The U.S. Committee on Government Reform and Oversight

Introduction

The Committee on Government Reform and Oversight has primary legislative and oversight jurisdiction with respect to the overall economy, efficiency and management of government operations and activities. Pursuant to this authority, the Subcommittee on Government Management, Information and Tecnology convened an oversight hearing on April 16, 1996, to examine whether computers throughout the Federal Government, the United States, and the world would be able to handle the transition from the year 1999 to the year 2000. The subcommittee has continued this investigation throughout the 105th Congress.

Here follows their latest recommendations, as of October 8, 1998. For the full report, visit the Web page, www.house.gov/reform/gmit/y2k/y/.

Committee Recommendations

1. The President and the Executive Branch of the United States Government Must Approach the Year 2000 Problem with Greater Urgency.

Executive leadership is the key to rectifying the year 2000 problem. Senior executive management in Federal agencies, other levels of government, and for-profit and nonprofit organizations throughout society must make year 2000 efforts a priority. This involves accepting the responsibility, freeing up the necessary resources, and insisting on a timeline for finishing the job before January 1, 2000. This is especially true for the Federal Government. The Federal Government is uniquely positioned to publicize the year 2000 crisis as a national priority and to take a leadership role. The President is the elected leader of the Nation. All efforts to combat the year 2000 problem take their cue from the top.

The current evidence points to considerable year 2000 failure unless the rate of progress throughout society improves considerably. In too many sectors, there is simply no reliable information about year 2000 vulnerability. We cannot head into the new millennium unprepared. It is time for the President to declare that the year 2000 problem is a National Priority. If sufficient progress is not made by an intermediate deadline, he may even need to escalate the year 2000 problem to a National Emergency.

The point of calling for such urgency is not to trigger panic, but in fact to avoid panic. If this problem does not receive the attention it demands during the next six to nine months, and if we allow the date change to approach without knowing our vulnerability, panic will be the inevitable result. The only way to avoid this is to act now. The President must sound the alarm and address to the Nation now in order to avoid panic later.

2. Public and Private Organizations as Well as Federal, State, and Local Governments Must all Work in Partnership to Prepare for the year 2000 Date Change.

America needs a national year 2000 Conversion strategy. As the year 2000 approaches, anxiety will increase throughout society. One major aggravation to this anxiety, which could cause more problems than the technology failure itself, is lack of information. It is imperative that citizens have as much information as possible. This includes information that can help individuals, families, and organizations prepare for the year 2000. This also includes information on how others are preparing: the Federal Government, State and local governments, telephone companies, utility companies, schools, banks, and so on. It also includes information on all kinds of products, from complex medical equipment to microwave ovens. Making this type of information available will have the double benefit of preparing citizens and pressuring organizations to complete their year 2000 fixes on time.

Along with Congress, State, and local representatives, the President must work in partnership with private companies and associations to define a year 2000 action plan and make this information available. In addition to specific action items, a minimal strategy should include goals, objectives, benchmarks, and performance measures. Most Federal departments and agencies have a year 2000 strategy and are well on their way to satisfying requirements. The private sector has a much broader range of effort. Some have just begun their effort. Others are nearing completion.

At the current time, the most logical mechanism for establishing a year 2000 strategy to coordinate efforts, share information, and alert citizens to the status of year 2000 preparations is the President’s Council on the Year 2000 Conversion. It is headed by Assistant to the President John Koskinen. As noted above, this Council has already established a number of working groups to focus on particular sectors of society, but these efforts seem to be taking place behind closed doors. Openness is crucial: dissemination of information should be a primary function of these working groups. For example, each of these groups should establish a database of compliant and noncompliant products as well as other information relevant to the sector.

A coordinated, public/private effort, under the leadership of the President, could effectively bring together the key economic sectors to coordinate the Nation’s year 2000 efforts and ensure that all sectors, as well as interdependencies between sectors, are being adequately addressed, and that the American people are fully informed as the year 2000 approaches.

3. Congress and the President Should Establish Carefully Limited Federal Liability Protection for Organizations that Share Information in Order to Facilitate Year 2000 Repairs.

Companies that go out of their way to inform other companies and the public of their year 2000 status should not be exposed to civil liability for unintentionally inaccurate statements. Limited protection from such liability would facilitate information sharing as the clock ticks toward January 1, 2000. S. 2392, the ‘Year 2000 Information Disclosure Act,’ establishes a uniform standard of legal liability to protect those who, in good faith, share information on the year 2000 problem and solutions to it. This bill passed the Senate on September 28, 1998. The House of Representatives passed the same bill by unanimous consent on October 1, 1998.

The key provision of the bill shields companies that make inaccurate statements on year 2000 issues from civil liability unless the statements are knowingly false or negligent. The bill also ensures that there is no threat of product defamation from inaccurate year 2000 statements unless they are knowingly false or negligent. Even well-tested systems can fail, especially in unusual situations.

The bill would not relieve companies of liability for building bad products. It protects sharing of information, but nothing more. The committee believes it would be counterproductive to relieve companies of liability for building bad products, doing sloppy work, or being careless with the truth. But with this legislation, Congress recognized that mistakes can be made, and that it is now more important for organizations to share year 2000 information than to argue over liability. The real work must begin in earnest as time is short. By taking the liability card off the table, organizations can share crucial information and focus on getting the year 2000 job done.

4. Year 2000 Problem Managers Should Develop Goals that are Linked to Readiness Measures.

Effective oversight by Congress and the Executive branch needs to measure regular progress towards year 2000 compliance for both public and private sectors. Year 2000 management should develop sector-by-sector goals. These goals should be linked to year 2000 readiness measures. The measures will provide a basis for determining what is being accomplished.

The year 2000 problem must not be allowed to spark a national crisis. Good measures of year 2000 readiness will be both a technological and psychological antidote to panic. For example, the subcommittee has measured how well the Federal Government is meeting the year 2000 challenge. It has developed a report card for the critical computer systems in the Executive branch. Grades are determined by the number of year 2000 compliant systems which are remediated by each agency achieves.

This model should be replicated. Markers or benchmarks must be developed for the broad spectrum of year 2000 problems across the country. The year 2000 computer problem will not be resolved unless we approach it systematically. A results-oriented approach to year 2000 will go a long way to moving the United States constructively into the 21st century.

One of the most difficult jobs in any human organization is to develop these markers, the behavioral standards, benchmarks, the points along the way toward achieving goals. These markers measure performance and are meant to hold people accountable for their performance. A few State and national governments have shown leadership here.

5. Citizens Should Demand Information on Year 2000 Readiness from their State and Local Governments, their Utility Companies, and Other Organizations upon which they are Dependent.

As noted above, there are at least two significant barriers to effective year 2000 remediation: (1) Management denial: the reluctance of senior management to recognize the year 2000 problem and make the hard choices necessary to solve it; and (2) fear of legal liability, which can have the effect of stifling the kind of disclosure and exchange of information necessary to solve the problem. These barriers to serious year 2000 efforts must be broken down. Perhaps the most effective means of doing so is public pressure. Profit-making organizations respond to pressure from consumers; political institutions respond to pressure from constituents; nonprofit organizations respond to their donors and public opinion as well.

Furthermore, the year 2000 problem raises the specter of widespread panic. There has been talk of customers withdrawing their money out of banks, stockpiling weapons, and taking other steps that could be more dangerous than the technological failure itself. One of the best antidotes to this panic is information. People need to speak directly with their banks, utility companies, and other organizations whose failure would have drastic consequences. They need to assure themselves that the fixes will be made. They need to know, based on direct contact, that there is no reason to panic. And they need to know what reasonable steps should be taken to prepare as January 1, 2000 approaches …

The ProFutures Financial Group stated that investors have not been given adequate disclosure of year 2000 issues by public companies. In addition, the ProFutures Financial Group stated that the Federal Reserve must start releasing the names of banks which are behind in their compliance programs. A consultant with Roma International stated that many vendors, suppliers, customers are either refusing to respond to year 2000 inquiries or are responding with vague generalities on the advice of their legal counsels. This consultant was uncertain whether a ‘safe harbor’ bill would improve the situation.

B-373 Rayburn House Office Building, Washington D.C. 20515
Phone: (202) 225-5147. Fax: (202) 225-2373

Committee Members:

Republicans

Stephen Horn, Chairman of the Subcommittee, 38th District, California; Pete Sessions, Vice Chairman of the Subcommittee, 5th District, Texas; Tom Davis, 11th District, Virginia; Joe Scarborough, 1st District, Florida; Mark Sanford, 1st District, South Carolina; John Sununu, 1st District, New Hampshire; Ron Lewis, 2nd District, Kentucky; Dan Burton (Ex Officio), Chairman, Full Committee, 6th District, Indiana

Democrats

Dennis Kucinich. Ranking Minority Member, 10th District, Ohio; Paul Kanjorski, 11th District, Pennsylvania; Major Owens, 11th District, New York; Carolyn Maloney, 14th District, New York; James Turner, 2nd District, Texas; Henry Waxman (Ex Officio), Ranking Minority Member, Full Committee, 29th District, California

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