Tax Systems Modernization

IRS Could Have Avoided Successful Protests of Major Computer Procurement Gao ID: IMTEC-92-27 March 13, 1992

The Internal Revenue Service (IRS) cannot successfully direct and control its procurement activities, and some of its recent procurements have run into trouble. GAO reviewed one of these troubled procurements--the Treasury Multi-User Acquisition Contract, which was awarded to AT&T in July 1991 but later successfully protested by IBM and Lockheed. This report examines what IRS (1) did to cause the protests, (2) could have done to avoid the successful protests, and (3) needs to do to prevent similar successful protests of Tax Systems Modernization procurements.

GAO found that: (1) the TMAC procurement was successfully protested because IRS failed to justify paying $500 million for the technically superior awardee; (2) to avoid the successful protests, IRS should have done a better price/technical trade-off analysis to determine whether any offer was worth its cost in relation to the other offers; (3) IRS did not give any specific guidance to its source evaluation board on the methodologies and criteria to be used in analyzing bids where technical excellence was an important evaluation factor and IRS made award to other than the low bidder; and (4) IRS did not revise its analysis after it received advanced review comments from the Department of the Treasury questioning the validity of its price/technical trade-off analysis.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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