ITAA's Year 2000 Outlook September 17, 1999 Volume 4, No. 31 Published by the Information Technology Association of America, Arlington, VA Tinabeth Burton, Editor tburton@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: .US, Russia Plan "Open Skies" Effort to Guard Against Y2K Missile Detonation Problem .Congress Grades Federal Y2K Readiness .Understanding the Y2K Act: Help is Out There ."The Year 2000 Endgame" Survey Results to be Released Next Week .Closer to Home .ITAA Y2K Information Center .Sponsor Advertising US, Russia Plan "Open Skies " Effort to Guard Against Y2K Missile Detonation Problem In the 1950 's, President Eisenhower proposed an "open skies " initiative to help calm superpower tensions. Under Ike 's proposal, the United States and the Soviet Union would permit over flights of each other 's territory so that each nation co what the other was doing. The Clinton Administration and the Russian government have, after a fashion, revived this idea with respect to potential Y2K-related problems and ballistic missile forces. On September 13, US Secretary of Defense William S. Cohen and Russian Defense Minister Igor Sergeyev signed an agreement establishing the Center for Year 2000 Strategic Stability at Peterson Air Force Base in Colorado. Officials from both nations would be present at the center to monitor events during the Y2K transition period and would use traditional communications methods to warn of accidental missile launches as well as phantom disturbances that could trigger an arm ed response. Military officials from both countries intend for the center to address the potential problems that may occur in each nation 's early warning systems as a result of a Y2K breakdown. A breakdown where each country 's complex warnings systems fails create a condition known as "flying blind, " where each side loses the ability to detect missile launches, leading to increased nervousness and tension. Secretary Cohen indicated the center would address these concerns and others as well. "We will give them other real-time, operational information about potentially destabilizing events, such as airspace violations that could result from the Y2K r challenge. This sharing will reduce the chance that a turn-of-the-millennium computer error will create an end-of-the-year security incident. " Seeing the center as especially significant, Senator Christopher Dodd (D-CT), co-chairman of the Senate Committee investigating Y2K issues, has called for the inclusion of the Mainland China, India and Pakistan in the center 's operations. But not all analysts see the center as significant from a military perspective. "It 's an important confidence building measure. We have no idea how vulnerable Russian missiles are to accidental launch. We do expect many major systems in Russia to fai l for Year 2000 reasons. It is important to make efforts in the areas, like this one, where the two superpowers have cooperated in the past. I doubt the Y2K coordination center is a substantive project from the reports I have seen but it is a nice gestu re. The military significance is probably minimal, " Jim Lucier, an analyst who follows international Year 2000 issues for Prudential Securities said. The establishment of the center has been derailed several times over the last year by tensions between the superpowers. Marshal Sergeyev alluded to these problems during his remarks at the signing ceremony. "Russian and American relations, including the military domain, over the last six months have gone through serious trials K Still common sense displayed by the Russian Federation and other countries, in the long run, allowed us to reach a compromise and to start the p rocess of political sentiment, " he said, speaking through an interpreter. Since 1992, the United States Congress has appropriated more than $1.7 billion to help Russia reduce Soviet-era nuclear, chemical, and biological weapons. More than $2 billion is slated for the threat reduction program over the next five years. Congress Grades Federal Y2K Readiness "The federal government has made significant progress in upgrading its essential computer systems. But it is only one link in the broad and complex chain that provides federal services to the millions of American citizens who rely on them, " Rep en Horn, chairman of the Congressional Subcommittee on Government Management, Information, and Technology said. In addition to rating the progress the 24 largest executive branch agencies have made in preparing their "mission-critical " computer systems for the Year 2000, the subcommittee has also added a second set of grades to assess the Year 2000 readin the Federal Government 's 43 "high impact " programs. The grades are based upon the percentage of mission-critical system reported in compliance as of August 13. Agencies with 100% compliance received a grade of A. Those with 89% or lower earned a D. Y2K compliance rate is one factor in computing grades. Others include: . Percentage of Renovated Systems . Outside Verification Efforts . Inventory and Testing/Remediation of Embedded Chips . Preparedness of Telecommunications Systems . Agency Contingency Plans In addition to rating the progress the 24 largest executive branch agencies have made in preparing their "mission-critical " computer systems for the Year 2000, the subcommittee has also added a second set of grades to assess the Year 2000 readin en Horn, chairman of the Congressional Subcommittee on Government Management, Information, and Technology said. "The federal government has made significant progress in upgrading its essential computer systems. But it is only one link in the broad and complex chain that provides federal services to the millions of American citizens who rely on them, " Rep Congress Grades Federal Y2K Readiness . Agency Contingency Plans . Preparedness of Telecommunications Systems . Inventory and Testing/Remediation of Embedded Chips . Outside Verification Efforts . Percentage of Renovated Systems The overall grade issued to the executive branch is "B -. " The grade distribution includes 14 A 's, 4 B 's, 4 C 's, 2 D 's, and, for the first time, no F 's. The evaluation of high impact programs was not as good. "Although the number of these Year 2000-ready programs has nearly tripled during the last three months, 36 programs remain at risk of failure when the clock ticks past midnight on December 31. In many cases, the federal agency responsible for the progra m may be compliant, but its business partners - state and local governments, and the private sector - who assist in delivering the service are not ready, " Rep. Horn said. The high impact programs have, as program partners, other federal agencies, state and local governments, private contractors, schools, banks, and other organizations and groups. Receiving F 's were: the Department of Health and Human Services, where only one of 10 programs were ready; the Departments of Interior and Labor, where each agency had one program and they were both rated unready; the Railroad Retirement Board; and the A ir Traffic Control System at the US Department of Transportation. An "A " grade was given to the Departments of Veterans Affairs and State, the Social Security Administration, and the National Crime Information Center. At the June evaluation, only the Social Security Benefits and National Weather Service were graded Y2K ready. Agencies now report that seven programs are ready. These programs deal with disease monitoring, crime information, passport application rans ' benefits, and veterans ' health care. The findings of the Horn report seem to parallel those of a recent report from the Office of Management and Budget, which says the government has completed 97% of the Year 2000 computer fixes on its most critical electronic systems. As reported in the Wa shington Post, the OMB report identifies 15 of 24 large cabinet departments and agencies as having finished Y2K repairs and tests. Nine agencies have a combined total of 217 critical systems that still require repair or replacement - including 161 system s at the Department of Defense. "We feel we 're making really solid progress as we come into the home stretch, " Linda Ricci, OMB spokesman, said. Understanding the Y2K Act: Help is Out There The Y2K Act was signed into law on July 20th, giving businesses less than 6 months to assess and understand its consequences. With so little time, there is a tool available designed to help managers in the Y2K arena handle pre-litigation Y2K customer co ntact. "Year 2000 Readiness and Responsibility Act: Guide for Business Compliance, " was published this month by Michael A. Aisenberg, Of Counsel in the Washington, DC law firm of Wilkinson Barker Knauer, LLP. The Guide, which although it includes the full tex t of the Year 2000 Act as well as the conference report on the act, is written in an easy-to-understand, non-legalese manner, and calls itself a "business guide, rather than a lawyer 's handbook. " Aisenberg 's "If you read no further " K section identifies three up-front provisions of the act for companies to heed, reprinted below with permission: 1. "Any correspondence you receive from a customer may begin the clock running on the 30/90 day notice / cooling off period; your failure to promptly respond will result in the loss of important rights provided by the Act. You MUST ANSWER ANY CORRE ENCE YOU RECEIVE COMPLAINING OF A "Y2K FAILURE, WITHIN 30 DAYS, IN WRITING, BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THIS RESPONSE SHOULD INDICATE YOUR POSITION ON THE MATTER COMPLAINED OF, AND, UNLESS YOU REJECT THE COMPLAINT, IDENTIFY WHAT YOU WIL L DO TO FIX THE PROBLEM AND IN WHAT TIME FRAME. If you require more time than 60 additional days from the end of the 30th day after the notice to you was sent, you may ask the complaining party for that time, BUT HE NEED NOT AGREE. 2. If you own or control a system that you believe may be subject to a Y2K failure, your ability to recover any losses may be reduced if you do not make reasonable efforts to learn of any remedies from you vendor, and take steps to accomplish those r es. Carefully document all steps taken to inventory, assess, remedy and test your systems to avoid Y2K failures; evidence of "due diligence " will help establish your entitlement to recover losses you experience due to a Y2K failure. 3. If you are an entity regulated by the federal government and required to file regular reports (e.g., power utility, telecommunications carrier, transportation carrier), you should immediately establish your status as having "no prior adverse reco with the agencies to which you make reports, so that you may benefit from the Act 's special provisions for regulatory upsets. " If you think these and other helpful hints will benefit your company 's strategy, free copies of the guide are available to Outlook readers. Requests should be made via e-mail: maisenberg@wbklaw.com. "The Year 2000 Endgame " Survey Results to be Released Next Week Results of the ITAA IndustryPulse Survey, The Year 2000 Endgame, will be published in detail in the September 25 edition of Year 2000 Outlook. Over 325 Outlook readers responded from 15 different industries. The fourth in a series of Y2K surveys conduct ed by the Information Technology Association of America, this survey suggests that while questions linger about Y2K readiness, optimism is the rule of the day. Closer to Home This week ITAA announced FreeBalance Inc., Research and Development Division of Ottawa Canada and Gelco Information Network, Inc. of Minneapolis received ITAA*2000 Certification. ITAA*2000 is the industry 's century date change certification program. Th e program examines processes and methods used by companies to perform their Year 2000 software conversions. FreeBalance Inc. and Gelco Information Network participated in a rigorous evaluation of its approach to date conversion, with extensive analysis i n eleven discrete process areas deemed necessary to a successful Year 2000 conversion. 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