Year 2000: Agencies Make 'Steady' Progress

By Richard McCafferyWith more than 90 percent of the federal government's mission-critical systems fixed and tested, President Clinton's year 2000 czar John Koskinen is more confident than ever that crucial agency computer systems will be ready for the new millennium."By the time we get to Labor Day, we're going to be able to list the [noncompliant] systems on two hands," said Koskinen, chairman of the President's Council on Year 2000 Conversion. The failure of any of these systems will not directly affect the public, Koskinen said. "None of them are in high-impact areas."Systems at the departments of Defense and Energy that will not be fixed by this summer should be fixed this fall, Koskinen said.Eleven agencies failed to make the Office of Management and Budget's March 31 deadline to have all mission-critical systems year 2000 compliant. Those agencies were the departments of Agriculture, Commerce, Defense, Energy, Health and Human Services, Justice, State, Transportation, Treasury, NASA and the U.S. Agency for International Development.Excluding Defense and Energy, all of these agencies should be 100 percent compliant this summer, Koskinen said. "We don't think any agency is at risk of not being ready for the year 2000," he said.Not everyone is as optimistic. "Some agencies are significantly behind schedule and are at high risk that they will not fix their systems in time," Joel Willemssen, the General Accounting Office's director of civil agencies' information systems, said in testimony April 19 before the House Committee on Government Reform. "While the year 2000 readiness of the government has improved, our reviews of federal agency year 2000 programs have found uneven progress."Americans could face disruptions such as grounded and delayed flights, higher airline costs and degraded safety, Willemssen told lawmakers. He also is concerned about the Department of Defense running out of critical supplies.Sen. Robert Bennett, R-Utah, chairman of the Senate Special Committee on the Year 2000 Technology Problem, told Washington Technology he is surprised how much progress the government has made in the last year. However, he is more guarded in his optimism than Koskinen. "I'm sure he [Koskinen] would agree there's much more to be done," said Bennett, who remains worried about the Health Care Financing Administration, which is in a disagreement with the GAO over compliance issues. Like Koskinen, Bennett is concerned about state and local communities as well as international readiness.Finally, Bennett said he is concerned about the chemical industry, and plans to examine its Y2K readiness at a hearing that has not been scheduled. He also plans to revisit the readiness of other critical industries throughout the year.Agencies Willemssen is worried about include the Department of Defense, the Health Care Financing Administration and the Federal Aviation Administration.But much has been accomplished since February 1997, when the GAO designated Y2K a high-risk area. Since then, GAO has issued more than 90 reports and testimonies on the problem. Many agencies are using GAO guidelines regarding testing, independent validation and verification, contingency planning and prioritization.In February 1998, the Office of Management and Budget issued its fourth quarterly report on Y2K progress in the federal government. At the time, only 35 percent of the 24 federal agencies' mission-critical systems were Y2K compliant. Six agencies were designated tier-one, meaning they were not working fast enough. They were the departments of Education, Energy, Health and Human Services, Labor, Transportation, and the U.S. Agency for International Development. Currently, 93 percent of all mission-critical systems have been renovated and tested. Thirteen of the 24 agencies report that 100 percent of their mission-critical systems are Y2K compliant.As of OMB's March 18 report, there were three tier-one agencies: the departments of Health and Human Services, Transportation and USAID.OMB's latest estimate for the cost of fixing the Y2K problem is $6.8 billion — an increase of more than $2 billion from its price tag in April 1998. "It's been a fairly steady rate [of progress] over the last five quarters," said Koskinen, who cited more government experience with the problem and the fact that all agencies made compliance their No. 1 goal."There's only so many hours of access a day to the systems, so when you were trying to do an upgrade, that meant you weren't doing Y2K work," Koskinen said. "We increasingly got the agencies to understand that they had to make Y2K a top priority." Despite missing the March 31 deadline, officials from many of these agencies said they are on track for compliance by early summer.Gary Christoph, chief information officer at the Health Care Financing Administration, said more than 250 people are readying the agency's systems for the new millennium. "The whole agency has become involved," he said. The agency established a Y2K war room and delayed plans to design a new information technology, architecture, Christoph said.Health Care Financing, which processes $1 billion worth of Medicare claims annually, has 100 mission-critical systems, 25 of which are internal and 75 of which are external — owned and operated by insurance companies. All of its internal systems are compliant, said Christoph, who expects all external systems to be compliant this summer.The rest of 1999 will be spent retesting systems, developing and testing contingency plans and reaching out to the agency's business partners, Christoph said. Health Care Financing works with more than 1 million doctor's offices, hospitals and nursing homes, all of which must be compliant to initiate the billing process, he said.Both he and Koskinen are concerned that smaller providers are falling behind. As a result, Health Care Financing sent out Y2K awareness letters to its 1.3 million providers in January and formed a task force to meet with medical associations and trade groups throughout the country. "We're so interconnected, if we don't go the extra mile, we're all at risk," Christoph said.The State Department, which has 59 mission-critical systems, has made rapid progress in the last three quarters as well.Thirty-eight of the State Department's systems needed renovation, an official said. Last October, only one was compliant. Repairs were delayed as the department worked to ship equipment to 250 posts overseas and obtain security clearance for technical personnel. "It was a real logistical maze," the official said. By the March 31 deadline, all but seven had been repaired, implemented and tested, the official said, and all systems should be compliant by mid-May.The rest of the year will be spent reviewing and testing embassy contingency plans, the official said. Embassies submitted their plans April 16. Since Y2K readiness varies greatly from country to country, the embassies must have solid backup plans, the official said."We need to make sure the embassies have everything they need to keep operating," the official said.