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DRT outage traced to lapse in maintenance contract as lawmakers press for immediate fixes
Summary
Legislators pressed the Department of Revenue and Taxation (DRT) on March 30 after a vendor suspended maintenance access and digital services during peak tax season; DRT said read-only access remains, payments are in suspense accounts and negotiations with DOA, GSA and the vendor are ongoing.
The Guam Legislatures Committee on Finance and Government Operations on March 30 held an oversight hearing after a near-total disruption of the Department of Revenue and Taxations online services during peak tax season.
Director Marie Lzama told the committee that DRT still operates core functions but that a maintenance/ support arrangement with a third-party vendor expired at the end of the last fiscal year and that negotiations to renew the maintenance agreement produced unexpectedly large price proposals. Management analyst Mikuel Spiritu said the maintenance line that had previously cost about $1.2 million per year rose in vendor proposals to as much as $2.2 million for a one-year renewal.
Why it matters: the vendors temporary suspension of transactional access affected online filing and certain automatic processing. DRT said payments have been received but are being held in suspense accounts until interfaces and reconciliations are completed, raising near-term revenue timing risks for government services.
At the hearing, DRT described a three-part deficit that underlies recent failures: legacy platforms with intermittent connectivity, chronic staffing shortfalls (the department reported operating at roughly 63% of authorized positions), and inconsistent process standardization across branches. DRT said it is stabilizing short-term operations while pursuing phased modernization, contract monitoring and more disciplined procurement.
On the vendor dispute, members of the committee pressed DRT and Department of Administration representatives for details. DRT said it had attempted to negotiate before contract expiration but encountered procurement and budget constraints; DOA said agencies must route requisitions early to create pre-incumbrances and avoid gaps. DRT also reported that vendor legal counsel was temporarily off-island during marquee days of negotiation, complicating a quick resolution.
Direct operational impacts: DRT said some online portals remain impaired, e-filing for business privilege tax (BPT) and certain returns is unavailable, and automatic accruals that the legacy AS/400 handled are not being completed. Passport services and some walk-in vehicle registration functions remained available because they use different vendors or manual workarounds.
What the agency is doing: DRT cited five near-term actions: stabilize platform performance; strengthen procurement oversight and vendor accountability; standardize procedures across divisions; realign staffing to operational demand; and advance a phased modernization plan. The agency has sought grant funding for equipment and cyber security and has procured replacement hardware for some branches.
What comes next: lawmakers demanded timelines for restoring full transactional access and asked DRT to provide a clear assessment of any revenue loss and the backlog of returns. The committee also pushed for contingency public messaging and an explicit policy for waiving penalties and interest when outages are agency-caused. DRT said it has authority to abate penalties in cases of agency error and will issue guidance if outages persist.
The committee kept the record open for follow-up documentation, including the draft contract language under negotiation, the vendors pricing proposals and an account reconciliation plan for suspense accounts.
