Pilot IRS to Return with New Focus Areas and Significantly More Funding

The IRS is considering tripling down on its experimental procurement vehicle Pilot IRS—an incremental funding program the tax agency uses to identify and develop cutting-edge technologies—with the second iteration of the program coming in the next few months, with three new focus areas and more than three times the funding up for grabs.

The first iteration of Pilot IRS sought to update the Federal Procurement Data System-Next Generation, or FPDS-NG, using robotic process automation tools to improve data quality and limit the amount of manual data entry. As with other alternative procurement methods like other transaction authority contracts, the Pilot IRS program uses a multi-phased funding approach that rewards vendors that meet milestones in a timely fashion.

Three weeks after issuing the solicitation in August, the IRS made five awards for the first phase, totaling $25,000. Since that time, “Two firms continue to receive funding, and have demonstrated return on investment rates of roughly 30-80% reductions in time required to make corrections to and improve the data in FPDS-NG,” according to a program update posted Wednesday to beta.SAM.gov.

The program also had a goal of getting working automation tools into production within 90 days. The team missed that goal—tools were deployed 96 days after the first awards.

That first solicitation was capped at $7 million for all firms across all phases. With the success of the initial project, the IRS team is looking to significantly increase the funding pool for the next solicitation.

According to the update document, IRS is considering raising the ceiling to allow for each winning vendor to receive as much as $7 million across all phases or up to $25 million for teams and projects with multiple awards.

The reality could be even more funding available than that, an IRS official told Nextgov Wednesday. For the first run of the program, officials opted for an “overly conservative” read of the Federal Acquisition Regulation and chose to cap the program at $7 million. With the success of the initial awards, the team has gotten authority to raise the funding limits. 

“If there are five firms that get awarded contracts at $7 million each, that’d be $35 million total,” the official said.

The team plans to finalize the larger scope and issue the next Pilot IRS solicitation within the next three to six months. While nothing has been decided yet, the program update suggests the next opportunity will be in one of three areas:

• Procurement data visualization: Develop a data visualization app that aggregates information from more than 10 procurement systems, including structured and unstructured data to “provide real time views into both pre-award acquisition planning elements and post-award contract management data.”
• Synthetic data production: The IRS uses fake data sets to test and improve certain systems but had difficultly creating the synthetic data and keeping it current. “By generating a robust synthetic data creation capability based on a simulation of the nation, the IRS can test systems based on fictitious data about people and business entities.”
• Code-free test automation tool analysis: The third potential area would focus on automating the testing process for more than 200 apps through a code-free system. IRS employees would be able to “input test criteria through a user interface and the software application does the underlying work to execute the appropriate test scripts in an automated and repeatable manner to increase the overall quality of testing with potentially significant reductions in test phase timeframes and IRS personnel resources.”

The program team also learned some lessons about staffing and the security clearance process for vendors.

“We did not immediately process/request clearances for personnel from each of the five firms who received a contract, believing that the cost savings would outweigh potential delays,” officials said in the update. “In future versions, this will likely change, and at least limited numbers of personnel will have clearance processes that will begin on the first day.”