IRS refuses CSC new modernization contracts

The IRS won't consider Computer Sciences Corp. for work on future contracts to modernize tax enforcement and compliance systems, IRS commissioner Mark Everson told lawmakers today. The action stems from CSC's inability to meet the latest delivery date in April for the first release of the Integrated Financial System, the tax agency's new core accounting system.

"Accordingly, I have decided to direct our upcoming enforcement modernization projects for collection contract support and filing and payment compliance to other contractors," Everson said in a letter to CSC president and chief operating officer Mike Laphen, which he showed to members of the House Ways and Means Subcommittee on Oversight.

The action was designed to limit the number of modernization projects CSC performs, he said. IRS recently said it would delay work on some projects to increase the probability of completing other modernization work.

Everson said the decision to omit CSC from the contracts was the first consequence stemming from the company's failure to deliver major modernization systems.

Additionally, the commissioner said he would "carefully assess CSC's performance on current projects and the results of CSC's overall program management and integration efforts before awarding any follow-on work for existing projects."

But Everson said CSC was not alone in its responsibility for failure to deliver Business Systems Modernization. "We were not correctly configured, so it got away from us," he said. And he praised CSC for the success of the e-Services suite of applications for taxpayers and tax professionals.

IRS will have the initial version of its new taxpayer database, the oft-delayed Customer Account Data Engine, working this summer, Everson said. But Steve Palmquist, chief engineer at Carnegie Mellon University's Software Engineering Institute, which conducted a technical review of CADE last fall, said there was only a 60 percent chance it would be released this year.

IRS will release its new core accounting system by Sept. 30, Everson said. The delay was unavoidable, but CSC will absorb the costs from April until IFS is released, said Paul Cofoni, the company's federal sector president. "CSC encountered data conditions unknown to us in the legacy systems. So we have to go back and redesign and retest," he said.

The IRS has experienced long schedule delays and huge budget overruns in its Business Systems Modernization. The General Accounting Office, Treasury Inspector General for Tax Administration and the IRS Oversight Board have scrutinized the work of IRS and CSC on the project. In December, the oversight board released recommendations for IRS to better manage its contractors and cost estimates and for CSC to better manage its technology.

Mary Mosquera writes for Government Computer News magazine.