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Federal spending on Y2K reaches $8.38 billion

Federal agencies estimate they will spend nearly $40 million more than expected tackling the Y2K computer problem, the Office of Management and Budget says in its final report.

Federal agencies will spend nearly $40 million more than expected tackling the Y2K computer problem, according to a new report issued by the Office of Management and Budget.

Government agencies now estimate they will have spent a total of $8.38 billion fixing the Y2K glitch from 1996 through 2000. This is an increase from the $8.34 billion price tag named in the OMB's quarterly report, released three months ago. As reported, the estimated $8.34 billion figure to assess and fix the government's 6,343 "mission critical" systems jumped $290 million from the previous report in June.

Y2K: The cost of fear The $37 million rise reflects increased costs for conducting last minute retesting and replacing of commercial products that manufacturers are now finding are not Y2K compliant, stated the report, issued this week.

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 and crash.

One of the contributors to the $37 million spending increase was the National Aeronautics and Space Administration (NASA), which said it has completed the implementation of fixes to both its "mission critical" and "non-mission critical" computer systems, such as telecommunications and physical plant systems. As a result of its extensive testing and formal Y2K certifications on NASA missions and programs, the agency's spending increased approximately $10 million this quarter, according to the OMB.

Back to Year 2000 Index Page The OMB report said that the majority of federal agencies are Y2K compliant, and most have completed work on more than 90 percent of their data exchanges, telecommunications systems and networks, and building systems.

Of the 6,175 "mission critical" computer systems, 6,167, or 99.9 percent, are Y2K compliant. However, eight non-compliant "mission critical" computer systems remain to be fixed, down from 217 in the previous report. The Justice Department and the Defense Department have two and six "mission critical" computer systems, respectively, that are not yet compliant, but will be this month. The computer systems mainly handle administrative tasks and don't affect the law enforcement or national security missions of these departments, the report stated.