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Progress on Year 2000 Conversion - U.S. Office of Management and Budget
August 15, 1997
From link provided below:
cio.fed.gov
as of August 15, 1997
The Administration is working to avert the problems that could occur if systems
are not able to correctly process the year 2000. On February 6, 1997, OMB sent a
report to the Congress entitled "Getting Federal Computers Ready for 2000," which outlines the Federal government's strategy to address the year 2000 computer problem in its systems. That strategy is predicated on assuring agency
accountability. To assist in that effort, OMB required agencies to report quarterly on their progress on the fifteenth of February, May, August, and November. (See OMB Memorandum M-97-13, "Computer Difficulties Due to the Year 2000 -- Progress Reports" - May 7, 1997). This report summarizes those plans and describes other actions being taken to asssure success.
The Federal government's strategy is based on the five phases of agency best
practices for addressing the problem: Awareness, Assessment, Renovation,
Validation, and Implementation<1>;. With advice from the CIO Council, OMB set
government-wide milestones for the completion of work in each of the phases.
Agencies then established plans for when they would complete the work in each
phase. The quarterly reports which are summarized here are used to measure
progress against those plans.
On June 23, OMB sent the Congress a summary of the first agency quarterly reports, and made it available to the public. This second summary report is based on the second agency progress reports which were due to OMB on August 15, 1997.
Government-wide Progress
Analysis
The February report established the schedule against which to measure progress
and provided initial cost estimates.
This report provides the second measure of progress and again updates cost estimates. It shows that:
many agencies have completed their assessment of the problem and are renovating
code;
others have not made substantial progress;
agencies now estimate they will spend $3.8 billion fixing the problem;
the number of mission critical systems that agencies have identified has increased to 8,562 (excluding the Social Security Administration, which reported modules); and,
of those mission critical systems:
o 5,332 (62%) are being repaired,
o 1091 (13%) are being replaced,
o 390 (5%) are being retired, and
o 1646 (19%) are already year 2000 compliant.
This report includes four tables which array and summarize information provided
by agencies.
Table 1, "Agency Progress and Plans for Year 2000 Compliance of Mission Critical
Systems," provides the agencies' schedules for completing the five phases of the
government-wide best practices. It shows that 20 of the 24 agencies were
scheduled to have completed the assessment phase by August 15, 1997.
Table 2, "Agency Year 2000 Mission Critical Systems," provides a snapshot of the
size of the year 2000 problem and the results of "repair, replace, or retire"
decisions made thus far. Agencies have now identified 8,562 mission critical
systems (excluding the Social Security Administration which has identified 29,139 modules), which is 913 more than the 7,649 identified in the May report.
Table 2 also shows that agencies are repairing the majority (62 percent) of their systems, replacing 13 percent, and retiring 5 percent. Nineteen (19) percent of agency mission critical systems are already Year 2000 compliant. In May agencies reported that they would repair 59 percent, replace 9 percent, and retire 5 percent of their mission critical systems, and that 21 percent were already compliant.
Table 3, "Status of Agency Year 2000 Mission Critical Systems Being Repaired,"
shows that, as a weighted percentage, the government is 56 percent complete with
its assessment, and 12 percent complete with renovation of the mission critical
systems to be repaired. These reductions in the percentages from the May report
(65 percent and 17 percent respectively) are due to the agencies' identifying 839 more systems being repaired than were reported in May.
Table 4, "Agency Year 2000 Cost Estimates as of August 15, 1997," shows the
estimated costs for fixing the problem by agency. Agencies now estimate it will
cost $3.8 billion to fix the year 2000 problem, which is $1 billion higher that the $2.8 billion reported in May. That includes estimated expenditures of $850 million in FY 1997 and $1.7 billion in FY 1998.
The estimates cover the costs of identifying necessary changes, evaluating the
cost effectiveness of making those changes (fix or scrap decisions), making
changes, testing systems, and preparing contingencies for failure recovery. They do not include the costs of upgrades or replacements that would otherwise occur as part of the normal systems life cycle. They also do not include the Federal share of the costs for state information systems that support Federal programs. The figures provided by agencies continue to be preliminary estimates.
Evaluation
Based on the reports, some agencies are making good progress in addressing the
year 2000 problem. Most are on schedule and have completed their assessment of
the problem; many have also begun renovating systems. However, as the summary
tables show, most of the work remains to be done. As of today, 75 percent of the
8,562 agency mission-critical systems identified must be repaired or replaced.
While progress has been made overall, it has not been uniform across the agencies.
The reports are disappointing in several of the agencies and we will therefore
increase our oversight of their activities. (See the agency evaluation discussion
below.)
As expected, our estimate of the government-wide cost ($3.8 billion) is higher than the $2.8 billion estimate that we reported in May, because agencies are progressing through their assessments of the problem. The primary sources of the increase are the Treasury Department ($736 million), the Transportation Department ($173 million), and the Department of Defense ($92 million). We expect that the next quarterly report will provide a better cost estimate as agencies complete the assessment phase and gain more experience about how much it costs to renovate their systems.
Government wide Issues
Validation
As agencies move into renovating code, proper validation of changes made will be
critical to success in fixing this problem. These two activities will happen
sequentially for each system, but their schedules will overlap within an agency,
because different systems will be at different stages of being fixed. Table 1
includes a schedule of when agencies will complete the renovation and validation
of all of their mission critical systems. Over the coming months OMB will meet
with those agencies with the latest scheduled completion of the validation phase
and discuss the adequacy of those dates.
As part of those meetings, we will discuss the preparedness of communications
interfaces with systems external to the Federal government, including State and
local governments and the private sector. The CIO Council has established a
working group to specifically look at ways to streamline the interfaces between
the Federal government and State and local governments. Among that group's
accomplishments are establishing points of contact for the States in each Federal agency, and work on a State-Federal summit, to be held in October, to discuss electronic data interfaces between the States and the Federal government.
Auditing
The year 2000 problem represents a threat to systems that are critical to the
functioning of the government. Therefore, it is important to be sure that the
problem has been or is being fixed. Auditors can provide an independent validation of progress in addressing this problem. Accordingly, OMB is revising its system audit guidelines to request that agency auditors report on Year 2000 progress from now through 2000.
Planning for Contingencies
Where a mission critical system is not fixed in time, it is essential that a
contingency plan be in place. Agencies are to develop such plans in accordance with the government-wide best practices endorsed by the CIO Council. To assure that such planning has occurred for systems in danger of not being repaired on time, we have asked for a summary of the contingency plan for any mission critical system that is reported behind schedule in two consecutive quarterly reports. We will identify and summarize any such plans in future reports to the Congress.
Other Government-wide Systems
We have identified and are working on three government-wide areas where the year
2000 problem occurs in other than computer systems: telecommunications,
bio-medical devices and laboratory equipment, and facilities. In these areas, the problem occurs in commercial products that have computers or computer chips
inside. We have established inter-agency working groups, chaired by the key
programmatic agency in each of these three areas, to raise awareness and to work
with manufacturers to assure that products are fixed. Should other
government-wide areas be identified, we will organize similar inter-agency
efforts to address them.
Agency-Specific Progress
Agency Evaluation.
While most agencies appear to be making progress in addressing this problem, a
number are not. Slippage in agency schedules is not an option. Therefore, we are
identifying agencies in one of three categories depending on whether there is
sufficient evidence they are making adequate progress in addressing this problem.
The following criteria helped form our evaluation of the information received from the agencies:
Status of the assessment of the problem
Measurable improvement from previous reports
Schedule for completion of the phases of best practices
Dramatic changes in previously reported information or other indications of
concern
The first category is agencies where there is insufficient evidence of progress. The agencies in the first category are: Agriculture, Education, Transportation, AID.
The Department of Agriculture missed its completion date for the assessment of
its problem and reports that it is only 38 percent complete with its assessment.
Because of this lack of progress, the Secretary of Agriculture has imposed several stringent measures on the components of the Department, including a moratorium on the purchase of new information technology until the assessment is completed.
Of the Department of Education's 24 mission critical systems, 10 are already
compliant, 6 are being replaced, 1 is being retired, and 7 are being repaired. The Department missed its completion date for the assessment of its systems to be repaired, and reported that 5 mission critical systems were already two months behind schedule. Of the 7 needing repair, 3 of the 4 systems directly relating to student financial aid delivery have been assessed or are undergoing assessment. The remaining student financial aid system needing repair, and 3 other systems, had not begun assessment as of the August report. The Department currently reports that it has begun all assessments and is taking action to assure that work on the systems is accelerated so that problems found will be corrected in time.
The Department of Transportation will not complete its assessment until December
1997. Based on the first part of the assessment, however, the Department has
increased its estimate of the work required to fix the problem by 3-fold. In
addition, the Department does not plan to complete its validation until December
1999. The Deputy Secretary has increased the executive level attention to this
problem within the Department.
The Agency for International Development has not provided a schedule for its
efforts. Based on its recently completed assessment of its corporate systems,
however, it found that its newly implemented suite of systems contained year
2000 vulnerabilities. The Administrator will update its report in November.
For these agencies we are establishing a rebuttable presumption going into the FY 1999 budget formulation process this Fall that we will not fund requests for
information technology investments unless they are directly related to fixing the year 2000 problem.
For agencies in the second category, we see evidence of progress, but also have
concerns. Many have strong year 2000 programs which we expect will continue to
show progress. The agencies in the second category are: Commerce, Defense,
Energy, HHS, Interior, Justice, Treasury, EPA, FEMA, NASA, OPM, and SBA. A
summary of concerns and progress for these agencies appears at Table 5.
For these agencies, we will discuss their year 2000 program with them during the
Fall, but will forbear applying the rebuttable presumption concerning funding until we receive their November 15th quarterly report. We will, however, put them on notice that FY 1999 funding for information technology investments will be contingent on continued progress in addressing the Year 2000 problem.
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The remaining agencies -- HUD, Labor, State, VA, GSA, NSF, NRC, and SSA -- appear to be making progress. For these agencies, our approach will be as follows:
Technology investments of these agencies will be treated in accordance with OMB's normal budgetary review criteria, which include a requirement that the investment "reflect the agency's year 2000 compliance plan. (See OMB Memorandum M-97-02, "Funding Information Systems Investments.").
All agency progress will be re-evaluated upon receipt of their November 15
reports.
Exception Report on Systems.
OMB requires agencies to report on any mission-critical systems for which year
2000 efforts have fallen more than two months behind schedule.
The Department of Energy reported that a number of its sites had not identified any mission critical systems, and that they were, therefore, behind schedule on the assessment phase. Senior management in the Department has taken action to assure that those sites identify their mission critical systems and assess whether they are year 2000 compliant. The Department reports that there will be some additions to their number of mission critical systems in future reports.
The Department of Education reported three systems that are behind schedule in
completing their assessment, due to contractual problems. They also report that
those contractual problems have been resolved and that the schedules have been
adjusted for those systems to assure they will be year 2000 compliant in time.
Conclusion.
Overall progress continues, and agencies continue to place a high priority on fixing this problem. However, a number of potential problem areas are apparent, and OMB is taking action to assure that these areas receive the proper attention.
(For timetable of each US Goverment Agency Year 2000 Problem Assessment, Renovation, Validation, and Implementation please, please see Tables, link provided below:
cio.fed.gov ) |
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