Equifax’s CEO was just before congress testifying how the company’s ineptness allowed a prolonged series of hacks to unveil the names, SSNs, DoBs, and other key identifying data of 150 million Americans (and some Canadians and Brits). That data could be invaluable in, among other things, tax fraud.
Which is why it makes perfect sense for the IRS to award a no-bid, single-source contract to Equifax for over $7 million to help them “verify taxpayer identity” to combat, of course, tax fraud.
Nice work, if you can get it.
The IRS contract award — which was made weeks after news of the breach was made public (which was, in turn, months after the breach had been detected by Equifax and that months after the first hacks actually occurred) — at least partially clarifies the rationale for what seems an extremely goofy thing to do. Equifax is the only company that can do what the IRS wants (it says), and the functionality is critical for the agency (well, duh, yeah, with all those SSNs out the in the wild …). The IRS also says that Equifax has already been doing this service for them, that none of the data the hackers broke into was their data, and that they haven’t seen any tax fraud from the hacking (yet).
Apparently various Congressfolk are just as confused about the IRS doing this as, well, I am.
Reps. Suzan DelBene (D-Wash.) and Earl Blumenauer (D-Ore.) separately penned letters to IRS Commissioner John Koskinen demanding he explain the agency’s rationale for awarding the contract to Equifax and provide information on any alternatives the agency considered. “I was initially under the impression that my staff was sharing a copy of the Onion, until I realized this story was, in fact, true,” Blumenauer wrote.
I suspect the eventual answer from the IRS will be, “Um, there really is nobody else who can or will do this for us, so we’re stuck with them.” Which always seems to be the lament of companies everywhere who thought that outsourcing was a great idea …
IRS awards Equifax no-bid, $7.25 million contract after hack
“This is considered a critical service that cannot lapse.”
You might want to read the fourth number on this list:
http://www.cracked.com/article_20612_5-seemingly-harmless-groups-that-wield-terrifying-power.html
Is it just me or did that look like a pop up ad 😀
Don’t believe the “nobody else can do it” line. It may occasionally be true, but typically what you do is decide what features you want, including those you’d never get away with putting in a bid, and who provides them. Then you tune the contract so only the company that has those features can win.
I went to college with Suzan DelBene. While we're of different political parties, she does good work and asks good questions.
+Kee Hinckley Yup. Pretty standard way of doing it. Also works for giving your friend (or preferred candidate) a job.
At a guess, they already had plans (and had socialized) to pick Equifax for the job, whcih nobody would have batted an eye about, and when the scandal broke, the process (regardless of when it was put out to bid) was already too far along to easily revise or open it up to others (or encourage others to bid on it).
What I didn't see noted was the duration of the contract — is this a one-year thing?
+Dave Hill it’s a pretty small amount. I wouldn’t be surprised if it were short term.
Looks like the politicians are having trouble telling satire from reality too. I like the crack about The Onion.
What does the irs gain from this?
What do they want?
The irs is one of the largest most entrenched beaurocracies in the government. What is the motivation?
I am a plebe and I don't get it.
Not shocking
+Melody Peters It's not quite clear to me what the identity validation they are doing is about, unless it is tying reported income / accounts by SSN to what the credit reporting company has about them. Or maybe it's just cross-checking and validating name + SSN + address info in general, since credit reporting remains a pretty dynamic database whereas tax submissions are not.
That is hopefully not about me, now that is just plain ridiculous, you wonder if the WON is being traded with the enemy. North Korea. that is not a tax advantage for anyone and my background check at WTO. well that blows it. Are we killing ourselves here?
All part of the plan
So this article clarifies the matter, at least a bit — Equifax is in the middle of contesting the long-term awarding of this contract to someone else. While it's under review, the contact can't be shifted, and so at present only Equifax can provide the service, and provide it beyond the date their current contract expires.
The appeal was placed in July; Equifax's contact expires at the end of September, but a decision on the appeal won't happen until later in October, and even if Equifax' appeal fails, there is still a necessary transition period.
Meanwhile, without the service, anything done with the IRS online can't varlidate identity. And quarterly taxes are due on 16 October, and for folk who've lost all their paperwork in the hurricanes, only the online IRS stuff can provide potentially critical tax documents.
While the article has a few other weirdities to it, it sounds like this was a poorly explained move on the part of the IRS, but a defensible one. For now.
https://gizmodo.com/irs-chief-says-aborting-equifax-contract-could-harm-hur-1819196481