IRS taps CSC for system overhaul

The Internal Revenue Service earlier this month awarded a multibillion-dollar contract to Computer Sciences Corp. to lead a 15-year effort to replace the IRS' archaic computer systems.

Under the Prime Systems Integration Services Contract, the CSC team will provide the program management and systems integration needed to improve the IRS' ability to process the more than 200 million tax filings it receives each year.

The Prime project is based on a Tax Systems Modernization plan the IRS unveiled in 1997. The program will consolidate the agency's diverse legacy systems into a smaller set of standard, centrally managed applications.

"This technology modernization project won't happen overnight, but it will ultimately be a springboard for us to provide top-flight taxpayer service,'' IRS Commissioner Charles Rossotti said in a released statement. "In many areas, improved service hinges directly on replacing outdated technology.''

Although the modernization blueprint outlines in detail what functions the systems would perform, it does not describe how these systems will be built or the specific technology the IRS wants to deploy.

The IRS and the CSC team will iron out the specifics of how they will proceed with the modernization project, said Michael Laphen, president of the civil group at CSC and account executive for the CSC Prime Alliance. CSC's Prime Alliance team includes IBM Corp., KPMG Peat Marwick, Lucent Technologies, Northrop Grumman Corp., Science Applications International Corp. and Unisys Corp.

During the first six months of the Prime contract, the team plans to improve service for people contacting the IRS by telephone or the Internet and to expand projects involving the Electronic Tax Administration, such as electronic filing. Additionally, the CSC team expects to provide a new generation of workstations that will allow IRS workers to retrieve tax records quickly and electronically while guaranteeing the security and privacy of taxpayers.

CSC beat out a team led by Lockheed Martin Corp. for the contract, which initially will cost $516.5 million. IRS officials said the program will be worth billions of dollars by the time it expires in 2013.

A spokeswoman for Lockheed Martin said company officials trust that the system to determine the winner was fair, but the company had not yet decided whether to protest the decision as of press time.

"We were disappointed,'' the spokeswoman said. "We'll survive. We do have some existing programs with the IRS. Our business is stable, healthy and strong.''

The IRS launched the Prime program to get a decade-old modernization project on track. The IRS spent about $3.3 billion over the past 10 years trying to revamp its computer systems, according to past congressional reports.

Robert M. Tobias, president of the National Treasury Employees Union (NTEU), the largest independent, federal-sector union representing more than 155,000 employees, said he is pleased that the IRS is moving ahead with is "much-needed'' plan to modernize its technology.

Tobias, who was sharply critical of the IRS' plan nearly 18 months ago to use private-sector employees to process federal tax returns, said he encourages the Prime Alliance to work closely with NTEU and IRS employees on all aspects of the 15-year project.

"The men and women of the IRS could do a comparable job, if not outperform, private-sector workers,'' Tobias said.

A spokesman for Rep. Rob Portman (R-Ohio), former co-chairman of the National Commission on Restructuring the IRS, said leaders on Capitol Hill have confidence in the IRS, but agency officials and the CSC team must clearly define during their planning sessions how this attempt will be different from others.

One difference is the oversight board that will work with Rossotti to hold the "IRS' feet to the fire on long-term goals and objectives,'' the spokesman said. Another plus for the IRS is Rossotti, who is expected to bring stability to an agency that normally loses its chief every two to three years.

"We're expecting Rossotti to stay longer,'' the spokesman said.