IRS inks electronic software delivery deal

In one of the largest deals of its kind by a civilian agency, the Internal Revenue Service last week signed a $120 million deal for the electronic delivery and upgrade of Microsoft Corp. software across 130,000 desktops nationwide.

The IRS signed the blanket purchase agreement with ITC (formerly IntelliSys Technology Corp.) as the prime integrator. Microsoft will supply the software, and will distribute and maintain all the software electronically through its CacheManager 2.0 distribution system.

The five-year contract includes licenses for Microsoft's Windows NT Server and Windows NT Workstation, Office Professional or Office 2000, BackOffice Server, Exchange Enterprise and Project 98. The IRS already has many of these products installed, and the contract will cover upgrades for both the new software and the installed base.

The system enables a systems administrator to deliver software to widely distributed desktops over a network rather than going to each desk individually.'s electronic software delivery system was a major factor in the deal because of the advantages of being able to install the software in stages over the Internet onto systems across the country, according to Tim Schmidt, director of the end-user computing support division at the IRS.

Beyond the discount that comes with volume purchasing, the savings that come from electronically distributing software, instead of manually installing it, can be large, especially in a nationwide deployment like the IRS requires, said Kendall Fargo,'s vice president of enterprise and government.

"[Considering] the total cost of ownership on receiving software electronically rather than shipping boxes out and installing the software from disks or CDs, you probably have savings of 50 percent," he last year was chosen by GTSI to deliver software to 200,000 or more desktops under the Army Software License Upgrade-1 program. The contractor also has smaller contracts at the Defense Logistics Agency, the National Imagery and Mapping Agency and the Patent and Trademark Office. will create a World Wide Web store for the IRS at which employees can order software that the agency did not include in the enterprise agreement. Not every IRS employee will need the software offered through the Web store, but the agency felt there would be enough demand that the software should be available, Fargo said.

ITC will supply consulting and integration services under the contract. has not been able to bring such services to its past deals with federal agencies, Fargo said. "This has been an extremely easy, perfect fit with ITC," he said. "It's been really nice where you can offer an end-to-end solution for the customer."

The IRS also has signed a one-year contract for a Microsoft enterprise program manager that will help architect and plan the entire deployment, according to a Microsoft spokesman.

The IRS currently does not have many people in-house trained on Microsoft software, but the agency will be working with Microsoft and other certified technical education centers to train IRS employees via the Web and through computer-based training, Schmidt said.


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