TREASURY
INSPECTOR GENERAL FOR TAX ADMINISTRATION
Telecommunication Projects Need Improved Contract
Documentation and Management Oversight
March 5, 2007
Reference Number: 2007-20-030
This
report has cleared the Treasury Inspector General for Tax Administration
disclosure review process and information determined to be restricted from
public release has been redacted from this document.
Phone Number |
202-927-7037
Email Address | Bonnie.Heald@tigta.treas.gov
Web Site |
http://www.tigta.gov
March 5, 2007
MEMORANDUM FOR CHIEF INFORMATION OFFICER
FROM: Michael R. Phillips /s/ Michael R. Phillips
Deputy Inspector General for Audit
SUBJECT: Final Audit Report – Telecommunication Projects Need Improved Contract Documentation and Management Oversight (Audit # 200620019)
This report presents the results of our review of the Internal Revenue Service’s (IRS) use of the Department of the Treasury (Treasury) contract to procure telecommunication services. The overall objective of this review was to determine whether the IRS ensures telecommunication services acquired outside of the Treasury Communications System (TCS) contract are cost effective and do not duplicate services offered through the TCS contract. This review was part of the Treasury Inspector General for Tax Administration’s Fiscal Year 2006 Information Systems Programs audit plan for reviews on the adequacy and security of IRS technology.
Impact on the Taxpayer
As a collector of United States citizens’ tax obligations,
it is imperative that the IRS effectively and efficiently manage its
resources. Although one of the goals of
the TCS program is to provide a cost-effective communications infrastructure, the
IRS did not always document consideration of the TCS contract and provide
effective oversight for major telecommunication investments. As a result, telecommunication projects may
not have ensured the most efficient use of resources on behalf of taxpayers.
Synopsis
The TCS program was established to provide Treasury and its bureaus with a centralized network and management system to support its customers’ missions by providing a wide range of data communications[1] services through a single contract vehicle. While Treasury does not mandate use of the TCS contract by departments and bureaus when acquiring services, IRS policies and procedures specify that the TCS contract be the first choice for data communications. To ensure the Federal Government receives the best value product, the Federal Acquisition Regulation[2] requires that program managers promote full and open competition among alternative sources for major system acquisitions and requires agencies to maintain effective documentation of contract actions, including cost proposals from contractors.
The TCS contract was not considered for the ERAP. As a result, the ERAP may not have been developed in the most cost-effective manner to ensure efficient use of resources.
As of September 28, 2006, the IRS had spent over $62 million during Fiscal Year 2006 on acquiring telecommunication data processing services outside of the TCS contract. Our review of these costs determined that only the Enterprise Remote Access Project (ERAP), which provides secure remote network access for IRS employees and contractors, would have warranted consideration of the TCS contract during the acquisition process. Although the TCS contract offers a solution to provide secure remote network access to employees, Project documentation did not show that it was one of the contracting vehicles considered for the ERAP. As a result, the acquisition may not have been completed in the most cost-effective manner to ensure efficient use of resources.[3]
In addition, Treasury requires preparation of a consolidated Capital Asset Plan and Business Case, commonly referred to as an Exhibit 300, for infrastructure-related information technology costs (e.g., telecommunications). In June 2006, Treasury also required a separate (internal) Exhibit 300 for any initiative that would otherwise qualify as a major investment to enable improved transparency for Treasury investments and enhance accountability. Individual initiatives for which the annual investment exceeds $5 million or the total life cycle cost exceeds $50 million are considered a major investment. The internal Exhibit 300s are not forwarded to the Office of Management and Budget as part of the Treasury’s information technology Investment Portfolio.
The initial submission of internal Exhibit 300s was due to Treasury on October 15, 2006, even though the guidelines were not received until June 2006. Capital Planning and Investment Control (CPIC) organization personnel informed us that, while they prepared only three internal Exhibit 300s based on discussions with Treasury, they would begin to review all infrastructure projects in the development, modernization, and enhancement stage to determine whether additional internal Exhibit 300s are needed. As a result, the IRS followed the prior practice of including all expenditures for telecommunication services on its information technology Investment Portfolio as a consolidated information technology infrastructure investment project and prepared a consolidated Telecommunications Infrastructure Exhibit 300. The Exhibit 300 defined the investment type as steady state (indicating the expenditures were for operations and maintenance) and reflected the total annual expenditure amount for telecommunications as maintenance cost.
The Enterprise
Networks organization spent nearly $18.7 million during Fiscal Years 2004
through 2006 for the ERAP and has budgeted another $10.6 million in Fiscal Year
2007. Therefore, the Project may meet
the IRS CPIC cost thresholds for a major information technology investment, and
an internal Exhibit 300 may need to be prepared as part of the continuing CPIC organization
review of infrastructure projects.
The classification
of information technology investments has been reported previously as a problem
for the IRS. For example, in response to
a prior audit report,[4] the Chief Information Officer agreed to
review all Applications Development organization projects to ensure they were
properly classified as developmental or steady state and to assign the
appropriate level of executive oversight.
Similarly, due to the new guidance, the Enterprise Networks
organization’s infrastructure projects need to be reviewed to identify those
projects that are under development and should be reclassified to ensure
appropriate executive oversight and efficient use of resources.
Recommendations
The Chief Information Officer should ensure project documentation supports consideration of Treasury contracts during the procurement process when comparing alternative solutions for telecommunication services. In addition, all (steady state and development, modernization, and enhancement stage) information technology investments included in the Telecommunications Infrastructure Exhibit 300 should be analyzed to identify projects under development that should be classified as major information technology investments requiring increased executive oversight and preparation of internal Exhibit 300s.
Response
IRS management agreed with all of our recommendations. The Chief Information Officer will communicate to the Enterprise Networks organization the importance of following the enterprise life cycle project process. This will ensure documentation indicates consideration of Treasury contracts when comparing alternative solutions for telecommunication services. The CPIC organization will provide training and guidance to Enterprise Networks organization project managers and executives to ensure compliance with existing Treasury guidance that requires infrastructure projects in the development, modernization, and enhancement phase of the life cycle to develop internal Exhibit 300s if they meet the criteria for a major project. In addition, the CPIC organization will review all projects in the Telecommunications Infrastructure Exhibit 300 to ensure proper classification. Management’s complete response to the draft report is included as Appendix VI.
Copies of this report are also being sent to the IRS managers affected by the report recommendations. Please contact me at (202) 622-6510 if you have questions or Margaret E. Begg, Assistant Inspector General for Audit (Information Systems Programs), at (202) 622-8510.
Appendices
Appendix
I – Detailed Objective, Scope, and Methodology
Appendix
II – Major Contributors to This Report
Appendix
III – Report Distribution List
Appendix
V – Glossary of Terms
Appendix
VI – Management’s Response to the Draft Report
Abbreviations
|
CPIC |
Capital Planning and Investment Control |
|
ERAP |
Enterprise Remote Access Project |
|
FY |
Fiscal Year |
|
IRS |
Internal Revenue Service |
|
LMSB |
Large and Mid-Size Business |
|
OMB |
Office of Management and Budget |
|
TCS |
Treasury Communications System |
|
TIAS |
Treasury Internet Access Solution |
|
VPN |
Virtual Private Network |
The Modernization and Information Technology Services organization is responsible for delivering information technology services and solutions that support effective tax administration. Within the Modernization and Information Technology Services organization, the Enterprise Networks organization is responsible for providing all forms of telecommunication services (e.g., voice, data, video, wireless) in the most efficient and effective manner and managing the design and engineering of the telecommunication environment.
The Treasury Communications System (TCS) program was established to provide the Department of the Treasury (Treasury) and its bureaus with a centralized network and management system by providing a wide range of data communications[5] services through a single contract vehicle. Services provided through the TCS contractor include Internet access, network security, and network operations and maintenance. The TCS program is funded through the Treasury Working Capital Fund, which is used for programs that can provide common administrative services that benefit multiple bureaus. The goals of such programs are to reduce overhead costs, create economies of scale, and avoid duplication of services.
Services from the TCS program are obtained by agencies through the TCS contract that was awarded in September 1995 to TRW.[6] The contract is a 10-year Indefinite Delivery/Indefinite Quantity contract with terms that allow for a 6-month extension. This type of contract establishes the price of supplies and services at the onset of the contract. The TCS contract expired in September 2005, but it has been extended until September 2007 due to delays in awarding the new telecommunication services contract.
On
May 4, 2004, Treasury issued a request for proposals to replace the TCS
contract. The new telecommunication
services procurement, the Treasury Communications Enterprise, is estimated to
be worth potentially $1 billion over its expected 10-year life. However, awarding of the Treasury
Communications Enterprise contract has been pushed back to 2007.[7]
This review was performed at the Internal Revenue Service
(IRS) Enterprise Networks organization office in New
Carrollton, Maryland, and the Procurement office in
Project Documentation Did Not Show the Treasury Communications System Contract Was Considered As an Acquisition Vehicle for Development of the Enterprise Remote Access Project
While Treasury does not mandate use of the TCS contract by departments and bureaus when acquiring data communications services, IRS policies and procedures specify that the TCS contract should be considered first. To ensure the Federal Government receives the best value product, the Federal Acquisition Regulation[8] requires full and open competition among alternative sources for major system acquisitions. The Federal Acquisition Regulation also requires agencies to maintain documentation of contract actions including the Federal Government estimate of contract price and cost proposals from contractors.
For Fiscal Year (FY) 2006, the IRS budgeted $263 million for telecommunication services. Figure 1 shows the IRS had spent $260 million on telecommunication services as of September 28, 2006; the Enterprise Networks organization spent $221.5 million of this total.
Figure 1: FY 2006 Expenditure Amounts for Telecommunication
Services
|
Organization/Program |
Amount |
Percentage |
|
Enterprise Networks |
$221,537,718 |
85% |
|
Web Services |
$31,621,752 |
12% |
|
Enterprise Services |
$3,324,829 |
1% |
|
Security Services |
$2,662,861 |
1% |
|
Unit General
Management and Administration |
$510,000 |
Less
than 1% |
|
Criminal
Investigation |
$146,725 |
Less
than 1% |
|
Tier B (Small to
Medium Investment Projects) |
$130,442 |
Less
than 1% |
|
Other Organizations
with Amounts < $100,000 |
$82,806 |
Less
than 1% |
|
Total |
$260,017,133 |
99%* |
Source: Associate Chief Information Officer, Management.
* = Column does not add to 100 percent due to
rounding.
Twenty-six percent[9] of the expenditures were for data communications services under the TCS contract. Specifically, the IRS incurred approximately $67 million in TCS costs in FY 2006.
The TCS contract was not considered for the ERAP. As a result, the ERAP may not have been developed in the most cost-effective manner to ensure efficient use of resources.
The remaining $193 million was spent mostly on other telecommunication
services not associated with data communications (e.g., mobile telephones,
local and long distance telephone services, toll-free telephone services); however,
over $62 million was spent on acquiring telecommunication data processing services
outside of the TCS contract. Our
analysis of these expenditures determined that only the costs associated with
the Enterprise Remote Access Project
(ERAP) were for data communications services that would have warranted
consideration of the TCS contract during the acquisition process. However, the Project documentation did not
show the TCS contract was considered as an acquisition vehicle for development
of the ERAP. Appendix IV provides an explanation for the telecommunication
data processing services expenditures that did not warrant consideration of the
TCS contract.
The justification for developing the ERAP was to provide a cost-effective Virtual Private Network (VPN) solution for all IRS personnel working at home under flexi-place (i.e., telecommuting) or requiring remote access while in travel status because the IRS’ two current VPN solutions were limited. For example, the IRS’ Secure Dial-In solution, which provided IRS employees with an encrypted connection from remote computers to the IRS network via dial-up modem connectivity, was subject to the limitation of dial-up modem technology and was not designed to access and download email messages with large files. While the IRS Large and Mid-Size Business (LMSB) Division VPN solution did provide broadband connectivity and secure remote site access, the ERAP Business Case indicated that to properly scale the LMSB Division VPN solution to meet the needs of the entire IRS was cost prohibitive. Neither of the IRS’ current VPN solutions (Secure Dial-In and LMSB Division VPN) were acquired under the TCS contract. Figure 2 shows a comparison of the three VPN solutions.
Figure 2: Comparison of VPN Solutions
|
Solution |
Key Features |
|
Secure
|
Modem-based
VPN solution owned and managed by the IRS. |
|
LMSB Division
VPN |
Internet-based
VPN solution capable of providing broadband connectivity and secure, fixed-site
access (e.g., at the taxpayer’s location) partially managed by the IRS. |
|
ERAP |
Internet-based
VPN solution capable of providing broadband connectivity and secure, fixed-site
access fully managed by a contractor. |
Source: ERAP Business Case.
Although the TCS contract offers a VPN-managed service that uses the assets of the Treasury Internet Access Solution (TIAS) to provide secure remote network access to employees, Project documentation did not show that it was one of the contracting vehicles considered for the ERAP. According to IRS Procurement office officials, three vendors were selected from the General Services Administration schedule for a detailed technological evaluation, which included evaluating cost, software, and scalability. A Blanket Purchase Agreement was then issued to the vendor that provided the best value product for the customer. According to the ERAP Business Case, this acquisition strategy was selected because the use of an existing Federal Government contracting vehicle would shorten procurement cycles by simplifying the procurement process. Although reasons were not documented in the ERAP Project file, both IRS Procurement office and Enterprise Networks organization personnel offered four reasons why the TCS contract was not considered for the ERAP. Figure 3 shows the reasons provided by the IRS and our comment for each reason.
Figure 3: Reasons Why the TCS Was Not Considered for the
ERAP
|
IRS Reason |
Treasury Inspector General for Tax Administration
Comment |
|
The TCS contract was
scheduled to expire in September 2005. |
While the TCS contract
was to expire in |
|
The TCS
TIAS solution did not meet established security requirements for the VPN
solution. |
Although management
provided documentation showing the TCS contract was considered when comparing
alternative solutions in FY 2001 for development of the LMSB Division VPN and
that security issues were identified, we were unable to locate any Project
documentation for the ERAP development effort in FY 2004 indicating the TCS TIAS solution was considered and that it would
not meet identified security requirements. |
|
The TCS TIAS solution would be too expensive because of the
overhead costs associated with services provided under the TCS contract. |
Both IRS Procurement office
and Enterprise Networks organization personnel were unable to provide any
cost estimates to support management’s position that the TCS TIAS solution would
be too expensive. |
|
The TCS TIAS solution could not meet the customer’s requirement
that the VPN solution support a dial-up capability. |
We were unable to locate
any Project documentation
to support management’s position that the TCS TIAS solution was excluded from
consideration because it would not support a dial-up capability. |
Source: IRS Procurement office
and
General for Tax Administration analysis.
Insufficient Project documentation occurred
because Modernization and Information Technology
Services management did not ensure documentation was maintained as
required by the Federal Acquisition Regulation to support that the acquisition
team considered the TCS contract during the procurement process when comparing
alternative solutions for telecommunication services. In fact, our discussions with management and
staff from the Enterprise Networks organization and ERAP Project office
indicated the former Director, Enterprise Networks, compared the costs of
remote access solutions and found that services acquired under the TCS contract
would be substantially more expensive.
However, by not adequately documenting consideration of the TCS contract
as one of the alternative solutions, the IRS may not have developed the ERAP in
the most cost-effective manner to ensure efficient use of resources.[10]
Recommendation
Recommendation 1: The Chief Information Officer should ensure project documentation supports consideration of Treasury contracts during the procurement process when comparing alternative solutions for telecommunication services.
Management’s Response: IRS management agreed with this recommendation. The Chief Information Officer will communicate to the Enterprise Networks organization the importance of following the enterprise life cycle project process. This will ensure documentation indicates consideration of Treasury contracts when comparing alternative solutions for telecommunication services.
Telecommunication Projects Were
Considered Infrastructure Projects and Not Classified As Major Information
Technology Investments
The Clinger-Cohen Act of
1996 (Federal Acquisition Reform Act of 1996) (Information Technology
Management Reform Act of 1996)[11] requires agencies to use a disciplined Capital Planning and Investment
Control (CPIC) process to acquire, use, maintain, and dispose of information
technology assets. In addition, Office
of Management and Budget (OMB) Circular A-11, Preparation, Submission, and Execution of the Budget, requires each
agency to include an information technology
Investment Portfolio, commonly called Exhibit 53, with its annual budget submission to the OMB containing the information
technology investment title, description, amount, and funding source. The required information allows the
OMB to review and evaluate each agency’s information technology spending and to
compare information technology spending across the Federal Government.
For the Exhibit 53, the agency should classify each information technology investment as either major or nonmajor. The OMB defines a major information technology investment as one that requires special management attention because of certain attributes, including the importance to an agency’s mission; external visibility; and high development, operating, or maintenance cost. Major information technology investments require a more stringent CPIC process, including increased executive oversight and preparation of a detailed Capital Asset Plan and Business Case, commonly called Exhibit 300. Treasury guidelines require preparation of one consolidated Exhibit 300 for all infrastructure costs (i.e., telecommunications).
In June 2006, new Treasury guidelines were
issued requiring separate (internal) Exhibit 300s for each project that would
otherwise qualify as a major investment, to enable improved transparency for Treasury
investments and enhance accountability. According
to Treasury, this would include individual initiatives for which the
annual investment exceeds $5 million or the total life cycle cost exceeds $50
million. The internal Exhibit 300s are not forwarded to the OMB as part of
Treasury’s information technology Investment Portfolio.
Figure 4: ERAP Expenditures Between FYs 2004 and 2007
|
Fiscal Year |
Annual Amount |
Cumulative Amount |
|
2004 |
$690,402 |
$690,402 |
|
2005 |
$11,671,843 |
$12,362,245 |
|
2006 |
$6,306,563 |
$18,668,808 |
|
2007[12] |
$10,634,987 |
|
Source: Associate Chief Information Officer, Management,
and the ERAP Project Office.
Recommendation
Recommendation 2: The Chief Information Officer should analyze all (steady state and development, modernization, and enhancement stage) information technology investments included in the Telecommunications Infrastructure Exhibit 300 to identify projects under development that should be classified as major information technology investments requiring increased executive oversight and preparation of internal Exhibit 300s.
Management’s Response: IRS management agreed with this recommendation. The CPIC organization will provide training and guidance to Enterprise Networks organization project managers and executives to ensure compliance with existing Treasury guidance that requires infrastructure projects in the development, modernization, and enhancement phase of the life cycle to develop internal Exhibit 300s if they meet the criteria for a major project. In addition, the CPIC organization will review all projects in the Telecommunications Infrastructure Exhibit 300 to ensure proper classification.
Appendix I
Detailed Objective, Scope, and Methodology
The overall objective of this review was to determine whether the IRS ensures telecommunication services acquired outside of the TCS contract are cost effective and do not duplicate services offered through the TCS contract. To accomplish this objective, we:
I.
Determined the amounts budgeted and expended by the IRS for
telecommunication services for FYs 2005 through 2007.
A.
Obtained
a download from the IRS Integrated Financial System[15] identifying total expenditures for
telecommunication services in FYs 2005 and 2006 for each telecommunication
project and the amounts budgeted for FY 2007.
We relied on the Government
Accountability Office’s assessment of the reliability of the computer-processed
data from the Integrated Financial System.
During
a review of the IRS’ financial statements,[16] the Government
Accountability Office concluded the expense and reimbursable revenue information processed through the System for FYs
2005 and 2006 was reliable in all material respects.
B.
Met with
Enterprise Networks organization management and staff to discuss FY 2005 TCS
expenditure amounts and the budgeted amounts for FY 2006.
C.
Reviewed
the IRS Main Account (TCS Program Financial Plan) to identify Bureau-Specific Costs
and Shared Costs for FYs 2005 through 2007.
D.
Reviewed
correspondence between the IRS and Treasury regarding the IRS’ financial plan
amounts for FYs 2005 through 2007, including concessions made by Treasury and
the resulting adjustments to the IRS Working Capital Fund Program requirements.
E.
Identified
the TCS contract actual expenditure amounts by category for FYs 2005 and 2006
and estimated expenditure amounts by category for FY 2007.
II.
Evaluated
controls over telecommunication services acquired outside of the TCS contract.
A.
Reviewed TCS program policies and procedures for acquiring
telecommunication services, including any fees for add-on services and bundled
services and the approval process for acquisitions. In addition, we reviewed the Internal Revenue
Manual and other directives governing the acquisition process for
telecommunication services both within and outside of the TCS program.
B.
Met with TCS Program Management Office and Enterprise Networks organization management and staff to
identify the services available in the TCS contract, procedures for acquiring
telecommunication services outside the TCS contract, and efforts to ensure IRS
telecommunication projects do not duplicate service available through the TCS
contract.
C.
Obtained
from the Enterprise Networks organization a list of all telecommunication
projects acquiring services outside of the TCS contract and met with other organizational
functions with expenditures for telecommunication services to identify projects
that warranted consideration of the TCS contract.
D.
For the
telecommunication projects identified in Step II.C. that warranted
consideration of the TCS contract, determined whether a business justification
was completed supporting the acquisition, a cost-benefit analysis was completed
comparing alternative solutions to services available under the TCS contract
and the telecommunication services solution selected was both the most feasible
and cost-effective, services acquired duplicate any of the shared (bundled)
services currently offered under the TCS contract, and associated costs for
services were identified.
Appendix II
Major Contributors to This Report
Margaret E. Begg,
Assistant Inspector General for Audit (Information Systems Programs)
Gary Hinkle, Director
Danny Verneuille, Audit
Manager
Phung-Son Nguyen, Senior Auditor
Van Warmke, Senior
Auditor
Olivia DeBerry,
Auditor
Appendix III
Commissioner C
Office of the
Commissioner – Attn: Chief of Staff C
Deputy Commissioner for Operations Support OS
Chief, Agency-Wide Shared Services OS:A
Deputy Chief Information Officer OS:CIO
Acting Associate Chief Information Officer, Enterprise Networks OS:CIO:EN
Director, Procurement OS:A:P
Director, Stakeholder Management Division OS:CIO:SM
Director, Capital Planning and Investment Control OS:CIO:M:CP
Chief Counsel CC
National Taxpayer Advocate TA
Director, Office of Legislative Affairs CL:LA
Director, Office of
Program Evaluation and Risk Analysis
RAS:O
Office of Internal
Control OS:CFO:CPIC:IC
Audit Liaisons:
Deputy Commissioner for Operations Support OS
Chief, Agency-Wide Shared Services OS:A
Acting Associate Chief Information Officer, Enterprise Networks OS:CIO:EN
Director, Procurement OS:A:P
Director, Program Oversight OS:CIO:SM:PO
Appendix IV
Analysis of Telecommunication Data Processing Services Expenditures
Not Warranting Consideration of the Treasury Communications System Contract
|
Title |
Description |
|
Web Services |
This project
involves maintenance for the three IRS portals (IRS.gov, Employee User
Portal, and Registered User Portal) that were originally developed as part of
the Business Systems Modernization program and were moved to the current
processing environment for production.
The project was excluded from further analysis because the IRS has
extended the maintenance contracts only to allow time to migrate the projects
to using commercial |
|
Unit General
Management and Administration |
These are
expenditures by the Modernization and Information Technology Services
organization that are not associated with a specific telecommunication
services project or Associate Chief Information Officer area. For example, the $1.8 million expended in
FY 2005 was the IRS’ share of the attorney fees associated with the award and
protest of the new Treasury Communications Enterprise contract. The FY 2006 expenditures totaling $510,000
paid to a contractor were on an existing contract for support and maintenance
of the current production systems within a web-based environment. |
|
Enterprise
Services |
These are
expenditures for contractor services for FY 2006 totaling |
|
Common
Communications Gateway |
This project,
which was budgeted to receive only $50,000 in FY 2006, was excluded because it
is an internal activity monitoring and intrusion detection system developed
to consolidate and standardize design requirements for all external
interfaces to the IRS network. |
|
Common Premise
Capability |
This project
is the IRS’ voice over Internet protocol solution. The project was excluded from further
analysis because the current project activities involve replacement of voice
telecommunication equipment that was aligned under the infrastructure roadmap
initiative and paid with FY 2005 funds that had to be spent by September
2006. The project was not funded in FY
2006. |
Appendix V
|
Capital Asset Plan
and Business Case |
Required by OMB
Circular A-11, Preparation, Submission,
and Execution of the Budget, dated June 2005, and commonly called Exhibit
300. Each agency must submit an
Exhibit 300 twice each year for each major information technology investment. |
|
Capital Planning
and Investment Control |
A management process for the ongoing identification,
selection, control, and evaluation of investments in information resources
focused on agency missions and achieving specific program outcomes. |
|
Data
Communications |
The electronic transmission of information that has been
encoded digitally for storage and processing by computers. |
|
Development,
Modernization, and Enhancement Investments |
Costs for the development, modernization, and enhancement
investments include costs for new investments and changes or modifications to
existing systems to improve capability or performance. |
|
Indefinite Delivery/Indefinite Quantity Contracts |
Contracts allowing the Federal Government to acquire an
indefinite quantity, within stated limits, of supplies or services during a
fixed period with deliveries or performance to be scheduled by placing orders
with the contractor. |
|
Information
Technology Investment Portfolio |
Required by OMB
Circular A-11 and commonly called Exhibit 53.
This portfolio must be submitted with each agency’s annual budget
submission and contain the information technology investment title,
description, amount, and funding source. |
|
Integrated
Financial System |
An administrative
accounting system used by the IRS. |
|
Steady State
Investments |
Costs for routine maintenance and operational costs at
current capability and performance level including costs for personnel, maintenance
of existing information systems, corrective software maintenance, voice and
data communications maintenance, and replacement of broken equipment. |
|
Telecommunication
Data Processing Services |
Represents services contracted from |
|
Virtual Private
Network |
A
data transport mechanism deployed on a public or shared communications
infrastructure, like the Internet, that simulates a private network through
use of privacy-enhancing technology (e.g., encryption). |
Appendix VI
Management’s Response to the
Draft Report
The response was removed due
to its size. To see the response, please
go to the Adobe PDF version of the report on the TIGTA Public Web Page.
[1] See Appendix V for a Glossary of Terms.
[2] 48 C.F.R. ch. 1 (2005).
[3] After discussing the results of the audit with IRS management, we received management comments advising that the ERAP costs $6,000 less per year than the TCS solution. However, no supporting documentation was provided and we did not verify the information.
[4] The Electronic Fraud Detection System Redesign Failure Resulted in Fraudulent Returns and Refunds Not Being Identified (Reference Number 2006-20-108, dated August 9, 2006).
[5] See Appendix V for a Glossary of Terms.
[6] On August 4, 1996, Northrop Grumman Missions Systems,
formerly TRW, assumed full control of managing operations of the nationwide,
integrated network for the Department of the Treasury’s bureaus and offices.
[7] On December 21, 2006, the Department of the Treasury announced that it was canceling its request for proposals for the Treasury Communications Enterprise contract, stating it will use the General Services Administration’s upcoming Federal Governmentwide telecommunication contract vehicle instead.
[8] 48 C.F.R. ch. 1 (2005).
[9] $66,660,988 divided by $260,017,133.
[10] After discussing the results of the audit with management, we received management comments advising that the ERAP costs $6,000 less per year than the TCS-managed VPN solution. However, no supporting documentation was provided and we did not verify the information.
[11] Pub. L. No. 104-106, 110 Stat. 642 (codified in scattered sections of 5 U.S.C., 5 U.S.C. app., 10 U.S.C., 15 U.S.C., 16 U.S.C., 18 U.S.C., 22 U.S.C., 28 U.S.C., 29 U.S.C., 31 U.S.C., 38 U.S.C., 40 U.S.C., 41 U.S.C., 42 U.S.C., 44 U.S.C., 49 U.S.C., 50 U.S.C.).
[12] The FY 2007 amount represents the amount budgeted for the ERAP.
[13] The Common Premise Capability Project is intended to upgrade telephone system equipment to Internet protocol technology to improve performance, security, and data connectivity.
[14] The Electronic Fraud Detection System Redesign Failure Resulted in Fraudulent Returns and Refunds Not Being Identified (Reference Number 2006-20-108, dated August 9, 2006).
[15] See Appendix V for a Glossary of Terms.
[16] Financial Audit: IRS’s Fiscal Years 2006 and 2005 Financial Statements (GAO-07-136, dated November 2006).