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IRS to modernize its computer system

December 11, 1998
Web posted at: 10:40 AM EST

by Juan Carlos Perez


(IDG) -- The Internal Revenue Service has awarded a contract to revamp its aging computer system infrastructure to a group of companies led by Computer Sciences Corp. (CSC), which also includes heavyweights like IBM, Unisys and Lucent.

The project, called the Prime Systems Integration Services Contract, could last for 10 to 15 years and people shouldn't expect to see results immediately, the IRS said. The IRS expects the computer system overhaul-described in an IRS statement as "mammoth" -- to dramatically improve its customer service and provide better security in the long run.

"To improve service, the IRS needs to break out of its technological time warp from the 1950s and 1960s," said Charles Rossotti, commissioner of Internal Revenue. "In the long run, this new partnership will help us replace archaic technology with the modern tools we need to deliver top-quality service to taxpayers."

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The IRS hasn't determined the total value of the contract, which is expected to be about $3 billion, according to the Dow Jones news service, citing analyst estimates reported by a CSC official. CSC was not immediately available for comment, but the IRS did say that it has set aside $10.5 million for the first six months of the project. The agency also plans to use a $506 million assignment from Congress for the project, the IRS said.

Work is expected to begin six months from now, after the IRS and its contractors have a chance to draft a game plan.

In 1999 and 2000, the project will focus on revamping systems to improve the agency's phone and Internet-based customer service, by giving taxpayers faster and easier access to information, forms and staffers. The project will also increase the agency's capabilities to handle electronic filing of tax returns and electronic payments. Finally, during this initial phase, the IRS will also give its employees new workstations to let them retrieve information faster and more securely.

The project will be conducted hand-in-hand with an organizational overhaul of the agency, which will be divided into four divisions to improve service, the IRS said.

IBM will focus its work on improving the IT infrastructure that the IRS' new applications will require, IBM said in a separate statement. IBM also will provide business process re-engineering, the company said.

A group led by Lockheed Martin also bid for the contract, the IRS said.

Juan Carlos Perez is Latin American News Editor for the IDG News Service.

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