Customs Service Modernization

The U.S. Customs Service's Automated Commercial Environment (ACE) is intended to introduce much-needed improvements to the enforcement of import trade laws and regulations and to the assessment and the collection of import duties, taxes, and fees, which total $22 billion annually. Customs estimates that the system will cost about $1.05 billion, although this amount is being revised upwards. GAO's recent report on ACE, upon which this testimony is based, cites serious managerial and technical weaknesses in Customs' management of ACE. (See GAO/AIMD-99-41, Feb. 1999.) This testimony focuses on the following ACE weaknesses and makes recommendations for correcting them: (1) building ACE without a complete and enforced enterprise systems architecture, (2) investing in ACE without a firm basis for knowing that it is a cost effective solution, and (3) building ACE without using engineering rigor and discipline.

GAO noted that: (1) the need to leverage information technology to improve the way that Customs does business in the import arena is undeniable; (2) Customs' existing import processes and supporting systems are simply not responsive to the business needs of either Customs or the trade community, whose members collectively import about $1 trillion in goods annually; (3) these existing processes and systems are paper-intensive, error-prone, and transaction-based, and they are out of step with the just-in-time inventory practices used by the trade; (4) recognizing this, Congress enacted the Customs Modernization and Informed Compliance Act to define legislative requirements for improving import processing through an automated system; (5) Customs fully recognizes the severity of the problems with its approach to managing import trade and is modernizing its import processes and undertaking ACE as its import system solution; (6) begun in 1994, Customs' estimate of the system's 15-year life cycle cost is about $1.05 billion, although this estimate is being increased; (7) in light of ACE's enormous mission importance and price tag, Customs' approach to investing in and engineering ACE demands disciplined and rigorous management practices; (8) such practices are embodied in the Clinger-Cohen Act of 1996 and other legislative and regulatory requirements, as well as accepted industry system/software engineering models, such as those published by the Software Engineering Institute; (9) unfortunately, Customs has not employed such practices to date on ACE; (10) GAO's February 1999 report on ACE describes serious management and technical weaknesses in Customs' management of ACE; and (11) the ACE weaknesses are: (a) building ACE without a complete and enforced enterprise systems architecture; (b) investing in ACE without a firm basis for knowing that it is a cost effective system solution; and (c) building ACE without employing engineering rigor and discipline.