With a new corporate headquarters, a new data center, and a new president, Transactive Corp. is staking its claim in Texas.
The company, a subsidiary of West Greenwich, R.I.-based Gtech Corp. created earlier this year, plans to use the Lone Star State as a launching pad for a national business that will allow welfare and food stamp recipients to get the benefits electronically at participating stores.
Gtech recently named Michael LaVigna president of the subsidiary, charging him with growing its electronic benefits transfer business beyond the state of Texas, with which the firm won a major contract earlier this year.
"We see the electronic benefits transfer business as a place to grow by providing governments with technology and services,' said Guy B. Snowden, Gtech's chairman and chief executive officer.
"Mike's entrepreneurial and leadership experience in managing and directing the start-up and growth of new businesses will be of great benefit to our entire organization."
Electronic benefits transfer allows families eligible for welfare and food stamp to receive benefits using debit cards at electronic terminals.
Industry experts and government officials believe delivering benefits electronically eliminates waste, fraud, and abuse while streamlining government operations.
Austin-based Transactive is currently implementing an EBT system for the state under a $200 million, seven-year contract it was awarded in February.
"We have made a strategic decision by coming to Texas," said Mr. LaVigna. "We now have the facilities to take the technology and point it in the right direction to expand the use of electronic benefits transfer programs."
Mr. LaVigna comes to Transactive from Cambridge, Mass.based Bolt Beranek and Newman Inc., where he served as president and chief operating officer. That communications firm specializes in building computer networks for large companies and government agencies.
Mr. LaVigna earned a Masters of Science degree at Sienna College and a Bachelor of Science degree at State University of New York at Buffalo.
"I come from a techie background, and introducing new technology for useful applications is both fun and very satisfying to me," he said.
"I like the idea of taking technology and using it for applications that otherwise would not be possible."
Some 500 merchants in Harris and Chambers counties have already agreed to accept the EBT cards.
And this week, nearly 17,000 households eligible for federal welfare benefits will have access to the program.
By 1995, Transactive plans to expand statewide, reaching 16,000 retailers and more than 1.2 million households.
Once the system is completely installed, it will be the largest of its kind in the nation.
"Our new data center and corporate offices will allow us to handle all of the functions for our EBT operation nationally," said Mr. LaVigna. "For the moment, we will be focusing on EBT, but eventually, we will expand the scope of our business and the operation in Texas will give us the right foundation to build on."
The awarding of the contract to Transactive stunned some of the biggest names in bank technology when it was announced earlier this year.
Gtech - which competed against a joint bid from Deluxe Data Corp. and Electronic Data Systems Corp., as well as Citicorp - was seen as a long shot for the contract, an upstart known primarily for it lottery systems.
At the time the contract was awarded, Deluxe Data, a subsidiary of Wisconsin-based Deluxe Corp., a leading check printer, filed a formal protest with the state of Texas' General Services Commission alleging irregularities in the bidding process.
The company asked that the decision be reversed. The commission, however, invoked its right to leave the contract in effect, and paved the way for the program to begin.
On Sept. 26, Deluxe withdrew its protest.