Pursuant to a congressional request, GAO discussed the Customs Service's management of its Automated Commercial Environment (ACE) system.

GAO noted that: (1) the need to leverage information technology to improve the way that Customs does business in the import arena is undeniable; (2) Customs' existing import processes and supporting systems are simply not responsive to the business needs of either Customs or the trade community, whose members collectively import about $1 trillion in goods annually; (3) these existing processes and systems are paper-intensive, error-prone, and transaction-based, and they are out of step with the just-in-time inventory practices used by the trade; (4) recognizing this, Congress enacted the Customs Modernization and Informed Compliance Act to define legislative requirements for improving import processing through an automated system; (5) Customs fully recognizes the severity of the problems with its approach to managing import trade and is modernizing its import processes and undertaking ACE as its import system solution; (6) begun in 1994, Customs' estimate of the system's 15-year life cycle cost is about $1.05 billion, although this estimate is being increased; (7) in light of ACE's enormous mission importance and price tag, Customs' approach to investing in and engineering ACE demands disciplined and rigorous management practices; (8) such practices are embodied in the Clinger-Cohen Act of 1996 and other legislative and regulatory requirements, as well as accepted industry system/software engineering models, such as those published by the Software Engineering Institute; (9) unfortunately, Customs has not employed such practices to date on ACE; (10) GAO's February 1999 report on ACE describes serious management and technical weaknesses in Customs' management of ACE; and (11) the ACE weaknesses are: (a) building ACE without a complete and enforced enterprise systems architecture; (b) investing in ACE without a firm basis for knowing that it is a cost effective system solution; and (c) building ACE without employing engineering rigor and discipline.