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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteA Treasury watchdog found that the IRS’s expedited procurement and deployment of its Procurement Hub bypassed key preventive controls. In a final report dated September 29, 2026, the Treasury Inspector General for Tax Administration (TIGTA) identified problems with contract milestones and upfront payments, market research, system authorization, and user access. The IRS agreed or partially agreed with the recommendations, while its officials disputed some of the audit’s characterizations.
What did the IRS audit find about the Procurement Hub?
The IRS began using the Procurement Hub in May 2025 to track and report decisions under the federal “Defend the Spend” initiative. The platform consolidated three data sources and documented communications among the IRS Procurement Office, business units, and Treasury. TIGTA’s central finding was that the rush to put the Hub into operation weakened preventive controls over both the contract and the system.
The audit examined three orders placed with one vendor through an existing Blanket Purchase Agreement:
| Order | Period and purpose | Value |
|---|---|---|
| Initial order | April–July 2025 | $250,000 |
| Extension | Through September 2025 | $250,000 |
| Third order | September 2025–September 2026; added artificial-intelligence capabilities | $4.5 million |
The three orders totaled nearly $5 million. TIGTA’s main contract concerns focused on the third order, not simply the total price: the report questioned how the engineering work was defined and paid for, and whether the IRS had done sufficient market research after the vendor’s introductory pricing ended.
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Why did TIGTA say contract controls were bypassed?
Engineering work lacked clear milestones and deliverables
TIGTA said the third order’s engineering services did not have clear milestones or deliverables. Without specified outputs and checkpoints, the IRS had less ability to assess whether the work was progressing as required or to hold payment against measurable performance.
The IRS paid the full order upfront
The IRS paid the full $4.5 million at the beginning of the performance period. TIGTA distinguished software licensing from engineering services: IRS officials said the licensing costs were paid upfront, while $651,000 of the order covered engineering services. TIGTA concluded that paying the engineering portion upfront was inappropriate because it limited the IRS’s recourse if requirements were not fulfilled.
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Market research did not adequately support the changed price
TIGTA also found that sufficient market research had not been conducted despite a substantial price increase after the vendor’s introductory pricing ended. Its recommendation called for adequate market research. The issue, as described in the audit, was whether the purchase and changed requirements were sufficiently evaluated—not merely whether the IRS had a mechanism to place an order.
What security and user-access weaknesses did the audit identify?
The Hub’s authorization package was not updated
The IRS deployed the Hub within its Selection and Analytic Platform environment without properly assessing and documenting the risk or submitting an updated authorization package to the Authorizing Official. TIGTA said the Hub introduced a new mission and changed the information processed and stored; the Authorizing Official had also changed. The audit therefore treated this as a system-authorization issue, not just a matter of whether the software was hosted inside an existing environment.
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Access did not reliably follow the IRS approval process
IRS procedures required Hub access to be requested and removed through BEARS, with approval from a manager and system administrator. In September 2025, 959 of the 1,017 employees who had Hub access—94%—had not used the BEARS entitlement for the Hub. The other 58 had used BEARS, but TIGTA found that their entitlements still did not accurately reflect their actual access levels.
These findings describe weaknesses in how the IRS administered access; they do not establish that users maliciously bypassed controls. Separately, audit logs showed that 903 of the 1,017 people with access—89%—did not access the Hub during April through September 2025. IRS policy called for disabling accounts after 120 inactive days. TIGTA found that none of those accounts had been disabled and that they had been inactive for at least 164 days.
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What did the IRS say in response?
TIGTA reported that officials identified the rush to make the Hub operational as the primary reason preventive controls were bypassed. The report attributes this explanation to discussions with a Procurement Office official and a senior IRS official: “According to our discussions with a Procurement Office official and a senior IRS official, the primary reason for bypassing preventive controls was the rush to get the Procurement Hub operational.”
The IRS agreed or partially agreed with all three recommendations, which addressed contract milestones and performance monitoring, adequate market research, and an updated authorization package. FedScoop reported on October 2, 2026, that IRS CIO Kaschit Pandya and Chief Procurement Officer Alan Monico disputed the watchdog’s characterization of market research and security controls. They said the base agreement was competitively awarded and that access was limited on a need-to-know basis. Those statements are the officials’ response; they do not replace TIGTA’s findings about the third order, authorization documentation, BEARS entitlements, or inactive accounts.
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What happened to the IRS Procurement Hub?
After TIGTA issued its draft report, the Procurement Office announced on September 21, 2026, that it would sunset the Hub. User access was terminated on September 23. In its September 29 final report, TIGTA said the IRS’s goal was to move the platform’s functions to an existing platform by December 31, 2026. That was a stated goal, not confirmation that the migration had been completed.
Why the findings matter beyond the Hub
The audit illustrates how procurement and cybersecurity controls work together. Contract milestones and deliverables give an agency a basis for monitoring performance; market research helps support a purchase’s value when price or requirements change; and system authorization and account-management procedures help ensure access is assessed, approved, and removed when no longer needed. TIGTA’s findings concern weaknesses across these controls, rather than a single allegation that the IRS paid too much for software.
Quick Recap
Sources
- TIGTA, Report No. 2026-200-060, final report dated September 29, 2026
- FedScoop, October 2, 2026, reporting on the IRS officials’ response
- FEDweek, October 6, 2026, summary of the audit
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