Computer Sciences Corp (CSC) will lead a team of seven firms to modernize the US Inland Revenue Service’s IT systems in a contract estimated to be worth between $3bn and $6bn. The CSC consortium consists of Northrup Grumman Corp, the defense and federal equipment and services company, accountants KPMG Peat Marwick, Unisys Corp, IBM, Lucent Technologies and SAIC, the IT research and engineering company. The partnership, which could last up to 10 to 15 years, will work on the IRS’s Prime Systems Integration Services contract to improve taxpayer service through IT and added security features. The Prime project will provide technology to assist the restructuring of the IRS into four operating divisions. Lockheed Martin led the consortium that lost the bid, which consists of services giant EDS, the accountants Arthur Andersen, Robbins-Gioia, the applications consultancy, Intuit Inc, the financial management software company, and research consultancy, the Gallup Organization. A Lockheed Martin spokesperson declined to comment why it had lost the bid. Lockheed Martin is, however, working for the agency on another long term project, but this contract is not in doubt according to the IRS. The IRS received the initial bids from the teams in June 1998 and final revisions on 14 October 1998 and said it favored CSC because of its stronger strategic technical and strategic business approach. For the first six months the IRS/Prime partnership will concentrate on installing new management processes. During this start up phase the team will lay out a framework for strategic planning management, requirements management, investment decision management and program and project management. The start up stage is expected to cost $10.5m, and will start next week. After the start up period, work will begin on the priority projects. This phase is expected to last 18 months. These projects include improving contact between the IRS and the public by phone and fax, electronic tax filing and payment capacity, and installing new workstations to retrieve records electronically. The US Congress will release a further $506m held in an IT Investment Account during this stage. The long-term IT architecture has been defined in the IRS modernization blueprint and individual projects will be decided over a 10 to 15 year period. Analysts at investment bank, Credit Suisse First Boston, estimate that the contract will be worth $5bn over five years with an additional $3bn to be awarded in 2000 through a similar bidding process. CSC’s share initially is estimated by CSFB to be worth $100m to $170m annually over 15 years. CSC posted annual revenues of $7.1bn for the 12 months to October 2. CSC’s year-to-date bookings are approximately $3.5bn, according to CSFB. CSC Federal Sector will lead and coordinate the efforts between the seven members of the consortium. Many of the key alliance staff will be based near the IRS facility at New Carrolton, Maryland. IBM will provide, among other products, its e-commerce testing facilities and Intellectual Capital Management AssetWeb. KPMG will provide its tax and IRS experience. Northrup Grumman will integrate its Service Center Recognition/Imaging Processing System. Unisys is merging the IRS’s 11 data centers into two sites currently and will provide its Tax and Revenue products. Lucent is already working on the IRS Customer Service Call Routing project and will provide network equipment and services. SAIC, is currently providing Y2K testing for the IRS’s $1bn program, and will install its other IT products and services for the Prime contract . John LaFaver, the deputy commissioner for modernization, is in charge of IRS reorganization planning. Chief information officer, John Cosgrave, has the newly-consolidated IT resources under his direction.
