IRS deploys bots to streamline procurement processes

When the National Defense Authorization Act required the IRS procurement office to insert telecommunications security language into all its contracts, staff used a bot to accomplish in three days what would have taken a year.

“As we looked at the number of contracts that had that criteria, it was 1,466 active contracts,” IRS Chief Procurement Officer Shanna Webbers said. “It would have taken us almost up to a year to modify all of those contracts.”

Called the DATA Act Bot, the tool focuses on improving transparency and accuracy of data in the Federal Procurement Data System and on improving compliance with its namesake, the Digital Accountability and Transparency Act of 2014. The bot, which incorporates artificial intelligence, natural language processing, optical character recognition and robotic process automation, is one of three that the office uses to streamline operations.

The first bot, the Contract Clause Review Tool, has been in use since 2018. It performs quality reviews on solicitation and contract documents by examining the words in the documents to identify missing, outdated or erroneous provisions or clauses. The other is the Contractor Responsibility Bot. Contracting staff email the bot a Data Universal Numbering System (DUNS) number, a unique numeric identifier for businesses. The bot searches publicly available databases to pull contractor compliance information and emails back a report with all of the research.

Before, IRS contracting officers, who oversee 12,000 transactions worth about $2.6 billion a year, had to plug the DUNS numbers into multiple databases to research vendors for past bankruptcies and other problems.

“The overall goal as we’re looking at this is to strengthen our agility by incorporating automated processes that are also streamlined,” said Andrea Kadish, director of the procurement office’s year-old Data Analytics and Technology Division. For instance, “a thorough clause review by a contracting professional would have taken six hours, but with the Contract Clause Review Tool, it just takes minutes” -- and it’s identified 53,000 errors so far.

Recently, the DATA Act bot has been adding unique coding for COVID-19-related transactions, as required by the Office of Management and Budget’s Office of Federal Procurement Policy and the Treasury Department’s Office of Procurement Executives. The IRS team programmed the bot to review and correct transactions related to COVID, fixing each in less than a quarter of a second, Kadish said.

Besides time savings, the office also has seen improved accuracy and contract language. In the future, Kadish said she anticipates increased employee engagement and reduced data entry errors.

This year, the office is building the Contract Administration Bot, which she expects to be ready by the end of the fiscal year. It will help in two main ways: automating contract administration functions, such as uploading documents to the contract data repository, and assisting with contract closeout documentation.

More bots are coming, too. “The sky’s the limit,” Kadish said of the potential areas for automation, but she added the office has three general areas where they want to apply bots. One is improving the accuracy of data within the procurement system, which has the potential to improve analyses and overall processes. Another area is reducing manual work, and the third is anything that would bring incremental improvements along with a quick return on investment.

In deciding what processes to automate, the team reaches out to contracting staff to uncover their pain points.

“It’s an opportunity for individuals on the team to really feel more investment, for them to feel that they are part of the solution,” Webbers said, adding that the team also talks to colleagues at the Office of the Chief Financial Officer and IT partners. “We don’t make these decisions in a vacuum.”

IRS established the Data Analytics and Technology Division last year as part of a transformation of the procurement office with the goal of using modern technologies to help with growing workloads and shrinking employee numbers, Webbers said. Advancements in how data is collected, stored, accessed and analyzed are part of the IRS Strategic Plan for fiscal years 2018-22.

“Historically, we in the Office of the Chief Procurement Officer looked at buying technology solutions for other organizations across the IRS, departmental offices and the Bureau of Engraving and Printing,” she said. “We did not take time to focus internally on ourselves.” The bots have shifted that thinking.

The initial bots were developed with vendor support, but now the office is talking to other federal agencies about building bots in-house. And while the office looks for partnerships to learn from, other agencies are already looking to the procurement office. The Army’s Acquisition Innovation through Technology team modeled its Determination of Responsibility Assistant bot after the Contractor Responsibility Bot.

The IRS bots show the importance of “continuously looking at how can we take this technology and really streamline our operations so that folks can really focus on those areas that require critical thinking and high-level engagement,” Webbers said.