Cancelling contracts that support taxpayer-facing services could prevent the IRS from completing this mission, said the report. Image: Jonathan Weiss/Shutterstock.com
By: FEDweek StaffCost savings from the cancellation of more than 300 IRS contracts under Trump administration initiatives are “either limited or unknown because most of the obligated funds had already been expended or the contracts had no obligated values,” an inspector general audit has said, adding that more than 100 of them involved direct services to taxpayers.
Of the 334 contracts, auditors said that “potential savings cannot be calculated” on 22, representing nine-tenths of the total value. “Certain contract award types do not carry obligated values and therefore do not allow for a direct calculation of potentially avoided costs or open obligations. These award types include Blanket Purchase Agreements and Indefinite-Delivery Contracts,” it said.
Of the others, auditors found the potential for saving $440 million by not exercising option years and a potential return of $205 million in funds that have been obligated but not yet spent. However, such “open obligations” may be reduced if the contractor submits valid settlement proposals or final invoices, it said.
Among the canceled contracts were 115 that the IG deemed “taxpayer-facing,” for example to update individual and business tax return filing, over the phone interpreter services, and expert witness testimony. Another 31 were “descoped”—for example, by removing maintenance requirements from a contract for both design and maintenance of a software application.
In a closer look at eight canceled contracts of that type, auditors determined that no assessment was made in advance regarding whether taxpayer-facing services were involved; agency officials said they did not know why. “For the remaining 6 contracts, IRS officials stated that they completed the assessment for 5 of the contracts, and they were unable to determine whether this assessment was completed on 1 of the contracts because all IRS employees related to that contract have left the IRS,” the report said.
“Cancelling contracts that support taxpayer-facing services could prevent the IRS from completing this mission. This can disrupt core operations such as processing returns, providing customer service, or enforcing compliance, and may require the IRS to reallocate resources or adopt alternative solutions to sustain mission delivery,” it said.
The report was “for information only” and made no recommendations.
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