Year 2000 Conversion Defense/International Security Sector Working Group:

• Department of Defense
• Department of the Interior
• Department of State
• Chair: Art Money (DOD)

OMB 9th Quarterly Report - U.S. Office of Management and Budget Data received May 14, 1999 Issued June 15, 1999 - Related Reports at CIO Council Documents

• Department of Defense:
  • The Department of Defense continues to make progress addressing its complex and challenging year 2000 problem. As of May, the Department reports that 87 percent of its 2,096 mission critical systems are year 2000 compliant -- an increase from 72 percent reported in February. Of the 264 non-compliant mission critical systems, 249 are being repaired, eight are being replaced, and seven are being retired. The Department is overseeing the progress of each of these systems through monthly reporting and regular steering committee meetings with the Deputy Secretary. In addition, the Department reports that 79 percent of its 6,319 non-mission critical systems are now compliant. The Department has also completed its replacement plan for biomedical equipment that is not year 2000 compliant and is evaluating its buildings and installations to assure they will be compliant.
  • Since December 1998, the Department has been doing operational evaluations of its core support functions. End-to-end evaluations of the core business functions of logistics, finance, communications, intelligence, personnel, medical, and others are being conducted by the Department and by the Services and will be completed by October. This is the largest and most comprehensive evaluation in the Department’s history and will improve the level of confidence in the Department’s ability to carry on operations regardless of Y2K. Nevertheless, the complex and interconnections of DoD’s systems guarantees that Y2K will have an impact on DoD. Therefore, the Department is also focusing on continuity of operations and contingency planning. Using GAO guidelines, DoD promulgated common sense guidance that requires every system, mission, and function owner to develop and validate system and operational contingency plans. Contingency plans are already in place for virtually all of the mission critical systems that are not yet compliant.
  • The Department reports that 257 mission critical systems are not yet Y2K compliant. This does not include the 7 additional systems reported to be retired before January 1, 2000. Eight of those are replacement systems, and 249 are being repaired. The Department plans to make all of those systems compliant prior to the end of the year. For each of those systems, the Department is tracking the status of the system and when the system will be compliant and is putting in place contingency plans. The Department expects that 92 of those systems to be made compliant by the end of May, 142 by the end of June, 175 by the end of July, 206 by the end of August, and 233 by the end of September.
• Now that 14 of the 24 large agencies have completed work on their mission critical systems and all but two will be done shortly, OMB will no longer be reviewing agency Y2K efforts by looking at overall progress on fixing systems. Instead, OMB and the agencies are now focusing on three priorities:
  • When an agency will complete work on each of its remaining systems.
  • Progress on business continuity and contingency planning.
  • Readiness of Federal programs, particularly the 43 high impact programs listed in Table 2.
    • DoD - Military Hospitals - Military Treatment Facilities, managed care support contractors, key pharmaceutical and medical suppliers, Defense Manpower Data Center - September
    • DoD - Military Retirement Military Services, Department of Treasury, Federal Reserve Bank, Social Security Administration, Internal Revenue Service, numerous financial institutions - September
• All agencies are making good progress on their systems containing embedded chips. For the majority of agencies, this area will not have a significant effect on the delivery of their programs. Those few agencies (e.g., Defense and NASA) that use specialized, mission critical equipment that relies on embedded chips are working hard to find and fix any problems.

Congressional Testimony - Statement of Jacob J. Lew, Director Office of Management and Budget before the Committee on Appropriations and the Senate Special Committee on the Year 2000 Technology Problem - June 22, 1999

• Fourteen of the 24 major Federal departments and agencies now report that 100 percent of their mission critical systems are Y2K compliant. These agencies are: the Departments of Education, Housing and Urban Development, Interior, Labor, State, and Veterans Affairs; the Environmental Protection Agency, the Federal Emergency Management Agency, the General Services Administration, the National Science Foundation, the Nuclear Regulatory Commission, the Office of Personnel Management, the Social Security Administration, and the Small Business Administration.
• In addition, two agencies, Commerce and NASA, report that 99 percent of their mission critical systems are compliant and that they expect to be finished soon. Three agencies, the Departments of Agriculture, Energy, and Health and Human Services, are between 96 and 97 percent compliant. Four agencies report that between 90 and 94 percent of their mission critical systems are compliant, including the Departments of Justice and Transportation at 92 percent.
• The Department of Defense reports that 87 percent of its systems are compliant, while the U.S. Agency for International Development has completed implementation of three of its seven mission critical systems.

Senate Report (Feb 24, 1999) on Y2K - Extract of Items on DoD

• DoD Status
• Assessment of Federal Agencies
• First Alert Plan

GAO Report: Year 2000 Computing Crisis: Readiness of the Oil and Gas Industries (Letter Report, 05/19/99, GAO/AIMD-99-162).  GAO noted that:

1. all phases of operations in the oil and gas industries--from production to distribution--use computer systems and equipment that are subject to year 2000 failures;
2. while the domestic oil and gas industries have reported that they have made substantial progress in making their equipment and systems ready to continue operations into the year 2000, risks remain;
3. in February 1999, following an industrywide survey, the nation's oil and gas industries reported that, on average, they were 40 percent finished validating their embedded systems;
4. however, over a quarter of the oil and gas industries reported that they did not expect to be year 2000 ready until the second half of 1999--leaving little time for resolving unexpected problems;
5. because over half of the nation's oil is imported, the nation is vulnerable to year 2000 failures of oil production and transportation in other countries;
6. however, little is known about the year 2000 readiness of foreign oil supplies;
7. the President's Council on Year 2000 Conversion's Oil and Gas Working Group has appointed a subgroup to collect year 2000 readiness information on foreign oil suppliers; however, the group has no plans to issue a country-by-country assessment; and
8. while individual domestic companies reported that they are developing year 2000 contingency plans, there are no plans to perform a national-level risk assessment and develop contingency plans to deal with potential shortages or disruptions in the nation's overall oil and gas supply.

Lieberman, Robert  - Hearing Testimony Statement by Robert J. Liebderman, Assistant Inspector General for Auditing Department of Defense, before the Subcommittee on Government Management, Information and Technology of the Committee on Government Reform and Oversight, US House of Representatives.  March 2, 1999.

• The DoD uses about 28,000 information systems, of which approximately 2,300 are mission critical.
• About 1.5 million DoD computers exchange data with organizations as diverse as other DoD components, allies, coalition partners, defense contractors, financial institutions, the National Command Authority, other Federal agencies, and state governments;
• Hundreds of thousands of pieces of equipment, ranging from the largest weapon systems to hand held electronics, contain tens of millions of microprocessor chips, some of which are date sensitive;
• The cost of the DoD year 2000 conversion effort is estimated at $2.9 billion;
• The Department depends on hundreds of governments and firms, domestically and abroad, to provide utilities such as power, telecommunication links and water to over 500 major military bases, many of which have populations equivalent to small cities;
• When U.S. forces deploy, they depend on allies and host nations for a wide range of additional logistical support services, as specified in thousands of agreements with dozens of governments; and
• The DoD purchases goods and services other than utilities, often electronically, from tens of thousands of contractors, 6,500 of which are considered critical suppliers.
• The number of mission critical systems that have been certified as Y2K compliant has grown as follows:

  February 1998:	706 (24%)
  May 1998 :	812 (29%)
  August 1998 :	1,236(39%)
  November 1998:	1,352(52%)
  February 1999:	1,670(72%)

  Equally important, efforts have greatly accelerated over the past few months to assess the Y2K readiness of DoD-owned, infrastructure; of the private sector infrastructure on which DoD also depends; of the diverse range of data exchange partners and of host nations abroad. In addition, one of the largest testing efforts ever undertaken by the Department has now started and will continue through calendar year 1999.

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