House panel partially funds Customs modernization

After months of waiting, the Customs Service has won approval from a House subcommittee for funds to begin a much needed overhaul of its computer systems.

The House Appropriations Subcommittee on Treasury, Postal Service and General Government Tuesday night marked up a total of $233.4 million for Customs automation activities. This figure includes $105 million for the Automated Commercial Environment (ACE), a system slated to replace the aging Automated Commercial System (ACS).

Customs had asked for $210 million to begin its modernization. Even so, Customs officials weren't complaining. "This funding gets us started," a Customs official said after the markup. "It's a step in the right direction."

"This is enough to get a contract awarded and off to a fast start," said Olga Grkavac, executive vice president of the Information Technology Association of America, a trade group in which many of the potential bidders on an ACE contract belong. "The House position is very favorable. This was was the subcommittee's number one priority as a new program." And because ACS must continue to operate while ACE is in development, a total of $123 million has been programmed for what has come to be known as ACS "life support." The subcommittee also appropriated $5.4 million for the International Trade Data System.

ACE has been delayed for years as a result of the Clinton administration's stipulation that any new automation funding for Customs come from a new user fee on the import community. But companies were against such fees, arguing that they pay almost $1 billion per year in fees already. And with trade increasing every year, Customs, Congress and the trade community all recognized that ACS could not keep up with the workload.

Now Customs can release a request for proposals that it has had prepared for months. "We hope to have an award in place in the first half of the next fiscal year," the Customs official said. "Then we'll spend a good six months defining the requirements of the new system."

The full House Appropriations Committee is scheduled to mark up the legislation Thursday. If the funding is still intact at that point, the issue moves to the Senate.