CSC battles for lost IRS contract

Computer Sciences Corp. is fighting back after losing an IRS contract for a second time.

The company was eliminated from the competitive range for the Infrastructure Shared Services contract last year, and it filed a protest with the Government Accountability Office.

That action led the IRS to pull back the award under the TIPSS 4 vehicle and add CSC to the competition.

But CSC still lost when the IRS awarded the contract to Northrop Grumman. CSC filed a new protest with GAO on Sept. 30.

While the value of the contract isn't publicly known, this battle is interesting for two reasons: An incumbent battling to keep its work, and a shift in how the government manages large complex modernization efforts.

From the perspective of CSC, the roots of this work go back to 1998 when it won the IRS Prime contract to revamp the agency’s business systems. It was a single-award contract with an $8 billion ceiling over 15 years.

But the huge sprawling contract ran into trouble within the first few years. In 2003, we had a story about an IRS Oversight Board report saying CSC should be fired if it didn’t shape up.

The company was never fired and some work under Prime continues, but it never lived up to the promise of its original vision.

The Prime contract was a task order contract so, over time, as tasks were completed and needed to be recompeted, much of the work has been shifted to competitions under TIPSS, multiple award vehicle.

That is where this Infrastructure Shared Services was competed.

For CSC, it’s a piece of business it has had for 15 years, so it’s important to hold onto it.

From a boarder government perspective, the dismantling of Prime and other large, single-award task order contracts, including the Automated Customs Environment held by IBM Corp., marks a change in how the government takes on these large modernization projects.

The troubles at Prime, ACE and the Coast Guard’s Deepwater contract have made the government very gun-shy about the lead systems integrator role. Instead of a single prime managing a large team on a range of task orders, the government has taken on more of the integrator role. Large contracts are getting broken up into smaller tasks, and each task gets competed.

On one hand, it makes a lot of sense because competition can foster innovation and drive down costs. Large projects also can be broken up into more manageable chunks and the government reaps benefits more quickly. Problems also can be spotted more quickly as well, saving money and resources.

It’s an agile development approach, even if technically it isn’t run as an Agile development project.

The downside, though, is weaknesses in the government’s ability to act as the integrator. Whether it is a contractor or the government in that role, success or failure lies with understanding the goals and outcomes and clearly describing them. Nearly every large failed project can be traced back to poorly stated requirements and mismanagement.

For me, CSC’s protest is another sign of the end of an era as well as a straight-forward business decision to fight for incumbent work.

It’s a compelling story on both the micro and macro levels.

A decision from GAO on CSC’s protest is expected by Jan. 8.