CSC excoriated over IRS work

Officials from Computer Sciences Corp. (CSC) feel renewed pressure to improve the company's performance on the Internal Revenue Service's Business Systems Modernization program following the release of a report that criticizes the company for slow progress and cost overruns.

The report, from the independent IRS Oversight Board, includes nine recommendations for project improvements, such as reducing the program's scope and closely examining CSC's ability to do the job.

The report drew particular attention to the Customer Account Data Engine (CADE), which will move taxpayer records from the old tape-based data storage system to a new database. The project is two years behind schedule and $30 million over its original cost estimate, according to the report.

"The overall structure of the program is good," said Larry Levitan, board chairman. "The strategy is good. What we need to do is to execute the plan effectively."

The IRS should implement all nine recommendations that the board offered, Levitan said.

"The really important thing is getting this program back on track," he said. "The program cannot fail. In the past, these programs have been canceled. We cannot do that."

The New York Times reported today that senior IRS executives will consider firing CSC if the company does not improve quickly. Levitan said such a decision is up to the agency.

"We have had a consistent track record of inadequate performance and that cannot continue," he said, adding that the company must "bring in projects that work, that are on budget, that are on schedule. This one's simple."

CSC is continuing to work to resolve issues, said James Sullivan, spokesman for CSC. The company and the IRS have jointly developed a 46-point action plan and are implementing it, he said.

"We are fully committed with continuing to work with IRS until the job is done," Sullivan said. "This is an important project for us."

Levitan said he is confident that CSC officials are serious about striving to succeed. The project is massive in size and complexity, he said. "That's not an adequate excuse, but it is one reason for difficulties," he added.

"The will is not an issue," he said. "The prime, its contractors, the IRS, all of the people looking at it -- everybody understands the importance of this program."

Another source close to the project said it is unlikely that CSC officials will be fired, due to the expense and lost time required to bring in another prime contractor.

"There's no graceful way to do it. You are going to lose a tremendous amount of invested money," the source said.

Judi Hasson contributed to this story.