Re: ALYD and Government Contracts - An Update
I did a little research on the magnitude of our government's Y2K problem. Yikes! As many have been saying on the 2000 Date Change thread, either there is little understanding of the magnitude of the potential consequences, or many people have simply chosen to ignore them here in 1997. Therefore, the biggest task for Y2K firms like ALYD is to bring awareness to the 535 members of the House and Senate that ultimately will vote on appropriations bills that hopefully will have funds allocated to solve it.
I must confess that even though I was a Political Science major in college, I was ignorant in how one would actually go about getting money for a particular project put into the budget. America's fiscal year starts 10/1, which means the various agencies have until around 12/15 to submit their budget requests to OMB (Office of Management and Budget). During the last week of January the President highlights the budget to us, the citizens, in the State of the Union address. Congress finally gets the "official" recommendation of the administration by mid February and they then spend the next 8 months debating/approving it... and the process begins anew.
The upshot of all this is that the stuff we are debating in Congress now, for use in 1998, is stuff that was proposed last year, 1996. Therefore, even if Y2K firms are successful in raising awareness, such as what will be discussed in the Senate tomorrow, it won't be until 1999 when Y2K money is earmarked in the budget!
Worse yet, with all this talk of balancing the budget, where will the funds come from? The first logical place will be from existing related line items. In other words, if IBM is entrenched in a particular Department, the money set aside for a new mainframe might likely be reallocated to fixing Y2K related code. Obviously, this would be a zero-sum game if IBM won the contract. For companies like ALYD, however, any money they would get from code remediation would be a dollar they never would have gotten otherwise.
Which Y2K firms will reap the rewards will boil down to allocation of resources, IMO. I think it's safe to assume there would be an outcry if our government bought tons of Y2K tools, yanked programmers off their existing projects, retrained them to fix 20 year old code, and then kept them out of commission for a year until the problem was "solved". That's why "we do it for you" shops like ALYD have a great shot at getting the work.
I'm sure we'll hear about how this or that Department bought a copy of this or that Y2K tool (heck, if I were a tool vendor I'd sell it for a penny to get the publicity), but the BIG contracts won't (can't) be awarded until 1999-- unless, of course, we reach some state of Y2K emergency between now and then, in which case $22 a share for ALYD will look like pennies on the dollar.
- Jeff |
