OMB seeks better Y2K cost tally
- By Heather Harreld, L. Scott Tillett, L. Scott Tillett
- Aug 23, 1998
In an effort to calculate a more accurate cost of fixing federal computers for the Year 2000 problem, the Office of Management and Budget this month asked agencies to prepare more detailed reports on Year 2000 costs.
OMB issued a memorandum Aug. 13 that directed agencies to submit by Sept. 1 with their next quarterly Year 2000 progress reports "comprehensive plans and associated funding requirements for achieving Year 2000 compliance. Activities and associated funding requirements should reflect a comprehensive assessment of Year 2000 needs, including procurement, personnel, contracts, work in support of President Clinton's Year 2000 Conversion Council, and business continuity and contingency planning." The costs should be reflected in OMB's upcoming Year 2000 report.
Ever since issuing its first Year 2000 estimate— for $2.3 billion— in February 1997, OMB has been criticized by Congress, Year 2000 experts and others for grossly underestimating the cost to reprogram, replace or retire federal systems afflicted with the millennium bug. OMB's latest Year 2000 cost estimate, released in May, totaled more than $5 billion, but critics said the estimate was still too low. Year 2000 experts view OMB's request for more detailed cost estimates as an attempt to push agencies to tally once and for all what it will take to squash the Year 2000 bug.
"Given that we are now approaching the end of 1999 [budget planning] and headed into the Year 2000 [budget planning], we are particularly focused on the budget issues that are central to achieving Y2K compliance," said Linda Ricci, an OMB spokeswoman.
When Congress returns from recess in two weeks, it will begin to finalize fiscal 1999 appropriations. The House so far has set aside $3.85 billion in Year 2000 contingency funds for civilian and Defense agencies. Close to $1 billion for the Year 2000 was already built into the 1999 budget by the Clinton administration, which also hopes to tap into a $3.2 billion general contingency fund if other money appropriated for the Year 2000 problem turns out not to be enough.
But balanced-budget hardliners on Capitol Hill have objected to the designation of Year 2000 contingency funds as "emergency" funds because it may draw money from an expected budget surplus. House leaders have proposed moving Year 2000 contingency funding to a separate bill and then paying for the cost by cutting from all 13 federal appropriations bills. But no such bill has surfaced.
Olga Grkavac, senior vice president at the Information Technology Association of America's (ITAA) Systems Integration Division, said OMB is trying to emphasize that agencies cannot rely exclusively on Year 2000 contingency funding.
"Now they've got these contingency funds that are in limbo, and they didn't necessarily have the funds in their [budget] requests," she said.
Bruce Webster, co-chairman of the Washington, D.C., Year 2000 Group, which includes capital-area computer users and information technology observers in and out of government, said OMB's latest request from agencies should allow administration officials to get an idea of which agencies might need to tap into planned contingency funds and to make last-minute appeals to Congress if it appears the agencies need the funds. "OMB is saying, 'Let's make really sure of what money we have there instead of having to go back to Congress yet again,' " Webster said.
But some agencies said they may not need more money. The Department of Veterans Affairs "may be in a unique circumstance in that we're not pursuing new funding," said Ernesto Castro, the VA's Year 2000 program manager. "We've always had everything."
Other agencies, however, are finding additional Year 2000 problems as they fix their systems. "Somebody in another office or bureau comes to me and says, 'OK, gee, we forgot about that or we overlooked this,' " said a Year 2000 program manager at one Cabinet-level department who spoke on the condition of anonymity. "I don't think anybody knows [the costs], to tell you the truth."
Agencies' cost estimates could likely increase because the OMB memo does not ask for projected costs of fixing only mission-critical systems; all systems could be included, said Mark Uncapher, vice president of ITAA.
Other agencies said they could not predict how they will respond to the memo. "We haven't gotten together with the financial and planning and policy people to put this together into one response," said a Year 2000 program manager at one agency.
Another Year 2000 program manager contacted last week said that she had not yet read the memo.