Cashing In on Competition Agencies will get a shot at other innovations already offered to private industry as card companies compete for new contracts on government's purchase, travel and fleet cards over the next year. In August, GSA was scheduled to release a request for proposals on those three contracts, as well as one for a hybrid card able to incorporate any or all of the three plus other data via smart card technology. GSA will make multiple awards on each contract to take effect in November 1998. All award winners will be required to meet a set of core requirements and then will compete based on fees, rebates, management software and other value-added services. But my experience has always been when you have a competitive environment, it is better for you.
Agencies have diverse requirements.
The threat of a recompete could improve service. Government's business is particularly attractive now that the consumer card market has grown stagnant, says First Bank's Putney. Government's high and growing volume of transactions is especially alluring, since card companies make their money by charging merchants discount fees per card transaction. Fees depend on a merchant's volume of card business, average transaction size, use of electronic commerce, risk of fraud and other factors. Transaction fees generally fall in the 1.5 percent to 3 percent range.