<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:70547.wais]
OVERSIGHT OF MANAGEMENT CHALLENGES AT THE U.S. CUSTOMS SERVICE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
APRIL 20, 2000
__________
Serial No. 106-196
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
70-547 WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Lisa Smith Arafune, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Randy Kaplan, Counsel
Bryan Sisk, Clerk
C O N T E N T S
----------
Page
Hearing held on April 20, 2000................................... 1
Statement of:
Avila, Yvonne, president, the Foreign Trade Association of
Southern California and director of communications, Port of
Long Beach; Maurine Cecil, president, the Los Angeles
Customs Brokers and Freight Forwarders Association, Inc.;
Judy Grimsman, chairman of the board, the L.A. Customs
Brokers and Freight Forwarders Association, Inc.; and J.
Richard Williams, Ph.D., P.E., professor of mechanical and
aerospace engineering, California State University, Long
Beach...................................................... 70
Ekstrand, Laurie E., Director, Administration of Justice
Issues, U.S. General Accounting Office; Charles Winwood,
Acting Deputy Commissioner, U.S. Customs Service; Peter
Gordon, Assistant Regional Director for Inspections,
Immigration and Naturalization Service, Western Region;
Colleen M. Kelley, national president, National Treasury
Employees Union............................................ 6
Letters, statements, etc., submitted for the record by:
Avila, Yvonne, president, the Foreign Trade Association of
Southern California and director of communications, Port of
Long Beach, prepared statement of.......................... 73
Cecil, Maurine, president, the Los Angeles Customs Brokers
and Freight Forwarders Association, Inc., prepared
statement of............................................... 85
Ekstrand, Laurie E., Director, Administration of Justice
Issues, U.S. General Accounting Office, prepared statement
of......................................................... 9
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 4
Kelley, Colleen M., national president, National Treasury
Employees Union, prepared statement of..................... 34
Williams, J. Richard, Ph.D., P.E., professor of mechanical
and aerospace engineering, California State University,
Long Beach, prepared statement of.......................... 93
Winwood, Charles, Acting Deputy Commissioner, U.S. Customs
Service, prepared statement of............................. 25
OVERSIGHT OF MANAGEMENT CHALLENGES AT THE U.S. CUSTOMS SERVICE
----------
THURSDAY, APRIL 20, 2000
House of Representatives,
Subcommittee on Government Management, Information,
and Technology,
Committee on Government Reform
Long Beach, CA.
The subcommittee met, pursuant to notice, at 10 a.m., in
the Board Room, Port of Long Beach Administrative Building, 6th
Floor, 925 Harbor Plaza, Long Beach, CA, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn and Becerra.
Staff present: J. Russell George, staff director and chief
counsel; Randy Kaplan, counsel; Bryan Sisk, clerk; Ryan McKee,
staff assistant; Bonnie Heald, communications director; Connie
Szeibel, district staff director; and Devin Storey, intern.
Mr. Horn. A quorum being present, the Subcommittee on
Government Management, Information, and Technology will come to
order.
The purpose of today's hearing is to examine a variety of
challenges facing the U.S. Customs Service. The Customs Service
has a wide-ranging mission to ensure that all imports and
exports comply with U.S. laws and regulations. Originating in
1789, the year of the first Congress in New York City, it is
the oldest Federal agency within the executive branch of our
government. In fact, until the income tax was implemented
during the First World War, our government was funded entirely
by Customs' duties.
This year, it is estimated that $2.6 trillion in
merchandise will be imported into and exported from the more
than 300 ports in the United States. In addition, close to half
a billion people will enter the country through U.S. border
crossings this year.
The Customs Service is responsible for processing those
people, their baggage, and all cargo and mail that crosses the
Nation's borders. Customs collects the appropriate duties,
excise taxes, and fees on all merchandise entering the country.
Next to the Internal Revenue Service, Customs is the second
largest revenue-producing agency in the Federal Government,
returning more than $22 billion each year to the U.S. Treasury.
Customs also has a major enforcement role. The staggering
growth in world trade over recent years has been accompanied by
an equally dramatic increase in the smuggling of illegal drugs,
weapons, printed, intellectual or pirated intellectual
property, and in some instances, human cargo. Each region of
our country faces unique threats based upon the nature, volume,
and origin of the cargo it receives.
Customs employs nearly 20,000 people to process and inspect
the cargo of more than 300 ports around the country. However,
as this subcommittee has learned during previous hearings, the
Customs Service does not have a system to determine how to
match its staffing resources with its enforcement and
inspection responsibilities.
In September 1998, Customs contracted with a private
consultant to develop a resource allocation model. This model
would serve as a tool to assist management in making staffing
decisions and preparing budget requests. The resource
allocation model was delivered to Customs over 1 year ago. We
are all interested in learning what staffing levels the model
predicted would be appropriate, and how Customs intends to use
this information.
In addition to the three source allocation model, Customs
is delivering and developing a new import processing system
called the Automated Commercial Environment [ACE] system. It is
no secret that Customs needs to modernize the way it processes
trade. The agency's current approach to enforcing trade laws
and regulations, and assessing and collecting import duties is
outdated. It is neither responsive to the needs of Customs nor
the needs of its commercial clients. The present system,
developed more than 16 years ago, has experienced frequent
breakdowns and have delayed the flow of data and cargo entering
the country. The Automated Commercial Environment, ACE system
will streamline the commercial import process and increase the
quality of service to its customers--the trade community. We
are interested in learning how well Customs is managing the
acquisition and development of this multi-billion-dollar
system.
In its enforcement role, Customs is currently using some
advanced technology, including x-rays and hand-held sensors to
detect illegal smuggling. Nevertheless, illegal smuggling
remains a significant problem. Today, we will hear about a new
project that could enhance this enforcement effort for Customs
and its partner, the Immigration and Naturalization Service,
and could expedite the processing of people and cargo entering
the country.
I would like to thank the Port of Long Beach for hosting us
today and for their help with the preparations for the hearing.
I also welcome Representative Doug Ose who represents the
Sacramento area and north of it, who is also a very
distinguished member of this subcommittee and we appreciate him
joining us here. He's done a great job on many of the hearings
that we've had in Washington, and we're delighted to see him in
southern California. And Representative Xavier Becerra, who is
well known to those from this area, without objection will be
sitting with this panel and have all the rights and
responsibilities of a member of this investigating committee. I
ask unanimous consent that he be permitted to join the
subcommittee for today's hearing. Without objection, it is so
ordered, and we welcome our witnesses, and we look forward to
your testimony.
Your full statement goes in the record, please don't read
your full statement. We've all read it. What we are interested
in is dialog with the witnesses and in others on the panel,
too. So, we would welcome your summary, and do it from the
heart and look us in the eye, and we'd appreciate it.
Now, we are going to swear in the witnesses, since that's
our tradition in Government Reform, and if you have staff
backing you up that might speak behind you, you should stand
also when we swear you in, and the clerk will note who has been
sworn in for the testimony and put it into the record at that
point.
So, first, before going to the witnesses, I want to ask Mr.
Becerra if he has an opening statement that he'd like to make.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Becerra. Mr. Chairman, let me first thank you for
allowing me to sit with the Government Management, Information,
and Technology Subcommittee of the Committee of Government
Reform and join you and Congressman Ose today, I thank you for
that opportunity.
As a member of the Ways and Means Committee, with
jurisdiction over Treasury, Customs, and the issues of trade,
obviously, this is of great concern to me, and I'm pleased that
you are holding this hearing.
I do have a statement. I can submit it for the record, and
rather than make further remarks I'd like to hear the testimony
of the witnesses.
Again, I thank you for the opportunity to be here and I
congratulate you on the work that you've done on these
particular issues with regards to Customs.
Mr. Horn. Well, I thank the gentleman.
Does the gentleman from California, northern California,
want to say anything at this point?
Mr. Ose. Speak less, say more.
Mr. Horn. OK. Fine. Mr. Ose is going to do most of the
questioning.
So, let me, if you would, stand, raise your right hands,
and if there's any support staff behind you, have them stand.
Yes, we have quite a few today.
The clerk will note that the five witnesses and the, it
looks like eight helpers, and we're delighted to have all of
you, have taken the oath.
So, we will now begin with the first witness. The first
witness, which is usual for these hearings, is a key member of
the U.S. General Accounting Office, otherwise known as GAO, and
that is part of the legislative branch with the authority of
Congress to look at both fiscal matters and programmatic
matters, and we have as the principal witness on panel one
Laurie E. Ekstrand, Director, Administration of Justice Issues,
U.S. General Accounting Office.
STATEMENTS OF LAURIE E. EKSTRAND, DIRECTOR, ADMINISTRATION OF
JUSTICE ISSUES, U.S. GENERAL ACCOUNTING OFFICE; CHARLES
WINWOOD, ACTING DEPUTY COMMISSIONER, U.S. CUSTOMS SERVICE;
PETER GORDON, ASSISTANT REGIONAL DIRECTOR FOR INSPECTIONS,
IMMIGRATION AND NATURALIZATION SERVICE, WESTERN REGION; COLLEEN
M. KELLEY, NATIONAL PRESIDENT, NATIONAL TREASURY EMPLOYEES
UNION
Ms. Ekstrand. Thank you very much, Chairman Horn. I'm
pleased to be here today with Randy Hite, from our Accounting
and Information Management Division, to discuss three issues
that are of really great importance to the efficient and
effective operations of the Customs Service.
The needs for Customs to develop a Resource Allocation
Model, called the RAM, and the development of an Automated
Commercial Environment [ACE], have been the subject of a number
of prior GAO reports and testimonies. And, as you know, our
report on Customs' airline passenger personal searches was
released 10 days ago. Let me address each one of these issues
in turn, and first start with the Resource Allocation Model.
In 1998, we recommended that Customs establish a process to
determine the needs for inspectional personnel across all
ports. Customs subsequently contracted with
PriceWaterhouseCoopers [PWC] to develop a Resource Allocation
Model. The model was intended to predict staffing levels needed
agency-wide and locally by occupation, such as inspectors, and
canine enforcement officers, and by core functions, such as
passenger processing.
PWC developed a model based on 1998 baseline data using two
different methodologies. One was a regression analysis and the
other an activity analysis. The regression analysis, which uses
a variety of counts of workloads as input, yielded some very
illogical results, and also failed to account for a variety of
infrastructure differences between ports. These differences
include elements such as facilities at the port, the extent of
automation, and the extent of threat.
PWC also produced an Activity Analysis Model. This approach
basically involves multiplying the units of work by the time it
takes to do each unit and then dividing by staff years.
Our concern with the RAM centers on data reliability. In a
previous report, we noted that source data for the amount of
time Customs personnel spent on air and sea passenger
processing activities is neither well documented, nor
consistently collected from port to port. We also found, and
PWC noted as well, that there are inconsistencies across source
databases where there should be none. And finally we observed
that there is considerable variation in activity times across
ports, and we are unsure of the reasons for these variations.
The bottom line on the RAM is that it could be a functional
tool as input for resource allocation decisionmaking, but data
reliability issues will have to be resolved. Customs is taking
some steps to improve some reliability of source data, and this
could change the picture.
Now, let me turn to ACE. We have long held that the need to
leverage information technology to modernize Customs approach
to import processing is both urgent and undeniable. The
outdated import processes currently in use are transaction-
based, paper laden, and time consuming, and they are out of
step with the just-in-time inventory practices of the trades.
It is, thus, absolutely critical that Customs' ACE project be
successful, and to be successful Customs must do the right
things the right way. To be right, Customs must, as we have
recommended: No. 1, invest in and build systems within the
context of an enterprise architecture. No. 2, make informed
data-driven decisions about investment options, based on
reliable analysis of business value for system increments, and
No. 3, build system increments using mature software processes.
Our work on other challenged modernization efforts has
shown that to do less increases the risk of systems falling
short of expectations, which is not in the best interest of
either the trades or the government. To Customs' credit, it has
already taken significant action to implement some of our
recommendations. It has also made clear commitments to seeing
that fundamental acquisition and investment management
capabilities that our remaining recommendations call for are
firmly in place before they invest huge sums of money in ACE.
Nevertheless, much remains to be accomplished before: No.
1, Customs is fully positioned to begin building large,
expensive, software intensive increments of ACE, and No. 2,
either the trade or the government will begin to see promised
returns on hundreds of millions of dollars to be invested.
As a result, we will continue to categorize ACE as a high-
risk endeavor and plan to monitor it closely.
Finally, let me turn to Customs personnel searches. A
recent GAO report was released that focused on who Customs
selects for personal searches, and of those searched who was
found to be carrying contraband. Our analysis utilized data
from 1997 and 1998 for those passengers who were subject to
some sort of personal search. Most were subject to frisks or
pat-downs, 4 percent were subject to strip searches, and 1
percent were subject to x-ray examination.
Our analysis centered on the latter two groups, that is,
those who were strip searched and those who were x-rayed, and
the frequency with which contraband was found in those types of
searches. Gender, race, citizenship, and year, that is, 1997
and 1998, were the variables in our analysis.
The analysis showed that searched passengers of certain
races and genders were more likely to be subject to strip
search and x-rays than other groups, and were less likely to be
carrying contraband. Specifically, white men and women and
Black women were more likely than Black men and Hispanic men
and women to be strip searched, rather than just frisked, but
were less likely to be found carrying contraband. The most
pronounced difference occurred with Black women who were U.S.
citizens. They were nine times more likely than white women to
be x-rayed, but less than half as likely to be found carrying
contraband.
During the course of our review, Customs was developing
some new policies and procedures for personal searches. They
included both new requirements for supervisory review prior to
searches, and additional training for inspectors. Customs also
started collecting more complete data on the characteristics of
passengers selected for intrusive searches and search results.
Analysis of these data could result in better targeting and,
thus, more productive searches.
This concludes my oral statement, and, of course, Mr. Hite
and I will be happy to answer any questions you might have.
[The prepared statement of Ms. Ekstrand follows:]
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Mr. Horn. Well, we thank you for that statement, and our
rule is sort of just to have all the presenters of the panel
and then we'll go to questions.
We're delighted to have the Acting Deputy Commissioner of
the Customs Service here today, that's the ranking career
servant in the system. He's spent at least three decades, I
believe, working his way up, Mr. Charles Winwood. We appreciate
you being here yesterday and showing us and Chairman Colby's
Appropriations Subcommittee the workings with your people in
the ports of Los Angeles and Long Beach.
So, Mr. Winwood, it's all your's.
Mr. Winwood. Thank you, Mr. Chairman, and thank you for the
opportunity to testify today. But before I begin, Commissioner
Kelly has asked me that I thank you for your efforts on
Customs' behalf to find a solution to our facility problem at
Terminal Island. Your letters and discussions with GSA were
instrumental in helping to expedite the process. We appear to
be on track now to relocate those Customs employees to
facilities that are safer and closer to the majority of our
work, and we very much appreciate it.
Customs is currently faced with two major challenges;
processing the expediential growth in legitimate trade and
combating an array of threats to our national security.
With regard to trade, in the last 5 years the number of
commercial Customs declarations ``entries'' processed by the
agency grew from 13 million to 18.4 million; that's an increase
of 41 percent. And the value of these entries now approaches $1
trillion, on which we collect over $22 billion in duty. Given
the robust world trade environment, we anticipate another 43
percent increase in entries and a doubling in their value; to
almost $2 trillion--by the year 2005.
Regarding national security, Customs is at the forefront of
efforts to protect the United States from: terrorism, the drug
trade, the trafficking of strategic materials, weapons of mass
destruction, adulterated food, and unregulated pharmaceuticals;
and economic crimes including intellectual piracy and commodity
dumping, among other things. In fact, the Customs Service
enforces over 400 statutes for more than 40 different agencies.
To accomplish this broad mission, Customs requires the
people and technology necessary to stand as America's Front
Line, keeping the threat in check and legitimate trade moving.
Mr. Chairman, as you are aware, in the past the Customs
Service has been criticized for being less than systematic in
the allocation of our limited resources. The GAO, as they just
testified, and others have suggested that we need to develop
methods to better calculate our workload and determine the most
effective deployment of staff and equipment. To address these
legitimate concerns, the Customs Service contracted with
PriceWaterhouseCoopers to develop a Resource Allocation Model
[RAM]. Constructed using quantitative analysis, the RAM, as far
as we are aware, represents the first time ever an entire
Federal agency's resource requirements have been modeled and
then projected using workload and threat indicators.
The RAM is currently under review by the Treasury
Department and the Office of Management and Budget. Because we
are awaiting their release of the document, I am limited in
what I can say today about specific findings calculated using
the model.
However, it should be understood that Customs sees the RAM
as an allocation tool, not a reallocation tool. Moreover, the
RAM is not the final determinant of future resource decisions;
rather it is intended to help management develop a
comprehensive staffing strategy year to year. Nonetheless, the
RAM's prescriptions should be received with three significant
caveats.
First, beginning as it does with a 1998 baseline, which is
the last full fiscal year for which data was available during
RAM development, the RAM does not account for further
operational efficiencies from applied technology in this
version, but should naturally reflect these in successive data
iterations.
Second, the successful future implementation of ACE, which
I will discuss in a moment, will itself introduce major
efficiencies in the way both Customs inspectors and the trade
address the arrival of merchandise.
Third, the part of the RAM related to ``threat'' will
always involve a complex relationship between total threat and
interdiction measures, where an increase in interdiction may
herald a growing supply of contraband or success in preventing
its introduction.
The RAM relies on the best available workload, staffing,
cost, and performance data. As accuracy is critical to the
success of the model, Customs has undertaken a yearly risk
assessment, annual data validation, and dedicated personnel to
oversee data integrity efforts.
We appreciate GAO's concerns regarding the reliability of
the RAM data, and would further stress that RAM is a tool with
excellent potential, which makes up one of several significant
factors in Customs' decisions on managing limited appropriated
resources.
Properly allocating our employees is obviously critical to
meeting the challenge of the future. But, in this day and age,
equipping our work force with the most up-to-date computer
technology is equally important. To do so the Customs Service
must replace our antiquated Automated Commercial System [ACS]
as you mentioned, with the proposed state-of-the-art Automated
Commercial Environment [ACE].
ACS, our present trade processing computer system, is now
16 years old. Mr. Chairman, I ask you what private-sector
company earning $22 billion a year, the amount of revenue
collected by Customs in 1999, operates an obsolete central
computer system. The answer, to the best of my knowledge, is
none. ACS has become increasingly inadequate to meet the growth
and demands of the expanding international trade environment. A
trade process that relies more and more on paperless
transactions overwhelms the system. To make matters worse, the
system is subject to temporary service disruptions, which we
refer to as brownouts.
Implementation of ACE will provide significant benefits to
Customs field operations personnel, the importing community,
and most importantly, the U.S. economy. This will occur through
uniformed and streamlined cargo entry processes and just-in-
time reporting capabilities, more efficient and accurate
revenue collection, and enhanced targeting and analytical
capabilities aimed at combating violations of U.S. import and
export trade laws, drug smuggling, money laundering, and
terrorism.
Initially there was some concerns with how Customs was
proceeding with the ACE project, but we believe, and others
including the GAO agree, that we have addressed these problems.
Customs created a program office to manage computer
modernization activities and have contracted with the MITRE
Corp., a company with expertise in supporting large government
projects, to help us manage ACE construction.
For fiscal year 2001, we are requesting $338.4 million.
This funding request is based on a detailed cost-benefit study
conducted by an outside expert and has been validated by two
other independent parties. Our request includes $210 million
for ACE software development and infrastructure, as well as
$123 million for maintaining ACS and continuing Customs
automation operations and an additional $5.4 million for the
International Trade Data System. Customs modernization requires
predictable and adequate funding. We need and hope for your
continued support.
On the matter of personal search, GAO's report on Customs
personal search was welcomed by the Customs Service, and the
findings in this instance were also welcomed, because it proved
and validated our concerns identified 18 months ago regarding
the manner in which the agency conducts and supervises personal
searches.
In 1998, Commissioner Kelly began a thorough review of
Customs personal search practices. This led to numerous
reforms. Customs lawyers are now on call 24 hours a day to
advise Customs officers during the search process. Customs
supervisors must now approve all pat-down searches, and Customs
Port Directors must approve all searches that involve moving a
person to a medical facility for a medical examination. A
revised manual and new training was provided to all Customs
officers involved in conducting personal searches. We have
instituted far more comprehensive data collection on all those
who undergo a Customs' search. We have purchased body scan
technology, giving people the option to be scanned for external
contraband rather than patted down.
These are just some of the changes we have made to the
personal search program, and they have made a difference. Our
number of searches has gone down by 75 percent in the first 6
months of fiscal year 2000, as compared to the same period last
year, while our seizure rate has remained basically the same.
And, with your permission, Mr. Chairman, I'd like to enter into
the record these handouts which further clarify the changes we
have made and the successes we are having.
Mr. Horn. Without objection, they will be inserted at this
point in the record.
Mr. Winwood. Customs' border search authority is critical
to perform our mission, but if its use is not carefully
monitored, it can be abused. Under the strong leadership of
Commissioner Kelly we are resolute to not let that happen.
Mr. Chairman, this concludes my statement for the record,
and I appreciate the opportunity to appear before you today and
at the conclusion of testimony stand ready to answer any
questions you might have.
[The prepared statement of Mr. Winwood follows:]
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Mr. Horn. Well, we thank you very much for that statement
on behalf of the Commissioner and yourself.
Our next witness in this panel is Peter Gordon, the
Assistant Regional Director for Inspections of the U.S.
Immigration and Naturalization Service. He represents the
Western Region.
We're glad to have you here, Mr. Gordon.
Mr. Gordon. Thank you. Good morning, Mr. Chairman,
Congressman Becerra, and distinguished members of the
subcommittee. I appreciate this opportunity to speak with you
about the crucial role that the Immigration and Naturalization
Service [INS], plays in our land, air, and sea ports of entry
in southern California, particularly, the sea and air ports of
entry in the Los Angeles/Long Beach area.
We work closely and cooperatively with other Federal
partners at ports of entry, particularly, the U.S. Customs
Service. As you know, the INS is responsible for ensuring that
individuals who seek to enter the United States at those ports
are eligible to do so under U.S. immigration law. Individuals
seeking entry into this country are inspected at ports of entry
by Immigration Inspectors who determine their admissibility.
This is accomplished at over 300 air, land and sea ports of
entry throughout the United States, including nine major ports
of entry here in southern California.
Currently, there are over 5,000 Immigration Inspectors
staffing our ports of entry nationwide. Of these inspectors,
292 are deployed to ports of entry in the Los Angeles area,
specifically, to Los Angeles International Airport [LAX], and
the Port of Long Beach.
In fiscal year 1999, our Immigration Inspectors nationwide
handled more than 525 million applicants for entry into the
United States. While the total number of applicants for entry
has risen approximately 9 percent over the last 5 fiscal years,
the amount of document fraud encountered in the course of those
inspections has risen 20 percent. Enforcement actions, such as
vehicle forfeitures, have doubled, while alien smuggling
apprehensions at the ports of entry have risen nearly 120
percent.
We have experienced similar increases here in the Los
Angeles area as well. In the last 12 months, our inspectors at
LAX have intercepted more than 1,600 fraudulent documents, a
nearly twofold increase compared to fiscal year 1998. One of
the most significant patterns we have witnessed here in the Los
Angeles area has been the increasing incidence of alien
smuggling through LAX. We measure this by applicants who arrive
at LAX with either fraudulent documents or without a passport.
On application for admission, they admit they were coached by a
smuggler in this method of travel to the United States. They
then proceed to claim credible fear--asylum--of returning to
their country of origin. Already this fiscal year, our
inspectors at LAX have encountered nearly 900 aliens expressing
a claim of credible fear. That is almost as many credible fear
cases as we've handled in all of fiscal year 1999.
While LAX continues to be the focus of the majority of
smuggling activity at airports in southern California, in
recent months we have witnessed a new and troubling trend, the
growing use of hard and soft-top cargo containers for human
smuggling. Just last week, two groups of 15 smuggled aliens
were intercepted at two local seaports within 48 hours of one
another. In both cases, the aliens had stowed away inside hard-
top cargo containers outfitted with escape hatches and
sophisticated ventilation systems.
Since December, more than 80 smuggled aliens have been
intercepted at Los Angeles area ports in connection with
container smuggling incidents. These migrants, not only stand
to lose tens of thousands of dollars, the smuggling fees can
run as high as $60,000 a piece, but they also risk their lives.
In January of this year, three smuggled aliens who stowed
away inside a soft-top container perished, after becoming
violently seasick during the 2-week voyage from Hong Kong to
Seattle.
INS is looking at ways to enhance its enforcement efforts
to combat this problem. We are seeking to identify methods to
better manage the risks in the seaport environment. The
development of intelligence is critical to achieving our
enforcement goals. By automating the collection of data on
vessels and those on board, we will be able to apply analytical
techniques to identify and intercept smuggling operations and
other illegal immigration activities in the seaport
environment.
We are also working closely with other enforcement
agencies, both domestically and abroad, including the U.S.
Customs Service and the U.S. Coast Guard, who have an interest
in this issue. Our efforts along these lines are consistent
with information shared in public hearings by the Interagency
Commission on Crime and Security in U.S. seaports, and
regionally we have established a working group to deal
exclusively with Chinese smuggling. That group, which includes
representatives from a number of Federal agencies, including
the U.S. Coast Guard and U.S. Customs, provides a mechanism for
us to share intelligence information and identify interdiction
opportunities.
That is a brief overview of some of the major issues and
initiatives the INS Inspections Program is involved with in
southern California. Our mission is to safeguard the borders
and boundaries of the United States against illegal entries,
while facilitating the flow of legal traffic. In a diverse and
prosperous State like California, the challenges inherent in
achieving that goal are considerable, but we are determined to
succeed.
Following the conclusion of testimony, I'd be happy to
answer any questions you may have.
Mr. Horn. Thank you very much.
One fact I just want to get on the record, you said there
were 5,000 personnel, of which 292 were at the Los Angeles
International Airport and the Port of Long Beach, what about
the Port of Los Angeles?
Mr. Gordon. The staffing, that 292 includes the Port of Los
Angeles and Long Beach.
Mr. Horn. OK, I just wanted to clarify that, because it
wasn't mentioned.
We now have the next witness, Colleen M. Kelley, who is
president of the National Treasury Employees Union. We
appreciate you coming out here for this testimony.
Ms. Kelley. Thank you, Mr. Chairman, Mr. Ose, and Mr.
Becerra, on behalf of the 13,000 Customs employees represented
by the National Treasury Employees Union I want to specifically
thank all of you, and you, particularly, Mr. Chairman, for
holding this hearing today on resource allocation and for
inviting NTEU to testify.
This is an appropriate site for a discussion of staffing
shortages in the Customs Service, because the inadequate
staffing levels in southern California have impacts on morale,
enforcement, efficiency, and progress. This geographic area
includes NTEU Chapter 103, Los Angeles/Long Beach Seaport,
Chapter 111, Los Angeles International Airport [LAX], Chapter
105, San Diego Port of Entry, and Chapter 123, Calexico Port of
Entry.
NTEU elected officials from these four chapters have
accompanied me here today as part of their ongoing and tireless
efforts to increase staffing at their respective sites. They
know that staffing levels here have not kept pace with the
dramatic increases in trade volume, drug smuggling, and public
travel, and they are as concerned as I am and you are about the
health and the welfare of the employees they represent, as well
as the successful accomplishment of the Customs' mission.
While the Resource Allocation Model is being revised and
finalized, staffing levels cannot be allowed to continue to
decrease in the U.S. Customs Service. The Port of Los Angeles/
Long Beach is the No. 3 container port in the world and the
largest in the United States. Although over 6,000 containers
arrive here for processing each day, only 30 of them will be
examined due to the staffing levels. Inadequate staffing at our
Nation's seaports leads to the risk of inadequate security,
safety, and efficiency. Many Customs operations are covered
with minimal staffing. For example, there are just six
inspectors assigned to clear the almost 900,000 passengers and
crews who arrive at these ports each year.
Customs' outbound enforcement program at the seaport is
designed to thwart illegal exports, including currency,
technology, narcotic transshipments, and weapons. The staffing
levels simply do not allow, however, for adequate staffing for
these and for many other endeavors.
Inspectors are also assigned to examine all imports for
possible enforcement violations. Their progress in following up
on potential violations of Federal law are considerably
hampered by the lack of staffing assigned to this volume of
work.
On the commercial side of the operations, the same lack of
staffing exists. Import Specialists struggle to keep up with
the volume of entries and trade. Ideally, a few import
specialists should be able to concentrate their time on
creating computer programs and scripts to respond to the
workload and to be more efficient. Formal computer training
would greatly enhance the operations, but there simply is not
enough time to give people training, so operations remain
static and the workload increases daily.
Currently, there are only six associates working on the
Import Specialist Enforcement Team [ISET], which processes
violations of trade and tariff laws. Their caseload has
increased from 322 cases in fiscal year 1998 to 428 cases in
just the first 7 months of fiscal year 2000.
The production and morale of Customs employees assigned to
Terminal Island facilities has hit rock bottom. Chairman Horn,
you have been instrumental in attempting to give the employees
the relief from the hazardous health conditions at Terminal
Island, and we thank you very much for your efforts, but there
is more that can and must be done for the 260 employees who
continue to remain at that facility and working as we speak.
They should all be temporarily moved, pending the permanent
move of the operations, and I implore this Congress to assist
us in this effort.
Mr. Horn. Thank you very much, and you can be assured a lot
of us from southern California will be pushing for this.
Ms. Kelley. I know I can count on them, Mr. Chairman, thank
you very much. I actually visited the Customhouse on Terminal
Island yesterday. After only 1 hour in the facility, I could
feel the effects of the air in that building, with itchy eyes
and scratchy throat, and the building also has an asbestos
debris problem, as you know.
Since 1999, in September, 236 employees working in that
facility have filed Worker's Compensation claims, and the
numbers continue to rise every day of those claims.
As we are told today, the process to relocate these
employees permanently will take up to 3 years. We need help,
which we know we can count on from southern California, and we
look to the rest of Congress and to GSA to provide relief as
soon as possible, so that no Customs employee is working in
that facility.
At the Customs Port of Los Angeles International Airport
[LAX], the enforcement efforts suffer from the lack of staff,
just as they do at the L.A. seaport. There is inadequate staff
to service the passenger, trade and outbound anti-smuggling
operations and to cover the threats posed by 50,000 flights and
7.4 million passengers that arrive at LAX each year. Staffing
is the No. 1 issue identified by employees at all levels of the
Customs Service at LAX, and the agency has responded to trade
volume increases, not by adding staff, but by planning to
modernize its computers. And, while the computers definitely
need to be modernized, computer modernization efforts have not
and will not solve the problems of inadequate staff levels. The
failure to keep the staffing levels for Import Specialists
remotely alive with the increased volume in trade has slowed
trade facilitation and curtailed much of the enforcement
efforts that need to be done commercially.
In the San Diego/San Ysidro and Calexico ports of entry,
the horrendous staffing shortages that they are experiencing
have impacted morale and jeopardized the health of employees to
the point that local NTEU officials have made this effort to
increase staffing their No. 1 priority. Not only has the
welfare of employees been impacted, but clearly, the ability to
provide services to the public and to the trade community has
been adversely affected. In these ports, the overtime system is
not used to augment enforcement efforts and to meet demands of
after-hour traffic, but its purpose is to ensure that the
agency meets minimum levels of coverage.
As of today, the port of San Diego operates with 60 fewer
Inspector positions and six fewer Canine Officers than it did
in 1998. Employees are being forced to work to the point of
exhaustion. Customs' own statistics show that during one pay
period between 20 and 25 Inspectors from Calexico will be
required to work 12 to 15 hour shifts up to 3 days in a row.
That is about one fifth of the Inspector ranks at Calexico who
will suffer from sleep deprivation while doing their best to
protect our borders.
I have letters here, Mr. Chairman, from five Inspectors in
Calexico that were sent to me urging that the inadequate
staffing situation be rectified. According to them, morale is
the lowest it has been in decades, and I would ask that these
letters be included in the hearing record.
Mr. Horn. Without objection, they'll be put in the record
at this point.
Ms. Kelley. Thank you, Mr. Chairman.
I would invite each of you to tour the southern California
ports and to hear from the dedicated front line employees
working there. The resources have not been provided to them
adequately to do their jobs, to maintain their family, and
their private lives. I urge Congress to appropriate more
funding to increase the staffing level in Customs and to
provide them the resources that they need to do the jobs they
want to do and the jobs that America needs them to do.
Thank you again for the opportunity to be here today on
behalf of the Customs Service employees to discuss these very
important issues.
[The prepared statement of Ms. Kelley follows:]
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Mr. Horn. Thank you very much.
We'll now start with the questioning of this panel, and
we're going to alternate 5 minutes on this side of the aisle
and 5 minutes on this side of the aisle, and we'll keep going
until we are through all the questions.
I will first yield 5 minutes to my colleague, Mr. Ose.
Mr. Ose. Thank you, Mr. Chairman.
If I may, Mr. Winwood, I'm curious, in terms of the $22
million that the Customs Service collects on an annual basis,
how much is generated here in the Port of Long Beach or across
the way at the Port of Los Angeles?
Mr. Winwood. I don't know the exact figure, Mr.
Congressman, but it's quite a large sum. This is a very large
seaport.
Mr. Ose. I understand, hundreds of millions?
Mr. Winwood. Yes.
Mr. Ose. My followup question is I'm trying to find out how
much is generated here versus how much is spent here, for
instance, addressing some of the things pointed out by Ms.
Ekstrand, and Ms. Kelley, and Mr. Gordon. There's got to be a
connection, and I'm trying to get to it.
Mr. Winwood. Well, I don't have the exact figures on what
is actually generated here as far as revenue, as far as duties
collected for Long Beach, but we can get that for the record.
But, there is no correlation between the money collected and
the appropriations for staffing. As you know, the money
collected from duties goes into the General Fund of the U.S.
Government, and our appropriations for staffing and for
distribution of resources and technology come through our
yearly budget cycle appropriations. There is generally no
connection between money collected and appropriations.
Mr. Ose. Maybe we're trying to rationalize a little bit. If
you could get that information, I would appreciate it, and I
want to, at least for my own edification, understand how much
is being generated versus how much is being spent here in Long
Beach and Los Angeles.
If I may, I want to particularly highlight something that
is of great concern to me.
Ms. Ekstrand, in your testimony on page 6, you talk about
the accuracy and reliability of the data.
Ms. Ekstrand. Yes.
Mr. Ose. We've got a half million dollar contract with
PriceWaterhouse to basically structure the Resource Allocation
Model, but I'm new enough to this to know that if we put bad
data in we're going to get bad analysis out.
You stated that even a small amount of imprecision in the
data can have enormous impact on the model's results. Can you
kind of expand on that, as to what transpires?
Ms. Ekstrand. Certainly.
The activity analysis part of the model involves
multiplying how much time it takes to do one unit of activity
by the number of times that activity occurs. So, if an estimate
is made of how much time it takes to process just one
passenger, and just hypothetically maybe it's 2 minutes, and
that gets multiplied by a million passengers, but that's off by
15 seconds, that 15 second error is multiplied by a million,
and it can become a very large number. So a very small amount
of error in activity time calculation can result in a very big
difference in terms of how much time is spent, or how much
staff years are needed to do that activity at that particular
port.
Mr. Ose. Does the Customs Service have a staffing standard,
or is that what you are trying to establish?
Ms. Ekstrand. Well, the staffing standard, in the way these
models are constructed, is basically the 1998 level of service.
Mr. Ose. The baseline.
Ms. Ekstrand. This model is not designed to improve the
level of service at any location. It basically perpetuates how
long it took to do something in 1998 for the out years.
Mr. Ose. It's simply a data collection model?
Ms. Ekstrand. Well, it can predict how much staff you need,
based on the predictions you put in the model of how much
additional passengers there will be, how many additional
containers at the port, etc., but in the model the time it
takes to process these things, at least in the way the model is
presented now, stays constant.
Mr. Ose. How does Congress make intelligent decisions, for
instance, on annual appropriations for Mr. Winwood if we can't
get the base data correct?
Ms. Ekstrand. Well, I think a lot of work needs to be done
to make sure that the data that goes into the model is much
more reliable than it is now. They have taken some steps in
that direction, but we have not yet analyzed these steps to
make us feel comfortable that the data next year will be more
reliable than it is this year.
Mr. Ose. Mr. Chairman, I'll come back.
Mr. Horn. Thank you.
Let me ask you at this point, do you feel that this model
is reliable to generate what staffing is needed, and then I
want to ask the Deputy Commissioner, have you used that model,
and did you recommend to the President for the budget for this
particular year any new resources? And, if so, did you send
them to the Office of Management and Budget, which speaks to
the President unless you appeal it, or did they just throw it
away? So, can you tell me that model is reliable at least to
project staffing when they go into the battles of the budget
frenzies in the executive branch?
Ms. Ekstrand. Conceptually, the model is a reasonable way
to go about this kind of workload analysis, but because the
data that is used to go into it seems to be quite flawed, the
output is going to bear the same flaws that the input had in it
to start with.
So, you know, this can provide some information, but, you
know, this certainly shouldn't be the sole basis for
decisionmaking at this point.
I believe Mr. Winwood would agree that this is too early in
development, and that more data reliability issues need to be
resolved before it can be considered solid.
Mr. Horn. Well, the question really is, if you were an
administrator in the Bureau of Customs, would you be able to
count on this as the evidence that they need more resources?
Ms. Ekstrand. I wouldn't count on this as evidence at this
time. I would think the----
Mr. Horn. OK, so you are saying it's an unsatisfactory
model?
Ms. Ekstrand [continuing]. Given the input to the model at
this point, I would have to say it's an unsatisfactory model.
Mr. Horn. OK.
Commissioner, how do you feel about it? Do you use that for
the basis for staffing in the current budget of the President,
and what was the increase Customs received in the President's
budget?
Mr. Winwood. Well, first of all, Mr. Chairman, we did not,
and have not yet, used the model for any official purposes, and
we did not use the model for any determinations of budget
requests for the 2001 budget.
As has been pointed out, it's still being further
developed. We are looking at some of the data challenges we
have, it's under review by the Office of Management and Budget,
and by our parent organization, Treasury, to take a look at the
model itself and to take a look at some of the concerns we've
identified.
But, I would like to say one more time for the record, Mr.
Chairman, to the best of our knowledge it's the first time ever
that a Federal agency has attempted to model their entire
agency to come up with a systematic, analytical, data-driven
approach to determining the best allocation of future
resources.
Now, we do have PriceWaterhouseCoopers taking a look at
some of the additional challenges. If you remember my
statement, I said there were three basic caveats, and one of
them, in addition to the time to perform tasks, is building in
for the future how technology and other issues affect that
time. I don't think anybody disputes the workload numbers that
we put into the data, the concern is a better way to determine
how much time it takes to do each one of those workload units,
taking into account the variances that occur because of
infrastructure, multiple facilities, and more sophisticated
automation versus less sophisticated automation. At one port it
might take 15 minutes to do a function, at another port it
might take a little bit longer, a little bit less, based on the
technologies available to them. That's the challenge we'd like
to continue to address. We have further engaged
PriceWaterhouseCoopers to take on these issues. We are further
developing the model, and like I said, it's the first time ever
that an agency, an entire agency is attempting to do it
scientifically, to do it based on data, and to do it uniformly,
so that we all can have some dependable outcomes that we can
look at.
The last point I would make, as was pointed out, it is a
tool, and it's an opportunity, but you also have to take into
consideration other factors in addition to that tool.
Mr. Horn. Well, let's get in the record, for the year 2000,
which ends on September 30, 2000, and for the 2001 budget that
begins October 1, could you give me the figures that the
Commissioner and you recommended to the President as to what
this number of positions that the Customs Service needs, what
was the number?
Mr. Winwood. I don't have the number for 2001. Mr.
Chairman, I just want to reiterate that we did not use the
model for either of those years.
Mr. Horn. Well, what did you, I mean, I don't care if you
used a Ouija Board.
Mr. Winwood. Right, well, hopefully, we were a little more
sophisticated than that, but we did----
Mr. Horn. Oh, I don't know, I've been in administrations
and, believe me, my favorite being the Pentagon, I might add.
Mr. Winwood. For 2001, there's approximately 100 Customs
inspectors and approximately 214 criminal investigators, as far
as official FTE. There's also some additional positions being
looked at because of a special amendment, under the Kyl
amendment, which is for 1 year funding, but those are the basic
numbers for 2001.
Mr. Horn. So, you are saying 1,000 inspectors?
Mr. Winwood. No, sir, I said approximately 100 inspectors
for 2001 budget.
Mr. Horn. OK.
Mr. Winwood. In 2001, approximately 100 additional
inspectors for the 2001 budget, and approximately 214 criminal
investigators in the 2001 budget request.
Mr. Horn. OK, so 100 inspectors, 214 criminal
investigators, is that it? Anything else?
Mr. Winwood. Yes. I can supply the rest of the numbers for
the record.
Mr. Horn. Yes, well, without objection we'll put them in
the record at this point, but I just wanted to know, one, this
is what you recommended and the Secretary of the Treasury did
approve it?
Mr. Winwood. This is the proposal sent forward in the
President's budget, Mr. Chairman.
Mr. Horn. This is the President's budget now for what year?
Mr. Winwood. 2001.
Mr. Horn. 2001, in other words, it's going into the shop
right now, I would think.
Mr. Winwood. Yes, sir.
Mr. Horn. So then, we don't know what OMB is going to do to
it?
Mr. Winwood. Well, that is the proposal for 2001, that's
the approved----
Mr. Horn. And, that's already cleared the Office of
Management and Budget?
Mr. Winwood. Yes, sir.
Mr. Horn. OK.
So, conceivably then, that is what everybody is talking
from the same hymnal to congressional committees in the Senate
and the House, and I'm glad that an authorizing committee
member is with us today. I knew there was a reason I did this.
He will go in there and squeeze it out of the Ways and Means
Committee, right?
Mr. Becerra. No pressure.
Mr. Horn. Yeah, that's right, and I'm now delighted to
yield to my friend from East Los Angeles, West Los Angeles,
North, and South Los Angeles, Mr. Becerra. So, feel free to
occupy us with questions.
Mr. Becerra. Thank you, Mr. Chairman.
Let me see if I can followup with the line of questioning
that the chairman just undertook. Commissioner Winwood, of
those 100 new positions for inspectors and 214 for criminal
investigators that you are requesting, have you determined
where they would go?
Mr. Winwood. No, sir. We will make a further determination
when the budget is passed based on what our allocated
appropriation is, and then we will look at the proper
allocation of those resources based on the most current
information we have as to threat and need by geography.
Mr. Becerra. Was there a determination made about where
those positions should be located when you initially submitted
the recommendation?
Mr. Winwood. To the best of my knowledge, just general
broad categories, Mr. Congressman, no specific city or no
specific port was identified.
Mr. Becerra. Then how did you come up with the precise
numbers of new need?
Mr. Winwood. Basically, looking at large geographic areas
and, if I can use an example, our export threat, as has been
mentioned here, they would be used for further enforcement of
exports for technology, money, etc.
Mr. Becerra. So, you do have some sense about where you
would place those new positions?
Mr. Winwood. Geographically, right, for instance----
Mr. Becerra. OK, so give us the breakdown geographically
where you would place these 100 new inspectors if Congress were
to appropriate money for them.
Mr. Winwood. I don't have that information today, but I can
supply it to you when it's available.
Mr. Becerra. If you could supply that, and supply the
information about where geographically, and as precise as you
can geographically where you would try to locate these new
positions if you received funding for them.
Mr. Winwood. We will do that.
Mr. Becerra. Thank you, for all the various new positions,
whether inspector, criminal investigator, or any other
positions, if you would do that for us.
Mr. Winwood. When it is available, we'll be glad to.
Mr. Becerra. And, if you could keep in mind, I suspect that
all of us here would probably say to you that we'll be keeping
an eye on where you would place those people, given that, as
Ms. Kelley testified, and others would indicate to you, that
there is a vast shortage here in the western States for Customs
inspectors, investigators, and any type of personnel.
Let me ask you about the RAM, the Resource Allocation
Model. When will Customs or Treasury conclude its review of the
RAM?
Mr. Winwood. I can't predict that, Mr. Congressman. We're
hoping, we've asked them to as expeditiously as possible, to
take a look at what we have so far, look at where we are going
with it, and we're just waiting for their----
Mr. Becerra. When was the last time you had a conversation
with someone in Treasury who was reviewing the RAM?
Mr. Winwood. I can't say for sure, I haven't had any
conversations this week. I've been on the road all week, but
there have been ongoing conversations since it was submitted to
them for their review.
Mr. Becerra. Who at Treasury is reviewing the RAM document?
Mr. Winwood. I can't say specifically who, but I will tell
you it has to be the Office of the Undersecretary for
Enforcement and the Office of Management, within the Treasury
Department.
Mr. Becerra. That modeling by PriceWaterhouse was completed
in 1998, correct?
Mr. Winwood. A first iteration was 1998, but there have
been some other iterations and modifications. This is really a
working model, Mr. Congressman, there's been a lot of
continuing work, and as I mentioned earlier we are continuing
to do work on it to further refine and, to further take into
account some of the issues we identified as you start putting
information in and looking at information that comes out, to
further improve it. And, for instance, some of the issues that
have been brought up by GAO, such as coming up with a better
way to determine the actual time it takes to do some of the
functions that were put in as actual workload totals.
Mr. Becerra. But the concerns that Ms. Ekstrand and the GAO
raised continue today. Have you made any dramatic changes in
the way you allocate staff or resources within Customs
geographically in the last 2 or 3 years?
Mr. Winwood. No, we've been doing the best we can with the
information we have, doing proper allocations based on what's
appropriate.
Mr. Becerra. So, the criticisms leveled by GAO remain
outstanding?
Mr. Winwood. I would suppose so, that's why, Mr.
Congressman, the whole idea of the RAM is to give us a more
scientific, analytical, statistical approach to be able to
better allocate those resources.
Mr. Becerra. I think we all agree. So let me ask you again,
do you have any sense of when you will complete your review of
RAM?
Mr. Winwood. I do not because it's in the hands of the
Treasury Department and the Office of Management and Budget
right now.
Mr. Becerra. Give us the name of the person at Treasury or
Customs who you believe best can give us a sense of when
Treasury or Customs will complete its review of RAM and
disclose what its recommendations will be.
Mr. Winwood. Well, I don't have the name for you today, Mr.
Congressman, but would be glad to find out who that might be.
Mr. Becerra. You can't give us the name of someone right
now who you think is most responsible for that?
Mr. Winwood. Well, I can just tell you, Mr. Congressman,
it's in the hands of the Undersecretary of the Treasury and the
Assistant Secretary for Management. They have the staff over
there to look at this, who is actually looking at it right now
I can't tell you.
Mr. Becerra. What's the name of the Undersecretary?
Mr. Winwood. The Undersecretary for Enforcement is Mr.
James Johnson.
Mr. Becerra. James Johnson.
Mr. Winwood. But, I'm not saying, in any way, that he is
the one physically looking at it right now.
Mr. Becerra. Mr. Chairman, and I know this is not my
committee, but I would--everything I say, I hope that whatever
is being provided will also be provided to those of us who sit
on the Ways and Means Committee. We do have jurisdiction over
authorization of resources to the Customs and Treasury
Departments.
I'd be very interested in finding out who it is we contact
to find out what the status of RAM is, because it's been 2 or 3
years GAO, no one is saying from Customs that GAO was incorrect
or it was misdirected in its findings, and if you've been
working on RAM it would be very helpful for those of us who
have to allocate dollars to make decisions to have some sense
about where you are going to head, because it's tough for us to
feel comfortable giving you dollars if we are not sure it's
going to be used wisely, and second, if it's not going to be
appropriated fairly. So, it would be very helpful if you could
get that information to us, or give us the name of someone to
contact.
Mr. Chairman, if I may go on, I still have a couple more
questions.
ACE, can you tell us where you are with ACE, in replacing
the ASE system?
Mr. Winwood. Well right now we are in the process of
preparing and finding additional money so that we can put out
the request for bids for the prime contractor.
Mr. Becerra. Where are you going to get the money?
Mr. Winwood. Pardon me?
Mr. Becerra. Where are you going to get the money?
Mr. Winwood. Well, the money right now, as we have
identified, there's a $12 million need, we have identified,
approximately, I believe, $7 million of it, and looking for
Treasury to help us with the other $5, so we can get the bid
out on the street, the solicitation. We've also found some
additional money from what we call ACS life support, there's an
ongoing repair, maintenance, and upgrades to keep ACS as viable
as possible while we are going through this transition. We hope
to have all that money found the remainder of this year so we
can get the bid out.
Once the bid is out, then the challenge is, as I mentioned,
our 2001 budget request, we requested approximately $338
million in our budget request, $210 million of that would be
for the beginning development and building of the ACE program,
starting in 2001. Our hope would be, if we have continual
predictable funding, using a prime contractor and paying for
the MITRE services also to make sure we have an outsider
overseeing the development of this project, our hope would be
that we'd have a 4-year developmental cycle, so we'd have it in
4 years.
Mr. Becerra. So, you have internal moneys to begin the
bidding process.
Mr. Winwood. Right now we've identified a good portion of
that, we're still looking for the rest of it so we can get the
RFP out on the street.
Mr. Becerra. How much do you need?
Mr. Winwood. $5 million.
Mr. Becerra. Additional?
Mr. Winwood. Yes. We've found $7, we're looking for the
additional $5 million within our budget for 2000.
Mr. Becerra. Within your budget, you are not asking
Congress for that additional money?
Mr. Winwood. No, sir, between the Treasury Department and
the U.S. Customs Service, we are looking for moneys from the
unobligated funds, etc., from 1999 and 2000 to be able to have
the proper funding to get the RFP out.
Mr. Becerra. So, Congress need not concern itself about
whether you could begin the bidding process, you are saying
that internally you'll find the moneys to begin that process?
Mr. Winwood. Yes, sir, to get the bid out on the street.
The bigger issue is getting the appropriations so we can start
the construction, because once you put it out----
Mr. Becerra. That's what I wanted to get to.
Mr. Winwood [continuing]. You get a prime contractor to
bid, and then you'll need the funds to be able to start that
process in 2001.
Mr. Becerra. Let me ask you a question on that then. Of the
$1.2 billion or so that it's estimated that this new system
will cost, you are requesting, what was it, $380?
Mr. Winwood. $338.4 million in 2001.
Mr. Becerra. How much of that takes the form of new fees?
Mr. Winwood. New fees?
Mr. Becerra. That you are requesting that Congress allow
you to charge?
Mr. Winwood. One of the proposals by the administration is
that the $210 million for ACE development for the first year,
2001, is a user fee to get that money into the General Fund.
Mr. Becerra. That's on top of any existing user fees?
Mr. Winwood. I believe so, yes.
Mr. Becerra. OK, and the remainder, is that an
appropriation?
Mr. Winwood. Yes, sir.
Mr. Becerra. I think it becomes fairly clear to the Customs
agency and to Treasury that a user fee is almost a non-starter,
at least in this Congress, and it has been in the previous
Congress, and I suspect will be a non-starter in the succeeding
Congress. If that's the case, and I don't think my colleagues
will disagree with me, that's probably the case, how are we
going to fund a system that you yourself admit you vitally
need, but don't have the money for and every time you have an
administration that requests a new fee that will never get
passed, you're going to end up with nothing, except a study or
a bid that you can't put out?
Mr. Winwood. It's an interesting challenge. I can only tell
you our need. I'm here to represent to you that what we are
proposing, and the amount of money it takes----
Mr. Becerra. Can you tell us if there's been any change in
thought by the administration about the use or the
recommendation of a new user fee for the payment of ACE?
Mr. Winwood. I cannot tell you that, I don't know what the
thinking is. I just know that's the proposal right now from the
administration, and that's the best I can do. I know that we
were with Kolbe the past several days, and he has some very
strong views from his committee as to how it should be funded,
and he has proposed that he will work very hard to help find
money to help us build the program.
Mr. Becerra. Have you all considered coming to us and
making the case that you are entitled to receive more of an
appropriation, straight dollar appropriation from us, because
you already have a merchandising fee that collects close to $1
trillion, and it could be used for that very purpose?
Mr. Winwood. There have been numerous proposals and ideas,
like I said, but not coming from the administration. It's an
interesting challenge. I can only speak to what we need. I will
tell you the administration's position, and that's the only
thing I can repeat today. It's an interesting challenge, and we
know what the funding costs are. I think we've done a great
deal of work to lay out the best way to do it. We've gone with
a prime contractor. We've gone with an outside overseer, MITRE,
who has a great reputation. I think we've documented well the
architecture necessary, and as the GAO has pointed out we've
been doing some tremendous----
Mr. Becerra. That's all pipe dreams unless you come up with
the money.
Mr. Winwood. Correct.
Mr. Becerra. And, you would have, rather than brownouts,
you would have blackouts, and we all pay the price, and when we
all start clamoring because those imported goods cost us more,
simply because we don't have a system that can help us
transport those goods inside this country, then we'll do
something, but it will be too late.
Mr. Chairman, I still have several questions, but I'll stop
because I know we want to keep to our time. We'll go another
round.
Mr. Horn. Well, yeah, we'll have another round, but let me
pursue this with Ms. Ekstrand, on behalf of the General
Accounting Office.
In the last few years sitting on the Transportation
Committee, as well as Government Reform, I have found two great
computer boondoggles. One is the IRS, where they reviewed this,
and I remember that very clearly, and another was the Federal
Aviation Administration. I remember as a freshman Mr. Oberstar,
the Ranking Democrat with Aviation, took two of us that were
particularly feisty, out to look at the FAA. And you walked
into the room and you knew right there they don't know what
they are doing. And, there was no management, no anything, no
go, and they eventually ran it up to $4 billion. And, they were
looking at $4 million, then $40 million, and then they didn't
pull the plug, and at $400 million they didn't pull the plug,
but when they hit the $4 billion they finally realized, gee, if
we don't pull the plug this thing is going to go to $40
billion, so they pulled the plug.
So, my question to you is, did you have anything to analyze
in either of those situations, IRS, FAA, and is this the third
one to grow, and what's your estimate of where they are on
this?
Ms. Ekstrand. This is really Mr. Hite's forte, so let me
have him answer for GAO.
Mr. Horn. OK, Mr. Hite, the ball is passed to you. Good
luck.
Mr. Hite. Mr. Chairman, interestingly enough, I led GAO's
work on FAA's Air Traffic Control Modernization and problems we
found there. I currently lead the work on the IRS
modernization.
Mr. Ose. You're the guy.
Ms. Ekstrand. He's the good guy.
Mr. Hite. And, there's a number of----
Mr. Horn. I should say, Mr. Hite's title here is Associate
Director, Government wide Defense Information Systems Issue.
That's a wonderful gobbledy-gook out of GAO, you know, our own
branch would not do crazy things like that. But, go ahead.
Mr. Hite. There are a number of parallels among these major
modernization programs, and we have long held that the key to
success on these modernization programs is instilling rigorous
and disciplined management controls around them. These controls
take the form of things like an enterprise architecture,
investment management controls, and software engineering
process controls.
When we first looked at the ACE program, we generally found
a wholesale absence of these things, and we made a series of
recommendations along those lines, and I have to say that
Customs has been very responsive. The new Commissioner came in
shortly after that. He embraced the recommendations and said
this is a priority, and they have made progress. On some
fronts, they have completely implemented our recommendations,
on other fronts they haven't. But in order to complete the
recommendations, in part they need funds in order to bring on
the prime contractor, because the prime contractor is going to
help them in these endeavors.
So, while I would say that they are positioning themselves
to begin building ACE, they are not there yet, but they are
positioned to begin the ACE program, and to bring on the prime
to help them with their initial task orders. These task orders
don't get into building systems yet, they don't get into
detailed system design, they don't get into software
development. You bring in the contractor, one of the first
things you have to do when the contractor comes in is, have to
set up a program office. One doesn't exist with that
contractor, whomever it may be right now, so that takes some
time. Another thing they want to do initially is refine and
validate the requirements for ACE, because time has passed
since those requirements were defined and technology has
changed, and the contractor is going to come in and propose its
own system solutions. So, that's going to take some time to do.
In the interim, until they get to that point where they are
ready to begin building the system, that's the time that they
are going to take to institute these rigorous investment
management and acquisition management controls. And they have
plans in place to do that, but they are not there yet. But,
everything is getting lined up for this to be successful. Now,
that's not a guarantee of success.
We can talk about IRS. IRS 9 months ago put forth an
expenditure plan that was a good plan. We commented, it was a
good plan, a good first step, but the key was implementation.
And as part of our testimony about a week ago before your
committee, part of the point was IRS fell short in the
implementation of that plan. So, it's not a guarantee, but at
this point in time Customs is doing the right things to
position itself for ACE to be successful.
Mr. Horn. As I understand it, the ACE, the Automated
Commercial Environment, is the successor of ACS, the Automated
Commercial Systems, and we're still using ACS, I believe, and
it's 17 years old, and COBOL is the program language, and it's
a little back in the 1930's almost, or the 1960's in the case
of COBOL when that popped around. So, you are saying you are
confident that this particular process and model, you don't see
going down to the $4 billion bit in more rat holes than we
could imagine?
Mr. Hite. Well, one predictor of success on a large-scale
modernization program is the management structure and process
and controls that you wrap around the program to ensure that
that doesn't happen. In this case, what we see is that level of
management capability could be put in place. And, again, I'll
mention it's not a guarantee of success. Using a prime
integration contractor acquiring the system is not a panacea,
you have to be an effective applier in order for that to
happen.
Another parallel between Customs and IRS, because
traditionally both organizations were system developers. They
developed the systems in-house using their own people. Now they
are going to a new model, that's one of acquiring systems. It
requires a different set of management discipline and control
in order to do that effectively.
Mr. Horn. So, are you familiar with the GAO recommendations
on the Automated Commercial Environment system, and has Customs
implemented them?
Mr. Hite. Yes, sir, I am. As a matter of fact, I crafted
every one of those recommendations, every word in them.
Mr. Horn. OK.
Mr. Hite. And, they have, in fact, fully implemented some
of the recommendations concerning the definition of an
enterprise architecture and managing ACE within that context,
recommendations concerning ITDS, which was the Integrated Trade
Data System that Treasury was developing, which was at odds
with ACE, and involved some duplication and incompatibility.
They have since merged the two programs, so they have, in fact,
acted on a number of the recommendations.
There are some that are still outstanding, in fact, they
need funding in order to complete those.
Mr. Horn. Yes, that funding the Deputy Commissioner says
will be found within Treasury, and in brief it will be
reprogrammed money, is that not correct?
Mr. Winwood. We have found the money internally through
Customs, Mr. Chairman, for preparing to put a solicitation out
on the street and the funds necessary to get the solicitation
out. We do have the funding to do some of the other things that
he is mentioning right now.
Mr. Horn. What's your estimate of what's going to go out on
the street?
Mr. Winwood. Basically, the $12 million will help set up
and pay for and fund an internal management structure, which is
one of the recommendations they had, and to get the
solicitation out on the street, and all the time, and money and
energy and staff hours it takes to review that solicitation.
That's what the $12 million is going to do, get the management
office set up, get the solicitation out on the street, do all
the necessary reviews, and then determine which is the best
bidder and the most appropriate person.
Mr. Horn. OK, at this point, how much have you spent on
this system? Do you know, Mr. Hite?
Mr. Hite. I know what they spent on the prototype of this
system, which is roughly $68 million.
Mr. Horn. So, we've got $68 million in the prototype, and
that led to the current system?
Mr. Hite. That led to our review and our set of
recommendations, and with the current system----
Mr. Horn. How much maintenance is going on to the current
system, besides the $68?
Mr. Hite. That's a different system, that's the Automated
Commercial System [ACS], and I believe Mr. Woodwin mentioned
the amount that was being requested in 2001 for maintenance of
that, I think it was----
Mr. Winwood. $123 million.
Mr. Hite [continuing]. $123 million, when you are
confronted with a system that's venerable and antiquated like
this, you are going to pay for maintenance on something like
that. There is proprietary middleware associated with this
system, and there is an antiquated data management system
associated with this. So, you are going to pay to keep ACS
going; it's going to be expensive. But there's no alternative
to that in the interim until----
Mr. Horn. This is the 17-year old system using COBOL?
Mr. Hite. Yes.
Mr. Horn. Does that make sense to you?
Mr. Hite. We're on record as saying we need to replace that
with a modernized system, not just because it's that age.
Mr. Horn. When you look at major corporations in this
country, in terms of how they analyze their personnel needs,
wouldn't it make more sense to simply say, let's get a new
slate here, and not trying to pick the pieces of the COBOL
program stuff that's in here, which you've already spent $68
million on to patch it up.
Mr. Hite. Correct, and that's, in fact, what Customs is
doing here. ACS, as a legacy system, is going to be maintained
until ACE is developed and brought on board, and they are two
different programs. You maintain the current system that works
to support ongoing operations, but then you have a separate
program designed to bring in the new technology in order to
support a new way of doing business.
Mr. Horn. Now, Mr. Hite, I believe our staff's analysis of
the GAO report is that you said the model predicts a fiscal
year 2000 level for inspection personnel of 166 at Los Angeles/
Long Beach, and 442 inspectors for New York/Newark. Now, that's
out of this particular program, right?
Mr. Hite. No, sir, that's a different system used for a
different purpose, and that's what Ms. Ekstrand was speaking
about.
Mr. Horn. Well, which are they using to recommend
personnel?
Ms. Ekstrand. That's the RAM, sir.
Mr. Horn. OK. So you are saying, can you tell me that this
isn't going to go the way of the Department of Defense, the
FAA, the IRS, and all the rest of them that fool around with
computer contracts?
Ms. Ekstrand. Well, the computer contract business is this
ACE system. This RAM model, of course, uses computer technology
to do the work, to run the model, but this is a, you know,
comparatively low priced computer programming operation
compared to this major, major ACE effort. I mean, the ACE
system is involved with processing all of the incoming Customs
merchandise, all the imports. You know, the RAM system is
related to how many staff you are going to have to do that
work.
Mr. Horn. Yes, that's the Resource Allocation Model. Now,
how old is that?
Ms. Ekstrand. This is what has been developed by
PriceWaterhouseCoopers in the last 2 years. This is something
new for the Customs Service, and as we just said a little bit
earlier, not quite ready for prime time yet.
Mr. Horn. Well, can we get a realistic dollar figure that
they will need to upgrade this or what? What are we getting out
of this?
Ms. Ekstrand. To work on the RAM?
Mr. Horn. $68 million was used on the ACS and we've got
$123 somewhere else, so what is it that you think they could
use on the Resource Allocation system?
Ms. Ekstrand. Maybe Mr. Winwood might know what the
contracts are currently with PriceWaterhouseCoopers.
Mr. Winwood. If I may, Mr. Chairman, I think we are mixing
two different products.
Mr. Horn. Right, and I want to separate them out.
Mr. Winwood. Yes, we need to separate them out.
Mr. Horn. Yes.
Mr. Winwood. The figures on the $68 million for the NCAP
prototype, that is automation, that was our first test for how
ACE would work in a real world environment; that's the money
was spent to develop and maintain, to run it over the last
several years. The $123 million we talked about is money in the
2001 budget for the purposes of making what we call ACS life
support and further maintenance and development to keep us
operating as efficiently as we can while ACE is being
developed. The $210 million is additional money requested in
2001 for the beginnings, to pay for the prime contractor and to
start the process of validating user requirements and start
establishing the necessary controls that Mr. Hite was pointing
out for the new ACE environment.
I would leave RAM out of that for a second. The RAM, the
Resource Allocation Model, is not associated with the
development of ACE, it's completely separate. The RAM, and
those figures, is a relatively very inexpensive software
application being developed by PriceWaterhouseCoopers; they
spent approximately $500,000 to develop over the last 18
months, the iteration is being reviewed. We are going to invest
a couple hundred thousand more to take into account the issues
that were brought out by GAO and others about having the proper
data, the proper data analysis, the proper controls over data
to make that model very viable. So, that's very small, that's
an aside; that RAM is not associated with the development of
ACE.
Mr. Horn. Well, if the RAM produced 166 for L.A./Long
Beach, versus 442 inspectors for New York and Newark, do you
think that makes sense when you look at the volume going here
versus the volume in New York? Granted they've got drugs,
granted they've got corruption, the mafia, and all the rest,
all the containers out of the Port of New York and Newark, but
does that make sense for 166 here versus 442 in New York?
Mr. Winwood. The one reason we have not yet used that
model, is that we've only run some test data. What you see in
front of you, Mr. Chairman, is probably something that GAO used
when they ran the first test of the RAM, to get an indication
of what the outputs were. We haven't used those numbers, those
numbers are not official numbers. We have not released any
numbers, and those numbers were, at least I think, based on an
analysis that GAO was doing when they were running the data
that we had available to us to see what the outputs would be.
I cannot tell you that those numbers are good or bad until
that RAM is completely reviewed and adjustments are made, and
we run it officially for the first time, which we haven't done
yet.
Mr. Horn. Yes, Ms. Ekstrand.
Ms. Ekstrand. We received these numbers from the Customs
Service. This was output from the model that they provided us.
Mr. Winwood. A test run, which was not meant to be
indicative of the actual staffing requests. Those numbers were
not used for any staffing requests. Those numbers did not
appear in any budget requests through our process yet, and
we've not yet used the model for official purposes.
Mr. Horn. Well, what you are saying is that GAO looked at
the model, they decided to test it and see what the outcome
would be, and this is the figure, is that not correct?
Ms. Ekstrand. Well, we didn't actually do the data
analysis. We received this from the Customs Service and
PriceWaterhouseCoopers as the output from this model. And our
understanding is, as Mr. Winwood said, that this has not been
used for any official purposes yet, but this output, plus
output that we did not see for year 2001 and 2002, is under
review at Treasury now.
But, we were given this year as what came out of their
analysis, PriceWaterhouseCoopers and Customs. We did not do any
analysis of our own.
Mr. Horn. Well, it sounds like we've got a system that
doesn't work and we're putting more money in it.
Ms. Ekstrand. Well, again, this system will only be as good
as the numbers that go into it. So, as long as there are data
reliability problems, the system will not be reliable.
Mr. Horn. The gentleman from California.
Mr. Ose. Thank you, Mr. Chairman.
Unfortunately, Mr. Chairman, I look at the clock and I need
to leave probably in another 15 or 20 minutes, for which I
apologize, and I apologize because as I prepared for this
hearing the information as to the importance of the Long Beach
and Los Angeles Ports, not only to this immediate area, but to
the State as a whole, and basically the southwestern region of
the United States, becomes abundantly clear.
Now, what we see is Congress having made a commitment, the
State having made a commitment, the community having made a
commitment to making Long Beach/Los Angeles extremely
competitive. We've invested in the trench. We have doubled our
track lines. We are trying to address any number of issues.
Mr. Horn. Translating to Alameda.
Mr. Ose. Correct, but I keep coming back to this question,
and many people have accused me of being a business person, and
I plead guilty to that. In a very real sense I get pretty
boring when I get focused on that, but I want to come back to a
couple points.
First, I want to followup on Congressman Becerra's question
having to do with the 100 Customs inspectors and the 214
criminal investigators. I think Mr. Winwood's comment was that
there had been no determination where they would go, but the
numbers were arrived at by a basis of somebody's judgment about
broad categorical evaluations having been made for the need for
these numbers.
What I'm trying to get to is, this area, in particular,
it's anticipated that trade through this port for the next 3 or
4 years is going to increase by around 40 or 45 percent. And, I
am somewhat stunned when you confront that, recognizing that we
have staffing shortages here now, how we are unable to say how
many, if any, of these 100 Customs inspectors, or 214 criminal
investigators, being added to the work force will come here. We
can't say that with any specificity, and we can't even get a
date as to when we might be able to get that information.
So, Mr. Winwood, I want to come back to that question. This
is critically important, as I'm sure you know, to this region,
to this city, to the State, however you want to craft it, to
this country, however you want to craft it. Could we have a
date certain by which time you will tell us how many of these
added people will be coming to this port to handle the trade
requirement, the processing requirement that we have here?
Mr. Winwood. I guess the best way to answer that, Mr.
Congressman, is when the budget is passed. That is a proposal
for 2001, that's the administration's submission to the
Congress, we are waiting for the approval of the budget. When
the appropriations occur we'll be able to give you a more firm,
definitive answer. That is a number that is yet to be finalized
and appropriated.
Mr. Ose. OK.
In the President's deliberations on the 100 added Customs
inspectors and the 214 added criminal investigators, how many
of those 100, or how many of those 214 were identified for this
particular marketplace?
Mr. Winwood. I don't have that answer today.
Mr. Ose. When can we get that answer?
Mr. Winwood. Again, it would only be a speculative answer,
as you understand, because, again, we don't have the
appropriation, we do not have that money. And I think the best
thing we are trying to do is that, based on when the
appropriations are available to us, we have to reevaluate the
issues that we have to face as far as the threat, and the
workload.
Mr. Ose. I'm not asking you for input as to after the fact
congressional resolution issue, what I'm asking for is in the
President's deliberations, this 100 and 214 evolve from
something, and did that discussion of the 110 and 214 say we
need three there, two there, five there, and four here, and
when we got around to those numbers how many were designated
for Long Beach and Los Angeles, within the President's
deliberations?
Mr. Winwood. Well, let me make two statements for you, if I
may. As I mentioned earlier, we don't have the specific number
that's in the budget. I used that 100 as a relative number;
that's pretty close, but I don't know the exact figure.
Mr. Ose. But 214 is not very much of a round number.
Mr. Winwood. Well, I'm just saying that the number could be
224. I will put the specific number in the record; the 100 may
be 99 or 98 for inspectors, the 200 might be 214 or 225. I will
put the actual number into the record.
I will also say to you that the 98 or 100 inspectors, at
the time the submission went in, were for special programs, for
outbound enforcement, for money laundering, for issues
associated with State find licensing, munitions for outbound;
so a lot of those numbers are looking at areas in which we have
to beef up our export and our outbound enforcement for law
enforcement purposes.
So, when we talk about the number specifically for Long
Beach and L.A. seaport, I don't have a specific number there,
but the deliberations revolved around those types of
activities.
Mr. Ose. Is that number available? Does somebody have it
somewhere?
Mr. Winwood. For outbound purposes, and for the----
Mr. Ose. Generically for Long Beach and Los Angeles Port,
the outbound or inbound.
Mr. Winwood. It will be a small number, I don't know the
exact number today, I will just tell you that that 98
represents the needs that the administration put forward for
the entire Customs Service.
Mr. Ose. Mr. Chairman, if I may, I apologize for going
over. What I'd like to do is, I'm hopeful that you'll leave the
record open so that--I don't mean to be presumptuous, I mean, I
don't live in the Long Beach/Los Angeles area, but I would like
to submit a question for the record.
Mr. Horn. You are doing great, we'll make you an honorary
member.
Mr. Ose. To actually get a definitive answer.
Mr. Horn. You'll have to ask the mayor and future mayors.
Mr. Ose. I'm just trying to get to that, because, I mean,
asking Congress for money for basically 314 people, I'd like to
know where that number comes from. I mean, somewhere, somehow,
the component parts of that sum total were developed. So, with
your permission, I will submit a question for the record, that
can be answered for the record, as to how many will be coming
to Long Beach and Los Angeles Port.
Mr. Horn. Without objection, that will be put at this point
in the record.
Mr. Ose. OK.
Now, I want to go back, we've kind of spent a lot of time
over here on this side, I want to talk to Mr. Gordon and Ms.
Kelley a little bit.
I noticed on page 7 of Ms. Ekstrand's testimony the comment
about activities in different locations basically consuming a
varing portion of time, in other words, processing a passenger
in one location might not take the same amount of time in
another or processing cargo in one location might be a
different time allocation in another. And, I keep coming back
to this data, and the Resource Allocation Model, how do we get
accurate data so we can have accurate analyses, so we can make
accurate decisions?
Ms. Kelley. I wish I could give you a better answer to that
question, because what I have to tell you is that in spite of
repeated requests NTEU has not yet had access to any of the
information that went into or out of the Resource Allocation
Model. We have been requesting and have scheduled briefings on
this that have been canceled. NTEU and Front Line employees had
no direct input or involvement into the calculations of those
things, so I can't even tell you what was used, if there are
inconsistencies, if there is a standard way to measure.
I think the employees who do those jobs would be the people
who could answer those questions, and there has been no formal
involvement at all with NTEU or those who are represented on
that issue. So, I really couldn't even speak to the
inconsistencies. I wish I could, because we would very much
like to see the model and what went in and what came out.
Mr. Ose. Mr. Gordon, is it accurate, is Ms. Ekstrand's
comment accurate in terms of different localities having
different efficiencies or inefficiencies in processing
passengers or cargo?
Mr. Gordon. Well, from the INS perspective, I can't speak
for Customs, as far as processing passengers, yes, there are
differences in the length of time. It has to do with
facilities. For example, at LAX we have to process passengers
arriving at five different terminals. We base our operation at
Tom Bradley International, but we have to staff five different
areas in various conditions of configuration for moving
passengers through rapidly.
Mr. Ose. Well, Mr. Chairman, my time is way over, I
apologize for that fact, this must be quite a conundrum?
Mr. Winwood. Can I give you an example, if I may, for
different processing times?
Mr. Ose. Yes.
Mr. Winwood. One of the technologies that we are expanding
as fast as we can, and have found very successful, particularly
on our border locations, doesn't relate to Long Beach/L.A.
because it is about cars.
Mr. Ose. Pictures.
Mr. Winwood. For instance, processing of a vehicle, one of
the first requirements an officer must do is to query the
license plate. One of the pieces of technology is an automated
license plate reader. So rather than the officer having to take
his attention away from the car, query the license plate
number, read the screen and then look at the car, the license
plate reader is reading the car that's next in line, so it's
automatically doing the query for him.
Mr. Ose. You are taking that bar code technology, for
instance, that the railroads have developed and being able to
translate license plate numbers into a visual----
Mr. Winwood. Right into the automated system.
Mr. Ose. Right.
Mr. Winwood. And, it does the query versus the key
stroking. So when you take into account the processing of a
vehicle in a place that has a license plate reader, versus one
that doesn't, there's a time variation. You multiply that over
hundreds and hundreds of events, it's going to change the
amount of time it takes one location to work versus the other
location.
Mr. Ose. Well, let me go right to that. Clearly, you've got
different locations around the country, ports of entries and
the like, where you've developed prototypical processing
facilities.
Mr. Winwood. Yes, sir.
Mr. Ose. Which might serve as a model as to, if you will,
the best practices that you might be able to implement.
Mr. Winwood. Yes.
Mr. Ose. Is the PriceWaterhouse study looking at that
relative to, for instance, locations like Long Beach/Los
Angeles that have a high volume capacity needs and whether that
technology is transferrable, and what the consequence would be?
Mr. Winwood. That's one of the caveats in my testimony that
I brought out. That's the next phase that has to be done,
because that has to be done, and that's one of the next stages
that need to be looked at for the future development of a more
sophisticated model, as we have more and more information
available to us.
The other thing we are looking at is coming up with what a
model port would look like, a combination of the right staff,
and the right technology, and the right equipment, and we
haven't done that work yet.
Mr. Ose. Does your $5 to $12 million number, I'm trying to
recall correctly, on the Resource Allocation Model do that?
Mr. Winwood. May I stop you there for a second?
Mr. Ose. Yes.
Mr. Winwood. That $12 million has nothing to do with the
RAM.
Mr. Ose. All right, let me rephrase it. What is it that you
are looking at to follow on the PriceWaterhouse study that
would give Congress the information that I'm trying to get, in
terms of prototype versus specific location?
Mr. Winwood. Right, the next phase of the further
development of the RAM, is contracted through an ongoing
contract with PriceWaterhouse to take into consideration the
very things we are talking about; to take into consideration
what the GAO found as far as the accuracy of data, the time it
takes to do the functions that are put in as raw data. We've
asked PriceWaterhouse to look at that. We've also asked them to
start considering things such as technology and automation that
would take into account reduced processing times versus manual
processing times. So that's the next phase. We are asking them
to further refine the model they built for us, while the
existing model is being reviewed for what it looks like today.
Mr. Ose. Mr. Chairman, I thank you for your generous use of
time.
Mr. Horn. Thank you.
The gentleman from southern California, Mr. Becerra.
Mr. Becerra. Thank you, Mr. Chairman, and I'm going to try
to keep my questions short and see if I can get the answers to
be short, because I know we are running late. And, Mr.
Chairman, unfortunately, I, too, will have to leave shortly
before 12, and I think we are going to miss the second panel. I
apologize to those witnesses in the second panel, because I did
wish to hear their testimony as well.
Very quickly, let me ask Mr. Hite, you touched on this and
it's starting to concern me the more I think about this, the
longer we take to implement ACE don't we run the risk that ACE
will become obsolete for the purpose that it's intended, unless
we spend more money to update it, as you say, that already is
occurring, because this was a program that was devised a few
years ago now? And, as we know, with anything in technology,
like a computer, in these days 2 or 3 years makes that product
obsolete.
Mr. Hite. Today's approach to designing large-scale
computer systems takes into account what you need to do in
order to introduce technology enrichment.
Mr. Becerra. Into a system.
Mr. Hite. Into a system and to be able to upgrade it and
scale it to do more things. So, you build it with that in mind
in today's environment. So, you bring on a world class systems
integrator, they bring that to the table in terms of their
solution, and it's part of the expectations that the government
then will levy on the contract to ensure that that, in fact,
occurs.
Mr. Becerra. So, we don't run the risk that ACE will also
become obsolete before it is ever implemented?
Mr. Hite. I'm not saying we don't run the risk, I'm saying
it's probably a minimum risk given the state of systems
engineering among big-time contractors.
Mr. Becerra. By the way, Mr. Winwood, I just want to make
sure this is very clear, you happen to be the representative
for Customs and the Department of Treasury, so many of the
questions that you get, obviously, will be tough, and I respect
your attempts to try to answer. I appreciate that sometimes you
have to deal within the confines of what you've been given to
work with, and I know often times the answers are more
appropriately given by OMB, the Office of Management and
Budget, when we are talking about budgets and so forth. So,
please understand that. Nonetheless, we do have to ask some
pointed questions.
Mr. Winwood. Yes, sir.
Mr. Becerra. Ms. Kelley said something disturbing, that
NTEU had no involvement or input in the formulation of RAM, is
that true?
Mr. Winwood. Why, I think what she said as an organization,
may be true. Again, that's best answered by PriceWaterhouse,
and who they surveyed, and where they got their information. I
will say that a lot of the information gathered for developing
the RAM by the contractor was using existing data sources that
were already available to us.
Mr. Becerra. But let me ask this.
Mr. Winwood. Yes, sir.
Mr. Becerra. As you continue in the process of reviewing--
--
Mr. Winwood. Yes.
Mr. Becerra [continuing]. RAM, what was delivered to you by
PriceWaterhouseCoopers, do you think it would be smart to
include NTEU in that ongoing review?
Mr. Winwood. I think the idea is that once we get a
workable model that we can all sit down and analyze, I think
it's going to be incumbent upon us to have as many people as
possible within the organization take a look at what went in
and what comes on, and what the rationale and the reason was
behind this. I agree with that.
Mr. Becerra. I am going to get you to give me an answer
that fits in really snug parameters, OK, so what I hear you say
is, no, not until after we're done will we show it to them, is
that what you are saying?
Mr. Winwood. I'm saying that not until Treasury and OMB
approve what we've done so far can we let it out to anybody.
That's all I'm saying.
Mr. Becerra. And, when you show it to them, the NTEU, will
it be, this is it, take a look, or this is it, copy it, so we
can, perhaps, tweak it again?
Mr. Winwood. I would say no, because this is a model that
has to constantly evolve, and we will constantly need to modify
and change it, because our environment is going to change
around us. So, we have to build a very flexible model that's
going to take into account the ability to bring new ideas and
new input all the time.
Mr. Becerra. So, that was a no, we won't exclude them, or
no we will exclude them?
Mr. Winwood. No, we will not exclude them, and the reason
is it's an environment that's changing constantly. We will need
constant review.
Mr. Becerra. So, let me make sure on the record we have a
clear answer. Are you representing that Customs will allow NTEU
to participate in what will become the final product of RAM?
Mr. Winwood. I'm saying they will have an opportunity to
see it when it is available to us for release. That's the best
I can say.
Mr. Becerra. So, you can't say at this stage that they'll
have any chance to provide input into the final product of RAM?
Mr. Winwood. As a representative of employees, I can say,
yes, they will, but I will tell you, it depends upon when it is
released and whether or not it's a model we can use.
Mr. Becerra. OK, you are confusing me. Let me try again.
And as I say, I appreciate your constraints, but I think the
committee has to know, because when you come before us and tell
us RAM is where we are going, we need this, we have to do that,
we are going to continue staffing levels as they are in New
York and Miami versus L.A., we're going to want to know how you
came about that decision.
Mr. Winwood. I understand.
Mr. Becerra. And, if NTEU comes and testifies and says, we
could have told you that this was not going to work, then we're
going to ask them, what role did they play, and if they tell us
they played no role, and they can come up with some good
information, we're going to sit you all down and ask you again
why you didn't allow them to participate.
Mr. Winwood. Right.
Mr. Becerra. So, let me see if I can get it again, an
answer that fits that parameter. Up to the point where OMB,
Customs, and Treasury finish their review, I understand you are
saying that no one other than those representatives within
Customs, Treasury and OMB will review the RAM document? Until
you've finished your review, your department level review, only
department authorized personnel will provide input?
Mr. Winwood. Until that department level review is
completed, the answer is yes.
Mr. Becerra. OK.
After that department level review is completed, will that
document be a final document?
Mr. Winwood. The best way I can answer that is to say no,
because we've already contracted with PriceWaterhouseCoopers to
make modifications and adjustments based on some of the
recommendations that have been made by GAO and others as to how
to incorporate better data.
Mr. Becerra. So, the next question is, does that mean that
document released after the Department's final review can be
amended?
Mr. Winwood. Yes, it can be.
Mr. Becerra. And, within that process of potential
amendments, will NTEU be allowed to participate and provide
input in potential changes to that document?
Mr. Winwood. I believe so. I'm just trying to keep my
answers nice and short, but that----
Mr. Becerra. No, that's a good answer, I like that. My
sense is what you are saying is that they will have some input
at the later stages before you make final pronouncements. So,
you said ``I believe so,`` why complicate it more with further
questions. A good attorney knows when to stop.
Let me move on. Ms. Kelley, you mentioned that only 30 of
6,000 containers in the L.A./Long Beach Ports are inspected
every day. What happens to the other 5,970?
Ms. Kelley. They just proceed without inspection.
Mr. Becerra. So, whatever may be in those containers goes
right through, cocaine, contraband, whatever it might be, it
just goes right through.
Ms. Kelley. There is no additional process that I'm aware
of that provides for any other inspection.
Mr. Becerra. Is there any chance that the inspectors could
actually examine more of those containers on a daily basis?
Ms. Kelley. If there were more inspectors, yes. With
current staffing, no.
Mr. Becerra. So, with current staffing the inspectors are
performing at what's considered optimal levels?
Ms. Kelley. Yes.
Mr. Becerra. Mr. Winwood, would you disagree with anything
she said?
Mr. Winwood. I won't disagree, but I will say I will not
necessarily agree with the number 30. I don't know that to be a
factual number. I'll just take it for what it is today. But I
will say this, that we do agree that we need more technology,
we do need, because of the workload growth, additional
resources to address the issue.
Mr. Becerra. Let's assume, and again this is only an
assumption, so I won't keep you to it if to the numbers are
incorrect, but assuming that there are 6,000 containers that
come into Los Angeles and Long Beach Ports every day, and
assuming that what Ms. Kelley has represented is accurate, that
the inspectors that they have working at optimal levels can
inspect 30 of those 6,000 containers on a daily basis, does it
concern you that 5,970 other containers move through the port
never having been inspected?
Mr. Winwood. Yes.
Mr. Becerra. Do you think that the response then to that
would be that you would try to increase the staffing levels in
the Los Angeles/Long Beach Port area?
Mr. Winwood. We'd love to increase the staffing of the
Customs Service, and to include the Port of Long Beach/Los
Angeles.
Mr. Becerra. No, no. Not enough. Let's talk about what you
can do. Would you be recommending that you increase the
staffing levels in the Long Beach/Los Angeles Port area?
Mr. Winwood. Again, Congressman, I can only do it based on
appropriations and the money available to us to do that.
Mr. Becerra. OK, well, let's move on, and that's a fair
answer. As I say, I know some of these it's tough to be
responsive.
Ms. Kelley mentioned that there are some 900,000 passengers
that come through every year, and there are six inspectors to
inspect all those people coming through, is that correct?
Ms. Kelley. For the seaport, yes.
Mr. Becerra. I did some quick math, if I didn't forget how
to do this manually, that means for six inspectors, 900,000
people, that's 150,000 people that each inspector is, on the
average, responsible for on a year, in any given year. If you
break it down by a month, that's 12,500 people that are
passengers that are inspected by one individual each month. On
a daily basis, that's 625 people that must be inspected by one
inspector, and on an hourly basis that's 78 people, and if you
want to bring it down to the minute, a little bit more than one
person per minute that an inspector has to examine as those
people are attempting to depart.
Commissioner Winwood, is that enough time to adequately
examine people who are entering this country, and maybe doing
so for the wrong reasons?
Mr. Winwood. If it was absolutely necessary to examine
every person, the answer is no. But I will tell you, while I'm
not agreeing that six is enough, and I'm not agreeing that that
workload is the right workload, that you also have to take into
consideration that there is a lot of honest, legitimate
travelers we deal with. Our goal and the way we operate is that
we don't examine or question every person that arrives on those
cruise vessels. And, even if you add additional staff, if we
were to get additional staff, we would probably put them
somewhere else, rather than on that function.
So, based on your math, those numbers are accurate, but my
answer is it is necessary to actually spend that much time with
every cruise vessel passenger that arrives here, would be no.
Mr. Becerra. But, we do need more inspectors?
Mr. Winwood. The answer is yes.
Mr. Becerra. How do those numbers that you just heard for
Los Angeles compare to other ports, New York, Miami, for
example?
Mr. Winwood. I don't have the exact figure in my head for
Miami, but I will say that although 900,000, is a lot of cruise
ship passengers into a place such as Long Beach/L.A., in Miami
there's millions.
Mr. Becerra. Let me ask Ms. Kelley, do you happen to know
the numbers in Miami?
Ms. Kelley. I do not know, but I will be glad to get them
for you.
Mr. Becerra. If you could provide those to us.
Ms. Kelley. I'll be glad to.
Mr. Becerra. If you could do it for the major ports of
entry in this country, Miami, New York and others.
Mr. Horn. Without objection, they'll be put in the record
at this point.
Mr. Becerra. Thank you, Mr. Chairman.
I just have a few more questions.
Commissioner Winwood, first let me make sure I acknowledge
the work that the chairman has done on the whole issue of the
Terminal Island facility and thank him for moving forward so
aggressively in trying to address the needs of the employees on
that.
My understanding is that Customs, and which is the other
department that's been working on this?
Mr. Horn. You mean the General Service----
Mr. Becerra. General Service, GSA. There's been an
agreement now that you will relocate all the workers that are
on Terminal Island?
Mr. Winwood. I believe so. We've already located the
temporary space. I believe the number is approximately 100 to
150 people from Terminal Island into temporary office space off
the island, and we put our space needs plan to GSA in the early
part of April to temporarily move the remaining employees. They
are looking for permanent office space and permanent work
space, so we can permanently relocate everybody into one
location that's convenient for the employees, homogenous, and
also convenient to the work site.
Mr. Becerra. Tell me the last date that there will be a
Customs employee on Terminal Island.
Mr. Winwood. I can't answer that.
Mr. Becerra. How long do you think it will take before you
are able to remove all the employees from Terminal Island?
Mr. Winwood. In all fairness, I think that question is best
asked of GSA. We are pushing them as hard as we can. They are
the ones that find the space, they are the ones that help us
move. I cannot answer that.
Mr. Becerra. I've got to tell you that those are all
disturbing responses, but----
Mr. Winwood. If I add for the record, though, Mr.
Congressman, it's disturbing to us, too.
Mr. Becerra [continuing]. Does that include the chemical
laboratory within there, will that be moved out also?
Mr. Winwood. That's the second phase. Our first priority
are the people within what we call the Customshouse. That's our
first priority. The lab facility is relatively new, built
within the last----
Mr. Becerra. Yes, but the people are affected.
Mr. Winwood [continuing]. That's the second phase.
Mr. Becerra. But, you shouldn't be leaving people with
asbestos in the building.
Mr. Winwood. Right, they are in a separate new building,
the lab. So, we are looking at that as an eventual move for the
second phase. Our first priority are the people within the old
Customshouse, the old building. It's been there for 35-36
years; we're looking to move everybody there as quickly as we
can, to get them out of that building and get them into more
appropriate workspace.
Mr. Becerra. I urge you to move quickly. The cost of
litigation and liability probably exceeds the cost of finding a
different location, even though temporary, and, you know, we
always talk in terms of monetary costs, do you want to have
your lungs filled with this stuff?
Mr. Winwood. Mr. Congressman, I totally agree with you.
Commissioner Kelly is pushing as hard as he can. He's put every
energy into this to get this----
Mr. Becerra. I would say that's where government looks so
bad in the eyes of the public, is when we come up with answers
that say we don't know. And I would really urge you to have
Commissioner Kelley, who is a phenomenal individual, and
Secretary Sumner, come back and give us some concrete numbers
and dates, because these people deserve nothing less than that.
They are working for us.
Mr. Winwood. We agree, we totally agree.
Mr. Becerra. But, let's get something concrete, because
they've been saying this for the longest time, now we all agree
they have to leave, but let's quit having them hang out there
wondering when they are finally going to get to leave. It's
ridiculous.
One last question, Mr. Chairman.
Commissioner, with regard to the issue of personal
searches, you mentioned that there have been some policy
changes and you are going to try to do a better job of tracking
some of this. What are you doing in terms of enforcement and
discipline? Once you find that there's someone who doesn't
abide by the new changes, and you find that there are still
inappropriate searches occurring, are you doing anything with
regards to enforcement or discipline?
Mr. Winwood. Yes, we will when it occurs, but I must tell
you, Mr. Becerra, the Customs employees and Customs officers
take their job very seriously. We have not seen any indication
of that. There has been no indication of wrongdoing on the part
of employees, and if it would happen, of course, we would take
the appropriate action, but I don't believe it's going to
happen.
Mr. Becerra. And, I'm not implying that there has been, I'm
just saying that it always helps when people know there's
severe punishment at the end of the day if they do the wrong
thing.
Mr. Winwood. Well, we make sure that our officers
understand, Mr. Becerra, that we have policies and procedures.
They've been trained, they've been given the proper
documentation, and we have all the faith and all the knowledge
that they will continue to work diligently. They have, and they
continue to do so, and you can see it in the results.
Mr. Becerra. Mr. Chairman, the witnesses have been more
than gracious with their time. I appreciate the extension of
time to ask questions, Mr. Chairman. Thank you.
Mr. Horn. Well, I thank you, and all of you on this panel.
It's been very helpful information.
We are now going to go to panel two. We are going to take a
4-minute recess, and then we will start in with panel two and
give the clerk time to----
[Recess.]
Mr. Horn. And any assistants of your's, we'd like them to
also stand and take the oath if they are going to talk and you
are going to yield to them. So, if you'll stand and take the
oath, we'd appreciate it, raise your right hands.
The clerk will note that the four witnesses have all
affirmed the oath, and we are delighted to start with Yvonne
Avila, the president of the Foreign Trade Association of
southern California and director of communications for the Port
of Long Beach.
STATEMENTS OF YVONNE AVILA, PRESIDENT, THE FOREIGN TRADE
ASSOCIATION OF SOUTHERN CALIFORNIA AND DIRECTOR OF
COMMUNICATIONS, PORT OF LONG BEACH; MAURINE CECIL, PRESIDENT,
THE LOS ANGELES CUSTOMS BROKERS AND FREIGHT FORWARDERS
ASSOCIATION, INC.; JUDY GRIMSMAN, CHAIRMAN OF THE BOARD, THE
L.A. CUSTOMS BROKERS AND FREIGHT FORWARDERS ASSOCIATION, INC.;
AND J. RICHARD WILLIAMS, Ph.D., P.E., PROFESSOR OF MECHANICAL
AND AEROSPACE ENGINEERING, CALIFORNIA STATE UNIVERSITY, LONG
BEACH
Ms. Avila. Good morning, Congressman Horn.
As stated, I am Yvonne Avila, director of communications
for the Port of Long Beach. Today, I am speaking as the
president of the Foreign Trade Association of southern
California. I am accompanied by Marian Duntley and Dennis Heck,
who serve on the Foreign Trade Association Board of Directors
with me.
The FTA of southern California is the oldest and most
prestigious trade association, representing more than 400
importers, exporters, manufacturers, retailers, and financial
institutions involved in international trade. An adequately
staffed U.S. Customs system is important to all of our members.
Before we address our concerns about the Customs system,
however, I think it is important to take a look at the growth
that is occurring at our southern California seaports, which
represent the two largest seaports in the United States and the
third largest port complex in the world. During the last 10
years, the volume of cargo containers passing through our
southern California ports has grown by 122 percent.
A recently completed cargo forecast indicates that the
growth we have experienced since 1990 will continue well into
the next two decades. The ports of Long Beach and Los Angeles
handled a combined total of 8.2 million container units in
1999. The most recent cargo forecast predicted the two ports
will handle 9 million containers in the year 2005.
Realistically, we will achieve those volumes this year, 5 years
ahead of question.
Projections also show that the two ports will handle a
combined total of 12 million containers by 2010, 17 million
units by 2015, 24 million units by 2020. Facing projections
such as these, you can understand why the FTA is concerned
about the adequacy of Customs staffing in southern California.
We believe that Customs must be adequately staffed for some
obvious reasons: to collect tax revenue, to detect drugs and
illegal imports, to prevent illegal exports, to enforce U.S.
intellectual property, to protect U.S. consumers from tainted
goods, to provide security at our Nation's ports, and to
collect accurate trade statistics for use in trade
negotiations.
We also believe that if additional resources are deployed
they should be used for purposes directly related to one of the
core duties of the Customs Service and in accordance with an
objective risk management strategy agreed to by Congress.
Customs resources should be used effectively and not as a
club intended to cost importers time and money and as a means
of getting your attention. We also believe that Customs must
constantly identify ways to balance its staffing and its other
resources between enforcement and commercial purposes.
Customs staffing must be spread equitably between all U.S.
ports of entry, because under staffing in one particular area
means less enforcement and less revenue collected in that area.
Under staffing caused by imbalance means some ports are
receiving more security at the expense of others. Under staffed
ports could be targeted by unscrupulous traders and drug
traffickers.
Finally, we believe that the Automated Commercial
Environment system must be funded immediately and from the
General Fund. We believe this because the existing ACS hardware
and software are antiquated and operating at near capacity at
all times. We are throwing good money after bad in maintaining
the old system. The existing system uses COBOL language, and
programmers familiar with this language are increasingly scarce
as the technology moves toward internet-based applications. In
fact, I think it's probably easier to find someone who speaks
Latin.
There are other reasons why we support funding from ACE
from the General Fund. The longer it takes ACE to be
implemented the more it will cost. ACE would give Customs
better tools and increase its efficiency. The Nation's
importers are already paying $900 million annually in user
fees. No new fees are needed to fund ACE. Other U.S. Government
computer systems, as well as the Customs budget, is paid for
via the General Fund, why should ACE be different?
I'd like to leave you with a final, yet rather grim
message. If the current Customs computer system were to
experience an extended brownout, and if cargo could not being
cleared through our seaports and airports, this Nation's
economy would grind to a halt. Three years ago, southern
California seaports were severely impacted by a shortage of
rail cars and equipment following the merger of two major
railroads. As a result, cargo containers were stacked four high
inside our terminals. Labor that should have been used to
unload ships was used instead to stack and unstack cargo. Ships
sat idle for 5 or 6 days, rather than departing after a day or
two. Other ships sat at anchor, waiting for space in
overcrowded berths, and importers, exporters, manufacturers,
farmers, and retailers throughout this Nation were left without
critical links to overseas markets.
What happened in 1997 would pale in comparison to what
could happen in if the Customs computer system were to fail. If
that happens, it will affect far more ports than those in
southern California. It will impact every seaport and every
international airport in our Nation. Cargo will not flow and
both imports and exports will sit idle without reaching their
destinations.
Our Nation cannot afford such an event. The members of the
Foreign Trade Association believe that funding for ACE from the
General Treasury is one of the best investments you can make in
our Nation's economy.
Thank you for giving me an opportunity to address you
today.
[The prepared statement of Ms. Avila follows:]
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Mr. Horn. Thank you very much. We appreciate it.
Now Maurine Cecil is president of the Los Angeles Customs
Brokers and Freight Forwarders Association, and she's
accompanied by Judy Grimsman, the chairman of the Board, the
Los Angeles Customs Broker and Trade Forwarders Association.
So, please proceed.
Ms. Cecil. Thank you. Thank you for the opportunity to
testify today on behalf of the Los Angeles Customs Brokers and
Freight Forwarders Association. The Association is honored to
have the opportunity to address the subcommittee. Completion of
the automated process, as expressed in our prior testimony in
1997, is essential to the expeditious processing of shipments
imported and exported. We thank you for allowing us the
opportunity to return today to express our concerns.
We are directly and daily involved with Customs and much of
its core business, especially cargo review, release, and duty
collections. Our membership is integral to the processing by
Customs of both imports and exports, as we are the conduit
between Customs and the shipping and importing public. Most
importantly, we think Customs must develop a realistic
strategic plan addressing its future needs and increases in
both the real and electronic worlds.
In the past, we have seen too many different pilot programs
started without being permanently adopted. Customs has
allocated too great a portion of its resources in pursuit of
too many initiatives, often all at the same time and competing
for the same resources, resulting in an inability to direct
sufficient resources to its core business.
Customs must be willing to take one step at a time in a
well-thought-out strategic plan. It should also complete the
basic automation process before diverting resources to other
new programs.
The overall mission of Customs sometimes seems to suffer if
such short-sighted planning is allowed to overwhelm the agency,
which is what sometimes seems to be the case from the outside
looking in. We have seen too many programs that Customs has
failed to complete, due to unreliable funding, forcing the
trade to operate with only partial systems available, creating
delays and tremendous additional work.
We think Customs would be better served to defer
implementation of programs such as AES, Automated Export
System, until they have additional funding available. Customs
needs to expand its use of technology in the inspection of
cargo, such as increased use of non-intrusive technologies such
as x-ray units, allowing more efficient and timely examination
of legitimate cargo. It is our understanding that 8 to 12
containers can be processed within an hour using the x-ray
technology available. I have been told we will be getting one
x-ray unit in September.
Importers are already paying and continuing to pay large
sums of money for examinations being handled by private
companies contracted by U.S. Customs. We support the allocation
of money from the General Fund toward the ACE concept, as long
as the trade continues to have input into the design of its
programs and resulting products meet the needs of Customs'
mission. Funds are needed for detection and enforcement, but
Customs must also offer support of a realistic understanding of
world commerce.
The Association firmly believes that funding for the new
ACE must come from the current user fees already being
collected by Customs. This fee is currently being sent to the
General Fund and is of such a size that it can easily cover the
needed appropriations. The current user fees are generally
approximately $800 million yearly. The original intent of that
user fee was supposed to be to reimburse Customs for the cost
of commercial operations, including automation.
We should also keep in mind the concept of ITDS, which was
only recently transferred to Customs for completion. ITDS must
not be an obstacle to other programs currently being developed
under the ACE umbrella. These programs limit the number of data
elements needed for release to those necessary to make an
admissibility determination. The majority of data needs by
Customs and most other government agencies can be provided post
entry. The goal of ITDS should be to consolidate the gathering
of data, primarily in a post-entry mode, and compliment, not
complicate, the single release process already laid out in the
early ACE prototypes. Lack of support of automation funding
will cause port backlogs, and possible brownouts such as the
recent 5-hour outage in Buffalo which would cripple our port
and shut down the flow of cargo.
The MOD Act empowered each of the 301 Customs ports, and in
many cases the empowerment has created different local
interpretations of rules and regulations for entry processing,
and headquarters seems unwilling or unable to intercede.
Automation should eliminate the need for different local port
procedures, which necessarily complicate the release process
and add nothing substantive to the process.
The reorganization of Customs has also resulted in a loss
of expertise within the agency. As a result of reorganization,
the personnel directly involved in entry processing are being
reduced. In addition, many of the most experienced Customs
personnel have left the agency to join private industry.
Customs has not replaced this expertise.
One of the goals of the Customs reorganization and the MOD
Act was to discourage port shopping, or the selection of
disqualification of a port based on the way in which Customs
processes shipments at specific locations. The numbers of
entries filed at the Customs port in southern California have
continued to grow at amazing rates. The responsibility for the
review of this data for admissibility evaluating
classification, whether filed electronically or on actual
paper, still falls on the shoulders of Customs personnel.
Commodity specialists, in addition to their current workload,
have been given the task of being port and national account
managers, and they are also the main point of interest with
primary focus industries.
These people are already overworked, and are now being
asked to head up most outreach programs with the trade. They
are also often asked to be instructors for Customs for training
programs, internal and external. These additional tasks
interfere with their primary responsibility of dealing with
data review and transaction processing. We believe that the
proportion of the number of entries filed at the ports of
southern California to the number of import specialists is very
high compared to the other ports, notably, New York, New
Jersey. We subscribe to the theory that effective enforcement
makes for effective facilitation.
We feel there should also be an equivalent of an ABI
representative to coordinate with the trade when they bring on
the new ACE program. They should have direct line authority to
headquarters, rather than to a local authority, so that there
will be a smooth transition and continuity when the system is
in place. Customs will also need this sort of expertise
internally to help all personnel make a smooth transition.
Until all aspects of trade are totally automated, the
location of the local Customs office is critical for timely
review of entry paperwork for Customs, brokers, carriers,
truckers, importers and individuals. The temporary and/or
permanent relocation of Customs should be in a central and
strategic area to which the trade has fast and convenient
access.
In closing, we'd like to affirm that the Customs Service
officials and personnel at the Port of Los Angeles/Long Beach,
and Los Angeles International Airport, have always been open,
accessible and responsive to the concerns of the Association
and its membership. We look forward to the continuation of that
open dialog.
I want to thank you also for allowing us to have this
opportunity to speak in front of you.
[The prepared statement of Ms. Cecil follows:]
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Mr. Horn. Thank you very much.
Ms. Grimsman, the chairman of the Board of the Los Angeles
Customs Brokers and Freight Forwarders Association.
Ms. Grimsman. Well, I didn't have a prepared statement
today.
Mr. Horn. Well, just what you'd like.
Ms. Grimsman. OK.
One thing I would like, from what I thought I heard the
first panel, that the ACS, life support fund not be diverted to
the ACE RFP, and they were talking about $12 million, they had
$7 and there was $5 that they needed, and I'm not sure if I
heard that that's where they were going to look, because it was
going back and forth somewhat.
Mr. Horn. Well, they were going to look, basically, at
funds within the Treasury or within Customs; what we call
reprogramming. When you are at the end of the fiscal year
there's always millions of dollars that you haven't quite
applied to existing programs, and if you can get a sign off
from the Secretary of the Treasury and the ranking and chair of
the appropriate committees on the Hill, you are home free. So,
that's good, the way we solved the Y2K thing years ago,
Director Rains agreed with me on reprogramming, otherwise you
waste a year going through the Presidential and congressional
budget process. So, that's, basically, looking for money that
you can apply to something, but you've got to get a sign off.
Ms. Grimsman. Because keeping that system alive, while we
are developing the new system, is absolutely critical, and I
think you've heard from all of us that if it goes down for a
couple hours, it's a serious problem.
Mr. Horn. Well, Doctor Williams, distinguished professor
and expert on all sorts of things. He's now a professor of
mechanical and aerospace engineering at California State
University, Long Beach. Glad to have you here.
Mr. Williams. Mr. Chairman, thank you for the opportunity
to address new and emerging technologies for Customs processing
enhancement. Advanced sensing technologies are becoming
available for automated container inspection that will enable
INS and Customs to more accurately assess container content,
location, and improved targeting of selected containers for
manual inspection.
For example, new x-ray devices have been developed that can
provide detailed information on container content with the
total x-ray dosage much, much less than that of a conventional
medical x-ray. A variety of other advanced sensing systems that
are safe and effective are also becoming available.
Appropriate new technology sensors as part of an integrated
automated system for container inspection can be deployed to
facilitate effective interdiction of illegal or inappropriate
imports by containerized freight. Detection of human beings
attempting to illegally enter the United States by container
will be enhanced. As a result, the unscrupulous practice of
profiting from the inhumane and illegal smuggling of persons by
shipping containers, that has resulted in the tragic and
unnecessary loss of human life, will be reduced and curtailed.
INS and Customs are currently pursuing a number of
technology initiatives to improve their inspection and
processing capabilities, including automated license plate
readers, and as you've heard earlier, the sentry systems that
use technology to identify enrolled vehicles, people, and
display information to the inspector. The vehicle and cargo
inspection system, which uses gamma ray images to detect
contraband within vehicles and cargo containers, is not only
non-intrusive, it can be disassembled, moved and reassembled at
another location the same day.
INS and Customs are also developing and deploying a variety
of non-intrusive technologies that lessen the physical
invasiveness of searches for drugs and other contraband, as
well as saving time, money and reducing the tensions of the
search. Large x-ray scanners examine entire railroad cars as
they cross the border, permitting much more rapid inspection
than manual searches.
Big site cargo search x-ray systems, which are currently
being deployed, scan the contents of a tractor trailer in
minutes, using a pencil sized beam of x-rays that produce
detailed transmission and backscattered x-ray images, providing
an excellent view of the contents. A person would have to pass
through the system 100 times to receive the same exposure as
the typical medical x-ray. This non-intrusive search technology
is safe to operate and quickly pinpoints concealed contraband.
INS and Customs are deploying a wide variety of hand-
operated technologies to examine commercial conveyances which
include detection devices, fiberoptic scopes, vapor particle
detectors and laser range finders. Broadband encrypted
communication systems and computers that can filter data,
noting which vehicles need special attention, are also being
deployed.
Classification technologies, such as weigh in motion and
automated vehicle identification systems, are used in concert
with bypass lanes to help border crossings pursue the dual
goals of efficient and effective operation. The Transportation
Automated Measuring System, or TrAMS, developed and
demonstrated at Ft. Bragg by the California State University,
Long Beach, Center for the Commercial Deployment of
Transportation Technologies, is an example of the new
classification technology that can have broad implications for
ports and border crossings, particularly, when deployed with
additional sensors. Future classification technologies
integrated with historical databases may greatly improve the
selection mechanism to recognize carriers that are habitual or
potential border crossing problems.
New electronic tags, seals, and transponders can be used to
allow containers and vehicles inspected at the points of origin
to bypass further inspections.
In support of INS and Customs efforts to enhance their
inspection capabilities, our university, in collaboration with
the Port of Long Beach, the Port of Los Angeles, and the
Alameda Corridor Transportation Authority, has proposed a
national demonstration project known as the CSULB, INS, and
Customs Inspection Technology Infrastructure Project. This
demonstration project would include the installation and
evaluation of existing and new technologies described
previously and the development and evaluation of advanced
technology prototypes in the Port of Long Beach, Port of L.A.,
the Alameda Corridor, and LAX. This project could be crucial to
the dissemination of enhanced inspection technologies,
ultimately, throughout the United States, as new technology
prototypes are proven.
Mr. Chairman, with your permission, I would like to
introduce for the record letters of support for this project
from Larry Keller, executive director of the Port of Los
Angeles, from Richard Steinke, executive director of the Port
of Long Beach, from James Hankla, chief executive officer of
the Alameda Corridor Transportation Authority, and from Doctor
Robert Maxson, president of California State University/Long
Beach.
Mr. Horn. Without objection, the letters the gentleman has
cited will be put at this point in the record.
Mr. Williams. The CSULB, INS, and Customs Inspection
Technology Infrastructure Project would be a 3-year program
specifically designed to expedite the flow and throughput of
people and goods at border crossings, and air and seaports
throughout the United States eventually. This project would
employ advanced technologies to identify people illegally
trying to enter the United States, and also expedite the
processing of personnel at INS border stations. It would
provide an increased ability to identify containers entering
and exiting ports, utilizing advanced sensing technologies for
automated container inspection that would enable inspectors to
assess the content, including human cargo, and improve
targeting of selected containers.
It is important that funding for this project clearly be in
addition to the existing budget proposals, and not a
redirection of funds from some other critical need. INS and
Customs are two of America's oldest Federal law enforcement
agencies and have been protecting our borders for over 200
years. To perform their missions, they must keep on the cutting
edge of technology applications. The same technologies that are
available to the government are increasingly available to well-
financed criminal and terrorist organizations. It is imperative
that Congress provide the funding that INS and Customs need to
counter these threats.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Williams follows:]
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Mr. Horn. We thank you very much for that very thorough and
accurate--of the Customs Service, and since the Deputy
Commissioner has had to catch a plane, why, if there are any
comments you'd like to make, particularly, on Doctor Williams'
presentation on the technical aspects, as to whether that would
be helpful to the Customs Service.
Ms. Jankov. Yes, I believe I would like to make just one
comment. I have very, very little information about this new
project that Doctor Williams is talking about, but I certainly
think that there is a role for Customs to play with the other
participants of the group, with the Port of Long Beach, with
the Port of Los Angeles, and with the members of the Alameda
Corridor. And, I would very much like to participate or have
Customs represented on that group, because I think it is a
group that looks at the Customs needs and requirements, as well
as those of the trade.
Mr. Horn. OK, any other reaction to the other witnesses?
Ms. Jankov. I believe that they've made the case.
Mr. Horn. OK.
I think the gentleman from the Immigration Service had to
leave, I don't know if there was a Deputy under him, but if so
we'd be glad to have your comments on anything that you have
heard here on the technical aspects. Since you are representing
the clients, I'd be interested to know what your reaction was
to Doctor Williams.
Ms. Avila. Congressman Horn, the Port of Long Beach is
working with U.S. Customs now to identify a location for that
non-invasive gamma ray x-ray system, and we do hope to identify
that location in order to implement that very shortly. That's
referred to as a docking system, and I am sure that we will be
able to install such a system within our seaports.
Mr. Horn. Very good.
Well, if there aren't any other questions, we will thank
the staff that set up this hearing, and J. Russell George, the
staff director for the Subcommittee on Government Management,
Information, and Technology, and Mr. Kaplan, the counsel to my
left and your right, is the one that put a lot of this hearing
together, Bonnie Heald, the director of communications, is also
here, and Brian Sisk is the clerk to make sure that everything
functions along with Ryan McKee. I want to thank, in
particular, the district director for our office, Connie
Martinez Sziebel, and her staff, which is located in Lakewood,
CA, who serve the 38th Congressional District, we thank her and
the intern, Devin Storey, we particularly like his help because
he got to get up bright and early this morning to bring Mr. Ose
down here.
Port of Long Beach people that have been especially helpful
are Steve Sakora, the graphic artist, Arturo Garcia, graphic
artist, and Cathleen Stephens is our court reporter.
So, we thank you all for what's made this a successful day,
so thank you very much. We are adjourned.
[Whereupon, the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
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