IRS review: Contractors lack full understanding of CADE

The underlying reason for repeated delays of IRS's CADE system is that the chief contractor has not fully grasped the complexity of the electronic taxpayer database, the chairman of a panel that reviews IRS business modernization said today.

'We've got an extremely complex system that the prime contractor has not fully grasped and understood, and they have consistently underestimated how it should be done,' said Larry Levitan, chairman of the business transformation committee of the IRS Oversight Board, which met today.

Computer Sciences Corp. is the lead company for the Prime alliance of contractors handling IRS business modernization. The alliance comprises IBM Corp., BearingPoint Inc. of McLean, Va., Northrup Grumman Information Technology of Herdon, Va., Unisys Corp. and Science Applications International Corp. of San Diego.

The Customer Account Data Engine will be operational for about 6 million 1040 EZ filers during the 2004 tax filing season, around March or April, the IRS said last week. It is the latest of several delays since 2001. (

CADE, the cornerstone of IRS's business modernization, is designed to replace the 40-year-old magnetic tape Master File with an Internet-based database system. It will hold the records of over 200 million taxpayers and be able to be updated immediately instead of a week the current system requires.

CSC has said it is confident that CADE's first phase would be in place during the 2004 tax season. It also welcomed an independent review of its performance.

The IRS Oversight Board continuously reviews CADE's status, budget issues, plans and performance, Levitan said. 'CADE has been unsatisfactortarily over budget and misscheduled. I am very concerned about the program,' he said.

IRS Commissioner Mark Everson selected the Software Engineering Institute of Carnegie Mellon University to conduct an independent technical assessment of CADE over the next 60-90 days. The IRS Oversight Board will evaluate SEI's review to assess the performance of the Prime alliance contractor and IRS' management. to determine if any changes are needed.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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