Customs project moves ahead despite management challenges, official says

Inadequate funding rather than poor management will be to blame if a five-year, $1.3 billion import processing system in the Homeland Security Department's Border and Transportation Security Directorate is not completed by 2007, the project's director said Wednesday.

The former Customs Service is making progress on the Automated Commercial Environment (ACE) system, despite recent management challenges, said Charles Armstrong, executive director of the Customs and Border Protection Modernization Office. ACE is intended to help border agents track inbound cargo more efficiently and target high-risk shipping containers for inspections.

The project received $314 million in fiscal 2003 appropriations, enough to keep it on track for now, according to Armstrong's calculations. IBM Global Services, the project's contractor, has completed much of the system's infrastructure and is now getting it ready for customs agents and shippers to log on and view data on imports, he said.

But a new report (03-406) from the General Accounting Office said that while the former Customs Service has met project goals mandated by congressional appropriators and has incorporated some important recommendations, ACE still faces management challenges.

The agency has been "slow to correct" weaknesses in "two areas fundamental to effective acquisition management-people and processes," the GAO report said. "These weaknesses increase the risk that ACE will be late, cost more than necessary, and not perform as intended."

Previous GAO reports concluded that managers in Armstrong's office were not equipped to oversee IBM Global Services. And an April inspector general's report faulted the modernization office for failing to fill key management positions.

Customs has taken steps to address these concerns, Armstrong said. In October, the modernization office completed a plan to recruit and improve training of contract managers, he said. The office has also filled many of the vacant managerial positions cited in the IG report, and has sent managers to courses on the acquisition process.

Armstrong acknowledged that his office has had a tough time filling all of the job openings, partly because of Customs' move into the Homeland Security Department on March 1. The transition has made it temporarily more difficult to focus on finding new employees, he said. The Customs Service was split into the Bureau of Customs and Border Protection and the Bureau of Immigration and Customs Enforcement. Both bureaus are part of Homeland Security's Border and Transportation Security Directorate.

Now that the former Customs Service is part of Homeland Security, ACE project managers will also have to spend more time coordinating their efforts with leaders at other agencies within the new department, Armstrong added. But the transition will still be a "step in the right direction" for the project, he said, because other agencies in Homeland Security have a vested interest in border control, and Customs will be able to leverage their expertise and resources.

But GAO was not convinced that the modernization office could meet its targets for filling all management vacancies by next month and for developing training programs for acquisition department managers by April 2004. The workforce management strategy would take more than a year to implement, according to the office's timeline--too long, in GAO's opinion. The modernization office plans to tie pay to employees' job performance, for example, but its proposed deadline for finalizing performance standards is still three months away, and a proposed deadline for delivering a set of career development standards is more than six months away, the report said.

Armstrong said that his office views the timeline as more of a long-term strategy for developing better managers, rather than a quick fix for current problems. To that end, the plan does fit with the accelerated timetable that GAO would like to see, he said.

The former Customs Service agreed with the report in general and is taking steps to address the issues it raised, according to officials. In a Feb. 13 memo to GAO, Brenda Smith, the agency's acting director for the office of planning, emphasized that Customs has been working "diligently" to address ACE management issues.

Smith pledged that the modernization office will complete an independent review of IBM's work and will place a higher priority on implementing management strategies. The Bureau of Customs and Border Protection will release quarterly reports to keep GAO updated on its progress.