Year 2000 federal costs are rising, but 'under control'

The federal government's price tag for millennium bug fixes may have leaped 20 per cent, according to a budget agency's report, but President Clinton's year 2000 czar said he believes "costs are under control."

Despite that statement of confidence, John Koskinen, chairman of the President's Council on Year 2000 Conversion, also said he expects estimates for the federal government's final bill for millennium bug fixes to continue to rise.

"I don't know if there's an easy way to prognosticate about cost, but costs will probably continue to go up somewhat," Koskinen said in a March 11 interview.

That statement came right after the Office of Management and Budget (OMB) in Washington issued a quarterly update on the government's bill for year 2000 fixes, putting the total at $US4.7 billion for two dozen federal agencies. That number was up $US800 million from the previous OMB estimate reported in November.

Koskinen, a former OMB deputy director, started in his new post on March 9 and didn't write the 20-page report. But he will help produce future quarterly updates.

After studying the report, Koskinen said the government as a whole is "making real progress and making sure we're devoting the resources" to meet the year 2000 deadline. Although the cost is substantial, it isn't so high that it will inhibit government business, he said.

Six of 24 federal agencies studied were found in the OMB report to be "making insufficient progress." They are the departments of Transportation (which includes the Federal Aviation Administration), Labor, Education, Energy and Health and Human Services and the US Agency for International Development. Independent agencies such as the Federal Deposit Insurance aren't included in the report.

The percentage of 7,850 mission-critical systems that are compliant jumped to 35 per cent from 27 per cent in November's report. Forty-five per cent of the systems are still being repaired, while about 15 per cent are still being replaced, and 5 per cent will be retired.

All the agencies have independent verification programs under way, which has paid off. Some have found mission-critical systems thought to be compliant that aren't, the OMB said.

The Department of Defense is spending the most to fix systems, $US1.9 billion of the total. The Department of Treasury, which includes the Internal Revenue Service, is second in spending, at $US1.4 billion.

The OMB report said the FAA "continues to be at significant risk of system failure."

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about Critical SystemsFAAFederal Aviation AdministrationFederal Deposit InsuranceInternal Revenue ServiceOffice of Management and BudgetTransportation

Show Comments