Feb 21 COAC Meeting Reports on ACE Funding Crunch, Fixes, Simplified Pilots

On February 21, 2012, the Advisory Committee on Commercial Operations of Customs and Border Protection (COAC) met in Washington D.C. to hear updates on ACE and other projects from government officials as well as reports from its various committees. With respect to ACE, government officials announced that (1) CBP will have six major ACE drops over next 6-8 months, (2) CBP is still looking at how to fix the ACE summary “edits” problem, (3) ACE is critically short on funding for further development, (4) ACE will soon be reviewed by DHS from a financial investment perspective, and (5) the main software developer’s contract has run its term. Attendees also gave an update on ACE Simplified Entry and Summary, and ACE for exports.

Meeting comments on developments in the Automated Commercial Environment (ACE) included:

Six major ACE drops (including fixes) coming. There are a number of current issues with ACE functionality that have had to wait until work on M1 finished. As M1 is now nearing completion, six major drops of ACE improvements are planned over the next 6-8 months -- including improvements that address over 120 of the highest priority problems and ticket reports that have been identified. These drops could begin as soon as the late March, early April 2012 timeframe.

(As M1 took all of CBP’s ACE development resources, these drops and fixes have had to wait. Once M1 is out of the development environment, those resources will be freed up for Simplified Entry and these ACE improvements and advances. The M1 project is why CBP has not met the target timelines set for Simplified Entry and the ticket reports.)

M1 pilot ended Feb 20, AMS ends late Sept. 17 different trading partners are participants in the pilot (including 6 ocean, 3 carrier, 3 service center, 3 rail, and Integration Point). On February 20, 2012, the M1 pilot officially ended. CBP is using the balance of February and March 2012 to correct issues seen in the operational environment. In April 2012 CBP will do a readiness review, and then expects to close down the ACS Automated Manifest System (AMS) for ocean and rail by the end of September 2012. A Federal Register notice be issued that announces this change.

(See ITT's Online Archives 12021749 for summary of CBP stating that it is time to prepare for M1 and the 6-month deadline for the decommissioning of AMS.)

CHBs at 5% ACE summary participation. Customs brokers are now at a 5% participation level for ACE entry summary (seven months ago they were at a participation level of 1% or less), and it continues to increase.

ACE summary edits for CHBs. Both importers and brokers have identified ACE summary edits as critical in their decision to use ACE, as entry filers will not want to use a dual system (ACE and ACS). CBP will be costing out the options for these edits. Given the limited budget environment, CBP has to evaluate how to meet and prioritize these needs.

CBP had originally thought that the ACE software codes could be changed to implement the needed edits. However, the cost of going into each piece of functionality is prohibitive. CBP is looking at other options such as front-end “filters.” However, the programming practicality and cost of such an approach has not yet been evaluated. Like ACE development in general, CBP states it will try to determine how to obtain the best value, the best quality product, in the most expeditious method possible, in light of budget constraints, for these edits needs. An example of such a development efficiency is DIS, which actually was accomplished in 30 days by using CBP’s existing resources.

(See ITT's Online Archives 11021531 for February 2011 summary stating that CBP had no funding to implement the 24 priority ACE entry summary edits wanted by the trade, and was looking at compensating controls. See ITT's Online Archives 11092019 for September 2011 summary stating that CBP was looking at an "upfront filter" as a cost effective way to do these edits, and asked the TSN to prioritize their list of 24 desired edits, as funding might be limited. )

ACE received no FY 2012 development money. ACE received a FY 2012 (October 1, 2011 -- September 30, 2012) funding level of $140 million, which only covers its “all-in costs” (total current expenses) on a yearly basis, which means no new development money for FY 2012. CBP does have some limited ‘carry over” funding which has been allocated for this period, and will continue to work to develop concepts that might not be tied so closely to automation development.

One COAC member and former CBP Commissioner stated that everyone should leave the COAC meeting with a sense of urgency over the need for ACE funding, adding that Congress must be asked to provide the funding needed.

(See ITT's Online Archives 11122013 for summary of Congress passing FY 2012 CBP funding with decrease for Automation, C-TPAT, etc. See ITT's Online Archives 12021417 for summary stating that the Administration's FY 2013 budget proposal would cut funding for CBP field operations overtime, C-TPAT, and automated systems, including deferred replacement of legacy IT infrastructure and upgrades. That summary stated that the Administration was proposing a minimum $140,790,000 budget for ACE, with $25 million held pending certain reporting to Congress.)

Need DHS approval for further ACE development. At the time the PGA message set is added to ACE Simplified Entry, CBP will need to obtain the approval of the Department of Homeland Security to continue ACE development, as in July 2010 DHS’ Chief Information Officer determined ACE was a moderately “high risk” investment, and CBP was required to map its remaining work against remaining funding, improve its oversight of the project, improve its management of contractors, and make other changes. DHS will now evaluate the success of CBP’s efforts.

CBP adds that it is in the process of going forward to get that DHS approval, which will impact how will be able to move forward on Simplified Entry and ACE Cargo Release.

Contract for main ACE software developer has ended. The contract for ACE’s main software developer has ended. Once CBP gets the approval from DHS, CBP will be able to bring in new contractors and deliver the rest of ACE.

(See ITT's Online Archives 12012321 for summary stating that the design and acquisition phase for ACE cargo release would begin with an anticipated contract award in the third quarter of FY 2012 (April - June 2012), and 11110103 stating that adequate funding was required for this to go forward.)

First 3 test ports for Simplified Entry pilot chosen. CBP has identified the first ports that will test Simplified Entry: Chicago, Atlanta, and the FedEx hub in Indianapolis. A pilot hub for UPS will also be added. Trade, technical and operational resources will be utilized at these test ports.

Start of Simplified Entry pilot now set for April. For the Simplified Entry air cargo pilot, CBP is very close to doing front-end testing (message testing and acceptance by CBP), and then production end-to-end testing in the April 2012 timeframe, if M1 deployment stays on track. After the test, there will be a 90-day evaluation period.

If pilot successful, then add PGA and DIS. If the pilot has been evaluated as successful, the next phase will launch the PGA Message Set, followed by the Document Imaging System. Both are already built (and do not need ACE development funds).

(DIS is already up and running, with some agencies participating and others testing. A Federal Register notice on the DIS pilot test will be out in the next few weeks. CBP noted that it is currently testing DIS for the collection of export manifests, as requested by the World Shipping Council, and was interested in hearing of additional new ideas for automating paper-based processes.)

Simplified Entry for OGA goods. While the first piece of the Simplified Entry pilot does not include OGA (other government agency) entries, CBP is actively engaged in discussion with OGAs and is walking them through the Simplified Entry process, in order to allow OGA entries as Simplified Entries at a later date.

Simplified Entry as an entry type. Simplified Entry may be a new entry type, like TIBs (temporary importations under bond).

(SE’s implementation may be impacted by ACE’s limited resources, as ACE cargo release takes priority.

See ITT's Online Archives 12022101 for summary of document containing Simplified Entry flowchart, that no longer states the first air cargo Simplified Entry is in March 2012. See ITT's Online Archives 11120515 for summary comparing the data elements of the CBP Form 3461 to the Simplified Entry and ISF. See ITT's Online Archives 11111801 for summary stating that the SE Pilot would use "best available" data and exclude OGA entries for now.)

Simplified summary. A COAC work group convened on Simplified Summary in January to try to develop a vision of consolidated summary and payment. After much discussion, it was determined that Simplified Summary is a long term project as significant new laws and regulatory changes are required. Current law and regulations are based on a transaction-by-transaction approach, while Simplified Summary would be an aggregate approach. Also to consider is how and if Simplified Summary would satisfy government and trade interest in obtaining granular data on imports, which could be lost in an aggregate reporting approach (though aggregating payment, with the potential of audits, is not a concern). CBP has taken these comments and putting together their own workgroups. The COAC workgroup will reconvene in the April time frame.

Also at the COAC meeting, CBP asked the trade if they were really interested in a Simplified Summary, as the perception of this trade interest was driving CBP efforts. COAC members commented that if the summary was truly simplified, it would be a great cost savings for both business and trade. Others noted that getting to a Simplified Summary might be a long term process, and that the trade would be interested in what short term changes could be put in place to improve the process.

(See ITT's Online Archives 11111801 for November 2011 summary on the simplified entry summary (aggregated monthly summary).)

ACE for exports. CBP is continuing to work on ACE export requirements with its last bit of “carry over” funding. CBP is taking the same approach as it used for ACE cargo release. CBP is documenting the process with other government agencies (OGAs) and internal users. This documentation will be completed by the end of summer 2012, and will identify options on how to move forward.

(See ITT's Online Archives 11092117 for September 2011 summary on CBP's automated export processing plans.)

(See future issues of ITT for articles on other topics discussed at this COAC meeting.