IRS to merge 11 data centers into 2 sites

The Internal Revenue Service plans to move forward this month with the merger of 11 data centers into two sites that will handle 3 trillion mainframe transactions annually.

As one of the largest mainframe consolidation efforts in the federal government and possibly in the world, the project will upgrade the computer systems that form the heart of IRS operations nationwide: systems that process tax returns and help agents collect delinquent payments.

Like most federal agencies, the IRS will not meet the June 30 data-center consolidation deadline imposed by the Office of Management and Budget. But when the migration is completed late next year, these systems are expected to provide a Year 2000-compliant underpinning for future IRS modernization efforts.

"Mainframe consolidation represents a complete end-to-end solution," said William Vajda, the IRS' executive officer for the project, which includes the replacement of 17,000 employee workstations and 1,700 telecommunications circuits that connect those workstations to the mainframes.

The IRS will replace the existing base of 67 Unisys Corp. and IBM Corp. mainframes in 10 IRS service centers nationwide with a dozen machines from both vendors. The new machines will be divided between the Memphis, Tenn., service center and the agency's central computing facility in Martinsburg, W.Va.

The IRS data center merger will require that the following systems are upgraded:

* The Service Center Replacement System, which is made up of Unisys machines that run the agency's Integrated Data Retrieval System software for accessing information about taxpayers' annual returns.

* The Integrated Collection System and the Automated Collection System, which run on IBM machines and which are used for collecting tax payments.

* The Communications Replacement System, also an IBM-based system, which provides secure access by IRS employees to the other two systems.

The IRS ran its tax-processing applications on the new equipment in Memphis last winter and spring. The consolidation is beginning with a pilot test of CRS this month.

Because the IRS' current workstation-to-mainframe communications system is not Year 2000-ready, CRS must operate before any service centers migrate their operations, Vajda said.

Chris Nicoletti, IBM's client executive for the Treasury Department, said upgrading CRS to exchange data with the Unisys systems has been the biggest technical challenge because "when these systems were originally deployed, we were both using our unique proprietary protocols. Now we're migrating to open systems and [Transmission Control Protocol/Internet Protocol]."

Although Unisys is the lead vendor for the project, under the Service Center Support System contract, the consolidation has produced unprecedented cooperation between the company and IBM, which is a subcontractor and a traditional corporate rival. At the urging of the IRS, the vendors share office space together with agency employees.

Some observers said they thought it was unusual for the firms to be working side-by-side. Unisys, IBM and IRS executives said the job and the marketplace require the arrangement.

"Nobody knows our stuff better than us, and nobody should know IBM's stuff better than them," said Joseph Santamaria, vice president and general manager for integrated government solutions with Unisys Federal Systems.

Jim Kerrigan, who heads Reston, Va.-based Colmar Corp. and was Treasury's senior information resources management executive in the 1980s, said that as far as the IRS systems are concerned, the two vendors always had to communicate because their systems were interconnected.

"Now, as they start the consolidation, they need to get along with each other if IRS is going to accomplish anything," Kerrigan said.

Vajda said the Kansas City, Mo., service center is scheduled to be the first to "cut over" to the new systems on Aug. 23. Three more centers are expected to make the transition this year, with the remainder migrating next spring and summer, once 1999 tax returns are in.

For now, Santamaria said, the systems are being configured so that they treat each center's transactions as separate applications.