In his article, Follow the Money, my business partner and dear friend, Kelby Woodard, succinctly set the stage for this piece with his comments on U.S. Customs & Border Protection’s (CBP) ability (or more appropriately inability) to deliver the Automated Commercial Environment (ACE) on a timely and cost effective basis.

 

As Deputy and Acting Commissioner Jayson Ahern bid his adieu at the 10th annual CBP Trade Symposium in December, I focused intently on his remarks…perhaps too intently. For two compelling reasons, I had very low expectations that this prepared speech would contain any substantive content or major announcements. First, the speech was his farewell address as he officially retired from CBP on December 31, 2009, following more than 30 years of dedicated federal service. Secondly, CBP is still an agency in transition awaiting Senate confirmation hearings for President Obama’s nominee, Alan Bersin.

 

You wouldn’t expect the Acting Commissioner to announce any new strategies or innovative programs while the newly appointed Commissioner is in the wings awaiting confirmation, which is in itself a travesty and a conundrum. We are one full year into this administration and CBP, a mission critical agency in the war on terror and with perpetuating problems like ACE to confront, is still adrift and rudderless. Mr. Bersin was finally nominated in September and as this went to press his confirmation hearings have not been announced or calendared.

 

So, while I wasn’t expecting any major announcements or riveting content in Acting Commissioner Ahern’s remarks at the symposium (and I wasn’t disappointed), I was completely taken aback by what I viewed as an almost cavalier indifference when his oratory turned to CBP budgets and ACE. Frankly, I continue to be nonplussed by CBP’s continued lack of accountability for ACE and their recklessly irresponsible spending.

 

Let’s quickly review the history of the ACE Program. ACE is the replacement for the legacy Automated Commercial System, which has more than outlived its anticipated shelf life. It is coded in COBOL and was once portrayed by CBP as crumbling under the pressures of 1) explosive trade growth, 2) new regulations and bilateral free trade agreements riddled with rules, and 3) exceptions to the rules.

 

In 1998 CBP (then called the U.S. Customs Service) sought Congressional appropriations to build and deploy ACE. The initial price tag was a staggering $1.3 billion in taxpayer dollars. I say staggering because based on my years of experience in the private sector with multi-billion dollar companies, it was unusual to spend more than $200 to $300 million on a system. In fact, to reach that kind of price tag in the corporate world the system would most likely be a behemoth that would touch multiple operating units requiring complicated processing and sophisticated applications. Also, any such initiative requiring that level of funding would be highly illuminated and scrutinized within the organization for progress and tangible on-time deliverables.

 

Furthermore, ACE is not what the private sector would refer to as an integrated all encompassing “enterprise system” that would eventually run every facet of CBP’s business including things like human resources, finance, immigration and passenger processing, targeting, security and fines, penalties and forfeitures. All of those other CBP activities and work functions are processed today in other silos.

 

Simply stated, ACE is a one-dimensional cargo processing system that needs to accept, analyze, process and store a finite amount of data points and attributes relating to a box of cargo or freight. That’s it, nothing more complicated. We’re not trying to land a person on the moon where there are billions of variables and complex processing required. And yet, here we are eight years after funding with very little to show for it. And the price tag? It has now ballooned beyond $3 billion! It’s unconscionable.

 

Is it fair to compare the public sector to the private sector? Perhaps not, but it is the only basis of comparison we can really make. Can you imagine the vice-president of information technology at Wal-Mart (the world’s largest company) asking the board of directors for $3 billion and eight years to build a single task system? After one year (or less at some companies), no results or deliverables generally equals no employment; it's called accountability.

 

When you are given a project and the associated funding for it, there are explicit expectations that you will deliver on-time and on budget. If this isn’t the case, heads roll and/or the initiative is scrapped. In any case, the continued hemorrhaging of huge sums of money for years on end with little or no progress is never be tolerated. Not a single person at CBP has truly been held accountable for the failures of ACE, and, to the best of my knowledge, no one has lost their job for failing to meet objectives or deadlines.

 

The Government Accountability Office (GAO) has previously reviewed ACE and in February of 2003 issued a 60 page report entitled, Automated Commercial Environment Progressing, but Further Acquisition Management Improvements Needed. Then again in March 2005 following another review the GAO issued a 128-page report emblazoned with a title decrying, Customs ACE Program Progressing, but Need for Management Improvements Continues. Do we see a theme here? I can only hope some hard-hitting hearings on Capitol Hill and the leadership of the new Commissioner (once confirmed) can exorcise the demons dwelling within ACE.

 

Among other things, CBP has had it wrong from the start by not adequately leading, monitoring or providing direction to the contractors involved in this project. It’s quite obvious that CBP does not have the skill sets necessary to manage a large, complex project with multiple contractors. In the meantime a small number of private sector contractors have singularly benefited from the CBP Stimulus Package known as ACE development.

 

As this article goes to press there is an announcement of yet another ACE delay. The release that was scheduled for January 17, 2010, is now delayed. This deployment was supposed to include new entry summary, account and revenue (ESAR III) capabilities specific to the filing, processing and case management of antidumping and countervailing duty entries. To credit the Trade Support Network, developers and CBP where credit is due, this particular release is purported to have some “very cool” functionality. The message did not define the cause of the postponement and only stated that a revised scheduled would be announced at a later date.

 

While I depict the ACE system requirements as relatively easy in the overall scheme of computer systems, if it really does cost more than $3 billion and take eight years to build, what a sad commentary that is on the state of our industry. We’ve allowed our Congressional brain trust to render our business so horribly prolix and complex that very few of us, if any, can say with authority that “they know it all.”

 

Has anyone inside the Beltway read the 1993 Modernization Act recently? It was supposed to simplify and make things easier, not create more regulatory labyrinths and landmines for the trade and CBP to interpret and navigate.

 

It is high time that CBP be held responsible for their actions (or lack thereof). The trade community and CBP deserve the modern new platform originally envisioned as ACE. The trade community and CBP need ACE. The trade community has paid for ACE with substantial investments of both time and money. Now it’s time to deliver the goods, and the trade community should demand nothing less than a complete and fully functional system without further delay or cost overrun.