The IRS ended access to its Procurement Hub on September 23, 2026, after a Treasury watchdog found that officials rushed the platform into service without adequate procurement and security controls. The Treasury Inspector General for Tax Administration (TIGTA) said the IRS paid $4.5 million for a 12-month order without sufficient Hub-specific market research or clear engineering deliverables, and did not properly document and approve the platform’s security risks or consistently control user access. The agency set a December 31, 2026, goal for moving the Hub’s functions to an existing platform; TIGTA’s September 29 report does not establish that the migration is complete.
Why did the IRS create the Procurement Hub?
Beginning in January 2025, three executive orders directed federal agencies to review contracts and eliminate or modify them where appropriate to reduce spending. The General Services Administration called the effort “Defend the Spend.” The IRS joined in February 2025 and had to send recurring contract-rationalization reports to Treasury, which reported Treasury-wide information to GSA.
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At first, IRS teams pulled the required information from different systems and spreadsheets. TIGTA said this process produced inconsistent contract details and rationalization decisions. An IRS senior official told the watchdog that the Procurement Hub was deployed to improve reporting accuracy. The Hub consolidated three data sources into a more comprehensive contract record and tracked communications among IRS Procurement Office staff, business units and Treasury.
The IRS procured and deployed the software in April 2025 using a blanket purchase agreement established in September 2018. It began using the Hub in May 2025 to track and report Defend the Spend decisions.
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How did the contract price change?
| Order | Period | Amount | What TIGTA reported |
|---|---|---|---|
| Initial order | April–July 2025 | $250,000 | Software development for tracking, reporting and traceability. |
| Extension order | July–September 2025 | $250,000 | Extended the first order. The first two orders together provided six months of introductory pricing for $500,000. |
| Third order | September 2025–September 2026 | $4.5 million | Included software licensing and engineering services, with artificial-intelligence capabilities. |
TIGTA found that the third order did not set clear engineering milestones or deliverables. The IRS paid the full $4.5 million in October 2025, at the start of the performance period. IRS officials said the license costs were paid upfront. TIGTA said upfront payment can be appropriate for licensing, but not for the $651,000 engineering-services portion: paying that amount in full before the work was delivered reduced the IRS’s recourse if the vendor failed to meet requirements.
TIGTA identified $4,458,165 as potential questioned costs associated with the signed contract’s lack of clear engineering deliverables and sufficient market research. That is an audit question about the cost, not a finding that the amount was a proven loss or definitively wasted.
What procurement step did TIGTA say the IRS skipped?
TIGTA concluded that the IRS did not conduct sufficient market research specific to the Procurement Hub before making the $4.5 million award. IRS officials said they relied on market research associated with the existing blanket purchase agreement. The watchdog found that research addressed a different need: lead-case and analytics work for IRS Criminal Investigation, not the Hub.
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The agency also disputed aspects of TIGTA’s characterization of the first contracts. As reported by FedScoop, IRS officials cited the competitive underlying agreement and described the second order as an option modification within the agreement’s scope. That response concerns the purchase structure; TIGTA’s finding was that the cited research did not establish the Hub’s specific market need or pricing.
In May 2026, an IRS official said market research was beginning ahead of the order’s expiration. Another official said in July that the order would not be extended. TIGTA found the research was not complete when it assessed the issue. Its recommendation was for the IRS to identify Procurement Office needs and complete sufficient research before the third order expired in September 2026, consulting Treasury to avoid duplicating similar tools across the department and its bureaus.
What security and user-access controls were missing?
No updated authorization package for a significant change
The IRS placed the Hub inside its Selection and Analytic Platform environment in April 2025. TIGTA said the agency did not properly assess, document and accept the risk of a significant change to that environment, or submit an updated authorization package for approval. The report cited a change in the Authorizing Official, a change in the type of information processed and stored, and a new mission for the analytic platform as reasons an update was required.
Some IRS personnel described the Hub as a pilot rather than a new system. TIGTA said pilot projects are not exempt from National Institute of Standards and Technology requirements. Its recommendation was for the platform’s Authorizing Official to review and sign an updated authorization package.
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Most users did not obtain access through the required process
IRS policy required users to request and remove system access through the Business Entitlement Access Request System (BEARS), with manager and system-administrator approval. Of 1,017 employees with Hub access as of September 2025, 959 (94 percent) had not used the Hub’s required BEARS entitlement; 58 (6 percent) had. TIGTA said even those 58 entitlements did not accurately reflect actual access levels or the different needs of 17 user groups. The watchdog also reported that a contractor said 1,083 Hub users belonged to a group with access to non-public data.
Inactive accounts were not disabled
TIGTA found that 903 of the 1,017 people with access (89 percent) did not use the Hub from April through September 2025. IRS policy required disabling accounts after 120 days of inactivity, yet none of the accounts TIGTA identified as inactive for at least 164 days had been disabled.
In May 2026, the Procurement Office established new BEARS entitlements and required existing users to request them or lose access. An IRS IT representative reported 171 users with access in July 2026, but TIGTA cautioned that this might not represent 171 unique people because one person could hold multiple entitlements.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What did IRS management say, and what did TIGTA recommend?
TIGTA’s report says the IRS agreed or partially agreed to all three recommendations and had taken or planned corrective action. The detailed response says the IRS agreed with the recommendation on service contracts, partially agreed on market research, and said it had completed research before the order expired. The IRS also said it maintained appropriate security controls and limited access on a need-to-know basis. Those assertions differ from TIGTA’s findings about the documentation, authorization and access practices it reviewed.
Do these 3 things before closing this tab:
1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsThe three recommendations were to:
- Include milestones and deliverables in future service contracts, or use stronger performance monitoring for engineering services.
- Identify Procurement Office needs and complete sufficient market research before the third order expired, with Treasury consultation to avoid duplication.
- Have the analytic platform’s Authorizing Official review and sign an updated authorization package.
TIGTA summarized the urgency in its report with the finding: “The primary reason for bypassing preventive controls (e.g., contract milestones and bypassing access control requirements) was the rush to get the Procurement Hub operational.” In its highlights, the watchdog added: “Additional market research could prevent future potentially unnecessary spending.”
Is the Procurement Hub shut down, and is the replacement ready?
After TIGTA issued its draft report, the IRS Procurement Office announced on September 21, 2026, that it would sunset the Hub. Access was terminated on September 23. The final audit report was issued September 29, 2026. The IRS’s stated goal was to move the Hub’s functions to an existing platform by December 31, 2026; the report does not confirm that the transition has been completed.
Read the TIGTA final audit report, “Contracting and Security Controls Were Not Followed While Expediting the Procurement Hub”, for the findings, agency response and recommendations. FedScoop’s October 2, 2026, account summarizes the IRS’s response and its disagreements with the audit.
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