Magazine article American Banker

Citi Teams Up with Lockheed to Compete for EBT Business

Magazine article American Banker

Citi Teams Up with Lockheed to Compete for EBT Business

Article excerpt

Citicorp and Lockheed Information Management Services Co. said they have agreed to compete jointly for electronic benefits transfer business.

The New York-based banking company and the Lockheed unit based in Teaneck, N.J., already operate an EBT system in South Carolina and recently lost a bid to run a statewide project in Texas.

'Teaming Agreement'

They said they have entered into a "teaming agreement" that signals a long-term, joint commitment that will help them bid more effectively against other potential processors for contracts with state and federal benefits agencies.

"Citicorp and Lockheed recognize in each other a mutual commitment to developing EBT," said Robert E. Terkhorn, division executive for Citibank global cash management services in Chicago.

"With nearly two centuries of Citibank financial service experience and more than 60 years of Lockheed government contracting," he added, "the team is ideally positioned for the long-term."

50-50 Split

Under the agreement, Citicorp and Lockheed will divide EBT project revenues equally.

They also agreed not to enter into partnerships with anyone else on EBT projects in which both companies wish to participate.

If one of the companies is not interested in bidding on a particular project, the other is free to seek another partner.

The reason for the two organizations' interest in EBT is clear. Streamlining benefits programs, such as welfare and food stamps, with plastic cards, automated teller machines, and point of sale terminals has become a front-burner concern for government agencies. …

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