As IRS Scales Back Outsourcing, Union Remains Skeptical

The contractor, IAP, will take over paper file management responsibilities Friday at the centers in Kansas City, Mo., and Ogden, Utah. IAP is to assume filing activities at the remaining centers -- Andover, Mass.; Atlanta; Austin; Fresno, Calif.; and Cincinnati -- in June.

Arlene J. Mellinger, public affairs director for IAP, said the company was "fully prepared to honor its contractual obligations."

IAP is owned by Cerberus Capital Management, a New York hedge fund chaired by John W. Snow, the former Treasury secretary. The company specializes in global operations and logistics, facilities management, and professional and technical services. Last year, IAP acquired Johnson Controls World Services, a longtime federal contractor.

The IRS also has decided to retool another major project, known as a seat-management competition, that involved about 2,700 technology jobs at the agency. That decision was not tied to the filing season but to IRS concerns about the size of the initiative, Grant said.

Seat management includes service and support for desktop and laptop computers and other equipment, the IRS help desk, hardware and software procurement, network services and computer security.

The agency has canceled a public-private competition for the work and will instead break up the project "into smaller, more manageable initiatives to put in industry best practices," Grant said.

Kelley welcomed the cancellation but said the agency "wasted countless dollars" on the project and "spread much anxiety" among IRS technology employees. The union will monitor the IRS's new approach to performing the work, she said.

Stephen Barr's e-mail address isbarrs@washpost.com.