Aviation Security: Cost Estimates Related to TSA Funding of Checked Baggage Screening Systems at Los Angeles and Ontario Airports

To meet the mandate to screen all checked baggage for explosives by December 31, 2003, the Transportation Security Administration (TSA) placed minivan-sized explosive detection systems (EDS) and other screening equipment in airport lobbies. However, these interim lobby solutions have caused operational inefficiencies, in part because they require a large number of screeners. According to TSA, in-line baggage screening--where EDS machines are integrated with an airport's baggage conveyor system--can be a more cost-effective and efficient alternative to lobby-based, stand-alone equipment. For example, in-line systems can increase the efficiency of airport, airline, and TSA operations, and lower costs by reducing the number of screeners. Moreover, in-line explosive detection systems can enhance security because they reduce congestion in airport lobbies, thus removing a potential target for terrorists. However, installing in-line systems can have large up-front costs, related to the need for airport modifications. To help defray these costs, in 2003, Congress authorized TSA to reimburse airports up to 75 percent of the cost to install these systems by entering "letter of intent" (LOI) agreements. An LOI, though not a binding commitment of federal funding, represents TSA's intent to provide the agreed-upon funds in future years if the agency receives sufficient appropriations to cover the agreement. TSA has issued eight letters of intent to help defray the costs of installing in-line systems at nine airports as of February 2007, but none since February 2004. In September 2003, TSA and the City of Los Angeles signed an LOI and an attached memorandum of agreement (LOI/MOA) in which TSA agreed to pay an amount not to exceed 75 percent of the agreed upon estimated total project cost of $341 million (about $256 million) to install in-line checked baggage screening systems at both Los Angeles (LAX) and Ontario (ONT) International Airports. However, in December 2003, officials from the City of Los Angeles' airport authority--Los Angeles World Airports (LAWA)--informed TSA that aspects of the design concept were infeasible and that additional construction modifications would be needed. LAWA subsequently submitted a revised cost estimate to TSA in April 2005 and requested that TSA amend the LOI/MOA to increase the federal reimbursement by about $122 million. TSA has not amended the LOI to provide for additional reimbursements; however, as of February 2007, TSA had obligated the $256 million for the City of Los Angeles LOI/MOA in accordance with the schedule agreed to in the LOI and had reimbursed LAWA for about $26 million in expenses. Senate Report 109-273 directs us to review the reasons for the differences between the original 2003 cost estimate and the revised 2005 cost estimate submitted by LAWA. In response and as agreed with committee offices, we identified the key factors that contributed to the differences between the two cost estimates. On January 23, 2007, we briefed staff of the Senate Subcommittee on Homeland Security, Committee on Appropriations, on the results of our work.