Published 12 December 2005

TSA shifts from looking for scissors and knives to detecting explosives in checked baggage and cargo carried on passenger planes, and companies offering new approaches and technologies benefit

We reported last week of the greater emphasis — much greater emphasis — the Transportation Safety Administration (TSA) is now placing on explosive detection at airports. One company to benefit from the shift is Bedford, Massachusetts-based Reveal Imaging (see story #7 below). Another Massachusetts company, Peabody-based imaging company Analogic (NASDAQ: ALOG) is also in the picture. TSA has just awarded Analogic a $3.8 million research and development contract to create computed tomography, or CAT scan technology, sophisticated enough to detect explosives in carry-on baggage. Reveal Imaging received a similar contract for $3.6 million, and then, last week, received an additional $2.5 million contract to develop CAT scan technology for commercial cargo shipped on passenger planes. Two months ago Reveal was awarded a $24.8 million order for more than seventy of its CT-80 devices to scan checked baggage.

Reveal, Analogic, and other companies in the space have much to work on. TSA says that more than one billion pieces of domestic checked baggage are screened a year. The state of the technology is such that an unacceptably high 30 percent of all scanned baggage alerts are false positives. The high false positive rate is not only time consuming; it is also disappointing because it occurs despite of the very expensive machines currently being deployed. Current explosive detection systems (EDS) come from L-3 (NYSE: LLL); they cost about $1 million each and require major construction (note that Analogic supplies the CAT scan technology for L-3’s machines). Smaller airports without the money to pay for the L-3 EDS still rely on old-fashioned manual swabbing for explosive detection.

Reveal Imaging and Analogic’s CAT scan technology are the only TSA-approved EDS. CAT scanners rotate 360 degrees and create 3-D images, which provide improved viewing relative to X-rays. Both Reveal Imaging’s and Analogic’s technology is bolstered with algorithms which measure the density and the atomic number of scanned objects. Among other players in the airport scanning industry include Hawthorne, California-based Rapiscan, a subsidiary of OSI Systems (NASDAQ: OSIS), and General Electric (NYSE: GE).

-read more in Danit Lidor’s Forbes report; for more of the detection products of the companies mentioned in the article, go to the Web sites of Analogic | Rapiscan

Analogic’s Cobra EDS

Rapiscan’s scanner

GE puffer machine