OMB gets tough with agencies

Pushing agencies to hasten their efforts to fix the century date processing problem in government computers the Office of Management and Budget is expected this week to require seven agencies to begin moving hundreds of millions of dollars earmarked for new information technology projects to fix date-sensitive programming.

According to a draft OMB report circulating throughout government last week the departments of Health and Human Services Energy Transportation Education and Agriculture as well as the Office of Personnel Management and the U.S. Agency for International Development were on a list of agencies that have shown "insufficient progress" in managing the Year 2000 bug according to sources familiar with the draft report.

In its last report OMB threatened to halt fiscal 1999 spending on new IT projects for agencies that had shown insufficient progress. With the final version due out this week the draft report comes at a time when OMB is again increasing its estimate of the government's cost for the Year 2000 fix - from $3.8 billion to $3.9 billion - and drastically moving up the deadline from November to March 1999 - when agencies must have rewritten tested and installed computer systems that are Year 2000-compliant.

Sally Katzen OMB's administrator for information and regulatory affairs last week declined to comment if HHS Energy and OPM had been added to the four other agencies that make up the so-called "Tier One" list. But she did confirm that OMB has begun to restrict the IT budgets of agencies with insufficient progress on the Year 2000 problem "because we were not satisfied with the progress that had been made.

"At this time we're taking the 1998 appropriations that have just been enacted by Congress and signed by the president and we're issuing apportionment orders that will tell agencies in Tier One how they can spend their IT money in 1998 focusing on [Year 2000] " Katzen said. "We're taking the approach that we had announced in our last report for the 1999 budget and applying it now for the 1998 funds."

HHS and DOT have two of the largest fiscal 1998 IT budgets in government with $2.3 billion and $1.8 billion respectively according to Federal Sources Inc. The USDA's fiscal 1998 IT budget is $1.2 billion. The seven agencies that now must redirect IT budgets declined to comment.

One top IT official at OPM said last week the agency was in "significant discussions with OMB" about its position.

Katzen also said OMB moved up its deadline to fix systems because most agencies planned to have software fixes installed in November 1999 and December 1999 not allowing enough time to fix any bugs before Jan. 1 2000.

Olga Grkavac senior vice president with the Information Technology Association of America's Systems Integration Division said agencies are facing a "crisis. We regret that agencies are not further along in their plans so that this step of redirecting information technology funding would not be necessary " Grkavac said. "This is going to cause agencies to fall behind the technology curve and delay implementation and development of very important needed programs. We were afraid that this redirection of funding would indeed happen and we are not happy about it but it does not surprise us " she added. Grkavac also said cutting by eight months the deadline for bringing fixed systems back online was "more than justified."

Joel Willemssen director of information resources management at the General Accounting Office said the new deadline will be particularly burdensome for agencies. "I don't think all of the agencies can meet the March 1999 deadline " he said. "No. Some of them aren't through" determining what systems and software programs need to be fixed. In OMB's last quarterly report released in August 19 of the 24 agencies reported they planned to install fixed systems after March 1999.

Thirteen of those planned to complete their fixes in November or December 1999 including the departments of Defense HHS DOT and Treasury. "We began to hear `Well we'll have our systems compliant in the summer of 1999 ' " Katzen said. "What OMB is saying is that that's too late because once the system is compliant it still has to be tested and validated and integrated and run in a work environment."

DOT which has numerous mission-critical systems said the deadline will be impossible to meet. "I don't believe we can meet the March 1999 deadline " said Bonnie Fisher the Year 2000 project manager at DOT's Transportation Administrative Services Center. "There's not enough money and there's not enough time left."

HHS officials said they developed a more aggressive Year 2000 fix strategy this summer. Most of HHS' systems will be put back online after testing in December 1998 leaving a full year to "test for real-life operation " an HHS IT official said.

Rep. Steve Horn (R-Calif.) chairman of the House Subcommittee on Government Management Information and Technology applauded OMB director Franklin D. Raines for getting tough with agencies about the Year 2000.

"He's absolutely correct " Horn said. "That was our concern because we needled [OMB] when they said they would have the testing held to the last minute " Horn said. He also added that agencies need as much time as possible for testing and implementation "because you'll still have bugs in the system."

Last week Horn released a report that concluded that based on the progress agencies have made so far the departments of Energy and Labor will not finish Year 2000 conversion work until 2019 DOD will finish in 2012 and DOT in 2010 and Treasury will complete its date changes in 2004.

In a letter to OMB's director Horn reiterated his call for President Clinton to appoint a full-time coordinator to spearhead the federal Year 2000 effort.