It's designed as a two-in-one piece of software: It helps companies purge the millennium bug from their computers, and it helps them show just how diligently they tried if they fail and get sued.

Y2K Command Center, the creation of a two-year-old Rockville company called Essential Technologies Inc., has been on the market just two weeks, and the company hopes it will become a big seller in the final six months of the mammoth job to fix the glitch.

The program uses the Internet to send alerts and informational messages between the offices of a company, helping coordinate and monitor progress against the bug. The goal is to integrate and streamline Y2K information throughout an organization, as well as its field offices, suppliers and distributors.

Along the way, it's keeping records that lawyers would use if they ever had to defend the company in court.

"It's a way to protect yourself from lawsuits and negative publicity by documenting your due diligence," said James Morentz, chief executive of the privately owned company, which posted $14.4 million in revenue last year.

With this product, Essential Technologies hopes to carve out a profitable niche for itself in the Washington area's huge industry aimed at eradicating the Y2K bug. The bug resides in the two-digit date systems of older computers, raising the possibility that if not fixed, they will interpret "00" as 1900, not 2000, and malfunction or crash in the new year.

The release of the product, one of several emergency-related software products that the 175-employee company has developed, comes at a time when millennium-bug liability is on more and more minds in the business world and government.

Congress last week passed legislation intended to ensure that a wave of litigation doesn't break out next year if bug-related failures cost companies serious money and they go looking to collect it from somebody.

The legislation, sent to President Clinton for his signature, would give companies as long as 90 days to fix any problems before a lawsuit could be brought. It also places limits on punitive damages against small companies, creates a formula for assessing blame and requires that large class-action suits be tried in federal rather than state courts.

Morentz praised the bill as a way to protect companies and organizations from petty lawsuits, although he said he thinks class-action lawsuits won't be the major problem. Rather, "there will probably be a lot of breach-of-contract disputes between companies and their suppliers and distributors."

Harris Miller, president of the Information Technology Association of America, said the software could be important because it comes at a time when companies need to protect themselves from possible damaging litigation and bad reputations.

Essential Technologies first drew up the idea for the software last August.

A prime component of Y2K Command Center is its use of the Internet to relay messages that alert technicians when something bug-related is going wrong.

A checklist of things that need to be done before Jan. 1 shows the company's progress toward accomplishing its goals and all that it's doing right.

Once the software has been installed, employees need only an Internet browser to access the company's information. After logging in to the system, the user is updated on the company's progress in fixing Y2K glitches. Little or no data entry is required unless the company has been keeping records on its own and needs to add them to the program.

The software sells for about $40,000 to small companies, including installation and access to a 24-hour support desk.

But it will not become useless after Jan. 1, Morentz said.

"Right now, that just happens to be the focus," he said. "Once you strip off the word `Y2K,' the program becomes simply an emergency management program. Y2K just happens to be the warning flag right now, but [the software] will help with emergencies we'll see down the line," including weather crises.

Two weeks into the product's introduction, the company has just one client for it, the U.S. Coast Guard.

"We're still developing it, but it should be up soon," said David Deaver, marine transportation specialist for the Coast Guard. "We've been able to proactively prepare for and hopefully avoid the interruptions other organizations will experience due to Y2K."

Deaver said the Coast Guard decided to try the software after it realized the potential for Y2K problems. "We need to be able to send alert messages instantly, and with this we'll have a central database to store everything and a way to reach everyone quickly."

A Look at ...

Essential Technologies

Business: Develops and provides solutions to technological crises that occur by making available software programs and support systems to help companies and government agencies manage their records and better prepare for future emergencies.

Founded: 1997 as a spinoff from a merger between EIS International Corp. and EnviroMetrics Software Inc.

Web site: www.essentech.com

President and chief executive: James W. Morentz

Headquarters: Rockville