No slowing down for biometrics

Biometrics and identity solutions are spicing up an otherwise flat outlook for the government information technology market in 2009 and 2010.

Major initiatives already under way –- such as the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) and the Transportation Worker Identification Credential (TWIC) programs –- will continue to receive funding, biometrics experts say. And although the presidential transition might delay new projects, they predict the industry will continue to be relatively robust.

Overall, projects related to identity security are expected to total $2.4 billion in 2009, with a 2.4 percent annual growth rate that year and a 4.6 percent annual growth rate in 2010, according to a recent report by Jeremy Grant, a senior vice president and analyst at the Stanford Group Co. research firm.

Biometrics and other identity programs “should survive intact through the presidential transition, and the industry should continue to do well in the Obama administration,” Grant wrote in his report. “Still, the distractions of the transition — magnified by the economic crisis — will slow some projects and delay the creation of new ones.”

“I’m feeling optimistic about 2009,” said Randy Vanderhoof, executive director of the Smart Card Alliance trade group. “We will see programs already funded continue to move forward, and new programs on the drawing board will likely achieve reality.”

The Defense Department has been the biggest user of biometrics, mainly for military activities in Afghanistan and Iraq, he said. “They have reported significant benefits from the use of biometrics. Those lessons learned will translate into usage in many other applications.”

“The public side has had the lion’s share of biometrics funding to date,” said Victor Lee, a senior consultant at International Biometric Group. He predicts a $1.4 billion market for federal, state and local biometric projects this year. Although the economic recession might delay or weaken some projects, large biometrics programs, such as US-VISIT and TWIC, will not be affected much, he said.

“If anything, there may be a delay or lengthening of full implementation,” Lee said. “We are seeing a lot of ports adopting the TWIC, and that will not change.”

Funding challenges
The biometrics industry’s biggest driver in the next two years is likely to be DOD, which could account for $500 million to $600 million in contracts in 2009, Grant said.

The big question this year is how biometrics will be funded. Grant said he anticipates that, for the first time, several initiatives will be included in DOD’s annual budget instead of incorporated into supplemental war appropriations.

Furthermore, the so-called biometric bake-off will take place in the spring. The FBI is sponsoring that competition, which involves numerous vendors, on behalf of its huge Next Generation Identification contract.

Other major programs contributing to the growth in identity solutions and biometrics are Homeland Security Presidential Directive 12, the Real ID Act of 2005, the U.S. Passport Card and enhanced state driver’s licenses.

Grant described the Homeland Security Department’s US-VISIT program as “troubled but still spending gobs of money.” DHS has been spending about $400 million a year to capture fingerprints of foreign visitors to the United States. In 2008, it began raising the requirement from two fingerprints to 10, and in January, it extended the fingerprinting requirement to legal U.S. residents.

Congress has criticized DHS for not implementing a biometrics program that tracks visitors when they leave the United States. Although a land-based exit program has been stalled for some time, DHS officials said they hope airlines will work with the agency early this year to test a system for capturing visitors’ fingerprints on departure.

There will also be a push to complete programs such as HSPD-12, which involves issuing identification cards to federal employees and contractors, and TWIC, which involves providing ID cards to millions of transportation workers. Enforcement of TWIC requirements for about 750,000 port workers begins in April.

The Bush administration did not fund HSPD-12, and as a result, most federal agencies did not meet the October 2008 deadline for 100 percent compliance. However, the Obama administration is likely to be more interested in deploying HSPD-12 because of its cybersecurity aspects, Grant said.

Because cybersecurity is a top priority of the new administration and strong identity management and authentication are crucial to cybersecurity, it is likely that the administration will propose more funding for HSPD-12, Grant added.

Real ID dilemma
In May, the states will face initial deadlines to implement the Real ID Act, which sets standards for personal identification on state driver’s licenses and for sharing that information with other states. The act has been controversial, and the Obama administration has not indicated its position, but $130 million in state grant money is available to help with implementation.

Enhanced driver’s licenses in border states could be an entry point for Real ID because those states have agreed to integrate the program’s requirements into their licenses. Janet Napolitano, DHS’ new secretary, signed legislation to counter the Real ID Act when she was governor of Arizona. But she also agreed to a deal with former DHS Secretary Michael Chertoff that would have incorporated Real ID requirements into a hybrid driver’s license that could be used as identification when crossing the U.S. border with Mexico.

During her confirmation hearing, Napolitano said she supports Real ID as a concept but does not approve of it as an unfunded mandate.
Other identity programs to watch in 2009 include the e-passports program, which might be reopened for competition, states incorporating facial recognition into driver’s licenses and IT infrastructure upgrades.