TRANSPORTATION SECURITY ACQUISITION REFORM ACT: EXAMINING REMAINING CHAL- LENGES HEARING BEFORETHE SUBCOMMITTEE ON TRANSPORTATION SECURITY OFTHE COMMITTEE ON HOMELAND SECURITY HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION JANUARY 7, 2016 Serial No. 114–48 Printed for the use of the Committee on Homeland Security Available via the World Wide Web: http://www.gpo.gov/fdsys/ U.S. GOVERNMENT PUBLISHING OFFICE 21–291 PDF WASHINGTON : 2016 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON HOMELAND SECURITY MICHAEL T. MCCAUL, Texas, Chairman LAMAR SMITH, Texas BENNIE G. THOMPSON, Mississippi PETER T. KING, New York LORETTA SANCHEZ, California MIKE ROGERS, Alabama SHEILA JACKSON LEE, Texas CANDICE S. MILLER, Michigan, Vice Chair JAMES R. LANGEVIN, Rhode Island JEFF DUNCAN, South Carolina BRIAN HIGGINS, New York TOM MARINO, Pennsylvania CEDRIC L. RICHMOND, Louisiana LOU BARLETTA, Pennsylvania WILLIAM R. KEATING, Massachusetts SCOTT PERRY, Pennsylvania DONALD M. PAYNE, JR., New Jersey CURT CLAWSON, Florida FILEMON VELA, Texas JOHN KATKO, New York BONNIE WATSON COLEMAN, New Jersey WILL HURD, Texas KATHLEEN M. RICE, New York EARL L. ‘‘BUDDY’’ CARTER, Georgia NORMA J. TORRES, California MARK WALKER, North Carolina BARRY LOUDERMILK, Georgia MARTHA MCSALLY, Arizona JOHN RATCLIFFE, Texas DANIEL M. DONOVAN, JR., New York BRENDAN P. SHIELDS, Staff Director JOAN V. O’HARA, General Counsel MICHAEL S. TWINCHEK, Chief Clerk I. LANIER AVANT, Minority Staff Director SUBCOMMITTEE ON TRANSPORTATION SECURITY JOHN KATKO, New York, Chairman MIKE ROGERS, Alabama KATHLEEN M. RICE, New York EARL L. ‘‘BUDDY’’ CARTER, Georgia WILLIAM R. KEATING, Massachusetts MARK WALKER, North Carolina DONALD M. PAYNE, JR., New Jersey JOHN RATCLIFFE, Texas BENNIE G. THOMPSON, Mississippi (ex officio) MICHAEL T. MCCAUL, Texas (ex officio) KRISTA P. HARVEY, Subcommittee Staff Director VACANCY, Minority Subcommittee Staff Director (II) C O N T E N T S Page STATEMENTS The Honorable John Katko, a Representative in Congress From the State of New York, and Chairman, Subcommittee on Transportation Security: Oral Statement ..................................................................................................... 1 Prepared Statement ............................................................................................. 3 The Honorable Kathleen M. Rice, a Representative in Congress From the State of New York, and Ranking Member, Subcommittee on Transportation Security: Oral Statement ..................................................................................................... 4 Prepared Statement ............................................................................................. 5 WITNESSES Mr. Steven Wallen, Director, Explosives Division, Homeland Security Ad- vanced Research Projects Agency, Science and Technology Directorate, U.S. Department of Homeland Security: Oral Statement ..................................................................................................... 6 Prepared Statement ............................................................................................. 8 Ms. Jill Vaughan, Assistant Administrator, Office of Security Technologies, Transportation Security Administration, U.S. Department of Homeland Se- curity: Oral Statement ..................................................................................................... 13 Prepared Statement ............................................................................................. 14 Mr. Michele Mackin, Director, Office of Acquisition and Sourcing Manage- ment, U.S. Government Accountability Office: Oral Statement ..................................................................................................... 17 Prepared Statement ............................................................................................. 18 Mr. T.J. Schulz, Executive Director, Security Manufacturers Coalition: Oral Statement ..................................................................................................... 37 Prepared Statement ............................................................................................. 38 APPENDIX Questions From Chairman John Katko for Steven Wallen .................................. 45 Questions From Chairman John Katko for Jill Vaughan .................................... 45 Questions From Chairman John Katko for Michele Mackin ............................... 50 (III) TRANSPORTATION SECURITY ACQUISITION REFORM ACT: EXAMINING REMAINING CHALLENGES Thursday, January 7, 2016 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON HOMELAND SECURITY, SUBCOMMITTEE ON TRANSPORTATION SECURITY, Washington, DC. The subcommittee met, pursuant to call, at 2:08 p.m., in Room 311, Cannon House Office Building, Hon. John Katko [Chairman of the subcommittee] presiding. Present: Representatives Katko, Carter, Walker, Ratcliffe, Rice, Keating, and Payne. Also present: Representative Hudson. Mr. KATKO. The Committee on Homeland Security Subcommittee on Transportation Security will come to order. The subcommittee is meeting today to examine the remaining challenges to transportation security acquisition reform. I now rec- ognize myself for an opening statement. Taxpayer dollars should never be wasted on technology that is not effective or meeting our needs. Unfortunately, this is a problem with which the TSA has struggled for many years. Our Govern- ment relies upon private-sector innovation to develop security tech- nologies. However, that innovation comes with a price tag and we cannot reasonably expect the private sector to spend millions of dollars into research and development of new and emerging tech- nologies without greater transparency, communication, and inter- action from both the TSA and the Department of Homeland Secu- rity as to what their future needs and technology investments will be. In the agency’s short history, TSA has exhibited a number of de- ficiencies in its procurement process. However, the acquisitions challenges facing TSA are not insurmountable. It is incumbent upon this subcommittee to provide the necessary oversight to streamline the agency’s policies and procedures while ensuring that taxpayer dollars are appropriately spent on technologies that are proven to be effective at protecting our Nation’s transportation sys- tems. I recently sat down with Administrator Neffenger, and I know that he is acutely aware of some of the challenges TSA faces in this regard. I look forward to continuing to support him in his efforts to lead and reform this agency along with Ms. Vaughan and others. The purpose of today’s hearing is to examine the challenges that (1) 2 TSA faces in their research and development of security tech- nologies and how those challenges affect TSA’s acquisitions prac- tices. On December 18, 2014, before we were sworn in for this Con- gress, President Obama signed the Transportation Security Acqui- sition Reform Act into law, which was introduced by Congressman Hudson, my predecessor last year. This bipartisan bill was passed on the premise that TSA must be more transparent and strategic in identifying its technology investment needs by working closely with industry stakeholders to develop and procure future tech- nologies. In addition, this legislation required TSA to submit to Congress a strategic, 5-year technology investment plan. This plan, which was provided to this committee in August of this year, lays out the—last year, rather, lays out the agency’s vision for near-term technology investments while providing a clearer vision of the agency’s often opaque acquisition strategy. Producing a 5-year plan is a meaningful step in the right direction and includes a number of pragmatic observations and goals. However, more must be done to build on the strategy and turn words on paper into more effi- cient and streamline procurement process. I will note that Ms. Vaughan was sworn in as a new director of this project a few weeks before it became incumbent upon her to come up with a strategy. So good luck, Ms. Vaughan. Earlier this year, Ranking Member Rice and I visited the TSA integration facility to observe how TSA tests and evaluates existing and emerging screening technologies. Additionally, we have met with a number of industry stakeholders offering a range of impres- sive technologies and innovations to better secure our Nation’s transportation systems. These stakeholders, like TSA, share a de- sire to improve the security of the traveling public and mitigate threats from a rapidly-evolving threat landscape and have talked frankly about the state of existing technologies and the challenges facing the agency. However, many of them also have shared troubling anecdotes about the bureaucratic difficulties they have encountered in at- tempts to partner with TSA in the Department of Homeland Secu- rity’s Science and Technology Directorate. I am concerned that bu- reaucracy and stagnation are preventing TSA and DHS from being responsive to legitimate security threats facing our Nation. Indeed, while it is critical that any acquisition process includes safeguards to prevent wasting taxpayer dollars on poor invest- ments and unproven technology, it is just as critical that we are not failing to meet our most basic mission, and that is to prevent terror attacks against transportation targets. This is, no doubt, a challenge and I am intent on holding both TSA and industry accountable to reasoned effective investment strategy. I am concerned about whether TSA is making procure- ment and investment decisions in a vacuum without leveraging suf- ficient support from other Government experts and stakeholders. Additionally, I remain unconvinced that TSA and Homeland Se- curity’s Science and Technology Directorate are working closely enough to develop and test existing and future technology. A lack 3 of cross-pollination and communication between these entities is, I believe, hindering our ability to meet mission needs. I look forward to hearing different perspectives from our wit- nesses today on how DHS and TSA work together to make their procurement decisions; how this committee’s legislation has in- formed this process; and what more needs to be done to ensure that taxpayer dollars are being spent in a deliberate and strategic man- ner with an eye towards keeping us safe. I would like to thank all of you for being here today and we have a two-paneled hearing. I will note that prior to preparing here today, I have been en- couraged about what I have heard about some of the improvements being made at TSA and I am looking forward to hearing about similar improvements at DHS if, in fact, they do exist. Note that we are not here to indict anybody. We are here to just find out how we can make the process better. It has gotten better. It needs to get better, and that is what this whole goal today is about. We will begin by hearing testimony from a panel of Government witnesses followed by a panel representing the security technology industry. [The statement of Chairman Katko follows:] PREPAREDSTATEMENTOFCHAIRMANJOHNKATKO JANUARY7, 2016 Taxpayer dollars should never be wasted on technology that is not effective or meeting our needs—unfortunately, this is a problem with which the Transportation Security Administration has struggled for many years. Our Government relies upon private-sector innovation to develop security technologies. However, that innovation comes with a price tag, and we cannot reasonably expect the private sector to spend millions of dollars in the research and development of new and emerging tech- nologies without greater transparency and communication from both TSA and the Department of Homeland Security as to what their future needs and technology in- vestments will be. In the agency’s short history, TSA has exhibited a number of deficiencies in its procurement processes. However, the acquisitions challenges facing TSA are not in- surmountable, and it is incumbent upon this subcommittee to provide the necessary oversight to streamline the agency’s policies and procedures, while ensuring that taxpayer dollars are appropriately spent on technologies that are proven to be effec- tive at protecting our Nation’s transportation systems. I recently sat down with Ad- ministrator Neffenger, and I know that is he is acutely aware of some of the chal- lenges TSA faces in this regard. I look forward to continuing to support him in his efforts to lead and reform this agency. The purpose of today’s hearing is to examine the challenges the Transportation Security Administration faces in their research and development of security tech- nologies and how those challenges affect TSA’s acquisitions practices. On December 18, 2014, President Obama signed the ‘‘Transportation Security Acquisition Reform Act’’ into law, which was introduced by Congressman Hudson last year. This bipar- tisan bill was passed on the premise that TSA must be more transparent and stra- tegic in identifying its technology investment needs, while working closely with in- dustry stakeholders to develop and procure future technologies. In addition, this leg- islation required TSA to submit to Congress a strategic 5-year technology invest- ment plan. This plan, which was provided to this committee in August of this year, lays out the agency’s vision for near-term technology investments, while providing a clearer vision of the agency’s often opaque acquisitions strategy. Producing a 5- year plan is a meaningful step in the right direction and includes a number of prag- matic observations and goals. However, more must be done to build on this strategy and turn words on paper into a more efficient and streamlined procurement process. Earlier this year, Rank- ing Member Rice and I visited the Transportation Systems Integration Facility to observe how TSA tests and evaluates existing and emerging screening technologies. Additionally, we have met with a number of industry stakeholders offering a range of impressive technologies and innovations to better secure our Nation’s transpor- 4 tation systems. These stakeholders, like TSA, share a desire to improve the security of the traveling public and mitigate threats from a rapidly-evolving threat landscape and have talked frankly about the state of existing technologies and the challenges facing the agency. However, many of them also have shared troubling anecdotes about the bureaucratic difficulties they have encountered in attempts to partner with TSA and the Department of Homeland Security’s Science and Technology Di- rectorate. I am concerned that bureaucracy and stagnation are preventing TSA and DHS from being responsive to legitimate security threats facing our Nation. Indeed, while it is critical that any acquisitions process include safeguards to prevent wasting tax- payer dollars on poor investments and unproven technology, it is just as critical that we are not failing in our most basic mission—to prevent terror attacks against transportation targets. This, no doubt, is a challenge, and I am intent on holding both TSA and industry accountable to a reasoned, effective investment strategy. I am concerned about whether TSA is making procurement and investment decisions in a vacuum, without leveraging sufficient support from other Government experts and stakeholders. Additionally, I remain unconvinced that TSA and the Department of Homeland Security’s Science & Technology Directorate are working closely enough to develop and test existing and future technology. A lack of cross-polli- nation and communication between these entities is, I believe, hindering their abil- ity to meet mission needs. I look forward to hearing different perspectives from our witnesses today on how DHS and TSA work together to make procurement deci- sions, how this committee’s legislation has informed this process, and what more needs to be done to ensure that taxpayer dollars are being spent in a deliberate and strategic manner. I would like to thank all of you for being here today. We have a two-panel hearing here today. We will begin by hearing testimony from a panel of Government wit- nesses, followed by a panel representing the security technology industry. Mr. KATKO. With that, I now recognize the Ranking Member of the subcommittee, the gentlewoman from New York, Miss Rice for any statements she may have. Miss RICE. Thank you, Mr. Chairman. First I want to thank you for convening this hearing and I want to thank the witnesses for coming to talk with us about TSA’s technology acquisition process, its strengths, and weaknesses, and what TSA is doing to make the process more effective and more efficient. The Transportation Security Acquisition Reform Act was signed into law just over 1 year ago. Among other things, the law requires the administrator to establish a strategic 5-year technology invest- ment plan and submit its intentions to Congress. The adminis- trator, with the approval of the Secretary, published the 2015 re- port to Congress in August of last year. This 5-year plan shows us the full scope of TSA’s investment objectives and it is a good start. But there are clearly some challenges that need to be addressed. In December GAO released a report assessing TSA’s acquisition process, specifically, its process for testing and evaluating screen- ing technology. This test and evaluation process is a necessary step that allows TSA and DHS to determine whether technologies meet mission needs before proceeding with procurement and deployment which saves the agency time and money. The GAO report acknowl- edges that TSA has come up with ways to improve the test and evaluation process in part by developing a third-party testing strat- egy in order to determine whether or not a vendor’s technology is immature before TSA and DHS begin the test and the evaluation process. Unfortunately, we have learned from this report that TSA has yet to implement that strategy. Allowing third-party testing and evaluation would determine early on if a certain technology is ma- 5 ture enough to deploy which will save, obviously, time and money, and prevent wasteful spending. So I hope to hear from our witnesses today why that strategy has not yet been implemented and when we can expect that it will be. While third-party testing has yet to be finalized, I am pleased to learn that TSA has been highly responsive to GAO’s recommenda- tions. I agree with the Chairman, Ms. Vaughan, you are not in an enviable position, but you were kind enough to take some time to meet with me yesterday and as a result of that, I think that this is going to be a very fruitful hearing. So with TSA’s screening more than 1 million passengers and checked bags, and more than 3 million carry-on bags every single day, it is critical that TSA utilize taxpayer dollars as efficiently as possible to procure the most effective technology available. We know that those numbers will only keep growing. The Federal Aviation Administration aerospace forecast for fiscal years 2015 to 2030 projects the number of passengers on U.S. carriers to increase 2 percent each year over the next 20 years. So TSA clearly needs technology that will cater to such growth, and as new threats emerge there is no question that we need to prioritize certain security-related technologies over others. That is why it is so important that TSA do the work now to establish and finalize all of the components of a straightforward and cost-efficient acquisition process in order to ensure that the agency can continue to fulfill its mission and keep passengers safe. I appreciate the fact that TSA has been so responsive to the GAO report. I truly do appreciate the opportunity to talk with our wit- nesses today about TSA’s efforts to improve their acquisition proc- esses. Among other things, I look forward to learning more about how TSA works with DHS to evaluate the different technologies. I am also interested in the ways in which TSA incentivizes small businesses to be able to innovate and compete with larger compa- nies that provide screening technology. That is probably one of the biggest challenges I think that we face today. TSA’s acquisitions process has been described as too long and too expensive for large businesses, so I can only imagine the issues that arise with small businesses, other start-ups that are trying to break into a field, that are obviously at a competitive disadvantage, and may endure a lengthy process only to learn their products aren’t mature enough for deployment. So I hope our witness can speak to that point as well. Mr. Chairman, thank you again for convening this hearing. I look forward to a productive conversation today. I yield back the balance of my time. [The statement of Miss Rice follows:] STATEMENTOFRANKINGMEMBERKATHLEENRICE JANUARY7, 2016 The Transportation Security Acquisition Reform Act was signed into law just over 1 year ago. Among other things, the law requires the administrator to establish a strategic 5-year technology investment plan and submit its intentions to Congress. The administrator, with the approval of the Secretary, published the 2015 report to Congress in August of last year. This 5-year plan shows us the full scope of TSA’s investment objectives, and it’s a good start—but there are clearly some challenges that need to be addressed. 6 In December, GAO released a report assessing TSA’s acquisition process—specifi- cally, TSA’s process for testing and evaluating screening technology. This test and evaluation process is a necessary step that allows TSA and DHS to determine whether technologies meet mission needs before proceeding with procurement and deployment, which saves the agency time and money. The GAO report acknowledges that TSA has come up with ways to improve the test and evaluation process, in part by developing a third-party testing strategy, in order to determine whether or not a vendor’s technology is immature before TSA and DHS begin the test and evaluation process. But unfortunately, we’ve learned from this report that TSA has yet to implement that strategy. Allowing third-party testing and evaluation would determine early on if a certain technology is mature enough to deploy, which will save time and money and prevent wasteful spending. So I hope to hear from our witnesses today why that strategy has not yet been implemented, and when we can expect that it will be. While third-party testing has yet to be finalized, I am pleased to learn that TSA has been highly-responsive to GAO’s recommendations. With TSA screening more than 1 million passengers and checked bags and more than 3 million carry-on bags every day, it’s critical that TSA utilize taxpayer dollars as efficiently as possible to procure the most effective tech- nology available. We know that those numbers will only keep growing. The Federal Aviation Ad- ministration Aerospace Forecast for fiscal years 2015–2035 projects the number of passengers on U.S. Carriers to increase 2 percent each year over the next 20 years. So TSA clearly needs technology that will cater to such growth, and as new threats emerge, there’s no question that we need to prioritize certain security-related tech- nologies over others. That’s why it’s so important that TSA do the work now to establish and finalize all the components of a straightforward and cost-efficient acquisition process, in order to ensure that the agency can continue to fulfill its mission and keep pas- sengers safe. Again, I appreciate the fact that TSA has been so responsive to the GAO report, and I appreciate the opportunity to talk with our witnesses today about TSA’s efforts to improve their acquisition processes. Among other things, I look forward to learning more about how TSA works with DHS to evaluate technologies. I’m also interested in the ways in which TSA incentivizes small businesses to be able to innovate and compete with larger compa- nies that provide screening technology. TSA’s acquisitions process has been described as too long and too expensive for large businesses—so I can only imagine the issues that arise with small businesses that may be at a competitive disadvantage, and may endure a lengthy process only to learn their products aren’t mature enough for deployment. So I hope our wit- nesses can speak to that point as well. Mr. KATKO. Thank you, Miss Rice. Our first witness is Mr. Steven Wallen, who currently serves as the director of the Explosives Division in the Department of Home- land Security Science and Technology Directorate. Previously Mr. Wallen worked for the United States Secret Service for 20 years where he managed the Science and Technology Group, including the Engineering Research and Development Branch. The Chair now recognizes Mr. Wallen to testify. STATEMENT OF STEVEN WALLEN, DIRECTOR, EXPLOSIVES DI- VISION, HOMELAND SECURITY ADVANCED RESEARCH PROJECTS AGENCY, SCIENCE AND TECHNOLOGY DIREC- TORATE, U.S. DEPARTMENT OF HOMELAND SECURITY Mr. WALLEN. Good afternoon, Chairman Katko, Ranking Member Rice, and distinguished Members of the subcommittee. Thank you for the opportunity to testify alongside my colleague from TSA on the ways the Science and Technology Directorates’ work on transportation security technology supports the aviation security mission. In this testimony I will discuss S&T’s approach to research and development and how our partnerships with TSA