ITAA's Year 2000 Outlook
January 22, 1999                        Volume 4, No. 3

Published by the Information Technology Association of
America, Arlington, VA

Bob Cohen, Editor bcohen@itaa.org

Read in over 80 countries around the world

ITAA's Year 2000 Outlook is published every Friday to
help all organizations deal more effectively with the
Year 2000 software conversion.  To create a
subscription to this free publication, please visit
ITAA on the web at https://www.itaa.org/transact/2ko
utlooksub.htm.  To cancel an existing subscription,
visit https://www.itaa.org/transact/2kremove.htm.


ITAA's Year 2000 Outlook is sponsored in part by CACI
International Inc., DMR Consulting Group Inc., and
Y2Kplus.

Y2K Bills Bloom

New Y2K bills popped up this week, at least two of
which are aimed at limiting liability.  In the U.S.
Senate, Sen.  John McCain (R-AZ), Chairman of the
Committee on Commerce, Science and Transportation,
introduced the S. 96, Y2K Act, a measure that would
limit damages to economic losses and, where additional
damages are allowed, limit the amount of such
additional damages against small business.  If enacted,
the measure would require a plaintiff to notify a
potential defendant of the Y2K glitch and provid e an
opportunity to remedy the failure.  The bill
establishes a good faith defense limiting award damages
to economic losses if efforts have been made to limit
the damage or remedy the failure.  Other provisions
would allow several but not joint liability among
defendants and would appoint a special master to hear
cases in federal courts.  Retailers without IT
expertise selling Y2K defective software would also
gain liability limitations.

"The purpose of this legislation is to ensure that we
look to solving the technology glitch…rather than clog
our courts with years of costly litigation," McCain
said.  "My goal is to provide incentives for fixing the
potential Y2K failures before they hap pen, rather than
create windfalls for those who litigate."

Last week, Rep.  Don Manzullo, (R-Ill.) introduced the
Year 2000 Consumer Protection Plan Act of 1999.  This
bill sets a series of limitations on the amount of
damages that would apply in Y2K actions and requires
plaintiffs to prove by a preponderance of ev idence
that defendants acted unreasonably thereby causing
foreseeable losses.  The new bill would make
arbitration mandatory, limit pain and suffering damages
to medical and hospital expenses, tie punitive damages
to willful or wanton misconduct, and allo w no Y2K
actions after January 1, 2002.

In the Commonwealth of Virginia, Sen.  Warren Barry
(R-Fairfax) introduced S.B. 983, a bill that would
limit liability and damages for economic loss in
connection with the century date change.  Liability and
damage rules for civil actions related to Y2K p roblems
would be limited to the scope of existing contracts,
protect persons from liability for the Y2K-related
actions of third parties, create an affirmative
protection for employees, officers and directors,
disallow consequential or punitive damages, a nd limit
total damages to actual, direct damages.

"The key to this type of legislation is understanding
both what it does and what it does not do," said ITAA
President Harris Miller, referring to the Virginia
bill.  "In terms of the former, S.B. 983 forces Y2K
litigation to be conducted within the contex t of
existing contracts, avoiding costly and
counterproductive Y2K witch hunts from rippling through
a supply chain.  In terms of the latter, as we
understand it, this bill takes nothing away from causes
of action which may grow out of fraud, property or
personal injury, nor does it deal with consumer
protection issues.  Short of alternative dispute
resolution, which we feel is a better approach to
settling Y2K disputes, this type of broad liability
protection makes the most sense to us.  We see it as a
g ood first step in confronting the Y2K problems that
will arise, in that it recognizes the proper balance of
public policy and equity."

Meanwhile, in other federal legislation, Sen.  Daniel
Patrick Moynihan (D-NY) has introduced S. 174, the Y2K
State and Local Government Assistance Programs (GAP)
Act of 1999.  The bill would set aside $40 million in
Y2K emergency funding from the FY99 omni bus spending
bill for states in fiscal years 1999-2001.  The measure
prompts states to make repairs to Medicaid, welfare,
food stamps and child support enforcement programs by
requiring grant recipients to spend one dollar for
every two received from the federal government.

Y2K Rates State of Union Mention; Republican Response

Perhaps it's time to start talking about the Year 2000
problem.  President Clinton did briefly in his State of
the Union address this week.  "We must be ready for the
21st century from its very first moment, by solving the
so-called Y2K computer problem," the President said.
Apparently departing from his text, the President
acknowledged the somewhat less than overwhelming
response given the mention in the House chamber.  "We
had one member of Congress stand up and applaud,
Clinton said, "And we may have about that ratio out
there applauding at home, in front of their television
sets.  But remember, this is a big, big problem.  And
we've been working hard on it.  Already, we've made
sure that the Social Security checks will come on time.
But I want all the folks at home listening to this to
know that we need every state and local government,
every business, large and small, to work with us to
make sure that this Y2K computer bug will be remembered
as the last headache of the 20th century, not the first
crisis of the 21st."

The brevity of Clinton's Y2K remarks drew criticism
from House Majority Leader Dick Armey in comments
released about the State of the Union address.  "Only
three sentences on the Year 2000 computer problem?"
Armey asked.  Going the President one better, he
added, "The Year 2000 problem will hit us in 346 days,
whether we're ready or not.  Paying only lip service to
the issue won't make it go away.  The president needs a
real plan to ensure that our nation's closely entwined
computer networks are ready."

Intelligence Official Offers Hedged Views on Global Y2K
Impact

A U.S. intelligence official appearing before a House
hearing on Year 2000 predicted a world of Y2K-related
problems, particularly in Russia and China.  Lawrence
K. Gershwin, a national intelligence officer for
science and technology at the National Intel ligence
Council, also told a joint hearing of the Government
Management, Information and Technology Subcommittee and
the Technology Subcommittee that the intelligence
community is not ready to make a "confident assessment"
of global impacts or the implica tions of Y2K failures
for U.S. interests.

"The consequences of Y2K failures abroad will range
from the relatively benign, such as a localized
inability to process credit card purchases, to problems
within systems across sectors that will have
humanitarian implications such as power loss in mid-wi
nter," Gershwin said.  "We have few indications that
countries are undertaking contingency planning for
recovery from Y2K failures."

Two of the biggest Y2K question marks on the U.S.
foreign policy horizon could be Russia and China.
Gershwin was not particularly upbeat about the
prospects of either to roll up the rollover.  "The
coincidence of widespread Y2K-related failures in the
wi nter of 1999-2000 in Russia and Ukraine, with
continuing economic problems, food shortages, and
already difficult conditions for the population could
have major humanitarian consequences for these
countries."  Noting that the Russian State Committee
respo nsible for Y2K issues has already admitted to not
having sufficient time or money to fix the problem,
Gershwin expressed particular concerns about the
country's ability to avoid power distribution and
generation disruptions.

Traveling on, Gershwin said the Asian economic crisis
has hampered the remediation efforts of all
Asia-Pacific countries except Australia, but China he
singled for special comment.  "While the lines of
authority for China's Y2K effort have been establishe
d, its late start in addressing Y2K issues suggests
Beijing will fail to solve many of its Y2K problems in
the limited time remaining, and will probably
experience failures in key sectors such as
telecommunications, electric power, and banking."

While the nuclear arsenals of Russia and China
launching as a result of Y2K failures is not seen as a
problem, early warning systems are a different matter.
"The problem we are more focused on is whether the
Russians will manage to locate and fix problem s in
their early warning systems that they use to monitor
foreign missile launches, and how their leadership is
preparing to deal either with the prospect of incorrect
information being provided by such systems, or with
system outages," Gershwin said.

And although Year 2000 readiness is becoming something
of a "water's edge" issue for many Americans, Gershwin
reminded the lawmakers of this country's global
interdependencies.  He said leading oil exporters to
the U.S., Venezuela, Saudi Arabia, Mexico, N igeria,
Angola and Gabon, are behind the Y2K curve and even the
oil producing multi-national corporations in those
countries must rely on ports, ocean shipping and
domestic infrastructures.

Having raised a litany of concerns, Gershwin was
unwilling to commit to "good answers or predictions
that would be meaningful on the consequences…the
incredible complexity of global interconnectivity and
interdependence, and the effects when some parts of the
information technology baseline start to fail, is a
daunting challenge to interpret and analyze."

HCFA Says Doctor Heal Thyself

The Health Care Financing Administration (HCFA), keeper
of the nation's Medicare program, says it will be up
and processing health care claims in the Year 2000.
But HCFA wants to be sure its 1.25 million U.S. health
care providers and suppliers are ready to receive its
payments.  In a letter today, HCFA Administrator
Nancy-Ann Min DeParle wrote the agency's business
partners, "HCFA will be ready to process acceptable
claims.  We have made substantial progress in
correcting our own systems in recent months and,
despite earlier concerns, we will be ready on time.
You must also be ready if you wish to be paid promptly.
It is urgent that you act now so your systems will be
ready."

South American Countries Seek Y2K Consensus

Several countries are working together to create a
South American Year 2000 Forum.  The forum will strive
to facilitate cooperation, communication and
coordination, according to its coordinator, Rodrigo
Moraga.  A website (www.foroy2kamericadelsur.org)
provides country and sector reports, although most of
the material is available only in Spanish.

Business to Business

Unisys Corporation, Seattle, WA, has entered into an
agreement with Data Dimensions, Inc. to resell
Interactive Vendor Review, an online database that
reports the Y2K compliance status of hardware,
software, and embedded systems.

Nortel Networks, Miami, FL, has been awarded a contract
worth over $13 million by the Bahamas Telephone
Company.

Data Integrity, Inc., Waltham, MA, has introduced
Millennium CrossCheck, an IV&V tool that audits
remediated PL/I code to identify Y2K-related errors.

Netscape has created a Y2K clearinghouse of information
on its Netcenter website: http://home.netscape.com/y2k.


ITAA Y2K Information Center

Solution Providers Directory
http://www.itaa.org/script/2000vend.cfm

ITAA*2000 Certification Program
http://www.itaa.org/2000cert.htm

Outlook Archive
http://www.itaa.org/script/get2klet.cfm

Legislative and Litigation Table
http://www.itaa.org/Y2Klaw.htm

Calendar
http://www.itaa.org/y2kcal.htm

Vendor/User Status Questionnaires
http://www.itaa.org/questmain1.htm


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Information Technology Association of America, 1616 N.
Fort Myer Drive, Suite 1300, Arlington, VA 22209.
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