EDS at Nine Airports 64 Figure 9: Costs and Savings at Nine
    Airports 65

    Abbreviations

    ATSA Aviation and Transportation Security Act
    DHS Department of Homeland Security
    EDS explosives detection system

    ETD explosives trace detection
    FAA Federal Aviation Administration
    LOI letter of intent

    OMB Office of Management and Budget
    TSA Transportation Security Administration

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office Washington, DC 20548

    March 15, 2005

    The Honorable Harold Rogers
    Chairman
    Subcommittee on Homeland Security
    Committee on Appropriations
    House of Representatives

    Dear Mr. Chairman:

    As demonstrated by the 1988 bombing of a U.S. airliner over Lockerbie,
    Scotland, U.S. commercial aircraft have long been a target for terrorist
    attacks through the use of explosives carried in checked baggage. In 1996,
    the Federal Aviation Administration (FAA) established a long-term goal of
    screening all checked baggage for explosives to prevent such attacks and a
    timetable for deploying explosive detection systems at all airports by
    2014.
    The terrorist attacks of September 11, 2001, however, increased the
    federal government's focus on screening checked baggage for explosives
    at U.S. airports. On November 19, 2001, the Aviation and Transportation
    Security Act (ATSA)1 was signed into law, creating the Transportation
    Security Administration (TSA) and mandating, among other things, the
    screening of all checked baggage using explosive detection systems by
    December 31, 2002. To satisfy this mandate, TSA deployed two types of
    screening equipment to all airports in the United States where screening
    is
    required: (1) explosives detection systems (EDS), which use computer
    aided tomography X-rays adapted from the medical field to automatically
    recognize the characteristic signatures of threat explosives and
    (2) explosives trace detection (ETD), which uses chemical analysis to
    detect traces of explosive materials' vapors and residue.

    As we reported in February 2004, largely because of shortages of
    equipment and insufficient time to modify airports to accommodate EDS
    machines, TSA was unable, at certain airports, to meet the 2002
    congressionally established deadline to screen all checked baggage for
    explosives using EDS and ETD machines.2 Recognizing the obstacles

    1Aviation and Transportation Security Act, Pub. L. No. 107-71, 115 Stat.
    597 (2001).

    2GAO, Aviation Security: Challenges Exist in Stabilizing and Enhancing
    Passenger and Baggage Screening Operations, GAO-04-440T (Washington, D.C.:
    February 12, 2004).

    encountered by TSA, Congress passed, and the President signed into law,
    the Homeland Security Act of 2002,3 which, in effect, extended the
    deadline for screening all checked baggage for explosives until December
    31, 2003, for airports at which TSA was unable to meet the earlier
    deadline established by ATSA. We also reported that TSA fell short of
    fully satisfying the extended 2003 mandate and continued to face
    challenges in deploying and leveraging screening equipment and
    technologies. To further assess TSA's efforts to deploy equipment and
    screen checked baggage for explosives using EDS and ETD, we addressed the
    following questions: (1) How did TSA use the funds it initially budgeted
    to procure and install EDS and ETD systems and make associated airport
    modifications, and what was the impact of the initial deployment of EDS
    and ETD systems? (2) What actions are airports and TSA currently taking to
    install automated in-line EDS baggage screening systems,4 and what are the
    federal resources that have been made available to fund these systems? (3)
    What actions, if any, is TSA taking to plan for the optimal deployment of
    EDS and ETD equipment, including in-line checked baggage screening
    systems, in order to ensure the efficiency, cost effectiveness, and
    security of its checked baggage screening operations?

    To address these objectives, we reviewed available documentation on TSA's
    checked baggage screening program, including contract obligations for
    modifying airports and procuring and installing EDS and ETD systems,
    inventory listings of EDS and ETD systems, funding and planning
    documentation for in-line systems, and cost analysis of in-line and
    standalone EDS equipment. Although we could not independently verify the
    reliability of all of this information, we compared it with other
    supporting documents, when available, to determine data consistency and
    reasonableness. On the basis of these efforts, we believe the information
    we obtained is sufficiently reliable for this report. We also reviewed the
    results of covert testing (undercover and unannounced) of checked baggage
    screening operations conducted by TSA's Office of Internal Affairs and
    Program Review and questioned TSA officials about the procedures used to
    ensure the reliability of the covert test data. Based on their answers, we
    believe that the covert test data are sufficiently reliable for the
    purposes of our review. Further, we interviewed officials from

    3Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135.

    4In-line EDS checked baggage screening systems typically involve checked
    baggage undergoing automated screening with EDS machines while on a
    conveyor belt that sorts and transports baggage to the proper location for
    its ultimate loading onto an aircraft.

    TSA, air carriers, airports, EDS and ETD equipment manufacturers, and
    airport industry associations to obtain information regarding TSA's
    efforts to improve checked baggage screening operations using EDS
    machines. We performed our work at TSA headquarters and 22 airports
    throughout the United States. At the airports we visited, we observed
    baggage screening procedures and discussed these procedures with TSA,
    airport, and airline officials. We chose these 22 airports based on one or
    more of the following factors: a large number of passenger boardings, the
    existence of an operational in-line system, whether the airport had
    received or requested TSA funding for an in-line system, whether the
    airport had begun screening all checked baggage using EDS or ETD, and the
    proximity to a larger airport also being visited by GAO. In addition, we
    surveyed all 155 federal security directors, who oversee federal security
    operations at one or more airports in the United States where screening is
    required to obtain their perspectives on the implementation of checked
    baggage screening operations at 263 airports under their supervision, and
    to obtain information on these airports' plans regarding the incorporation
    of EDS machines within the airports' baggage conveyor systems for
    screening checked baggage for explosives. We conducted our work from
    September 2003 through January 2005 in accordance with generally accepted
    government auditing standards. A detailed discussion of our scope and
    methodology is contained in appendix I. Terms used in this report are
    further defined in a glossary at the end of this report.

    From its creation in November 2001 through September 2004, TSA obligated
    about $2.5 billion (93 percent) of the approximately $2.7 billion it had
    budgeted for fiscal years 2002 through 2004 for procuring and installing
    explosive detection equipment-predominantly to screen checked baggage for
    explosives-and making associated airport modifications to accommodate the
    equipment.5 Specifically, TSA procured and placed about 1,200 EDS machines
    and about 6,000 ETD machines at over 400 airports and modified airports
    for the installation of this equipment. Although TSA made significant
    progress in fielding EDS and ETD equipment to the nation's airports, TSA
    placed this equipment in a stand-alone mode-usually in airport lobbies-to
    conduct the primary screening of checked baggage for explosives, rather
    than integrating EDS machines in-line with airports' baggage conveyor
    systems. TSA officials

    5Obligations are amounts of orders placed or contracts awarded during a
    given period that will require payment during the same or a future period.

      Results in Brief

    stated that they use EDS machines in stand-alone mode and ETD machines as
    an interim solution in order to meet the congressional deadline for
    screening all checked baggage for explosives. Officials stated that they
    employed these interim solutions because of the significant costs required
    to install in-line systems and the need to reconfigure many airports'
    baggage conveyor systems to accommodate the equipment. These interim
    screening solutions led to operational inefficiencies, including requiring
    a greater number of screeners and screening fewer bags for explosives each
    hour, as compared with using EDS machines in-line with baggage conveyor
    systems. Performing primary screening using ETD machines, as is the case
    for more than 300 airports, is more labor intensive and less efficient
    than screening using the EDS process. TSA's placement of stand-alone EDS
    and ETD machines in airport lobbies also resulted in passenger crowding,
    which presented unsafe conditions and may have added security risks for
    passengers and airport workers. Certain information we obtained and
    analyzed regarding explosive detection technologies and their
    effectiveness in TSA's checked baggage screening operations are classified
    or are considered by TSA to be sensitive security information.
    Accordingly, the results of our review of this information have been
    removed from this report.6

    TSA and airport operators are taking actions to install in-line EDS
    baggage screening systems-to streamline airport and TSA operations, reduce
    screening costs, and enhance security-but resources have not been made
    available to fund these systems on a large-scale basis. Most airports that
    have installed or are planning to install these capital-intensive in-line
    systems have relied on or plan to rely on some form of federal funding to
    help install the systems. Although TSA and airports operators are taking
    actions to install in-line EDS baggage screening systems, identifying the
    resources to fund the systems on a large-scale basis continues to be a
    challenge. The issuance of letter of intent (LOI) agreements-TSA's primary
    method for funding in-line systems-has been limited to nine airports. An
    LOI, though not a binding commitment of federal funding, represents an
    intent by TSA to provide funds in future years if they are

    6We issued two additional reports detailing the results of our review,
    which discuss results deemed to be classified or sensitive security
    information. The report that contains classified and sensitive security
    information is GAO, Aviation Security: Systematic Planning Needed to
    Optimize the Deployment of Checked Baggage Screening Systems,

    GAO-05-135C (Washington D.C.: February 4, 2005). The report containing
    sensitive security information but not the classified information is GAO,
    Aviation Security: Systematic Planning Needed to Optimize the Deployment
    of Checked Baggage Screening Systems,

    GAO-05-302SU (Washington D.C.: February 4, 2005).

    appropriated by Congress. This in turn enables an airport to proceed with
    a project, such as installing in-line baggage screening systems, because
    the airport and investors are aware that allowable costs will likely be
    reimbursed. Further, TSA has not determined the total cost of installing
    inline EDS baggage screening systems at airports determined to need these
    systems, the availability of funding for in-line systems is uncertain, and
    perspectives differ regarding the appropriate role of the federal
    government and airport operators in funding these systems.

    Moreover, TSA has not yet conducted the systematic analyses needed to plan
    for optimally deploying EDS and ETD equipment-including installing in-line
    EDS baggage screening systems or replacing ETD machines with stand-alone
    EDS machines-at the nation's more than 400 airports to enhance security
    and reduce TSA staffing requirements and long-term costs. Although TSA
    established criteria to prioritize airport eligibility for receiving LOI
    funds for in-line EDS systems and conducted a limited retrospective
    analysis for the nine airports that received LOI agreements, TSA has not
    conducted a prospective analysis to determine at which airports it could
    achieve long-term savings and improved security benefits by installing
    in-line baggage screening systems rather than continuing to rely on
    labor-intensive stand-alone EDS and ETD machines to screen checked baggage
    for explosives. TSA's retrospective cost-benefit analysis conducted on the
    nine airports with signed LOI agreements to install in-line screening
    systems found that significant savings and other benefits, including
    reduced screener staffing requirements and increased baggage throughput,
    may be achieved through the installation of in-line systems. Also, for
    airports where in-line systems may not be economically justified because
    of the high cost of installing these systems, TSA has not conducted an
    analysis to determine whether it could achieve savings and other benefits
    by making greater use of stand-alone EDS systems rather than relying on
    the use of less efficient and more labor-intensive ETD machines at these
    airports. Further, although Congress has directed TSA to continue
    submitting quarterly reports on its plans for installing in-line baggage
    screening systems, TSA has not yet provided all of the information
    requested by Congress.7

    7Conference Report 108-774 (Oct. 9, 2004), which accompanies the fiscal
    year 2005 Department of Homeland Security Appropriations Act, Pub. L. No.
    108-334, 118 Stat. 1298 (2004), directs that TSA continue submitting
    quarterly reports on its plans for installing inline systems, consistent
    with similar language included in House Report 108-169 (June 23, 2003),
    directing that TSA submit quarterly reports beginning September 1, 2003.

    We are recommending that the Secretary of the Department of Homeland
    Security (DHS) direct the TSA Administrator to systematically evaluate
    baggage screening systems at the nation's airports to include the costs
    and benefits associated with installing in-line EDS baggage screening
    systems and deploying stand-alone EDS machines-in lieu of ETD machines-to
    conduct the primary screening of checked baggage at airports where an
    inline system would not be cost-effective or for justified other reasons.
    We also made a recommendation to DHS addressing TSA's protocols for
    screening checked baggage and associated screener training, which is
    included in the restricted versions of this report.

    We provided a draft of this report to DHS for its review. DHS, in its
    written comments, generally concurred with our findings and
    recommendations, and agreed that efforts to implement the recommendations
    are critical to a successful checked baggage screening program. DHS
    described some actions TSA has initiated to implement these
    recommendations, including conducting an analysis of the deployment of
    in-line checked baggage screening systems, and an analysis of those
    airports that would benefit from replacing ETDs with stand-alone EDS
    equipment. A copy of DHS's comments is included as appendix V.

    With the passage of ATSA in November 2001, TSA assumed from FAA the
    majority of the responsibility for securing the commercial aviation
    system.8 Under ATSA, TSA is responsible for ensuring that all baggage is
    properly screened for explosives at airports in the United States where
    screening is required, and for the procurement, installation, and
    maintenance of explosive detection systems used to screen checked baggage
    for explosives. ATSA required that TSA screen 100 percent of checked
    baggage using explosive detection systems by December 31, 2002. As it
    became apparent that certain airports would not meet the December 2002
    deadline to screen 100 percent of checked baggage for explosives, the
    Homeland Security Act of 2002 in effect extended the deadline to December
    31, 2003, for noncompliant airports.9 Prior to the passage of

    8For additional details on ATSA and other legislation related to checked
    baggage screening, see appendix II.

    9ATSA also authorized the use of alternative means to screen checked
    baggage, such as positive passenger bag match (i.e., air carriers
    determining whether the passenger is on the same aircraft as the checked
    baggage), canine searches, and searches of bags by hand for time periods
    when airports were not able to screen 100 percent of checked baggage using
    explosive detection equipment.

      Background

    ATSA in November 2001, only limited screening of checked baggage for
    explosives occurred. When this screening took place, air carriers had
    operational responsibility for conducting the screening, while FAA
    maintained oversight responsibility. With the passage of ATSA, TSA assumed
    operational responsibility from air carriers for screening checked baggage
    for explosives. Airport operators and air carriers continued to be
    responsible for processing and transporting passenger checked baggage from
    the check-in counter to the airplane.

    Explosive detection systems include EDS and ETD machines (see figs. 1 and
    2). EDS machines use computer-aided tomography X-rays adapted from the
    medical field to automatically recognize the characteristic signatures of
    threat explosives. By taking the equivalent of hundreds of X-ray pictures
    of a bag from different angles, the EDS machine examines the objects
    inside of the baggage to identify characteristic signatures of threat
    explosives. TSA has certified, procured, and deployed EDS machines
    manufactured by two companies. ETD machines work by detecting vapors and
    residues of explosives. Human operators collect samples by rubbing bags
    with swabs, which are chemically analyzed to identify any traces of
    explosive materials. ETD is used both for primary, or the initial,
    screening of checked baggage, as well as secondary screening, which
    resolves alarms from EDS machines that indicate the possible presence of
    explosives inside a bag. TSA has certified, procured, and deployed ETD
    machines from three manufacturers.

              Figure 1: EDS Machine Used by TSA to Screen Checked Baggage

              Figure 2: ETD Machine Used by TSA to Screen Checked Baggage

    Source: GAO.

    The operational processes for conducting screening of checked baggage for
          explosives using ETD and EDS machines differ. Specifically, the ETD

    screening process requires the screener to manually screen checked baggage
    by (1) swabbing an area of, or item in, the checked bag and (2) placing
    the swab in the ETD machine. The ETD machine then evaluates the sample on
    the swab to detect trace amounts of explosive residue. If these steps are
    not conducted correctly, the test may fail to detect explosives that are
    present. Since the first steps of this process require screeners to
    collect explosive particles, they are vulnerable to human error. In
    contrast, when using EDS machines as the primary means of detection, the
    screening is automated and the machine either alarms indicating the
    possible presence of explosives or does not alarm without screener
    involvement.

    As we reported in February 2004, to initially deploy EDS and ETD equipment
    to screen 100 percent of checked baggage for explosives, TSA implemented
    interim airport lobby solutions and in-line EDS baggage screening
    systems.10 The interim lobby solutions involved placing standalone EDS and
    ETD machines in the nation's airports, most often in airport lobbies or
    baggage makeup areas where baggage is sorted for loading onto aircraft.
    For EDS in a stand-alone mode (not integrated with airport's or air
    carrier's baggage conveyor system) and ETD, TSA screeners are responsible
    for obtaining the passengers' checked baggage from either the passenger or
    the air carrier, lifting the bags onto and off of EDS machines or ETD
    tables, using TSA protocols to appropriately screen the bags, and
    returning the cleared bags to the air carriers to be loaded onto departing
    aircraft.

    In addition to installing stand-alone EDS and ETD machines in airport
    lobbies and baggage makeup areas, TSA collaborated with some airport
    operators and air carriers to install integrated in-line EDS baggage
    screening systems within their baggage conveyor systems. While each inline
    baggage screening system is unique, these systems generally operate in a
    similar manner, as shown in figure 3. Typically, in-line systems involve
    checked baggage undergoing automated screening while on a conveyor belt
    that sorts and transports baggage to the proper location for its ultimate
    loading onto an aircraft. During this automated process, all checked
    baggage on the conveyor belt passes through EDS machines where the bags
    are screened for explosives. If no explosives are detected during this
    primary screening, the bag continues forward on the main conveyor belt to
    be loaded onto the aircraft. If an EDS machine alarms,

    10GAO-04-440T.

    indicating the possibility of explosives, TSA screeners, by reviewing
    computer-generated images of the inside of the bag, attempt to determine
    whether a suspect item is actually a threat.11 If the screener determines
    that the suspect item is not a threat, the cleared bag continues on the
    conveyor belt system to be loaded onto the aircraft. If the screener is
    unable to make this determination, the bag is diverted from the main
    conveyor belt into an area where it receives a secondary screening in
    which the bag is opened and the contents of the bag are screened by a
    screener using an ETD machine and physical inspection. If the bag
    successfully clears secondary screening, it is placed on the main conveyor
    belt system to be loaded onto the aircraft. If the bag tests positive for
    explosives during secondary screening, TSA screeners are required to
    notify the appropriate officials.

    11This review procedure is known as on-screen alarm resolution, which TSA
    began to implement in May 2004 after pilot testing the procedure at
    several airports. To enhance the efficiency of an in-line screening
    system, TSA also may network several EDS machines together so that images
    from multiple EDS machines that alarm can be sent to a centralized
    location for screeners to review and resolve using the on-screen
    resolution procedure. This process is known as "multiplexing."

    facilities to install in-line EDS systems-LOIs, other transaction
    agreements, and Airport Improvement Program funds from the FAA.12 In 2003,
    Congress authorized TSA to issue LOIs for airport modifications related to
    the installation of in-line baggage screening systems.13 When an LOI is
    established to provide multiyear funding for a project, the airport
    operator is responsible for providing-up front-the total funding needed to
    complete the project, even though the LOI is not a binding commitment of
    federal funds. Work proceeds with the understanding that TSA will, if
    sufficient funding is appropriated, reimburse the airport operator for a
    percentage of the facility modification costs. Congress initially mandated
    a 75 percent federal government cost-share for LOIs in February 2003, but
    in December of that year it increased the cost-share to 90 percent.14
    However, the fiscal year 2005 DHS Appropriations Act subsequently
    re-established the federal government cost-share at 75 percent for fiscal
    year 2005. Also, the President's fiscal year 2006 budget request for TSA
    proposes to maintain the 75 percent federal government cost share for
    projects funded by LOIs at large and medium airports.

    TSA also uses other transaction agreements, which are administrative
    vehicles used by TSA to directly fund airport operators engaged, or
    planning to engage, in smaller in-line airport modification projects
    without undertaking a long-term commitment. These transactions, which can
    take many forms and are generally not required to comply with federal laws
    and regulations that apply to contracts, grants, or cooperative
    agreements, enable the federal government and others entering into these
    agreements to freely negotiate provisions that are mutually agreeable.

    12As described below and in appendix II, Congress has supported in-line
    EDS baggage screening systems by authorizing funding mechanisms and
    appropriating funds, and issuing calls for expediting the installation of
    such systems. However, Congress does not require that in-line systems be
    installed to satisfy the 100 percent explosive detection system screening
    mandate.

    13Consolidated Appropriations Resolution, 2003, Pub. L. No. 108-7, S: 367,
    117 Stat. 11.

    14The Consolidated Appropriations Resolution mandated that each LOI
    provide for a 75 percent federal cost-share of the project's cost, with
    the remaining 25 percent to be paid by the airport operator at airports
    with at least 0.25 percent of the total number of passenger boardings each
    year at all airports (and 90 percent for projects at all other airports).

    The Vision 100-Century of Aviation Reauthorization Act (Vision 100), Pub.
    L. No. 108-176, 117 Stat. 2490 (2003), instituted a 90 percent federal
    cost-share of the project's cost, with the remaining 10 percent to be paid
    by the airport operator at medium and large hub airports (and 95 percent
    for projects at any other airport).

      TSA Equipped More than 400 Airports to Screen Checked Baggage for Explosives,
      but the Initial Deployment Led to Operational Inefficiencies, and Additional
      Security Risks

    In addition, airports have utilized Airport Improvement Program grants,
    which are awarded by the Secretary of Transportation for airport planning
    and development to maintain a safe and efficient nationwide system of
    public airports and for limited aviation security purposes. Some airport
    operators used the Airport Improvement Program in fiscal years 2002 and
    2003 to fund facility modifications needed to accommodate installing
    inline systems. However, provisions of ATSA and the Vision 100-Century of
    Aviation Reauthorization Act (Vision 100), as well as fiscal years 2004
    and 2005 appropriations language, have limited the future availability of
    the Airport Improvement Program to fund in-line systems.15

    Since its inception in November 2001 through September 2004, TSA obligated
    about $2.5 billion (93 percent) of the approximately $2.7 billion it
    budgeted for fiscal years 2002 through 2004 for the procurement and
    installation of EDS and ETD machines to screen checked baggage for
    explosives and to modify airport facilities to accommodate this equipment.
    Although TSA made significant progress in fielding this equipment, TSA
    used most of the $2.5 billion to design, develop, and deploy interim lobby
    screening solutions rather than install more permanent in-line EDS baggage
    screening systems. TSA employed these as interim solutions in order to
    meet the congressional deadline for screening all checked baggage for
    explosives because of the significant costs required to install in-line
    systems and the need to reconfigure many airports' baggage conveyor
    systems to accommodate the equipment. TSA officials also stated that they
    did not have time to conduct the planning needed or make airport
    modifications required for longer-term and more streamlined baggage
    screening operations. However, these interim lobby screening solutions
    used by TSA resulted in operational inefficiencies and additional security
    risks. Specifically, TSA's use of stand-alone EDS and ETD machines
    required a greater number of screener staff and resulted in screening
    fewer bags for explosives per hour, as compared with using EDS

    15Section 119 of ATSA significantly increased the amount of Airport
    Improvement Program funds available for security-related projects but also
    provided that this increase would be substantially reduced at the
    conclusion of fiscal year 2002. In December 2003, section 142 of Vision
    100 further reduced the availability of Airport Improvement Program funds
    by limiting the sources from which Airport Improvement Program funds could
    be used for security-related improvements. Subsequent prohibitions on the
    use of Airport Improvement Program funds for activities related to the
    installation of in-line explosive detection systems arose in the fiscal
    year 2004 Consolidated Appropriations Act, Pub. L. No. 108-199, 118 Stat.
    283, enacted in January 2004, and again in the fiscal year 2005
    Consolidated Appropriations Act, Pub. L. No. 108-447, 118 Stat. 2809,
    enacted in December 2004.

    machines in-line with baggage conveyor systems. Also, screening with ETD
    machines, as is the case for more than 300 airports, is more
    laborintensive and less efficient than screening using the EDS process.
    TSA officials also raised concerns about the possible security risks
    caused by baggage screening equipment being located in airport
    lobbies-causing overcrowding due to passengers waiting to have their bags
    screened.

    TSA Procured and Installed Explosive Detection Equipment and Modified
    Airports to Integrate this Equipment to Screen Checked Baggage for
    Explosives

    TSA used most of the airport modification and equipment procurement and
    installation funds to deploy interim lobby screening solutions at more
    than 400 airports to provide the means for screening all checked baggage
    for explosives as mandated by the Congress. As shown in table 1, the
    Congress earmarked about $1.5 billion of the $2.7 billion budgeted amount
    specifically to install EDS and ETD equipment, and to modify and prepare
    airport facilities to incorporate the use of this equipment for screening
    checked baggage for explosives. Congress earmarked and TSA budgeted the
    remaining $1.2 billion for the procurement of EDS and ETD machines.

    Table 1: Airport Modification, Procurement, and Installation Funding for EDS/ETD
                          Equipment for Fiscal Years 2002-2004

    Dollars in millions

    Airport modification EDS/ETD and EDS/ETD procurement Public law
    installation funds funds Total

                      Fiscal year 2002 TSA budget (not earmarked)

                         EDS/ETD procurement $0.0 $703.5 $703.5

                   Other nonearmarked TSA funding $0.0 $156.0 $156.0

                      Total nonearmarked budget $0.0 $859.5 $859.5

                             Earmarked TSA appropriations a

          Fiscal year 02 supplemental    107-206   $738.0                  $738.0
         Fiscal year 03 consolidation     108-7    $265.0       $174.5     $439.5
    Fiscal year 03 emergency wartime  108-11    $235.0                  $235.0
                 supplemental
    Fiscal year 04 DHS appropriations 108-90    $249.4       $149.7     $399.1
        Total earmarked appropriations            $1,487.4      $324.2   $1,811.6
          Total fiscal year 2002-2004             $1,487.4    $1,183.6   $2,671.1
               EDS/ETD fundingb
          Less amount obligated as of            ($1,307.4) ($1,183.4) ($2,490.8)
              September 30, 2004
        Amount available for additional
               obligation as of
              September 30, 2004b                  $180.0         $0.3     $180.3

    Source: GAO analysis of TSA data.

    aThese earmarked appropriations are funds that Congress has specified can
    be spent by TSA only for the particular purpose indicated in the table.

    bTotals may not add because of rounding.

    As of the end of fiscal year 2004, TSA used about one-half of the $2.5
    billion that it had obligated to modify airport facilities and to install
    EDS and ETD machines, and the remaining half primarily to procure EDS and
    ETD machines. As of September 30, 2004, TSA had obligated approximately
    $1.3 billion of the approximately $1.5 billion that had been earmarked for
    airport modifications and the installation of EDS and ETD equipment. As
    shown in table 2, TSA had used about $885 million (about 68 percent) of
    these obligated funds for the general deployment and installation of EDS
    and ETD equipment at various airports as part of interim lobby solutions
    to quickly install checked baggage screening equipment. Also included in
    this amount are funds that TSA used for installing interim partial in-line
    baggage screening systems at some airports. In general, these systems were
    for sections of an airport, were not fully integrated into the airport's
    baggage handling system, and most often were temporary until a permanent
    in-line system could be installed. For example, TSA awarded the Port of
    Seattle about $9 million for the construction of interim partial in-line
    systems and modification of the

    baggage handling systems serving four airlines at the Seattle-Tacoma
    International Airport. These interim partial in-line systems, which are
    not fully integrated with the baggage handling systems, will be replaced
    by permanent in-line baggage screening systems that will be fully
    integrated with the airport's baggage handling systems by March 2007. Most
    of the remaining airport modification and equipment installation
    obligations are being used by TSA for work related to the permanent
    in-line integration of EDS baggage screening equipment into airportwide or
    individual terminal baggage conveyor systems at 33 airports. See appendix
    III for a listing of the 33 airports having in-line baggage screening
    systems installed and the source of TSA funding for the in-line systems.

      Table 2: Fiscal Year 2002-2004 Airport Modification and EDS/ETD Installation
                          Obligations as of September 30, 2004

    Dollars in millions

                   Reason for obligation Amount obligated Percentageb

    Funding for general interim lobby deployment and integration of EDS and
    ETD equipment for screening checked baggage

    Planning, designing, and airport structural modification work performed at
    over 400 airports

    a

    by TSA's prime contractor, Boeing Service Company and its subcontractors
    $843.3

    Work performed by other individual contractors and EDS manufacturers $32.8

    Costs associated with transporting and upgrading EDS/ETD equipment $8.5

    Subtotalb $884.7

    Funding for permanent in-line integration of EDS screening equipment into
    airportwide or individual terminal baggage conveyor systems at 33 airports

    Initial letter of intent funding to nine airports for airport modification
    $259.4

    Other transaction agreement funding to eight airports for airport
    modification $82.6

    Airport modification and EDS equipment installation work performed by
    Boeing Service
    Company, other contractors, and EDS manufacturers at 25 airports $52.2

    Subtotalb $394.3

           Funding for engineering, testing, and analytical support services

    Engineering, testing, and analytical support services to TSA for airport
    facility modification and
    EDS/ETD installation activities $28.4

    Total obligatedb $1,307.4

    Source: GAO analysis of TSA data.

    aSome of these funds were used for the permanent in-line installation and
    integration of EDS equipment into baggage conveyor systems at eight
    airports including two category X, and six category I and II airports. We
    were unable to determine the amount expended for this effort because at
    the time the work was accomplished, TSA did not require Boeing Service
    Company, the prime contractor responsible for deploying EDS and ETD
    equipment, to track obligations and expenditures at the airport level.

    bTotals and subtotals may not add because of rounding.

    TSA contracted with Boeing Service Company in June 2002 to be the prime
    contractor for deploying EDS and ETD equipment at the nation's airports.
    This effort involved designing and implementing airport facility
    modifications for EDS and ETD equipment, such as new construction,
    infrastructure reinforcement, and modification of electrical systems
    required to install the EDS and ETD equipment. Originally, the period of
    performance for this contract was to expire on December 31, 2002. However,
    TSA extended the contract's period of performance in order for Boeing to
    perform activities associated with installing interim lobby solutions to
    help airports meet or to maintain compliance to screen 100 percent of
    checked baggage with explosive detection systems. These contract
    extensions have resulted in a $486.3 million increase in TSA

    obligations against this contract for work related to airport
    modifications and EDS and ETD installation from $372.6 million in fiscal
    year 2002 to $858.8 million as of September 30, 2004.16 Boeing had
    expended most (98 percent) of these funds for interim lobby screening
    solutions.

    As of September 30, 2004, TSA had obligated almost 100 percent of the
    approximately $1.2 billion that had been budgeted or earmarked for
    procurement of EDS and ETD machines. As shown in table 3, about 80 percent
    of these funds has been obligated for procuring EDS machines, with most of
    the remaining funding being obligated for procuring ETD machines.

    16As of September 30, 2004, TSA has obligated $1.3 billion against the
    Boeing contract; in addition to the $858.8 million for airport
    modification and EDS/ETD installation, Boeing is receiving $297.4 million
    for EDS/ETD maintenance, $134.9 million for training baggage screeners,
    and $2.5 million for EDS/ETD transportation and other costs.

    Table 3: Fiscal Year 2002-2004 EDS/ETD Procurement Obligations as of
    September 30, 2004

    Dollars in millions Amount obligated

    Number of Item/task description units Subtotal Total Percent

                  Procurement of EDS machines and associated equipment

    Invision EDS machines and associated equipment

        CTX 2500 EDS designed for stand-alone configuration    82    $31.0
    CTX 5500 EDS designed for both stand-alone or in-line
                           configurations                      357  $190.5
          CTX 9000 EDS designed for in-line configuration      246  $284.4
           EDS machine manufacturing ramp-up, engineering
                            services and
                            other costs                              $17.3
    L3 Examiner 6000 EDS designed for both stand-alone or
                              in-line
                           configurations                      519  $428.7
                       Total EDS procurement                  1,204        $951.9

    Procurement of ETD machines, parts and consumables Other services and equipment
                                      procurement

        Ionscan 400B ETD machines, parts, and consumables  3,162   $121.5
          Itemiser ETD machines, parts, and consumables    1,785    $65.5
          EGIS-II ETD machines, parts, and consumables      700     $32.5
                      Total ETD procurement                5,647          $219.5

    Other engineering, testing, and analytical support services to TSA
    for airport facility modification and EDS/ETD installation activities $6.6

    X-ray machines and other services $3.6

    Transportation of EDS equipment within and between airports $1.0 Other
    charges for services and supplies $0.9

    Total other services and equipment $12.1 Total obligateda $1,183.4

    Source: GAO analysis of TSA data.

    aTotal does not add because of rounding.

    Table 4 summarizes the location of EDS and ETD equipment at the nation's
    airports by airport category,17 based on a June 2004 TSA inventory
    listing. The number of machines shown in table 4 includes EDS and ETD

    17 TSA classifies the over 400 airports in the United States into one of
    five categories-X, I, II, III, and IV. Generally, category X airports have
    the largest number of passenger boardings, and category IV airports have
    the smallest number.

    machines procured by both TSA and FAA prior to and during the
    establishment of TSA.

     Table 4: EDS and ETD Machines Deployed at U.S. Airports as of June 2004 Number

                  Airport category   Airports     EDS machines       ETD machines
                                 X           21              679            2,833
                                 I           61              467            2,401
                                II           50               71
                               III          124                9
                                IV          190                2
                             Total          446            1,228            7,146

                           Source: GAO analysis of TSA data.

    TSA's Initial Deployment of EDS and ETD Machines Resulted in Interim
    Solutions for Screening with Stand-alone Equipment Located Mainly in
    Airport Lobbies

    Although TSA made significant progress in fielding EDS and ETD equipment
    to the nation's airports to screen checked baggage for explosives, as
    mandated by Congress, TSA primarily used this equipment as part of interim
    lobby solutions to screen checked baggage for explosives, rather than the
    permanent integration of EDS machines in-line with airport baggage
    conveyor systems. TSA fielded most of the EDS and ETD machines needed to
    screen checked baggage for explosives to the nation's over 400 airports by
    the congressionally mandated date of December 2003 (extended from the
    original deadline of December 2002), despite limited time to deploy the
    equipment and some of the equipment not being available when needed. In
    1996, FAA, the organization then responsible for the procurement of
    checked baggage screening equipment, established a long-term goal of
    fielding explosive detection systems at all airports within 18 years-by
    2014. As of June 2002, we reported that FAA had fielded 200 EDS and 200
    ETD systems to 56 airports.18 In about two and one-half years following
    the mandate to screen all checked baggage for explosives, TSA's deployment
    of equipment resulted in 1,228 EDS machines and 7,146 ETD machines being
    available in over 400 airports, as shown in table 4. Initially, EDS
    manufacturers were unable to produce and deliver the number of machines
    needed by TSA, and TSA determined that a mix of EDS and ETD technologies
    would provide an efficient and effective means of passenger protection.

    18GAO, Aviation Security: Transportation Security Administration Faces
    Immediate and Long-Term Challenges, GAO-02-971T (Washington, D.C.: July
    25, 2002).

    During our site visits to 22 category X, I, and II airports, we observed
    that in most cases, TSA used stand-alone EDS machines and ETD machines as
    the primary method for screening checked baggage.19 Generally, this
    equipment was located in airport lobbies and in baggage makeup areas. In
    addition, in our survey of 155 federal security directors, we asked the
    directors to estimate, for the 263 airports included in the survey, the
    approximate percentage of checked baggage that was screened on or around
    February 29, 2004, using EDS, ETD, or other approved alternatives for
    screening baggage such as positive passenger bag match or canine
    searches.20 As shown in table 5, the directors reported that for 130 large
    to medium-sized airports in our survey (21, 60, and 49 category X, I, and
    II airports, respectively), most of the checked baggage was screened using
    stand-alone EDS or ETD machines. The average percentage of checked baggage
    reported as screened using EDS machines at airports with partial or full
    in-line EDS capability ranged from 4 percent for category II airports to
    11 percent for category X airports. In addition, the directors reported
    that ETD machines were used to screen checked baggage 93 to 99 percent of
    the time at category III and IV airports, respectively.

    19The 22 airports included 12 category X, 9 category I, and 1 category II
    airports.

    20A TSA federal security director oversees federal security operations at
    one or more U.S. commercial airports and has operational responsibility
    for the screening of passengers and checked baggage.

    Table 5: Average Percentage of Checked Baggage Reported as Screened Using
    EDS, ETD, or Other Approved Method at 263 Airports on or around February
    29, 2004

                          Airport category X I II III IV Total

                         Number of airports 21 60 49 73 60 263

                     Percentage of checked baggage screened using:

               EDS (at airports with no in-line EDS
                                        capability)  59   59   27     6    0
                   EDS (at airports with partial or
                airportwide in-line EDS capability)  11     8    4    0    0
                                         Totala EDS  70   67   32     6    0
                                                ETD  18   33   66   93   99
                                 Totala EDS and ETD  88   99   98   99   99
                              Other approved method  12     1    2    2    1
                                             Totala 100  100  100  100  100   100

             Source: Analysis of GAO federal security director survey data.

                     aPercentages may not add because of rounding.

    Interim Solutions Resulted in Operational Inefficiencies and Additional
    Security Risks

    TSA's interim solution of using stand-alone EDS and ETD machines as the
    primary method to screen checked baggage for explosives led to operational
    inefficiencies including (1) the increased use of screener staff, (2) a
    lower baggage throughput rate per hour for screening baggage for
    explosives, and (3) an increase in on-the-job injuries. Further, at many
    airports, TSA's placement of the minivan-sized stand-alone EDS machines
    and ETD machines in airport lobbies at times resulted in passenger
    crowding, which presented unsafe conditions and may have added security
    risks for passengers and airport workers.

    Stand-alone EDS and ETD machines are both labor-and time-intensive to
    operate since each bag must be physically carried to an EDS or ETD machine
    for screening and then moved back to the baggage conveyor system prior to
    being loaded onto an aircraft. With an in-line EDS system, checked baggage
    is screened within an airport's baggage conveyor system, eliminating the
    need for a baggage screener or other personnel to physically transport the
    baggage from the check-in point to the EDS machine for screening and then
    to the airport baggage conveyor system. Further, according to TSA
    officials, ETD machines and stand-alone EDS machines are less efficient in
    the number of checked bags that can be screened per hour per machine than
    are EDS machines that are integrated in-line with the airport baggage
    conveyor systems. As shown in table 6, as

    of October 2003, TSA estimated that the number of checked bags screened
    per hour could more than double when EDS machines were placed in-line
    versus being used in a stand-alone mode. According to a senior TSA
    official in the Office of Security Technology, these throughput numbers
    could change as TSA gains greater operational experience.

    Table 6: Bags Per Hour Screened by Stand-alone and In-line EDS Machines
    and ETD Machines

                  Bags per hour Type of equipment Stand-alone In-line

                                      EDS machines

                            CTX 2500-stand-alone only           120            NA
                                             CTX 5500           180           250
                                CTX 9000-in-line only            NA           425
                                              L3 6000           180           425
                        ETD machines-stand-alone only            36            NA

    Source: TSA.

    NA: Not applicable.

    In January 2004, TSA, in support of its planning, budgeting, and
    acquisition of security screening equipment, reported to the Office of
    Management and Budget (OMB) that the efficiency benefits of in-line rather
    than standalone EDS are significant, particularly with regard to bags per
    hour screened and the number of TSA screeners required to operate the
    equipment. According to TSA officials, at that time, a typical lobby-based
    screening unit consisting of a stand-alone EDS machine with three ETD
    machines had a baggage throughput of 376 bags per hour with a staffing
    requirement of 19 screeners. In contrast, TSA estimated that approximately
    425 bags per hour could be screened by in-line EDS machines with a
    staffing requirement of 4.25 screeners.

    In order to achieve the higher throughput rates and reduce the number of
    screener staff needed to operate in-line baggage screening systems, TSA
    (1) uses a screening procedure known as "on-screen alarm resolution" and
    (2) networks multiple in-line EDS machines together, referred to as
    "multiplexing," so that the computer-generated images of bags from these
    machines are sent to a central location where TSA screeners can monitor
    the images of suspect bags centrally from several machines using the
    onscreen alarm resolution procedure. When an EDS machine alarms,
    indicating the possibility that explosive material may be contained in the
    bag, the on-screen alarm resolution procedure allows screeners to

    examine computer-generated images of the inside of a bag to determine if
    suspect items identified by the EDS machines are in fact suspicious. If a
    screener, by viewing these images, is able to determine that the suspect
    item or items identified by the EDS machine are in fact harmless, the
    screener is allowed to clear the bag, and it is sent to the airline
    baggage makeup area for loading onto the aircraft. If the screener is not
    able to make the determination that the bag does not contain suspicious
    objects, the bag is sent to a secondary screening room where the bag is
    further examined by a screener. In secondary screening, the screener opens
    the bag and examines the suspect item or items, and usually swabs the
    items to collect a sample for analysis using an ETD machine. TSA also uses
    this on-screen alarm resolution procedure with stand-alone EDS machines.21

    A TSA official estimated that the on-screen alarm resolution procedure
    with in-line EDS baggage screening systems will enable TSA to reduce by 40
    to 60 percent the number of bags requiring the more labor-intensive
    secondary screening using ETD machines. In estimating the potential
    savings in staffing requirements, TSA officials stated that they expect to
    achieve a 20 to 25 percent savings because of reductions in the number of
    staff needed to screen bags using ETD to resolve alarms from in-line EDS
    machines.

    TSA also reported that because procedures for using stand-alone EDS and
    ETD machines require screeners to lift heavy baggage onto and off of the
    machines, the interim lobby screening solutions used by TSA led to
    significant numbers of on-the-job injuries.22 In addition, in responding
    to our survey about 263 airports, numerous federal security directors
    reported that on-the-job injuries related to lifting heavy baggage onto or
    off the EDS and ETD machines were a significant concern at the airports
    for which they were responsible. Specifically, these federal security
    directors reported that on-the-job injuries caused by lifting heavy bags
    onto and off of EDS machines were a significant concern at 65 airports,
    and were a significant concern with the use of ETD machines at 110
    airports. To reduce on-the-job injuries, TSA has provided training to
    screeners on proper lifting procedures. However, according to TSA
    officials, in-line EDS screening systems would significantly reduce the

    21TSA began implementing the on-screen alarm resolution procedure in May
    2004 after pilot testing the procedure.

    22TSA was unable to provide GAO with data on the on-the-job injuries
    sustained during baggage screening operations.

    need for screeners to handle baggage, thus further reducing the number of
    on-the-job injuries being experienced by TSA baggage screeners.

    In addition, during our site visits to 22 large and medium-sized airports,
    several TSA, airport, and airline officials expressed concern regarding
    the security risks caused by overcrowding due to ETD and stand-alone EDS
    machines being located in airport lobbies. The location of the equipment
    resulted in less space available to accommodate passenger movement and
    caused congestion due to passengers having to wait in lines in public
    areas to have their checked baggage screened. TSA headquarters officials
    also reported that large groups of people congregating in crowded airport
    lobbies, as shown in figure 4, increases security risks by creating a
    potential target for terrorists. The TSA officials noted that crowded
    airport lobbies have been the scenes of terrorist attacks in the past. For
    example, in December 1985, four terrorists walked to the El Al ticket
    counter at Rome's Leonardo DaVinci Airport and opened fire with assault
    rifles and grenades, killing 13 and wounding 75. On that same day, three
    terrorists killed three people and wounded 30 others at Vienna
    International Airport.

    Figure 4: Crowded Airport Lobby with Stand-alone EDS Screening

    Source: TSA.

    Airports and the Airport operators and TSA are taking actions to install
    in-line EDS baggage

    screening systems because of the expected benefits of these systems.
    Federal Government However, airport operators and TSA have made limited
    progress in Are Taking Actions to installing in-line baggage screening
    systems on a large-scale basis because

    sufficient resources have not been made available for the installation of
    Install In-line Baggage these capital-intensive systems. To install
    in-line systems, airport Screening Systems, operators and TSA work
    cooperatively, with airport operators responsible

    for the baggage conveyor systems and utilities, and TSA responsible forbut
    Resources Have the EDS and ETD machines. Airport operators and TSA have
    also shared Not Been Made in the total costs-25 percent and 75 percent
    respectively under LOI

    agreements, which have been TSA's primary method for funding
    in-lineAvailable to Fund systems. Most airports that have installed or are
    planning to install in-line These Systems on a systems have relied on or
    plan to rely on some form of federal funding to

    help install the systems. However, as of January 2005, TSA has not used

    Large-Scale Basis 	LOIs to fund the installation of in-line systems beyond
    nine airports. Further, TSA has not determined the total cost of
    installing in-line EDS baggage screening systems at airports determined to
    need these systems. In addition, perspectives differ regarding the
    appropriate role of the federal government and airport operators in
    funding these systems.

    Many Airports Have, Are Planning to Have, or Are Considering Installing
    Inline EDS Baggage Screening Systems

    Airport operators and TSA are taking actions to install in-line EDS
    baggage screening systems because of the expected benefits of these
    systems. Our survey of federal security directors and interviews with
    airport officials revealed that 86 of 130 category X, I, and II airports
    (66 percent) included in our survey either have, are planning to have, or
    are considering installing in-line EDS baggage screening systems
    throughout or at a portion of their airports. As shown in figure 5, as of
    July 2004, 12 airports had operational in-line systems airportwide or at a
    particular terminal or terminals, and an additional 45 airports were
    actively planning or constructing in-line systems. Our survey of federal
    security directors further revealed that an additional 33 of the 130
    category X, I, and II airports we surveyed were considering developing
    in-line systems.

    Figure 5: Status of In-line EDS Systems for Category X, I, and II Airports
    Included in Survey of Federal Security Directors as of July 2004

    aThe total number of airports having, planning to have, or considering an
    in-line system is 86. The pie charts above include three category X and
    one category I airports twice because they currently have operating
    in-line systems either covering the total airport or a particular terminal
    or terminals and are in the process of planning and constructing
    additional in-line systems.

    In addition to the expected benefits of reduced TSA screening personnel,
    enhanced security, and increased baggage throughput, airport officials
    anticipate that they will be able to streamline their airport

    operations from installing in-line baggage screening systems. For example,
    some airport and air carrier officials we interviewed anticipate that
    in-line systems will result in less congestion at airline ticket counters
    by removing stand-alone EDS and ETD machines from crowded airport lobbies,
    thereby improving airline passenger flow and queuing in the terminals by
    not forcing passengers to wait in long lines at ticket counters to have
    their bags screened. Officials also believe that the installation of
    in-line systems would allow for airport growth because in-line EDS systems
    could screen checked baggage faster than stand-alone EDS and ETD systems
    and could be upgraded to accommodate growth in airline passenger traffic.
    Officials further stated that in-line systems would allow them to retain
    greater control and autonomy of their baggage handling systems by creating
    a streamlined process for moving checked baggage directly from where
    baggage is checked to the aircraft.

    Total Costs of In-line EDS Baggage Screening Systems Are Unknown, and
    Federal Resources Have Not Been Made Available to Fund These Systems on a
    Large-Scale Basis

    While in-line EDS baggage screening systems have a number of potential
    benefits, the total cost to install these systems is unknown, and limited
    federal resources have been made available to fund these systems on a
    large-scale basis. In-line baggage screening systems are capital-intensive
    because they often require significant airport modifications, including
    terminal reconfigurations, new conveyor belt systems, and electrical
    upgrades.

    TSA has not determined the total cost of installing in-line EDS baggage
    screening systems at airports that it had determined need these systems to
    maintain compliance with the congressional mandate to screen all checked
    baggage for explosives using explosive detection systems, or to achieve
    more efficient and streamlined checked baggage screening operations.
    However, TSA and airport industry association officials have estimated
    that the total cost of installing in-line systems is-a rough
    orderof-magnitude estimate-from $3 billion to more than $5 billion. TSA
    officials stated that they have not conducted a detailed analysis of the
    costs required to install in-line EDS systems at airports because most of
    their efforts have been focused on deploying and maintaining a sufficient
    number of EDS and ETD machines to screen all checked baggage for
    explosives. TSA officials further stated that the estimated costs to
    install in-line baggage screening systems would vary greatly from airport
    to airport depending on the size of the airport and the extent of airport
    modifications that would be required to install the system. While we did
    not independently verify the estimates, officials from the Airports
    Council International-North America and American Association of Airport
    Executives estimated that project costs for in-line systems could range

    from about $2 million for a category III airport to $250 million for a
    category X airport.23

    Airport operators have relied on several sources of federal funding to
    help pay for the planning and construction of in-line EDS baggage
    screening systems. We interviewed airport officials from 53 airports that
    either have or are in the process of planning or constructing in-line
    systems to determine the extent to which they have relied on or plan to
    rely on federal funding to install in-line systems.24 As shown in table 7,
    officials at 42 of the 53 airports we interviewed reported that they
    relied on the use of federal funds from the FAA Airport Improvement
    Program and TSA to help fund the planning and construction of these
    systems. However, there was no readily available information that would
    allow us to determine to what extent these 42 airports relied on or plan
    to rely on the use of federal funds for constructing or planning their
    in-line systems. Only one of the 53 airports completed its in-line system
    without first receiving federal funds for the project, while an additional
    10 airports have started planning or constructing their in-line systems
    without receiving federal assistance or a commitment to receive federal
    assistance.

    23Joint Statement of David Z. Plavin, President, Airports Council
    International-North America (ACI-NA) and Todd Hauptli, Sr. Executive Vice
    President, American Association of Airport Executives (AAAE) before the
    House Aviation Subcommittee Hearing on Passenger and Baggage Screening
    Problems; February 12, 2004. GAO did not independently verify cost figures
    provided in this testimony.

    24These 53 airports were among 70 airports identified by federal security
    directors during our Web-based survey as either having or in the process
    of planning or constructing in-line systems. Officials at the remaining 17
    airports indicated that their airports had not developed plans for in-line
    baggage screening systems.

    Table 7: Source of Federal Funding Used for Airport Modification Planning
    and Construction of In-line EDS Systems as of July 2004

    Number by airport category

                                      X I II Total

    Airports that have either constructed
    or are in the process of planning 19 27 7

                             Source of federal funding used

                           Combination of Airport
                      Improvement Program and TSA
                                          funding     5          0              0
                      Airport Improvement Program
                                     funding only     7          17             4
                                 TSA funding only     3          5              1
                                            Total     15         22             5
                          No federal funding used     4          5              2

    Source: GAO analysis of information received from interviews with airport
    officials.

    TSA and airport operators are relying on LOI agreements as their principal
    method for funding the modification of airport facilities to incorporate
    in
    line baggage screening systems. The fiscal year 2003 Consolidated
    Appropriations Resolution approved the use of LOIs as a vehicle to
    leverage federal government and industry funding to support facility
    modification costs for installing in-line EDS baggage screening systems.
    When an LOI is established to provide multiyear funding for a project, the
    airport operator is responsible for providing-up front-the total funding
    needed to complete the project, even though the LOI is not a binding
    commitment of federal funds. Work proceeds with the understanding that
    TSA will, if sufficient funding is appropriated, reimburse the airport
    operator for a percentage of the facility modification costs, with the
    airport funding the remainder of the costs. LOIs issued by TSA for in-line
    baggage screening systems provide for reimbursement payments over a
    multiple year period, contingent upon the appropriation of sufficient
    funding to cover such projects.

    As of January 2005, TSA had issued eight LOIs to reimburse nine airports
    for the installation of in-line EDS baggage screening systems for a total
    cost of $957.1 million to the federal government over 4 years. In
    addition,
    TSA officials stated that as of July 2004, they had identified
    27 additional airports that they believe would benefit from receiving LOIs
    for in-line systems because such systems are needed to screen an
    increasing number of bags due to current or projected growth in passenger
    traffic. TSA officials stated that without such systems, these airports

    would not remain in compliance with the congressional mandate to screen
    all checked baggage using EDS and ETD.25 However, because TSA would not
    identify these 27 airports, we were unable to determine whether these
    airports are among the 45 airports we identified as in the process of
    planning or constructing in-line systems. Table 8 identifies the nine
    airports awarded LOI agreements, total project costs, and the cost-share
    for the federal government and the airport.

                             Table 8: Airports Awarded LOIs

                                    Total federal Airport cost-
                              Total  cost-share           share Estimated in-line
               Airport project cost (75 percent)  (25 percent)  operational date
                     Atlanta $125.0         $93.8         $31.3 December 2005
                             Boston                             Completed January
                              116.0          87.0          29.0              2003
                  Dallas-Fort Worth         104.4          34.8         June 2005
                              139.2
                        Denver 95.0          71.2          23.8      January 2005
                          Las Vegas                                     July 2005
                   (McCarran) 125.0          93.8          31.3
                    Los Angeles and                             September 2007
              Ontario, Calif. 341.9         256.5          85.4
                      Phoenix 122.0          91.5          30.5      Fall of 2006
                      Seattle 212.0         159.0          53.0        March 2007
                     Total $1,276.1        $957.1        $319.1

    Source: GAO analysis of TSA data.

    Note: Total project costs do not include costs to procure and install EDS
    machines.

    TSA officials stated that they also use other transaction agreements as an
    administrative vehicle to directly fund, with no long-term commitments,
    airport operators for smaller in-line airport modification projects.26
    Under these agreements, as implemented by TSA, the airport operator also

    25TSA officials stated that the number of airports that could benefit most
    from in-line checked baggage screening systems varies depending on
    changing airport circumstances, such as adding new terminals or an
    increased or decreased number of flights.

    26Other transaction agreements are administrative vehicles used by TSA to
    directly fund airport operators for smaller airport modification projects
    without undertaking a long-term commitment. These transactions take many
    forms and are generally not required to comply with federal laws and
    regulations that apply to contracts, grants, or cooperative agreements;
    and enable the federal government and others entering into these
    agreements to freely negotiate provisions that are mutually agreeable.

    provides a portion of the funding required for the modification. As of
    September 30, 2004, TSA had negotiated arrangements with eight airports to
    fund small permanent in-line projects or portions of large permanent
    inline projects using other transaction agreements.27 These other
    transaction agreements range from about $640,000 to help fund the
    conceptual design of an in-line system for one terminal at the Dallas
    Fort-Worth airport to $37.5 million to help fund the design and
    construction of in-line systems and modification of the baggage handling
    systems for two terminals at the Chicago O'Hare International Airport. TSA
    officials stated that they would continue to use other transaction
    agreements to help fund smaller in-line projects.28

    Airport operators also used the FAA's Airport Improvement Program- grants
    to maintain safe and efficient airports-in fiscal years 2002 and 2003 to
    help fund facility modifications needed to accommodate installing in-line
    systems. As shown in table 7, 28 of 53 airports that reported either
    having constructed or planning to construct in-line systems relied on the
    Airport Improvement Program as their sole source of federal funding.

    27The eight airports included four category X airports: Dallas Fort-Worth
    International, Chicago O'Hare International, Detroit Metro Wayne County,
    and San Francisco International; three category I airports: Piedmont Triad
    International (North Carolina), Pittsburgh International, and Sacramento
    International; and one category II airport Harrisburg International
    (Pennsylvania). These eight airports were among the 45 airports that we
    identified as being in the process of planning or constructing in-line
    systems.

    28TSA also used four other transaction agreements to fund work related to
    interim solutions, three of these agreements were for partial in-line
    systems that eventually were to be replaced by permanent in-line systems.

    Airport Officials Report That They Will Require Federal Funding to Install
    In-line EDS Baggage Screening Systems, but the Availability of this
    Funding Is Uncertain, and Perspectives Differ Regarding Funding
    Responsibilities of the Federal Government and the Aviation Industry

    Airport officials at over half of the 45 airports that we identified are
    in the process of planning or constructing in-line systems stated that
    they will require federal funding in order to complete the planning and
    construction of these in-line systems. Despite this reported need,
    however, the President's fiscal year 2005 and 2006 budget requests do not
    provide, and the fiscal year 2005 DHS Appropriations Act does not include,
    funding for additional LOIs for in-line EDS baggage screening systems
    beyond the eight already issued. Also, the availability of federal funds
    from the Airport Improvement Program for future planning and construction
    of in-line baggage screening systems is limited. In addition, perspectives
    differ regarding the appropriate role of the federal government, airport
    operators, and air carriers in funding these capital-intensive systems.

    Officials at 28 of the 45 airports that we identified in figure 5 as
    planning or constructing in-line baggage screening systems stated that
    they could not or would not move forward with installing these systems
    without funding support from TSA.29 Also, in our review of correspondence
    to TSA regarding 26 airports' interest in receiving LOIs, officials from
    half of the 26 airports stated that they would have to delay, suspend, or
    abandon their plans for installing in-line systems until TSA committed to
    funding these projects. According to TSA officials, the high cost of
    developing final design plans for in-line systems has resulted in airports
    delaying plans to install the systems until they are confident that TSA
    will be able to support their funding needs.

    Although airport officials stated that they will require federal funding
    to install in-line systems-and TSA officials reported that additional
    airports will require in-line systems to maintain compliance with the
    congressional mandate to screen 100 percent of checked baggage for
    explosives-TSA officials stated that they do not have sufficient resources
    in their budget to fund additional LOIs beyond the eight LOIs that have
    already been issued. Vision 100, among other things, provided for the
    creation of the Aviation Security Capital Fund to help pay for placing EDS
    machines in line with

    29These 28 airports include 8 of the 9 airports that have been awarded
    LOIs by TSA for planning and constructing in-line systems.

    airport baggage handling systems.30 However, according to OMB officials,
    the President's fiscal year 2005 budget request, which referred to the
    Vision 100-mandated appropriation of $250 million for the Aviation
    Security Capital Fund, only supported continued funding for the eight LOIs
    that have already been issued and does not provide resources to support
    new LOIs for funding the installation of in-line systems at additional
    airports. Further, while the fiscal year 2005 DHS Appropriations Act
    provides $45 million for installing explosive detection systems in
    addition to the $250 million from the Aviation Security Capital Fund,
    Congress directed, in the accompanying conference report, that the $45
    million be used to assist in the continued funding of the existing eight
    LOIs. Further, the President's fiscal year 2006 budget request for TSA
    provides approximately $240.5 million for the continued funding of the
    eight existing LOIs and provides no funds for new LOI agreements for
    in-line system integration activities.

    In addition, the availability of Airport Improvement Program funds for
    airport security-related improvements, though expanded for a time, is
    presently limited as a resource for the installation of in-line EDS
    baggage screening systems. Following the events of September 11, ATSA
    authorized the use of Airport Improvement Program funds for
    securityrelated enhancements through fiscal year 2002. ATSA also provided
    for the use of Airport Improvement Program funds to replace airport
    baggage handling systems and to reconfigure airport terminal baggage areas
    as required to install explosive detection equipment, but Vision 100
    amended this provision to allow only a specific portion of Airport
    Improvement Program funds to be used for this purpose after December 12,
    2003.31 Subsequent prohibitions found in the fiscal year 2004 Consolidated

    30Vision 100 authorizes up to $500 million for aviation security for each
    of fiscal years 2004 through 2007, of which $250 million is a mandatory
    appropriation to the Aviation Security Capital Fund. Of that mandatory
    amount, the act designates $125 million as priority funding to fulfill
    intentions to obligate under LOIs. In the fiscal year 2004 Department of
    Homeland Security Appropriations Act, Congress provided $250 million for
    the physical modification of airports to install checked baggage explosive
    detection systems but did so separate from the Aviation Security Capital
    Fund because a provision of that act precluded the use of funds to
    establish the Fund in fiscal year 2004. The Intelligence Reform and
    Terrorism Prevention Act of 2004, Pub. L. No. 108-458, 118 Stat. 3638,
    enacted in December 2004, increases the authorized appropriation for
    aviation security from Vision 100 from $250 million to $400 million for
    each of fiscal years 2005 through 2007. The $250 million mandatory
    appropriation remains the same.

    31Vision 100 limited the source of funding available to carry out this
    provision (49 U.S.C. S: 47102(3)(b)(x)) to amounts apportioned under 49
    U.S.C. S: 47114.

    Appropriations Act, enacted in January 2004, and again in the fiscal year
    2005 Consolidated Appropriations Act, enacted in December 2004, prohibit
    the use of Airport Improvement Program funds for activities related to the
    installation of in-line explosive detection systems.

    A 75 percent federal cost-share will apply to any project under an LOI for
    fiscal year 2005.32 Further, the President's fiscal year 2006 budget
    request for TSA requests to maintain the 75 percent federal government
    cost share for projects funded by LOIs at large and medium airports.
    However, in testimony before Congress, an aviation industry official
    expressed a different perspective regarding the cost sharing between the
    federal government and the aviation industry for installing in-line
    checked baggage screening systems. Testifying in July 2004, the official
    said that airports contend that the cost of installing in-line systems
    should be met entirely by the federal government, given its direct
    responsibility for screening checked baggage, as established by law, in
    light of the national security imperative for doing so, and because of the
    economic efficiencies of this strategy. Although the official stated that
    airports have agreed to provide a local match of 10 percent of the cost of
    installing in-line systems at medium and large airports, as stipulated by
    Vision 100, he expressed opposition to the administration's proposal,
    which was subsequently adopted by Congress for fiscal year 2005, to
    reestablish the airport's costshare at 25 percent.33

    In July 2004, the National Commission on Terrorist Attacks upon the United
    States (the 9/11 Commission) also addressed the issue of the federal
    government/airport cost-share for installing EDS in-line baggage

    32The fiscal year 2003 Consolidated Appropriations Resolution authorized
    TSA to issue LOIs for terminal modifications related to the installation
    of in-line baggage screening systems and mandated that each LOI provide
    for a 75 percent federal cost-share of the project's cost, with the
    remaining 25 percent to be paid by the airport operator at airports with
    at least 0.25 percent of the total number of passenger boardings each year
    at all airports (and 90 percent for projects at all other airports).
    Subsequently, Vision 100 instituted a 90 percent federal cost-share of the
    project's cost, with the remaining 10 percent to be paid by the airport
    operator at medium and large hub airports (and 95 percent for projects at
    any other airport) though TSA continued to operate at the 75 percent
    cost-share. The fiscal year 2005 DHS Appropriations Act, signed into law
    in October 2004, reestablished the federal cost-share at 75 percent for
    any medium or large hub airport during fiscal year 2005.

    33TSA officials stated that the increased cost-share to 90 percent
    stipulated in Vision 100 would further constrain their ability to fund
    future LOIs, as well as impact their ability to assist airports to achieve
    and maintain compliance with the congressional mandate to screen all
    checked baggage for explosives.

    screening systems.34 Specifically, the commission recommended that TSA
    expedite the installation of in-line systems and that the aviation
    industry should pay its fair share of the costs associated with installing
    these systems, since the industry will derive many benefits from the
    systems. Although the 9/11 Commission recommended that the aviation
    industry should pay its fair share of the costs of installing in-line
    systems, the commission did not report what it believed the fair share to
    be.35

      TSA Has Not Systematically Planned for the Optimal Deployment of Checked
      Baggage Screening Equipment to Ensure the Efficient and Cost-Effective
      Screening for Explosives while Enhancing Security Benefits

    TSA has not conducted the analyses needed to plan for optimally deploying
    EDS and ETD equipment-including installing in-line EDS baggage screening
    systems or replacing ETD machines with stand-alone EDS machines-at the
    nation's more than 400 airports to enhance security and reduce TSA
    staffing requirements and long-term costs. Although TSA established
    criteria to prioritize airport eligibility for receiving LOI funds for
    in-line EDS baggage screening systems, it has not conducted a systematic,
    prospective analysis to determine at which airports it could achieve
    long-term savings and enhanced security by installing in-line systems
    rather than continue to rely on labor-intensive stand-alone EDS and ETD
    machines to screen checked baggage for explosives. TSA's retrospective
    analysis of the nine airports that received LOIs identified the potential
    for significant cost savings through the installation of in-line EDS
    baggage screening systems and the merit of conducting prospective analyses
    of other airports to provide information for future funding decisions.
    Further, for airports where in-line systems may not be economically
    justified because of the high cost of installing the systems, TSA has not
    conducted an analysis to determine whether it could achieve savings by
    making greater use of stand-alone EDS systems rather than relying on the
    use of more labor-intensive ETD machines. OMB has provided guidance for
    agencies to conduct these types of cost analyses to help build a business
    case for funding their programs. Moreover, Congress directed that TSA
    continue submitting plans for installing in-line baggage

    34The 9/11 Commission Report: Final Report of the National Commission on
    Terrorist Attacks Upon the United States (Washington, D.C.: July 2004).

    35The Intelligence Reform and Terrorism Prevention Act of 2004 requires
    the Secretary of Homeland Security to conduct a cost-sharing study that
    must include, among other things, a proposed formula for cost sharing
    among the federal, state, and local governments and the private sector for
    projects to install in-line baggage screening equipment that reflects the
    benefits that each such entity will derive from the projects, including
    national security benefits and labor and other cost savings.

    screening systems. However, TSA has not yet provided Congress with all of
    the information requested.

    TSA Applied Criteria to Award Initial LOIs to Fund In-line Systems but Has
    Not Systematically Determined Which Additional Airports Should Receive
    Future In-line Systems to Increase Efficiencies and Enhance Security

    In October 2003, TSA reported to OMB criteria it used to prioritize
    airports eligible to receive LOI funds to install in-line EDS baggage
    screening systems. However, TSA did not systematically determine which
    airports could achieve long-term savings and improved security by
    installing in-line systems rather than continuing to rely on
    labor-intensive stand-alone EDS and ETD machines to screen checked baggage
    for explosives.

    The criteria TSA established for prioritizing airport participation in the
    LOI program, as shown in figure 6, included airports that were not yet
    conducting 100 percent screening of checked baggage with EDS or ETD, and
    airports that would fall out of compliance with the requirement to screen
    checked baggage with EDS or ETD at peak load times. In July 2004, TSA
    officials reported that they had recently expanded these criteria to take
    into account additional security benefits that an in-line baggage
    screening system would provide an airport. Specifically, TSA officials
    stated that they compared airport operational needs with identified
    threats, based on information received from TSA's Transportation Security
    Intelligence Service, to consider security needs for specific airports.
    TSA officials further reported that an airport's circumstances, such as
    passenger load increases or decreases, may change how it is prioritized,
    given these criteria, and that an airport could qualify to receive LOI
    funding based on more than one criterion.

               Figure 6: TSA Criteria for Prioritizing Letters of Intent

                           Source: GAO analysis of TSA data.

    TSA officials stated that they selected the first nine airports to receive
    LOIs to fund in-line baggage screening systems because, in general, they
    were the first to submit applications for an LOI, and they agreed to pay

    25 percent of airport modification costs in accordance with the LOI
    requirements.36 TSA officials also stated that the nine airports generally
    met their criteria even though seven of the airports had received LOIs in
    July and September 2003, before the TSA's promulgation of the criteria in
    October 2003.

    In addition to the nine airports currently receiving LOI funds, TSA
    officials stated that, based on their criteria, in July 2004, they
    identified 27 additional airports that are potential candidates for 22
    future LOIs.37 TSA officials stated that an in-line screening system at
    each of these airports would provide enhanced security and efficiencies.
    More important, officials stated that if the 27 airports did not receive
    an LOI to install an in-line baggage system, these airports could fall out
    of compliance with the requirement to screen 100 percent of checked
    baggage using explosive detection systems during peak passenger traffic
    load periods or because of passenger load increases or new air carrier
    service-TSA's second prioritization criterion shown in figure 6. Although
    TSA officials asserted that in July 2004, 27 airports were good candidates
    for in-line systems, they would not identify the 27 airports. TSA
    officials also did not provide the analyses they conducted to determine
    that these airports would fall out of compliance with the mandate to
    screen all checked baggage using explosive detection systems or state why
    these airports were more at risk than other airports for not complying
    with this mandate. Rather, TSA officials stated that they identified these
    27 airports as good candidates for LOIs based on their day-to-day working
    knowledge of airports and professional judgment about airport operations.
    TSA officials were also unable to provide information on what the
    associated costs, benefits, and time frames would be for installing
    in-line systems at these 27 airports.

    Although TSA developed criteria to use as a guide for determining which
    airports should receive LOI funding for in-line EDS baggage screening
    systems, TSA has not yet conducted a systematic, prospective analysis of
    individual airports or groups of airports to determine at which airports
    installing in-line EDS systems would be cost-effective in terms of
    reducing long-term screening costs for the government and would improve
    security.

    36TSA did not have a formal, standardized process for soliciting or
    responding to requests for LOIs.

    37LOI agreements can include multiple airports, as was the case with one
    of the original eight LOIs including both the Los Angeles International
    and Ontario airports.

    Such an analysis would enable TSA to determine at which airports it would
    be most beneficial to invest limited federal resources for in-line systems
    rather than continue to rely on the stand-alone EDS and ETD machines to
    screen checked baggage for explosives, and it would be consistent with
    best practices for preparing benefit-cost analysis of government programs
    or projects called for by OMB Circular A-94.38 TSA officials stated that
    they have not conducted the analyses related to the installation of
    in-line systems at individual airports or groups of airports because they
    have used available staff and funding to ensure all airports have a
    sufficient number of EDS or ETD machines to meet the congressional mandate
    to screen all checked baggage with explosive detection systems. During the
    course of our review, in September 2004, TSA contracted for services
    through March 2005 to develop methodologies and criteria for assessing the
    effectiveness and suitability of airport screening solutions requiring
    significant capital investment, such as those projects associated with the
    LOI program. However, TSA officials could not provide us with information
    on how they plan to use the results of the effort in planning for the
    installation of in-line systems.

    In October 2004, the conference report accompanying the 2005 Department of
    Homeland Security Appropriations Act directed that TSA continue submitting
    quarterly reports on its plans for the installation of inline baggage
    screening systems. However, TSA has not yet provided Congress with all of
    the information requested. Specifically, the conference report directed
    that TSA provide information describing, among other things, the universe
    of airports that could benefit from an inline EDS baggage screening system
    or other physical modifications; costs associated with each airport's
    project, along with a tentative timeline for award and completion; and
    information reflecting the anticipated cost savings-particularly personnel
    savings-that would be achieved through the use of in-line checked baggage
    systems instead of ETD and stand-alone EDS systems. TSA, directed to
    provide a report on September 1, 2003, and every quarter thereafter,
    provided two reports to Congress. However, TSA was asked to submit amended
    reports because the original reports lacked the requested information. As
    of January 2005, TSA had not submitted the amended reports or subsequent
    reports to Congress. The conference report further directed TSA to develop
    a comprehensive plan for

    38OMB Circular A-94 Guidelines and Discount Rates for Benefit-Cost
    Analysis of Federal Programs, January 22, 2002. Agencies use this guidance
    to support government decisions to initiate, review, or expand programs
    that would result in measurable costs or benefits extending for 3 or more
    years into the future.

    expediting the installation of in-line EDS baggage screening systems,
    including the formulation of detailed budget requirements to provide for
    both equipment acquisition and the capital costs of installing these
    system configurations at airports. In addition, the December 2004,
    Intelligence Reform and Terrorism Prevention Act, among other things,
    directs TSA to develop a schedule to expedite the installation of in-line
    explosive detection systems.

    According to TSA officials, TSA recently began to conduct an analysis of
    alternatives to determine the best manner to acquire, deploy, and maintain
    EDS and ETD equipment for screening checked baggage as part of the
    Department of Homeland Security Investment Review process.39 However,
    according to TSA officials who prepared the review, the Investment Review
    Board review did not include a prioritization of which airports should
    receive funding for in-line systems or an analysis of screening needs at
    individual airports. TSA would not provide us with the baggage screening
    program data and analysis that it provided to the Investment Review Board
    for the review that occurred in late October 2004.

    The Installation of In-line EDS Baggage Screening Systems May Result in
    Significant Savings and Benefits

    Although TSA has not conducted a systematic analysis of cost savings and
    other benefits that could be derived from the installation of in-line
    baggage screening systems, TSA's limited, retrospective cost-benefit
    analysis of inline projects at the nine airports with signed LOI
    agreements found that significant savings and other benefits may be
    achieved through the installation of these systems. This analysis was
    conducted in May 2004- after the eight LOI agreements for the nine
    airports were signed in July and September 2003 and February 2004-to
    estimate potential future cost savings and other benefits that could be
    achieved from installing in-line systems instead of using stand-alone EDS
    systems. TSA estimated that inline baggage screening systems at these
    airports would save the federal government $1.3 billion40 compared with
    stand-alone EDS systems and that

    39The Department of Homeland Security Investment Review Board reviews the
    department's capital asset programs with acquisition costs exceeding $100
    million to ensure that projects meet mission needs at the expected levels
    of cost and risk.

    40This figure refers to the net present value saved over 7 years if
    received up front.

    TSA would recover its initial investment in a little over 1 year. 41 TSA's
    analysis also provided data to estimate the cost savings for each airport
    over the 7-year period. According to TSA's data, federal cost savings
    varied from about $50 million to over $250 million at eight of the nine
    airports, while at one airport, there was an estimated $90 million loss.
    The individual airport results are described in appendix IV.

    According to TSA's analysis of the nine LOI airports, in-line cost savings
    critically depend on how much an airport's facilities have to be modified
    to accommodate the in-line configuration. Savings also depend on TSA's
    costs to buy, install, and network the EDS machines; subsequent
    maintenance cost; and the number of screeners needed to operate the
    machines in-line instead of using stand-alone EDS systems. In its
    analysis, TSA also found that a key factor driving many of these costs is
    throughput-how many bags an in-line EDS system can screen per hour
    compared with the rate for a stand-alone system. TSA used this factor to
    determine how many stand-alone EDS machines could be replaced by a single
    in-line EDS machine while achieving the same throughput. According to
    TSA's analysis, in-line EDS would reduce by 78 percent the number of TSA
    baggage screeners and supervisors required to screen checked baggage at
    these nine airports, from 6,645 to 1,477 screeners and supervisors.
    However, the actual number of TSA screeners and supervisor positions that
    could be eliminated would be dependent on the individual design and
    operating conditions at each airport.

    TSA also reported that aside from increased efficiency and lower overall
    costs, there were a number of qualitative benefits that in-line systems
    would provide over stand-alone systems, including:

    o  	fewer on-the-job injuries, since there is less lifting of baggage when
    EDS machines are integrated into the airport's baggage conveyor system;

    o  	less lobby disruption because the stand-alone EDS and ETD machines
    would be removed from airport lobbies; and

    o  	unbroken chain of custody of baggage because in-line systems are more
    secure, since the baggage handling is performed away from passengers.

    41For a basis of comparison, Office of Management and Budget Circular A-94
    stipulates using a 7 percent real discount rate to compute the present
    value of cost savings. TSA used a 4 percent real discount rate. Following
    Office of Management and Budget guidance, cost savings are $1.14 billion.
    In addition, in TSA's analysis, the federal government does not pay for
    $319 million, or 25 percent, of project costs. Accounting for these costs
    to reflect total costs, as recommended by Circular A-94, lowers overall
    savings to $820 million.

    TSA's retrospective analysis of these nine airports indicates the
    potential for cost savings through the installation of in-line EDS baggage
    screening systems at other airports, and it provides insights about key
    factors likely to influence potential cost savings from using in-line
    systems at other airports. This analysis also indicates the merit of
    conducting prospective analyses of other airports to provide information
    for future federal government funding decisions as required by the OMB
    guidance on costbenefit analyses.42 This guidance describes best practices
    for preparing benefit-cost analysis of government programs or projects,
    one of which involves analyzing uncertainty. Given the diversity of
    airport designs and operations, TSA's analysis could be modified to
    account for uncertainties in the values of some of the key factors, such
    as how much it will cost to modify an airport to install an in-line
    system. Analyzing uncertainty in this manner is consistent with OMB
    guidance. Appendix IV illustrates how analyzing uncertainty in TSA's cost
    estimates can help identify which cost factors to focus on when
    determining the appropriateness of installing EDS baggage screening
    systems for a particular airport.

    TSA Has Not Systematically Assessed Needs of Airports to Gain Efficiencies
    by Making Greater Use of Stand-alone EDS Systems

    TSA also has not systematically analyzed which airports could benefit from
    the implementation of additional stand-alone EDS systems in lieu of
    labor-intensive ETD systems at more than 300 airports that rely on ETD
    machines, and where in-line EDS systems may not be appropriate or
    costeffective. More specifically, TSA has not prepared a plan that
    prioritizes which airports should receive EDS machines (including machines
    that become surplus because of the installation of in-line systems) to
    balance short-term installation costs with future operational savings.
    Furthermore, TSA has not yet determined the potential long-term operating
    cost savings and the short-term costs of installing the systems, which are
    important factors to consider in conducting analyses to determine whether
    airports would benefit from the installation of EDS machines. TSA
    officials said that they had not yet had the opportunity to develop such
    analyses or plans, and they did not believe that such an exercise would
    necessarily be an efficient use of their resources, given the fluidity of
    baggage screening at various airports.

    There is potential for TSA to benefit from the introduction of smaller
    stand-alone EDS machines-in terms of labor savings and added
    efficiencies-at some of the more than 300 airports where TSA relies on

    42OMB Circular A-94.

    the use of ETD machines to screen checked baggage. Stand-alone EDS
    machines are able to screen a greater number of bags in an hour than the
    ETD used for primary screening while lessening reliance on screeners
    during the screening process. For example, TSA's analysis showed that an
    ETD machine can screen 36 bags per hour, while the stand-alone EDS
    machines can screen 120 to 180 bags per hour. As a result, it would take
    three to five ETD machines to screen the same number of bags that one
    stand-alone EDS machine could process. In addition, greater use of the
    stand-alone EDS machines could reduce staffing requirements. For example,
    one stand-alone EDS machine would potentially require 6 to 14 fewer
    screeners than would be required to screen the same number of bags at a
    screening station with three to five ETD machines. This calculation is
    based on TSA estimates that 4.1 screeners are required to support each
    primary screening ETD machine, while one stand-alone EDS machine requires
    6.75 screeners-including staff needed to operate ETD machines required to
    provide secondary screening.

    Without a Plan for Installing In-line Systems and EDS Equipment, It Is
    Unclear How TSA May Make Use of New Technologies to Screen Checked Baggage
    for Explosives

    Without a plan for installing in-line EDS baggage screening systems, and
    for using additional stand-alone EDS systems in place of ETD machines at
    the nation's airports, it is unclear how TSA will make use of new
    technologies for screening checked baggage for explosives, such as the
    smaller and faster EDS machines that may become available through TSA's
    research and development programs. For example, TSA is working with
    private sector firms to enhance existing EDS systems and develop new
    screening technologies through its Phoenix project. As part of this
    project, in fiscal year 2003, TSA spent almost $2.4 million to develop a
    new computer-aided tomography explosives detection system that is smaller
    and lighter than systems currently deployed in airport lobbies. The new
    system is intended to replace systems currently in use, including larger
    and heavier EDS machines and ETD equipment. The smaller size of the system
    creates opportunities for TSA to transfer screening operations to other
    locations such as airport check-in counters. TSA certified this equipment
    in December 2004 and will pilot the machine in the field to evaluate its
    operational efficiency. Also, the ARGUS program was initiated in 1999 to
    develop EDS equipment that would cost less to build and install-even
    though baggage throughput may be lower-in order to provide a more uniform
    level of security using EDS machines at U.S. airports. TSA's
    Transportation Security Laboratory has certified three varieties of these
    machines, though the machines have not been procured and deployed at U.S.
    airports.

    Conclusions

    TSA has made substantial progress in installing EDS and ETD systems at the
    nation's airports-mainly as part of interim lobby screening solutions-to
    provide the capability to screen all checked baggage for explosives, as
    mandated by Congress. With the objective of initially fielding this
    equipment largely accomplished, TSA needs to shift its focus from
    equipping airports with interim screening solutions to systematically
    planning for the more optimal deployment of checked baggage screening
    systems. The need for sound planning is also recognized by Congress
    through the Intelligence Reform and Terrorism Prevention Act of 2004 and
    through the fiscal year 2005 DHS Appropriations Act Conference Report,
    which, among other things, directs TSA to develop a comprehensive plan for
    expediting the installation of in-line explosive detection systems. Part
    of such planning should include analyzing which airports should receive
    federal support for in-line EDS baggage screening systems based on cost
    savings that could be achieved from more effective and efficient baggage
    screening operations and on other factors, including enhanced security.
    Also, for airports, where in-line systems may not be economically
    justified because of high investment costs, a cost effectiveness analysis
    could be used to determine the benefits of additional stand-alone EDS
    machines to screen checked baggage in place of the more labor-intensive
    ETD machines that are currently being used at the more than 300 airports.
    In addition, TSA should consider the costs and benefits of the new
    technologies being developed through its research and development efforts,
    which could provide smaller EDS machines that have the potential to reduce
    the costs associated with installing in-line EDS baggage screening systems
    or to replace ETD machines currently used as the primary method for
    screening. We believe that without such analyses, and without associated
    plans for the installation of in-line baggage screening systems and
    replacing stand-alone EDS machines, TSA cannot ensure that it is
    efficiently allocating its limited resources to maximize the effectiveness
    of its checked baggage screening operations.

    An analysis of airport baggage screening needs would also help enable TSA
    to determine whether expected reduced staffing costs, higher baggage
    throughput, and increased security would justify the significant up-front
    investment required to install in-line baggage screening. TSA's
    retrospective analysis of nine airports installing in-line baggage
    screening systems with LOI funds, while limited, demonstrated that cost
    savings could be achieved through reduced staffing requirements for
    screeners and increased baggage throughput. In fact, the analysis showed
    that using in-line systems instead of stand-alone systems at these nine
    airports would save the federal government about $1 billion over 7 years
    and that TSA's initial investment would be recovered in a little over 1
    year. In considering

    airports for in-line baggage screening systems or the continued use of
    stand-alone EDS and ETD machines, a systematic analysis of the costs and
    benefits of these systems would help TSA justify the appropriate screening
    for a particular airport, and such planning would help support funding
    requests by demonstrating enhanced security, improved operational
    efficiencies, and cost savings to both TSA and the affected airport.

    In addition to identifying the most optimal baggage screening solutions at
    the nation's airports, a systematic analysis of baggage screening
    operations and solutions-including an estimate of savings that could be
    achieved through the installation of in-line EDS baggage screening
    systems-would assist the Administration and Congress in determining the
    appropriate role of the federal government and aviation industry in
    funding capital-intensive in-line baggage screening systems. By
    identifying efficiencies that could be achieved for both TSA-such as
    savings achieved through reduced TSA staffing needs for screeners-and the
    airports and airlines-such as increased security due to less crowding in
    airport lobbies and the faster processing of baggage and passengers-the
    Administration and Congress would have information identifying the costs
    and benefits of in-line baggage screening systems for all parties involved
    to assist in determining an appropriate cost-share between the federal
    government and aviation industry in funding these systems.

    In developing the comprehensive plan for installing in-line EDS baggage
    screening systems, as directed by the fiscal year 2005 DHS Appropriation
    Act Conference Report, and in satisfying the requirements set forth in the
    Intelligence Reform and Terrorism Prevention Act of 2004, we recommend
    that the Secretary of the Department of Homeland Security direct the
    Administrator for the Transportation Security Administration to
    systematically assess the costs and benefits of deploying in-line baggage
    screening systems at airports that do not yet have in-line systems
    installed. As part of this assessment, the Administrator should take the
    following four actions:

      Recommendations for Executive Action

    o  	identify and prioritize the airports where the benefits-in terms of
    cost savings of baggage screening operations and improved security-of
    replacing stand-alone baggage screening systems with in-line systems are
    likely to exceed the costs of the systems, or the systems are needed to
    address security risks or related factors;

    o  	consider the projected availability and costs of baggage screening
    equipment being developed through research and development efforts;

    o  	estimate total funds needed to install in-line systems where
    appropriate, including the federal funds needed given different
    assumptions regarding the federal government and airport cost-shares for
    funding the in-line systems; and

    o  	work collaboratively with airport operators, who are expected to share
    the costs and benefits of in-line systems, to collect data and prepare the
    analyses needed to develop plans for installing in-line systems.

    We also recommend that the Administrator for the Transportation Security
    Administration assess the feasibility, expected benefits, and costs of
    replacing ETD machines with stand-alone EDS machines for primary screening
    at those airports where in-line systems would not be either economically
    justified or justified for other reasons. In conducting this assessment,
    the Administrator should consider the projected availability and costs for
    screening equipment being developed through research and development
    efforts.

    We also made a recommendation to DHS addressing TSA's protocols for
    screeners using ETD systems and associated screener training, which is
    included in the restricted versions of this report.

                                    Agency Comments
                                   and Our Evaluation

    We provided a draft of this report to DHS for review and comment. On
    February 18, 2005, we received written comments on the draft report, which
    are reproduced in appendix V.43 DHS generally concurred with our findings
    and recommendations, and agreed that efforts to implement the
    recommendations are critical to a successful checked baggage screening
    deployment program. Regarding our recommendation that TSA systematically
    assess the costs and benefits of deploying in-line baggage screening
    systems at airports that do not yet have in-line systems installed, DHS
    stated that TSA has initiated an analysis of deploying in-line checked
    baggage screening systems and is in the process of formulating criteria to
    use to identify those airports that would benefit from an in-line system.
    According to DHS, TSA believes that it can focus on approximately 40
    airports that handle anywhere from 60 to 80 percent of all checked

    43 DHS's initial comments on our draft report were dated January 12, 2005
    , and we have included in the version of this report that contains
    classified and sensitive security information--GAO-05-135C--and in our
    report containing sensitive security information but not the classified
    information--GAO-05-302SU. In its February18, 2005 letter, DHS removed
    comments considered by TSA to be security sensitive information.

    baggage nationwide. Once TSA officials have finalized the criteria and
    determined those airports at which in-line systems should be installed,
    they plan to conduct an airport-specific analysis to determine the
    individual costs and operational benefits. We are encouraged that TSA is
    proceeding with this analysis, which should provide a sound business case
    to justify resource allocation decisions. It is important, however, that
    TSA establish milestones and time frames for completing the analysis and
    documenting and reporting the results, such that they are available in a
    timely manner for DHS and congressional budget decisions.

    Concerning our recommendation that TSA assess the feasibility, expected
    benefits, and costs of replacing ETD machines with stand-alone EDS
    machines for primary screening at those airports where in-line systems
    would either not be economically justified or justified for other reasons,
    DHS stated that TSA has started conducting an analysis of the airports
    that rely on ETD machines as the primary checked baggage screening
    technology to identify those airports that would benefit from replacing
    ETDs with stand-alone EDS equipment. Again, we are pleased that TSA
    officials are conducting this analysis, which should provide them with the
    basis for optimizing the use of its EDS machines for screening checked
    baggage. Further, DHS stated that TSA continues to review and refine the
    protocols and training of all screening procedures including screening
    checked baggage, and are in the process of implementing the
    recommendations made by the DHS Inspector General regarding improved
    screener training and other improvements for both the passenger and
    checkpoint and checked baggage.

    TSA also provided additional technical comments on our draft report, which
    we have incorporated where appropriate.

    We will send copies of the report to the Secretary of the Department of
    Homeland Security, the TSA Administrator, and interested congressional
    committees as appropriate. We will also make copies available to others on
    request. In addition, the report will be available at no charge on GAO's
    Web site at http://www.gao.gov.

    If you have any questions about this report, please contact me at (202)
    512-3404, berrickc@gao.gov or Christine Fossett, Assistant Director at
    (202) 512-2956, fossettc@gao.gov. Key contributors to this report are
    listed in appendix VI.

    Cathleen A. Berrick, Director Homeland Security and Justice Issues

    Appendix I: Objectives, Scope, and Methodology

    To assess efforts by the Transportation Security Administration (TSA) to
    screen checked baggage for explosives using explosives detection system
    (EDS) and explosives trace detection (ETD) equipment, we addressed the
    following questions: (1) How did TSA use the funds it initially budgeted
    to procure and install EDS and ETD systems and make associated airport
    modifications, and what was the impact of the initial deployment of EDS
    and ETD systems? (2) What actions are airports and TSA currently taking to
    install automated in-line EDS baggage screening systems,1 and what are the
    federal resources that have been made available to fund these systems? (3)
    What actions, if any, is TSA taking to plan for the optimal deployment of
    in-line baggage screening systems in order to ensure the efficiency, cost
    effectiveness, and security of its checked baggage screening operations?

    To determine how TSA used its funding for procuring and installing EDS and
    ETD systems and modifying airports, we obtained and analyzed relevant
    legislation and appropriate budget documents, contracts, and inventory
    reports from TSA related to checked baggage screening with EDS and ETD
    machines. We interviewed TSA officials from the Office of Budget and
    Performance, the Office of Acquisition, and TSA's Security Technology
    Deployment Office. We also obtained and reviewed funding and contractual
    documents from these locations. To determine what impact the initial
    deployment of EDS and ETD systems had on TSA and airport operations, we
    conducted a literature search to obtain information on the purpose and use
    of explosive detection screening equipment to screen checked baggage at
    airports for explosives. This search identified various TSA reports,
    Department of Homeland Security (DHS) Inspector General reports,
    Congressional Research Service reports, and aviation industry reports
    documenting TSA's use of this equipment for screening checked baggage.
    Also, we obtained and reviewed relevant documents from TSA and interviewed
    TSA headquarters officials from TSA's Office of Aviation Operations,
    Office of Chief Counsel, Office of Technology Deployment and Maintenance,
    and Office of Internal Affairs and Program Review. This documentation
    included information on staffing requirements and the number of bags per
    hour that can be screened by inline EDS systems as compared with
    stand-alone EDS and ETD machines. We also interviewed officials from TSA,
    air carriers, airports, explosive

    1In-line EDS checked baggage screening systems typically involve checked
    baggage undergoing automated screening while on a conveyor belt that sorts
    and transports baggage to the proper location for its ultimate loading
    onto an aircraft.

    Appendix I: Objectives, Scope, and Methodology

    detection systems equipment manufacturers, and airport industry
    associations to obtain information regarding TSA's efforts to improve
    checked baggage screening operations using EDS machines. Although we could
    not independently verify the reliability of all of this information, we
    compared it with other supporting documents, when available, to determine
    data consistency and reasonableness. Based on these efforts, we believe
    the information we obtained is sufficiently reliable for this report.
    Further, we reviewed the results from unannounced, undercover covert
    testing of checked baggage screening operations conducted by TSA's Office
    of Internal Affairs and Program Review and questioned TSA officials about
    the procedures used to ensure the reliability of the covert test data. On
    the basis of their answers, we believe that the covert test data are
    sufficiently reliable for the purposes of our review.

    To address our second and third objectives-to determine what actions
    airports and TSA are taking to develop in-line EDS baggage screening
    systems and what resources are available for these systems; and to
    determine what TSA is doing to optimally deploy these systems in order to
    improve the efficiency, cost effectiveness, and security of its checked
    baggage screening operations-we obtained briefings and other documents
    related to the planned use and installation of in-line systems and
    interviewed officials from the Office of Chief Counsel and the Office of
    Security Technology. We also interviewed officials from the TSA's
    Transportation Security Laboratory in Atlantic City, New Jersey, to
    discuss the agency's efforts to examine future baggage screening
    technologies and the certification process for EDS and ETD equipment. We
    also used information related to checked baggage screening from a
    Web-based survey of all 155 federal security directors about 263 of the
    airports under their supervision. This survey is described below. We also
    followed up by telephone with airport officials from 70 of those airports
    to obtain additional information about their plans for in-line systems.
    These airports were selected primarily based on the responses from the
    federal security directors regarding whether the airport had or planned on
    installing in-line EDS checked baggage screening systems. In addition,
    GAO's Office of General Counsel formally requested that TSA describe its
    means for compliance with the baggage screening requirements of the
    Aviation and Transportation Security Act and the Homeland Security Act of
    2002, and inquired how TSA would approach its letters of intent for
    funding in-line checked baggage screening systems in light of changes
    mandated by the

    Appendix I: Objectives, Scope, and Methodology

    Vision 100-Century of Aviation Reauthorization Act.2 Also, to assess
    potential savings, we reviewed a TSA cost model showing savings expected
    to be achieved with in-line rather than stand-alone EDS equipment at nine
    airports. We assessed the model's logic to ensure its completeness and
    correctness of calculations. Also, as discussed in appendix IV, we
    conducted a Monte Carlo simulation to: (1) illustrate sensitivity of
    potential cost savings of replacing stand-alone with in-line EDS systems
    to alternative values of key cost drivers and (2) to explore the
    variability in the key factors used by TSA in their model. Based on our
    review of TSA's cost model, we believe that it is sufficiently reliable
    for the analyses we conducted and the information included in this report.

    In addition, in addressing all three objectives, we conducted site visits
    and a Web-based survey. Specifically, we conducted site visits at 22
    airports (12 category X airports, 9 category I airports, and 1 category II
    airport) to observe airport security baggage screening procedures and
    discuss issues related to the baggage screening processes with TSA,
    airport, and airline officials. We chose these airports on the basis of
    one or more of the following factors: a large number of passenger
    boardings; the existence of an operational in-line system; whether the
    airport had received or requested TSA funding for an in-line system;
    whether the airport had begun screening all checked baggage using EDS or
    ETD; and the proximity to a larger airport being visited by GAO. The
    results from our airport visits provide examples of checked baggage
    screening operations and issues but cannot be generalized beyond the
    airports visited because we did not use statistical sampling techniques in
    selecting the airports. We administered a Web-based survey to all 155
    federal security directors who oversee security at each of the airports
    falling under TSA's jurisdiction. The questionnaire contained questions
    related to the status of checked baggage screening operations and planning
    and implementation of in-line EDS checked baggage screening systems. A GAO
    survey specialist designed the questionnaire in combination with other GAO
    staff knowledgeable about airport security issues. We conducted pretest
    interviews with six federal security directors to ensure that the
    questions were clear, concise, and comprehensive. In addition, TSA
    managers and an independent GAO survey specialist reviewed the
    questionnaire.

    2The fiscal year 2005 Department of Homeland Security Appropriations Act
    re-established the federal cost-share for letters of intent at the
    pre-Vision 100 level.

    Appendix I: Objectives, Scope, and Methodology

    For this Web-based survey, each federal security director received one or
    two airport-specific questionnaires to complete, depending on the number
    of airports for which he or she was responsible. Where a federal security
    director was responsible for more than two airports, we selected the first
    airport based on the federal security director's location and the second
    airport to obtain a cross-section of all airports by size and geographic
    distribution. In all, we requested information on 265 airports. However,
    two airports were dropped from our initial selection because the airlines
    serving these airports suspended operations and TSA employees were
    redeployed to other airports. As a result, our sample size was reduced to
    263 airports, which included all 21 category X airports, 60 category I
    airports, 49 category II airports, 73 category III airports, and 60
    category IV airports. In that we did not use probability sampling methods
    to select the sample of airports, we cannot generalize our findings beyond
    the selected airports in these categories.

    We conducted this Web-based survey from late March to mid-May 2004. We
    received completed questionnaires from all 155 federal security directors
    for all 263 separate airports for which we sought information for a 100
    percent response rate. We called selected survey respondents, or other TSA
    officials designated to respond on the respondent's behalf, to obtain
    answers to key survey questions that may have been left blank, to look
    into situations where instructions were not followed and to investigate
    answers that looked suspicious or out of range. The survey results are not
    subject to sampling errors because all federal security directors were
    asked to participate in the survey and we did not use probability sampling
    techniques to select specific airports. However, the practical
    difficulties of conducting any survey may introduce errors, commonly
    referred to as non-sampling errors. For example, inconsistencies in how a
    particular question is interpreted, in the sources of information that are
    available to respondents, or in how the data are entered into a database
    or were analyzed can introduce unwanted variability in the survey results.
    We took steps in the development of the questionnaires, the data
    collection, and the data editing and analysis to minimize these
    non-sampling errors. Also, in that these were Web-based surveys whereby
    respondents entered their responses directly into our database, data entry
    or transcription errors were possible. In addition, all computer programs
    used to analyze the data were peer-reviewed and verified to ensure that
    the syntax was written and executed correctly.

    We performed our work from September 2003 through January 2005 in
    accordance with generally accepted government auditing standards. Certain
    information we obtained and analyzed regarding explosive

    Appendix I: Objectives, Scope, and Methodology

    detection technologies and their effectiveness in TSA's checked baggage
    screening operations are classified or are considered by TSA to be
    sensitive security information. Accordingly, the results of our review of
    this information have been removed from this report. 3

    3We issued two additional reports detailing the results of our review,
    which discuss results deemed to be classified or sensitive security
    information. The report that contains classified and sensitive security
    information is GAO, Aviation Security: Systematic Planning Needed to
    Optimize the Deployment of Checked Baggage Screening Systems, GAO-05-135C
    (Washington D.C.: February 4, 2005). The report containing sensitive
    security information but not the classified information is GAO, Aviation
    Security: Systematic Planning Needed to Optimize the Deployment of Checked
    Baggage Screening Systems, GAO-05-302SU (Washington D.C.: February 4,
    2005).

    Appendix II: Summary of Checked Baggage Screening Legislation

    Table 9: Highlights of Authorizations in Laws Related to Checked Baggage
    Screening in Aviation Transportation Security since the Terrorist Attacks
    of September 11, 2001

    Authorizations found in public laws Key provisions

    Aviation and Transportation Security Established the Transportation
    Security Administration (TSA) as the agency responsible
    Act (ATSA), Pub. L. No. 107-71, 115 for security in all modes of
    transportation, including civil aviation
    Stat. 597 (Nov. 19, 2001)

    Appointed federal security managers to oversee the screening of passengers
    and baggage at airports

    Deployment of federal personnel to screen all passengers and baggage at
    airports

    Mandated the screening of all checked baggage with explosive detection
    systems by December 31, 2002, and authorized alternative means to screen
    checked baggage (positive passenger bag match, manual search, canine
    search in combination with other means, other technology approved by TSA)
    where explosive detections systems are unavailable

    Mandated the imposition of passenger security fees (and authorized the
    imposition of air carrier fees, if necessary)

    Authorized use of Airport Improvement Program funds to replace baggage
    conveyor systems and reconfigure terminal baggage areas for installing
    bulk explosive detection systems; for other security-related activities
    required by law or the Secretary of Transportation from September 11,
    2001, through October 1, 2002; and waived the local matching share for
    fiscal 2002 security related projects

    Required that the Computer-Assisted Passenger Prescreening System, or any
    successor system, evaluate all passengers before they board an aircraft
    and that procedures exist to ensure adequate screening of selected
    individuals and their checked baggage

    Authorized $50 million for each of fiscal years 2002 through 2006 for
    research, development, testing and evaluation of technologies such as
    explosive detection systems Homeland Security Act of 2002, Pub. L.
    Extended ATSA's mandate to screen all checked baggage using explosive
    detection No. 107-296, 116 Stat. 2135 (Nov. 25, systems to December 31,
    2003, for noncompliant airports and required that all baggage 2002) at
    noncompliant airports be screened by alternative means until the mandate
    is fulfilled Requires the submission of a classified report describing
    TSA's progress toward meeting the baggage screening mandate every 30 days
    to the Senate Committee on Commerce, Science and Transportation and the
    House of Representatives Committee on Transportation and Infrastructure

    Requires the Secretary of Transportation to consult with the Secretary of
    Homeland Security before approving applications for Airport Improvement
    Program grants as they relate to security equipment or the installation of
    bulk explosive detection systems

    Consolidated Appropriations Authorized $500 million for each of fiscal
    years 2003 through 2007 for TSA to issue letters Resolution, 2003, Pub. L.
    No. 108-7, 117 of intent (LOIs) to airports, with a government cost-share
    of 75 percent at airports with at Stat. 386 (Feb. 20, 2003) least 0.25
    percent of total passenger boardings each at all airports (90 percent at
    any

    other airport)

                             Emergency Wartime Supplemental

    Authorized LOIs to assist in the installation of explosive detection
    systems at airports by December 31, 2003

    Appropriations Act, 2003, Pub. L. No. 108-11, 117 Stat. 559 (Apr. 16,
    2003) Vision 100-Century of Aviation Limited the availability of Airport
    Improvement Program funds for replacing baggage Reauthorization Act, Pub.
    L. No. 108-conveyor systems and reconfiguring terminal baggage areas to
    install bulk explosive 176, 117 Stat. 2490 (Dec. 12, 2003) detection
    systems to entitlement funds

    Appendix II: Summary of Checked Baggage Screening Legislation

                   Authorizations found in public laws Key provisions

    Required the Secretary of Homeland Security to study the effectiveness of
    the aviation security system, including checked baggage, and to report
    that study within 6 months of the act's passage to the Senate Committee on
    Commerce, Science and Transportation and the House of Representatives
    Committee on Transportation and Infrastructure

    Authorized TSA to make grants for projects to replace baggage conveyer
    systems related to aviation security, to reconfigure terminal baggage
    areas as needed to install explosive detection systems, to enable TSA to
    deploy explosive detection systems behind the ticket counter, in the
    baggage sorting area, or in line with the baggage handling system, and for
    other airport security capital improvement projects TSA determines will
    improve security at an airport or improve the efficiency of the airport
    without lessening security

    Authorized up to $500 million for each of fiscal years 2004 through 2007
    for TSA to make grants under 49 U.S.C. S: 44923:

    $250 million mandatory appropriation derived from passenger security fees
    to constitute the Aviation Security Capital Fund: $125 million available
    on the basis of airport size and aviation security risks; $125 million
    available for discretionary grants with priority to fulfilling LOIs

    $250 million authorized appropriation for each of fiscal years 2004
    through 2007: 50 percent available on the basis of airport size and
    aviation security risks; 50 percent available for discretionary grants
    with priority to fulfilling LOIs

    Authorizes LOIs for airport security improvement projects at a 90 percent
    government cost-share at medium or large hub airports (95 percent at any
    other airport) and provides that TSA shall revise LOIs issued before the
    date of enactment to reflect the new costshare with respect to grants made
    after September 30, 2003

    Intelligence Reform and Terrorism Requires that TSA take action to
    expedite the installation and use of baggage screening

    Prevention Act of 2004, Pub. L. No. equipment and requires that TSA submit
    schedules to the Senate Committee on

    108-458, 118 Stat. 3638 (Dec. 17, 2004) 	Commerce, Science and
    Transportation and the House of Representatives Committee on
    Transportation and Infrastructure for expediting the installation and use
    of in-line baggage screening equipment that estimate the impact that such
    equipment, facility modification, and baggage conveyor placement will have
    on staffing needs and levels related to aviation security and for
    replacing trace detection equipment with explosive detection system
    equipment as soon as practicable and where appropriate, within 180 days of
    enactment

    Requires the Secretary of Homeland Security, in consultation with air
    carriers, airport operators, and other interested parties, to submit, in
    conjunction with its fiscal year 2006 budget proposal, a proposed formula
    for cost sharing among federal, state and local governments and the
    private sector for the installation of in-line baggage screening systems,
    recommendations for defraying the costs of in-line systems, and a review
    of innovative financing approaches and possible cost savings associated
    with installing inline systems at airports

    Amends 49 U.S.C. S: 44923(i) by increasing the authorized appropriations
    for each of fiscal years 2005 through 2007 to $400 million

    Allows for a reimbursement period under any LOI to extend for a maximum of
    10 years after issuance

    Source: GAO analysis of public laws related to checked baggage screening
    since the Terrorist Attacks of September 11, 2001.

             Appendix II: Summary of Checked Baggage Screening Legislation

    Table 10: Highlights of Appropriations in Laws Related to Checked Baggage
    Screening in Aviation Transportation Security since the Terrorist Attacks
    of September 11, 2001

    Appropriations found in public laws Funding appropriated and other key
    provisions

    2002 Emergency Supplemental $40 billion (available until expended) for,
    among other things, the costs of providing
    Appropriations Act for Recovery from and increased transportation
    security; no specific baggage screening-related appropriation
    Response to Terrorist Attacks on the
    United States, Pub. L. No. 107-38, 115 Stat.
    220 (Sept. 18, 2001)

    Department of Transportation and Related $1.25 billion (available until
    expended) for necessary expenses of TSA related to Agencies Appropriations
    Act, Pub. L. No. providing civil aviation security services pursuant to
    ATSA; no specific baggage 107-87, 115 Stat. 833 (Dec. 18, 2001)
    screening-related appropriation H.R. Conf. Rep. No. 107-308 (2001)
    directed $97.5 million from "FAA, Facilities and Equipment": $38 million
    for bulk explosive detection systems; $12 million for trace detection
    equipment; $12 million for threat image projection systems; $2 million for
    computer-based training; $33.5 million for system integration Department
    of Defense Emergency Funds to be obligated from amounts made available in
    Public Law 107-38:

    Supplemental Appropriations for Recovery $108.5 million to "FAA Facilities
    and Equipment" (available until Sept. 30, 2004) for
    from and Response to Terrorist Attacks on procurement and installation of
    explosive detection systems
    the United States, 2002; Department of

    Defense Appropriations Act, 2002, Pub. L. $50 million to "FAA Research and
    Development" (available until Sept. 30, 2003), of No. 107-117, 115 Stat.
    2230 (Jan. 10, 2002) which H.R. Conf. Rep. No. 107-350 (2001) directed $2
    million for a demonstration of 100 percent positive passenger bag match
    technology at DCA

    2002 Supplemental Appropriations Act for Further Recovery from and
    Response to Terrorist Attacks on the United States, Pub.

    L. No. 107-206, 116 Stat. 820 (Aug. 2, 2002) $738 million (available until
    expended) for physical modifications to commercial service airports for
    installing checked baggage explosive detection systems

                        Consolidated Appropriations Resolution,

    2003, Pub. L. No. 108-7, 117 Stat. 386 (Feb. 20, 2003)

    $3.0379 billion (available until expended) for screening activities, of
    which H.R. Conf. Rep. No. 108-10 (2003) directed $1.4159 billion for
    baggage screening activities:

    The Resolution earmarked $265 million for the physical modification of
    commercial service airports to install, and $174.5 million for the
    procurement of, checked baggage explosive detection systems

    The Conference Report directed $900 million for baggage screeners, $75
    million for detection equipment maintenance, and $1.4 million for a
    checked baggage data system Emergency Wartime Supplemental $235 million
    (available until expended) for the physical modification of commercial
    Appropriations Act, 2003, Pub. L. No. service airports to install checked
    baggage explosive detection systems 108-11, 117 Stat. 559 (Apr. 16, 2003).

    Department of Homeland Security $1.3187 billion (available until expended)
    for baggage screening activities:

    Appropriations Act, 2004, Pub. L. No. The act earmarked $250 million for
    physical modification of commercial service

    108-90, 117 Stat. 1137 (Oct. 1, 2003). 	airports to install, and $150
    million for the procurement of, checked baggage explosive detection
    systems.

    H.R. Conf. Rep. No. 108-280 (2003) directed $774.2 million for personnel,
    compensation and benefits; $69.5 for training and other purposes; and $75
    million for explosive detection system maintenance $45 million (available
    until expended) for research and development of explosive detection
    devices

    Appendix II: Summary of Checked Baggage Screening Legislation

    Appropriations found in public laws Funding appropriated and other key
    provisions

    Precludes the obligation or expenditure of funds appropriated or otherwise
    made available by this or any other act to carry out provisions of 49
    U.S.C. S: 44923(h)-the Aviation Security Capital Fund-during fiscal year
    2004

    Consolidated Appropriations Act, 2004, Precludes the availability of
    Airport Improvement Program funds for the replacement Pub. L. No. 108-199,
    118 Stat. 3 (Jan. 23, of baggage conveyor systems, reconfiguration of
    terminal baggage areas, and other 2004) improvements necessary to install
    bulk explosive detection systems

    Department of Homeland Security $1.45246 billion (available until
    expended) for baggage screening activities:

    Appropriations Act, 2005, Pub. L. No. 108-The act earmarks $180 million
    for procurement of, and $45 million to install, checked334, 118 Stat. 1298
    (Oct.18, 2004) baggage explosive detection systems.

    H.R. Conf. Rep. 108-774 (2004) directs $848.86 million for personnel,
    compensation and benefits; $203.66 million for training and other
    purposes; $174.94 million for maintenance; and at least $30 million of the
    $180 procurement earmark to install nextgeneration explosive detection
    systems to permit more efficient handling of checked bags and reduce
    dependence on baggage screeners, particularly at medium-sized and small
    airports. It further recognizes the mandatory $250 million mandatory
    appropriation to the Aviation Security Capital Fund.

    $54 million earmarked for research and development of next generation
    explosive detection devices, of which the Conference Report directs $10
    million for the Manhattan II project

    Reestablishes, for fiscal year 2005, the75 percent government cost-share
    for the eight LOIs issued for the installation of in-line baggage
    screening systems

    The Conference Report directs that TSA:

    comprehensively plan for expediting the installation of in-line explosive
    detection systems, including the formulation of detailed budget
    requirements to provide for both equipment acquisition and the capital
    costs of installing such system configurations at airports; continue
    submitting quarterly reports, consistent with the requirement of H.R. Rep.
    No. 108-169 (2003), on its plans for the installation of in-line systems

    Consolidated Appropriations Act, 2005, Precludes the availability of
    Airport Improvement Program funds for the replacement Pub. L. No. 108-447,
    118 Stat. 2809 (Dec. 8, of baggage conveyor systems, reconfiguration of
    terminal baggage areas, and other 2004) improvements necessary to install
    bulk explosive detection systems

    Source: GAO analysis of public laws related to checked baggage screening
    since the Terrorist Attacks of September 11, 2001.

    Appendix III: Airports Receiving TSA Airport Modification and EDS/ETD Equipment
    Installation Funding for In-line Systems

    Table 11: Listing of Airports Receiving Modification and EDS/ETD Equipment
    Installation Funding for Developing In-line EDS Baggage Screening Systems
    as of September 30, 2004

    Airport modification and EDS equipment installation work Other transaction
    performed by Boeing Service LOI funding for agreement funding for Company,
    other contractors, or Name of airport airport modification airport
    modification EDS manufacturers

                                 13 Category X Airports

    Hartsfield Atlanta International X

    Boston Logan International X X

    Baltimore/Washington International X

    Chicago O'Hare International X

    Denver International X X

    Dallas-Fort Worth International X X X

    Detroit Metro Wayne County X

    Houston George Bush Intercontinental X

    Los Angeles International X

    Miami International X

    Orlando International X

    San Francisco International X X

    Seattle-Tacoma International X X

    Subtotal 6 4 9

                                 16 Category I Airports

    Anchorage Ted Stevens International X
    Boise Air Terminal/Gowen Field X
    Burbank-Glendale-Pasadena X
    Santa Ana John Wayne X
    Las Vegas McCarran International X X
    Metropolitan Oakland International Airport X
    Oklahoma City Will Rogers World X
    Ontario International X
    Phoenix Sky Harbor International X
    Greensboro Piedmont Triad International X
    Pittsburgh International X X
    Sacramento International X
    Southwest Florida International
    Spokane International X
    Tampa International X
    Tulsa International X

    Appendix III: Airports Receiving TSA Airport Modification and EDS/ETD
    Equipment Installation Funding for In-line Systems

    Airport modification and EDS equipment installation work Other transaction
    performed by Boeing Service LOI funding for agreement funding for Company,
    other contractors, or Name of airport airport modification airport
    modification EDS manufacturers

    Subtotal 3 3 12

                                 3 Category II Airports

    Harrisburg International X X

    Juneau International X

    Manchester X

    Subtotal 1 3

                                 1 Category III Airport

    Okaloosa County Air Terminal X

    Subtotal 1

    Total (33 Airports) 9 8 25

    Source: GAO analysis of TSA obligation and commitment data and contract
    files.

    Appendix IV: Analysis of TSA's Cost Savings Estimates for In-line EDS Checked
    Baggage Screening Systems

    TSA estimated that baggage screening operations at the nine airports
    receiving letters of intent (LOIs) will result in a savings to the federal
    government of $1.26 billion over 7 years-and would recover the initial
    investment in 1.07 years-as a result of installing in-line rather than
    standalone EDS systems.1 To make these estimates, TSA made a variety of
    assumptions about in-line and stand-alone EDS systems, including how many
    bags can be processed per hour by both, how many screeners both would
    need, and how much it would cost to purchase, install, and operate these
    systems.2 In addition, TSA used data on how much it cost to modify these
    nine airports to accommodate in-line systems. In considering the accuracy
    of TSA's estimates, uncertainties inherent in many of these assumptions
    should be considered. TSA could have analyzed uncertainty in their
    estimate by conducting sensitivity or other analyses to determine how
    variations in these assumptions would change its estimate of cost savings.
    Analyzing uncertainty in this way is consistent with best practices for
    preparing benefit-cost analysis of government programs or projects called
    for by OMB Circular A-94. Nonetheless, TSA's cost model for these nine
    airports offers insights about key factors likely to influence potential
    cost savings at other airports.

    To illustrate taking uncertainty into account, we conducted a Monte Carlo
    analysis using TSA's cost model.3 We found that TSA's cost savings
    estimate of $3.5 million per in-line EDS machine as compared to standalone
    could range from a loss of $1.6 million to a savings of $8.3 million per
    machine using generalized assumptions about cost uncertainty in TSA's
    model. The most important source of uncertainty causing this wide range in
    possible savings was the cost to modify an airport to accommodate an
    in-line EDS system. Variation in modification costs explained over 60
    percent of the variation in potential cost savings from

    1This is the present value of cost savings over a seven-year period.
    Unless otherwise noted, all dollar figures cited are present values. As
    noted earlier, this estimate falls to $1.14 billion after adjustments to
    the discount rate following Office of Management and Budget Circular A-94
    guidance.

    2Costs to install and multiplex in-line EDS systems were based on budget
    assumptions rather than true requirements.

    3Our analysis was conducted using what is called Monte Carlo simulation,
    which uses random numbers to measure the effects of uncertainty. In the
    absence of additional information, our simulation is based on some general
    assumptions about the probability distributions characterizing values used
    by TSA for most of the cost factors. In the case of modification costs, we
    were able to use information on the variation of those costs across the
    nine airports.

    Appendix IV: Analysis of TSA's Cost Savings Estimates for In-line EDS
    Checked Baggage Screening Systems

    in-line EDS as compared to stand-alone EDS. The next most important
    variable, the number of bags per hour that in-line and stand-alone
    machines can screen per hour, each accounted for about 15 percent of the
    variation in cost savings. In this way, Monte Carlo analysis can offer
    insights on factors to focus on when determining the appropriateness of an
    in-line EDS baggage screening system for a particular airport.4

    The analysis provided by TSA aggregated the nine airports to present a
    total estimate. Using TSA's analysis, we were able to determine the
    results for each of the nine airports. Figure 7 illustrates the variation
    in modification costs at the nine airports TSA studied, ranging from over
    $14 million per in-line EDS machine at Seattle to less than $2 million for
    Boston and Dallas-Fort Worth.5 Figure 8, which shows the cost savings from
    in-line EDS compared to stand-alone EDS, identifies that Seattle could end
    up spending more for an in-line EDS system than from using stand-alone EDS
    machines. Further, as shown in figure 9, at Seattle the relatively large
    costs for upfront in-line EDS are not offset by the estimated $48 million
    in operation and maintenance cost savings; therefore, the in-line EDS
    system may be more costly than EDS standalone. By contrast, at Dallas-Fort
    Worth, the upfront costs of in-line EDS are lower than for stand-alone
    EDS, and there is an estimated $252 million in operation and maintenance
    cost savings. Therefore, the in-line EDS system at Dallas-Fort Worth may
    be less costly than stand-alone EDS.

    4TSA's model covers nine airports handling relatively large numbers of
    passengers, reflecting the fact that in-line EDS has been limited mostly
    to larger airports.

    5TSA's data shows zero cost shown for Ontario, but it may be due to it
    being combined with Los Angeles.

    Appendix IV: Analysis of TSA's Cost Savings Estimates for In-line EDS
    Checked Baggage Screening Systems

    Figure 7: Airport Modification Costs Per In-line EDS Machine at Nine
    Airports

    Dollars

    16,000,000

    14,000,000

    12,000,000

    10,000,000

    8,000,000

    6,000,000

    4,000,000

    2,000,000

    0

    Atlanta Boston Denver Dallas Los Seattle Las Phoenix Ontario Fort Angeles
    Vegas Worth

    Airports

    Source: Transportation Security Administration data.

    Appendix IV: Analysis of TSA's Cost Savings Estimates for In-line EDS
    Checked Baggage Screening Systems

    Figure 8: Cost Savings from In-line EDS Systems Compared to Stand-alone
    EDS at

    Nine Airports

    Present value

    300,000,000

    250,000,000

    200,000,000

    150,000,000

    100,000,000

    50,000,000

    0

    -50,000,000

    -100,000,000

    -150,000,000

    Atlanta Boston Denver Dallas Los Seattle Las Phoenix Ontario Fort Angeles
    Vegas Worth

    Airports

    Source: Transportation Security Administration data.

    Appendix IV: Analysis of TSA's Cost Savings Estimates for In-line EDS
    Checked Baggage Screening Systems

    Figure 9: Costs and Savings at Nine Airports

    Dollars

    300,000,000

    250,000,000

    200,000,000

    150,000,000

    100,000,000

    50,000,000

    0

    -50,000,000

    -100,000,000

    -150,000,000

    -200,000,000

    Atlanta Boston Denver Dallas Los Seattle Los Phoenix Ontario Fort Angeles
    Vegas Worth

    Airports

    In-line operation and maintenance cost savings
    Upfront standalone EDS costs minus upfront in-line EDS costs
    Overall savings from in-line
    Source: Transportation Security Administration data.

    Appendix V: Comments from the Department of Homeland Security

    Appendix V: Comments from the Department of Homeland Security

    Appendix VI: GAO Contacts and Staff Acknowledgments

    GAO Contacts 	Cathleen A. Berrick (202) 512-3404 Christine A. Fossett
    (202) 512-2956

    Staff 	In addition to those named above, David Alexander, Leo Barbour,
    Charles Bausell Jr., Kevin Copping, Katherine Davis, Kevin Dooley,

    Acknowledgments 	David Hooper, Lemuel Jackson, Stuart Kaufman, Noel Lance,
    Thomas Lombardi, Jan Montgomery, Jobenia Odum, Jean Orland, Keith Rhodes,
    Minette Richardson, and Mark Tremba were key contributors to this report.

    Glossary

    Airport categories 	TSA classifies the over 400 airports in the United
    States that require screening into one of five categories (X, I, II, III,
    and IV) based on various factors, such as the total number of take-offs
    and landings annually, the extent to which passengers are screened at the
    airport, and other special security considerations. In general, category X
    airports have the largest number of passenger boardings and category IV
    airports have the smallest. TSA periodically reviews airports in each
    category, and, if appropriate, changes an airport's categorization to
    reflect current operations.

    Airport Improvement Program

    The Airport Improvement Program has provided federal grants since the
    passage of the Airport and Airway Improvement Act of 1982, Pub. L. No.
    97-248, 96 Stat. 324. Administered by the Federal Aviation Administration,
    Airport Improvement Program grants have supported airport planning and
    development. Grants are issued to maintain and enhance airport safety,
    preserve existing airport infrastructure, and expand capacity and
    efficiency throughout the airport system. Funds obligated for the Airport
    Improvement Program are drawn from the Airport and Airway Trust Fund,
    which is supported by user fees and fuel taxes.

    Checked baggage 	An individual's personal property offered to and accepted
    by an aircraft operator for transport, which will be inaccessible to the
    individual during flight.

                              Cost-effectiveness analysis

    A program is cost effective if, on the basis of life cycle cost analysis
    of competing alternatives, it is determined to have the lowest costs
    expressed in present value terms for a given amount of benefits.
    Costeffectiveness analysis is appropriate whenever it is unnecessary or
    impractical to consider the dollar value of the benefits provided by the
    alternatives under consideration. This is the case whenever (1) each
    alternative has the same annual benefits expressed in monetary terms; or
    (2) each alternative has the same annual affects but dollar values cannot
    be assigned to their benefits.

    Explosives Detection A TSA certified automated device that has the ability
    to detect in checked

    System (EDS) 	baggage, the amounts, types, and configurations of explosive
    material specified by the TSA. An EDS machine uses computer-aided
    tomography to automatically measure the density of objects in baggage to
    determine whether the objects have the same density as explosives. The
    system automatically triggers an alarm when objects with high densities
    characteristic of explosives are detected.

                                        Glossary

    Explosives Trace A device that has been certified by TSA for detecting
    explosive vapors and

    Detection (ETD) 	residues on objects intended to be transported aboard an
    aircraft. Explosives trace detection works by detecting vapors and
    residues of explosives. Human operators collect samples by rubbing bags
    with swabs, which are chemically analyzed to identify any traces of
    explosive materials. ETD is used both for primary screening of baggage and
    secondary screening to resolve alarms from EDS machines.

    Interim lobby Solutions employed by TSA to initially deploy explosive
    detection systems

    solutions 	to screen 100 percent of checked baggage for explosives, until
    more permanent solutions could be designed and constructed. Efforts
    involved designing and implementing facility modifications, such as new
    construction, infrastructure reinforcement, and modification of electrical
    systems required to install the EDS and ETD equipment; and developing and
    administering equipment training for baggage screeners.

    In-line system (also known A baggage conveyor system with incorporated EDS
    machines. The EDS's as integrated checked baggage feed and output belts
    are directly connected to an airline's or baggage screening system
    airport's baggage belt system. The checked baggage undergoes automated

    screening in the EDS while on the conveyor belt system that sorts and

    or integrated EDS system)	transports baggage to the proper location for
    its ultimate loading on an aircraft. Baggage is introduced into the EDS
    without manual loading or unloading by TSA screeners.

    Letters of intent (LOI) 	The fiscal year 2003 Consolidated Appropriations
    Resolution, Pub. L. No. 108-7, 117 Stat. 11, authorized an LOI program for
    shared federal government and aviation industry funding to support
    facility modification costs associated with the installation of in-line
    EDS baggage screening systems. The Vision 100-Century of Aviation
    Reauthorization Act, Pub. L. No. 108-176, 117 Stat. 2490 (2003), also
    authorized the use of LOIs for this purpose.

    Multiplex 	EDS machines are networked together so that images from
    multiple EDS machines can be sent to a centralized location where
    screeners can resolve alarms by studying EDS generated images.

    On-screen alarm resolution When an EDS machine alarms, indicating the
    possibility of explosives,

    of EDS alarms 	TSA screeners, by reviewing computer generated images of
    the inside of the bag, attempt to determine whether or not a suspect item
    or items are in fact explosive materials. If the screener is unable to
    make this determination, the bag is diverted from the main conveyor belt
    into an area where it receives a secondary screening by a screener with an
    ETD machine.

                                        Glossary

    Other Transaction Other transaction agreements are administrative vehicles
    used by TSA to

    Agreements 	directly fund airport operators for smaller in-line airport
    modification projects without undertaking a long-term commitment. These
    transactions, which undertake many forms and are generally not required to
    comply with Federal laws and regulations that apply to contracts, grants,
    and/or cooperative agreements, enable the federal government and others
    entering into these agreements to freely negotiate provisions that are
    mutually agreeable.

    Positive passenger An alternative means of screening checked baggage,
    conducted by the

    bag match 	airline, which requires that the passenger be on the same
    aircraft as his or her checked baggage.

    Stand-alone EDS machines 	EDS machines that are placed in terminal
    lobbies, curbside or in baggage makeup areas, not integrated with baggage
    conveyor systems as part of inline systems.

    Throughput Bags screened per hour as a measure of efficiency.

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