Dutch Company Building U.S. Passports, Partly in Thailand

My friend Ted Lane called my attention to this story reporting that the U.S. Government Printing Office (GPO) has been outsourcing the key security component in the new electronically protected U.S. passports to a Dutch company which does part of its manufacturing in Thailand.

The outsourcing raised security concerns among some experts who point out that Thailand has a history of political instability and "Muslim discontent." Apart from the fact that that last is code for the less politically acceptable Islamofascist term and that it represents an ugly attempt at using fear, this outsourcing does seem to me to be problematic on at least three fronts, with what scant information is now available.

First, there is a legitimate security concern here. It seems the Dutch are putting the chips into the passports and then sending them to Thailand for assembly. This means blank but secured U.S. passports are traversing numerous international borders and ending up in a country with lax law enforcement and the constant potential for a regime unfriendly to the U.S. taking power. How many thousands of passports could be confiscated in the process and what would the consequences be?

Second, the GPO says the Dutch firm Smartrac Technology Ltd., "was the only company in the world that produced a chip to store passport information that met the State Department’s standards." Having been around the block a few times, I can tell you what that means. It means that some lobbyist convinced the GPO and/or the State Department to issue a specification that only Smartrac could meet. Bureaucrats love those kinds of situations because it saves them the hassles associated with a competitive bid. I can't tell you how many times I saw that happen in my years in Silicon Valley.

Finally, it means that a technology that really should be developed by an American technology company will now probably not be. There wouldn't be a market for it. And you can bet your last tax dollar that somewhere in the U.S., more than one company was working on this problem because its solution was mandated by Congress in a piece of 2002 legislation.

The Bush Administration has been particularly inept at keeping American technology competitive as it has sought to run the government like a business. That is a favorite refrain of conservatives: run the government as if it were a business and things will be less expensive. Sure, and the only real beneficiaries will be those who run the businesses who get the juicy contracts -- many of them no-bid deals -- with the Feds.

Just another reason we have to rid D.C. of this corruption.