ITAA's Year 2000 Outlook June 18, 1999 Volume 4, No. 23 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. In this Issue: · Y2K Litigation Bill Passes Senate; Conference Could Be Sticky · Federal Y2K GPA Up Slightly · Senators Air Concerns on Federal Y2K Response; New Center · Pension Fund Finds Information Lacking · Small Business Survey Indicates Increased Awareness, Readiness · Business to Business · ITAA Y2K Information Center · Sponsor Advertising Y2K Litigation Bill Passes Senate; Conference Could Be Sticky The United States Senate passed the McCain - Dodd Y2K Act this week--on its third attempt to bring the legislation up for a vote--by a tally of 62-37. The Act seeks to discourage Y2K litigation and encourage remediation and is strongly opposed by the Tri al Bar. While the House passed a similar bill this spring and the two versions are moving into Conference committee shortly, a train wreck is still very possible. The Senate announced Thursday, just two days after passage of the bill, their appointees to the Conference panel for the legislation: Republicans Bennett (UT), Burns (MT), Gorton (WA), Hatch (UT), McCain (AZ), Stevens (AK) and Thurmond (SC) will join Demo cratic Senators Dodd (CT), Hollings (SC), Kerry (MA), Leahy (VT) and Wyden (OR). The House, embroiled in a gun control debate, has not yet appointed its Conference members, and there is no indication of timing once the committee meets, from either side of Capitol Hill. Businesses and the high tech community, which support the legislation, are pushing for fast action. But Hill sources are indicating that, with the chief sponsors and opponents of the bill in the Senate set to take it to Conference, the question remains i f consensus can be reached. The White House has indicated it will veto the bill unless major changes are made in the House-Senate Conference committee. The White House stance perplexes some observers. ITAA President Harris Miller told the Associated Press that the Administration's attempt to please both bill backers and opponents "has been like trying to take two girls to the same prom." Miller called on the White House to become constructively engaged on the issue. Intel Corporation spokesman Bill Calder said that the Senate vote is a significant step in the right direction but that the White House support for the measure in its current form could be a key stumbling block. "We continue to be surprised by the appare nt desire on the part of the White House to ignore the most important legislative priority of the high tech community," he said. The legislation encourages businesses to remediate Y2K-related computer problems while discouraging legal actions when companies take proper actions to fix the problems. The provisions of the Y2K Act would discourage frivolous lawsuits related to Y2K by preserving the enforceability of existing contracts, establishing a cure period for Y2K disputes and allowing a reasonable efforts claim into evidence in contractual disputes. Federal Y2K GPA Up Slightly The federal government's cumulative Y2K grade point average is on the rise, but many of its most important systems may still be candidates to go on the fritz. Rep. Stephen Horn, R-CA, released his quarterly Year 2000 report card this week, raising Uncle Sam's GPA slightly from a C plus to a B minus overall. "We have found that the government's mission-critical systems are 94 percent compliant-up from 79 percent in February," Horn said, adding, "Good progress has been made, but there are still critical systems to fix. The FAA's Air Traffic Control System is not Year 2000 compliant. Nor is the Department of Health and Human Service's Payment Management System ready. Each year, this computer system processes nearly $165 billion in payments and grant programs, such as Medicaid." Horn's latest assessment places greater weight on factors over and above mission critical system compliance. These factors include contingency planning, telecommunications, embedded systems, and external data exchanges. This report card also added the c ategory of verification efforts. While agency performance is on the rise, several systems appear to need help. Horn cited an Office of Management and Budget list of 43 "high impact" programs and said only two-Social Security and the Weather Service-claim to be ready for January 1, 2000. Other big ticket systems like national defense and the Internal Revenue Service are not even included in the OMB tally-omissions Horn called "astounding." High impact programs with December 1999 complete dates include child nutrition, food stamps, child care, child support enforcement, child welfare, low income energy assistance, Medicaid, temporary assistance to needy families and unemployment insurance. A spokesperson for the House Subcommittee on Government Management, Information and Technology, which Horn chairs, suggested the high impact problem for these systems is data exchanges, both among federal agencies and between the federal government and st ate and local governments. "Until everyone is done," this person said, "you can't test the data exchanges….it's a problem." As a result, agency readiness reports may mask key concerns with some of the nation's most important systems. "Nobody has looked at it in this fashion before," the spokesperson said. Regardless of the agencies' readiness, "the bottom line is 'are these programs going to work?'" Senators Air Concerns on Federal Y2K -Response; New Center Senators Fred Thompson (R-TN) and Robert Bennett (R-UT) have criticized the Clinton Administration for failing to articulate a strategy on protecting the nation's infrastructure from Y2K ills. "The Administration waited until the 11th hour to recognize that they had a responsibility to manage this problem," Sen. Thompson said. "Congress has provided more than $7 billion for this effort, and they don't have their final emergency efforts in plac e. That is unacceptable." In particular, Thompson and Bennett criticized the Clinton Administration's Information Coordination Center (ICC) for spending $11 million with few tangible results. A statement from the Senate Committee on Governmental Affairs claims that the expenditur e has, to date, resulted only "in a confusing data collection system." The statement notes that the ICC has failed to fill 25 of its staff positions, to detail its plan to collect and disseminate information or to explain how technology swat teams would be deployed in the event of multiple mission critical system failures. President Clinton this week amended Executive Order 13073, which created and authorized the President's Council on Year 2000 Conversion in February 1998, to include a section establishing a Y2K Information Coordination Center. The Information Center will "assist in making preparations and coordination within the Federal Government and key components of the public and private sectors … and, if necessary, assisting Federal agencies and the Chair in reconstitution processes where appropriate," according to the amendment. Although reporting to the President's Council, the Center is housed in the General Services Administration. Lieutenant General (U.S. Army -- Retired) Peter A. Kind will serve as the Center's Director. A Hill staffer said one question expected to arise next week at a joint hearing of the Senate Appropriations Committee and Special Committee on the Year 2000 Technology Problem is how the Center spent the $11 million in advance of the President's Executiv e Order action. According to Jack Gribben, spokesman for the President's Council, the concept of the center has been underway for several months, and the staffing process has already begun. Gribben said the June 14th amendment to Executive Order 13073 was simply making the Center "official." Hill sources say that the ICC is expected to ask for another $38 million from the roughly $140 million Y2K allocation soon to be distributed to agencies by the Office of Management and Budget. One observer said it may be a matter of "too much too late." "Overall there is concern that with less than 200 days remaining the Center is still trying to figure out how to collect data." Pension Fund Finds Information Lacking Even money may not talk when it comes to the Year 2000. A survey by the nation's largest pension fund produced a tepid response from international companies. The California Public Employees' Retirement System (CalPERS) solicited Y2K information from 2,4 69 companies in which it has more than $35 billion invested. Only 600 firms responded and a mere 13.5 percent provided meaningful information. "The surprisingly low number of direct, meaningful responses to our survey concerns us," said Charles P. Valdes, Chair of CalPERS Investment Committee. "A company's failure to make adequate disclosures about its Y2K exposure makes it extremely difficult for an investor to make informed investment decisions." Responding firms told CalPERS they are spending an average of 22 percent of total computer budget in the past two years on Y2K issues. Also, they indicated that the cost of performing the work was .7 percent of total company revenues since 1996. The sur vey also found that companies certifying themselves Y2K compliant spend almost twice as much on the issue as others polled. Small Business Survey Indicates Increased Awareness, Readiness A survey conducted by the National Federation of Independent Business (NFIB) and Wells Fargo released earlier this month confirms that US small businesses are making progress in their Y2K readiness plans. The third in a series of Y2K polls attempting to monitor small business progress and readiness, surveyors queried 504 businesses employing fewer than 100 people between mid-April and mid-May, 1999. NFIB researchers found that sixty-two percent of all surveyed have taken action or plan to take action to fix Y2K-related problems. Surveyors used this number to estimate that a significant share of the small business population, 80% of those considering themselves directly exposed to Y2K glitches, and two-thirds of businesses non-directly exposed, should be ready at year-end. Then there's the flip side. Surveyors estimate that one million businesses, 850,000 of which are considered to be directly exposed to the problem, will have taken no action to prepare for Y2K. And five percent say they are "not very aware" or "not at all aware" of the Y2K computer glitch. A year ago, the unaware figure stood at 18 percent. Six percent of respondents said that they had already experienced one or more Y2K-related malfunctions in 1999. Business to Business Viasoft Inc., Phoenix, AZ, has announced the availability of version 4 of their Y2K impact analysis tool for PC's, Viasoft OnMark 2000 Assess. Zmax Corporation, Germantown, MD, has been awarded IV&V licensing contracts by Federal Express, Sodexho Marriott and Lockheed Martin. 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/year2000/legis.htm Calendar http://www.itaa.org/y2kcal.htm Vendor/User Status Questionnaires http://www.itaa.org/questmain1.htm Alternate Dispute Resolution (ADR) http://www.itaa.org/year2000/adr.htm Statement of Intention to Use ADR http://www.itaa.org/year2000/soi.htm, Y2K Mediators Seminar http://www.technologymediation.com/Y2K_seminar.htm Copyright ITAA 1999. All rights reserved. The Information Technology Association of America, 1616 N. Fort Myer Drive, Suite 1300