The Board of Equalization is negotiating with two vendors as the state nears the contracting phase for the Centralized Revenue Opportunity System (CROS), according to the board's CIO.
CROS will replace the Board of Equalization’s patchwork of legacy systems built in the 1990s to collect and monitor sales-and-use taxes, some property taxes, special taxes and other revenue streams. The system is expected to cost in the neighborhood of $300 million, and the state intends to hire one system integrator to develop and integrate the new solution.
Brenda Fleming, the Board of Equalization's CIO and deputy director over the Technology Services Department, told the board during a July 14 meeting that the BOE has completed evaluation and scoring of offers from the bidders, and is reconciling gaps in the offers before signing a contract.
The two vendors have not been named publicly. Fleming said each is offering different and distinct approaches.
Similar to the Franchise Tax Board’s Enterprise Data to Revenue system, CROS will use a benefit-based procurement approach that pays the vendor based on a percentage of revenue collected.
"The compensation model is set up in such a way that the vendors are carrying the cost of the project for quite a while. So the vendors will be very motivated to try to get to some revenue as quickly as possible," Fleming said.
Ten revenue streams will move through CROS, she said.
Staff at BOE headquarters and subject matter experts are reviewing business rules to ensure they're complete and accurate, Fleming said.
"Those are going to be very important to us when we sit down with the bidders to make sure that they're clear on how we do business, but it still gives room for them to offer some process improvements," Fleming said.
One of those areas of improvement might be tax payments. The proposed CROS solutions would allow taxpayers to pay on a daily or weekly basis — something the Board of Equalization's current systems don't allow. That functionality would be set according to policy, Fleming said, and board members said enabling legislation might be needed to allow that type of new functionality.
Fleming said the contract phase of CROS is tentatively scheduled to begin in August, and the solution vendor would come aboard during the fourth quarter of 2016. New functionality from CROS could debut sometime in 2017, she added.
The Request for Proposals document for CROS was initially released three years ago, in July 2013.
