Ruling upholds state contract to replace food stamp system

COLUMBUS, Ohio - A court has cleared the way for the state to move forward with its plan to replace the current system for distributing food stamps.

Franklin County Common Pleas Judge Daniel T. Hogan denied a request to invalidate the eight-year, $45 million contract the state has with Dallas-based Affiliated Computer Services Inc. The company will replace the current "smart cards" that hold computer chips with less expensive magnetic-strip cards similar to bank or credit cards.

"We're continuing with the conversion process and, beginning the end of this month, recipients will begin using new cards and taxpayers will save," Jon Allen, spokesman for the Ohio Department of Job and Family Services, said Monday.

The swipe cards cost 89 cents per case per month, versus the $4.74 cost of the smart card, the most expensive distribution system in the nation.

The swipe cards are expected to save the state $23 million annually.

About 1 million Ohio households receive food stamps.

J.P. Morgan Electronic Financial Systems and eFunds Corp. had asked the court to cancel the contract between the state and Affiliated Computer Services.

Both J.P. Morgan and eFunds had bid for the work and argued that the state awarded it illegally by violating Ohio's Open Meetings Act. The companies claimed a review committee met privately over several months to consider offers before recommending Affiliated Computer Services.

Hogan ruled Monday that the Open Meetings Act did not apply because the evaluation committee was not a public body.

J.P. Morgan holds the state's current food-stamp contract.

Messages seeking comment were left Tuesday for J.P. Morgan and eFunds.

Attorneys for the state and Affiliated Computer Systems had argued that state law requires competitive bids to be reviewed privately to guarantee fairness.

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