TRW removes itself from IRS modernization bid

At the request of the Internal Revenue Service TRW Inc. has removed itself as a competitor for the contract to run the new IRS modernization program.

In a meeting July 16 with potential bidders for the 15-year contract IRS officials said TRW would instead continue to work for the agency under a $300 million integration contract it currently holds the Integration Support Contract (ISC).

"We could not afford to lose the momentum that we have with them " IRS spokeswoman Jodi Patterson said. TRW however was not ordered to step aside she added.

To pursue the IRS modernization prime contract TRW would have had to divert some employees from work they are doing in order to flesh out the information systems architecture that the IRS published in May said Jerry Agee TRW program manager for ISC. That Agee said would have meant the IRS would have to reassign its own staff from projects to upgrade agency legacy systems for the Year 2000 problem.

"We're also in the middle of trying to assist the IRS in implementing a standard systems life cycle " Agee said. "We would have to cut back on some of those activities to compete for the prime. That's why they asked us `Would you keep marching on?' "

TRW is in the fifth year of the 10-year ISC pact which it won to oversee the recently abandoned Tax Systems Modernization program. IRS has been criticized for not assigning enough work to TRW and other vendors in the past but last year the agency turned to TRW to write its architecture blueprint.

Other vendors vying for the new prime contract have grumbled privately that TRW's experience gave it an advantage on the new procurement whether as a direct rival or as a member of someone else's team. "I can see the potential for conflict of interest if they were in a consulting role and helped shape the terms and conditions of the procurement " said Norman Berthaut vice president with the market research firm Input Inc. But Patterson said the IRS did not think that TRW had any legal conflict.

Continuing Workflow

Agee said TRW's position was no different from that of any incumbent contractor. "We could be the prime but [that would] bring everything to a halt in the interim and that was not ultimately in IRS' best interest."

TRW would not be involved in writing the request for proposals which is expected to be released later this year. But in the future the IRS does want to assign TRW program management duties have it maintain the blueprint and have it develop strategies and business cases for future systems according to an IRS proposal obtained by FCW that outlines how responsibility for various modernization tasks would be divided up. That role is similar to one that TRW has served for the Federal Aviation Administration under a $187.9 million contract it won in 1994.

Some of TRW's new duties under ISC were to be assigned to a systems engineering and technical assistance contractor which the IRS was in the process of hiring.

Patterson said the agency still plans to award the contract but its scope would be reduced.

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