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Testimony:

Before the Subcommittee on Aviation, Committee on Transportation and 
Infrastructure, House of Representatives:

United States General Accounting Office:

GAO:

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

Wednesday, March 17, 2004:

AVIATION SECURITY:

Challenges Delay Implementation of Computer-Assisted Passenger 
Prescreening System:

Statement of Norman J. Rabkin, Managing Director, Homeland Security and 
Justice Issues and David A. Powner, Director, Information Technology 
Issues:

GAO-04-504T:

GAO Highlights:

Highlights of GAO-04-504T, a testimony before the Subcommittee on 
Aviation, Committee on Transportation and Infrastructure, House of 
Representatives:

Why GAO Did This Study:

The security of U.S. commercial aviation is a long-standing concern, 
and substantial efforts have been undertaken to strengthen it. One such 
effort is the development of a new Computer-Assisted Passenger 
Prescreening System (CAPPS II) to identify passengers requiring 
additional security attention. The development of CAPPS II has raised a 
number of issues, including whether individuals may be inappropriately 
targeted for additional screening and whether data accessed by the 
system may compromise passengers' privacy. GAO was asked to summarize 
the results of its previous report that looked at (1) the development 
status and plans for CAPPS II; (2) the status of CAPPS II in addressing 
key developmental, operational, and public acceptance issues; and (3) 
additional challenges that could impede the successful implementation 
of the system.

What GAO Found:

Key activities in the development of CAPPS II have been delayed, and 
the Transportation Security Administration (TSA) has not yet completed 
important system planning activities. TSA is currently behind schedule 
in testing and developing initial increments of CAPPS II, due in large 
part to delays in obtaining needed passenger data for testing from air 
carriers because of privacy concerns. TSA also has not established a 
complete plan identifying specific system functionality that will be 
delivered, the schedule for delivery, and estimated costs. The 
establishment of such plans is critical to maintaining project focus 
and achieving intended results within budget. Without such plans, TSA 
is at an increased risk of CAPPS II not providing the promised 
functionality, of its deployment being delayed, and of incurring 
increased costs throughout the system's development.

TSA also has not completely addressed seven of the eight issues 
identified by the Congress as key areas of interest related to the 
development, operation, and public acceptance of CAPPS II. Although TSA 
is in various stages of progress on addressing each of these eight 
issues, as of January 1, 2004, only one--the establishment of an 
internal oversight board to review the development of CAPPS II--has 
been completely addressed. However, concerns exist regarding the 
timeliness of the board's future reviews. Other issues, including 
ensuring the accuracy of data used by CAPPS II, stress testing, 
preventing unauthorized access to the system, and resolving privacy 
concerns have not been completely addressed, due in part to the early 
stage of the system's development. See table below for a summary of 
TSA's status in addressing the eight key legislative issues.

GAO identified three additional challenges TSA faces that may impede 
the success of CAPPS II. These challenges are developing the 
international cooperation needed to obtain passenger data, managing the 
possible expansion of the program's mission beyond its original 
purpose, and ensuring that identity theft--in which an individual poses 
as and uses information of another individual--cannot be used to negate 
the security benefits of the system. GAO believes that these issues, if 
not resolved, pose major risks to the successful deployment and 
implementation of CAPPS II.

What GAO Recommends:

In a recent report (GAO-04-385), GAO recommended that the Secretary of 
the Department of Homeland Security (DHS) develop project plans, 
including schedules and estimated costs; a plan for completing critical 
security activities; a risk mitigation strategy for system testing; 
policies governing program oversight; and a process by which passengers 
can correct erroneous information. DHS generally concurred with the 
report and its recommendations.

For more information, contact Norman J. Rabkin at (202) 512-8777 or 
rabkinn@gao.gov or David Powner at (202) 512-9286 or pownerd@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee:

The security of our nation's commercial aviation system has been a 
long-standing concern. For over 30 years, numerous efforts have been 
undertaken to improve aviation security, but weaknesses persist. 
Following the tragic events of September 11, 2001, substantial changes 
were made to strengthen aviation security and reduce opportunities for 
terrorists to hijack or destroy commercial aircraft. However, as recent 
flight cancellations over the last 3 months have shown, the threat of 
terrorist attempts to use commercial aircraft to inflict casualties and 
damage remains. With thousands of daily flights carrying millions of 
passengers, ensuring that no passenger poses a threat to commercial 
aviation remains a daunting task.

My testimony today focuses on the development of and challenges facing 
one particular effort underway to strengthen aviation security--the new 
Computer-Assisted Passenger Prescreening System (CAPPS II). More 
specifically, my testimony highlights three key areas: (1) the 
development status and plans for CAPPS II, (2) the status of CAPPS II 
in addressing eight program issues of particular concern to the 
Congress, and (3) additional challenges that pose major risks to the 
development and implementation of the system. My testimony is based on 
our recently issued report[Footnote 1] and, because the development of 
CAPPS II is ongoing, updated information we have acquired since our 
report's issuance.

In summary, we found that:

* Key activities in the development of CAPPS II have been delayed, and 
the Department of Homeland Security's (DHS) Transportation Security 
Administration (TSA)--the agency responsible for developing CAPPS II--
has not yet completed important system planning activities. TSA is 
currently behind schedule in testing and developing the initial phases-
-called increments--of CAPPS II due in large part to delays in 
obtaining needed passenger data for testing from air carriers because 
of privacy concerns. Furthermore, the system's initial operating 
capability--the point at which the system will be ready to operate with 
data from one airline--has been postponed and a new date has not been 
determined. TSA also has not yet established a complete plan that 
identifies specific system functions that it will deliver, the schedule 
for delivery, and the estimated costs throughout the system's 
development. Establishing such plans is critical to maintaining project 
focus and achieving intended system results. Project officials reported 
that they have developed cost and schedule plans for initial 
increments, but are unable to plan for future increments with any 
certainty due to testing delays.

* TSA has not fully addressed seven of eight CAPPS II issues identified 
by the Congress as key areas of interest, due in part to the early 
stage of the system's development. The one issue that has been 
addressed involves the establishment of an internal oversight board to 
review the development of major systems, including CAPPS II. DHS and 
TSA are taking steps to address the remaining seven issues; however, 
they have not yet:

* determined and verified the accuracy of the databases to be used by 
CAPPS II,

* stress tested and demonstrated the accuracy and effectiveness of all 
search tools to be used by CAPPS II,

* developed sufficient operational safeguards to reduce the 
opportunities for abuse,

* established substantial security measures to protect CAPPS II from 
unauthorized access by hackers and other intruders,

* adopted policies to establish effective oversight of the use and 
operation of the system,

* identified and addressed all privacy concerns, and:

* developed and documented a process under which passengers impacted by 
CAPPS II can appeal decisions and correct erroneous information.

* In addition to facing developmental and operational challenges 
related to the key areas of interest of the Congress, CAPPS II also 
faces a number of additional challenges that may impede its success. 
These challenges are developing the international cooperation needed to 
obtain passenger data, managing the expansion of the program's mission 
beyond its original purpose, and ensuring that identity theft--in which 
an individual poses as and uses information of another individual--
cannot be used to negate the security benefits of the system.

Background:

During the late 1960s and early 1970s, the government directed that all 
passengers and their carry-on baggage be screened for dangerous items 
before boarding a flight. As the volume of passengers requiring 
screening increased and an awareness of terrorists' threats against the 
United States developed, a computerized system was implemented in 1998 
to help identify passengers posing the greatest risk to a flight so 
that they could receive additional security attention. This system, 
known as CAPPS,[Footnote 2] is operated by air carriers in conjunction 
with their reservation systems. CAPPS enables air carriers to separate 
passengers into two categories: those who require additional security 
screening--termed "selectees"--and those who do not. Certain 
information contained in the passenger's reservation is used by the 
system to perform an analysis against established rules and a 
government supplied "watch list" that contains the names of known or 
suspected terrorists. If the person is deemed to be a "selectee," the 
boarding pass is encoded to indicate that additional security measures 
are required at the screening checkpoint. This system is currently used 
by most U.S. air carriers to prescreen passengers and prescreens an 
estimated 99 percent of passengers on domestic flights. For those 
passengers not prescreened by the system, certain air carriers manually 
prescreen their passengers using CAPPS criteria and the watch list.

Following the events of September 11, 2001, Congress passed the 
Aviation and Transportation Security Act[Footnote 3] requiring that a 
computer-assisted passenger prescreening system be used to evaluate all 
passengers, TSA's Office of National Risk Assessment has undertaken the 
development of a second-generation computer-assisted passenger 
prescreening system, known as CAPPS II. Unlike the current system that 
is operated by the air carriers, the government will operate CAPPS II. 
Further, it will perform different analyses and access more diverse 
data, including data from commercial and government databases, to 
classify passengers according to their level of risk.

TSA program officials expect that CAPPS II will provide significant 
improvements over the existing system. First, they believe a 
centralized CAPPS II that will be owned and operated by the federal 
government will allow for more effective and efficient use of up-to-
date intelligence information and make CAPPS II more capable of being 
modified in response to changing threats. Second, they also believe 
that CAPPS II will improve identity authentication and reduce the 
number of passengers who are falsely identified as needing additional 
security screening. Third, CAPPS II is expected to prescreen all 
passengers on flights either originating in or destined for the United 
States. Last, an additional expected benefit of the system is its 
ability to aggregate risk scores to identify higher-risk flights, 
airports, or geographic regions that may warrant additional aviation 
security measures.

System Development Behind Schedule and Critical Plans Incomplete:

Key activities in the development of CAPPS II have been delayed, and 
TSA has not yet completed key system planning activities. TSA plans to 
develop CAPPS II in nine increments, with each increment providing 
increased functionality. (See app. I for a description of these 
increments.) As each increment is completed, TSA plans to conduct tests 
that would ensure the system meets the objectives of that increment 
before proceeding to the next increment. The development of CAPPS II 
began in March 2003 with increments 1 and 2 being completed in August 
and October 2003, respectively. However, TSA has not completely tested 
these initial two increments because it was unable to obtain the 
necessary passenger data for testing from air carriers. Air carriers 
have been reluctant to provide passenger data due to privacy concerns. 
Instead, the agency deferred completing these tests until increment 3.

TSA is currently developing increment 3. However, due to the 
unavailability of passenger data needed for testing, TSA has delayed 
the completion of this increment from October 2003 until at least the 
latter part of this month and reduced the functionality that this 
increment is expected to achieve. Increment 3 was originally intended 
to provide a functioning system that could handle live passenger data 
from one air carrier in a test environment to demonstrate that the 
system can satisfy operational and functional requirements. However, 
TSA officials reported that they recently modified increment 3 to 
instead provide a functional application of the system in a simulated 
test environment that is not actively connected to an airline 
reservation system. Officials also said that they were uncertain when 
the testing that was deferred from increments 1 and 2 to increment 3 
will be completed. TSA recognizes that system testing is a high-risk 
area and plans to further delay the implementation of the system to 
ensure that sufficient testing is completed. As a result, all 
succeeding increments of CAPPS II have been delayed, moving CAPPS II 
initial operating capability--the point at which the system will be 
ready to operate with one airline--from November 2003 to a date 
unknown. (See app. II for a timeline showing the original and revised 
schedule for CAPPS II increments.):

Further, we found that TSA has not yet developed critical elements 
associated with sound project planning, including a plan for what 
specific functionality will be delivered, by when, and at what cost 
throughout the development of the system. Our work on similar systems 
and other best practice research have shown that the application of 
rigorous practices to the acquisition and development of information 
systems improves the likelihood of the systems' success. In other 
words, the quality of information technology systems and services is 
governed largely by the quality of the processes involved in developing 
and acquiring the system. We have reported that the lack of such 
practices has contributed to cost, schedule, and performance problems 
for major system acquisition efforts.[Footnote 4]

TSA established plans for the initial increments of the system, 
including requirements for increments 1 and 2 and costs and schedules 
for increments 1 through 4. However, officials lack a comprehensive 
plan identifying the specific functions that will be delivered during 
the remaining increments; for example, which government and commercial 
databases will be incorporated, the date when these functions will be 
delivered, and an estimated cost of the functions. In addition, TSA 
officials recently reported that the expected functionality to be 
achieved during early increments has been reduced, and officials are 
uncertain when CAPPS II will achieve initial operating capability. 
Project officials also said that because of testing delays, they are 
unable to plan for future increments with any certainty.

By not completing these key system development planning activities, TSA 
runs the risk that CAPPS II will not provide the full functionality 
promised. Further, without a clear link between deliverables, cost, and 
schedule, it will be difficult to know what will be delivered and when 
in order to track development progress. Until project officials develop 
a plan that includes scheduled milestones and cost estimates for key 
deliverables, CAPPS II is at increased risk of not providing the 
promised functionality, not being fielded when planned, and being 
fielded at an increased cost.

Developmental, Operational, and Privacy Issues Identified by the 
Congress Remain Unresolved:

In reviewing CAPPS II, we found that TSA has not fully addressed seven 
of the eight issues identified by the Congress as key areas of interest 
related to the development and implementation of CAPPS II. Public Law 
108-90 identified eight key issues[Footnote 5] that TSA must fully 
address before the system is deployed or implemented. These eight 
issues are:

* establishing an internal oversight board,

* assessing the accuracy of databases,

* testing the system load capacity (stress testing) and demonstrating 
its efficacy and accuracy,

* installing operational safeguards to protect the system from abuse,

* installing security measures to protect the system from unauthorized 
access,

* establishing effective oversight of the system's use and operations,

* addressing all privacy concerns, and:

* creating a redress process for passengers to correct erroneous 
information.

While TSA is in various stages of progress to address each of these 
issues, only the establishment of an internal oversight board to review 
the development of CAPPS II has been fully addressed. For the remaining 
issues, TSA program officials contend that their ongoing efforts will 
ultimately address each issue. However, due to system development 
delays, uncertainties regarding when passenger data will be obtained to 
test the system, and the need to finalize key policy decisions, 
officials were unable to identify a time frame for when all remaining 
issues will be fully addressed.

The following briefly summarizes the status of TSA's efforts to address 
each of the eight issues.

* Establishment of a CAPPS II oversight board has occurred.

DHS created an oversight board--the Investment Review Board--to review 
the department's largest capital asset programs. The Board reviewed 
CAPPS II in October 2003. Based on this review, the Board authorized 
TSA to proceed with the system's development. However, DHA noted some 
areas that the program needed to address. These areas included 
addressing privacy and policy issues, coordinating with other 
stakeholders, and identifying program staffing requirements and costs, 
among others, and directed that these issues be addressed before the 
system proceeds to the next increment.

Although DHS has the Board in place to provide internal oversight and 
monitoring for CAPPS II and other large capital investments, we 
recently reported that concerns exist regarding the timeliness of its 
future reviews. DHS officials acknowledged that the Board is having 
difficulty reviewing all of the critical departmental programs in a 
timely manner.[Footnote 6] As of January 2004, DHS had identified about 
50 of the largest capital assets that would be subject to the Board's 
review. As CAPPS II's development proceeds, it will be important for 
the Board to oversee the program on a regular and thorough basis to 
provide needed oversight.

In addition, on February 12, 2004, DHS announced its intentions to 
establish an external review board specifically for CAPPS II. This 
review board will be responsible for ensuring that (1) the privacy 
notice is being followed, (2) the appeal process is working 
effectively, and (3) the passenger information used by CAPPS II is 
adequately protected. However, in announcing the establishment of this 
review board, DHS did not set a date as to when the board will be 
activated or who would serve on the board.

* The accuracy of CAPPS II databases has not yet been determined.

TSA has not yet determined the accuracy--or conversely, the error rate-
-of commercial and government databases that will be used by CAPPS II. 
Since consistent and compatible information on database accuracy is not 
available, TSA officials said that they will be developing and 
conducting their own tests to assess the overall accuracy of 
information contained in commercial and government databases. These 
tests are not intended to identify all errors existing within a 
database, but rather assess the overall accuracy of a database before 
determining whether it is acceptable to be used by CAPPS II.

In addition to testing the accuracy of commercial databases, TSA plans 
to better ensure the accuracy of information derived from commercial 
databases by using multiple databases in a layered approach to 
authenticating a passenger's identity. If available information is 
insufficient to validate the passenger's identification in the first 
database accessed, then CAPPS II will access another commercial 
database to provide a second layer of data, and if necessary, still 
other commercial databases. However, how to better ensure the accuracy 
of government databases will be more challenging. TSA does not know 
exactly what type of information the government databases contain, such 
as whether a database will contain a person's name and full address, a 
partial address, or no address at all. A senior program official said 
that using data without assessing accuracy and mitigating data errors 
could result in erroneous passenger assessments; consequently 
government database accuracy and mitigation measures will have to be 
developed and completed before the system is placed in operation.

In mitigating errors in commercial and government databases, TSA plans 
to use multiple databases and a process to identify misspellings to 
correct errors in commercial databases. TSA is also developing a 
redress process whereby passengers can attempt to get erroneous data 
corrected. However, it is unclear what access passengers will have to 
information found in either government or commercial databases, or who 
is ultimately responsible for making corrections. Additionally, if 
errors are identified during the redress process, TSA does not have the 
authority to correct erroneous data in commercial or government 
databases. TSA officials said they plan to address this issue by 
establishing protocols with commercial data providers and other federal 
agencies to assist in the process of getting erroneous data corrected.

* Stress testing and demonstration of the system's efficacy and 
accuracy have been delayed.

TSA has not yet stress tested CAPPS II increments developed to date or 
conducted other system-related testing to fully demonstrate the 
effectiveness and accuracy of the system's search capabilities, or 
search tools, to correctly assess passenger risk levels. TSA initially 
planned to conduct stress testing on an early increment of the system 
by August 2003. However, stress testing was delayed several times due 
to TSA's inability to obtain the 1.5 million Passenger Name Records it 
estimates are needed to test the system. TSA attempted to obtain the 
data needed for testing from three different sources but encountered 
problems due to privacy concerns associated with its access to the 
data. For example, one air carrier initially agreed to provide 
passenger data for testing purposes, but adverse publicity resulted in 
its withdrawal from participation:

Further, as the system is more fully developed, TSA will need to 
conduct stress testing. For example, there is a stringent performance 
requirement for the system to process 3.5 million risk assessment 
transactions per day with a peak load of 300 transactions per second 
that cannot be fully tested until the system is further along in 
development. Program officials acknowledge that achieving this 
performance requirement is a high-risk area and have initiated 
discussions to define how this requirement will be achieved. However, 
TSA has not yet developed a complete mitigation strategy to address 
this risk. Without a strategy for mitigating the risk of not meeting 
peak load requirements, the likelihood that the system may not be able 
to meet performance requirements increases.

Other system-related testing to fully demonstrate the effectiveness and 
accuracy of the system's search tools in assessing passenger risk 
levels also has not been conducted. This testing was also planned for 
completion by August 2003, but similar to the delays in stress testing, 
TSA's lack of access to passenger data prevented the agency from 
conducting these tests. In fact, TSA has only used 32 simulated 
passenger records--created by TSA from the itineraries of its employees 
and contractor staff who volunteered to provide the data--to conduct 
this testing. TSA officials said that the limited testing--conducted 
during increment 2--has demonstrated the effectiveness of the system's 
various search tools. However, tests using these limited records do not 
replicate the wide variety of situations they expect to encounter with 
actual passenger data when full-scale testing is actually undertaken. 
As a result, the full effectiveness and accuracy of the tools have not 
been demonstrated.

TSA's attempts to obtain test data are still ongoing, and privacy 
issues remain a stumbling block. TSA officials believe they will 
continue to have difficulty in obtaining data for both stress and other 
testing until TSA issues a Notice of Proposed Rulemaking to require 
airlines to provide passenger data to TSA. This action is currently 
under consideration within TSA and DHS. In addition, TSA officials said 
that before the system is implemented, a final Privacy Act notice will 
be published. According to DHS's Chief Privacy Officer, the agency 
anticipated that the Privacy Act notice would be finalized in March 
2004. However, this official told us that the agency will not publish 
the final Privacy Act notice until all 15,000 comments received in 
response to the August 2003 Privacy Act notice are reviewed and testing 
results are available. DHS could not provide us a date as to when this 
will be accomplished. Further, due to the lack of test data, TSA 
delayed the stress and system testing planned for increments 1 and 2 to 
increment 3, scheduled to be completed by March 31, 2004. However, 
since we issued our report last month, a TSA official said that they no 
longer expect to conduct this testing during increment 3 and do not 
have an estimated date for when these tests will be conducted. 
Uncertainties surrounding when stress and system testing will be 
conducted could impact TSA's ability to allow sufficient time for 
testing, resolving defects, and retesting before CAPPS II can achieve 
initial operating capability and may further delay system deployment.

* Security plans that include operational and security safeguards are 
not complete.[Footnote 7]

Due to schedule delays and the early stage of CAPPS II development, TSA 
has not implemented critical elements of an information system security 
program to reduce opportunities for abuse and protect against 
unauthorized access by hackers. These elements--a security policy, a 
system security plan, a security risk assessment, and the certification 
and accreditation of the security of the system--together provide a 
strong security framework for protecting information technology data 
and assets. While TSA has begun to implement critical elements of an 
information security management program for CAPPS II, these elements 
have not been completed. Until a specific security policy for CAPPS II 
is completed, TSA officials reported that they are using relevant 
portions of the agency's information security policy and other 
government security directives as the basis for its security policy. As 
for the system security plan, it is currently in draft. TSA expects to 
complete this plan by the time initial operating capability is 
achieved. Regarding the security risk assessment, TSA has postponed 
conducting this assessment because of development delays and it has not 
been rescheduled. The completion date remains uncertain because TSA 
does not have a date for achieving initial operating capability as a 
result of other CAPPS II development delays. As for final certification 
and accreditation, TSA is unable to schedule the final certification 
and accreditation of CAPPS II because of the uncertainty regarding the 
system's development schedule.

The establishment of a security policy and the completion of the system 
security plan, security risk assessment, and certification and 
accreditation process are critical to ensuring the security of CAPPS 
II. Until these efforts are completed, there is decreased assurance 
that TSA will be able to adequately protect CAPPS II information and an 
increased risk of operational abuse and access by unauthorized users.

* Policies for effective oversight of the use and operation of CAPPS II 
are not developed.

TSA has not yet fully established controls to oversee the effective use 
and operation of CAPPS II. However, TSA plans to provide oversight of 
CAPPS II through two methods: (1) establishing goals and measures to 
assess the program's strengths, weaknesses, and performance and (2) 
establishing mechanisms to monitor and evaluate the use and operation 
of the system.

TSA has established preliminary goals and measures to assess the CAPPS 
II program's performance in meeting its objectives as required by the 
Government Performance and Results Act.[Footnote 8] Specifically, the 
agency has established five strategic objectives with preliminary 
performance goals and measures for CAPPS II. While this is a good first 
step, these measures may not be sufficient to provide the objective 
data needed to conduct appropriate oversight. TSA officials said that 
they are working with five universities to assess system effectiveness 
and management and will develop metrics to be used to measure the 
effectiveness of CAPPS II. With this information, officials expect to 
review and, as necessary, revise their goals and objectives to provide 
management and the Congress with objective information to provide 
system oversight.

In addition, TSA has not fully established or documented additional 
oversight controls to ensure that operations are effectively monitored 
and evaluated. Although TSA has built capabilities into CAPPS II to 
monitor and evaluate the system's operation and plans to conduct audits 
of the system to determine whether it is functioning as intended, TSA 
has not written all of the rules that will govern how the system will 
operate. Consequently, officials do not yet know how these capabilities 
will function, how they will be applied to monitor the system to 
provide oversight, and what positions and offices will be responsible 
for maintaining the oversight. Until these policies and procedures for 
CAPPS II are developed, there is no assurance that proper controls are 
in place to monitor and oversee the system.

* TSA's plans address privacy protection, but issues remain unresolved.

TSA's plans for CAPPS II reflect an effort to protect individual 
privacy rights, but certain issues remain unresolved. Specifically, TSA 
plans address many of the requirements of the Privacy Act, the primary 
legislation that regulates the government's use of personal 
information.[Footnote 9] For example, in January 2003, TSA issued a 
notice in the Federal Register that generally describes the Privacy Act 
system of records[Footnote 10] that will reside in CAPPS II and asked 
the public to comment. While TSA has taken these initial steps, it has 
not yet finalized its plans for complying with the act. For example, 
the act and related Office of Management and Budget guidance[Footnote 
11] state that an agency proposing to exempt a system of records from a 
Privacy Act provision must explain the reasons for the exemption in a 
published rule. In January 2003, TSA published a proposed rule to 
exempt the system from seven Privacy Act provisions but has not yet 
provided the reasons for these exemptions, stating that this 
information will be provided in a final rule to be published before the 
system becomes operational. As a result, TSA's justification for these 
exemptions remains unclear. Until TSA finalizes its privacy plans for 
CAPPS II and addresses such concerns, the public lacks assurance that 
the system will fully comply with the Privacy Act.

When viewed in the larger context of Fair Information 
Practices[Footnote 12]--internationally recognized privacy principles 
that also underlie the Privacy Act--TSA plans reflect some actions to 
address each of these practices. For example, TSA's plan to not collect 
passengers' social security numbers from commercial data providers and 
to destroy most passenger information shortly after they have completed 
their travel itinerary appears consistent with the collection 
limitation practice, which states that collections of personal 
information should be limited. However, to meet its evolving mission 
goals, TSA plans also appear to limit the application of certain of 
these practices. For example, TSA plans to exempt CAPPS II from the 
Privacy Act's requirements to maintain only that information about an 
individual that is relevant and necessary to accomplish a proper agency 
purpose. These plans reflect the subordination of the use limitation 
practice and data quality practice (personal information should be 
relevant to the purpose for which it is collected) to other goals and 
raises concerns that TSA may collect and maintain more information than 
is needed for the purpose of CAPPS II, and perhaps use this information 
for new purposes in the future. Such actions to limit the application 
of the Fair Information Practices do not violate federal requirements. 
Rather, they reflect TSA's efforts to balance privacy with other public 
policy interests such as national security, law enforcement, and 
administrative efficiency. As the program evolves, it will ultimately 
be up to policymakers to determine if TSA has struck an appropriate 
balance among these competing interests.

* Redress process is being developed, but significant challenges 
remain.

TSA intends to establish a process by which passengers who are subject 
to additional screening or denied boarding will be provided the 
opportunity to seek redress by filing a complaint; however, TSA has not 
yet finalized this process. According to TSA officials, the redress 
process will make use of TSA's existing complaint process--currently 
used for complaints from passengers denied boarding passes--to document 
complaints and provide these to TSA's Ombudsman.[Footnote 13] 
Complaints relating to CAPPS II will be routed through the Ombudsman to 
a Passenger Advocate--a position to be established within TSA for 
assisting individuals with CAPPS II-related concerns--who will help 
identify errors that may have caused a person to be identified as a 
false positive.[Footnote 14] If the passengers are not satisfied with 
the response received from the Passenger Advocate regarding the 
complaint, they will have the opportunity to appeal their case to the 
DHS Privacy Office.

A number of key policy issues associated with the redress process, 
however, still need to be resolved. These issues involve data 
retention, access, and correction. Current plans for data retention 
indicate that data on U.S. travelers and lawful permanent residents 
will be deleted from the system at a specified time following the 
completion of the passengers' itinerary. Although TSA's decision to 
limit the retention of data was made for privacy considerations, the 
short retention period might make it impossible for passengers to seek 
redress if they do not register complaints quickly. TSA has also not 
yet determined the extent of data access that will be permitted for 
those passengers who file a complaint. TSA officials said that 
passengers will not have access to any government data used to generate 
a passenger risk score due to national security concerns. TSA officials 
have also not determined to what extent, if any, passengers will be 
allowed to view information used by commercial data providers. 
Furthermore, TSA has not yet determined how the process of correcting 
erroneous information will work in practice. TSA documents and program 
officials said that it may be difficult for the Passenger Advocate to 
identify errors, and that it could be the passenger's responsibility to 
correct errors in commercial databases at their source.

To address these concerns, TSA is exploring ways to assist passengers 
who are consistently determined to be false positives. For example, TSA 
has discussed incorporating an "alert list" that would consist of 
passengers who coincidentally share a name with a person on a 
government watch list and are, therefore, continually flagged for 
additional screening. Although the process has not been finalized, 
current plans indicate that a passenger would be required to submit to 
an extensive background check in order to be placed on the alert list. 
TSA said that available remedies for all persons seeking redress will 
be more fully detailed in CAPPS II's privacy policy, which will be 
published before the system achieves initial operating capability.

Other Challenges Could Affect the Successful Implementation of CAPPS 
II:

In addition to facing developmental and operational challenges related 
to key areas of interest to the Congress, CAPPS II faces a number of 
additional challenges that may impede its success. We identified three 
issues that, if not adequately resolved, pose major risks to the 
successful development, implementation, and operation of CAPPS II. 
These issues are developing the international cooperation needed to 
obtain passenger data, managing the expansion of the program's mission 
beyond its original purpose, and ensuring that identity theft--in which 
an individual poses as and uses information of another individual--
cannot be used to negate the security benefits of the system.

International Cooperation:

For CAPPS II to operate fully and effectively, it needs data not only 
on U.S. citizens who are passengers on flights of domestic origin, but 
also on foreign nationals on domestic flights and on flights to the 
United States originating in other countries. However, obtaining 
international cooperation for access to these data remains a 
substantial challenge. The European Union, in particular, has objected 
to its citizens' data being used by CAPPS II, whether a citizen of a 
European Union country flies on a U.S. carrier or an air carrier under 
another country's flag. The European Union has asserted that using such 
data is not in compliance with its privacy directive and violates the 
civil liberties and privacy rights of its citizens.

DHS and European Union officials are in the process of finalizing an 
understanding regarding the transfer of passenger data for use by the 
Bureau of Customs and Border Protection. However, this understanding 
does not permit the passenger data to be used by TSA in the operation 
of CAPPS II but does allow for the data to be used for testing 
purposes. According to a December 16, 2003, report from the Commission 
of European Communities, the European Union will not be in a position 
to agree to the use of its citizens' passenger data for CAPPS II until 
internal U.S. processes have been completed and it is clear that the 
U.S. Congress's privacy concerns have been resolved. The Commission 
said that it would discuss the use of European Union citizen passenger 
data in a second, later round of discussions.

Expansion of Mission:

Our review found that CAPPS II may be expanded beyond its original 
purpose and that this expansion may affect program objectives and 
public acceptance of the system. The primary objective of CAPPS II was 
to protect the commercial aviation system from the risk of foreign 
terrorism by screening for high-risk or potentially high-risk 
passengers. However, in the August 2003 interim final Privacy Act 
notice for CAPPS II, TSA stated that the system would seek to identify 
both domestic and foreign terrorists and not just foreign terrorists as 
previously proposed. The August notice also stated that the system 
could be expanded to identify persons who are subject to outstanding 
federal or state arrest warrants for violent crimes and that CAPPS II 
could ultimately be expanded to include identifying individuals who are 
in the United States illegally or who have overstayed their visas.

DHS officials have said that such changes are not an expansion of the 
system's mission because they believe it will improve aviation security 
and is consistent with CAPPS II's mission. However, program officials 
and advocacy groups expressed concern that focusing on persons with 
outstanding warrants, and possibly immigration violators, could put TSA 
at risk of diverting attention from the program's fundamental purpose. 
Expanding CAPPS II's mission could also lead to an erosion of public 
confidence in the system, which program officials agreed is essential 
to the effective operation of CAPPS II. This expansion could also 
increase the costs of passenger screening, as well as the number of 
passengers erroneously identified as needing additional security 
attention because some of the databases that could be used to identify 
wanted felons have reliability concerns.

Identity Theft:

Another challenge facing the successful operation of CAPPS II is the 
system's ability to effectively identify passengers who assume the 
identity of another individual, known as identity theft. TSA officials 
said that while they believe CAPPS II will be able to detect some 
instances of identity theft, they recognized that the system will not 
detect all instances of identity theft without implementing some type 
of biometric indicator, such as fingerprinting or retinal scans. TSA 
officials said that while CAPPS II cannot address all cases of identity 
theft, CAPPS II should detect situations in which a passenger submits 
fictitious information such as a false address. These instances would 
likely be detected since the data being provided would either not be 
validated or would be inconsistent with information in the databases 
used by CAPPS II. Additionally, officials said that data on identity 
theft may be available through credit bureaus and that in the future 
they expect to work with the credit bureaus to obtain such data. 
However, the officials acknowledge that some identity theft is 
difficult to spot, particularly if the identity theft is unreported or 
if collusion, where someone permits his or her identity to be assumed 
by another person, is involved.

TSA officials said that there should not be an expectation that CAPPS 
II will be 100 percent accurate in identifying all cases of identity 
theft. Further, the officials said that CAPPS II is just one layer in 
the system of systems that TSA has in place to improve aviation 
security, and that passengers who were able to thwart CAPPS II by 
committing identity theft would still need to go through normal 
checkpoint screening and other standard security procedures. TSA 
officials believe that, although not fool-proof, CAPPS II represents an 
improvement in identity authentication over the current system.

Concluding Observations:

The events of September 11, 2001, and the ongoing threat of commercial 
aircraft hijackings as a means of terrorist attack against the United 
States continue to highlight the importance of a proactive approach to 
effectively prescreening airline passengers. An effective prescreening 
system would not only expedite the screening of passengers, but would 
also accurately identify those passengers warranting additional 
security attention, including those passengers determined to have an 
unacceptable level of risk who would be immediately assessed by law 
enforcement personnel. CAPPS II, while holding the promise of providing 
increased benefits over the current system, faces significant 
challenges to its successful implementation. Uncertainties surrounding 
the system's future functionality and schedule alone result in the 
potential that the system may not meet expected requirements, may 
experience delayed deployment, and may incur increased costs throughout 
the system's development. Of the eight issues identified by the 
Congress related to CAPPS II, only one has been fully addressed. 
Additionally, concerns about mission expansion and identify theft add 
to the public's uncertainty about the success of CAPPS II.

Our recent report on CAPPS II made seven specific recommendations that 
we believe will help address these concerns and challenges. The 
development of plans identifying the specific functionality that will 
be delivered during each increment of CAPPS II and its associated 
milestones for completion and the expected costs for each increment 
would provide TSA with critical guidelines for maintaining the 
project's focus and achieving intended system results and milestones 
within budget. Furthermore, a schedule for critical security 
activities, a strategy for mitigating the high risk associated with 
system and database testing, and appropriate oversight mechanisms would 
enhance assurance that the system and its data will be adequately 
protected from misuse. In addition to these steps, development of 
results-oriented performance goals and measures would help ensure that 
the system is operating as intended. Last, given the concerns regarding 
the protection of passenger data, the system cannot be fully accepted 
if it lacks a redress process for those who believe they are 
erroneously identified as an unknown or unacceptable risk.

Our recently published report highlighted each of these concerns and 
challenges and contained several recommendations to address them. DHS 
generally concurred with our findings and has agreed to address the 
related recommendations. By adequately addressing these 
recommendations, we believe DHS increases the likelihood of 
successfully implementing this program. In the interim, it is crucial 
that the Congress maintain vigilant oversight of DHS to see that these 
concerns and challenges are addressed.

Mr. Chairman, this concludes my statement. I would be please to answer 
any questions that you or other members of the Subcommittee may have at 
this time.

GAO Contacts and Acknowledgments:

For further information on this testimony, please contact Norman J. 
Rabkin at (202) 512-8777 or David A. Powner on (202) 512-9286. 
Individuals making key contributions to this testimony include J. 
Michael Bollinger, Adam Hoffman, and John R. Schulze.

[End of section]

Appendix I: CAPPS II Developmental Increments:

The following describes general areas of functionality to be completed 
during each of the currently planned nine developmental increments of 
the Computer -Assisted Passenger Prescreening System (CAPPS II).

Increment 1. System functionality established at the central processing 
center. By completion of increment 1, the system will be functional at 
the central processing center and can process passenger data and 
support intelligence validation using in-house data (no use of airline 
data). Additionally, at this increment, validation will be completed 
for privacy and policy enforcement tools; the exchange of, and 
processing with, data from multiple commercial data sources; and 
processing of government databases to support multiple watch-lists.

Increment 2. System functionality established to support processing 
airline data. At the completion of increment 2, the system is 
functionally and operationally able to process airline data. 
Additionally, the system can perform functions such as prioritizing 
data requests, reacting to threat level changes, and manually 
triggering a "rescore" for individual passengers in response to 
reservation changes or adjustments to the threat level.

Increment 3. This increment will provide for a functional system that 
will use a test simulator that will not be connected to an airline's 
reservation system. System hardware that includes the establishment of 
test and production environments will be in place and a facility 
capable of performing risk assessment will be established. Design and 
development work for system failure with a back up system and help desk 
infrastructure will be put in place.

Increment 4. By the completion of this increment, a back up location 
will be functionally and operationally able to support airlines 
processing application, similar to the main location. A help desk will 
be installed to provide assistance to airlines, authenticator, and 
other user personnel.

Increment 5. Enhanced intelligence interface. At the conclusion of this 
increment, the system will be able to receive from DHS the current 
threat level automatically and be able to adjust the system in response 
to changes in threat levels. The system will also be able to semi-
automatically rescore and reclassify passengers that have already been 
authenticated.

Increment 6. Enhanced passenger authentication. This increment will 
allow the system to perform passenger authentication using multiple 
commercial data sources in the instance that little information on a 
passenger is available from original commercial data source.

Increment 7. Integration of other system users. By the completion of 
this increment, TSA Aviation Operations and law enforcement 
organizations will be integrated into CAPPS II, allowing multiple 
agencies and organizations to do manpower planning and resource 
allocations based on the risk level of the nation, region, airport, or 
specific flight.

Increment 8. Enhanced risk assessments. This increment provides for the 
installation of capabilities and data sources to enhance risk 
assessments, which will lower the number of passengers falsely 
identified for additional screening. This increment also provides for a 
direct link to the checkpoint for passenger classification, rather than 
having the passenger's score encoded on their boarding pass.

Increment 9. Completion of system. Increment 9 marks the completion of 
the system as it moves into full operation and maintenance, which will 
include around-the-clock support and administration of the system, 
database, and network, among other things.

[End of section]

Appendix II: Timeline for Developing CAPPS II, by Original and Revised 
Increment Schedule:

[See PDF for image]

[A] System functionality to be achieved at revised schedule dates will 
be less than originally planned.

[End of figure]

[End of section]

FOOTNOTES

[1] U.S. General Accounting Office, Aviation Security: Computer-
Assisted Passenger Prescreening System Faces Significant 
Implementation Challenges, GAO-04-385 (Washington, D.C.: Feb. 12, 
2004).

[2] When initially developed by the Federal Aviation Administration, 
this system was known as the Computer-Assisted Passenger Screening 
system or CAPS.

[3] Pub. L. No. 107-71,  136, 115 Stat. 597, 637 (2001).

[4] U.S. General Accounting Office, Major Management Challenges and 
Program Risks: A Government-wide Perspective, GAO-03-95 (Washington, 
D.C.: January 2003) and High-Risk Series: An Update, GAO-03-119 
(Washington, D.C.: January 2003).

[5] Department of Homeland Security Appropriations Act, 2004, Pub. L. 
No. 108-90,  519, 117 Stat. 1137, 1155-56 (2003).

[6] U.S. General Accounting Office, Information Technology: OMB and 
Department of Homeland Security Investment Reviews GAO-04-323 
(Washington, D.C.: Feb. 10, 2004).

[7] Because operational safeguards to reduce opportunities for abuse 
and security measures to protect CAPPS II from unauthorized access by 
hackers are so closely related, these two issues are discussed jointly.

[8] Pub. L. No. 103-62, 107 Stat. 285 (1993).

[9] Pub. L. No. 93-579, 88 Stat. 1896 (1974) (codified as amended at 5 
U.S.C.  552a).

[10] Under the act, a system of records is a collection of information 
about individuals under the control of an agency from which information 
is actually retrieved by an individual's name or by some identifying 
number, symbol, or other particular assigned to the individual. 

[11] Responsibilities for the Maintenance of Records About Individuals 
by Federal Agencies, 40 Fed. Reg. 28,948, 28,972 (July 9, 1975).

[12] We refer to the eight Fair Information Practices proposed in 1980 
by the Organization for Economic Cooperation and Development and that 
were endorsed by the U.S. Department of Commerce in 1981. These 
practices are collection limitation, purpose specification, use 
limitation, data quality, security safeguards, openness, individual 
participation, and accountability.

[13] The Ombudsman is the designated point of contact for TSA-related 
inquiries from the public.

[14] Passengers who are erroneously delayed or prohibited from boarding 
their scheduled flights are considered false positives.