IRS wants flexibility in modernization effort

The changes, however, raise more questions about the IRS' commitment to vendor teams bidding on Prime, headed up by Computer Sciences Corp. and Lockheed Martin Corp., said Bob Dornan, senior vice president of Federal Sources Inc., McLean, Va. "The desire for flexibility will have costs associated with it," Dornan said. "[When] asking CSC or Lockheed Martin to put their corporate reputation on the line, the question is: Are they willing to do that if there is not a willingness for the government to commit to them? I wonder, what is the criteria the IRS is going to use to ask the prime to step aside?" ~In addition, Dornan said the Prime winner will be exposed to an unusual amount of public attention. "The IRS' tax system has received more scrutiny from Congress and the press than any other government information system," he said. "Whoever wins this contract will be subjected to more oversight, second-guessing and monitoring than any other contractor. The risk and the stakes are monumental." ~CSC said Rossotti's need for flexibility will not present a problem, and he is entitled to make changes he is comfortable with. "If they are going to sign a contract for some 15 years, the IRS will want flexibility; we can live with that," said Donald Brown, vice president of CSC's Integrated Systems Division, which is leading one of the two Prime teams. ~Lockheed Martin officials said, "While we are still examining the RFP documentation in detail, overall we are pleased with the contents." ~Rep. Rob Portman (R-Ohio), co-chairman of the bipartisan National Commission on Restructuring the IRS and one of the leading advocates of change at the agency, reserved comment on the RFP. "We prefer to stay on the sidelines as we watch and wait to see who wins the contract," said Brian Besanceney, Portman's spokesman. "We consider it to be an internal matter."The Internal Revenue Service last month launched its much-anticipated contract worth more than half a billion dollars to modernize its outmoded information technology systems.

Release of the request for proposals for the Prime systems integration project had been delayed for almost four months as IRS Commissioner Charles Rossotti made some changes to the document, which will eventually lead to a prime contractor providing program management, systems development and integration that the agency needs to carry out its systems modernization project to better process the more than 200 million tax filings every year.

The release of the RFP completes a nearly year-long process since the IRS outlined its new modernization strategy in its May 1997 Modernization Blueprint. That plan, developed after the IRS was criticized for wasting more than $3 billion on a previous modernization effort, provided details on how the agency intends to implement new IT systems to upgrade and simplify its service to the tax-paying public.

The RFP represents another step the IRS has taken to fulfill its vision of a future in which tax filing will be paper-free and taxpayer information will be readily available, making it easier for IRS employees to update taxpayer accounts and quickly respond to taxpayer inquiries.

Rossotti's changes "are important but not dramatic," said Art Gross, the outgoing chief information officer of the IRS. "They reflect the fact that Mr. Rossotti created additional flexibility with respect to contract relationships between the prime contractor and its principal contractors and between the prime and the government."

One example of the way in which the IRS has given itself more options during the development of Prime is that it will be able to decide who will perform which tasks as the 15-year project proceeds. "If at some time during those 15 years circumstances change [to] where the IRS, for example, becomes more capable as its own integrator, it's possible, under this contract, to modify the role of the prime," Gross said. The IRS could also rearrange responsibilities among team members, Gross added.

Gross said Rossotti wanted to have the flexibility to include his new organizational concept, which reorganizes the business of the IRS into four divisions: the individual wage earner, small business, large corporate taxpayers and taxpayers under the employee plan/exempt organization.

"These changes are still conceptual at this time, and we wanted the RFP to have the flexibility to accommodate the changes as they evolve," said spokeswoman Jodi Patterson.