Committee approves $30.6 million Department of Revenue contract with FAST Enterprises after members raise sole‑source and cost concerns

The committee voted to approve a new three‑year contract for the Tennessee Department of Revenue with FAST Enterprises to supply and support the department’s tax collection software. The contract carries a maximum liability of $30,600,000 and includes an option for two additional years.

The contract drew sustained questioning from members over price, procurement method and staffing. Representative Cindy Bricken said the new agreement represents roughly a 40% increase over the existing contract and asked whether the state was paying for “15 full time equivalent employees” embedded with the department. "This contract is very generous to FAST," Bricken said, adding that the hourly rates implied by the FTE component appeared high.

Greer Allison, who identified herself as the tax systems manager overseeing the vendor, said the vendor‑provided staff are directed by Revenue business leads and work on continuous deliverables tied to state law. "Their work is continuous. I actually have more work for them than we have time to do," Allison said, describing a steady increase in legislative changes that require system work. She said the maintenance portion is a subscription to the vendor's packaged software and that the department holds deliverable due dates.

Committee members pressed why the procurement remained sole source. Allison said the vendor's product (referred to in the hearing as Gentax) was the only solution in production with sales‑tax functionality for the required period when the original procurement happened and that the department therefore used a sole‑source justification. "The only company that was in production for at least 3 years with sales tax was Fast Enterprises. That is why it was awarded Sole Source," Allison said.

Senator Yeager and other members asked whether the increase in cost was driven by a different payment basis or an increase in projected FTEs. Budget director Matilda Carpet said the contract continues to include a subscription fee and an FTE component and that the formula is the same approach used in 2015; the rate increases over successive renewals led to the higher liability in the proposed contract.

Members also noted the department had begun the contract because of timing: the contract term began before the committee meeting after the committee granted a waiver to let the department proceed while the contract returned for committee review. Director Savage explained there is a standing process to permit departments to proceed in time‑sensitive cases and that the committee may still take action if it chooses.

After discussion the committee approved the contract by voice vote.

The committee’s questions focused on price benchmarks, sole‑source justification, the number and pay rates of vendor FTEs, and whether milestone‑based contracting alternatives had been considered. Representatives said they would follow up with the department outside the meeting for additional procurement detail and cost justification.

The department and the vendor were asked to provide additional procurement and cost detail to members following the meeting.