IRS Offering $7.5M for New Ideas to ‘Digitize’ and ‘Digitalize’ Paper Documents

The IRS wants new ideas for digitizing and digitalizing paper files and is offering up to $7.5 million per proposal in the latest solution challenge under the Pilot IRS program.

The Pilot IRS program was started in 2019 as a way for the agency to develop innovative technologies without a dedicated research and development arm or non-traditional funding sources. Using multiple funding phases with a focus on end results rather than upfront requirements, the program mirrors non-traditional procurement methods like commercial solutions openings and other transaction authorities while remaining within the guardrails of the Federal Acquisition Regulation.

The latest solution challenge looks to tackle the agency’s backlog of paper documents, according to the draft request for proposals posted to SAM.gov. The sixth solution challenge divides the effort into two buckets: paper documents that simply need to be scanned into a digital format—digitizing—and those that need to be transformed into a digital document with machine-readable data—digitalizing.

For both the digitizing and digitalizing efforts, the challenge includes four goals that must be addressed by all proposals:

• Receive, prepare, reproduce, sort, validate, store, return and transfer 300 and 400 dots per inch PDF—or comparable formats to be determined at a later date by the IRS—digital copies of various sized paper records, pictures and forms, potentially in very large volumes, with impeccable accuracy, high level of speed, and low levels of manual activity.
• Meet all IRS minimum technical digitization specifications, minimum metadata elements for IRS records, and minimum quality assurance, control and review standards.
• Interface and be compliant with IRS systems, cybersecurity requirements, hardware and software, etc. Interfaces and schemas included in potential solutions would need to be approved for use by the IRS chief information officer.
• Validate and report on the accuracy of scanned digital copies against the original records. Transfer the digital copies to downstream processes such as data extraction that may be hosted within IRS systems and/or third-party extraction solutions through industry standard interface mechanisms.

“There are no specific solutions or approaches that are being requested; rather, any approach that is focused on the four goals of the solicitation will be considered,” the draft RFP states.

The Pilot IRS program was built on the idea that risk in innovation can be mitigated using iterative funding. The sixth solution challenge has been broken into two phases: a testing and pilot phase with a cap of $200,000 over 180 days; and a deployment phase capped at $7.3 million over four and a half years.

All totaled, the IRS plans to spend around $1 million on Phase I projects this year, expecting “three to five Phase I awards,” according to the RFP.

Projects will have to show progress during the first phase and a strong deployment plan to be eligible for the second phase.

Initial proposals are due by 8 a.m. July 28.