Customs deal is at hand, but biz knocks funding

Customs modernization request for proposals

The prime contractor for the Customs Service's $1.4 billion modernization project could be selected as early as this week.

Industry leaders knowledgeable about the project said Customs officials were scheduled to meet with General Accounting Office officials on April 23 to discuss modernization plans. The meeting is seen as the final hurdle to freeing $45 million in fiscal 2001 funds that would then allow Customs to proceed with the award.

GAO has expressed concerns about how the Automated Commercial Environment (ACE) would interact with the International Trade Data System, which will be implemented as part of ACE and will create a single interface for submitting trade data. Awarding the prime contract, however, would just be a starting point, industry leaders said during a meeting with reporters and congressional staff members last week. Their main argument is that the Bush administration's spending proposal for next year is inadequate.

President Bush has proposed $130 million for ACE for fiscal 2002, a figure that business leaders calculate would stretch implementation of the system across 14 years.

That kind of piecemeal funding is a "recipe for failure," said Sam Banks, chief customs officer for Arzoon.com Inc., San Mateo, Calif., and former acting Customs commissioner.

"A 14-year implementation cycle is inefficient and possibly counterproductive," said Robert Cresanti, senior vice president of government affairs for the Information Technology Association of America, an Arlington, Va., industry group. If the program is to be done effectively, it needs to be done across five years, he said.

The group argued that Customs modernization is critical for ensuring the nation's economic health and protecting it from terrorists and agricultural problems such as foot-and-mouth disease.

Customs' 17-year-old Automated Commercial System (ACS) is increasingly unable to deal with the requirements of trade in a global economy and has become susceptible to brownouts, delaying shipments of imported goods at U.S. ports and border crossings. Banks said the only way Customs can adequately tackle the monumental enforcement task associated with the unparalleled levels of international trade is by automating its operations so inspectors can focus their efforts.

ACS is also inefficient for importers and exporters. Caterpillar Inc., best known for its tractors, is able to track parts as they are transported around the world. "But when they reach the United States and Customs asks for documentation, we have to stop and hit the print button," said Ronald Schoff, manager of customs and export regulations for the firm.

The business group said Customs has taken the necessary steps to ensure the success of its modernization. "Customs is ready for this," Banks argued, adding that the agency has a business plan in place and is merely awaiting the necessary approvals to get started.

The three companies vying for the ACE contract are Accenture, Electronic Data Systems Corp. and IBM Corp., industry sources said.