[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                 THE SAFE PORT ACT: A SIX-MONTH REVIEW

=======================================================================

                                HEARING

                               before the

     SUBCOMMITTEE ON BORDER, MARITIME, AND GLOBAL COUNTERTERRORISM

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 26, 2007

                               __________

                           Serial No. 110-31

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
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                     COMMITTEE ON HOMELAND SECURITY

               BENNIE G. THOMPSON, Mississippi, Chairman

LORETTA SANCHEZ, California,         PETER T. KING, New York
EDWARD J. MARKEY, Massachusetts      LAMAR SMITH, Texas
NORMAN D. DICKS, Washington          CHRISTOPHER SHAYS, Connecticut
JANE HARMAN, California              MARK E. SOUDER, Indiana
PETER A. DeFAZIO, Oregon             TOM DAVIS, Virginia
NITA M. LOWEY, New York              DANIEL E. LUNGREN, California
ELEANOR HOLMES NORTON, District of   MIKE ROGERS, Alabama
Columbia                             BOBBY JINDAL, Louisiana
ZOE LOFGREN, California              DAVID G. REICHERT, Washington
SHEILA JACKSON LEE, Texas            MICHAEL T. McCAUL, Texas
DONNA M. CHRISTENSEN, U.S. Virgin    CHARLES W. DENT, Pennsylvania
Islands                              GINNY BROWN-WAITE, Florida
BOB ETHERIDGE, North Carolina        MARSHA BLACKBURN, Tennessee
JAMES R. LANGEVIN, Rhode Island      GUS M. BILIRAKIS, Florida
HENRY CUELLAR, Texas                 DAVID DAVIS, Tennessee
CHRISTOPHER P. CARNEY, Pennsylvania
YVETTE D. CLARKE, New York
AL GREEN, Texas
ED PERLMUTTER, Colorado
VACANCY

       Jessica Herrera-Flanigan, Staff Director & General Counsel

                     Rosaline Cohen, Chief Counsel

                     Michael Twinchek, Chief Clerk

                Robert O'Connor, Minority Staff Director

                                 ______

     SUBCOMMITTEE ON BORDER, MARITIME, AND GLOBAL COUNTERTERRORISM

                LORETTA SANCHEZ, California, Chairwoman

JANE HARMAN, California              MARK E. SOUDER, Indiana
ZOE LOFGREN, California              BOBBY JINDAL, Louisiana
SHEILA JACKSON LEE, Texas            DAVID G. REICHERT, Washington
JAMES R. LANGEVIN, Rhode Island      MICHAEL T. McCAUL, Texas
HENRY CUELLAR, Texas                 GUS M. BILIRAKIS, Florida
AL GREEN, Texas                      PETER T. KING, New York (Ex 
BENNIE G. THOMPSON, Mississippi (Ex  Officio)
Officio)

                         Alison Rosso, Director

                         Denise Krepp, Counsel

                       Carla Zamudio-Dolan, Clerk

        Mandy Bowers, Minority Senior Professional Staff Member

                                  (ii)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California, and Chairwoman, Subcommittee on 
  Border, Maritime, and Global Counterterrorism..................     1
The Honorable Mark E. Souder, a Representative in Congress From 
  the State of Indiana, and Ranking Member, Subcommittee on 
  Border, Maritime, and Global Counterterrorism..................     2
The Honorable Gus M. Bilirakis, a Representative in Congress From 
  the State of Florida...........................................     3
The Honorable Al Green, a Representative in Congress From the 
  State of Texas.................................................    57
The Honorable Sheila Jackson Lee, a Representative in Congress 
  From State of Texas............................................    59

                               Witnesses
                                Panel I

Mr. Jayson Ahern, Assistant Commissioner, Office of Field 
  Operations, Customs and Border Protection:
  Oral Statement.................................................    24
  Prepared Statement.............................................     6
Admiral Craig E. Bone, Assistant Commandant for Prevention, U.S. 
  Coast Guard:
  Oral Statement.................................................     5
  Prepared Statement.............................................     6
Mr. Stephan L. Caldwell, Director, Homeland Security and Justice 
  Issues, U.S. Government Accountability Office:
  Oral Statement.................................................    28
  Prepared Statement.............................................    29
Ms. Maurine S. Fanguy, Program Director, Transportation Worker 
  Identification Credential (TWIC) Program, Transportation 
  Security Administration:
  Oral Statement.................................................    26
  Prepared Statement.............................................     6

                                Panel II

Mr. Manny Aschemeyer, Executive Director, Marine Exchange of 
  Southern California:
  Oral Statement.................................................    72
  Prepared Statement.............................................    73
Mr. George P. Cummings, Director of Homeland Security, Port of 
  Los Angeles:
  Oral Statement.................................................    62
  Prepared Statement.............................................    63
Mr. Leal Sundet, Coast Committeeman, Longshore Division of the 
  International Longshore and Warehouse Union
  Oral Statement.................................................    68
  Prepared Statement.............................................    70
Mr. Richard A. Wainio, Port Director & CEO, Tampa Port Authority:
  Oral Statement.................................................    65
  Prepared Statement.............................................    66

                                Appendix

Appendix I: Change in Number of Staff Performing Customs Revenue 
  Functions......................................................    87

I07
                 THE SAFE PORT ACT: A SIX-MONTH REVIEW

                              ----------                              


                        Thursday, April 26, 2007

             U.S. House of Representatives,
                    Committee on Homeland Security,
                          Subcommittee on Border, Maritime,
                               and Global Counterterrorism,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:14 p.m., in 
Room 1539, Longworth House Office Building, Hon. Loretta 
Sanchez [chairwoman of the subcommittee] presiding.
    Present: Representatives Sanchez, Jackson Lee, Green, 
Souder, and Bilirakis.
    Ms. Sanchez. [Presiding.] Good afternoon, and thank you all 
for being here today. I thank the members of the committee who 
are here.
    I know that votes have just finished for the day, so some 
of our members who believed they would be here obviously are 
trying to beat the crowd at the airport and come to their home 
districts. We understand that.
    The Subcommittee on Border, Maritime, and Global 
Counterterrorism will come to order.
    The committee is meeting today to receive testimony on 
``The SAFE Port Act: A Six-Month Review.''
    I would ask the indulgence of my colleagues before we begin 
if we might take a moment of silence in honor of Congresswoman 
Juanita Millender-McDonald. For those of you who know anything 
about the entire process of the SAFE Port Act, Juanita's bill 
was what we used as the base for that bill. So I think it would 
be appropriate to take a moment of silence as we go into the 
weekend. We will have her memorial services on Sunday and 
Monday, and I know many of my colleagues will be back there for 
that.
    So if we could take a moment of silence.
    Thank you.
    So first of all, let me thank all of the witnesses for 
joining us today and for your testimony on how the 
implementation of the SAFE Port Act is going.
    As you know, the SAFE Port Act mandated many long-overdue 
improvements and advancements that will enhance our nation's 
port security once they are all implemented, but it is always 
about how you can have a great plan, a great study, but you 
need to implement it. So that is what we are here about today.
    These issues are very complex. It requires a lot of 
agencies at different levels working together to make sure we 
get it all done. So today's hearing will have two panels.
    The first will consist of government witnesses. I am very 
pleased that representatives from the Coast Guard, Customs and 
Border Protection, and the Transportation Security 
Administration are here to provide detailed information 
regarding how their agencies' implementation of the SAFE Port 
Act is coming along. In addition, I am looking forward to the 
Government Accountability Office's insight into the 
government's ongoing port security issues.
    During the second panel, we will hear from a variety of 
port security stakeholders. I am very proud to represent an 
area where we have the ports of Los Angeles and Long Beach so 
close, and some of the committee members have been able to 
visit those ports. So I am really proud to have the Port of Los 
Angeles represented here today, and Tampa represented at 
today's hearing, as well as the International Longshore and 
Warehouse Union and the Marine Exchange of Southern California.
    What I am looking for from this hearing is, 6 months 
later--I know it is early, but you have to realize that I was 
just having lunch today with an accountant, and if anybody 
knows anything of my background, you will know that I come from 
finance. And so, having the plan and implementing the plan and 
checking it every so often I believe is the only way we really 
get to whatever our desired goal is. That is why I am so happy 
that we are having this.
    There are specific issues that I would like to hear about--
Custom and Border Protection's progress on the planning and 
implementation of the year-long pilot project for C-TPAT third-
party validation; the Coast Guard's current long-range vessel 
tracking capabilities; the TSA's and Coast Guard's progress in 
rolling out the TWIC, or the transportation worker 
identification card; and Custom and Border Protection plans for 
the 1-year pilot program to assess the risk posed by the empty 
containers at our ports.
    Those are just a few of the issues. If you have any others 
that are burning that you think I need to worry about at night, 
then please talk about those also.
    So I am looking forward to having some good dialogue about 
all these important issues under the SAFE Port Act, and I thank 
you for being here.
    I now believe it is time for my ranking member to give his 
opening statement. So the gentleman of Indiana, I will give his 
time for the opening statement.
    Mr. Souder. Thank you.
    I want to thank all the witnesses, both on our first panel 
as well as the port directors and the representatives from the 
workers at the different port authorities for being here.
    Approximately 95 percent of our overseas commerce travels 
by ship through the U.S. seaports. More than 12 million 
containers entered the United States last year, and that number 
grows annually. Port activities contribute more than $700 
billion annually to our GDP.
    The ability to protect this system from terrorist attacks 
and rapidly recover are essential capabilities for securing our 
homeland and maintaining our economic health.
    The SAFE Port Act built upon the significant investments 
made by the departments, specifically by CBP and the Coast 
Guard, in securing our port infrastructure and global supply 
chains after
9/11. The public law strengthens exiting programs and creates 
new initiatives to develop a robust, risk-based system for 
securing the entire maritime transportation system from the 
point of origin through the supply chain, for safe and secure 
delivery into the United States ports.
    I applaud the leadership of Mr. Lungren, Ms. Harman, 
Chairwoman Sanchez, as well as Ranking Member King and Chairman 
Thompson, for developing this legislation, as well as our late 
colleague, and moving it through the committee last Congress 
and onto the president's desk.
    I look forward to hearing more from the witnesses about 
current port security efforts and the implementation of the new 
mandates. In particular, I am interested in an update on the 
transportation worker identification credential, minimum 
standards for securing containers, supply chain security 
programs, the secure freight initiative, and what is being done 
to enhance our ability to target high-risk containers.
    The SAFE Port Act has been a truly bipartisan effort from 
the start to the finish in both bodies of Congress. The SAFE 
Port Act passed the House of Representatives on May 4, 2006, by 
a vote of 421 to 2, and the Senate on September 14, 2006, by a 
vote of 98 to 0. The legislation was signed into law on October 
13, 2006.
    To bring a bill through the process involving more than six 
committees, all the while in the midst of preparing for an 
election, shows the importance this body places on securing our 
ports and supply chains. You can be sure that there will be 
significant oversight, as well as congressional support, for 
the implementation of the 90-plus mandates in the law.
    Thank you again, Madam Chair, for holding this hearing. I 
hope that the SAFE Port Act process will be a model that the 
committee will follow as we move to consider other pieces of 
legislation in the 110th Congress.
    I would now like to yield the balance of my time to my 
colleague from Florida, Congressman Bilirakis, to welcome and 
introduce a fellow Floridian who will be presenting his 
testimony on the second panel.
    Mr. Bilirakis. Thank you, Ranking Member Souder. I want to 
commend you and Chairwoman Sanchez for holding this hearing to 
examine port security and review of the SAFE Port Act.
    I am pleased to welcome to our committee Mr. Richard 
Wainio, the director of the Port of Tampa, which is Florida's 
largest port and, although I am surely biased, one of our best, 
the best.
    I recently spent a day at the port and learned about the 
good work being done there and the security challenges the 
ports across my state and around the country are facing.
    I look forward to hearing your testimony today, sir, and 
thank the Madam Chairwoman and Ranking Member Souder. I 
appreciate it, and yield back the balance of my time. Thank 
you.
    Ms. Sanchez. Thank you to both of you.
    The chair will let other members of the subcommittee know 
that, under the committee rules, opening statements may be 
submitted from them for the record.
    And now I welcome our first panel of witnesses.
    Our first witness, Admiral Craig E. Bone, is the assistant 
commandant for prevention in the Coast Guard. In this capacity, 
he directs national and international policy and programs for 
port, vessel and facility safety and security, waterways 
management, including navigation systems, ice-breaking, bridge 
administration, and marine transportation system policy.
    Does that mean you are helping the Canadians break those 
people out of the ice up there?
    Admiral Bone. Yes, ma'am.
    Ms. Sanchez. Admiral Bone is a 1977 graduate of the U.S. 
Coast Guard Academy. He began his Coast Guard career as a deck 
watch officer aboard the Coast Guard Cutter Hamilton in Boston, 
Massachusetts. His previous flag assignments include director 
of port security and director of the Inspection and Compliance 
Directorate.
    Our second witness, Mr. Jayson Ahern, is the assistant 
commissioner, Office of Field Operations, Customs and Border 
Protection. As such, he oversees national programs and 
operations at 20 field operations offices, 326 ports of entry, 
50 operational container security initiative ports worldwide, 
and 15 pre-clearance stations in Canada, Ireland and the 
Caribbean.
    Whenever you need to get a hold of him, you can. I have 
experienced that.
    Assistant Commissioner Ahern began his career with the U.S. 
Customs Service in San Ysidro, California. He has previously 
been assigned as the director of field operations in Southern 
California, and he was also the principal field manager of 
customs port operations in Los Angeles, California, and Miami, 
Florida. Assistant Commissioner Ahern is a graduate of 
Northeastern University.
    Welcome.
    Our third witness, Ms. Maurine Fanguy, is the program 
director of the transportation worker identification credential 
program, or TWIC--we have a lot of questions for you--over at 
TSA. She is a graduate of Virginia Polytechnic Institute and 
State University in Blacksburg, Virginia. She has worked for 
TSA for 1 year.
    Prior to joining TSA, Ms. Fanguy provided business and 
technology consulting services to private and public sector 
clients at Accenture. She also worked on a wide range of 
homeland security-related projects, including border management 
issues and application of biometric technology as well.
    Our last witness on the first panel is Mr. Stephen L. 
Caldwell, director, homeland security and justice issues, 
Government Accountability Office. In this capacity, he provides 
direct support to congressional committees and individual 
members of the House and Senate on maritime security and U.S. 
Coast Guard issues. In the aftermath of Hurricane Katrina, for 
example, he was detailed from GAO to the House Select Committee 
on Hurricane Katrina to help investigate the preparations for 
and the response to that disaster.
    Mr. Caldwell holds a bachelor's and a master's degree from 
one of those great universities of California at Berkeley.
    Welcome.
    So, without objection, your written testimony will be put 
into the record. I will now ask each of you please to summarize 
your statements or tell us whatever it is that you want to tell 
us for 5 minutes apiece, beginning with the admiral.

 STATEMENT OF ADMIRAL CRAIG E. BONE, ASSISTANT COMMANDANT FOR 
                  PREVENTION, U.S. COAST GUARD

    Admiral Bone. Good morning, Chairwoman Sanchez, Ranking 
Member Souder, and distinguished members of the subcommittee. I 
am Rear Admiral Craig Bone, U.S. Coast Guard, assistant 
commandant for prevention. It is a pleasure to appear before 
you today to discuss the Coast Guard's efforts in implementing 
the SAFE Port Act requirements.
    The primary objective of the SAFE Port Act is stated as, 
``to improve maritime and cargo security through enhanced 
layered defenses.'' The Coast Guard decided that, as one of the 
primary organizations with specific responsibilities in 
implementing this objective, several facets within our 
organization have been intimately involved in achieving the 
requirements since the enactment on October 13, 2006.
    I will address only a few of the SAFE Port Act requirements 
that the Coast Guard is responsible for, in the interest of 
time. Section 101, the development of salvage response plans 
within each area maritime security plan has been integrated 
into the 5-year plan update cycle established by the Maritime 
Transportation Security Act, or MTSA, of 2002. The area 
maritime security plan updates will be performed by federal 
maritime security coordinators in consultation with their 
respective area maritime security committees, and is planned 
for completion during early summer of 2009.
    Resumption of commerce and recovery of the marine 
transportation system following a significant disruption is an 
issue of national concern. The Coast Guard is currently 
developing a concept of operations and specific planning 
requirements and organizational structures with our other DHS 
partners, to ensure a focus on MTS recovery following a 
significant incident that disrupts the marine transportation 
system.
    Progress within section 104 of the SAFE Port Act included a 
number of statutory requirements governing the implementation 
of the transportation worker identification credentialing 
program. The Coast Guard and TSA met the first timeline with 
posting of the TWIC final rule on January 1, 2007. We have also 
met several of the regulatory requirements established in the 
Act. For example, the TWIC rule, together with the merchant 
mariner credential supplemental notice of proposed rulemaking 
published on January 25, 2007, incorporated the provisions set 
forth in the Act for concurrent processing of TWICs and 
merchant mariner documents.
    In section 107, the Act requires the secretary of the 
Department of Homeland Security to establish a long-range 
identification tracking system that the chairwoman had spoken 
about. This SAFE Port Act requirement demands a multifaceted 
approach, using the full range of classified and unclassified 
vessel tracking information, including some information 
purchased from vendors where appropriate.
    The Coast Guard currently meets the tracking requirements 
of the Act. Currently, sufficient tracking information exists, 
but work is needed in the processing, the display, and training 
in the use of this information. The long-range identification 
tracking notice of proposed rulemaking is still being developed 
and therefore did not meet the April 1, 2007 deadline.
    The department is also working to establish a system 
through IMO that will provide an unclassified global tracking 
capability by the end of the year 2008, as a part of an 
existing IMO convention, and make available to the United 
States a system that is compatible and interoperable with the 
global maritime community.
    In section 109, the Coast Guard is supporting FEMA's 
National Preparedness Directorate's National Integration Center 
through training and exercise integration in implementing the 
requirements of this Act with regard to port security training.
    We have made great progress. We have worked with MARAD in 
establishment of model courses. These courses are competency-
based as required by the Transportation Security Act. In 
addition, FEMA and the National Preparedness Directorate has 
awarded a $6.18 million cooperative grant to Florida State 
University to develop courses meeting MTSA requirements and 
covering the eight core security-related topics under the SAFE 
Port Act.
    Total port security grant funding available in fiscal year 
2007 is $201,670,000. Those funds will be awarded based on 
analysis of risk and effectiveness of return on investment that 
the port entities have identified and applicants have 
identified. The initial reviews have been completed and 
actually final reviews are ongoing. It is anticipated the 
awards will be announced in May of 2007.
    In accordance with the Act, the Coast Guard has also 
increased its foreign port assessments and we anticipate that 
all initial assessments of the 145 foreign ports that are 
trading partners with the U.S. will be completed by March, 
2008, following which we will have examinations completed 
within every 2 years.
    In conclusion, the Coast Guard is committed to working with 
the Department of Homeland Security team implementing all of 
the various statutes given within the SAFE Port Act. We 
continue to make headway on all fronts, and look forward to 
future progress and partnerships with the international, the 
federal, state and local port organizations, as well as the 
marine industry.
    Thank you, Chairwoman, for the opportunity to testify 
today. I will be happy to answer any questions.
    [The statement of Admiral Bone, Mr. Ahern, and Ms. Fanguy 
follows:]

  Prepared Statements of Jayson P. Ahern, Adm Graig Bone, and Maurine 
                                 Fanguy

Introduction
    The Department of Homeland Security appreciates this opportunity to 
discuss with you today the Security and Accountability For Every Port 
Act and the efforts of its components six months after its passage.
    It is noteworthy that DHS, CBP, TSA, and the Coast Guard worked 
quite closely with the House and Senate in the development of the SAFE 
Port Act and applaud the high level of Congressional interest in 
securing United States ports and the global supply chain. Much of what 
is in the SAFE Port Act codified initiatives that the Department of 
Homeland Security undertook immediately after 9/11 and has been 
implementing successfully ever since.
    Below are updates on the primary areas of activity being undertaken 
by the testifying components to fully implement the Act.

Area Maritime Security Plans.
    Development of Salvage Response Plans within each Area Maritime 
Security Plan (AMSP) has been integrated into the five-year plan update 
cycle established by the Maritime Transportation Security Act (ACT) of 
2002. The AMSP update will be performed by Federal Maritime Security 
Coordinators (FMSC) in consultation with their respective Area Maritime 
Security Committees (AMSC) and is planned for completion during early 
summer 2009.
    A Salvage Response Plan will be a major element of the U.S. Marine 
Transportation System (MTS) recovery section of each AMSP and will 
provide the coordination and procedural foundation to support 
development of unified command incident action plans under the Incident 
Command System (ICS) construct when salvage response becomes necessary 
to facilitate resumption of trade. Authorities, capabilities, and other 
salvage issues are currently being coordinated and researched with 
Federal Government partners. Consultation with national-level salvage 
industry representatives is continuing with the development and 
establishment of a Memorandum of Understanding (MOU) between the Coast 
Guard and the American Salvage Association of America. The MOU will 
establish a working partnership with goals of strengthening the 
communication and working relationship between the Coast Guard and the 
marine salvage and fire fighting industry to improve vessel and 
personnel safety within the industry, enhance national security 
preparedness and response, promote timely and professional salvage 
response to marine casualties, and enhance the protection of the 
environment along the nation's waterways.
    Resumption of commerce and recovery of the marine transportation 
system (MTS) following a significant disruption is an issue of concern 
nationwide. The Maritime Transportation Security Act (MTSA) 2002 
required that the National Maritime Transportation Security Plan 
include a plan to restore cargo flow following a National 
Transportation Security Incident (NTSI). The Coast Guard held a 
National Recovery Symposium at the National Maritime Institute of 
Technology and Graduate Studies on August 1st and 2nd, 2006. The 
symposium was attended by over 150 executive level participants from 
numerous branches of state and federal government, and the private 
sector.
    The Coast Guard is currently developing a concept of operations and 
specific planning requirements and organizational structures to ensure 
a focus on MTS recovery following a significant incident that disrupts 
the MTS. MTS recovery guidance will be harmonized with, and support 
implementation of, the forthcoming Strategy to Enhance International 
Supply Chain Security that is being prepared by the Department of 
Homeland Security with Coast Guard and interagency input. 
Implementation guidance will also harmonize with MTS recovery 
principles gleaned from Hurricane Katrina lessons learned that have 
already been published in the U.S. Coast Guard Incident Management 
Handbook.
    Review of maritime security developments since the implementation 
of MTSA, MTS recovery lessons from Hurricane Katrina, best Area 
Maritime Security practices from the field, and an update of MTSA 
implementation guidance are in progress. Review results will form the 
basis for revising Navigation Vessel Inspection Circular (NVIC) 09-02 
which is used to guide the five-year AMSP update.
    Consistent with the overriding requirement to deter, and when 
necessary, mitigate the effects of Transportation Security Incidents 
(TSI), the Coast Guard is working to make AMSP coordination and 
procedures hazard and transportation disruption compatible as much as 
practicable. This, in conjunction with oil and hazardous materials 
response coverage provided through Area Contingency Plans (ACP) and 
application of Incident Command System (ICS) principles and structures 
per the National Incident Management System (NIMS), is intended to 
support a consistent preparedness approach across all transportation 
disruptions without the need for additional port-level plans.

Maritime facility security plans.
    The Department of Homeland Security recognizes that information on 
ownership of maritime facilities and the companies that operate them is 
vitally important to the management of the security posture and the 
clear delineation of security responsibilities within the port. 
Currently, in 33 CFR 104.415(b)(2), 105.415(b)(2), and 106.415(b)(2), 
the Coast Guard requires a security plan audit whenever the owner or 
operator of a vessel, facility or Outer Continental Shelf (OCS) 
facility changes. Should the audit reveal that an amendment to the 
security plan is necessary, the security officer of the vessel, 
facility or OCS facility, will submit the amendment to the cognizant 
Captain of the Port or District Commander for approval. Consistent with 
the requirement in Section 102 of the SAFE Port Act, the DHS 
Appropriations Act of 2007 requires the Coast Guard to gather ownership 
information on vessel and facility security plans.
    In order to meet the requirements in these statutes, the Coast 
Guard has initiated a regulatory project to update 33 CFR Subchapter H 
regulations and will incorporate these new ownership reporting 
requirements.
    Implementation of the Transportation Worker Identification 
Credential (TWIC) regulations published in January 2007 will meet the 
requirement in Section 102 for a qualified individual having full 
authority to implement security actions for a facility. The Secretary 
can still waive the requirement after a determination based on a 
complete background check of the individual. These regulations in 33 
CFR 105.205(a)(4), require facility security officers (the qualified 
individuals in the statute) to possess and maintain a TWIC. The 
security threat assessment conducted as part of the TWIC program 
includes a complete background check, including a criminal history 
records check, a legal status check, and an intelligence and terrorist 
watch list check, thus satisfying the relevant mandate within this 
section. In addition, the Coast Guard is addressing the requirement for 
Facility Security Officers to be U.S. citizens in the regulatory 
project to update Subchapter H.

Unannounced inspections of maritime facilities.
    Currently, Coast Guard policy requires one annual inspection of 
each facility to be supplemented with periodic spot checks. The FY 2007 
Homeland Security Appropriations Act provided $15M to, among other 
efforts, fund additional port security inspections. With this funding, 
the Coast Guard has created 39 new field billets, which will be filled 
during the 2007 transfer season, to add to the existing 350 facility 
inspectors. The Coast Guard has also created 61 reserve inspection 
billets to support additional inspections until permanent billets are 
filled this summer. This will ensure that each facility is inspected no 
less than two times per year, with at least one being an unannounced 
inspection. The Coast Guard conducted more than 7500 annual security 
inspections and unannounced spot checks of 3200 facilities in calendar 
year 2006, and will use the additional billets to increase these 
inspections. The 2006 inspections resulted in 465 violations which 
levied $1,892,000 in penalties.

    Transportation Security Card.
    The final rule for TWIC went into effect on March 26, 2007. With 
the passing of this critical milestone, this hearing provides an 
excellent opportunity to highlight program developments and describe 
how the Department of Homeland Security is incorporating lessons 
learned into an effective, efficient business plan for TWIC enrollment. 
This extremely important program is moving aggressively towards its 
objectives with a focus on making good security and business decisions. 
This leading edge program is developing essential processes, 
capabilities and expertise that will be beneficial to other programs.
    The Department of Homeland Security has framed the program 
decisions and processes within the context of the nation's port 
security goals, including the need to:
         Identify authorized individuals who require unescorted 
        access to secure areas of Maritime Transportation Security Act 
        (MTSA) regulated facilities and vessels;
         Determine the eligibility of an individual for access 
        through a security threat assessment;
         Ensure unauthorized individuals are denied access 
        through biometric confirmation of the credential holder;
         Revoke access promptly for individuals who fail to 
        maintain their eligibility;
         Apply privacy and security controls to protect TWIC 
        information; and,
         Fund the program entirely by user-fees.
    Achieving these ambitious goals has required creative planning, 
flexible implementation, effective stakeholder communication, and 
adaptive contract management. The basic program deployment philosophy 
has been a commitment to evaluate all practicable technical 
alternatives that will provide adequate port security and minimize 
adverse impacts, either economically or logistically, to United States 
citizens and the international trading system. This has been and will 
continue to be the program's implementation premise.
    The Department of Homeland Security fully respects the fact that 
this program has significant operational implications to the economic 
wellbeing of the nation. Therefore, the Department is committed to 
ensuring that the program is tested, fully integrated and does not 
compromise security in any linked system TWIC is an advanced, 
sophisticated credentialing system that presents at least four 
groundbreaking technological challenges:
         TWIC uses the latest, most advanced federal government 
        biometric and credentialing standards and for the first time 
        applies them to the commercial sector.
         TWIC issues cards that work anywhere in the nation's 
        private port environment, involving multiple potential 
        companies and industries, by anyone working in a secure area.
         TWIC has not only unparalleled flexibility, it 
        involves mass scale. There will be over 750,000 card holders 
        working at 3,200 ports.
         TWIC security checks will be integrated into all of 
        TSA's vetting programs creating potential security synergies 
        throughout the entire transportation sector.
    In other words, the hard part is not the card; the challenge is the 
network behind the card. The landmark technical principle underlying 
TWIC's ability to authenticate a person's identity includes three 
factors. When using the full extent of TWIC's authentication ability 
each person can be identified by:
         Something they know--a worker's Personal 
        Identification Number (PIN);
         Something they have--the TWIC credential; and
         Something they are--a biometric.
    With these considerations in mind, the below provides an overview 
of milestones completed, program plans, and how the Department has 
incorporated the lessons learned from this pioneering program.

TWIC Milestones to Date.
    Obviously, new processes and technologies require systematic pilot 
studies. The prototype study was deployed to 26 locations in the areas 
of Los Angeles/Long Beach, Wilmington/Philadelphia and Florida's 
deepwater ports. The prototype TWIC was successfully issued to more 
than 4,000 volunteer workers including truck drivers, longshoremen, 
container terminal, railway, and airport personnel. A name-based threat 
assessment was completed on each individual. A criminal background 
check was conducted by the State of Florida for the deep-water port 
volunteers. These efforts were a success on multiple levels; it 
provided invaluable experience and a much deeper understanding of the 
technical and logistical challenges.
    Security improvements cannot wait until TWIC is fully deployed. The 
Department has gone forward with significant interim security 
enhancements and actions during TWIC's initial development phase. These 
actions included:
         The Coast Guard worked effectively with the National 
        Maritime Security Advisory Committee (NMSAC) to define secure 
        areas. This definition will have a direct impact on over 10,000 
        vessels and more than 3,200 facilities. These secure areas 
        delineate where a TWIC will be required for unescorted access.
         The joint rulemaking process between the Coast Guard 
        and TSA was accelerated resulting in TWIC Notice of Proposed 
        Rulemaking (NPRM) being published on May 22, 2006.
         The Coast Guard and TSA worked with industry partners 
        to develop an interim process that compares a worker's 
        biographical information against terrorist watch lists and 
        immigration databases.
         Facility owners, facility operators and unions 
        submitted worker names, date of birth, and, as appropriate, 
        alien identification number. To date TSA has completed 750,000 
        name based threat assessments on port workers and longshoreman. 
        This task will be repeated this summer to keep the assessment 
        fresh. These assessments are interim measures and do not 
        include the criminal history records check or biometric 
        credential that is part of TWIC.

TWIC Rule and Stakeholder Input.
    The TWIC rule was posted on the TSA and Coast Guard websites on 
January 1, 2007, and published in the Federal Register on January 25, 
2007. The rule is the result of extensive public involvement and 
interagency coordination. In addition to the direct involvement of the 
National Maritime Security Advisory Committee, TSA and the Coast Guard 
held four public meetings in Newark, NJ, Tampa, FL, St. Louis, MO and 
Long Beach, CA. Over 1,900 comments were received from workers, port 
owners and operators, small businesses and others affected by the new 
program. All comments were carefully considered and significant changes 
were made to the NPRM in the development of the Final Rule. These 
changes include:
         The Coast Guard and TSA delayed the requirement to 
        purchase and install electronic readers to allow for additional 
        field testing, technology improvements, and more public 
        comment.
         An expedited interim threat assessment process was 
        created for new hires so that they may go to work pending 
        completion of the full threat assessment.
         Immigration requirements were expanded to permit 
        certain Visa-holders who are prevalent in the maritime industry 
        to apply for a TWIC.
    The rule also meets SAFE Port Act requirements to concurrently 
process TWICs and merchant mariner's documents, and to include a 
provision to enable newly hired workers to begin working after TSA 
conducts an initial threat assessment. In addition, the TWIC NPRM and 
Final Rule include provisions that respond to comments received from 
workers subject to similar threat assessment programs. These include:
         Creating a new process where TSA can make a 
        determination that a security threat assessment conducted by 
        another government agency is comparable, eliminating redundancy 
        and reducing costs for workers;
         Providing workers more time to apply for an appeal or 
        waiver;
         Streamlining the process, jointly with the Coast 
        Guard, for merchant mariner credentialing and ensuring that 
        there was no duplication of requirements resulting from the 
        TWIC process.
    TWIC cards will be required not only for port facility workers, but 
for anyone who seeks unescorted access to secure areas of a MTSA 
regulated facility or vessel, regardless of frequency. The workers 
covered by this rule include certain truck drivers, rail employees, 
security guards, longshoremen, as well as all U.S. merchant mariners. 
TSA will use the time tested security assessment procedures and 
standards that are currently used for commercial motor vehicle drivers 
licensed to transport hazardous materials, known as Hazardous Material 
Endorsements (HME). In short, TWIC will be issued to workers who 
successfully complete a security threat assessment, which includes: (1) 
a check against terrorist watch lists, (2) an immigration status check, 
and (3) a FBI fingerprint-based criminal history records check.

TWIC Card Readers.
    The TWIC rule does not currently include a requirement for owners 
and operators to use card readers. This was done as a response to 
important public comments received on the NPRM and concerns from 
Congress expressed in the SAFE Port Act. The card reader requirement is 
being formulated and coordinated by extensive technical input from 
industry and the public. In the interim, workers seeking unescorted 
access to secure areas will present their cards to authorized 
personnel, who will compare the photo, inspect security features on the 
card, and evaluate the card for signs of tampering. At facilities with 
various sophisticated access control systems, the magnetic stripe on 
the credential could be used to grant or deny access at entry gates. 
The Coast Guard will also institute periodic unannounced checks to 
confirm the identity of the holder of the TWIC.
    The Department of Homeland Security will continue to work closely 
with all interested parties to address the ever evolving technology 
issues. The TWIC technical architecture is compatible with Homeland 
Security Presidential Directive (HSPD) 12 and Federal Information 
Processing Standards (FIPS) 201-1 requirements which provide an open 
standard that will ensure interoperability and real-time exchange for 
supply chain security cooperation between the Department and the 
private sector. The applicant's photograph, name, TWIC expiration date, 
and a unique credential number are printed on the card. An integrated 
circuit chip on the card stores two fingerprint minutia templates and a 
PIN as well as a digital photo of the applicant, the applicant's name, 
and card expiration. The embedded computer chip is capable of being 
read by both contact and contactless card readers and also contains the 
magnetic strip and linear bar codes.
    In addition to previously conducted prototype testing, pilot test 
planning and discussions with interested port, facility, and vessel 
operators began late last year. The pilots will test access control 
technologies in real world marine environments. The National Maritime 
Security Advisory Committee is providing invaluable input regarding 
operational requirements and has recommended specifications for 
contactless biometric smart cards and card readers. Public feedback is 
being collected and analyzed on the recommendations. As part of the 
outreach efforts for the TWIC program and the Department's Port 
Security Grant Program the Department has met with a number of maritime 
interests to invite their participation in the pilot tests. The 
Department's objective is to include pilot test participants that are 
representative of a variety of facility and vessel types and sizes 
which operate in a variety of geographic locations and environmental 
conditions. There appears to be sufficient interest from the maritime 
community to achieve this objective.
    The Department of Homeland Security is currently reviewing Port 
Security Grant applications relating to these pilot studies and will 
announce awards later this spring. While the grant process is 
proceeding, TSA and the Coast Guard are working with Department test 
and evaluation experts to develop a comprehensive plan that addresses 
the unique pilot test challenges. The evaluation of the pilot tests 
will greatly facilitate the Department's efforts to propose a TWIC 
reader requirement rule that effectively addresses security 
requirements, maintains the flow of commerce, and protects the personal 
information used to validate the TWIC holder's identity.

Rollout Contract.
    A key operational piece of the rollout plan was the award of a 
competitively bid, indefinite delivery/indefinite quantity contract to 
Lockheed Martin Corporation. The TWIC enrollment and systems operations 
and maintenance contract will include a Quality Assurance Surveillance 
Plan (QASP) that establishes detailed metrics to be monitored through 
the life of the contract and will determine whether the contractor will 
receive any award fee for services performed.
    Lockheed Martin will establish approximately 130 enrollment centers 
near the port facilities where applicants will provide biographic 
information and fingerprints. This information will be transferred to 
TSA so they may conduct a threat assessment involving checks of 
criminal history, immigration, and intelligence databases. Once a 
worker successfully completes the threat assessment process, the 
government will produce the credential and send it to the enrollment 
center, where the worker will retrieve it. TWIC enrollment will begin 
initially at select ports based on risk and other factors and will 
proceed throughout the nation over the next 18--24 months.

TWIC Card Costs.
    As required by Congress, the costs of the program will be borne by 
TWIC applicants. Therefore, the Department is obligated to look for 
practicable ways of controlling costs, eliminating duplicative 
processes, providing timely decisions, and, most importantly, ensuring 
accuracy and fairness.
    The fees for a TWIC will be slightly lower than was anticipated in 
the Final Rule. A TWIC will be $137.25 for a card that is valid for 5 
years. Workers with current, comparable background checks (e.g., 
HAZMAT, Merchant Mariner Document (MMD) or Free and Secure Trade 
(FAST)) will receive a discounted fee of $105.25. The cost of a lost, 
damaged or stolen credential is $36, although the Department has 
solicited comment on raising that fee.
    The Department of Homeland Security fully realizes that these costs 
are not an insignificant amount to some workers. However, the 
Department feels that the costs compare very favorably with equivalent 
HSPD-12 compliant card fees and in some instances may actually reduce 
the costs for some workers. For example, the Coast Guard is in the 
process of completing a companion rule which will consolidate existing 
mariner credentials and streamline the application process for mariners 
who have already applied for the TWIC. This will reduce the overall 
cost burden for these workers. Preparations are underway to reduce 
duplication by having TSA provide the Coast Guard with electronic 
copies of the applicant's fingerprints, proof of identification, proof 
of citizenship, photograph, and if applicable the individual's criminal 
record, FBI number and alien registration number. This will eliminate 
the need for TWIC holding mariners to visit a Coast Guard Regional Exam 
Center to apply for or renew their Merchant Mariner Credential unless 
an examination is required.

Rollout Communication Plan and Pre-Enrollment.
    Effective public communication is fundamental to the Department 
rollout plan. The TWIC program office has used the lessons learned from 
the prototype phase to develop a multi-dimensioned outreach strategy 
for all of the enrollment phases. A toll-free help desk, Frequently 
Asked Questions, informational brochures, and a centralized e-mail 
address will provide up-front assistance and guidance for workers, 
owners, and operators. These services include program information, 
response to enrollment questions, pre-enrollment assistance, lost/
stolen card reporting, credential replacement support, updates on an 
individual's case, and information on appeals and waivers. Applicants 
are encouraged, but not required, to ``pre-enroll'' and provide 
biographic information at the secure TWIC web site which should help 
reduce waiting time at the enrollment centers. An additional service 
that is provided during pre-enrollment is an opportunity for the 
applicant to schedule an appointment for appearing at the enrollment 
center.
    Lockheed Martin is required by contract to develop a communication 
plan to ensure that applicants, operators, and relevant industry 
associations are educated and knowledgeable about the TWIC enrollment 
process. The communication plan will identify TSA goals and 
responsibilities, contractor goals and responsibilities, port facility 
and vessel responsibilities, target audiences, communications 
processes, and supporting communication tools. A key plan element was 
the establishment of the TWIC Stakeholders Communications Committee. 
The initial committee meeting was held last month with new meetings on 
a regularly occurring basis. These meetings will serve as a forum to 
ensure sustained two-way communication with stakeholders and directly 
provide the most current, accurate program information. Additionally, 
Lockheed Martin will facilitate rollout communications by deploying 
advance teams prior to the opening of enrollment centers to seek input 
and communication from local port officials, field federal agents, and 
local stakeholders.

Enrollment Centers.
    Enrollment sites will be operated by trusted agents who are 
employees of a vendor under contract with TSA. These trained agents 
will have undergone a TSA security threat assessment before being 
allowed to collect data. The trusted agents will provide applicants 
with a privacy notice and consent form, by which the applicant agrees 
to provide personal information for the security threat assessment and 
credential. The trusted agents will verify an applicant's identity, 
confirm the accuracy of biographic information, collect biometric 
information (a full set of fingerprints and a facial photograph), and 
obtain the applicant's signature on the enrollment documents. The 
contract performance parameter for the trusted advisor enrollment 
process will be an average enrollment time of 15 minutes. The 
enrollment process for a pre-enrolled applicant is fully expected to 
take less time. Focused planning that fosters convenience for 
applicants will benefit workers as well as garner process efficiencies.

Data Security Vetting and Card Issuance.
    After enrollment, an applicant's data is sent to the TSA system, 
and the vetting process (i.e., terrorism database, criminal history 
records check, immigration check) is started. One of the top technical 
challenges to introducing the new technology associated with TWIC is 
ensuring that the data is appropriately and efficiently transmitted to 
the appropriate destinations. The Department intends to enhance 
security synergies and efficiencies by using the same screening IT 
systems used for security screening in other programs. These 
efficiencies, however, require the Department to be absolutely certain 
that the stability or security of this larger vetting system is not 
jeopardized. Rigorous performance testing, and the accompanying 
scheduling complexities, is the only way to know for certain that 
satisfactory technical integration has been achieved.
    Once the technical integration has occurred, it is anticipated that 
the TWIC threat assessment processing time will be similar to that 
experienced in the HME program. Since the inception of the HME program, 
threat assessments have frequently been completed in 3 days or less. 
During this same period the average time for completing HME threat 
assessments has been approximately 14 days, which includes all appeals 
and waivers. The process will be impacted by steps where there is 
minimum governmental control. For example, applicants need to promptly 
provide corrected records, and respond to initial determinations. Other 
anticipated factors that could result in processing delays include an 
applicant providing incorrect information, watch list determinations, 
evaluation of the nature of threats, whether the applicant is currently 
under criminal investigation, and confirming immigration status that is 
not available in electronic format. Nonetheless, the 14 day average for 
processing the HME assessments includes the time required to meet the 
same threat assessment challenges that will be faced with TWIC.
    If TSA determines that an applicant does not pose a security 
threat, the applicant's information is sent for card production. After 
the card is developed it is sent to the enrollment center, where the 
worker will be notified to pick up the card. Due to the secure nature 
of the credential, the smart cards are shipped as ``inactive.'' An 
applicant must verify his or her personal identity by providing a 
biometric (i.e., fingerprint) that is matched to the cards electronic 
template. After identity is verified, the applicant selects a secret 
PIN which is stored on the card as an additional identity 
authentication factor.

Worker Redress/Waivers/Appeals.
    If an applicant is denied a TWIC they will be notified of the 
reason and instructed on how to apply for an appeal or waiver. All 
applicants have the opportunity to appeal a disqualification and may 
apply to TSA for a waiver. .
    The standards for denial of a TWIC are the same standards that 
apply in the HME process. Any applicant who is subject to removal 
proceedings or an order of removal under the immigration laws of the 
United States is not eligible to apply for a TWIC. An individual will 
be disqualified if he or she lacks legal presence and/or authorization 
to work in the United States, has a connection to terrorist activity, 
or has been determined to lack mental capacity.
    A person will also be denied a TWIC for a criminal history 
involving certain disqualifying crimes. TSA received valuable NPRM 
comments on the list of disqualifying crimes and decided to fine tune 
the list to better reflect crimes that are more likely to result in a 
terrorism security risk or a risk that the individual may engage in a 
transportation security incident. Permanent disqualifying criminal 
offenses include: espionage, sedition, treason, terrorism, improper 
transportation of a hazardous material, unlawful possession, use or 
sale of an explosive, murder, threats to a place of public use 
(government facility, public transportation system, or infrastructure 
facility), violations of the Racketeer Influenced and Corrupt 
Organizations (RICO) Act in which the predicate act is one of the 
permanently disqualifying crimes, or a crime involving a transportation 
security incident. A transportation security incident is a security 
incident resulting in a significant loss of life, environmental damage, 
transportation system disruption, or economic disruption in a 
particular area.
    Individuals are ineligible for a TWIC if convicted in the last 
seven years or incarcerated within the last five years of the following 
crimes: Unlawful possession, use or sale of a firearm or other weapon, 
extortion, fraud, bribery, smuggling, immigration violations, 
distribution or importation of a controlled substance, arson, 
kidnapping or hostage taking, rape or aggravated sexual abuse, assault 
with intent to kill, robbery, RICO violations that do not involve a 
permanent disqualifying crime.
    The appeal process involves ensuring that the information on which 
TSA bases its threat assessment is completely accurate. This process 
allows the applicant to correct the record on which that threat 
assessment occurs.
    Fairness and accuracy in TWIC waiver determinations are further 
ensured by an opportunity for independent review by an Administrative 
Law Judge. As previously noted, the regulations provide a lengthened 
period for appealing denial of waivers, from 30 days to 60 days, to 
accommodate workers who tend to travel for extended periods of time. 
Furthermore, the regulations allow a worker to file a request for a 
time extension after the deadline has passed by filing a motion 
describing the reasons why they were unable to comply with the 
timeline. The extra procedural measures are intended to give workers 
every reasonable chance to bring legitimate concerns and issues to the 
attention of people who are trying to make the best and correct 
decision regarding security risks.

Lessons Learned and Future Efforts.
    The initial rollout of TWIC will be focused on the maritime mode. 
However, once the initial maritime rollout is complete the Department 
of Homeland Security will evaluate deployment of this program in other 
modes of transportation. The analysis and planning for any resulting 
decision will benefit from the experience, technical expertise, and 
lessons learned that evolved under the TWIC program.
    There are several vital lessons learned during the development of 
this program that must be prominently considered in future efforts:
         Look for efficiencies in duplicative regulatory 
        processes. As noted previously, TSA and the Coast Guard are 
        developing procedures for the sharing of mariner fingerprints, 
        identity verification, criminal history, and photographs for 
        TWIC which is expected to save not only money but time. In 
        addition, merchant mariners will no longer be required to visit 
        a Regional Exam Center to obtain and renew their credentials, 
        resulting in substantial time and travel savings.
         Address the impact on small businesses. TSA and the 
        Coast Guard worked closely with the Small Business 
        Administration to minimize the financial and operational impact 
        on small businesses wherever possible. The rule includes 
        provisions that allow MTSA-regulated passenger vessels 
        (excluding cruise ships) to establish employee access areas for 
        crewmembers that do not require unescorted access to secure 
        areas such as the pilot house and engine room. This provision 
        reduces the impact on those employees who rarely need to use 
        spaces beyond those designated for support of passengers while 
        maintaining the integrity of vessels' secure areas. A Small 
        Business Compliance Guide is also being produced and 
        distributed to assist small businesses in their implementation 
        of the program.
         When practicable, preserve State regulatory 
        flexibility. Mariner regulations and port security plans 
        preempt state regulations. However, TSA does not preempt States 
        from requiring background checks and badging systems in 
        addition to TWIC. States may need to set standards for 
        important purposes other than terrorism threats.
         Plan for privacy. All data collected at an enrollment 
        center will be deleted from the enrollment center work 
        stations. The entire enrollment record (including all 
        fingerprints collected) is stored in the TSA system, which is 
        protected through role-based entry, encryption, and 
        segmentation to prevent unauthorized use. No paper records are 
        created during the enrollment process.
         Technical innovation requires adaptive contract 
        management. TWIC is attempting to develop a 21st century 
        technology that accommodates evolving IT standards suited to 
        emergent needs that span local, international, public, and 
        private interests. This requires continual reevaluation of the 
        scope and methods of contracting. The recent Lockheed Martin 
        contract award is a culmination of Department efforts to date. 
        Due to the nature of this task, however, the Department will 
        need to continue to look for and implement adaptive planning, 
        metrics, and changes to ensure this effort stays on track.
         Don't expect a ``silver bullet' technology solution. 
        Evolving technology, such as card readers, creates a changing 
        environment and program control constraints. This is especially 
        the case when the technology must be deployed to a vast 
        multitude of entities with remote connectivity challenges 
        (e.g., vessels) and varying degrees of access control system 
        capabilities.
         Place the highest value in stakeholder input; it is 
        time well spent. The public hearings, comments to the NPRM, 
        meetings with operators and associations, and contributions of 
        advisory councils all added pure value. The Department came 
        away from each and every one of these efforts better informed 
        about the challenges, the unacceptable impacts, and the 
        practicable options for protecting United States ports.

Long-range vessel tracking.
    The Coast Guard currently meets the intent and tracking 
requirements of the Act using the full range of classified and 
unclassified vessel tracking information available. However, it takes 
up to two years to develop and finalize a regulation, and the Long 
Range Identification and Tracking (LRIT) NPRM is still being developed 
and, therefore, did not meet the April 1, 2007 deadline. The Act 
requires the Secretary of the Department of Homeland Security to 
establish a long range automated vessel tracking system that meets the 
following:
         Tracking: Provided for all vessels in U.S. waters 
        equipped with Global Maritime Distress and Safety System 
        (GMDSS) or equivalent satellite technology
         International: Consistent with international treaties, 
        conventions and agreements
Tracking:
    The SAFE Port Act requirement demands a multi-faceted approach. 
Using the full range of classified and unclassified vessel tracking 
information, including some information purchased from vendors where 
appropriate, the Coast Guard currently meets and exceeds the tracking 
requirement of the Act. Currently, sufficient tracking information 
exists, but work is needed in the processing, display, and training in 
the use of this information.

International:
    The Departments work to establish a system through the 
International Maritime Organization (IMO) will provide an unclassified 
global tracking capability by the end of 2008 as a part of recently 
adopted amendments to an existing IMO convention and make available to 
the United States a system that is compatible and interoperable with 
the global maritime community. Since shortly after 9/11, the Coast 
Guard has been working with the IMO to implement a global tracking 
system for the types of vessels described in the Act. Following 
considerable U.S. diplomatic efforts, the international agreement to 
implement such a system was reached last year, and the global tracking 
system will be in effect at the end of 2008. In the long run, this 
approach is more advantageous to the United States because it applies 
globally to all ships described in the Act rather than just those in 
U.S. waters or vessels intending to make port calls in the U.S. Under 
this system, the U.S. will have access to information for U.S. Flag 
vessels regardless of their current location and vessels bound for U.S. 
ports when they declare intent to arrive. Information on all other 
vessels will be available whenever a ship is within 1,000 nautical 
miles of the U.S. coast. The Coast Guard is examining funding 
strategies for this important international system that it is committed 
to support, and believes it will be able to implement capabilities to 
participate by the time the system comes into effect.

Interagency operational centers for port security.
    Section 108 requires a budget and cost-sharing analysis for 
implementing interagency operations centers. The Department of Homeland 
Security did not meet the April 11, 2007 report deadline because it is 
are still working with agency partners to provide a consistent report. 
An interim letter has been sent, indicating that the report will be 
completed by July 30, 2007.
    The establishment of interagency operations centers is currently 
not funded. In cooperation with Department of Justice (DOJ), Navy, and 
DHS Office of Science and Technology (S&T), three prototype centers 
have been established to date. The Coast Guard pilot projects for 
interagency operations centers are listed below. These centers are each 
configured differently as test beds for concepts, tactics, procedures 
and equipment. Cost sharing arrangements exist among the various 
participants.

------------------------------------------------------------------------
                                                         Cost-Sharing
           Designator                  Location            Agencies
------------------------------------------------------------------------
Seahawk Joint Task Force          Charleston, SC      Dept. of Justice/
                                                       U. S. Coast Guard
------------------------------------------------------------------------
SCC *-Joint                       Hampton Roads, VA   U. S. Coast Guard
                                                       U.S. Navy
------------------------------------------------------------------------
SCC-Joint                         San Diego, CA       U. S. Coast Guard
                                                       U.S. Navy
------------------------------------------------------------------------

                * Sector Command Center
    Additionally, a half dozen locations have been identified for 
short and medium term pilot projects to develop joint operations design 
models between the Coast Guard and Customs and Border Protection (CBP). 
These pilots will include examination of methods for implementation of 
a virtual command center constructs using collaboration tools.
    When funded, the Command 21 project will field the capabilities 
necessary to create interagency operations centers as required by 
Section 108. This major establishment of proposed interagency 
operational centers for port security is a major system acquisition 
designed to close gaps in port and coastal maritime security.

Command 21 will:
         Improve maritime port and coastal security systems to 
        complement the terrestrial Secure Border Initiative (SBI) Net;
         Improve unity of effort in a multi-agency operations 
        center environment;
         Accelerate deployment of a net-centric tactical system 
        that implements Department enterprise standards for the sharing 
        of situation data and services across multiple Department 
        interagency domains and Coast Guard systems; and
         Help address the security and safety issues posed by 
        the 17 million smaller vessels that operate in port and coastal 
        areas.
The Coast Guard's experience with interagency operations centers 
demonstrates that many tangible benefits to improve maritime safety, 
security, and stewardship can be achieved. Some of these include:
         Facilitate cooperative targeting and coordination of 
        intelligence;
         Daily field-level coordination that breaks down 
        barriers between agencies;
         Collective use of tactical sensors (radars/cameras) 
        saves time, money and effort;
         Cooperative planning that improves readiness and 
        efficiency; and
         Sharing of law enforcement information that helps 
        reduce criminal activity in the port and cut off potential 
        funding to terrorist groups.
Command 21 will close a critical gap between current capabilities and 
the desired interagency end state. Future interagency operations will 
be greatly improved as all partners will be able to:
         See maritime activities using port surveillance 
        sensors;
         Understand the scene by automatically bringing 
        tactical and intelligence information together; and
         Share this tactical data with each other as they work 
        side by side in improved facilities.
Command 21 will publish tactical data in an open standard that allows 
other systems across multiple Department domains to subscribe to the 
information and use it according to the individual needs of each 
agency. It provides the maritime component of the Department of 
Homeland Security's Secure Border Initiative (SBI). Good government 
demands that both programs move forward in parallel to increase 
deterrence capabilities. If the two programs move ahead unevenly, 
illegal incursions will seek the path of least resistance. Moving ahead 
on both fronts will provide collaborative opportunities to leverage 
critical resources to broaden the impact of both programs toward 
securing the borders.

Notice of arrival for foreign vessels on the Outer Continental Shelf.
    The regulations for Notice of Arrival for Foreign Vessels on the 
Outer Continental Shelf (OCS) are being developed and incorporated into 
an existing Coast Guard rulemaking project related to OCS activities. 
This rulemaking, the updating of 33 CFR Subchapter N, ``Outer 
Continental Shelf Activities,'' already includes Notice of Arrival 
requirements for foreign vessels operating on the OCS. Once the Coast 
Guard has completed evaluation of the proposed regulations and public 
comments, the final rule will be issued to implement the provisions of 
Section 109 as expeditiously as possible.

Enhanced crewmember identification.
    Historically, the Coast Guard advanced the effort to negotiate the 
international seafarer's identification initiative at the International 
Labor Organization (ILO), resulting in the ILO-185 Seafarer's 
Identification Document (SID). However, a requirement within ILO 185 
prohibiting implementing nations from requiring a visa for seafarers 
holding a SID to be eligible for shore leave has prevented the U.S. 
from ratifying ILO 185.
    The Coast Guard is engaged in discussions with Customs and Border 
Protection (CPB), Department of State, and Department of Labor to 
evaluate all options. In accordance with the Act, the Coast Guard will 
initiate a rulemaking to define identification documents necessary for 
foreign mariners calling on U.S. ports.

Risk assessment tool.
    The Maritime Security Risk Analysis Model (MSRAM) is being used by 
Captains of the Ports/Federal Maritime Security Coordinators and Area 
Maritime Security Committees (AMSC) to analyze and prioritize scenario-
based risks within their areas of responsibility and measure risk 
reduction potential in the evaluation of port security grant program 
proposals. AMSCs are required to validate the MSRAM on an annual basis. 
This was last completed in 2006 using MSRAM Version One, with an update 
expected to be complete in the summer of 2007 using MSRAM Version Two.

Port security grants.
    The Coast Guard has been working with Department of Homeland 
Security Office of Grants and Training, who has fiduciary 
responsibility for the Port Security Grant Program, to complete the 
report to Congress required by this Section, but the report is not yet 
complete. In the interim, a letter was sent to Congress stating that 
the April 11, 2007 deadline would not be met but that the Department 
expects to have the report to them by July 30, 2007.
    The Port Security Grant Program (PSGP) provides grant funding to 
port areas for the protection of critical port infrastructure from 
terrorism. Fiscal Year 2007 PSGP funds are primarily intended to assist 
ports in enhancing risk management capabilities, domain awareness, 
capabilities to prevent, detect, respond to and recover from attacks 
involving improvised explosive devices (IEDs) and other non-
conventional weapons, as well as training and exercises.
    The total PSGP funding available in Fiscal Year (FY) 2007 is 
$201,670,000, and these funds were divided into four tiers of ports. 
Within Tier I, eight of the highest risk port regions have been 
identified and are eligible to apply for a fixed amount of funding 
based on risk. In many cases, multiple port areas have been grouped 
together to reflect geographic proximity, shared risk, and a common 
waterway. Port areas submitting applications within Tier II and III are 
eligible to compete for the FY07 PSGP but are not guaranteed funding. 
Section 112 of the Act also required that any entity addressed in an 
Area Maritime Security Plan also be eligible to apply. Tier IV has been 
established for those new entities not within the port areas in Tiers 
I-III. This added approximately 259 ports to the 102 highest risk ports 
for a total of 361 that are eligible to compete with no guarantee of 
funding.
    Funds will be awarded based on analysis of risk and the 
effectiveness of the applicants' proposed investments. Risk to port 
Infrastructure Protection Program Detail areas is assessed using a 
methodology consisting of threat, vulnerability, and consequence 
factors. The majority of port security grant funds--$120.6 million--
will be available to eight Tier I ports or port areas considered to be 
the highest risk.
    Grant applicants had 60 days from January 6, 2007 to complete this 
process for the remaining $81M. Applications were required to be 
submitted electronically via the grants.gov web site no later than 
11:59 PM Eastern Standard Time on March 6, 2007.
    The initial reviews were completed by the local Captain of the Port 
and results were forwarded to a national review panel comprised of 
representatives from the Coast Guard, the Transportation Security 
Administration (TSA), The Department of Homeland Security 
Infrastructure Protection (IP), Grants and Training (G&T), the Domestic 
Nuclear Detection Office (DNDO), and the Maritime Administration 
(MARAD) that convened for two weeks beginning April 9, 2007. It is 
anticipated that awards will be announced in the beginning of May 2007.

Port Security Training Program.
    The Coast Guard is supporting the FEMA National Preparedness 
Directorate's National Integration Center, through Training and 
Exercises Integration (formerly a function of the Preparedness 
Directorate, Office of Grants and Training Division) in implementing 
the requirements of the Act relating to Port Security Training. 
Collectively, progress has been made in establishing the program 
delineated in the Act, and there are a number of existing initiatives 
and new initiatives that taken together will address the requirements.
    In response to Congressional mandate, the Coast Guard and MARAD 
prepared a Report to Congress and developed model courses for the 
training of facility and other personnel to meet the requirements in 
Section 109 of the Maritime Transportation Security Act of 2002. These 
model courses establish a competence-based standard and contain the 
majority of the requirements under this Section of the Act. The model 
courses were developed in support of the facility security plan 
requirements and apply to all personnel working in a port facility or 
required to enter a port facility in response to an emergency. These 
model courses are currently available via the MARAD website to Federal, 
state and local personnel from the public and private sector, and they 
are undergoing a review to include lessons learned and the additional 
topics required under the Act. To ensure quality training, Coast Guard 
and MARAD developed and implemented a voluntary course approval and 
certification process using the model courses as the guidelines for 
acceptance. The CG is currently revising the regulations for security 
training for facility personnel to ensure that all training is measured 
against a standard of competence, including the topics required under 
by the SAFE Port Act.
    The FEMA National Preparedness Directorate's National Integration 
Center, through Training and Exercises Integration, has awarded a $6.18 
million Cooperative Grant to the Florida State University to develop 
courses meeting the Maritime Transportation Security Act of 2002 
requirements (model courses) and covering the eight port security-
related topics required under the Act. MARAD and the USCG are actively 
assisting DHS to ensure that this training will be consistent with 
existing standards and that it will provide the maximum possible return 
on investment. It is envisioned that these courses will be available 
for in-classroom and on-line training, and will be available to 
Federal, state and local personnel as well as to members of the private 
sector who work in the port security realm.
    In addition, the FEMA National Preparedness Directorate's National 
Integration Center, through Training and Exercises Integration, has 
available other training courses that address individual port security 
topics required under the Act. These courses are provided to State and 
local emergency responders and other identified audiences by Training 
and Exercises Integration, and coordinated by each State's governor-
designated Training Point of Contact.

Port Security Exercise Program.
    Current port security exercise programs conduct live risk-based 
exercises that are realistic and evaluate total capability by focusing 
on the port community. These exercises involve State and local 
governments, as well as facilities and vessels, to ensure that 
consistent methodology is applied and that all requirements are met as 
a result. Although current programs do not mandate facility 
participation in these annual exercises, participation has been strong 
and continues to increase. Facilities, as well as vessels, are 
encouraged to observe and/or participate in these port security 
exercises. When they choose to participate, they are offered the 
opportunity to put forth exercise objectives tailored to meet their 
specific needs.
    Since January 2005, the Coast Guard has assisted TSA in 
implementing their Port Security Training and Exercise Program 
(PortSTEP). Similarly, since October 2006, the Coast Guard has 
sponsored its own Area Maritime Security Training and Exercise Program 
(AMStep) that exercises the port stakeholder's ability to execute the 
Area Maritime Security Plan. The Coast Guard and TSA have synchronized 
AMStep and PortSTEP to maximize coverage across the U.S. and minimize 
duplication of effort. In calendar year 2006, these two programs 
collectively sponsored 53 port security exercises. The results of both 
these exercise programs and all lessons learned, best practices and 
corrective actions are documented in a semi-annual report to Congress. 
Exercise types have included basic and advanced table-top, discussion-
based exercises to full-scale, operations-based exercises. The type of 
exercise and scenario selected are collectively decided upon by Area 
Maritime Security Committee (AMSC) members, through application of 
their most current risk-based port assessment.
    The ``Training'' aspect of current port security exercise programs 
focuses on the National Incident Management System (NIMS) Incident 
Command System (ICS). Training, such as I-200 (Basic), I-300 
(Intermediate) and I-320 (Team training), and is offered to the entire 
port community prior to each annual exercise. Security-specific 
training is provided from within the port community.
    Initial performance measures for port security exercises were 
established under change two to Coast Guard NVIC 09-02. These measures, 
outlined as objectives, are currently being revised by the Coast Guard 
Office of Incident Management Preparedness to align with the Department 
of Homeland Security Preparedness capabilities-based planning model. 
All lessons learned and best practices are captured in the Coast Guard 
Contingency Preparedness System (CPS), which can be accessed by the 
entire Coast Guard. Additionally, through the use of Homeport, the 
Coast Guard's web-based communications and collaborations Information 
Technology application, Lessons Learned & Best Practices are made 
available to the entire port community (Federal, state, local, tribal 
and industry). Finally, the Coast Guard is working with the Department 
to offer and post select After Action Reports to the Department Lessons 
Learned Information Sharing (LLIS) system.
    The implementation of the Coast Guard Remedial Action Management 
Program (RAMP) in May 2006 has assisted in the tracking and correction 
of numerous issues identified through current port security programs.
    Although AMStep is currently being carried out under contract 
support, the Coast Guard has begun the hiring of personnel to staff 
National-level and Regional-level exercise support teams. These teams 
will assist Coast Guard Sector Commands (port-level) and Districts with 
the following contingency exercise programs: port security, oil/
hazardous substance response, natural disaster, mass rescue, alien 
migration interdiction, civil disturbance, counterterrorism, military 
outload, combatant commander support, and physical security/force 
protection. This is an ``All Threats / All Hazards'' approach.

Facility exercise requirements.
    Current regulations in 33 CFR 105.220(c) require facilities to 
conduct an annual exercise. These exercises may include either live, 
tabletop, or participation in a non-site-specific exercise. In order to 
meet the requirement in Section 115, the Coast Guard has initiated a 
regulatory project to update 33 CFR Subchapter H regulations and will 
incorporate the definition of ``high risk facility'' and the 
requirement for high risk facilities to conduct annual full-scale 
exercises.

Domestic radiation detection and imaging.
    The SAFE Port Act requires that a deployment strategy plan be 
developed for the placement of radiation portal monitors (RPMs) 
throughout the nations ports of entry. That plan has been recently 
submitted to Congress by the Department.
    CBP began deploying RPMs in October 2002, with the first deployment 
at the Ambassador Bridge in Detroit. Since that time, CBP and the 
Domestic Nuclear Detection Office (DNDO) have deployed 973 RPMs at mail 
facilities, seaports, and land border crossings, and will deploy the 
first RPM in the air cargo environment this year. Specifically, the 
SAFE Port Act mandates that all containers entering through the top 22 
seaports be scanned for radiation. Currently, the Department has 
deployed radiation detection equipment to each of these 22 ports. Due 
to unique operational considerations at some of these ports, not every 
terminal within a port is currently equipped with such equipment. 
However, to satisfy the requirements of the SAFE Port Act and to 
further enhance port security, CBP and DNDO continue to work with these 
considerations, and by the end of this calendar year will scan 98% of 
all containerized cargo at these 22 seaports. With the additional 
deployment of radiation screening equipment CBP currently scans 91% of 
the cargo and 81% of the passenger vehicles arriving from Canada; 96% 
of the cargo and 91% of the passenger vehicles arriving from Mexico, as 
well as 89% of arriving sea-borne cargo containers.
    Since CBP began scanning cargo and conveyances for radiation, they 
have scanned over 151 million conveyances, and resolved over 840,000 
alarms. This is a tremendous workload, and the SAFE Port Act authorizes 
200 new CBP Officers in each of the next five years to help accomplish 
this mission. Furthermore, the Department is currently testing the next 
generation of radiation detection equipment known as Advanced 
Spectroscopic Portals at the New York Container Terminal (NYCT). Future 
deployments of ASPs will allow CBP to quickly differentiate between 
benign materials such as kitty litter or granite, while determining 
which shipments pose a true risk. This will perfectly fit with CBP's 
twin goals of increasing security while facilitating the flow of 
legitimate trade and people.

Inspection of car ferries entering from abroad.
    CBP is currently developing a plan for the inspection of passengers 
and vehicles on ferries before the ferry embarks for the United States. 
Ferries reach the United States from four countries: Mexico, Canada, 
the Dominican Republic, and the British Virgin Islands. Currently, CBP 
is in the process of contacting the owners and operators of each ferry 
with a U.S. arrival to help determine the level of interest and the 
proper course of action. Once feedback from the owners and operators is 
received, CBP will reach out to the foreign governments of Mexico, 
Canada, the Dominican Republic, and the British Virgin Islands to 
further collaborate on implementing a plan.

Center of excellence for Maritime Domain Awareness.
    The Coast Guard is assisting the Department of Homeland Security 
Science and Technology (S&T) Directorate to meet the requirements of 
the Act relating to a Center of Excellence for Maritime Domain 
Awareness (MDA). The Broad Area Announcement (BAA) for a Center of 
Excellence (COE) for Maritime, Island and Extreme/Remote Environment 
Security was announced at the beginning of February 2007. This BAA 
incorporated MDA study as a central component of a broader system of 
research into maritime security. This solicitation is still open, and 
there has been a promising response from the academic community. S&T 
expects to award the COE by the end of 2007. The Coast Guard looks 
forward to this important new research component that will support DHS.

Security of the International Supply Chain
    The SAFE Port Act requires the Department of Homeland Security 
develop and implement a strategic plan to enhance the security of the 
international supply chain, including protocols for post-incident 
resumption of trade. A working group consisting of Department component 
subject matter experts was convened shortly after enactment and 
completed drafting the strategy in early February. The Department is 
currently consulting with appropriate groups including the Federal 
Interagency and Federal Advisory Committees and is on track to finalize 
the document and meet the July 10, 2007 submission deadline.

Automated Targeting System.
    CBP requires advanced electronic cargo information as mandated in 
the Trade Act of 2002 (including the 24-hour rule for maritime cargo). 
Advanced cargo information on all inbound shipments for all modes of 
transportation is effectively evaluated using the Automated Targeting 
System (ATS) before arrival in the United States. The SAFE Port Act 
requires CBP to seek additional data elements for ATS as well as to 
evaluate the entire system. CBP is complying with both these mandates
    As a matter of background, ATS provides decision support 
functionality for CBP officers working in Advanced Targeting Units 
(ATUs) at United States ports of entry and CSI foreign ports. The 
system provides uniform review of cargo shipments for identification of 
the highest threat shipments, and presents data in a comprehensive, 
flexible format to address specific intelligence threats and trends. 
ATS uses a rules-based program to highlight potential risk, patterns, 
and targets. Through rules, the ATS alerts the user to data that meets 
or exceeds certain predefined criteria. National targeting rule sets 
have been implemented in ATS to provide threshold targeting for 
national security risks for all modes: sea, truck, rail, and air.
    Working with the Commercial Operations Advisory Committee (COAC), 
CBP has proposed a new Security Filing in an effort to obtain 
additional advanced cargo information and enhance their ability to 
perform risk-based assessments prior to cargo being laden on a vessel 
overseas. The CBP proposal, better known as ``10 plus 2'' covers the 
following key areas:
         Ten unique data elements from importers not currently 
        provided to CBP 24 hours prior to the foreign loading of cargo;
         Two additional data elements provided by the carriers 
        including the Vessel Stow Plan which is currently utilized by 
        the vessel industry to load and discharge containers and 
        Container Status Messaging which is currently utilized by the 
        vessel industry to track the location of containers and provide 
        status notifications to shippers, consignees and other related 
        parties.
    CBP is currently developing a Notice of Proposed Rulemaking (NPRM) 
which will be published in the Federal Register along with a request 
for comments. Obtaining additional information earlier in the process 
will increase the transparency of the global supply chain enabling the 
refinement of CBP's targeting processes and will provide additional 
information to make a more fully informed decision with respect to the 
risk of individual shipments.
    In addition to Security Filing, CBP continually updates ATS. Since 
2004, ATS has continually undergone independent audits from the GAO and 
the IG. Furthermore, CBP regularly reevaluates to improve the data sets 
in ATS. The Office of Field Operations National Targeting and Security 
(NTS) office and the Office of Information Technology Targeting and 
Analysis Systems Program Office (TASPO) have been working together to 
enhance the ATS Maritime rule set capabilities for ocean cargo 
targeting. Under the direction of OFO, TASPO placed the updated rule 
sets into production on March 21, 2007, to conduct initial assessments. 
Since that time, OFO subject matter experts and members of the Maritime 
Targeting Working Group have provided feedback to NTS, which resulted 
in further refinements and enhancements to the maritime rule set. 
Currently NTS is modeling several versions of the new Country of 
Interest list to include iterations of different scores and scenarios 
to include entity concepts such as first time, unknown, and high 
volume. OFO is currently using the updated rule set (OCEN5) for 
maritime threshold targeting.

Container security standards and procedures.
    The Department of Homeland Security strongly supports and continues 
to seek opportunities to enhance supply chain security efforts, 
including enhancements to the security of the container. Indeed, 
securing the container is a critical part of a multi-layered approach 
to supply chain security. However, in order to establish minimum 
standards for container security, it is first necessary to ensure that 
there are available solutions that would significantly improve 
container security without significantly disrupting the flow of 
legitimate commerce. The Department does not believe that, at the 
present time, the necessary technology exists for such solutions. The 
Department is actively working with industry to test different 
technologies and methodologies that would provide economically and 
operationally viable enhancements to container security.
    It should be noted that minimum security criteria for participants 
in the C-TPAT do include a requirement that all C-TPAT importers must 
affix a high security seal to all loaded containers bound for the 
United States. These seals must meet or exceed the current ISO/PAS 
17712 specifications for high security seals.

Container Security Initiative.
    To meet their priority mission of preventing terrorists and 
terrorist weapons from entering the United States, CBP has partnered 
with other countries through their Container Security Initiative (CSI). 
CSI is another example where the SAFE Port Act codified existing DHS 
programs, and CBP is in compliance with the Act's mandates.
    Almost 32,000 seagoing containers arrive and are off loaded at 
United States seaports each day. In fiscal year 2006, that equated to 
11.6 million cargo containers annually. Because of the sheer volume of 
sea container traffic and the opportunities it presents for terrorists, 
containerized shipping is uniquely vulnerable to terrorist 
exploitation. Under CSI, which is the first program of its kind, CBP is 
partnering with foreign governments to identify and inspect high-risk 
cargo containers at foreign ports before they are shipped to United 
States seaports and pose a threat to the U. S. and to global trade.
    The goal is for CBP's overseas CSI teams to conduct 100 percent 
manifest review before containers are loaded on vessels destined for 
the United States. However, in those locations where the tremendous 
volume of bills does not allow for the overseas CSI team to perform 100 
percent review, CSI targeters at the National Targeting Center provide 
additional support to ensure that 100 percent review is accomplished. 
Utilizing the overseas CSI team and the CSI targeters at the National 
Targeting Center, CBP is able to achieve 100% manifest review for the 
CSI program.
    Oversight of the CSI program is supported by automated tools for 
statistical analysis, an evaluation database to track and analyze any 
deficiencies identified during the evaluation process of the CSI ports, 
and a non-intrusive inspection (NII) equipment utilization database 
that tracks the use of NII equipment at CSI ports to include the 
downtime of the equipment.
    Today, CSI is operational in 50 ports covering 82 percent of the 
maritime containerized cargo shipped to the United States. CBP is 
working towards strategically locating CSI in additional locations 
focusing on areas of the world where terrorists have a presence. CBP 
projects that by the end of 2007, CSI will be operational in 58 foreign 
seaports, covering over 85 percent of cargo destined for the United 
States. Declarations of Principles for each of the remaining 8 ports 
have been signed.

Customs-Trade Partnership Against Terrorism
    The SAFE Port Act not only legislatively recognized the supply 
chain security industry partnership program known as C-TPAT, but the 
Act also added greater accountability by mandating that certain program 
activities be completed within specific time frames, and that greater 
program oversight be developed for the program. CBP began implementing 
such changes, which were first outlined in GAO reports from 2003 and 
2004, eighteen months prior to the passage of the Act, and continues to 
make progress in this regard.
    Specifically, clearly defined minimum security criteria have been 
developed and implemented for the major enrollment sectors, and will be 
completed for all current enrollment sectors by this summer. The SAFE 
Port Act requires CBP to work with the COAC to review and modify as 
appropriate these criteria on an annual basis, and they have done so. 
This program enhancement will be completed each year as part of the 
development of the C-TPAT annual plan, another SAFE Port Act 
requirement. CBP is finalizing revisions to the C-TPAT Strategic Plan, 
which was first published in December 2004.
    The SAFE Port Act also required CBP to review their certification 
processes for new members, and make adjustments to strengthen this 
initial review if necessary. They have done so, and all new 
applications are being reviewed within 90 days.
    Additionally, the Act requires that all new certified members 
undergo their initial validation within 1 year of acceptance into the 
program, and be revalidated every four years. In 2007, CBP's goal is to 
complete 3,000 validations. As a point of reference, CBP completed 133 
validations in 2003; 287 in 2004; 1,080 in 2005; and 2,398 in 2006. 
This is real progress, and has been made possible by adding Supply 
Chain Security Specialists (SCSS) to the program.
    With current staffing levels, the C-TPAT program should fulfill its 
operational goals for both the 2007 and 2008 calendar years. With the 
projected level of validations and revalidations needed to be in 
compliance with the Act set at just less than 3,000 per year; the 
current staff of 150 SCSS's should be able to manage this workload. The 
SAFE Port Act mandates that all revalidations must occur within 4 years 
of the initial validation, while the FY07 DHS Appropriations Act called 
for revalidations to occur within 3 years of the initial validation. 
Thus, the C-TPAT program is moving forward on a 3 year revalidation 
model to ensure compliance.
    Projected revalidations alone will reach over 2,300 in 2009. The 
addition of Mexican Highway Carrier validations (done annually due to 
higher risk models) will add approximately 400. Further, required 
initial validations within 1 year of certification are being projected 
at 1,500. As a result, the final validation/revalidation totals needed 
would well exceed 4,000 for 2009 creating compliance issues with the 
current staffing numbers.
    However, with the identified additional staffing of 50 SCSS's being 
brought on board sometime in late calendar year 2008, C-TPAT would 
again see compliance with SAFE Port Act mandated timelines to be well 
within reach.
    CBP has also developed a proposal through discussions with the 
COAC, where third parties will be used to validate supply chains where 
CBP currently lacks full access, and as a result, C-TPAT members are 
not receiving all the program benefits they are entitled to. 
Specifically, CBP will pilot using three to four accepted third party 
validators to perform reviews in China. A solicitation is currently 
posted to the Federal Business Opportunities website which outlines the 
requirements and conditions a firm wishing to be selected as a third 
party validator must meet. Those validation firms selected for this 
pilot must sign confidentiality agreements, maintain liability 
insurance, apply for SAFETY Act certification, and remain free from 
conflict of interests including having any direct or indirect control 
over the company which is being validated. The pilot program is 
voluntary, and as outlined in the Act, any C-TPAT member wishing to 
participate must pay for this service from the validating firm. Those 
validation firms selected will also be subject to background 
investigations. The solicitation closes on April 30th, and CBP 
anticipates that third party validations will begin in China in June.
    C-TPAT is an integral part of the CBP multi-layered strategy. CBP 
works in partnership with the trade community to better secure goods 
moving through the international supply chain. C-TPAT has enabled CBP 
to leverage supply chain security overseas where CBP has no regulatory 
reach. In 2007, CBP will continue to expand and strengthen the C-TPAT 
program and ensure that certified member companies are fulfilling their 
commitment to the program by securing their goods moving across the 
international supply chain to the United States. To carry-out this 
critical tenet of C-TPAT, teams of SCSS's will conduct validations and 
begin revalidations of C-TPAT members' supply chains to ensure security 
protocols are reliable, accurate, and effective.

Pilot integrated scanning system.
    Another example of extending port security outward is the Secure 
Freight Initiative (SFI). SFI is an unprecedented effort to build upon 
existing port security measures by enhancing the United States 
government's ability to scan containers for nuclear and radiological 
materials in seaports worldwide and to better assess the risk of 
inbound containers.
    On December 7, 2006, the Department and the Department of Energy 
(DOE), in cooperation with the maritime industry and foreign government 
partners, announced Phase One of the SFI. The lessons learned and 
experience gained from Phase One represent critical steps in the 
process of determining whether the concept of 100% overseas scanning is 
technologically and economically feasible and the degree to which it 
increases the security of the international supply chain. Phase One 
will provide lessons and evidence on how this new, integrated suite of 
radiation detection and radiography technology can meld smoothly into 
the logistics, operations, and flow of commerce at each different port.
    The initial phase of the SFI involves the deployment of a 
combination of existing technology and nuclear detection devices to 
three ports as per the requirements of the SAFE Port Act, but will also 
extend, in limited operation, to three additional foreign ports. This 
will provide a more complete analysis for SFI by including different 
operational and geographic settings at each port. The ports involved 
include: Port Qasim in Pakistan; Port Cortes in Honduras; Southampton 
in the United Kingdom; Port Salalah in Oman; Port of Singapore; and the 
Gamman Terminal at Port Busan in Korea.
    Secure Freight will provide carriers of maritime containerized 
cargo with greater confidence in the security of the shipment they are 
transporting, and it will increase the likelihood for shippers and 
terminal operators that the flow of commerce will be both uninterrupted 
and secure.
    This initiative is the culmination of work with other Government 
agencies, foreign governments, the trade community, and vendors of 
leading edge technology. The scanning project is a first step toward 
realizing a greater vision of Secure Freight, a fully integrated global 
network for risk assessment.
    The Department anticipates completing SFI on schedule, and 
reporting the results as per the requirements of the Act.

International cooperation and coordination.
    The Coast Guard has been working with a variety of international 
organizations including the Asia Pacific Economic Cooperation (APEC) 
Forum, the Group of Eight (G8), and the Organization of American States 
(OAS) to conduct capacity building activities to improve the port 
security regimes of developing countries. Coast Guard representatives 
serve on maritime security expert groups of these organizations and 
have been intimately involved in identifying and executing projects.
    Of particular note is the Coast Guard work with the OAS, an 
organization that is specifically mentioned in the SAFE Port Act for 
close coordination. Through the Inter-American Committee on Counter-
Terrorism (an OAS body), and in conjunction with Canada, the Coast 
Guard is developing a series of exercises and best practice 
conferences.

Foreign Port Assessments.
    The Coast Guard has increased the pace of assessments and is on 
track to complete an initial assessment of all trading partners by 
March 2008. The Coast Guard intends to conduct assessments on a two 
year cycle thereafter.
    This two year cycle is consistent with the guidance contained in 
the FY-07 Appropriations Act, which called on the Coast Guard to double 
the rate of assessments (basically from three per month to six per 
month). This reassessment cycle actually exceeds the requirement of the 
SAFE Port Act which call for reassessments to be conducted on a three 
year cycle. Additional resources (approx $6.7M which covered the costs 
of 32 new billets and associated operations and maintenance costs) were 
provided.

Office of Cargo Security Policy.
    The SAFE Port Act established the Office of Cargo Security Policy 
within the Department of Homeland Security, and required that the 
Secretary appoint a Director to lead the office. This has been 
accomplished, with the Director of the Office of Cargo, Maritime, and 
Trade Policy being the designee.

Research, development, test, and evaluation efforts in furtherance of 
maritime and cargo security.
    The Department of Homeland Security and the Coast Guard have 
current and planned efforts to support the furtherance of maritime and 
cargo security. Fifty-seven percent of the Coast Guard Research, 
Development, Test, and Evaluation (RDT&E) fiscal year 2007 (FY07) 
project budget supports the furtherance of maritime and cargo security. 
The Coast Guard RDT&E efforts for FY07 include:

------------------------------------------------------------------------
               Mission Areas                      Programs/Projects
------------------------------------------------------------------------
Boarding Team Support and Communications    Maritime Biometrics, ID at
(FY07 funding--$730K)                        Sea
                                            Boarding Team Connectivity
                                            Next Generation Underway
                                             Connectivity
                                            Boarding Officer Tools and
                                             Equipment Support
------------------------------------------------------------------------
Compel Compliance                           Anti-Personnel
(FY07 funding--$195K)                       Stopping Mid-Sized Vessels
------------------------------------------------------------------------
Platforms and Sensors                       Acoustic Buoy
(FY07 funding--$915K)                       Multi-Sensor Performance
                                             Prediction
                                            Global Observer
                                            Small UAS Evaluations
------------------------------------------------------------------------
Sector and Port Security Operations         Maritime Domain Awareness
(FY07 funding--$389K)                        Community of Interest
                                            National Automatic
                                             Identification System
------------------------------------------------------------------------
Miscellaneous                               Net-Centricity
(FY07 funding--$85K)                        Weapons of Mass Destruction
------------------------------------------------------------------------

    The Department of Homeland Security Office of Science and 
Technology (S&T) FY07 funds to the Coast Guard that support the 
furtherance of maritime and cargo security total $3,687K. The projects 
include:

------------------------------------------------------------------------
               Mission Areas                      Programs/Projects
------------------------------------------------------------------------
Boarding Team Support and Communications..  Boarding Team Communications
(FY07 funding--$1050K)
------------------------------------------------------------------------
Sensor, Data Fusion,                        Visualization Tools
& Decision Aids (Maritime)                  Hawkeye Watch keeper
(FY07 funding--$2637K)                       Prototype
                                            Offshore Buoys for Vessel
                                             Detection
                                            Emergence Response Blue
                                             Force Tracking
                                            Swimmer/Diver Detection
                                            Global Observer
------------------------------------------------------------------------

    S&T FY08 funding has yet to be defined. The Coast Guard is planning 
a comparable dollar figure to support the furtherance of maritime and 
cargo security in FY08. Through the S&T-established Capstone Integrated 
Product Teams (IPT), FY09-FY13 funding has been identified for the 
furtherance of maritime and cargo security through the Maritime 
Security Capstone IPT and the Cargo Capstone IPT.

Office of international trade.
    The mandates of the SAFE Port Act and the actions of CBP 
intersected again when CBP formed the Office of International Trade in 
September 2006. The establishment of this office will serve to 
strengthen CBP's ability to carry out their mission of facilitating the 
flow of legitimate trade across U.S. borders while securing the borders 
and protecting the American economy from unfair trade practices and 
illicit commercial enterprises. The Office of International Trade 
consolidates trade policy, program development, and compliance 
measurement functions into a single office, providing greater 
consistency within CBP with respect to its international trade programs 
and operations. In addition, CBP's close working relationship with the 
trade community, a hallmark of CBP's operations and programs, has been 
further enhanced. The new Office of International Trade is providing 
CBP and the Trade community with an organization that can effectively 
address the growing volume and complexities of international trade and 
is enabling us to successfully meet the challenges inherent in managing 
the balance of trade and security.
    To meet the Congressional requirements of the SAFE Port Act, CBP is 
developing a resource optimization model (ROM) for the Office of 
International Trade. The objectives of the model are to: (1) optimally 
align the workforce to the Office of International Trade's performance 
outcomes and goals; (2) adequately staff the priority trade functions; 
and (3) comply with statutory requirements. The model will be designed 
to use the new office's performance objectives and goals as inputs to 
determine the right number and right mix of resources to facilitate 
legitimate trade.
    Additionally, in preparation of submitting a report on the 
reorganization into the Office of International Trade, CBP has been 
meeting regularly with the COAC subcommittee on the Office of 
International Trade. During this first year, the work group will assess 
improvements to communications as a result of the reorganization, as 
well as some quantifiable measures for trade facilitation. Currently, 
the group is working together to find mutually beneficially process 
improvements to facilitate legitimate trade, which in turn will assist 
CBP in its trade enforcement efforts.

Domestic Nuclear Detection Office
    The Department of Homeland Security greatly appreciated that 
Congress formally authorized the Domestic Nuclear Detection Office 
(DNDO) in the SAFE Port Act. Recently celebrating its second 
anniversary, DNDO is a vital component in the Departments ability to 
develop and implement WMD detection and response capabilities.

Conclusion
    The steps the Department of Homeland Security is taking to 
implement the SAFE Port Act are and will be an extremely important 
aspect to the security of the nation's port facilities and vessels. 
Through the SAFE Port Act, Congress has recognized and bolstered many 
of our aggressive programs to protect our ports. We appreciate the 
close cooperative relationship the Department and its component 
agencies had with the House and Senate in the development of the Act, 
and look forward to the continued interaction to promote our mission 
and ensure the safety of American citizens and commerce.

    Ms. Sanchez. Thank you, Admiral Bone.
    We will go straight to Mr. Ahern for 5 minutes.

 STATEMENT OF JAYSON AHERN, ASSISTANT COMMISSIONER, OFFICE OF 
          FIELD OPERATIONS, CUSTOMS AND BORDER PATROL

    Mr. Ahern. Good afternoon, Chairwoman Sanchez. It is very 
good to see you again, and Ranking Member Souder as well, and 
Congressman Bilirakis, Congressman Green. Thank you for the 
opportunity to discuss with you today the status of U.S. 
Customs and Border Protection's efforts since the passage of 
the SAFE Port Act.
    I would first like to thank the Congress for your continued 
interest and support on the important subject of maritime and 
supply chain security. In many ways, I look at the 
congressional passage of this legislation as an endorsement of 
CBP's approach to cargo security begun after the tragic events 
of September 11.
    As you know, CBP has developed and implemented 
unprecedented initiatives to achieve our twin goals of both 
strengthening the security of containerized cargo entering our 
borders, all the while facilitating the flow of legitimate 
travel and trade.
    CBP uses a multi-layered approach to ensure the integrity 
of the supply chain from the point of stuffing through arrival, 
as employed at our U.S. ports of entry. Through this approach, 
it includes trained CBP officers, a complement of technology 
automation and electronic information, as well as partnerships 
with trade organizations and many foreign governments 
throughout the world.
    Madam Chairwoman, I know that you and a number of your 
colleagues, as you stated, have had the opportunity to see many 
of our operations at our ports in the United States, certainly 
Long Beach and Los Angeles are two critical ones that account 
for 44 percent of the container traffic coming into this 
country.
    I know that Congressman Green had the opportunity to be a 
part of the congressional delegation that went down to the Port 
of Cortez to see our first phase-one of the Secure Freight 
Initiative, as well as many of the other members of this 
subcommittee, as well as the full committee under the 
chairman's leadership.
    Certainly, I believe it is important to talk about many of 
the things you are already familiar with and some of the 
programs and the various components of the strategy we have had 
in place for a number of years. What I would like to do is 
highlight some of the critical things that we have done since 
the passage of the SAFE Port Act approximately 6 months ago.
    Advance information: One of the key components of our 
strategy is making sure that we have sufficient advance 
information electronically received in advance of arrival. 
Certainly, the Trade Act and the 24-hour rule provide that 
information to us, but certainly today, working with the 
Departmental Advisory Committee on Commercial Operations, know 
as COAC, CBP is proposing a new security filing known as ``10-
plus-2.''
    It will provide additional information so that we can do 
more transparent security screening prior to lading overseas to 
make sure that we can continue to fulfill the requirements of 
the SAFE Port Act on electronic information. This will 
certainly help us.
    C-TPAT: I know it has been a project of interest of this 
subcommittee in the past, and we look forward to talking about 
the third-party validators as we go forward. But certainly as 
we have evolved C-TPAT, we have steadily increased the rigor of 
the program and I would be happy to talk about that in some 
greater detail.
    Today--just some numbers--there are 6,931 companies that 
have been certified into C-TPAT. Of those, 4,138 have been 
validated. CBP will meet the SAFE Port Act requirements and 
validate all members within 1 year of certification, and we 
will revalidate members not less than once every 4 years.
    CBP has also had the discussion with the COAC, our 
Commercial Advisory Council, with the third parties on the 
validation process. This pilot program will be voluntary, as 
outlined in the Act, and any member wishing to have the payment 
of service for a validation can certainly begin with this 
process. I think it is important to note, too, that the 
solicitation that we have had out through the FedBizOpps 
actually closes on February 30 for those companies who want to 
be involved with the third-party validation pilot. I would be 
happy to talk in more detail.
    RPM and NNI technology: Certainly, it is important for us 
to take a look to have the best technology deployed to our 
nation's ports of entry, including large-scale X-ray, gamma 
imaging systems, as well as a variety of radiation detection 
devices. It is important to note that the significant 
advancements made by CBP, as well as our departmental 
components, the Science and Technology Domestic Nuclear 
Detection Office, DNDO, has aided us in the rapid deployment of 
the technology to our ports of entry since the terrorist 
attacks of 2001. I want to talk to you a bit about some 
progress.
    Certainly, before 9/11, we had no radiation portal monitors 
deployed at our ports of entry. Today, we have 966 RPMs at our 
seaports and land border ports. That accounts for 91 percent of 
all the trucks coming into this country across the northern 
border; 96 percent of all the trucks coming across the southern 
border of the United States; and 90 percent of the sea 
containers, close to 12 million sea containers coming into this 
country. About 90 percent of that universe is actually being 
scanned through radiation portal monitors and we will meet our 
objective of 98 percent by the end of this calendar year.
    Just to put it in perspective, just 12 months ago in a 
maritime environment, when I reported to this subcommittee 
previously, we were only doing 37 percent of the sea 
containers. That is progress.
    In addition to the strides in the area of radiation 
technology, we certainly continue to take a look at the latest 
advancements for non-intrusive inspection technology. This NII 
technology serves certainly as a force multiplier for us to 
detect anomalies, for not only just concealments of weapons 
with mass effect, but also narcotics. In fact, we scanned over 
five million scans last year using systems throughout fiscal 
year 2006.
    Secure Freight Initiative: It is important for us to talk 
about that. It is building on the concept of our Container 
Security Initiative, with 50 ports covering, 82 percent of the 
worldwide global maritime container cargo destined for the 
United States has the opportunity to be scanned prior to be 
laded from the 50 ports. We will be at 58 by the end of this 
fiscal year. That will be for 85 percent of the containerized 
cargo coming into the country.
    Importantly, and my final point, as I see I am close to 
time here, the Secure Freight Initiative. The secretary 
announced that on December 7. As stated, we had members of this 
subcommittee, as well as the full committee, in Honduras 2 
weeks ago. We will be announcing the operational testing 
beginning in Pakistan in the next few days as well. And then 
the third location as required under the SAFE Port Act will be 
Southampton in the U.K., which will be operational towards the 
latter part of this summer or early fall. I would be happy to 
take more questions on that.
    Thank you very much.
    Ms. Sanchez. Thank you, Assistant Commissioner Ahern.
    Ms. Fanguy, your turn. Am I saying that correctly?
    Ms. Fanguy. You are saying it absolutely correctly.
    Ms. Sanchez. Okay, go ahead.

       STATEMENT OF MAURINE S. FANGUY, PROGRAM DIRECTOR, 
   TRANSPORTATION WORKER IDENTIFICATION CREDENTIAL PROGRAM, 
             TRANSPORTATION SECURITY ADMINISTRATION

    Ms. Fanguy. Good afternoon, Madam Chairwoman, Ranking 
Member Souder, and members of the subcommittee. My name is 
Maurine Fanguy, and I am the program director for the 
Transportation Worker Identification Credential Program, also 
known as TWIC. I am pleased to represent Assistant Secretary 
Kip Hawley here today.
    Thank you for this opportunity to discuss TSA's progress on 
the TWIC program. Today, I would like to specifically focus on 
the technology and business processes that make TWIC 
successful.
    To start off, I would like to answer one of the most 
frequently asked questions about TWIC: What makes a TWIC card 
different from the badges we all carry every day? There are 
four major differences between a TWIC card and one of these 
types of badges.
    First, TWIC uses ``smart card'' and biometric technologies 
based on the most advanced federal government standards and, 
for the first time, applies then in the commercial sector. 
Second, TWIC issues cards that can be used at any port or 
vessel across the nation.
    Third, TWIC has massive scale. Over 1 million cardholders 
will use the same credential across 3,200 facilities and on 
10,000 vessels. In comparison with our prototype project, we 
will process in 1 day more credentials than we did in 1 year 
during the prototype.
    Finally, TWIC issuance is based on very comprehensive 
security checks that involve data-sharing across multiple 
agencies. These checks are integrated into all of TSA's vetting 
programs, which means that we can connect the dots throughout 
the entire transportation sector.
    In addition to the complexities of rolling out a 
sophisticated credentialing program nationwide, TSA and the 
Coast Guard established a regulatory framework for the program. 
The TWIC final rule, as Admiral Bone mentioned, was issued on 
January 1, 2007 and addressed over 1,900 comments from the 
public. The final rule includes important changes from the 
prototype, such as the ability to provide a discount for FAST-
holders, mariners and HAZMAT truckers. The TWIC blueprint now 
aligns with the final rule.
    TWIC is a sophisticated system powered by state-of-the-art 
technologies, and we are focused on a rigorous program to 
flight-test TWIC before we can go out to the ports. In other 
words, the hard part is not the actual card, it is the network 
behind the card. The TWIC network has five main components.
    One, the pre-enrollment website allows workers to schedule 
appointments and provide biographic information ahead of time 
to make enrollment easier.
    Two, the enrollment work station captures a worker's 
biometric and biographic information, and submits the 
information for security processing.
    Three, the TWIC back end routes applicant information for 
processing, conducts data integrity checks, and manages the 
status of TWIC cards.
    Four, the screening gateway is a TSA tool that aggregates 
security threat assessment data from the FBI, Citizen and 
Immigration Services, and watch lists. It is important to note 
that the screening gateway is used across all of TSA's vetting 
programs.
    And five, the card production component electronically 
loads an applicant's information onto a TWIC smart card and 
then physically produces the card.
    All the internal moving parts must work together to conduct 
accurate and timely security threat assessments. We recognize 
that TWIC will affect both businesses and port workers. That is 
why rigorous performance testing is the only way to ensure that 
TWIC is ready to go live. The program must not negatively 
impact commerce or people's livelihoods. Assistant Secretary 
Hawley has given us the mandate to get TWIC right the first 
time.
    TSA will continue to work with our partners, the U.S. Coast 
Guard and maritime stakeholders, to ensure that for the first 
time in history, thousands of independent businesses will have 
one interoperable security network and workers will hold a 
common credential that can be used across that entire network.
    We look forward to working with this subcommittee as we 
move forward with the TWIC program. Thank you for the 
opportunity to appear today, and I would be happy to answer any 
questions.
    Ms. Sanchez. Thank you.
    Mr. Caldwell, please, for 5 minutes or less.

 STATEMENT OF STEPHEN L. CALDWELL, DIRECTOR, HOMELAND SECURITY 
   AND JUSTICE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Caldwell. Thank you very much. I will take that as a 
challenge anyway.
    Chairman Sanchez and Mr. Souder, I am very pleased to be 
here, and thank you for inviting me here.
    I would like to tee off on a comment you made about, well, 
it has only been 6 months since the SAFE Port Act has been 
enacted. We have to remember that before the SAFE Port Act, 
there was MTSA and MTSA really laid a lot of the foundations 
here. I think it provided a very solid foundation in many ways.
    The prior witnesses have already discussed a lot of the 
programs related to that, and they are also in my written 
statement, so I am not going to go into that in detail.
    But I would like to add some important things about these 
efforts related to MTSA. First of all, they were brand new. 
Second, they were very ambitious. Third, they required very 
high levels of coordination across federal, state, local, 
private and international sectors. And third, the programs were 
being implemented by a brand new department. So we all had a 
lot of challenges there that I am sure my colleagues up here on 
the panel can affirm.
    So it is not surprising that GAO's early work on a lot of 
these efforts found some basic management problems related to 
strategic planning, workforce planning, and coordination both 
within and across organizations. I can say that the more recent 
work that GAO has done has found that many of these programs 
are maturing. They are maturing at different rates, obviously, 
but some of the problems we are currently finding are more 
related to maintaining and improving current operations, as 
opposed to not having basic management foundations in place.
    However, there are two ongoing concerns which we find in 
our work that is not only in our earlier work, but as well as 
the work here. The first concern is resources. Many of these 
programs have been challenged by a lack of resources, or at 
least the right resources. So many agencies have needed not 
only additional staff, but staff with the correct training and 
expertise.
    Perhaps the Coast Guard is an example here, where there has 
not been a very large increase in the number of personnel, but 
there certainly has been a large increase in the number of 
responsibilities put upon the Coast Guard.
    The second ongoing concern that our work has shown involves 
technology. While there has been a drive to use technologies 
for a wide variety of applications, not all of these 
technologies are as mature as we would like them to be, or at 
least as they need to be to get the job done. Also in some 
cases, even the newest technologies are not going to work if 
the right people are not using them. So even with the 
technology component, you still need people that know how to 
use it.
    DOE's Megaport Program is an example of that, because we 
are providing the equipment to do radiation monitoring in 
foreign countries, but again we pretty much depend on those 
other countries once we leave to do all of the monitoring of 
the program, and some of this equipment may need careful 
calibration and other things to make sure it is working 
appropriately.
    Then along came the SAFE Port Act, and while it covered a 
very broad range of topics, everything from port issues to 
Internet gambling, much of it was aimed at strengthening the 
security regime that was put in place by MTSA. First of all, it 
formalized some existing programs into law. CSI and C-TPAT are 
good examples of these.
    Second, it directed specific program improvements, for 
example, some of the recommendations made by either GAO, the 
IG, or congressional committees. And third, it set deadlines 
for specific actions to be accomplished. Some of these 
deadlines include actions for the implementation of TWIC, and 
100 percent scanning for certain kinds of containers.
    In many cases, Congress was approving existing programs, 
but it was clearly telling the agencies to do them better and 
to do them faster.
    Getting back to resources, the congressional directives in 
the SAFE Port Act, whether it is to do something better or is 
to do something faster, all generally require additional 
resources. Additional resources certainly have been provided if 
you look at the budgets of these organizations.
    But the question for Congress and the agencies is whether 
the increases in the budgets were commensurate with the 
additional responsibilities that they were given, and also some 
issues of whether they were allocated as well as they could 
have been.
    Beyond security-related issues, when Congress created DHS 
there were clear concerns that DHS continue doing everything it 
was doing because all the component agencies came into DHS. In 
the case of the customs revenue function, Congress went as far 
as directing that specific numbers of people and positions be 
maintained in the customs revenue function, something that CBP 
has not done.
    In the competition for resources within agencies, I think 
this is an example of the difficult choices that agencies are 
having to make when reallocating the resources between security 
and non-security priorities.
    In terms of our work, we have made a number of 
recommendations involving the SAFE Port Act, as well as MTSA. 
We have worked with the agencies pretty closely in getting them 
to accept these recommendations, and they are certainly making 
attempts to implement those.
    Looking ahead, we will continue to work with these 
agencies, as well as this committee and other representatives 
in Congress, to provide oversight, to keep our ports as safe as 
practical.
    I would be happy to answer any questions. Thank you.
    [The statement of Mr. Caldwell follows:]

                Prepared Statement o Stephen L. Caldwell

    Madam Chairwoman and Members of the Subcommittee:
    I am pleased to be here today to discuss port security and revenue 
functions related to provisions of the Security and Accountability for 
Every Port Act (SAFE Port Act).\1\ The nation's ports are the doorway 
for more than 80 percent of our foreign trade. Worldwide, some 30 large 
ports, spread across North America, Asia, and Europe constitute the 
world's primary, interdependent trading web. Much of this trade--
particularly high-value cargo--enters and leaves in cargo containers. 
In 2004, for example, $423 billion worth of goods traveling to the 
United States arrived in 15.8 billion containers. Similarly, ports are 
vital for our energy supplies. In 2005, 55 percent of the nation's 
crude oil supply and natural gas supply was imported on seagoing 
tankers. The trade that passes through ports also generates substantial 
revenue for the U.S. government.
---------------------------------------------------------------------------
    \1\ Pub. L. No. 109-347, 120 Stat. 1184 (2006).
---------------------------------------------------------------------------
    In our post September 11, 2001, environment, however, the potential 
security weaknesses presented by these economic doorways have become 
readily apparent. Ports present potential terrorist targets: they are 
sprawling, easily accessible by water and land, often close to urban 
areas, and contain facilities that represent opportunities for 
inflicting significant damage as well as causing economic mayhem. 
Further, they are conduits for weapons prepared elsewhere and concealed 
in cargo designed to move quickly to many locations beyond the ports 
themselves. At this time, the U.S. government does not require that all 
cargo destined for the United States be checked until it arrives.
    Since the 9/11 attacks, a new port security framework has taken 
form. Much of this framework was set in place by the Maritime 
Transportation Security Act (MTSA).\2\ Enacted in November 2002, MTSA 
was designed, in part, to help protect the nation's ports and waterways 
from terrorist attacks through a wide range of security improvements. 
Among the major requirements included in MTSA were: (1) conducting 
vulnerability assessments for port facilities, and vessels.; (2) 
developing security plans to mitigate identified risks for the national 
maritime system, ports, port facilities, and vessels; (3) developing 
the Transportation Worker Identification Credential (TWIC), a biometric 
identification card to help restrict access to secure areas to only 
authorized personnel; and (4) establishment of a process to assess 
foreign ports, from which vessels depart on voyages to the United 
States. Much of this framework is administered by the Department of 
Homeland Security (DHS), itself a creation of the new security 
environment brought on by the September 11, 2001, attacks. This 
framework also attempts to balance security priorities with the need to 
facilitate legitimate trade.
---------------------------------------------------------------------------
    \2\ Pub. L. No. 107-295, 116 Stat. 2064 (2002).
---------------------------------------------------------------------------
    One of the latest additions to this port security framework is the 
SAFE Port Act, which was passed and took effect in October of 2006. The 
act made a number of adjustments to programs within this framework, 
creating additional programs or lines of effort and altering others. 
The SAFE Port Act created and codified new programs and initiatives, 
and amended some of the original provisions of MTSA. The SAFE Port Act 
included provisions that (1) codified the Container Security Initiative 
(CSI) and the Customs-Trade Partnership Against Terrorism (C-TPAT)--two 
programs administered by Customs and Border Protection (CBP) to help 
reduce any threats stemming from cargo containers; (2) established port 
security interagency operational centers at all high risk ports; (3) 
set an implementation schedule and fee restrictions for TWIC; (4) 
required that all containers entering high volume U.S. ports be scanned 
for radiation sources by December 31, 2007; and (5) required additional 
data be made available to CBP for targeting cargo containers for 
inspection. The SAFE Port Act also mandated GAO to report to Congress 
on some topics related to maritime security, including (a) the security 
of ports overseas in the Caribbean Basin, (b) the background check 
program for transportation workers, including those seeking access to 
ports and other sensitive areas, and (c) the extent to which DHS 
continues to collect revenues at ports given the new emphasis on 
security.\3\ This statement summarizes our work on these three 
mandates, though all of them have been, or will be, addressed in 
separate reports.
---------------------------------------------------------------------------
    \3\ The SAFE Port Act had an additional requirement that GAO report 
on DHS pre-screening for charter and leased aircraft. Today's 
statement, with its primary emphasison maritime security and other 
activities at seaports, does not address this other reporting 
requirement.
---------------------------------------------------------------------------
    Over the past several years, we have examined and reported on many 
of the programs in this new homeland security framework. This statement 
is designed both to provide an overview of what we have learned about 
these programs and to describe, to the extent we have information 
available, what DHS is doing as a result of the SAFE Port Act 
requirements and the challenges it faces in doing so. This statement 
discusses more than a dozen programs and lines of effort, as shown in 
table 1.
Table 1: Summary of Programs and Lines of Effort Included in this 
Statement

------------------------------------------------------------------------
                  Program                            Description
------------------------------------------------------------------------
Overall port security                       ............................
------------------------------------------------------------------------
Area Maritime Security Committees           Committees consisting of key
                                             port stakeholders who share
                                             information and develop
                                             port security plans.
------------------------------------------------------------------------
Interagency Operational Centers             Command centers where
                                             agencies share information,
                                             coordinate their
                                             activities, and coordinate
                                             joint efforts.
------------------------------------------------------------------------
Area Maritime Security Plans                Plan laying out local port
                                             vulnerabilities,
                                             responsibilities, and some
                                             response actions.
------------------------------------------------------------------------
Port security exercises                     Exercises among various port
                                             stakeholders to test the
                                             effectiveness of port
                                             security plans.
------------------------------------------------------------------------
Evaluations of security at foreign ports    Coast Guard officers
                                             visiting and assessing
                                             security conditions at
                                             foreign ports.
------------------------------------------------------------------------
Port facility security                      ............................
------------------------------------------------------------------------
Port facility security plans                Facilities are required to
                                             have security plans and
                                             security officers.
------------------------------------------------------------------------
Port facility security compliance           Coast Guard reviews of port
 monitoring                                  facility security plans and
                                             their compliance with such
                                             plans.
------------------------------------------------------------------------
Transportation Worker Identification        Biometric identification
 Credential                                  cards to be issued to port
                                             workers to help secure
                                             access to areas of ports.
------------------------------------------------------------------------
Background checks                           DHS requirements for person
                                             who enter secure or
                                             restricted areas or
                                             transport hazardous cargo.
------------------------------------------------------------------------
International supply chain--container       ............................
 security
------------------------------------------------------------------------
Automated Targeting System                  Risk based decision system
                                             to determine cargo
                                             containers requiring
                                             inspection.
------------------------------------------------------------------------
Container Security Initiative               Stationing CBP officers at
                                             foreign ports to help
                                             identify and inspect high
                                             risk cargo containers.
------------------------------------------------------------------------
Megaports Initiative                        Radiation detection
                                             technology at foreign ports
                                             to stop the proliferation
                                             of Weapons of Mass
                                             Destruction.
------------------------------------------------------------------------
Secure Freight Initiative                   Combines Container Security
                                             Initiative scanning with
                                             Megaports Initiative
                                             radiation detection at
                                             foreign ports.
------------------------------------------------------------------------
Customs-Trade Partnership Against           Partnership between private
 Terrorism                                   companies and CBP to
                                             improved international
                                             supply chain security.
------------------------------------------------------------------------
Customs revenue functions                   ............................
------------------------------------------------------------------------
Customs and Border Protection               Collect revenues applied to
                                             incoming cargo as
                                             appropriate based on
                                             tariffs and other laws and
                                             regulations.
------------------------------------------------------------------------

                        Source: GAO.

    This statement is organized into four main areas, as follows:
         Programs related to overall port security, such as 
        those for developing security plans, coordinating among 
        stakeholders, and conducting exercises to test security 
        procedures.
         Programs related more specifically to security at 
        individual facilities, such as examining security measures and 
        ensuring that only properly cleared individuals have access to 
        port areas.
         Programs related more specifically to the 
        international supply chain and to cargo container security, 
        such as screening containers at ports both here and abroad.
         The extent to which DHS--and more specifically, CBP--
        has maintained the customs revenue function at ports formerly 
        managed by Treasury.
    This statement is based primarily on a body of work we have 
completed in response to congressional requests and mandates for 
analysis of maritime, port, and cargo security efforts of the federal 
government. The end of this report has a list of relevant GAO reports 
and testimonies. As such, the timeliness of the data that was the basis 
for our prior reporting varies depending on when our products were 
issued. In several cases, such as CBP's maintenance of effort on the 
customs revenue function, our findings are based on recent work 
specifically conducted in response to SAFE Port Act requirements. We 
conducted all of our work in accordance with generally accepted 
government auditing standards, and the scope and methodology for this 
work can be found in the respective products. Similarly, agency 
comments on the findings we cite can be found in the respective 
products. While this body of work does not cover all the provisions of 
the SAFE Port Act, it does cover a wide range of these provisions.

Summary
    Regarding overall port security, the Coast Guard has generally 
implemented key requirements laid out in MTSA. It has established area 
maritime security committees, written area maritime security plans, 
conducted exercises to test such plans, and visited foreign ports to 
assess their compliance with international port security standards. In 
addition, the SAFE Port Act called for changes in several programs 
related to developing and testing security plans and coordinating 
information across agency lines. For example, it called for 
establishing interagency operational centers at all high-risk ports in 
the United States within 3 years. Three ports currently have such 
centers, which are designed to have a unified command structure that 
can act on a variety of incidents ranging from possible terrorist 
attacks to search and rescue and environmental response operations. 
Several new interagency operational centers are about to come on line, 
but in continuing the expansion, DHS may face such challenges as 
creating effective working relationships and dealing with potential 
coordination problems. Additionally, the SAFE Port Act required the 
establishment of a Port Security Exercise Program to test and evaluate 
the capabilities of various governmental and nongovernmental entities 
when faced with emergencies, and to improve the communication of 
lessons learned during the exercises. We have not specifically reviewed 
the implementation of these new requirements, but our past work 
suggests that the need to increase the already substantial exercise 
program, the need to quickly and thoroughly complete after action 
reports and the increased need for interagency coordination for the 
exercises may challenge port security stakeholders' efforts. The act 
also called for expanding a program in which the Coast Guard works with 
other countries to assess--and where needed, strengthen--their security 
procedures. The Coast Guard has developed plans for meeting these 
requirements, but it is likely to face challenges in developing 
sufficient staff to deal with the increased workload.
    Regarding security at individual facilities at ports, MTSA has 
generally been implemented in that facilities have generally written 
and implemented security plans and the Coast Guard has inspected such 
facilities to verify compliance and take enforcement actions where 
necessary. However, the MTSA required transportation worker 
identification card has been plagued by delays. The SAFE Port Act 
called for such steps as mandating the frequency of Coast Guard 
inspections of facilities, requiring unannounced inspections, and 
directing the implementation of the initial phase of the transportation 
worker identification credential program by mid-2007. The Coast Guard, 
which is responsible for the facility inspection program, is likely to 
face challenges in putting enough trained inspectors in place, 
especially since many experienced inspectors are scheduled to rotate to 
other duties. The Transportation Security Administration (TSA), the 
agency responsible for implementing the identification credential, told 
us it has drawn up plans and schedules for implementing the program as 
required and has also brought on additional expertise to deal with past 
problems in the program's development. The effectiveness of these steps 
is not likely to be known until the deadlines approach. While DHS has 
created the Screening Coordination Office to better coordinate the 
various background checks, it will be challenged to fully coordinate 
all the DHS screening programs, ensuring that the cost and benefits of 
potentially eliminating or keeping different screening programs are 
properly considered, and coordinating with other federal screening 
programs outside DHS.
    Regarding the security of containers that move through ports, CBP 
has developed a layered security strategy to identify and inspect 
suspicious containers, and to work with both foreign governments and 
private firms to improve the security of the international supply 
chain. Many of the provisions in the SAFE Port Act dealing with 
container security served to codify existing programs in DHS--such as a 
program to place CBP officials in foreign ports to help target 
suspicious containers and a program where private companies agree to 
improve the security of their supply chains in exchange for reduced 
scrutiny over their shipments--it also expanded and provided additional 
guidance for those programs. The SAFE Port Act also required pilot 
programs to test new technologies or combine existing technologies for 
inspecting cargo containers. In our prior work on container security 
programs, we found that progress had been made, but challenges could 
affect ongoing efforts. Examples of progress made include increasing 
the number of foreign ports where U.S. officials are located and a 
rapid growth in the number of companies agreeing to take steps to 
secure their supply chains. Examples of challenges include ensuring 
adequate staff are available, and the inability to directly test the 
security measures used by different companies in their supply chains, 
particularly overseas.
    Since DHS was formed, it has focused on homeland security issues, 
including striving to prevent terrorists entering or attacking the 
United States through its ports, but has not provided the same focus on 
ensuring the maintenance of customs revenue functions. Although it has 
improved recently, CBP has not maintained the mandated staffing levels 
for performing customs revenue functions, due in part to homeland 
security priorities. Despite a legislative mandate to at least maintain 
minimum specific numbers of staff in certain key customs revenue 
positions, the numbers of staff in several of these positions have 
declined since the formation of DHS. The numbers of staff in other 
positions that can help improve the performance of customs revenue 
functions have declined also. Further, CBP has not produced a strategic 
workforce plan to help ensure it has a sufficient number of staff with 
the necessary skills and competencies to effectively perform customs 
revenue functions. While CBP has made recent efforts to improve the 
management of its human capital for performing customs revenue 
functions, gaps in these efforts remain. Finally, CBP's public 
reporting on its performance of customs revenue functions does not 
ensure accountability. For example, despite being the second largest 
revenue generator for the U.S. government, CBP does publicly report on 
performance measures related to its customs revenue functions in its 
annual plans and Performance and Accountability Reports, the official 
documents agencies issue to Congress and the public to report program 
performance.
    We have reviewed many of the MTSA and SAFE Port Act related 
programs and made recommendations to the appropriate agencies to 
develop strategic plans, better plan their use of human capital, 
establish performance measures, and otherwise improve the operations of 
these programs. In general, these agencies have concurred with our 
recommendations and are making progress implementing them.

Prior Actions Have Improved Port Security, but Challenges Remain
    Port security in general has improved as a result of the 
development of organizations and programs such as Area Maritime 
Security Committees (area committees), Area Maritime Security Plans 
(area plans), maritime security exercises, and the International Port 
Security Program, but challenges to successful implementation of these 
efforts remain. Additionally, management of these programs will need to 
address additional requirements directed by the SAFE Port Act. Area 
committees and interagency operational centers have improved 
information sharing, but the types and ways information is shared 
varies. Area plans are limited to security incidents and could benefit 
from unified planning to include an all-hazards approach. Maritime 
security exercises would benefit from timely and complete after action 
reports, increased collaboration across federal agencies, and broader 
port level coordination. The Coast Guard's International Port Security 
Program is currently evaluating the antiterrorism measures maintained 
at foreign seaports.

Area Committees and Interagency Operational Centers Have Become 
Important Forums for Cooperation and Information-Sharing across 
Agencies
    Two main types of forums have developed as ways for agencies to 
cooperate and share information about port security--area committees 
and interagency operational centers. Area committees serve as a forum 
for port stakeholders, facilitating the dissemination of information 
through regularly scheduled meetings, issuance of electronic bulletins, 
and sharing key documents. MTSA provided the Coast Guard with the 
authority to create area committees--composed of federal, state, local, 
and industry members--that help to develop the area plan for the port. 
As of June 2006, the Coast Guard had organized 46 area committees. Each 
has flexibility to assemble and operate in a way that reflects the 
needs of its port area, resulting in variations in the number of 
participants, the types of state and local organizations involved, and 
the way in which information is shared. Some examples of information 
shared includes assessments of vulnerabilities at specific port 
locations, information about potential threats or suspicious 
activities, and Coast Guard strategies intended for use in protecting 
key infrastructure.
    Interagency operational centers are currently located at three 
ports--Charleston, South Carolina; Norfolk, Virginia; and San Diego, 
California. These centers are designed to unite maritime intelligence 
and operational efforts of various federal and nonfederal 
participants.\4\ Unlike area committees, they are operational in nature 
with a unified or joint command structure designed to receive 
information from multiple sources and act on it. However, the centers 
fulfill varying missions and operations, and thus share different types 
of information. For example, the Charleston center is led by the 
Department of Justice and focused solely on port security, while the 
San Diego center is led by the Coast Guard with missions expanding 
beyond port security to also include search and rescue activities, drug 
interdiction, and environmental response.
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    \4\ Existing interagency operations centers are led by the Coast 
Guard or DOJ, and can include participation by representatives of 
organizations such as the Navy, U.S. Customs and Border Protection, 
Transportation Security Administration, U.S. Immigration and Customs 
Enforcement, other federal agencies, state and local law enforcement, 
or port security personnel. The Charleston center was created through 
an appropriation in the fiscal year 2003 Consolidated Appropriations 
Resolution (Pub. L. No. 108-7, 117 Stat. 11,53 (2003.)); the Norfolk 
and San Diego centers were established as (Joint Harbor Operations 
Centers'' between the Coast Guard and Navy.
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    In past work, we have reported that these two types of forums have 
both been helpful in fostering cooperation and information-sharing.\5\ 
We reported that area committees provided a structure to improve the 
timeliness, completeness, and usefulness of information sharing between 
federal and nonfederal stakeholders. These committees were an 
improvement over previous information-sharing efforts because they 
established a formal structure and new procedures for sharing 
information. In contrast to area committees, interagency operational 
centers can provide continuous information about maritime activities 
and involve various agencies directly in operational decisions using 
this information. While we have reported that interagency operational 
centers have improved information sharing, our past work has also shown 
the types of information and the way information is shared varies at 
the operational centers depending on their purpose and mission, 
leadership and organization, membership, technology, and resources.
---------------------------------------------------------------------------
    \5\ See GAO, Maritime Security: New Structures Have Improved 
Information Sharing, but Security Clearance Processing Requires Further 
Attention, GAO-05-394 (Washington, D.C.: Apr. 15, 2005); Maritime 
Security: Enhancements Made, but Implementation and Sustainability 
Remain Key Challenges, GAO-05-448T (Washington, D.C.: May 17, 2005); 
Maritime Security: Information-Sharing Efforts Are Improving, GAO-06-
933T (Washington, D.C.: July 10, 2006).
---------------------------------------------------------------------------
    The SAFE Port Act called for an expansion of interagency 
operational centers, directing the Secretary of DHS to establish such 
centers at all high-risk priority ports no later than 3 years after the 
Act's enactment. In addition to authorizing the appropriation of funds 
and requiring DHS to report on potential cost-sharing at the centers, 
it directs the new interagency operational centers to utilize the same 
compositional and operational characteristics of existing centers, such 
as the pilot project operational centers for port security. Currently 
two more centers are expected to be functional within weeks. These will 
be located in Jacksonville, Florida, and Seattle, Washington. Like the 
centers in San Diego and Norfolk, they will both be operated jointly by 
the Coast Guard and the Navy. In addition, the Coast Guard has 
developed its own operational centers, called sector command centers, 
as part of an effort to reorganize and improve its awareness of the 
maritime domain. These are being developed at 35 locations to monitor 
information and to support planned future operations, and some of these 
sector command centers may include other agencies on either a regular 
or an ad hoc basis.
    Information sharing efforts, whether through area committees or 
interagency operational centers, face challenges in several areas. 
These challenges include:
         Obtaining security clearances for port security 
        stakeholders. The lack of federal security clearances among 
        port security stakeholders has been routinely cited as a 
        barrier to information sharing, one of the primary goals of 
        both the area committees and interagency operational centers. 
        In previous reviews, we found that the inability to share 
        classified information may limit the ability to deter, prevent, 
        and respond to a potential terrorist attack. The Coast Guard 
        has seen improvements based on its efforts to sponsor security 
        clearances for members of area committees. In addition, the 
        SAFE Port Act includes a specific provision requiring DHS to 
        sponsor and expedite security clearances for participants in 
        interagency operational centers. However, the extent to which 
        these efforts will ultimately improve information sharing 
        remains unclear.
         Creating effective working relationships. Another 
        challenge associated with establishing interagency operational 
        centers at all high risk ports is the difficulty associated 
        with encouraging various federal, state and local agencies that 
        have never worked together before to collaborate and share 
        information effectively under new structures and procedures. 
        While some of the existing operational centers found success 
        with existing interagency relationships, other high-risk ports 
        might face challenges establishing new working relationships 
        among port stakeholders and implementing their own interagency 
        operational centers.
         Addressing potential overlapping responsibilities. 
        Overlapping leadership roles between the Coast Guard and FBI 
        has been seen during port security exercises. While the SAFE 
        Port Act designates the Coast Guard Captain of the Port as the 
        incident commander in the event of a transportation security 
        incident, the FBI also has leadership responsibilities in 
        terrorist incidents.\6\ It is important that actions across the 
        various agencies are clear and coordinated.
---------------------------------------------------------------------------
    \6\ The Captain of the Port is a Coast Guard officer who enforce, 
within their respective areas, port safety and security and marine 
environmental protection regulations. There are 41 Captains of the Port 
nationwide.
---------------------------------------------------------------------------
         Determining relationships among various centers. The 
        relationship between the interagency operations centers and the 
        recently developed Coast Guard sector command centers is still 
        to be determined. We have not studied either of these issues in 
        depth, but they may bear watching.

Area Plans Are in Place but Do Not Address Natural Disasters
    Area plans are another MTSA requirement, and the specific 
provisions of the plans have been specified by regulation and Coast 
Guard directive. Implementing regulations for MTSA specified that area 
plans include, among other things, operational and physical security 
measures in place at the port under different security levels, details 
of the security incident command and response structure, procedures for 
responding to security threats including provisions for maintaining 
operations in the port, and procedures to facilitate the recovery of 
the marine transportation system after a security incident. A Coast 
Guard Navigation and Vessel Inspection Circular (NVIC) provided a 
common template for area plans and specified the responsibilities of 
port stakeholders under the plans.\7\ Currently, 46 area plans are in 
place at ports around the country. The Coast Guard approved the plans 
by June 1, 2004, and MTSA requires that they be updated at least every 
5 years.
---------------------------------------------------------------------------
    \7\ NVICs provide detailed guidance about enforcement or compliance 
with certain Coast Guard safety regulations and programs. NVIC 09-2, 
most recently revised on October 27, 2005, detailed requirements for 
area plans.
---------------------------------------------------------------------------
    The SAFE Port Act added a requirement to area plans. To ensure that 
the waterways are cleared and the flow of commerce through United 
States ports is reestablished as efficiently and quickly as possible 
after a security incident, the act specified that area plans include a 
salvage response provision identifying salvage equipment capable of 
restoring operational trade capacity. None of our past or current work 
specifically addresses the extent to which area plans now include this 
provision. We have, however, conducted other work that has a broader 
bearing on the scope of area plans, and thus potentially on this 
provision as well.
    In a recent report examining how ports are dealing with planning 
for natural disasters such as hurricanes and earthquakes, we noted that 
area plans cover security issues but do not include other issues that 
could have a major impact on a port's ability to support maritime 
commerce.\8\ As currently written, area plans are concerned with 
deterring and, to a lesser extent, responding to security incidents. We 
found, however, that unified consideration of all risks faced by a 
port, both natural and man-made, may be beneficial. Because of the 
similarities between the consequences of terrorist attacks and natural 
or accidental disasters, much of the planning for protection, response, 
and recovery capabilities is similar across all emergency events. 
Combining terrorism and other threats can enhance the efficiency of 
port planning efforts because of the similarity in recovery plans for 
both natural and security-related disasters. This approach also allows 
port stakeholders to estimate the relative value of different 
mitigation alternatives. The exclusion of certain risks from 
consideration, or the separate consideration of a particular type of 
risk, gives rise to the possibility that risks will not be accurately 
assessed or compared, and that too many or too few resources will be 
allocated toward mitigation of a particular risk. As ports continue to 
revise and improve their planning efforts, available evidence indicates 
that, if ports take a system-wide approach, thinking strategically 
about using resources to mitigate and recover from all forms of 
disaster, they will be able to achieve the most effective results. Area 
plans provide a useful foundation for establishing an all-hazards 
approach. While the SAFE Port Act does not call for expanding area 
plans in this manner, it does contain a requirement that natural 
disasters and other emergencies be included in the scenarios to be 
tested in the Port Security Exercise Program. Based on our work, we 
found there are challenges in using area committees and plans as the 
basis for broader all-hazards planning. These challenges include:
---------------------------------------------------------------------------
    \8\ GAO, Port Risk Management: Additional Federal Guidance Would 
Aid Ports in Disaster Planning and Recovery, GAO-07-412 (Washington, 
D.C.: Mar. 28, 2007).
---------------------------------------------------------------------------
         Determining the extent that security plans can serve 
        all-hazards purposes. We recommended that DHS encourage port 
        stakeholders to use area committees and area plans to discuss 
        all-hazards planning. While MTSA and its implementing 
        regulations are focused on transportation security incidents 
        rather than natural disasters and other types of emergencies, 
        we believe that area plans provide a useful foundation for 
        establishing an all hazards approach. Some federal officials 
        indicated that separate existing plans can handle the range of 
        threats that ports face. However, there would need to be an 
        analysis of gaps between different types of planning. Finally, 
        DHS noted that most emergency planning should properly remain 
        with state and local emergency management planners and were 
        cautious about the federal government taking on a larger role.

Maritime Security Exercises Require a Broader Scope and Participation
    MTSA regulations require the Coast Guard Captain of the Port and 
the area committee to conduct or participate in exercises to test the 
effectiveness of area plans once each calendar year, with no more than 
18 months between exercises. These exercises are designed to 
continuously improve preparedness by validating information and 
procedures in the area plan, identifying weaknesses and strengths, and 
practicing command and control within an incident command/unified 
command framework. Such exercises have been conducted for the past 
several years. For example, in fiscal year 2004, the Coast Guard 
conducted 85 port-based terrorism exercises that addressed a variety of 
possible scenarios. In August 2005, the Coast Guard and the 
Transportation Security Administration (TSA) initiated the Port 
Security Training Exercise Program (PortSTEP)--an exercise program 
designed to involve the entire port community, including public 
governmental agencies and private industry, and intended to improve 
connectivity of various surface transportation modes and enhance area 
plans. Between August 2005 and October 2007, the Coast Guard expects to 
conduct PortSTEP exercises for 40 area committees and other port 
stakeholders.
    The SAFE Port Act included several new requirements related to 
security exercises. It required the establishment of a Port Security 
Exercise Program to test and evaluate the capabilities of governments 
and port stakeholders to prevent, prepare for, mitigate against, 
respond to, and recover from acts of terrorism, natural disasters, and 
other emergencies at facilities regulated by the MTSA. It also required 
the establishment of a port security exercise improvement plan process 
that would identify, disseminate, and monitor the implementation of 
lessons learned and best practices from port security exercises. 
Finally, it added natural disasters, such as hurricanes or earthquakes, 
to be included in the list of scenarios to be tested.
    Our work has not specifically examined compliance with these new 
requirements, but our review of these requirements and our work in 
examining past exercises suggests that implementing a successful 
exercise program faces several challenges.\9\ These challenges include:
---------------------------------------------------------------------------
    \9\ GAO, Homeland Security: Process for Reporting Lessons Learned 
from Seaport Exercises Needs Further Attention, GAO-05-170 (Washington, 
D.C.: Jan. 14, 2005); Maritime Security: Federal Efforts Needed to 
Address Challenges in Preventing and Responding to Terrorist Attacks on 
Energy Commodity Tankers, GAO-07-286SU (Washington, D.C.: Mar. 20, 
2007); Port Risk Management: Additional Federal Guidance Would Aid 
Ports in Disaster Planning and Recovery, GAO-07-412 (Washington, D.C.: 
Mar. 28, 2007).
---------------------------------------------------------------------------
         Setting the scope of the program. It will be necessary 
        to determine how exercise requirements in the SAFE Port Act 
        differ from area committee exercises that are currently 
        performed. Exercises currently conducted by area committees 
        already test the ability of a variety of port stakeholders to 
        work together in the event of a port incident. The potential 
        exists for these efforts to be duplicated under the SAFE Port 
        Act exercise requirements. On the other hand, the SAFE Port Act 
        exercise requirements clearly move beyond previous requirements 
        by including natural disasters and other emergencies in the 
        list of scenarios to be exercised. Ensuring that these 
        scenarios are exercised as part of a comprehensive security 
        program may require a wider scope when exercise planning 
        commences.
         Completing after-action reports in a timely and 
        thorough manner. In past work, we found that earlier after-
        action reports were generally submitted late and that many 
        failed to assess each objective that was being exercised. 
        Inability to provide timely and complete reports on exercises 
        represents a lost opportunity to share potentially valuable 
        information across the organization as well as plan and prepare 
        for future exercises.
         Ensuring that all relevant agencies participate. While 
        exercise preparation and participation is time-consuming, joint 
        exercises are necessary to resolve potential role and incident 
        command conflicts as well as determine whether activities would 
        proceed as planned. Our work has shown that past exercises have 
        not necessarily been conducted in this manner.

Coast Guard Is in Process of Evaluating the Security of Foreign Ports
    The security of domestic ports is also dependent on security at 
foreign ports where cargoes bound for the United States originate. To 
help secure the overseas supply chain, MTSA required the Coast Guard to 
develop a program to assess security measures in foreign ports and, 
among other things, recommend steps necessary to improve security 
measures in their ports. The Coast Guard established this program, 
called the International Port Security Program, in April 2004. Under 
this program, the Coast Guard and host nations review the 
implementation of security measures in the host nations' ports against 
established security standards, such as the International Maritime 
Organization's International Ship and Port Facility Security (ISPS) 
Code.\10\ Coast Guard teams have been established to conduct country 
visits, discuss security measures implemented, and collect and share 
best practices to help ensure a comprehensive and consistent approach 
to maritime security in ports worldwide. The conditions of these 
visits, such as timing and locations, are negotiated between the Coast 
Guard and the host nation. Coast Guard officials also make annual 
visits to the countries to obtain additional observations on the 
implementation of security measures and ensure deficiencies found 
during the country visits are addressed.\11\ As of April 2007, the 
Coast Guard reported that it has visited 86 countries under this 
program and plans to complete 29 more visits by the end of fiscal year 
2007.\12\
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    \10\ The International Port Security Program uses the ISPS Code as 
the benchmark by which it measures the effectiveness of a country's 
anti-terrorism measures in a port. The code was developed after the 
September 11, 2001, attacks and established measures to enhance the 
security of ships and port facilities with a standardized and 
consistent security framework. The ISPS code requires facilities to 
conduct an assessment to identify threats and vulnerabilities and then 
develop security plans based on the assessment. The requirements of 
this code are performance-based; therefore compliance can be achieved 
through a variety of security measures.
    \11\ In addition to the Coast Guard visiting the ports of foreign 
countries under this program, countries can also make reciprocal visits 
to U.S. ports to observe U.S. implementation of the ISPS Code, 
obtaining ideas for implementation of the Code in their ports and 
sharing best practices for security.
    \12\ There are approximately 140 countries that are maritime 
trading partners with the United States.
---------------------------------------------------------------------------
    The SAFE Port Act and other congressional directions have called 
for the Coast Guard to increase the pace of its visits to foreign 
countries. Although MTSA did not set a timeframe for completion of 
these visits, the Coast Guard initially set a goal to visit all 
countries that conduct maritime trade with the United States by 
December 2008. In September 2006, the conference report accompanying 
the fiscal year 2007 DHS Appropriations Act directed the Coast Guard to 
``double the amount'' at which it was conducting its visits.\13\ 
Subsequently, in October 2006, the SAFE Port Act required the Coast 
Guard to reassess security measures at the foreign ports every 3 years. 
Coast Guard officials said they will comply with these more stringent 
requirements and will reassess countries on a 2-year cycle. With the 
expedited pace, the Coast Guard now expects to assess all countries by 
March 2008, after which reassessments will begin.
---------------------------------------------------------------------------
    \13\ See H.R. Conf. Rep. No. 109-699, at 142 (2006).
---------------------------------------------------------------------------
    We are currently conducting a review of the Coast Guard's 
international enforcement programs, such as the International Port 
Security Program.\14\ Although this work is still in process and not 
yet ready to be included in this testimony, we have completed a more 
narrowly scoped review required under the SAFE Port Act regarding 
security at ports in the Caribbean Basin.\15\ As part of this work, we 
looked at the efforts made by the Coast Guard in the region under the 
program and the Coast Guard's findings from the country visits it made 
in the region. For the countries in this region for which the Coast 
Guard had issued a final report, the Coast Guard reported that most had 
``substantially implemented the security code,'' while one country that 
was just recently visited was found to have not yet implemented the 
code and will be subject to a reassessment. At the facility level, the 
Coast Guard found several facilities needing improvements in areas such 
as access controls, communication devices, fencing, and lighting. 
Because our review of the Coast Guard's International Port Security 
Program is still ongoing, we have not yet reviewed the results of the 
Coast Guard's findings in other regions of the world.
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    \14\ This work is being conducted at the request of the Committee 
on Commerce, Science and Transportation, U.S. Senate.
    \15\ Section 233 (c) of the SAFE Port Act requires GAO to report on 
various aspects relating to the security of ports in the Caribbean 
Basin. The act required GAO to provide this report to specified 
cognizant Senate and House Committees. To satisfy this requirement, 
GAO's findings for this work were presented in a briefing format to the 
cognizant committees by April 13, 2007. GAO will release a public 
report containing the briefing materials in June 2007.
---------------------------------------------------------------------------
    While our larger review is still not complete, Coast Guard 
officials have told us they face challenges in carrying out this 
program in the Caribbean Basin. These challenges include:
         Ensuring sufficient numbers of adequately trained 
        personnel. Coast Guard officials said the faster rate at which 
        foreign ports will now be reassessed will require hiring and 
        training new staff--a challenge they expect will be made more 
        difficult because experienced personnel who have been with the 
        program since its inception are being transferred to other 
        positions as part of the Coast Guard's rotational policy. These 
        officials will need to be replaced with newly assigned 
        personnel. Another related challenge is that the unique nature 
        of the program requires the Coast Guard to provide specialized 
        training to those joining the program, since very few people in 
        the Coast Guard have had international experience or extensive 
        port security experience.
    Addressing host nation sovereignty issues. In making arrangements 
to visit the ports of foreign countries, Coast Guard officials stated 
that they have occasionally encountered initial reluctance by some 
countries to allow the Coast Guard to visit their ports due to concerns 
over sovereignty. In addition, the conditions of the visits, such as 
timing and locations, are negotiated between the Coast Guard and the 
host nation. Thus the Coast Guard team making the visit could 
potentially be precluded from seeing locations that were not in 
compliance.

Port Facility Security Efforts Are Long Standing, but Additional 
Challenges Have Emerged
    Many long-standing programs to improve facility security at ports 
are underway, but new challenges to their successful implementation 
have emerged. The Coast Guard is required to conduct assessments of 
security plans and facility inspections, but faces challenges to staff 
and train staff to meet the additional requirements of the SAFE Port 
Act. TSA's TWIC program has addressed some of its initial program 
challenges, but will continue to face additional challenges as the 
program rollout continues. Many steps have been taken to ensure 
transportation workers are properly screened, but redundancies in 
various background checks have decreased efficiency and highlighted the 
need for increased coordination.

Coast Guard Faces Challenges in Monitoring Compliance of Maritime 
Facilities
    MTSA and its implementing regulations requires owners and operators 
of certain at-risk maritime facilities (such as power stations, 
chemical manufacturing facilities, and refineries that are located on 
waterways and receive foreign vessels) to conduct assessments of their 
security vulnerabilities, develop security plans to mitigate these 
vulnerabilities, and implement measures called for in the security 
plans. Under the Coast Guard regulations, these plans are to include 
such items as measures for access control, responses to security 
threats, and drills and exercises to train staff and test the plan.\16\ 
The plans are ``performance-based,'' meaning the Coast Guard has 
specified the outcomes it is seeking to achieve and has given 
facilities responsibility for identifying and delivering the measures 
needed to achieve these outcomes. Facility owners were to have their 
plans in place by July 1, 2004.
---------------------------------------------------------------------------
    \16\ Requirements for security plans for facilities are found in 33 
C.F.R. Part 105, Subpart D.
---------------------------------------------------------------------------
    The Coast Guard performs inspections of facilities to make sure 
they are in compliance with their security plans. In 2005, we reported 
that the Coast Guard completed initial compliance inspections at all 
MTSA regulated facilities by the end of 2004 found that approximately 
97 percent of maritime facility owners or operators were in compliance 
with MTSA requirements.\17\ The most frequently cited deficiencies 
related to insufficient controls over access, not ensuring the facility 
was operating in compliance with security requirements, not complying 
with facility security officer requirements (such as possessing the 
required security knowledge or carrying out all duties as assigned), 
and having insufficient security measures for restricted areas. The 
Coast Guard reported taking enforcement actions and imposing 
operational controls, such as suspending certain facility operations, 
for identified deficiencies.
---------------------------------------------------------------------------
    \17\ See GAO, Protection of Chemical and Water Infrastructure: 
Federal Requirements, Actions of Selected Facilities, and Remaining 
Challenges, GAO-05-327 (Washington, D.C.: March 2005).
---------------------------------------------------------------------------
    Coast Guard guidance calls for the Coast Guard to conduct on-site 
facility inspections to verify continued compliance with the plan on an 
annual basis. The SAFE Port Act required the Coast Guard to conduct at 
least two inspections of each facility annually, and it required that 
one of these inspections be unannounced. We are currently conducting a 
review of the Coast Guard's efforts for ensuring facilities' compliance 
with various MTSA requirements and are not yet in a position to report 
our findings.\18\ However, our previous work showed the Coast Guard 
faces challenges in carrying out its strategy to review and inspect 
facilities for compliance with their security plans, and these 
challenges could be amplified with the additional requirements called 
for by the SAFE Port Act.\19\ These challenges include:
---------------------------------------------------------------------------
    \18\ This work is being conducted at the request of the Committee 
on Commerce, Science and Transportation, U.S. Senate.
    \19\ See GAO, Maritime Security: Substantial Work Remains to 
Translate New Planning Requirements into Effective Port Security, GAO-
04-838 (Washington, D.C.: June 2004).
---------------------------------------------------------------------------
         Ensuring that sufficient trained inspectors are 
        available. Because security measures are performance-based, 
        evaluating them involves a great deal of subjectivity. For 
        example, inspectors do not check for compliance with a specific 
        procedure; instead, they have to make a judgment about whether 
        the steps the owner or operator has taken provide adequate 
        security. Performance-based plans provide flexibility to owners 
        and operators, but they also place a premium on the skills and 
        experience of inspectors to identify deficiencies and recommend 
        corrective action. This complexity makes it a challenge for the 
        Coast Guard to ensure that its inspectors are trained 
        appropriately and have sufficient guidance to make difficult 
        judgments about whether owners and operators have taken 
        adequate steps to address vulnerabilities. Additionally, once 
        proficient at their job, inspectors often face reassignment. 
        Further, the rotation period has been shortened by 1 year--from 
        4 years to 3.
         Evaluating compliance activities so they can be 
        improved. In our previous work we also recommended that the 
        Coast Guard evaluate its compliance inspection efforts taken 
        during the initial 6-month period after July 1, 2004, and use 
        the results as a means to strengthen its long-term strategy for 
        ensuring compliance.\20\ While the Coast Guard agreed with this 
        recommendation, and has taken some steps to evaluate its 
        compliance efforts, it has not conducted a comprehensive 
        evaluation of these efforts to date. Without knowledge that the 
        current approach to MTSA facility oversight is effective, the 
        Coast Guard will be further challenged in planning future 
        oversight activities.
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    \20\ Ibid.

TSA Has Made Progress in Implementing the TWIC Program, but Challenges 
Remain
    MTSA required the Secretary of DHS to, among other things, issue a 
maritime worker identification card that uses biometrics, such as 
fingerprints, to control access to secure areas of seaports and 
vessels. When MTSA was enacted, TSA had already initiated a program to 
create an identification credential that could be used by workers in 
all modes of transportation. This program, called the TWIC program, is 
designed to collect personal and biometric information to validate 
workers' identities, conduct background checks on transportation 
workers to ensure they do not pose a threat to security, issue tamper-
resistant biometric credentials that cannot be counterfeited, verify 
these credentials using biometric access control systems before a 
worker is granted unescorted access to a secure area, and revoke 
credentials if disqualifying information is discovered, or if a card is 
lost, damaged, or stolen. TSA, in partnership with the Coast Guard, is 
focusing initial implementation on the maritime sector.
    We have reported several times on the status of this program and 
the challenges that it faces.\21\ Most recently, we reported that TSA 
has made progress in implementing the TWIC program and addressing 
problems we previously identified regarding contract planning and 
oversight and coordination with stakeholders.\22\ For example, TSA 
reported that it added staff with program and contract management 
expertise to help oversee the contract and developed plans for 
conducting public outreach and education efforts.
---------------------------------------------------------------------------
    \21\ See GAO, Port Security: Better Planning Needed to Develop and 
Operate Maritime Worker Identification Card Program, GAO-05-106 
(Washington, D.C.: December 2004); and Transportation Security: DHS 
Should Address Key Challenges before Implementing the Transportation 
Worker Identification Credential Program, GAO-06-982 (Washington, D.C.: 
September 2006).
    \22\ GAO, Transportation Security: TSA Has Made Progress in 
Implementing the Transportation Worker Identification Credential 
Program, but Challenges Remain, GAO-07-681T (Washington, D.C.: April 
12, 2007).
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    The SAFE Port Act contained a requirement for implementing the 
first major phase of the TWIC program by mid-2007. More specifically, 
it required TSA to implement TWIC at the 10 highest risk ports by July 
1, 2007, conduct a pilot program to test TWIC access control 
technologies in the maritime environment, issue regulations requiring 
TWIC card readers based on the findings of the pilot, and periodically 
report to Congress on the status of the program. TSA is taking steps to 
address these requirements, such as establishing a rollout schedule for 
enrolling workers and issuing TWIC cards at ports and conducting a 
pilot program to test TWIC access control technologies.
    As TSA begins enrolling workers and issuing TWIC cards this year, 
it is important that the agency establish clear and reasonable 
timeframes for implementing TWIC. Further, TSA could face additional 
challenges as the TWIC implementation progresses. These challenges 
include:
         Monitoring the effectiveness of contract planning and 
        oversight. While the steps that TSA reports taking are designed 
        to address the contract planning and oversight problems that we 
        have previously identified and recommendations we have made, 
        the effectiveness of these steps will not be clear until 
        implementation of the TWIC program begins.
         Ensuring a successful enrollment process. Significant 
        challenges remain in enrolling about 770,000 persons at about 
        3,500 facilities in the TWIC program. Sufficient communication 
        and coordination to ensure that all individuals and 
        organizations affected by the TWIC program are aware of their 
        responsibilities will require concerted effort on the part of 
        TSA and the enrollment contractor.
         Addressing access control technologies. TSA and 
        industry stakeholders need to address challenges regarding TWIC 
        access control technologies to ensure that the program is 
        implemented effectively. Without fully testing all aspects of 
        the technology TSA may not be able ensure that the TWIC access 
        control technology can meet the requirements of the system. 
        Given the differences among the facilities and locations where 
        the technology is to be implemented, it may be difficult to 
        test all scenarios.

Multiple Background Check Programs for Transportation Workers Need to 
Be Coordinated
    Since the terrorist attacks on September 11, 2001, the federal 
government has taken steps to ensure that transportation workers, many 
of whom transport hazardous materials or have access to secure areas in 
locations such as ports, are properly screened to ensure they do not 
pose a security risk. For example, the USA PATRIOT Act in October 2001 
prohibited states from issuing hazardous material endorsements for a 
commercial driver's license without an applicant background check.\23\ 
Background checks are also part of the TWIC program discussed above. 
Concerns have been raised, however, that transportation workers may 
face a variety of background checks, each with different standards. A 
truck driver, for example, is subject to background checks for all of 
the following: unescorted access to a secure area at a port, unescorted 
access to a secure area at an airport, expedited border crossings, 
hauling hazardous materials, or hauling arms or ammunition for the 
Department of Defense or cargo for the U.S. Postal Service. In July 
2004, the 9/11 Commission reported that having too many different 
biometric standards, travel facilitation systems, credentialing 
systems, and screening requirements hampers the development of 
information crucial for stopping terrorists from entering the country, 
is expensive, and is inefficient.\24\ The Commission recommended that a 
coordinating body raise standards, facilitate information-sharing, and 
survey systems for potential problems. In August 2004, Homeland 
Security Directive 11 announced a new U.S. policy to ``implement a 
coordinated and comprehensive approach to terrorist-related screening-
in immigration, law enforcement, intelligence, counterintelligence, and 
protection of the border, transportation systems, and critical 
infrastructure--that supports homeland security, at home and abroad.''
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    \23\ Pub. L. No. 107-56, Sec. 1012(a)(1), 115 Stat. 272, 396-97 
(2001).
    \24\ Final Report of the National Commission On Terrorist Attacks 
Upon that United States.
---------------------------------------------------------------------------
    DHS has taken steps, both at the department level and within its 
various agencies, to consolidate, coordinate, and harmonize such 
background check programs.\25\ At the department level, DHS created the 
Screening Coordination Office (SCO) in July 2006 to coordinate DHS 
background check programs. The SCO is in the early stages of developing 
its plans for this coordination. In December 2006, SCO issued a report 
identifying common problems, challenges, and needed improvements in the 
credentialing programs and processes across the department. The office 
awarded a contract in April 2007 that will provide the methodology and 
support for developing an implementation plan to include common design 
and comparability standards and related milestones to coordinate DHS 
screening and credentialing programs. DHS components are currently in 
the initial stages of a number of their own initiatives. For example, 
In January 2007, TSA determined that the background checks required for 
three other DHS programs satisfied the background check requirement for 
the TWIC program.\26\ An applicant who has already undergone a 
background check in association with any of these three programs does 
not have to undergo an additional background check and pays a reduced 
fee to obtain a TWIC card. Similarly, the Coast Guard plans to 
consolidate four credentials and require that all pertinent information 
previously submitted by an applicant at a Coast Guard Regional 
Examination Center be submitted to TSA through the TWIC enrollment 
process.
---------------------------------------------------------------------------
    \25\ See GAO, Protection of Chemical and Water Infrastructure: 
Federal Requirements, Actions of Selected Facilities, and Remaining 
Challenges, GAO-05-327 (Washington, D.C.: March 2005).
    \26\ TSA determined that the background checks required for the 
hazardous materials endorsement, which authorizes an individual to 
transport hazardous materials for commerce; and the Free and Secure 
Trade card, a voluntary CBP program for commercial drivers to receive 
expedited border processing, satisfy the background check requirements 
for TWIC. TSA also determined that an individual issued a Merchant 
Mariner Document (issued between Feb. 3, 2003, and Mar. 26, 2007) was 
not subject to an additional background check for TWIC.
---------------------------------------------------------------------------
    The SAFE Port Act required us to conduct a study of DHS background 
check programs similar to the one required of truck drivers to obtain a 
hazardous material endorsement. Our work on other projects indicates 
that DHS is likely to face additional challenges in coordinating its 
background check programs. These challenges include:
         Ensuring its plans are sufficiently complete without 
        being overly restrictive. The varied background check programs 
        related to transportation workers may have substantially 
        different standards or requirements. SCO will be challenged to 
        coordinate DHS's background check programs in such a way that 
        any common set of standards developed to eliminate redundant 
        checks meets the varied needs of all the programs without being 
        so strict that it unduly limits the applicant pool or so 
        intrusive that potential applicants are unwilling to take part.
         Ensuring that accurate performance information is 
        available. Without knowing the potential costs and benefits 
        associated with the number of redundant background checks that 
        would be eliminated through harmonization, DHS lacks the 
        performance information that would allow its program managers 
        to compare their program results with goals. Thus, DHS faces 
        challenges in determining where to target program resources to 
        improve performance. DHS could benefit from a plan that 
        includes, at a minimum, a discussion of the potential costs and 
        benefits associated with the number of redundant background 
        checks that would be eliminated through harmonization.
         Coordinating across the broader universe of federal 
        background check programs. Many other federal agencies also 
        have background check programs, making coordination a cross-
        cutting, government-wide issue. DHS could face challenges 
        harmonizing background check programs within DHS and other 
        federal agencies.

container Security Programs Maturing, but Implementation Challenges 
Continue
    Several container security programs have been established and 
matured through the development of strategic plans, human capital 
strategies, and performance measures. But these programs continue to 
face technical and management challenges in implementation. As part of 
its layered security strategy, CBP developed the Automated Targeting 
System, but this system has faced quality assurance challenges since 
its inception. In the past, CSI has lacked sufficient staff to meet 
requirements. C-TPAT has faced challenges with validation quality and 
management in the past, in part due to its rapid growth. DOE's 
Megaports Initiative faces ongoing operational and technical challenges 
in the installation and maintenance of radiation detection equipment at 
ports.

Automated Targeting System Continues to Require Management Action
    As part of its responsibility for preventing terrorists and weapons 
of mass destruction from entering the United States, CBP addresses 
potential threats posed by the movement of oceangoing containers. CBP 
inspectors at seaports help determine which containers entering the 
country will undergo inspections and then perform physical inspections 
of such containers. To carry out this responsibility, CBP uses a 
layered security strategy that attempts to focus resources on 
potentially risky cargo containers while allowing other cargo 
containers to proceed without disrupting commerce. The ATS is one key 
element of this strategy. CBP uses ATS to review documentation, 
including electronic manifest information submitted by the ocean 
carriers on all arriving shipments, to help identify containers for 
additional inspection.\27\ CBP requires the carriers to submit manifest 
information 24 hours prior to a United States-bound sea container being 
loaded onto a vessel in a foreign port. ATS is a complex mathematical 
model that uses weighted rules that assign a risk score to each 
arriving shipment based on manifest information. CBP inspectors use 
these scores to help them make decisions on the extent of documentary 
review or physical inspection to conduct.
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    \27\ Cargo manifests are prepared by the ocean carrier to describe 
the contents of a container.
---------------------------------------------------------------------------
    In our previous work on ATS we found that CBP lacked important 
internal controls for the administration and implementation of ATS.\28\ 
Despite ATS' importance to CBP's layered security strategy, CBP was 
still in the process of implementing the following key controls, (1) 
performance metrics to measure the effectiveness of ATS, (2) a 
comparison of the results of randomly conducted inspections with the 
results of its ATS inspections, and (3) a simulation and testing 
environment. At that time CBP was also in the process of addressing 
recommendations contained in a 2005 peer review.
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    \28\ The Comptroller General's internal control standards state 
that internal control activities help ensure that management's 
directives are carried out. Further, they state that the control 
objectives should be effective and efficient in accomplishing the 
agency's control objectives. GAO, Standards for Internal Control in the 
Federal Government, GAO/AIMD-00-21.3.1, 11 (Washington, D.C.: November 
1999).
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    The SAFE Port Act required that the CBP Commissioner take actions 
to improve ATS. These requirements included such steps as (1) having an 
independent panel review the effectiveness and capabilities of the ATS, 
(2) considering future iterations of ATS that would incorporate smart 
features, (3) ensuring that ATS has the capability to electronically 
compare manifest and other available data to detect any significant 
anomalies and facilitate their resolution, (4) ensuring that ATS has 
the capability to electronically identify, compile, and compare select 
data elements following a maritime transportation security incident, 
and (5) developing a schedule to address recommendations made by GAO 
and the Inspector General of the Department of the Treasury and DHS. 
Based on our findings and the further changes to the program enacted by 
the SAFE Port Act, we found the following challenge faced by CBP:
     Implementing the program while internal controls are being 
developed. The missing internal controls would provide CBP with 
critical information on its container screening performance. CBP's 
vital mission does not allow it, however, to halt its screening efforts 
during the period it needed to put these controls into place. CBP is 
faced with the challenge of ensuring that the highest-risk containers 
are inspected without important information needed for optimum 
allocating resources used targeting and inspecting containers.

The CSI Program Has Matured but Challenges Remain
    In response to the threat that a cargo container could be used to 
smuggle a weapon of mass destruction (WMD) into the United States, the 
U.S. Customs Service (now CBP) initiated the CSI in January 2002 to 
detect and deter terrorists from smuggling WMDs via containers before 
they reach domestic seaports. Under this initiative, foreign 
governments allow CBP personnel to be stationed at foreign seaports to 
identify container shipments at risk of containing WMD. CBP personnel 
refer high-risk shipments to host government officials, who determine 
whether to inspect the shipment before it leaves for the United States. 
Host government officials examine shipments with nonintrusive 
inspection equipment and, if they deem it necessary, open the cargo 
containers to physically examine the contents inside.\29\ Since our 
last report on the CSI program, CBP has increased the number of 
seaports that participate in the program from 34 to 50, with plans to 
expand to a total of 58 ports by the end of this fiscal year.\30\
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    \29\ A core element of CSI is the use of technology to scan high 
risk containers to ensure that examinations can be done rapidly without 
slowing down the movement of trade. This technology can include 
equipment such as large scale X-ray and gamma ray machines and 
radiation detection devices.
    \30\ See GAO, Container Security: A Flexible Staffing Model and 
Minimum Equipment Requirements Would Improve Overseas Targeting and 
Inspection Efforts, GAO-05-557, (Washington, D.C.: Apr. 26, 2005).
---------------------------------------------------------------------------
    In our previous work, we identified numerous issues affecting the 
effectiveness of the CSI program. On the positive side, we praised some 
of the positive interaction and information sharing we found among CBP 
officials and host nation officials at CSI ports--something that could 
lead to better targeting and inspections. In some cases where we found 
problems, CBP took steps to implement our recommendations, such as 
developing a strategic plan, a human capital strategy, and performance 
measures. In other cases, CBP found it more difficult to implement our 
recommendations. For example, they deferred establishing minimum 
technical requirements for nonintrusive inspection equipment used by 
host nations at CSI ports.
    The SAFE Port Act formalized CSI into law and specified factors to 
be considered in designating seaports as CSI, including risk level, 
cargo volume, results of Coast Guard assessments, and the commitment of 
the host government to sharing critical information with DHS. The act 
also called for DHS to establish minimum technical criteria for the use 
of nonintrusive inspection equipment in conjunction with CSI and to 
require that seaports receiving CSI designation operate such equipment 
in accordance with these criteria. Another provision related to 
container cargo requires DHS to ensure that integrated scanning 
systems, using nonintrusive imaging equipment and radiation detection 
equipment, are fully deployed to scan all containers before their 
arrival in the United States as soon as possible, but not before DHS 
determines that such systems meet a number of criteria. The SAFE Port 
Act addresses a number of the issues we have previously identified, but 
our work suggests that CBP may face continued challenges going forward. 
These challenges include:
         Ensuring sufficient staff are available for targeting. 
        Although CBP's goal is to target all U.S. bound containers at 
        CSI seaports before they depart for the United States, we 
        previously reported that it has not been able to place enough 
        staff at some CSI ports to do so.\31\ Since then, CBP has 
        provided additional support to deployed CSI staff by using 
        staff in the United States (at the National Targeting Center) 
        to screen containers for various risk factors and potential 
        inspection.
---------------------------------------------------------------------------
    \31\ GAO-05-557.
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         Developing an international consensus on technical 
        requirements. There are no internationally recognized minimum 
        technical requirements for the detection capability of 
        nonintrusive inspection equipment used to scan containers. 
        Consequently, host nations at CSI seaports use various types of 
        nonintrusive inspection equipment and the detection 
        capabilities of such equipment can vary. Because the inspection 
        a container receives at a CSI seaport could be its only scan 
        before entering the United States, it is important that the 
        detection equipment used meets minimum technical requirements 
        to provide some level of assurance that the presence of WMDs 
        can be detected.
         Ensuring that designated high-risk containers are 
        inspected. We also found that some containers designated as 
        high risk did not receive an inspection at the CSI seaport. 
        Containers designated as high risk by CSI teams that are not 
        inspected overseas (for a variety of reasons) are supposed to 
        be referred for inspection upon arrival at the U.S. destination 
        port. However, CBP officials noted that between July and 
        September 2004, only about 93 percent of shipments referred for 
        domestic inspection were inspected at a U.S. seaport. According 
        to CBP, it is working on improvements in its ability to track 
        such containers to assure that they are inspected.

DOE Has Made Progress with Megaports Program
    Another component in the efforts to prevent terrorists from 
smuggling weapons of mass destruction in cargo containers from overseas 
locations is the Megaports Initiative, initiated by the Department of 
Energy's (DOE) National Nuclear Security Administration in 2003. The 
goal of this initiative is to enable foreign government personnel at 
key seaports to use radiation detection equipment to screen shipping 
containers entering and leaving these ports, regardless of the 
containers? destination, for nuclear and other radioactive material 
that could be used against the United States or its allies. DOE 
installs radiation detection equipment, such as radiation portal 
monitors and handheld radioactive isotope identification devices, at 
foreign seaports that is then operated by foreign government officials 
and port personnel working at these ports.
    Through April 2007, DOE had completed installations of radiation 
detection equipment at nine ports: Freeport, Bahamas; Piraeus, Greece; 
Puerto Cortes, Honduras; Rotterdam, the Netherlands; Port Qasim, 
Pakistan; Manila, the Philippines; Port of Singapore; Algeciras, Spain; 
and Colombo, Sri Lanka. Additionally, DOE has signed agreements to 
begin work and is in various stages of implementation at ports in 15 
other countries: Belgium, Columbia, China, the Dominican Republic, 
Egypt, Israel, Jamaica, Mexico, Oman, Panama, South Korea, Taiwan, 
Thailand, the United Arab Emirates, and the United Kingdom. Further, in 
an effort to expand cooperation, DOE is engaged in negotiations with 
approximately 20 additional countries in Europe, Asia, the Middle East, 
and South America.
    When we reported on this program in March 2005, DOE had made 
limited progress in gaining agreements to install radiation detection 
equipment at the highest priority seaports.\32\ At that time, DOE had 
completed work at only two ports and signed agreements to initiate work 
at five other ports. We also noted that DOE's cost projections for the 
program were uncertain, in part because they were based on DOE's $15 
million estimate for the average cost per port. This per port cost 
estimate may not be accurate because it was based primarily on DOE's 
radiation detection assistance work at Russian land borders, airports, 
and seaports and did not account for the fact that the costs of 
installing equipment at individual ports vary and are influenced by 
factors such as a port's size, its physical layout, and existing 
infrastructure. Since our review, DOE has developed a strategic plan 
for the Megaports Initiative and is in the process of revising its per 
port cost estimate.
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    \32\ For additional information, see GAO, Preventing Nuclear 
Smuggling: DOE Has Made Limited Progress in Installing Radiation 
Detection Equipment at Highest Priority Foreign Seaports, GAO-05-375 
(Washington, D.C.: Mar. 31, 2005).
---------------------------------------------------------------------------
    As DOE continues to implement its Megaports Initiative, it faces 
several operational and technical challenges specific to installing and 
maintaining radiation detection equipment at foreign ports. These 
challenges include:
         Ensuring the ability to detect radioactive material. 
        Certain factors can affect the general capability of radiation 
        detection equipment to detect nuclear material. For example, 
        some nuclear materials can be shielded with lead or other dense 
        materials to prevent radiation from being detected. In 
        addition, one of the materials of greatest proliferation 
        concern, highly enriched uranium, is difficult to detect 
        because of its relatively low level of radioactivity.
         Overcoming the physical layout of ports. In its effort 
        to screen cargo containers at foreign ports for radioactive and 
        nuclear materials, DOE faces technical challenges related to 
        these ports' physical layouts and cargo stacking 
        configurations. To address a part of these challenges at some 
        ports, DOE is testing at Freeport, Bahamas, a device used to 
        transport cargo containers between port locations--known as a 
        straddle carrier--that is outfitted with radiation detection 
        equipment.
         Sustaining equipment in port environments. 
        Additionally, environmental conditions specific to ports, such 
        as the existence of high winds and sea spray, can affect the 
        radiation detection equipment's performance and long-term 
        sustainability. To minimize the effects of these conditions, 
        DOE has used steel plates to stabilize radiation portal 
        monitors placed in areas with high winds, such as in Rotterdam, 
        and is currently evaluating approaches to combat the corrosive 
        effects of sea spray on radiation detection equipment.

Secure Freight Initiative Only Recently Announced
    In another provision related to container security and the work to 
address WMD and related risks, the SAFE Port Act specified that new 
integrated scanning systems that couple nonintrusive imaging equipment 
and radiation detection equipment must be pilot tested at three 
international seaports. It also required that, once fully implemented, 
the pilot integrated scanning system scan 100 percent of containers 
destined for the United States that are loaded at such ports. To 
fulfill these requirements, DHS and DOE jointly announced the formation 
of a pilot program called the Secure Freight Initiative (SFI) in 
December 2006, as an effort to build upon existing port security 
measures by enhancing the U.S. government's ability to scan containers 
for nuclear and radiological materials overseas and better assess the 
risk of inbound containers. In essence, SFI builds upon the CSI and 
Megaports programs.
    According to agency officials, the initial phase of the initiative 
will involve the deployment of a combination of existing container 
scanning technology--such as x-ray and gamma ray scanners used by host 
nations at CSI ports to locate high density objects that could be used 
to shield nuclear materials, inside containers--and radiation detection 
equipment. The ports chosen to receive this integrated technology are: 
Port Qasim in Pakistan; Puerto Cortes in Honduras; and Southampton in 
the United Kingdom. Three other ports located in Singapore, the 
Republic of Korea, and Oman will receive more limited deployment of 
these technologies as part of the pilot program. According to DHS, 
containers from these ports will be scanned for radiation and other 
risk factors before they are allowed to depart for the United States. 
If the scanning systems indicate that there is a concern, both CSI 
personnel and host country officials will simultaneously receive an 
alert and the specific container will be inspected before that 
container continues to the United States. The determination about what 
containers are inspected will be made by CBP officials, either on the 
scene locally or at CBP's National Targeting Center.
    We have not yet reviewed the efforts made under SFI. However, in 
carrying it out, the agencies may likely have to deal with the 
challenges previously identified for the CSI and Megaports programs. 
Per the SAFE Port Act, DHS is to report by April 2008 on, among other 
things, the lessons learned from the SFI pilot ports and the need for 
and the feasibility of expanding the system to other CSI ports, and 
every 6 months thereafter, DHS is to report on the status of full-scale 
deployment of the integrated scanning systems to scan all containers 
bound for the United States before their arrival.

C-TPAT Maturing, but Validation and Other Management Challenges Remain 
C-TPAT, initiated in November 2001, is designed to complement other 
container security programs as part of a layered security strategy. C-
TPAT is a voluntary program that enables CBP officials to work in 
partnership with private companies to review the security of their 
international supply chains and improve the security of their shipments 
to the United States. In return for committing to improving the 
security of their shipments by joining the program, C-TPAT members 
receive benefits that result in reduced scrutiny of their shipments, 
such as a reduced number of inspections or shorter wait times for their 
shipments. Since C-TPAT's inception, CBP has certified 6,375 companies, 
and as of March 2007, it had validated the security of 3,950 of them 
(61.9 percent).
    CBP initially set a goal of validating all companies within their 
first 3 years as C-TPAT members, but the program's rapid growth in 
membership made the goal unachievable. CBP then moved to a risk-based 
approach to selecting members for validation, considering factors such 
as the company having foreign supply chain operations in a known 
terrorist area or involving multiple foreign suppliers. CBP further 
modified its approach to selecting companies for validation to achieve 
greater efficiency by conducting ``blitz'' operations to validate 
foreign elements of multiple members' supply chains in a single trip. 
Blitz operations focus on factors such as C-TPAT members within a 
certain industry, supply chains within a certain geographic area or 
foreign suppliers to multiple C-TPAT members. Risks remain a 
consideration, according to CBP, but the blitz strategy drives the 
decision of when a member company will be validated.
    In our previous work, we raised a number of concerns about the 
overall management of the program and the effectiveness of the 
validation process.\33\ We found that CBP had not established key 
internal controls necessary to manage the programs. Since that time, 
CBP has worked to develop a strategic plan, a human capital strategy, 
and performance measures. We also found that validations lacked 
sufficient rigor to meet C-TPAT stated purpose of the validations--to 
ensure that members' security measures are reliable, accurate and 
effective. Since that time, CBP has developed new validation tools, and 
we have ongoing work to assess what progress is being made.
---------------------------------------------------------------------------
    \33\ See GAO, Cargo Security: Partnership Program Grants Importers 
Reduced Scrutiny with Limited Assurance of Improved Security, GAO-05-
404 (Washington, D.C.: March 2005); and Container Security: Expansion 
of Key Customs Programs Will Require Greater Attention to Critical 
Success Factors, GAO-03-770 (Washington, D.C.: July 2003).
---------------------------------------------------------------------------
    The SAFE Port Act formalized C-TPAT into law. In addition, it 
included a new goal that CBP validate C-TPAT members' security measures 
and supply chain security practices within 1 year of their 
certification and revalidate those members no less than once in every 4 
years. CBP faces several challenges in addressing this requirement and 
dealing with the concerns we previously identified. These challenges 
include:
         Conducting validations within 1 year. The goal of 
        completing validations within a year of members' certification 
        is a challenge. While CBP has belatedly reached some of its 
        earlier staffing goals, consistent membership growth has led to 
        a steady backlog of validation requirements.
         Ensuring sound validations. CBP's standard for 
        validations--to ensure that members' security measures are 
        reliable, accurate and effective--is hard to achieve. Since C-
        TPAT is a voluntary rather than a mandatory program, there are 
        limits on how intrusive CBP can be in its validations. Further, 
        CBP lacks jurisdiction over foreign companies operating outside 
        the United States in a member's foreign supply chain; therefore 
        its ability to review the complete supply chain of a member is 
        questionable.
         Measuring outcomes and results. Challenges developing 
        C-TPAT outcome-based performance measures persist because of 
        difficulty measuring deterrent effect. CBP has contracted with 
        the University of Virginia for help in developing useful 
        measures.

DHS's Emphasis on Security Issues Has Contributed to Diminished 
Attention on Customs Revenue Functions
    While DHS's priority mission since its inception has been homeland 
security, various DHS components have other nonsecurity functions. CBP, 
which is responsible for border security, also collects customs duties 
and other revenues. In forming DHS, there was concern that moving the 
customs revenue functions from Treasury into the new CBP would diminish 
attention given to these functions. In recognition of that concern, 
Congress required the newly created DHS not reduce the number of staff 
in key positions related to customs revenue functions.\34\ CBP is the 
second largest revenue generator for the U.S. government, collecting 
nearly $30 billion in customs revenue in fiscal year 2006. The SAFE 
Port Act required us to study the extent to which CBP had been able to 
carry out its customs revenue functions. We recently completed this 
study,\35\ in which we found three key weaknesses related to CBP's 
performance of customs revenue functions: (1) CBP failed to maintain 
the legislatively mandated staffing levels for performing customs 
revenue functions, (2) CBP lacks a strategic workforce plan to help 
ensure it has a sufficient number of staff with the necessary skills 
and competencies to effectively perform customs revenue functions, and 
(3) CBP does not publicly report on its performance of customs revenue 
functions, which would help ensure accountability.
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    \34\ The Homeland Security Act of 2002 (Pub. L. No. 107-296, Sec. 
412, 116 Stat. 2135, 2179) required DHS to maintain a least the March 
2003 number of staff in each of nine specific customs revenue positions 
and their associated support positions. The nine designated customs 
revenue positions are Import Specialists, Fines and Penalties 
Specialists, attorneys of the Office of Regulations and Rulings, 
Customs (Regulatory) Auditors, International Trade Specialists, and 
Financial Systems Specialists. When DHS was formed in March 2003, it 
employed 2,263 people in customs revenue positions and 1,006 additional 
associated support staff.
    \35\ GAO, Customs Revenue: Customs and Border Protection Needs to 
Improve Workforce Planning and Accountability, GAO-07-529 (Washington, 
D.C.: Apr. 12, 2007).

Although Improving, CBP Failed to Maintain Mandated Staffing Levels for 
Customs Revenue Positions
    Staff resources contributing to customs revenue functions generally 
declined since the formation of DHS in March 2003, in part due to 
department priorities focused on homeland security and recruiting and 
retention problems for some positions. As shown in figure 1, since 
September 2003, CBP has not maintained the mandated number of staff in 
each of the nine designated customs revenue positions, although recent 
efforts by CBP increased the number of staff to the mandated levels in 
most of these positions as of December 2006. For example, the number of 
Import Specialists on board dropped from 984 in March 2003 to a low of 
892 in March 2006, and grew to 1,000 in December 2006. CBP was below 
the mandated staff levels for three customs revenue positions as of 
December 2006, ranging from 2 to 34 positions below the baseline. 
Recently, CBP took several steps such as opening job announcements and 
closely monitoring its customs revenue staffing levels to increase the 
number of customs revenue staff by more than 130 to 2,273.\36\
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    \36\ See appendix I for more information on staff levels over time. 
I21The number of support staff--which includes a variety of management, 
technical, and administrative support positions--associated with the 
customs revenue positions has also declined overall, and the declines 
for some positions have been substantial. For example, the Import 
Specialist position lost 94 of its 407 mandated level for support 
staff. As shown in figure 2, CBP has maintained the mandated support 
staff levels for few of the customs revenue positions, with six of 
eight positions being below the mandated level in September 2006. 


    Lastly, other positions within DHS such as CBP Officers, 
Immigration and Customs Enforcement (ICE) Investigators, and Office of 
Inspector General (OIG) Auditors contribute to performing or improving 
customs revenue functions, but their contributions have declined over 
time. For example, before the formation of DHS, there were about 65 
Treasury OIG Auditors focused on customs issues. Since the formation of 
DHS, the DHS OIG has prioritized audits in other areas such as homeland 
security and, more recently, disaster assistance, and the number of 
Auditors focusing on customs issues declined to 15 as of February 2007. 
Because of other priorities, DHS OIG Auditors have not conducted any 
assessments of high-risk areas within customs revenue functions and 
have not done any performance audits focused on improving these 
---------------------------------------------------------------------------
functions.

CBP Lacks a Strategic Workforce Plan, but Some Steps Taken to Improve 
Its Human Capital Management as It Faces Key Challenges
    CBP lacks a strategic workforce plan to guide its efforts to 
perform customs revenue functions but has taken some recent steps to 
improve its human capital management amid external and internal 
challenges. CBP has not performed an assessment to determine the 
critical workforce skills and competencies needed to perform customs 
revenue functions. In addition, CBP has not yet determined how many 
staff it needs in customs revenue positions, their associated support 
positions, and other positions that contribute to the protection of 
customs revenue. Further, CBP has not developed a strategic workforce 
plan to inform and guide its human capital efforts to perform its 
current and emerging customs revenue functions. CBP has recently taken 
some steps to improve staffing for customs revenue functions, but gaps 
exist in these efforts. CBP has proposed revising the roles and 
responsibilities for Import Specialists and is working to develop 
legislatively mandated resource allocation models to determine ideal 
staffing levels for performing various agency functions. For example, 
the SAFE Port Act requires CBP to determine optimal staffing levels 
required to carry out CBP's commercial operations. According to CBP, 
this model, which is due in June 2007, will suggest the ideal staffing 
level for the customs revenue positions as well as some other trade-
related positions. However, the resource allocation models being 
developed will not assess the deployment of customs revenue staff 
across the more than 300 individual ports--an important consideration 
since about 75 percent of customs revenue staff work at ports of entry.
    Additionally, external and internal challenges heighten the 
importance of such strategic workforce planning. First, the workload 
for some customs revenue positions has increased. For example, the 
growing number of free trade agreements has had a pronounced effect on 
some customs revenue positions, including attorneys in CBP's Office of 
Regulations and Rulings who participate in every phase of the 
negotiation and implementation of the free trade agreements--from 
participating in negotiating sessions through issuing binding rulings 
regarding the proper interpretation of the CBP regulations implementing 
the agreement. In addition, some customs revenue positions have seen an 
expansion of revenue-related as well as nonrevenue-related 
responsibilities. For instance, with the formation of DHS, the Fines, 
Penalties, and Forfeitures Specialists from the former Customs Service 
became responsible for administering fines and penalties for violations 
of immigration and agriculture laws in addition to their existing 
responsibilities related to customs law. Also, staff in some customs 
revenue positions told us they have been assigned work that is 
unrelated to customs revenue functions. For example, one port has not 
had a Secretary/Receptionist position for 5 years. As a result, that 
function was given to Import Specialists on a rotational basis.

CBP's Public Reporting Does Not Ensure Accountability for Customs 
Revenue Functions
    Despite being the second largest revenue generator for the U.S. 
government, CBP does not publicly report on its performance of customs 
revenue functions in its annual plans and performance reports, thus 
failing to help ensure accountability. We have previously found that 
good management practices dictate linking performance measures to 
strategic goals and objectives in an effort to improve performance and 
accountability. Good management practices also suggest publicly 
reporting this information so that Congress can make informed decisions 
and so that taxpayers have a better understanding of what the 
government is providing in return for their tax dollars, or in this 
case, how well it is collecting customs revenue. CBP's strategic 
planning documents recognize the importance of customs revenue 
protection by establishing it as a strategic objective and identifying 
a revenue-related performance measure. However, we found that CBP does 
not use this measure or publicly report on results related to its 
customs revenue functions in its annual plans and Performance and 
Accountability Reports, the official documents agencies issue to 
Congress and the public to report program performance. According to a 
CBP official, CBP does not report on customs revenue functions in its 
Performance and Accountability Reports because these functions do not 
directly address its long-term goal of facilitating trade.
    In our recent report, we made three recommendations. We recommended 
that the CBP Commissioner develop a strategic workforce plan and work 
with the Office of Management and Budget to establish and report on 
performance measures related to customs revenue functions in its 
Performance and Accountability Reports. We also recommended that the 
DHS Inspector General should identify areas of high risk related to 
customs revenue functions. The department concurred with our 
recommendation to develop a strategic workforce plan and partially 
concurred with our recommendation to establish and report on specific 
customs revenue performance measures and agreed to take action to 
implement these recommendations by March 31, 2008. The DHS Inspector 
General also concurred with our recommendation and agreed to take 
action to implement it by September 30, 2007.

Concluding Observations
    MTSA established a maritime security framework that the Coast Guard 
implemented with area maritime security committees, area maritime 
security plans, and exercises to test the plans. In addition, various 
agencies showed initiative in establishing other programs related to 
maritime security--such as the Coast Guard, DOD and DOJ establishing 
interagency operations centers; CBP implementing CSI and C-TPAT; and 
DOE establishing the Megaports Inititive. In some cases, agencies have 
struggled to implement programs required by MTSA or other legislation--
such as TSA delays with the TWIC program and CBP not meeting required 
staffing levels for customs revenue functions. The SAFE Port Act 
further defined and strengthened this maritime security framework--and 
created additional requirements for agencies at a time when their 
programs are still maturing. We have reviewed many of the MTSA and SAFE 
Port Act related programs and made recommendations to develop strategic 
plans, better plan their use of human capital, establish performance 
measures, and otherwise improve the operations of these programs. In 
general, these agencies have concurred with our recommendations and are 
making progress implementing them. We will continue to monitor these 
programs and provide Congress with oversight and insight into maritime 
security.
    Madam Chairwoman and Members of the Subcommittee, this completes my 
prepared statement. I will be happy to respond to any questions that 
you or other Members of the Subcommittee have at this time.
    For Information about this testimony go to [email protected].

    Ms. Sanchez. Thank you, Mr. Caldwell.
    Now I will give myself some time in order to ask my 
questions, and then we will move on to the ranking member.
    Let's see, to the TWIC lady, do I have anything for you?
    [Laughter.]
    Welcome, by the way.
    According to the SAFE Port Act, TSA is supposed to begin 
the TWIC at the top 10 ports. Can you provide us with the names 
of those ports? And how did you select those ports?
    Ms. Fanguy. We have actually just recently published the 
list of the 130 initial list of fixed-enrollment sites, so 
those are the different ports. We are still working with our 
program to finalize the deployment plan. At this time, we are 
working through the testing of the overall TWIC program.
    So, again, as I said in my opening statement, we want to 
make sure that we get the program right. We are still planning 
on starting at Wilmington. That has been our plan. We continue 
to have that as our plan. After we field test our processes in 
Wilmington, we will be progressing out throughout the nation at 
the rest of the 129 ports.
    Ms. Sanchez. Last week we heard that--well, before last 
week, when we had that briefing, some of our staff was talking 
to some of the Homeland staff about when we would meet that 
deadline, because it is set for July 1. We were told that it 
might be until September. Then last week we heard you were 
trying to meet that July 1 deadline.
    What do you think is happening over there? Because you 
really haven't even picked the 10 ports. You can't tell them to 
me today. I know what you just told me. I have it in front of 
me, but that doesn't really answer my question.
    Ms. Fanguy. Sure. Again, we are continuing to test the TWIC 
program. We want to make sure that on the five key areas I 
talked about that we absolutely get those pieces right. We need 
to make sure that the data for TWIC applicants is processed 
correctly through all five of those key components. And that 
when they work together, that they tie the security threat 
assessment data to the right individual. Then when that 
credential is used at a port facility, that again it can be 
used to tie the information back to that individual.
    Again, we want to get it right so that we don't impact 
commerce and we don't impact people's livelihoods.
    Ms. Sanchez. I understand that answer, but that is not the 
answer to the question that I asked.
    Ms. Fanguy. We are continuing to try to move the program 
out as aggressively as possible, while very much focusing on 
program integrity.
    Ms. Sanchez. So does that mean July 1 or not?
    Ms. Fanguy. We are very focused on the July 1 deadline, but 
again, we want to definitely focus on program integrity to make 
sure that we get the program right the first time.
    Ms. Sanchez. And how about the top 10 ports? Can you list 
them today?
    Ms. Fanguy. I cannot list them for you today.
    Ms. Sanchez. Okay. Can you give us some information on how 
TSA selected Lockheed as the prime contractor? It is also my 
understanding that there is at least one company that protested 
the decision. How is that going to impact our timeline in 
trying to get this done?
    Ms. Fanguy. Sure. Let me address the second part first. I 
am actually very pleased to announce that the company that had 
protested the TWIC award worked through the Federal Aviation 
Administration's Office of Dispute Resolution for Acquisitions, 
and that protest has now been resolved. So we are very pleased 
about that, so that should not impact Lockheed Martin's overall 
timeline.
    In terms of the Lockheed Martin selection, when we set 
about putting together the RFP for the TWIC program, we were 
looking at two key factors. The first is to make sure that we 
had a company that has the appropriate skills and resources to 
manage a technology system of the scale and complexity of the 
TWIC program. So again, we were looking for a technology that 
had the right resources there.
    The other piece of it, of course, is the deployment. That 
is absolutely critical to the TWIC program. So we were looking 
for a company that had a flexible approach to rolling out the 
program; a company that would actually have the resources to be 
able to go out at the minimum of 130 locations, but essentially 
have the flexibility to offer more flexible options to make 
things more convenient for our port workers.
    So Lockheed Martin had a very flexible plan. They are going 
to be going to those 130 locations. They have a flexible 
contract structure so that we can add additional locations if 
appropriate. And then they will also be doing mobile 
enrollment. So those are some of the things that we looked at, 
and we really liked their proposal and we are very excited to 
work with them as we move forward in the TWIC program.
    Ms. Sanchez. Do they know the top 10 ports?
    Ms. Fanguy. They are working at our direction on the top 10 
ports.
    Ms. Sanchez. Okay.
    One quick question for the admiral, and then I have one for 
Mr. Ahern. I have a lot for you, but I am going to let the rest 
of my colleagues go for a moment.
    On long-range vessel tracking, you said we have all the 
data, but there is a problem in how we manipulate it, get it 
together, and have access to the right people for it. Does that 
mean that the Coast Guard's people in the field are unable to 
access on the information that they need to do their job?
    Admiral Bone. Madam Chairwoman, the reality is we know 
exactly where vessels are, and we actually do work, again, 
interagency, both within DHS, but also in the intelligence 
committee and other sources to gather information on it. What 
is important, though, is how you collectively respond and do 
that in the most timely manner, and fuse that information so 
that you put the resources to it in a timely manner and most 
effective manner.
    We know we can make improvements in that area. We also can 
make improvements in the way we communicate with the maritime 
industry what our intent is going to be, when we are going to 
take action with a vessel and the basis for it, and basically 
taking information that may even be coming in in a classified 
manner, and moving it into a law enforcement-sensitive so that 
we can communicate and set expectations.
    The marine industry quite often is concerned about 
predictability and timing issues, and the costs associated with 
delays. I think as we improve our processes and improve our 
capabilities with the fusion of that information and 
communication, we will be better able to use our shared 
interagency resources and set expectations for the marine 
industry.
    Ms. Sanchez. How are you currently using the Maritime 
Information Service of North America? And could that help the 
process? Is there no overlap there? What is going on with that?
    Admiral Bone. We actually procure data from a variety of 
sources, including MISNA. In fact, in areas where there are 
gaps of information or there are gaps related into our sensor 
technology, or whether it is the best return on investment to 
the government to use those services, we will acquire those 
services. That is an example.
    I would offer that those services also, whether or not they 
are purchased, are extremely useful and have proven useful in 
responses to incidents in order to control and manage traffic 
in areas where there are no vessel traffic systems in place, 
and even in places where there are vessel traffic systems, to 
communicate to the industry as well as communicate across the 
government sectors in some of the hard-to-reach places such as 
Alaska and the Northwest.
    I think we need to figure out how to best use all the 
marine exchanges, both in prevention, but I can tell you both 
in response and recovery and even continuity of operations. I 
know the Port of L.A.-L.B. is about to undertake an exercise 
looking at continuity of operations following a significant 
event. I think the Marine Exchanges provide an essential 
service in that operation as well.
    Ms. Sanchez. Thank you, Admiral.
    Mr. Ahern, I have a question about the empty container 
pilot, because my main concern when we were envisioning this 
was, being from the West ports, all the empties that arrive to 
the port and then sit around. Which government agency has the 
information on how many empties sit at particular ports?
    Mr. Ahern. I can tell you as far as the universe of empty 
containers that come into the country internationally from 
abroad, there are 461,650. That would be an international 
responsibility that we would have within Customs and Border 
Protection.
    Ms. Sanchez. But those are ones that are coming in.
    Mr. Ahern. That would be correct.
    Ms. Sanchez. What about ones that are coming from areas, 
say, they brought something in from China and now they have put 
them at the Wal-Mart in the middle of the country or whatever; 
and now we have to get that container back on that ship and it 
is going to go empty. Does anybody keep numbers on where those 
empties are at any time?
    Mr. Ahern. Those would basically be in the custody and 
control of the carrier at that point in time, or if they are 
subletting those out to individuals. But the universe we are 
responsible for are the international arrivals that come from 
foreign ports, and that is that 461,000 universe.
    Ms. Sanchez. Do you have any idea how long empty containers 
that are delivered from land-side to the ports sit around?
    Mr. Ahern. I don't have any data on that.
    Ms. Sanchez. Can you tell me what you think is the mean or 
what did it look like, or is there a program to look at these 
empty containers when they come from land-side?
    Mr. Ahern. That would not be something that we are looking 
at within Customs and Border Protection. I would tell you some 
of the things that we are doing, and what our part of the SAFE 
Port Act requirements that we are looking at as part of the 
pilot if you would like.
    Ms. Sanchez. Thank you.
    To my ranking member, Mr. Souder.
    Mr. Souder. I don't want you to get offended if I don't ask 
lots of questions to each one of you, because I have so many I 
can't possibly cover them.
    The last round of questioning sounded like the entry/exit 
on the border with humans, and it is something we are going to 
need to look at because it is a potential vulnerability. Just 
out of curiosity, is anybody watching it?
    I am not familiar enough with this TWIC port targeting. Why 
is it hard to say the 10 that you are going to? I missed it. 
Why can't you just say these are the 10. Wouldn't they be the 
10 largest?
    Ms. Fanguy. In terms of the overall deployment plan, we are 
starting at Wilmington. They were one of our prototypes since 
they know the program pretty well, and we have been working 
very closely with them to prepare for the start of TWIC 
enrollment.
    In terms of the remaining ports, what we are looking at is 
port criticality, size of ports, but then we are also looking 
at the overall deployment approach and taking industry best 
practices to make sure that we don't want to start at the very 
largest ports first because potentially it could negatively 
impact commerce there.
    So what we are going to do is have a mix of large and small 
ports as we go out across the nation. That is going to allow us 
to field test the overall processes.
    So we are going to front-load the most critical ports in 
our overall deployment plan, but when we do put out our 
deployment plan, you are going to see a mix, again, of smaller 
and larger ports as we fan out across the nation.
    Mr. Souder. I kind of understand that, but not completely, 
because Wilmington is supposed to be the test, and what you are 
telling me is that you are not confident enough in the test to 
have it be at the largest and most critical ports because it 
could foul up commerce, but that was supposed to be resolved in 
a test.
    Let me ask each of our government witnesses, Admiral and 
Mr. Ahern and Ms. Fanguy, do you agree with Mr. Caldwell that 
you have had an expansion of tasks and resources haven't 
matched?
    Admiral Bone. Congressman, this is a situation where, how 
much risk do you want to buy down? How much vulnerability do 
you want to close? As you identified, there are things that you 
can do, and one of our biggest jobs every day is to take the 
government's dollars and the taxpayer's dollars, I should say, 
and make the best use of it.
    I can tell you that surely if you gave the Coast Guard, TSA 
or Customs and Border Protection more funding and resources, we 
could close more vulnerabilities and reduce the risk to the 
public, more so than we will be able to today.
    Mr. Souder. Thank you. That was a great answer on the 
confines of what government witnesses have.
    Mr. Ahern?
    Mr. Ahern. Would it surprise you if I stay within those 
same confines?
    [Laughter.]
    I would first want to begin by thanking this Congress for 
providing what we did receive in fiscal year 2007. We received 
a plus-up of around 556 positions, principally dedicated for 
our seaports and principally to use for the radiation portal 
monitors and the large-scale X-ray systems we have deployed 
over the last 2 and 3 years.
    One of the things as you deploy technology, oftentimes we 
don't forecast quickly enough or have the opportunity to get 
the commensurate level of resources it takes to man and follow 
up on alarms, anomalies and things of that nature that comes 
with the technology. For instance, for the radiation portal 
monitors, since we deployed close to 1,000 RPMs now at our 
northern and southern borders in a maritime environment, we 
have run over 151 million transactions through those RPMs.
    That is great for the security of the country, and we will 
continue to do that, but the resolution of those alarms has 
been to the tune of over 800,000 alarms that we have had to 
resolve, thereby consuming a lot of resources to do that. So we 
are very pleased to receive the resources we did get this year. 
As we continue to deploy, we need to make sure that as we are 
modeling not only the needs for technology, but also what it 
takes in resources to run those.
    Mr. Souder. Ms. Fanguy, let me make yours even more 
specific. If you had more resources, would you be closer to 
making the deadline goals?
    Ms. Fanguy. In terms of this, this is one of those cases 
where again on technology, you want to make sure that you go 
through it, and it takes a certain amount of time.
    So again, it takes 9 months to make a baby, which is very 
close to my mind because I just had a baby. So this is one of 
those things where we want to get this right. We want to make 
sure that the technology has been fully tested before we put it 
out there in the port environment.
    Mr. Souder. So it is not a financial constraint that has 
restricted your testing? In other words, if we doubled your 
money would you get it into the experimental ports faster?
    Ms. Fanguy. You could certainly do lots and lots of tests 
and lots and lots of testing. With more money, you can do lots 
of tests. But in terms of getting it out there, we are looking 
at more overall entry and exit criteria as we go through the 
phases of testing. So what I mean by that is we lay out 
objective criteria when we start a phase of testing, and we lay 
out the exit criteria. So we say, these are the types of errors 
that we cannot have as we come out of the tests.
    So as an example, it is absolutely unacceptable not to have 
the security threat assessment go to all of the different 
vetting sources that we need it to go to. That has to be met. 
So that is what we are looking at in terms of the overall 
testing program. Again, we want to make sure that we get it 
right.
    Mr. Souder. It is a fundamental question, because I have 
many of these electronics companies in my area who are actually 
working with Homeland Security on some of these IDs. And 
obviously the more places you test and the more tests you have, 
the more you find out what is working and not working. It 
becomes tough to make deadlines if we haven't put adequate 
funds in to getting all that process through.
    Let me ask Mr. Ahern another question along the same lines. 
Do you feel pretty comfortable that in our risk-based container 
checking of known shippers, containers that seem to be at risk, 
anomalies, that we are in effect getting 100 percent screening 
of the highest risk, along with a high-percent at random to 
double check that?
    Mr. Ahern. I am very comfortable with the layered strategy 
that we do have, but I would submit that what we need to do is 
continue to build upon the current layers we have. One of the 
things I spoke about that also is a requirement under the SAFE 
Port Act is getting additional information that we can then run 
through our targeting mechanism, the automated targeting 
system. We are in the process of doing that.
    We have been working exhaustively with stakeholders, the 
trade, and the carrier community, to try to get 10 data 
elements, plus two additional. And to the chairwoman's question 
on the empty containers, one of the things that we will be 
looking for is being referred to as ``10 plus 2,'' it is ten 
data elements additional that we are going to get deeper into 
the supply chain for being able to validate the information.
    But also, one of the two elements will be container status 
messages, which will be provided to us so that we actually can 
be able to track and monitor the container movements when they 
are coming in and out of gates globally. So that will give us 
some visibility as far as just to be able to pinpoint and track 
a lot of these containers going forward. But we will be in the 
rulemaking process on that coming up in the next few weeks, and 
we will go forward with the public comment period.
    Mr. Souder. One of my concerns is that I have seen, for 
example, Long Beach-Los Angeles is our biggest port. Over the 
number of years that I have been in Congress going several 
times before 9/11 and since, is steady improvement in perimeter 
security, I think 100 percent radiological screening there. And 
we have certain basic general improvements.
    But that 100 percent container screening, when we are 
already resource-challenged, when we still don't have clear 
resolutions to chem-bio screening and need tremendous resources 
there, where the locks on the containers are still a question. 
The containers coming back in is a question; getting adequate 
screening so we don't have penetration into the people who are 
working at the places.
    It seems to me that on the container side, we are ramping 
up, but if we are not careful, we are going to have a limited 
resource switching to something that is low risk, and take it 
from high risk, not to mention from narcotics. And that was 
partly some of my questioning, because this is difficult, where 
even if we increase the resources substantially, the 
combination of the missions and the things where we still have 
vulnerabilities are huge.
    One last thing, and this was one of the most amazing things 
that I have seen. I have seen at the ports the different 
testing, but I was up at the Soo border, the Michigan-Soo-
Canada, and was in the little station. And the person comes 
through and a little radiation beep went off. I thought I am 
either dead or I don't know what is going on here. But the 
beeper went off, and obviously they had seen this before 
because they asked the person, ``Did you just have an 
operation?'' And he said, ``Why? Did something go off in 
there?'' They said, ``You need to get to secondary 
immediately.''
    They got him out of his vehicle, tested the vehicle--no 
radiation. They put the radiation monitor on him, and not only 
did it identify it, because he said ``I had an operation 10 
days ago.'' It said the date and it said the name of the form 
of volume and the amount in him. And he said both as they first 
pulled him over, and there he said, ``I right now am more 
impressed with the United States homeland security program than 
I have ever been in my life. I can't believe you identified 
that 10 days ago I had an operation, and I have a little bit of 
radiation in my body.''
    We have made improvements, and we just need to get, in many 
of our opinions, accelerate that progress.
    Mr. Ahern. I would like an opportunity to answer. I think 
it is a great question and a great point.
    Finishing on the last point first, I actually had that 
personal experience. I had had a thallium stress test about 2 
years ago. I had to go to Canada for a meeting and came back 
through the radiation portal on primary. It was about 10 days 
after the stress test, and the thallium isotope still did alert 
to me on primary as I walked in. We resolved the issue, but I 
had a chance to actually red test our own operation first hand.
    But all that being said, to your point, I think there is a 
very good discussion we need to have as a government, and 
certainly with this Congress and this subcommittee as we move 
forward in the future. We have had, as I stated in my short 
statement, a very well thought-out layered strategy.
    I don't think we ever say that we are done and it is 
completed and it is perfected, but I think certainly we need to 
continue to enhance the information we are getting. We need to 
continue to enhance our targeting capabilities through the 
automated targeting system. We need to continue with the tests 
that we have put in place in Honduras and also in Qasim, 
Pakistan and also for Southampton, meeting the requirements of 
the SAFE Port Act.
    But also we need to make sure as far as that at some point 
in time we make a value determination against the risk that is 
present. Certainly, there are high consequences with the global 
maritime supply chain. Where may be some other vulnerabilities 
we need to focus our resources and attention as we go forward?
    Ms. Sanchez. Thank you.
    The chair will now recognize other members for questions 
they may wish to ask the witnesses. In accordance with our 
committee rules, I will recognize members who were present at 
the start of the hearing based on seniority on the 
subcommittee, alternating between the majority and the 
minority. Those members coming in later will be recognized in 
the order of their arrival.
    We will go to the gentleman from Florida, Mr. Bilirakis, 
for 5 minutes.
    Mr. Bilirakis. Thank you. I don't know if I am a senior 
member, but I will take it.
    The Port of Tampa is one of the busiest. I recently spent a 
day with Richard here who will testify on the second panel, and 
he said that the greatest concern that the port has--and I 
discussed this with you before the hearing, Ms. Fanguy--is the 
TWIC card, the implementation of the TWIC card.
    As you know, Florida has been a national leader, 
innovative, and we implemented our card called the FUPAC card 
in 2003. It is very similar to the TWIC card. As a matter of 
fact, I understand that it is interchangeable with a few 
exceptions.
    Of course, this is a big problem for us, for the whole 
state of Florida, not just the Port of Tampa. I can't stress 
enough the importance of resolving the issues because we don't 
need these duplicative cards that accomplish the same purpose. 
It is very costly, very costly for the port and the scanner. I 
understand the reader is going to be very costly. I understand 
that the people that work at the port have to pay for the card. 
It is just unnecessary and inefficient.
    So is there any way we can solve this problem? Have you all 
been working on this problem?
    I would like to discuss this problem with you further. It 
is a big concern of people in my district and the entire state 
of Florida. Thank you.
    Ms. Fanguy. Yes, that is a great question and very timely.
    We have actually been working very closely with folks in 
your state of Florida to hopefully come to resolution in terms 
of aligning the two programs. In the past few months, we have 
been talking with the Department of Drug Control, the 
Department of Law Enforcement, and Highway and Safety in 
Florida to look at the two programs, specifically looking at 
the types of security threat assessments that the state and 
then the TWIC program would do to look to see where there are 
differences.
    In the conversations that we have had, I think both sides 
agree that having one card is probably the right way to go, and 
definitely it would help to avoid redundancies for both port 
workers, as well as for businesses. So we are working on that 
and we hope to come to resolution on that soon.
    In terms of the technology aspects, in the initial 
conversations, as you have mentioned, from a technology 
perspective there are similarities and we are hoping that the 
readers can be leveraged to actually read the TWIC cards when 
those are put out.
    Mr. Bilirakis. As far as the top 10 list that they 
discussed earlier, I understand the July 1 deadline, and it may 
be extended. Is it possible that Florida can be excluded from 
that pilot program?
    Ms. Fanguy. Do you mean in terms of that Florida would not 
be one of the first?
    Mr. Bilirakis. Yes, on the TWIC card. Yes. Would you 
consider that?
    Ms. Fanguy. We can certainly look at the deployment 
program, and we have been working very closely with the state 
of Florida to look at the overall deployment plan, taking into 
account some of the aspects that they have. But again, we are 
trying to frontload critical ports into the overall deployment 
plan, so we need to look at all of those different aspects.
    Mr. Bilirakis. I will be working with you closely. Do you 
envision somehow or some way in which to integrate Florida's 
system with the federal system?
    Ms. Fanguy. The overall TWIC program in the conversations 
that we have had with the folks who are working on FUPAC, the 
conversations have been that the TWIC program would proceed. As 
we have discussed, there is absolutely nothing to prevent the 
state of Florida from doing additional checks or from having 
additional credentials. But again, we are hoping that from an 
operational perspective and technology perspective, that the 
TWIC card can be integrated into the existing infrastructure 
that exists today in Florida.
    Mr. Bilirakis. Can you tell me the differences between the 
federal TWIC card and Florida's access card?
    Ms. Fanguy. I would need to get back to you on the specific 
technology down to the bits and bytes level. They are similar, 
but not the same kind of card. My understanding is that the 
Florida card is based on similar technologies, but it is not 
100 percent aligned with the federal standards that we align 
with.
    So when we started the TWIC phase four national deployment 
program, we decided to align with the federal standards for 
credentials and biometrics. Those were on a FIPS 201. Those are 
the credentials that ultimately all federal government 
employees will have. So we are aligned with a nonproprietary 
standard that is put out by NIST.
    Mr. Bilirakis. Do you feel it is possible for the TWIC 
card, for the Florida card to be modified to meet the TWIC 
standards and requirements, federal standards?
    Ms. Fanguy. I am not sure if I can speak specifically to 
that. I think that would take some more analysis, but it is 
certainly possible.
    Mr. Bilirakis. Okay, thank you very much.
    Ms. Sanchez. Thank you. Thank you to the gentleman from 
Florida.
    I will now call on Mr. Green from Texas for 5 minutes.
    Mr. Green. Thank you, Madam Chair. Notwithstanding the 
chasm between us, it is an honor to be your ranking member 
today.
    [Laughter.]
    I thank the witnesses for providing us a great degree of 
jocularity today. I would also like to thank all of the many 
persons who have taken the time to be here. There is obviously 
a great amount of interest in this subject matter, and I thank 
you for being here as well.
    I have two issues that I would like to broach briefly. The 
first has to do with the notion that many people are not aware 
that our southern border includes St. John's, St. Thomas, St. 
Croix and Puerto Rico. When we think ``southern border,'' we 
tend to think of that area between Mexico and the United 
States. These islands are part of the southern border because 
of the ease with which persons who are on the islands can board 
planes and come to the continental United States.
    As a result, we are obviously concerned about border 
security for our southernmost border, if you will. There has 
been an increase in traffic in the area of the waters around 
these borders from Cuba, from Haiti, and other places as well. 
And because of this increasing traffic, there has been a 
request made for a border patrol unit right off the Virgin 
Islands or on the Virgin Islands. I believe this is section 126 
of the report that is due I think on May 18.
    My question has to do with where are we in terms of 
establishing the border patrol unit, because we do have one in 
Puerto Rico, and I compliment our services for that one being 
there, but it appears that the increase in traffic may merit 
additional consideration.
    Before you respond, let me just thank each of you public 
servants for the outstanding work that you do under very 
difficult circumstances. So would you kindly respond, the 
appropriate person? My suspicion is that that will be Mr. 
Ahern.
    Mr. Ahern. I would be happy to give you some answer.
    I wouldn't want to necessarily speak for Commissioner 
Basham or Chief of the Border Patrol David Aguilar, because it 
is not within my specific area of responsibility. But I do know 
as far as we are working diligently on the report to meet the 
requirement. I know you had an opportunity while you were down 
there, after seeing you in Honduras, the CODEL went on to the 
Virgin Islands and had a tour there from both the Coast Guard's 
and CBP's perspective.
    One of the things certainly within our closest sector is 
over in Puerto Rico, as you point out. We are taking a look and 
assessing the vulnerability in that area to find out what is 
the appropriate deployment, and that will be in the report that 
we will meet the deadline on.
    Mr. Green. Just for additional edification before I go to 
my next point, we met with a host of persons including the 
governor of one of the islands. They were all very much 
convinced of the necessity because of the increase in 
trafficking. We are talking about both human and other 
trafficking, drugs, smuggling, whatever. They were convinced 
that this is something that we should give some serious 
consideration to. I thank you for your answer.
    The final question has to do with the TWIC card. We do have 
persons who are of modest means who may contend that 
affordability is a factor. If affordability is a factor for 
someone, how will we have a person who is a good worker, who 
wants to comply, but who literally has affordability as a 
factor. I am told that this card could cost as much as $137.25. 
If I have inaccurate information, I beg that I be corrected.
    Ms. Fanguy. Your information is correct on the standard 
TWIC card, and there is a $32 discount if you hold a FAST card, 
if you are a documented merchant mariner, or if you have a 
hazardous materials endorsement. In terms of the overall cost 
of the TWIC program, we have tried to be as frugal as possible 
as we project out the overall costs of the program. So when we 
worked on the final rule, we were very careful to look at the 
overall cost implications of the program.
    It does cost $137.25 up front, but it is a 5-year 
credential. So we believe that when you look at it over the 5 
years, the cost over the 5 years is lower when you look at it 
in that way.
    Mr. Green. Must all workers come on-line in a given sector 
at the same time? Or do you have a provision that will allow a 
person who cannot afford the cost today on a given date to have 
an extension of time? Is there some means by which you will try 
to accommodate persons who are of modest means?
    Ms. Fanguy. As we roll out to the ports, as you know, we 
are going to be rolling out in a phased-in approach. It is in a 
little bit over a year period of time that we will be phasing 
in the program. So we will work with port stakeholders, 
including labor groups, to let people know where we are going 
ahead of time. We have informal as well as formal processes to 
do that, so we have government personnel who go out to the 
various ports ahead of time, work with port stakeholders, 
including labor, to let people know.
    We also have advance teams from our contractor who will go 
out and again meet with port stakeholders, and then of course 
in the Federal Register, we will put out a notice announcing 
when we will start enrollments. But the enrollment, let me 
stress, is going to be over a phased period of time, so people 
will have an extended period of time to both get their TWIC as 
well as plan to get their TWIC.
    Then in terms of compliance, that is actually something 
that the Coast Guard is going to cover, but compliance is going 
to be phased in based on captain of the port district. So 
although your port may begin enrollment during a certain time, 
you will have plenty of time before you have to get a TWIC, and 
will have notice, again, in the Federal Register, as well as 
informal communications through posters and working with 
stakeholders to let people know well in advance before 
compliance begins.
    Mr. Green. I thank you very much.
    Madam Chair, thank you for your generosity with the time. I 
yield back.
    Ms. Sanchez. Ms. Jackson Lee, do you have any questions for 
our panel?
    Ms. Jackson Lee. Thank you, Madam Chair.
    Ms. Sanchez. Five minutes.
    Ms. Jackson Lee. Admiral and others, welcome very much to 
what I consider to be a very important hearing. Obviously, I 
know that your testimony was instructive and vital, and so I 
may be gearing you toward questions already asked and answered.
    We had a very productive delegation overview on some of the 
ports over the spring recess. I got a chance to see some of the 
challenges as well.
    My question with respect to your issues goes just directly 
to the heart of funding resources. If we are looking back over 
6 months--and I ask this question all the time--do you have 
everything you need for the next 6 months for this to be an 
effective program that is not just a review of 6 months, but 
now has the legs to withstand the challenges of increased 
tonnage, wider utilization, and certainly more utilization of 
your services?
    Admiral Bone. I sort of answered this before, but I can say 
specifically with regard to the entire SAFE Port Act, I mean, I 
can give you areas such as integrated operations, joint 
operations centers, we will be building our budgets as these 
come on-line collectively in order to establish those joint 
operations centers where they don't currently exist.
    Other examples are, as we have already received a certain 
amount of resources to close vulnerabilities. As Mr. Ahern 
addressed earlier, we know there are other security 
vulnerabilities beyond containerized cargo, such as small 
vessels. We are working very closely collectively across DHS to 
close that gap and better address maritime domain awareness.
    So systems and sensors that will be able to identify who is 
moving where and why, and the ability to intercept, as well as 
improved capabilities in screening technologies, and some of 
these Centers of Excellence that are coming forward in order to 
improve maritime domain awareness that Congressman Green 
addressed, will be built into our funding requests. Hopefully, 
Congress will look favorably upon those, knowing their 
importance, as they have in the past, in providing the 
additional resources for this and our improvements in spot-
checks at facilities.
    But I can tell you that any funding we receive will work 
across DHS and the other agencies, and we will be good stewards 
of the dollar.
    Ms. Jackson Lee. You always have. Do you need increased 
personnel as well?
    Admiral Bone. Congresswoman, if you provide increased 
personnel, we will lower the risk and the threat to the public.
    Ms. Jackson Lee. You are a little stretched, and let me 
thank you for your service. I know that you have either been 
engaged in Iraq, and I know that you have been called on for 
many different responsibilities. We appreciate it.
    Mr. Ahern, I ask the same question. I know it may be a 
slight redundancy, but if you forgot something and wanted to 
add something extra, you now have the opportunity to do so.
    Mr. Ahern. Thank you very much. What I would say is 
basically repeat of some of the things.
    Certainly, we thank the Congress for some of the resources 
we did receive in this year for resource to run a lot of the 
technology we do have in place. Our position is very similar to 
the Coast Guard as well. We do have a very well though out plan 
for deployment of technology, the appropriate resources it 
takes for doing that. We are in the process of formulating the 
appropriate budget request and working that with our department 
and the Office of Management and Budget.
    But certainly, when you take a look at the volume and the 
increasing workload that we see within our legitimate travel 
and trade coming in, coupled with the risk that is accompanying 
with that legitimate travel, then the balance we have to have 
to make sure that we are providing the level of security that 
is necessary to continue to keep travel and trade growing and 
ensuring the economic prosperity of this country continues, we 
need to all the while make sure that we have the adequate 
strategy with the resources to execute that strategy so that we 
can make sure that we don't bring that travel and trade to a 
halt if we are not sufficiently executing the strategy and 
plans we have in place.
    Ms. Jackson Lee. Mr. Caldwell, you had an extensive report. 
If you had to pick a single issue that we needed to be reminded 
of or remember, what would that be out of that overview?
    Mr. Caldwell. That is a hard question. It requires a little 
more thought, so I could answer that for the record.
    I did try to, in my opening statement, make a broad 
reference to the concern about resources in general. One of the 
other things I talked about is a push sometimes from Congress 
and sometimes from our other political leaders, to do things 
better and faster. Sometimes faster is not better, and there is 
a trade-off there.
    But for the record, I would like to answer your question of 
whether I would put priority on some of the problems we have 
identified here. I could go on and talk for a long time, but 
let me just close it with that.
    Ms. Jackson Lee. Submit it in writing, and we would ask you 
to report back to us in writing.
    Thank you very much.
    Ms. Sanchez. I thank the witnesses for their valuable 
testimony and the members for their questions.
    The members of the subcommittee may have additional 
questions for the witnesses. We will ask you to respond quickly 
to those in writing to the questions we may ask.
    Again, I thank you for your testimony.
    If I can have the second panel up, because I know some of 
us are trying to catch some planes. As I said, this is a 
traveling day for our members, and many of them end up in 
places where it is difficult to catch a flight after certain 
times. So we would like to move this along.
    In order to do that, I am going to ask that you gentlemen, 
since we have everything in writing, to limit your testimony to 
3 minutes so we get a chance to ask you questions.
    I know you love me, don't you?
    [Laughter.]
    Anyway, I welcome you, the second panel of witnesses.
    Our second panel contains four witnesses.
    Our first witness will be George P. Cummings. He is the 
director of homeland security for the Port of Los Angeles, one 
of the busiest and most successful seaports in the nation. He 
is retired from the U.S. Coast Guard after serving 21 years as 
a commissioned officer.
    Our second witness is Richard Wainio, the port director and 
CEO of Tampa Port Authority. He has a bachelor's degree from 
Davidson College, a master's degree from American Graduate 
School of International Management. He served 2 years as 
executive director of the Port of Palm Beach, Florida, before 
coming to Tampa.
    Our third witness is Mr. Leal Sundet, coast committeeman, 
Longshore Division of the International Longshore and Warehouse 
Union. He has been a registered longshoreman for nearly 18 
years. That is a long time.
    Our last witness on this panel, Mr. Manny Aschemeyer, is 
the executive director of the Marine Exchange of Southern 
California. Captain Aschemeyer is a native of Maryland, and 
attended the California Maritime Academy. He has sailed 
extensively abroad on American-flag merchant vessels.
    Welcome to all four of you gentlemen. If you will begin.
    Without objection, the witnesses' full statements will be 
inserted in the record.
    I now ask Mr. Cummings to summarize his statement for 3 
minutes.

STATEMENT OF GEORGE P. CUMMINGS, DIRECTOR OF HOMELAND SECURITY, 
                      PORT OF LOS ANGELES

    Mr. Cummings. Thank you. Good afternoon, Chairwoman 
Sanchez, Ranking Member Souder and members of the subcommittee. 
Thank you for inviting the Port of Los Angeles to testify 
before you today regarding the SAFE Port Act.
    You are aware, Madam Chairwoman, of the size and complexity 
of the Port of Los Angeles, the fact that we handle over 43 
percent of the nation's cargo. There are 50 individual maritime 
terminals that comprise the two ports, along with complexities 
associated with moving other goods, petroleum, as well as a 
large cruise and passenger industry.
    Access to the port facilities is a critical component of 
port security. Access control will require a comprehensive 
credentialing program. We consider a federal credentialing 
program such as the TWIC program to be a solution to this major 
security challenge. We fully support the TWIC program and look 
forward to its implementation.
    Ports throughout the nation are awaiting the TWIC program 
full implementation to address the security challenge. The Port 
of Los Angeles, along with the Port of Long Beach, have been 
chosen by TSA to conduct the TWIC field test, which will test 
card-reading technologies as well as processes and procedures 
on the terminals before the full implementation of the 
credentialing and access control.
    In addition to our part of the program, which will be 
installing the systems, the other main component of the TWIC 
program will be the enrollment phase. Our point on this is that 
it is critical that all the enrollment within the L.A.-Long 
Beach area is completed before we can enter the field tests. We 
will not be able to achieve the objectives of the field tests 
unless we have full enrollment of all the people within the 
L.A.-Long Beach. That is the longshoremen, the truckers, all 
the communities within the area that will require a TWIC card, 
are provided the opportunity to enroll before we can begin the 
field tests.
    The enrollment team has been out to the port. They have had 
initial meetings with our stakeholders. However, there is much 
work to be done in order to achieve the milestone of full 
enrollment.
    The Port of Los Angeles has been a participant in the Port 
Security Grant Program from its inception. These grant awards 
fund the initial capital required for us to build and develop 
the security infrastructure in the port for projects such as 
provide surveillance camera systems, a command and control 
center to be located in the Port of Long Beach serving the 
entire port complex, and a fiber-optic backbone that will 
connect all 50 of our maritime terminals' security systems and 
information systems.
    We look toward this grant program to continue to fund these 
projects as we move forward with additional projects on the 
drawing board for us, such as underwater and surface detection 
capabilities, shoreside virtual perimeter systems, and system 
integration of all of these security infrastructure to optimize 
efficiency and share data with law enforcement agencies.
    U.S. Customs and Border Protection is currently operating 
radius and portal monitors and container imaging units in the 
port's container terminals. The Port of Los Angeles supports 
increased scanning of cargo at both ports and at foreign ports. 
It is critical to ensure that the movement of goods is 
maintained. Our concern is that CBP receive necessary resources 
and funding in order to achieve high levels of cargo scanning, 
without having a negative impact on the movement of goods.
    We are also concerned on any reciprocity that may result as 
a result of foreign governments' reacting to steps taken by the 
U.S. government.
    Port security training exercises are ongoing in the port 
complex. They are coordinated through our Area Maritime 
Security Committee. Each year, we have a major port security 
exercise which involves both industry and law enforcement 
agencies. We have a multitude of training opportunities that 
are shared for, again, both industry as well as law enforcement 
and agency members.
    In closing, Madam Chairwoman and members of the 
subcommittee, we at the Port of Los Angeles thank you for your 
leadership in calling attention to the critical elements of 
port security, and one that has not been fully accomplished 
yet, the TWIC program in particular. We look forward to sharing 
the port's experience with the TWIC field test program.
    Thank you again for the opportunity to participate in this 
hearing.
    [The statement of Mr. Cummings follows:]

                Prepared Statement of George P. Cummings

    Good afternoon, Chairwoman Sanchez, and members of the 
Subcommittee. Thank you for inviting the Port of Los Angeles to testify 
before you today to convey the Port experiences with the implementation 
of the SAFE Port Act as it relates to the national Transportation 
Worker Identification Credential (TWIC) Program, container screenings 
and inspections, training and exercises, and the Port Security Grant 
Program.
    I am George Cummings, Director of Homeland Security, for the Port 
of Los Angeles. I am responsible for coordination of the Port's 
homeland security and maritime security programs at the national, 
state, and local levels. As you can imagine, Port security is the top 
priority for the Port of Los Angeles. Not only are we responsible for 
the security and well-being of our tenants, workers, visitors, and the 
surrounding communities; but the port is also charged with maintaining 
the free flow of commerce that moves through our Port and that is vital 
to this nation's economy.

THE IMPORTANCE OF MARITIME TRADE AND SEAPORT SECURITY
    As you well know, Madame Chair, the Ports of Los Angeles and Long 
Beach comprise the San Pedro Bay port complex through which 95 percent 
of all goods entering the United States arrives by container ship; and 
the San Pedro Bay port complex is the gateway for more than 43 percent 
of the containerized goods that enter the American stream of commerce 
annually. Together, the San Pedro Bay port complex is ranked the fifth 
busiest port complex in the world. Alone, the Port of Los Angeles is 
the eighth largest container port in the world and is the number-one 
container port in the United States. To further illustrate our 
importance to the national economy, and hence, the importance of port 
infrastructure security, in 2006 8.5 million twenty-foot equivalent 
units (TEUs) of containers entered the U.S. through the Port of Los 
Angeles, and 15.8 TEUs through the port complex. In addition to 
containerized freight, the Los Angeles/Long Beach port complex handles 
more than one million cruise passengers, half a million automobiles, 
and more than 50 percent of California's oil.
    By size, the Port of Los Angeles spans 7500 acres of real estate, 
including 4300 land acres and 3200 water acres along 43 miles of 
waterfront. The Port leases 27 marine cargo terminals with 270 berths, 
the World Cruise Center that hosts more than 1.2 million passengers 
each year, and 17 marinas that accommodate more than 3,700 recreational 
boat slips.
    Trade through the Port of Los Angeles has grown steadily by an 
estimated 20 percent each year over the last five years, and we expect 
this trend to continue. Likewise, the industry expects national 
maritime trade volumes to double by the year 2020, although some 
economists have predicted that such doubling may occur as early as 2014 
due to the demands of the American marketplace.
    In the event of a catastrophic incident, whether caused by 
intentional acts or natural disaster, it is the responsibility of the 
Port of Los Angeles to stand up cargo operations as quickly as possible 
to minimize the impacts to the nation's economy that is dependant on 
trade and the movement of goods. A recent example of the affects of a 
major port shutdown occurred in the fall of 2002 when a labor 
disruption caused a 10-day shutdown of the west coast ports that 
brought cargo movement through the west coast ports to an immediate 
halt. This action cost the nation's economy an estimated $1.5 billion 
dollars a day (valued in 2002 dollars), disrupting the availability of 
goods and products that Americans rely upon daily. A healthy U.S. 
economy relies heavily on secure, functioning ports throughout the 
United States.

THE CURRENT STATUS OF THE TWIC PROGRAM
    Access control at ports and port facilities is a critical component 
of port security, and access control will require a comprehensive 
credentialing program. We consider a federal credentialing program, 
such as TWIC, to be the solution to this major security challenge. We 
fully support the TWIC program and look forward to its full 
implementation. Ports throughout the nation are waiting for the TWIC 
program guidance so they may be able to fully complete their access 
control systems.
    The Port of Los Angeles and the Port of Long Beach have been chosen 
by TSA to conduct the TWIC Field Test which will look at testing the 
card reader, processing the TWIC cards, and designing procedures at 
terminals for program implementation. The Field Test will also evaluate 
the impact of the TWIC card on the ongoing efficient movement of goods 
through port terminals.
    In addition, the TWIC Enrollment Program is critical and must be 
completed before the Field Test can get underway. The TWIC enrollment 
team has made an initial visit to the Ports of Los Angles and Long 
Beach and met with port stakeholders. However, much work is yet to be 
done to achieve full enrollment for port and all transportation workers 
nationally. Full enrolment in for our port will be required before we 
can initiate the operational phase of the TWIC field test.

PORT SECURITY GRANTS
    The Port of Los Angeles has been a participant in the Port Security 
Grant Program since its inception. Grant awards fund the initial 
capitol required to development the security infrastructure throughout 
the Port, and to date, funds have supported projects such as (1) a 
port-wide surveillance camera system, (2) a command and control center 
that will be located in the Port of Long Beach and serve the entire 
port complex, and, (3) a fiber optic backbone that will allow 
connectivity of all 50 terminals throughout both ports. We will look to 
this grant program to continue to fund critical port security projects 
such as enhanced surface and underwater detection capabilities, shore-
side virtual perimeter systems, and system integration to optimize the 
efficiency of security systems and share data with other law 
enforcement agencies.

CONTAINER SCREENING AND INSPECTION
    U.S. Customs and Border Protection (CPB) are currently operating 
Radiation Portal Monitors and container imaging units at all of the 
Port's container terminals. The Port of Los Angeles supports increased 
scanning of cargo, both at our port and at foreign ports where cargo is 
loaded. It is critical to ensure that the movement of goods is 
maintained. Our concern is that sufficient operational resources are 
made available to CBP that are adequate to support increases in cargo 
inspections without adversely affecting the movement of cargo. 
Additionally, we would want to make sure the any reciprocity 
requirements imposed by foreign governments for inspection of exported 
goods are also supported with adequate recourses so that the flow of 
exported goods out of the port is not adversely affected.

TRAINING AND EXCERCISES
    Port security training and exercises for the Los Angeles/Long Beach 
port complex are coordinated through the Area Maritime Security 
Committee which established a subcommittee to coordinate these 
activities. Each year, a major port security exercises has been held in 
the port, and many types of security training opportunities are 
available throughout the year for both law enforcement agencies, 
emergency responders and port industry members.

IN CLOSING
    In closing, Chairwoman Sanchez and members of the Subcommittee, we 
at the Port of Los Angeles thank you for your leadership in calling 
attention to the critical elements of port security, and one that has 
not yet been fully accomplished--the TWIC program. Also, we appreciate 
the opportunity to share the Port of Los Angeles's experience with the 
TWIC field test, and our recommendations to improve the TWIC Program. 
The Port is confident that the federal regulatory development process 
will be a speedy one, leading to the full implementation of the TWIC 
program, and that elements of the SAFE Port Act will be fully funded. 
Thank you again for the opportunity to participate in this important 
hearing, and I look forward to answering any questions you may have.

    Ms. Sanchez. Thank you, Mr. Cummings.
    Mr. Wainio, for 3 minutes, please.

STATEMENT OF RICHARD WAINIO, PORT DIRECTOR AND CEO, TAMPA PORT 
                           AUTHORITY

    Mr. Wainio. Thank you, and good afternoon.
    The Port of Tampa is the largest of Florida's 12 active 
deepwater seaports, handing nearly 40 percent of the state's 
waterborne trade. Tamps is one of the nation's largest and most 
diverse seaports. Few ports in the country, in fact, face the 
diverse and complex security challenges that confront our port.
    Florida's seaports have been at the forefront nationwide in 
developing comprehensive strategies for addressing security 
issues. At Tampa, like most ports, we rely on a very effective 
layered seaport security approach, working in concert with our 
local, state and national partners.
    The Tampa Port Authority also works closely, of course, 
with U.S. Customs and Border Protection. At the Port of Tampa, 
every single in-bound container to the port is scanned for 
radiation through radiation portal monitors operated by CBP, 
without unduly disrupting port operations.
    Congress is currently debating whether to require 100 
percent overseas scanning of containers within 3 to 5 years, 
which would include both scanning for radiation and imaging. We 
support the effort, but we certainly urge DHS to use the pilot 
study approach and not to move too quickly on this because it 
will seriously disrupt the supply chain if it is not handled 
properly.
    There has also been some discussion about 100 percent 
inspection of in-bound containers once they arrive in this 
country. Port directors across the country oppose this concept, 
which would unnecessarily and severely constrain our nation's 
highly efficient and effective maritime transportation system. 
A layered approach that includes screening or scanning of all 
containers as they are loaded overseas, after a pilot project 
is successfully tested, as well as 100 percent radiation 
scanning in the U.S. and 100 percent inspection by CBP of all 
identified high-risk containers, would significantly strengthen 
container security.
    There has been significant enhancement of port security 
since 9/11 and the SAFE Port Act of 2006 should further 
strengthen the system. The costs, of course, as you know, have 
been very high. Since September 11, Tampa Port Authority alone 
has committed over $50 million to security infrastructure and 
security personnel costs. Nearly $30 million of the total 
expenditures have been for security infrastructure. We have 
received $10.7 million from the Port Security Grant Program, so 
we put $20 million in out of our own pockets.
    We have fared reasonably well, but we certainly advocate 
for the higher level of annual funding, the $400 million target 
that was originally set that is supported by the American 
Association of Port Authorities. Nationwide, the program has 
been sorely underfunded, and all major ports like Tampa have 
been forced to spend millions of dollars on projects and not 
funded by grants, millions of dollars that we sorely need to 
expand the port capacity to handle what we expect to be a 
doubling of business over the next 15 to 20 years.
    Of greatest concern to the port community, as you have 
heard before, is the issue of security access credentials, the 
TWIC being the primary issue. There are concerns over the 
timetable. There are concerns over the technology. Of course, 
it is going to put a greater financial burden on ports and port 
users.
    Florida's seaports have the very special concern that you 
have already discussed regarding access credentials. Since 9/
11, Florida seaports have already successfully screened and 
badged over 100,000 people at Florida's ports, with 39,000 of 
them in Tampa alone. Federal officials and state officials have 
been working to resolve differences between TWIC and the 
Florida credentials. However, to date, there has been an 
apparent inability to integrate the Florida system with the 
federal system.
    As has been repeatedly said, it will lead to duplicative 
security checks, separate card reader systems, with higher 
costs that hamper commerce without providing additional 
security for our seaports and our nation. I urge this committee 
to review the issue of duplicative criminal history checks for 
port access and require the development of a one-card criminal 
history vetting process at all U.S. seaports.
    Thank you very much for this opportunity to speak with you.
    [The statement of Mr. Wainio follows:]

                Prepared Statement of Richard A. Wainio

    Florida's 12 active deepwater seaports handle nearly 130 million 
tons of cargo, 4.0 million containers (TEU's) and over 14 million 
cruise passengers annually. The Port of Tampa is Florida's largest 
seaport accounting for approximately 50 million tons of cargo annually, 
or nearly 40% of the State's total waterborne trade.
    Tampa is one of the nation's largest and most diverse seaports. The 
port's core bulk business includes almost 20 million tons of petroleum 
products--virtually all the gasoline and jet fuel consumed in West and 
Central Florida--and over 15 million tons of fertilizer and related 
products. Tampa is rapidly diversifying its cargo base into 
containerized freight with the recent introduction of new direct 
container services from Asia; shipments of vehicles and steel are 
increasing; and the current annual volume of 4-5 million tons of cement 
and aggregates is expected to double in the next few years.
    Tampa is also a major cruise port handling over 900,000 cruise 
passengers in 2006. Additionally, the Port has the largest ship repair 
facilities between Pascagoula and Norfolk, and has a thriving retail / 
entertainment complex along its downtown waterfront area. The Port of 
Tampa encompasses over 5,000 sprawling acres and a relatively narrow 
main ship channel that stretches 42 miles across Tampa Bay. In short, 
few ports in the country face the diverse and complex security 
challenges that confront the Port of Tampa.
    In Florida, the State Legislature passed security legislation 
(Florida Statute 311.12) prior to September 11, 2001, that mandated 
enhanced security standards throughout the Florida port system. The 
primary emphasis for the original Florida legislation was to address 
drug interdiction and cargo theft. This law was quickly revised after 
9/11 to encompass additional requirements to prevent terrorism. With 
security plans in place early, Florida ports were in a position to 
receive and immediately implement federal security grant funds when the 
Port Security Grant Program began in 2002. Florida's seaports have been 
at the forefront nationwide in developing comprehensive strategies for 
addressing security issues.
    Tampa has relied on a very effective layered seaport security 
approach. This layered approach occurs on the infrastructure side 
(surveillance cameras, lighting, fencing, gates, etc.) and on the 
personnel side, where Tampa contracts with the Hillsborough County 
Sheriff's Office for 24/7 coverage of all port zones within our 
jurisdiction. In addition, the Port Authority contracts with private 
security as well as employing its own professional security force.
    We work in concert with our local, state and national partners. 
Recently, the Cooperative Vessel Traffic Service (CVTS) Tampa Bay was 
inaugurated. This innovative vessel traffic service allows real-time 
monitoring of vessels throughout the Tampa Harbor. The U.S. Coast 
Guard, the Tampa Bay Harbor Safety and Security Committee and the ports 
of Tampa, Manatee and St. Petersburg were partners in this endeavor. I 
commend the cooperative efforts of our community as a model for 
addressing and resolving security issues, and in fact, the Tampa Bay 
Harbor Safety and Security Committee was named the top harbor safety 
committee nationwide for 2005 by the U.S. Coast Guard.
    The Tampa Port Authority also works closely with another of its 
federal partners, U.S. Customs and Border Protection (CBP). Every 
single inbound container to the Port of Tampa is scanned for radiation 
through radiation portal monitors operated by CBP. CBP has indicated 
that nationwide it is now scanning over 90% of all inbound containers 
for radiation and will increase this to nearly 100% by the end of 2008. 
Through careful planning, this has been accomplished without unduly 
disrupting port operations.
    Congress is currently debating whether to require 100% overseas 
scanning of containers within 3-5 years which would include both 
scanning for radiation and imaging. The SAFE Port Act of 2006 calls on 
the Department of Homeland Security (DHS) to move to such a system, but 
first calls for a pilot program to more fully evaluate the 
effectiveness and practicality of this approach and required new 
technology. We agree with the American Association of Port Authorities 
that pilot projects are important and that quick implementation of 100% 
integrated scanning without incorporating the lessons from the pilots 
could be both costly and detrimental for our maritime transportation 
system.
    There has also been some discussion about 100% inspection of 
inbound containers once they arrive in this country. Port directors 
across the country oppose this concept which would unnecessarily and 
severely constrain our nation's highly efficient and effective maritime 
transportation system. I do support the efforts to screen or scan 100% 
of all containers as they are loaded overseas, as well as 100% 
radiation scanning in the US and 100% inspection by CBP of all 
identified high risk containers. This layered approach would 
significantly strengthen container security.
    The Regional Domestic Security Task Force is a unique component of 
security in Florida seaports that serves as the focal point for 
security coordination. It includes all federal and state First 
Responders and is headed by the local Sheriff and includes 
representatives of the local FBI, Florida Department of Law Enforcement 
and the U.S. Coast Guard. Tampa's local Area Maritime Security 
Committee is also very proactive and has been singled out as a national 
model for cooperation and collaboration.
    One major annual exercise and multiple regional, state and local 
Port exercises are conducted within the framework of the Area Maritime 
Security Committee and the Regional Domestic Security Task Force. 
Additionally, our Hillsborough County Emergency Operations Center is a 
cornerstone for emergency response and coordination. Recent active 
Florida hurricane seasons have afforded multiple real-time 
opportunities to exercise the full spectrum of emergency response 
capabilities.
    Our Regional Domestic Security Task Force brings together the 
leadership of the local First Responders in a very positive way. The 
information flow can be characterized as immediate and the leadership 
interacts daily. However, the flow of security information from the 
federal government remains bogged down due to dated security clearance 
requirements. A more effective security clearance system must be 
designed and put in place similar to the system used by the U.S. 
military, where an interim security clearance can be conveyed to an 
individual on a ``need to know'' basis, allowing that individual to 
receive an immediate clearance to formulate a plan to mitigate an 
immediate threat.
    There has been significant enhancement of port security since 9/11 
and the SAFE Port Act of 2006 should further strengthen the system. The 
costs, however, have been very high and continue to increase. Since 
September 11, 2001, the Tampa Port Authority alone has committed over 
$50 million to security infrastructure and security personnel costs. 
Nearly $30 million of the total expenditures have been for security 
infrastructure. In that regard, the Port Security Grant Program has 
certainly been helpful. The Tampa Port Authority has received $10.7 
million since the program's inception, with much of that funding going 
toward access control infrastructure. Tampa handles over 11,000 truck 
movements daily, and efficient flow of vehicles through security 
checkpoints is vital to maintaining and supporting the commercial base 
of the Port.
    Though Tampa has fared reasonably well and is grateful for the 
federal support it has received, we do advocate for the higher level of 
annual funding ($400 million) supported by the American Association of 
Port Authorities for the nationwide grant program. Nationwide the 
program has been sorely under-funded with many ports unable to complete 
key security projects in a timely manner and all major ports, like 
Tampa, forced to spend millions of dollars on projects not funded by 
grants--millions of dollars that are badly needed for expansion of port 
cargo and container capacity to meet international trade demand that is 
projected to double over the next fifteen to twenty years years.
    Of greatest concern to the port community, at this time, is the 
issue of security access credentials. The Transportation Worker 
Identification Credential (TWIC) will be another important tool to 
strengthen port security, but it will place an even greater financial 
burden on ports and port users. DHS has estimated that the card readers 
alone will cost $300 million. There are additional concerns over the 
inability to meet the timetable in the Safe Port Act in a manner that 
will allow for the effective and efficient implementation of the 
system. Also, the biometric portion of the program must be extensively 
tested in the maritime environment. We respectfully urge adequate 
staffing and funding for TSA and the Coast Guard to test and provide 
oversight for the implementation of the TWIC program. The biometric / 
technology issues with the card must be resolved prior to full scale 
implementation. If these issues are not resolved and significant delays 
occur, the commercial trade we are seeking to protect will be 
compromised.
    Florida's seaports have a special concern and dilemma regarding 
access credentials. Since 9/11 Florida's seaports have already 
successfully screened and badged over 100,000 users at Florida's ports, 
to include 7 year criminal background checks on each individual. In 
Tampa alone about 39,000 port badges have been issued. The Florida 
credential, created under Florida Statute 311.12, is vetted by both the 
FBI and the Florida Department of Law Enforcement and is the model on 
which much of the TWIC is based. Federal officials and Florida 
officials have been working to resolve differences between the TWIC and 
the Florida credential. We are concerned about the apparent inability 
to integrate the Florida system with the Federal system which could 
lead to duplicative security checks, separate card reader systems and 
higher costs that hamper commerce without providing additional security 
for our seaports and the nation. A dual credential / technology system 
requirement in Florida will be costly, inefficient, and will negatively 
disrupt the progress that has been accomplished in Florida to date.
    I urge this Committee to review the issue of duplicative criminal 
history checks for port access, and require the development of a ``one-
card'' criminal history vetting process for all U.S. seaports.
    Thank you for this opportunity to comment on these selected aspects 
of seaport security.

    Ms. Sanchez. Mr. Sundet?

    STATEMENT OF LEAL SUNDET, COAST COMMITTEEMAN, LONGSHORE 
  DIVISION OF THE INTERNATIONAL LONGSHORE AND WAREHOUSE UNION

    Mr. Sundet. As you know, ILW represents longshore workers 
on the West Coast. We have long advocated that the ILW 
workforce should be utilized as the first line of defense 
against maritime terrorist activities, and recognized as a 
natural ally by law enforcement and first providers.
    We are fully committed to cooperating to ensure that all 
West Coast longshoremen enroll in the TWIC program and are 
confident that all incumbent longshoremen will be deemed risk-
free from a terrorist perspective.
    That being the case, we must also say the credentialing 
will have little impact on actually securing the ports that are 
used as conduits. The reality is that in a modern container 
facility, the longshore workers has no real access to the cargo 
and the documentation associated with the container's contents 
is not readily available to the worker.
    Furthermore, it makes little sense to implement a TWIC 
credentialing system without having card-readers in place, 
given that the primary purpose of TWIC is to control access to 
secure areas.
    On the TWIC rollout itself, the challenge for the union 
leadership is to ensure that the membership fully cooperates. 
To that end, it is incumbent that enrollment centers be 
conveniently located so that the local union leadership will be 
able to ensure the greatest participation in the affected and 
covered workers. Charging workers a fee is counterproductive to 
ensuring broad cooperation. We urge the committee to reevaluate 
the fee and consider legislation obligating the employer to pay 
the fee, if our government is unwilling to appropriate funds to 
pay the fee.
    The plan to selectively implement the actual usage of the 
TWIC by Coast Guard captains of port zones is potentially 
unworkable on the West Coast, with the exception of Hawaii. 
Longshoremen in Oregon, Washington and California are essential 
casual workers who obtain their assignments daily from a series 
of dispatch halls. There is an established travel system 
whereby workers regularly move between ports and across zones.
    On the facilities security plan, refer to my written 
statements. On training and exercise, refer to my written 
statements. On pilot program and empty containers, refer to my 
written statements. On safety impacts of non-intrusive imaging 
technology, refer to my written statement.
    On customs initiatives, the real threat lies in the 
relatively unknown content of the container, and at the various 
and numerous points in the transportation chain where 
containers can be accessed. Access to contents of containers at 
a modern container terminal by a rogue worker is nearly 
impossible. A rogue worker accessing a container would be 
noticed. It is an unusual event.
    Yet even assuming that the shipper is a secure source, the 
container can be easily accessed en route to the overseas or 
domestic terminal. It can be accessed on the vessel. Rail 
operators often sidetrack containers on desolate spurs for days 
without security. The best use of scarce resources is in this 
area. Voluntary customs initiatives do not work. They need to 
be mandatory. The concept of pushing our borders out needs to 
be better financed and adequate personnel needs to be utilized 
in that area.
    As with anything we do, there are tradeoffs. The industry 
has been willing to accept a higher level of risk, rather than 
implementing security measures that might slow commerce in any 
way. To principally placate the public, resources that should 
be used to secure the supply transportation chain outside and 
around the nation's ports are instead used to isolate and 
barricade the nation's ports and their workforce. Yes, we check 
for radiation occasionally, and yes, we X-ray some containers. 
But in general, we only do so after the container has arrived 
and after the facility and facility workers may already have 
been exposed.
    At the chair's pleasure, I am willing to take questions.
    [The statement of Mr. Sundet follows:]

                   Prepared Statement of Leal Sundet

    Good morning Madam Chair and members of the Subcommittee:
    We would like to thank you, Chairwoman Sanchez and members of the 
Subcommittee, for inviting the International Longshore and Warehouse 
Union (ILWU) to present our views on the six month status of the SAFE 
Port Act.
    As you know, the ILWU represents longshore workers in the states of 
Washington, Oregon, California, Hawaii and Alaska. As a Union, we have 
been very active in attempting to develop and implement a system of 
checks and balances so as to limit the risk of terrorism activity at 
our work site and to keep our ports from being used as a conduit to 
move weapons of destruction. To that end, we have long advocated that 
the ILWU workforce should be utilized as the first line of defense 
against maritime terrorist activities, and recognized as a natural ally 
by law enforcement and other first responders.
    In each of the states where we have presence, key union officers 
participate as members of the Area Maritime Security Committee. Our 
relationship with the Coast Guard has never been better and we applaud 
that agency for its cooperation with the ILWU and for performing its 
job admirably--often with limited resources.
    The ILWU is actively participating with Lockheed Martin and its 
TWIC Stakeholder Communications Committee. We are fully committed to 
cooperating to ensure that all West Coast longshoremen enroll in the 
TWIC program and are confident that all incumbent longshoremen will be 
deemed risk free from a ``terrorist'' perspective.
    That being the case, we must also say that such credentialing will 
have little impact on actually securing the ports or their use as 
conduits. The reality is that in a modern container facility, the 
longshore worker has no real access to the cargo, and the documentation 
associated with a container's contents is not available to the worker. 
TWIC credentialing is, as a practical matter, mostly a feel-good 
gesture promoted by those who do not completely understand modern 
container terminal operations as a way to diminish public and political 
hysteria while doing little to mitigate the real threat--container 
access outside of the terminal throughout the supply/transportation 
chain. Furthermore, it makes little sense to implement a TWIC 
credentialing system without having card readers in place, given that 
the primary purpose of TWIC is to control access to secure areas.
    Given the majority support in Congress for background checks and 
TWIC cards after 9/11, we focused on advocating that the background 
check be limited to ``terrorism security risks'' and to ensure that 
there is due process for workers denied a TWIC card. However, we remain 
concerned that TWIC will be used to single out workers who may have a 
felony background but do not pose a terrorism security risk. It is 
imperative that waivers be granted by TSA when a worker shows no 
propensity to commit terrorist acts. It is also imperative that the 
Coast Guard have the resources and personnel to guarantee there will be 
sufficient numbers of Administrative Law Judges to review cases when a 
worker is denied a TWIC card.
    Furthermore, the ILWU was approached last year by the Coast Guard 
to request that we help them identify our members to run their names 
through the terrorist watch list. We cooperated with that request and 
apparently they have found no matches. They apparently did not check 
truck drivers or many other workers with access to our ports. That 
process of checking longshore workers and ignoring other workers makes 
no sense from the standpoint of ensuring that our ports are secure.

TWIC Rollout:
    In spite of the rationale for TWIC and its questionable 
effectiveness as a deterrent relative to security incidents, the ILWU 
leadership has committed its membership to cooperate. The membership 
knows, however, what the leadership knows. The TWIC credential is 
widely viewed as an unnecessary facade and in many members' views, 
fundamentally a privacy invasion.
    The challenge for the Union leadership is to ensure that the 
membership fully cooperates. To that end, it is incumbent that 
enrollment centers be conveniently located so that the local union 
leadership is able to ensure the greatest participation by the affected 
and covered workers.
    Charging workers a fee is counterproductive to ensuring broad 
cooperation. We urge the Committee to reevaluate the fee and consider 
legislation obligating the employer to pay the fee if our government is 
unwilling to appropriate funds to pay the fee. In our case, attempts to 
negotiate with our employer group, Pacific Maritime Association to pay 
the fee have not been successful to date. For some workers at our 
nation's ports, the cost of the TWIC card is a day's pay. We would 
further state that the protection against terrorist activities in our 
nation's ports is a matter of national interest and the cost of this 
national security protection should be borne by the Federal government.
    The plan to selectively implement the actual usage of the TWIC by 
the Coast Guard Captain of the Port Zone is potentially unworkable on 
the West Coast, with the exception of Hawaii. Longshoremen in Oregon, 
Washington and California are essentially casual workers who obtain 
their work assignments daily from a series of dispatch halls. There is 
an established travel system whereby workers regularly move between 
ports and across zones.

Facility Security Plans:
    Because of the interchange of workers, West Coast terminals should 
have consistent procedures with respect to TWIC application and entry. 
In approving facility security plan modifications, the Coast Guard 
should do so with this in mind and not allow a given terminal to be 
more restrictive than the Federal rules or associated NAVIC may 
require.

Training and Exercises:
    It has been our experience that, to date, there has been little 
cooperation by our employer group, Pacific Maritime Association, in 
utilizing the ILWU workforce as a cognitive partner in terminal 
awareness and reporting of unusual activity.
    Anything that may have the potential for slowing commerce is 
ignored.
    To date, longshoremen have not been trained, except where the Union 
has taken initiative to train its own members.
    One immediate concern should have priority. The Act calls for 
training involving evacuation procedures and for live exercises. With 
some minor exceptions, the vast numbers of longshoremen have no idea, 
other than to run, on how to orderly evacuate facilities. Our employers 
resist live exercises because it may temporarily disrupt commerce and 
without live exercises, any plan cannot be tested and assimilated.
    A second concern is that there is no plan for recovery in the event 
of an incident that may disable a key terminal. Given the reality, that 
no matter what efforts are made, it is impossible to always stop what a 
sophisticated ``terrorist'' is intent on doing, focus should be on 
recovery. Currently, we are in discussions with our employer group to 
identify cadres of longshoremen who would volunteer to specialty train 
and make themselves available to work in potentially hazardous 
environments. To ensure that this concept works, there must be 
cooperation to include that union leadership is integrated into 
emergency command structures.

Pilot Program on Empty Containers:
    This very important aspect of the Act needs to be implemented. Our 
port facilities face a significant threat involving multiple scenarios 
from the domestic side. So called empty containers are a real risk as a 
means to transport weapons or people. Today, most terminal operators 
allow empty containers to pass through the gates of our ports without a 
visual inspection of the box to ensure that it is safe.
    On March 14, 2004, ten dock workers were killed in the Israeli Port 
of Ashdod by suicide bombers, who were able to enter the port 
facilities undetected by hiding inside a cargo container. I understand 
that the Israelis have excellent security at their port facilities but 
were unable to detect people in containers being transported through 
their port facility. We should not have to go through a tragic event 
that takes our members lives before we get serious about the cargo and 
empty containers that enter our port through the landside.
    On a related issue concerning containers, the integrity and 
correctness of all seals on containers must be checked as they enter a 
port facility and then as they are placed in inventory on the docks to 
detect and deter any tampering as required by regulation 33 CFR 105.265 
(b)(4) and 105.265 (c)(4); presently this is simply not being done at 
all at most port facilities; in fact, since September 11, many facility 
operators have discontinued their past practice of checking seals in 
order to save themselves a few dollars.

Safety Impacts of Non-Intrusive Imaging Technology:
    The Act requires the National Institute for Occupational Safety and 
Health and OSHA to evaluate the environment and safety impacts of non-
intrusive imaging technology and to develop and put in place a 
radiation risk reduction plan to minimize the risks to workers and the 
public. Such evaluation needs to proceed. I am alarmed at the lack of 
independent study of the long-term effects of this technology on the 
human body. The ILWU will place the safety of our members' lives first.

Customs Initiatives:
    As stated earlier, much of the focus of port security has been on 
ways to physically secure the terminals and scrutinize the backgrounds 
of port/transportation workers. While this has some marginal value, the 
real threat lies in the relatively unknown content of the container and 
at the various and numerous points in the transportation chain where 
containers can be accessed.
    Access to the contents of a container at a modern container 
terminal by a rogue worker is nearly impossible. Containers are 
infrequently opened and done so only after approval from multiple 
customer levels requiring several layers of terminal management 
intervention. A rogue worker or group of rogue workers accessing a 
container would be noticed! It is an unusual event.
    Yet even assuming that the shipper (foreign or domestic) is a 
secure source, the container can be easily accessed en route to the 
overseas or domestic terminal. It can be accessed on the vessel. Rail 
operators often sidetrack containers on desolate spurs for days without 
security.
        The best use of scarce resources is in this area. Voluntary 
        Customs initiatives do not work. They need to be mandatory. The 
        concept of ``pushing our borders out'' needs to be better 
        financed and adequate personnel needs to be utilized.
    As with anything that we do, there are trade offs. The industry has 
been willing to accept a higher level of risk rather than implementing 
security measures that might slow commerce in any way. To principally 
placate the public, resources that should be used to secure the supply/
transportation chain outside and around the nation's ports are instead 
used to isolate and barricade the nation's ports and their workforce. 
Yes, we check for radiation occasionally. And yes, we x-ray some 
containers. But we only do so after the container has arrived and after 
the facility and facility workers may already have been exposed.
    The members of the ILWU are proud of what they do for a living. We 
built the West Coast ports into a model of efficiency and 
competitiveness. ILWU members are patriots. They do not want anything 
to happen to their ports. They make a good living on trade and 
unencumbered commerce. As an institution, we have cooperated on port 
security since September 11, 2001 and will continue to do so even 
though we believe that priorities and resources have been poorly 
allocated and often misdirected.
    Thank you for listening. We believe there were some very good 
aspects of the SAFE Port Act, including training and exercises, an 
empty container pilot program, and a radiation worker safety study. We 
hope that the Department of Homeland Security is prioritizing these 
aspects of port security. At the Chair's pleasure, I will try to answer 
any questions that you may have.

    Ms. Sanchez. Thank you, Mr. Sundet.
    Mr. Aschemeyer, for 3 minutes.

   STATEMENT OF MANNY ASCHEMEYER, EXECUTIVE DIRECTOR, MARINE 
                EXCHANGE OF SOUTHERN CALIFORNIA

    Mr. Aschemeyer. Good afternoon. Thank you for inviting me 
here from California. I am delighted to be here.
    I am here for one simple reason: to tell you that we have a 
system in place for long-range vessel tracking. We have been 
developing it now for over 5 years. We have had an MOU with the 
Coast Guard and have worked diligently with them to create an 
atmosphere of partnership with them for long-range tracking. We 
are hopeful that that will continue to move forward.
    We believe that there is a need to enhance maritime domain 
awareness. We have worked diligently. I gave you a couple of 
graphics in your kits. I will just show you right now, this is 
who we are. We are located all the way around the country. We 
have 13 major sections of coverage. On any given day, this is 
our map that we are actively--this is a real-time active 
picture. We can track 2,000 vessels on any given day in and out 
of the United States' waters from Maine to Florida, from New 
York to Hawaii, and up into Alaska.
    This is one example I wanted to show you real quick, that 
we tracked a vessel from Rotterdam through the Mediterranean 
through the Red Sea, across the Indian Ocean, into the Far 
East, and then back and forth across the Pacific several times. 
This is real-time. This is happening now. We can do this now. 
You can click on any one of those dots there and you will get 
an immediate name of that vessel, course, speed, latitude, 
longitude, vessel owner, vessel operator, where it is coming 
from, where were its ports of call.
    This, in fact, will validate the notice of arrival that the 
Coast Guard needs when a ship says, ``I have been to those last 
four ports of call.'' Have they? We can validate that. This 
system does that at an eye's glance.
    We are working very hard and we heard earlier about best 
use of taxpayer dollars. This system is available to the Coast 
Guard now, today. We can have it up and running. It will be 
virtually at no cost to the Coast Guard. That is the best use 
of taxpayer dollars that I can think of because it will be paid 
for by the industry. It will be a volunteer system. Granted, 
people will say, ``How many are going to participate?'' There 
will probably be those that won't, but those that won't will be 
the ones that you need to concentrate on.
    Most ship operators are good citizens. They want to do the 
right thing. They want to play by the rules. If the Coast Guard 
comes out with a NAVIC or with a letter that says, ``Look, we 
have a system we would like you to participate in this.'' This 
has happened up in Alaska. Virtually every ship participated--
tankers, cruise ships, container vessels, tugs, barges, ferry 
boats, what have you. They participate when the Coast Guard 
said, ``Would you please do this?''
    So it is not an order. It is a request. It costs the 
shipping line operator about $3 to $4 a day per vessel to 
operate. We used to say it is a latte a day if you drink 
Starbucks. It is a very modest cost.
    I know my time is very limited. I ask you to refer to my 
written statements. There is a wealth of information in there. 
I would really seriously ask you to read that in detail. If you 
have any questions, I would be happy to go on from there.
    Thank you very much.
    [The statement of Mr. Aschemeyer follows:]

             Prepared Statement of Captain Manny Schemeyer

    CHAIRWOMAN SANCHEZ, RANKING MEMBER SOUDER, AND DISTINGUISHED 
SUBCOMMITTEE MEMBERS, it is my honor to have the opportunity to appear 
before you today to talk about what the maritime industry is doing to 
enhance maritime domain awareness, and specifically with regards to 
long range vessel tracking. My name is Manny Aschemeyer and I am the 
Executive Director of the Marine Exchange of Southern California. I am 
here representing the Maritime Information Service of North America 
(MISNA). I would like to begin by giving you a brief history of MISNA.
    MISNA is a national coalition of non-profit maritime information 
sharing service organizations that are dedicated to providing 
information, communications and other services in order to ensure safe, 
secure, efficient and environmentally sound maritime operations. MISNA 
represents the commercial maritime community's shared commitment to 
proactively address the challenges faced by the maritime industry, as 
well as the U.S. Coast Guard, U.S. Customs and Border Protection (CBP), 
U.S. Maritime Administration (MARAD), the Office of Naval Intelligence 
(ONI) and other federal and state agencies in a cooperative and cost 
efficient manner.
    MISNA membership includes maritime exchanges and associations from 
throughout the United States and in Canada. Maritime exchanges' 
operations are vital to the maritime industry and their government 
partners in Baltimore, British Columbia, Jacksonville, Alaska, Puget 
Sound, San Francisco Bay, Hawaii, Southern California, New York and New 
Jersey, the Delaware River and Bay, New Orleans, Virginia, Texas and 
Portland, Oregon. Several of the people who oversee the operations of 
these maritime exchanges are former Coast Guardsmen and have served as 
Captains of the Port at various places, and all the people who run 
these maritime exchanges have extensive maritime experience, including 
as licensed master mariners, and senior maritime industry executives.
    MISNA represents a broad cross section of maritime interests in 
each of these regions. The work of these maritime exchanges supports 
vessel owners and agents, port authorities, pilots, towboat companies, 
stevedores and terminal operators, admiralty lawyers, customs brokers 
and freight forwarders, ship repair firms, employer associations, 
insurance agencies, marine surveyors, maritime unions (both afloat and 
ashore) and oil spill response organizations. Collectively, over 8,000 
private and public maritime businesses, agencies and associations are 
represented by MISNA.
    While MISNA was established as a non-profit maritime organization 
in 1995, several of the marine exchanges that make up MISNA have been 
in existence for over 125 years. Whereas the maritime exchanges in the 
1800s used telescopes to spot vessels approaching the U.S. and 
communicated the locations of those vessels to the maritime community 
with messengers and semaphore, today we use state of the art technology 
to provide accurate and timely information on maritime operations 24 
hours a day. In a sense, MISNA serves as the ``eyes and ears'' of the 
maritime community.
    The maritime exchanges that make up MISNA work with every segment 
of the maritime and waterfront business communities, and they provide 
state, county and municipal law enforcement, and emergency responders 
with both a snapshot of river and harbor activity, detailed vessel 
movement and position information, detailed terminal, pier and berth 
data, commodity information, lightering and bunkering activity, as well 
as in many cases local tide, weather and current conditions. But it is 
our work with the local Coast Guard Sector Commands and District 
Operations Centers that we view as being most critical to maritime 
operations in the U.S. and the Department of Homeland Security and the 
Coast Guard's efforts to maximize maritime domain awareness.
    Maritime Domain Awareness (MDA) is defined in the National Strategy 
for Maritime Security as being the effective understanding of anything 
in the maritime environment that can affect the safety, security, 
economy, or environment of the United States. To state it simply, MISNA 
is working closely with the Coast Guard and other government agencies 
to understand the maritime domain and what is happening within it so as 
to protect our ports, vessels, mariners, and the American public, as 
well as the supply chains that are so critical to our nation's economy. 
This exchange of information benefits the marine industry through 
increasing efficiency and minimizing delays incurred in addressing 
security issues.
    Maritime exchanges provide their public sector partners with access 
to historical and anticipated vessel schedules and reports, and in many 
cases the Coast Guard, Customs and Border Protection and other agencies 
rely on maritime exchanges for access to real-time vessel position 
information through Automatic Identification System (AIS) displays. In 
addition, exchanges play leadership roles in their Area Maritime 
Security Committees, Harbor Safety Committees and a host of other 
venues where private and public maritime stakeholders convene to 
identify opportunities for improvement, solve problems, and address the 
challenges of the future.
    In Southern California we are closely tied to the Coast Guard's 
Sector Command at Los Angeles-Long Beach Harbor, which is America's 
biggest and busiest intermodal cargo complex. Our Marine Exchange 
provides the Coast Guard with vital information 24 hours a day, 7 days 
a week, and 365 days a year in helping them to execute their multi-
faceted mission that includes Maritime Domain Awareness, Vessel Traffic 
Management & Facilitation, Search-and-Rescue, Law Enforcement, Port 
State Control, Environmental Protection & Response, and a host of 
others. Similar symbiotic Coast Guard-Marine Exchange relationships 
exist throughout the U.S. from Maine to Alaska and Hawaii.
    I would like to take this opportunity to heartily applaud the Coast 
Guard. Since the September 11 terrorist attacks, the Coast Guard has 
accepted countless new responsibilities--including their ongoing 
efforts to enhance maritime domain awareness, improve port security, 
increase vessel traffic efficiency, enforce port state controls, 
augment search and rescue (SAR) operations and generally make our ports 
and waterways safer, more efficient, and environmentally protected. I 
have only the greatest admiration, respect and appreciation for what 
they do and how they do it. Given their limited manpower, assets and 
funding the Coast Guard has done a remarkable job, to say the least. As 
Winston Churchill once said of the RAF during World War Two: ``Never 
have so many owed so much to so few!'' That same adulation can be 
applied to our U.S. Coast Guard today.
    But maritime security is not the role of the Coast Guard alone. To 
the contrary, the only way to achieve maritime domain awareness to the 
fullest extent possible is through strong public-private partnerships. 
In fact, the only way to maximize maritime domain awareness quickly and 
in a way that is cost-effective is to utilize all existing resources. 
The U.S. Coast Guard Strategy for Maritime Safety, Security, and 
Stewardship has it right in saying that securing our maritime borders 
require ``extensive partnerships that integrate and build unity of 
effort among governments, agencies, and private-sector stakeholders.''
    A perfect example of public-private partnerships in action--and one 
that I was intimately involved in creating, and in fact appeared before 
Congress over ten years ago to discuss--is the Vessel Traffic Service 
(VTS) located at Los Angeles-Long Beach Harbor. Since 1994, the VTS at 
Los Angeles-Long Beach Harbor has been operated by the Marine Exchange 
of Southern California, in partnership with the U.S. Coast Guard. While 
the Coast Guard did not at first embrace the ``partnership concept'' we 
had conceived, or recognize the advantages of working in cooperation 
with the maritime community, the VTS has come to serve as a ``national 
model'' for other ports across the nation and around the world to study 
and emulate.
    In February of this year the Marine Exchange of Southern California 
had the opportunity and distinct pleasure to give DHS Deputy Secretary 
Michael Jackson a first-hand look at how the Coast Guard is working in 
tandem with the private sector to ensure the security of maritime 
operations at America's busiest intermodal port facility. During his 
visit Deputy Secretary Jackson praised our public-private partnership 
and appeared genuinely impressed with our operation.
    The Marine Exchange of Southern California's work to bring the VTS 
at Los Angeles-Long Beach Harbor online was only the beginning of 
MISNA's efforts to maximize the Coast Guard's ability to achieve 
success in its various missions. When the International Maritime 
Organization (IMO) mandated that all vessels be equipped with VHF-based 
line of sight Automatic Identification System (AIS) transponders in 
2004, MISNA quickly realized that all the transponders in the world 
would not do anything to improve maritime operations unless there were 
also AIS receiving stations on shore. Using our extensive network of 
maritime stakeholders, MISNA quickly constructed and presently operates 
over 80 shore-based AIS receiving stations that range over 3,000 miles 
north to south from above the Arctic Circle in Alaska all the way down 
to Florida; and east to west over 5,000 miles from Maine to Adak, 
Alaska and Hawaii. While this network of AIS receiving stations is now 
tracking over 2,000 vessels daily in the U.S., this system is growing 
daily with over 100 AIS sites expected to be in operation later this 
year. MISNA is currently sharing much of this information with the 
Coast Guard.
    MISNA recognized early on that AIS has serious limitations, and saw 
first-hand what the consequences of those limitations are, foremost 
among which is the limited range of AIS. AIS was originally conceived 
as an anti-collision ``tool'' for mariners to use at sea and while 
navigating in and out of port. AIS was not designed to provide much 
help in addressing maritime emergencies, especially those that occurred 
many miles offshore, or even just outside the proximity of an AIS 
receiving station. Not only does AIS have a limited range of 
approximately forty to fifty miles, but the information it collects and 
disseminates is not secure. Given these shortfalls, while still 
recognizing the benefits of AIS, MISNA developed the ability to track 
vessels around the world and destined for our ports using satellite 
technology.
    MISNA created a Voluntary-Long Range Vessel Tracking system called 
the Automated Secure Vessel Tracking System (ASVTS), which combines 
short range (AIS) and long range (satellite) vessel tracking 
capabilities, and provides a way for this information to be displayed 
in a way that is secure but can be shared easily with stakeholders who 
need to analyze that data. For over five years now, MISNA has been 
successfully tracking vessels near our coasts and around the world. The 
system's unique ability to process and display both AIS and long range 
(satellite) data provides a means of comparing and validating vessel 
information, aiding the detection of anomalies and providing system 
redundancy. MISNA is currently tracking tankers, cargo vessels, 
container ships, tugs, barges, ferries and cruise ships mostly along 
the U.S. West Coast and in some cases, around the world. And in Alaska, 
the Marine Exchange has also been monitoring Coast Guard vessels at the 
request of Coast Guard District 17.
    After the terrorist attacks on 9/11 when the Office of Naval 
Intelligence (ONI) needed to improve its information gathering 
activities, ONI officials approached MISNA and asked us to provide 
information on anticipated port calls and actual arrivals of vessels. 
MISNA complied with that request within a few days and continues to 
assist the ONI in its missions, consolidating this information 
nationwide on a daily basis. Each year, MISNA reports to the ONI on 
over 65,000 thousand vessels calling on U.S. ports. We have been 
contracted by ONI to provide this service since December of 2001.
    MISNA also entered into a Memorandum of Understanding (MOU) with 
the Coast Guard in 2002 and through this forum has repeatedly offered 
the Coast Guard assistance in attaining enhanced maritime domain 
awareness to aid maritime security. In many areas of the country the 
Coast Guard is using MISNA's AIS and long range vessel tracking 
information on a daily basis.
    The Coast Guard consistently calls on MISNA members for long range 
vessel tracking capabilities. As a result, MISNA members have assisted 
in several high profile maritime emergencies during the past few years, 
some of which have been covered by CNN. In one instance, MISNA tracked 
the ``Semester at Sea'' passenger vessel Explorer when it encountered 
heavy seas in the Pacific and was in distress. In other instance, 
MISNA's tracking system aided the Coast Guard's search and rescue 
response to the stricken cargo vessel Selendang Ayu when it lost power 
and grounded in a heavy storm in Alaska. And on yet another instance, 
MISNA tracked the response vessels assisting the car carrier Cougar Ace 
when it rolled on its side in the North Pacific. While most of the 
vessels that utilize MISNA's long range vessel tracking capabilities do 
so voluntarily, MISNA was able to track these vessels without having 
tracked them previously, and did so in few minutes. Without MISNA's 
tracking capabilities, it would have taken hours to locate and track 
these vessels.
    It is in Alaska that MISNA's AIS and long range vessel tracking 
capabilities are most prevalent. The ASVTS system enables the Coast 
Guard in District 17 to efficiently manage its resources in order to 
augment its search and rescue (SAR) operations, enhance maritime domain 
awareness, improve maritime security, promote maritime safety, better 
assist in waterway management, and respond more effectively to 
environmental emergencies. Due to concerns about the vulnerability of 
ships operating in the restricted and often remote waters of Alaska, 
Coast Guard District 17 encourages vessel operators to utilize the 
ASVTS vessel tracking capabilities under a voluntary, industry-funded 
program. The participation and compliance by the vessel owners and 
operators is significant with tankers, ferries, tugs, fishing boats, 
cruise ships and container ships being tracked as they sail to and from 
Alaska to other ports on the West Coast and overseas. The information 
provided to the Coast Guard in District 17 is used to execute search 
and rescue and Medical Evacuation (MEDEVAC) missions, coordinate 
security escorts, schedule vessel boardings, and provide data for 
waterways management issues on a daily basis.
    Long range vessel tracking, however, is more than about just 
tracking ships. It is about managing risk. Effectively managing risk 
creates resiliency which reduces disruptions and gives the Department 
of Homeland Security and the Coast Guard greater control in their 
homeland security activities. Simply stated, you can't control 
something you can't see. This is why long range vessel tracking is 
critical to achieving maritime domain awareness.
    Congress recognized the need for long range vessel tracking in 2002 
when it gave the Coast Guard the authority to ``develop and implement a 
long-range automated vessel tracking system for all vessels in United 
States waters that are equipped with the Global Maritime Distress and 
Safety System or equivalent satellite technology'' and to ``use 
existing maritime organizations to collect and monitor tracking 
information under the system.'' Congress reinforced this authority in 
the Maritime Transportation Security Act of 2004 and in the Maritime 
Transportation Security Act of 2006 before adding a date certain of 
April 1, 2007 in the SAFE Port Act. MISNA has had these capabilities 
the entire time, and has consistently offered to provide these 
capabilities to the Coast Guard in a way that would not cost them (and 
the American taxpayers) almost nothing.
    Despite this authority, DHS has not yet maximized maritime domain 
awareness through tapping into the marine industry's vessel tracking 
capabilities. While there are ongoing efforts to correct this, these 
efforts will continue to fall short unless they incorporate existing 
and proven technologies and invest in the willingness of industry 
partners to work together. In other words, I firmly believe that we can 
do better.
    While I have been focused on the security aspects of long range 
vessel tracking, I would like to take a moment to discuss the 
commercial implications of increased maritime domain awareness. While 
maritime domain awareness is critically important to preserving the 
well-being of the United States, it is only one half of this equation. 
Maritime domain awareness must also create an environment in which 
international commerce can be conducted in a safe, secure, efficient 
and environmentally sound manner.
    The primary motivation of MISNA to develop both AIS and long range 
vessel tracking systems was to better serve our members. By providing 
more accurate vessel information, maritime exchanges support efficient 
maritime operations and help our members avoid or minimize fines and 
costly delays arising from a lack of current vessel movement 
information. Vessels' arrival times change continuously due to wind, 
fog, visibility, currents, traffic density, mechanical problems and 
myriad other reasons. Over the past few years, numerous U.S. and 
foreign vessels have been turned back to sea due to the fact that the 
Coast Guard did not have their actual positions or updated arrival 
times, costing the industry millions of dollars. This situation can be 
avoided by providing the Coast Guard with real time and accurate 
information on a vessel's entire voyage track, thereby confirming that 
that ship has ``nothing to hide'' if its ETA happens to change by a 
couple of hours one way or another.
    To put it another way, air traffic control does not turn a plane 
around if it does not land at the specified time. If a plane flying 
from LAX to DCA has a strong tail wind that helps the plane to arrive 
earlier than expected, the pilots are not told to fly around in circles 
until its originally schedule arrival time. Neither should ocean going-
vessel that do not meet their notice of arrival window, in most cases 
due to variable weather and sea conditions, be forced to turn around 
and provide an arrival update. This is especially true if they have 
been constantly and accurately tracked all along their voyage route by 
a system like ASVTS.
    So what exactly does MISNA offer to the Department of Homeland 
Security and the Coast Guard? Simply stated MISNA offers a seamless 
network of maritime information sharing organizations that offer a 
variety of programs, services and technology designed to both improve 
maritime domain awareness and promote maritime commerce. The U.S. 
government is constantly seeking the right balance between security and 
trade facilitation. MISNA believes that the capabilities provided by 
ASVTS can help in achieving that balance.
    In that vein, the National Security for Maritime Strategy, the Port 
Security Grant Program and various Presidential Directives have 
highlighted the need for enhanced information sharing as critical to 
targeting efforts, incident prevention and response, and improved asset 
utilization. In line with the Coast Guard's call for public-private 
collaboration in information sharing, MISNA members have suggested that 
the Coast Guard and other agencies work more closely together and with 
the maritime industry to create and use electronic information 
reporting systems.
    DHS has made good progress in several initiatives, such as the 
International Trade Data System and the portal for ocean carriers to 
submit electronic crew manifest data to both Coast Guard and Customs 
and Border Protection through a single interface, but additional 
opportunities remain unexplored. For instance, CBP and the Coast Guard, 
along with various other agencies require ship operators or their 
agents to submit advance notice of vessel arrival and departure (NOA/
D). MISNA has suggested that Coast Guard share information on notices 
received through the electronic NOA/D port back to maritime exchanges, 
similar to the way CBP will share cargo manifest data with port 
authorities or exchanges. This information can be integrated with and 
displayed as part of ASVTS, and it could improve some of the 
difficulties I described above with regards to trade facilitation.
    There have been many questions about how MISNA's vessel tracking 
system compares to the Long Range Identification and Tracking (LRIT) 
system being developed by the International Maritime Organization (IMO) 
that is scheduled to be fully operational in 2009. In short, IMO's 
system will fall short of MISNA's system in several areas, especially 
in light of the fact that MISNA's system is operational today and has 
been proven time and again during the past five years. Here is how the 
two systems differ:
         The IMO system imposes limits on what information 
        contracting governments are entitled to. The past position 
        reports and vessels' voyage histories are not provided and 
        information will be restricted to when the vessel first makes 
        notification, which is typically 96 hours before arrival or 
        approximately 2,000 miles offshore, depending on the vessel's 
        speed. MISNA's system provides global tracking information that 
        can reveal past history and identify prior port calls of 
        concern and/or anomalies in a voyage.
         The IMO system will be funded by the government at a 
        cost yet to be determined while MISNA's voluntary system is 
        paid for by the marine industry saving the government millions 
        of dollars every year.
         The IMO system will not share information on vessels' 
        locations with the maritime industry. If the maritime industry 
        does not have access to this information, how can vessel 
        operators improve the efficiency of maritime operations with 
        respect to safety, commerce and environmental protection?
    In summary, each commercial seaport in the U.S. has a different 
combination of geography, governance, operating rules, ownership and 
mix of activities. MISNA has developed a firm grasp of this complicated 
picture and provides an institutional memory at each of the ports where 
it has a presence while providing an environment of information sharing 
that helps the industry to work together more effectively and enhance 
the activities of its government partners.
    MISNA's vessel tracking, display and reporting capabilities are 
already significantly enhancing maritime domain awareness in a way that 
provides increased security and promotes efficient trade facilitation, 
but MISNA has the capacity to offer much more. MISNA's vessel tracking, 
display and reporting capabilities are supported by the maritime 
industry; they are cost effective; and they are ready to go right now. 
With these capabilities, MISNA can help the Department of Homeland 
Security and the Coast Guard accomplish its stated goal of ``achieving 
an unprecedented level of information sharing and intelligence 
integration.'' We look forward to continuing to work with Coast Guard, 
CBP, MARAD, ONI and other agencies to explore opportunities designed to 
meet our mutual goals of improved homeland security and facilitation of 
commerce.
    I would like to thank you, Ms. Chairwoman and Members of the 
Subcommittee for the opportunity to testify today on behalf of the 
Marine Exchange of Southern California and the Maritime Information 
Service of North America. I look forward to answering any questions you 
may have.

    Ms. Sanchez. Thank you, Mr. Aschemeyer. We will make sure 
that the printouts that you have there are in the committee 
record.
    I will now just ask a couple of questions. I know we are 
pressed for time, and I want to give some more time to my 
fellow colleagues.
    Mr. Aschemeyer, why does the Marine Exchange exist? Why are 
you in place? Why do you already have this system in place?
    Mr. Aschemeyer. The Marine Exchanges have been around in 
many cases since the 1800s. We are the respected and trusted 
honest brokers of maritime information on the waterfront. We 
are the maritime information clearinghouses. If you need to 
know anything about a ship--where it came from, where it is 
going from, who owns it, who operates it, what kind of cargo is 
it carrying--we are that person that does that.
    But we saw a real need from a commercial viewpoint to 
improve port security, but also to enhance the flow of 
international trade. There have been instances, for example, 
where the NOA system, the ship misses its window by 6 hours. 
The ship has to turn around and is held outside of 12 miles 
until they sort it all out. We don't do that with airplanes. 
Airplanes come in, and if they get a tailwind and they are 
early, they don't circle them for 1 1/2 hours and say, ``We 
can't land because you said you were going to be here 1 hour 
later.'' They let them land.
    If you are tracking a vessel from point A to point B and 
they have nothing to hide, and you know exactly where they have 
been, and you know exactly what they have done, that is the 
kind of efficiency we are trying to achieve. But also, it would 
greatly enhance port security. It would greatly enhance 
maritime domain awareness.
    Again, this system is ready to go. Now, with all due 
respect, the Coast Guard has done a tremendous job. As Winston 
Churchill once said, ``Never have so many owed so much to so 
few.'' I mean, they have really been called upon to do a lot. 
But by their own admission, they need partnerships to enhance 
what they are doing. They are trying to leverage their assets. 
They are trying to leverage what they do. And we are here to 
help them do that.
    Ms. Sanchez. Thank you, Mr. Aschemeyer.
    Mr. Sundet, you don't like the TWIC program much.
    [Laughter.]
    Mr. Sundet. Well, I think that--
    Ms. Sanchez. Why don't you think we should put it in?
    In the overall aspect of it, my understanding is that 
when--I don't know when--but when we get this done, somebody 
that is up in Oakland or down in L.A. that worked yesterday in 
the Port of Long Beach can go up to Port Hueneme with the same 
card and have access onto the premises. And that this is going 
to be required for everybody who wants access onto the ports of 
California, for example, whether it is a truck driver or a 
longshoreman or somebody else.
    Why don't you think it is going to work?
    Mr. Sundet. How much time do you have, Congresswoman?
    [Laughter.]
    Ms. Sanchez. You have about 2 minutes to answer that 
question.
    Mr. Sundet. Well, I am not sure it is going to work quite 
like that. I think that the industry is far too complicated 
than that. I don't see it working. But I don't want to go back 
and argue over so-called ``spilled milk.'' I mean, the TWIC 
system is what it is and we are going to support it and try to 
get our people 100 percent enrolled in the process.
    But I think that I agree with the previous speakers, the 
TSA and so forth. They need to take their time and do it right 
so that people aren't without work for any period of time, and 
that it actually works. We will see if it is going to work. I 
don't think that is the clear emphasis on what we are trying to 
do. It is easy to focus on that because that plays good to the 
public and the public feels good that something is being done. 
It is similar to an airport situation.
    But the real problem is with the cargo and looking at what 
is inside that box, whether it is really locked, whether that 
seal means anything, and what has happened to it en route. And 
we are not spending resources on that of any significance 
because industry doesn't want that to happen. It is not 
happening.
    And so if you look at it just from an airport analogy, we 
put this perimeter around the airplane and we check everything 
that is going to go onto the airplane. We check people. We 
check cargo. The main reason is we don't want somebody 
hijacking the plane, or we don't want a bomb on the plane. But 
what we are doing with our terminals is we are not doing that. 
We are bringing the cargo in and then maybe we are checking it 
on the out-gate. Maybe. That is a maybe. Okay?
    So you take it back to the airplane situation, it is kind 
of like putting the bomb on an airplane, flying the airplane to 
its destination, and then when the airplane has landed and 
everybody has come off the airplane, then check them. It is 
kind of what we are doing.
    Ms. Sanchez. Okay.
    I just remember back to Chief Cunningham's comment about, 
and he used to be the chief of Los Angeles Port, when he first 
testified before this committee 3 years or 4 years ago now, 
where he said, ``There are three things you need to worry 
about: What is in the container, what is in the box; and two, 
who is on the port, who is actually there; should they be 
there; and three, are all these different layers of different 
agencies and everything actually talking and working 
together?''
    So I respectfully disagree in this instance. I think that 
that number two needs to be done, and I think that the TWIC, if 
we can get it correct, is hopefully going to make the lives of 
your longshoremen better.
    Mr. Sundet. I don't think that we are disagreeing, 
Congresswoman. I think it just has a marginal positive impact. 
I think that right now, there is too much focus and too much 
influence on getting that done yesterday, when it is a very 
difficult problem for all kinds of different reasons, and we 
are not spending even equal resources on the other end.
    Ms. Sanchez. Oh, believe me, I am getting on the department 
about C-TPAT and containers initiative and all of those. We are 
working on them also, Mr. Sundet. Don't think we aren't.
    I am going to let Mr. Souder ask his questions for however 
much time he may consumer, realizing he has one colleague 
behind him who is waiting to ask questions also.
    Mr. Souder. I want to say I agree on the seals. That is a 
huge question that often gets overlooked. The bottom line is 
you can do pre-screening in Singapore, you can do screening on 
the ship, you can have screening at the place, but if the seal 
can be altered, you can go in at any place.
    I have to go catch a plane. I am going to yield to Mr. 
Bilirakis. But I wanted to say this, having been a staff 
director, a staffer, a chairman and now a ranking member, I 
know it gets frustrating to our witnesses. You come in from a 
long way and you do 3 minutes and everything seems to go. Just 
know that you generated this book on our side and a similar 
thing on the other side. Your statement has been dissected into 
pieces to generate pages of questions.
    There are eight people who got to comment on this, and 
maybe with a few more hearings, there will be 20 in America 
that get into this. You are in a very unique group. We 
appreciated each of your testimonies today because it adds to 
it, because it gave us a diversity to it.
    Our staff, having been a staffer, we go around like ADD 
people, from thing to thing, but all of it mattered a lot on 
this and it was very helpful for us to get an overview today.
    With that, I am headed to an airplane, and I am going to 
yield to Mr. Bilirakis.
    Thank you.
    Mr. Bilirakis. Thank you, Mr. Souder. I appreciate it.
    Thank you, Madam Chairwoman, for having this committee 
hearing.
    Ms. Sanchez. We will actually recognize you for 5 minutes 
if you would like.
    Mr. Bilirakis. Thank you very much. I appreciate it. Thank 
you.
    Mr. Wainio, I have a few questions. What is the Tampa Port 
Authority's number one port security concern, in your opinion?
    Mr. Wainio. As we have noted before, the number one concern 
that we have at this time is with port access credentialing. We 
strongly support port access credentials. I disagree slightly 
with my colleague here from the industry. I do think port 
access credentials do serve an important purpose. Keep in mind 
that there are two elements, basically, we are talking about. 
One is terrorism. The other is criminal activity.
    Florida has had port access credentials in place for many 
years. Before 9/11, they had a law that required access 
credentialing, and then they came along with the FUPAC 
requirement as well, that they were pursuing. And now TWIC is 
coming down the pike. So we do believe in it. I think any 
industrial facility that serves as an entry point, as ports do, 
has to limit who goes on and off for a whole series of reasons.
    We are, of course, extremely concerned over the potential 
for Florida ports to end up with two access cards. We think 
that would make security more difficult. It would not help. It 
would hurt security. As has been noted, it will be extremely 
costly for Florida, with millions of dollars in dual card 
readers unless they are able to do something about that. As was 
mentioned by a previous witness, they are working on trying to 
get one card reader to work. At this point, I don't think they 
have reached that point. It looks like if you have a FUPAC and 
a TWIC, you would have two separate systems, two expensive 
systems.
    We just think that that would be extremely burdensome. It 
would create competitive disadvantages for ports in Florida. 
Take a port like Jacksonville, which is on the Georgia border 
competing directly with ports like Charleston and Savannah, for 
the container trade. They have literally thousands of truck 
drivers coming and going from out of state, coming into 
Jacksonville, and certainly will in the future when they start 
moving a million containers or more a year, which is coming 
soon at that port.
    So that extra burden, that extra cost, the delays, 
everything involved in that duplicative effort will create 
significant competitive disadvantages by driving up the cost to 
use Florida ports. We think it is just unacceptable and we urge 
you, again, to insist that a solution be found to this problem.
    Mr. Bilirakis. Thank you very much. So you are saying it is 
going to have a detrimental impact on commerce as well.
    Mr. Wainio. On commerce and it will not augment security in 
any substantial way.
    Mr. Bilirakis. Do you have any thoughts or suggestions on 
how federal and state officials in Florida might resolve the 
discrepancies between their respective port access control 
credentials?
    Mr. Wainio. I am not really able to give you the answer to 
that. I know that in Tallahassee and, as was noted before, all 
of the people that are working on it--Mr. Sadler from the TSA 
working with Colonel Janes of the Office of Drug Control in 
Florida--all say we want one card. Everybody agrees we should 
have one card, but integrating the Florida criminal data 
systems with what the federal systems are doing apparently is a 
hurdle at this point. They need to find a way to do that.
    Our goal, again, is one card. We don't really care how they 
arrive at that, but I do understand that the main hurdles do 
have to do with the criminal background checks and the 
integration of the data. For example, if you violate the law in 
Florida--and Florida would not be unique in this case, in any 
state--and you have done something wrong in the state, it may 
not be in the FBI database. That, Florida says, is a problem.
    So some steps have to be taken by the state, I assume, to 
find a way to provide that data to the federal authorities so 
they can incorporate it into the background checks that TWIC 
does. Again, this is not just unique to Florida. Other states 
apparently do not provide the data to the federal entities as 
well on a lot of local crimes.
    Mr. Bilirakis. I know you touched on this in your opening 
statement, but could you talk about the current container 
security procedures in place in the Port of Tampa?
    Mr. Wainio. Yes. We are new to the container business. We 
just started. We built our first container terminal last year 
and we just started to receive ships every week direct from 
Asia, China, Korea, Japan, coming into our port. We expect that 
business to grow geometrically over the next few years, and 
expect to be moving hundreds of thousands of containers on an 
annual basis.
    Our port, like most Florida ports, is ahead of the curve on 
security. We have had radiation portals in place for a number 
of years, and 100 percent of all the containers that arrive are 
checked. I agree with Mr. Sundet that in some cases, some could 
clearly argue that checking for radiation once they arrive and 
leave a port is a little bit late, but it is done.
    We also think that Customs and Border Protection is very 
effective in the way that they are doing visual searches of the 
containers. They clearly screen the manifests. We have a new 
CES system--customs examination station--and they do pull all 
high-risk containers over to that CES and they de-van them, 
strip them down, and search them. So we think the security that 
is being accomplished related to containers at the Port of 
Tampa is quite good. Again, we have a small number of 
containers at this time.
    As I indicated in my remarks, both the prepared and the 
oral remarks, I do believe, as I think everyone in this room 
probably does, that more of that screening and scanning needs 
to be done overseas, and that should be the primary focus on 
the effort.
    Mr. Bilirakis. Is the federal funding for the security 
adequate, in your opinion?
    Mr. Wainio. Well, certainly nationwide, I don't believe so. 
I think it falls short in many areas. In the state of Florida, 
as I can speak directly for Tampa and Florida, over the last 5 
years we have spent literally hundreds of millions of dollars 
on security infrastructure, most of that has come from our own 
pockets. We have done better than most States.
    What it means is that we have had to transfer funds that 
would have been used for commercial projects needed to expand 
capacity and improve productivity. We have had to shift 
millions of dollars from that into security projects. Now, we 
need to start finding money to do those commercial projects 
that have been sitting there for years undone. We do have a 
primary mission, and that is to move international trade. If we 
don't focus our resources there, we are going to start to see 
more and more delays and problems, and costs obviously will go 
up to the consumers.
    Mr. Bilirakis. Thanks very much. I appreciate it very much. 
Thank you.
    I yield back, Madam Chairman. Thank you.
    Ms. Sanchez. I thank the gentleman from Florida.
    Let me just ask a quick question of Mr. Sundet, and then 
Mr. Cummings. I would hate to have you come all the way and not 
get a question off of us.
    Mr. Sundet, the empty containers coming from land-side, do 
you have any idea how many there are? How long they stay? If I 
should worry about these at all, when they are sitting out 
there in the ports?
    Mr. Sundet. I can't give you an exact number, but there are 
lots of them. There are lots of them.
    [Laughter.]
    Ms. Sanchez. Especially in L.A., right?
    Mr. Sundet. Especially in L.A. They stay at different 
intervals because they are taken onto vessels when there is 
room for them. Usually, they are dropping off a vessel and if 
they have room, they take as many empties as they can, because 
they need empties to bring imports back, and imports are what 
is moving the trade here. There is a huge imbalance between 
imports and exports.
    We have always advocated, and we have had different ideas 
on how to deal with empties, but it is a very vulnerable point 
because too often we don't look at the domestic side of this 
thing, whether it be an empty container or even an export 
container that is coming, you know, a potential export 
container on the domestic side is not looked at.
    I personally think that there is a significant threat of 
some kind of thing, you know, depending on what the scenario is 
that you are looking at. Say, for instance, you are going to 
blow up a ship in the channel, for instance, in the L.A. 
channel, it would be a threat. It might be easier to do that 
from the domestic side than it would be from the import side, 
or from overseas.
    Ms. Sanchez. Thank you, Mr. Sundet.
    I think Oklahoma always reminds us that sometimes we have 
our own born terrorists right here in the United States, and we 
don't look at them.
    Mr. Cummings, the last question: What is the most 
significant security challenge that your port faces today?
    Mr. Cummings. I would probably refer back to what Noel 
Cunningham said. There are three basic areas. I think all three 
of them we have to continue to work aggressively. At the Port 
of L.A., we have to keep working on building our security 
infrastructure to get our ports secure, and that is the grant 
projects that we submit for. We get some grant money and we do 
engineering and contracting. We build the systems out.
    I think in our estimation, between myself and my 
counterpart in Long Beach, we are somewhere just over the 
halfway line in terms of the projects that are on the drawing 
board. We have another set of projects that have been 
identified and that need to be funded, and go through the same 
process of engineering and contracting.
    In terms of cargo security, clearly a critical concern of 
ours. As you know, we move 43 percent of the nation's cargo. We 
see more containers than the rest of the country put together. 
We would advocate strongly, as my testimony included, 
increasing security, increasing cargo screening overseas. I 
mean, we really feel like if the mission and the objective is 
to protect the port, as has been stated across the panel here, 
to protect the ports you have to screen overseas.
    Screening and the measures taken in the port protect the 
supply chain beyond us. They don't protect the port. And that 
has to be clear. That has to be a clear part of this 
discussion. There are reasons to do different parts of the 
security puzzle at different places, but you have to be clear 
on what you are accomplishing.
    So cargo security done in the port of L.A.-Long Beach 
protects the rest of the supply chain, and that is a worthwhile 
mission, but it doesn't protect the port. You have to screen 
the cargo overseas and then you have to have a supply chain 
security methodology with seals and monitoring that you have 
some confidence in, that you have a lot of confidence in.
    Ms. Sanchez. Excuse me.
    Do you agree with that, Mr. Sundet?
    Mr. Sundet. Yes.
    Ms. Sanchez. I am just trying to get management and labor 
here to agree on something.
    Mr. Cummings. Actually, we agree with our longshoremen all 
the time. We are very closely aligned in terms of port 
security.
    Ms. Sanchez. I know you use them quite a bit for some 
information.
    Mr. Sundet. We have an excellent working relationship with 
the Ports of Los Angeles and Long Beach, I think.
    Mr. Cummings. And I guess lastly is the TWIC program. 
Again, as we stated, we think that it is critical. We do need 
to know who is on the terminals and we need to not have people 
on the terminals that have no business being there and that are 
not known people, and have had at least a check on some basic 
fundamentals of who they are--not an in-depth security check, 
not like getting a classified clearance, but some basic 
fundamentals.
    We basically agree with the way the regulations came out in 
terms of what is the criteria for a TWIC card. That, we think, 
came out just about the right kind of checks for this level of 
security.
    So I guess the answer is kind of all three. As Noel pointed 
out 3 years ago, we still have to pursue all three areas.
    Ms. Sanchez. Thank you.
    Okay, gentlemen. As my ranking member said, we really thank 
you for coming before us today. I know this second panel got 
shortchanged, but we have, will, or at least staff will read 
your testimony. It has been dissected. We will think about it, 
and of course we will probably have some follow-up questions.
    The members of the subcommittee, if they have additional 
questions for the witnesses, we will ask you to respond quickly 
to those so that we can move forward.
    This will not be the last time that we take a look at how 
the SAFE Port Act is being implemented. As I said, as a finance 
person, I like to continue to check and make sure what is going 
on. If you have any other comments that you didn't get in your 
testimony, please get them to our staffs and we will move 
forward.
    Again, I thank you.
    Having no further business, this subcommittee stands 
adjourned.
    [Whereupon, at 3:07 p.m., the subcommittee was adjourned.]

Appendix I: Change in Number of Staff Performing Customs 
Revenue Functions
    This appendix provides information on the number of staff in 
specific customs revenue functions positions from the creation of the 
Department of Homeland Security (DHS) until late in 2005. The change in 
the number of staff in customs revenue positions and their associated 
support staff varies by position. Figure 3 shows the change in the 
number of staff in customs revenue positions; figure 4 shows the change 
in the number of associated support staff.



Note: Number in parentheses is the 
mandated baseline staff level for each 
position.


Related GAO Products:

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