What flexible tech acquisition looks like at IRS

Shutterstock photo ID: photo ID: 245503636 By Mark Van Scyoc Sign outside the Internal Revenue Service building in downtown Washington, DC on December 26, 2014.

In 2018, the IRS rolled out plans for a series of pilots that aimed to sidestep the traditionally lengthy and solution-specific procurement process in favor of a faster, more open-ended approach to buying technology. On March 4, the agency gave an update on how its first Pilot IRS acquisition has performed, provided insights into lessons learned and discussed what's in store for future projects.

In August 2019, the IRS announced its first pilot to automate and improve data entry into its Federal Procurement Data System-Next Generation system. That process resulted in the awards of 30-day, $25,000 contracts to five companies. Two of those companies are still receiving funding after demonstrating 30%-80% reductions in time needed to correct FDPS-NG data. FCW reached out to the IRS procurement contact for more information on the winning firms.

Under the initial Pilot IRS scope, each project was funded at a maximum of $7 million over five years, with the potential for additional funding and scoping as individual projects matured. It also gave the agency an opportunity to cut bait on projects that don't look promising, with four built-in phases that allow officials to revisit a project and determine whether to continue funding or terminate at the end of each phase.

However, the update indicated that future projects could blow past those initial funding caps, with the agency floating the potential for individual companies to receive up to $7 million per project and total funding for all contracts across a project reaching as high as $25 million.

The IRS also revealed a handful of future projects it will pursue under the pilot, including improvements to aggregation and visualization services for 10 different procurement-related systems, synthetic data creation capabilities to test enterprise software systems and "code-free" automation tools to test systems, production and performance for up to 200 different applications.

"The initial results of Pilot IRS have generated significant levels of interest from IRS and other federal agency customers. Within the next 3-6 months, IRS anticipates releasing at least one of [these] projects for competition," the notice stated.

While the pilots are designed to be agile and quick, that desire can sometimes conflict with other, lengthier bureaucratic processes. Under the data entry project, IRS said it waited too long to request and process security clearances for personnel from the five awarded firms. In the future, the agency said it plans to devote more front-end resources to ensure a limited number of personnel are cleared by the start of each project.

About the Author

Derek B. Johnson is a senior staff writer at FCW, covering governmentwide IT policy, cybersecurity and a range of other federal technology issues.

Prior to joining FCW, Johnson was a freelance technology journalist. His work has appeared in The Washington Post, GoodCall News, Foreign Policy Journal, Washington Technology, Elevation DC, Connection Newspapers and The Maryland Gazette.

Johnson has a Bachelor's degree in journalism from Hofstra University and a Master's degree in public policy from George Mason University. He can be contacted at [email protected], or follow him on Twitter @derekdoestech.

Click here for previous articles by Johnson.


  • Acquisition
    Shutterstock ID: 1993681 By Jurgen Ziewe

    Spinning up telework presents procurement challenges

    As concerns over the coronavirus outbreak drives more agencies towards expanding employee telework, federal acquisition contracts can help ease some of the pain.

  • Congress
    The US Centers for Disease Control and Prevention headquarters on March 30, 2013.  Katherine Welles. Shutterstock ID 147558686

    CDC: Data modernization would have improved coronavirus detection, tracking

    Officials said more money would improve the agency's detection and tracking capabilities for emerging diseases.

Stay Connected


Sign up for our newsletter.

I agree to this site's Privacy Policy.