"I can't give you the specifics I can't tell you why they lost surveillance on him … It happens, we prefer it doesn't happen, " said New York City Police Commissioner Ray Kelly.
Since Shahzad's arrest Monday, it's been unclear how tight the surveillance was of the accused bomber. And some have questioned why he was allowed to get on a crowded airplane where he might have injured passengers.
"My understanding was that he was lost for several hours and obviously he came very close to getting out of the country," said New York Rep. Peter King.
The lastest news contradicts a version given Tuesday by Attorney General Eric Holder who said: "I was here all yesterday and through much of last night and was aware of the tracking that was going on. And I was never in any fear that we were in danger of losing him."
As Axelrod reports, a surveillance team was watching Shahzad's house Monday and monitoring his e-mails and phone calls. They could have arrested him. But sources tell CBS News they held back, hoping to uncover leads to other possible associates and plots.
By late Monday afternoon, he drove away from his Bridgeport, Connecticut apartment. Sources tell CBS News the surveillance team lost him in traffic as he drove south toward New York's Kennedy airport.
Faisal Shahzad's Near Escape
The Pakistan Connection
Faisal Shahzad's Motive Shrouded in Mystery
"Unguided Missiles" Pose New Terrorist Threat
53 Hours from Times Square Smoking SUV to Arrest
How Close was Shahzad from Getting Away?
Shahzad's Connecticut Associates under Scrutiny