For lack of funding, the Customs Service will shut down its Customs Modernization Project, aimed at overhauling the agency's information technology infrastructure, in March. The decision, slated to be announced Thursday, comes at a time when international trade is booming and Customs' current systems have been struggling to keep pace.
"Right now we need $15 million to keep the modernization effort moving forward," said Charles R. Armstrong, director of Customs Modernization. "We'll put the program in mothballs till we can get funding."
Last month Customs officials decided not to proceed with issuing a request for proposals on the estimated $2 billion project because there wasn't enough money to get through contractor selection, Armstrong said
"We have no choice here," Armstrong said. "And there is no knight on a white horse coming any time soon to find funding for us."
Customs also needs the money to keep operating a pilot project of the Automated Commercial Environment, Customs' new architecture for handling imports. The pilot, now operational at two ports in Michigan and one in Texas, helps major American automobile manufacturers by streamlining the entry of automobile parts made in Canada and Mexico. These parts are typically assembled into cars the day they leave points abroad.
The pilot will be shut down before the end of March if funding is not found.
This is not the first time the modernization project has had funding troubles. The administration has requested $210 million for it for the past two years. However, Congress withheld the funds after the General Accounting Office reported the plans were flawed.
Customs remedied the plan's faults and got a clean bill of health from GAO. But Armstrong was not hopeful that funding would materialize, even though the administration's fiscal 2001 budget seeks the $210 million for modernization for the third year in a row.
In the future, Woody Hall, Customs' chief information officer, and budget officials will champion the need for modernization and the project's funding requirements, Armstrong said. But there is no indication that the White House will request a supplemental appropriation to keep the project afloat.
The shutdown belies Customs' desperate need for new systems. In 1999, Customs' main transaction processing system, the Automated Commercial System, had two series of brownouts that Armstrong termed "potentially disastrous."
"We reached the physical capacity of the architecture that is in place today," Armstrong said. "Last year we got $35 million for what we call ACS 'life support.'" Although Customs has mitigated the problems to some degree, he predicted that at some point the Customs system will hit the wall again. "No one knows when that is going to be," Armstrong said.
As trade increases, the system constantly has to be able to deal with more and more transactions. Trade is expected to double over the next several years. Customs collects $22 billion in import duties and fees every year.
Customs will publish a Federal Register notice Thursday announcing the shutdown of the project office and the pilot automation program.
NEXT STORY: TSP's C Fund takes a big dip