ITAA's Year 2000 Outlook January 16, 1998 Volume 3, No. 2 Published by the Information Technology Association of America, Arlington, VA ITAA's Year 2000 Outlook is sponsored in part by BDM International, Inc., CACI International Inc., IBS Conversions, Inc., Softworks, Inc. and Y2Kplus, Inc. Katzen Calls It Quits The Clinton Administrationís top official for Year 2000 is moving to a new assignment in the federal government. Sally Katzen, Administrator of the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB), has been appoin ted Deputy Assistant to the President for Economic Policy. She will serve as Deputy Director at the National Economic Council. Katzen has led federal efforts to manage the Y2K conversion within federal agencies. She has also served as the Administratio nís chief spokesman for addressing the issue before Congress. Katzen is expected to leave the position in the next few weeks. Although Y2K issues drew Katzen into the spotlight, the larger part of her job involved overall government oversight of regulatory affairs. "Katzen lacked the management clout to expedite the governmentís response to Year 2000," said one industry observe r. "While OMB has a broken line reporting relationship on Year 2000 to agency CIOs, what it really needs is a pointy stick to make things happen. That means a direct connection to Cabinet Secretaries on this issue." In a prepared statement, Rep. Stephen Horn (R-CA), Chairman of the House Government Management Subcommittee, said, Katzenís departure "highlights a very serious question: who is in charge of the Year 2000 problem? With less than two years to go before pot ential electronic chaos, the Administration needs to focus like a laser beam on this issue. In the wake of Sally's departure, it is time to establish full-time leadership for the Federal Year 2000 effort." SEC Issues Additional Guidance Responding to pressure from Capitol Hill, the Securities and Exchange Commission (SEC) issued guidance again this week on how public companies, investment companies and investment advisors should handle Y2K disclosure. Staff Legal Bulletin No. 5 notes that public companies which have not performed a Y2K assessment or have not determined whether they have material Year 2000 issues should disclose this information as a known uncertainty. The bulletin also states that Y2K disclosure should be "based on whether the Year 2000 issues are material to a companyís business, operations, or financial condition, without regard to related countervailing circumstances (such as Year 2000 remediation programs or contingency plans)." The SEC staff expects a firm making disclosure to cover general plans to address Year 2000 issues in its business and operations; plans for dealing with customers, suppliers and other constituents (if material); as well as timetables. Y2K expenditures ar e also expected to be included in the disclosure if such sums are considered material to the companyís business, operations or financial condition or have a material impact on the results of operations, liquidity and capital reserves. Sen. Robert Bennett (R-UT), Chairman of the Senate Banking Subcommittee on Financial Services and Technology and author of the CRASH Protection Act (Computer Remediation and Share Holder Protection Act) was quick to claim credit for the SEC move. In a st atement this week, Bennett said "The SEC chose to incorporate key components of my legislation in their revised bulletin." Bennett said response to the bulletin will help determine the fate of the CRASH bill. One SEC watcher questions whether the bulletin will move companies to quickly come forward on Y2K, at least in terms of their financial expenditures. "Itís a tiny step forward," this attorney said. "The bulletin is not that onerous and companies will be happy if Bennett withdraws the [CRASH] bill." This source suggested that while companies will disclose standard information about their Y2K programs, they will not consider the costs material or disclose them. He also noted that the bulletin is silent on insurance coverage and expected litigation costs, two issues included in the CRASH legislation. States Look for Y2K Relief Whether or not their information systems work properly, some states may enter the Year 2000 with a little extra protection: immunity. Last year, the state of Nevada decided not to gamble on its Y2K prospects and instead passed a law shielding it from li ability for date related computer glitches. States like Oregon, Indiana, Hawaii, Utah and others may be considering a similar move, and California has a liability protection plan on the table. The Year 2000 is a problem visited on government by industry at no fault of the state's employees, says Nevada Deputy Attorney General Randal Munn. Noting that government will have to pay to fix its systems, Munn said the immunity amendment incorporated into SB-180 prevents Nevada taxpayers from being forced to become the state's insurer too. Thatís a contentious issue. "The expression of dates in two digits has been a practice going back to the Civil WarÖall the way back to card sorting machines," said one industry observer. "It was a common practice in businessóeven before the advent of the computer industry. If there is blame involved, itís a blame that belongs across industries, including government." Nevada's immunity umbrella covers Y2K actions arising from torts, contractual disputes and civil rights claims. In putting the proposal forward last May, Munn said Y2K snafus could damage the state's credit rating, handicap tax collection, collapse highw ay construction and maintenance systems, and more. He warned Nevada's Senate Finance Committee "Öthe state's exposure to Year 2000 liability for damages could in the worst case threaten the fiscal stability of this state." With those kind of stakes, Nevada legislators passed SB-180 with little opposition. The act expires on December 30, 2005. Now other states are considering similar legislation. Barbara Jensen, manager of Oregon's statewide Year 2000 project office, says, "We are looking at everything we can to protect the state's interests in the Y2K world." Jensen said she hopes to meet soon with counsel from the Oregon Department of Justice to discuss immunity legislation. Oregon Risk Management official Dan Hartman says his shop is working with the state attorney general to provide better protection to public entities in the state, not unlike whatís happening in other states. "In addition to state agencies, I have had a l ot of interest from schools, cities, counties, community colleges and special districts in this concept. They want to provide support and be involved. They want to partner up. Either we all get Y2K immunity or thereís no need to go forward. I have my personal opinion about how successful weíll be because at the same time Iím requesting greater authority to pay lawyers to handle the defense of lawsuits we expect." Last November, California Chief Information Officer John Thomas Flynn went past the talking stage, proposing an immunity bill. "The state has the option unique to the public sector of limiting its tort liability exposure through governmental immunity and should seize that opportunity," he wrote. For some states, that may be easier said than done. States enjoy sovereign immunity, but for political reasons, waive that immunity and allow themselves to be defendants in lawsuits. The action by Nevada reinstates immunity protections on the narrow iss ue of Year 2000 damages. But in passing the law, Nevada was dealt a pair of aces. First, the state's immunity waiver was a matter of statute-not written into the state constitution. Lawmakers could make the change by amending current law, avoiding the costly and time-consuming matter of placing the issue before the voters. Other states may not be this lucky. Other states are also not this small either. Munn thinks the relatively small stakes Nevada represents to litigation-minded lawyers may have worked in his state's favor, allowing the immunity provision to be adopted with little opposition. Whether deep pocket states have this same kind of luck moving Y2K immunity bills through the legislature remains to be seen. But at least one observer appears to see a trend in actions by states and others to fend off Y2K liability. "Now we are seeing a sea change within governments because of the recognition of how little time there is," says Michael Aisenberg, of Galland, K harasch, Morse & Garfinkle and counsel to Digital Equipment Corporation. "Thinking has shifted from remediation to risk management and dealing with the inevitable problems that will arise when applications donít handle dates properly. A thoughtful resp onse is not to point fingers at a particular industry. That will only lead to a game of musical chairs. Insurance companies are writing exclusions for Year 2000 coverage. Congress is considering safe harbors for regulated industries like banking and se curities firms. Such moves only narrow the range of choices for an aggrieved party to target as a defendant in a lawsuit. If the computer industry gets left holding the bag for all problems, that could mean the end for some industry California Launches Oversight Program California officials hoping to perhaps stick a fork into half-baked state government conversion programs this week announced a five-pronged Y2K action plan. In "do what it takes" mode, the state's Department of Information Technology (DOIT) said it will not only collect Y2K status information from agencies but also begin applying quantitative measures to evaluate their progress. The Y2K plan, announced by California CIO John Thomas Flynn, includes an automated tracking and oversight program, the first state/county/city summit to discuss interface issues, a legal program to limit liability and seek cost recovery, a program manage ment training program, and regular status snapshots as well as warning reports to the Legislature and Administration. California has more than 150 boards, departments and agencies, operating over 600 mission critical systems. DOIT will begin applying its new performance metrics in February. According to a statement issued this week, "Anything other than a steady increa se in the number of systems remediated will be interpreted as a signal that the state's mission critical practices and programs may be at risk." "The Year 2000 challenge needs to take precedence over other projects and as a result, I expect to see far fewer projects initiated by state departments until this work is done," Flynn said in a prepared statement. Y2K Hearing Slated CQ Monitor reports that the Senate Commerce, Science and Transportation Committee, chaired by Sen. John McCain, R-AZ, will hold a Y2K hearing on April 28 at 9:30 a.m., in Room SR-253 of the Russell Building, Washington, DC. Business to Business Intersolv, Inc., Rockville, MD, has been awarded a Y2K conversion contract by Sprint's Long Distance Division. Platinum Technology, Milton Keynes, England, has announced the release of TransCentury File Age, a Y2K data aging software product. Viasoft Inc., Phoenix, AZ, has announced the acquisition of EraSoft Technologies, a Canadian company, for $7.75 million. Complete Business Solutions Inc., Farmington Hills, MI, has selected Siva P. Velu as the Vice President of their Retail, Wholesale and Distribution Business Unit. Princeton Softech, Princeton, NJ, has been awarded one of the Crossroads 98 A-List Awards for their RELATIONAL TOOLS FOR DB2. NeoMedia Technologies, Fort Myers, FL, has announced the release of ADAPT/2000 Release 3.0, an automated COBOL Y2K toolset. Sponsor Advertising BDM International, Inc. Are you confident that your renovated software applications are millennium-ready? Have you also validated the associated hardware, firmware, interfaces, third party software, and non-information systems that keep your business running? If not, BDM can help you mitigate business risks across your enterprise with our BDM SMART ValidatorSM solution. SMART Validator helps you to objectively validate that each and every automated system affected by Year 2000 performs as intended. SMART Validator provides customers with detailed processes, checklists, compliance statements, and guidelines to validate a nd maintain compliance beyond Year 2000. With 37 years of large-scale project management and testing experience backing our solutions, you can count on BDM and SMART Validator to help you prove Year 2000 compliance across your organization. (800) 794-6085 e-mail: year2000@bdm.com http://www.bdm.com. CACI International Inc - Restore 2000 Tired of hearing about Y2K problems - and more interested in hearing about solutions? Join hundreds of other organizations who have turned to CACI for answers. No matter where you are in the Y2K conversion process, CACI can help. CACI's software reengin eering legacy cuts the problem down to size, and allows flexibility for mid-course adjustments, emerging tools and results-testing. Certified by ITAA as meeting the highest standards for Y2K conversions, our Y2K methodology, Restore 2000SM, helps organizations meet their conversion needs while protecting their existing technology investments. CACI offers a three-phase conversion met hodology covering every detail: assessment, planning, and remediation, testing and audit. January 1, 2000 - let CACI help you look forward to this deadline! CACI International Inc CACI, with 35 years of experience in technology and software solutions. CACI: Y2K solutions, process reengineering, software reuse, systems engineering, simulation, electronic commerce, imaging and document management, product data management systems and marketing systems. Worldwide Headquarters 1100 North Glebe Rd. Arlington, VA 22201 http://www.caci.com e-mail: npeters@hq.caci.com IBS Conversions, Inc. IBS Conversions, Inc., founded in 1982, is the first service organization to receive ITAA*2000 Certification for IBS/Solution 2000TM methodology, products and services. IBS is a recognized leader in automated conversion/migration software and consulting having translated millions of lines of code for companies worldwide. IBS/Solution 2000 IBS/Solution 2000TM is a full suite of Year 2000 services and products: Full project Analysis, Pilot Project and Repair, staffing and management/methodology Scan/Repair Conversion Factories for Mainframe and AS/400 environments Project Methodology Qwik-Sizer Analysis Licensing Scan/Repair Tools for AS/400 Y2K Projects License Conversion Factories/Tools to other Consulting Firms http://www.ibs2000.com SOFTWORKS, Inc. HOT DATE 2000/SIMULATE Preparing for the new millennium isn't easy, especially in the data center. Ensuring an accurate conversion could be a daunting task. That's why SOFTWORKS has created HotDate 2000/SIMULATE. HotDate 2000/SIMULATE is a comprehensive identification, testing, and simulation utility created to locate the programming changes needed to prepare for the Year 2000. Using a simulated Year 2000 environment, HotDate 2000/SIMULATE locates and tests pote ntial date problems the Year 2000 will cause to your individual programs, applications, and entire system. HotDate 2000/SIMULATE is transparent to your applications and supports all programming languages. For more information about HotDate 2000/SIMULATE, call SOFTWORKS at 800-727-4422. Http://www.softworkscc.com Y2Kplus, Inc. Y2Kplus provides a portfolio of "best of class" software products and outsourcing services that address Year 2000 issues. These offerings are available both to IT Solution Providers and IT organizations. Since no one vendor has "all of the answers", we fe el this portfolio approach, with tools from multiple vendors, makes the most sense. Y2Kplus addresses the following needs: … Renovation Preparation to enable you to prepare complete and accurate packages of software components ready for mainframe code renovation; … Code Renovation tools and services for Mainframe COBOL, Assembler, PL/1 and Natural; Mid range COBOL systems: DEC, HP, DG, NCR, Unisys, Wang, Bull & Tandem, AS/400 RPG & COBOL end to end renovation or client/server migration. … Testing tool to analyze, convert, warp test data dates and compare test results. For more information about any of the above offerings send an email to info@y2kplus.com, call Dave Ehlke at 781-863-8111 or visit our web site at www.y2kplus.com Calendar January 20, '98 Washington DC Y2K Group Meeting Washington, DC http://www.bfwa.com/bwebster/y2k January 20-22, '98 Software Quality Engineering - Y2K Pasadena, CA Info: 800-423-8378 Software Testing http://www.sqe.com January 22, '98 U.S. Air Force Y2K Software & Wright-Patterson AFB Info: 305-899-1239 Support Solutions Technology Day OH January 26-28, '98 DCI - Managing Y2K Projects: The Orlando, FL Info: 508-470-3870 Key Issues External & Internal http://www.dciexpo.com January 26-28, '98 Software Quality Engineering - Y2K Orlando, FL Info: 800-423-8378 Software Testing http://www.sqe.com January 29-30, '98 DCI - Testing For Y2K Compliance Orlando, FL Info: 508-470-3870 http://www.dciexpo.com February 2-3, '98 Financial Institutions Y2K Millennium Orlando, FL Info: 800-931-6722 Bug" Legal Liability Conference February 4-6, '98 Software Quality Engineering - Y2K New Orleans, LA Info: 800-423-8378 Software Testing http://www.sqe.com February 9-10, '98 DCI - Testing For Y2K Compliance Phoenix, AZ Info: 508-470-3870 http://www.dciexpo.com February 10-12, '98 AFCEA's 3rd Annual Virtual Gov't College Park, MD http://www.afcea.org Conference & Expo February 11-13, '98 DCI - Y2K Issues and Answers Phoenix, AZ Info: 508-470-3870 Conference http://www.dciexpo.com February 17, '98 Washington DC Y2K Group Meeting Washington, DC http://www.bfwa.com/bwebster/y2k February 18-20, 98 Software Quality Engineering - Y2K Austin, TX Info: 800-423-8378 Software Testing http://www.sqe.com March 9-11, '98 DCI - Managing Y2K Projects: The Washington, DC Info: 508-470-3870 Key Issues External & Internal http://www.dciexpo.com March 10-12, '98 DCI - Testing For Y2K Compliance Washington, DC Info: 508-470-3870 http://www.dciexpo.com March 17, '98 Washington DC Y2K Group Meeting Washington, DC http://www.bfwa.com/bwebster/y2k March 18-20, '98 SPG Year 2000 Conference & Expo New York, NY Info: 508-652-1010 http://www.spgnet.com March 23-24, '98 IBC's Y2K Legal Compliance Conference New York, NY Info: 508-481-6400 http://www.ibcusa.com/conf/2000legal April 6-9, '98 Year 2000 National Symposium Atlanta, GA Info: 508-393-3266 BrainStorm Group, Inc. lindaodonnell@compuserve.com April 20-22, '98 SPG Year 2000 Conference & Expo Orlando, FL Info: 508-652-1010 http://www.spgnet.com April 21, '98 Washington DC Y2K Group Meeting Washington, DC http://www.bfwa.com/bwebster/y2k April 29-30, '98 Y2K Info Net Technology Conference Toronto, Info: 905-454-8577 Canada May 18-20, '98 IBM Y2K Technical Conference Las Vegas, NE Info: 800-426-8322 http://www.training.ibm.com/ibmedu/conf/yr2000/ June 22-25, '98 Year 2000 National Symposium Chicago, IL Info: 508-393-3266 BrainStorm Group, Inc. lindaodonnell@compuserve.com June 29-July 1, '98 SPG Year 2000 Conference & Expo Chicago, IL Info: 508-652-1010 http://www.spgnet.com August 10-13, '98 Year 2000 National Symposium San Francisco, CA Info: 508-393-3266 BrainStorm Group, Inc. lindaodonnell@compuserve.com September 23-25, '98 SPG Year 2000 Conference & Expo San Francisco, CA Info: 508-652-1010 http://www.spgnet.com November 9-11, '98 SPG Year 2000 Conference & Expo Boston, MA Info: 508-652-1010 http://www.spgnet.com ITAA's Year 2000 Outlook is published every Friday to help all organizations deal more effectively with the Year 2000 software conversion. If you would like to receive this free publication, please sign up on the web at https://www.itaa.org/transact/2kout looksub.htm. Copyright ITAA 1998. All rights reserved. The Information Technology Association of America, 1616 N. Fort Myer Drive, Suite 1300, Arlington, VA 22209. Internet: http:\\www.itaa.org