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  Fixing Year 2000 Woes May Cost $5.4 Billion

By Stephen Barr
Washington Post Staff Writer
Thursday, September 3, 1998; Page A19

The number of federal agencies making inadequate progress on resolving Year 2000 computer problems has grown by one, to seven, and new estimates peg the cost of the government-wide repair job at almost $5.4 billion, Clinton administration officials said yesterday.

In an Office of Management and Budget report scheduled for release today, the State Department becomes the latest agency added to a White House list of agencies that face exceptional troubles in fixing computer systems so they will function properly on Jan. 1, 2000. The State Department moved onto the worry list because it has made little progress in key areas over the last three months, the officials said.

Vice President Gore, in an apparent effort to underscore the seriousness of the computer problem, met yesterday with officials from the seven troubled agencies and left little doubt that the repair job should be their No. 1 management concern, participants said.

Besides the State Department, the troubled agencies are the departments of Defense, Education, Energy, Health and Human Services and Transportation and the Agency for International Development.

"The vice president's tone was serious and direct. There was no mistaking his intentions," one official at the meeting said.

Gore, who has cast himself as a champion of high technology and probably will be campaigning for president in 2000, told the agencies to report back to him in mid-October. If they continue to face obstacles on the Y2K front, Gore indicated he would use his political muscle to help push them aside, the official said.

"The thrust of the meeting was that people need to take a hard look at their priorities," said a White House official, who asked not to be identified. "The point was that they need to take a hard look at their overall operations in the context that Y2K has to be their top priority."

Y2K, the computer industry's shorthand when discussing the Year 2000 problem, stems from the use in many computer systems of a two-digit dating system that assumes the first two digits of the year are 1 and 9, a convention adopted years ago when coding space was at a premium. Without specialized reprogramming, the systems will recognize "00" not as 2000 but as 1900. That misinterpretation could cause the computers either to shut down or malfunction. With government computers, that could mean anything from benefit checks being held up to defense systems failing.

The federal government has launched a massive mobilization -- pulling thousands of workers off their regular jobs, diverting money from other projects and delaying long-scheduled technology modernization projects -- to fix computers for the so-called century date conversion.

OMB's new status report shows that half of the government's 7,343 "mission critical" systems will accurately process data when 1999 ends and 2000 begins. But only 37 percent of those systems have been tested for compliance and put back on line.

"As a general matter, we're making progress, but everyone would like the progress to go faster," the White House official said.

The Health Care Financing Administration (HCFA), which oversees the Medicare program, remains one of the White House's top worries. HCFA relies on 60 private insurance companies to process Medicare claims electronically and pay doctors and hospitals for services provided to program beneficiaries.

But HCFA has encountered problems in assessing the scope of its problem and administration officials fear it could still face hefty costs for contingency planning and unanticipated Y2K-related work.

The new trouble spot, the State Department, failed to show sufficient progress over the last three months and still does not have any repaired systems up and running, the White House official said.

But a State Department official said the computer system used to verify passports and visas has been repaired and is being phased in. Repairs for another critical system, used to send secret diplomatic messages, have been successfully tested.

"We're comfortable that the department won't have a problem in 2000," the official said.

Yesterday, the White House sent a supplemental fiscal 1998 budget request to Senate and House Appropriations committees seeking $3.25 billion to pay for computer repairs. The White House has given agencies a March 1999 deadline for completing the fixes so that the remainder of the year can be spent testing computer and telecommunications systems for errors.

The Senate has already set aside a similar amount for last-minute spending on Y2K fixes, but the House dropped an emergency spending provision after some conservatives complained that the proposal allowed the administration and Congress to break previously negotiated budget restraints.

Congress and industry lobbyists also grappled with the Year 2000 problem yesterday at a closed-door meeting sponsored by Senate Judiciary Committee staff members trying to fashion legislation that would encourage private-sector companies to share information on Y2K fixes.

Companies have been reluctant to share information on their products or remediation efforts because of fears that shared data could be used against them later in liability lawsuits.

The Clinton administration, working with telecommunication groups, drafted a bill to protect companies that unknowingly disclose false information. Reps. David Dreier (R-Calif.) and Anna G. Eshoo (D-Calif.) offered even broader protection in a bill.

Industry lobbyists said they hope to agree on a compromise by next week, but a spokesman for the Association of Trial Lawyers of America said the group opposes the effort to relieve companies of liability.

© Copyright 1998 The Washington Post Company

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