contract that will be awarded next month in seven northeastern states. Citibank, Chemical Bank, Fleet, NationsBank, and First Security Corp. are all that remain from a field of more than 100 companies that had expressed interest in bidding on the huge project. The winner will be responsible for delivering food stamps and cash benefits to as many as three million people using electronic benefits transfer, in which networks of electronic terminals or automated teller machines are used to distribute government payments. The winning bidder will have the right to sign individual contracts with each of the seven states - Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. The Northeast Coalition of States is working closely with the new EBT Council formed by the National Automated Clearing House Association. The council is working to establish uniform operating rules for the processing of EBT transactions. Brian Wing, a representative in the New York Department of Human Services, is chairing the Council's operating rules committee, which is expected to approve the new rules at a mid-December meeting. Most of the banks bidding for the Northeast Coalition contract have joined forces with processing companies. For example, Chemical has teamed up with processing companies Affiliated Computer Services Inc. and National Data Corp. to bid for the five-year contract. Chemical's geographic reach overlaps much of the Coalition territory, but the bank is not considered a major player in the EBT world. Citibank, which aligned itself with Deluxe Data Systems and Lockheed Information Services Co., is considered the leading EBT contractor in the nation today. It has contracts with seven states and last month won a key endorsement from the Treasury Department that could gain it contracts with eight Southeastern states. The Northeast and Southeast states have nearly identical timetables for rolling out their EBT projects, and a few people have questioned whether Citibank has the resources to handle two such ambitious projects. Fleet Financial Group, another bank with market penetration in the geographic area defined by the Coalition but no EBT experience, joined forces with Transactive Corp., the company that administers the EBT program in Texas. NationsBank teamed up with Electronic Data Systems Corp. to place its bid for this EBT contract, as well as for others. NationsBank, which does not have any EBT business, decided to partner with EDS to parlay the Plano, Tex.-based company's expertise and experience working with California's Medi-Cal program as well as 28 other state Medicaid systems. First Security Processing Services Inc., a subsidiary of Salt Lake City's First Security Corp., operates the EBT system in New Mexico and was recently awarded the contract for Oklahoma's program.

*** A pesky lawsuit filed by National City Processing Co. has not achieved its desired effect of stopping Ohio and Citicorp Services Inc. from proceeding with their contracted agreement to roll out an EBT system for the state. "We are proceeding with the program, and Citi is preparing to get the Dayton area up-and-running just as our original schedule called for," said Ron Rhodes, a spokesman for the Ohio Department of Administrative Services. "As for the lawsuit, we are still in the information-gathering mode." National City Processing, a subsidiary of Cleveland's National City Corp., charged in its suit that Ohio had improperly awarded the electronic food-stamp delivery contract to Citicorp. National City Processing said that it was the lowest qualified bidder and requested a court-ordered permanent injunction to prevent Citicorp from performing under the contract. "Both sides are deposing officials right now," said Mr. Rhodes, who contends that the National City suit is without merit. A Citicorp spokeswoman said the bank believes Ohio chose the best bid in terms of cost and service capabilities.

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