Koskinen said he is pressing federal agencies,
including the Antitrust Division of the Justice Department, to allow greater candor.
'ITAA's Year 2000 Outlook
May 1, 1998 Volume 3, No. 17
Published by the Information Technology Association of America, Arlington, VA
Bob Cohen, Editor bcohen@itaa.org
Read in over 60 countries around the world
ITAA's Year 2000 Outlook is sponsored in part by BDM International, Inc., CACI
International Inc., DMR Consulting Group Inc., IBS Conversions, Inc., Softworks,
Inc. and Y2Kplus, Inc.
Koskinen Walks Wire at Industry Breakfast
Speaking at an industry breakfast this week, the federal government's "Y2K
Czar," John Koskinen, said the international dimensions of the Year 2000 could
become a foreign policy issue for the United States. Koskinen said surveys
indicate that 70 percent of countries have not done anything in response to the
situation. Y2K-triggered outages, he suggested, could not only affect U.S.
citizens, businesses and embassies abroad, it could also impact the political
stability of nations. He said Secretary of State Madeleine Albright will
shortly be issuing a cable designating U.S. ambassadors overseas as Y2K point
persons in their respective countries.
Koskinen offered his candid remarks in an address which stressed the need to
"walk the high wire" on the issue, balancing between "energizing" the public and
causing panic. The recently appointed Czar said he has met with 42 agency
heads, CIOs or other executives in an "agency of the day" series of assessment
meetings. Koskinen said the Presidential Council he heads, composed of 35
agency deputy secretaries and CIOs, has begun to subdivide into a series of
smaller work groups, focused on issues like energy, telecom, workforce, and
emergency preparedness. The goal, he indicated, is not to assume
responsibility for corrections in these areas but provide leadership, focus,
awareness, and problem solving.
While lead agency responsibility in certain areas will be obvious, Koskinen said
areas like energy and telecommunications are not as straightforward. The
electric power grid in the U.S., for instance, is not a single entity but a
series of interlocking grids with no one in charge, he said, adding that a
"hodge podge" of federal agencies have jurisdiction for various facets of this
infrastructure.
Koskinen identified four phases the Y2K Council will move through: organizing
the government's response, monitoring performance, contingency planning and
crisis management. On the last point, he said the National Security Council has
offered the Council the use of its communications network in the last months of
1999.
His remarks spent significant time on the tenor of the current Y2K debate.
Koskinen said the "background noise" surrounding the issue is becoming
increasingly "apocalyptic," some of which, he said is hard to dismiss out of
hand. Noting that worldwide disaster would result were all work on Y2K to stop
immediately, Koskinen encouraged companies to advise the public on the status of
their systems, to combat rumors of the week and to become inoculated against
systems that will not work. Koskinen said he is pressing federal agencies,
including the Antitrust Division of the Justice Department, to allow greater
candor. He said the Council is trying to determine how the federal government
might act as a buffer in the communication of Y2K status information. Such a
move, he suggested, would facilitate collaboration and help bootstrap the Y2K
conversion efforts of later starters.
On the Y2K budget front, Koskinen said that because Y2K is the highest IT
priority for federal agencies, they should take money away from other programs
to pay for it. He admitted that with the Department of Defense, not having a
Y2K "line item" may detract from the perceived importance of the program. He
said the Office of Management and Budget (OBM) is considering creation of $25
million pool of funds to help smaller agencies lacking budget resources to
reprogram funds. In terms of federal contracting and procurement reform,
Koskinen said that agencies may not realize the high degree of flexibility they
already have to award Y2K contracts. He said that the next Y2K Council meeting
will take up the question of limiting regulatory changes which may take a toll
on Y2K conversion efforts within the agencies.
Senate Y2K Committee Announces Members
The Senate Leadership announced the make up of the Senate Special Committee on
Year 2000 Technology Problem this week. Sen. Bob Bennett (R-UT) will chair the
committee. Sen. Chris Dodd (D-CN) is the ranking member. Also appointed are
Sen. Jon Kyl (R-AZ), Sen. Susan Collins (R-ME), Sen. Patrick Moynihan (D-NY),
Sen. Jeff Bingaman (D-NM), and Sen. Gordon Smith (R-OR). Ex Officio members are
Sen. Ted Stevens (R-AK) and Sen. Robert Byrd (D-WV). The committee will provide
"oversight and legislative recommendations to help the government and private
sector react quicker and more effectively to the economic difficulties arising
from the Year 2000 system failures," according to a statement issued by
Bennett's office. Priority areas for the committee include: utilities,
telecommunications, transportation, financial services, general government
services, general business services and litigation. On a related note, Senator
Bennett introduced S. 2000 this week, a bill to ensure that businesses,
financial markets, and the federal government are taking adequate steps to
resolve the year 2000 computer problems. The measure has been referred to
Governmental Affairs
Swiss See Down Hill Sledding
A survey by the Institute of Information Systems of the University of Bern
appears to find a few holes in the Swiss approach to the Year 2000 conversion.
Based on work conducted in December 1997, the survey finds that only 25 percent
of companies polled believe their Y2K efforts will be "high or very high."
Although 25 percent have already experienced problems, more than 35 percent of
firms plan to get started on their conversion work this year or later. When
they do get going, companies may face an uphill road. Only about 20 percent of
organizations have complete documentation on their applications. Perhaps taking
a "less is more" approach to the situation, only half of those polled have
established a Y2K project manager and 70 percent of this group have created the
job on a part-time basis. More than 70 percent of firms have not called in
external auditors, lawyers or insurance companies. Fifty percent of firms have
failed to include internal auditors or to consider their facilities management
or communications systems as part of the effort. Confidence, however, appears
to be high. About 80 percent say they do not plan to prepare a contingency
plan.
Austrialian Bankers Pose Tax Break
The Australian Bankers Association has proposed that Y2K repairs for business be
made tax deductible. The Australian Taxation Office promises a white paper on
the Y2K issue, and Tax Commissioner Michael Carmody says the government will
weigh in on the tax incentive issue by June 30.
OECD Offers Ministerial View
The Organization for Economic Cooperation and Development (OECD), a major
multinational organization, has recognized the Y2K problem as a concern for its
members. According to a communique from the Ministerial meeting held this week:
"As the year 2000 approaches, Ministers agreed on the importance of rapidly
adapting computer systems in order to avoid the potential for significant
disruption due to the so-called "millennium bug". They stated their intention
to meet this challenge and recognised the need to exchange information among
governments and to work with the private sector, as appropriate, to ensure that
the problem is resolved in a timely and comprehensive manner. They also called
on the OECD to promote global awareness of the Year 2000 problem and its
potential economic impact, and to report to the Ottawa ministerial Conference on
electronic commerce."
Dr. Ed Offers Data
Ed Yardeni has launched a free searchable database of Y2K disclosure statements.
The statements come from annual and quarterly reports filed in 1998. The
database is accessible at yardeni.com.
...
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