Customs Is Developing ACE Without a Complete Enterprise Systems Architecture

Customs is not building ACE within the context of an enterprise systems  architecture, or  “blueprint” of its agencywide future systems environment. Using SEI’s  method, we found that Customs’ $1.05 billion ACE life cycle cost estimate  was not reliable, and that it did not provide a sound basis for Customs’  decision to invest in ACE. For example, the analysis includes  $203.5 million in savings attributable to 10 years of avoided maintenance  and support costs on the Automated Commercial System (ACS)—the  system ACE is to replace. Also, these estimates are subject to change in light of experiences on  nearer term increments and changing business needs. Failure of the grand design approach was a major impetus for the  IT management reforms contained in the Clinger-Cohen Act. Customs Has Committed to Implementing Our Recommendations for Strengthening ACE Management

To address ACE management weaknesses, we recommended that Customs analyze alternative approaches to satisfying its import automation  needs, including addressing the ITDS/ACE relationship; invest in its defined ACE solution incrementally, meaning for each  system increment (1) rigorously estimate and analyze costs and  benefits, (2) require a favorable return-on-investment and compliance  with Customs’ enterprise systems architecture, and (3) validate actual  costs and benefits once an increment is piloted, compare actuals to  estimates, use the results in deciding on future increments, and report  the results to congressional authorizers and appropriators; establish an effective software process improvement program and  correct the software process weaknesses in our report, thereby bringing  ACE software process maturity to a least an SEI level 2; and require at least SEI level 2 processes of all ACE software contractors. Conclusions

Successful systems modernization is absolutely critical to Customs’ ability  to perform its trade import mission efficiently and effectively in the 21st  century. Systems modernization success, however, depends on doing the  “right thing, the right way.”  To be “right,” organizations must (1) invest in  and build systems within the context of a complete and enforced enterprise  systems architecture, (2) make informed, data-driven decisions about  investment options based on expected and actual return-on-investment for  system increments, and (3) build system increments using mature software  engineering practices. Fortunately, Customs fully recognizes the seriousness of the situation and  has committed to correcting its ACE management and technical  weaknesses. We are equally committed to working with Customs as it  strives to do so and with Congress as it oversees this important initiative.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed the Customs Service's management of its Automated Commercial Environment (ACE) system.

What GAO Found

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.