More cards to deal

The Homeland Security Department's$3.3 billion initiative to revamp the computersystems that track the country's incomingcargo is in its eighth year andstill has much work ahead.Creation of the Automated CommercialEnvironment (ACE) to replace outdated,paper-based systems has been a high-profileproject in the trade community since its 2001debut, when IBM Corp. won the contract. It isone of the most complex information technologymodernizations in federal government,with incremental, phased-in developmentand deployment now projected through 2012.ACE has received average to good reviewsthus far, although there have been significantglitches along the way and a possibility ofdelays ahead.The U.S. Customs and Border ProtectionAgency has spent about $2 billion on ACE todate, said Lou Samenfink, executive directorof the Cargo Processing Systems ProgramOffice at CBP. His office oversees the program."We are happy with ACE," Samenfink said."It is a big IT project, and there are frustrationsand a lot of stakeholders."Will ACE be completed on schedule by 2012?"We are pushing hard, but I am not sure,"Samenfink said. "It is complicated stuff. I wish itcould move faster."Congress has approved $100 million upfrontfor ACE this year, and an additional $217 millionis available pending final approval of a modernizationplan by DHS.The project began in 2001 before the Sept. 11terrorist attacks. Its goal was to move customsprocessing from its aging mainframe computerand paper setup to a more efficient,Web-enabled data system.Reporting programs required by CBP are beingintegrated into each step to eventually provide acomplete view of a shipper's activity by monthrather than transaction.Prime contractor IBM ? supported by teammembers Lockheed Martin Corp., BearingPointInc., Computer Sciences Corp., and Sandler andTravis Trade Services ? won a five-year,$1.3 billion contract for the work in 2001. It wasrenewed in 2006.ACE's completed projects have includeddeployment of electronic shipping manifests fortruckers, monthly fee statements for importersand delivery statements. During the transitionperiod, ACE operates concurrently with theexisting Automated Commercial System, whichis slated to be shut down in 2012. ACE processesabout 30,000 trucks a day and collects about $1billion in tariffs each month.Following the 2001 attacks, ACE was reconceivedto focus more attention on security aspects, and its estimated cost increased sharply.CBP officials began developing the relatedAutomated Targeting System to screen incomingcargo and identify high-risk shippers. Those newrequirements contributed to delays in deliveringACE's promised benefits. ACE also experiencedtechnical glitches during deployment of the electronicmanifests in November 2007 and at othertimes."We have not really seen the features that canbenefit trade, and there have been significantglitches," said Beth Peterson, a trade consultantin San Francisco. "In the long run, though, it hasbeen worth it.""The timing of 9/11 and the change in nationalfocus that followed, and the move of U.S.Customs into the Homeland SecurityDepartment ? all of that had impacts on thescope and execution of ACE," said David Abel,homeland security account leader at IBM GlobalBusiness Services. "Originally, the goal was efficiency.Now we try to balance security and convenience,which can be mutually reinforcing withnew functionalities."ACE will next begin to deploy electronic manifestsfor vessel and rail cargo shipments andthen for air cargo. Electronic documents are alsobeing prepared to admit commercial items intothe United States and identify merchandise inbonded warehouses."ACE will replace all existing stovepiped systemsinto one system," Samenfink said.In addition, ACE is linked to 42 other federalagencies via the International Trade DataSystem. For example, the Food and DrugAdministration can monitor all incoming drugshipments, and the Agriculture Department cancheck imported meats and animal products.The so-called 10 rule is a congressional initiativeunder which shippers would be asked toprovide 10 additional data elements, includingwhere cargo was packed, the packer's nameand address, a cargo stowing map, and cargostatus messages. It has been controversialbecause traders are reluctant to provide shippinginformation they consider competitivelyadvantageous.The 10 rule is likely to become part ofACE, although how and when that will happenhasn't been determined. "I am worried thatACE may not stay on track because of the newlogistics needed for 10," Peterson said.Samenfink said the 10 package will be partof ACE, but because the final rule is not ready,details about what it would entail were notavailable.Other challenges also lie ahead. TheGovernment Accountability Office warned inOctober that more major program scheduledelays and cost overruns are likely because ofredefined requirements and shortcomings indata security, enterprise architecture and riskmanagement.Samenfink, who became director of ACE in2004, said the cost of the program has risenfrom its original estimate of $1.3 billion becauseof additional features and functions added tomeet needs that arose after the 2001 attacks."To me, risk management is about 'Howgood was our estimate? How well are you controllingrisks?' " Samenfink said. "Meanwhile,the cost of resources is going up." He said thecost to complete ACE might rise slightly, possiblyto $3.8 billion, to accommodate additionalrequirements.For IBM, ACE still presents many opportunities,and the company is seeking subcontractors,said Alan Heath, ACE programleader at IBM Global Business Services. "Weprobably have about 90 to 95 subcontractorssupporting us, small and large, and we areopen to discussions on new technologies andprocesses."Some vendors have developed ACE-relatedsoftware on their own. For example, MSReCustoms, of Buffalo, N.Y., has developedcomprehensive packages to serve shippers'needs, including handling their ACE filings.From the point of view of truckers, ACE isalready providing benefits. By filing andobtaining customs' acceptance of electronicmanifests at least 30 minutes ahead of entry ata U.S. border station, they can avoid beingturned back or detained at the border whiletheir paperwork is checked.

AUTOMATED COMMERCIAL ENVIRONMENT Awarded: 2001 | Prime: IBM Corp.

SUBCONTRACTORS:

Lockheed Martin Corp.

BearingPoint Inc.

Computer Sciences Corp.

Sandler and Travis Trade Services

Value: $1.3 billion over five years. It could be
worth $3.8 billion through 2012.

Purpose: Modernize the computer systems tracking
the nation's incoming cargo.

ACCOMPLISHMENTS:

  • Electronic shipping manifests for truckers.
  • Monthly fee statements for importers.
  • Processes 30,000 trucks a day.
  • Collects $1 billion in tariffs each month.
  • Automated Targeting System screens incoming
    cargo and identifies high-risk shippers.

STILL TO BE DONE:
  • Electronic manifests for shipments by sea, rail
    and air.
  • Electronic documents to admit commercial
    items.
  • System to identify merchandise in bonded
    warehouses.

CHALLENGE:
  • Implementing the 10 rule, which requires
    shippers to provide 10 additional data elements
    that include where cargo was packed,
    the packer's name and address, a cargo
    stowing map and cargo status messages.
    Traders are reluctant to provide the information
    because they consider it competitively
    advantageous.
  • Final rule is still pending, but officials said it
    will become part of ACE.































DEADLINES LOOM





















































































CHALLENGES AHEAD












































MORE OPPORTUNITIES























Alice Lipowicz (alipowicz@1105govinfo.com) is a
staff writer at Washington Technology.
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