The interagency Federal Electronic Benefits Transfer Task Force is taking steps to ensure that financial institutions are the main vendors of services related to the electronic delivery of government benefits.

At the heart of the effort is a change in the way the government fields bids for EBT services. The traditional request for proposal (RFP) process is slated to be replaced, in an increasing number of cases, with a procedure known as invitations for expressions of interest, or IEI.

The task force believes the new process, which will be overseen by the Treasury Department, will reduce the amount of time it takes to review bids and award contracts to the companies that administer to EBT programs.

It is also hopeful that one of IEI's central tenets -- that financial institutions be the lead vendors on EBT contracts -- will bring more banks into a business that is expected to be a significant source of electronic transaction volume in the coming years.

The task force wants the increased involvement of financial institutions in EBT because EBT's goal of cutting the cost of delivering benefits is highly dependent upon the use of existing transaction processing infrastructures that are largely owned and operated by banks.

The Treasury Department will play a central role in IEI by handling bidding for federal projects and, when asked to do so, by helping state projects to procure EBT-related services.

By using Treasury as a sort of clearing house for EBT servicers, the task force hopes to hasten progress toward a standardized, nationwide EBT system based on a single benefit card.

The hope is to make EBT "more of a standard product, with some state-specific features around the edges," said Lee Jones, EBT program manager at Treasury in Washington.

Under IEI, "Treasury will acquire services from financial institutions that states can then essentially pick off a list. The idea is to give states some options and flexibility while also potentially making their process simpler."

Since EBT servicers approved under IEI would feature standardized services, states partaking of these services will not have to put forth so much effort to define and design their EBT programs, Mr. Jones explained.

The implementation of IEI is the second major action taken by the EBT task force since it was created a year ago at Vice President Gore's behest.

In May, the Washington-based group issued a report that established the goal of delivering by 1999 a wide range of benefits, such as welfare, Social Security, and food stamps, through a nationwide system based on single type of payment card. The benefits will be delivered through automated teller machines and point of sale terminals.

Among the purported advantages of IEI over the request for proposal process is the streamlining of the protest process. When a contract award is made under request for proposal procedures, the losing companies are permitted to file legal challenges that can stymie the progress of an EBT project for months.

However, since IEI is not subject to standard procurement rules, protests often can be resolved more quickly.

While financial institutions are receptive to the idea of IEI, some doubted whether the requirement that banks be the prime vendor will have much effect on the way financial institutions participate in the EBT business.

"In terms of the physical mechanics, the two [procedures] seem very similar," said Brian Claire, senior director of Citibank EBT Services in Chicago.

To date, Citi EBT and Lockheed Information Management Services Co. are the only companies to have secured EBT service contract via an IEI, but many are expected to follow.

Treasury has scheduled an IEI information session for Nov. I in Arlington, Va., to answer industry questions regarding the process.

Subsequently, Treasury expects to issue in early 1995 an IEI for the EBT program in the so-called southern alliance of states, which consists of Alabama, Arkansas, Florida, Georgia, Tennessee, North Carolina, and Missouri.

In addition, Treasury also expects to issue a more general IEI in 1995 from which it hopes to build a list of vendors that other states can use for EBT projects. Two Ways To Win an EBT Bid Requests for Invitations for proposal expressions of interest 1. Any vendor can be selected 1. Primary vendor must be a financial institution2. Can take up to 2 years 2. Can be done in 6-12 months3. Compensation through 3. Compensation flexible appropriated funds 4. Not a procurement, so legal4. Legal protest can stop challenges do not process necessarly stop process5. Any agency can contract for 5. Treasury grants contracts services

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