GAO Issues Report on the Management of ACE

GAO states that as required by law, it has reviewed the Department of Homeland Security's (DHS') fiscal year (FY) 2005 expenditure plan for the Automated Commercial Environment (ACE) program, which was submitted to Congress by U.S. Customs and Border Protection (CBP) in November 2004.

According to GAO, its report (1) addresses whether the FY 2005 expenditure plan satisfies certain legislative conditions, (2) describes the status of GAO's open ACE recommendations, and (3) provides observations about the FY 2005 expenditure plan and DHS' management of the ACE program.

This is Part I of a multi-part series of summaries on this GAO report and "highlights" GAO's observations on the FY 2005 ACE expenditure plan and DHS' management of ACE. See future issue of ITT for BP summary on the status of GAO's open ACE recommendations.

GAO's Observations on FY 2005 Expenditure Plan & DHS' Management of ACE

According to GAO, it has made observations related to ACE performance, use, testing, development, cost and schedule performance, and expenditure planning. The following are "highlights" of GAO's observations:

99.9% of ACE transactions each day have been successful since February 1, 2004, except for 11 days. According to a service level agreement between the ACE development contractor and the CBP Modernization Office (CBPMO), 99.9% of all ACE transactions are to be executed successfully each day. The development contractor reports that ACE has met this requirement on all but 11 days since February 1, 2004.

Number of activated ACE user accounts has not met expectations. CBPMO established a goal of activating 1,100 ACE importer accounts by February 25, 2005, when Release 4 was to become operational, and weekly targets were established to help measure CBPMO's progress toward reaching the overall goal. However, GAO reports that CBPMO has not reached any of its weekly targets, and the gap between the actual and targeted number of activated accounts has continued to grow. To illustrate, as of November 26, 2004, the goal was 600 activated accounts and the actual number was 311.

Release 3 milestones "passed" despite open system defects. GAO states that ACE Release 3 test phases and pilot activities were delayed and revealed system defects, some of which remained open at the time decisions were made to pass key life-cycle milestones. For example, the test readiness milestone was passed despite the presence of 90 severe defects.

Release 4 test phase has revealed unexpected number & significance of defects. According to GAO, Release 4 test phases were delayed and overlapped, and have revealed a higher than expected volume and significance of defects, raising questions about decisions to pass key milestones and about the state of system maturity. For example, as of November 30, 2004 (which was about 1 weeks from deployment of the Release 4 pilot period), 33 material defects were present.

(See ITT's Online Archives or 02/03/05 news, 05020325 1, for BP summary of CBP's reinstatement of the ACE Release 4 (Truck Manifest) pilot in Blaine, WA.)

Resources meant for later releases are being used by Release 4. GAO reports that in order to improve the schedule performance, resources targeted for later releases have been retained on Release 4 longer than planned. While this has resulted in improved performance against the schedule, it has adversely affected cost performance.

Usefulness of FY 2005 ACE expenditure plan for congressional oversight is limited. According to GAO, the usefulness of the FY 2005 ACE expenditure plan for congressional oversight is limited. For example, GAO states that the FY 2005 plan does not adequately describe progress against commitments (e.g., ACE capabilities, schedule, cost, and benefits) made in previous plans, which makes it difficult to make well-informed judgments on the program's overall progress.

GAO further reports that in light of recent program changes, it questions the FY 2005 expenditure plan's usefulness to Congress as an accountability mechanism. GAO explains that the FY 2005 expenditure plan is based largely on the ACE program plan of July 8, 2004. However, recent program developments have altered some key bases of the ACE program plan and thus the current expenditure plan. In particular, the FY 2005 expenditure plan does not reflect additional program releases that are now planned or recent changes to the roles and responsibilities of the ACE development contractor and the program office. According to GAO, without complete information and an up-to-date plan, meaningful congressional oversight of program progress and accountability is impaired.

GAO report (GAO-05-267, dated March 2005) available at http://www.gao.gov/new.items/d05267.pdf