'STATEMENT OF REAR ADMIRAL GEORGE N. NACCARA, USCG
ON
YEAR 2000 (Y2K) READINESS OF THE
UNITED STATES COAST GUARD
BEFORE THE
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
U.S. HOUSE OF REPRESENTATIVES
October 7, 1998
Good morning, Mr. Chairman and distinguished members of the Committee. I am Rear Admiral George Naccara,
the Coast Guard's Chief Information Officer. I have responsibility for the Coast Guard's Year 2000 (Y2K)
project. I want to thank you for giving me the opportunity to testify before you today.
Today I want to address four major aspects of the Coast Guard Y2K project. They are repair of our own
systems, our contingency planning initiatives, our outreach to the maritime industry and boating public, and the cost
of all of these efforts to the Coast Guard.
The Coast Guard is keenly aware of the potential for disruption posed by the so-called millennium bug, both in
Coast Guard readiness, as well as in the maritime economy. In fact, the Coast Guard experienced a Y2K
disruption in early 1997 -- we had a failure in a software program at the Coast Guard Institute in Oklahoma City.
The program triggers an informational mailing to all enrollees of Coast Guard correspondence course with a
3-year completion window. In January 1997, the 3 year window suddenly fell beyond the start of the new
millennium, and the program, unable to interpret the "00" completion date correctly as the year 2000,
malfunctioned and deleted hundreds of student records. The staff at the Institute required 2 weeks to correct the
problem. It was a sobering wake up call. Our industry partners have learned similar lessons. One major shipper
told of spending thousands of dollars to identify and replace systems on their ships potentially affected by the Y2K
problem, only to experience a subsequent Y2K failure on one ship after an on board power loss. Those that have
had these experiences are very focused on timely repair of their systems, as well as preparing for all contingencies.
The Coast Guard Y2K Program
We are engaged on two major fronts in dealing with this serious international concern. First, we are working
diligently to ensure our own information technology is ready for the millennium. Our motto is "Semper Paratus" --
Always Ready -- and in consonance with that, we want to ensure that we can continue to deliver our marine
safety, environmental protection, search and rescue, and maritime law enforcement services to the public without
interruption. On that score I am pleased to report that we are making good progress, and we expect our boats,
ships, and planes will be ready and operating on January 1, 2000. In addition, our managers and technical staffs
are repairing the administrative and support systems that underpin our operations, and we expect them to be
repaired and working when the new millennium dawns.
Let me give you the specifics. As you can imagine, in 190 aircraft, 225 cutters, thousands of small boats, and
15,000 facilities of all sizes nationwide, the Coast Guard has a sizable inventory of computer systems, software
applications, and electronic equipment. The list includes large operational systems like the Automated Mutual
assistance Vessel Rescue System (AMVER) and the Marine Safety Information System (MSIS), large personnel
and financial systems like our pay and personnel system (PMIS/Jumps) and Large Unit Financial System (LUFS),
and other equipment like telephone switches and radio consoles. Of our total inventory of systems, we reported
75 as mission critical to the Office of Management and Budget (OMB). As of September 30, we have renovated
66 of the 75 systems, and expect to complete the renovation, testing, and implementation phases on all but one of
these by March 31, 1999, the OMB completion date. For example, the Finance Center Information Resource
and Management System (FIRMS) and the Aviation Maintenance Management Information System (AMMIS),
have fallen behind the OMB milestones for renovation, but we expect to have these systems renovated, tested,
and implemented as well by the end of March 1999. Though we are very concerned about the delay in completing
renovation work on these systems, we remain confident that they will be implemented by the final OMB milestone
of March 31, 1999. One mission critical system, the Vessel Traffic Service (VTS) in Valdez, Alaska, cannot be
repaired by March 31, 1999. All told, I can say with confidence that all Coast Guard mission critical systems will
be ready well before the dawn of the millennium.
In addition, we are paying special attention to other systems which, though they may not be on the mission critical
list, support our Coast Guard personnel, such as medical or training systems. We want our members and their
families to suffer minimal disruption.
On the operational front, we are taking a fresh look at our ships and aircraft as integrated operational systems,
and undertaking steps to ensure that they are ready. During 1999, we expect to participate with the Navy in
operational evaluations of these platforms as part of field exercises intended to validate our readiness. For
example, and as you may be aware, the Chairman of the Joint Chiefs of Staff has canceled the major annual joint
service exercise "Positive Force" for 1999. In its place, the Services will engage in "Positive Response Y2K," with
a focus on the Y2K readiness of participating services' operational assets. I anticipate the Coast Guard will be
approached to participate in other related activities during 1999, which my staff likes to call "the year of the
contingency plan." The Coast Guard will leave no stone unturned to prepare its technology for the millennium, but
will also be ready to continue responding to the call even if a piece of technology lets us down. We will be
"Semper Paratus," as our motto states.
Contingency and Continuity of Operations Planning
Despite the feverish pace of repair work inside and outside the Coast Guard, two things are certain. One is that
not all government, business, or industry systems will be repaired in time. On that score, the Coast Guard may be
more fortunate than others within the
Federal government, as the scope of our repairs is manageable. By the end of 1999 we can expect to complete
repairs not only to all of our mission critical systems, but also to most other systems that may not have been
designated mission critical, but are important to our operations. The second certainty is that errors will surface in
repaired systems, both during testing and then during actual operations. Independent testing contractors have
found error rates from 2 to10 percent in systems that have been repaired and tested by their owners. For this
reason, the Office of Management and Budget prudently requires that all systems have workable contingency
plans in place in the event of system failure. Though our focus as a Service has been on the 75 mission critical
systems, we have directed our unit commanders and Headquarters program managers to prepare contingency
plans for all systems that are important to the functioning of their units.
To prepare on a national level, the Coast Guard has launched a continuity of operations initiative called Operation
Millennium Approach/Millennium Dawn. We recognize that even if Coast Guard systems and equipment are
prepared for the year 2000 rollover, there is the potential for failures across the country, in public infrastructure,
among our suppliers and business partners, and in the industry we regulate. To properly prepare for external
disruptions that may impact the Coast Guard, we are convening a planning meeting in St. Louis on October 8,
1998 to be attended by the Area and District Chiefs of Staff. They will inventory and evaluate the range of
possible Y2K impacts upon the Coast Guard from region to region, determine the Service-wide, Incident
Command System (ICS) based organization needed to be fully prepared to respond to disruptions while
continuing operations, and issue planning guidance for Coast Guard-wide use. By mid-1999, the team will issue
guidance for Operation Millennium Dawn which will spell out actions to be taken across the country by all levels
of the organization. In addition, as efforts ramp up to prepare a coordinated Federal-level response organization
with agencies such as the Federal Emergency Management Agency and state and local Emergency Operating
Centers, we will be configured to establish liaison points and interact seamlessly with such a Federal-level
organization.
I should point out that since Y2K is a global phenomenon, it is possible that a Y2K-ready Coast Guard could be
called upon to assist others who have failures, including other U. S. government agencies, the maritime industry
and boating public, and even other governments in the hemisphere. Our Y2K readiness could carry us beyond our
shores.
Outreach
The second major focus of our program is our outreach efforts to help ensure the success of our partners and
customers in the marine industry in dealing with their Y2K problem. The United States economy is extraordinarily
dependent upon maritime shipping. I only need mention that according to the Energy Information Administration,
more than 50 percent of the oil consumed in this country comes to us from foreign sources through our ports. Add
to this the fact that 95 percent of all the overseas cargo entering the U. S. comes via our ports, and over 97
percent of that comes in foreign ships. Any disruption of the cargo and especially oil flow, for even a few days,
would have a discernable effect on our economy, particularly during the winter heating season. We are anxious to
ensure that the ships and ports are ready. In consonance with the call of Mr. John Koskinen, Chairman of the
President's Council on the Year 2000 Conversion, to build Y2K awareness with our partners in the maritime
industry, we have mounted several outreach initiatives. At my direction, regional Y2K awareness conferences
have been scheduled for this fall and early winter on the East, West, and Gulf Coasts, as well as in the Great
Lakes region and on the Inland Rivers. Over a thousand representatives of maritime companies will attend these
conferences to learn more about what their counterparts are doing, and to share best practices in Y2K project
management. We have created a Y2K awareness brochure that is being distributed by 46 Captain of the Port
offices around the country. They will be distributed to the masters of vessels, both foreign and U.S., that we board
during routine inspections, to facilities operators and cargo transfer terminals and to participants at local industry
days hosted by our Captains of the Port. They will also be distributed by thousands of our Coast Guard
Auxiliarists at boating safety courses, courtesy marine examinations, and boat shows to the recreational boating
public. We have put information about Y2K on our web sites, and information on the Global Positioning System
rollover issue is being broadcast by our Navigation Information Center. We published a notice on the Y2K
problem and the marine industry in the Federal Register, and on the international scene, we succeeded in
persuading the Maritime Safety Committee of the International Maritime Organization to publish a circular on the
Y2K issue. We will continue these efforts into 1999, with an increased emphasis on the importance of
contingency planning. We are considering a requirement for contingency plans at the port level. We are also
encouraging existing maritime associations and port safety committees to establish Y2K readiness planning
groups, and to establish port readiness web sites to disseminate information on the status on Y2K issues in the
port and how they are being addressed.
It is worthwhile to note, in connection with outreach, that the Coast Guard is stressing aggressive Y2K education
and awareness building in its approach to the maritime industry. By working cooperatively with industry, and
capitalizing on the powerful economic incentives they have to avoid delay, we can help to ensure they prepare
their technology for the millennium. Also, we will exercise our authority to ensure safety in our ports and on board
vessels, and ensure vessels are safe and seaworthy. We are putting the word out that ships that have problems
may be restricted in their movements based on the criticality of the ship's system that is inoperative and its effect
on the ability of the vessel to proceed safely. The root cause of the system's problem may be related to Y2K; if
this is the case, the ship will have to demonstrate that this error has been corrected before the restrictions will be
lifted. For example, if a vessel entering port conducts the required steering test and detects a problem, regardless
of cause, it must be reported immediately to the Coast Guard Captain of the Port who will take appropriate action
to control the movement of the vessel in light of the steering problems. If the cause of the system malfunction is
Y2K-related, that problem must be corrected before the ship may proceed on its way unrestricted. As stated, the
shipping company is motivated by economic incentives to correct problems, and get their vessel back into service.
I would like to say that our port evaluations to date indicate no major problem in this regard. Most larger
companies take the Y2K problem very seriously, and have active projects in place to deal with it. Some smaller
companies are only now becoming aware of the problem. I recall the representative of a small tug and barge
company who spoke at our conference in Hampton Roads last month. Once alerted to the seriousness of the
problem, the company moved promptly to replace affected systems.
The Cost of the Y2K Efforts
Needless to say, the repair, contingency planning, and outreach efforts we have undertaken entail significant costs.
The estimate for overall Coast Guard Y2K costs stands today at $34 million, including approximately $10 million
already incurred through fiscal year 1998. I hope the Committee will work with us in doing all that can be done to
make sure the Coast Guard, the maritime industry, and the U. S. economy are not significantly disrupted by the
Y2K problem starting a little less than a year from now.
I will be happy to answer any questions you might have.
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