Office of Audit
REVIEW OF THE ENTERPRISE E-MAIL SYSTEM ACQUISITION
Final Report issued on September 30, 2016
Highlights of Reference Number:† 2016-20-080 to the Internal Revenue Service Chief Information Officer and Chief Procurement Officer.
IMPACT ON TAXPAYERS
The IRS currently maintains an on-premises e‑mail environment that does not have archive capability.† The existing system hardware is approaching manufacturer end-of-support and is experiencing numerous failures resulting in a significantly increased workload on enterprise e‑mail support staff.† If the IRS does not efficiently upgrade its e-mail environment, it could adversely affect the IRSís ability to effectively perform tax administration.
WHY TIGTA DID THE AUDIT
The overall objective was to determine whether the IRS properly procured a new enterprise e‑mail system. †In order to comply with an Office of Management and Budget directive that requires Federal agencies to manage both permanent and temporary e-mail records in an accessible electronic format by December 2016, the IRS plans to procure a complete new enterprise e‑mail system.
WHAT TIGTA FOUND
The IRS purchased subscriptions for an enterprise e-mail system that, as it turned out, it could not use.† The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise.
IRS Information Technology organization executives made a management decision to consider the enterprise e-mail project an upgrade to existing software and not a new development project or program.† Therefore, the Information Technology organization did not follow the Internal Revenue Manual Enterprise Life Cycle guidance.† The IRS authorized the $12 million purchase of subscriptions over a two-year period between June 2014 and June 2016.† However, the software to be used via the purchased subscriptions was never deployed.
The IRS may have violated the bona fide needs rule when it purchased the subscriptions using Fiscal Years 2014 and 2015 appropriations and did not deploy the software subscriptions in those years.† In addition, the IRS violated Federal Acquisition Regulation requirements by not using full and open competition to purchase these subscriptions.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Chief Information Officer ensure that 1) appropriate Internal Revenue Manual sections are followed prior to the subscription requisition process and throughout the subscription project development life cycle for new subscriptions or managed services procurements and 2) a review is conducted by IRS Chief Counsel to determine if the subscriptions purchased violated the bona fide needs rule and take any actions required by law.† TIGTA also recommended that the Chief Information Officer and Chief Procurement Officer ensure that, if the IRS intends to purchase a cloud solution in the future, it acquires the products through competitive procedures outlined in the Federal Acquisition Regulation.
In managementís response to the report, the IRS agreed with two recommendations and plans to have a review conducted by Chief Counsel and to collaborate and follow the Federal Acquisition Regulation. †The IRS partially agreed with one recommendation because it does not believe the Enterprise Life Cycle was applicable.† The IRS also disagreed that it wasted taxpayer dollars.† TIGTA maintains that the Enterprise Life Cycle was applicable and funds were wasted as explained in the report.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number ††/† 202-622-6500
E-mail Address †/† TIGTACommunications@tigta.treas.gov
Website†††††† ††††††/† https://www.treasury.gov/tigta