Union: Another Blunder
IRS Delays Shift Of Files to Contractor

By GINGER ADAMS OTIS
The Internal Revenue Service announced last week that plans to transfer paperwork maintenance at seven U.S. taxpayer locations to a private vendor awarded a multi-million dollar contract were running more than six months behind schedule.

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The switch from Federal employees to IAP Worldwide, a private firm that in May was awarded a controversial $103 million contract to manage and guard IRS taxpayer files, was to have occurred Dec. 1.

IAP took over file management at IRS centers in Kansas City, Mo., and Ogden, Utah on schedule.

Six-Month Extension

But the remaining five processing centers - in Andover, Mass.; Atlanta; Austin, Texas; Fresno, Calif.; and Cincinnati - will be operated by IRS employees until June.

The taxpayer files, containing private financial information and Social Security numbers for million of taxpayers, are kept for up to one year at one of the 10 IRS Campus sites across the country before being transferred to a central Federal facility.

"Once again the [Bush] Administration's zeal to send the work of the Federal Government to private-sector contractors is failing America's taxpayers," said Colleen M. Kelley, president of the National Treasury Employees Union that represents IRS employees.

The announcement that the IRS was pushing back proceedings was particularly galling to the union in light of the fact that in 2003 - when the agency sought competitive bids to determine which group could best receive, file and maintain all tax returns and related documents - the Federal employees already doing the job won.

Losers Won on Appeal

But the losing company filed a protest, and after re-examining results, the IRS awarded the contract to IAP Worldwide Services of Cape Canaveral, Fla.

"This is not the first time that IRS employees will be expected to clean up behind a contractor that has not fulfilled its agreed-upon duties," Ms. Kelley told The Federal Times, a Washington, D.C.-based newspaper.

"I will be asking the IRS to explain the failure of this contractor and to publicly disclose the penalty the agency plans to impose on IAP Worldwide Services for breaking the agreement," she added.

An unidentified IRS spokesman told the Federal Times that the contract was modified because the agency "doesn't want to take risks" that the paperwork filing process isn't perfect for the busy tax season that is approaching.

IAP Worldwide Public Affairs Director Arlene Mellinger said the IRS proposed the contract change, which was not due to lack of readiness on the company's part. She told the Federal Times that the company was prepared to honor its contractual obligations at all seven sites.

The IRS released a written statement that said agency officials had agreed with IAP that a delayed start would ensure that a sufficient number of employees with the required training and security clearances were in place to manage the files for the 2007 tax season.

Ms. Kelley's response was to reiterate her union's position that properly trained and security-cleared staff already existed.

"Given the resources, there is no one who performs the work of the Federal government better than Federal employees," she said.