The CAC card, or Common Access Card, allows the user access to computer systems, web pages that require a security certificate and to allow a user to encrypt and digitally sign e-mail. There is a chip embedded in the card that stores user information as well as the users security certificate.
For active duty and civilian employees the CAC card is used as the ID card. For government contractors, they are issued a CAC card as well as a contractor badge if they require access to government computer systems.
Most of the services have disabled entering a username and password to access a computer and you are now required to insert your CAC card into a card reader and enter your PIN for access.