Office of Audit
CONTROLS OVER INFORMATION TECHNOLOGY PROCUREMENTS NEED IMPROVEMENT
Final Report issued on June 19, 2019
Highlights of Reference Number: 2019-20-038 to the Commissioner of Internal Revenue.
IMPACT ON TAXPAYERS
The Office of Information Technology Acquisitions is responsible for ensuring that the acquisition process is properly and efficiently managed and is conducted with integrity, fairness, and openness. Information technology products and services remain one of the largest costs for Federal agencies. Without proper controls, the IRS cannot assure that it secured the lowest cost, increasing the risk of overpayments for products and services and the potential waste of taxpayer dollars.
WHY TIGTA DID THE AUDIT
This audit was initiated to assess the various procurement methods the IRS uses to obtain information technology hardware and software to determine whether it followed established policies and procedures and that the procurements were the most cost effective for the Federal Government.
WHAT TIGTA FOUND
TIGTA selected and reviewed a stratified statistical sample of 43 awarded contracts and 22 executed delivery orders from a population of 106 awarded contracts and 77 executed delivery orders for information technology hardware and software. The 183 awarded contracts and executed delivery orders had combined obligations of approximately $94.9 million, of which our stratified statistical sample comprised approximately $26.2 million, or about 28 percent of the total population obligations.
For 56 of the awarded contracts and executed delivery orders in the stratified statistical sample, TIGTA was unable to find the same or similar product at a better price than what the IRS had obtained. A number of these products required specific features or specifications, making them a unique product not largely available in the common marketplace and not identified in our search.
However, TIGTA found nine delivery orders associated with one indefinite-delivery, indefinite-quantity contract for which the IRS could have procured eight distinct types of commercial hardware at a lower cost. TIGTA estimates that the IRS could have saved $122,803 had it used a General Services Administration Federal Supply Schedule to purchase the hardware.
In addition, TIGTA found that preaward and award procurement documentation was not readily available or was missing from contract files. TIGTA estimates that 91 preaward and award procurement documents were missing.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Chief Procurement Officer and the organization requesting a product or service ensure that sufficient market research is completed to support the contract vehicle used. In addition, the Chief Procurement Officer should ensure that: 1) contract file content reviews are timely and regularly conducted to confirm that documentation is complete, organized, current, consistent, and stored electronically as required and 2) all missing preaward and award procurement documents subsequently found during TIGTA’s review are saved in their respective electronic contract files.
The IRS agreed with all of our recommendations and responded that it now complies with the market research policy. The IRS plans to remind managers to verify compliance during contract file reviews and to ensure that all missing preaward and award procurement documents found during this review are saved in their respective electronic contract files.
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