CSC loses fight to keep IRS contract

Computer Sciences Corp. has lost its bid to keep the Infrastructure Shared Services contract with the Internal Revenue Services.

The contract was part of the much larger IRS Prime contract CSC won back in 1998 to modernize IRS business systems. Prime was a 15-year, $8 billion task order contract, and as tasks came to a close, the IRS competed the work more broadly.

CSC has been in a tough fight for Infrastructure Shared Services contract from the beginning.

First, it was eliminated from the competitive range in 2013 and filed a protest, which resulted in being let back into the competition.

But they ultimately lost the contract to Northrop Grumman in September and filed another protest with the Government Accountability Office.

This week, GAO issued its ruling that it had denied CSC’s protest, clearing the way for Northrop to begin work on the contract.

A CSC spokeswoman declined to comment on the GAO decision.

The contract was issued as a task order under the Total Information Processing Support Services 4 contract, known as TIPSS 4. It’s worth about $62 million.

The GAO decision has not been released publicly yet, so the grounds of the denial aren’t available. Typically, GAO decisions go through a vetting process where the protester, the agency and other interested parties, in this case Northrop Grumman, can ask for portions of the decision to be redacted or deleted from the public version. Usually, the deletions have to do with proprietary information in the decision.

This protest is another example of how the government has lost favor with large, single-award modernization contracts. Incumbents, who held these large contracts as single awards, now find themselves having to compete on multiple fronts against a broader range of competitors.

As I wrote in an earlier blog, the upside is the government can break these contracts into smaller, more manageable chunks. The downside is that the government has to play the role of integrator, and those capabilities can vary greatly from agency to agency.