TSA considers sole-sourcing TWIC contract

Bill language steers contract to a group that ID management companies view as unqualified

The Homeland Security Department sparked industry consternation last week when it moved to revoke competitive bidding for part of a major transportation credentialing program and instead award a sole-source contract to a politically connected association with no experience in operating such programs.

DHS Secretary Michael Chertoff said April 25 that the department intends to start implementing the Transportation Worker Identification Credential program by this fall. The Transportation Security Administration will oversee TWIC, which will provide biometric security credentials for transportation workers.

“It is fundamental that individuals who pose a security threat do not gain access to our nation’s ports,” he said in a statement. “The name-based checks will provide an immediate security boost while we simultaneously complete the work to implement a secure national transportation worker credential.”

TSA published a presolicitation notice April 4 stating that it would seek a contractor to implement the TWIC program for 850,000 port workers. Then TSA issued another notice April 19 stating that it planned only to solicit bids for collecting participant information for enrollment in the program.

TSA appears to have changed its acquisition strategy for TWIC, said Gordon Hannah, managing director of BearingPoint’s security and identity management practice and program manager for the TWIC prototype phase, which the company developed. The only competitive bid opportunity appears to be for information collection, Hannah said.

DHS’ TWIC procurement strategy conforms to Section 528 of the 2006 DHS appropriations bill, which requires TSA to use the Transportation Security Clearinghouse (TSC) for TWIC’s identity management activities. The legislation also requires TSA to use the clearinghouse for its voluntary Registered Traveler airline passenger-screening program.

Despite its name, the TSC is not a federal program. It is run by the American Association of Airport Executives. AAAE is an industry lobbying group with close ties to Rep. Hal Rogers (R-Ky.), according to the Center for Responsive Politics and other sources.

As chairman of the House Appropriations Committee’s Homeland Security Subcommittee, Rogers inserted the requirement that TSC get the identity management contract into the 2006 funding bill, according to industry sources.

TSA spokesman Darrin Kayser said TSA is evaluating its options for the identity management portion of TWIC but is moving ahead with the enrollment part of the program. He declined to comment on AAAE’s ability to run identity management systems.

A TSA document that updates the status of the TWIC program this month states that the TSC will operate TWIC’s Identity Management System.

“TSA intends to enter into a contract directly with AAAE to ready the TWIC system for full implementation,” the document states. DHS’ decision to adhere to the language in Section 528 of the bill has angered companies that sell identity credentialing and identity-management services. “We’re in the middle of a firestorm,” said Walter Hamilton, chairman of the International Biometric Industry Association and vice president and general manager of biometric solutions at Saflink.

Companies with experience in identity management systems will be excluded from bidding on an important government program if TSA awards a sole-source contract to AAAE, he said.

Industry wants Congress to eliminate the proposed earmark and put the entire TWIC program out for competitive bids. Hamilton said DHS should be able to run the procurement without legislative meddling.

The Bush administration apparently agrees that the legislative language is problematic. Its fiscal 2007 budget proposal for DHS would remove Section 528 entirely.

AAAE officials could not be reached for comment.

Luck of the Irish?

Federal legislation that could give an airline industry association a sole-source contract for the Transportation Security Administration’s new biometric credentialing program for workers could also put most of the work — and money — in the hands of an Irish company.

Because it has only a handful of employees, the American Association of Airport Executives (AAAE) is too small to operate the Transportation Worker Identification Credential program, and its nonprofit status means it cannot earn a profit from the deal, said Walter Hamilton, chairman of the International Biometric Industry Association and vice president and general manager of biometric solutions at Saflink.

That is why AAAE formed a for-profit joint venture — the Security Biometric Clearing Network — with Daon, an Irish biometrics company, Hamilton said.

If a majority of the estimated 10 million transportation workers enroll, managing the program could be worth more than $1 billion.

“This is about Daon being handed a $1 billion program without fair and open competition” and both partners reaping the benefits, Hamilton said.

AAAE and Daon officials could not be reached for comment.

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