Roadblocks ahead for Real ID

By Ethan Butterfield

| February 9, 2007

Driver's licensing reform stalls without DHS guidance.

State & Local opportunities: Small steps for Real ID

Requests for proposals specific to Real ID have been slow to come out of states, but a number of current solicitations for motor vehicle work involve some form of compliance with the Real IID Act, industry officials said.

Opportunities for state and local integrators are on the rise, with some states looking at overhauling their motor vehicle systems. What's more, systems integrators eventually will see opportunities to build the large state databases and bridges between databases that the Real ID Act requires of them.

If Real ID comes out and mandates re-enrollment, you're going to see states need to go to an outsourced enrollment model."
?Jim Ebzery

But there are not many specific Real ID solicitations on the street at this time, said Scott Carr, executive vice president for Digimarc Corp. of Beaverton, Ore.

For now, states mostly are enlisting companies to upgrade to cards with better security features and considering whether they want to process applications in a
central facility rather than at the counter to review documents, he said.

Perhaps because states believe increases in driver's license security is a good idea, and perhaps because they think some form of Real ID is inevitable, they are budgeting to make improvements, said Jim Ebzery, president of secure credentialing for L1 Identity Solutions Inc. of Stamford, Conn.

"They are putting aside lots of money to do document verification and [data] capture," Ebzery said.

Many industry officials believe that if DHS doesn't voluntarily extend the May 2008 deadline for compliance, Congress will force them to do it to give states sufficient time to comply. That could spark a number of states to completely overhaul their systems.

The private sector may be able to bid on as many as eight or nine RFPs over the next 18 months to replace driver's license systems, Ebzery said.
"These are multimillion dollar deals that are five and even 10 years in length," he said.

Companies targeting these opportunities should expect to see Hawaii, Kentucky, New Jersey, New Mexico, Rhode Island, Vermont and Virginia come out with Real ID-related solicitations in the first and second quarters of 2007, said Saber president and CEO Nitin Khanna.

Among the technologies in greatest demand are facial-recognition solutions. Facial-recognition projects will happen in bunches over the next five years until most states have the technology, Ebzery said. Another hot opportunity is outsourcing the processes associated with issuing driver's licenses under any new guidelines, he said.

"That's an area that will be large over the next year to two years," he said. "If Real ID comes out and mandates re-enrollment, you're going to see states need to go to an outsourced enrollment model."

Ethan Butterfield

"If our personal privacy is not protected, and the burden placed on states is too great, I will not hesitate to pursue a legislative change to Real ID." ?Sen. Daniel Akaka (D-Hawaii)

Newscom

Like many initiatives the federal government passes down to states, the Real ID Act comes with plenty of baggage. Privacy concerns, insufficient funding and a lack of strong security measures may derail the 2008 deadline for states to comply with the law unless pending regulations from the Homeland Security Department satisfy the 110th Congress.

The act requires states to overhaul how they issue driver's licenses and to build a network to store and share information verifying the identity of hundreds of millions of driver's license recipients. Anyone who wants to enter a federal building or board an airplane would have to have a new driver's license that meets Real ID standards.

A sign that trouble may lie ahead is the introduction Dec. 11 of a bill by Sen. Daniel Akaka (D-Hawaii) and Sen. John Sununu (R-N.H.) that would add privacy and civil liberties safeguards to the act.

The Identification Security Enhancement Act of 2006 addresses what the two senators believe are key shortcomings in the act, and is intended as a warning shot to DHS that the heavily Democratic Congress may revisit the controversial
act if the department's long-awaited regulations governing the measure are not to its liking.

Akaka said that he hopes not to have to push the bill forward. "If our personal privacy is not protected, and the burden placed on states is too great, I will not hesitate to pursue a legislative change to Real ID," he said when the bill was introduced.

Blasted by state officials as an unfunded mandate when the Republican-controlled Congress passed it in May 2005, the Real ID Act has had its share of controversy.

In addition to Akaka and Sununu, other members of Congress also have threatened to hold hearings to investigate the intent of the law, privacy safeguards and implementation costs and schedule.

The Real ID Act was attached to another measure, the Emergency Supplemental Spending Bill of 2005, which provided funds for the military and for the December 2004 tsunami in Southeast Asia. The bill's sponsor, Rep. James Sensenbrenner (R-Wis.), in- tended the legislation as a way to help prevent terrorists from being able to get fraudulent identity documents.

DHS is creating regulations governing how states should implement the act. States expected the regulations in 2006, but they have yet to be issued.

Lack of progress

Further, DHS officials de- clined to say when they will be available. Industry officials expect DHS to issue draft regulations soon, but final regulations might not be established until mid-year, following a mandatory public comment period, they said.

States may not be able to meet the mandate to comply with requirements to overhaul their motor vehicle departments in less than 12 months, state officials and industry experts said.

"There are 240 million drivers in the country, and clearly [compliance] isn't going to happen by May 2008," said Gary Miglicco, vice president and national director for electronic government services for BearingPoint Inc., McLean, Va.

Among the chief concerns that Congress and citizens' rights groups have about the Real ID Act is its lack of security measures to protect the sensitive personal information that states will collect, store for seven to 10 years and share with each other, the federal government and law enforcement.

Not included

No measures were included in the initial wording of Real ID to safeguard that information or protect it from being sold.

"That scares the hell out of us," said David Williams, vice president for policy with the watchdog group, Citizens Against Government Waste, Washington. "We all want the country to be more secure, safer from terrorists, but we don't know if that huge database that is potentially hackable is going to protect the country at all."

How much Real ID will cost and how it will be paid for are two other issues central to the concerns of state governments.

A study published in September by the National Governor's Association, National Conference of State Legislatures and the American Association of Motor Vehicle Administrators pegged the cost of implementing Real ID at $11 billion.

Industry analysts say this is the most reliable estimate done yet. In introducing the bill he cosponsored, Akaka said the act "places an unrealistic and unfunded burden on state governments."

So far, the federal government has set aside just $40 million to help cover the costs of implementation, leaving states wondering how they will afford it.

About $6 million of that total has been budgeted for Kentucky and New Hampshire to run pilot projects testing a path to Real ID compliance. The money has not been allocated or spent, industry officials said.

New Hampshire officials, who contend that a national ID card is unnecessary, are considering legislation that presents a case for why the state should refuse to comply with the act.

From a practical standpoint, it could take states years to comply with the measures contained in the Real ID Act and the regulations issued by DHS, said BearingPoint's Miglicco. "It's going to cost states a significant amount of money [and] it will take years to get the systems in place to do this within a state."

Ethan Butterfield is a former staff writer with Washington Technology.

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