Late yesterday, the Office of Management and Budget released its seventh quarterly report reviewing federal agencies' progress on the Year 2000 technology problem. Although pleased with the progress that most federal government agencies have made in bringing their computers into Y2K compliance, OMB officials said there are still several agencies facing "significant challenges" in preparing their systems for the year 2000.
For the first time since the OMB began reporting on Y2K status of federal government computers, the administration has acknowledged that some agencies may not make the March 1999 deadline for Year 2000 compliance, and has urged agencies to develop contingency plans for systems that are not expected to be ready by that deadline.
As it stands today, 61 percent of the government's most critical computer systems have been repaired or replaced so they can process dates after December 31. That's 50 percent more compliant systems than three months ago.
The departments of Energy, State, Transportation, and Health and Human Services, along with the Agency for International Development continue to lag in their preparations, however. The Education Department, which had been considered a significant laggard three months ago, is now making adequate progress, the administration reported.
The administration's quarterly report said the increased cost estimate was expected and included in the government's 1999 budget.
The Year 2000 problem, also known as the millennium bug, stems from an old programming shortcut that used only the last two digits of the year. Many computers now must be modified or they may mistake the year 2000 for the year 1900 or may not be able to function at all, causing widespread disruptions in services in the transportation, financial, utility, and public safety sectors, observers warn.
"Several agencies still face significant challenges in preparing their systems for the year 2000," G. Edward Deseve, deputy director of OMB, said in a statement. "OMB and the President's Council on Year 2000 Conversion will continue to provide support to those agencies identified as making insufficient progress toward meeting the March 1999 government-wide goal for compliance. These agencies will continue to submit to OMB on their progress."
According to the report, of the remaining 39 percent of the government's mission critical systems that are not Y2K compliant, 30 percent are still being repaired, 7 percent are still being replaced, and 3 percent will be retired.
There are now six agencies not making adequate progress, down from seven in August; seven agencies are making progress, but with some concerns, down from eight; and eleven agencies are making satisfactory progress, up from nine.
The Senate Special Committee on the Year 2000 Technology Problem is currently reviewing the report and has not commented on the findings.
However, the chairman of the House of Representatives Task Force on the Year 2000 Problem, Rep. Stephen Horn (R-California), released an earlier report card which details the progress of the largest federal government departments' and agencies' efforts to avoid Year 2000 problems in their computer systems and embedded chips.
"Unfortunately, the federal government has not made enough progress since the last report card when it also received a 'D'," Horn said in a statement during the release of his report. "Executive branch departments and agencies are responding too slowly in assessing and repairing their mission-critical systems, their telecommunications equipment..., embedded chip systems, and...data exchanges."
Jack Gribben, spokesperson for the President's Council on Year 2000 Conversion, said the new report shows that there is indeed progress being made by federal agencies on Year 2000 conversion. "But there are still some agencies that have a long way to go. As we have moved along it's become clear that some computers won't make the March 1999 deadline, about 10 to 15 percent."
Reuters contributed to this report.