House changes Y2K grading system

But the reason for the positive report has less to do with the actual progress made by the government's Y2K efforts and more to do with a change in the grading structure used by the House Subcommittee on Government Management, Information and Technology, which conducts the survey.

According to a spokeswoman for the subcommittee, the body has decided not to issue grades for more than 40 government programs, including Medicaid and Medicare. As the committee sees it, many of the programs dependent on the state and private organizations are not completely ready for the transition to 2000.

Now, the subcommittee will use a thumbs-up, thumbs-down method for rating agencies. "They're either ready or they're not," said Bonnie Heald, a spokeswoman for the subcommittee.

Part of the reason for the new system is that the old grading system did not accurately depict Y2K progress, the subcommittee is expected to explain.

In March of 1998, the government's overall grade was a D minus. But the grades rose steadily as more agencies reported completion of their repair work, testing and development of contingency plans. With a growing number of A's stacking up, the subcommittee shifted some of its focus to a hole in its survey: the preparedness of state governments and private organizations that the federal government relies on to provide federal money, services and regulatory enforcement to the public.

In September, the subcommittee issued separate grades for the first time to agencies on the readiness of 43 programs designated "high impact" by the Office of Management and Budget. Suddenly, agencies sporting A and B ratings for their own work found themselves on the laggard team because of state or private programs rated D or F with only a few months left until the Year 2000 rollover.

For today's report card, the subcommittee is simply classifying programs as "ready" or "not ready," Heald said.

The so-called millennium bug refers to the fact that many computers are programmed to register only the last two digits of the year, meaning that "2000" may be read as "1900." If left uncorrected, such programs could generate errors and scramble the computers that companies use to keep track of customers, run their payrolls, handle their accounts, run elevators and monitor air traffic.