GAO assails Customs' handling of ACE project

The General Accounting Office last month slammed the Customs Service’s
billion-dollar Automated Commercial Environment project for its technical and management
weaknesses. But Customs officials, while promising reform, said GAO exaggerated the

In a report released March 3, GAO said the Customs ACE program—an effort to
modernize systems that process import data—has an unrealistic budget and lacks a
systemwide architecture plan.

“Customs is not managing ACE effectively,” the report said. “GAO found
serious weaknesses relating to architectural definition, investment management, and
software development and acquisition that must be corrected before further investment in
ACE is justified.”

Calling the project unrealistic and immature, the GAO report said Customs has failed to
develop a complete systems architecture that would guarantee interoperability and

Customs officials disagreed with many of GAO’s conclusions.

“We agree that a project the size and complexity of ACE will require more emphasis
on planning and program control on behalf of Customs,” said Charlie Armstrong, acting
division director of software development. “We do not agree with the notion that not
being certified implies a lack of competence.”

In November 1997, Customs estimated it would cost $1.05 billion to develop, operate and
maintain ACE from fiscal 1994 until fiscal 2008.

ACE will replace Customs’ Automated Commercial System, which is made up of an IBM
9672-Y76 mainframe processor running OS/390. Customs is undecided on the hardware and
software specifications for the replacement system.

GAO said Customs, in preparing its cost-benefit analysis, had omitted costs and
inflated benefits. Customs plans to develop and acquire ACE in 21 incremental stages, but
the report said costs of these increments were not individually justified, nor has the
department determined what benefits each increment will provide. Customs has promised to
redo its cost-benefit work in response to GAO’s criticisms.

“Customs will not know if ACE’s expected return on investment is actually
being realized until it has already spent hundreds of millions of dollars developing and
acquiring the entire system,” the report said.

GAO also criticized Customs for not considering a viable alternative to the
billion-dollar project. For example, Customs apparently never considered using the
Treasury Department’s International Trade Data System (ITDS) to supplement some ACE
functions, such as collecting and disseminating trade data, the report said.

Customs officials, however, said they plan to use the ITDS system on the front end of
their ACE project. “We are trying to leverage the two projects to work
together,” Armstrong said.

The report also claimed Customs is developing ACE without an enterprise systems
architecture plan. The report said Customs had planned to complete its target architecture
by September 1998, but the date has slipped to May 1999.

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