Ports of Entry Is Likely to Cost About $3 Billion

As we discuss in our report, our independent cost estimate suggested the  total cost of DNDO’s program to equip U.S. ports of entry with radiation  detection equipment will likely be about $3.1 billion, but could range  between $2.6 billion and $3.8 billion. We based our estimate on the  anticipated costs of DNDO implementing its 2006 project execution plan,  the most recent official documentation of the radiation portal monitor  project’s objectives, scope, schedule, costs, and funding requirements. DNDO’s estimate of $2.1 billion to deploy radiation detection equipment  (submitted as part of its budget request to OMB in March 2008) is  unreliable because it omits major project costs and relies on flawed  methodology. (We used the 2006 project execution  plan because it is the agency’s only official plan for ASP deployment.) DNDO’s estimate considers only 8 years rather than 10 years, the  operational life expected by the manufacturer of sodium iodide crystals, a  key ASP component. Furthermore, several official DNDO documents specify that multiple  versions of ASPs will be deployed. We found that from 2008 to 2017 the total program cost for buying and  deploying standard cargo portals would likely be about $2 billion, but  could range from about $1.7 billion to $2.3 billion. Our report recommended that the Secretary of Homeland Security direct  the Director of DNDO to (1) work with the Commissioner of CBP to  update the project execution plan to guide the entire radiation detection  program at U.S. ports of entry, (2) revise DNDO’s estimate of the  program’s cost and ensure that the estimate considers all the costs  associated with its project execution plan, and (3) communicate this  revised estimate to the Congress so that it is fully apprised of the  program’s scope and funding requirements. Preliminary Observations of Ongoing Testing of ASPs

We are currently reviewing the ongoing 2008 ASP testing program and  process leading to a decision by the Secretary of Homeland Security on  certification of ASPs, and we plan to issue a final report in November 2008,  prior to the Secretary’s decision on certification. Our work to date shows  that DNDO has made progress in addressing a number of problems we  identified in previous rounds of ASP testing. Despite these improvements, we have identified potential areas of concern  based on our ongoing review. These criteria appear to set a low bar for improvement. Most  notably, the criteria for primary screening require ASPs to perform at least  as well as current generation equipment when special nuclear material or  medical or industrial isotopes are present in cargo, but they do not specify  an actual improvement. We recently requested additional information from  DNDO about the rationale behind these criteria, particularly in light of  seemingly stricter criteria found in other documents such as the ASP  performance specification, which requires an 80 percent probability of  detection, at a 95 percent confidence, of government-designated  representative threat objects. While the performance  testing at Nevada Test Site could provide a useful comparison of the  performance of the ASPs and current generation equipment for both  primary and secondary screening given the improvements described  above, DNDO does not plan to complete “injection studies” that could  provide additional data on ASP performance prior to ASP certification. The test schedule leading up to  certification is highly compressed and is running at least 8 weeks behind  the schedule DNDO provided to us in May 2008, leaving limited time for  analysis and review of test results. Assuming that DHS addresses these concerns—for example, by clarifying  the criteria for significant increase in operational effectiveness,  performing the injection studies, and delaying a Secretarial decision on  certification—the 2008 round of testing could provide an objective basis  for comparing ASPs with current generation equipment. However,  consistent with our March 2006 recommendation that DHS analyze the  benefits and costs of deploying ASPs to determine whether any additional  detection capability provided by ASPs is worth the cost, we would still  question the replacement of current generation equipment with ASPs,  particularly considering the gaps identified by DNDO in the global nuclear  detection architecture—essentially, an integrated system of radiation  detection equipment and interdiction activities to combat nuclear  smuggling in foreign countries, at the U.S. border, and inside the United  States.
Why GAO Did This Study

The Department of Homeland Security's (DHS) Domestic Nuclear Detection Office (DNDO) is responsible for addressing the threat of nuclear smuggling. Radiation detection portal monitors are key elements in our national defenses against such threats. DHS has sponsored testing to develop new monitors, known as advanced spectroscopic portal (ASP) monitors, to replace radiation detection equipment currently being used at ports of entry. ASPs may offer improvements over current generation portal monitors, particularly the potential to identify as well as detect radioactive material and thereby minimize both missed threats and false alarms. However, ASPs cost significantly more than current generation portal monitors, and testing of ASPs' capabilities needs to be more objective and rigorous. Due to concerns about ASPs' cost and performance, Congress has required that the Secretary of DHS certify that ASPs will provide a significant increase in operational effectiveness before obligating funds for full-scale ASP procurement. DHS is currently testing ASPs and anticipates a decision on certification in November 2008. This testimony addresses (1) the highlights of GAO's September 2008 report on the life cycle cost estimate to deploy ASPs (GAO-08-1108R), and (2) preliminary observations from ongoing work reviewing the current program of ASP testing.

What GAO Found

GAO's independent cost estimate suggested that from 2007 through 2017 the cost of DNDO's program to equip U.S. ports of entry with radiation detection equipment will likely be about $3.1 billion, but could range from $2.6 billion to $3.8 billion. GAO's estimate was based on the anticipated costs of DNDO implementing its 2006 project execution plan, the most recent official documentation of the program. DNDO's cost estimate of $2.1 billion to implement its project execution plan is unreliable because it omits major project costs, such as maintenance, and relies on a flawed methodology. For example, although the normal life expectancy of the standard cargo ASP is about 10 years, DNDO's estimate considers only 8 years. According to DNDO officials, the agency is now following a scaled-back ASP deployment strategy rather than the 2006 project execution plan, and a senior DNDO official told GAO the ASP deployment strategy could change dramatically depending on the outcome of ongoing testing. GAO's analysis indicated the cost to implement the scaled-back plans over the period 2008 through 2017 will be about $2 billion, but could range from $1.7 billion to $2.3 billion. However, frequent changes in DNDO's deployment strategy make it difficult to assess ASP program costs. GAO's recent report recommended that the Secretary of Homeland Security direct DNDO to update the project execution plan, revise its cost estimate, and communicate the revised estimate to the Congress so that it is fully apprised of the program's scope and funding requirements. DHS agreed with the recommendations. DNDO has made progress in addressing a number of problems GAO identified in previous rounds of ASP testing. However, GAO's ongoing review of the 2008 ASP testing program identified several potential areas of concern. First, the DHS criteria for "significant increase in operational effectiveness" appear to set a low bar for improvement--for example, by requiring ASPs to perform at least as well as current generation equipment when nuclear material is present in cargo but not specifying an actual improvement. GAO recently requested additional information from DNDO about the rationale behind these criteria, particularly in light of seemingly stricter criteria found in other documents. Second, the ASP certification schedule does not allow for completion of computer simulations that could provide additional data on ASP performance. While these computer simulations may have limitations, they also could provide useful data on ASP capabilities prior to the Secretary's decision on certification. Finally, the test schedule is highly compressed and is running at least 8 weeks behind, leaving limited time for analysis and review of test results. Assuming that DHS addresses these concerns, the 2008 round of testing could provide an objective basis for comparing ASPs with current generation equipment. However, GAO recommended in March 2006 that DHS analyze the benefits and costs of deploying ASPs to determine whether any additional detection capability provided by ASPs is worth the cost, and would still question the replacement of current generation equipment with ASPs until DNDO demonstrates that any additional increase in security would be worth the ASPs' much higher cost.