"The Secretary of Commerce has approved Federal Information Processing Standard (FIPS) Publication 201, Standard for Personal Identity Verification of Federal Employees and Contractors, and has made it compulsory and binding on Federal agencies for use in issuing a secure and reliable form of personal identification to employees and contractors. The standard does not apply to personal identification associated with national security systems as defined by 44 U.S.C. 3542(b)(2).

Homeland Security Presidential Directive (HSPD) 12, Policy for a Common Identification Standard for Federal Employees and Contractors, dated August 27, 2004, directed the Secretary of Commerce to promulgate, by February 27, 2005, a Government-wide standard for secure and reliable forms of identification to be issued by the Federal Government to its employees and contractors (including contractor employees). HSPD-12 specified that the secure and reliable forms of identification to be issued to employees and contractors should be based on: sound criteria for verifying an individual employee's identity; strong resistance to identity fraud, tampering, and terrorist exploitation; capability of being rapidly authenticated electronically; and issuance by providers whose reliability has been established by an official accreditation process.

FIPS 201 was developed to satisfy the technical, administrative, and timeliness requirements of HSPD 12. The standard was developed in a “manner consistent with the Constitution and applicable laws, including the Privacy Act (5 U.S.C. 552a) and other statutes protecting the rights of Americans” as required in HSPD 12. In developing the standard, NIST used technical input solicited from industry and government participants in workshops and public meetings, and from a Federal Register notice (69 FR 68128) of November 23, 2004, inviting comments from industry and government on the draft standard."