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GGD-92-14R 1 (1992-05-28)

handle is hein.gao/gaobackbk0001 and id is 1 raw text is: G~o United States General Accounting Office Washington, D.C. 20548 General Government Division 146734 B-248773 May 28, 1992 The Honorable William E. Dannemeyer House of Representatives Dear Mr. Dannemeyer: This letter responds to your request that we consider a number of allegations from your constituent concerning the Internal Revenue Service's (IRS) negotiation and administration of certain contracts for ADP support services. You requested that we determine whether proper safeguards were implemented against contract abuse and the resultant waste of tax dollars. To obtain the information presented in this letter, we reviewed the ADP support services contracts and related IRS Internal Audit reports. We also interviewed IRS Procurement staff and Internal Audit staff. We did not review the negotiation of individual task orders issued under the contracts. BACKGROUND The contracts involved are two successive ADP support service contracts. The first contract was awarded competitively to Vanguard Technologies Corp. in 1985 with a $50 million ceiling price over 5 years. The second contract was awarded competitively to the OAO Corporation in 1989 with a ceiling price of $500 million over 7 years.1 In 1988, Cincinnati Bell Information Systems, Inc. (CBIS) acquired Vanguard. CBIS later purchased the assets of the OAO division that was awarded the second contract and, through agreement with IRS, became the successor party to that contract. Both contracts provided IRS and other Treasury bureaus with needed ADP support services. The services to be performed included requirements definition, systems analysis and design, software development, testing, maintenance, and program and project management. The contracts established labor rates ranging from less than $10 per hour to over $40 'GAO has reviewed aspects of the award of this contract. See IRS Automation: Procurement Practices Need Strengthening (GAO/IMTEC-90-24, Jan. 12, 1990). GAO/GGD-92-14R IRS ADP CONTRACTS

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