ITAA's Year 2000 Outlook July 1, 1999 Volume 4, No. 25 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 Bill Nears Finish Line · Firm Predicts Outages for Americas, Europe · Commerce Offers Assist · Business to Business · ITAA Y2K Information Center · Sponsor Advertising Y2K Bill Nears Finish Line It took a 1 a.m. wake-up call, but the White House and Congress finally got together on an acceptable Year 2000 liability bill this week. Senator Chris Dodd (D-CN) proved to be the indispensable man, reaching for the phone in the dead of night to breath new life into a deal that was rapidly becoming legislative road kill. Dodd's call to President Clinton and White House Chief of Staff John Podesta clarified misunderstandings about the scope and intent of the Y2K Act, opened the door for a few precise 'g ive-backs' to the Administration, and cleared the way for its final passage into law. Major provisions of the act, shaped in a compromise negotiated at the end of May between Commerce Committee Chairman Senator John McCain (R-AZ), Senator Ron Wyden (D-OR) and Dodd, remained largely unchanged throughout. The bill requires a 30-day notice to a potential defendant by the potential plaintiff of its intention to sue for monetary damages (there is no requirement to wait to sue for injunctive relief or specific performance, however), including a description of the Y2K problem. The recipient of the notice can either deny any culpability or respond with a plan to fix the failure within 60 days. The recipient of the notice can be sued as soon as the 30-day notice expires or after the 90th day if the failure has not been adequately addressed. The bill caps punitive damages at $250,000 for businesses with fewer than 50 employees and for individuals with a net worth of up to $500,000. It establishes proportionate liability among defendants and preserves contract rights, keeping disputes from be coming "tortified" in cases where otherwise valid contracts exist. At the same time, however, economic damages can be awarded as the result of torts arising independently of contracts. The bill confirms a plaintiff's duty to mitigate damages by taking reasonable steps to avoid them. And it gives federal courts jurisdiction over class action lawsuits if they involve claims of $10 million or when punitive damages are requested or where there are 100 or more plaintiffs. Compromises negotiated to the bill in conference were decidedly narrow. Lawmakers increased the amount of proportionate damages to be paid when there is an uncollectible share and further increased if the plaintiff proves that a defendant was a "bad actor." The monetary threshold for removing a class action suit from state to Federal court was raised from $1 million to $10 million. The Economic Loss Rule was tweaked to allow defendants to receive economic damages in cases where fraud enters into a cont ract. More interesting than the bill's provisions, perhaps, was the on-again/off-again nature of the deal itself. The story picks-up last Thursday, when conferees met with White House officials to reach the final agreement. A measure with strong bipartisan support, the conference should have been a straightforward meeting of the minds. But funny things happen on the way to a millennium. According to one industry insider, the White House sent its legal team to what was intended to be a political deal-cutting meeting. In essence, Administration lawyers were coming to twiddle the legal bits with congressmen and senators. "They were talking above, around and under each other," the source says. "A classic disconnect. The White House miscalculated the timing because between the Thursday afternoon meeting and the Dodd 1:00 a.m. call on Tuesday morning, they could not produce someone with the political influence to say, 'Here's our bottom line.'" The conference's inability to cut to the chase sent veto rumors swirling and political spin merchants on both sides of the aisle spinning. Some saw Republican lawmakers refusing to deal, forcing the President to veto the measure and to hand Vice President Gore a political goose egg. Other insiders speculated that the President would veto the legislation, but that doing so would actually give him the upper hand, allowing his Administration to set the terms on any Y2K legislation he would sign. Still others insisted that the Administration truly wanted to sign a bill, but a classic case of disconnect was at work. In the end, the situation's overheated political calculus gave way to a far simpler explanation: the failure to communicate. According to the industry source, the President, as late as Monday afternoon, had not been fully briefed on the bill. "Clinton, for example, didn't know about the bill's sunset provision [the act expires on January 1, 2003]. He didn't know it was narrowly drawn to cover only the Year 2000 situation and wasn't a tort reform bill. The specifics came as a revelation." Dodd and Wyden worked together through Monday afternoon and into the early hours of Tuesday morning and cut through the clutter. A series of last minute negotiations to bring House leaders on board led to Podesta releasing a letter indicating that, with a few changes, he would advise the President to sign the bill. But even this process met with procedural hiccups. The President's team, on Capitol Hill ready to negotiate the specifics of the letter, not just its spirit, were met with resistance by the Congressional conferees. Irresistible object meeting immovable force presented translation difficulties. Even though the Y2K bill Congressional leaders took to the press podium to announce a 'deal,' the White House negotiators only saw a final draft of the Conference Report fifteen minutes before it was filed on the House floor. As a result, veto rumors again took wing on Wednesday, to be finally shot down when the White House issued a statement late Wednesday night indicating that the President would indee d be prepared to sign the compromise agreement into law. Clearly, politics and political game playing nearly derailed the process. In part, the Y2K bill almost fell victim to the fallout of the impeachment and the mistrust engendered between Congress and the Administration, this source says. "The 105th Congress passed a full agenda of legislation important to the high tech industries with strong bipartisan, and in many cases, unanimous, support. For reasons that I think go back to the impeachment, this bill got caught in residue and what resulted was an ugly process." Pretty or not, indications are now that with the amended legislation having taken a fast track through Congress (this afternoon the House passed the Conference Report by a vote of 404-24 and the Senate passed the legislation 81-18), the President could sign the bill as early as tomorrow. Now it becomes a question of how he signs it. "The President missed an opportunity with the Year 2000 Information and Readiness Act last year. He signed the bill without a Rose Garden ceremony, losing the opportunity to communicate its importance to the American people. Signing it as an after thought or in the dead of night would certainly send a mixed signal and lose a golden opportunity to inform American businesses of its provisions." In the count down to the Year 2000, stranger things have happened. Firm Predicts Outages for Americas, Europe The typical country in the Americas could experience Y2K-related infrastructure outages and disruptions for eight days, according to an international consulting firm. International Monitoring, a London-based firm, assesses the Y2K damage and delay risk p rofile of 140 countries around the world, using a rating system based on technological inventory and usage profiles. The IM-Y2K Rating puts the average Americas country at 5.5, with a 9.0 representing worst case scenarios. The model covers utilities, telecommunications, transportation and finance. International Monitoring also predicts a seven-day electrical power failure for countries in Europe and the former Soviet Union. The firm says world's 30 busiest airports are running behind on Y2K repairs too, leading to average air passenger delays of seven days. Commerce Offers Assist The U.S. Department of Commerce has published Y2K: Managing the Challenge, a CD-ROM. The disk is intended to help organizations around the world cope with the Y2K computer problem. A Y2K Tool on the disk provides problem tracking support. The disk also includes a user's guide and web-based Y2K links. Support in the U.S. is available by calling 1-800-925-7557 or visiting the Commerce website at www.doc.gov/y2k. Business to Business ZMAX Corporation, Germantown, MD, has won Y2K IV&V contracts with New Jersey, Pennsylvania, Maryland and Kentucky. The Center for Year 2000 Community Action Plans (CYTCAP) and Public Technology, Inc., Washington, D.C., have announced the availability of "Business Continuity Planning for Local Infrastructures, a Y2K Guide for Cities and Counties," a best practices guid e for Y2K contingency planning at the local government level. MERANT, Mountain View, CA, has been selected as a key provider of Y2K testing tools and solutions by Vodafone Ltd. 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