GSA sets HSPD-12 price point

The General Services Administration has achieved its goal of lowering the cost of mandatory security credentials by awarding a contract to EDS. Under the contract, GSA will provide identity-credentialing services for the governmentwide program known as Homeland Security Presidential Directive 12. That contract, with its lower card costs, has forced other federal agencies, including the Interior Department, to stop and reconsider their plans for meeting the presidential mandate.Interior officials took a second look and decided June 18 to abandon their plans to offer HSPD-12 card services to other federal agencies. They decided instead to become one of GSA’s customers and use its HSPD-12 Managed Services Office (MSO). Interior had signed 26 agencies. Those agencies must now decide whether to transfer their HSPD-12 business to GSA or one of 32 government-certified companies that offer HSPD-12 card services.For the more than 42 agencies using the MSO, the cost of a card and a year’s maintenance of the card will be $82, which is nearly $20 less than GSA’s previously announced card price. “GSA put a number out there that will be tough to beat,” said Randy Vanderhoof, executive director of the Smart Card Alliance, which represents smart card manufacturers. “Now GSA has to deliver, and if they do at that price, it will be hard for others to stand up comparable organizations.” GSA said it was pleased that it could offer the cards at a lower cost. “There were a lot of happy people when they saw the price,” said Mike Butler, program manager of GSA’s HSPD-12 MSO. “The difference between $82 and $110 is a lot of money when you have thousands of people who need cards.”Agency and industry experts had mixed reactions to GSA’s price announcement.“We were hoping other factors would get us to a competitive rate,” said Doug Bourgeois, director of Interior’s National Business Center, which would have operated Interior’s HSPD-12 shared-services program. “We just didn’t achieve the volume we hoped to.” Interior has orders for about 100,000 smart card credentials, but it needed more than 300,000 to offer them at a price low enough to compete with GSA. Bourgeois said Interior had priced its cards at about $150 each.Some company officials questioned whether GSA’s true price point is $82 per card. GSA’s price does not consider the total cost across three years, which is the lifetime of the cards’ digital certificates, said an industry official who did not want to be identified. The industry official said, for example, that GSA is charging $82 per card for the first 11 months and then $36 a year for two years, making the total cost of the card $152. Other vendors are offering three-year card prices of $125 per card, the industry official said.Interior’s decision to step aside lowers GSA’s risk considerably, said a government official, who asked not to be identified. GSA is signing up new customers almost every day, including most recently the Transportation Department, the official said.“What will be good news for GSA is if the other agencies that are going at it alone look at the prices and start asking internal questions,” the official said.