IRS Awards CSC-Led Group Mammoth Contract : LUSENET : TimeBomb 2000 (Y2000) : One Thread

IRS Awards CSC-Led Group Mammoth Contract 12/9/98

NEW YORK (Reuters) - The U.S. Internal Revenue Service said Wednesday it awarded a seven-company consortium led by Computer Sciences Corp. a 15-year outsourcing deal to modernize the nation's antiquated tax system. Financial terms of the contract were not disclosed. But several industry sources said the contract is expected to be worth up to $8 billion. The CSC PRIME Alliance will be awarded $5 billion, with another $3 billion potentially to be reopened for new competitive bidding after 2000, they said. The CSC-led partnership beat out a rival bidding group led by government systems contractor Lockheed Martin Corp. that included computers services supplier Electronic Data Systems Corp. and the accounting firm Arthur Andersen. Known as the PRIME Alliance, the winning group includes lead contractor CSC, along with computer equipment and services provider IBM and accounting firm KPMG Peat Marwick. Other participants included communications equipment maker Lucent Technologies Inc. government contractor Northrop Grumman, software and services provider SAIC and computer hardware and services supplier Unisys Corp. Officials of the PRIME Alliance promised to draw on their extensive tax, business and computer services expertise to provide the tax collecting arm of the U.S. government with the best business practices learned from private sector work. "The CSC PRIME Alliance will implement at the IRS commercial best practices that have been used in related industries to achieve dramatic business results around the world," Milton Cooper, president of CSC's Federal Sector business, said in a statement. "This team is committed to bringing the breadth and depth of resources needed as we partner with all of the IRS stakeholders during this time of critical change," he said. The IRS has come under intense political fire in recent years by congressional critics, portrayed as an oppressive adversary of taxpayers that unjustly seized money and property and was unwilling to admit or correct mistakes. Acknowledging some mistakes, the IRS appealed to Congress for funding to fix its aging computer systems, which have figured heavily in the agency's lack of responsiveness. The agency also brought in Charles Rossotti, a veteran computers services company executive, as its commissioner in 1997. He vowed to make the IRS friendlier to the public and set to work on transforming its basic operations. "To improve service, the IRS needs to break out of its technological time warp from the 1950s and 1960s," Rossotti said in statement announcing the award to CSC and partners. Many of the participants in the CSC PRIME Alliance have previously acted as contractors on behalf of the IRS. Spokesmen for CSC, IBM and Lucent declined to comment on the financial terms of the deal. Officials at Andersen, SAIC, Unisys could not be reached to comment. CSC will take charge of managing the full range of computer services called for under the deal, ranging from strategic business systems planning for the IRS, to organizational re-engineering to actual integration of new systems. As lead contractor, CSC is in a position, to reap 30 to 35 percent of the total contact of up to $8 billion, or upward of $3 billion, several industry sources said. CSC's portion of the contract would rank as one of the largest deals the El Segundo, Calif.-based company has won in its 40-year history. About 25 percent of CSC's $7.1 billion in annual revenues comes from federal contracts, with the rest from its commercial and international computers services work. IBM, which is expected to contribute a range of computer services, could see more than $1 billion from the IRS contract, other industry sources said. It follows a $4 billion services deal IBM announced Monday with AT&T Corp. as part of AT&T's acquisition of IBM's Global Network business. Lucent will consult with the IRS on future improvements to the agency's taxpayer call center, a company spokeswoman said. Among other pieces of the deal, KPMG will contribute tax and business re-engineering consulting. Northrop will contribute its expertise in building state tax-collection systems on behalf of the IRS, a spokesman for the CSC PRIME group said. Ahead of the news, CSC stock closed up 81 cents at $66.75 during the regular New York Stock Exchange trading session Tuesday. After the announcement, CSC gained another $1.25 to $68 in composite NYSE trading, a gain of $2 on the day.

====================================================================== anyone really think the IRS will be compliant any time soon?

Mike ==============

-- Michael Taylor (, December 10, 1998


Mike, the IRS ain't compliant, only complaint.

They're still sending their $$ Million $$ deposits by way of $6/hour bicycle messengers who leave the bundles in plain view on coffee stops.

Could tell you unbelievable asinine horror stories about Official Revenue Collectors, and I taped the Close Encounters Of The Worst Kind, fit for Ripleys. The IRS is toast simply because of their lousy karma. So many companies have made $$ Billions $$ selling hogwash computer deals to the porkers. Whoever's gonna shake hands with the RevDepts on a deal becomes contaminated, corrupted, undesirable. Them cooties can't be shook off. Compliant? hahahahahahahahahaha They aren't even compliant with the LAW.

xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx

-- Leska (, December 10, 1998.

" to modernize the nation's antiquated tax system."

That's not all they need to modernize. Humanity, for one, truth for another, computers? Well maybe after 2000. If they're still operational, and unless they're fired for gross mismanagement, by "we the people."


-- Diane J. Squire (, December 10, 1998.

If half of what we've been reading about Y2K is even half true, the "CSC-led group" had better work fast. This is a complete redesign of the IRS IT structure, as I read it. In 12 months?

-- Tom Carey (, December 10, 1998.

# # # 19981210

Almost a SURE BET:

Last night, someone at my 5th public Y2K forum suggested that if the IRS cancels the typical August 15, 1999 extensions we'll know they are "toast."

The IRS would certainly have to announce a change like this well before April 15, 1999. How's _that for an awareness shocker for the DGI's?

Looks like the Y2K genie's closer to doing a "full monty."

Have to get some more beans ...

Regards, Bob Mangus


"I'm a computer 'Y2K-bomb' technician. If you see me running, try to keep up." RMangus "Sometimes a majority simply means that all of the fools are of one mind." Author Unknown

Year 2000 Citizen Action Group [Y2KCAG] (Oakland County, Michigan - USA) E-mail: Year 2000 Techno-Ambush Public Awareness Org Cassandra Proj: Gary North: Sharefin's Gold: # # #

-- Robert Mangus (, December 10, 1998.

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