Feds signal deepening Y2K crisis (Part 1)

In the wake of Office of Management and Budget threats to bar four agencies from buying information technology in fiscal 1999 at least one top manager has asserted that his agency will need "a massive infusion of money" to make its computers Year 2000-compliant.

Jim Harrel the Transportation Department's Year 2000 project coordinator last week told Federal Computer Week that the Federal Aviation Administration will not have its new air traffic control computer system in place by 2000 thereby requiring the FAA to make current air traffic control systems Year 2000-compliant.

The revelation culminates a week during which two reports were released that showed just how far behind agencies are in making their computers Year 2000-compliant including a congressional "report card" that failed 11 out of 24 agencies for their lack of progress in upgrading their computer systems.

The FAA's funding shortfall is another indication of how much more money agencies must find to fix their computers. "The FAA's problems are going to be of a magnitude of scale larger than any of our other operating administrations " Harrel said. "I would expect toward the beginning of [October] to have FAA's best guess [of how much money it will take] to get things moving. They are doing work now and they have been taking [money] out of their hide but they're fast approaching a drop-dead point by which they will need a massive infusion of money."

OMB officials who earlier this year adamantly stated that agencies must find funds for fixing their computers in existing programs declined to comment specifically on the FAA's budget shortfall. But an OMB spokesman said "We would have to look at each agency's progress in dealing with the Year 2000 problem on a case-by-case basis and we will go from there in terms of re-evaluating [the FAA's] status."

DOT is one of four agencies that OMB in a quarterly Year 2000 report released last week threatened to bar from buying any new computer hardware and software in fiscal 1999 until those agencies convince OMB that they have met certain benchmarks for making their computer systems Year 2000-compliant. In the report OMB also increased the cost estimate for the Year 2000 fix to $3.8 billion - a $1 billion jump from what OMB reported in May.

OMB also threatened to cut off fiscal 1999 IT buys at the Education and Agriculture departments and at the Agency for International Development (AID). The agencies were singled out because they missed completion dates for assessing systems did not show measurable improvement since the May report did not keep to their schedule for completion of the phases for best practices and failed to update their information.

"For these agencies we are establishing a rebuttable presumption going into the FY 1999 budget formulation proc-ess this fall that we will not fund requests for information technology investments unless they are directly related to fixing the Year 2000 problem " according to the OMB report.

OMB also warned 12 other agencies - including the departments of Defense Justice and Treasury - that they may be barred from fiscal 1999 IT purchases if their Year 2000 progress does not improve. But the guidelines issued by OMB for determining whether an agency will be barred from purchasing computers have also provided agencies with ways to avoid such a fate.

Sally Katzen OMB's administrator for information and regulatory affairs said the four agencies have time to show that they are making progress on Year 2000 problems. "What we are saying in the presumption is we're not going to fund new IT projects unless and until we're confident that you're fixing the Y2K problem and it's up to you the agencies to demonstrate that " she said.

Katzen also left room for agencies to buy systems that are "essential" to mission-critical services. "There's a presumption that there is a ban unless [the agencies] can demonstrate that the use of these funds is imperative important and essential for the American public " she said. "We're not going to do things stupidly."

Most of the four agencies on OMB's critical list are confident that they will show marked improvement in assessing and fixing computers. "We recognize what we have to do " said Ira Hobbs the deputy chief information officer at the USDA. "I believe we will meet OMB compliance."

Treasury Secretary Robert Rubin whose department was one of 12 warned about its slow progress said "I spoke to [Katzen] and she said that we had in her judgment been behind where we should have been but we've come up a long way. She thought that we were proceeding effectively now."

DOD officials said that although the department has about three times more mission-critical systems identified than any other agency the department has completed the renovation phase for 40 percent of those systems. "DOD is moving forward to solving this problem " DOD spokeswoman Susan Hansen said. "However we would like to accelerate our progress."

According to Joel Willemssen the director of IRM at the General Accounting Office OMB's report marks a stiffening in its attitude regarding the Year 2000. "I'm encouraged by the change in tone of OMB in this report " he said. "They are not coming across as optimistic anymore."

But Olga Grkavac senior vice president of systems integration at the Information Technology Association of America said OMB's policy will hurt the development of future computer systems. "The agencies are going to fix the Year 2000 computer costs at the expense of their future computer needs and that is going to be a setback in terms of being prepared for the 21st century " she said.

Also last week Rep. Steven Horn (R-Calif.) chairman of the House Government Reform and Oversight Committee's Subcommittee on Government Management Information and Technology gave 11 agencies a grade of D or F for their progress in assessing renovating testing and completing Year 2000 fixes. DOT

Education and AID were the only agencies to receive an F. The USDA was slapped with a D-minus.

The report card is the second that Horn has issued. Last year he also gave failing grades to many agencies. "Some agencies received worse grades than last year because they made little progress as they kept finding more and more computer programs requiring modification " he said.


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