United States General Accounting Office

GAO Report to the Chairman, Committee on

Banking and Financial Services, House

of Representatives

October 1998 YEAR 2000

COMPUTING CRISIS

Status of Efforts to

Deal With Personnel

Issues

GAO/AIMD/GGD-99-14

GAO United States

General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-280543 

October 22, 1998

The Honorable James J. Leach

Chairman

Committee on Banking and Financial Services

House of Representatives

Dear Mr. Chairman:

With close to half the world’s total computer capacity and 60 percent of its

Internet assets, the United States is the most advanced and most

dependent user of information technology.1

 Should these information

systems—which perform functions and services critical to our

nation—suffer disruption, a widespread crisis could result. Accordingly,

the upcoming change of century is a sweeping and urgent challenge for

public- and private-sector organizations. Correcting this problem will be

labor-intensive and time-consuming—and must be done while systems

continue to operate. However, many departments and agencies2

 are

expressing concern that the critical information technology personnel

needed to correct the Year 2000 problem are not available.

Given the criticality of the Year 2000 problem and the importance of

having adequate resources to solve the problem, you asked us to assist in

assessing workforce issues associated with the Year 2000. Our objectives

were to (1) determine the nature and extent of Year 2000 personnel issues

being reported by federal agencies and (2) identify what is being done by

the government to address reported federal personnel shortages related to

the Year 2000 problem. Appendix I contains our scope and methodology.

Results in Brief About half of the 24 large agencies and a quarter of the 41 small agencies

and independent entities reporting to the Office of Management and

Budget (OMB) expressed concerns that the personnel needed to resolve the

Year 2000 problem would not be available. Generally, these concerns fall

into the categories of difficulty in finding and keeping qualified

government personnel, and difficulty in obtaining contractors. While a

significant number of agencies are raising these concerns, their comments

are largely anecdotal and a comprehensive analytical assessment of the

1

Critical Foundations: Protecting America’s Infrastructures (President’s Commission on Critical

Infrastructure Protection, October 1997).

2

Departments and agencies will be referred to collectively as agencies throughout this letter.

Page 1 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

issue has not yet been made. As a result, the full extent and severity of the

Year 2000 workforce issue across the government is not known.

The President’s Council on Year 2000 Conversion, the Chief Information

Officers (CIO) Council, and the Office of Personnel Management (OPM) have

various initiatives underway to address reported Year 2000 personnel

issues. For example, OPM has recently developed additional human

resources management aids, such as waivers allowing agencies to rehire

federal retirees without the usual offsets, to assist agencies in dealing with

Year 2000 workforce issues.

While such initiatives have provided agencies with important options to

help address reported Year 2000 personnel problems, it is not yet clear

that recent actions have enabled agencies to successfully resolve all

perceived personnel issues. Accordingly, it is essential that OMB, as part of

its monitoring responsibilities for the government’s Year 2000 program,

continue to solicit from agencies whether they have any remaining Year

2000 personnel problems and to help provide specific assistance to

individual agencies. Moreover, OMB should work with the CIO Council to

expedite evaluations of the full extent and scope of information

technology personnel issues to help formulate effective solutions.

Background On January 1, 2000, computer systems worldwide could malfunction or

produce inaccurate information simply because the century has changed.

Unless corrected, such failures could have a costly, widespread impact.

The problem is rooted in how dates are recorded and computed. For the

past several decades, systems have typically used two digits to represent

the year—such as “97” for 1997—to save electronic storage space and

reduce operating costs. In such a format, however, 2000 is

indistinguishable from 1900. Software and systems experts nationwide are

concerned that this ambiguity could cause systems to malfunction in

unforeseen ways, or to fail completely.

As we reported to you and testified to Congress earlier this year, the

public faces a risk that critical services could be severely disrupted by the

Year 2000 computing crisis.3

 Financial transactions could be delayed,

airline flights grounded, and national defense affected. Also, the many

3

Year 2000 Computing Crisis: Strong Leadership and Effective Public/Private Cooperation Needed to

Avoid Major Disruptions (GAO/T-AIMD-98-101, March 18, 1998); Year 2000 Computing Crisis: Strong

Leadership Needed to Avoid Disruption of Essential Services (GAO/T-AIMD-98-117, March 24, 1998);

and Year 2000 Computing Crisis: Potential for Widespread Disruption Calls for Strong Leadership and

Partnerships (GAO/AIMD-98-85, April 30, 1998).

Page 2 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

interdependencies that exist among governments and within key

economic sectors could cause the failure of a single system to have

adverse repercussions across the nation and internationally. While

managers in the government and the private sector are taking many

actions to mitigate these risks, a significant amount of work remains, and

time frames are unrelenting.

One key concern in addressing the Year 2000 problem is the availability of

trained information technology personnel. We reported in April 1998, that

while various agencies stated that they or their contractors had problems

in obtaining or retaining information technology personnel, no

governmentwide strategy existed to address recruiting and retaining the

personnel with the appropriate skills for Year 2000-related work.4

 We

recommended that the Chairman of the President’s Council on Year 2000

Conversion develop a personnel strategy which includes (1) determining

the need for various information specialists, (2) identifying any

administrative or statutory changes that would be required to waive

reemployment penalties for former federal employees, and (3) identifying

ways to retain key Year 2000 staff in agencies through the turn of the

century.5

 We reemphasized the need for such a strategy in a June 1998

testimony.6

Within the executive branch, several executive councils and agencies are

responsible for the human resources aspect of the Year 2000 effort. These

councils and agencies, and their respective Year 2000 responsibilities are

described below:

• The President’s Council on Year 2000 Conversion is chaired by an

Assistant to the President and is comprised of one representative from

each of the executive departments and from other federal agencies as

determined by the chair. The chair of the Conversion Council is tasked

with the following Year 2000 roles: (1) overseeing federal agencies’ Year

2000 activities, (2) acting as chief spokesperson in national and

international forums, (3) providing policy coordination of executive

branch activities with state, local, and tribal governments, and

4

GAO/AIMD-98-85, April 30, 1998.

5

Shortly after a draft of our report was given to the Chairman for comment, OPM issued a

memorandum stating that the Year 2000 was an “unusual circumstance” which would allow OPM to

grant agencies waivers, allowing them to rehire former federal personnel to work on Year 2000

conversion efforts temporarily without a reduction in the employee’s salary or annuity.

6

Year 2000 Computing Crisis: Actions Must Be Taken Now to Address Slow Pace of Federal Progress

(GAO-T-AIMD-98-205, June 10, 1998).

Page 3 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

(4) promoting appropriate federal roles with respect to private sector

activities.

To date, the Conversion Council has established several working groups to

address Year 2000 concerns. One of these is the Workforce Issues working

group, which began meeting in May 1998. The working group is chaired by

the Deputy Secretary of the Department of Labor, and includes officials

from the Departments of Labor, Education, Housing and Urban

Development, Commerce, Defense, as well as OPM and the Small Business

Administration. The group’s main objective is to determine what the

federal government can do to help meet the country’s needs for technically

skilled personnel to address the Year 2000 problem, with special attention

to small businesses, local governments, and organizations in rural areas.

• The CIO Council is comprised of CIOs and Deputy CIOs from 30 federal

departments and agencies, representatives from OMB, and the chairs of the

Government Information Technology Services Board and Information

Technology Resources Board. It is the principal interagency forum for

improving the design, modernization, use, sharing, and performance of

information technology resources. The Council’s role includes:

(1) developing recommendations for information technology management

policy, procedures, and standards, (2) identifying opportunities to share

information resources, and (3) assessing and addressing the needs of the

federal government for an information technology workforce. One of the

committees reporting to the CIO Council, the Education and Training

Committee, is charged with addressing issues in hiring, training, and

maintaining an effective federal information technology workforce.

• OMB is responsible for overseeing federal agencies’ responses to the Year

2000 problem. In early 1997, OMB issued a broad Year 2000 strategy for the

federal government and required that 24 major agencies submit quarterly

reports on their Year 2000 progress.7

 On January 20, 1998, OMB added new

quarterly reporting requirements, specifically asking agencies to provide a

narrative description of progress, including a description of any problems

affecting progress and, in particular, any problems in acquiring or

retaining skilled personnel. In March and April 1998, OMB requested that an

additional 31 small agencies report their progress to OMB by April 30, 1998,

and another 10 small agencies and other entities, such as the Tennessee

Valley Authority and the United States Postal Service, report by May 15,

1998. Most recently, in July 1998, OMB revised its earlier reporting

requirements and asked that nine small and independent agencies begin

7

Although 25 major agencies report to OMB, we are only reporting on 24. The Central Intelligence

Agency’s reports are classified, and so are not included in this summary.

Page 4 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

providing quarterly reports on progress in addressing difficulties relating

to the Year 2000 problem.

• OPM, the federal government’s human resources agency, provides federal

agencies with personnel services and policy leadership including staffing

tools, guidance on labor-management relations, preparation of

government’s future leaders, compensation policy development, and

programs to improve workforce performance. OPM is responsible for

helping agencies to equip themselves with the systems they need to

manage their human resources effectively, and in light of the Year 2000

problem, is providing tools that agencies may use to help recruit and retain

information technology professionals.

Concerns Exist About

the Availability of

Information

Technology Personnel

Of the 24 large agencies reporting to OMB, 13 are expressing concerns

about the availability of information technology personnel.8

 Also, 10 of the

41 small agencies and independent entities expressed these concerns.9

These organizations’ concerns generally fall into the categories of

difficulty in recruiting and retaining internal staff and in obtaining

contractor support. Appendix II identifies the organizations reporting

workforce issues and summarizes them. It also identifies the organizations

with no reported concerns.

Agencies Reporting

Difficulty in Finding and

Keeping Needed Personnel

Both large and small agencies and entities reported that retaining key

information technology staff and recruiting new staff were among their

greatest concerns in addressing the Year 2000 problem. Agencies indicated

that they had lost skilled information technology employees through

retirements and through increased recruitment by the private sector. For

example, in May 1998, the Department of Agriculture reported that several

of its agencies expressed particular concern that the loss of staff would

affect their ability to meet Year 2000 deadlines. Specifically, the Farm

Services Agency reported that it lost 28 (7 percent) of its 403 information

technology staff in the first 6 months of fiscal year 1998.

Agencies have also reported that recruiting replacements for information

technology personnel is difficult. The Department of Veterans Affairs

noted that recruiting is very competitive for Year 2000 professionals in

8

Four of these agencies, the Department of Agriculture, the Department of Commerce, the Department

of Labor, and the Department of the Treasury did not state these concerns in their August reports to

OMB, but told us of them in subsequent discussions.

9

Three of these entities, the Farm Credit Administration, the Federal Deposit Insurance Corporation,

and the Neighborhood Reinvestment Corporation did not state these concerns in their reports to OMB,

but told us of them in subsequent discussions.

Page 5 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

some geographic areas, and stated the concern that with lucrative finders

fees being advertised, government employees may leave for the private

sector. Also, the National Credit Union Administration reported that it had

experienced difficulties in hiring senior Year 2000 program officials.

Among the various types of information technology workers needed,

computer programmers are reported to be in the shortest supply. For

example, in February 1998, the Justice Department reported that it had

difficulty hiring and retaining skilled COBOL10 programmers. In August, the

Department reported that it continues to encounter these problems. As

another example, in its February, May, and August reports, the

Environmental Protection Agency stated that it experienced problems

finding PL/I11 programmers.

Agencies Reporting

Difficulty in Obtaining

Contractor Support

Recruiting and retaining qualified contract personnel is another issue

frequently mentioned by agencies reporting staffing problems. Once again,

the specific type of information technology worker most often mentioned

as being in short supply is programmers. For example, the Department of

Justice reported in February, May, and again in August that it is continuing

to encounter problems in obtaining contractor support with the necessary

programming skills.

Agencies’ concerns also include the high turnover rate of contractor staff

and the time it takes to recruit contractor staff. For example, the State

Department indicated in May 1998 that the recruitment cycle for replacing

contract systems programmers took more time than in past years despite

the use of professional recruitment services by the contract vendors.

Also, several agencies noted problems with increasing contract labor wage

rates. These agencies reported that they are having to increase the hourly

rate they pay for contractor staff because contractors are increasing their

own staff salaries. For example, the Department of Agriculture indicated

that its agencies are experiencing contracting delays as vendors find it

increasingly difficult to bring on more contract employees without

substantial increases in contract dollars. In addition, the Federal Deposit

Insurance Corporation reported that some of its contractors are losing

personnel to higher salaries with other contractors. When replacing these

personnel, the contractors are increasing their hourly rates.

10COBOL (Common Business Oriented Language) is a common programming language for business

applications that was introduced in the 1960s.

11PL/I (Programming Language 1) is a programming language that was introduced in the 1960s.

Page 6 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

Four agencies reported delays on six system development efforts because

of problems they had encountered in obtaining contractors to address the

Year 2000 problem. For example, the State Department reported that the

loss of key contractor personnel had delayed the completion of one of its

mission critical systems, the Management, Policy and Planning

Information System, by 3 months. The Department of Commerce also

reported that its Patent and Trademark Office experienced a 3-month

delay on one of its mission-critical system development efforts, the

Classified Search and Image Retrieval system, when the contractor was

unable to place qualified staff on the task. The task order was terminated

with that contractor, a new task order was awarded to another contractor,

and work is now proceeding.

Full Extent and Severity of

Year 2000 Workforce Issue

Is Unclear

Although a significant number of agencies are reporting concerns with the

availability of qualified Year 2000 staff, it is not possible to determine the

full extent or severity of personnel shortages from these concerns because

they are often anecdotal. For example, one department notes that one of

its agencies “has had difficulty” hiring a particular type of programmer,

while another reports that it is encountering “some problems” hiring

personnel. Also, only six mission critical systems were reported to have

“experienced delays” in reaching Year 2000 compliance because of

personnel issues. Without more detailed information on the nature and

extent of personnel issues, it is difficult to determine how to best address

it.

Executive Councils

and OPM Have Begun

to Respond to

Reported Year 2000

Personnel Issues

OPM, the Conversion Council, and the CIO Council have various initiatives

underway to address Year 2000 personnel issues: OPM has provided tools to

assist agencies in dealing with Year 2000 workforce issues; the Conversion

Council is identifying solutions to personnel shortages in both the

government and the private sector; and the CIO Council has initiated a

broad study of information technology workforce issues in the

government and private sector.

OPM Provides Aids to

Agencies to Help in

Obtaining Needed

Personnel

Agencies currently have a number of aids they can use to help recruit and

retain needed personnel. Some have been available for years. Others are

new. These aids are summarized below:

Recruitment and relocation bonuses: Federal agencies have the authority

to make a lump-sum payment of up to 25 percent of basic pay to a newly

appointed employee, or to an employee who must relocate in cases in

Page 7 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

which the agency determines that the position would otherwise be

difficult to fill. In return for this lump-sum payment, the employee must

sign a service agreement with the agency to complete a specified period of

employment.

Superior qualifications appointments: Agencies have the authority to set

pay for new appointments or reappointments of individuals to General

Schedule (GS) positions above step 1 of the grade12 on the basis of the

candidate’s superior qualifications or the agency’s special need.

Pay at highest previous rate: Upon reemployment, transfer, reassignment,

promotion, or change in type of appointment, agencies can set an

employee’s basic pay by taking into account the employee’s previous pay

rate while employed in another civilian federal position (with certain

exceptions).

Temporary and term appointments: Agencies can use temporary

appointments in the competitive service for positions not expected to last

longer than 1 year, but which can be extended for 1 additional year.

Agencies can use term appointments when positions are expected to last

longer than 1 year but not more than 4 years.

Retention allowances for individual employees: Agencies have the

authority to make continuing payments of up to 25 percent of basic pay if

the agency determines that (1) the unusually high or unique qualifications

of the employee or the agency’s special need for the employee’s services

makes it essential to retain the employee and (2) the employee would be

likely to leave federal service in the absence of a retention allowance.

Retention allowances must be paid in accordance with the agency’s

previously established retention allowance plan and must be reviewed and

certified annually.

Performance and incentive awards: Agencies can provide employees a

lump-sum cash award on the basis of a fully successful or better rating of

record or in recognition of accomplishments that contribute to the

improvement of government operations. Awards based on the rating of

record can be up to 10 percent of salary, or up to 20 percent for

exceptional performance, provided the award does not exceed $10,000 per

employee. With OPM review and approval, agencies can grant awards over

12In the federal government, grades represent levels of difficulty, responsibility, and qualifications that

are sufficiently similar to warrant their inclusion within one range of basic pay. Each grade includes 10

fixed rates of pay through which employees advance based on satisfactory job performance and length

of service.

Page 8 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

$10,000, up to $25,000. Any award that would grant over $25,000 to an

individual employee must be reviewed by OPM for submission to the

President for approval.

Quality step increases: Agencies have the authority to increase an

employee’s pay by providing an additional step increase to an employee

who has received the highest rating of record available in the agency’s

performance appraisal program.

Training and education costs reimbursement: Agencies can pay or

reimburse an employee for all or part of the necessary expenses for

training and education, including the costs for college tuition. Agencies

may require service agreements for training of long duration or of high

cost.

Advance payments for new appointees: Agencies may advance a new hire

up to two paychecks so that a new employee can meet living and other

expenses.

Special salary rates: Agencies may request a higher salary rate for an

occupation or group of occupations nationwide or in a local area based on

a finding that the government’s recruitment or retention efforts are, or

would likely become, significantly handicapped without those higher

rates. The minimum of a special rate range may exceed the maximum of

the corresponding grade by as much as 30 percent. However, no special

rate may exceed the rate for Executive Level V (currently $110,700). A

special rate request must be submitted to OPM by department headquarters

and must be coordinated with other federal agencies with employees in

the same occupational group and geographic area.

Dual compensation waivers for retirees: On March 30, 1998, OPM issued a

memorandum announcing that agencies could reemploy federal retirees

(civilian and military) to work specifically on the Year 2000 conversion

without the usually required reduction in the retiree’s salary or military

annuity. With OPM’s determination that the Year 2000 computer conversion

problem is an “unusual circumstance,” agencies can request delegated

authority from OPM to rehire former federal personnel (up to a maximum

number of individual exceptions approved by OPM) on a temporary basis

through March 31, 2000.

Premium pay for employees performing emergency work: Agencies have

authority under the law and OPM regulations to make exceptions to the

Page 9 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

biweekly limitation on premium pay (including overtime, night, and

holiday pay) when the head of an agency or his or her designee determines

that an emergency involving a direct threat to life or property exists. In its

March memorandum, OPM also encouraged agency heads to exercise this

authority in the case of any employee who performs emergency work to

resolve a direct threat to property (including monetary errors or cost) in

connection with updating computer systems to prevent malfunction,

erroneous computations, or other problems associated with the Year 2000.

By exercising this authority, agencies will be able to compensate

employees who perform significant amounts of overtime work related to

the Year 2000 problem, as long as the total of their basic pay and premium

pay does not exceed a certain rate.13

Exclusions from early retirement programs: On June 15, 1998, OPM issued

interim regulations allowing agencies, with OPM approval, to limit the

scope of voluntary early retirement offers when separating or

downgrading employees in a major reorganization, a major reduction in

force, or a major transfer of functions. Agencies can limit their retirement

offers on the basis of (1) occupational series or level, (2) organizational

unit, (3) geographic area, (4) specific window periods, (5) other similar

nonpersonal factors, or (6) any combination of these factors that the

agency determines appropriate. Using this tool, agencies can exclude

critical Year 2000 positions from any voluntary early retirement program it

offers.

Retention allowances for groups or categories of employees: On June 23,

1998, OPM issued interim regulations allowing agencies to authorize a

retention allowance of up to 10 percent of an employee’s rate of basic pay

(or up to 25 percent with OPM approval) for a group or category of

employees such as computer programmers and system engineers.

Retention allowances authorized for a category of employees must be

based on a written determination that (1) the category of employees has

unusually high or unique qualifications, or (2) the agency has a special

need for the employees’ services that makes it essential to retain the

employees in that category, and (3) it is reasonable to presume that there

is a high risk that a significant number of employees in the targeted

category are likely to leave federal service in the absence of the allowance.

Conversion Council Is

Identifying Solutions to

Workforce Issues

The Conversion Council’s Year 2000 Workforce Issues working group

began meeting in May 1998 to address some of the Year 2000 workforce

issues in both the government and private sector, focusing on three areas:

13An employee’s total annual salary is not to exceed the rate for GS-15, step 10.

Page 10 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

(1) raising awareness of the Year 2000 problem, (2) helping managers

assess their particular situations, and (3) connecting managers with

solution-providers, including programmers, project managers, and those

familiar with embedded systems. In July 1998, the working group released

a draft sector action plan which lists key activities that the group is

undertaking. Specifically, the group

• established an Internet site to link information technology workers with

the companies that need them to solve the Year 2000 problem;14

• is attempting to determine the effect of workforce issues on local

communities by surveying community colleges; and

• is exploring outreach activities, such as having community colleges raise

awareness of the Year 2000 problem within their communities and assist in

solving the problem.

Although some of these initiatives may benefit the government, the

working group is clearly adopting a nationwide focus and is not solely

targeting the federal workforce issue.

CIO Council Is Studying

the Workforce Challenge

In March 1998, the CIO Council tasked its Education and Training

committee with crafting recommendations and legislation by May 1998 to

help agencies recruit and retain information technology personnel.

However, the committee found that in order to develop recommendations,

it first needed more information about the problem.

In May, the committee formed five focus teams to study the federal

information technology workforce challenge. The focus teams will address

the following areas: (1) national workforce strategies, (2) federal

workforce planning, (3) recruitment, (4) retention, and (5) executive

development. Each team will present its findings at a forum of CIO Council

Members, Human Resource Council members, and OPM personnel

currently planned for November 1998. The committee expects to prepare a

final conference report to the CIO Council after the November 1998 forum.

According to the Co-Chair of the Committee, part of the study will be

focused specifically on the Year 2000 personnel issue and determining the

extent and scope of the personnel problems that exist for the Year 2000

problem.

14This site is part of the Labor Department’s electronic America’s Job Bank and America’s Talent Bank

(Internet databases).

Page 11 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

It is unclear, however, that this committee will produce timely

recommendations because the final report is scheduled to be issued after

November 1998, which may be too late to address the Year 2000 workforce

issues.

Effectiveness of Year 2000

Workforce Initiatives Not

Yet Assured

While the executive councils and OPM have initiatives underway to help

resolve Year 2000 workforce issues, it is not yet known if these efforts will

effectively address federal agencies’ concerns. OPM has developed new

human resources management flexibilities, the Conversion Council

working group is identifying solutions that are applicable to private

industry, and the CIO Council is studying the problem. No organization,

however, is working with individual agencies to determine how significant

their personnel concerns are, and if they can be adequately resolved

through existing human resources management tools. Given that the

potential consequences of having an inadequate workforce to tackle

critical Year 2000 conversions are severe, such an endeavor seems

worthwhile.

Conclusions A significant number of agencies have reported concerns about the

availability of information technology personnel needed to address their

Year 2000 problems. Also, the executive councils and OPM have a number

of initiatives underway to address perceived personnel shortages.

However, it is not yet known whether these efforts will ensure an adequate

supply of qualified personnel to solve the government’s Year 2000

problem.

Various organizations have responsibilities in this arena. While individual

agencies are in the best position to determine if current tools adequately

resolve their own Year 2000 personnel issues, OMB is responsible for

overseeing federal agencies’ responses to the Year 2000 problem, and OPM

has both the knowledge of existing personnel management options and, in

some cases, the authority to waive existing rules or develop new

approaches.

The workforce issue could quickly become more complicated. As

awareness of the criticality of the Year 2000 problem grows throughout

government and industry, there is a chance that competition for limited

skilled personnel will increase. If this more vigorous competition occurs,

the government may find it increasingly difficult to obtain and retain the

skilled personnel needed to correct its mission critical systems in time.

Page 12 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

Given the adverse consequences of any staffing shortages, it is critical that

agencies be able to quickly determine if mechanisms currently exist to

resolve personnel issues or if additional solutions are needed.

Recommendations Given the likelihood that critical government operations will cease if key

systems are not made Year 2000 compliant, we recommend that the

Director of the Office of Management and Budget, as part of the agency’s

monitoring responsibilities for the government’s Year 2000 program,

determine if recent OPM initiatives have satisfactorily addressed agencies’

reported personnel problems.

If these problems have not been addressed by existing OPM tools, the

Director of the Office of Management and Budget should designate an OMB

official who, together with OPM and the CIO Council, would proactively and

quickly help individual agencies resolve their Year 2000 workforce

concerns.

We also recommend that the Director of the Office of Management and

Budget work with the CIO Council to expedite the portions of its ongoing

study that are relevant to the Year 2000 problem, with a goal of issuing its

Year 2000-related recommendations as soon as possible.

Agency Comments The Chairman of the President’s Council on Year 2000 Conversion, as well

as officials representing the CIO Council, OMB, and OPM provided oral

comments on a draft of this report. These officials concurred with the

report and our recommendations. They also offered several technical

suggestions which we have incorporated as appropriate.

We are sending copies of this report to the Chairmen and Ranking

Minority Members of the Senate and House Committee on Appropriations

and the House Committee on Government Reform and Oversight; the

Ranking Minority Member of the House Committee on Banking and

Financial Services; the Co-Chairs of the House Year 2000 Task Force; the

Chairman of the President’s Council on Year 2000 Conversion; the Director

of the Office of Management and Budget; and the Director of the Office of

Personnel Management. Copies will also be made available to others upon

request. If you have any questions about this report, please contact us at

(202) 512-6253 and (202) 512-8676, respectively. We can also be reached by

Page 13 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
B-280543 

e-mail at willemssenj.aimd@gao.gov and brostekm.ggd@gao.gov. Major

contributors to this report are listed in appendix III.

Sincerely yours,

Joel C. Willemssen

Director, Civil Agencies Information Systems

Accounting and Information Management Division

Michael Brostek

Associate Director, Federal Management

 and Workforce Issues

General Government Division

Page 14 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Page 15 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Contents

Letter 1

Appendix I 

Scope and

Methodology

18

Appendix II 

Agencies’ Information

Technology Personnel

Concerns

19

Appendix III 

Major Contributors to

This Report

25

Tables Table II.1: Agencies Reporting Personnel Problems 19

Table II.2: Agencies Not Reporting Personnel Problems in Their

Latest Reports To OMB

23

Abbreviations

CIO Chief Information Officer

GS General Schedule

OMB Office of Management and Budget

OPM Office of Personnel Management

Page 16 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Page 17 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix I 

Scope and Methodology

To determine the nature and extent of the Year 2000 personnel issues

being reported by federal agencies, we reviewed and analyzed the Year

2000 progress reports submitted to OMB by 24 large agencies in February,

May, and August 1998, by 40 of the 41 small agencies and entities in April

and May 1998,1

 and by 9 of those same small agencies and entities that

were requested to report in August 1998. In addition, when personnel

issues were not specifically addressed by these agencies in their progress

reports or when the progress reports were not submitted to OMB, we

conducted telephone interviews with agency officials to determine if the

agencies were experiencing personnel problems related to the Year 2000

problem. Further, after reviewing the August 1998 reports, we conducted

telephone interviews with agency officials when an agency was newly

reporting it had no personnel problems. We did this to determine if prior

concerns had been resolved. We did not independently assess the

reliability of the information provided by the agencies.

To identify what is being done to address personnel shortages related to

the Year 2000 problem, we evaluated the Year 2000 personnel efforts of

OPM, the Human Resources Technology Council, and the CIO Council’s

Education and Training and Year 2000 Committees. We also reviewed the

efforts of the Workforce Issues Working Group of the President’s Council

on Year 2000 Conversion. In addition, we interviewed officials from each

of these groups.

We conducted our review from May 1998 through August 1998 in

accordance with generally accepted government auditing standards. We

provided a draft of this report to the Chair of the President’s Council on

Year 2000 Conversion, the Chair of the CIO Council, and OPM and OMB

management and incorporated their comments as appropriate.

1

OMB did not receive a report from the Federal Home Loan Mortgage Corporation.

Page 18 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix II 

Agencies’ Information Technology

Personnel Concerns

Table II.1 summarizes the concerns identified by the various agencies and

other entities in their reports to OMB. In cases where the agencies and

entities did not specifically report on personnel issues, we interviewed

agency officials to determine if the agencies were experiencing personnel

problems related to the Year 2000 problem. Also, in cases where agencies

newly reported that they had no personnel problems in August 1998, we

interviewed agency officials to determine if prior concerns had been

resolved. We did not independently assess the reliability of the information

provided by the agencies. Table II.2 lists the agencies and entities that

identified no concerns with the availability of personnel to address the

Year 2000 problem.

Table II.1: Agencies Reporting

Personnel Problems

Agency

Description of in-house

personnel issue

Description of contractor

issue

Large departments and agencies (13)

Agency for International

Development

The agency is experiencing

increased attrition, and

reported concern with the

short supply of human

resources and the upward

pressure on salaries of key

personnel.

A contractor hired to

perform legacy system

maintenance and Year 2000

compliance services did not

supply the key officials as

provided in the contract for

5 weeks.

Agriculture The department is

encountering high turnover

and is finding it difficult to

compete with higher

salaries being offered by

private industry.

Vendors are finding it

increasingly difficult to bring

on contract employees

without substantial

increases in contract dollars

and have lost contract

employees who have left for

better paying positions.

Commerce The department reported

that it continues to

experience difficulties in

finding and hiring qualified

information technology

personnel.

A key contractor was

unable to provide qualified

staff, causing contract

delays.

Energy The department reported

that one facility has

experienced difficulty in

retaining and recruiting

programming resources for

the Year 2000 effort.

Efforts to contract for

mainframe systems

programmers at one facility

have not been successful.

Environmental

Protection

Agency

The agency experienced

problems in finding

programmers needed to fix

key payroll systems. 

While the agency has

located contractor

resources, the costs are

higher than the agency has

historically paid.

(continued)

Page 19 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix II 

Agencies’ Information Technology

Personnel Concerns

Agency

Description of in-house

personnel issue

Description of contractor

issue

Interior The department reported

concern that unforeseen

retirements could affect its

Year 2000 efforts.

Justice The department is

experiencing difficulty

acquiring and retaining

skilled personnel,

particularly COBOL

programmers. 

The department is

encountering problems in

obtaining contractor

support with necessary

programming skills.

Labor The department is

experiencing problems in

acquiring and retaining

skilled programmers.

The department reported

concerns with the

availability of trained

contractor staff and that the

turnover rate tends to be

high due to current market

conditions.

National

Aeronautics and Space

Administration

The Ames Research Center,

located in the Silicon Valley

area, is finding it a

challenge to hire qualified

contract programmers.

State The department

experienced high turnover

in systems support

personnel, and is now

facing severe staffing

shortages.

The department reported

that recruiting to replace

contract systems

programmers has taken

more time than in past

years and has resulted in a

labor rate increase.

Transportation The department reported

that one agency’s

contractors have

experienced problems in

finding qualified

programmers.

Treasury The department

encountered an increased

rate of attrition of its

information systems

workforce. It reported that

skilled programmers,

especially those with skills

in legacy platforms, are in

strong demand with the

private sector, which can

pay significantly higher

salaries than the

government.

(continued)

Page 20 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix II 

Agencies’ Information Technology

Personnel Concerns

Agency

Description of in-house

personnel issue

Description of contractor

issue

Veterans

Affairs

The department reported

that recruiting is very

intensive for Year 2000

professionals in some

geographic areas and

expressed the concern that

government employees

may leave for the private

sector because of the

lucrative “finders fees”

being advertised.

Contractors are having

difficulty finding and

retaining personnel.

Small agencies and other entities (10)

Farm Credit

Administration

The agency reported that

retention and recruitment

could become key issues if

key computer programmers

and/or network personnel

decide to leave the agency.

Federal Communications

Commission

The agency expressed

concern about retaining

sufficient qualified

contractors to carry out

needed work as the

demand for Year 2000

programmers increases.

Federal Deposit

Insurance Corporation

The agency has

encountered problems with

contractors who are losing

personnel for higher

salaries at other

contractors. When

replacing the contractor

staff, they are increasing

the hourly rate.

National Archives and

Records Administration

The agency reported that it

has insufficient personnel

resources to accomplish all

Year 2000 renovation,

testing, and implementation

work in-house.

National Credit

Union Administration

The agency experienced

delays in scheduling the

conversion of its systems

due to competing

workloads. Also, it has

experienced difficulties in

hiring senior Year 2000

program officials.

(continued)

Page 21 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix II 

Agencies’ Information Technology

Personnel Concerns

Agency

Description of in-house

personnel issue

Description of contractor

issue

Neighborhood

Reinvestment

Corporation

The agency has

encountered increased

competition for skilled Year

2000 personnel, and has

had to settle for Year 2000

contractors with fewer skills

than needed because the

contractors that possessed

all the desired skills

generally cost too much.

Also, the agency reported

that its consultants are

paying their staffs more to

retain them, and these

costs are being passed on

to the agency.

Office of Administration,

Executive Office of the

President 

The office reported that the

Year 2000 program is

severely straining the

workload of existing

information systems and

technology personnel, and

that any diversion of

personnel to the Year 2000

program creates a potential

support problem for

ongoing or day-to-day

operations.

The office reported that

finding contractor personnel

with the appropriate skill

level to analyze legacy

systems and to recommend

alternatives continues to be

a problem.

Peace Corps The corps reported its

concerns with retaining

information resources

management staff and

filling vacancies.

Tennessee

Valley

Authority 

The agency has

encountered problems

matching information

technology skill sets with

specific Year 2000 needs

and has found that there is

a strong employment

market for information

technology skills. It also

reported that salaries have

increased for all information

technology skills, not just for

Year 2000 staff.

U.S. Postal Service The service reported that

retaining skilled resources

needed for remediation and

testing continues to be a

challenge which is

exacerbated by a limited

labor pool.

The service reported that

retaining skilled contractor

staff continues to be a

challenge.

Page 22 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix II 

Agencies’ Information Technology

Personnel Concerns

Table II.2: Agencies Not Reporting

Personnel Problems in Their Latest

Reports to OMB1

Large Departments and Agencies (11)

Defense

Education

Federal Emergency Management Agency

General Services Administration

Health and Human Services

Housing and Urban Development

National Science Foundation

Nuclear Regulatory Commission

Office of Personnel Management

Small Business Administration

Social Security Administration

Small Agencies and Other Entities (31)

Armed Forces Retirement Home Board

Commodities Futures Trading Commission

Consumer Product Safety Commission

Corporation for National and Community Services

Defense Nuclear Facilities Safety Board

Equal Employment Opportunity Commission

Export-Import Bank of the United States

Federal Election Commission

Federal Energy Regulatory Commission

Federal Home Loan Mortgage Corporation

Federal Housing Finance Board

Federal Reserve System

Federal Retirement Thrift Investment Board

Federal Trade Commission

John F. Kennedy Center for the Performing Arts

Legal Services Corporation

National Gallery of Art

National Labor Relations Board

National Mediation Board

National Transportation Safety Board

Overseas Private Investment Corporation

Pension Benefit Guaranty Corporation

Railroad Retirement Board

Securities and Exchange Commission

Selective Service System

(continued)

Page 23 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix II 

Agencies’ Information Technology

Personnel Concerns

Small Agencies and Other Entities, cont.

Smithsonian Institution

U.S. Arms Control and Disarmament Agency

U.S. Enrichment Corporation

U.S. Information Agency

U.S. International Trade Commission

U.S. Trade Representative, Executive Office of the President

1

 Four large and three small agencies did not state concerns in their most recent reports to OMB, but

told us of them in subsequent discussions. These agencies are not included in this list.

Page 24 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Appendix III 

Major Contributors to This Report

Accounting and

Information

Management Division,

Washington, D.C.

Colleen M. Phillips, Assistant Director

General Government

Division, Washington,

D.C.

K. Scott Derrick, Senior Evaluator

Atlanta Field Office Glenda C. Wright, Senior Information Systems Analyst

(511252) Page 25 GAO/AIMD/GGD-99-14 Year 2000 Personnel Issues
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100