GAO Expresses Concerns Over ACE's Cost Overruns and Scheduling Delays
On May 14, 2004, the General Accounting Office (GAO) submitted to the Homeland Security Subcommittees of the House and Senate Appropriations Committees a report entitled "Information Technology - Early Releases of Customs Trade System Operating, but Pattern of Cost and Schedule Problems Needs to be Addressed."
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This report addresses the Department of Homeland Security's (DHS') fiscal year 2004 Automated Commercial Environment (ACE) expenditure plan that was submitted to the House and Senate Appropriations Committees in January 2004.
(Congress mandates that DHS provide it with an expenditure plan for ACE that meets certain conditions, including GAO review, in order for DHS to obtain the release of the funding that has been appropriated by Congress for ACE.)
DHS' FY 2004 expenditure plan was recently approved by Congress and FY 2004 funds for ACE were released. U.S. government sources have previously stated that the House and Senate Appropriations Committees recently approved DHS' FY 2004 ACE Expenditure Plan and, as a result, the committees have released all of the funds appropriated to CBP for modernization in FY 2004. (Although sources could not confirm the exact levels of the FY 2004 funding released, CBP was appropriated not less than $318,690,000 in FY 2004 for the development of ACE. See ITT's Online Archives or 10/02/03 news, 03100215, for BP summary of the enactment of the FY 2004 Department of Homeland Security appropriations bill.)
GAO Expresses Concerns About ACE Cost Overruns and Schedule Delays
GAO noted that although ACE Releases 1 and 2, which have been deployed, are operating largely as intended, achieving that initial operating capability has been difficult. Highlights of GAO's observations and concerns regarding ACE management include (partial list):
DHS has borrowed from ACE future releases to fund near-term releases. According to GAO, DHS has established a pattern of borrowing resources from future ACE releases to address problems of near-term ACE releases, something that has adversely affected the cost, schedule, and capability commitments of ongoing releases.
In particular, GAO notes that the delay in completing the second ACE release has introduced a pattern of increased reliance on concurrent activities to meet the dictated schedule, continued release schedule delays, and cost overruns for the ongoing releases. According to GAO, this domino effect is continuing into ACE Release 3 and beyond and is not likely to change unless the degree of concurrence among activities within and between the releases is better controlled, which will require that the reasons for release quality problems that led to the concurrent activity be addressed.
For example, the GAO reports that ACE Release 3, which was originally scheduled to begin on March 15, 2004, is now scheduled to begin on August 26, 2004 and ACE Release 4, which was originally expected to begin on July 15, 2004 is now not scheduled to begin until February 23, 2005. In addition, the GAO's report notes that ACE Releases 3 and 4 are $46 million over budget.
Until the reasons for this pattern are pinpointed and corrected, GAO expresses concern that DHS will not be positioned to deliver promised capabilities on time and within budget, or produce mission value commensurate with investment cost.
Many requirements scheduled for Releases 1 and 2 have been deferred. According to GAO, requirements planning for ACE Releases 1 and 2 have been deferred to later releases. GAO states that ACE Releases 1 and 2 were originally planned as a single release that would satisfy 465 requirements. However, 103 of those requirements, which included capabilities related to document management, data recovery, and security, were subsequently deferred to Releases 3 and 4 and 13 of those requirements were deferred to even later releases.
Initial releases represent only small fraction of total ACE software. The GAO also notes that the initial releases of ACE represent only a small fraction of the total ACE software. According to GAO, ACE Releases 1-4 account for only about 14% of ACE software and are to be designed, developed, and deployed within about three years. In contrast, the remaining six ACE releases constitute 86% of ACE software but are to be designed, developed, and deployed within about 3 years.
GAO report (GAO-04-719, dated May 2004) available at http://www.gao.gov/new.items/d04719.pdf.