Baltimore firm tapped for Treasury's TCS

The Treasury Department has begun to buy key-management technology from Information Resources Engineering Inc. (IRE) to allow users to remotely access its nationwide network the Treasury Communications System.

The Baltimore firm is providing token-based encryption products including secure modems and key-management software under a subcontract to TCS vendor TRW Inc. Abe Schachter an electrical engineer with Treasury's Office of Telecommunications Management said Treasury chose the technology because it meets the department's requirements for hardware-based encryption using the federal Data Encryption Standard (DES) and supports multiple communications protocols.

Now for the first time remote users will be able to dial in to the network itself rather than connecting directly with specific systems Schachter said. That means wider access to agency applications by employees who travel or work at home.

The deal could bring IRE as many as 20 000 new users for its products which had been deployed by several Treasury bureaus - including the Financial Management Service the Customs Service and the Secret Service - before they were made available through the TCS contract. That could make the TCS subcontract IRE's largest federal pact to date said company spokeswoman Roberta Bowersox although it's hard to say how many units Treasury ultimately will purchase from the indefinite-delivery indefinite-quantity contract.

According to a Securities and Exchange Commission filing IRE posted a net loss of $2.7 million for the nine months ending Sept. 30. The company saw revenue increase 190 percent to $11.1 million during that period.

IRS Testing

The Internal Revenue Service has been IRE's main TCS customer so far purchasing $500 000 worth of equipment in recent weeks Bowersox said. The agency spent more than a year testing how IRE products would work on TCS before the deal was made according to Schachter.

Eight hundred IRS examiners are using the technology to help them research whether diesel fuel is properly taxed.When agents inspect gas stations or fuel trucks they use the public-switched network or cellular phones to connect to the TCS network and tap into central databases.

Sales to Other Agencies

Treasury approval of the products has also resulted in some sales to other agencies.

The Justice Department's Tax Division plans to purchase modems and key-management software through a separate contract vehicle for 350 to 400 tax attorneys who need IRS data for their cases said Dara Murray director of computer and information security for the agency.

"The Tax Division has to go by all IRS or Treasury standards" when using taxpayer information Murray said and she considers token-based encryption to be more secure.

"Even though [federal regulations] now say we can use software encryption no one is going to get past hardware " she added.

The products work like this: The user inserts a smart card with an encryption chip into his notebook or desktop computer and then enters a personal identification number. When the user dials into the remote network the secure modem generates a one-time password that is verified by the host system and encrypts the data that is being transmitted between the network and the remote site.