Pressure mounts to block TWIC sole-source award

Several U.S. biometric ID card companies are urging Congress to overturn a law that would award of a significant part of the upcoming Transportation Workers Identification Credential contract to a company backed by an foreign entrepreneur and casino owner.

Under a little-noticed provision last year, Congress required that the Homeland Security Department award a portion of the ID contract, known as TWIC, to a clearinghouse operated by the American Association of Airline Executives. Industry executives raised an alarm about that proposed contract last week, complaining that it was a sole-sourced, noncompetitive contract.

In addition, there is new information indicating that a subcontract for the TWIC work will be awarded to a newly created company that is a partnership between the airline executive association and Daon, an Irish biometric company financed by Dermot Desmond, who also is a director of Daon.

Daon's board of directors includes among its members former Homeland Security Secretary Tom Ridge.

Daon has an agreement with the airline group to be hired as a subcontractor for the TWIC contract, according to an article in the New York Times.

Walter Hamilton, chairman of the International Biometric Industry Association, said today that his group is working to seek a congressional sponsor for legislation overturning the original provision awarding the sole-source contract. The language was included in the Homeland Security Department's 2006 budget appropriation.

"The key point is the remedy for this," Hamilton told Washington Technology today. "We are actively looking for a sponsor for this, either on the House Appropriations or on the Senate Appropriations committee."

Hamilton said that while he does not specifically object to foreign ownership of companies holding U.S. government national security contracts, he believes the issue raises concerns. "I don't personally believe it's a security threat, but I know a lot of people are uncomfortable with it," he said.

His primary opposition is to the noncompetitive nature of the contract with the airline executives. "This is a critical information security program, and there are a lot of American companies that could do that work," Hamilton said.

The contract in question is for the identification management system database for about 850,000 port workers. The entire TWIC program is expected to encompass about 10 million transportation workers.

According to the Business Post of Ireland, Desmond has invested millions of euros in Daon since the company was founded in 2000 with offices in Dublin, London and Reston, Va. Daon is run by U.S. chief executive Tom Grissen.

According to the Daon Web site, the company's flexible identity assurance platform was used in TWIC testing in November 2004 at four sites in Pennsylvania, California and Florida.

The company's parent firm, Daon International, and ultimate holding company are both based in the Cayman Islands, according to the Business Post.