IBM gets Customs pact

The Customs Service, marking a major milestone in its modernization effort, selected a team led by IBM Global Services Inc. for its $1.3 billion Customs Modernization Prime Integration Contract.

The April 27 announcement is part of a massive effort to overhaul antiquated systems at Customs. Those Reagan-era systems are working at capacity, increasingly unable to keep up with the growth in trade. The 17-year-old Automated Commercial System (ACS) has also become susceptible to brownouts, which then delay shipments of imported goods at U.S. ports and border crossings.

The project represents a whole new way of doing business for the agency, said S.W. "Woody" Hall, Customs' chief information officer and assistant commissioner for the Office of Information and Technology. "Sometimes that just kind of rolls off the tongue and seems like "So what?' But we basically do customs today [the way] that we've been doing it for 200 years," he said. "It drives you to a very manual, very labor-intensive process."

The new system will enable Customs to send monthly bills and review exporters on a nationwide basis. The current system requires Customs to collect duties at each individual port.

"This is not just a computer program," said Customs acting Commissioner Charles Winwood. "This is truly devising an international focus for the future, [a] globally designed trade process that allows us to move easily and adapt quickly to changes in the modern global environment. So there's a lot more to it than just building a computer system."

The announcement means that Customs can now begin the work it has planned for nearly six years. "This is work that was needed for years," Hall said.

Customs officials said they selected IBM because the group was already working together as a team and because of its software Capability Maturity Model, a system developed by Carnegie Mellon University's Software Engineering Institute to measure an organization's software engineering practices.

"We now have the opportunity to completely revitalize" Customs' systems, said Roland Harris III, general manager for the public sector at IBM Global Services.

IBM beat out Accenture and Electronic Data Systems Corp. to win the Customs deal.

Customs officials made the contract award after spending much of the week getting the necessary approval to spend $50 million of the $130 million appropriated for fiscal 2001. As with the Internal Revenue Service, Customs modernization money is put in a separate account and can be spent only after the agency gets approval from Treasury Department officials, the General Accounting Office and congressional appropriators.

Later this year, Customs will seek approval for funds to continue rolling out its Automated Commercial Environment (ACE), which will handle trade compliance and replace ACS.

The modernization project still faces some significant hurdles. Winwood acknowledged that projects of this size are inherently risky, but he said Customs is taking steps to ensure its success.

More funding battles lie ahead. President Bush has proposed $130 million for ACE for fiscal 2002, a figure that business leaders calculate would stretch implementation of the system to an unpalatable 14 years.

At that funding level, Winwood said Customs could not meet the timetable it has laid out. "It will cause an extension of the time," he said.