GAO disputes that IRS had to award $7.25M contract to Equifax

by Julia Manchester - 10/05/17 9:21 PM ET

The Government Accountability Office (GAO) is pushing back against the Internal Revenue Service’s (IRS) claim this week that it had to give a $7.25 million, no-bid contract to Equifax in the wake of its massive data breach.

“Congress gave agencies, like IRS, the tools to move forward under appropriate situations. They appear to be electing not to use it,” GAO public affairs managing director Chuck Young said in a statement to The Hill.

“Congress provided IRS (and all agencies) with the authority to proceed should the agency determine that performance of the contract is ‘is in the best interest of the United States;’ or that there are ‘urgent and compelling circumstances that significantly affect interests of the United States [that] will not permit waiting for the Decision of the Comptroller General concerning the protest,’ ” he said, citing U.S. code.

The comments from Young, first reported by Politico, come after the IRS agreed to give Equifax the more than $7 million contract to verify taxpayers’ identities and help combat fraud, according to a recently-issued contract.

The IRS is hiring the embattled credit reporting agency to “verify taxpayer identity and to assist in ongoing identity verification and validations needs of the Service,” according to its filing on Federal Business Opportunities, a website that lists federal contracts.

The IRS labels Equifax as a “sole source order,” which means that the agency believes the credit reporting company is the only business capable of providing the service.

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IRS Commissioner John Koskinen defended the company’s decision in a letter to Rep. Earl Blumenauer (D-Ore.) obtained by Politico saying, “the only alternative” to doing business with Equifax was “to shut down all online access to taxpayer accounts.”

Lawmakers are taking aim at the IRS to figure out why the agency awarded the contract to Equifax after the credit rating company suffered a massive hack that compromised the personal information of more than 145 million Americans.

“Right now, no businesses or consumers in Massachusetts or Nebraska would blindly trust Equifax to protect against fraud or handle sensitive personal information,” wrote Sens. Elizabeth Warren (D-Mass.) and Ben Sasse (R-Neb.) on Wednesday.

Updated: 9:43 p.m.

Tags Ben Sasse Earl Blumenauer Elizabeth Warren