State and Local Agencies Race 2000 Clock

It's no secret that federal agencies will spend billions of dollars and countless hours to convert their computer systems and software to register the year 2000. State and local agencies will not be far behind.

Kevin Schick, a senior analyst at the Stamford, Conn.-based Gartner Group, said state and local agencies will pay $5 billion to convert their systems and software. But he fears that politics and insufficient funding will prevent state governments from actually tackling the problem before 2000 arrives.

That is because state and local governments, under pressure to convert their software, have the added burden of coordinating their steps with federal government officials, whose system often runs in tandem, analysts and state CIOs said.

"States are just not there," said Schick. "I am not optimistic about the federal government or state and local governments' [ability to address the problem]." He thinks government agencies will finally start to address the problem when it's too close to the millennium, and by then the cost of the problem will be much higher than it is now.

With the extensive use of dates in computers for transactions such as financial investments, payroll support, license renewals and social security benefit payments, the scope of the year 2000 software conversion problem becomes apparent in state and local computer systems.

The size of the computer system depends on the population of the state. For example, Schick predicts that states such as Nebraska could spend $32 million to correct the problem, while California could spend up to $150 million.

What's more, federal government computer systems are intricately linked to states. Even after federal government systems are upgraded to handle the century date change, government programs that coordinate with state systems will fail if the latter are not year 2000-compliant.

Schick said fewer than 25 percent of state government computer systems will be ready for the year 2000 date change. Only a few states have begun focusing on the solution to the problem. For example, in August, Minnesota established the Year 2000 Project Steering Committee to assess the scope of the year 2000 problem. State agency liaisons have been appointed to perform communication, coordination and other functions related to the state's efforts to correct the year 2000 problem.

All Minnesota's agencies are expected to submit their year 2000 budget requests this month to the steering committee. But Schick said the state has struggled to receive funding for its efforts -- a problem in other states, too.

Agencies in the state of Washington have also attempted to step up to the challenge. In fall 1995, an executive steering committee was formed to coordinate year 2000 activities across state government. Deputy directors from eight agencies across the state serve on the committee. A Year 2000 Special Interest Group was also formed under the committee to identify opportunities to work collaboratively on common issues and problems among agencies. There are more than 30 members on the two teams.

Some states are not getting the funding they need to solve the problem. The state of Nebraska has created a 2-cent cigarette tax to help fund the state's problem.

"Most elected officials have a strong distaste for money that is being requested for the year 2000 problem," said Ian Temple, a technology analyst with Gartner Group.

Schick said Pennsylvania is one of the few states that has taken a leadership positions on the issue.

Charles Gerhards, director of the central management information center under the state's office for information technology, said Pennsylvania recognized the software conversion problem in early 1996.

His office concluded that the state would need $18.9 million and 470 full-time people for one year to fix mission-critical systems for the year 2000. Gerhards said the state's estimate covers its 525 mission-critical applications and 29,000 computer programs that must be changed.

State officials from the Office of Information Technology put into motion a year 2000 action plan in August 1996. Gerhards was appointed chairman of the committee, which will lead a statewide outreach effort to inform businesses, local governments and citizens of the problem and promote shared solutions.

The committee will take inventory of all computer software, hardware and equipment that will be affected inside the state's 40 agencies. The state's solution to fixing the problem is to buy new computer equipment. Gerhards said agencies will be evaluating all computer systems for efficiency and necessity. Agencies will submit a plan to the committee detailing which hardware and software to eliminate or retain. Gerhards said all mission-critical applications must be corrected and tested by June 1998.

He said about 50 different companies have offered solutions for the state's year 2000 problem, but the state's plan is still in the early stages.

"There is no silver bullet, no tool, no perfect solution," said Gerhards. "It just doesn't exist, and from what we understand, we don't expect one."

A few states are collaborating to solve the problem. Pennsylvania is sharing information with New York and Arizona on how its agencies are addressing the problem. For example, New York state officials have shared their approach with Pennsylvania on procuring services.

Gerhards said Pennsylvania's biggest challenge is getting federal government officials to address the problem and start working toward a solution that is compatible with state agencies.

"We can't just make a change on our end until [the federal government] makes a change on their end," said Gerhards. "This is not a technology issue but a project management issue."

Gerhards said agencies must get away from state politics, and that the federal government should step back from the "business as usual" mentality.

Schick agrees that the federal government has not been responsive.

"Their actions are passive and you can't do anything in a timely fashion if you're passive," said Schick. "They treat the problem like it's a dirty little secret."

He said government agencies have been slow to get started, and late to deliver, which will cause a tremendous amount of failures associated with the year 2000.