ITAA's Year 2000 Outlook May 21, 1999 Volume 4, No. 19 Published by the Information Technology Association of America, Arlington, VA Bob Cohen, Editor bcohen@itaa.org Read in over 80 countries around the world ITAA's Year 2000 Outlook is published every Friday to help all organizations deal more effectively with the Year 2000 software conversion. To create a subscription to this free publication, please visit ITAA on the web at https://www.itaa.org/transact/2ko utlooksub.htm. To cancel an existing subscription, visit https://www.itaa.org/transact/2kremove.htm. ITAA's Year 2000 Outlook is sponsored in part by CACI International Inc., DMR Consulting Group Inc and Y2Kplus. In this Issue: · Y2K Texas Style: Does Bush Do Two-Step Around Gore? · OMB Reminds Agencies Not to Break Fixed Systems · Tokyo Exchange Airs Y2K Plan · Beijing Official: More is Better · African Y2K Group Formed · Closer to Home · Business to Business · ITAA Y2K Information Center · Sponsor Advertising Y2K Texas Style: Does Bush Do Two-Step Around Gore? As Year 2000 liability legislation pitched and tossed on stormy Senate seas this week and the White House again sent mixed signals, Texas Gov. George Bush signed into law a state bill which contains a series of Y2K liability lessening provisions. SB 598 imposes a 60-day "cooling off" period for suppliers and customers to work out their differences, creates a series of affirmative defenses to liability, and limits damages for good faith efforts on the part of the defendant. The new law imposes a two-year limitation period for the bringing of suits, starting at the point where the computer date failure first caused harm. Products older than 15 years cannot be the basis for such suits. In the case of Y2K disputes, claimants must give defendants written notice of the computer date failure, including a description of the failure, the harm caused and the remedy sought. Affirmative defenses include notifying claimants of potential computer date problems, offering a cure and do ing so at either a nominal cost for low end software or at market value cost for more expensive business systems. "This is certainly a step in the right direction," said one Hill staffer, noting that fear of litigation has companies generating paper trails when they should be fixing systems. But this person said that the drafting of the new law may be too focused on computer and software companies. Federal legislation (now tripping its way over a series of procedural hurdles) takes a broader view, she said, because Y2K lawsuits are likely to impact a far broader array of businesses. One IT industry lobbyist involved with the Texas bill agrees that the law is too computer industry-centric, but says it still takes an even-handed approach to the issue, preserving the right of plaintiffs to bring Y2K lawsuits while allowing defendants to make good faith efforts to fend off damage claims. He says attempts to make the Texas bill more strongly resemble federal legislation fell in the face of opposition from the plaintiffs' bar: "The trial lawyers in Texas are significantly more sympathetic to corporations than they are in Washington, D.C.," he said, but not so much so that the legislation was not dramatically pared back. "Still, it provides a workable template that other states can follow," he indicated. Perhaps. Even though the federal liability bill is stalled, whether the new Texas law amounts to anything more than a symbolic victory for defendants remains to be seen. One observer claims the law will have little effect. "The chances of having an in- state plaintiff and in-state defendant are minimal," this industry lobbyist says. Instead, if the Y2K liability law in Texas is too tough, plaintiffs' attorneys will simply press their claims in other jurisdictions, known in the legal trade as "forum sho pping." Others say the law is simply unnecessary. Attorney Howard Nations, past president of the Texas Trial Lawyers Association and the Southern Trial Lawyers Association, says the Uniform Commercial Code in Texas is specifically designed to handle business lit igation. Nations suggests 33 years of UCC law in Texas is more than up to handling Y2K disputes and that actions rising from this week's bill will be the stuff of appellate court reviews for years to come. Nations says the new law is a case of Gov. Bush and the state's Republican leadership championing the cause of big business. He calls it a political fund-raising bill for the next election. Meanwhile, the IT industry lobbyist might say that such a view gives the Texas governor too much credit. Far from being at the head of the legislative parade, the lobbyist calls Bush's current circumstance "opportunistic." "He didn't ask for a Y2K bill. Bush just showed up at the press conference and signed it." But most of success in life is, as the popular saying goes, just showing up. Bush has a Y2K law; his possible presidential opponent, Al Gore, does not. So this may not be the last week that fortune smiles in the governor's direction. Despite the Texas law's deficiencies, for instance, it could still become the model for legislation in other states. Particularly if legislation at the federal level, carrying the heavier baggage of punitive damage caps and limits on attorneys' fees, sputters out. This week, the White House threatened to veto the McCain-Dodd compromise and Senate Majority Leader Trent Lott said that the Senate may not even get to the Y2K legislation again until after the Memorial Day recess, despite the fact that thirteen Democrati c Senators sent him a letter yesterday asking that the measure be brought up as soon as possible. All of which leaves Washington to wonder: Will no Y2K bill in hand for Al Gore be worth a vote or two to George Bush? OMB Reminds Agencies Not to Break Fixed Systems The Office of Management and Budget has asked federal agencies to hold the line on changes that could reintroduce errors to Y2K-compliant systems and essentially to report on how they plan not to make the changes. OMB Director Jacob Lew told the agencies that while realizing regulatory goals is important, goals should not jeopardize fixed systems. Tokyo Exchange Airs Y2K Plan The Tokyo Stock Exchange says it will cut off trading if Y2K problems appear. A TSE report notes that the suspension would cover stocks, bonds, futures and options. The exchange says it found no serious Y2K problems with its systems, following a test in volving 118 member brokerages. Beijing Official: More is Better A Beijing official has called the city's efforts to deal with the Year 2000 "not so optimistic" and says more effort is necessary. Xinhua reports that 78 percent of Beijing departments and units have entered the "final stage" for solving the problem, but efforts are slowed by delayed funding, incomplete testing and "general lack of expediency for solutions." African Y2K Group Formed A group of African officials want Y2K on the political and diplomatic agenda. Meeting at Accra, Ghana recently, the officials established the African Y2K Coordinating Body and an African Action Group. The latter will seek to raise Y2K awareness in Afric a. The group called for discussions of the Y2K issue at regional organization meetings. Closer to Home This week ITAA announced NEN Life Science Products, Inc. of Boston, MA received ITAA*2000 Certification. ITAA*2000 is the industry's century date change certification program. The program examines processes and methods used by companies to perform their Year 2000 software conversions. NEN Life Science Products, Inc. of Boston, participated in a rigorous evaluation of its approach to date conversion, with extensive analysis in eleven discrete process areas deemed necessary to a successful Year 2000 conv ersion. Business to Business Complete Business Solutions, Inc., Farmington Hills, MI, has been selected as a Strategic Alliance Service (SAS) partner by the Commonwealth of Kentucky. Allstate Insurance Company, Northbrook, IL, has entered into a partnership agreement with Computer Generated Solutions, Inc. to provide Y2K services. Inacom Corporation, Omaha, NE, has won a five-year $15 million contract with Bridgestone/Firestone Tire Division to provide Life Cycle Services. ITAA Y2K Information Center Solution Providers Directory http://www.itaa.org/script/2000vend.cfm ITAA*2000 Certification Program http://www.itaa.org/2000cert.htm Outlook Archive http://www.itaa.org/script/get2klet.cfm Legislative and Litigation Table http://www.itaa.org/year2000/legis.htm Calendar http://www.itaa.org/y2kcal.htm Vendor/User Status Questionnaires http://www.itaa.org/questmain1.htm Alternate Dispute Resolution (ADR) http://www.itaa.org/year2000/adr.htm Statement of Intention to Use ADR http://www.itaa.org/year2000/soi.htm, Y2K Mediators Seminar http://www.technologymediation.com/Y2K_seminar.htm Copyright ITAA 1999. All rights reserved. The Information Technology Association of America, 1616 N. Fort Myer Drive, Suite 1300