The Interior Department is abandoning its plans to be a shared-services provider (SSP) under Homeland Security Presidential Directive-12.
Agency officials said they decided June 18 to give up on providing smart card credentialing services to more than 26 agencies after Interior couldn’t lower its price per card enough to be competitive with the General Services Administration. GSA now will be the only federal SSP.
Doug Bourgeois, director of Interior’s National Business Center, which would have run the SSP, said the department signed up only about 100,000 customers, but needed about 300,000 to lower the card price enough to be competitive.
“We didn’t get volumes to ensure our costs were as economical as we thought it could be,” Bourgeois said. “Also from a risk standpoint, we think we would have, over time, mostly achieved the volume necessary, but when? There is risk until you achieve that and then the question became why take risk when there is GSA?”
Bourgeois added that Interior’s cost per card was in the $150 range. GSA announced earlier this week that agency customer costs per card would be about $82 for the first year, which included the card and 11 months of maintenance.
Interior wanted to compete with GSA based on its involvement in providing human resources services to a number of agencies. To set up its SSP, the agency hired IBM under a five-year, $41 million contract in October 2006.
Interior spent about $1.7 million on a proof of concept. Bourgeois said the prototype worked, but the other factors — cost and risk — forced officials to change their plans.
Bourgeois said the business center will work with its current customers to help them decide whether to transition to GSA or implement HSPD-12 on their own.
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