[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]





 
           H.R. 1599, THE YEAR 2000 COMPLIANCE ASSISTANCE ACT

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
                      INFORMATION, AND TECHNOLOGY

                                 of the

                     COMMITTEE ON GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   ON

                               H.R. 1599

 TO AMEND THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 
TO AUTHORIZE THE PURCHASE OF INFORMATION TECHNOLOGY RELATED TO THE YEAR 
2000 COMPUTER CONVERSION BY STATE AND LOCAL GOVERNMENTS THROUGH FEDERAL 
                            SUPPLY SCHEDULES

                               __________

                             JUNE 23, 1999

                               __________

                           Serial No. 106-46

                               __________

       Printed for the use of the Committee on Government Reform


     Available via the World Wide Web: http://www.house.gov/reform

                                 ______

                     U.S. GOVERNMENT PRINTING OFFICE
60-934 CC                    WASHINGTON : 1999




                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
JOHN T. DOOLITTLE, California            (Independent)
HELEN CHENOWETH, Idaho


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                      Carla J. Martin, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

   Subcommittee on Government Management, Information, and Technology

                   STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois               JIM TURNER, Texas
THOMAS M. DAVIS, Virginia            PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon                  MAJOR R. OWENS, New York
DOUG OSE, California                 PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin                 CAROLYN B. MALONEY, New York

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
          J. Russell George, Staff Director and Chief Counsel
                    Matt Ryan, Senior Policy Advisor
                     Grant Newman, Staff Assistant
          Mark Stephenson, Minority Professional Staff Member
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 23, 1999....................................     1
    Text of H.R. 1599............................................     3
Statement of:
    Giles, Glenn, managing director, Keane Federal Systems, Inc.; 
      and Nancy Peters, vice president, Sales and Marketing, 
      CACI, Inc..................................................    86
    Willemssen, Joel C., Director, Civil Agencies Information 
      Systems, Accounting and Information Management Division, 
      General Accounting Office; Frank P. Pugliese, Commissioner, 
      Federal Supply Service, General Services Administration; 
      and Gary Lambert, chief executive officer, National 
      Association of State Procurement Officials.................    51
Letters, statements, etc., submitted for the record by:
    Davis, Hon. Thomas M., a Representative in Congress from the 
      State of Virginia, prepared statement of...................    11
    Giles, Glenn, managing director, Keane Federal Systems, Inc., 
      prepared statement of......................................    89
    Horn, Hon. Stephen, a Representative in Congress from the 
      State of California:
        Information concerning a survey..........................    29
        Letter dated June 22, 1999...............................    23
        Letter dated June 23, 1999...............................    21
        Prepared statement of....................................     6
        Prepared statement of Mr. Nold...........................    25
    Lambert, Gary, chief executive officer, National Association 
      of State Procurement Officials, prepared statement of......    78
    Peters, Nancy, vice president, Sales and Marketing, CACI, 
      Inc., prepared statement of................................    98
    Turner, Hon. Jim, a Representative in Congress from the State 
      of Texas, prepared statement of............................    18
    Willemssen, Joel C., Director, Civil Agencies Information 
      Systems, Accounting and Information Management Division, 
      General Accounting Office, prepared statement of...........    53


           H.R. 1599, THE YEAR 2000 COMPLIANCE ASSISTANCE ACT

                              ----------                              


                        WEDNESDAY, JUNE 23, 1999

                  House of Representatives,
Subcommittee on Government Management, Information, 
                                    and Technology,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:30 a.m., in 
room 2203, Rayburn House Office Building, Hon. Stephen Horn 
(chairman of the subcommittee) presiding.
    Present: Representatives Horn, Biggert, Davis and Ose.
    Staff present: J. Russell George, staff director and chief 
counsel; Randy Kaplan, counsel; Matt Ryan, senior policy 
advisor; Matthew Ebert, policy advisor; Bonnie Heald, director 
of communications; Grant Newman, staff assistant; Paul Wicker, 
Justin Schleuter, and John Phillips, interns; Michelle Ash and 
Faith Weiss, minority counsels; Mark Stephenson, minority 
professional staff member; Earley Green, minority staff 
assistant; and Patricia Jones, minority congressional fellow.
    Mr. Horn. Sorry about the hearing delay. OK. So we will 
begin the Subcommittee on Government Management, Information, 
and Technology. A quorum is present.
    Only 191 days remain until we greet the new millennium, its 
expectations and enormous challenges. Last week, on behalf of 
the Subcommittee on Government Management, Information, and 
Technology, I released our eighth report card on the year 2000 
within 24 agencies and departments in the executive branch of 
the Federal Government.
    Based on our analysis of the agencies' self-reported data, 
we gave the executive branch an overall B-minus. That is 
progress. We had given them F's, we had given them D's, we had 
given them C-pluses, and now they're at the B-minus category. 
The agencies have made remarkable progress, frankly, in the 
last 6 months.
    At the same time, the subcommittee has begun to examine 43 
Federal programs that affect millions of Americans, such as 
Social Security, Air Traffic Control, and Medicare. The 
President's Office of Management and Budget identified these 
Federal programs as high impact. When it comes to year-2000 
computer readiness, they may also be considered as high risk.
    Although Federal computers may be fully prepared for the 
global glitch by the January 1st deadline, 10 of those 43 
programs are administered and delivered by State governments. 
In addition, each program involves a large number of public and 
private sector partners, from vendors and suppliers to county 
and municipal governments.
    The fact is that several of these high-impact programs, 
including Medicaid, Food Stamps and Child Nutrition, are not 
scheduled to be ready until December, leaving little, if any, 
time to correct unforeseen problems.
    The year 2000 problem dates back, as we know, to the mid-
1960's when programmers were desperate for space and these huge 
dinosaurs that filled the whole room such as this and somebody 
had the bright idea, instead of 1967, let's just put in 67 and 
drop the 19. And, obviously, when you get to the year 2000 and 
you do that, you have zeros in the 67 area, and the computer 
might well think it is back to McKinley in the 1900's.
    Today, we will discuss H.R. 1599, the Year 2000 Compliance 
Assistance Act, proposed by our colleague, Representative Tom 
Davis of Virginia. The legislation would amend the Federal 
Property and Administrative Services Act of 1949, giving 
temporary authority to the General Services Administration to 
allow State and local governments to purchase year 2000-related 
projects and services from Federal supply schedules. The 
participation of these governmental entities and the 
information technology suppliers is voluntary.
    Our goal today is to discuss how the proposed legislation 
would allow the Federal Government to help its essential 
business partners--State and local governments--prepare their 
computers for the year 2000.
    We will examine whether the bill would provide the States 
and localities with another tool in their efforts to prepare 
for the year 2000.
    I welcome our witnesses, and I am delighted to have the 
author of the bill, who has been an excellent member of this 
committee, Mr. Davis of Virginia, for opening remarks on this 
legislation.
    [The text of H.R. 1599 and the prepared statement of Hon. 
Stephen Horn follow:]

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    Mr. Davis. Thank you, Mr. Chairman. Let me first convey to 
you how impressed I am by your work and leadership.
    Mr. Chairman, over the past 4 years, we have tried to 
ensure that our Nation is ready for the year 2000. For this 
reason, I am pleased that we are here today to hold this 
hearing on H.R. 1599, the Year 2000 Compliance Assistance Act. 
This bill is critical to addressing the very unique 
circumstances brought on by the year 2000, circumstances that 
exist only once every thousand years, by providing our State 
and local governments with the necessary assistance for 
achieving year 2000 compliance.
    As a former local government official and high technology 
executive, I recognize the tremendous burden placed on State 
and local governments as they work to ensure that their mission 
critical systems are ready for the new millennium.
    Over the past 4 years, under the persistent urging of the 
chairman of this subcommittee, Mr. Horn, and Representative 
Connie Morella of Maryland, the Federal Government has 
sluggishly moved toward readying most Federal mission-critical 
systems for the year 2000 conversion. However, many are now 
just beginning to turn their attention to the condition of 
State and local government mission-critical systems that are 
critical to the seamless delivery of essential services at all 
levels of government.
    As John Koskinen, the chair of the President's Council of 
Year 2000 Conversion, has emphasized, we should all be 
concerned about the ability of some State and local systems to 
interface with year 2000 compliant Federal systems. There are 
approximately 160 different State systems that interface with 
the Federal Government. These systems include the delivery of 
vital services such as Medicaid, unemployment insurance and 
child nutrition aid programs.
    Many State and local governments have been unwilling to let 
the Federal Government or the private sector know the progress 
of their Y2K work for fear of lost public confidence and/or 
fear of the potentially negative effect on their bond rating. 
This reluctance makes it exceptionally difficult for us to 
judge our true readiness for January 1st, 2000.
    At the Federal level, we should do all we can to help State 
and local governments that lack the resources and expertise to 
tackle Y2K problem. As the latest report card from this 
subcommittee indicates, the Federal Government and its mission-
critical systems are rapidly reaching compliance or are already 
compliant. It is time to make the valuable resources and 
expertise of the IT firms included on the FSF/FTS schedules 
available to State and local governments.
    As the former chairman of the Fairfax County Board of 
Supervisors, I understand all too well the countless number of 
local government services the citizens take for granted on a 
daily basis. If a county is not prepared for the year 2000, it 
is quite possible that the school bus won't be there to pick 
the kids up at the end of the winter break or that the locally 
controlled stoplights will not be operational.
    Oftentimes, the technical expertise necessary to correct 
the Y2K problem may not be readily available to State or local 
governments. Access to the GSA schedule will give State and 
local governments access to the companies and products that can 
address these problems. Many officials from State and local 
governments are not aware of the scope of the problem either.
    Different computer systems must be tested together in order 
to see whether or not they can interface on January 1st, 2000. 
It is not just the local fire station's computer system but its 
ability to communicate with neighboring jurisdictions, the 
local police department and so on. Critical information must 
still be transmitted from computer system to computer system in 
every level of government.
    In the metropolitan D.C. area we have seen a stark contrast 
in the resources available to State and local governments and 
the readiness of local governments. For instance, on June 15th, 
1999, Fairfax County in northern Virginia tested their Y2K 
readiness in best case and worst case scenarios successfully. 
Clearly, this is a local government that is comfortably 
prepared to deliver local services on January 1, 2000. However, 
just a short distance away, the District of Columbia is still 
struggling with Y2K compliance as they work to find out the 
status of many of their computer systems.
    A General Accounting Office report on the status of D.C.'s 
Y2K conversion efforts reported that our Nation's Capital was 
at significant risk of not being able to effectively ensure 
public safety, collect revenue, educate students and provide 
health care services.
    In my role as chairman of the Subcommittee on the District 
of Columbia, I have had the opportunity to watch our Nation's 
Capital struggle to address its Y2K situation. Despite the 
Herculean efforts on the part of the District's chief 
technology officer, strong private sector support and 
substantial Federal resources, it appears that the one thing 
that cannot be controlled during D.C.'s year 2000 compliance 
efforts is time. Many States and localities are simply running 
out of time.
    Unfortunately, I believe that a substantial number of 
States, cities, towns, and villages across the country are in 
similar situations as our Capital City.
    According to 1992 census statistics, it's estimated that 
there are 84,000 local governments operating throughout the 
United States. Our State and local governments are responsible 
for management or delivery of essential services such as fire 
and police services, airports, transit systems, and court and 
criminal justice systems. Are we at the Federal level prepared 
to say that we are unwilling or unable to provide all of the 
tools at our disposal to State and local governments to deliver 
these services?
    That is why I introduced the Year 2000 Compliance 
Assistance Act. This legislation is a voluntary program where 
the Federal Government will allow State and local governments 
to purchase year 2000 conversion-related information technology 
products and services off GSA's IT multiple award schedules. 
Under this emergency authority, State and local governments 
will have one more option in the fight against time to procure 
year 2000 compliance assistance in a cost-effective and timely 
manner. I believe that during this period of moving 
governmental responsibilities back to the States and localities 
the Federal Government has a unique opportunity to provide 
procurement assistance to State and local governments to ensure 
nationwide year 2000 compliance and contingency preparation.
    The authority under this legislation is limited to the 
unique nature of the year 2000 computer bug, and I want to 
underscore that this legislation is intended for the unique 
nature of the year 2000 computer bug. It doesn't include drug 
companies, fire stations, fire equipment or anything else. 
There is no intent to do that here, no underlying intent to do 
that. We are trying to solve a once-in-a-thousand-year problem.
    The authority would expire on December 31, 2002; and, 
frankly, after looking at the letter today from--Mr. Chairman--
--
    Mr. Horn. Lee.
    Mr. Davis [continuing]. The White House, we are willing to 
make that much sooner schedule if that will accommodate some of 
the critics. This can only be used by State and local 
governments for procurement necessitated by the year 2000 
computer problem. I don't consider this legislation the first 
step on any pathway toward cooperative purchasing, and I 
welcome any constructive comments to alleviate any lingering 
concerns on that front. I have long been a proponent of working 
toward forging reasonable compromises that allow us to 
accomplish our end goal and will gladly work with those who 
have concerns about H.R. 1599. I want to stress that this is a 
unique legislation to address a unique circumstance.
    Again, Mr. Chairman, I thank you for holding this timely 
hearing on this bill, and I look forward to the testimony from 
our two panels on this critically important legislation.
    [The prepared statement of Hon. Thomas M. Davis follows:]

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    Mr. Horn. I now yield enough time for an opening statement 
to the vice chairman of the committee--subcommittee, Mrs. 
Biggert, the Representative from Illinois.
    Mrs. Biggert. Thank you, Mr. Chairman. I am pleased to 
participate in the hearing today about the Year 2000 Compliance 
Assistance Act, and I commend the gentleman from Virginia.
    I believe that, largely because of congressional attention, 
our Federal agencies will be ready for the year 2000 date 
change. But will our Nation's State and local communities have 
the necessary technology to partner with the Federal Government 
in service delivery? Many of the programs that our constituents 
rely upon are administered by our State. So it's not enough for 
the Federal Government to be ready. Our States also must help 
to provide seamless delivery of key programs such as Medicare 
and nutrition services.
    I am pleased to be from a State, Illinois, that has 
reported 98 percent of Y2K renovations completed. However, some 
States may not be so far along. The Y2K computer date change 
will affect every business, consumer, local government, and 
school.
    This July, we will hold a hearing in my home District to 
determine the Y2K progress made in our community. At our 
hearing, local gas stations, grocery stores, banks and 
utilities will testify to their computer capacity. So we must 
all work together to find solutions to the Y2K problem.
    I look forward to hearing today how Mr. Davis' legislation 
will assist the States in preparing for year 2000, for as we 
all know, the year 2000 won't wait.
    Thank you.
    Mr. Horn. Thank you.
    Mr. Turner. Mr. Chairman, thank you for holding this 
hearing on H.R. 1599, the Year 2000 Compliance Assistance Act, 
which presents a possible approach to helping State and local 
governments with Y2K readiness. As this subcommittee has 
observed, the Federal Government is making progress in ensuring 
that its mission-critical computer systems are Y2K compliant. 
However, many State and local governments have not made as much 
headway in their efforts.
    Numerous State and local governments began their Y2K 
readiness efforts significantly later than the Federal 
Government, and as a result, we are just now hearing about 
potential Y2K problems at the local level. For example, last 
week in Los Angeles, the testing of a septic system caused 
sewage overflows that resulted in the closing of a city park 
for several days. I am pleased that testing is occurring. It is 
certainly preferable to experience these small test failures 
now rather than confront whole system failures in the year 
2000. However, the results of this test do illustrate the 
magnitude of the work that remains at the State and local 
levels.
    In addition to State and local problems with regard to 
personal computers, elevators, telephone switches, and the 
breakdown of computer-aided dispatch operations, the Federal 
Government could also suffer from the impact of Y2K failures at 
the State and local government level because of the frequent 
information exchanges between local and Federal computer 
systems. The Federal Government sends and receives data from 
the States in support of many social service programs, 
including Medicare, Medicaid, welfare, food stamps, and 
unemployment insurance.
    The Federal Government will not be able to deliver critical 
social services if data exchanges with State governments are 
not Y2K-compliant. According to John Koskinen with the 
President's Council on Year 2000 Conversion, approximately 165 
Federal interfaces with State systems have been identified. And 
according to the Office of Management and Budget [OMB], as of 
May 27, 1999, Federal agencies report that 75 percent of 
Federal/State data exchanges are Y2K-compliant.
    There is no question that we need to have State and local 
governments Y2K compliant, and we know that compliance efforts 
will place a burden on State and local budgets. H.R. 1599 would 
offer assistance by permitting State and local governments to 
purchase computers and other information technology off of the 
Federal supply schedules. Due to the volume of purchasing done 
by the Federal Government, these schedules generally have very 
good prices, so we might actually be helping State and local 
governments quite a bit.
    In closing, I look forward to hearing from our witnesses as 
to how the Year 2000 Compliance Assistance Act, or any other 
resource or tool that we may be able to provide, can assist 
State and local governments meet their goals for Y2K 
preparation and compliance.
    [The prepared statement of Hon. Jim Turner follows:]

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    Mr. Horn. Let me put in the record some communications we 
have received, without objection.
    One is from the Baxter firm, a developer and manufacturer 
of medical products. They are opposed to the Federal 
cooperative purchasing concept in this legislation, and a 
letter has come here to the chairman dated June 23rd. It will 
be put in the record without objection.
    [The letter referred to follows:]

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    Mr. Horn. We have a communication from the Acting Deputy 
Director for Management of the Office of Management and Budget. 
Their concern is that they would recommend H.R. 1599 be amended 
to provide the authorities strictly to address critical Y2K 
needs and to be available only through June 2000, a period of 
time during which such purchases would be directly related to 
Y2K readiness. And this correspondence was signed by Deidre A. 
Lee, the Acting Deputy Director for Management. We put it in 
the record at this point without objection.
    [The letter referred to follows:]

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    Mr. Horn. The testimony of Mr. John J. Nold, the Director, 
Office of Information Services for the State of Delaware. He 
favors the proposed legislation of Mr. Davis, and without 
objection that will go into the record.
    [The prepared statement of Mr. Nold follows:]
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    Mr. Horn. We also have two very interesting documents from 
the National Association of Counties. One is the Y2K Survey of 
America's Counties, and the other is a statement for the 
record. And the National Association of Counties favors the 
Davis legislation. Without objection, all of that is in the 
record at this point.
    [The information referred to follows:]

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    Mr. Horn. We now will go to panel one, and I think most of 
you know the routine. We swear in all witnesses in this 
investigating committee, and we would like you to summarize 
your statement as best you can. The statements automatically 
become a part of the record and to be printed when I introduce 
you. And so if you gentlemen will rise and stand and raise your 
right hands.
    [Witnesses sworn.]
    Mr. Horn. All three witnesses have affirmed, the clerk will 
note.
    We will begin with Joel Willemssen, the Director for Civil 
Agencies Information Systems, Accounting and Information 
Management Division of the General Accounting Office. Mr. 
Willemssen has been our principal witness in almost every one 
of these hearings and usually starts out with a fine statement; 
and we keep him usually till the end to get back into it in 
terms of the dialog and discussion, if you don't mind.
    Mr. Willemssen. Certainly, Mr. Chairman.
    Mr. Horn. So go ahead.

  STATEMENTS OF JOEL C. WILLEMSSEN, DIRECTOR, CIVIL AGENCIES 
  INFORMATION SYSTEMS, ACCOUNTING AND INFORMATION MANAGEMENT 
    DIVISION, GENERAL ACCOUNTING OFFICE; FRANK P. PUGLIESE, 
    COMMISSIONER, FEDERAL SUPPLY SERVICE, GENERAL SERVICES 
  ADMINISTRATION; AND GARY LAMBERT, CHIEF EXECUTIVE OFFICER, 
      NATIONAL ASSOCIATION OF STATE PROCUREMENT OFFICIALS

    Mr. Willemssen. Thank you, Mr. Chairman, Congressman, 
Congresswoman. Thank you for inviting GAO to testify today.
    As requested, I will briefly summarize our statement on the 
Y2K readiness of State and local governments and on H.R. 1599.
    Available information on the year 2000 readiness of State 
and local governments indicates that much work remains. For 
example, according to recent information on States reported to 
the National Association of State Information Resource 
Executives, about 18 States had completed implementing less 
than 75 percent of their mission-critical systems. Further, 
while all States responding said they were engaged in 
contingency planning, 14 reported their deadlines for this as 
October or later.
    State audit organizations have also identified significant 
Y2K concerns in areas such as testing, embedded systems and 
contingency planning. Recent reports have also highlighted Y2K 
issues at the local government level. For example, a March 
1999, National League of Cities poll of over 400 
representatives found that almost 70 stated that they would 
finish 75 percent or less of their systems by January 1, 2000.
    Another area of risk is represented by Federal human 
services programs administered by States, programs such as 
Medicaid, food stamps, unemployment insurance, and child 
support enforcement. Of the 43 high-impact programs identified 
by OMB, 10 are State-administered Federal programs. OMB 
reported data on the systems supporting these programs show 
that numerous States are not planning to be ready until close 
to the end of the year. Specifically, a large number of State 
systems are not due to be compliant until the last quarter of 
1999. Further, this is based on data that predominantly has not 
been independently verified.
    To provide an additional option to State and local 
governments to address Y2K, especially for those entities 
facing major risks, Congressman Davis has introduced H.R. 1599, 
a bill enabling State and local governments to use the GSA 
schedule to address Y2K.
    Although State and local governments have in the past 
expressed interest in having access to GSA's schedules, the 
extent to which they would use it is somewhat uncertain. 
Factors that could limit use include lack of authority in laws 
or ordinances, in State or local purchasing preferences and 
possibly higher prices on the schedule for some items. By 
contrast, States and localities could benefit to the extent 
they could acquire needed information technology products and 
services at lower prices, more quickly and with less 
administrative burden.
    In particular, access to the information technology 
schedule would provide States with an additional tool for 
obtaining essential Y2K help. Such access may be especially 
appealing to those entities not planning to be compliant until 
close to the end of the year.
    In addition, another consideration of the bill is the 
effect on businesses of opening the schedule. Those that would 
choose to participate could benefit from increased market 
exposure and sales and lower administrative costs. Conversely, 
some businesses that are not on the schedule could lose 
business to those that are on the schedule.
    Nevertheless, the Congress should balance concerns such as 
those against the extraordinary circumstances facing the Nation 
because of Y2K.
    Further, some of the concerns may be reduced by the limited 
nature of the bill and by GSA publishing implementation plans 
showing how the bill would be implemented. At the same time, to 
be most useful, this bill will need to be implemented 
expeditiously because of the very limited time remaining until 
the turn of the century.
    That concludes a summary of my statement, and after the 
panel is through, I will be pleased to answer any questions. 
Thank you.
    Mr. Horn. Well, thank you for that usual, very thorough 
statement.
    [The prepared statement of Mr. Willemssen follows:]

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    Mr. Horn. The next witness is Frank P--and I don't quite 
know the pronunciation. I apologize.
    Mr. Pugliese. Pugliese, Mr. Chairman.
    Mr. Horn. Pugliese, OK--Commissioner, Federal Supply 
Service, General Services Administration. Mr. Pugliese.
    Mr. Pugliese. Good morning, Mr. Chairman, members of the 
subcommittee. I appreciate the opportunity to be here.
    I don't have a formal statement. In fact, we worked late 
into the night trying to work out some appropriate language and 
were unable to do that. So what I would like to do is, without 
sounding like a plug for the schedules program, which I am a 
big proponent of, I will be happy to answer whatever questions 
that come up as a result of the later testimony, and I can 
certainly get into lots of nitty-gritty on the program and what 
I feel we can achieve with it.
    GAO's testimony is to the point. Time is of the essence. 
This will certainly be a vehicle that allows us to expedite 
this process.
    Mr. Horn. So we really need to ask you a few questions to 
get your views on the record?
    Mr. Pugliese. Yes, sir, Mr. Chairman.
    Mr. Horn. Have you had a chance to read the Davis bill?
    Mr. Lambert. Yes, sir.
    Mr. Horn. Can you comply with that should the Congress 
approve it?
    Mr. Pugliese. I think the Davis bill will go a long way in 
achieving and accomplishing what we need to do, which is quick 
response to a very serious problem. It also will allow you to 
get to 1,800 companies who have already negotiated contracts 
with us.
    I would like to step back for a second. And there always is 
some concern about what does this do from a pricing standpoint. 
The beauty of the schedule program, the way it currently is 
structured, is if our price is not good, get a better price, 
negotiate with the vendor, establish a BPA or, in fact, say, 
you guys are not a good deal; I'm walking away. I think that's 
the beauty of that program, and it's the beauty of this current 
legislation. The way it's being proposed, it is voluntary on 
both parts.
    Mr. Horn. Has legislation similar to this ever been passed, 
do you know?
    Mr. Pugliese. Never.
    Mr. Horn. In terms of the 50 years of the GSA?
    Mr. Pugliese. Never. It always comes close, Mr. Chairman, 
but never quite makes it.
    Mr. Horn. Well, this is focused in on a very narrow thing 
and a very narrow time period. You noted the statement I read 
from Ms. Lee of OMB. Would you concur with her in terms of----
    Mr. Pugliese. Yes, I read the statement early this morning, 
and I believe it's a reasonable statement, and certainly this 
is an issue that does become a hot button for certain 
industries, even though they are in fact excluded and there is 
no intention to include them. I think it is a very reasonable 
approach.
    Mr. Horn. Now, where do you keep these different products 
throughout the Nation? You've got various regional facilities.
    Mr. Pugliese. We--I guess, the other beauty of the 
schedules program is I'm not really keeping anything anywhere. 
It's between a buyer and a seller, and the seller would be a 
commercial partner of ours, and, as I say, there are 1,800 
firms; 78 percent of those are small businesses, for those 
folks who like to say it's only the big boys that play with us; 
78 percent of those 1,800 are small business concerns; 450 of 
those 1,800 are small disadvantaged concerns. So this is not 
just the big boys playing in this game, and it is truly a 
commercial transaction.
    You as a customer make your selection, negotiate your best 
deal and deal with the commercial partner who can deliver, 
whether it's hardware, software, integration services. So it is 
strictly a commercial transaction once we have done our work 
which has already been done.
    Mr. Horn. I have fairly strong feelings in this area, and 
that is my worry about a small businessperson who has a 
franchise in a particular community, let's say, it's the county 
seat, the State capitol and, quote, a Wal-Mart type operation 
comes in, drives them out. And I have seen this with Home Depot 
which came into my end of Long Beach, drove two wonderful 
hardware stores that had been there for 50 years out of 
business. Then they moved to another city. So we have no 
hardware stores. And what kind of worry is that to GSA?
    Mr. Pugliese. What we have generally--it is a concern 
because the core of our program, as I said, is 17 percent small 
business concerns. What we see generally when we look across 
the landscape, though, is--I mean, local purchase normally is 
local purchase. State and local governments try to deal with 
local folks.
    When you look at our schedules program what you will see as 
you look across the landscape is almost every person, every 
company, every State is represented because they are in locales 
all around the country. I mean, if you deal with a CACI or an 
IBM or a smaller group, they are usually not just in one place; 
and, in fact, even if they are located here in D.C., they have 
staff who are going to go to where they need to go.
    What you are seeing right now also is State and local 
governments, aside from not being able to use the schedules 
program, have been fairly creative and have actually formed co-
ops to do similar kinds of things when they see what they can 
get.
    Mr. Horn. This is off the record.
    [Discussion held off the record.]
    Mr. Horn. Would you have any other comments on the 
legislation?
    Mr. Pugliese. I just believe it is--time is of the essence, 
and if we are going to move forward, we should probably move 
forward and allow State and local governments to get the 
benefit.
    Mr. Horn. OK. I don't want to shortchange you without a 
Member here, Mr. Lambert, so we are going to be in recess till 
Mr. Davis comes back, and then he can pick up on you, and then 
we will have a dialog. By that time I will have come back. So 
we are in recess until Mr. Davis returns.
    [Recess.]
    Mr. Davis [presiding]. Now, we will come back to Mr. 
Lambert.
    Mr. Lambert. Thank you.
    Mr. Chairman, members of the Subcommittee on Government 
Management, Information, and Technology, thank you for inviting 
me to testify before the subcommittee this morning. I'm here to 
speak in favor of H.R. 1599, the Year 2000 Compliance 
Assistance Act.
    For several years now State and local governments have been 
working diligently to ensure that the systems that we use will 
function properly on and after January 1, 2000. Despite all of 
this hard work and diligence from dedicated government workers 
and their contractors, they are still faced with the fact that 
more work and assistance from our work force and our colleagues 
in the private sector is needed if we are going to be 
successful at all levels of government.
    We are working against the clock, and we need to provide 
State and local government officials, procurement 
professionals, and chief information officers with all of the 
tools available in the public sector. What we need is cross 
boundary and cross-jurisdictional cooperation and coordination. 
We cannot afford to spend time bidding for and developing 
contracts that replicate those that may already be in place at 
the Federal level or available in sister States. What State and 
local government needs is easy access to all public sector 
contracts that offer Y2K solutions. By enabling State and local 
government more tools to tackle the Y2K problem head on, our 
chances for success on January 1, 2000, will increase 
significantly, particularly at the local level where several 
small communities continue to struggle with this problem at 
this late date in 1999.
    I applaud the efforts of Congressman Davis of Virginia for 
championing this bill, but I contend that without rapid passage 
and enactment of the bill, his efforts will be for naught. 
Throughout State and local governments today, people are 
running out of time to address the problems of Y2K, and the 
longer it takes to pass H.R. 1599 the less likely it will be 
that there will be an opportunity to utilize the Federal supply 
schedules to solve this problem.
    Also, I submit that Congress and the General Services 
Administration must do their part to guarantee State and local 
government easy access to the schedules and not complicate the 
administrative process by requiring a myriad of bureaucratic 
registration, ordering, reporting and/or auditing requirement.
    Failure to apply the KISS principle--keep it simple and 
stupid--will be as harmful to this effort as not passing the 
legislation.
    For NASPO, National Association of State Procurement 
Officials, to be in a position to fully support this 
legislation, we must be able to demonstrate to our members and 
to the local government purchasing professionals, who in many 
instances are our customers, that there is value in the use of 
these schedules for Y2K. This means that use of the schedules 
must be as easy, or easier, than the use of our current 
contract at the State and local levels. There must also be a 
willingness on the part of scheduled vendors to work 
cooperatively with State and local government once we make a 
decision to explore using the services available to us on the 
schedules.
    Without the easy access to the schedules by State and local 
government and without a willingness from vendors on the 
schedules to enthusiastically take on State and local 
government business, this legislation, if enacted, will not 
live up to the expectation of NASPO, its members and the 
customers we serve.
    Thank you for the opportunity to appear before the 
subcommittee; and on behalf of the National Association of 
State Procurement Officials, we look forward to working with 
you and other members of the subcommittee to successfully 
implement H.R. 1599.
    Mr. Davis. Thank you very much.
    [The prepared statement of Mr. Lambert follows:]

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    Mr. Davis. Let me say at the start that the criticism I've 
heard of this legislation doesn't go to what this legislation 
does. I think everyone recognizes that Y2K is a critical 
problem, and for many State and local governments in particular 
where they're bound under different procurement rules, 
sometimes it's lengthy. You have to go under State code and 
everything else. You don't know where to get this. This becomes 
and will become over the next--particularly September, October, 
November, December, panic will set in; and they will want to 
know where they can get answers and where they can get it very 
quickly.
    And I don't think anyone really objects to what this 
legislation is trying to do, but the concerns are where else 
does this go? Is this the camel's nose under the tent? And I 
think the opposition--in fact, drug companies, pharmaceutical 
companies that are opposing this, I can't believe they wouldn't 
want State and local governments to be Y2K compliant. Why in 
the world would they not want that or do everything they could?
    So we are going to try to do what we can to assuage them 
and let them know this is a once-every-thousand-year type of 
episode, but we think, frankly, that the Federal Government is 
doing some other extraordinary things to assist State and local 
governments with Y2K, and this falls along those lines rather 
than being the camel's nose inside the tent for cooperative 
purchasing. And I'm a little suspect because I have been a 
strong supporter of that, and we fought that battle, and we 
lost it last year in a conference report.
    That's not what this is about, though. That's why we have 
narrowly tailored this, and we don't want that fear of where 
this might go to be the enemy of what otherwise I think 
everyone agrees is a pretty good bill. And if the 
administration has concerns about this, I'm again a little 
nervous because they wanted the full-blown, cooperative 
purchasing and fought hard for it a year ago, and now they want 
this bill tailored, very narrowly focused, and I guess they're 
all over the place. But we will work with them. I mean, that's 
the legislative sausage-making that goes through here.
    What we have to do is sit down and accommodate a lot of 
different interests that sometimes change their minds and roll 
back and forth. But if we don't get there, it's going to be 
very difficult for some little village out there or State or 
locality that has to get an answer to be able to get it and 
coordinate it in an appropriate fashion. And I don't want 
something to go wrong in Bullfrog Corner, West Virginia, or 
wherever on a Y2K and not knowing that we didn't do everything 
we could here at the Federal level to try to assist these 
localities and that someone is hurt because we didn't do 
everything that we could, and that's really what the motivation 
of this is.
    And I think, from the thrust of your comments, this is 
something that can work very, very well, and it may make a 
difference in some people's lives if we can pass it, and it 
may--and we want to do it in a way where we are not setting 
some outstanding precedent that's going to be cited down the 
road. And I will just say for myself, I'm not going to cite 
this as a precedent if these issues come back. I just want this 
to pass because I, along with Chairman Horn, Mrs. Morella and 
others who have been on the cutting edge of this Y2K, we want 
as minimal disruption as we can of services from all levels of 
government on January 1, 2000.
    Let me just ask a few questions.
    Mr. Pugliese, in dollar amounts, how much does the Federal 
Government procure each year in computer systems, software, 
hardware?
    Mr. Pugliese. Total government is probably doing--we have 
seen a couple of estimates, anywhere from $30 to $70 billion. 
Our piece of that is probably $8 to $10 billion goes through 
schedules.
    Mr. Davis. And growing, isn't it?
    Mr. Pugliese. And growing.
    Mr. Davis. And the schedules just work really well in 
terms--I mean, what I see around town is with the procurement 
reforms we've made and the growth of the schedule, the only 
losers are really the protest lawyers, of which I used to be 
one.
    Mr. Pugliese. Yes.
    Mr. Davis. That's why I'm here now.
    Mr. Pugliese. That's correct. And the schedule program, 
when Federal supply took it over on the IT side of it only, 
because we do schedules for other things, like furniture and 
other commodities, was about a little more than a billion, and 
it will probably finish this year at about $10 billion. 
Services in all fashions are all growing, aside from IT 
services also.
    Mr. Davis. OK. Thank you very much. And I think no one is 
in disagreement with the fact that State and local governments 
that are encountering acquisition problems getting 
procurement--in fact, some of them are still waking up, and we 
will see this in the next panel, still waking up to the fact 
that there is a problem. This Y2K problem is tough.
    My wife is a physician out in Fairfax, a gynecologist, and 
she and her two partners had to pay $25,000, which is a lot of 
money for a small practice like that, operating under managed 
care and seeing what's happened to her income, just to get Y2K 
compliant in their own offices.
    So this is, you know, something people would rather not 
spend money on. As an elected official, you get no credit for 
spending money on Y2K because nobody's life is improved, you 
aren't adding any value. What you are doing is, you're cutting 
losses. You're trying to make sure something bad doesn't 
happen, and when you have these budgets out there that are 
already tight to begin, these State and local governments, 
spending money, you just get no credit. So many governments 
have been very late to come to the table on this. This is a 
time-sensitive problem.
    Let me ask you, there are products, aren't there, windowing 
and some other issues, that can give you short-term solutions 
sometimes when you're backed against the wall that can be used 
in some circumstances?
    Mr. Pugliese. Yes, there are some short-term products, but 
I think more appropriately what we are looking at here, 
obviously, is the correct fix in a timely fashion, which 
hopefully this legislation will allow State and local 
governments--and I think we need to also be careful that State 
and local governments do have enough protective devices. If 
they are concerned about their local firms, there are some 
requirements and remedies on the State and local governments 
that they would be prohibited probably from using, but there's 
enough here to let folks get to where they need with a solution 
quickly.
    Mr. Davis. Let me ask Mr. Willemssen, according to GAO, how 
close do you think that State governments are in reaching the 
Y2K compliance with the mission-critical systems that have to 
interface with the Federal Government? Is there any way of 
estimating that or is the data just so sketchy in terms of 
what's available to you?
    Mr. Willemssen. The best data we've seen is for those 10 
State-administered Federal programs such as Medicaid, food 
stamps, child support enforcement; and that data for the most 
part has not been independently verified and validated. What 
the data shows is a tremendous variance among States and even 
in some cases within States. Several States, and several 
programs have taken the lead and been aggressively dealing with 
Y2K for several years. On the other hand, the data indicates 
that there are States and programs that aren't planning to 
resolve their Y2K issues until the last quarter of 1999 and 
that's the State's estimates.
    As you know, as well----
    Mr. Davis. There is some risk in that, isn't there?
    Mr. Willemssen. As you know, IT projects historically run 
late. So to the extent that those kind of organizations can 
have other available tools accessible to them to make sure they 
get the job done on time, I think that will be to everyone's 
benefit.
    Mr. Davis. And my observations have been that you--
governments always tend to undertake the problems for a lot of 
reasons.
    Mr. Willemssen. Correct.
    Mr. Davis. Also, Mr. Willemssen, is the noncompliance by 
State and local governments hindering the ability of the 
Federal Government to reach Y2K compliance?
    Mr. Willemssen. Yes, because of the massive amount of data 
exchanges that Federal agencies and State governments in 
particular have, that can be a hindrance.
    And in particular, again on these State-administered 
programs which are considered Federal programs but administered 
at the State level, it's particularly important that those 
systems are compliant. We are looking at hundreds of those 
systems and so the risk that some of them will not be compliant 
is there. I think the States and the Federal Government have to 
use all available avenues and tools that are out there to try 
to get done in time.
    Mr. Davis. So let me understand, the Federal Government can 
do--can have its programs clean as a whistle, fixed, Y2K 
compliant, every terminal, everything's fine, and yet people 
who are the beneficiaries of some kind of Federal aid that's 
funneled through the State or whatever can get hurt because the 
State government may not be compliant and may not have--for 
whatever reason?
    Mr. Willemssen. Correct, and even two different entities 
may, looking at just themselves, be compliant but if one entity 
has expanded their date fields and another one has windowed and 
they haven't dealt with the data exchange or tried to exchange 
the data properly, all of that good work by the individual 
entities may go for naught because they haven't dealt with that 
exchange.
    Mr. Davis. So the interconnectivity really--if the Federal 
Government wants to become compliant, we have to do everything 
we can to make sure the State and local governments and even 
the private sector we interconnect with are compliant?
    Mr. Willemssen. Correct.
    Mr. Davis. Mr. Lambert, will the ability to shop off the 
GSA schedule for Y2K products provide States with more timely 
access to necessary tools, do you think, to bring these systems 
into compliance?
    Mr. Lambert. I think it will. I think it provides a 
wonderful opportunity for those States particularly that are 
behind right now to gain access to a whole series--1,800 
companies is not a small number of companies--to gain access to 
get those solutions. And as you step it down into the villages 
and the smaller communities, the fixes may not be difficult, 
but the procurement process may be more difficult than the fix 
in opening the schedule up, and giving access is going to 
provide that opportunity to perhaps get back up to speed or at 
least get back on schedule, so that, come January 1, 2000, 
those small town halls or whatnot may only have a few PCs and a 
server will be compliant as opposed to losing all of their data 
potentially and not being able to recreate the records because 
they don't have the skills.
    Mr. Davis. Let me ask this. If this legislation doesn't 
pass, and I'm a small town and I want to get Y2K compliant and 
it's October and I'm bumping up against the edges and, oh, my 
goodness, we need to fix this, what's preventing me from 
getting a schedule, opening up and just calling some of those 
vendors and cutting my own deal?
    Mr. Lambert. It's really going to depend on what the local 
laws say. In some cases, there may be an emergency provision in 
the laws that will allow them to do that. In other cases, it 
may be a question of whether or not you call someone off of 
that schedule and say, well, I can't really work because the 
legislation didn't pass with you off of the schedule so we are 
going to have to think about this and----
    Mr. Davis. With this legislation, we basically allow State 
and--many State and local governments who couldn't do that to 
be able to buy off and waive the usual procurement?
    Mr. Lambert. Correct, and it also provides an affirmative 
statement that this is something that you can do, as limited as 
the timeframe may be, but it is something that you can do to 
solve a very critical problem for your constituents within that 
community.
    Mr. Davis. Any liability to the Federal Government by 
opening up these schedules? A State or local government decides 
to buy off the schedule, the vendor that they pick botches the 
job, somebody is injured, and they say, well, gee, the Federal 
Government recommended these people, they put them on the 
schedule.
    Mr. Lambert. That's going to be hard to say. It depends on 
how the schedules are worded and what the liability conditions 
are there.
    Mr. Davis. But as a general rule?
    Mr. Lambert. As a general rule, a botched job is a botched 
job, and you are going to go after whoever made that mistake.
    Mr. Davis. Mr. Pugliese.
    Mr. Pugliese. Let me try to take a stab at that, 
Congressman.
    A botched job is a botched job, that's correct, but at 
least when you're under the schedules program, you have the 
immediate recovery of saying, let me go back to that 1,800 and 
figure out how to get this botched job fixed, No. 1 priority, 
which is what you want to do; and, second, let me have recourse 
against my commercial partner, which you would have in any case 
in any contract.
    Mr. Davis. So you don't really--the Federal Government's 
exposure on this----
    Mr. Pugliese. In the normal government parlance, what you 
would have had to do is start your procurement process all over 
again and select somebody hopefully who could successfully 
complete, whereas in this process you move to your next x 
number of folks you'd like to consider, you make your choice, 
and you still can't recover for damages.
    Mr. Davis. Let me ask Mr. Lambert this from the State 
procurement office. Do you think this would be widely used by 
State and local governments or do you think it would not be if 
this were passed?
    Mr. Lambert. I think the potential is there for it to be 
widely used.
    It's really going to be a timing matter. If we get into 
late summer, there may not be a reasonable number of local 
governments that are going to be able to wait that long for 
this to happen in order to take advantage of it and maybe far 
enough down another road that it will be too late to turn back 
or there will be some concerns about whether or not they should 
stop in the middle of a process now in order to take advantage 
of the schedules. So timing is very, very important right now.
    Mr. Davis. Well, let me ask you this, and I'll ask all of 
you, what do you bet January 2nd, 2000--I think that's a 
Monday, I'm not sure of what the date is--when they open up, 
things have gone bad over the weekend, they find they've got a 
problem, this schedule could still help them even if--when you 
find you have a problem after January 1, right?
    Mr. Lambert. That's very true, on the back end. And also, 
if I may, the OMB date of June 2000 may be a bit too 
shortsighted. From the standpoint of--if you have that major a 
problem come January 2nd, you may be spending enormous amounts 
of time trying to, A, recreate the records before you can 
actually solve the problem or doing both, and 6 months may not 
be a broad enough window to get all of that work completed. So 
it may be a question of interpretation of what does June 2000 
mean. Does June 2000 mean that you cannot engage a service 
after June 2000 or does it mean that all services must be 
completed and all products must be installed by June 2000 for 
that Y2K fix?
    Mr. Davis. You know, that's an excellent point. I think 
from our perspective the question is, are we trying to fix a 
problem or is there another agenda? And there's nothing wrong 
with having other agendas. I mean, I think if you're sitting 
there as a pharmaceutical and you're very nervous about the 
expansion of this, that's not a bad agenda. I understand that. 
But we want to work with that because the goal of this 
legislation is to solve the problem without creating other 
problems.
    And I just want to tell you that I know Mr. Horn and myself 
and others feel the same way, we want to get this Y2K problem 
resolved to the best ability we are able. If something goes 
wrong, we don't want it at our doorsteps that we didn't do 
everything we could to make this--and we will work with anybody 
to try to draft this legislation I think in a way that solves 
our problem and solves their problems or concerns about it as 
well. I think the chairman would agree with me.
    Mr. Lambert. I have no issue with just focusing this on 
Y2K. My real concern is just making sure that if we are doing 
this to solve the Y2K problem that we give that amount of time 
that's necessary to do that problem solving.
    Mr. Davis. Thank you very much.
    Mr. Horn [presiding]. Before you leave that question, could 
I just ask Mr. Willemssen if you would like to put a GAO figure 
on that? We now have the author in 2002, we have Ms. Lee, June 
2000. What does GAO think after they looked at the complexities 
throughout the Nation?
    Mr. Willemssen. I'll give you my estimate not from a 
procurement or legal perspective but more from a Y2K 
remediation perspective. To be safe, you would probably want to 
look at early 2001, especially to the extent that there's a 
large amount of windowing done. You also increase the 
possibility of problems down the line, but you may want to go 
one more calendar year rollover just for added assurance of any 
additional problems that may occur. I don't know that you'd 
have to go to December 31st of that year, but----
    Mr. Davis. That's an excellent point. I think what you are 
saying is you may want to use the schedule to get a short-term 
solution, but then the permanent ones, when it comes along, you 
want to keep it open.
    And let me just say, again, I think we want to have 
discussions with OMB, and we want to keep everyone here in the 
loop. We are trying to solve a problem. We are doing everything 
we can to solve the problem before it becomes a problem, and if 
you look at that as the goal and everybody understands that is 
the limited goal, there is no hidden agenda, I think we can get 
this done.
    If more people are concerned about protecting their own 
industries long term from some precedent or something like 
that, it becomes more difficult to resolve. But I sincerely 
mean this when I say we are just trying to solve a problem at 
this point, and we are doing everything we can so that on 
January 1, 2000, citizens across this country at all levels of 
the government are going to have minimal disruption in their 
lives, and hopefully no one will get hurt.
    Mr. Chairman, I yield back.
    Mr. Horn. Well, thank you for that line of questioning. Let 
me just throw in one or two others.
    Do the State and local governments currently have access to 
information about products and services on the Federal supply 
schedule?
    Mr. Pugliese. Mr. Chairman, yes, they do, from the 
standpoint of this issue has been swirling around Washington, 
DC, as long as I have been in Washington, DC. So they are very 
familiar with schedules. So they are very familiar with 
schedules. They are very familiar with the companies that are 
on the schedule; and most of them, because they cannot do 
cooperative purchasing, in some cases they have basically 
approached companies and used the scheduled price as the 
starting point for their own negotiations. That is, my 
benchmark is this schedule price. Can you do better? Will you 
do better? So, yes, they are very familiar with what's 
available on the schedule.
    Mr. Horn. How many State GSAs are there? I know there's a 
very active one in California that used to love to bill back 
everything so they could go to the legislature and say we cost 
you nothing.
    Mr. Pugliese. We actually--we were fairly proactive 
actually with the State of California GSA, because they looked 
at our electronic commerce site and also the fact that we have 
not used paper invoices in 10 years in Federal supply, and 
California still does a tremendous amount of paper invoicing 
and purchase orders. So there are 50 of them. Everybody 
recreates or reinvents the wheel in a little bit different form 
or fashion.
    Mr. Horn. Any comment on that, Mr. Lambert, in terms of the 
use of the GSA schedule in terms of negotiation?
    Mr. Lambert. It's used effectively throughout most of the 
country. There are some States where the laws are pretty 
restricted, but there are not that many. There are probably 10 
where low bid rules, and you must do a low bid procurement 
every time, but other than that, people do use the GSA schedule 
as a benchmark and to a minimum. It is not a negotiating tool.
    Mr. Horn. Any further questions on our side, Mr. Ose?
    Mr. Ose. No, sir.
    Mr. Horn. OK. With that, we will move to panel two; and we 
thank all of you gentlemen on panel one.
    And, Mr. Willemssen, if you would like to sit through panel 
two, please join us.
    So we have Mr. Giles and Ms. Peters.
    OK. If you would stand and raise your right hands.
    [Witnesses sworn.]
    Mr. Horn. The clerk will note that both witnesses have 
affirmed.
    Mr. Horn. We will begin with Mr. Giles, who is the managing 
director of Keane Federal Systems, Inc.
    Welcome.

  STATEMENTS OF GLENN GILES, MANAGING DIRECTOR, KEANE FEDERAL 
  SYSTEMS, INC.; AND NANCY PETERS, VICE PRESIDENT, SALES AND 
                     MARKETING, CACI, INC.

    Mr. Giles. Good morning, Mr. Chairman and members of the 
committee. Thank you for this opportunity to give you an 
industry perspective on H.R. 1599, the Year 2000 Compliance 
Assistance Act.
    I'm Glenn Giles, a managing director in Keane, Inc., and I 
am responsible for Keane's public sector's subsidiary. Keane's 
a $1.1 billion software services company headquartered in 
Boston, with operations throughout the United States, Canada 
and the United Kingdom. Keane's 12,000 employees help 
organizations plan, build and manage applications software. Our 
clients include Fortune 1000 companies, Federal, State and 
local agencies and health care organizations.
    In this .com age of the Internet, the market drivers are 
convenience, speed, selection, and price. These drivers are not 
new to the consumer marketplace, and they are no different for 
our government clients as they acquire goods and services to 
benefit American taxpayers.
    As we approach the new millennium, these drivers have 
become more and more important to the civil servants who 
oversee and implement Y2K solutions. For the last 5 years, 
Keane has provided Y2K services in virtually every industry of 
the United States, eventually becoming the U.S. leader in Y2K 
services. We have planned, analyzed, fixed, tested, verified 
and validated thousands of systems, both for the commercial and 
government sectors. Many of these systems would have failed had 
it not been for timely access to affordable, high-quality Y2K 
services.
    Y2K solutions need to be formulated and acquired very 
quickly now. There is no time to waste. Year 2000 transactions 
for many State and local governments begin, if they haven't 
already, in 7 days, on July 1, 1999, as they enter their fiscal 
year 2000. Others will enter their fiscal year 2000 over the 
next 6 months. We should soon begin seeing the successes and 
failures of government Y2K efforts in a very graphic way as the 
year progresses.
    Access to the GSA schedule will allow State and local 
governments who haven't been able to make significant headway 
on their Y2K problems the ability to make up lost time, 
potentially. For those who have made significant progress, it 
will allow them to access Y2K capabilities to quickly solve 
problems that suddenly and unexpectedly appear, probably at the 
worst possible time.
    The competitive procurement process takes time. If State or 
local governments are in the early stages of developing 
procurements for Y2K remediation, they are in trouble. 
Alternatively, these government organizations could use the GSA 
schedule and avoid the precious administration time, cost and 
resources that they don't have at this late stage in the game.
    Service to the citizen has no less urgency and priority 
than customer service in a commercial setting. When the check 
isn't in the mail or it is in the mail and the mail room 
tracking system doesn't work and can't find it, or it is sent 
and it's too much or it's too little, citizens suffer. When a 
Y2K problem occurs or must be avoided, quick access to 
appropriate vendors must be an absolute given, not a question 
mark.
    Convenience goes hand in hand with speed. The potential for 
quick response from contracted services is of little value if 
the front end process to gain contract access is made laborious 
and confusing by Federal restrictions and paperwork. GSA must 
keep its process simple for its potential State and local 
buyers just as it has for its Federal customer base.
    An enormous amount of money has been spent by U.S. industry 
and public sectors on their Y2K problems. Most of these funds 
have come from ``out of hide'' and, therefore, have caused 
impacts on new technology priorities, postponed new systems 
initiatives and created much pressure on IT budgets. Y2K 
compliance expenditures, for the most part, were not 
investments in upgraded capabilities or functionality. We 
simply restored broken systems to a working state.
    Since Y2K expenditures are predominantly viewed as 
maintenance expenses rather than capability enhancing 
investments, funding efforts to achieve compliance have been 
especially painful. Y2K funds are diminishing from many State 
and local agencies, so it is vital that we enable access to 
economical, competitive services through vehicles such as the 
GSA schedule.
    Finally, passage of the Year 2000 Compliance Assistance Act 
will allow selection options by State and local governments of 
seasoned corporate veterans having extensive experience in the 
unique and not-so-unique Y2K problems encountered in government 
computer systems.
    The key issue at stake is allowing the State and local 
governments to decide for themselves. I don't advocate that the 
use of the GSA's schedules be made any more or any less 
attractive to potential non-Federal users, only that they be 
made available for the asking.
    Mr. Chairman, as a result of my experience as a manager of 
both Federal and State contracts, I can without any reservation 
whatsoever encourage this committee and this Congress to pass 
H.R. 1599. Allowing the States to use the GSA schedule for Y2K 
addresses the critical need for speed, convenience, price, and 
selection. This legislation is in the best interest of our 
taxpayers, our citizens and our economy.
    Thank you.
    Mr. Horn. We thank you.
    [The prepared statement of Mr. Giles follows:]

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    Mr. Horn. And Ms. Peters is the sales and marketing vice 
president, and do we--how do we pronounce this? What does C-A-
C-I stand for?
    Ms. Peters. Well, it doesn't stand for anything any longer. 
It once was a computer company name, but it is C-A-C-I--or CACI 
as someone referred to it.
    Mr. Horn. As in army and uniforms?
    Ms. Peters. Not exactly. A unique spelling.
    Mr. Horn. Were these the partners' initials or what?
    Ms. Peters. No. It was a computer--California Analysis and 
Computer Institute. That was----
    Mr. Horn. I see.
    Ms. Peters. That was 37 years ago.
    Mr. Horn. OK. Now, I have that little bit of history in my 
head.
    Ms. Peters. Valuable information.
    Mr. Horn. Well, I always like to know.
    Ms. Peters. The company did start in California.
    Mr. Horn. Where did it start there? Do you know? Was it in 
Silicon Valley?
    Ms. Peters. Silicon Valley didn't exist then. It was 
another valley.
    Mr. Horn. OK. We have lots of valleys.
    Ms. Peters. Yeah.
    Mr. Horn. OK. Ms. Peters, it's all yours. Try to summarize 
it if you can. Take your time.
    Ms. Peters. Yes. Good morning, Chairman Horn and members of 
the subcommittee. I'm pleased to appear here today on behalf of 
CACI, a systems integration company located in northern 
Virginia, and ITAA, the Information Technology Association of 
America, to express our support for H.R. 1599, the Year 2000 
Compliance Assistance Act. Congressman Davis, as you know, is 
the chief sponsor of this legislation, with several cosponsors.
    I commend the chairman and the subcommittee for holding 
this hearing and urge you to support the bill which will allow 
State and local governments to acquire needed Y2K products and 
services. With only 191 days left, time is of the essence.
    In addition, not all of the systems used by these entities 
will be Y2K compliant by January 1st. Many of them were not 
deemed mission-critical but will need to be remediated during 
the year 2000. Since the bill's provisions will be extended at 
a yet to be determined date, perhaps this provides sufficient 
time for all systems to be converted.
    A key question is, why are the schedules so attractive? 
That's because they work. They work quickly. The Federal 
procurement process has been greatly streamlined and has been 
extensively used by Federal agencies for some time now, and 
there are services on the schedules from a variety of companies 
that address the entire Y2K process from assessment through 
mediation and all the way through IV and V and contingency 
planning.
    As this committee knows so well, in dealing with the year 
2000, speed is a good thing and delay is the enemy. Federal 
agencies have been able to gain rapid access to a variety of 
service providers such as CACI through the schedules, and these 
ordering processes have often been completed within a number of 
days. The ease of purchase of these vital services is one of 
the reasons that State and local governments need to have this 
access. One of the most appealing features of the schedules is 
that they are contracts with the Federal Government with 
negotiated terms and conditions already in place. This includes 
negotiated labor ratings for services and products, which have 
the guarantee of preferred customer status.
    Another advantage to State and local government in gaining 
access to our Federal business partners is that it opens the 
door to service providers who have supported the Federal 
Government for 2 years or more. This gives them the added 
assurance that the companies on the schedules have successfully 
met their Federal customers' needs and have experience in 
providing Y2K products and services with skilled employees who 
understand public sector systems.
    In the case of CACI, we've been providing Y2K support for 
Federal agencies for more than 2 years, primarily through the 
schedules. We've also provided Y2K services to State and local 
governments through some State contracts, often established 
when the Congress repealed the cooperative purchasing 
provision.
    In addition to my experience with Federal, State and local 
governments, I serve as the Chair of the ITAA Year 2000 Task 
Group. I have been a member since its formation in 1995, and we 
have repeatedly been concerned that some State, but especially 
local, governments are lagging in their Y2K preparedness. Study 
after study has indicated that some local governments have 
barely started their remediation and have no contingency plans 
in place.
    It's high time for these localities to cut to the chase and 
be able to cut through red tape. We can help them by enacting 
H.R. 1599. It would give governments immediate access to 
hundreds of companies, as I learned today, 1,800 companies, 
large and small, on the schedule. This is an invaluable 
resource. There are, it's true, some States, cities and 
counties that are leaders in Y2K conversion, but there are many 
more lagging behind private sector and the Federal Government, 
and they could greatly benefit from access to these services.
    The Y2K problem is unique, not even a once-in-a-lifetime 
occurrence, and it requires bold and innovative solutions by 
Congress to pass such a bill. In many cases, Y2K problems are 
going to be felt most heavily at the local level. It's the 
local governments' success that will make a difference.
    Mr. Chairman, I know you are partial to Y2K report cards. 
As a former teacher myself, I suggest you give Representative 
Davis and his cosponsors an A for this innovative legislation. 
I would also give high marks to every Member of Congress who 
can understand that the Nation's business continuity in this 
unprecedented situation means a break from business as usual. 
Let's get on with getting it done.
    I will be glad to respond to any questions you have.
    Mr. Horn. Well, thank you very much.
    [The prepared statement of Ms. Peters follows:]

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    Mr. Horn. Now, do you have--how does the system work with 
your firm? Do you have franchises or do they operate all over 
the United States on their own?
    Ms. Peters. We have offices all over the country, about 80 
around the country.
    Mr. Horn. So you don't really--some of your adaptation in 
working on Y2K things are not left with local people that might 
have other firms work through them?
    Ms. Peters. Sometimes they do. Certainly, with the work we 
are doing in Ohio and Virginia, we have subcontractors working 
for us and companies that are subcontracting to us who are 
local firms.
    Mr. Horn. Would you essentially be--if this legislation 
passed, in your adaptation mission, you would buy off that 
schedule, I take it? Is that how it works with you?
    Ms. Peters. I don't understand your question.
    Mr. Horn. Well, if you have got people that are helping 
solve the Y2K problem of various firms around the country and 
at these governments, nongovernment, you go in and do most of 
that work to make sure they are 2000 compliant, right?
    Ms. Peters. Yes, uh-huh.
    Mr. Horn. OK. And you sometimes contract with local firms 
to use your method and approach and all that?
    Ms. Peters. Right.
    Mr. Horn. OK. That--and leading up to that, do any of the 
local firms object to you going off and doing that? I realize 
it's far different than a manufacturer.
    Ms. Peters. Right.
    Mr. Horn. But they might want to do it themselves, and 
could they, if they are under contract to you? You'd be doing 
all that, I assume.
    Ms. Peters. We wouldn't be preventing them from doing other 
work.
    Mr. Horn. So they could do--well, on your contract, could 
they go draw on the GSA schedule to fulfill your contract that 
you want them to do?
    Ms. Peters. Are you suggesting that they would do the work 
through our contract but without us?
    Mr. Horn. Yeah--no. They could use you for the advice----
    Ms. Peters. Oh, certainly.
    Mr. Horn [continuing]. And the consultant work. I'm talking 
about getting the software or maybe even hardware.
    Ms. Peters. Oh, absolutely. They could do that.
    Mr. Horn. OK. So you could both access the GSA schedule 
essentially?
    Ms. Peters. Right.
    Mr. Horn. And that wouldn't be a problem for the people 
with whom you contract if they are regulars and not just a one-
shot affair?
    Ms. Peters. Yeah, as long as we have a subcontract in place 
with them, that would not be a problem.
    Mr. Horn. OK. Because I think one of the things we are 
interested in is, on the software in particular, if that's a 
franchise or if they are trying to put it everywhere in 
America, I realize that might be their best approach, but let's 
say there's some franchise, certain computing approaches, 
programs, so forth, and I'm just interested in, is there a 
feedback coming on those? And maybe your experience would tell 
us that, Mr. Giles.
    Mr. Giles. Yeah, I think there's----
    Mr. Horn. If there's a feedback, do you get any? Do they 
say, hey, what are you doing?
    Mr. Giles. Just to further comment on what Ms. Peters said, 
typically, the tools come along and are deployed by people, and 
CACI and Keane are predominantly focused on services that 
utilize tools. The tools are commodities. It's our 
methodologies and our management that really ensure the Y2K 
solutions. So it would be unlikely that we would totally 
franchise or totally subcontract a year 2000 engagement to a 
subcontractor, even if they were going through our GSA schedule 
simply because the liabilities are too high, and we want to 
ensure that the benefits of all of our corporate knowledge were 
going to be put into play for any particular engagement.
    Mr. Horn. Now, your firm meets a lot of people, has acted 
and is asked to do certain things in a lot of different States. 
How would you sum up where the States are in America at this 
point on the Y2K compliance? And you don't have to name the 
States, but which ones are successes in a way? And if you want 
to name them, fine, and there are others that aren't successes, 
where do you think the mistakes were made by some States in how 
they organized to get the job done?
    Mr. Giles. I think just as the Federal Government has its 
A's and its F's, within each State agency there are A's and 
F's, except they don't for the most part have anybody giving 
them report cards. So their intention isn't focused as well in 
many of the States.
    Keane is located in 26 States around the country, and we 
are doing State and local business in probably 20 States or so. 
I would have to say that States that I'm personally involved in 
run across the gamut, not only from State to State but within 
States. We have found that States that are more dependent upon 
financial information seem to have gotten the message early on, 
started working more quickly. Those that aren't as financial 
information centered have waited a long time to get started 
because the urgency just didn't seem to be there at the 
beginning.
    The States that we are finding that have been more 
successful are the ones that had a well-crafted plan laid out 
at the very beginning and an organized approach to making sure 
that most or all of their agencies are adhering to a standard 
methodology or standard approaches.
    Mr. Horn. Where those success stories are, was that because 
the Governor was very active or the Governor's department of 
finance or department of organization and management?
    Mr. Giles. Yeah, I would say that whenever there is 
executive leadership and administration leadership on these 
issues we have encountered a lot more success. Whenever there's 
leadership at the top, there's always a natural ability to get 
things done more quickly, more focused.
    In other agencies or other States, I've found that the 
States that thought they were going to wait for a silver bullet 
to come along were the ones that were fooled. We have not 
encountered a silver bullet. The tools are enabling devices, 
but they are not the end-all solutions. The States that have 
depended on silver bullets coming along are going to have to 
resort to the pick and shovel method, and that's where I 
believe the GSA schedule can help the most.
    Ms. Peters. May I comment?
    Mr. Horn. Sure.
    Ms. Peters. Of the States that I think are in pretty good 
shape, and I will just stick my neck out and name a few, 
certainly Washington, Oregon, California to some extent, 
Maryland and Virginia, New York, Ohio, those were all States 
that put into place some sort of procurement vehicle for Y2K 
service and products, but they did it 2 or 3 years ago, and it 
took in some cases many months to get that vehicle in place. I 
think about the shortest turnaround I know about with a State 
was something like 3 months.
    The point of this legislation is to give people access now 
to a schedule that's in place. States don't have time to 
develop some sort of procurement vehicle now, and for that 
reason we need to give them a vehicle that's easy to use and 
available because the time is gone for putting those in place.
    Mr. Horn. Do any of you have any estimate from your own 
pricing system where--how much you would save if the products 
that GSA has a bargaining with were used by you as part of your 
adaptation and implementation process? Would you say 5 percent 
or 2 percent or what are we talking about here in real money?
    Mr. Giles. There are economies of scale. There are quite a 
few States that have so-called convenience contracts that are 
somewhat similar to the GSA schedule, a lot of vendors that 
they can select from fairly easily. For the most part, those 
convenience contracts have as their basis pricing from GSA's 
schedule. The States are aware of GSA's schedule contracts, and 
they use them often as a basis for that. In those States that 
have tracked their pricing to the GSA schedules, unless we 
negotiated a discount independently, they would probably not 
save a lot of money, but they would indeed some time perhaps.
    In other States, we would probably be able to save them 
money, 5 percent, 10 percent I think is probably an outside 
number. It would have to be on a case-by-case basis, though.
    Mr. Horn. Now, we have a lot of people in the country 
saying they can really help firms, adapt them. They are 
bringing people that know COBAL out of retirement and so forth. 
What's your impression? Are most of these legitimate or are 
some just saying they can do it and when the chips are down 
nothing much has changed?
    Mr. Giles. One of the things that Keane has maintained all 
along, and I believe our other competitors in Y2K services 
area, is Y2K is a management problem more than it is anything 
else. It is difficult to bring a tool based or a commodity 
based solution into place and make it successful. And many of 
the companies that want to sell a COBAL body or a silver bullet 
solution that's not surrounded with a management and a 
methodology approach are not successful because they are not 
looking comprehensively at the problem with a comprehensive 
solution. So we have not had a lot of success in relying on 
those sorts of firms. In some cases, we will subcontract to 
them and bring them into the overarching solution, the 
management techniques and methods that we have.
    Mr. Horn. We have been preaching that management point 
since April 1996, so I'm glad that's followed out. I think it's 
pretty obvious that chaos sort of reigns when you don't have 
decent management.
    Mr. Giles. Indeed.
    Mr. Horn. Now, has Keane worked for any of the Federal 
executive departments and agencies or have you been mostly 
working with the States?
    Mr. Giles. No. States. Our private or public sector 
business is about 15 percent or $175 to $200 million of our 
revenues per year. I would say approximately a third to a half 
of that is in the Federal sector. We have done a lot of Y2K 
business across the analysis to independent verification, 
validation and everything in between for at least 12 to 15 
agencies.
    Mr. Horn. Now, how does that happen? Does somebody come to 
you because you've got a reputation in the area or do you talk 
to who with an agency and does GSA route in or do you just deal 
directly with the particular agency or department? How does it 
work?
    Mr. Giles. Five years ago we knocked on a lot of doors that 
didn't open up because no one wanted to talk about the year 
2000 in the Federal Government. That's when our commercial 
sector really started paying attention to the year 2000. I 
would say several years ago agencies started listening, and a 
year or two ago, agencies started calling us up to either begin 
remediation for them but recently to perform independent 
verification, validation services on efforts that have already 
been under way. So we've kind of matured through this process 
as the market has and vice versa. Many agencies are using our 
GSA schedule for these services. Others are using their own IT 
IQ contracts for us to provide them services.
    Mr. Horn. In your testimony you said, ``funding 
documentation requirements and the local procurement statutes 
will test the effectiveness of the GSA scheduled solution.'' 
Can you explain what you meant by this and how the local 
procurement laws and regulations would affect the ability of 
State and local governments to procure off the Federal supply 
schedules?
    Mr. Giles. I have found that even within the Federal 
Government, whenever an agency is using somebody's else's 
contract vehicle, whether it's a GSA schedule or whether it's 
an IT IQ contract, GIWAC or what have you, there is always an 
education, orientation and negotiation process that goes on 
within the buying agency's procuring shop. They tend to want to 
do things in-house. They tend to want to stand behind whatever 
their particular agency's regulation--acquisition regulations 
are; and sometimes there is a lag, if you will, to overcome 
that.
    I believe--and particularly when it comes to the whole 
funding document and funding process, how do you transfer 
funds? How do you get the right signatures within these 
procurement shops and contracts groups and through their legal 
counsel to expedite the process? I don't think it will be any 
less daunting a test than in the State and local agencies, 
particularly because they are dealing with an entirely 
different government entity.
    Mr. Horn. Ms. Peters, has your experience with CACI been 
about the same as Mr. Giles where 3 or 4 years ago you didn't 
have any open doors and awareness came and then panic came 
and----
    Ms. Peters. Right, right.
    Mr. Horn [continuing]. Et cetera? Is that the way your 
situation has gone?
    Ms. Peters. Yes. I would say that about half of our Y2K 
business is with Federal agencies and the other half with State 
and local governments. In a number of cases, Federal customers 
have already been our customers and have called us up and said, 
can you help? Sometimes we get calls from people. Often they 
will call and say, I need Y2K support. Do you have a GSA 
schedule? Because they know if we have a GSA schedule that, in 
fact, we can probably get something in place and get work 
started within a matter of days because GSA doesn't have to 
intervene. We just have to verify through our schedule number 
that we, in fact, have a contract in place with the Federal 
Government, and it's a matter of agreeing on labor categories 
which are already set and kinds of services and products, if 
they are relevant, and then we move forward, and so it can be a 
very simple and very expedient process. It's a matter of being 
willing to trust that process.
    I certainly have some instances with Federal agencies where 
we set out to do some Y2K work through an internal vehicle or a 
GIWAC of some kind. In one case, it took 6 months to get the 
work started.
    Mr. Horn. Now, is that because of their procurement system 
in this particular area?
    Ms. Peters. Right, it was the internal agency's procurement 
system.
    Mr. Horn. Did they have a chief information officer?
    Ms. Peters. Yes.
    Mr. Horn. Was that a helpful position to bang heads?
    Ms. Peters. Not in that particular situation. It has been 
in others.
    Mr. Horn. Yeah. I was wondering because, during this 4 
years, shall we say, since 1996 up, you've got more and more 
chief information officers, and they're better and better in 
many cases than it was before 1996. So I just wondered how 
helpful they could be. They're supposed to report directly to 
the Secretary or the Deputy Secretary, and unless they are just 
sloughed aside somewhere and somebody says, ``oh, yeah, we've 
got one of those. Where is he or she?''
    Ms. Peters. I think as the visibility of the CIO has 
increased and they have gained in authority that they've been 
able to be much more effective.
    Mr. Horn. Good.
    Ms. Peters. And certainly can make some differences. But we 
also have agencies who have normally dealt with us through 
their own vehicles who have gone to the GSA because it's easier 
and, in some cases, less expensive.
    Mr. Horn. Yeah. Well, that's always interesting.
    You heard some dates passed around here. Mr. Davis has 
2002. The OMB, Ms. Lee speaking as Deputy Director for 
Management, says it ought to end in June 2000; and the GAO has 
a view on it also, as we heard from Mr. Willemssen.
    By the way, Mr. Willemssen, if you have some sum-up things 
here, I'd like you at the table, and feel free to get into this 
one because this is one of the last two or three questions.
    So, do you have any feeling on how long that authority 
should last for the schedule?
    Ms. Peters. I think June 2000 is unrealistic in terms of 
organizations being done. We've been focusing and talking about 
mission-critical systems for some time now because those are, 
obviously, the ones that have to be dealt with first. But in 
most organizations, mission-critical systems can comprise as 
little as 10 percent of the whole organization systems, and 
while there are some systems that will fade away, they won't 
work and nobody will notice, it won't be 90 percent of the 
systems that will fade away. So it seems to me one of the 
things we really have to deal with after the year 2000 begins 
is all of the nonmission-critical systems or the mission-
enabling or mission-essential systems that will also have to be 
fixed and dealt with, and I think you need at least a year, and 
that's probably pushing it.
    Mr. Giles. I would agree. June 2000 will only allow some of 
the temporary fixes that people have put in place to cross over 
the year 2000 boundary to fail.
    My concern would be these band-aids that have been put on 
some of these systems that would fail after June 2000 which 
would cause the fire drill that would require some new or some 
easy access to contract vehicles after everybody's guard's let 
down because January 1st has already gone, we create some 
problems. I would advocate that we at least let it go into the 
first quarter of calendar year 2001, because you get a full-
year cycle, you've cleared out everybody's fiscal year 
boundaries, and you've got some postmortem assessment time 
after that year boundary has been crossed to determine what 
your procurement actions and your responses need to be.
    Mr. Horn. Some of these agencies that reflect some of our 
13 appropriations subcommittees are obviously going to be 
seeking long-overdue upgrades in their equipment, and that 
could last, as you suggest, I think through 2001 and maybe even 
2002, given the budget cycle and how much you can do in a 
particular year. Do you think that needs an even longer 
extension than Mr. Davis wanted in his bill? Should it be 2003 
or what?
    Mr. Giles. That's going to be conditional. I mean, we are 
predicting here, and there's one thing that I found out about 
year 2000 problems, you don't predict anything very well with 
them. They crop up where you don't expect them.
    I would think that a reasonable procurement cycle to allow 
the procurement for any particular year 2000 fix with hardware 
and software be allowed to gestate. I don't know that needs to 
be until the year 2002, but what I am suggesting is, the 
systems that we've dealt with, I think the preponderance of 
them would be--would show their stripes, whether they are Y2K 
compliant after a full-year cycle.
    Mr. Horn. Mr. Willemssen, any additions you'd like to make?
    Mr. Willemssen. One related comment in this area is that 
there can actually be Y2K problems that occur that aren't 
actually noticed for many, many months afterwards, especially 
in financial-oriented systems, where a problem may have 
happened but has not been picked up until many months later by 
senior management, and when they start investigating, they 
uncover the full exposure of what that problem is. So that also 
points to the need to have this--the deadline beyond June 2000.
    Mr. Horn. Well, I thank you for that, and I thank you and 
the previous panels. We obviously want to help State and local 
governments in their efforts to ready their computers for the 
year 2000, and this bill, while it's limited in scope, clearly 
does target that significant problem. As the legislative 
process continues, we must also remain mindful of the bill's 
impact on the businesses and vendors who are supplying year 
2000 products and services.
    I want to insert in the record at the beginning, after Mrs. 
Biggert as vice chairman, please put the opening statement of 
the ranking member of the Democratic side, Mr. James Turner, 
the gentleman from Texas, and that will be put in as read.
    I now want to thank the subcommittee staff for the hard 
work they've done on such short notice. Mr. J. Russell George 
is the third one in on my left and against the wall, the staff 
director and chief counsel. Randy Kaplan is over here with the 
flag backing him up, is the counsel; and Matt Ryan at the other 
end is the senior policy advisor.
    The one that did the most to set up this particular hearing 
is to my immediate left, Patricia Jones. She's a professional 
staff member and congressional fellow, which is a great 
program.
    I happened to be in it in 1958-1959, so I'm well aware of 
it. You weren't born in 1958-1959, I don't think, but that was 
the fourth year of the program; and it's a good program run by 
the American Political Science Association to turn around the 
attitudes of the profession of political science; and we did 
it, and that's--so it was all Presidential executive oriented, 
and every great political scientist was working for Roosevelt 
in the Second World War.
    This program has resulted in probably 400 books that have 
come out of it of the fellows in the program. And she is on 
loan from the National Security Agency [NSA], and we are 
delighted to have her with us. And we wish you would educate 
all your colleagues in the executive branch when you go back 
there, but smile a lot when you do that because they won't 
believe you, that we work hard.
    And Bonnie Heald, our director of communications, is over 
there, second in from Mr. Ryan; and Grant Newman, our clerk. 
There he is. And we've got a few interns--Paul Wicker. Is Paul 
around? He's down there working. You know what interns--they 
slave all summer. Justin Schlueter is the other intern and 
Lauren Leftin, intern.
    On the other side, we have Faith Weiss as minority counsel; 
Earley Green as minority staff assistant.
    And our official reporter for this hearing, Melinda Walker. 
Melinda, thank you very much. We appreciate it.
    With that, this hearing is adjourned.
    [Whereupon, at 12 noon, the subcommittee was adjourned.]

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