OMB drops three on Year 2000 tier

The departments of Defense, Veterans Affairs and Interior have slowed in their efforts to fix Year 2000 problems in the past three months, according to officials familiar with a draft report by the Office of Management and Budget.

The report, which outlines progress at 24 federal agencies in fixing Year 2000 problems for the quarter ending May 15, dropped DOD in its ranking from Tier II, for agencies that show evidence of progress but are still a concern, to Tier I, OMB's so-called critical list, which indicates "insufficient evidence of adequate progress" in fixing Year 2000 problems. The VA and Interior both fell from Tier III, the highest ranking, to Tier II.

Besides DOD, other agencies in Tier I include the U.S. Agency for International Development and the departments of Education, Energy, Health and Human Services, and Transportation.

Deputy Secretary of Defense John Hamre said last week he was "frustrated" by OMB's grading. "It's a very simplistic approach, and I don't know what good it will do," he said. "I'm already working as hard as I can.''

In testimony before the Senate Armed Services Committee last week, Hamre said about 1,000 DOD mission-critical systems have been fixed or will be replaced by new systems. But DOD is still evaluating another 2,200 mission-critical systems, and several hundred systems are not on schedule, Hamre said. "We are not going to go without some nasty surprises," he said.

During the same hearing, Sen. Robert Bennett (R-Utah), chairman of the Senate Special Committee on the Year 2000 Technology Problem, said the Pentagon should acknowledge that the department will not be able to fix all its Year 2000 problems on time and should focus on the roughly 2,800 mission-critical systems designed to support such areas as command and control.

Dave Brandt, Year 2000 program manager for Interior, also took exception to OMB's grading. "I [couldn't] care less about their grade. All I want to do is make sure we have the least amount of impact possible," he said. Brandt explained that OMB moved the department down a tier in part because Interior discovered some systems that had not been fully renovated.

Some agencies have made more progress, according to OMB. The Federal Emergency Management Agency moved from Tier II to Tier III, while the Labor Department moved from Tier I to Tier II.

Some federal observers question the accuracy of OMB's rankings. "I just don't think [the progress report] is totally accurate," said one senior federal information technology official. "But I think it's as close to accurate as [OMB] can get."

The report also estimates the total cost of the federal Year 2000 fix at $4.9 billion, up from $4.7 billion in the previous quarter.