Utah wants the private sector to fund a smart card driver's license program in return for real estate on the chip.
The project could be a true example of multiple-application smart cards. A Sept. 17 deadline has been set for interested companies or consortia to answer the state's request for proposals, but it may be extended.
While other states - including New Jersey - are considering "smart" driver's licenses, Utah is "the first to get an RFP on the street," said Bart Blackstock, driver services bureau chief with the state's driver's license division.
"We recognize the value of putting a chip on a card to help bring us into the new financial world," said Mr. Blackstock.
Because the program could be expensive to implement, Utah decided to mine the private sector, in hopes that the prospect of 400,000 cards in the hands of consumers would lure payment companies, financial institutions, and processors.
"I don't know if there's any bidders," said Mr. Blackstock, "I wouldn't bet a nickel either way - it's a very expensive proposition."
Even so, the project piqued the interest of a long list of major corporations. A mandatory conference for would-be prime contractors on Aug. 6 attracted executives from the likes of American Express Co., Data Card Corp., Electronic Data Systems Corp., International Business Machines Corp., Schlumberger, First Security Corp., and Zions Bancorp.
The winning bidder or bidders may have to invest as much as $40 million for the opportunity to put loyalty programs, an electronic purse, and other functions on the card, said Keith Clayton, vice president of sales for Data Card, a card personalization company.
Though the project is too pricey for Data Card to lead the bid, the company will monitor the project, possibly joining as a subcontractor.
Industry observers said American Express, which has operations in Salt Lake City, is expected to bid within a consortium. Other consortia have been rumored to be preparing bids, though none want to tip their hands before the due date.
The cards, with eight kilobytes of memory, would be powerful microprocessors with room for several applications. The state would use two kilobytes for consumers' driver's license information, and would leave the rest to private businesses.
The front of the card will look like a regular license with a picture and a bar code. The back of the card would contain the chip.
Mr. Blackstock said that all squad cars eventually would have computers, putting information about drivers at an officer's fingertips. The system would provide more security, and would be less susceptible to counterfeiting and fraud. He said Utah, with a population of two million, is a manageable size for a test.
The state wants a contractor to provide the operating system, cards, and terminals. It will maintain the right to veto participants.
"The challenge with the state's RFP is how to make financial sense out of it," said Don Rowberry, product manager at Zions Bank in Salt Lake City.
Though Mr. Blackstock said companies could "make a ton of money," Mr. Rowberry noted, "having a card with a chip and no place to use it is a very expensive test."
Since consumers would be offered a choice of applications to put on the chip, education and promotion would be necessary as well. Mr. Rowberry said consumers may not want to put banking applications on their drivers' licenses.
The cards will cost nearly $8 apiece to manufacture, said Dave Dowdle, vice president and senior marketing officer at Salt Lake City-based First Security Bank. "We couldn't see income coming back to us in any way," he said.
Zions and First Security were the only financial institutions on the list for the prebid conference. Neither plans to make a bid.
