The chairman of the Ways and Means Committee, which oversees the Internal Revenue Service, has urged the agency to reconsider its contracts with Computer Sciences Corp.

Rep. Bill Thomas, R-Calif., wrote a letter to Treasury Secretary Henry M. Paulson Jr. complaining that the agency paid Computer Sciences more than $18 million over the course of two years for a revamped screening system that is still not in place. Worse, the IRS recently announced that because not even the old system was not online for tax returns filed in 2006, the government had not caught an estimated $200 million to $300 million of fraudulent returns.

"Despite these failures, the IRS continues to contract with this company today," Thomas wrote. " A four-month investigation by this committee has uncovered incompetence at all levels."

Computer Sciences declined to comment on Thomas' letter.
Last week, the IT services company announced that more than a third of its $3.5 billion in first-quarter sales had come from its federal government unit.

CSC has had problems with its IRS contracts in the past. In 2003, the agency put a $3-billion contract in review, and a year later, lost $40 million of the contract because of missed deadlines.

Thomas said that he found CSC's involvement in the failure particularly troubling because of the company's role as the primary contractor responsible for the IRS's business systems modernization effort.

"This effort is still in progress after eight years and expenditures of more than $2 billion," Thomas wrote. "Considering the inability of the CSC in this case to deliver a functional product to the government and its inability to provide accurate information to the IRS, it may be an appropriate time to reexamine the dependence of the IRS on the CSC and determine whether the federal government is best served by this particular contractor."

Previously on WebCPA:

IRS: Lack of Program Costs Government Upwards of $200M (July 18, 2006)

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