The Government Publishing Office’s eight years of experience in producing modern identification documents for agencies—from e-passports to Trusted Traveler border entry cards—generated sparks on Wednesday from lawmakers and private firms crying unfair competition.
“As government records move from print to digital, GPO finds itself in a challenge to remain relevant and necessary,” said Rep. Jason Chaffetz, R-Utah, as he opened a hearing of the House Oversight and Government Reform Committee. “One major change to its business model involves GPO supplying secure credentials containing radio frequency identification chips to government agencies handling our nation’s immigration functions. It is unclear, however, if those documents are both secure and functional.”
Also problematic is the way “federal departments and agencies can circumvent the full and open competition process and sole-source their secure credentials requirements to the GPO,” Chaffetz added. “This means that the American taxpayer does not realize the benefit of innovation and best price through the full and open competition process.”
Two representatives of private firms in the secure credentialing business warned of an “existential threat” to their survival presented by GPO’s entry into the field. “GPO doesn’t have the incentive or capacity to manufacture like the private sector,” said Kathleen Carroll, vice president for corporate affairs at HID Global, which makes voting cards among other identification products. “Congress needs to decide if it desires the innovation and expertise that only the provide sector can provide.”
James Albers, senior vice president for government operations for MorphoTrust, which manufactures most of the nation’s driver’s licenses, described receiving a letter from the State Department’s Office of Competition Advocate saying the department was now required under U.S. Code, Title 44 to shift passport production to GPO.
“There’s a belief that GPO enjoys a loophole in Title 44,” Albers said. “When you remove competition, you destroy capitalism.” The reason his industry invests in research and development and attends security-threat trade shows, he said, is both to stay ahead of the bad guys and to stay ahead of the competition. “When we make mistake, we bear the costs, but when government makes a mistake, taxpayers bear the cost,” he said.
GPO Director Davita Vance-Cooks stressed that agencies that order secure cards made at the publishing office’s secure site in Mississippi do “have a choice.” The agencies have a competitive option to outsource,” she said. ”We are a printer and secure card integrator, with an expert staff that partners with the private sector in consulting, design of equipment, and fabrication that creates thousands of jobs.”
GPO has produced 100 million e-passports for the State Department “without problems,” she said. Its business unit of only 27 employees accounts for $30 million in revenue in 2014, a “fraction of 1 percent of the global industry’s revenues.”
Vance-Cooks sought to refute what she says are common charges that agencies are forced to go to GPO for the cards and that GPO has a “sales team that goes door-to-door at agencies” seeking contracts. “We have account managers who take care of agencies, and we outsource all of our requirements,” she said.
Title 44 gives GPO certain authority because modern “smart cards” for identity verification are a printed product. “But I don’t believe we should be in charge of all credentials—we don’t have the capacity,” she said. “Some agencies desire that choice. In eight years, not one client has left us.”
When the State Department told the private firms that it was required to use GPO for e-passports, State must not have believed what it wrote, because if that were true, “we’d be doing all the printing,” Vance-Cooks said. Under prodding from Rep. Mark Meadows, R-N.C., she promised to send a letter to all agencies clarifying that no agency is required to use GPO for secure credentialing.
Rep. Gerry Connolly, D-Va., said he was puzzled by the private firms’ statements about being threatened, given the $80 million GPO spends on such work is only 4 percent of its overall budget. “GPO often turns to industry to competitively procure products to meet its needs. The few agencies that have relied on GPO have in fact reported savings, as GPO is only allowed to recoup its costs and does not make any profit,” Connolly said. The current set-up should be a “textbook opportunity” for private-public partnerships in maximizing quality and cost-effectiveness in producing secure credentials, he said.
GPO Inspector General Michael Raponi cited State and Customs and Border Protection confidence in GPO and the agency’s follow-through on 22 of 34 of his recommendations for improvements. He said he did find flaws in GPO’s acquisition process and intragency coordination of technology.
Rep. John Mica, R-Fla., attacked Vance-Cooks for expressing pride in her agency when the government’s Transportation Worker Identification Credential card is “a multi-billion-dollar fiasco.” A lack of thumb print and iris data render the cards worthless because the user needs a second form of identification, he said. “I’ve never seen a more screwed-up program,” Mica said.
Chaffetz also criticized the global entry card. He told Vance-Cooks she’d been “a good witness, and my confidence in you is up, but you are partly accountable for producing a product that serves no purpose but costs a lot of money.”
The committee, the chairman concluded, does “anticipate potentially rewriting the title 44 statute.” He told the GPO chief: “Your comments will go a long way toward making sure agencies know they have a choice.”