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41–005 CC 1997

WILL FEDERAL COMPUTERS BE READY FOR THE

YEAR 2000?

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON

GOVERNMENT REFORM

AND OVERSIGHT

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

FEBRUARY 24, 1997

Serial No. 105–12

Printed for the use of the Committee on Government Reform and Oversight

(

(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

J. DENNIS HASTERT, Illinois

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

STEVEN H. SCHIFF, New Mexico

CHRISTOPHER COX, California

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

JOHN SHADEGG, Arizona

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

JOHN E. SUNUNU, New Hampshire

PETE SESSIONS, Texas

MIKE PAPPAS, New Jersey

VINCE SNOWBARGER, Kansas

BOB BARR, Georgia

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

GARY A. CONDIT, California

CAROLYN B. MALONEY, New York

THOMAS M. BARRETT, Wisconsin

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

TIM HOLDEN, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JUDITH MCCOY, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY

STEPHEN HORN, California, Chairman

PETE SESSIONS, Texas

THOMAS M. DAVIS, Virginia

JOE SCARBOROUGH, Florida

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

JOHN E. SUNUNU, New Hampshire

——— ———

CAROLYN MALONEY, New York

PAUL E. KANJORSKI, Pennsylvania

MAJOR R. OWENS, New York

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

J. RUSSELL GEORGE, Staff Director and Chief Counsel

MARK UNCAPHER, Counsel

ANDREA MILLER, Clerk

DAVID MCMILLEN, Minority Professional Staff Member

MARK STEPHENSON, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on February 24, 1997 ....................................................................... 1

Statement of:

McClenaghan, Eliza, Chief Information Officer, Department of State; Emmett Paige, Assistant Secretary, Command, Control, Communications,

Computers and Intelligence, Department of Defense; Patricia Lattimore, Chief Information Officer, Department of Labor; John J. Callahan, Chief Information Officer, Department of Health and Human

Services; Michael Huerta, Associate Deputy Secretary, Acting Chief

Information Officer, Department of Transportation; and Mark D.

Catlett, Chief Information Officer, Department of Veterans Affairs ........ 29

Willemssen, Joel C., Director, Information Resources Management, Accounting and Information Management Division, General Accounting

Office, accompanied by Keith Alan Rhodes, Technical Director, Office

of Chief Scientist; and John Stephenson, Assistant Director .................... 8

Letters, statements, etc., submitted for the record by:

Callahan, John J., Chief Information Officer, Department of Health and

Human Services:

Information concerning progress on year 2000 readiness of HHS computer systems ......................................................................................... 69

Prepared statement of ............................................................................... 73

Report on the critical systems of the HCFA and CDC ........................... 115

Catlett, Mark D., Chief Information Officer, Department of Veterans

Affairs, prepared statement of ..................................................................... 94

Davis, Hon. Tom, a Representative in Congress from the State of Virginia, prepared statement of ........................................................................ 5

Huerta, Michael, Associate Deputy Secretary, Acting Chief Information

Officer, Department of Transportation, prepared statement of ................ 83

James, Bill, U.S. Air Force, information concerning global positioning

system ............................................................................................................ 113

Lattimore, Patricia, Chief Information Officer, Department of Labor, prepared statement of ........................................................................................ 47

McClenaghan, Eliza, Chief Information Officer, Department of State, prepared statement of ........................................................................................ 32

Paige, Emmett, Assistant Secretary, Command, Control, Communications, Computers and Intelligence, Department of Defense, prepared

statement of ................................................................................................... 39

Sessions, Hon. Pete, a Representative in Congress from the State of

Texas, prepared statement of ....................................................................... 7

Willemssen, Joel C., Director, Information Resources Management, Accounting and Information Management Division, General Accounting

Office, prepared statement of ....................................................................... 11

(1)

WILL FEDERAL COMPUTERS BE READY FOR

THE YEAR 2000?

MONDAY, FEBRUARY 24, 1997

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

INFORMATION, AND TECHNOLOGY,

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. Stephen Horn (chairman of the subcommittee) presiding.

Present: Representatives Horn, Davis of Virginia, Maloney, and

Davis of Illinois.

Staff present: J. Russell George, staff director and chief counsel;

Mark Uncapher, counsel; Andrea Miller, clerk; Jean Gosa, minority

administrative clerk; David McMillen, and Mark Stephenson, minority professional staff member.

Mr. HORN. The Subcommittee on Government Management, Information, and Technology will come to order. Today, the subcommittee will once again visit the so-called year 2000 problem facing the Federal Government and its vast array of computer systems.

For at least three decades, many computer systems have used

two digits, not four, to represent the year; for example, ‘‘66’’ instead

of 1966. The aim was to gain more electronic storage in the early

computers which did not have the capacity which they have today.

Although more storage was gained by the two-digit year, major difficulties will arise in the year 2000 when that year is ‘‘00’’ and the

computer cannot differentiate between the year 1900 and the year

2000.

When we first looked into this problem a year ago, very few Federal agencies knew or cared about the issue. The good news is that

every Federal agency now knows there is a problem. The bad news

is that only a few of them have specific, realistic plans to solve the

problem before the stroke of midnight on the last day of 1999.

Here is the problem in a nutshell: Not only Federal Government

computers, but also computers worldwide, face potentially disastrous disruptions unless they are properly reprogrammed to recognize that a double zero is 2000. If they are not adapted, they will

not be able to calculate dates, ages, schedules, or other functions

that are essential to running nearly every program of the Federal

Government. If we do not fix this problem, we face the potential

of electronic chaos.

2

This has serious implications for millions of Americans who depend on Government computers for Social Security and veterans’ benefits, unemployment checks, weather forecasts, airline schedules, and financial transactions as simple as cashing a check or as

complex as managing a trillion-dollar currency exchange. In short,

the possibility for nationwide disruption is almost endless, and

without careful planning and deliberate action, it will be endless.

This morning we will hear from the Chief Information Officers

of key Federal Departments and agencies on the progress they

have made thus far in preventing a complex and difficult problem

from becoming a full-fledged catastrophe. These Chief Information

Officers, or CIO’s as they are called, are receiving a baptism by

fire. Their positions were created only a year ago by the ClingerCohen Act which seeks to make Federal agencies more effective in

their use of information technology.

Earlier this year the subcommittee asked each Department and

agency to respond to detailed questions regarding their plans to address the year 2000 problem. Every Department has responded,

which is refreshing; however, the quality of the response varies

widely. Frankly, that is very troubling because it suggests a continuing lack of urgency in a situation that faces a very clear and

abrupt deadline, which we know down to the exact second, which

cannot be extended.

At this point, the subcommittee wants answers to some very

basic and vital questions. Among these are: Has each Department

now defined the size and scope of the problem? What computer systems are vulnerable to disruption? Do they know how many computer codes need to be reprogrammed? How and when will this be

done, and by whom? Most important, has each Department and

agency set clear priorities for action? Have the agencies identified

the systems that are critical to Government operations?

Congress needs to be reassured that we do not face the possibility of computer disruptions in several critical areas: those affecting the public health and safety, national security and financial

systems, including Government benefit programs. Members of Congress would also like to feel certain that we have an overall grasp

of the complexities that we face so that the continuing interactions

of Federal, State, local and private sector computer networks do

not recontaminate systems which we have corrected.

This subcommittee finds it very troubling that 12 of the 14 Federal Departments plan to implement their solutions in the final 3

months of 1999. This strikes me as dangerously optimistic planning, especially since this subcommittee has monitored dozens of

Government computer modernization programs that have seldom,

if ever, been completed as planned, on time and on budget. Need

I mention the IRS and the FAA?

Perhaps it is possible for thousands of computer programmers in

hundreds of locations to rewrite millions of lines of code with the

precision and the delicacy of a finely choreographed ballet, but I

find it hard to believe that the ballerina will also kick a field goal

in the final seconds of the last quarter.

I do not mean to be unduly pessimistic or alarming, but I do

think we need to be very careful in setting clear priorities and realistic plans to solve what could be either a minor bump on the elecVerDate 11-MAY-2000 10:51 Jun 13, 2002 Jkt 078863 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 W:\DISC\41005 pfrm09 PsN: 41005
3

tronic superhighway or a full-scale disaster. The difference between

those two outcomes will be decided largely by the work of the witnesses who are before us today.

We will receive testimony from Joe Willemssen, the Director of

the Accounting and Information Management Division in the General Accounting Office, who will provide the GAO’s assessment of

the steps which Federal Departments and agencies must take to

address the year 2000 problem. He is joined by Keith Alan Rhodes,

the technical director of the Office of Chief Scientist, and John Stephenson, the Assistant Director, Accounting and Information Management Division, all from the General Accounting Office.

The second panel will consist of those who have the role of Chief

Information Officer in six different Federal Departments: Ms. Eliza

McClenaghan of the Department of State; Mr. Emmett Paige of the

Department of Defense; Ms. Patricia Lattimore of the Department

of Labor; Mr. John Callahan of the Department of Health and

Human Services; Mr. Michael Huerta of the Department of Transportation; and Mr. Mark Catlett of the Department of Veterans Affairs.

We welcome all of you. Before getting to the testimony, I will ask

the ranking member on the Democratic side, Mrs. Maloney of New

York, for her opening statement.

Mrs. MALONEY. Thank you very much, Mr. Chairman.

The public has awakened to this issue since we first raised it last

April. I hope that through this hearing we can continue the process

of bringing this problem to the attention of the American public.

The agencies before us today are involved in some of the most critical functions of our Government: international travel, defense, unemployment insurance, food and drug safety, transportation, and

veterans’ benefits. We cannot afford for these agencies to fail in

their mission because their computer cannot keep track of time

across the change in the millennium.

When we surveyed these agencies last spring, I was distressed

to learn that over half of the agencies we surveyed are only beginning to address this problem. Since that hearing, there has been

substantial progress, but there is a long way to go.

The General Accounting Office has put together a useful assessment guide, and I look forward to hearing more about it today. It

is a useful guide for agencies to use in planning their project resolving this computer problem. However, a plan is just a piece of

paper and says nothing about implementation.

The Computer Security Act required each agency to prepare a

computer security plan, and I am sure each agency could produce

that plan for all of us at the drop of a hat. However, as GAO pointed out in the high-risk reports, computer security in Government

agencies is woefully inadequate. The plan is useless unless it is implemented.

Today’s witnesses are representative of what is happening in

Government agencies. Some, like the Department of Transportation, were slow to answer our inquiry. Today, they will report

substantial progress from their August 1996 response to our survey. Others, like the Department of State, were in good shape last

summer and have progressed from there.

4

There is still, however, an overriding concern about whether the

appropriate level of management oversight and resources are being

directed to the problem. We cannot afford a failure in this conversion. That is why the General Accounting Office placed the year

2000 on the high-risk list and that is why we are having this hearing today.

Thank you for coming.

Mr. HORN. I thank the gentlewoman from New York. A quorum

is present. Mr. Davis of Virginia, I believe, has a statement that

he will provide for the record.

[The prepared statements of Hon. Tom Davis and Hon. Pete Sessions follow:]

5

6

7

8

Mr. HORN. We will now begin with the testimony. As you know,

the tradition in this committee is to swear all witnesses, so if all

three of you would stand.

[Witnesses sworn.]

Mr. HORN. The clerk will note all three witnesses have affirmed.

Mr. Willemssen will please proceed.

STATEMENTS OF JOEL C. WILLEMSSEN, DIRECTOR, INFORMATION RESOURCES MANAGEMENT, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, GENERAL ACCOUNTING

OFFICE, ACCOMPANIED BY KEITH ALAN RHODES, TECHNICAL DIRECTOR, OFFICE OF CHIEF SCIENTIST; AND JOHN

STEPHENSON, ASSISTANT DIRECTOR

Mr. WILLEMSSEN. Mr. Chairman, Ranking Member Maloney,

Congressman Davis, thank you very much for inviting us here

today to testify on the year 2000 problem.

In summarizing my statement, I will briefly touch on the implications of the Y2K issue and then spend a little time talking about

a guide that we have put together, sort of a step-by-step approach

that agencies can follow in implementing their year 2000 programs.

Mr. Chairman, within the last year, as you pointed out, the

awareness of the year 2000 issue has gone up dramatically, in

large part due to some of the efforts of this subcommittee. As was

mentioned, GAO has recently placed the year 2000 issue on its list

of high-risk issues because of the dramatic effects that it could

have if not rectified by the year 2000.

Virtually every citizen could be affected by the year 2000 issue

if not corrected, and that is why we have placed it on the high-risk

area. For example, every Government benefits program, ranging

from Social Security to veterans’ benefits to subsidized housing,

could be affected.

Correcting the problem is going to be labor-intensive and timeconsuming. Many of these systems that we are talking about are

over 20 years old. They have application languages that are fairly

old, in some cases obsolete, and in some cases the documentation

is lacking. Also, many of the components of the system, other components beyond the application languages, will be affected by the

date problem: operating systems, telecommunications, data base

management systems.

However, the challenge involved in the year 2000 issue is primarily managerial. It requires top management, and senior executives in each agency, including the head of the agency and the

Chief Information Officer, to be firmly aware of the issue and what

they plan to do to resolve it. That awareness and the plan to resolve it need to be communicated throughout the agency.

As I mentioned up front, GAO has developed a guide that provides what we think is a useful framework for agency managers to

use in planning and implementing their year 2000 programs. We

have put together this guide in large part based on some of the

work of the Best Practices Subcommittee of the Federal Year 2000

Interagency Committee. We also identified some of the best practices of the leading information technology organizations in the private sector.

9

If I may, I want to take a couple of minutes and highlight some

of the major phases of the guide that we have put together. That

guide, by the way, we are releasing today as an exposure draft.

Mr. HORN. Please do, and at this point, without objection, that

guide will be placed in the record to be printed.

[Note.—The report entitled, ‘‘Year 2000 Computing Crisis: An Assessment Guide,’’ GAO/AIMD–10.1.14, can be found in subcommittee files.]

Mr. WILLEMSSEN. As shown here on the chart, we have laid out

the five phases, each of which needs to be supported by strong program and project management.

The first phase, the awareness phase, as you have previously

pointed out, we have pretty much completed.

We have come a long way on this in the last year, but among

the critical elements that need to take place in this phase is important for the agency to explicitly define the problem, make sure that

you have executive support for not only problem identification, but

the need to put a plan in place to rectify the problem.

It is also important that the word be spread across the agency,

that all employees know about the problem and what the plans are

to fix it. Similarly, it is very important that an agency establish an

overall team to take the lead in putting together the plan and,

most importantly, implementing that plan before the year 2000.

The second major phase of the guide is the assessment phase. As

you pointed out, most of the Federal agencies are in that phase

currently. It is a crucial phase that includes such activities as assessing in much more detail the kind of impact that can occur with

the Y2K problem, which could happen on any mission-critical system.

In addition, it is important that an agency identify its core lines

of business as part of that inventory and prioritize its systems. It

is not necessarily realistic to think that an agency is going to be

able to fix every system. It is important in this assessment phase

to set priorities and decide what we are going to fix first, and what

we will fix second, and so on.

Also, an important element within this phase is the need for an

agency to put together a contingency plan: What happens in the

event of a year 2000 failure? Then, what do we do? It is important

that kind of plan be in place.

The next critical phase is the renovation phase. Essentially this

is where the agency needs to go in and make the changes to its systems. In doing that, an agency essentially has three options.

One, it can go into its existing systems and modify the code as

necessary to try to get it to be year 2000 compliant; or, second, it

can design and implement entirely new systems that would be year

2000 compliant and replace its existing systems; or, third, in going

through the priority-setting process, agencies may find that they

have systems that really are not that important anymore. In fact,

that could be one of the side benefits of this entire exercise, is that

agencies identify systems that are no longer needed and they can

simply eliminate them.

Another key aspect within this phase is the need for the agency

to modify its interfaces after identifying them. An agency needs to

be careful that it does not allow data from outside sources to come

10

into its internal systems and corrupt their system. So it is an especially important point for them to cover within this phase.

The next phase: validation. This is, again, an especially critical

area that we want to make sure that agencies spend enough time

on. Essentially what we are looking at here is agencies testing to

make sure that the changes they have put in are, in fact, going to

work. In many cases this is going to take agencies at least a year

to do, and we generally have set aside the entire calendar year

1999, to address most of this phase.

And the last phase, somewhat in conjunction with putting our

changed systems into effect, will still include some amount of testing, especially as it relates to integration and acceptance testing.

Some agencies may also find it is very useful to have two systems

running in parallel, the existing system and the new system, to reduce risks.

In summary, Mr. Chairman, I would like to reiterate for any organization or agency that does not take the year 2000 issue seriously, they are risking a crisis. Fortunately, within the last year

the awareness level is up. So we have an opportunity, I think,

through executive management support and leadership to actually

fix this problem.

That concludes a summary of my statement. I would be pleased

to address any questions that you may have or the other Members.

[The prepared statement of Mr. Willemssen follows:]

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Mr. HORN. We thank you very much for that concise statement.

I thought your testimony, which I read last night, was excellent,

and I think that handbook is going to be very helpful.

As you know, when we started these hearings about a year ago, the Gardner Group said this is a $600 billion worldwide problem,

and since America has half the computers, it is a $300 billion U.S.

problem and it would be a $30 billion Federal Government problem.

I felt those figures were a little high. Now, our latest figure from

the Office of Management and Budget, the President’s management arm, says that, well, they estimate about $2.3 billion will be the

cost of conversion. As I read Mr. Paige’s testimony, the Chief Information Officer of the Department of Defense, DOD would be half

of that $2.3 billion.

Now, based on your experience, where does GAO come out on

this as to the estimated cost to the Federal Government?

Mr. WILLEMSSEN. I think the estimate that has been provided to date, $2.3 billion, we have to keep in mind that that is considered

not the most reliable estimate in view of the fact that almost all

agencies are not yet through the assessment phase. I think between now and this summer you are going to see estimates varying

dramatically from what we have now.

I think OMB is the first to recognize that. They have come up

with a dollar figure right now, but that amount is going to, I think,

change quite a bit once agencies really get in and understand what

they have to fix. Most agencies are not at that stage yet and will

not be for several more months.

Mr. HORN. In my discussions with the Director of OMB a month

ago, I expressed the hope that this would not be seeking new

money, but that they would reprogram existing money. The main

reason being, No. 1, they have the funds there, most of these Departments, for reprogramming; No. 2, if we sit around waiting for

a new budget year, we will lose a year, and it is urgent we move

in this direction.

Does the General Accounting Office have any view on that matter?

Mr. WILLEMSSEN. Not to reiterate, but it is important that the

assessment phase get completed as quickly as possible. But I would

also point out it is important that agencies look at their year 2000

program in view of other priorities that they may have in the information technology arena.

This cannot necessarily be seen as just a simple add-on to other

modernization projects that they may have. This has to be looked

at in total, year 2000 program plus all the other funds that we

spend on information technology, and there needs to be a

prioritization process that the agency goes through for all of those.

Mr. HORN. You heard my testimony about being a little distressed that they are pushing the envelope, if you will, so close to

when actual D-Day is. Do you feel that is a major problem and they

should move things up earlier to allow for the usual snafus that

occur in computer programs?

Mr. WILLEMSSEN. Our biggest point on the timeframes was, it is

absolutely critical that at least a year be left at the end for 1999,

to do most of the testing and implementation. If an agency is in

22

1999, and still making major changes and has not entered its testing program yet, then I would be very concerned. So at this point

any schedule for an agency that shows testing starting sometime

late in that year, I would be concerned.

Mr. HORN. We are going to be hearing from some of the key

Chief Information Officers. We are not hearing from all of them.

We will follow that up in writing. Of those that are testifying this

morning, does the GAO have any sense of which ones are much

further behind than they say they are?

Mr. WILLEMSSEN. Unfortunately, we have not yet completed any

work on specific agencies. As you may know, we do have ongoing

work at several agencies, including the Department of Defense, the

Veterans Administration, the Social Security Administration, the

Health Care Financing Administration, and the Internal Revenue

Service, and we will very shortly be beginning a review at the Federal Aviation Administration.

We have tried to select those agencies where we think the impact

of a Y2K failure would be most dramatic on the American citizenry.

Mr. HORN. Very good.

I now yield to the ranking Democrat, Mrs. Maloney of New York.

Mrs. MALONEY. First, I want to thank you and the General Accounting Office for laying out a very useful guide for how agencies

can prepare for the millennium problem. But, as I said in my opening statement, a plan is just that, a plan, a piece of paper, and I

would like to ask what do you think that your Department or what

do you think Congress should be doing to make sure that the agencies respond; that they actually implement the plan? What followup

do you think is necessary?

Mr. WILLEMSSEN. I will first cover us and then speak toward the

Congress.

Our strategy essentially in doing work in this area is threefold:

One is to put together some guidance that Federal agencies could

use, which we are, as you said, releasing that exposure draft today.

The second element of our strategy is to go into the more highrisk agencies and do readiness assessment reviews, which we currently have ongoing at five agencies. And then as we near the

deadline, the third part of our strategy is to go into some depth on

selected mission-critical systems, to see that indeed the fixes that

need to be in place are there.

Speaking from the Hill’s perspective, I think one of the most useful things that you can do is to continue to have forums such as

this, so that the word keeps getting out that this is an important

issue. We have to see progress. I think the more routine that you

hold hearings like this, the more we can be assured that progress

is being made.

As an aside, look at where we are today on the awareness issue

compared to the hearing that was held last April. It has made

quite a difference.

Mrs. MALONEY. Do you believe that Congress needs to write any

type of legislation or just use the oversight power?

Mr. WILLEMSSEN. My initial reaction is to use oversight, but I

have not, to be honest, given that a lot of thought.

Mrs. MALONEY. As you said in your statement, it is probable to

believe that some agencies will have some failure in this endeavor

23

in getting ready for the millennium problem. At this point in time,

what do you think the probability is that we will have a failure in

some of our official systems?

Mr. WILLEMSSEN. I think there is a high probability that there

will be some failures. I think the important point is that those failures be limited to low-priority systems and lines of business.

In fact, as I might have mentioned earlier, I do not think it is

necessarily realistic to think an agency can fix everything and,

therefore, I think setting priorities is especially important. To the

extent that we can limit our exposure to the lower priority applications, I think we will be better off.

Mrs. MALONEY. Does each agency now have an oversight team

and a budget to address this problem?

Mr. WILLEMSSEN. I cannot speak toward that. I do not have the

information. It would be my guess that they have done something

in terms of reporting to OMB, but we have not done the detailed

work at each of the 24 agencies to know that for sure.

Mrs. MALONEY. I think that is a critical question. If they have

not even appointed a staff and allocated a budget to address the

problem, I can assure you it will not be handled. I would think that

that is something you should begin today to look at.

Second, do you have any form now for evaluating which critical

systems would possibly collapse, are not going to be able to respond

to the ‘‘00’’ crisis?

Mr. WILLEMSSEN. The form we are using predominantly right

now is the detailed step-by-step instructions in the guide that we

are publishing. I think a key element that gets at your question is

to identify again the highest priority systems. And then, as I pointed out earlier, we will plan to go in some depth with some of our

senior technical staff in looking at the coding to see that the system fixes have been made.

Mrs. MALONEY. Obviously, some areas are of a greater crisis potentially for the Nation: Social Security, transportation. I would

think that you should make a list of those that are the most critical

to the functioning of the Nation and go in there immediately and

make sure that it is taken care of. I can see a monumental problem

in this country if we do not address this, and there is no reason

we cannot begin in the timeframe we have.

Mr. WILLEMSSEN. We have started at the Social Security Administration, and we are just initiating work at the Federal Aviation

Administration.

Mrs. MALONEY. What other agencies are on your list for high

critical?

Mr. WILLEMSSEN. Well, the Department of Defense has been a

critical Department that we have wanted to look at, and we have

been in there for several months. In addition, the Health Care Financing Administration, which is responsible for Medicare and

Medicaid programs, and also the Veterans Administration, which is

responsible for issuing veterans’ benefits.

We are also considering looking at the Federal Reserve and the

Securities and Exchange Commission to see what oversight activities they have in mind for banks and financial institutions.

Mrs. MALONEY. Well, there are two stages. No. 1 is isolating

those agencies which are the most critical to the Nation; the second

24

is whether or not these agencies are responding to the crisis. It appears you have not done anything in the second level.

Mr. WILLEMSSEN. We have not published any work yet on that

second level. We do have the ongoing reviews and will be publishing later this spring and this summer, and we will be able to

comment on some of those high-profile agencies.

Mr. HORN. I thank the ranking Democrat, and I now yield to Mr.

Davis of Virginia for 5 minutes of questioning.

Mr. DAVIS OF VIRGINIA. I found very interesting the fact you

noted that some of the severely older, poorly programmed and documented applications developed 15 years ago, that this, in a sense,

may be the silver lining because it may be cheaper to come in and,

rather than convert these, replace these applications. That is an

opportunity to do that.

I do not know how the timeframe stretches out in terms of our

ability to do that; where the level of analysis is on these so we can

plan right away to do that. Do you have any feel for how far along

they are?

Mr. WILLEMSSEN. Generally speaking, the agencies are in the

midst of doing that. Some are a little further ahead than others.

In addition to the opportunity to replace, I think there is an opportunity to eliminate, also.

Mr. DAVIS OF VIRGINIA. That is a good point.

I think it was in the 6th century A.D. when Dionysius Exiguus,

again among the first who brought the consecutive year calendar

to America—I mean to the world; and the year 999, with the end

of the millennium, history writers would recall that people, both

Christians and pagans, were crowing at the moon.

At the end of the millennium, now we find out in the year 999

nobody even knew what year it was. Frankly, the calendar was

kind of an ‘‘in’’ thing and most people did not know what it was.

The irony is that in the year 1999 everyone will know it is the year

1999 except the computers, who have obviously a very important

role to play in our world today, and we will not be ready for that.

I am concerned about what the costs are going to be in terms of

what the administration has set forward at this point. You have

done some analysis and say we are still in the middle of that, but

I do not see, under any scenario, where the costs the administration is coming in with are going to be enough.

If we do not address that in the fiscal appropriation for this year

and have a better feel for this in a very short order, we will be way

behind the eight ball a year from now when we go through the next

appropriation period, and it will be hard to get any contracts out

or anything else.

Any thoughts on that?

Mr. WILLEMSSEN. One issue I would bring up, possibly when the

panel of CIO’s is up here, is I think the CIO’s may have revised

and in some cases have larger cost estimates today than what they

had even a few weeks ago when they reported to OMB, as they

have gone further into the assessment process. So I would encourage you to continue asking the cost question, because as agencies

go further into the assessment phase and learn more about what

they actually have to do, even within the next month or two, I

think you will get more reliable cost figures.

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Mr. DAVIS OF VIRGINIA. I think that is important for us to get

a handle for on this reason: It does not have to be the President’s

budget because Congress will end up putting the appropriation together anyway. But to the extent that is not addressed as part of

the appropriations process, and the work needs to get done and the

agencies recognize it has to get done, what they will do is go into

other IT procurements and then cancel those or put those off, and

Congress will not get a say in them at all. And there will be some

devastating consequences for many of our IT contractors, but also

for the kind of work we want to do that we think needs updating

in other Departments.

Any thoughts on that?

Mr. WILLEMSSEN. Well, it is absolutely critical that as part of

this process, to pick up on the point you made, agencies have to

look at priorities from the whole information technology budget

arena and think about trading off some of the year 2000 compliant

activities against other initiatives that they may have ongoing, because there will obviously be a limit on the amount of resources

that are available.

Mr. DAVIS OF VIRGINIA. Do you have any feel for, at this point,

the level of what could go wrong if we do not make the changes?

We know some agencies are way ahead of the curve. We have

Chairman Horn’s report card last year. I think everybody is looking

for an improved grade this time. But I wonder if you can share

some of the consequences if this is not followed through on.

Mr. WILLEMSSEN. Certainly. I will let Mr. Rhodes, who has followed that issue a little more closely, respond to that, if that is OK.

Mr. Rhodes.

Mr. RHODES. I can give you one example from the Defense Logistics Agency. They have a system at DLA Columbus that issues contracts for 3 years. They have already encountered in microcosm

this problem.

A contract was let for 3 years to begin on January 1, 1997. A

1997 year delinquency notice was issued. It was caught in time and

not given to the contractor. The contract lasted for 3 years and, of

course, will end on January 1, 2000.

This is just on the business side. It is one thing if I am an individual contractor, and I get a 1997 year delinquency notice, and I

live in Columbus and I come back and say, ‘‘Well, obviously this

is incorrect.’’ But the errors that are smaller than that can be much

more insidious, and the ability for the contractor to then come back

and even understand that the problem has existed—that is where

you move into the level of crisis. If everyone’s getting a 1997 year

delinquency notice on their contract, then there are a lot of people

standing at your contracting officer’s door.

Mr. DAVIS OF VIRGINIA. So you can pay me now or pay me later,

and it is more expensive to fix under pressure than doing it now.

My concern is you can fix your system, but then you are talking

to other systems, and you have to go that back and forth.

Mr. WILLEMSSEN. That is a critical concern, dealing with those

interfaces. Agencies will probably have to set up some filters or

data bridges in order that the data that is coming in from those

external sources, is identified and scrubbed before you allow it into

your system. That is a critical issue.

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Mr. DAVIS OF VIRGINIA. Mr. Chairman, I see my time is up. I

note one thing. I notice Visa is encountering this problem worldwide as the expiration dates now go to ‘‘00’’, and about 10 percent

of the cards are kicking back, from what I can see across, and then

they are trying to deal with that. If we are faced with that at the

Government level, there are some severe repercussions.

Thank you.

Mr. HORN. I might add, before calling on Mr. Davis of Illinois,

that I was fascinated by the exchange on the Columbus processing

center. I think it is a great improvement when they are issuing

1997 year delinquencies, because last year when we held a hearing

they were issuing million dollar checks to contractors who said,

‘‘We never did the job and we do not want the check.’’ And they

said, ‘‘Oh, yes, you did; keep the check.’’ So I think we have made

much progress here, and we will be holding a hearing on that in

a month or so.

We are delighted to welcome a newly elected Member of Congress, Mr. Davis of Illinois.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman,

and let me just say I am delighted to be here.

You indicated that corrective action would be labor-intensive and

quite time-consuming. Do we have much of a handle on how much

internal capacity we currently have as opposed to what we are

going to have to seek from other sources?

Mr. WILLEMSSEN. It is clear that in most cases agencies are not

going to be able to handle this totally internally. That is why it is

imperative to get through the assessment phase as quickly as possible, so that an agency can identify what the resource needs are,

and can go out and contract for those needs that it cannot meet internally as quickly as possible.

In many cases we are looking at systems which were programmed in COBOL. There are simply not a lot of COBOL programmers available, or if they are available, there are not necessarily a lot of them within the agency. So we are going to have

to look at innovative approaches to get the kind of talent in that

is needed to make these changes.

Mr. DAVIS OF ILLINOIS. So the level of assessment will have a

great deal to do with the timeliness of our ability to respond?

Mr. WILLEMSSEN. Yes, sir.

Mr. DAVIS OF ILLINOIS. Thank you.

Mr. HORN. Mrs. Maloney has a followup question.

Mrs. MALONEY. You mentioned that we may not have, quote, the

talent, end quote, in the agencies to respond to this problem. Oftentimes our more talented programmers are hired by the private sector. Also, with the reinventing Government there has been a general downsizing of Government.

How do you propose that we get the talent that we need to handle this problem? You responded to Mr. Davis’ question by saying

he is entirely right we may not have the talent to address it. And

you said there would be innovative approaches. What are the innovative approaches that you are looking at to bring the talent in to

address it?

Mr. WILLEMSSEN. Innovative approaches such as putting together requests for proposals for a given level of programming supVerDate 11-MAY-2000 10:51 Jun 13, 2002 Jkt 078863 PO 00000 Frm 00030 Fmt 6633 Sfmt 6602 W:\DISC\41005 pfrm09 PsN: 41005
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port, for a given application language, for a certain mission-critical

system. If you don’t have it in-house, put it out in the marketplace

and see if you can get an adequate response.

My only concern is that we need to do that quickly because the

more we wait, the less talent in total, private and public, that will

be available.

Mrs. MALONEY. And then to followup with a question posed by the chairman earlier on the cost, the $30 billion estimate is now

$2.1 billion. Does the $2.1 billion include the cost for innovative

proposals to possibly the private sector to bring in talented programmers to handle it?

Mr. WILLEMSSEN. Not to be evasive, but I am not sure. My guess

would be it probably generally does not, but we have not analyzed

that in depth for each of the 24 agencies at this point.

Mrs. MALONEY. Well, we are galloping toward a budget, hopefully, so any information needs to be put before us very quickly.

Mr. WILLEMSSEN. We will do that.

Mr. HORN. I thank the gentlewoman. Some of my questions to

end this are related to cost.

One of them is, when we make these estimates as to what it is

going to cost to make the conversion, to what degree is it appropriate to try and estimate the lines of code that are affected by the

‘‘00’’ bit and put a value on those lines to change?

As I remember, a lot of estimates have been made. I do not know

if it is out of the air or not, if we have a line of code affected, we

have to bring it up and deal with it and it is $1 in cost, so if you

have 30 million lines you have a $30 million problem.

Do you think that is a sensible basis on which to make these estimates?

Mr. WILLEMSSEN. Lines of code can be one useful metric or indicator to use, but using lines of code alone is probably not wise. In

fact, with some application languages you may not want to use

them at all. You may want to choose something like function

points. When we are looking at 40, 50, 60 different types of application languages. In some cases lines of codes can work and the dollar-per-line estimate is reasonable; in other cases it is not.

So I would not say throw it away; I would say it is useful, but

only in conjunction with other available metrics.

Mr. HORN. Have you had a chance to talk to the people at OMB that made the $2.3 billion estimate, and what is their basis for

that? Was there any comparability between departments?

Mr. WILLEMSSEN. My understanding is that that estimate is essentially a compilation of what was submitted by the agencies.

Mr. HORN. We do not know if there is a common criterion by

which a judgment can be made.

Mr. WILLEMSSEN. I think that is a good question to ask some of

the CIO’s.

Mr. HORN. We will get to that, then, so those CIO’s in the audience, phone your Deputy and see what happened before you take

the oath.

Some observers have suggested that the year 2000 problem is

most severe with the older, poorly programmed and documented

applications that were developed, say a decade and a half, two decades ago. Does it make more sense for the Federal Government

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simply to replace those rather than convert those? Is there any

feeling at GAO on this?

Mr. WILLEMSSEN. I think it really needs to be taken on a caseby-case basis. In many cases it may be wise to replace, but, again,

we have to keep the calendar in mind so that we can put in a replacement system in time. We have to be able to start now.

In some cases where the code is old, it may have been written

in an assembler language that is tied to a particular piece of hardware and there are not a lot of folks around anymore who actually

know that language, it may be most beneficial to actually just try

to replace. Again, assuming it is a high-priority system.

Mr. HORN. Let me move to another area. The gentleman from

Virginia is the distinguished chairman of our Subcommittee on the

District of Columbia. To what degree do we know, if any, that the

District of Columbia, to which the Federal Government has a major

interest, do they have any problems in this area? Are we even looking at them or thinking about them?

Mr. WILLEMSSEN. Unfortunately, I have no basis to comment on

that. We have not done any work and at this point we have no

plans to do so.

Mr. DAVIS OF VIRGINIA. It is good news/bad news. Unfortunately,

the city has invested so little in information technology they do not

have much to repair. They are so far behind where they need to

be otherwise, so I do not think it is the huge problem it has been

in other States.

Mr. HORN. So if they do something, they can be Cinderella.

Mr. DAVIS OF VIRGINIA. Exactly.

Mr. HORN. That is good news. Any further questions from any

member of the panel of the GAO?

Will you gentlemen be here to hear some of the other testimony?

Mr. WILLEMSSEN. Certainly, if that is what you would like.

Mr. HORN. Yes, I would like you to listen to it, and maybe at the

end come back and we will have a discussion of what we heard and

what we think we ought to be doing in the GAO area.

I thank you all for coming. You always do a splendid job in laying out the case for it. I was very impressed by the written testimony. Obviously, all of this is in the record, even though you summarized a lot of that, and I think that handbook will be immensely

helpful.

Mr. WILLEMSSEN. Thank you, Mr. Chairman.

Mr. HORN. We now have the Chief Information Officers of the

various agencies, if they would please come forward. We will swear

you in.

[Witnesses sworn.]

Mr. HORN. All six affirm, I will so inform the clerk, and it will

be noted in the record.

We will simply go in the order in which we have listed you under

panel two, and the first Chief Information Officer would be Eliza

McClenaghan.

We are delighted to have you here from the Department of State,

and we would welcome a summary basically of your testimony, because some, Department of Labor in particular, while very interesting, is also very long, and in order to get to the questions Members

have, we would be most grateful if you could summarize it in 5

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minutes. If that takes a little longer, that will not bother me, but

I don’t want a half-hour reading of the written statements. That is

automatically in the record anyhow. So if we can summarize most

of the testimony, we will be grateful.

STATEMENTS OF ELIZA McCLENAGHAN, CHIEF INFORMATION

OFFICER, DEPARTMENT OF STATE; EMMETT PAIGE, ASSISTANT SECRETARY, COMMAND, CONTROL, COMMUNICATIONS,

COMPUTERS AND INTELLIGENCE, DEPARTMENT OF DEFENSE, ACCOMPANIED BY BILL JAMES, U.S. AIR FORCE; PATRICIA LATTIMORE, CHIEF INFORMATION OFFICER, DEPARTMENT OF LABOR; JOHN J. CALLAHAN, CHIEF INFORMATION OFFICER, DEPARTMENT OF HEALTH AND HUMAN

SERVICES; MICHAEL HUERTA, ASSOCIATE DEPUTY SECRETARY, ACTING CHIEF INFORMATION OFFICER, DEPARTMENT OF TRANSPORTATION; AND MARK D. CATLETT, CHIEF

INFORMATION OFFICER, DEPARTMENT OF VETERANS AFFAIRS

Ms. MCCLENAGHAN. Thank you, Mr. Chairman.

I am Eliza McClenaghan, Chief Information Officer of the Department of State. I have the responsibility for providing policy

guidance and direction to ensure that, among other things, Department of State computer hardware and software applications will be

able to handle the year 2000 calculations.

The Department responded to a request for information the subcommittee made on January 14, 1997. I understand the description

we provided for our year 2000 activities will be made a part of the

hearing record. Accordingly, in my opening remarks I will briefly

highlight our activities to date, note the next steps in our program

and reiterate our management structure.

The problem: We began to address the year 2000 challenge in fiscal year 1996. We used the better part of that year to analyze Department hardware and software applications as they relate to the

problem. As a result of the surveys at our domestic and overseas

sites, and extensive discussions among our systems managers and

with outside consultants, we have accurately defined the problem

we face.

In total, the Department has over 220 applications consisting of

35.3 million lines of code. They are written in 17 different programming languages. We have determined that 141 applications consisting of 27.7 million lines of code will need to be corrected.

With respect to hardware, the Department has 250 minicomputers, more than 18,000 personal computers, and several hundred network systems that support these 141 applications. Our biggest challenge is the minicomputer base that will have to be upgraded or replaced and the applications on the minicomputers that

will have to be corrected.

It will also be necessary to have appropriately trained personnel

to, for example, manage contracts, validate and test changes, and

implement revised systems. We estimate the total cost will be approximately $135.2 million.

Our plans: There are several components to our strategy. We are

capitalizing on the fact the year 2000 problem comes at a time

when we are investing in an infrastructure modernization program.

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We will make investments that satisfy year 2000 in infrastructure

modernization goals.

Secretary Albright has cited our need for resources necessary to

maintain U.S. leadership and for the tools required to get that job

done. To support the Secretary we have established, under the

leadership of the CIO, a strategic information resources plan that

will, when fully implemented, replace our current dependence on

substantially obsolete and proprietary technology that cannot readily accommodate many standard business applications. By integrating our year 2000 investment plans for the information resource

capital investment plans necessary to modernize our infrastructure,

we will leverage our investments to the maximum advantage.

A planning process is integral to development of an IRM strategic plan. That process includes procedures for the analysis and

prioritization of proposed IRM capital investments. We have studied, for example, the 141 software applications to which I referred

earlier and determined, in consultation with the department users,

that 85 are mission-critical.

We have defined mission-critical as either directly affecting the

public, such as passport and visa processing; essential department

operations such as payroll, personnel and telegram distribution; or

essential to national security responsibilities such as intelligence

research. Of the 85 mission-critical applications, 57 are not year

2000 compliant, and these 57 account for 19.8 million lines of code.

The code in 40 of the applications will be rewritten and the balance will be replaced. Those applications are either developed centrally for deployment to multiple domestic and overseas sites or are

centrally developed and operated.

Department applications are supported by four major systems

platforms: mainframes, minicomputers, personal computers, and

client service systems. Our biggest problem is in the minicomputer

base: 271 minicomputer systems are noncompliant and the manufacturer will not have the year 2000 operating system for 74 of

them. These latter systems must, therefore, be replaced.

Our milestones: The Department has established milestones to

ensure timely conversion of its systems and platforms. Using guidelines provided by OMB, we have successfully completed the awareness milestone and the inventory phase of the assessment milestone. By June 1997, we will have completed our renovation schedule and our test plans. Renovation and validation and implementation of mission-critical systems and other systems will be completed

in August and November 1999, respectively, so that the Department can meet its commitment to be fully compliant by December

1999.

The cost: As I noted earlier, we estimate the total cost to become

year 2000 compliant will run $135.2 million. This estimate covers

the cost between fiscal year 1996 and fiscal year 2000 to identify

necessary changes, evaluate the cost effectiveness of making those

changes, make changes, test systems and develop contingency

plans. The cost estimate does not include the cost of upgrades or

replacements that would otherwise occur as part of the normal system life cycle cost.

Management: We do not underestimate the scope of the problem

at hand, and have put in place a management structure that will

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provide policy direction and oversight to all operating elements of

the department. As I stated at the outset, I have met the responsibility for providing policy guidance and direction to ensure that Department of State computer systems and hardware and software

applications will handle year 2000 calculations. Our year 2000

project office is responsible for implementing that guidance and direction.

I have a good working relationship with the system managers

throughout the department, at domestic sites and overseas. I believe we have a collegial environment conducive to productive collaboration. At the same time, we have established a functioning

IRM program board, comprised of 12 senior department officials

and chaired by the CIO, which will review program implementation

at key decision points. On balance, I believe our management

structure is appropriate and sound.

Mr. Chairman, that concludes my opening remarks and I will be

happy to answer your questions.

[The prepared statement of Ms. McClenaghan follows:]

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Mr. HORN. Well, we thank you very much. We are going to ask

all the panel to testify before we throw it open to questions.

Our next witness has made frequent appearances before both the

subcommittee and the full committee. General Paige comes to this

job with a distinguished career in the Army, where he retired as

a Lieutenant General, and he has evidenced more Distinguished

Service Medals out of the civilian sector and the military sector, I

think, than almost anyone I know.

So welcome in your new role as Chief Information Officer.

Ltg. PAIGE. Thank you very much, Mr. Chairman and members

of the committee. I want to thank you for the opportunity to testify

before you today, and I do not want to tell you that I am looking

forward to coming back again and again, but I do appreciate being

here this morning.

As I testified to you in April 1996, the Department of Defense

considers the year 2000 millennium change to be potentially a serious problem and we are dealing with it aggressively. All of DOD

is using the structured five-phase approach for resolving the problem.

This approach, as you might know, was first developed by the Air

Force and was adopted for use across the Federal Government

through the Chief Information Officer Council’s Year 2000 Interagency Committee. We are well into the first phase of that approach, which is to raise awareness of the problem with the senior

leaders, managers and decisionmakers throughout the Department.

As you are probably aware, we officially began the awareness

campaign in November 1995, after many earlier e-mails alerting

people all around the world that the problem existed. Today, I

would like to believe that virtually every commander or senior

leader in the Department is aware that the problem exists and that

it could affect them in many ways.

Taken as a whole, the Department is far down the road to completing the second phase, in which our systems are assessed for the

year 2000 impact and compliance. We have a backbone management tool, the Defense Integration Support Tools, or the DIST, that

we are using as a corporate data base to maintain inventory and

track essential elements of information about our systems. We are

using the tool to record the progress of our systems as they move

toward retirement or year 2000 compliance.

Each of the components, including the military departments, report the results of their ongoing assessments, and all actions

planned are taken to my office. This information will also be given

to the General Accounting Office in their ongoing year 2000 audit

of the Department.

Some of our defense agencies have progressed beyond the assessment phase into the renovation and validation phases, primarily

because they started on the problem early, as early as 1991 in

some cases. In the case of the defense agencies that started early,

and in most of our weapon systems programs, the year 2000 fixes

are taking place as normal systems maintenance. And I have no

doubt that they will be ready long before that dreaded Saturday

morning of January 1, 2000.

The Comptroller and I co-chaired the first of a series of interface

assessment workshops to ensure the systems that are in his funcVerDate 11-MAY-2000 10:51 Jun 13, 2002 Jkt 078863 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 W:\DISC\41005 pfrm09 PsN: 41005
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tional area or that have direct interfaces with the financial systems

will be year 2000 compliant. These interface assessment workshops

will continue semiannually until all of our systems in each of the

functional areas, that is, not only finance, intelligence, but on and

on, are compliant.

Dr. Hamre and the senior leaders in the entire financial community across the Department have left no doubt that they are aware

and concerned. Their participation and assumption of leadership to

make it happen was clearly demonstrated during that functional

area assessment.

Since I last testified, we have undertaken a number of year 2000

activities. Our participation in the Federal CIO Interagency Council has been continuous, and has resulted not only in the adoption

of the five-phase process for the Federal Government but also in

the development of a best-practices document to back up that process, a Federal Acquisition Regulation clause, and conferences to

raise awareness and share lessons learned on assessments.

We are working closely with OMB and GAO to share the status

of our activities and concepts on how to fix the year 2000 problem.

We established a Year 2000 Steering Committee, led by our Deputy

Secretary of Defense, the Honorable John White, so that critical

issues are brought before the Department’s senior leadership for

immediate decision and action.

We are working toward fixing the year 2000 problems in the Department, and you have the reports furnished in response to your

letters to the military departments. If you have had the time to review those responses, I hope that you were as impressed as I am

that they understand the problems and are hard at work to solve

them. I have had the opportunity to review the detailed plans from

some of our overseas commands, and I assure you that the professionalism is evident.

We recognize that we need to get on with it, find, fix and test

every mission critical system in the Department, to include our

support systems, which were referred to by some folks as management information, or other admin and LOG systems.

As I mentioned earlier, the CIO’s of the military departments

and I, on February 12, 1997, submitted to this committee responses

to 10 questions to help you evaluate where the Department of Defense is in relation to solving the year 2000 problem. These responses reinforce the fact that the Department’s senior leaders and

systems managers are not waiting until the last minute to test,

validate and implement their year 2000 solutions but are, indeed,

taking aggressive action to plan for and fix the year 2000 date-related issues early on.

This year we are closer than last year, and we know we cannot

change the deadline for solving this problem. January 1, 2000 will

be here whether or not we are ready. Each time we are required

to answer additional calls for information from the Office of Management and Budget, GAO, or from Members of Congress, it

stretches our resources, both manpower and funding, a little thinner. If you were to ask how you can help, my response would be

to help in reducing the drain on our resources by reducing the

number of special reporting requirements. We are reprogramming

resources from all areas to use in solving the year 2000 problem.

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We need to use those resources to the maximum extent for that

purpose.

I appreciate the opportunity to share with you the year 2000 initiatives that have been put in place to bring the Department’s systems to full year 2000 compliance. You can be confident that DOD

will get the job done and we will be prepared on January 1, 2000,

to perform our mission. We will not let America down. Your continued support is critical to the Department’s success.

Thank you.

[The prepared statement of Ltg. Paige follows:]

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Mr. HORN. Thank you, General.

The next witness is Patricia Lattimore, who is now the Chief Information Officer for the U.S. Department of Labor.

Welcome.

Ms. LATTIMORE. Good morning.

I, too, welcome the opportunity to briefly describe the Department’s year 2000 preparatory activities. We have reported to you

a number of positive efforts to date, some of which began over a

decade ago. I think that you will see from our report that the Department is making excellent progress toward our singular goal, to

ensure that all Department of Labor systems transition successfully to the next century and do so in a manner that allows the Department to carry out its mission of providing the best possible

service to America’s workers without interruption.

As the examples in our submission demonstrate, the Department

has a long-standing commitment to serving the public and thus to

ensuring that its automated systems meet the challenge of the year

2000.

The Department’s Chief Information Officer structure is coordinating the Department’s year 2000 project plans and detailing required actions. We have 58 mission-critical systems that need conversion. Six of those are already year 2000 compliant; 34 are scheduled to be completed for compliance by the end of 1998; we have

18 that were scheduled for conversion early to mid 1999, and those

are currently under review to see if we can move their conversion

into the 1998 window.

We are reviewing these plans carefully and closely scrutinizing

completion dates, especially those that stretch into 1999, to see if

we cannot expedite some of that through additional resources or

reprioritization. We have measured our progress to date against

the Government-wide year 2000 guidelines published by OMB, and

we believe our conversion approach to be consistent with OMB’s 5-

pronged goal and timetable approach.

As the newly appointed CIO for the Department, I place strong

emphasis on achieving a structured and goal-oriented approach to

our total information technology environment. We are working to

create a stronger, more cohesive IRM program responsive to the

mandate and full intent of the Information Technology Management Reform Act.

Through the combined efforts of our actions completed to date,

those currently under way, and ongoing coordination and information sharing, we feel we are well on the way to mastering the year

2000 challenge. Nonetheless, we recognize the challenge is unprecedented. The efforts we have undertaken have few models in terms

of scope or complexity. A project of this magnitude always has room

for improvement, and we hope to benefit by the constructive dialog

that this hearing will generate.

[The prepared statement of Ms. Lattimore follows:]

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Mr. HORN. We thank you very much.

Our next Chief Information Officer is John J. Callahan, Department of Health and Human Services.

Mr. CALLAHAN. Thank you very much, Chairman Horn and

Ranking Member Congresswoman Maloney. We appreciate the opportunity to testify before the subcommittee today.

I am also accompanied by Dr. Neil Stillman, who is the Deputy

Chief Information Officer in the Department. We have submitted

our testimony for the record, and I will summarize, as requested.

The subcommittee is correct about the nature and the urgency of

the problem. We at the Department are very cognizant of the need

to have year 2000 compliant systems. We understand the sensitive

nature of our various programs underneath our jurisdiction, and it

is our intent, obviously, to meet the deadlines contained therein.

Clearly, the subcommittee is also correct that there are different

estimates of the severity of the year 2000 problem. Some say that

we can’t possibly succeed and we’ll have massive failures of our

computer systems. Others, I believe incorrectly, say it is a bit of a

minimal problem, it is not rocket science—you’ve probably all

heard that—and that we’ll be able to get there from here.

The Department, in general, views the problem as serious but

manageable, and we feel that all our OPDIV’s will meet the goal

of having—operational divisions, will meet the goal of having year

2000 compliant systems.

Let me briefly talk about the HHS response to the year 2000

compliance problem. First of all, in the area of organization, we

have to meet our year 2000 compliance plan problem along the

lines of our operating divisions. We have 13 operating divisions,

and they are all in the process of constructing and organizing their

plans. We have CIO’s in every single operating division, Deputy

CIO’s in each operating division, as well as day-to-day year 2000

compliance managers for those operating divisions.

As to priority, both the Secretary and the Deputy Secretary have

made this a top priority of the Department as well as I in my capacity as the Chief Information Officer. At this point, if I could,

Chairman Horn, I would like to submit for the record a communication from the Deputy Secretary to that effect.

Mr. HORN. Without objection, it will be inserted and printed in

the record at this point.

[The information referred to follows:]

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Mr. CALLAHAN. We have just recently completed our personal

meetings with all our operating division CIO’s. We’ve gotten good

reports from them. These reports form the basis for the material

that was submitted to the committee.

Second, the area of budget. You raise a good concern about the

budget. Right now we estimate that we will have to spend somewhere on the order of $90.7 million through the year 2000. Seventy-eight percent of that will go to some of our most major agencies: The Health Care Financing Administration, CDC, and NIH.

Currently we estimate that they can do this within this budget, but

I will say also, I wear the hat as Assistant Secretary for Management and Budget and I can assure you that as we go through the

budget process, both in the execution of the 1997 budget and the

preparation of the 1999 budget, we will make sure that they have

the resources for reprogramming or revised estimates for the year

2000 problem.

Let me just give you a brief synopsis of the dimensions of the

problem inside the Department and what we have achieved. All 13

of our operating divisions have completed their awareness phase of

the year 2000 problem. We think they will complete their assessments of the year 2000 problem by March 1997. We estimate that

six of our operating divisions will be fully compliant by the end of

1997, one by 1998—this is calendar 1998—and we hope that the remaining OPDIV’s will be finished up by 1999, hopefully the first

quarter. But this is something that we’ll look at closely.

Of our 1,027 information systems, 389, we believe, will be year

2000 compliant at the end of 1997, 39 percent by 1998, and 23 percent by 1999.

The big ones are complex. You know the complexity of these systems. HCFA, for example, has 69 information systems. This is the

agency that administers Medicare, Medicaid, and a variety of systems. They have 15.6 million lines of code to analyze and to determine the priority of their various systems. They are doing that

now, and this is one of the agencies which we will take a close look

at.

The CDC, a different type of complexity: 230 information systems, 12 million lines of code, but their big problem is dealing with

their external partners, State health agencies, et cetera, and they

are now in the process of devising systems so that they will be able

to accept a noncompliant year 2000 data system and make it compliant within their own systems.

The FDA is replacing a good deal of its internal systems. They

are pursuing an agency-wide system of architecture, and we feel

that they are making good progress in that area.

Then finally, NIH works with the university research community

throughout the country in terms of making their systems compliant.

Problems in meeting our year 2000 goal: Clearly, budget is one;

you’ve correctly identified it. We are going to go back once again

and ask them for very, very precise and prudent and reliable budget estimates, and those will be rolled into our budget process.

Interface with external systems: This is also a major problem.

Quite frankly, we cannot be sure that all State and local data systems that we interact with will be year 2000 compliant. We intend

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to cooperate with the National Association of State Information Resource Management officials, and we will develop in each agency

a system to make sure we only accept year 2000 compliant systems.

We also need to continue to monitor with inside the agency our

purchase of hardware and make sure we have the appropriate warranties which we will have and make sure the agencies use that

90-day period to ensure that their hardware is year 2000 compliant.

So in conclusion, Chairman Horn, we think the year 2000 problem is a serious one. The Department on behalf of Secretary

Shalala and Deputy Secretary Thurm would commend you for your

oversight hearings, would urge you to keep them up; it may get

painful at times, but it is a necessary process. We think it’s a manageable goal, and we will try to meet it as best we can.

Thank you.

[The prepared statement of Mr. Callahan follows:]

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Mr. HORN. Thank you very much.

Our next witness has also been before us a number of times. The

Associate Deputy Secretary of the Department of Transportation,

Mr. Huerta, is now the Acting Chief Information Officer.

Welcome.

Mr. HUERTA. Thank you, Mr. Chairman, Ranking Member

Maloney, and members of the committee. Thank you for the opportunity to share with you how the Department of Transportation is

addressing the year 2000 problem. Clearly this is one of the great

challenges of the information age.

For years we’ve been developing more and better computer systems to improve the way we do business and to improve our lives.

Now, in just 34 short months, if we do not take appropriate actions,

those systems we have come to depend on may fail us.

At the Department of Transportation, we recognize that we cannot afford to allow our systems to fail. One of our critical missions

is to ensure the safety of the American traveling public. Many of

our systems, which we are discovering cannot operate in the year

2000, directly support that mission.

Our goal is to renovate the year 2000 affected systems by December 1998. This will allow a full year to test and ensure smooth implementations that have no impact on our missions. We know this

is ambitious, but we have little choice.

I regret that our delayed and limited response to your April 1996

inquiry created an impression that the Department was not actively addressing this impending problem. In fact, several of our

operating administrations were actively pursuing solutions to the

year 2000 problem at that time. Admittedly, however, we did lack

a consistent, high level departmental sense of urgency. Your inquiry elevated this issue from the program offices who operate the

Department’s systems to the most senior management levels in the

Department.

One change that occurred is that I was named the Department’s

Acting Chief Information Officer, and the responsibility for overall

leadership in DOT on this issue now resides with me. I have on my

staff a full-time project manager whose daily responsibilities include maintaining the Department’s inventory of systems, tracking

our progress, and sharing other Government agencies’ best practices, as well as serving as a facilitator and clearinghouse of information for our 10 operating administrations.

The Department’s organizational structure and its many program offices and their supporting automation—hardware, software,

and systems—makes solving this pervasive problem a real challenge. Consequently, we have placed the responsibility for corrective actions within our operating administrations. Each now has an

active year 2000 program under the leadership of a senior executive. Also, they have the detailed knowledge of their systems and

the mission requirement to fix problems in their systems.

In order to ensure support from the top of each operating administration, I have personally briefed our Secretary’s Management

Council on the possible consequences if the year 2000 problem is

not solved. The Council is chaired by the Deputy Secretary and attended by the Deputy Administrators of all of the operating administrations.

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In terms of the year 2000 approach, the Department is generally

following the five-phased best practices framework that you heard

about earlier this morning and which is outlined by the Interagency Year 2000 Committee. These phases, of course, are awareness, assessment, renovation, validation, and implementation. We

recently reported to the Office of Management and Budget that

DOT has now substantially completed the awareness phase, will

complete the assessment phase by December 1997, and the renovation phase by December 1998. The validation and implementation

phases, which will run concurrently, will be completed by December 1999.

As you can imagine, our operating administrations face different

problems depending upon the complexities of their individual systems. In an October 1996 survey, we collected important information about 180 systems that were being evaluated for year 2000

problems. We’ve created a data base of information which will be

essential for tracking our progress. We see the information collection process as dynamic and will continue to refine and update the

data base as additional system assessments are completed.

The information we now have provides a good foundation on

which to build, but because all of the assessments have not yet

been completed, it still lacks complete cost information. We will be

requiring monthly updates to the data base from all of our operating administrations.

A large and crucial piece missing from our initial inventory is information regarding the Federal Aviation Administration’s air traffic control systems. Sophisticated assessments of the en route and

terminal systems applications are currently under way at the FAA

Technical Center in Atlantic City, NJ. The FAA expects to have the

preliminary assessment of this component of the air traffic control

system completed in May of this year.

Another major portion of the air traffic control systems are the

communications, navigations, and surveillance components. These

components include radar weather systems, voice switching and recording, radio communications, radar systems, global positioning

systems, and others. These systems are beginning their assessment

which the FAA will complete by December 31. Once assessments

of these systems are completed, they will be added to our inventory

data base and of course will be prioritized and then renovated.

As a final note on our status, I’m pleased to report that renovations are either under way or have been completed on several of

our systems. These include the Department’s Integrated Personnel

and Payroll System and the Federal Highway Administration’s

Motor Carrier Management Information System.

In our recent report to OMB, we provided preliminary cost estimates over the next 3 years of $80.4 million to address the year

2000 problem. This has since been updated to include an additional

$10 million for the U.S. Coast Guard, who have completed their assessment. It is safe to assume that as our system assessments are

refined, the assessment of all the air traffic control components systems is completed, that our cost estimates will change and may

rise.

In summary, the Department of Transportation has made good

progress in elevating the urgency of the year 2000 problem across

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the Department. Additionally, management structures are in place

in our operating administrations and in the Office of the Secretary

to lead to corrective efforts. Our assessments of system vulnerabilities are ongoing and continue to improve.

In some, albeit limited cases, systems have already been fixed to

accommodate the year 2000. We also recognize, however, that we

have a long way to go. Until we are finished with our assessment

of the large, complex, and critical air traffic control systems, we

will have only a partial picture of the magnitude of the work which

we have ahead of us. Clearly, only the most effective use of the

coming months will lead to success, and successful we must be.

Thank you, and I would be happy to respond to any questions

that you or members of the committee might have on anything that

I have said this morning or anything that is contained in my written testimony.

[The prepared statement of Mr. Huerta follows:]

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Mr. HORN. Thank you very much.

Our last witness on this panel is Mr. Mark D. Catlett, the Chief

Information Officer for the Department of Veterans Affairs.

Mr. CATLETT. Good morning, Mr. Chairman and members of the

committee. It is my pleasure to testify on behalf of the Department

of Veterans Affairs this morning concerning the readiness of our

computers for the year 2000.

As VA’s Chief Information Officer, I am working closely with

VA’s administration level CIO’s in leading our efforts to become

year 2000 compliant; that is, ensuring that our information systems will function correctly with the dates beyond 1999. We are

taking numerous steps to ensure that the VA’s information systems

will provide uninterrupted service supporting benefits delivery and

medical care.

We have recently completed a year 2000 readiness assessment of

the major VA organizations. Over 80 information systems professionals and managers were interviewed in Washington and various

field locations.

We hired a consultant to assess our plans, testing methodologies,

contingencies, inventories, and cost estimates. The readiness assessment focused on our Cemetery System, our Austin Automation

Center, the Veterans Benefits Administration, and our Veterans

Health Administration. Let me summarize quickly in each of those

areas.

For our smallest line organization, our National Cemetery System, the information systems supporting our cemetery systems are

fully year 2000 compliant. We just recently replaced the last noncompliant systems there in December 1996.

At our Austin Automation Center, we have been addressing the

year 2000 problem there since 1991 through planning and the required conversion of software. Almost 70 percent of production applications are year 2000 compliant now. Our automation center

plan will have all systems compliant by September 1998.

The Veterans Benefits Administration: they have been developing a comprehensive plan to ensure that their systems will be

ready for the year 2000. VBA’s goal is to have all systems compliant by November 1998. VBA is taking several tracks to ensure

their systems will be ready.

We are maximizing application redesign to solve the year 2000

problem. Our Compensation and Pension Payment System replacement effort and our Education Payment System replacement effort

will replatform many of our applications on to current technology

and make them year 2000 compliant at the same time.

Additionally, VBA is executing a contingency plan for our compensation, pension, and education systems, which are the systems

that are the large payment systems for the veteran beneficiaries in

this Nation, to ensure their continued operation past the year 2000

in the event that our above redesigned efforts are delayed—if we

are delayed in meeting those delivery dates.

For our Veterans Health Administration, the primary information system supporting our medical facilities is known as the Decentralized Hospital Computer Program. All DHCP, the acronym,

applications use MUMPS programming language. ANSI standard

MUMPS or M language is year 2000 compliant. However, we must

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verify that programmers have followed standard development and

programming conventions for this primary software. VHA is developing a plan to analyze the entire DHCP product line portfolio to

confirm that DHCP applications are year 2000 ready. VHA’s goal

is to complete any necessary code conversions by May 1998.

VHA has begun development of a plan that includes schedules

and contingencies necessary to mitigate year 2000 impacts, but has

not completed an overall comprehensive plan. The plan will address areas beyond information systems, such as biomedical equipment currently in use at VA medical facilities, especially those that

input patient data in our DHCP systems. This plan will detail how

the VHA Year 2000 Project Office will support and assist our networks throughout the country to achieve compliance throughout

the medical facilities in their networks. The plan for our VHA system will be completed by April 1997.

In summary, VA organizations have developed detailed systems

inventories, testing methodologies, individual project plans and

contingencies. Our inventories and plans include such key elements

as estimated lines of code, number of modules, operating systems

and commercial off-the-shelf packages. Additionally, the individual

system and COTS inventories include assessments of year 2000

compliance.

We are also working with the Year 2000 Interagency Committee

chaired by Ms. Kathy Adams. We will be working with the Office

of Management and Budget and other appropriate agencies to resolve potential issues with biomedical equipment. We are confident

that VA information systems will be well prepared for the coming

millennium.

I thank you for the opportunity to appear here today and will be

glad to answer any of the questions that you or the committee

Members may have.

Mr. HORN. We thank you for your testimony.

[The prepared statement of Mr. Catlett follows:]

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Mr. HORN. I thought I might just go in and ask several questions

of one Department here to try to illustrate some points. It is going

to be the Department of Transportation, partly because I sit on the

authorizing committee as my other full-time job here. I noted that

back in 1989, April 1989 to be exact, almost the same time the Social Security Administration got interested in the year 2000 problem and was way ahead of everybody else, a component unit of the

Department of Transportation got involved, and that was the Federal Highway Administration, when they began their year 2000 activity.

The obvious question comes to mind, why didn’t someone at the

Department of Transportation report up the chain of command,

‘‘hey, we have got a problem here.’’ Maybe you people in the other

administrations, bureaus, divisions by whatever name also have a

problem? What happened was that the Department of Transportation, when we sent our survey out, I and the ranking Democrat,

asked to join me on this in April 1996, they were one of the two

departments that really got an ‘‘F’’ on response, even though I have

great respect for the Secretary then, and I have got great respect

for the Secretary now. But something was going wrong in the chain

of command when you have got one group, the Federal Highway

Administration, knows there is a problem, starts dealing with it,

and nobody else, including the Secretary, seems to know it is a

problem. What happened?

Mr. HUERTA. I can’t really explain what happened in 1989, nor

when you sent out your initial inquiry of last year. I didn’t even

know there was such a thing as a year 2000 problem until August

when I became the Acting CIO.

I will say that we have identified as the major difficulty the communication of the urgency of the problem as was cited by the representatives of the GAO this morning. We agree with their assessment that the issue is essentially one of management. We must ensure that the Department’s top-level managers, both within the operating administrations as well as in the Office of the Secretary,

have a full and complete understanding of the urgency of this issue

and are doing what they can to resolve it.

What we have put in place is a regular reporting mechanism not

only of progress, but also as part of the budget call. We are asking

agencies to identify their year 2000 resources, as I mentioned in

my testimony. That is an area that we will continue to refine as

the assessments are underway.

To talk a little bit about the Federal Highway Administration

and some of the progress that they have made, I already mentioned

that one of their motor carrier systems is pretty much taken care

of. I would also like to point out that they have one system, their

financial management information system, that I think is a rarity

in the Government. It is a system that when it was originally programmed, was programmed with the 4-digit date field. Someone

was clearly thinking ahead at that point.

Some of the complexities we will need to deal within the Federal

Highway Administration, however, are the interfaces to the States

and the two territories that receive Federal aid funds. The Federal

Highway Administration has been working closely with the American Association of State Highway Transportation officials in order

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to ensure that this issue is elevated to the highest levels within the

State Departments of Transportation with which we need to link,

to ensure that our data is not contaminated.

Mr. HORN. That is a very good point. I know the Department of

Labor has the same situation. HHS was mentioned, where you

have got tremendous partnerships with the States, and we will get

to that later.

But let me pursue, one of the main concerns if authors Clinger,

former chairman of the full committee, as we all know, now retired,

or on the other body side, author Cohen, now Secretary of Defense,

were here, one of the reasons they got a law through that said, pick

a Chief Information Officer, was to elevate this whole area into the

management team of a particular Department. I guess what bothers me a little is you are the Acting Chief Information Officer, but

you have got a lot of other responsibilities. Is there a plan to bring

in a Chief Information Officer for Transportation?

Mr. HUERTA. Absolutely, Mr. Chairman. You have correctly

pointed out that I am acting, and no one more than I is looking

forward to the day that this act ends.

Mr. HORN. Good. I am glad you are such an easy sale on this because your colleague right next to you from HHS is also Assistant

Secretary for Management, and I think you are also CFO, are you

not?

Mr. CALLAHAN. That’s correct.

Mr. HORN. Here in Congress, this reminds me of the story when

the President said he had created 11 million new jobs, and a

woman said, ‘‘Gee, I can believe that, I have three of them.’’ Well,

I didn’t know he was creating them in the administration. You

have got three of them.

Mr. CALLAHAN. That is correct.

Mr. HORN. The question is, can we really get focused in this area

when the Assistant Secretary for Management is also the Chief Financial Officer, is also the Chief Information Officer. What do you

think, Mr. Callahan?

Mr. CALLAHAN. The particular situation in our Department is

under discussion with the Office of Management and Budget about

the long-term placement of the Chief Information Officer.

I would offer to the subcommittee one insight, though. It is very

important for that Chief Information Officer, whoever he or she is,

to be really at the top level of the Department. I feel fortunate actually in having some of these responsibilities because we can sort

of, quite frankly, apply more muscle to this problem than maybe

some of our other counterparts in other agencies. That is, for example, as Assistant Secretary of Management and Budget, I have an

extra degree of leverage with regard to making sure that we have

the resources for the year 2000 problem. That may not be the case

in some of the other agencies.

So I think this is a matter that is under discussion with OMB,

but I can assure you that this whole problem will not get done unless it has the full backing of the Secretary, the Deputy Secretary

and the other top people.

Mr. HORN. I agree with you on that, but I think the authors’ view of this in both the CFO legislation and the Chief Information

Officer legislation was that those individuals should be at the highVerDate 11-MAY-2000 10:51 Jun 13, 2002 Jkt 078863 PO 00000 Frm 00105 Fmt 6633 Sfmt 6602 W:\DISC\41005 pfrm09 PsN: 41005
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est level management team in the Department. I mean, good heavens, 17 years ago in a university I had a Chief Information Officer

in my management group, and believe me, nobody else around that

table knew what he knew on resource management, computers, so

forth, and that is why he was in the room. He participated in every

single decision that the university made in the management area.

What bothers me is all you wonderful managers and wonderful

CFO’s, your time is chewed up, and you cannot focus on the problem because you have got too much to do. While it is great when

you have got it all in one hat and you can issue it as Assistant Secretary for Management, you can use any of these hats, I am just

wondering if the job is really getting done, at least in the intent

of Congress.

Mr. Huerta.

Mr. HUERTA. Mr. Chairman, just to talk some about how we at

the Department of Transportation are setting up our CIO’s office.

I think one of the things that is a major significant point is that

we are actually creating the office as a new entity on the core management team of the Secretary. It is for that reason that I initially

got involved in it. Then Secretary Pen ̃ a asked if I could convene a

group of all of our operating administrations to look at how best

to take this important responsibility given to us by the Information

Technology Management Reform Act and make it real within the

Department of Transportation. He was quite specific in saying that

we do not simply want to take something that we are already doing

and call it the Chief Information Officer. We needed to rethink

that. We now have created the CIO position, and we are aggressively recruiting for it.

Mr. HORN. Let me pursue some of the things in Transportation.

I agree with you, and you agree, apparently, that we had a little

communication problem there when one of the agencies is way

ahead of everybody else and nobody else knows it, including the

Secretary. But the Federal Aviation Administration’s air traffic

control modernization was certainly one of the most troubled information technology acquisitions we had, and I am not sure where

we are on that. Maybe you could educate this committee on where

we are.

I remember my freshman year, 1993, going with the then chairman, Mr. Oberstar, chairman of the Aviation Subcommittee, out to

look at it, and Mr. Mica, who is a fellow subcommittee chairman

in this group, and I went, and you could tell just walking through

the situation that they didn’t know what they were doing, and several billion was being expended. Now we read in the paper about

IRS, $4 billion down the drain. My problem is I don’t understand

why they don’t catch it at the $1 million mark, not the $4 billion

mark. Where are we in the FAA on that situation as it relates to

the year 2000? Obviously they can solve that problem, they have

got the storage capacity now, but go ahead.

Mr. HUERTA. The FAA has been working quite aggressively to fix

the problems that they encountered in the modernization of the air

traffic control program. Under Dr. George Donohue, who is Associate Administrator for Research and Acquisition, he has set up a

very clear set of milestones and regular progress reports all the

way up to the Secretary in terms of what is going on.

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I have personally participated in many briefings on the current

status of FAA’s modernization program, and I have been impressed

that some of the old difficulties that we saw in the previous contracts, things like mission creep or requirements being added and

so forth, simply are not happening in this instance. The program

offices are able to maintain their calendar and maintain their

budget estimates as things get refined and implemented. And we

have had some success in introducing new equipment in many key

FAA facilities around the country.

Having said that, while we feel that the modernization program

has turned around and is on track, we recognize that we need to

also plan for the contingency that some elements of the older systems may still be operating by the year 2000, and that is what a

lot of the ongoing assessment in FAA is looking at. It is clear that

in the new systems which are being acquired, we have required

that they will be year 2000 compliant. However, we want to make

sure that we cover those contingencies.

Mr. HORN. I now yield 8 minutes, since I went over, to the ranking Democrat, Mrs. Maloney.

Mrs. MALONEY. Thank you very much, Mr. Chairman.

I would like to ask all of the panelists the same question and just

have you go down the panel from State to Defense to Labor and

all the way down. First, have you completed a survey of all of your

systems as to the millennium problem, yes or no?

Ms. MCCLENAGHAN. Yes.

Ltg. PAIGE. No, we have not completed the survey. The assessment phase is still ongoing.

Mrs. MALONEY. Is still ongoing. When do you expect to complete

the assessment stage?

Ltg. PAIGE. By the first of April.

Mrs. MALONEY. By the first of April.

Ms. LATTIMORE. We have completed our survey and are working

on the second phase.

Mr. CALLAHAN. We have just about completed our survey. We

will be through by the end of March.

Mrs. MALONEY. By the end of March?

Mr. CALLAHAN. Yes.

Mr. HUERTA. We have conducted one survey and have substantially completed a big chunk of it. The two pieces which are outstanding are air traffic control, which we expect to complete in

May, and radar systems, which we expect to complete at the end

of the year.

Mr. CATLETT. We have completed our survey at the VA.

Mrs. MALONEY. Second, I would like to ask all panelists, again

starting with State, after completing your survey, have you

prioritized those systems that absolutely must be fixed, that are

the ones that are the most critical, and made a priority list so that

they will be addressed first?

Ms. MCCLENAGHAN. Yes, we have.

Mrs. MALONEY. Could we get a copy of that list then?

Ms. MCCLENAGHAN. We will be happy to submit that with the

testimony.

Ltg. PAIGE. In the Department of Defense, each of the military

departments will prioritize their own systems. Agencies will

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prioritize their systems. We will furnish you that information if you

would like a copy of it.

Ms. LATTIMORE. Attached to the Department of Labor’s submission was a chart that listed our 58 mission-critical sensitive systems that we believe are our priority ones. Those are the systems

that deal with benefits, entitlements and the fiduciary systems that

interface with the States.

Mr. CALLAHAN. Our operational divisions will have that classification fully complete by the end of March, but we have made considerable progress both in the Health Care Financing Administration and CDC. They have classified their systems as to how critical

they are, and we will provide that full information to the committee.

Mr. HUERTA. In our submission to the committee, we identified

systems as either being mission-critical or not. We intend to refine

that, particularly as we complete the assessment phase.

Mrs. MALONEY. Which will be when?

Mr. HUERTA. As I mentioned a little bit earlier, we will complete

the air traffic control components in May and in December.

Mr. CATLETT. We have not prioritized at this point. We will have

that completed in the spring.

Mrs. MALONEY. Thank you. And would you, when you complete

it, submit it to the committee?

Again, I would like to ask all of the panelists, again beginning

with State, do you have a way to test your systems once the fixes

have been made?

Ms. MCCLENAGHAN. We are establishing a plan which will be

complete in June of this year on how to test those individual systems. It depends upon whether it is the platform that is not compliant or whether it is the application, or the operating system, or the

combination there of.

Mrs. MALONEY. Defense.

Ltg. PAIGE. As you know, we have plenty of experience in testing

systems, and we do have a way, methodologies, and plans, to test

all of our systems.

Ms. LATTIMORE. Our systems will have a detailed plan for testing

and implementation by June of this year.

Mr. CALLAHAN. Our systems also will have a detailed plan for

testing and improvement, and we will be actually testing some of

them, and they should be compliant by, as I mentioned, a number,

by 1997.

Mr. HUERTA. We intend to have testing plans, and as we indicated in our submission to the committee, it is our intention to

spend the entire last year doing testing and implementation.

Mr. CATLETT. We will use our current testing methodologies, but

as noted in terms of the schedule, many of those fixes will be completed in 1998, but all of them will have the year 1999 to finish

any testing that will be needed.

Mrs. MALONEY. We look forward to the results from those tests.

Mr. Chairman, I have no further questions.

Mr. HORN. Thank you very much.

The gentleman from Virginia, Mr. Davis.

Mr. DAVIS OF VIRGINIA. Thank you very much.

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Let me ask each of you, having seen the administration’s budget

submissions at this point for what they are asking for this program, are you all confident that in your various agencies and departments that you can deliver on the year 2000 with what has

been requested so far, or are you willing to keep an open mind at

this point and maybe say you might want to amend the earlier submission? I will take silence as just saying you are happy with

where things are at this point.

Mr. CALLAHAN. As also the budget officer for the Department of

Health and Human Services, we did request a specific line item in

the 1998 budget for the Health Care Financing Administration of

$15 million, and we will continue to scrutinize those budget estimates very carefully, and if there is a need for reprogramming or

reallocation within existing resources, we will bring that to the attention of the Secretary, and we will also be very vigorous in this

regard in terms of putting together the fiscal year 1999 budget.

Mr. CATLETT. Mr. Davis, I would like to make a point here. As

GAO noted and from what I understand of it, that report that OMB

has prepared is the compilation of our estimates. I think there is

a factor there that we need to understand and all come to a common agreement on.

We did not include the cost for replacing systems, instead of recoding. So those systems that we are replacing aren’t reflected

here, and primarily the reason is that the year 2000 is not the only

reason that we are replacing those systems. We need to replace old

systems. That work has been underway for some time.

Mr. DAVIS OF VIRGINIA. In fact, originally when we went to two

numbers, everybody figured they would be replaced by this time,

is that not part of the rationale, and they haven’t been done in

many cases?

Mr. CATLETT. Yes. So again, working with you and working with

OMB, I think we all ought to come to some understanding, if we

want to split some of that cost and assign it to year 2000, we may

need to do that. But we didn’t intentionally leave it out. It’s just

the fact that there are other reasons, primarily service delivery in

our case, that we are replacing those systems.

Mr. DAVIS OF VIRGINIA. Let me ask Ms. Lattimore, when OMB

reported 2 weeks ago to this subcommittee on the cost of the year

2000, they indicated that the Department of Labor’s costs were

only $15 million over several fiscal years. But I also notice in the

Department’s submission to the subcommittee you have made a

$200 million new-needs budget request to cover the Federal Government’s share of the cost of year 2000 conversions for State programs such as for unemployment insurance.

I guess my question would be, will the States be ready in time,

are they ahead of or further behind the Federal Government in addressing the year 2000 problem? What steps are the States and the

Department taking to avoid the consequences of receiving corrupt

data from nonyear 2000 compliance systems? What are the consequences of corrupted data slipping through, and didn’t the Office

of Management and Budget’s estimate of $15 million fairly dramatically understate the real budget impact for DOL for the year

2000?

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Ms. LATTIMORE. We believe the $15.2 million based on the information we have to date and the assessment we’ve conducted to

date is accurate. The $200 million was in grant money, not appropriation to the Department, to meet what we felt was the Federal

share of what we believed to be a $477 million price tag to appropriately handle the conversion for our interface with the unemployment insurance from the States.

Mr. DAVIS OF VIRGINIA. That is not in the administration’s budget, to your knowledge, is it?

Ms. LATTIMORE. In fiscal year 1998?

Mr. DAVIS OF VIRGINIA. Yes.

Ms. LATTIMORE. Yes, it is. It is specifically there for that purpose.

Our work with the States, to date—we find them to be, I would

say, a little bit behind the Federal Government. We are working

with the States, with the State employment security agencies as recently as last week, with all of their representatives, in Florida;

and we have some ongoing sessions planned with them to ensure

that they are able from the State side to work for the year 2000.

We have the Federal aspects to ensure that we are able to receive the data either through appropriate conversions or we will

have bridges built. We will be able to accept their data, transmit

data, not allow it to corrupt our data in our systems; and that will

be fully ready significantly prior to the 2000 conversion date. We

are working with them, though, to be assured that they will also

be able with their internal systems to not just give us information

and get money, but their systems will be able to disseminate that

money within the State.

So it is a two-pronged approach that Federal information technology systems have to work, but, in turn, our systems don’t do the

States any good if we don’t help them get their systems up to speed

whereby they can then properly disseminate those benefits and entitlements.

Mr. DAVIS OF VIRGINIA. And you have got 50 States that are all

giving us different priorities. I notice Nebraska has done a tobacco

tax, a cigarette tax, to pay for that. I don’t think that would fly up

here. I would support it, but I don’t think it is going to fly up here

for getting additional money. But I think States are at different

levels.

Ms. LATTIMORE. There will be 52 different plans and different approaches, which is why we’re working with the State employment

security agencies. None of them will be alike or few. If they’re

alike, it will be by accident.

Mr. DAVIS OF VIRGINIA. But you think the OMB estimate—remember you’re going to be back here next year and the year after;

their estimate of $15 million fairly dramatically—you think it is a

realistic budget impact for DOL for the year 2000 problem?

Ms. LATTIMORE. It’s what we’ve provided OMB. If we find as we

move through these step processes that we have underestimated

that, we will be back again with hat in hand.

Mr. DAVIS OF VIRGINIA. Just to make sure I give you some room

to maneuver there. Does anyone else want to add or supplement?

Ltg. PAIGE. I can assure you that the figures that we presented

to OMB, we furnished them reluctantly because we figured that,

first, somebody would try to hold us to the figures.

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Second, as far as we’re concerned, the figures are not very important in terms of getting on with the job because we’ve tried to emphasize to everyone, not to use the year 2000 expecting that it will

provide funds to bank other things. We’ve tried to emphasize that

there are no dollars coming; they will have to prioritize from within

their organization.

Ms. MCCLENAGHAN. At the Department of State, as I have mentioned, we are undergoing a modernization effort, so we’re going to

have to forgo some of those modernization activities in response to

year 2000; but our numbers are the best numbers we could have

at this time.

Mr. DAVIS OF VIRGINIA. Our concern here is that if we don’t get

it in the appropriation process, we can’t factor it in. And then you

are taking away from other projects; sort of robbing Peter to pay

Paul and setting different priorities.

I know there are variables in this. I worked for a computer software company for many years before I came here. There are a lot

of variables as we go through this. One of them is just getting good

people, trying to get good COBOL people at this point. Their price

is going up and up and up the longer we delay.

Let me ask Mr. Huerta if he’d want to comment, and also on

January 1, 2000, are you going to be flying the first plane out to

make sure everything is working straight?

Mr. HUERTA. I will probably be on that plane as a way of ensuring that it does comply.

Mr. DAVIS OF VIRGINIA. I will be after you on the next plane.

Mr. HUERTA. Regarding our estimate, we had estimated $80.4

million to OMB, as I mentioned in my opening remarks this morning. We have since increased that by $10 million, based on the U.S.

Coast Guard having completed their assessment. And we have two

large assessments that are currently under way with FAA.

Mr. DAVIS OF VIRGINIA. We are not trying to put anybody in a

‘‘gotcha’’ situation. We just want to know what it is so we can make

the appropriate judgments from here.

Thank you all very much.

Thank you, Mr. Chairman.

Mr. HORN. I might add, listening to who is going to be in the first

and second plane, when it comes to dealing with computers, I

learned 20 years ago, don’t be the alpha site, don’t be the beta site,

be the next one. Then I think we’re safe.

I now am delighted to yield to the gentleman from Illinois, Mr.

Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

Ms. McClenaghan, you may have answered part of the question,

but I note that during your testimony you indicated that solving

the year 2000 problem would require the diversion of scarce resources from new developments. What kind of new developments

are you talking about?

Ms. MCCLENAGHAN. Sitting here with my friend from DOD, we’re

looking at the defense message system as an implementation to replace our aging cable and information e-mail system, and we would

have to delay spending funds on that, as an example.

Mr. DAVIS OF ILLINOIS. Thank you very much. That might lead

right to my next question.

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General Paige, I didn’t hear any projections relative to cost from

Defense.

Ltg. PAIGE. We submitted, in the response on February 12th,

that it was about $970 million. Since that time it has increased to

about $1.2 billion. I submit that as we continue the assessments,

that figure will continue to rise. However, again, we are not going

to come and ask for an additional bank of money to solve this problem.

Mr. DAVIS OF ILLINOIS. So even though the cost may continue to

go up——

Ltg. PAIGE. We are concerned with the cost because Congress is

concerned and OMB is concerned.

Mr. DAVIS OF ILLINOIS. I would certainly say that everybody

around here seems to be concerned a great deal about it.

Mr. Huerta, you indicate that the FAA would complete its assessment phase by the end of December 1997.

Mr. HUERTA. That’s correct.

Mr. DAVIS OF ILLINOIS. GAO indicates that that’s going to be

about 6 months later than we need to be. How would you propose

to make up that time?

Mr. HUERTA. The FAA is completing their assessment in phases.

They have done their administrative work, which is essentially

complete at this point. Their focus on air traffic control, that’s a

very significant system in and of itself, that we expect will be completed by May.

What is lagging to December are radio navigation systems, which

is again one component and an extremely important component,

but we’re not holding up renovation of the wholesale FAA system

pending completion of every last piece of it. Instead, we will immediately jump into renovation of specific systems as we’ve assessed

the components of them.

Mr. DAVIS OF ILLINOIS. And so you would have made enough

progress to be comfortable?

Mr. HUERTA. We don’t have any choice.

Mr. DAVIS OF ILLINOIS. Thank you.

My last question, Mr. Chairman, is to Mr. Catlett.

I know that the Veterans Administration is currently undergoing

some reorganization. How does this impact upon, or does it impact

upon, the preparation for corrective action?

Mr. CATLETT. Mr. Davis, I don’t believe it will have much of an

impact. The reason for that is, the reorganization referred to is in

our health administration. As I noted in my testimony, the basic

system that supports all of our health care applications is year

2000 compliant. So the work we have to do is at the local level,

where they have made interfaces or made adjustments to the software, to make sure that those local applications are made compliant now, if they have done something beyond the capacity of the

basic software. So that is, as I described it, in our health care system.

I think our challenge there is broad but shallow. I mean, there’s

a lot of places where they have to check, but the fixes for those

shouldn’t be very significant in terms of the cost or the time. So

that is an issue that I don’t believe has to get raised to the new

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organizational level that you’re referring to in our health care administration.

Mr. DAVIS OF ILLINOIS. Thank you very much.

I have no further questions, Mr. Chairman.

Mr. HORN. Thank you very much.

Let me pursue a few closing questions; then we’ll ask the General Accounting Office to come back briefly.

In the case of the Department of Veterans Affairs’ submission to

the subcommittee, it stated that the assessment had not been completed on the possible impact of the year 2000 computer problem

on biomedical equipment. Is that correct?

Mr. CATLETT. Yes, sir.

Mr. HORN. With HHS, Mr. Callahan, is that the same situation

there where HHS, Health and Human Services, has not really

looked at the impact on biomedical equipment?

Mr. CALLAHAN. The critical agencies here, Congressman Horn, as

we understand it, are FDA and NIH; and we have already met

with them, alerted them to this particular problem. I think FDA

will be coming back to us with a plan vis-a-vis their laboratory

equipment, as will NIH; and we will supply that to the subcommittee.

Mr. HORN. Do we have any sense of what medical diagnostic and

laboratory equipment we are talking about that would be affected

by this?

Mr. CALLAHAN. They have a wide variety of equipment out there

in their labs and testing labs and in their clinics, and we’ll provide

that for the record.

Mr. HORN. OK. If you would, we would be grateful. We think it

is a problem we ought to be sure is handled.

Mr. Callahan, in the subcommittee’s prior hearings, which we

held jointly with Mr. Shays’ committee, on the Health Care Financing Administration and the new Medicare Transaction System for

processing claims, a serious problem seemed to be identified, including missed deadlines, poor management.

The original plan had been to roll out this new claims processing

system, as I remember, in the fall of 1999. The deadline has now

been scrapped, the existing claims processors are now making the

year 2000 changes to their software. If the Medicare claims processing contractors encounter even a fraction of the delays that the

Department has already experienced developing that Medicare

Transaction System, then there is a real risk that after December

31, 1999, Medicare claims will not be processed in a timely manner. I think you alluded to that in your statement.

So I guess what I am interested in, since this has such a major

impact on American society, what assurances can you give the public, Medicare beneficiaries, and the Members of Congress, whose

caseworkers in the district office will be flooded with requests if it

does not work, and to the health care providers that rely on these

billions of dollars in payments, that these claims will be paid when

they are supposed to be paid after December 31, 1999?

Mr. CALLAHAN. HCFA is approaching this on a two-part, doubletrack basis. You are correct in the assessment that the Medicare

Transaction System is a major system that is being looked at under

the Investment Technology Management Review Act. It has been

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the subject of prolonged discussions between the Department and

the Office of Management and Budget and will be with the Appropriations Committees very, very shortly.

Mr. HORN. What is the nature of the discussion between the Department and the OMB?

Mr. CALLAHAN. On MTS, the basic discussion has been on the

overall cost of moving to a Medicare Transaction System and the

savings that will result.

Aside from the schedule of putting into effect all the appropriate

software, getting dedicated sites for the processing of the Medicare

claims, there has also been a concern about how much will we actually save. There will be information provided, I’m sure, to this subcommittee and others about the savings that HCFA estimates can

occur from a unified Medicare Transaction System that will prevent duplicate claims, et cetera, and those are being looked at by

the Office of the Actuary.

So we’re trying to determine all the appropriate savings that can

be made. We’re trying to determine the appropriate costs over the

many years that this thing will be put into effect.

At the same time, HCFA has assured us that there is a doubletracking of their current contractor systems to make sure that they

are year 2000 compliant, and we are moving, as a matter of fact,

to a claims processing function that is outside of MTS that will

have one Part A contractor and one Part B contractor that will be

year 2000 compliant.

So we’re moving on this on two tracks, but I’m not going to kid

you, this is a very, very delicate, complex project, and it is the subject of very intense discussion right now between the Department,

the administration, your committee and the Appropriations Committee.

Mr. HORN. I think you are very wise to have a dual-track system.

I know every university that changed over, from some wonderful

people at the window that did it by hand and suddenly did it by

computerization, when the system crashed, they had to figure out

how to go back and do it by hand for a while.

Is this debate between OMB and the Department partly over a

sort of government-controlled system totally or the role for private

contractors on a regional basis?

Mr. CALLAHAN. The final MTS system would be contractor-owned

and contractor-operated. It is a question of how many contractors

that we have processing claims.

As you and other members of the committee would know, at one

time we had a large number of contractors processing our claims.

It was determined not only from the Congress, but by OMB, that

we wanted to reduce those numbers of contractors. We have been

doing that and this is one of the ways we would like to still try

to go. But it is a complex project and we have to put together appropriate cost estimates on the spending side to get those savings

that we are confident of once we get the system in operation.

Mr. HORN. I yield to the ranking Democrat who has a followup

question in this area.

Mrs. MALONEY. It is really a brief question to the State Department, which so far is earning an ‘‘A’’ in their readiness and reVerDate 11-MAY-2000 10:51 Jun 13, 2002 Jkt 078863 PO 00000 Frm 00114 Fmt 6633 Sfmt 6602 W:\DISC\41005 pfrm09 PsN: 41005
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sponse time and in responding to the ‘‘00 crisis’’ and having our

computers ready for the millennium problem.

You stated that you really are thinking ahead, both onshore and

offshore, and that our computer system will be working. What

about our interaction with foreign computer systems? Have you put

any thought into that, which may not be responding adequately to

the millennium problem?

Ms. MCCLENAGHAN. The Department of State does not have any

interconnection with foreign computer systems.

Mrs. MALONEY. None whatsoever?

Ms. MCCLENAGHAN. None whatsoever.

But we are concerned about our officers receiving reports in

paper form or off the Internet or other kinds of publications and

whether they can discern whether the data as contained in those

reports is from compliant systems.

Mrs. MALONEY. Thank you very much.

Ms. MCCLENAGHAN. You are welcome.

Mr. HORN. Let me go to you, General Paige. As we saw in the

Gulf war, modern warfare depends on the interconnection of very

sophisticated electronics and linking the weapons with command

and control systems, which is your bailiwick in the Department of

Defense.

I am curious if weapons systems are at risk of malfunctioning because of bad data coming from command and control systems which

are not compliant. What is the worst case you have identified with

such a malfunction?

Ltg. PAIGE. I would have to give that some thought, but right offhand, I would say the most significant system today that is not

compliant is GPS, that it will have more impact than anything

else. Yet I have no doubt that GPS will be ready, along with all

the other weapons systems and command and control systems in

the Department of Defense.

Mr. HORN. What is the nature of the problem with the GPS system? That seems such a simple thing; I wouldn’t see how the year

2000 is connected other than in a maintenance schedule.

Ltg. PAIGE. I have Mr. James from Air Force. Maybe he can explain that.

Mr. JAMES. Sir, the problem as I understand it——

Mr. HORN. Could I just swear you in quickly.

[Witness sworn.]

Mr. HORN. Proceed.

Mr. JAMES. I’m Bill James from the Office of——

Mr. HORN. Why don’t you use a microphone, too, if you can get

through that phalanx.

Ltg. PAIGE. If you prefer, I will give you a followup, a written answer to the question.

Mr. HORN. OK. But could you respond orally, though, at this

point?

Mr. JAMES. Yes, sir.

Quickly, the problem, as I understand it, is that the satellite

itself is not at issue; it is the ground station handling of the signals

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and that the software and the ground station, all that will be fixed

in time.

We’ll followup with the specific information for you.

Mr. HORN. Please, if you would.

[The information referred to follows:]

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Mr. HORN. In fact, to all of you, there will be questions, if you

don’t mind, that we will send down to you. We would appreciate

your usual cooperation in giving us an answer. We will put them

in the record at this point or where the relevant testimony is on

that problem.

Does any member of the committee have any further questions?

If not, I thank you very much.

[The information referred to follows:]

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Mr. HORN. I am going to ask the General Accounting Office to

come back and take your seats, and we will round out this hearing.

Let us know if you have got any problems and we can be of help

in prodding a few people in OMB and other places. But my basic

understanding with the Director is that it is reprogram money, not

new money, so save those pennies at the year spend-out period.

Mr. Willemssen, let me ask if, in listening to the testimony of the

Chief Information Officers, do you have some concerns you have

gathered from some of that testimony; and, if so, what are they?

And is GAO planning any followup efforts that might be affected

by that testimony?

Mr. WILLEMSSEN. I think my overriding reaction is the wide degree of variability you see on a readiness scale among the six Departments. Some are way ahead of the game; others are clearly not.

And in some cases where they are clearly not, we are talking about

a very critical agency. So there is clearly a wide degree of variability.

As I mentioned up front, our approach is going to be, and already

has been, to go into those agencies where an impact of a failure on

the year 2000 would most affect the general public and evaluate

how well the agencies are implementing their programs; and to the

extent they are not doing what we think they should, we are going

to be reporting that.

We will be reporting out this spring and summer on Veterans

Administration, and the Department of Defense. We will probably

have some preliminary things to say about the Social Security Administration and possibly the Federal Aviation Administration; and

we will also be reporting on an agency you brought up just a few

minutes ago, the Health Care Financing Administration and the

Medicare Transaction System. We will definitely have a report on

that in a few months, and we will be prepared to talk about that

in more detail at that time.

Mr. HORN. I suspect there are some agencies perhaps we should

have invited today. Based on GAO’s analysis of at-risk programs

within those agencies, the question would be, do they relate to the

year 2000 problem?

Mr. WILLEMSSEN. I guess one other critical one that comes to

mind is, obviously, the Internal Revenue Service. The impact on

the public could be fairly traumatic with a year 2000 failure there.

But, other than that, you have a pretty good cross-section here.

One thing to maybe consider down the road is also bringing in

some of the component agencies, who are really closer, hands-on,

to what may be actually going on.

Mr. HORN. To what degree will you review the State activities

with some of these Federal-State partnerships, HHS, Labor, other

agencies that have those relationships that go back 50, 60, 70

years? Should we be looking at that?

Mr. WILLEMSSEN. That is an area of concern.

The major assignment we have recently initiated that will be

looking at that is at the Social Security Administration. As you are

aware, SSA is considered to be further out front than any other

agency; and one of the reasons we wanted to go in there was to see

if we could find any lessons learned that could be applied to other

agencies.

146

But there is a critical interface issue there with some of the

State systems that we will be closely evaluating, and to the extent

we can identify some improvements and corrective actions we will

point those out.

Mr. HORN. Does any member of the minority, the ranking member, have any additional questions?

Mrs. MALONEY. Yes, thank you, Mr. Chairman.

First of all, from the testimony we heard earlier from the previous panel, some were well along the road to completing the task

and others had quite a long way to go. What incentives can you

recommend that we could use to give these agencies to get them

moving quicker and more accurately on this problem, those that

need to?

Mr. WILLEMSSEN. The best incentive that you can have is to continue having hearings such as these and continually asking the departments and agencies where they are at. In doing that, bring up

to them what they said they were going to do several months ago

and where are they at today.

Mrs. MALONEY. Earlier I was handing out a grade to one of the

agencies. Based on the testimony that you heard, would you grade

the agencies on where you think they are?

Mr. WILLEMSSEN. I would be reluctant to do that.

Mr. HORN. Are you a product of the sixties or what? No grades;

everybody’s at the top of the class?

Mr. WILLEMSSEN. Once we have completed evaluations at specific

agencies, I will be more than happy to answer that question.

Mr. HORN. Good. We will bring you in, and you and I can flip

if there’s a tie. We might have incompletes next time, not just A,

B, C, D and F.

Mrs. MALONEY. We will certainly need an early warning system

for those that are in a critical situation. How soon do you think you

will have before us a developed early warning system?

Mr. WILLEMSSEN. Late this spring and early this summer, we

should be in a position to begin sounding warnings on specific

agencies. We do not have anything in place and planned yet that

is government-wide in nature.

We are a bit reluctant to do that, in view of the fact that OMB

is now planning a quarterly reporting system. So we are a bit reluctant to overload too many of the departments and agencies with

additional reporting requirements.

We did consider that early on. We are standing pat right now

and trying to work with OMB.

Mrs. MALONEY. Mr. Chairman, I think we should get OMB here

for their early warning system, then.

I have no further questions. Thank you.

Mr. HORN. Mr. Davis.

Mr. DAVIS OF ILLINOIS. Nothing, thank you.

Mr. HORN. Thank you very much.

And now I would like to conclude the hearing by thanking the

staff that helped in the preparation.

Our staff director for the Subcommittee of Government Management, Information, and Technology is J. Russell George, who is

right behind me; and to my left, the counsel assigned for this particular area, so you will be hearing from him, and he is safe for

147

employment for the next 4 years on this problem, is Mark

Uncapher, who is counsel to the subcommittee; and Andrea Miller,

our clerk, who helped put the hearing together.

And for the minority professional staff, Mark Stephenson; David

McMillen; and my own office, David Bartel, the chief of staff; and

Matt Phillips, who has handled the communications and press aspects.

We thank, too, our official reporters, Pam Garland and Bill

Odom; and, with that, this hearing is adjourned.

[Whereupon, at 12:05 p.m., the subcommittee was adjourned.]

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