BAGGAGE SYSTEM RECAPITALIZATION AND OPTIMIZATION
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1 BAGGAGE SYSTEM RECAPITALIZATION AND OPTIMIZATION Susan Tashiro, Deputy Assistant Administrator TSA - Office of Security Capabilities March 6, 2013
2 Agenda Prioritization for Funding Within EBSP Recapitalization Project Prioritization FY13 Recapitalization Overview ROI Analysis for Optimization Recapitalization Project Lessons Learned FY14 & Next Steps
3 Prioritization for Funding within EBSP
4 Recapitalization Project Prioritization EDS equipment is prioritized for recapitalization based on need as determined by three equally weighted factors: The number of downtime occurrences the equipment experiences The length of time of each downtime incident The age of the equipment Within an in-line system, once more than 50% of the equipment in the zone is considered high priority for recapitalization all of the equipment in the zone will be replaced It is possible and likely that not all EDS at an airport will be recapitalized at the same time given the performance-based prioritization process EDS recapitalization prioritization is conducted by TSA HQ and there is no action required of airports or local TSA to have equipment considered for replacement
5 FY13 Recapitalization Overview The recapitalization process has been modified for execution at an accelerated pace to ensure critical systems are funded for replacement while funds are available TSA is issuing two-phased OTAs to airports to support the design and associated facility modification efforts necessary to support recapitalization and/or optimization efforts Nearly all Design OTAs for FY13 projects have been executed Facility Modification OTAs will be executed following the 30% design approval If airports with planned FY13 recapitalization projects are unable to meet the timelines to support Facility Modification OTA execution by September 2013, the project will be considered for FY14, pending the availability of funding Any recapitalization project will also be considered for optimization efforts should a positive 10-year Return-on-Investment (ROI) for TSA be achievable and funds availability TSA will only consider optimization projects for zones identified for recapitalization
6 ROI Analysis for Optimization To conduct the ROI analysis the recapitalization baseline project is compared against the proposed optimization project to determine cost savings and cost avoidance potential to TSA over a 10-year investment period Estimated returns are typically based on: Expected reductions in number of EDS machines and associated maintenance, if applicable Expected reductions in TSO staffing, potentially driven by: Sub-optimal existing CBRA conditions Consolidated OSR and/or Screening zones for proposed alternative Investment = Upfront TSA capital expenditure for the optimization alternative ( Return Investment ) ROI (%) = Investment Return = Present Value (PV) of life cycle cost savings / avoidance relative to a recapitalization alternative over the selected investment period Based on the initial results of the ROI the airport may opt to increase its cost share to support a more favorable result
7 Recapitalization Project Lessons Learned Lessons learned from the Boston Logan (BOS) and San Francisco (SFO) recapitalization and optimization pilot locations: Establishing the Baseline It is imperative that TSA and the airport and airlines mutually define the baseline performance of the system prior to any recapitalization efforts commencing. Since straight recap is a replacement of the existing equipment, it is important that all stakeholders acknowledge the required system capacity and necessary growth that will be replaced and maintained through recapitalization. Temporary Screening Recapitalization and Optimization projects will require temporary screening for some locations for varying amounts of time depending on the complexity of the project and the phasing of equipment removal and replacement. TSA and the airport must agree to the approach for temporary screening and associated equipment requirements at the outset of the project. The project schedule should support time to properly install and commission the temporary screening equipment, and to allow airline operations to be adjusted adequately.
8 FY14 & Next Steps EDS recapitalization will continue to be a major focus for EBSP given the number of EDS in the field reaching or at the end of the projected useful life The modified execution process for OTAs will continue to be implemented going forward to ensure more efficient and effective execution of funds Airports are always encouraged to submit applications for new in-line systems but approval of projects are subject to: Positive 10-year ROI analysis Funds availability after recapitalization requirements are met for each FY PGDS is still the governing guidance for the design and construction of baggage screening systems, however; Appendix F (Reimbursable and Nonreimbursable Costs) will become a separate policy document published by EBSP and posted on the TSA website PGDS version 5.0 is planned for a Spring 2013 publication Any inquires about current or future recapitalization projects should be sent to CBTPlanning@tsa.dhs.gov
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