Aviation Security: TSA Has Strengthened Efforts to Plan for the  
Optimal Deployment of Checked Baggage Screening Systems, but	 
Funding Uncertainties Remain (29-JUN-06, GAO-06-875T).		 
                                                                 
The Transportation Security Administration (TSA) has deployed two
types of baggage screening equipment: explosive detection systems
(EDS), which use X-rays to scan bags for explosives, and	 
explosive trace detection systems (ETD), in which bags are	 
swabbed to test for chemical traces of explosives. TSA considers 
screening with EDS to be superior to screening with ETD because  
EDS machines process more bags per hour and automatically detect 
explosives without direct human involvement. In March 2005, GAO  
reported that while TSA had made progress in deploying EDS and	 
ETD machines, it had not conducted a systematic, prospective	 
analysis of the optimal deployment of these machines to achieve  
long-term savings and enhanced efficiencies and security. GAO's  
testimony today updates our previous report and discusses TSA's  
(1) deployment of EDS and ETD systems and the identified benefits
of in-line systems, and (2) planning for the optimal deployment  
of checked baggage screening systems and efforts to identify	 
funding and financing options.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-875T					        
    ACCNO:   A56100						        
  TITLE:     Aviation Security: TSA Has Strengthened Efforts to Plan  
for the Optimal Deployment of Checked Baggage Screening Systems, 
but Funding Uncertainties Remain				 
     DATE:   06/29/2006 
  SUBJECT:   Airport security					 
	     Airports						 
	     Antiterrorism					 
	     Aviation security					 
	     Baggage screening					 
	     Checked baggage screening				 
	     Cost analysis					 
	     Explosives 					 
	     Explosives detection systems			 
	     Explosives trace detection 			 
	     Homeland security					 
	     Strategic planning 				 
	     Transportation security				 
	     Cost estimates					 
	     TSA Federal Aviation Security Capital		 
	     Fund						 
                                                                 

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GAO-06-875T

     

     * Summary
     * Background
     * The Deployment of Stand-alone Explosive Detection Systems Le
          * Stand-alone Checked Baggage Screening Systems Created Operat
          * In-Line Systems Have Efficiency, Safety, and Security Benefi
     * TSA Has Begun Systematically Planning for the Optimal Deploy
          * TSA Has Made Progress in Planning for the Optimal Deployment
          * TSA Is Collaborating with Key Stakeholders to Identify Fundi
     * Concluding Observations
     * Contact Information
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Testimony before the Subcommittee on Aviation, Committee on Transportation
and Infrastructure, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EDT

Thursday, June 29, 2006

AVIATION SECURITY

TSA Has Strengthened Efforts to Plan for the Optimal Deployment of Checked
Baggage Screening Systems, but Funding Uncertainties Remain

Statement of Cathleen A. Berrick, Director Homeland Security and Justice
Issues

GAO-06-875T

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Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to participate in today's hearing on the
status of the Transportation Security Administration's (TSA) efforts to
deploy checked baggage screening technology to the nation's commercial
airports, and to discuss our work in this area. As you know, after the
terrorist attacks of September 11, 2001, which highlighted the
vulnerability of U.S. aircraft to acts of terrorism, Congress passed and
the President signed into law, the Aviation and Transportation Security
Act (ATSA), creating the TSA and mandating, among other things, that all
checked baggage at U.S. airports be screened using explosive detection
systems by December 31, 2002.1 To meet this requirement, TSA deployed two
types of equipment to screen checked baggage for explosives: (1)
explosives detection systems (EDS) that use specialized X-rays to detect
characteristics of explosives that may be contained in baggage as it moves
along a conveyor belt and (2) explosive trace detection (ETD) systems,
whereby a Transportation Security Officer (TSO) swabs baggage and then
inserts the swab into the ETD machine, which in turn can detect chemical
residues that may indicate the presence of explosives within a bag.

In November 2002, Congress passed, and the President signed into law, the
Homeland Security Act of 2002, which, in effect, extended the deadline for
screening all checked baggage for explosives until December 31, 2003, for
airports at which TSA was unable to meet the earlier deadline established
by ATSA.2 In March 2005, we reported that largely because of shortages of
equipment and insufficient time to modify airports to accommodate EDS
machines, TSA had been unable, at certain airports, to meet the 2002
congressionally established deadline to screen all checked baggage for
explosives using explosive detection systems.3 We also reported that at
most smaller airports, where EDS machines are not installed, TSA screens
solely with ETD machines. Further we reported that while TSA had made
progress in deploying EDS and ETD machines, it had not conducted a
systematic, prospective analysis of the optimal deployment of these
machines to achieve long-term savings and enhanced efficiencies and
security. Finally, in February 2006, we reported that TSA considers
screening with EDS to be superior to screening with ETD because EDS
machines process more bags per hour and automatically detect explosives
without direct human involvement.4

1Aviation and Transportation Security Act, Pub. L. No. 107-71, 115 Stat.
597 (2001). See 49 U.S.C. S:S: 114(a), 44901(d)(1).

2Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135. See
49 U.S.C. S: 44901(d)(2).

3GAO, Aviation Security: Systematic Planning Needed to Optimize the
Deployment of Checked Baggage Screening Systems, GAO-05-365 (Washington,
D.C.: March 15, 2005).

My testimony today updates the information we reported in March 2005, and
discusses (1) TSA's deployment of EDS and ETD systems and the identified
benefits of installing in-line checked baggage screening systems at
airports and (2) TSA's efforts to plan for and identify funding options
for the optimal deployment of EDS and ETD equipment, including in-line
checked baggage screening systems. My comments are based on issued GAO
reports and testimonies addressing TSA's checked baggage screening program
and our review of TSA documents related to the deployment of checked
baggage screening systems, including TSA's February 2006 strategic
planning framework for its checked baggage screening program.5 We
conducted our work in accordance with generally accepted government
auditing standards. Appendix I contains a list of related GAO products
issued on TSA's checked baggage screening program.

                                    Summary

Since its inception in November 2001 through June 2006, TSA has procured
and installed about 1,600 EDS machines and about 7,200 ETD machines to
screen checked baggage for explosives at over 400 commercial airports.
However, initial deployment of EDS machines in a stand-alone mode-usually
in airport lobbies-and ETD machines resulted in operational inefficiencies
and security risks as compared with using EDS machines integrated in-line
with airport baggage conveyor systems. For example, TSA's use of
stand-alone EDS and ETD machines required a greater number of screeners
and resulted in screening fewer bags for explosives each hour.
Additionally, because in-line EDS checked baggage screening systems can
significantly reduce the need for TSOs to handle baggage, installing them
may also reduce the number of TSO on-the-job injuries. In March 2005, we
reported that at nine airports where TSA has agreed to help fund the
installation of in-line EDS systems, TSA estimated that screening with
in-line EDS machines could save the federal government about $1.3 billion
over 7 years. In February 2006, TSA reported that a savings of
approximately $4.7 billion could be realized over a period of 20 years by
installing optimal checked baggage screening systems, including in-line
EDS machines, at the airports with the highest checked baggage volumes.
However, TSA also reported in February 2006 that many of the initial
in-line EDS systems did not achieve the degree of anticipated savings
initially estimated. TSA has since determined that recent improvements in
the design of the in-line EDS systems and EDS screening technology now
offer the opportunity for higher performance and lower cost screening
systems. Screening with in-line EDS systems could also result in security
benefits by reducing congestion in airport lobbies and reducing the need
for TSA to use alternative screening procedures, such as screening with
explosives detection canines and physical bag searches. TSA's use of these
procedures, which are only to be used when volumes of baggage awaiting
screening pose security vulnerabilities or when TSA officials determine
that there is a security risk associated with large concentrations of
passengers in an area, has involved trade-offs in security effectiveness.6

4 GAO, Aviation Security: TSA Management of Checked Baggage Screening
Procedures Could Be Improved; GAO-06-291SU (Washington, D.C.: February 28,
2006).

5Although we could not independently verify the reliability of all of the
information we obtained, we compared it with other supporting documents,
when available, to determine data consistency and reasonableness.

TSA has begun to systematically plan for the optimal deployment of checked
baggage screening systems, but resources have not been made available to
fund the installation of in-line EDS machines on a large-scale basis. In
February 2006, TSA released its strategic planning framework for checked
baggage screening aimed at increasing security through deploying more EDS
machines, lowering program life-cycle costs, minimizing impacts to TSA and
airport and airline operations, and providing a flexible security
infrastructure. According to TSA, the framework will be used to establish
a comprehensive strategic plan for TSA's checked baggage screening
program. TSA expects to complete the strategic plan in early fall 2006. As
part of this planning effort, TSA identified, among other things, the top
25 airports that should first receive federal funding for projects related
to the installation of in-line EDS systems, and the optimal checked
baggage screening solutions for the 250 airports with the highest checked
baggage volumes. In June 2006, TSA officials reported that if the top 25
airports do not receive in-line checked baggage screening systems, they
will require additional screening equipment to be placed in airport
lobbies and additional TSO staffing in order to remain in compliance with
the mandate for screening all checked baggage using explosive detection
systems. In February 2006, TSA estimated that the total cost of installing
and operating the optimal checked baggage screening systems at the 250
airports is approximately $22.4 billion over 20 years, of which about $6
billion is for installation, life-cycle replacement, existing committed
funding, and equipment maintenance costs. However, insufficient resources
have been made available to fund in-line systems on a large scale basis.
TSA currently uses annual appropriations and a mandatory appropriation
from the Aviation Security Capital Fund to fund the construction of
in-line baggage screening systems.7 Further, in order to leverage federal
and private sector resources, TSA has supported the construction of
in-line systems at 9 airports through letter of intent agreements.8 TSA
reported that as of June 2006, 25 airports had operational in-line EDS
systems and an additional 24 airports had in-line systems under
development.9 In May 2006, TSA reported that under current investment
levels, installation of optimal checked baggage screening systems would
not be completed until approximately 2024. TSA is currently collaborating
with airport operators, airlines, and other key stakeholders to identify
funding and cost-sharing strategies-an effort that TSA expects to complete
by early fall 2006. TSA is also focusing its research and development
efforts on the next generation of EDS technology.

6Certain information we obtained and analyzed regarding explosives
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 testimony.

                                   Background

Prior to the passage of ATSA in November 2001, only limited screening of
checked baggage for explosives occurred. When this screening took place,
air carriers had operational responsibility for conducting the screening,
while the Federal Aviation Administration (FAA) maintained oversight
responsibility. With the passage of ATSA, TSA assumed responsibility for
ensuring that all checked baggage is properly screened for explosives at
airports in the United States where screening is required, and for the
procurement, installation, and maintenance of explosive detection systems
used to screen checked baggage for explosives. Airport operators and air
carriers continued to be responsible for processing and transporting
passenger checked baggage from the check-in counter to the airplane.

7Airports also rely on nonfederal sources of funding to fund in-line EDS
systems.

8A letter of intent, though not a binding commitment of federal funding,
represents an intent by TSA to provide future years funding in support of
a project, contingent upon the availability of appropriated funds.

9The in-line systems were either airportwide (full) or at a particular
terminal or terminals (partial).

Explosive detection systems used to screen checked baggage include EDS and
ETD machines. EDS machines, which cost between about $300,000 and $1.2
million each, use computer-aided tomography X-rays adapted from the
medical field to examine the objects inside baggage to automatically
recognize the characteristic signatures of threat explosives. TSA has
certified, procured, and deployed EDS machines made by three
manufacturers. ETD machines, which cost approximately $40,000 to $50,000
each, work by detecting vapors and residues of explosives. Because human
operators collect samples by rubbing bags with swabs, which are then
chemically analyzed in the ETD machines to identify any traces of
explosive materials, the use of ETD is more labor-intensive and subject to
more human error than the automated process of using EDS machines. ETD is
used for both primary, or the initial, screening of checked baggage, and
secondary screening, which resolves alarms from EDS machines that indicate
the possible presence of explosives inside a bag.

As we reported in March 2005, to initially deploy EDS and ETD equipment to
screen 100 percent of checked baggage for explosives, TSA implemented
interim airport lobby solutions and in-line EDS baggage screening
systems.10 The interim lobby solutions involved placing stand-alone EDS
and ETD machines in the nation's airports, most often in airport lobbies
or baggage makeup areas where baggage is sorted for loading onto aircraft.
For EDS in a stand-alone mode (not integrated with an airport's or air
carrier's baggage conveyor system) and ETD, TSA TSOs are responsible for
obtaining the passengers' checked baggage from either the passenger or the
air carrier, lifting the bags onto and off of EDS machines or ETD tables,
using TSA protocols to appropriately screen the bags, and returning the
cleared bags to the air carriers to be loaded onto departing aircraft. In
addition to installing stand-alone EDS and ETD machines in airport lobbies
and baggage makeup areas, TSA collaborated with some airport operators and
air carriers to install integrated in-line EDS baggage screening systems
within their baggage conveyor systems.

In March 2005, we reported that TSA used most of its fiscal year 2002
through 2004 checked baggage screening program funding to design, develop,
and deploy interim lobby screening solutions rather than install more
permanent in-line EDS baggage screening systems. We also reported that
during our site visits to 22 category X, I, and II airports,11 we observed
that in most cases, TSA used stand-alone EDS machines and ETD machines as
the primary method for screening checked baggage.12 Generally, this
equipment was located in airport lobbies and in baggage makeup areas. In
addition, in our survey of 155 federal security directors,13 we asked the
directors to estimate, for the 263 airports included in the survey, the
approximate percentage of checked baggage that was screened on or around
February 29, 2004, using EDS, ETD, or other approved alternatives for
screening baggage such as screening with explosives detection canines, and
physical bag searches. As shown in table 1, the directors reported that
for 130 large to medium-sized airports in our survey (21, 60, and 49
category X, I, and II airports, respectively), most of the checked baggage
was screened using stand-alone EDS or ETD machines. On average, the
percentage of checked baggage reported as screened using EDS machines at
airports with partial or full in-line EDS capability ranged from 4 percent
for category II airports to 11 percent for category X airports. In
addition, the directors reported that ETD machines were used to screen
checked baggage 93 to 99 percent of the time at category III and IV
airports, respectively.

10 GAO-05- 365.

11TSA 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.

12The 22 airports included 12 category X, 9 category I, and 1 category II
airports. We conducted our site visits between September 2003 and March
2004.

13 The federal security directors are the ranking TSA authorities
responsible for the leadership and coordination of TSA security activities
at the nation's commercial airports.

Table 1: 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    25 
EDS (at airports with partial or airportwide      11   8   4   0   0     3 
in-line EDS capability)                                              
Totala EDS                                        70  67  32   6   0    28 
ETD                                               18  33  66  93  99    69 
Totala EDS and ETD                                88  99  98  99  99    98 
Other approved method                             12   1   2   2   1     2 
Totala                                           100 100 100 100 100   100 

Source: analysis of GAO federal security director survey data.

aPercentages in totals may not add to 100 percent because of rounding.

  The Deployment of Stand-alone Explosive Detection Systems Led to Operational
  Inefficiencies and Security Risks that In-Line Systems Could Address at Some
                                    Airports

Stand-alone Checked Baggage Screening Systems Created Operational Inefficiencies
and Security Risks

Since its inception in November 2001 through June 22, 2006, TSA has
procured and installed about 1,600 EDS machines and about 7,200 ETD
machines to screen checked baggage for explosives at over 400 commercial
airports. For the most part, TSA deployed EDS machines at larger airports
and ETD machines at smaller airports, resulting in primary screening being
conducted solely with ETD machines at over 300 airports. TSA installed ETD
machines instead of EDS for primary screening at these airports because of
the configuration of screening stations, the costs associated with
procuring EDS, and the low passenger volume at smaller airports. Table 2
summarizes the location of EDS and ETD equipment at the nation's airports
by airport category as of June 22, 2006.

Table 2: EDS and ETD Machines Deployed at U.S. Airports as of June 22,
2006

                                  Number
Airport category Airports EDS machines ETD machines 
X                      27        1,019        3,439 
I                      55          468        1,969 
II                     73          104          889 
III                   116           29          607 
IV                    176            7          432 
Total                 447        1,627        7,336 

Source: GAO analysis of TSA data.

Stand-alone EDS and ETD machines are both labor- and time-intensive to
operate since each bag must be physically carried to an EDS or ETD machine
for screening and then moved back to the baggage conveyor system prior to
being loaded onto an aircraft. With an in-line EDS system, checked baggage
is screened within an airport's baggage conveyor system, eliminating the
need for a TSO or other personnel to physically transport the baggage from
the check-in point to the EDS machine for screening and then to the
airport baggage conveyor system. Further, according to TSA officials, ETD
machines and stand-alone EDS machines are less efficient in the number of
checked bags that can be screened per hour per machine than are EDS
machines that are integrated in-line with the airport baggage conveyor
systems. According to TSA estimates, the number of checked bags screened
per hour can more than double when EDS machines are placed in-line versus
being used in a stand-alone mode. Table 3 identifies TSA's estimates for
bags screened per hour by EDS machines in stand-alone and in-line
configurations and ETD machines.

Table 3: Estimated 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     500 
L3 6000                               140     500 
Reveal CT-80                           80      NA 
ETD machines-stand-alone only          36      NA 

Source: TSA.

NA: Not applicable.

In-Line Systems Have Efficiency, Safety, and Security Benefits

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

In order to achieve the higher throughput rates and reduce the number of
TSOs needed to operate in-line baggage screening systems, TSA (1) uses a
screening procedure known as on-screen alarm resolution and (2) networks
multiple in-line EDS machines together, referred to as multiplexing, so
that the computer-generated images of bags from these machines are sent to
a central location where TSOs can monitor the images of suspect bags
centrally from several machines using the on-screen alarm resolution
procedure.14 A TSA official estimated that the on-screen alarm resolution
procedure with in-line EDS baggage screening systems would enable TSA to
reduce the number of bags requiring the more labor-intensive secondary
screening using ETD machines by 40 to 60 percent. In estimating the
potential savings in staffing requirements, TSA officials stated that they
expect to achieve a 20 to 25 percent savings because of reductions in the
number of staff needed to screen bags using ETD to resolve alarms from
in-line EDS machines. According to TSA officials, as of June 22, 2006, all
airports with EDS equipment use on-screen alarm resolution protocols and
16 airports had networked in-line systems.

In May 2004, TSA conducted a limited, retrospective cost-benefit analysis
at the nine airports that signed letter of intent (LOI) agreements and
found that significant savings and other benefits could be achieved
through the installation of these systems.15 This analysis was conducted
to estimate potential future cost savings and other benefits that could be
achieved from installing in-line systems instead of using stand-alone EDS
systems. We reported in March 2005 that, according to TSA's analysis,
in-line EDS would reduce by 78 percent the number of TSA TSOs and
supervisors required to screen checked baggage at these nine airports,
from 6,645 to 1,477 TSOs and supervisors. The actual number of TSOs and
supervisor positions that could be eliminated would be dependent on the
individual design and operating conditions at each airport. TSA estimated
that in-line baggage screening systems at these airports would save the
federal government about $1.3 billion16 compared with stand-alone EDS
systems and that TSA would recover its initial investment in a little over
1 year.17 According to TSA's analysis of the nine LOI airports, in-line
cost savings critically depend on how much an airport's facilities have to
be modified to accommodate the in-line configuration. Savings also depend
on TSA's costs to buy, install, and network the EDS machines; subsequent
maintenance costs; and the number of screeners needed to operate the
machines in-line instead of using stand-alone EDS systems. In its
analysis, TSA also found that a key factor driving many of these costs is
throughput-how many bags an in-line EDS system can screen per hour
compared with the rate for a stand-alone system. TSA's analysis also
provided data to estimate the cost savings resulting from installing
in-line EDS checked baggage screening systems for each airport over the
7-year period. According to TSA's data, federal cost savings varied from
about $50 million to over $250 million at eight of the nine airports,
while at one airport, there was an estimated $90 million loss.18

14Under the on-screen alarm resolution procedure, when an EDS machine sets
off an alarm, indicating the possibility that explosive material may be
contained in the bag, TSOs 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 TSO, by viewing these images, is able to
determine that the suspect item or items identified by the EDS machine are
in fact harmless, the TSO is allowed to clear the bag, and it is sent to
the airline baggage makeup area for loading onto the aircraft. If the TSO
is not able to determine 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 TSO. TSA also uses this on-screen alarm resolution procedure
with stand-alone EDS machines.

15We reviewed the 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 of our March 2005 report (
GAO-05-365 ), 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. On
the basis of 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 testimony.

In February 2006, TSA reported that a saving of approximately $4.7 billion
could be realized over a period of 20 years by installing optimal checked
baggage screening systems at the 250 airports with the highest checked
baggage volumes. This savings represents the difference between TSA's
compliance only strategy-which assumes minimum capital expenditures and no
additional investment in in-line systems in order to comply with the
mandate to screen all checked baggage using explosive detection
systems-and its preferred strategy, which is based on using optimal
checked baggage screening systems, including in-line EDS systems, for the
250 airports. TSA estimated that the compliance only strategy would cost
$27.05 billion and the preferred strategy would cost $22.39 billion over
20 years, creating a saving of $4.66 billion.19

16This figure refers to the net present value saved over 7 years if
received up front.

17For 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.

18The relatively large costs for up-front in-line EDS at one of the nine
LOI airports were not offset by the modest amount of estimated operation
and maintenance cost savings; therefore, the in-line EDS system may be
more costly than EDS stand-alone. By contrast, at another one of the nine
LOI airports, the up-front costs of in-line EDS are lower than for
stand-alone EDS, and there is a substantial amount of estimated operation
and maintenance cost savings. Therefore, the in-line EDS system at this
latter airport may be less costly than stand-alone EDS.

TSA reported that many of the initial in-line systems have produced a
level of TSO labor savings insufficient to offset up-front capital costs
of constructing the systems. According to TSA, the facility and baggage
handling system modification costs have been higher than expected, with
the nine airports with LOIs having incurred or projecting to incur up to
$6 million or more in infrastructure costs for every EDS machine required.
TSA stated that the keys to reducing future costs are establishing
guidelines outlining best practices and a set of efficient design choices,
and using newer EDS technology that best matches each optimally scaled
design solution. In February 2006, TSA reported that recent improvements
in the design of the in-line EDS checked baggage screening systems and the
EDS screening technology now offer the opportunity for higher-performance
and lower-cost screening systems.

A safety benefit of in-line EDS systems is the potential to reduce on-the
job injuries. TSA reported that because procedures for using stand-alone
EDS and ETD machines require TSOs to lift heavy baggage onto and off of
the machines, the interim lobby screening solutions used by TSA led to
significant numbers of on-the-job injuries.20 Additionally, in responding
to our survey about 263 airports, numerous federal security directors
reported that on-the-job injuries related to lifting heavy baggage onto or
off the EDS and ETD machines were a significant concern at the airports
for which they were responsible. Specifically, these federal security
directors reported that on-the-job injuries caused by lifting heavy bags
onto and off of EDS machines were a significant concern at 65 airports,
and were a significant concern with the use of ETD machines at 110
airports. To reduce on-the-job injuries, TSA has provided training to TSOs
on proper lifting procedures. However, according to TSA officials, in-line
EDS screening systems would significantly reduce the need for TSOs to
handle baggage, thus further reducing the number of on-the-job injuries
being experienced by TSA TSOs.

19These estimates are in present value terms. TSA estimated that it would
cost about $1.7 billion for the optimal systems at the 250 airports, and
TSA would achieve savings of about $6.2 billion in TSO staff savings.
Additionally, TSA's estimate identified that equipment maintenance and EDS
equipment life cycle replacement costs would be lower (about $150 million)
under the preferred strategy.

20 The Occupational Safety and Health Administration has projected based
on the first two quarters of fiscal year 2006 that more than 16 percent of
TSA employees will report a job related injury or illness by the end of
the fiscal year, the highest percentage in the federal government.

Use of in-line EDS systems can also provide security benefits at airports
where they are installed by reducing congestion in airport lobbies and
reducing the need for TSA to use alternative screening procedures at
airports. During our site visits to 22 large and medium-sized airports,
several TSA, airport, and airline officials expressed concern regarding
the security risks caused by overcrowding due to ETD and stand-alone EDS
machines located in airport lobbies.21 The location of the equipment
resulted in less space available to accommodate passenger movement and
caused congestion due to passengers waiting in lines in public areas to
have their checked baggage screened. TSA headquarters officials reported
that large groups of people congregating in crowded airport lobbies
increases security risks by creating a potential target for terrorists.
TSA also reported that airports favor replacing stand-alone EDS machines
with in-line systems to mitigate the negative effects of increased
congestion and passenger processing times. TSA further reported that
in-line systems are more secure than stand-alone EDS machines because the
baggage screening is performed away from passengers who otherwise could
tamper with the baggage.

Another potential security benefit of in-line EDS systems is the reduction
of the need for TSA to use alternative screening procedures. In addition
to screening with standard procedures using EDS and ETD, which TSA had
determined to provide the most effective detection of explosives, TSA also
allows alternative screening procedures to be used when volumes of baggage
awaiting screening pose security vulnerabilities or when TSA officials
determine that there is a security risk associated with large
concentrations of passengers in an area. These alternative screening
procedures include the use of EDS and ETD machines in nonstandard ways,22
and also include three procedures that do not use EDS or ETD-screening
with explosives detection canines, physical bag searches, and matching
baggage to passenger manifests to confirm that the passenger and his or
her baggage are on the same plane.23 TSA's use of alternative screening
procedures has involved trade-offs in security effectiveness. However, the
extent of the security trade-offs is not fully known because TSA has not
tested the effectiveness of alternative screening procedures in an
operational environment.

21 We conducted our site visits between September 2003 and March 2004.

22The nonstandard ways that the machines are used is sensitive security
information.

As part of our ongoing work on TSA's use of alternative screening
procedures to screen checked baggage, we found that the superior
efficiency of screening with in-line EDS compared to screening with
stand-alone EDS may have been a factor in reducing the need to use
alternative screening procedures at airports where in-line systems were
installed. After in-line EDS systems are installed and staffing reductions
are achieved, redistributing the screening positions to other airports
with staffing shortages may reduce airports' need to use alternative
screening procedures. In addition to deploying more efficient checked
baggage screening systems, TSA is pursuing other mitigating actions to
reduce the need to use alternative screening procedures. These factors
include strengthening its coordination with groups such as tour operators,
deploying "optimization teams" to airports that were frequently using
alternative screening procedures to determine why the procedures were
being used so often and to suggest remedies; and deploying additional EDS
machines.

Although TSA officials have estimated that a low percentage of checked
baggage is currently screened using alternative screening procedures, in
February 2006 TSA reported that the use of alternative screening
procedures will increase at some airports because of rising passenger
traffic. TSA has projected that the number of originating domestic and
international passengers will rise by about 127 million passengers over
current levels by 2010. If TSA's current estimate of an average of 0.76
checked bags per passenger were to remain constant through 2010, TSA would
be screening about 96 million more bags that it now screens. This could
increase airports' need to rely on alternative screening procedures in the
future in the absence of additional or more efficient EDS machines,
including in-line EDS systems.

23It is TSA's policy to use standard EDS and ETD screening procedures
whenever possible because of legislative requirements to do so and because
TSA has concluded that these procedures provide the most effective
detection of explosives at a checked baggage screening station.

  TSA Has Begun Systematically Planning for the Optimal Deployment of Checked
Baggage Screening Systems, but It Continues to Face Funding Uncertainties

TSA Has Made Progress in Planning for the Optimal Deployment of Checked Baggage
Screening Systems

TSA has made progress in its efforts to systematically plan for the
optimal deployment of checked baggage screening systems, but resources
have not been made available to fund these systems on a large-scale basis.
In March 2005, we reported that while TSA has made progress in deploying
EDS and ETD machines, it had not conducted a systematic, prospective
analysis of the optimal deployment of these machines to achieve long-term
savings and enhanced efficiencies and security.24 We recommended that TSA
assess the feasibility, expected benefits, and cost to replace ETD
machines with stand-alone EDS machines for the primary screening of
checked baggage at those airports where in-line EDS systems would not be
either economically justified or justified for other reasons. In February
2006, in response to our recommendation and a legislative requirement to
submit a schedule for expediting the installation and use of in-line
systems and replacement of ETD equipment with EDS machines, 25 TSA
completed its strategic planning framework for its checked baggage
screening program. This framework introduces a strategy intended to
increase security through deploying in-line and stand-alone EDS to as many
airports as practicable, lower life-cycle costs for the program, minimize
impacts to TSA and airport/airline operations, and provide a flexible
security infrastructure for accommodating growing airline traffic and
potential new threats. 26 The framework is an initial step in addressing
the following areas:

24 GAO-05-365 .

25 Intelligence Reform and Terrorism Prevention Act of 2004, Pub. L. No.
108-458, S: 4019(a)-(c), 118 Stat. 3638, 3721-22.

           o  Optimized checked baggage screening solutions-finding the ideal
           mix of higher-performance and lower-cost alternative screening
           solutions for the 250 airports with the highest checked baggage
           volumes;

           o  Funding prioritization schedule by airport-identifying the top
           25 airports that should first receive federal funding for projects
           related to the installation of explosive detection systems based
           on quantitative modeling of security, economic, and other factors;

           o  Deployment strategy-developing a plan for the acquisition of
           next-generation EDS systems, the redeployment of existing EDS
           assets, and investment in life-cycle extension programs;

           o  EDS Life-Cycle Management Plan-structuring guidelines for EDS
           research and development investment, procurement specifications
           for next-generation EDS systems, and the redeployment of existing
           EDS assets and investment in life-cycle extension programs that
           minimize the cost of ownership of the EDS systems; and
           o  Stakeholder collaboration plan-working with airport operators
           and other key stakeholders to develop airport-specific screening
           solutions, refine the nationwide EDS deployment strategy, and
           investigate alternative funding programs that may allow for
           innovative as well as non-federal sources of funding or financing,
           including formulas for sharing costs among different government
           entities and the private sector.

TSA said it is continuing its efforts in these areas as it works toward
completing a comprehensive strategic plan for its checked baggage
screening program. TSA expects to complete the strategic plan in early
fall 2006.

While TSA has begun to conduct a systematic prospective analysis to
determine at which airports it could achieve long-term savings and
enhanced efficiencies and security by installing in-line systems or by
making greater use of stand-alone EDS machines in lieu of ETD machines,
resources have not been made available on a large-scale basis to fund
these systems. In-line baggage screening systems are capital-intensive
because they often require significant airport modifications, including
terminal reconfigurations, new conveyor belt systems, and electrical
upgrades. According to TSA, lessons learned from the first airports where
in-line systems were built identified that facilities and infrastructure
modifications accounted for up to 50 percent of the total cost of in-line
screening systems, and modifications and upgrades to the baggage handing
system typically accounted for another 25 percent of the total cost. In
February 2006, TSA estimated that the total cost of installing and
operating the optimal checked baggage screening systems, including in-line
EDS machines, at the 250 airports is approximately $22.4 billion over 20
years, of which about $6 billion is for installation, life-cycle
replacement, existing committed funding, and equipment maintenance
costs.27 According to TSA officials, the estimated costs to install
in-line baggage screening systems would vary greatly from airport to
airport depending on the size of the airport and the extent of airport
modifications that would be required to install the system.28 In March
2005 we reported that while we did not independently verify the estimates,
officials from the Airports Council International-North America and
American Association of Airport Executives estimated that project costs
for in-line systems could range from about $2 million for a category III
airport to $250 million for a category X airport.29

26TSA has determined that the details of its analysis of the optimal
checked baggage screening solutions are sensitive security information.

TSA's February 2006 strategic planning framework identified that because
many of the EDS and ETD machines were deployed in 2002 and 2003 to comply
with ATSA and subsequent deadlines for achieving the 100 percent checked
baggage screening mandate, a large share of the EDS machines will incur
life-cycle replacement obligations during the 2013 to 2014 time period.
Although TSA has not completed its efforts to develop a life-cycle cost
model,30 TSA's February 2006 strategic planning framework identified that
a substantial funding requirement for EDS equipment life-cycle replacement
will compete with funding requirements for new in-line systems in
approximately 8 to 9 years.31 Further, in June 2006, as discussed in the
framework, TSA officials reported that if the top 25 airports do not
receive in-line checked baggage screening systems, they will require
additional screening equipment to be placed in airport lobbies and
additional TSO staffing in order to remain in compliance with the mandate
for screening all checked baggage using explosive detection systems.

27Operating costs include costs related to staffing, training, and
research and development.

28According to TSA, a fully automated in-line screening system is not
appropriate for every airport, even when security and operational benefits
are considered in the analysis. Therefore, for many smaller airports or at
smaller terminals or airline operational areas at larger airports, the
identification of other alternative in-line solutions, such as partially
automated ones, will accomplish the same goal of moving checked baggage
screening out of terminal lobbies. In February 2006, TSA reported that
most of these solutions also offer significant TSO savings over comparable
airport lobby systems.

29Joint Statement of David Z. Plavin, President, Airports Council
International-North America (ACI-NA) and Todd Hauptli, Senior 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.

TSA Is Collaborating with Key Stakeholders to Identify Funding and Financing
Strategies for Installing Optimal Baggage Screening Systems

In March 2005, we reported that TSA and airport operators were relying on
several sources of funding to construct in-line checked baggage screening
systems. One source of funding airport operators used was FAA's Airport
Improvement Program, which traditionally funds grants to maintain safe and
efficient airports. In fiscal years 2002 and 2003, 28 of the 53 airport
officials we interviewed reported that their airports either had
constructed or were planning to construct in-line systems relying on the
Airport Improvement Program as their sole source of federal funding. With
Airport Improvement Program funds no longer available after fiscal year
2003 for this purpose, airports turned to other sources of federal funding
to construct in-line systems.32 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.33
Between June 2003 and February 2004, TSA issued eight LOIs to reimburse
nine airports for the installation of in-line EDS baggage screening
systems for a total cost of $957.1 million to the federal government over
4 years. That cost represents 75 percent of the facility modification
costs, with the airport funding the remaining costs.34 TSA also uses other
transaction agreements as an administrative vehicle to directly fund, with
no long-term commitments, airport operators for smaller in-line airport
modification projects.35 Under these agreements, as implemented by TSA,
the airport operator also provides a portion of the funding required for
the modification. As of June 2006, TSA reported that about $140 million
had been obligated for other transaction agreements for in-line EDS
systems. To fund the procurement and installation of explosive detection
systems in-line, TSA also uses annual appropriations and the $250 million
mandatory appropriation of the Aviation Security Capital Fund.36 For
example, in fiscal years 2005 and 2006, TSA received appropriations of
$175 million and $180 million, respectively, for the procurement of
explosive detection systems and received $45 million each year for the
installation of explosive detection systems. For fiscal year 2007, DHS
requested $91 million for the procurement of explosive detection systems
and $94 million for the installation of such systems. Of the $250 million
available through the Aviation Security Capital Fund, $125 million is
designated as priority funding for LOIs. The remaining $125 million is to
be allocated in accordance with a formula based upon the size of the
airport and risks to aviation security.37 Congress also authorized an
additional appropriation of $400 million per year through fiscal year 2007
for airport security improvement projects that relate to the use of
in-line EDS systems. However, appropriations have not been made under this
authorization.38

30Life-cycle costs provide an estimate of how long the machines will be in
operation and the estimated maintenance costs over this period.

31According to TSA, EDS machines are estimated to have a useful life of 7
years, extended to 11 years with refurbishment.

32 The Consolidated Appropriations Act, 2004, prohibited the use of
Airport Improvement Program funds for activities related to the
installation of in-line explosive detection systems. See Pub. L. No.
108-199, 118 Stat. 3, 283. The Consolidated Appropriations Act, 2005, and
the Department of Transportation Appropriations Act, 2006, continued this
prohibition. See Pub. L. No. 108-447, 118 Stat. 2809, 3203 (2004); Pub. L.
No. 109-115, 119 Stat. 2396, 2400-01 (2005).

33Consolidated Appropriations Resolution, 2003, Pub. L. No. 108-7, S: 367,
117 Stat. 423-24.

34Under an LOI, the airport operator is responsible for providing the
total funding needed to complete the project with an expectation that the
federal government will reimburse the airport for a set percentage of the
costs over an agreed upon period of time, contingent upon the availability
of federal funds. Under all LOIs issued by TSA, the federal government
bears 75 percent of the cost, while the airport operators bear 25 percent
of the costs. Although the Vision 100-Century of Aviation Reauthorization
Act (Vision 100), Pub. L. No. 108-176, S: 605, 117 Stat. 2490, 2566-68
(2003) revised this cost share to reflect a 90 percent - 10 percent
difference, subsequent appropriations acts have maintained the original 75
- 25 cost share for medium and large hub airports. See 49 U.S.C. S: 44923
but see, e.g., Pub. L. No. 109-90, 119 Stat. 2070 (2005).

35Other 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.

36Vision 100 established the Aviation Security Capital Fund, which
authorized a mandatory appropriation of $250 million for each of fiscal
years 2004 through 2007 in support of airport improvement projects related
to the installation of explosive detection systems. See 49 U.S.C. S:
44923. In the fiscal year 2004 DHS Appropriations Act, however, Congress
appropriated $250 million for the physical modification of airports to
install checked baggage explosive detection systems but did so separate
from the capital fund. A provision of that act precluded the use of funds
to establish the capital fund in fiscal year 2004. Congress must
reauthorize the capital fund for it to continue beyond fiscal year 2007.

In July 2004, as part of this subcommittee's hearing on TSA's progress in
deploying in-line systems, TSA reported that there were nine in-line
systems in place and an additional nine were due to be completed by 2006.
In March 2005, we reported that 12 airports had operational in-line
systems airportwide or at a particular terminal or terminals. As of June
2006, 25 airports had operational in-line EDS systems and an additional 24
airports had in-line systems under development. Additionally, TSA reported
that it has received requests from an additional 50 airports either
seeking funding to construct in-line EDS systems or reimbursement for
already completed in-line systems. Table 4 provides information on the
status of in-line system deployment as of February 2006.

Table 4: Airports with In-line Explosives Detection Systems That Are
Operational or Under Construction by Airport Category as of June 2006

                                Airport category
Status of in-line EDS system   X  I II III IV 
Operational                    8 11  4   2  0 
Under Construction            12 12  0   0  0 

Source: GAO analysis of TSA data.

In a May 2006 meeting of the Aviation Security Advisory Committee, TSA
reported that under current investment levels, installation of optimal
checked baggage screening systems would not be completed until
approximately 2024.39 TSA further reported that unless investment is
accelerated, substantial investment will be needed to replace EDS and ETD
machines at the end of their life cycles and to refurbish suboptimal
systems. TSA is currently collaborating with airport operators, airlines,
and other key stakeholders to develop a cost-sharing study that identifies
funding and cost-sharing strategies for the installation of in-line
baggage screening systems. TSA plans to use the results of this study to
finalize its checked baggage screening program strategic plan, which TSA
expects to complete by early fall 2006.40 In its May 2006 report to the
Aviation Security Advisory Committee, TSA outlined financing options
including leasing equipment, sharing savings from in-line systems with
airports, and enhancing eligibility for the Passenger Facility Charge,41
LOIs, and tax credit bonds.42 In this meeting, TSA reported that tax
credit bonds had the most potential support among stakeholders.

37 The pending fiscal year DHS Appropriations Act, as passed by the House
of Representatives, proposes to eliminate the funding formula as applied
to the Aviation Security Capital Fund and other appropriations authorized
under 49 U.S.C. S: 44923. See H.R. 5441, 109th Cong. (2006).

38These additional authorized appropriations are to follow the same 50
percent split as mandated under the Aviation Security Capital Fund. See 49
U.S.C. S: 44923(i).

As TSA moves forward with planning for the deployment of checked baggage
screening systems and identifying funding and financing options, it is
also important for TSA to engage in planning to focus its research and
development efforts. To enhance checked baggage screening, TSA is
developing and testing next-generation EDS machines. According to TSA,
manufacturers have only marginally improved false alarm rates and
throughput capabilities of the equipment since the large-scale deployment
of EDS machines in 2002 and 2003. The maximum number of bags an EDS
machine can screen per hour is 500, which can be achieved only when the
machines are integrated in-line with the baggage conveyor system. New EDS
equipment was certified in 2005, including a smaller EDS machine designed
to replace ETD machines used for primary screening and an upgraded large
EDS machine. In September 2005, TSA entered into a $24.8 million contract
to purchase 72 smaller EDS machines to be installed at 24 airports. The
President's fiscal year 2007 budget request for TSA includes funding to
support research and development for in-line EDS machines that can operate
at up to 900 bags per hour and employ new threat detection concepts. In
its February 2006 strategic framework for checked baggage screening, TSA
identified the development of high-throughput in-line EDS machines and
lowering of EDS false alarm rates as key areas for improving investment
management of next-generation technologies. TSA reported that these
performance gains would be feasible and available in the near term. TSA
also reported that given that the planning, design, and construction cycle
for an in-line system can be 2 to 3 years, and these high-throughput and
lower false alarm rate technologies are anticipated to be deployable by
about 2008, the agency is recommending that all in-line planning and
design efforts consider these new technologies.

39The Aviation Security Advisory Committee's mission is to examine areas
of civil aviation security as tasked by TSA with the aim of developing
recommendations for the improvement of civil aviation security methods,
equipment, and procedures. Its membership includes government officials
and private sector organizations representing key constituencies affected
by aviation security requirements.

40Section 4019(d) of the Intelligence Reform and Terrorism Prevention Act
of 2004 requires the Secretary of Homeland Security to complete a
cost-sharing study in collaboration with industry stakeholders to review
the benefits and cost of in-line checked baggage screening systems,
innovative financing approaches, formulas for cost sharing among different
government entities and the private sector, and potential cost-saving
approaches.

41The Passenger Facility Charge (PFC) Program allows the collection of PFC
fees up to $4.50 for every enplaned passenger at commercial airports
controlled by public agencies. Airports use these fees to fund
FAA-approved projects that enhance safety, security, or capacity; reduce
noise; or increase air carrier competition.

42 Tax credit bonds are bonds where bondholders receive credit against
their federal income tax liabilities instead of cash interest.

We reported in September 2004 that the Department of Homeland Security
(DHS) and TSA have made some progress in managing their transportation
security research and development programs according to applicable laws
and R&D best practices.43 However, we found that their efforts were
incomplete in several areas, including preparing strategic plans for R&D
efforts that contain measurable objectives, preparing and using risk
assessments to select and prioritize R&D projects, and coordinating with
stakeholders-a condition that increases the risk that their R&D resources
will not be effectively leveraged. We also found that TSA and DHS delayed
several key R&D projects and lacked both estimated deployment dates for
the vast majority of their R&D projects and adequate databases to
effectively manage their R&D portfolios. We recommended that DHS and TSA
(1) conduct some basic research in the transportation security area; (2)
complete their strategic planning and risk assessment efforts; (3) develop
a management information system that will provide accurate, complete,
current, and readily accessible project information for monitoring and
managing their R&D portfolios; and (4) develop a process with the
Department of Transportation to coordinate transportation security R&D
efforts and share this information with transportation stakeholders. In
June 2006, DHS reported several actions that it had taken to address these
recommendations, including coordinating with other federal agencies to
leverage their basic research, issuing a Science and Technology
Directorate Strategic Plan, implementing a program and project management
system to monitor program and project funding and milestones, and
establishing a memorandum of agreement that resulted in the formation of a
Mass Transit Technology Working Group to coordinate efforts across
agencies and to optimize resources. DHS also reported that basic research
has been limited because the majority of R&D funds have been appropriated
for countermeasures for specific threat areas. We will examine these
efforts to implement our recommendations as part of our ongoing review of
DHS's and TSA's airport checkpoint R&D program.

43The DHS Science and Technology Directorate took over R&D from TSA in
October 2005.

                            Concluding Observations

TSA has made progress in installing EDS and ETD systems at the nation's
airports-mainly as part of interim lobby screening solutions-to provide
the capability to screen all checked baggage for explosives as mandated by
Congress. With the objective of initially fielding this equipment largely
accomplished, TSA has shifted its focus from equipping airports with
interim screening solutions to systematically planning for the more
optimal deployment of checked baggage screening systems.

TSA's February 2006 strategic planning framework for the checked baggage
screening program is a positive step forward in systematically planning
for the more optimal deployment of checked baggage screening systems. The
completion of a strategic plan for checked baggage screening by early fall
2006 should help TSA more fully determine whether expected reduced
staffing costs, higher baggage throughput, and increased safety and
security will in fact justify the significant up-front investment required
to install in-line baggage screening systems. TSA's retrospective analysis
on nine airports installing in-line baggage screening systems with LOI
funds, while limited, estimated that cost savings could be achieved
through reduced staffing requirements for TSOs and increased baggage
throughput. Specifically, the analysis identified that using in-line
systems instead of stand-alone systems at these nine airports could save
the federal government about $1.3 billion over 7 years and that TSA's
initial investment would be recovered in a little over 1 year. TSA also
recently estimated that a saving of approximately $4.7 billion could be
realized over a period of 20 years by installing optimal checked baggage
screening systems at the 250 airports with the highest checked baggage
volumes. However, TSA's strategic planning framework identified that many
of the initial in-line systems have produced a level of savings
insufficient to offset up-front capital costs of acquiring and installing
the systems. Nevertheless, TSA reported that recent improvements in the
design of the systems and EDS screening technology now offer the
opportunity for higher performance and lower-cost screening systems.

In-line EDS baggage screening systems have efficiency, safety, and
security benefits that have been reported on extensively by Congress, GAO,
TSA, and aviation industry representatives. As part of its strategic
planning efforts, TSA has identified the top 25 airports that should first
receive federal funding for projects related to the installation of
explosive detection systems and also identified the ideal mix of
higher-performance and lower-cost alternative screening solutions for the
250 airports with the highest checked baggage volumes. With this initial
planning now completed, a critical question that remains is how to fund
and finance these screening systems and who should pay for them. TSA is
currently working with airport and air carrier stakeholders to identify
funding and financing options, an effort that is due to be completed by
early fall 2006.

As TSA works toward identifying funding and financing options, it will
also be important for the agency to sustain its R&D efforts and further
strengthen its R&D management and planning efforts. Researching and
developing technologies, such as higher-throughput EDS machines with lower
false alarm rates, should help TSA to improve the security and efficiency
of checked baggage screening.

Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions that you or other members of the subcommittee have.

                              Contact Information

For further information on this testimony, please contact Cathleen A.
Berrick at (202) 512-3404 or [email protected] . Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this statement.

In addition to the contact named above, Kevin Copping, Katherine Davis,
Michele Fejfar, Thomas Lombardi, Allison Sands, and Maria Strudwick made
key contributions to this testimony.

Related GAO Products

Aviation Security: Enhancements Made in Passenger and Checked Baggage
Screening, but Challenges Remain. GAO-06-371T . Washington, D.C.: April 4,
2006.

Aviation Security: Progress Made to Set Up Program Using Private-Sector
Airport Screeners, but More Work Remains. GAO-06-166 . Washington, D.C.:
March 31, 2006.

Aviation Security: TSA Management of Checked Baggage Screening Procedures
Could Be Improved. GAO-06-291SU . Washington, D.C.: February 28, 2006.

Transportation Security Administration: More Clarity on the Authority of
Federal Security Directors Is Needed. GAO-05-935 . Washington, D.C.:
September 23, 2005.

Aviation Security: Better Planning Needed to Optimize Deployment of
Checked Baggage Screening Systems. GAO-05-896T . Washington, D.C.: July
13, 2005.

Aviation Security: Screener Training and Performance Measurement
Strengthened, but More Work Remains. GAO-05-457 . Washington, D.C.: May 2,
2005.

Aviation Security: Systematic Planning Needed to Optimize the Deployment
of Checked Baggage Screening Systems. GAO-05-365 . Washington, D.C.: March
15, 2005.

Transportation Security: Systematic Planning Needed to Optimize Resources.
GAO-05-357T . Washington, D.C.: February 15, 2005.

Aviation Security: Preliminary Observations on TSA's Progress to Allow
Airports to Use Private Passenger and Baggage Screening Services.
GAO-05-126 . Washington, D.C.: November 19, 2004.

Aviation Security: Private Screening Contractors Have Little Flexibility
to Implement Innovative Approaches. GAO-04-505T . Washington, D.C.: April
22, 2004.

Aviation Security: Improvement Still Needed in Federal Aviation Security
Efforts. GAO-04-592T . Washington, D.C.: March 30, 2004.

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

Aviation Security: Efforts to Measure Effectiveness and Strengthen
Security Programs. GAO-04-285T . Washington, D.C.: November 20, 2003.

Aviation Security: Efforts to Measure Effectiveness and Address
Challenges. GAO-04-232T . Washington, D.C.: November 5, 2003.

(440526)

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Highlights of GAO-06-875T , a testimony before the Subcommittee on
Aviation, Committee on Transportation and Infrastructure, House of
Representatives

June 29, 2006

AVIATION SECURITY

TSA Has Strengthened Efforts to Plan for the Optimal Deployment of Checked
Baggage Screening Systems, but Funding Uncertainties Remain

The Transportation Security Administration (TSA) has deployed two types of
baggage screening equipment: explosive detection systems (EDS), which use
X-rays to scan bags for explosives, and explosive trace detection systems
(ETD), in which bags are swabbed to test for chemical traces of
explosives. TSA considers screening with EDS to be superior to screening
with ETD because EDS machines process more bags per hour and automatically
detect explosives without direct human involvement. In March 2005, GAO
reported that while TSA had made progress in deploying EDS and ETD
machines, it had not conducted a systematic, prospective analysis of the
optimal deployment of these machines to achieve long-term savings and
enhanced efficiencies and security. GAO's testimony today updates our
previous report and discusses TSA's (1) deployment of EDS and ETD systems
and the identified benefits of in-line systems, and (2) planning for the
optimal deployment of checked baggage screening systems and efforts to
identify funding and financing options.

What GAO Recommends

GAO previously recommended that TSA systematically evaluate checked
baggage screening needs at airports, such as identifying the costs and
benefits of installing in-line systems or stand-alone EDS. DHS generally
concurred with our recommendations.

Since its inception in November 2001 through June 2006, TSA has procured
and installed about 1,600 EDS machines and 7,200 ETD machines to screen
checked baggage for explosives at over 400 airports. However, initial
deployment of EDS machines in a stand-alone mode-usually in airport
lobbies-and ETD machines resulted in operational inefficiencies and
security risks as compared with using EDS machines integrated in-line with
airport baggage conveyor systems. For example, TSA's use of stand-alone
EDS and ETD machines required a greater number of screeners and resulted
in screening fewer bags for explosives each hour. In March 2005, we
reported that at nine airports where TSA has agreed to help fund the
installation of in-line EDS systems, TSA estimated that screening with
in-line EDS machines could save the federal government about $1.3 billion
over 7 years. In February 2006, TSA reported that many of the initial
in-line EDS systems did not achieve the anticipated savings. However,
recent improvements in the design of the in-line EDS systems and EDS
screening technology now offer the opportunity for higher-performance and
lower-cost screening systems. Finally, screening with in-line EDS systems
may result in security benefits by reducing the need for TSA to use
alternative screening procedures, such as screening with explosives
detection canines and physical bag searches, which involve trade-offs in
security effectiveness.

TSA has begun to systematically plan for the optimal deployment of checked
baggage screening systems, but resources have not been made available to
fund the installation of in-line EDS systems on a large-scale basis. In
February 2006, TSA released its strategic planning framework for checked
baggage screening aimed at increasing security through deploying more EDS
machines, lowering program life-cycle costs, minimizing impacts to TSA and
airport and airline operations, and providing a flexible security
infrastructure. As part of this effort, TSA identified the 25 airports
that should first receive federal funding for the installation of in-line
EDS systems, and the optimal checked baggage screening solutions for the
250 airports with the highest checked baggage volumes. In February 2006,
TSA estimated that installing and operating the optimal checked baggage
screening systems will cost about $22.4 billion over 20 years and reported
that under current investment levels, installation of optimal baggage
screening systems would not be completed until approximately 2024. TSA is
collaborating with airport operators, airlines, and other key stakeholders
to identify funding and cost sharing strategies and is focusing its
research and development efforts on the next generation of EDS technology.

EDS and ETD Machines Used by TSA to Screen Checked Baggage
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