Tax Systems Modernization

GAO reviewed the Internal Revenue Service's (IRS) use of outside consultants to do a second price/technical tradeoff analysis for the Treasury Multi-user Acquisition Contract (TMAC) procurement, which will provide IRS with minicomputers, workstations, printers, and other equipment as part of the agency's $8-billion modernization effort. Although IRS' decision to use outside consultants appears reasonable and not inconsistent with the Federal Acquisition Regulation, federal guidance is not specific as to what is required to determine whether expertise is readily available within the government. This experience underscores the need for IRS to properly plan procurements and to ensure the availability of expertise to do them successfully. This is especially true for best value procurements that may involve sophisticated analyses and judgments of the relative value of technical and cost features. IRS' plans to award more procurements using the best value method make it imperative that the lessons learned from TMAC be carried forward. IRS' efforts to include guidance in source selection plans and to have people with the requisite expertise are steps in the right direction.

GAO found that: (1) IRS use of consultants to perform the price/technical tradeoff analysis was not inconsistent with the Federal Acquisition Regulation (FAR); (2) IRS chose to use consultants to do the analysis because it believed the consultants could complete the analysis more quickly than in-house sources, thereby avoiding additional delay in awarding TMAC, and the credibility of the analysis would be enhanced if a new team and new methodology were used in its preparation; (3) IRS has taken steps to make greater use of in-house expertise on future procurements that may involve price/technical tradeoffs; (4) the price/technical tradeoff analysis employed a methodology that appeared reasonable; (5) in February 1990, GSA established a post-delegation review and tracking process that requires agencies to submit reports and provide briefings on the status and progress of their acquisition efforts; (6) IRS is furnishing GSA the information it requires; and (7) IRS has requested GSA assistance on two TSM procurements and on several other TSM projects.