GAO questions Customs' ability to execute ACE

The General Accounting Office issued a report May 13 calling the Customs Service's Automated Commercial Environment project "a high-risk endeavor" because of its complexity, the agency's lack of acquisition management controls and the decision to complete the project in four years instead of five.

ACE is intended to be Customs' new import processing system. It is a major part of the Customs Modernization program, a complete overhaul of the agency's information technology systems.

IBM Corp. was awarded the contract in April 2001; the initial contract is for five years, with two five-year options, and it has a ceiling of $5 billion.

GAO concluded that pulling off ACE is risky for several reasons:

*It is technically and managerially complex and challenging; it aims to fundamentally change the organization's business processes; it has to be available around-the-clock.

*Customs does not have a good track record on ACE, underestimating funding requirements in its first expenditure plan. ("Actual requirements were about 90 percent higher than estimated," the study found.)

*Management controls are missing in key areas, including enterprise architecture, human capital, software acquisition management and methods for cost estimation.

*Customs has compressed its plans for acquisition from five years into four, increasing the amount of overlap among program components and adding to the risk of project slippage.

While the Customs Service agreed with the overall outcome of GAO's report, William Riley, the director of Customs' planning office, said the agency has already taken several steps to address the concerns raised. It has received authorization to double the size of the staff in the Customs Modernization Office and is now using an independent government cost estimator and software tools to improve budget estimates, Riley said.

As for the agency's credibility on the project, Riley said, improvements can already be seen on the cost estimates.

"The cost estimates from the first ACE expenditure plan pre-dated the contract award and did not include task order changes recommended by [e-Customs Partnership] and approved by the CMO," Riley wrote. "Once the scope changes were approved, [the first three task orders] have come in on time, on budget and without modification."

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