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  Postal Service Emerging As Key Year 2000 Backup

By Stephen Barr
Washington Post Staff Writer
Wednesday, October 7, 1998; Page A19

The U.S. Postal Service, long spoofed by technology wizards as the bastion of "snail mail," appears to be getting new respect from federal agencies and large companies drafting emergency computer backup plans for the Year 2000.

Worried that the so-called millennium bug could put at risk electronic transfers of data and money in some parts of the nation and abroad, private-sector and government groups are looking to the Postal Service as a backup delivery system if their computers malfunction, administration officials said.

Deputy Postmaster General Michael S. Coughlin, in an interview before departing for Hawaii to brief the postal Board of Governors yesterday, said the prospect of a mail surge in January 2000 is an "increasing concern."

The Postal Service has coped with floods, hurricanes and earthquakes and found ways to move mail. It has even managed to absorb larger than expected volume, as it did during the United Parcel Service strike last year.

But Coughlin said the Year 2000 computer problem holds the potential to cause multiple disruptions in a region or in separate geographic areas, creating a "cumulative effect" that could seriously challenge postal operations. Post offices, for example, could be swamped with letters and packages lacking bar codes if the computer systems used by bulk mailers collapse. The codes are critical to speeding parcels through mail processing plants.

The Year 2000 problem, often called Y2K, stems from the inability of computers using two-digit date systems to correctly indicate the year or calculate dates. In many cases, the computers cannot distinguish the year 2000 from 1900, and may malfunction on Jan. 1, 2000.

The Postal Service's mobilization on the Year 2000 glitch underscores just how much large organizations depend on other companies and vendors to sustain operations. Even as the Postal Service becomes the backup for companies, the agency must also take into account how its own operations might be directly affected by Y2K.

Coughlin said the Postal Service depends on 15,000 suppliers -- such as meter manufacturers and telephone companies -- for services and equipment, and uses computer networks to conduct financial transactions with the Treasury Department and financial institutions.

The Year 2000 computer problem has received high-level management attention at the Postal Service for the past year, although some employees began working on Y2K as early as 1992. About 1,300 postal and contract employees are working on Y2K issues at the agency, Coughlin said. They have identified 153 software applications critical to business operations that must be checked and fixed before Jan. 1, 2000.

Mail processing depends on about 50 computer systems operating in 250 plants across the country. More than 100,000 personal computers, mainframes and other hardware and software must be analyzed.

The Y2K effort will cost the Postal Service between $500 million and $700 million, Coughlin said. That estimate indicates that the Postal Service will spend more on the problem than most other government agencies; among the exceptions are the huge departments of Defense, Treasury and Health and Human Services.

Coughlin described the Postal Service as in "reasonable shape," since assessments have shown that mail processing equipment, such as optical scanners and bar-coding machines, will not face significant Y2K problems.

But he said postal officials are researching "fundamental questions," such as what level of mail volume to expect, what transportation would be available and whether employees would be able to get to work.

"It's the gut level -- what do we have to do to move the mail," Coughlin said.

Internally, the Postal Service appears most concerned about its business operating systems. Payroll computers, for example, provide $1.5 billion worth of salary payments every two weeks. They are complex systems that use dates to calculate automatic pay raises, pay increases tied to union contracts and retirement income, Coughlin said.

Karla W. Corcoran, the Postal Service inspector general, said the agency still faces "significant challenges" and that her IG office and the congressional General Accounting Office will form teams to monitor Y2K progress.

To ensure that systems will work, Coughlin said he has brought in a consulting firm to verify the work performed by postal employees and Y2K contractors. In one batch of tests involving 15 systems certified as ready for Year 2000 operation, the consulting firm found six that were not in compliance, he said.

"I'm demanding they test everything," Coughlin said. "This is one of those things where I have to be thorough and complete."

© Copyright 1998 The Washington Post Company

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