Diamond Provides 90-Day Action Plan for States to Follow in Issuing Driver's Licenses, ID Cards in Compliance With Real ID Act Anti-Terrorism Measures
May 2008 Deadline Puts Pressure on State Departments of Motor Vehicles to Make Progress
CHICAGO, Nov. 2 -- Proceed with caution, but don't wait: while the road ahead for states racing to comply with the federal Real ID Act is has some potholes, there is an actionable roadmap the states can follow to make progress now, according to Diamond Management & Technology Consultants, Inc. .
The Real ID Act requires that the states, by May 11, 2008, meet stringent requirements in confirming the identities of applicants seeking a driver's license or state identification card. Among the requirements, applicants must provide state agencies with proof of identity, date of birth, address of principal residence, a social security number and evidence of lawful presence in the U.S. Complicating matters is the need for states to confirm that a person holding a driver's license issued by another state has terminated that driver's license before issuing a valid Real ID Act license.
"The challenges states face in providing some 245 million individuals with new driver's licenses will significantly alter the process citizens go through at the Department of Motor Vehicles and the sophisticated technology that supports those processes," said Chris O'Brien, a partner in Diamond's Public Sector practice. "But even though the states are still waiting for additional guidance from the Department of Homeland Security, there are steps the states should be taking now if they have any hope of meeting the 2008 deadline."
Diamond has published a new report, "Real ID - The Art of the Possible," that details the process, technology and regulatory challenges states face in complying with this anti-terrorism legislation. The report also includes a 90- day action plan that states can undertake now to prepare for the new regulations. A complete copy of the report is available upon request via an e-mail to: RealID@diamondconsultants.com
Major Roadblocks
The process of applying or re-applying for a license or ID card is in for a major overhaul. States will need to review their current processes for verifying a renewing applicant's information. The increase in workload, not to mention the time applicants spend waiting in line, is expected to put a major strain on the states' Departments of Motor Vehicles.
The employees who manufacture or produce driver's licenses and ID cards will have to get security clearances and training to learn how to spot fraudulent documents.
States will need to retain paper copies of source documents for at least seven years, or digital images of those documents for 10 years. States will have to ensure that they meet these stringent data retention requirements and will likely have to invest in storage facilities or additional computer capacity.
States have the option of providing, on request, ID cards that don't meet the federal requirements. That eliminates some of the identification verification requirements for applicants who, for example, are sure they won't need to board a commercial airplane and therefore won't need a card for federal identification purposes. But it also forces states to create a two- tiered model that adds complexity and cost.
"On the technology front, additional investment is inevitable," said O'Brien. "Most states will require some combination of new identity and card management systems, including new infrastructure to confirm the validity of an identification document, such as a birth certificate, with the issuing agency. DMV facilities will require new card printers and cards with a standardized security feature, and devices to read cards and store digital documents.
"And as with any major information technology overhaul, untold hours in systems development, programming and testing must go on," O'Brien added.
The Cost and Effort Required for Compliance
Estimates about the costs of compliance are all over the map. At the low end the Congressional Budget Office estimated the combined costs to all 50 states at approximately $100 million over five years. Conversely, $11.1 billion is the estimated price tag in a report sponsored by associations representing state legislatures, state governors and motor vehicle administrators. The watchdog group Citizens Against Government Waste estimates that full implementation could run as high as $15 billion, pushing the cost of a driver's license to $90 or more.
"State Departments of Motor Vehicles will bear the brunt of the impact of the Real ID Act," said O'Brien. "Some states -- Virginia, New Jersey, Alabama, Texas and a few others -- are already upgrading their driver's license and ID card processes. But every state can start now to prepare and soften the impact of the impending requirements."
While the Real ID Act is still open to interpretation, Diamond's Public Sector Practice reports that there are prudent steps states over a 90-day period to make significant progress towards compliance:
-- Month One: Establish a Real ID Act (RIDA) Task Force comprised of team
members from business, technology, budget and policy disciplines from
the DMV, state technology office and other stakeholder groups,
including potentially citizens' groups. The task force's charter should
include interpreting RIDA requirements, assessing its legal and fiscal
impact, and developing findings and recommendations that can be shared
with lawmakers to amend laws, adapt policies and request additional
funding. The Commonwealth of Virginia, for example, established a task
force of major stakeholders and 14 of the state's agencies to produce
specific recommendations.
-- Month Two: Conduct Focused Task Force Working Sessions and Survey the
RIDA Solutions Landscape: The task force should identify the impact of
RIDA on several dimensions, including regulations, finance,
infrastructure, citizens and the business of issuing driver's licenses
and ID cards. For example, the Act renders current online renewal
systems obsolete because it requires a renewing applicant to appear in
person to confirm their identity. A scheduling system offered via
phone, the web, and at DMV sites can improve an agency's ability to
eliminate spontaneous crowd build-ups. States should also consider
offering a choice of compliant and non-compliant cards. Driver's
license and ID cards that don't comply with federal identification
requirements can still be offered online and offer consumers a choice
of greater privacy, faster issuance and lower cost.
Findings should include rough order of magnitude cost estimates. In
addition, the state task force should look outside its own borders to
other states and trade associations and other non-governmental
organizations to understand their experience with the compliance
process.
-- Month Three: Establish Tactical Focus and Assess Existing Technology.
With the key issues in sight, the task force can establish criteria for
prioritizing initiatives and identify alternative funding and new
revenue opportunities. It is not clear how much of the RIDA will be
funded by the federal government, but states will inevitably have to
shoulder a share of the load. Start planning for the possibility that
fees and fines may need to be adjusted and consider public/private
partnerships, as well as a strategy for legislative approval.
In addition, the task force should carefully assess existing
technology, including DMV systems and related IT infrastructure, to
determine which systems can be used as-is and which will need to be
overhauled. Start exploring ways of modifying existing processes and
technical infrastructure to comply with RIDA requirements while waiting
for additional funding and further clarification from the Department of
Homeland Security. Verifying source documents is one RIDA requirement
where manual intervention, such as web site searches and phone calls,
can be applied without major technology investment.
This is also a good time to assess the effort required to resolve
duplicate identities in DMV databases. The state of New York conducted
a data cleansing that uncovered tens of thousands of Social Security
numbers being used by multiple individuals. Removing duplicate
identities will minimize the application verification workload and
uncover fraud.
"We can't forget that the 9/11 terrorists fraudulently obtained valid drivers' licenses. Weaknesses in the current system must be addressed," said O'Brien. "But we must recognize that The Real ID Act presents a tremendous undertaking for the states. Success hinges on the Department of Homeland Security and the states collaborating to find a way of implementing its requirements in a fiscally responsible and risk adjusted manner."
About Diamond
Diamond is a premier global management consulting firm that helps leading organizations develop and implement growth strategies, improve operations, and capitalize on technology. Mobilizing multidisciplinary teams from our highly skilled strategy, technology, and operations professionals worldwide, Diamond works collaboratively with clients, unleashing the power within their own organizations to achieve sustainable business advantage. To learn more visit http://www.diamondconsultants.com/ .
Contacts: David Moon Media Relations +1.312.255.4560 david.moon@diamondconsultants.com Margaret Boyce Investor Relations +1.312-255-5784 margaret.boyce@diamondconsultants.com