GAO: IBM performing well on Customs' ACE program

Prime contractor IBM Corp. appears to be performing well on the Customs Services' Automated Commercial Environment, the agency's new trade processing system, according to a recent General Accounting Office report.

IBM's systems integration and acceptance testing is being conducted in accordance with best practices, and the test results are positive, GAO reported. In addition, "data on unresolved system defects show a recent downward trend, suggesting that the contractor is delivering a quality product," the report said.

However, GAO found fault with Customs' reliance on IBM's capabilities and reputation to guarantee a quality system, as well as its reliance on the Customs modernization staff and support contractors to oversee IBM's testing.

Customs should require independent verification and validation, in which an independent organization reviews test management processes, products and results, GAO said. Smith said in her letter that while Customs has implemented elements of IV&V, it would engage nonprofit Mitre Corp. of McLean, Va., to review, document and strengthen the process.

GAO is required to periodically evaluate the progress of the ACE project and report to Congress. Its latest report was published March 3.

The initial contract for ACE is for five years with two five-year options and has an estimated value of $1.3 billion. IBM of Armonk, N.Y., won the contract in April 2001. ACE is a major part of the Customs Modernization program, a total overhaul of the agency's information technology systems.

GAO also said Customs has been slow to correct weaknesses in its ACE work force and acquisition management practices, increasing the risk that ACE will not be completed on time, cost more than necessary and not work as intended, GAO said.

GAO found that the Customs Modernization Office has developed a work force strategy that includes plans for filling vacancies and defining performance standards, but has not laid out the steps or identified the resources needed to implement that strategy. Moreover, according to Customs' plan, the strategy will not be fully in place for another year.

GAO also found that Customs has lagged in its implementation of acquisition practices such as project office management and acquisition risk management. Numerous acquisition practices have been developed, but only 2 percent have been implemented, GAO said.

Brenda Smith, acting director of Customs' Office of Planning, noted in memo responding to the GAO study that Customs has hired and trained additional staff to oversee modernization project task orders, and has created performance plans for Modernization Office staff. Smith also said Customs staff members have been instructed to implement acquisition processes and have been trained in process improvement goals, timeframes and their related responsibilities.

Smith's memo was published with the March 3 report.

The GAO report also recommended that in future ACE plans, agency leadership discuss any proposals to extend ACE infrastructure to support other homeland security applications, including the impact on ACE schedule and cost. Customs is one of several agencies recently merged into the new Department of Homeland Security, and it has proposed that the ACE infrastructure be used by other DHS agencies.