DAON, the biometrics company backed by the financier Dermot Desmond, has teamed up with a consortium led by the weapons manufacturer Lockheed Martin to bid for a $1.4 billion (€1 billion) US government security contract.

The US Department of Homeland Security (DHS) is handling tenders for the contract, which is for the Transport Worker Identification Credential (TWIC), a biometric system involving fingerprint and iris-scanning techniques that will provide 10m American transport workers with security cards. It is expected to make a decision early next month.

Daon is pitching for the key role of compiling and managing the database of security information for TWIC, which was designed to improve security at American ports and airports in the wake of the 9/11 terror attacks. Lockheed Martin is proposing to manage the roll-out of the system, while four other companies including Deloitte are playing smaller parts in the group bid.

Earlier this year, Daon had been poised to win a slice of the contract in a joint venture with the American Association of Airport Executives (AAAE), but competitors complained that there had been no open bidding process and that Daon and AAAE were being handed the contract unfairly. The DHS back-tracked and decided to hold a tender instead.

Daon, which counts former DHS chief Tom Ridge as a director, has won lucrative state contracts around the world to handle biometric identification systems, including Australia, Qatar and Ireland, where the Department of Justice asked it to provide software to shore up the visa application process.

The global market for biometrics firms such as Daon is growing exponentially with the tightening up of security systems now top of the agenda for many governments. Acuity Market Intelligence has estimated that the world biometrics market could be worth $32billion by 2012.

Desmond, who is Ireland’s fifth-richest man with a personal fortune estimated at more than €1.4 billion and investments ranging from Celtic football club to tech firm Datalex, once referred to Daon as “the best company I’ve ever been involved with”.

He also recently netted €1.1 billion when he sold London City airport to a consortium comprising AIG, Credit Suisse and GE Capital. He bought the airport, which is strategically located near London’s docklands, for just £23.5m from a construction firm in 1995.