2nd Update on GAO's Report on ACE Cost Overruns and Schedule Delays

This congressionally-mandated report addresses the Department of Homeland Security's (DHS') fiscal year (FY) 2004 Automated Commercial Environment (ACE) expenditure plan that was submitted to Congress in January 2004.

This is Part III, the final partof a multi-part series of summaries on the GAO's report and highlights of GAO's conclusions regarding U.S. Customs and Border Protection's (CBP's) development and management of ACE.

ACE Releases 1 and 2 are providing support to 73 importer accounts and 3,300 users. GAO notes that ACE Releases 1 and 2 began operating on October 17, 2003 and are providing support to 73 import accounts and 3,300 users. According to GAO, these accounts represent about 7% of the 1,100 accounts expected to be supported by the end of 2004, and about 19% and 20% of the annual import value and trade duties collected, respectively. GAO concludes in its report that ACE Releases 1 and 2 are operating largely as intended.

CBP's concurrent design, development, and testing of ACE releases has resulted in cost overruns and schedule delays. According to GAO, CBP's achievement of ACE initial operating capability has not occurred without some difficulty, such as borrowing resources from future releases to overcome problems on near-term releases and similar difficulties that could impact cost, schedule, and capability commitments are being experienced on ongoing releases.

(According to GAO, the importance of ACE to U.S. security and trade facilitation has prompted CBP to take steps aimed at expediting ACE acquisition and development, including introducing greater reliance on performing release design, development, and testing activities concurrently.)

GAO notes that prospectively the pattern of cost overruns and schedule delays is not likely to change unless the degree of concurrency among activities within and between releases is better controlled, and the underlying reasons for introducing this concurrency are addressed.

CBP has yet to prove management improvements are sufficient. GAO states that while time and resources were invested in management improvements over a year ago to address the root causes of cost overruns, schedule delays, etc., the absence of meaningful measures for determining whether such investments will be successful, coupled with limited progress on some of GAO's previous recommendations, makes the chances of CBP delivering future ACE release capabilities on time and within budget uncertain at best.

Despite the examples offered by CBP as to the progress it has made, GAO states that CBP officials could not point to metrics that demonstrate such improved performance. In contrast, GAO states that more concrete measures of performance do not suggest adequate improvements. As an example, GAO notes that ACE Releases 3 and 4 have experienced 5 to 6 month delays and are over budget by $36.2 million.

In response to GAO's concerns, CBP stated that the corrective actions it has taken will only be evident when eCP begins achieving milestones on schedule and within budget, results that CBP expects to be seen with the delivery and approval of the Global Business Blueprint (GBB) in May 2004, the first major activity to be initiated after CBP's corrective actions were implemented.

(According to the report, GBB is a planning project for future releases that is expected to establish an integrated business framework and identify appropriate technology enablers to support ACE cargo management. A CBP fact sheet on GBB is available at http://www.cbp.gov/ImageCache/cgov/content/import/modernization/trade_5fsupport_5fnetwork/gbb_5ffact_5fsheet_2edoc/v1/gbb_5ffact_5fsheet.doc.)

CBP plans to consider potential for ACE infrastructure to support other homeland security applications, etc. GAO notes that CBP plans to implement the GAO's recommendation that CBP have future ACE expenditure plans specifically address any proposals or plans, whether tentative or approved, for extending and using ACE infrastructure to support other homeland security applications, including any impact on ACE of such proposals and plans. According to GAO, CBP has begun this by initially focusing on discussing collaboration opportunities with DHS' U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT) program.

(See ITT's Online Archives or 05/19/04 and 05/21/04 news, 04051910 and 04052105, for Parts I and II of this multi-part series of summaries.)

GAO report (GAO-04-719, dated May 2004) available at http://www.gao.gov/new.items/d04719.pdf.