In modernization race, IRS a loser, U.S. Visit, Customs winners

The Prime Integration Services contract to modernize IRS systems, a $5 billion deal awarded to Computer Sciences Corp. in December 1998, has had its budget for 2005 cut more than 26 percent, from $387.7 million in fiscal 2004 to $285 million next year, a drop of almost $103 million. The Bush administration unveiled its proposed federal budget this week.

In December, the IRS Oversight Board issued a report critical of the agency and CSC in conducting the modernization program, and raised the prospect of removing CSC as the lead contractor. One recommendation was to cut the number of projects being done at the same time.

In the IRS' explanation of the 2005 budget request, the agency said it is focusing its efforts on a "smaller portfolio of investments."

By contrast, funding for the $5 billion Customs Service modernization contract awarded to IBM Corp. in April 2001 is growing.

Customs and the Immigration and Naturalization Service were combined and reallocated into two new directorates with the creation of the Homeland Security Department. In the Customs and Border Protection directorate, funding for automation modernization increased $11 million in the 2005 budget, to $450 million from $439 million in 2004.

Also at DHS, the U.S. Visitor Immigration Status Indication Technology System contract, known as U.S. Visit, has been given a boost in funding for 2005 to $340 million, up from $328 million in 2004.

U.S. Visit is up and running since Jan. 1, screening international visitors at 451 airports across the country. Its second phase, adding to the system seaports and the busiest land entry points, is to go into effect in January 2005. A third phase for the remaining land entry points, is to start in January 2006.

There is a prime contract to be awarded in May to overhaul and integrate all border control systems.