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Pentagon orders up smart chips
Scripps Howard News Service


May 01, 2005

Washington - Smart chips are going to war.

The Pentagon, which lost track of $1.2 billion in weapons and supplies in 2002 sent to the front lines of Iraq, announced Thursday that it wants to require contractors to switch from using bar codes to new radio frequency identification chips, known as RFID, on weapons parts and supplies.

The plan is to phase the technology in, beginning with the two largest supply depots in Pennsylvania and California. The chips will be phased in for the other 17 military depots.

The Pentagon, which initially hoped the technology would be ready this year, now is setting a 2007 date for using the new chips.

"The RFID market has stalled a little bit," said Kara Romanow, an analyst who tracks the technology for AMR Research in Boston.

She said the Pentagon has been forced to scale back ambitious plans for using the technology because smaller manufacturers have been reluctant to spend the $13 million to $23 million it costs on equipment to integrate the chips into their manufacturing processes.

"There's no return on investments - they get nothing back," Romanow explained.

In announcing its proposed rules Thursday, the military said the technology will provide military supply clerks with the capability of "immediate, automatic and accurate identification of any item in the supply chain of any company, in any industry, anywhere in the world."

Under the rules, non-profit organizations would also be required to use the chips, including charities that rely on the Air Force cargo planes to deliver disaster relief supplies.

The radio frequency chips are tiny, battery-driven radio transmitters attached to palates of supplies. When activated, they send signals to computers giving information on what the palate contains, when it was packed and other information that can speed the supply chain. Unlike bar codes, which have to be seen to be read, the tags provide information even if they are inside boxes buried under other equipment.

Uncle Sam is weighing many other uses for the technology including pasting the chips to the back of airline tickets to speed selected passengers through security lines

Privacy advocates are battling the wider use of the chips, contending they could be used to track people and their daily activities. Officials with the Transportation Security Administration acknowledged at a meeting with industry leaders that one result of using the chip technology would be to let security personnel "know people's whereabouts." One California school district also considered putting the chips on student ID cards until parents protested and the idea was shelved.

Privacy advocate Katherine Albrecht said she is concerned the Pentagon's action will speed moves in private industry to adopt the new technology before privacy issues are properly addressed.

Albrecht, who is director of the organization Consumers Against Supermarket Privacy Invasion and writing a book on the ID chips, said widespread use of the technology by business "will make a pipedream of consumer privacy."

Wal-Mart and other large private companies are demanding suppliers switch from bar codes to the chip technology because it's easier to track goods through the supply chain.

Tracking supplies has been a perennial headache for the Pentagon, and the Government Accountability Office has repeatedly taken the agency to task for the military's inability to track and locate weapons and supplies sent to the front lines.

In a report this month, the GAO said the documentation on palates of supplies sent to Iraq was so poor that GIs had to break apart the boxes to find the rubber shoes, tires and armor they needed for their vehicles. When they still couldn't find what they needed, the military cannibalized other military equipment to keep the war going.

There were similar problems in the 1991 Desert Storm operations.

The Pentagon tried using the tags in the deployment to Iraq, but the experiment failed. Some chips were dead on arrival, and not all of the shipments were tagged with chips. GIs in the field couldn't take advantage of the new tracking devices because they didn't have the right machines to read the information on the chips.

The investigators found "a discrepancy of $1.2 billion between the amount of materiel shipped to Army activities in the theater of operations and the amount of materiel that those activities acknowledged they received," but even the GAO said it couldn't determine where all the missing supplies went.

RFID Journal, an industry publication, says the Pentagon recently tested an advanced version of the tags that talk to satellites and found they could locate tagged packages of supplies even when they were placed in remote areas or at sea. The Army has spent more than $100 million over the last decade developing the new chips.


Contact Lance Gay at GayL(at)
Distributed by Scripps Howard News Service,

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