Information Technology:

Early Releases of Customs Trade System Operating, but Pattern of Cost and Schedule Problems Needs to Be Addressed

GAO-04-719: Published: May 14, 2004. Publicly Released: May 14, 2004.

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The Department of Homeland Security's (DHS) Bureau of Customs and Border Protection (CBP) is conducting a multiyear, multibillion-dollar acquisition of a new trade processing system planned to support the movement of legitimate imports and exports and strengthen border security. By congressional mandate, expenditure plans for this system, called the Automated Commercial Environment (ACE), must meet certain conditions, including GAO review. This study addresses the extent to which the latest plan, for fiscal year 2004, satisfies these conditions, provides information about DHS's efforts to implement GAO's recommendations for improving ACE management, and makes observations about ACE.

The DHS fiscal year 2004 ACE expenditure plan provides for certain activities, including system implementation infrastructure and support, operations and maintenance, and the definition and design of two future releases. This plan, including related program documentation and program officials' statements, largely satisfies the legislative conditions imposed by the Congress. Some of the recommendations that GAO has previously made to strengthen ACE management have been addressed, and DHS has committed to addressing those that remain. However, much remains to be done before these recommendations are fully implemented. Specifically, progress on overcoming human capital challenges has been slow. GAO made several observations about ACE. Specifically, the first two ACE releases, which have been deployed, are operating largely as intended. However, achieving this initial operating capability has been difficult. DHS has established a pattern of borrowing resources from future releases to address problems of near-term releases, which has adversely affected the cost, schedule, and capability commitments of ongoing releases. In particular, 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 release. This domino effect is continuing into Release 3 and beyond. This pattern is not likely to change unless the degree of concurrence among activities within and between releases is better controlled, which will require that the reasons for release quality problems that led to the concurrent activity be addressed. Until the reasons for this pattern are pinpointed and corrected, in part through implementation of GAO's unaddressed recommendations, DHS will not be positioned to deliver promised capabilities on time and within budget, or produce mission value commensurate with investment cost.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To assist CBP in managing ACE and increasing the chances that future releases will deliver promised capabilities on time and within budget, the Secretary of Homeland Security, through the Under Secretary for Border and Transportation Security and the CBP Commissioner, should direct the CBP Chief Information Officer to define measures, and collect and use associated metrics, for determining whether prior and future program management improvements are successful.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Customs and Border Protection

    Status: Closed - Not Implemented

    Comments: The Bureau of Customs and Border Protection (CBP) and Automated Commercial Environment (ACE) program office have made changes that are intended to improve overall program management, and report that additional program management changes are envisioned. However, CBP and ACE officials said that they have yet to define indicators to measure the effectiveness of these changes.

    Recommendation: To assist CBP in managing ACE and increasing the chances that future releases will deliver promised capabilities on time and within budget, the Secretary of Homeland Security, through the Under Secretary for Border and Transportation Security and the CBP Commissioner, should direct the CBP Chief Information Officer to reconsider the ACE acquisition schedule and cost estimates in light of early release problems, including these early releases' cascading effects on future releases and their relatively small size compared with later releases and in light of the need to avoid the past levels of concurrency among activities within and between releases.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Customs and Border Protection

    Status: Closed - Implemented

    Comments: In response to the cost overrun on Releases 3 and 4, Customs and Border Protection (CBP) and the ACE development contractor established a new cost baseline of $196 million for these releases, extended the associated baseline schedule and began reporting schedule and cost performance relative to the new baselines. Additionally, in July 2004, a new version of the ACE Program Plan was developed that rebaselined the ACE program, extending delivery of the last ACE release from fiscal year 2007 to fiscal year 2010, adding a new screening and targeting release, and increasing the ACE life-cycle cost estimate by about $1 billion to $3.1 billion. Last, the new program schedule reflects less concurrency between future releases.

    Recommendation: To assist CBP in managing ACE and increasing the chances that future releases will deliver promised capabilities on time and within budget, the Secretary of Homeland Security, through the Under Secretary for Border and Transportation Security and the CBP Commissioner, should direct the CBP Chief Information Officer to ensure that future expenditure plans are based on cost estimates that are reconciled with independent cost estimates.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Customs and Border Protection

    Status: Closed - Implemented

    Comments: The Bureau of Customs and Border Protection (CBP) has continued to ensure that future expenditure plans are based on cost estimates that are reconciled with independent cost estimates. For example, the cost estimate in the fiscal year 2006 expenditure plan is based on the estimates in the current ACE program plan, and CBP, with contractor support, compared the program plan cost estimate with the independent cost estimate. According to the analysis performed, the two estimates are consistent.

    Recommendation: To assist CBP in managing ACE and increasing the chances that future releases will deliver promised capabilities on time and within budget, the Secretary of Homeland Security, through the Under Secretary for Border and Transportation Security and the CBP Commissioner, should direct the CBP Chief Information Officer to ensure the independence of its IV&V agent.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Customs and Border Protection

    Status: Closed - Implemented

    Comments: Customs and Border Protection (CBP) established an IV&V function to assist in overseeing ACE. Further, CBP has taken steps to ensure the independence of its IV&V agent by selecting a contractor that has had no prior involvement in the modernization program.

    Recommendation: To assist CBP in managing ACE and increasing the chances that future releases will deliver promised capabilities on time and within budget, the Secretary of Homeland Security, through the Under Secretary for Border and Transportation Security and the CBP Commissioner, should direct the CBP Chief Information Officer to report quarterly to the House and Senate Committees on Appropriations on efforts to address recently reviewed issues, as well as on our previous but unaddressed recommendations.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Customs and Border Protection

    Status: Closed - Implemented

    Comments: The Bureau of Customs and Border Protection (CBP) has submitted quarterly reports to the Appropriations Committees that described its efforts to address open GAO recommendations since November 2002.

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