Industry pressures Hill to fund Customs system

A coalition of business and retail groups — including automakers, Kmart

Corp. and even McDonald's — are banding together to pressure Congress to

fund $1.2 billion to modernize the Customs Service's antiquated computer

system. In an unusual alliance, the group of more than 400 trade organizations

and companies say aging computers at every U.S. port are slowing the importation

of goods, costing time and money.

"People are feeling the urgency because the system that Customs is using

is 16 years old. In computer life, that's ridiculous. It's just not big

enough to handle the demand," said Robin Lanier, chairwoman of the Coalition

for Customs Automation Funding.

The Customs Service installed Customs' Automated Commercial System at

301 ports of entry in the mid-1980s and has not kept up with updating systems

that handle more than $1 trillion in goods per year.

"U.S. manufacturers, retailers and consumers rely on the smooth flow

of goods across our borders. Disruption to Customs systems...ultimately

[result] in higher costs for producers and consumers alike," the coalition

said in a March 8 letter to members of the House of Representatives.

Customs' DOS-based system crashed for several hours last week, disrupting

the flow of more than $8.8 billion worth of goods. The system has been plagued

in recent years by brownouts, slowdowns and a crash in 1998 that lasted

six days, halting goods at the border.

Customs has tried to patch the system, but "most people think those

are Band-Aids and that the system will start experiencing problems in the

middle of this year," Lanier said.

The Senate Budget Committee is considering adding $200 million to the

Treasury's budget appropriations for fiscal 2001 to help pay for a new system — ACE, the Automated Commercial Environment — but no deal has been finalized.

House budgeteers plan to add money to the project's budget, but may stretch

the four-year plan to six years.

Rep. Jim Kolbe (R-Ariz.), chairman of the House Appropriations Subcommittee

that oversees Customs and other Treasury Department agencies, said the funding

debate is being "compromised by its link to user fees and unlikely to be

enacted."

"This enormous modernization effort is a priority that calls for positive,

responsible action — not walking away from making hard choices," Kolbe wrote

in a Feb. 16 letter to Customs Service Commissioner Raymond Kelly.

Last month, Customs said it would have to suspend a pilot project for

the new system because of lack of funds. The project enabled Detroit automakers

to electronically clear parts and supplies from Canada. Last week, Treasury

found $3 million for the pilot project, but lawmakers and retailers remain

angry at the way the issue was handled.

Part of the problem, they say, is that the Clinton administration is

willing to fund the new system but wants to impose a user fee on importers

to pay for it.