IRS Modernization Funds Could Be in Danger

By Nick Wakeman, Senior Editor


NOV. 10 ? Money for the Internal Revenue Service's modernization efforts may get caught up in politically wrangling when Congress returns next week for its lame duck session.


About $200 million for modernization efforts at the IRS were included in the Treasury, Postal Service and Government Operations bill, which was vetoed Oct. 30 by President Clinton.


That appropriations bill will be taken up next week during the lame duck session, but the money for IRS modernization might be pulled, Rep. Tom Davis, R-Va., told Washington Technology Nov. 9.


"It was a spite veto," Davis said. "The president promised he would sign it, and then didn't."


The IRS money, which funds the IRS Prime Integration contract won by Computer Sciences Corp. in late 1998, may be taken out of the new appropriations bill, Davis said.


"You can't just veto something and then expect to still get everything you want," Davis said. "But I think at the end of the day, we'll figure out a way to get everything in there we need."


IRS and CSC officials were not available for comment Nov. 10.


About $130 million to start the Customs Service modernization contract also is included in the Treasury bill, but industry officials believe this money is safe.


Rep. James Moran, D-Va., who appeared with Davis at a meeting of the Industry Advisory Council, also said after the meeting that the Treasury bill would be passed during the lame duck session.


"We can't have continuing resolutions for three months," he said. A continuing resolution allows the government to operate until an appropriations bill is signed into law.


The money for the Customs contract is of special interest to the four companies bidding on it ? Andersen Consulting, Electronic Data Systems Corp., IBM Corp. and Logicon Inc.


But the project also has broader implications for the IT industry, said Olga Grkavac, an executive vice president at the Information Technology Association of America, Arlington, Va.


"Computer modernization is so important that we want any project to go forward," she said.


The Customs project is worth $2 billion over 15 years and promises to modernize and update the systems and processes that the Customs Service uses to monitor imports and exports.


Once implemented, the new systems could reduce to seconds the processing time needed to clear exports and imports across U.S. borders, Grkavac said.


"The Customs project is just one example of the benefits that come from modernizing our computer systems," she said.