14

Third, because of the dependencies within the District, and
around the District—the District is not an island that’s by itself—
it really requires the interaction of the surrounding counties and
cities in order to operate in a reasonable fashion. It supports the
Nation’s Capitol, it supports the Chief Executive Office, it supports
the Congress, and it supports the Judiciary Branch. It’s important
for all of these functions operated by the city be ready. It’s also im-
portant for the city to be ready, that the Federal Government be
ready, and that the surrounding municipalities be ready.

So far, we haven’t seen the high level of attention and coopera-
tion that we would like to see among all the jurisdictions that
share the area to move forward on this. And again, we recommend
in this case, that the District immediately develop an aggressive
outreach program to first identify the dependencies that it has, and
then determine the remediation if necessary that’s required to min-
imize risk of the year 2000 failure.

And finally, our last point, is that efforts to address the problem
must have the continued top level commitment from the chief man-
agement officer, and the department and agency heads, the mayor’s
office, and the control board. That establishing a program office,
hiring the contractor, establishing the various boards—these were
all good first steps—but they need to continue.

The key stakeholders within this need to own the processes. This
is not a technical problem; this is a management problem. And the
managers have to own the solutions, they have to support the solu-
tions, they have to make the resources available to implement the
solutions. This is a critical step. This is the problem that we’ve
seen in many agencies across government, where the processes,
once implemented, are assumed to be a technical solution and man-
agement withdraws until the crisis is looming.

This completes my testimony, Ms. Norton, and at the end of the
statements, would be pleased to address any questions.

{The prepared statement of Mr. Brock follows!]


35

Constance Berry Newman-Member

Constance Berry Newman became Under Secretary of the Smithsonian Institution in July,
1992. She was Dit of the Office of Personnel Management from June 1989 tojJune,
1992. For more than 20 years she managed public and private organizations. Among her
‘major management positions were: Assistant Secretary of the United States Department of
Housing and Urban Development, Director of VISTA, and President of the Ni &
Hermanson Company. She was also commissioner and Vice-Chair of the Consumer
Product Safety Commission.

From 1987 to 1988, Ms. Newman worked for the Government of Lesotho as a Coaperative
Housing Foundation consultant to advise the ministry of Interior regarding the
establishment of a housing corporation to receive World Bank funding.

During her public career which began in 1961, Ms. Newman worked both as a car¢er public

servant and a political appointee with four Presidential appointments, three of which were
confirmed by the Senate.

Ms. Newman was a Woodrow Wilson Visiting Fellow from 1977 to 1988, and a ber of
the Adjunct Faculty at the Kennedy School, Harvatd University from 1979 to 1984. She has
received an Honorary Doctor of Laws from her Alma Mater, Bates College, Amhejst
College. end Central State University. In addition toeceiving an A.B. from Bates College,
she received a Bachelor of Science in Law from the University of Minnesota Law
‘School, In 1985, she received the Secretary of Defense Medal for Outstanding Putlic
Service..At present she serves on the Board of Trustees of The Brookings Institution, the
National Academy of Public Administration, and:is‘a member of the Board of Govsmors of

: Newman is a member of the Hoard of
of Columbia Finacial



31

Ms. NorTON. Thank you very much, Mr. Brock.

Mrs. Newman.

Ms. NEWMAN. Good afternoon, Congresswoman Norton. I am rep-
resenting the, as you call it, control board. We like to be referred
to as the Authority—we think that is a softer way to describe our-
selves. [Laughter.]

The District government and the Authority are paying consider-
able attention to making sure that the computer systems are Y2K
compliant, especially those that support critical service delivery op-
erations.

The Authority’s role in this matter is to provide oversight, and
to ensure that the required resources are available and appro-
priately applied toward addressing the Y2K problem. We have real-
ly received, and continue to receive, regular briefings from the chief
management officer and the chief technology officer. I will say that
I personally spend time with them, and have done so more in the
last couple of months, to understand exactly how they are planning
to address this problem.

We have, you should also know, considered this problem as a
management reform project. What this does is it allows the Author-
ity to direct necessary resources based upon the recommendations
of the chief management officer and the chief technology officer.

We are being very honest about the fact that we did get a late
start. There’s no question about that. But we understand that this
requires that we put in place an aggressive schedule and a sched-
ule that requires that certain steps that would normally be sequen-
tial are now undertaken simultaneously. This, we know, is not the
gptimum strategy, but we believe we have no choice at this time.

Authority will continue to monitor the manner in which the
management is handling this matter.

You will hear more about this, but I just want to raise the point
with you, that early last summer the city contracted with IBM to
perform the assessment of the District’s Y2K compliance, and to
provide recommendations on necess: remediation. Contrary to
what I heard earlier, the assessment is complete. Now it is true,
that it just happened. The assessment is complete. And I think you
will hear much more about this from the chief technology officer.

I just want to put in a plea too—we understand that Congress
is considering emergency appropriation of $3.35 billion to aid gov-
ernment agencies in achieving Y2K compliance. We would like vei
much for your support to have the District government considered.

In my prepared testimony—I will not go through it now—I want-
ed to provide some positive information about exciting opportuni-
ties for improving technology utilization. I will not take up your
time with that, right now but it is in the testimony.

In conclusion, the information technology aspect of management
reform is a very critical area that is receiving, as it should, the at-
tention of the Authority. Y2K remedies are certainly among the
most crucial and time-sensitive matter that must be addressed by
the District government at this time. We are all aware of the risks
associated with failing to address the Y2K problems with the time,
and attention, and leadership of the government.

We at the Authority commit to you that we take these problems
seriously, and will continue to conduct rigorous oversight of the re-


40

chip expenses to fall within a range of $40 to $70 million. We are seeking your support for our efforts to
obtain the additional funds.

To address the risks posed by failure in the private sector vendor and supplier chain environments, we have
established a vendor and supplier management program, This includes the creation of a large database of
information which we will gather from various sources, including our own inventories and assessments, the
results of vendor and supplier surveys and shared information from groups like the Council on
Govemments. We will use this information to evaluate the readiness-status of the Agencies and their
assets,

Conelusion

| would like to end my statement by giving recognition and thanks to the many branches of government
and individuals who have helped us quickly accelerate from ground zero. The Congress has already
provided important support for our efforts, I thank each of you, Chairman Tom Davis, Congresswomen
Eleanor Hoims Norton and Connie Morella, and Congressman Stephen Hom, along with the Chairs of the
participating Subcommittees. [ also wish to thank the Office of Management and Budget, which has
reached out to the entire Metropolitan area to improve our capability to successful solve the Y2K
challenge, and the U.S. Department of the Treasury for their technical and Management assistance.

T also want to thank members of the Council and Financial Authority for their help and support in
addressing these critical issues, including establishing and funding a new Office of Technology. I also
want to specifically thank our new Technology Officer, Suzanne Peck and our new Y2K Program
Manager, Mary Etlen Hanley.

We realize that our top level commitment from the Chief Management Office, the Department and Agency
heads, the Control Board and the Mayor's Office must rernain focused, visible and continuous, for our

Y2K initiatives to go forward successfully.


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‘House of Representatives "WOMEN'S ISSUES
Washington. B.C. 20515

STATEMENT OF CONGRESSWOMAN ELEANOR HOLMES NORTON AT JOINT
SUBCOMMITTEE OVERSIGHT HEARING ON THE DISTRICT OF COLUMBIA’S
YEAR 2000 COMPLIANCE CHALLENGE,

‘October 2, 1998

1 want to thank the Chairs of the three Subcommittees participating today, Tom Davis,
‘(Subcommittee on the District of Columbia), Connie Morella (Subcommittee on Technology),
and Stephen Hom (Subcommittee on Government Management, Information and Technology)
for working together for this hearing on the District's progress in meeting the Year 2000 or Y2K
computer and technology challenge. While the District certainly does not need a new problem to
fix, ironically, the Y2K problem has come at an opportune time. ‘The District is in the throws of
taking down every system, and rebuilding its government from the ground up. Thus, the city will
need brand new computers and other technology in any case and should be able to seize the
opportunity to build in Y2K remedies as a part of ongoing and indispensable management
reforms,

At the same time, Y2K problems that could bring additional disruption to services are the
last thing that a city that is just emerging from insolvency and has serious service delivery
problems needs. Even so, the city is by no means in a class by itself on fixing the Y2K problem.
Alll governments, including the Federal government, are behind, and state and local governments,
even more so. I have no reason to believe that the District is even the worst case.

‘That is a very small comfort, however. As the millennium comes, it won't much matter
‘who was ahead and who was behind to the victims of an incomplete or faulty Y2K process. I am
pleased that the Authority and the city are using monthly progress reports to track
implementation, and that the D.C. Subcommittee has been assured in writing that Y2K
compliance will be in place by June 1999. The District appears to have first-rate assistance in
place, although I am concemed at the widely divergent estimates of cost. The District has
accepted responsibility for its late start and appears to be quickly catching up. I expect today’s
hearing to help clarify many of the unresolved issues and to be helpful to all concerned,


68

T’ve got to ask, Ms. Barnett, what is the status of the overall
management reform of the District of Columbia government, which
is the outstanding problem if we are to get home rule back?

Ms. BARNETT. I think we’ve made good progress this year. We
have good progress on our management reform projects that have
been approved by the Congress, as well as the local mayoral council
and control board. And so those projects are underway. In addition,
I think that we have improved services outside of these manage-
ment reform projects that people are seeing as real improvements
in their services.

So, I think we have begun to see some momentum there, and I
think particularly when we get our technology applications and
some of these things that are underway but not completed, we will
see some really substantial results in management reform.

The Authority expects to give a full report to Congress, as re-
quired, at the end of this month, on progress in all areas, including
very specific progress on each of the management reform projects,
as well as all operational improvements in the government.

Ms. NEWMAN. Congresswoman Norton, the highest concern of the
Authority now is to ensure that the delivery of services is im-
proved. Whether that is through the management reform vehicles,
or better management without using the resources of the manage-
ment reform. But on a meeting by meeting basis, the chief manage-
ment officer has to report to us on improvements in service delivery
and on building a stronger management team and work force team.

In addition, she has to show us how she is investing in the work
force. It is not just putting money in to deal with resource prob-
lems, but to build the capacity which you are concerned about, of
the city to govern itself because its work force is prepared. We are
all very serious about this, and I think that the chief management
officer may, by the end of the term with us, be sick of us, because
at each meeting, she has to report what is happening in manage-
ment reform.

Ms. Norton. I’m pleased to hear that. I just want you to know
that improvements have typically been made in the city govern-
ment. It hasn’t been a government that hasn’t made improvements.
They have always been episodic, and it has always reverted to
type. And what the subcommittee expects, and what the Congress
expects, is that the District government will be taken apart and
put back together again.

Perhaps the most incisive comment I’ve heard came from the po-
lice chief, when we asked him why weren’t the PSA’s quite working
in some places. And, he said, it was because they took the notion
of community policing and fastened it onto the existing system.

You are dealing with a system—this is not a city where you need
to have some improvements in services. While I’m sure that the
services differ, some are much better than others, there is no way
for us to assure that when the control board goes away, it won't
just all revert to where it was, unless somebody has diagnosed it,
and said OK, this is an opportunity to take the whole thing apart,
junk it, and start again. And I am not sure we see that happening,
because I think you’re under such pressure to simply improve what
we have.


Opening Statement of
Congresswoman Connie Morella
Chair, Technology Subcommittee

House Science Committee

Oversight Hearing on the
Status of the District of Columbia’s
Year 2000 Compliance Effort

Joint Hearing with the Government Reform and Oversight
Subcommittees on the District of Columbia and
Government Management, information and Technology
Friday, October 2, 1998

As both the Vice Chair of the District of Columbia
Subcommittee and the Chair of the Technology Subcommittee, |
am pleased to join with my distinguished colleagues, Mr. Davis of
Virginia, the Chair of the District of Columbia Subcommitee, and
Mr. Horn of California, in holding this important hearing on the
ability of our Nation’s Capital City in meeting the challenges of
the Year 2000 problem.

In the past 2 % years since we first began, we have
embarked on a review of how the Federal Government will be
impacted by the Y2K problem — and unfortunately, it has given us
pause.

However, since our first assessment of the Federal Year
2000 efforts in March 1996 when we determined that the
government was not moving forward with the necessary dispatch
to correct the problem in a timely and effective manner, we have
been working closely with the Administration to ensure that the
Federal Government will continue to operate without interruption.

As a result, a great deal of progress has been made.


48

Mr. Davis of Virginia [presiding]. Thank you very much.

We're going to start the questioning with Mrs. Morella, who is
the chairman of the Technology Subcommittee on Science. Mrs.
Morella, if you want to make any opening statement or you may
include it in the record. Otherwise, we'll go Tight to the questions.

Mrs. MORELLA. Thank you, Mr. Chairman. I would like to ask,
with unanimous consent, to make an opening statement. I'll try to
make it very briefly.

Mr. Davis of Virginia. So ordered.

Mrs. MorELLA. I apologize for being late because of the two votes
and conversations that ensued following them.

But I’m pleased to be here today. And as both vice chair of the
District of Columbia Subcommittee and chair of the Technology
Subcommittee of the Science Committee, I’m pleased to join with
my distinguished colleagues, Mr. Davis of Virginia, the chair of the
District of Columbia Subcommittee, and I know that Mr. Horn of
California, if not here now, is here in spirit—he’s been very much
involved—as well as with Ms. Norton, who’s always been very
much of a leader with District of Columbia issues.

In the past 242 years, since we first began, we’ve embarked on
a review of how the Federal Government will be impacted by the
Y2K problem. And unfortunately, it’s given us cause. However, our
first assessment of the Federal year 2000 efforts, in March 1996,
when we determined that the government was not moving forward
with the necessary dispatch to correct the problem in a timely and
effective manner. We’ve been working very closely with the admin-
istration to make sure that the Federal Government will continue
to operate without interruption.

And as a result, a great deal of progress has been made. First,
we require the creation of a national Federal strategy. Subse-
quently, we’ve met our Federal oversight responsibilities by cre-
ating greater Y2K accountability and directing the government to
strengthen it’s quarterly reporting requirements by including a
summary of costs to date, reviewing agency validation schedules,
and ensuring successful interfaces with systems external to the
Federal Government, including State and local governments, as
well as private sector systems.

Yet, I’m still very concerned that, with little more than a year
to go before the new millennium, critical government information
systems may still be in jeopardy of not meeting the January 1,
2000 deadline, the date conversion. And the problems which plague
the Federal efforts include the failure to adequately champion the
year 2000 problem as a national priority, and not providing the
critical leadership and coordination to business operation partners
in both the public and private sectors.

Information systems experts have reported that the Y2K fix is
rooted in management and oversight, not in the lack of technology
available to address the problem. And unfortunately, valuable time
has been lost waiting for management to embrace the magnitude
and the consequences of this issue.

With congressional oversight over the District of Columbia, the
hope was that the problems affecting the Federal Government
would not be replicated in the local government. Unfortunately,
we're being informed by the General Accounting Office that the


54

Ms. PECK. Yes, I'd be delighted.

Mrs. MorELLA. Thank you, Ms. Peck.

Ms. Peck. There are, if you look financially, two almost co-equal
parts to the Y2K problem; one is the IT systems portion and the
other is the embedded chip portion. Embedded chips are ubiq-
uitous. They are everywhere. They are in elevators; they are in
HVAC systems; they are in alarm systems; they are in cameras;
they are in water systems, telephones, pagers, security systems,
call and accounting systems. They are in pumping stations; they
are in traffic lights.

In order to deliver city services to the District, absolutely, finan-
cially, and from a citizen perspective, we have an equivalent prob-
lem in embedded chips that we have to the systems themselves.
And our focus is equally on both of those problems.

As I mentioned before, we have completed an assessment of our
systems activities and of the size and magnitude of our systems
challenge. We are now in process, to be completed by December—
2% months from now of a total assessment, District-wide, of our
embedded chip challenge, and of the activities and replacements we
will have to make in those areas in order that all of the city serv-
ices maintain themselves in year 2000.

Embedded chips are a heavy focus activity—one of the principal
two.

Mrs. MORELLA. Are you also coordinating any interoperability—
are you working with the private sector also?

Ms. PECK. Yes, we are very fortunate in having IBM as our part-
ner in Y2K, because given the enormous scope of other Y2K work
they have done, they have built a very, very substantial inventory
of vendors of all types of embedded chip equipment. So in terms of
having an inventory and a dictionary of vendors who are Y2K com-
pliant, and of us not having to go through all the equipment we
have and make those discoveries ourselves of the individual ven-
dors, we simply can go many, many times to the IBM inventory
and discover that equipment either is Y2K compliant or is not com-
pliant. That is for the equipment itself, so we are very far ahead
of the game in having that inventory.

We also have our own District-wide inventory which we are keep-
ing, through which we are making our own discoveries of equip-
ments that are or are not Y2K compliant, and of the exact inter-
operability functionality that you’ve spoken to. So we are building
those data bases now, so that everything that we discover is kept
and is reusable for us.

Mrs. MORELLA. So you feel somewhat confident that you’re going
to be able to make the deadline, and have your contingency plans,
and we'll have a seamless kind of continuation of services.

Ms. Peck. I have been reporting, Madam Chairwoman, for some
time, even at the very beginning of this project, that citizens, tax-
payers, businesses, tourists—the end-users of our city services—
would see only very slight effects of any failure that we had in
Y2K. And I’ve reported that for this reason—contingency planning.

Because we don’t know which of our agencies will fail. We ony
know that no matter how much we do in Y2K, we can’t be perfect.
We don’t know which of the agencies will fail; we know that some
will. Because of that, the development and the implementation of


58

Ms. Norton. That’s a very good job, Ms. Peck, of making lem-
onade out of lemons—we’re late, but there’s some advantage in this
being late, and I buy that.

Ms. PECK. There are.

Ms. Norton. No, no, no—I want to go on. Mr. Chairman, ’m
going to ask one more question, so you can rotate your rounds, be-
cause I have a number of questions.

This question has to do with—it really is for Ms. Peck and Ms.
Barnett—it has to do with something in Ms. Peck’s testimony, in
which she says, “contingency planning cannot be done to or for any
agency. It must be done principally by the agency.”

So I’ve got to ask you, given the fact that there’s not a lot of con-
fidence in District of Columbia agencies yet, because they're only
now themselves being renovated, is this dependency on work with-
in the agency a sign that we may be in more trouble than we would
be if our agencies were up and running at the level of excellence
we are seeking?

Ms. BaRNETT. Let me just say that I a; with Suzanne’s state-
ment, that contingency planning, to be effective, has to be done by
the people who will ultimately be responsible for carrying out the
contingenc plan. But we have not structured this in such a way
that they have to do it by themselves. So there’s a great deal of
attention being given to what a contingency plan needs to have,
there’s technical assistance, as well as——

Ms. Nortow. Is that from IBM?

Ms. BARNETT. Yes. So that I feel confident that through the plan-
ning process that we’ve designed, that it not only will help us on
year 2000, but I think that it’s also a way that we'll have an ex-
pected benefit of having good contingency plans for other kinds of
emergencies.

Ms. Norton. I just want to say, Ms. Barnett and Ms. Peck,
there’s nobody in the Congress, and I think nobody in the District,
that thinks that they’re anything like the capacity to assist, with
experience, this in our agency—our agencies. Our agencies don’t
have up and running technological capacity. So unless this were in-
side the agency, it’s essentially being led almost entirely by experi-
enced people.

There can be no confidence anywhere, I think, that there will not
be glitches. This is no reflection on the people in the agencies, but
if they had not been given over the years the kind of technology
that—of the ordinary kind—I can hardly expect them to leapfrog
and be able to somehow accommodate this complicated problem
without enormous outside help.

Thank you. I'll wait for the next round, Mr. Chairman.

Mr. Davis of Virginia. Thank you. Now on June 19 of this year,
I wrote to Dr. Brimmer, regarding the status and the oversight
issues relating to the District’s Y2K challenge. In his response, a
cost range to address the challenge was established at $18 to $45
million. That was in June. Does anybody know how that number
was determined, and how much has been spent on the effort so far?

Now we're talking about costs of $80 to $130 million. And this
is just in a 3-month period. What has accounted for the discrep-
ancy? That is a huge discrepancy over what was in his letter. I
think our best guess here is that about $8.5 million has been spent


46

Before closing, I'd like to take a few educational minutes for the subcommittee members, to describe the
environmental context within which we're working. Y2K projects fail by molehills, not mountains. I'd
like to give you three examples of the types of problems we struggle with every day in the District on Y2K:
problems we're solving quickly to achieve overall project success, but which every “next day” are replaced
with others to be solved.

|, Initially, three agencies refused to accept the services of the Distrc’s Y2K project, and a fourth
elected to receive only very limited services, It's taking a direct order from the Financial Authority
to bring these agencies under the District's Y2K project rent.

2. _ Led by the Chief Procurement Officer. every senior city officer strongly supports streamlined
Financialiprocurement processes for the District, Historie inefficiencies run deep however. and
urgent Y2K activities often provide the discovery and tactical repair situations that allow District-
wide procurement process improvements to be made - but atthe time expense of Y2K.

3. Because of the lack of IT investment in the District for several years. the test team is often unable
to find written documentation about how applications work. This requires end user stafFto verbally
describe how application process flows work, At one agency. day-to-day business activities have so
overwhelmed were initially unable to provide adequate process descriptions.
Only when senior man sisted they suspend their normal work were the descriptions
received. We're expecting to encounter similar situations at other agencies

In closing, I'd like to recognize the Chairinan and members of the Financial Authority, senior members of
Congressman Davis’ staff, and GAO staffers assigned to District ¥2K for their financial responsiveness,
their timely and collegial advice. and their consultative expertise in strengthening the rapid recovery effort
of the District's ¥2K program.



18

format, however, the year 2000 is indistinguishable from 1900, or 2001 from 1901. As
a result of this ambiguity, system or application programs that use dates to perform

calculations, comparisons, or sorting may generate incorrect results.

The District has a widespread and complex data processing environment, including a
myriad of organizations and functions. There are four major data centers located
throughout the city, each serving divergent groups of users, running multiple
applications, and using various types of computer platforms and systems. Most of the
District's computer systems were not designed to recognize dates beyond 1999 and

will thus need to be remediated, retired, or replaced before 2000.

To complicate matters, each District agency must also consider computer systems:
belonging to other city agencies, other governments, and private sector contractors
that interface with their systems. For example, the Social Security Administration
exchanges data files with the District to determine the eligibility of disabled persons for
disability benefits. Even more importantly, the District houses the most critical
elements of the federal government. The ability of the District to perform critical
government services after the century date change is not only essential to District
residents but also important to the continuity of operations of the Executive,

Congressional, and Judicial offices housed here.


36

Ms. Norton. Thank you very much, Mrs. Newman.

Ms. Barnett.

Ms. BARNETT. Thank you, Ms. Norton. It’s a pleasure to be here.
T'm Camille Cates Barnett, the chief management officer for the
District of Columbia. And I’m here to give you an update on our
year 2000 activities.

Let me begin by telling you where we are with several initia-
tives, and also commenting on our working with governments and
other entities in the region, and also how we're gathering informa-
tion from the private sectors, vendors and suppliers in particular.

Once again, I'll confirm that the District is behind. Until last
June, the District had made limited Progress in addressing the
year 2000 problem, principally because of resource and organiza-
tional issues. But since June, we have moved very quickly to en-
gage a private contractor to assist in establishing a program, man-
agement office, and to begin the process of system discovery, as-
sessment, remediation, and testing. We've also established our Dis-
trict CTO leader and our Y2K team. The head of that team is with
us today. And all of these people are working together and aggres-
sively to address these problems.

has been mentioned earlier this afternoon, the District is not
unusual. We're like about 70 percent of the other municipalities in
coming late to this year 2000 challenge. However, just because
we're similar to other places, doesn’t mean that we aren’t as vul-
nerable, because we are. We're vulnerable to several problems.

The District has distinct challenges in the year 2000 arena. Our
organization has over 75 agencies responsible for service delivery
to a very diverse group of stakeholders. As you know, our services
included not only municipal services, but also State and Federal ac-
tivities, and each one is susceptible to year 2000 problems. Our
data processing environments are also complex and widespread.
And as been mentioned, we are also in the process of implementing
major new technology systems. Our environment is further com-
plicated by our relationship to other city agencies, governments,
and private sector vendors.

Our risks are complicated as well, involving public safety sys-
tems, water and sewer systems, telecommunication systems, secu-
rity systems, and administrative, financial, and educational man-
agement systems. We're addressing the year 2000 projects in a par-
allel fashion. That is, doing several things at once, rather than tak-
ing the time to do them in sequence. We are testing and remedi-
ating IT software applications, assessing noninformational tech-
nology assets, structuring business continuity and contingency
plans, and assessing our technology infrastructure.

Let me also take this opportunity to discuss the IT application
assessment phase of the project, and our first completed milestone,
which was August 28, 1998. We have developed an IT inventory of
mission-critical systems. The District has identified 336 informa-
tion technology application systems, 84 of which are year 2000
compliant; 177 that will require remediation and testing; and 135
that will require testing only. Since July, we have underway sev-
eral pilot efforts in the area of testing and remediation, contingency
planning, and evaluation of non-IT assets.


67

If we are ever to be the Nation’s capital in technology, there are
many activities which I have authorized at the infrastructure level,
at the applications level, and at the integration levels as well which
must be completed. All of them must be done simultaneously, with
Y2K standing at the top of the heap, having our first call on re-
sources,

Ms. Norton. Well, my question Ms. Peck is, are they being done
at the same time that OR is being worked on?

Ms. PECK. Yes, yes—concurrently.

Ms. Norton. So that systems in various agencies are being tech-
nologically renovated and overhauled at the same time that you're
working on the special Y2K problem?

Ms. PECK. Yes, yes. The Y2K team is absolutely free-standing
and independent. It is focused, it is large, it is well organized, it
is well managed, and it is experienced. And it is a clump working
on Y2K, and there are other clumps doing the other activities, as
well—all simultaneously.

Ms. BARNETT. Let me add to that. The principal place where we
have new technology applications are in our management reform
project, and they are moving ahead. As Suzanne has said, we have
to do both of these things at once. There is more technology work
going on in the District than I have seen ever in any organization.
There’s a substantial amount of it. And the idea is to get it done
together, and to get it done on time.

's. NORTON. One final question, Mr. Chairman, if I may. As you
may know, I’m focused on the next 2 years, when home rule is to
return to the District. The subcommittee—has been concerned all
along that the District manages to get things done, but we have
seen very little in the way of plans, so that one knows that the city
moves on a plan, timetable, and functional basis. Over and over
again, that has been a concern.

It becomes an urgent concern because I do not want to be put
in the position 2 years from now that somebody jumps up in my
face on the House floor, and demands to know why XYZ hasn’t
been done, or indeed what has been done. So, that while I think
we can all take heart at what you've said today, I have to ask that
you show—and I know the chairman expects to have a hearing on
management reform—that you show the committee what your
management plan is for accomplishing the total renovation of the
city government. I cannot say enough.

try to move ahead of where I think the Congress is going to
be, about how it is impossible to overhaul a government that was
in the state ours was in, just doing it as quickly as you can.

And even with respect to Y2K, that is the impression we're being
left. It’s being done, it’s being done as quickly as you can, but not
that there have been systemic plans with timelines that have been
met, until you go on to the next one, or you didn’t meet the
timeline, but you set a new one. The people who get things done
in the world either get them done that way, or they get them done
out of their hip pocket.

The District is a hip pocket jurisdiction, and we very frankly, on
this subcommittee, have not seen—while we see lots of progress in
the District—you don’t insight confidence from the subcommittee,
because we don’t see the plans.


CONTENTS

Hearing held on October 2, 1998
Statement of:

Brock, Jack, Director, Information Management Issues, Accountin, and
Information Management Division, U.S. General Accounting
Constance Newman vice-chairman, District of Columbia Financial Re-

nsibility and Management Assistance Authority; Camille Barnett,

chief management officer, government of the District of Columbia; and
Suzanne Peck, chief technology officer, government of the District of
Columbia ...
Letters, statements, ete., submitted for the record by:

Barnett, Camille, chief management officer, government of the District
of Columbia, prepared statement of ...

Brock, Jack, Director, Information Management Issues, Accounting and
Information Management Di General Accounting Office,
prepared statement of ..

Davis, Hon. Thomas M., a Representative in Congress from the State
of Virginia, prepared statement of

Gutknecht, Hon. Gil, a Representative in Congress from the State of
Minnesota, prepared statement of ...

Morella, Hon. Constance A., a Representative in Congress from the State
of Maryland, prepared statement of

Newman, Constance, vice-chairman, Re-
came and Management Assistance Authority, prepared statement

ion,

P!
‘District of Columbia, prepared statement of ..

Peck, Suzanne, chief technology officer, governmel
Columbia, prepared statement of ...

W)

il

38

15

10
50


70

derstanding is that, now that we have it we may go way out and
re-bid it again, and that that would delay the implementation.

Ms. PECK. No, no. Absolutely, there will be a re-bid. There will
be a re-bid because, since the first bid, just like prices of com-
puters, the prices of those planimetric mapping services have come
way, way down, and the original bid is absurd now. And so, we’re
going to——

Mr. Davis of Virginia. What’s the delay going to be in doing that,
because it’s been delayed here on funding.

Ms. PECK. It’s going to be short. There’s going to be a bid process.
We will be well advantaged, both financially and in terms of the
work to be done, to have that re-bid done. I am breathless to have
the bid redone. I am breathless for the work to be done.

Mr. Davis of Virginia. Well, we would rather see it in finality.
It took 2 years to get the thing funded up here. Just to tell you
what’s happened with it. We couldn’t get it funded. We had hold
ups at this level of appropriations and everything else, and there
were all kinds of problems. So, we’re really eager to get this thing
moving.

Ms. PEcK. I’m with you.

Mr. Davis of Virginia. All right, I want to thank all of you. With-
out objection, all written statements submitted by witnesses will be
made part of the permanent record. The record will remain open
for 10 days. The subcommittee will continue consideration of this
matter, and may ask for further written responses from the wit-
nesses.

These proceedings are closed. Thank you.

(Whereupon, at 3:28 p.m., the subcommittees adjourned subject
to the call of the Chairs)

[@)


69

But if all reverts to t; when the control board is gone, there
will be hell to pay. And while that methodical way of doing it is
very, very frustrating, it’s the only way to assure that a govern-
ment that has been built like tops, given to us by the Federal Gov-
ernment in putrid shape, then of course, we did what all govern-
ments do—they simply build on what they have. Well, finally that
broke down.

And what the subcommittee expects is that it will all go away,
and we begin again. That doesn’t mean that every part of it goes
away, but it does mean that neies will be consolidated, that sys-
tems will be taken apart, and repaired, put back together again,
that the government will look totally different from what it did.
And the government does not look much different from the way it
did when the government went down—it’s got the same number of

encies, it’s kind of the same ball of wax. And I don’t want to sim-
ply encourage you to make it look different for differences sake, but
I do want to say that we're looking for dramatic changes in every
respect in the government.

I want to say to you, finally—I think it’s Mrs. Newman, or no
maybe you, who talked about a report—I’d like to see the govern-
ment reverse the report notion, and start with the plan. In which
case, the report will probably be unnecessary. If you start with a
plan that says this is what we intend to do, this is by which we
intend to do it, you Es that to people who want to know what
you’ve been doing. I think that is far more informative than doing
a report after the fact. Because we don’t have anything to measure
that by. Is that good or is that bad? Is that what you intended to
do, or not?

you, Mr. Chairman.

Mr. Davis of Virginia. I just have a couple of questions. Have the
public school systems been an active participant in the planning
and implementation strategies?

Ms. PECK. Yes.

Mr. Davis of Virginia. Finally, in the reauthorization of the Fed-
eral transportation bill, the Congress appropriated approximately
$7 million for the Washington Geographic Information System, the
WGIS program. We believe this is a critical program that will dra-
matically assist the District of Columbia in areas, such as land use
planning and 911 emergency response.

What is the status of this WGIS program? What are you doing
to ensure that it’s Y2K compliant, and are there any impediments
to moving forward with the WGIS program immediately? And if so,
what are they, and what are we doing to address these obstacles?

Ms. Peck. I believe GIS is extraordinarily important for the city
as well, and we are taking those funds with National Capitol Plan-
ning we've formed a consortium and are basically going to build
something called planimetric maps for this region. Those maps will
allow the identification of many, many different elements of topol-
ogy that can be linked to government services, so that we will
know, for example, where all the streets are, where all the alleys
are, where all fire hydrants are, we will know where to locate child
services.

Mr. Davis of Virginia. I know what it’s going to do. But is this
being delayed or is this being implemented immediately? My un-


29

Mrs. Chairwoman and Mr. Chairmen, this concludes my statement. | will be happy to

answer any questions you or Members of the Subcommittees may have.

(511130)


15

Mrs. Chairwoman, Mr. Chairmen, and Members of the Subcommittees:

Thank you for inviting me to participate in today's hearing on the District of Columbia's
Year 2000 problem. As you know, the District of Columbia, like other local and state
governments, is extremely vulnerable to Year 2000 problems due to its widespread
dependence on computer systems to deliver vital public services and carry out its
operations. If the problems are not addressed in time, systems supporting important
functions such as public safety, revenue collection, traffic control, payroll, and pensions
may be unable to operate. Today, | will discuss the Year 2000 risks facing the
District, its progress to date in fixing systems, and our concerns with the District's

remediation strategy.

Until this past June, the District had made only limited progress in addressing the Year
2000 problem. It lacked both the structure and the resources necessary to address
the issue. Since June, the pace of the District's Year 2000 effort has picked up
considerably. The District hired a contractor to assist in remediating systems,
established a Year 2000 program management office, assigned more resources, and
began a more aggressive strategy to compensate for lost time. These actions will
substantially improve its ability to complete the difficult tasks that lay ahead. But
because the District is so far behind in addressing the problem, the risk that critical
processes could fail is greatly increased. As a result, it is vital that the District

promptly identify its most important operations, determine which systems supporting


21

IKE TI I oT,
ARI ING FORMIDAI YEA HALLEN!

Based on the limited data available on the status of local and state governments, we
believe that the District's Year 2000 status is not atypical. For example, a survey
conducted by Public Technology, Inc. and the International City/County Management
Association in the fall and winter of 1997, found that of about 1,650 cities that
acknowledged an impact from Year 2000, nearly a quarter had not begun to address

the problem.

In addition, state governments are also reporting areas where they are behind in fixing
Year 2000 problems. For example, as we recently testified before the Subcommittee
on Government Management, Information and Technology, House Committee on
Government Reform and Oversight,> a June 1998 survey conducted by the
Department of Agriculture's Food and Nutrition Service, found that only 3 states
reported that their Food Stamp Program systems Year 2000 were compliant and only
14 states reported that their Women, Infants, and Children Program were compliant.
Moreover, four states reported that their Food Stamp Program systems would not be
compliant until the last quarter of calendar year 1999, and five states reported a similar

compliance time frame for the Women, Infants, and Children Program.

5 ty m
Partnerships (GAO/T-AIMD-98-278, September 3, 1998).

7


7

Management Association, the National Association of State Information Resources
Executives, the National Governors’ Association, and the Regional Council of
Governments to evaluate the progress of other state and local governments. We
performed our work in Washington, D.C., between March and September 1998, in

accordance with generally accepted government auditing standards.

YEAR 2000 RISKS FACING.
THE DISTRICT OF COLUMBIA

Addressing the Year 2000 problem in time will be a formidable challenge for the
District of Columbia. The District government is composed of approximately 80
entities, responsible for carrying out a vast array of services for a diverse group of
stakeholders. These services include municipal, state, and federal functions, such as
street maintenance and repairs, economic development and regulation, trash pick-up,
water and sewer services, educational institutions, hospital and health care, public
safety, and correctional institutions. Each of these services is susceptible to the Year

2000 problem.

The Year 2000 problem is rooted in the way dates are recorded and computed in
automated information systems. For the past several decades, systems have typically
used two digits to represent the year, such as "97" representing 1997, in order to

conserve on electronic data storage and reduce operating costs. With this two-digit


30
JACK L. BROCK, JB.

Jack Brock is Director, Governmentwide Information Systems, at the U.S.
General Accounting Office. Mr. Brock is responsible for information
management evaluations at the Department of Defense, State, Treasury, and
Justice, as well as developing guidance for improving performance in such
areas as performance management, investment controls, and computer
security.

Currently, Mr. Brock is heavily involved in evaluating the readiness of federal
agencies to successfully address the issues associated with the year 2000.

He is responsible for reviews at Treasury, Defense, Justice, NASA, State, and
other federal agencies. Additionally, Mr. Brock is reviewing the year 2000
readiness of the banking industry, telecommunications, retail and
manufacturing, and international sectors.

Mr. Brock joined the General Accounting Office in 1973 after receiving his
MPA from the University of Texas at Austin. He is also a graduate of the
Harvard Business School Program for Management Development.


12

started late, that’s a fact. They're working very hard, and that’s
also a fact.

What we hope to do today is illuminate the problem; allow a
great understanding, and not only of the members of these sub-
committees, but also residents of the District, as well as other cities
and municipalities that face this very same problem. It was men-
tioned—this is not an atypical problem; it is not atypical. Every or-
ganization that has systems and processes that rely on date, has
this problem. We believe very strongly that cities and State govern-
ments are behind others in addressing the problem.

Where the impact that many, many citizens of the United States
will feel January 1, 2000, is not with some large scale business fail-
ing or something like that—that might occur later—but will actu-
ally be in the provision of local services. And the District, like other
municipalities and States, deals with hospitals, police emergency
provisions, a whole range of provisions of power, water, a range of
services that includes payroll, pensions, the list goes on and on. It’s
a very complex environment that they operate in, and for many cit-
ies, they don’t have the resources to do large scale renovation in
terms of staff, or money, or whatever. So it’s a serious problem.

The failure, however, to address the problem has some serious
ramifications, and that failure can result in inconvenience; that
failure can result in a loss of revenue; or more importantly, that
failure can result in a threat to human safety and well-being.

Td like to just very briefly go over the status of the District, and
refer the Members to the chart that’s on your left. The District is
over 1 year behind in getting started. I think there’s no real dis-
pute over that. There was a late start. Until recently, earlier in the
summer, the District had no full-time office, they had no full-time
manager, there was no real identification of mission-critical sys-
tems or processes, no reporting mechanisms, and very little assess-
ment of what the issues were.

Since that time, the District has taken some very good steps to
move forward. They have a full-time program office, they have a
new chief technology officer, they have a very capable contractor.
And as a result, they moved forward. They’ve identified 336 critical
applications. They have reported that 84 of these applications are
now compliant—or were compliant—that 135 had been remediated,
but not tested, and that 117 remain to be remediated. This rep-
resents a substantial workload of over 9 million lines of code. Addi-
tionally, the District is piloting a contingency planning model on
the 911 system, a very critical system, as well as the water and
sewer system, and the lottery board. And finally, they're testing a
strategy for remediating non-IT assets, which is also being applied
on the water and sewer system.

So this is a good start. I'd like to spend a few minutes though
going over what’s missing. What’s missing to date is a complete in-
ventory of all critical business functions—not just systems, but
business functions that may, in fact, involve many computer sys-
tems and applications in order to provide a service.

They have not finished assessing the IT infrastructure. By that
I mean all the data centers, the local area networks, the wide area
networks, the infrastructure that these applications have to run on,
nor have they identified all of the non assets and the assess-


56

An advantage the District has—sometimes they may view it as
a curse, but in this case I think it’s an advantage—is there is visi-
bility into their process. And as a result, there’s an opportunity to
not only examine the status of the District, but also to provide as-
sistance, advice, and consultative services in terms of improving
their process, and I think that’s exactly what’s been happening.

So in that case, the District has an opportunity through this visi-
ble government process, of airing it’s problems and airing it’s solu-
tions, and giving people an opportunity to buy in. Some of the other
locations, cities, et cetera, governmental entities across the Nation,
aren’t involved in that. And I think, as a result, there’s a great deal
of uncertainty.

One of the things that we’ve urged the President’s Y2K Conver-
sion Council is to take a more active role in outreach to cities, local,
State governments, et cetera, to provide them with some of the in-
formation, an impetus that they might need to be ready. For exam-
ple, we’re completing a review on the Bureau of Prisons, and dis-
cussing where they are in terms of Y2K readiness. But to us, the
real issue is the State and local governments that house most of
the prisoners in the country, and the Bureau has been neglectful
in working with their counterparts in the State and local govern-
ments to give them advice on what needs to be done, so there will
not be a problem.

So again, I apologize for the length of the answer. It’s impossible
to put the District on a curve, but I think it is possible to say that
now there’s a visible process, so you're better able to gauge the
Progress and develop a level of comfort as to where they are.

's. NORTON. I t: it you haven’t looked at the regional entities
in Maryland and Virginia, as part of your evaluation of the Dis-
trict’s process?

Mr. Brock. We have not. We’ve only read some of the material
they’ve put together, and some of the publications they put out.
But it seems to me from reading those materials, that while
thought is being given to it, I don’t see a lot of concrete solutions
about how to address common problems of transportation, com-
muting, power grid issues, working with local telecommunications,
and other vendors as well. This is a whole community. If the Dis-
trict fails, then there’s a sense of failure everywhere. If Mont-
gomery County fails, or Fairfax County fails, then there will be
that same sense.

Ms. NorTON. And so, in a real sense, you can’t really evaluate
the District, given the way we are hooked into the suburbs of
Maryland and Virginia, with respect to Metro, and phones, and the
rest, without looking also at them.

Mr. Brock. That’s correct.

Ms. Norton. Could I ask you, as well, trying to get a handle on
this—particularly, a handle to keep us from the “chicken little” sce-
nario, which I think is running around this issue everywhere—you
indicated, and here I’m using your words as I wrote them down,
that we’re dealing obviously in a city with very complex operating
systems. I would venture that they would probably be far more
complicated than a Federal agency. And the testimony here has
been that the District is willing to take risks to ensure that the
work is completed on time, that it is over a year behind, and that


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SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

Honorable Tom Davis
Chairman

OVERSIGHT HEARING
Oversight Hearing on the Status of the District of Columbia's Year 2000 Compliance Effort

October 2, 1998
1:30 pam,

Room 2318
Rayburn House Office Building

OPENING STATEMENT

Good afternoon and welcome. Today, | am particularly honored and pleased to be joined by
two of my distinguished colleagues, Mr. Hom, Chairman of the Subcommittee on Government
‘Management, Information and Technology, and Mrs. Morella, Chairwoman of the Subcommittee
on Technology, in sponsoring this important oversight hearing dealing with the District of
Columbia's Y2K challenge. Congressman Steve Horn and Congresswoman Connie Morella
provided extraordinary leadership in their subcommittees, and also accepted the challenge of co-
chairing the House Y2K Task Force. Mr. Horn and Mrs. Morella have conducted numerous field
hearings around the Country, a number of which I have been privileged to attend. Few people in this
country understand the magnitude and complexity of this national and intemational issue more than
these dedicated leaders.

1 also want to weleome my distinguished colleague from the D. C. Subcommittee, Mrs.
Norton, and acknowledge her continuing leadership on behalf of the citizens of the District of
Columbia


27

results of this decision should drive remediation, testing, and business continuity and
contingency planning and should provide increased focus to the efforts of the Year
2000 office and its contractor. To this point, we recommend that the District, in
parallel with its current Year 2000 efforts, identify and rank the most critical business.
operations and systems by October 31, 1998. The District should use this ranking to
determine by November 30, 1998, the priority in which supporting systems will be
renovated and tested. Continuity of operations and contingency plans for these
processes and systems should also be initiated at this time if such action is not

already underway.

Second, for systems that may not complete remediation but that are still important to
city operations, managers will need to develop contingency plans for continued
operations. It is essential that such plans be developed early to provide stakeholders
as much time as possible to provide resources, develop “workarounds,” or secure

legislative or administrative approvals as necessary to execute the plans.

Third, because of the dependencies between the District and the surrounding local
and federal government entities, the District will need to work closely with those bodies
to both identify and prepare appropriate remedial steps and contingency plans to
accommodate those dependencies. We recommend that the District immediately
develop an outreach program to first identify its dependencies and then determine the

remediation required to minimize the risk of Year 2000 failure.

13


63

Mrs. MoRELLA. A number of other States have introduced legisla-
tion that’s going through the process. Last night, our Federal bill
just passed unanimous consent, so at least that’s going to help to
facilitate the data excl e. It’s not strict liability. I would also

‘ee with the chairman that we are to be very cautious we don’t
fill it out too easily, because then you’re going to find entities,
whether they’re governmental or the private sector, that say, well,
we don’t have to really push forward.

Ms. Norton. Would the gentlelady yield one remaining moment.
I don’t think one would be—I’m not talking about immunity. I’m
talking about some kind of capped liability so the District is not
sued for $1 billion by somebody. I wouldn’t suggest that the Dis-
trict should be immune from its own errors. But the District is the
only jurisdiction I know that leaves itself wide open to be sued for
the full amount for any and everything. So I think that we need
to take special caution.

Mrs. MORELLA. Yes, exactly. But I mean, that’s what we're trying

t at. So there can be the honest data exchange, information
exchange, so that you don’t have every entity feeling like an island
where they cannot share, that they’re afraid of what they say, they
can’t get any insurance. And certainly, the District of Columbia to
look into that, I think, would be appropriate.

Now we had a hearing the other day, Technology Subcommittee,
where we did it from a consumer point of view. It was like, what
should consumers know about this. Because my feeling is, some-
where between “Chicken Little,” who said, the sky is falling, and
“Pollyana,” who said, don’t wo: about anything; everything is
OK—but you know you read in the paper about people who panic
and someone who says, I’m going to get a vegetable garden, so I
won't have to rely on other entities, or I’m going to take my money
out of the bank and put it under my mattress.

We did come out with a little flyer on what every consumer
should know to prepare for the year 2000 problem. It may be that
at some point along the line, the District of Columbia may want
to do something. You can certainly look at ours. It was also the
Business Software Alliance that helped, and Consumer Electronics
Manufacturers Association, and the Information Technology Asso-
ciation of America.

My final question really is, how do you reach out to the private
sector in the District of Columbia? I know you've said IBM is help-
ing set this up, but how do you work with the Board of Trade, how
about the small companies, how about the electrical utilities? Any
of. yen feel like you'd like to comment on that?

is. PECK. We're currently working through council government,
through COG. At our most recent meeting last week, Janet Abrams
offered to be the liaison and intermediary to several of the local
utility companies, because individual enterprises such as ours—and
this particular meeting was a meeting of all of surrounding county
and municipal entities—all of us having some difficulty currently
getting information from utility companies.

And council government and Janet, through the President’s Y2K
Council, have offered to act as liaison organizations for us, and as
organizations that would also keep inventories of information for
us, and that would capture information for us in a central place,


65

also think that that order will help us with the follow through on
some of the agencies that are not direct reports to me—that’s the
general area where we've got some compliance problems.

Ms. Norton. The courts may present a special problem, and I
will undertake—first of all, let me ask Mr. Brock, were you given
any information as to how they are seeking to comply? I can’t be-
lieve they’re doing nothing.

Mr. Brock. No, ma’am. We do not know what their remediation
efforts are, and it’s our understanding that the contractor for the
District has very little information on what their remediations are
as well.

Ms. Norton. Because the courts and the President’s revitaliza-
tion plan are now under the Federal Government, my office will
seek information on the courts. The housing authority is some-
where in purgatory here. It’s a District agency, but it’s under the
courts. I should think, however, one of the best managers in the
city is the receiver, and I would think he would be the first to want
to cooperate. I take it—Mrs. Newman, are you seeking to get his
cooperation?

Ms. NEwMaN. I think there is a stronger way to put this. We
sought the cooperation and now there is a very strong letter going
from Authority to the receiver, saying that this is very important
for the city that he participate in this. This is not just a favor that
we are doing for the receiver. It will be interesting to see his re-

sponse.

Ms. NorTON. Well, would you let us know within the week, what
his response is.

Ms. NEWMAN. I certainly will.

Ms. Norton. Because if everybody is starting late, we need to
know. I can’t believe that the housing authority, which has been
one of the best agencies has not already begun to do something.
And if not, we need to know that right away.

I am interested in knowing whether we are merely fixing exist-
ing decrepit computer systems to make them compliant with Y2K,
or if Y2K compliance is being pursued within the context of our
broader need to upgrade our technology systems. If I can give you
an example.

One of the best known in the city is 911—that’s a danger to the
life and health of every citizen. I know it for a fact. And I know
that the reason it hasn’t been fixed is because of the computer
problem. And of course, as soon as the computer problem and the
personnel problem are online, then it will be fixed. Meanwhile, you
folks out there who need 911, are on your own.

As you deal with Y2K and 911, do you have a plan for dealing
with 911? Are you pasting Y2K on what they’ve got there?

Ms. Peck. As I mentioned earlier today, about 25 percent of our
systems are already Y2K compliant. That’s because Y2K compli-
ance can be achieved either by, just as you say, remediating sys-
tems, by retiring those systems, or by replacing those systems.

And because, again, the District had for so long not made tech-
nology investments, we have taken the opportunity to replace and
upgrade to the next generation many of our systems. Included in
that general plan of w de the 25 percent of the systems being
upgraded, are the city’s principal financial systems and princip:


66

personnel and payroll systems which have just been upgraded. Ad-
ditionally, we have very near term plans in place for a very broadly
based update of all of our 911 and computer automated dispatch
operations.

Ms. Norton. I know this is very difficult, because obviously, you
are faced with overall technology problems, yet you must get the
Y2K problem done. I can appreciate that. I just hope you’re not put
in the position of having to go back over these systems several
times, when you’ve got to meet your deadlines. I understand that.

Mr. Brock. Ms. Norton, could I add to that, please?

Ms. NorTON. Please, Mr. Brock.

Mr. BROCK. A point that was made earlier by Mr. Davis. The
District is using a windowing technique. This is a temporary fix.
The District will have to go back and make permanent fixes to
these systems or replace them. One of the difficulties of the com-
pressed schedule they have, and the contractor made this clear to
us, is that poorly functioning systems that are remediated will con-
tinue to function poorly. The Y2K, the date problem, is fixed, but
any inefficiencies in those systems aren’t being addressed. So for
systems not being replaced, but merely being repaired, to the ex-
tent those systems work great, they'll continue to work great; to
the extent that those systems weren’t very efficient, they will con-
tinue to be inefficient.

Ms. Norton. To me, given their deadline problems, is it within
their capacity to upgrade an entire system, or are they driven to
having to deal with the windowing technique, or other such short
term fixes?

Mr. Brock. It would depend on the complexity of the application.
But I think at this point in time, it’s very risky to start replacing
systems, given the lead time necessary to procure the system, to in-
stall it, to test it, to make sure that it’s ready.

Ms. Norton. Yes, I can understand that. The District has such
an overall technology problem, that Congress mandated the Au-
thority to work with the city to reform all it’s technology functions
when we did the revitalization plan. I’d like to know whether this
emergency, as it were, has essentially displaced all other work to
upgrade the technology of the city.

Ms. PECK. As I came to the city 120 days ago, here’s what I
found. Usually in technology—and again, I will use the word se-
quentially—you are invited to do things sequentially. First, to stop
the bleeding and stabilize the technology. Then to lay into place the
technology infrastructure for the enterprise. Then to lay in all of
the applications which the enterprise needs. And finally, to globally
integrate all of those applications.

As I found the District, technologically, 120 days ago, the dance
to which we were invited was not sequential—it was concurrent.
All of those activities from the lowest “stop the bleeding activity,”
to the most global, integration activity, a portion of each of those
had to be carved out and done simultaneously.

Certainly, overwhelmingly, Y2K was the largest “stop the bleed-
ing,” stabilization activity that we had, and the most important.
But there were many other stabilization activities, and there are
many other stabilization activities which are going on simulta-
neously with that.


24

to assess and remediate non-IT equipment at agencies providing critical safety,

health, and environmental services.

THE Dis WEICANT! HI

IN i YI PI

‘The District's recent actions reflect a commitment on the part of the city to address the
Year 2000 problem and to make up for the lack of progress. However, the District is
stil! significantly behind in addressing the problem. As illustrated in the following
figure, our Assessment Guide recommends that organizations should now be testing
their systems in order to have enough time to implement them. They should also
have business continuity and contingency plans in place for mission-critical systems to
ensure the continuity of core business operations if critical systems are not corrected

in time.

By contrast, the District is still in the assessment process--more than 1 year behind

our recommended time table. For example, it has not

+ identified all of its essential business functions that must continue to operate,
+ finished assessing its IT infrastructure and its non-information technology
assets,

10


THE DISTRICT OF COLUMBIA’S YEAR 2000
COMPLIANCE CHALLENGE

FRIDAY, OCTOBER 2, 1998

House OF REPRESENTATIVES, SUBCOMMITTEE ON THE
District OF COLUMBIA, JOINT WITH THE SUB-
COMMITTEE ON GOVERNMENT MANAGEMENT, INFORMA-
TION, AND TECHNOLOGY, COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT, AND THE SUBCOMMITTEE ON
TECHNOLOGY, COMMITTEE ON SCIENCE,

Washington, DC.

The subcommittees met, pursuant to notice, at 1:35 p.m., in room
2318, Rayburn House Office Building, Hon. Tom Davis of Virginia
(chairman of the Subcommittee on the District of Columbia) pre-
siding.

Present: Representatives Davis of Virginia, Morella, Norton,
Kucinich, Maloney of New York, Gutknecht, Rivers, and Barcia.

Staff present: Peter Sirh, staff director; Ellen Brown, clerk; Anne
Barnes and Bob Dix, professional staff members, Subcommittee on
the District of Columbia; J. Russell George, staff director and chief
counsel; Matthew Ebert, clerk; Mason Alinger, staff assistant, and
John Bouker, minority counsel, Subcommittee on Government
Management, Information, and Technology; and Benjamin Wu, pro-
fessional staff member; and Mike Bell, clerk, Subcommittee on
Technology.

Mr. Davis of Virginia. Good afternoon. Welcome.

Today, I’m honored and pleased to be holding this important
oversight hearing dealing with the District of Columbia’s Y2K chal-
lenge with my two distinguished colleagues, Mr. Horn, who’s chair-
man of the Subcommittee on Government Management, Informa-
tion, and Technology, and Connie Morella, the chairwoman of the
Subcommittee on Technology.

Congressman Steve Horn and Congresswoman Connie Morella
provide extraordinary leadership in their subcommittees. They've
also accepted the challenges as members of the District of Colum-
bia Subcommittee, and of cochairing the House Y2K Task Force.
Both Mr. Horn and Mrs. Morella have conducted numerous field
hearings around the country, a number of which I have been privi-
leged to attend. Few people in the country understand the mag-
nitude and complexity of this national and international issue more
than these dedicated leaders.

I also want to welcome my distinguished colleague from the Dis-
trict of Columbia Subcommittee, Ms. Norton, and acknowledge her
continued leadership on behalf of the people of the District of Co-
lumbia.

()




13

ment of those. And by that we mean elevators, other functions that
use embedded chips, radio systems, things like that.

They have not yet provided testing guidance to the agencies, and
this is required when the agencies do the unit acceptance test of
any systems that have been remediated. And they have not yet
identified all the needed resources that are needed for completing
the remediation and testing.

Until the District completes its current assessment, it won’t have
a real good picture of where it stands, how long it’s going to take
to complete the renovation, how much it’s going to cost, or to really
develop good business continuity Planning.

And finally, something that is distressing to us, and I understand
that action is being taken on this. According to the Y2K office,
three agencies within the District have chosen not to participate.
Until this changes within these three agencies, no one can be cer-
tain as to the impact this might have on city operations. Similarly,
participation and coordination between the Y2K program office and
some agencies has not been as good as desired. And again, this was
reported to us by the Y2K office.

’'d like to conclude my statement by really addressing what we
believe is needed in order for the District to move forward. The
District needs to make some significant changes in it’s approach to
achieve a reasonable level of assurance that critical operational
Processes will continue to work after the century date change.

e’ve identified in the statement today, four steps.

First, it’s unlikely the District will be able to remediate all of its
systems. We believe that it’s critical that the District prioritize its
key business operations and focus on those first. And this con-
sensus should not reside within the Y2K office of the contractor,
but it needs to be a shared consensus among all the stakeholders
who both operate city programs and who are recipients of the bene-
fits of those programs.

To this point, we recommend that the District, in parallel with
its current Y2K efforts, identify and rank the most critical business
operations and systems that support those operations by October
81 of this year. Second, the District should use this ranking to de-
termine, by November 30, the priority in which supporting systems
that support those business operations should be renovated and
tested. And the continuity of operations and contingency plans for
these processes and systems should be initiated at the same time.
This is recognition that you can’t do everything, so focus the first
attention on the most critical operations, and those critical oper-
ations need to be identified in a very short timeframe.

The second step, for those systems that may not fall in this first
priority, but are still necessary or appropriate for the city to con-
tinue, which may not complete remediation or make complete re-
mediation, but not be adequately tested, it’s also essential that con-
tingency plans of operation be developed for these processes as
well. And by that we mean that when you develop contingency
plans, the reason it’s important to do them early is that contin-

ncy plans in themselves aren’t simple. Sometimes they require

ding, sometimes they require operational workarounds that re-
quire special approval or permission to implement, sometimes they
involve a completely new way of doing business.


3

tivities which are critical to the ability of the Federal agencies to
function efficiently, must be maintained.

On March 18, 1998, I requested that the U.S. General Account-
ing Office conduct a review of the District of Columbia’s effort to
ensure compliance with the year 2000 challenge. I was concerned
then, and I remain concerned, about the ability of the District of
Columbia to meet the Y2K challenge in an effective and timely

manner,

I might add that Dr. Barnett called to our attention early when
she uncovered, and came right up to us and talked to us, and in-
stead of hiding it, or trying to cover it up, said, we have a problem.
And that has lured us to try to get as much help for the city as
we can as we move forward. Part of the solution is recognizing the
problem. So, I commend you for that.

On June 17, 1998, the GAO reported to our subcommittee that
the District of Columbia faces serious problems in ensuring that
vital services are not disrupted by the year 2000 challenge. Two
other previous reviews of the District of Columbia Y2K status, one
conducted by KPMG as part of the fiscal year 1997 financial state-
ment audit report and one conducted in January 1998 by the Dis-
trict of Columbia inspector general, found significant deficiencies in
the District’s readiness mechanisms to address the Y2K challenge.

The District has responded to the subcommittee’s request and
GAO’s inquiry, by taking a number of important actions that I
hope we will hear about in some detail today. There are, however,
significant risks which are the result of the late entry of the Dis-
trict into these necessary preparations, because many of their ef-
forts will be conducted simultaneously. While many entities con-
duct a comprehensive system assessment, which are followed by
the development and implementation of a remediation plan, and
then by testing activities, the District is confronted by the enemy
of time and will have no choice but to pursue much of the remedi-
ation and testing efforts simultaneously. This, of course, potentially
has explosive ramifications which could threaten not only the abil-
ity of the District of Columbia to provide uninterrupted services,
but also the ability, among other things, of the Federal work force
to get to their places of employment.

ur subcommittee has worked closely with the new chief tech-
nology officer and the city’s new chief management officer to iden-
tify these impediments, and will continue to do that.

Tm going to ask unanimous consent that the rest of my state-
ment be included in the record.

[The prepared statement of Hon. Thomas M. Davis follows:]


19

In addition, the Year 2000 could cause problems for the many facilities used by the
District of Columbia that were built or renovated within the last 20 years and contain
embedded computer systems to control, monitor, or assist in operations. For example,
water and sewer systems, building security systems, elevators, telecommunications
systems, and air conditioning and heating equipment could malfunction or cease to

operate.

The District cannot afford to neglect any of these issues. If it does, the impact of Year
2000 failures could potentially be disruptive to vital city operations and harmful to the

local economy. For example:

* Critical service agencies, such as the District's fire and police departments, may
be unable to provide adequate and prompt responses to emergencies due to
malfunctions or failures of computer reliant equipment and communications
systems.

+ The city's unemployment insurance benefit system may be unable to accurately

process benefit checks as early as January 4, 1999.*

“Because of benefit year date calculations used in determining claimant eligibility, many state
unemployment systems are at risk of Year 2000 failures as early as January 1999. For example, if a
claim is filed January 4, 1999, it wil have a benefit year ending date of January 3, 2000. If a state's
benefits system has not been repaired, it may fail as early as January 1999 because it would not
properly recognize dates beyond 2000. Because the District had not yet procured a contractor to
remediate its unemployment system, GAO and the Department of Labor's Inspector General recently
reported that the system was at a high risk of failing.

Department of Labor, But Key Systems at Risk (GAO/T-AIMD-98-303, September 17, 1998))

5


THE DISTRICT OF COLUMBIA’S YEAR 2000
COMPLIANCE CHALLENGE

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA

AND THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT

AND THE

SUBCOMMITTEE ON TECHNOLOGY

OF THE

COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS
SECOND SESSION

OCTOBER 2, 1998

Committee on Government Reform and Oversight

Serial No. 105-193

Committee on Science

Serial No. 105-92

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

oe

U.S. GOVERNMENT PRINTING OFFICE
52-939 WASHINGTON : 1999

For sale by the U.S. Government Printing Office
‘Superintendent of Documents, Congressional Sales Office, Washington, DC. 20402

3 ISBN 0-16-058392-6



42

Our contingency planning model is straightforward. We're identi-
fying the mission-critical business processes in each agency, includ-
ing their supply chains and business partners, and putting plans
in place for manual workarounds in the short run against those
failures, As an example, for 911 emergency operations, which have
already been initially tested, our contingency operations dispatch
emergency vehicles approximately 30 to 60 seconds later than nor-
mal operations.

Again, as the GAO witness said, and I concur absolutely, the suc-
cess of contingency planning depends on a very substantial commit-
ment from resources from the agencies themselves. We can’t do, in
the chief technologist’s office, contingency planning for the agen-
cies. It must be done by the agencies and those agencies must take
responsibility for their critical business processes.

We can help them, however, in many ways. We are building for
them contingency planning kits, we are training agency personnel
on contingency planning activities, and we are developing a contin-
gency planning support desk. Our three pilot agencies for contin-
gency planning are 911, water and sewer, and the lottery. These
contingency plan pilots began in September of this year, and they
will be completed Py December of this year.

Lessons that we learn in these agencies, including the identifica-
tion of critical business processes that are linked to critical sys-
tems, which we have already identified—those lessons we will take
forward from the initial 3 agencies to the remaining 72 agencies.
And we expect to complete the contingency plans for all 75 agencies
by April 1999.

In terms of timelines for Y2K remediation and testing, GAO
judges, and we concur, that we are about a year behind their rec-
ommended timetable. We have, however, completed our IT assess-
ment. We expect to complete our non-IT assessment in December.
We've identified all required IT remediation resources. We'll begin
to provide testing guidance to agencies shortly, but we have not yet
completed the identification of all the required resources at the de-
partmental level. That will take the completion of our non-IT as-
sessment.

Dr. Barnett mentioned that the District’s system inventory con-
sists of 336 systems. We began the remediation and test of the first
of those systems in July 1998, and we will end the last mission-
critical system work around the first of November 1999. In the in-
tervening 15 months, we have several concurrent operating teams
remediating other systems of the 386 which are mission-critical
and require our first priority for remediation.

I repeat again, what the GAO witness said, because I think it’s
important. Of the 336 systems which we have, 84, or 25 percent of
them, are currently Y2K compliant; 117, another 35 percent, re-
quire a full remediation and test; and the remaining 45 percent
have already been remediated in their departments and require
testing only

Nine million lines of code, 20,000 programs, and an IBM auto-
mated remediation tool set that currently is remediating about 50
percent of those code lines on an automated basis, but still requir-
ing 50 percent of those 9 million lines of code to be hand remedi-
ated; that’s our challenge.


On March 18, 1998, I requested that the United States General Accounting Office conduct
a review of the District of Columbia's efforts to ensure compliance with the Year 2000 challenge.
1 was concerned then, and | remain concerned today. about the ability of the District of Columbia
to meet the Y2K challenge in an effective and timely manner.

On June 17, 1998, the GAO reported to our Subcommittee, that the District of Columbia
faces serious problems in ensuring that vital services are not disrupted by the Year 2000 challenge.
Two other previous reviews of the D. C. Y2K status, one conducted by KPMG as part of the fiscal
year 1997 financial statement audit report and one conducted in January 1998 by the D. C. Office
of the Inspector General, found significant deficiencies in the District's preparedness effort to
address the Year 2000 challenge.

The District has responded to the Subcommittee’s request and GAO's inquiry. by taking a
number of important actions, about which I hope we will hear in some detail today. There are
significant risks which are the result of the late entry by the District into this effort in any meaningful
way, because many of their efforts will be conducted simultaneously. While many entities conduct
a comprehensive system assessment, which followed by the development and implementation of a
remediation plan and then followed by testing activities. the District is confronted by the enemy of
time, and will have no choice but to pursue much of the remediation and testing efforts
simultaneously. This potentially has explosive ramifications which could threaten not only the
ability of the government of the District of Columbia to provide uninterrupted services but also the
ability, among other things, of the Federal workforce to get to their places of employment.

My Subcommittee has worked closely with the new Chief Technology Officer and the City’s
Chief Management Officer to identify any impediments to the District's ability to achieve successful
results in addressing this challenge, and I believe that with the commitment of the Control Board,
the City Council, and others, that we can collectively improve the potential for a positive result,
while minimizing the risk of a less desirable outcome. Following today’s hearing. we will look at
the results and progress to clearly understand the status of the District's Y2K plan development and
implementation, and then pursue an oversight strategy that will keep us all informed of their
progress. Utilities, communications, health services, transportation and public safety. are but a
handful of the areas that will require specific strategies and oversight.

| anticipate that early in 1999, we will conduct another oversight hearing to examine the
status of these efforts. { look forward to the testimony of our witnesses today and hope that we all
are able to learn much from this hearing so that we can effectively move forward.


The Year 2000 computer problem presents an enormous challenge for this Nation. Itis a
management issue of the magnitude which may never have confronted public agencies, private
businesses or the citizens of American people ever before. The problem is not new. The
requirement to address this matter has been known for years. However, many decision makers
mistakenly believed that affected systems and devices would be sufficiently replaced with new
technology sufficiently in advance of the dates when the Year 2000 issues would become a reality.

Simply put, many computers and other electronic devices are programmed to use only two
digits to represent each year. As a result, many computer systems will not be able to differentiate
between the year 2000 and the year 1900. In the 1970's and 1980's, it was common practice to
program using two-digit dates to save costly computer storage space. Even in the 1990's, old habits
are regularly demonstrated: two-digit dates abound in mainframe, client/server, desktop, and process
control systems. Programmers and managers making decisions to continue to use two-digit dates
obviously failed to recognize, or acknowledge, the magnitude of the issues that the Year 2000
problem would create.

In fact, it has only been recently that an increased recognition and attention have been given
to the fact that process controllers with embedded computer chips also present a significant Year
2000 challenge. This is because microprocessors have been programmed with the same two-digit
year and are therefore subject to the same failure potential.

Government entities face a unique Y2K challenge. Not only does the Year 2000 matter
require a plan for remediation and testing of all critical systems and processes, but it must be done
in a manner so as to insure that there are a continued and uninterrupted delivery of services. The
District of Columbia, as is the case with other local and state governments, is responsible for
ensuring the health, safety and economic vitality of all ofits residents. To accomplish this, efforts
must be taken to minimize the risk of failures in both the government and business environments,
which included contingency planning for possible failures. Many of these activities are
interdependent, and in far too many instances, the recognition level of the potential ramifications is
inadequate.

Given the complexity of the issue itself, the unique nature of the relationship between the
District of Columbia and the federal government, and the important role of the District of Columbia
within the Metropolitan Washington region, our attention is drawn in a special way to the Y2K
challenges that confront the District. The regional compacts which exist among various
governmental entities require us to examine these matters in a more comprehensive fashion.
Examples include the D, C. Water and Sewer Authority, and the Metropolitan Washington Area
Transit Authority. Regional agreement dealing with emergency response and emergency
preparedness, along with several health and human services activities, reinforces the need to work
together to insure to the extent possible that none of these important public services are jeopardized,
Additionally, the transportation and public safety activities which are critical to the ability of the
federal agencies to function efficiently, must be maintained,



55

very, very precise contingency plans, alternate manual plans in
every agency has been a principal focus of ours.

What will happen January 1, or any of the other Y2K susceptible
failure dates, is that end-user services will continue to be provided.
If there is chaos, if there is inefficiency in any agency because there
has been a Y2K failure, it will be within that agency as they oper-
ate on their manual contingency plan, rather than against their
normal automated operations. So we may well have inefficiencies
within particular agencies, for a modest number of days, within a
particular agency. But because of the contingency plans, that
should not be visible to external receivers of the services.

Mrs. MORELLA. The chairman’s been very generous with his
time, and so I’m going to yield back and ask questions later.

Mr. Davis of Virginia. Thank you. Let me recognize our ranking
member, Ms. Norton.

Ms. Norton. Thank you, Mr. Chairman. I want to begin by con-
gratulating the District with some invisible sign of your progress
on the Y2K problem, because I’m holding in my hand a driver's li-
cense which I recently had to have renewed, which has an expira-
tion date 1/3/01. And my executive assistant, Sheila Bunn, has a
grand slam. She has one that says 7/11/00. So I know that you’re
doing something right, and I congratulate you on it, and I’m sure
it's——

Mr. Davis of Virginia. The pictures still aren’t very good, but you
get the rest of it. [Laughter.]

Ms. Norton. Moving right along. [Laughter.]

Let me begin with Mr. Brock. I was interested to read your re-
port and testimony, and somewhat surprised by some of what you
report. I've also read of what the GAO has found with respect to
the Nation generally, and the Federal Government in particular. A
survey, for example, that showed that of 1,650 cities, nearly a quar-
ter had not begun to address the Y2K problem. Your finding that
all of the States, and it’s apparently 50 States, have indicated they
will not be able to renovate all of their systems in time, and there-
fore are focusing on the mission-critical systems.

While, if you know me, you know I’m not interested in giving a
pass to the District, but rather, in prodding them and congratu-
ating them as they move, I would like to get some sense of where
the District stands. Because given the testimony here today, one
might even believe that the District is now responding more rap-
idly to the problem than many cities, and even many States.

Could you evaluate the District—I’m still a teacher—I still teach
a course at Georgetown Law Center, so I have to confess that I do
still mark on the curve. I’m trying to find out, relatively speaking,
where the District stands. Because too often, the District is
everybody’s worst case scenario, when that really may not be a fair
assessment.

Mr. Brock. First of all, Ms. Norton, we have never looked at an-
other city or State, so it would be impossible to say where the Dis-
trict ranks in comparison with other cities and States. However, we
have information from a number of sources that indicates that
States and cities are generally behind other sectors—not just the
Federal sector, but other private sectors as well.


38

Madam Chair Chairmen and of the 7

I am Dr. Camille Cates Chief M Officer for the Gor of the District of
Columbia, since January of 1998. I appreciate the opportunity to present the Y2K initiatives that are being

aggressively carried out in the District.

Overview

Let me begin by telling you where we are with the Y2K initiatives, how we are working with other
governmental entities in the region, and how we are gathering information from our private sector vendors
and suppliers.

Untif this past June, the District had made limited progress in addressing the Y2K problem due to resource
‘and organizational issues. Since June, we have moved quickly to engage a private contractor to assist in
establishing a program management office and to begin the process of system discovery, assessment,
remediation and testing. We have also established a District CTO Leader and a Y2K team, all of whom are
‘working aggressively with the contractor to address our problems.

We are like about 70% of the nation’s municipalities in coming late to Y2K challenges. Consequently we
are vulnerable to the problems as well. The District also has distinctive challenges in the Y2K arena. Our
organization has over 75 Agencies, responsible for service delivery to a diverse group of stakeholders. Our
services include municipal, state and federal activities, and each is susceptible to Year 2000 problems. Our
data processing environments are complex and widespread. We are also in the process of implementing
major new technology systems. Our environment is further complicated by our relationship to other city
agencies, governments and private sector vendor systems.

‘Our risks are complicated as well, and involve public safety systems, water and sewer systems,

telecommunication systems, security systems, and administrative, financial and educational management

systems. We are addressing the Y2K projects in a parallet fashion; testing and remediating IT software
applications; assessing non-informational technology assets: structuring business continuity and

contingency plans; and assessing technology infrastructures.


26

Superior Court, and Housing Authority--have refused to participate in the program
office's assessment activities. Agencies also do not consistently attend program office
meetings and do not always follow though on their assessment commitments, such as
ensuring that program office and contractor teams have access to agency personnel
and data. Program office officials attributed these problems to the office's limited
authority and the lack of mandatory requirements to participate in the Year 2000
program. Failure to fully engage in the Year 2000 program can only increase the risks
the District faces in trying to ensure continuity of service in key business process

areas.

NEED! ITIGAT!

District officials acknowledge that the city is not able to provide assurance that all
critical systems will be remediated on time. We agree. Therefore, to minimize
disruptions to vital city services, it will be essential for the District to effectively manage

risks over the next 15 months.

First, because it is likely that there will not be enough time to remediate all systems,
the District must identify and prioritize its most critical operations, This decision must
collectively reside with the key stakeholders involved in providing District services and

must represent a consensus of the key processes and their relative priority. The

12


43

Before closing, I’d like to take a few truly not whining, but edu-
cational, minutes for the committee members to describe the envi-
ronmental context in which we operate on a day-to-day basis. Y2K
projects fail by molehills, not by mountains. I’d like to give you
three examples of the types of problems we struggle with every day
in the District. Problems we're solving quickly, but which every
next day are replaced by other problems that need to be solved.

The first example: Initially, three agencies refused to accept the
services of the District's Y2K project, and a fourth elected to re-
ceive only very limited services. It has taken a direct order from
the Financial Authority to bring these agencies under the District’s
Y2K project tent.

Second, led by the chief procurement officer, every senior officer
in the District strongly supports streamlined financial and procure-
ment processes for the District. Historic inefficiencies run deep,
however, and urgent Y2K activities often provide the discovery and
tactical repair situation that allow District-wide procurement proc-
ess improvements to be made, but they are made at the time ex-

nse of Y2K, the driving activity that has discovered the prob-
lems.

Third, because of the lack of IT investment in the District for
several years, the test team is often unable to find written docu-
mentation. At one agency, day-to-day business activities have so
overwhelmed the agency, that they were initially unable to provide
adequate process descriptions to the Y2K team. Only when senior
management insisted they suspend their normal work were the de-
scriptions received. We’re expecting to encounter similar situations
at other agencies.

Tn closing, I’d like to recognize the chairman and members of the
Financial Authority, senior members of Congressman Davis’ staff,
and GAO staffers assigned to the District Y2K, for their financial
responsiveness, for their timely and collegial advice, and for their
consultative expertise in strengthening the District’s rapid recovery
effort in Y2K.

Thank you.
[The prepared statement of Ms. Peck follows:]


25

* provided guidance to its agencies on testing, and

. identified resources that will be needed to complete remediation and testing.

Figure 1: The District's Year 2000 Status Compared to GAO's Recommended Year
2000 Schedule
were
Doe Suse

Untit the District completes the assessment phase, it will not have reliable estimates
on how tong it will take to renovate and test mission-critical systems and processes
and to develop business continuity and contingency plans. Nor will the District be able
to provide a reliable estimate of the costs to implement an effective Year 2000

program.

Further, the District has had some probiems in completing the assessment phase. For

example, according to program office officials, three agencies~the Court System,

1


62

Mr. Davis of Virginia. Do you feel that you have been delegated
sufficient authority, Ms. Barnett?

Ms. Barnett. I think the control board has made it clear that
all of the agencies need to be involved in the year 2000 remediation
effort together, regardless of their reporting relationship.

Mr. Davis of Virginia. But do you feel, as the chief management
officer, you are given the appropriate authority here to get every-
thing finished?

Ms. BARNETT. I think so, yes.

Mr. Davis of Virginia. OK. Let me recognize Mrs. Morella again,
for any additional questions she may have. Thanks.

Mrs. MoRELLA. Thank you. You know, we hear about the fact
that there’s like a cottage industry of lawyers just waiting and in
anticipation of lawsuits, and we also know that some States and
jurisdictions have passed some laws in anticipation of Y2K-related
lawsuits that are like limiting liability type legislation. I just won-
dered, is there any consideration that the city council or the control
board may be looking at any legislation of that nature?

Ms. PecK. Our dependency now is on the Federal legislation that
would limit liability if information were given that turns out not
to be exactly precise. But that national legislation does not limit li-
ability for an actual event, which the enterprise itself has per-
formed some mistake on.

Ms. NEWMAN. And I would just say that all of the conversations
that I have held with Councilwoman Patterson, who is the lead
member of the council, have revolved around her concern about
getting the services to the people and fixing the problem. I have
not had a conversation with her about the liability issue, but I will
raise it. I do not think it is at the top of the concern of that com-
mittee.

Ms. Norton. Will the gentlewoman yield? You do know of States
that have indeed enacted such laws?

Mrs. MORELLA. Yes.

Ms. Norton. Could I ask that this be investigated? The District
would be the first to be sued for God knows how much, and I’m
pleased the gentlelady has raised it, and would like you to look at
those laws and see if they are appropriate to the District of Colum-

ia.

Mr. Davis of Virginia. Nevada is one State that has put forward
laws on this. Obviously, in the gaming industry, a lot of money can
be lost if the timing’s bad. Would the gentlelady yield to me just
a point further.

One of the difficulties is if you put the law out too quickly and
you're giving immunity too quickly, then nobody has incentive to
fix it. On the other hand, this city having more lawyers per square
inch than any other jurisdiction on the planet, it would be a great
haven if there is no kind of immunity.

So, whether you’re an insurance company, whether you're a hos-
pital, or a bank, there can be great liability problems with this, and
it would be appropriate for the city to address them. We’d be happy
to work with you, as we look at other States that have enacted
similar laws.

In Nevada, as I understand it, it’s almost like an act of God if
somebody gets hurt on Y2K computers.


2

The year 2000 computer problem presents an enormous chal-
lenge for this Nation. It’s a management issue of the magnitude
that may never have confronted public agencies, private busi-
nesses, or the American people ever before. The problem is not
new. The requirement to address this matter has been known for
years. However, many decisionmakers mistakenly believe that af-
fected systems and devices would be sufficiently replaced with new
technology in advance of the dates when the year 2000 issues
would become a reality.

Simply put, many computers and other electronic devices are
programmed to use only two digits to represent each year. As a re-
sult, many computer systems will not be able to differentiate be-
tween the year 2000 and the year 1900. In the 1970’s and 1980's,
it was common practice to program computers using two-digit dates
to save costly computer storage space. Even in the 1990's, old hab-
its are regularly demonstrated. Two-digit dates abound in main-
frame, client/server, desktop, and process control systems. Pro-
grammers and managers making decisions to continue to use two-
digit dates obviously failed to recognize, or acknowledge, the mag-
nitude of the issues that the year 2000 problem would create.

In fact, it has only been recently that an increased recognition
and attention has been given to the fact that process controllers
with embedded computer chips also present a significant year 2000
challenge. This is because microprocessors have been programmed
with the same two-digit year, and are therefore subject to the same
failure potential.

Government agencies face a unique Y2K problem. Not only does
the year 2000 matter require a plan for remediation and testing of
all critical systems and processes, but it must be done in a manner
so as to insure that there is a continued and uninterrupted delivery
of services.

The District of Columbia, as is the case with other local and
State governments, is responsible for ensuring the health, safety,
and economic vitality of its residents. To accomplish this, efforts
must be taken to minimize the risk of failures in both the govern-
ment and business environments, which include contingency plan-
ning for possible failures. Many of these activities are inter-
dependent, and in far too many instances, the recognition level of
the potential ramifications is inadequate.

Given the complexities of the issue itself, the unique nature of
the relationship between the District of Columbia and the Federal
Government, and the important economic role of the District of Co-
lumbia within the Washington metropolitan region, our attention is
drawn in a special way to the Y2K challenges that confront the
District. The regional compacts which exist among various govern-
mental entities requires us to examine these matters in a more
comprehensive fashion. Examples include the D.C. Water and
Sewer Authority and the Metropolitan Washington Area Transit
Authority.

Regional agreements dealing with emergency response and emer-
gency preparedness, along with several health and human service
activities, just reinforce the need to work together to insure, to the
extent possible, that none of these important public services are
jeopardized. Additionally, the transportation and public safety ac-


16

these operations can be fixed before the Year 2000 deadline, and ensure that
business continuity and contingency plans are developed for systems that will not be

renovated on time.

To prepare for this testimony, we evaluated the District's efforts to address risks
associated with the Year 2000 date change and compared these efforts to criteria
detailed in our Year 2000 Assessment Guide,’ Business Continuity and Contingency
ide,” and Testing Guide.” We interviewed District officiats responsible for
overseeing the Year 2000 effort, including the Chief Management Officer and her
deputy, the Acting Chief Technology Officer, the Year 2000 Program Manager, the
Chiet Procurement Officer, and Office of Inspector General officials. We reviewed and
analyzed the District's request for contractor assistance in assessing, renovating, and
testing city systems. We also attended two hearings held by the District of Columbia

Council

in May and July 1998 on the status of the city's Year 2000 efforts. Finally, we

interviewed officials from Public Technology, Inc., the international City/County

Year 2000 Computing Crisis:_An Assessment Guide (GAO/AIMD-10.1.14), Published as an
exposure draft in February 1997 and finalized in September 1997, the guide was issued to help federal
agencies prepare for the Year 2000 conversion.

?Year 2000 Computing Crisis: Business Continuity and Contingency Planning (GAO/AIMD-
10.1.19). Published as an exposure draft in March 1998 and finalized in August 1998, this guide
provides a conceptual framework for helping organizations to manage the risk of potential Year 2000-
induced disruptions to their operations. It discusses the scope and challenge and offers a structured
approach for reviewing the adequacy of agency Year 2000 business continuity and contingency
planning efforts.

>Year 2000 Computing Crisis: A Testing Guide (GAO/AIMD-10.1.21, Exposure Draft, June
1998). This guide addresses the need to plan and conduct Year 2000 tests in a structured and
disciplined fashion. The guide describes a step-by-step framework for managing, and a checklist for
assessing all Year 2000 testing activities, including those activities associated with computer systems or
system components (such as embedded processors) that are vendor supported.

2


* The District also needs to identify to Congress, in advance,
any allocation of extra resources or funding for any federal
agency critical mission programs.

* Additionally, someone in the District management structure
should be identified and authorized to directly access and
take control of any critical agency system that is in jeopardy
of not meeting the January 1, 2000 deadline because of
ineffective management action.

These are some of the actions required by District
management officials.

With the strength, expertise, and management capabilities,
of the District leadership, such as the distinguished panel before
us today, | am confident that together we can overcome any
previous deficiencies in correcting the Year 2000 problem.



60

Ms. BARNETT. And so she’s here, and she has also now completed
the hiring of her core staff for Y2K. So we have on board a full con-
tingent of city——

Mr. Davis of Virginia. What’s her background?

Ms. BaRNETT. Would you like to come and talk about your back-
ground?

Mr. Davis of Virginia. If you'll just give me your background.

Ms. HANLEY. I’ve come out of information processing and data
center management, and Y2K experience.

Mr. Davis of Virginia. OK. Are you fluent in COBOL and all
that?

Ms. HANLEY. At one point in my career, I was, yes.

Mr. Davis of Virginia. OK.

Ms. BARNETT. In addition to the staff that we have hired, we
have on contract IBM. And IBM has the capacity to put on contrac-
tors—the number of contractors—that’s necessary to respond to the
changing conditions. So that’s the way that we're handling it.

Mr. Davis of Virginia. Kind of mega-contract, and within that ve-
hicle, they have a lot of discretion.

Ms. BARNETT. And when we begin really the balance of the reme-
diation, we'll be breaking that contracting process up into about
four different chunks, all supervised by IBM. We've designed this
so that we can get the maximum number of talented people on this,
but keep it coordinated.

Mr. Davis of Virginia. We heard testimony in this room in the
Transportation Committee earlier this week by some experts talk-
ing about windowing. Do you know what windowing is?

Ms. BaRNETT. No.

Mr. Davis of Virginia. Windowing is a temporary fix; it is not a
permanent fix, where you can take the 28- or 30-year cycles and
address the issue on a temporary basis that way, while you are
working for a permanent solution. It works in a lot of cases, but
it does not work in every case. I am sure your IBM folks are look-
ing at that. I would hope they are looking at that solution. I'd like
to hear back from you in terms of whether it is viable for certain
pieces of this.

Because we want to get over the hump, and my guess is that in
the city’s case, we are going to be with this Y2K problem far after
the year 2000. These issues will not all be addressed on that day,
that little snags will come up here and there over a period of time.
Of course, the real problem is not just what you do with the sys-
tems, it is the systems that you are interacting with that right now
you have no idea how good they are. You can do everything right,
but if these systems are not good, then you may need time to test
them.

But from the consumer perspective, if they are not getting their
paycheck on time, if the traffic lights are not working, if the trains
are not running, then they will not care who it is, and will find
somebody to blame. And at this point, we just don’t want it to be
here. That is why we are holding this hearing.

About a year ago, I understand the city administrator’s office
presented a Y2K compliance plan to department heads, and that

nding was identified for preliminary assessment and more de-


33

Good afternoon Chairman Davis, Chairman Horn, Chair Morella, Congresswoman
Norton, and members of the Committee:

I am Constance Newman, Vice Chair of the District of Columbia Financial
Responsibility and Management Assistance Authority. The Authority is pleased to
appear today to offer testimony on the District of Columbia government's efforts to
ensure effective computer operation in the Year 2000.

‘The District government and the Authority are paying considerable attention to
making sure that all computer systems are Year 2000 (“Y2K”) compliant, especially
those which support critical service delivery operations.

The Authority's role in this matter is to provide oversight and to ensure that the
required resources are available and appropriately applied toward addressing the Y2K
problem. The Authority has received regular briefings from the Chief Management
Officer and the Chief Technology Officer on the status of the District’s Y2K plan. We
have approached Y2K as a management reform project. This allows the Authority to
direct the necessary resources, based upon the recommendations of the Chief
Management Officer and the Chief Technology Officer. The Chief Management Officer
and the Chief Technology Officer are here today and they will provide additional details.

As we have previously reported to the District got a very late start in addressing
the Y2K problem. An aggressive schedule of work was necessitated by the late start.
This schedule requires that certain steps that would normally be done sequentially, are
undertaken simultaneously. This is not the optimum strategy, but we have no choice.
The Authority will carefully monitor this strategy.

Early last summer, the city contracted with IBM to perform an assessment of the
state of the District’s Y2K compliance and to provide the necessary remediation. The
assessment process is now complete. In her testimony, the Chief Management Officer
will discuss the additional needs for Y2K. We understand that the Congress is
considering an emergency appropriation of $3.25 billion to aid government agencies in
achieving Y2K compliance. We hope that we can count on your support for a portion of
that Federal program for the District of Columbia government to help us close the gap.

In addition to the Y2K efforts I want to bring to the committee’s attention some
exciting opportunities for improving technology utilization as it relates to service
delivery. These opportunities are logical extensions of currently approved management
reform technology infrastructure projects, and are necessary to build a unified District-
wide communications system with shared data access capabilities. The successful
completion of these projects will dramatically increase the District's ability to improve
services to citizens, reduce costs, and expand revenue opportunities. The projects will
take four years to implement and have a payback period of four years or less. In other
words they will pay for themselves during the period of implementation, or sooner.



34

In addition, the Chief Technology Officer and the Chief Management Officer plan
to create a Unified Communications Center to serve the police, Fire and Emergency
Medical Services and the communications requirements of the Emergency Preparedness
Department. Also as part of the Unified Communications Center, the District will
establish a 311 number for citizen non-emergency calls. This will increase service
delivery

In conelusion, the information technology aspect of management reform is a very
critical area. Year 2000 remedies are certainly the most crucial and time sensitive matters
that must be addressed, but it is not the only information technology project that the
District is addressing.

Mr. Chairmen, this concludes my prepared statement. I will be pleased to answer
any questions.


49

District is facing tremendous year 2000 challenges to ensure that
vital services will not be disrupted. GAO suggests that the District
has made only limited progress in addressing the year 2000 prob-
lem, and has lacked both the structure and the resources necessary
to address the issue. And this is very troubling, which is why we
have this hearing.

It appears the very same Y2K triage the Federal Government is
now undergoing must also be performed here in the District. If
that’s the case, then the District must focus also it’s attention and
resources on the management and oversight of the most critical
date-sensitive information and infrastructure systems, prioritizing,
renovation, repair, and replacement systems that can meet the
deadline.

The District must also accelerate the development of business
contingency plans for those mission-critical systems that can’t meet
the deadline, in order to ensure the uninterrupted delivery of gov-
ernment critical services.

Management officials in the District, as well as the new mayor,
must give the year 2000 problem a greater profile to aggressively
promote century date change awareness for both information, tech-
nology information systems, and sensitive infrastructure applica-
tions. Officials should monitor, coordinate, and prove oversight over
the progress over all governmentwide cent date exchange con-
version initiatives, with the primary goal of maintaining critical
systems operations into the new millennium.

A couple of other points—the District also needs to identify to
Congress, in advance, any allocation of extra resources of funding
for any Federal agency critical mission programs. And someone in
the District management structure should be identified and author-
ized to directly access and take control of any critical agency sys-
tem that is in jeopardy of not meeting that January 1, 2000 dead-
ine.

I really think that with this distinguished panel discussing it,
with District of Columbia leadership, that I think we can, working
together, prevent deficiencies and correct any year 2000 problem.

All of that being said in the way of a digest of the situation, I
think one of our concerns is this whole concept of interoperability.
And we can talk about any system as working exceedingly well, but
it’s like the hipbone connected to the thighbone, and you've got that
interoperability. You also have, and maybe this has been men-
tioned in some of the testimony, but you have the embedded chips
problem too. And I don’t know whether you've all addressed it, but
if you would like to comment on what is being done with regard
to interoperability, and whether or not you're looking at the embed-
ded chips. If you start off, that would be great.

[The prepared statement of Hon. Constance A. Morella follows:]


22

TQ ADDRESS THE YEAR 2000 PROBLEM

Until June 1998, the District had made very little progress in addressing the Year 2000
problem. It had not identified all of its mission-critical systems, established reporting
mechanisms to evaluate the progress of remediation efforts, or developed detailed
plans for remediation and testing. In addition, it lacked the basic tools necessary to
move its program forward. For example, it had not assigned a full-time executive to
lead its Year 2000 effort, established an executive council or committee to help set
priorities and mobilize its agencies, or identified management points-of-contact in

business areas.

Since this past June, the District has recognized the severity of its situation and taken
a number of actions to strengthen program management and to develop a strategy
that is designed to help the city compensate for its late start. For example, to improve
program management, the District has hired a new chief technology officer, appointed
a full-time Year 2000 program manager, established a Year 2000 program office, and
continued to use its chief technology officer council to help coordinate and prioritize

efforts.

The District also contracted with an information technology firm to assist in completing

the remediation effort. To accomplish this in the short time remaining, the District and


52

2000 challenges to ensure that vital services will not be
disrupted.

GAO suggests that the District has made only limited
progress in addressing the Year 2000 problem and has lacked
both the structure and the resources necessary to address the
issue.

This is very troubling.

it appears the very same Y2K triage the Federal Government
is now undergoing must also be performed here in the District.

If that is the case, then:

* The District must focus all of its attention and resources on
the management and oversight of the most critical date
sensitive information and infrastructure systems,
prioritizing renovations, repair, and replacement of systems.
that can meet the January 1, 2000 deadline.

« The District must also accelerate the development of
business contingency plans for those mission critical
systems that cannot meet the Y2K deadline, in order to
ensure the uninterrupted delivery of government critical
mission-related services.

« Management officials in the District, as well as the new
mayor, must give the Year 2000 problem a greater profile to
aggressively promote century date change awareness for
both information technology systems and sensitive
infrastructure applications.

° Officials should monitor, coordinate, and provide oversight
over the progress of all government-wide century date
change conversion initiatives, with the primary goal of
maintaining critical systems operations into the new
millennium.


61

failed, evaluation. Any idea what happened to that plan? Do you
ow?

Ms. NEWMAN. My understanding is that the problem with that
plan was that it analyzed the problem by agency and not by pri-
ority application.

Mr. Davis of Virginia. Fair enough.

Ms. NEWMAN. en you really get down to it, what is important
is what are the applications that will affect the public, and what
are the ones that will affect the dollars, and then some of the other
applications are less important. So to go by agency and say these
agencies are more important than the others, does not get you at
the problem.

ir. Davis of Virginia. Right, because you're funding low level
priorities.

Ms. NEWMAN. You are funding low-level priorities. And my un-
derstanding of the city administrator’s plan is that the key ap-
proach was at the agency level and it did not work.

Mr. Davis of Virginia. That’s OK, if you have all the time in the
world, but we don’t.

Ms. NEWMAN. Yes, but we were too late. And I do not even think
that if we would have been on time, that would have been the way
to a roach it.

r. Davis of Virginia. If you could ist trace for me again the
current management structure that will ensure communication, co-
ordination, and cooperation among all the critical decisionmakers
at the control board, the chief management officer, and the chief
technical officer, and the city council. If you could just walk me
through how this is being managed. One of the criticisms of the
structure we have now is that no one person is in charge. Where

does the buck stop?
Ms. Newman, Well, ’'m 1 Bo to let-——
Mr. Davis of Virginia. 0 do we call when things don’t go well?

Ms. NEWMAN. As far as the Authority is concerned, the buck
stops with the Authority, which is why we are having constant
hearings and constant briefings by the chief management officer
and the chief technology officer. The chief m: ement officer can
describe for you the organization within the administration, but
even having said that, ultimately, you will have to call us, and that
is one reason why I think we are interfering more than we would
normally with them and their process here.

But, Camille, why do you not talk about the committee.

Ms. BARNETT. We have several mechanisms that we've set up to
coordinate the various activities and there at various levels in the
organization. We have what we call the citywide executive steering
committee, which has representatives from the control board an
the city council, as well as Suzanne and I sit on that, and key
agency heads also are part of that team. Then we have what we
call a chief technol officer’s steering committee, which are the
senior technical people throughout the city organization, that meet
regularly. Then there is also a senior functional group, which are
essentially agency managers, so those would be the department di-
rectors that would be meeting regularly and talking about these.
And in each of the departments, there are also coordinating task
forces set up that particularly deal with their core businesses.


Iv

COMMITTEE ON SCIENCE
F. JAMES SENSENBRENNER, JR., Wisconsin, Chairman

SHERWOOD L. BOEHLERT, New York GEORGE £, BROWN, Jr., California RMM*

HARRIS W. FAWELL, Illinois RALPH M. HALL, Texas

CONSTANCE A. MORELLA, Maryland BART GORDON, Tennessee

CURT WELDON, Pennsylvania JAMES A. TRAFICANT, Jr., Ohio

DANA ROHRABACHER, California TIM ROEMER, Indiana

JOE BARTON, Texas JAMES A. BARCIA, Michigan

KEN CALVERT, California EDDIE BERNICE JOHNSON, Texas

ROSCOE G. BARTLETT, Maryland ALCEE L. HASTINGS, Florida

VERNON J, EHLERS, Michigan** LYNN N. RIVERS, Michigan

DAVE WELDON, Florida ZOE LOFGREN, California

MATT SALMON, Arizona MICHAEL F. DOYLE, Pennsylvania

THOMAS M. DAVIS, Virginia SHEILA JACKSON LEE, Texas

GIL GUTKNECHT, Minnesota BILL LUTHER, Minnesota

MARK FOLEY, Florida DEBBIE STABENOW, Michigan

THOMAS W. EWING, Llinois BOB ETHERIDGE, North Carolina

CHARLES W. “CHIP” PICKERING, NICK LAMPSON, Texas
Mississippi DARLENE HOOLEY, Oregon

CHRIS CANNON, Utah LOIS CAPPS, California

KEVIN BRADY, Texas BARBARA LEE, California

MERRILL COOK, Utah BRAD SHERMAN, California

PHIL ENGLISH, Pennsylvania VACANCY

GEORGE R. NETHERCUTT, Jr., Washington
TOM A. COBURN, Oklahoma
PETE SESSIONS, Texas

VACANCY
Topp R. SCHULTZ, Chief of Staff
Barry C. BERINGER, Chief Counsel
Patricia S. ScHwartZ, Chief Clerk /Administrator
Vivian A. TesstErt, Legislative Clerk
Rosert E. PALMER, Democratic Staff Director
SUBCOMMITTEE ON TECHNOLOGY
CONSTANCE A. MORELLA, Maryland, Chairwoman

CURT WELDON, Pennsylvania JAMES A. BARCIA, Michigan
ROSCOE G. BARTLETT, Maryland BART GORDON, Tennessee
VERNON J. EHLERS, Michigan EDDIE BERNICE JOHNSON, Texas
‘THOMAS M. DAVIS, Virginia LYNN N, RIVERS, Michigan
GIL GUTKNECHT, Minnesota DEBBIE STABENOW, Michigan
THOMAS W. EWING, Illinois MICHAEL F. DOYLE, Pennsylvania
CHRIS CANNON, Utah BOB ETHERIDGE, North Carolina
KEVIN BRADY, Texas VACANCY

MERRILL COOK, Utah

*Ranking Minority Member
**Vice Chairman


41

Ms. Norton. Thank you very much, Ms. Barnett.

Ms. Peck.

Ms. Peck. Thank you very much, Ms. Norton. My name is Su-
zanne Peck, and I’m the chief technology officer for the District of
Columbia. I'll cover the areas of financial and human resources, of
contingency planning, and of the timelines our Y2K remediation
and testing activities.

No District initiative has more importance than Y2K. From the
congressional level and from the Financial Authority level, and
from senior District management perspectives, this effort has first
call on all of our resources and first call on our urgency.

We've projected a remaining IT expense for the District of $40 to
$60 million. Additionally, we are now in discovery on the non-IT
expense portion, I will tell you today, that directionally, we prob-
ably have an expense of equal magnitude—I would compute be-
tween $40 and $70 million for non-IT expenses. Combined, that
adds to a possible total expense for the District of between $80 and
$130 million. Of that amount, as Dr. Barnett has said to you, we
have funded about $22 million, and have spent about $8.5 million
of that $22 million. This leaves us with a potential total remaining
funding requirement of between $67 and $117 million.

In terms of our human resource focus, the focus is on our Y2K
team, and our citywide departmental resources. The District’s team
is led by a senior Y2K program manager and by staffers who pro-
vide program oversight and functional service area coordination.
Our expandable IBM team is currently at about 50 persons, and
that team is staffed by functional specialists in both IT and non-
IT infrastructures and assessments, in conversion, in testing, in
end-user and vendor management, and in contingency planning.
Citywide, departmental resources are being made available on a
priority basis to this effort. Their challenges are to develop and im-
plement contingency plans and to lead departmental support ef-

forts. Making these resources available to Y2K places a substantial
strain within the District on daily activities, and often requires the
suspension of normal activities in District departments. And where
those suspensions of normal work are required they are currently,
at the direction of senior management in the District, being done.

In terms of contingency planning, the District’s Y2K project is
120 days old. Our most important task over the next 15 months is
to effectively manage the risk of disruption to essential city serv-
ices. As the GAO member testified, Y2K is not an IT problem; it
is a management problem; it is a business problem; and it extends
not only within our city boundaries, it extends without our city
boundaries as well.

We have identified and prioritized the most critical systems in
every District agency, and have a prepared document with that
prioritization. Again, as the GAO witness testified, those systems
Prioritizations must be extended to be operational prioritizations as
well.

We are now very, very focused on contingency plans in all of our
approximately 75 agencies. Because what we don’t know is which
oF the operations in the 75 agencies will fail, What we do know is
that some of them will fail, and we must be ready for that failure
with alternative operations.


39

‘Y2K Initiatives and Relationships

Let me take this opportunity to discuss the IT application assessment phase of the project; our first
completed milestone was on August 28, 1998. We have developed an IT inventory of mission-critical
systems. The District has identified 336 IT application systems, 84 of which are Year 2000 ready; 117 that
will require remediation and testing; and 135 that will require testing only. Since July, we have underway
several pilot efforts in the area of testing and remediation; continuity and contingency planning and

evaluation of non-IT assets.

We are significantly behind, and have much more to do to address known risks and impediments that could

affect our progress through FY 1999.

First, we must continue the prioritization process at a rapid pace. We have reviewed priorities with Agency
‘managers and have determined the numbers of IT mission-critical systems involved in the project
Schedules for remediation will detail the IT applications, given the number of systems and allocated

budgets funded by the Chief Technology Office (CTO).

Second, Agencies who can not be accommodated in the schedule will be required to have extensive
contingency plans and support to develop them,

‘Third, the District must work closely with local, regional and federal offices to involve them in appropriate
actions and planning to decrease the risk of their dependency upon affected assets. We will be working
with the President’s Council for Y2K and the Metropolitan Council of Governments to facilitate this kind
of communication and position the District to be the benefactor of their past work and plans in the Y2K
arena.

Fourth, the District must aggressively assist the Agencies in defining data exchanges and interfaces among
and between themselves, and with their business partners.

Fifth, financing. Initial funding of $21.8 million will not be adequate to carry on vendor support activities
within the Technology Office. We have detailed additional requirements of $47 million for information

technology expenses and additionally, as we complete the discovery process, we anticipate our embedded


64

so that we all didn’t individually have to go get this information.
That is a tremendous boon to us, and a tremendous benefit to us.

So we are really less attempting to go to each individual inter-
face entity, and we are attempting much more—and I think we will
be very successful in using the President’s Y2K Council and in
using council of government to attract that information to all of the
jurisdictions in a singularity.

Mrs. MORELLA. Do you meet with the President’s Y2K Council?

Ms. PECK. Yes.

Mrs. MORELLA. How often? Is it a regular, weekly get together
meeting?

Ms. PECK. It’s a monthly activity.

Mrs. MORELLA. Monthly. And that’s working out successfully?

Ms. PECK. Yes, and those are major activities. Usually, we're
using them as liaison people when we have difficulty getting to
other organizations or when there’s information that we have dif-
ficulty procuring. They've been very, very successful in providing
that intermediary function for us.

Mrs. MORELLA. Well, I’m glad that we had this hearing, Mr.
Chairman, because I think it’s important that we know what the
District is doing. It sounds like they have a late start, but they are
on the correct road. I hope you will report back to us periodically,
because we have no continuing resolution opportunity for Y2K.

People need to realize that there are going to be inconveniences.
I mean, I know we're not going to be ready totally, so we're goin;
to have to have contingency plans. People have to know there wil
be some inconveniences, but mission-critical systems will be taken
care of.

So, I thank you, and wish you well.

Mr. Davis of Virginia. Thank you. I now will recognize the
gentlelady from the District of Columbia.

Ms. Norton. Thank you, Mr. Chairman. Mr. Brock, I believe
that you testified that three agencies were not participating, I take
it, in the Y2K. What are those agencies, and why are they not par-
ticipating?

Mr. Brock. The three agencies that were identified to us this
week that were not participating were the court system, the supe-
rior court, and the housing authority. And they’ve refused to par-
ticipate in the program office’s assessment activities. That means,
at that time when the program office was identifying the mission-
critical systems, they were not given a list of mission-critical sys-
tems.

It was also reported to us that some agencies don’t consistently
attend all of the management meetings, and don’t always follow
through on their assessment commitments. And this is another
problem across the board, but happened enough that it was a mat-
ter of concern.

Ms. Norton. Ms. Barnett, what’s your response on the non-
participation part of that answer?

Ms. BARNETT. Well, on the areas that were discussed with the
housing authority, the superior court, and the D.C. court system,
that was discussed with the control board last week at their meet-
ing, and that is the reason that there is an order going from the
control board to these agencies to bring them into compliance. I


9

Mr. Davis of Virginia. Thank you. We're also pleased to have the
gentleman from Michigan, Mr. Barcia. Would you like to make an
opening comment?

Mr. BarctA. Thank you very much. As the ranking member of
the Subcommittee on Technology, I want to join my colleagues in
welcoming everyone to this afternoon’s hearing. And while today’s
hearing is ostensibly about the District of Columbia government’s
efforts to address the Y2K challenge, I believe this hearing really
highlights the challenges that all municipal, local, and State gov-
ernments face in making their computer systems Y2K compliant.
While the GAO testimony paints a grim picture for the District,
what I found most’ disturbing in the GAO testimony was that,
based on the limited data available on the status of local and State
governments, we believe that the District’s year 2000 status is not
atypical.

‘oday’s hearing should focus on the need for State and local gov-
ernments to give the Y2K issue their highest priority. It doesn’t
matter if Federal agency systems are Y2K compliant, if all the
State and local governments, which exchange electronic data on ev-
erything ranging from food stamp assistance to disability benefits
to driver registration, are not compliant. The worst case scenarios
painted by the witnesses’ testimony is not limited to the District,

yut one that can happen in all of our communities across the coun-

try.

I hope that we don’t use this hearing today to beat up on the Dis-
trict’s shortcomings, but take the opportunity to inform ourselves
about the problems that cities and towns across the Nation face,
and examine possible solutions that they can use.

And I thank the intent, Mr. Chairman. I appreciate this effort,
as my great colleague, Ms. Norton, already expressed. We need to
work together in partnership with these local units of government
to mitigate and reduce the kind of problem that we’re going to have
come January 1, 2000. I also want to just briefly thank our wit-
nesses for appearing before the subcommittee today, and I hope
that they will broaden their comments and recommendations, so
that they can be used by city officials across this country. Thank
you very much, Mr. Chairman.

[The prepared statement of Hon. Gil Gutknecht follows:}


51

First, we required the creation of a National Federal
Strategy.

Subsequently, we have met our Federal oversight
responsibilities by creating greater Y2K accountability and
directing the government to strengthen its quarterly reporting
requirements by: including a summary of costs to date;
reviewing agency validation schedules; and ensuring successful
interfaces with systems external to the Federal Government -—
including state and local governments, as well as private sector
systems.

Yet | am still very concerned that with little more than a year
to go before the new millennium, critical government information
systems may still be in jeopardy of not meeting the January 1,
2000 deadline for date conversion.

The problems which plague the Federal efforts include: the
failure to adequately champion the Year 2000 problem as a
national priority and not providing the critical leadership and
coordination to business operation partners in both the public
and private sectors.

Information systems experts have reported that the Y2K fix
is rooted in management and oversight, not in the lack of
technology available to address the problem.

Unfortunately, valuable time has been lost waiting for
management to embrace the magnitude and consequences of
this issue.

With Congressional oversight over the District of Columbia,
the hope was that the problems affecting the Federal Government
would not be replicated in the local government.

Unfortunately, we are being informed by the General
Accounting Office that the District is facing tremendous Year


57

it is going to have to do some of its work in parallel, rather than
in sequence.

Td like you to assess how risky this is. Is this really high risk,
is this what everybody else is doing, and is this likely to produce
satisfactory results?

Mr. Brock. Well, Y2K is a very high risk situation. One of the
things that any entity would need to do is to assess each of it’s
business processes—I’m not talking about systems now, but busi-
ness processes—and make a determination about how critical the
underlying IT and non-IT applications are to that process. And if,
in fact, a date failure would cause that process to fail, then you're
at risk of having a key business process fail. Which is one of the
reasons you need to develop a contingency plan, even if you think
you've remediated the problem.

That’s why we're urging the District to focus on key business
processes and the underlying systems.

Ms. Norton. Mr. Brock, I want to know something more specific.
And that is, how risky it is to do the work in parallel, rather than
in sequence? Is that so risky—so much more risky—and is that
what most folks are having to do now?

Mr. Brock. No. If you started earlier, you can do it in sequence.
I think at this point in time, the District is taking appropriate ac-
tion to do things in parallel. That’s about the only option they

ive.

Ms. Norton. And that’s being generally done throughout the
country, isn’t it?

Mr. Brock. It depends on the entity. Some entities that started
several years ago, don’t have to do that. They can take a more or-
derly process.

Ms. Norton. How about the Federal Government?

Mr. Brock, It varies from agency to agency.

Ms. PEcK. Ms. Norton, coul

Ms. Norron. By all means, Ms. Peck.

Ms. PEcK [continuing]. Answer from my perspective. Normally,
things are done sequentially, not concurrently, because there are
dependencies that prevent things from being done concurrently.
One of the few happy circumstances about Y2K, especially as we
came late, is that overwhelmingly, the bulk of the systems and the
underlying business processes in the District are independent of
each other. So that in terms of risk, while it is risky to do things
concurrently because you have a lot going on at the same time, in
this case, because the systems are independent of each other, there
is much less risk to doing things concurrently. And it is the happy
circumstance that we're able to do that.

We do have other advantages, because we have come somewhat
late. The team that we have from IBM is a very, very experienced
team. They have literally, within reasonable limits, the ability to
make that team as large as we need concurrently with very, very
well trained and experienced people on Y2K. y’ve come from
other Y2K activities, so we are advantaged.

And so, by lovely circumstance, doing things concurrently—reme-
diating all of our systems relatively concurrently—is less of a risk
than it might be in any circumstances where the activities were de-
pendent on each other.

—


il

Mr. Davis of Virginia. Thank you very much. I’m going to call
our panel of witnesses forward to testify. Mr. Jack Brock, the Di-
rector of Information Management Issues, Accounting and Informa-
tion Management Division, U.S. General Accounting Office; Mrs.
Constance Newman, the vice chairman of the D.C. Financial Re-
sponsibility and Management Assistance Authority; Dr. Camille

arnett, the chief management officer, government of the District
of Columbia; Ms. Suzanne Peck, the chief technology officer, gov-
ernment of the District of Columbia.

As you know, it’s the policy of this subcommittee that all wit-
nesses be sworn before they can testify. If you’d rise with me, and
raise your right hands.

Do you solemnly swear the testimony you're about to give to be
the truth, the whole truth, and nothing but the truth?

Mr. Brock. I do.

Ms. NEwMaN. I do.

Ms. BARNETT. I do.

Ms. PEck. I do. .

Mr. Davis of Virginia. Thank you very much. You can be seated.
Td ask unanimous consent that any written statements be made
part of the permanent record.

John Koskinan had wanted to be with us today, but his official
duties required him to be in New York this afternoon. To give an
example of his travel requirements, Mr. Koskinan was in Japan for
2 days earlier in the week. He will continue to actively work with
the President’s Council on the Year 2000 Conversion. I know Mr.
Koskinan and his colleagues have been good allies of this city by
working together on so many other endeavors. The administration

been partners with this subcommittee in trying to reshape the
District of Columbia.

Tm going to turn over the gavel to Ms. Norton, who is going to
run the hearing until we come back from two votes, and then we'll
be back in time to hear you finish. Thank you.

Ms. Norton [presiding]. Mr. Chairman, I now announce that a
District appropriation is hereby passed. [Laughter.]

Mr. Davis of Virginia. You won't get any argument from me.
(Laughter.]

Ms. NorTON. Nor does this subcommittee have any jurisdiction,
I might add. But we’d ask you to proceed—whichever of you is in-
clined to go first—GAO, I think, has to go first.

STATEMENTS OF JACK BROCK, DIRECTOR, INFORMATION
MANAGEMENT ISSUES, ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, U.S. GENERAL ACCOUNTING OF-
FICE; CONSTANCE NEWMAN, VICE CHAIRMAN, DISTRICT OF
COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT
ASSISTANCE AUTHORITY; CAMILLE BARNETT, CHIEF MAN-
AGEMENT OFFICER, GOVERNMENT OF THE DISTRICT OF CO-
LUMBIA; AND SUZANNE PECK, CHIEF TECHNOLOGY OFFI-
CER, GOVERNMENT OF THE DISTRICT OF COLUMBIA

Mr. Brock. Thank you very much, Ms. Norton. I’d like to empha-
size a point that was made by you, and other members of the sub-
committees, is that we’re not here to beat up on the District. They


site

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY
STEPHEN HORN, California, Chairman

PETE SESSIONS, Texas DENNIS J. KUCINICH, Ohio

THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania

JOE SCARBOROUGH, Florida MAJOR R. OWENS, New York

‘MARSHALL “MARK” SANFORD, South CAROLYN B. MALONEY, New York
Carolina JIM TURNER, Texas

JOHN E. SUNUNU, New Hampshire
RON LEWIS, Kentucky

Ex OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russet. Georce, Staff Director and Chief Counsel
Ropert ALLOwAY, Professional Staff Member
MatTHew Epert, Clerk
Joun BouKER, Minority Counsel


32
mediation, the testing, as well as the important contingency plan-
‘And I too am available for questions at the end of the other

statements.
(The prepared statement of Mrs. Newman follows:]


20

* The city's tax and business systems may not be able to effectively process tax
bills, licenses, and building permits. Such problems could hamper local
businesses as well as revenue collection.

+ Payroll and retirement systems may be unable to accurately calculate pay and
retirement checks.

* Security systems, including alarm systems, automatic door locking and opening
systems and identification systems, could operate erratically or not all, putting
people and goods at risk and disabling authorized access to important

functions.

To address these Year 2000 challenges, GAO issued its Year 2000 Assessment
Guide to help federal agencies plan, manage, and evaluate their efforts. This guide
provides a structured approach to planning and managing five delineated phases of an
effective Year 2000 program. The phases include (1) raising awareness of the
problem, (2) assessing the complexity and impact the problem can have on systems,
(3) renovating, or correcting, systems, (4) validating, or testing, corrections, and

(5) implementing corrected systems. GAO has also identified other dimensions to
solving the Year 2000 problem, such as identifying interfaces with outside
organizations specifying how data will be exchanged in the Year 2000 and beyond and
developing business continuity and contingency plans to ensure that core business
functions can continue to be performed even if systems have not been made Year

2000 compliant.


COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, JR., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
CHRISTOPHER COX, California EDOLPHUS TOWNS, New York
ILEANA ROS-LEHTINEN, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN M. McHUGH, New York GARY A. CONDIT, California
STEPHEN HORN, California CAROLYN B. MALONEY, New York
JOHN L. MICA, Florida THOMAS M. BARRETT, Wisconsin
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
DAVID M. McINTOSH, Indiana DC
MARK E. SOUDER, Indiana CHAKA FATTAH, Pennsylvania
JOE SCARBOROUGH, Florida ELIJAH E, CUMMINGS, Maryland
JOHN B. SHADEGG, Arizona DENNIS J. KUCINICH, Ohio
STEVEN C. LATOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois
MARSHALL “MARK” SANFORD, South DANNY K. DAVIS, Ilinois

Carolina JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas
PETE SESSIONS, Texas THOMAS H. ALLEN, Maine
MICHAEL PAPPAS, New Jersey HAROLD E. FORD, JR., Tennessee
VINCE SNOWBARGER, Kansas —
BOB BARR, Georgia BERNARD SANDERS, Vermont
DAN MILLER, Florida (Independent)

RON LEWIS, Kentucky
KEVIN BINGER, Staff Director
DANIEL R. MOLL, Deputy Staff Director
Davin A. Kass, Deputy Counsel and Parliamentarian
Lisa Swit ARAFUNE, Deputy Chief Clerk
PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON THE DISTRICT OF COLUMBIA
THOMAS M. DAVIS, Virginia, Chairman

CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, District of
ILEANA ROS-LEHTINEN, Florida Columbia
STEPHEN HORN, California ‘THOMAS H. ALLEN, Maine
Ex OFrricio
DAN BURTON, Indiana HENRY A. WAXMAN, California

Perer SIRH, Staff Director
Bos Dix, Professional Staff Member
ANNE BARNES, Professional Staff Member
ELLEN Brown, Clerk

ap


44

‘Mrs. Chairwoman, Mr. Chairmen, and Members of the Subcommitt

My name is Suzanne Peck, and I'm the Chief Technology Otticer for the Government of the District of
Columbia, 1 appreciate the opportunity to appear before your Subcommittees and to continue this
testimony on Y2K. I'll cover the areas of financial and human resource availability. contingency planning,
and time fines for Y2K remediation and testing.

Resource Availability (Financial and Human) Required to Address the Y2K Challenge

No District initiative has more importance than Y2K. From Congressional. Financial Authority, and
District Government management perspectives. this effort has first urgency and first call on our financial
and fnuman resources. We've projected a remaining $40-S60MM District-wide expense for Y2K IT
systems, Directionally. { expect a similar order-ot-magnitude expense, S40MM-S70MM. to be attached to
the city’s needs (now in discovery) for departmental-ievel imbedded chip replacements - adding to a
possible total of $80-S130MM. This number does not include departmentally-absorbed contingency
planning. or re-training costs. Of this amount, $21,8MM has been funded, and $8.5MM spent. This leaves
aan additional funding requirement of $27MM-S47MM for systems expenses. and of possibly S40MM
S70MM for imbedded chip replacement expenses. to a potential total remaining funding requirement of
S67-S117MM.

(Our human resources focus is on the Y2K team and on citywide departmental resources. ‘The District's
S-person Y2K team is led by a senior Y2K program manager and staffed by program oversight and
functional service area professionals. The 30-person IBM team whom they lead is staffed by functional
specialists in IT and non-IT infrastructures and assessments. conversion, testing, end-user and vendor
management, and contingency planning. Citywide departmental resources are being made available on a
priority basis to aid in system testing. to develop and implement contingency plans. and to lead
departmental Y2K training efforts, Making these departmental resources available for Y2K places
substantial strain on the departments, and sometimes requires suspension of their normal work

Contingency Planning

the District's most important task over the next 15 months is to effectively: manage the risk of disruption
to essential city services. Y2K is not simply an IT problem: it’s a business problem which extends
beyond city boundaries, Having identified and prioritized the most critical operations in every city

ide
cy. We're now focused on contingency plans for these

We don’t know which oF the city’s 75 agencies will sf fail after remediation and test. but we're sure that
‘a handfut wil fail. Consequently the mission-critical business processes of every agency about which Mrs.
Newman spoke must be reud tor failure and alternative operation.

(Our departmental contingeney planning mode} is straightforward. We're identifying the mission-critical
business provesses of each agency (inchiding those of their supply chains and business partners) and
deconstructing them into subprocesses antl tasks. We're mapping the tasks into the assets required to
support them. Then we're parting plans in place to conduct these mission-critical tasks through manual
workarounds in the short run. For 911 emergency operations for example. which have already been
initially tested. contingency operations dispatch emergency vehicles approximately 30-60 seconds later
than normal operations,

The success ot our contingency planning model depends on a subscanrad! commitment of resources fr
the agencies, Contingency planning cannot be done fo or for an ageney. Ht must be doxte principally Ay the
Key stakeholders must “ow” their critical business processes,



28

Finally, efforts to address this problem must have continued top-level commitment from
the Chief Management Officer and the department and agency heads, the Mayor's
office, and the Control Board.* Establishing a program office and hiring a contractor
with significant expertise is a good first step. However, the key stakeholders need to
"own" the process, i.e., participate in critical decision-making on program direction,
provide resources and support for the program, and ensure that all District agencies

and offices fully participate in the process.

To conclude, we believe the District's Year 2000 program needs an absolute
commitment from its leadership to make the most of the short time remaining. By
addressing the steps outlined above, the District can better ensure a shared
understanding of the key business processes that must be remediated, a shared
understanding of the risks being assumed in establishing priorities for remediation,
testing, and business continuity and contingency planning, and a shared commitment

to provide the resources required to address those priorities.

“The District of Columbia Financial Responsibility and Management Assistance Authority, also
known as the District of Columbia Control Board, was established in April 1995 by Public Law 104-8.
The Board's responsibilities include improving the District's financial planning, budgeting, and revenue
forecasting as well as ensuring the most efficient and effective delivery of city services. The Board is
also responsible for conducting investigations to determine the fiscal status and operational efficiency of
the District government,

14


37

We are significantly behind, and we have much more to do to ad-
dress the known risks and impediments that could affect our
progress through fiscal year 1999.

First, we must continue to prioritize at a rapid pace. We have re-
viewed with the agency managers, and have determined the num-
ber of IT mission-critical systems involved in each of these projects.
Schedules for this remediation will detail the IT application, given
the number of systems and the allocated budgets funded by the
chief technology office.

Second, agencies who cannot be accommodated in the schedule,
will be required to have extensive contingency plans and support
to develop them.

Third, the District must work closely with local, and regional,
and Federal offices to involve them in appropriate actions and
planning to decrease the risk of their dependency on affected as-
sets. We will be working with the President’s Council for Y2K and
the Metropolitan Council of Governments to facilitate this kind of
communication, and position the District to be the benefactor of
their past work and p! in the Y2K area.

Fourth, the District must aggressively assist the agencies in de-
fining data exchanges and interfaces among and between them-
selves, and with their business partners.

The fifth item is financing. Initial funding for the Y2K problem

in the District of Columbia is approximately $22 million, and that
will not be adequate to carry on the vendor support activities with-
in the technology office. We now have completed the assessment
stage, and so we have detailed additional requirements of $47 mil-
lion for information technology and expenses. And additionally, as
we complete the discovery process, we anticipate our embedded
chip expenses to fall within t) range of $40 to $70 million. We are
seeking your support for efforts to obtain the additional funds.
To address the risks posed by failure in the private sector vendor
and supply chain environments, we have established a vendor and
supplier management program. This includes the creation of a
large data base of information which we will gather from various
sources, including our own inventories and assessments, the results
of vendor and supplier surveys, and shared information from
groups like the Council on Governments. We'll use this information
to evaluate the readiness status of agencies and their assets.

In conclusion, I would like to thank the members of these various
committees, and the various branches of the Federal Government,
who have helped the District accelerate very quickly it’s applica-
tions of Y2K remediation. I'd also particularly like to Su-
zanne Peck, our chief technology officer, and also Mary Ellen Han-
ley, who is here with us, who is our year 2000 program manager,
for their help in developing and implementing this plan.

We realize that to do this will take top level commitment, not
only from me and my office, but from all of the agency heads, the
Authority, the mayor's office, and city council, and we commit to
you to remain focused and visible for this remediation process. We
understand the seriousness of these issues, and we are committed
to it’s resolution.

Thank you.
(The prepared statement of Ms. Barnett follows:]


23

the contractor pian to concurrently (1) remediate and test system applications, (2)
assess and fix the information technology (IT) infrastructure, including the data
centers, hardware, operating systems, and telecommunications equipment, (3) assess
and correct noninformation technology assets, and (4) develop contingency plans. So

far, the District has done the following.

* Developed an inventory of information technology applications. Of the 336
applications identified, the District and its contractor determined that 84 are
deemed Year 2000 compliant, 135 have already been remediated but still need
to be tested, and 117 need to be remediated and tested. According to the
District, over 9 million lines of code still need to be remediated.

* Initiated pilot remediation and test efforts with the pension and payroll system.
The system has been converted and the conversion results are being readied
for system users to review. The District expects to complete the pilot by
December 31, 1998.

* Adopted a contingency planning methodology which it is now piloting on the
911 system, the water and sewer system, and the lottery board system. It
expects to complete the first two pilots by October 31, 1998, and the remaining
one during the first quarter of fiscal year 1999.

* Developed a strategy for remediating non-IT assets which is now being tested
‘on the water and sewer system. This is also expected to be done by October

31, 1998. After this effort is completed, the District and the contractor will begin


7

Mr. Davis of Virginia. I'm going to yield now to my colleague,
Ms. Norton, for any statement she may make.

T have to go vote on the House floor, so I’m going to yield to Ms.
Norton who may chair the meeting while I go over to the House
floor. Then Mr. Barcia can make a comment, and we'll continue the
testimony. When we get back, we can get right to the questions,
so we don’t have to delay the hearing.

We have read your comments in advance and have questions pre-
pared. Please take your time, and read your statements for the per-
manent record. If you want to abbreviate it, you can do that also;
the whole statement will be in the record.

Ms. Norton.

Ms. Norton. Thank you, Mr. Chairman. I want to thank the
chairs of the three subcommittees participating today, Tom Davis,
Connie Morella, and Stephen Horn, for working together for this
hearing on the District’s progress in meeting the year 2000, or
Y2K, computer and technology challenge.

While the District certainly does not need a new problem to fix,
ironically, the Y2K problem has come at an opportune time. The
District is in the throes of taking down every system and rebuild-
ing it’s government from the ground up. Thus, the city will need
brandnew computers and other technology in any case, and should
be able to seize the opportunity to build in Y2K remedies as a part
of ongoing and indispensable management reforms. At the same
time, Y2K problems that could bring additional disruption to serv-
ices are the last thing that a city, just emerging from insolvency
and serious service delivery problems, needs.

Even so, the city is by no means in a class by itself on fixing the
Y2K problem. All governments, including the Federal Government,
are behind, and State and local governments even more so. I have
no reason to believe that the District is even the worse case. That
is a very small comfort, however. As the millennium comes, it won't
matter much who was ahead and who was behind to the victims
of an incomplete or faulty Y2K process.

Tm pleased that the Authority and the city are using monthly

rogress reports to track implementation, and that the District of

‘columbia Subcommittee has been assured in writing that Y2K
compliance will be in place by June 1999. The District appears to
have first-rate assistance in place, although I am concerned at the
widely divergent estimates of cost. The District has accepted re-
sponsibility for it’s late start, and appears to be quickly catching

up.

T expect today’s hearing to help clarify many of the unresolved
issues, and to be helpful to all concerned. Thank you, Mr. Chair-
man.

1 (rhe prepared statement of Hon. Eleanor Holmes Norton fol-
lows:


59

so far. On what has the $8.5 million been spent? Is there anybody
who wants to answer the question?

Ms. PEcK. Yes, as we mentioned earlier in the testimony, we are
funded at $22 million, of which $8.5 has been spent. In response
to your question, where did the original $18 to $45 million come
from—I think the answer to all financial questions on Y2K is dis-
covery. That number was a rational number, given the discovery of
that time and place, and as we have——

Mr. Davis oF Virginia. The Federal Government’s numbers keep
going up—just as a comparison.

Ms. PECK. It is discovery. There is what is known to exist, there
is what people suspect to exist, there is what you—in addition to
all that discover when you go in. And on top of that, even when
you have your entire inventories taken, on a daily basis you make
additional discoveries of systems and nonsystems activities that
have to be taken care of.

Mr. Davis of Virginia. Dr. Barnett, do you want to address that
or do you Mrs. Newman?

Ms. NEWMAN. I was just going to say, to be honest, Mr. Chair,
at that time, we were really just beginning the process. I think
there was an honest effort to give you some answer, but we were
really not in a position to be very specific about the assessments,
because it had just really started.

Mr. Davis of Virginia. When you et your plan in place, then
there are no surprises. Or at least along the way, you can track
how this comes. t’s why it’s great to have them. I think Ms.
Norton pointed out that levels of government are struggling
with this. The difficulty in the city is—when you came on Dr.
Barnett, very little had been done. Isn’t that correct?

Ms. BARNETT, That’s correct.

Mr. Davis of Virginia. You can find out in terms of addressing
this issue that the city was just trying to keep it’s head above
water. This was probably the last priority you could imagine ad-
dressing when you're just trying to make sure you’re getting the
payche ‘s out on time, and everything else. We recognized it—and
I think the first major step is identifyin, you have a problem, then
make an assessment, find solutions, and then test them. We're just
a little late.

My concern is there’s a limited labor market that does this type
of work. The later you begin, the more you have to pay, because

ou’'re having to pay a premium for people for not having them on
board a year or two earlier. How will you do this? Will you be doing
this through bringing people in to city government, or are you just
doing it through contractors, and if so, how are the procurements—
do you go through the usual procurement process? If you bring
somebody in quickly, then somebody says you did a favor for some-
body. t's the strategy on that? Any of you want to address
that?

Ms. BARNETT. Well, it’s a dual strategy. We have set up a year
2000 program office within the chief technology office. We've hired
a Y2K program manager; she’s here with us today—her name is
Mary Ellen Hanley. We're very pleased to have her here.
wht, Davis of Virginia. If she could raise her hand? Thank you.

‘elcome.


45

We're identifying responsible managers and support staff in each agency to establish and test their
contingency plans, They'll be guided by our Y2K contingency team’s expertise and plan templates. We're
developing contingency planning kits. training agency personnel in contingency planning activities, and
developing a contingency planning support desk. Our three pilot agencies are the Office of Emergency
Preparedness ( 911"), the Water and Sewer Authority (WASA), and the Lottery. These pilots began in
September, 1998, and will be completed by the end of December, 1998. Lessons we leam in these
agencies will be applied fairly simultaneously to the remaining 72 agencies. We expect to complete
‘contingency plans for all agencies in April, 1999.

While the goal of our planning is business continuity. in the District we'll realize a disaster recovery
planning benefit as well in our contingency planning activities. Currently only 2 of the District's largest 56
agencies have full-blown disaster recovery plans. A natural consequence of ¥2K contingency planning is
the emergence of elementary disaster recovery plans for the remaining $4 agencies as well

Time Lines for ¥2K Remediation and Testing

In terms of Y2K remediation and testing, the GAO judges we're about a year behind their recommended
timetable. We've completed our IT assessment. We expect to complete our non-IT assessment in
December, We've identified all required 1T remediation resources. We'll begin to provide testing
guidance to agencies shortly, but have not yet completed the identification of all required department-level
testing resources,

‘As Dr. Barnett mentioned, the District's systems inventory consists of 336 systems, Remediation and test
of pilot systems in the first of 4 functional service areas began on July 6, 1998. Remediation and test of
the last system in the 4th functional service area is planned for November 1, 1999. tn the intervening 15
‘months. operating teams will concurrently remediate/test other systems of the 336 which require it.

OF the 336 systems. 84 (25%) are currently 2K ready: 117 (35%) require remediation and test: and 135
(45%) have already been remediated by their departments and require testing only.

Approximately 9 million lines of code requiring remediation were produced from our 2-month IT
assessment, That’s good news, We were expecting much more, Conversely, because we've conducted the
assessment much more rapidly than normal (and through agency personnel interviews and surveys,
without automated validation of agency-supplied data), we also expect fo discover additional code fines as
remediation and testing proceed

As I mentioned, code requiring remediation is distributed across 117 business applications, consisting of
about 20.000 programs, in 14 different agencies. For District applications, IBM's automated tools have
been remediating, on average. approximately 50% of the code electronically

After remediation, these applications will be tested according to the standard IBM Year 2000
Transformation Methodology. This methodology consists of regression testing. 20" century testing, 21"
century testing. and a limited form of end-to-end testing.

The remediation test pilot we chose was the Pension and Payrall System from the Office of Payroll and
Retirement Systems (OPRS). It consists of 750,000 lines of code, That code was successfully renovated
and retured to OPRS on September 22, 1998. as scheduled in the project plan

{mn addition to the 14 remediation agencies. 26 other agencies have 135 business applications, consisting of
at least 7000 programs, which have been previously remediated by the agencies themselves. and only
require testing. The schedule for this work is currently being built


aT

Suzanne Peck
Chief Technology Officer

Before her appointment as Chief Technology Officer for the District of Columbia, Suzanne Peck
worked on technology-related issues for over 25 years. Ms. soit based tology aces,

number of areas, including conceiving and building electronically-based

improving toner service an penn! performs td proving td erst nee

For the past 16 years, Ms. Pock has held senior management responsibility for information
technology efforts in a variety of firms. She has served in positions such as Vice President for
Regional Technology Operations and Marketing, Systems and Computer Technology
Corporation, Chief Executive Officer, Transys; Senior Vice President for Technology and New
Business Activities, Student Loan Marketing Association (Sallic Mae); and Vice President for
‘Merchant Banking System, Bankers Trust Company, She has contributed to the expansion and
strengthening of existing businesses and has helped to establish stert-ups.

‘Ms. Peck graduated cum laude from the College of Notre Deme of Maryland and received an
MBA. with distinction from the Wharton School of Finance and Commerce.

Ms. Peck is a Lecturer on Total Quality Management at the University of Virginia and sits on the
Board of Directors for the Concerto Soloists, based in Philadelphia.


10
OPENING STATEMENT OF CONGRESSMAN GIL GUTKNECHT
TECHNOLOGY SUBCOMMITTEE HEARING ON Y2K

OCTOBER 2, 1998

THANK YOU MADAM CHAIRMAN FOR SCHEDULING THIS VERY IMPORTANT HEARING.

AS WE ALL KNOW, THE YEAR 2000 COMPUTER PROBLEM IS GETTING CLOSER AND CLOSER,
AND AS MUCH AS SOME PEOPLE WANT TO, WE CAN'T RESCHEDULE IT. BEFORE THIS
COMMITTEE STARTED HOLDING HEARINGS ON THIS ISSUE, NOBODY REALLY UNDERSTOOD
OR CARED ABOUT THE Y2K PROBLEM. I CREDIT CHAIR MORELLA AND CHAIRMAN HORN

FOR THEIR OUTSTANDING EFFORTS TO BRING THIS {SSUE TO THE FOREFRONT,

AFTER I READ THE HEARING CHARTER, I BECAME SERIOUSLY CONCERNED THAT THE.
GOOD CITIZENS OF THIS CITY ARE GOING TO FACE CRITICAL PROBLEMS ON JANUARY 1,
2000, WHILE I AM INFORMED THAT THE DISTRICT HAS MADE SIGNIFICANT PROGRESS,
I’M CONCERNED THAT DUE TO THE LATE STARTING DATE, CITIZENS OF THIS GREAT CITY

MIGHT FACE DISRUPTION OF ESSENTIAL. PUBLIC SERVICES. | HOPE THIS IS NOT THE CASE.

ONCE AGAIN, THANK YOU MADAM CHAIRMAN FOR CALLING THIS MEETING TODAY AND I
LOOK FORWARD TO HEARING THE WITNESSES TODAY [NFORM US ON THE PROGRESS

WASHINGTON, DC IS MAKING IN THEIR BATTLE AGAINST THE Y2K COMPUTER PROBLEM.