IRS tones its systems to better handle the tax season

Two contracts with Unisys that could be worth more than $800 million help the tax agency innovate and become more efficient. The IRS is using the first-of-its-k...

The IRS accepts more than 80 percent of all tax returns electronically. So the systems that process the data are under enormous pressure to perform, especially during this time of the year.

The IRS recently hired Unisys under two separate contracts to make sure its systems can handle the annual influx of data and can return money to taxpayers as efficiently as possible.

In both deals, the tax agency is trying to inject innovation into the support, maintenance and expansion of its taxpayer systems.

The IRS hired the Blue Bell, Pa., integrator under a $139 million, 10-year deal for storage-as-a-service in July 2012. The most recent deal from February could be worth $650 million over 10 years for the support and maintenance of the agency’s tier one customer service computing environment.

“These are among the most important systems environment within the IRS because they do process the core tax processing, as well as they maintain the master data information for taxes,” said PV Puvvada, the group vice president for civilian agencies for Unisys federal systems. “The enormity of the mission here represents that tier one status.”

In 2012, the IRS processed 234 million tax returns and brought in about $2.4 trillion. It also returned about $400 billion back to the taxpayers.

Increased expectations

Puvvada said the support and maintenance contract, which is called the Enterprise Computing Center Support (ECCS) program, is a follow-on deal, but it changed in several ways.

PV Puvvada, group vice president for civilian agencies, Unisys federal systems
The IRS increased the performance requirements and required the implementation of new technologies.

Unisys must integrate the data in the systems that fall under ECCS with the Customer Account Data Engine (CADE) more often — now daily instead of weekly. Additionally, Unisys has less time to fix problems, again going from an entire weekend to 20-to-30 minutes at a time.

“We have to have a very good contingency plan to support the IRS incident response system, which is very well thought out and very rigorous,” Puvvada said. “They have made improvements and done the implementation last year to be able to perform at that level.”

He said Unisys also will provide assistance to bring in new technologies, such as JAVA processing, intercommunications between systems, secure intertransactions as well as mobile computing.

“This is not an environment where IRS would enable all of them at the same time. But what we’d be looking forward to is provide a roadmap as they modernize on how do they take advantage of the new technology,” Puvvada said. “This new technology is more reliable, more secure and more reactive to the flexibilities that the IRS needs as their requirements change.”

One of a kind in the cloud

The storage-as-a-service contract is one of those new technologies that is giving the IRS flexibilities and security.

Unisys is taking over more than 7.5 petabytes of storage space currently in multiple IRS data centers and facilities. Unisys then will deploy and maintain a new IRS storage environment in a private cloud, letting the IRS pay for storage capacity as needed.

“It would come down and go up based on the tax processing needs of the IRS, he said. “As they are doing more rigorous tax processing during the tax filing season, they will consume more, and when they don’t need the excess capacity to process those or do analytics, it provides the IRS with the flexibility of paying for what they use. This is first of its kind in the federal market, a private cloud mission-critical storage.”

Puvvada said Unisys is charging IRS based on a per gigabyte of storage used and the business model expects the cost of storage to continue to decrease over the life of the contract.

He said in many ways this is the electricity model that many have talked about over the years as a benefit of cloud computing.

“IRS was very creative in constructing the storage-as-a-service requirement,” he said. “The problem that comes in with these cloud based services is who takes the risk and how do you take the risk. Unisys has invested in making the business model work and for us to provide this flexibility to the IRS. It’s not an easy thing to do, but the creative way the IRS constructed the contract because they really understood what could work, what kind of governance do you need to have, how do you need to consolidate and how do we need to commonly operate the requirements of the data and its movement. This would be relevant to other federal customers, but it requires a lot of thought process and understanding the culture, the business model, the mission needs and having the foresight to have a longer contract. This wouldn’t have worked for neither the IRS or Unisys if it was a standard three-year or five-year contract because the payback period for the industry partner takes a long time to get to.”


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