Customs Service Modernization

The U.S. Customs Service plans to spend well over $1 billion to modernize its systems environment for certain core missions: facilitating international trade, enforcing laws governing the flow of goods and services across U.S. borders, and assessing and collecting about $22 billion annually on imported merchandise. GAO found that Customs is not managing its modernization effort, known as the Automated Commercial Environment (ACE), effectively, and it lacks a firm basis for concluding that ACE is a cost-effective solution to modernizing its commercial environment. GAO found serious weaknesses involving architectural definition, investment management, and software development and acquisition that must be corrected before further investment in ACE is justified.

GAO noted that: (1) Customs is not managing ACE effectively, and it does not have a firm basis for concluding that ACE is a cost-effective solution to modernizing its commercial environment; (2) 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; (3) Customs is not building ACE within the context of a complete and enforced systems architecture; (4) in May 1998, GAO reported that Customs' architecture was incomplete because it was not based on a complete understanding of its enterprisewide functional and information needs; (5) GAO also reported that Customs had not yet instituted effective procedures for ensuring compliance with the architecture once it is completed; (6) until its architecture is completed and effectively enforced, Customs will not have adequate assurance that information systems like ACE will optimally support its needs across all business areas; (7) further, Customs lacks a reliable estimate of what ACE will cost to build, deploy, and maintain; and Customs has neither adequately justified, nor is it effectively monitoring, ACE's cost-effectiveness; (8) specifically, Customs did not use rigorous cost estimating techniques in preparing its cost estimate, and did not disclose the inherent imprecision of the estimate; (9) additionally, Customs omitted costs and inflated benefits in preparing its cost-benefit analysis; (10) moreover, Customs is not using effective incremental investment management practices; (11) while Customs plans to develop/acquire ACE in 21 increments, these increments are not individually cost-benefit justified, and Customs is not determining what benefits each increment, once operational, actually provides; (12) as a result, 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/acquiring the entire system; and (13) GAO found that Customs has neither the capability to effectively develop nor acquire ACE and that its processes for doing both, according to widely accepted and proven software capability maturity models, are ad hoc, immature, and ineffective.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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