Forbes.com

Bidding for Biometric Riches

January 13, 2004
By Penelope Patsuris

NEW YORK - The rich business of protecting America against terrorists is about to get a lot richer.

On Jan. 22, bids are due for a U.S. government contract that could be worth up to $20 billion over five to ten years. Three consortiums are competing for the chance to build out the Department of Homeland Security's U.S. Visitor and Immigrant Status Indicator Technology (U.S. VISIT), which officially launched on Jan. 5. The program, currently in place at 115 airports and 14 ship terminals, requires most foreign visitors who don't have immigration visas to be photographed and have their fingerprints scanned. These data are then compared against a government database of possible terrorists and people with criminal histories.

While the government-issued request for proposal puts the cost of the program at $10 billion, a spokeswoman for the Department of Homeland Security admits that industry estimates forecasting a total closer to $20 billion may very well be on the money. "I think it's going to be a dynamic figure," she says. "[The project] needs to be scalable. We need ability to upgrade it, and it could even change according to the [terror] threat."

And this is just the beginning, which is why the stakes are big for bidders. "This is very important," says Richard Fogel, director of strategic initiatives for Lockheed Martin, which is leading a team vying for the project. "It's the first major procurement out of [Homeland Security], and we want to set a precedent for us." The contract is to be awarded in May.

The U.S. Homeland Security contract is likely to be the first of many. "The market for biometrics is enormous, for reasons well beyond U.S. VISIT," says Jane's Information Group analyst Chris Yates, who adds that many other countries are moving toward implementing similar programs. "Places that are also on the front lines of terrorism, like the U.K., Western Europe and Australia, lag behind the U.S. in this technology, but it will come," he says.

Lockheed's consortium includes IBM, Harris, Unisys and SI International, among others. Computer Sciences is working with Electronic Data Systems. Consulting outfit Accenture has its own team that includes Raytheon, Dell and AT&T.

The group that lands the project will be charged with expanding the current entry system to U.S. land border crossings and implementing a corresponding exit system. A big part of the job will be merging the many different databases (and technologies) that the government uses to track immigrants and criminal suspects, as well as "people of interest." Also on the docket: getting biometrics into U.S. consulates and embassies abroad so that travelers can be fingerprinted and entered into the U.S. database when they apply for visas and passports.

The push for biometrics could give a boost to plenty of other outfits beyond the major bidders, according to Raj Nanavati, a partner with the New York-based International Biometric Group, a consulting firm working with the White House's Office of Science and Technology Policy.

"Everyone wants to know if they should invest in fingerprint technologies," says Nanavati. Unfortunately, Cross Match, the company that makes the fingerprint scanners primarily being used by U.S. VISIT, is private--so far. Another biometric outfit, Identix, isn't involved in U.S. VISIT, but it did land a purchasing agreement with Homeland Security in September. The contract is currently being contested by a competitor.

Only a handful of companies, including NEC and a unit of Motorola, make the fingerprint-matching software, according to Nanavati; U.S. VISIT relies on privately held Cogent.

As more biometric systems are installed in both the public and private sectors, Nanavati expects to see iris scan technology take off next. "Iris recognition is still relatively difficult to do," he says, "but many experts think it's the most accurate identification method around."