The Department of Homeland Security is testing surveillance technology that could someday allow law enforcement to scan crowds with video cameras and ID people by their faces -- in another advancement that could raise major privacy concerns.

The department acknowledged Wednesday that testing is still in the works, and claimed it is "not ready for deployment," following a report in The New York Times about progress being made in the facial-scanning push.

The department for years has faced challenges to its screening procedures at U.S. airports, which have been criticized as invasive. Intelligence agencies like the National Security Agency are separately trying to assure the public that their surveillance of Internet activity and phone calls respects privacy rights as well. The prospect of numerous law enforcement agencies having access to a facial-screening system is raising a new set of privacy questions.

But a DHS official told Fox News that any emerging technologies "sustain, and do not erode, privacy protections."

The official said the facial-recognition technology, a program called Biometric Optical Surveillance System (BOSS), was funded by Congress and originally run under the Pentagon. It was later transferred over to them for testing "to determine its effectiveness and suitability for the deployment by state and local law enforcement partners."

The official said the testing is still in "early stages" and not ready.

"Testing concluded that BOSS did not meet the original requirements for the technology. The independent test showed that additional efforts are needed to have the technology meet those requirements, and if new technology is developed, assessments will continue," the official said.

The Times reported that the research began as an effort to help the military find possible bombers and terrorists overseas. But in 2010, the DHS started testing it as a possible tool for police in the U.S.

The department recommended against deploying it after recent testing, but the program remains under development.

One specialist told the Times they're "at least five years off."