Who will pay?

Despite the scale of the problem, federal agencies cannot count on special 2000 funding to set things right. At DOD, Emmett Paige Jr.'s office has said that DOD agencies and the services must reallocate existing budgets.

The services are acknowledging this reality. "Funding will come from other programs," said Kevin Carroll, an Acquisition Division chief at the Army's Information Systems Selection and Acquisition Agency. "Some...programs will be hurt in order to fund this change."

Likewise, at the Health Care Financing Administration, the money to pay for the re-engineering will come out of other programs. "We're robbing Peter to pay Paul," said a HCFA official familiar with the project.

Making computers 2000-compliant "is going to have to compete with everything else [for funding]," noted Bruce McConnell, chief of information policy at the Office of Management and Budget's Office of Information and Regulatory Affairs. "We expect there will be some slowdown in system development efforts, [and] I expect some systems will fail" because the government does not have enough money to fix everything before 2000.

OMB plans to calculate a rough estimate of the cost by this fall, when the fiscal 1998 budget requests are prepared.

Another obstacle facing agencies in the 2000 fix is the procurement process.

"There will be so much work for vendors in the coming years [in the commercial sector], they won't need to deal with government bureaucracy, even if enough money is allocated," said Bruce Hall, director of research for The Gartner Group Inc.

Meanwhile, Bob Molter, chairman of DOD's Year 2000 Work Group, said existing contracts—such as the Defense Enterprise Integration Services deal, Integrated Computer-Aided Software Engineering and the General Services Administration schedule—offer 2000-related tools and services.

But even these ready-made vehicles will not speed solutions fast enough to fix every federal system.

"There is just not enough time," Molter said. "We should have started 10 years ago. We've got to do the best we can."

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