DHS radiation detection program may exceed cost estimates by $1 billion, GAO says

In a briefing for lawmakers and staff on Tuesday, the Government Accountability Office estimated the cost of the Homeland Security Department's program to equip ports of entry with radiation detection equipment will be $3.1 billion. That's $1 billion more than the agency told the White House and Congress it would cost last spring.

The department's Domestic Nuclear Detection Office estimated it would cost $2.1 billion to furnish ports with the equipment, an assessment GAO says "is unreliable because it omits major project costs and relies on a flawed methodology."

Preventing nuclear and radiological material from being smuggled into the United States has become a top national priority in recent years. In 2005, the White House created the Domestic Nuclear Detection Office at Homeland Security to manage the acquisition and deployment of radiation detection equipment at ports of entry. Previously those responsibilities were under the department's Customs and Border Protection directorate.

In briefing documents presented to Congress, GAO auditors wrote, "We believe our estimate helps clarify the program's true cost, while DNDO's estimate obscures it."

The agency disputes GAO's charge.

There are several points of contention between the nuclear detection office and GAO. For one thing, they calculated life cycle costs differently: GAO included equipment operation and maintenance costs in its estimates where the Homeland Security agency did not.

"GAO incorrectly assumes DNDO's budget submission for [advanced spectroscopic portal monitors] should include operation and maintenance costs when in fact those are costs assumed by Customs and Border Protection. These costs are important but would never be included in a DNDO budget submission," Jerald Levine, director of Homeland Security's Departmental GAO/OIG Liaison Office, wrote in a Sept. 9 letter to GAO in response to its findings.

GAO maintained those costs need to be included to give lawmakers a complete understanding of the true program costs.

A more troubling disagreement between the nuclear detection office and GAO centers on what exactly the program aims to accomplish. In September 2006, the nuclear detection office and CBP produced a project execution plan that defined the objectives, scope, schedule, costs and funding requirements to deploy radiation detection systems at U.S. ports of entry.

The following month, Congress enacted the SAFE Port Act, which made the nuclear detection office responsible for developing and deploying a system to detect radiation at all ports of entry.

The project execution plan included elements of CBP's initial program for deploying radiation detection monitors, known as polyvinyl toluene monitors, along with handheld devices that could identify specific radioactive isotopes. The polyvinyl toluene monitors cannot distinguish between dangerous and benign radioactive materials, thus the handheld devices were needed.

To address this limitation with the early monitors, the DNDO sponsored the development of a next-generation technology, known as the advanced spectroscopic portal monitor. These monitors, now undergoing testing, could eliminate or reduce the need for the handheld radioactive devices. The 2006 project execution plan calls for the nuclear detection office to deploy several variations of the advanced spectroscopic portal monitors to screen cargo arriving by ship, rail and truck.

But officials in the nuclear detection office told GAO in October 2007 that the deployment strategy had been revised and only monitors to screen standard commercial trucks would be purchased. Yet, despite repeated requests from GAO, the nuclear detection office did not provide an updated plan documenting new schedule and funding requirements until July 2008, when agency officials provided auditors with a one-page spreadsheet of summary information regarding new equipment quantities and costs.

The spreadsheet summary did not provide detailed information requested by GAO, nor was it signed by any official. In GAO's view, "Estimates of any program's costs must be based on the agency's documented program."

"Agency officials acknowledged the program requirements that would have been fulfilled by the discontinued [advanced spectroscopic portal] monitors remain valid, including screening rail cars, airport cargo and cargo at seaport terminals, but the agency has no current plans for how such screening will be accomplished," GAO wrote.

In August, a senior official at the nuclear detection office told GAO the deployment strategy could change again substantially depending on the results of ongoing equipment testing, thereby making it all but impossible to reasonably estimate program costs.

If the nuclear detection office does try to implement the 2006 program execution plan -- the only plan on record -- GAO estimates a $1.6 billion funding shortfall. The agency would have to cut the program or request more money from Congress to make up the deficit. The decision to eliminate additional portals for examining rail and sea cargo could reflect an effort to trim costs, auditors concluded, noting that, "In either case, the Congress will not be getting the radiation portal monitor program it initially approved."

Also troubling to GAO was what auditors perceived as hindrance from the agency in conducting its assessment. DNDO officials informed contractors that all information requests from GAO and corresponding data from companies must go through the agency before being submitted to GAO, and that agency officials must to be present during interviews with GAO. So contentious were the discussions that GAO canceled one interview after repeated interruptions by DNDO officials.

"DNDO merely requested the opportunity to participate in contractor interviews, and that all data provided by the contractors be provided through DNDO so that DNDO could ensure that the data was current and accurate," Levine said.

The Senate Homeland Security and Governmental Affairs Committee plans to hold a hearing on the issue on Sept. 25. Scheduled to testify are Vayl Oxford, director of the Domestic Nuclear Detection Office and Thomas Winkowski, assistant commissioner at Customs and Border Protection's Office of Field Operations. The hearing is titled "Preventing Nuclear Terrorism: Hard Lessons Learned From Troubled Investments."