Wright Express, the nation's top provider of fuel cards to fleets, has won a lucrative contract to run a program for the government.
The South Portland, Maine, unit of CUC International was notified in late December by the General Services Administration that it beat out five other companies to develop and manage a proprietary fleet credit card program covering about 150,000 vehicles.
The two parties announced the contract last week. By May, Wright Express will issue cards for an additional 190,000 vehicles in the fleets of most other federal agencies. The combined fleet of 340,000 is the largest in the world, the parties said, with total fuel purchases estimated at $170 million per year.
"This is an excellent deal for Wright Express, it adds credibility to its system," said Stanley W. Anderson, president of Anderson and Associates, Arvada, Colo.
What's more, it sets Wright Express up for the next phase of government card contracts. In 1998 the government will combine travel, purchasing, and fleet functions on one card, said Mr. Anderson, who is working for the government on the project.
By Dec. 1, 1988, the government will be issuing contracts to multiple issuers. Those that can handle the travel and procurement functions would then likely turn to Wright Express to contract out the fuel card function, he added. "Wright could get 100% of the business."
With this contract, Wright Express said it will maintain its high growth rates - 55% last year and 60% in 1995. "By far this is our largest contract," said Matt Hoffner, Wright Express' senior vice president. "We're going from one million cards to 1.4 million in 90 days."
Wright Express has one million cards, more than 10 times as many as its nearest competitor, Fuel Man Gas Card.
Potentially, other government agencies with fleets not included among the 340,000 vehicles in the initial contract could take advantage of the Wright Express fuel card, said Les Gray, director of fleet management division for the GSA.
The GSA had a fleet card under the generic name Standard Form 149, known as "the blue-and-white plastic card," which did not have a magnetic stripe. Employees could stop in about 120,000 gas stations across the nation that accepted the card to conduct a paper-based transaction. These cards were used for all 340,000 vehicles administered by the GSA.
The GSA was billed, and there was no security, and no control over who used the card, no way to turn it off if it was lost or stolen, and no information collected, Mr. Hoffner said.
Two years ago, the GSA upgraded about 150,000 of these cards, Mr. Hoffner said, adding a magnetic stripe and a vehicle identification number. Only one oil company agreed to program its point of sale terminals to accept the cards, he said, so the GSA ditched the cards and went back to the old system.
GSA officials have been in Maine meeting with Wright Express executives on how to implement the program, including setting up accounts and securing vehicle information numbers and driver information.
When the Wright Express cards are used by government employees, the point of sale terminal will prompt the cardholder for the vehicle's odometer reading and the driver's identification number. This allows for security and data collection, Mr. Hoffner said.