By Stephen Barr
Monday, May 14, 2007

The Internal Revenue Service purchased about $450 million in goods and services in 1990 when David A. Grant joined the agency. Today, it spends about $1.8 billion a year.

Grant was a contracting officer then; he is now the director of IRS procurement. His time at the IRS has been shaped, to a large degree, by the agency's quest to upgrade its technology, especially tax-processing and record-keeping systems.

Grant is part of the government's giant procurement machine, one of hundreds of federal officials who spent $417 billion last year on services and products -- consulting, computers, concrete -- purchased from global firms and local companies. Like the chiefs at other procurement shops, Grant also has duties that go beyond buying goods and services.

A significant part of his time is spent on ensuring that the IRS contracts include clauses to protect confidential taxpayer information and on better ways to retain and recruit acquisition specialists, who are in high demand in and out of government.

Contentious and sometimes politically sensitive issues show up at his doorstep, such as the IRS initiatives that use private debt collectors to track down delinquent taxpayers and contractors for filing, storage and retrieval activities at IRS tax-processing centers.

Regardless of the issue, Grant said he strives to be neutral. "We try not to let the company sort of dictate what we buy and how we buy it," he said. "We want to define what it is that we want."

Putting it more bureaucratically, Grant explained: "We try to use the acquisition strategy that meets the need for that particular buy."

The agency has about 500 procurement officers, with about 400 of them stationed in Oxon Hill. About 120 are information technology specialists who understand the technical side of computer operations and help the IRS write contracts and evaluate proposals from contractors.

About two-thirds of IRS acquisitions involve hardware, software and services to support computers and networks. Most of the larger companies selling to the IRS have sizable federal systems offices in the Washington area and some have their headquarters here. The roster of IRS contractors includes Computer Sciences Corp., Northrop Grumman, Booz Allen Hamilton and Accenture.

While technology is big at the IRS, Grant's procurement team also buys a little bit of everything else -- lawn and building maintenance, expert witnesses, consulting and training services -- for the hundreds of agency offices across the nation.

Last year, about half of the agency's 14,000 contracting actions, including purchase orders, task orders and other types of contract documents, involved small businesses. Local firms handled 3,000 to 4,000 contracting actions, Grant said.

Many of the agency's desktop computers and support services, such as help desks, are purchased from local companies, he said. Local firms also provide staffing for projects, logistics and training.

The IRS undertakes what Grant called "community outreach" -- bringing in new companies every quarter for introductions to procurement officials and for lessons in how to do business with the agency.

Many companies that were small when they started contracting with the IRS have grown into "robust, mid-size firms and do a lot of business with us," Grant said.

"I always tell them, get that first job and make sure you do well. Because if you do well, you are going to get a sterling reputation and more people are going to want to do business with you in the future. We have a number of success stories with small businesses that have basically grown up here in the IRS into well-established firms, and then they really branch out into other parts of the government."

Like a number of other agencies, the IRS keeps track of which contractors meet performance expectations and those that don't. Grant acknowledged that the IRS is sometimes at fault when expectations are not met, usually because the contract did not contain certain specifications or requirements. Every so often, he said, contracts fall apart because the vendor is no longer deploying its best team to do the work.

Asked if some companies deliberately promise to use their best employees but substitute the B team after winning the contract, Grant said that "good companies don't do that. Poor companies try that. Good contracting shops don't let that happen. And poor contracting shops don't recognize it soon enough."

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