IRS News Release  
February 18, 1993

Grumman Wins IRS Tax
Systems Modernization Contract

WASHINGTON - The IRS tax systems modernization took an important step forward today with the award of a contract for character recognition and imaging systems to Grumman Data Systems. The systems provided by Grumman will be used to electronically process tax information from single sided paper tax forms.

The Internal Revenue Service said that under terms of the contract, known as the Service Center Recognition/Image Processing Systems (SCRIPS) contract, it can acquire as many as 13 of the systems. IRS said it plans on acquiring the systems it needs within four years. Grumman also will provide maintenance and support service under terms of the SCRIPS contract.

IRS said SCRIPS will replace optical character recognition systems it has used over the past decade for processing federal tax deposit forms, information returns, employment tax forms and Forms 1040EZ. The current systems are not compatible with each other or with the information processing system IRS is building for the future.

The SCRIPS contract is in effect for eight years and has a maximum estimated value of $87.7 million. Five firms bid on the contract. Grumman 's proposal was the highest rated technically and the lowest priced, clearly representing the best overall value to the public.

When its modernization program is fully implemented, IRS said that most taxpayers should be able to file their tax forms electronically. Taxpayers who do not file electronically will continue to file paper tax forms. Character recognition is the most efficient format with a high degree of accuracy. These systems create an image of the paper document from which the tax data can be processed electronically.

IRS said that creating an integrated electronic environment for tax data processing is the key to IRS' modernization effort. Ready access to current and accurate data in electronic format by IRS employees will result in improved IRS operations and service to taxpayers.

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