In conducting our review, we assessed the Air Force’s Year 2000 efforts against our own Year 2000 Assessment Guide. This guide addresses common issues affecting most federal agencies and presents a structured approach and a checklist to aid in planning, managing, and evaluating Year 2000 programs. The guidance, which is consistent with DOD’s Year 2000 Management Plan and the Air Force’s own Year 2000 management approach, describes five phases—supported by program and project management activities—with each phase representing a major Year 2000 program activity or segment. The phases and a description of each follows. Awareness - Define the Year 2000 problem and gain executive-level support and sponsorship. Establish a Year 2000 program team and develop an overall strategy. Ensure that everyone in the organization is fully aware of the issue. Assessment - Assess the Year 2000 impact on the enterprise. Identify core business areas and processes, inventory and analyze systems supporting the core business areas, and prioritize their conversion or replacement. Develop contingency plans to handle data exchange issues, lack of data, and bad data. Identify and secure the necessary resources. Renovation - Convert, replace, or eliminate selected platforms, applications, databases, and utilities. Modify interfaces. Validation - Test, verify, and validate converted or replaced platforms, applications, databases, and utilities. Test the performance, functionality, and integration of converted or replaced platforms, applications, databases, utilities, and interfaces in an operational environment. Implementation - Implement converted or replaced platforms, applications, databases, utilities, and interfaces. Implement data exchange contingency plans, if necessary. During our review, we concentrated primarily on the Air Force’s efforts to oversee its Year 2000 program during the awareness and assessment phases. We focused our review on Year 2000 work being carried out by (1) DOD’s Office of the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence (OASD/C3I)—which is responsible for promulgating DOD guidance on Year 2000 and providing assistance to Defense components, (2) Air Force headquarters, including the Air Force Communications and Information Center (AFCIC)—which is responsible for day-to-day management and supervision and for issuing Air Force Year 2000 policy and guidance, (3) Air Force Communication Agency, the designated Air Force Year 2000 program office, and (4) selected program offices managed by the Air Force Materiel Command’s Aeronautical Systems Center at Wright-Patterson Air Force Base, Ohio. To assess OASD/C3I efforts in providing Year 2000 support to the Air Force, we met with the Acting Assistant Secretary of Defense for Command, Control, Communications and Intelligence, the Principal Director for Information Management, the Director for Information Technology, and other senior staff responsible for Year 2000 issues. We reviewed the office’s Year 2000 guidance and other documentation on Year 2000 funding, reporting, and date format requirements. To assess Air Force headquarters efforts to manage and oversee the Year 2000 computer problem, we (1) met with the Air Force Communications and Information Center officials and Year 2000 focal points, (2) obtained and analyzed documents issued by these offices that describe organizational structure and responsibilities for carrying out the Air Force Year 2000 program, and (3) reviewed the Air Force’s Year 2000 Guidance Package to assess the level of guidance, roles, and responsibilities, and target milestone dates for the Year 2000 effort. Further, we obtained and analyzed the Air Force Year 2000 inventory data to determine (1) the number of systems owned and operated by Air Force organizations and (2) the status of Air Force systems in their Year 2000 efforts, proposed strategy, and the number of systems reporting to be compliant. We reviewed pertinent Year 2000 program documentation such as Defense and Air Force guidance and management directives, working group minutes, status reports, and cost and schedule data. We performed our work primarily at the Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio; Headquarters Air Force at the Pentagon, Washington, D.C.; and the Office of Assistant Secretary of Defense for Command, Control, Communications and Intelligence at Arlington, Virginia. We conducted our work from July 1996 through August 1997 in accordance with generally accepted government auditing standards. We received written comments on a draft of this report from the Chief Information Officer for the Department of the Air Force. His comments are discussed in the “Agency Comments and Our Evaluation” section and are reprinted in appendix II. Most of the Air Force’s automated information systems and embedded weapon systems are vulnerable to the Year 2000 problem, which 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 format, however, the Year 2000 is indistinguishable from 1900, or 2001 from 1901, etc. As a result of this ambiguity, system or application programs that use dates to perform calculations, comparisons, or sorting may generate incorrect results when working with years after 1999. Should Air Force computer systems fail on the morning of the Year 2000, Air Force operations at all levels could be affected by the incorrect processing of data, as well as corrupted databases, or even massive system failures. In turn, this could result in such problems as delays in supply shipments, faulty inventory forecasts, unreliable budget estimates, and erroneous personnel-related information. Moreover, the problem could adversely affect critical warfighting functions such as combat, communications, command and control, intelligence, surveillance, reconnaissance, and air traffic control. Like the other military services, the Air Force has adopted DOD’s Year 2000 management strategy, which calls for centralized oversight with decentralized execution of Year 2000 correction. In February 1995, the Air Force designated the Air Force Communication Agency (AFCA) as the focal point for Year 2000 efforts, with responsibility for (1) coordinating Year 2000 efforts being carried out by its 9 major commands, 36 field operating agencies, and 3 direct reporting units, (2) ensuring that components completed Year 2000-related tasks on time, (3) developing Year 2000 guidance, (4) collecting and reporting progress and inventory-related data, and (5) chairing the Air Force Year 2000 working group which is comprised of representatives from components. In April 1997, the Air Force established a Year 2000 program office at AFCA. The program office is currently staffed with 24 full-time personnel and it reports to the Air Force Communications and Information Center (AFCIC). AFCIC, which was established in April 1997 due to a Headquarters Air Force reorganization, was tasked with responsibility for implementing Year 2000 policy and programmatic changes across the Service. AFCIC also reports to the Office of the Chief Information Officer and it has assigned three full-time staff members to oversee the Air Force’s Year 2000 Program. Appendix I illustrates the Air Force’s Year 2000 organizational structure and describes the complexity involved in carrying out Year 2000 efforts at the command level. Early in its Year 2000 effort, the Air Force introduced a five-phased management approach for addressing the Year 2000 problem, which was later adopted by DOD and the Federal Government CIO Council’s Year 2000 Subcommittee. According to Air Force officials, if properly implemented, this phased approach will enable the Air Force to achieve its goal of having every mission-critical system compliant by December 1998. The five phases and their supporting program and project management activities are consistent with those identified in our Year 2000 Assessment Guide, which draws heavily on the best practices work of the CIO Council’s Year 2000 Subcommittee. In addition to following the five-phase approach, our guidance addresses common issues affecting most federal agencies and provides a checklist to aid them in planning, managing, and evaluating their year 2000 programs. Also, because the Year 2000 is a massive and complex management challenge, our guidance recommends that agencies plan and manage a Year 2000 program as a single large information system development effort and promulgate and enforce good management practices on the program and project levels. To comply with DOD’s current Year 2000 funding mandate, the Air Force does not plan to provide system/program managers with any additional funds to manage and fix the Year 2000 problem. Rather, system/program managers have been directed to reprioritize or reprogram previously budgeted funds (primarily operational & maintenance (O&M) funds) to fix Year 2000 problems. The Air Force estimates there are 2,944 automated information systems and weapons embedded systems in its inventory and that the majority of these systems will have to be either renovated, replaced, or retired before January 1, 2000. Of the 2,944 systems, 550 (about 19 percent) are considered to be mission-critical systems, that is, they directly support wartime operations. As of September 4, 1997, the Air Force reported that all of its 2,944 systems completed the awareness phase, 33 percent were in the assessment phase, 32 percent in renovation, 17 percent in validation, 12 percent were in implementation, and 6 percent will be decommissioned by December 1999. As of September 1997, the Air Force estimated that it will cost about $405 million to successfully complete its Year 2000 program. Table 1 details the status of Air Force systems according to their mission impact. The Air Force has taken a number of positive steps to ensure that its personnel are fully aware of the impact should Air Force systems not be compliant at the turn of the century. For example, in November 1995, the Air Force established a Year 2000 working group comprised of focal points from each major command, field operating agency, and direct reporting unit. This group has focused on such matters as sharing lessons learned, eliminating duplicative efforts, sharing resources, and tracking component progress.