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






 
 Y2K AND CONTINGENCY AND DAY 1 PLANS: IF COMPUTERS FAIL, WHAT WILL YOU 
                                  DO?

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

                             JOINT HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
                      INFORMATION, AND TECHNOLOGY

                                 of the

                     COMMITTEE ON GOVERNMENT REFORM

                                and the

                       SUBCOMMITTEE ON TECHNOLOGY

                                 of the

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 29, 1999

                               __________

                     Committee on Government Reform

                           Serial No. 106-51

                          Committee on Science

                           Serial No. 106-54

                               __________

   Printed for the use of the Committee on Government Reform and the 
                          Committee on Science


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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
61-119 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 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana


                      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 Director
                          Chip Ahlswede, Clerk
                    Trey Henderson, Minority Counsel
                          COMMITTEE ON SCIENCE

       HON. F. JAMES SENSENBRENNER, Jr., (R-Wisconsin), Chairman
SHERWOOD L. BOEHLERT, New York       RALPH M. HALL, Texas, RMM**
LAMAR SMITH, Texas                   BART GORDON, Tennessee
CONSTANCE A. MORELLA, Maryland       JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            JAMES A. BARCIA, Michigan
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
JOE BARTON, Texas                    LYNN C. WOOLSEY, California
KEN CALVERT, California              LYNN N. RIVERS, Michigan
NICK SMITH, Michigan                 ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland         MICHAEL F. DOYLE, Pennsylvania
VERNON J. EHLERS, Michigan*          SHEILA JACKSON-LEE, Texas
DAVE WELDON, Florida                 DEBBIE STABENOW, Michigan
GIL GUTKNECHT, Minnesota             BOB ETHERIDGE, North Carolina
THOMAS W. EWING, Illinois            NICK LAMPSON, Texas
CHRIS CANNON, Utah                   JOHN B. LARSON, Connecticut
KEVIN BRADY, Texas                   MARK UDALL, Colorado
MERRILL COOK, Utah                   DAVID WU, Oregon
GEORGE R. NETHERCUTT, Jr.,           ANTHONY D. WEINER, New York
    Washington                       MICHAEL E. CAPUANO, Massachusetts
FRANK D. LUCAS, Oklahoma             BRIAN BAIRD, Washington
MARK GREEN, Wisconsin                JOSEPH M. HOEFFEL, Pennsylvania
STEVEN T. KUYKENDALL, California     DENNIS MOORE, Kansas
GARY G. MILLER, California           VACANCY
JUDY BIGGERT, Illinois
MARSHALL ``MARK'' SANFORD, South 
    Carolina
JACK METCALF, Washington


                       Subcommittee on Technology

               CONSTANCE A. MORELLA, Maryland, Chairwoman
CURT WELDON, Pennsylvania            JAMES A. BARCIA, Michigan**
ROSCOE G. BARTLETT, Maryland         LYNN N. RIVERS, Michigan
GIL GUTKNECHT, Minnesota*            DEBBIE STABENOW, Michigan
THOMAS W. EWING, Illinois            MARK UDALL, Colorado
CHRIS CANNON, Utah                   DAVID WU, Oregon
KEVIN BRADY, Texas                   ANTHONY D. WEINER, New York
MERRILL COOK, Utah                   MICHAEL E. CAPUANO, Massachusetts
MARK GREEN, Wisconsin                BART GORDON, Tennessee
STEVEN T. KUYKENDALL, California     BRIAN BAIRD, Washington
GARY G. MILLER, California

                               Ex Officio

F. JAMES SENSENBRENNER, Jr.,         RALPH M. HALL, Texas+
    Wisconsin+




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 29, 1999.................................     1
Statement of:
    Dyer, John, Principal Deputy, Social Security Administration; 
      Marvin J. Langston, Deputy Assistant Secretary of Defense 
      for C3I and year 2000, Department of Defense, accompanied 
      by Rear Admiral Bob Willard and Bill Curtis, Department of 
      Defense; John Gilligan, Chief Information Officer, 
      Department of Energy; Paul Cosgrave, Chief Information 
      Officer, Internal Revenue Service; and Norman E. Lorentz, 
      senior vice president, Chief Technology Officer, U.S. 
      Postal Service.............................................    47
    Willemssen, Joel C., Director, Civil Agencies Information 
      Systems, U.S. General Accounting Office; and John Spotila, 
      Administrator, Office of Information and Regulatory 
      Affairs, Office of Management and Budget...................    12
Letters, statements, etc., submitted for the record by:
    Cosgrave, Paul, Chief Information Officer, Internal Revenue 
      Service, prepared statement of.............................    86
    Davis, Hon. Thomas M., a Representative in Congress from the 
      State of Virginia, prepared statement of...................    11
    Dyer, John, Principal Deputy, Social Security Administration, 
      prepared statement of......................................    50
    Gilligan, John, Chief Information Officer, Department of 
      Energy, prepared statement of..............................    75
    Horn, Hon. Stephen, a Representative in Congress from the 
      State of California, prepared statement of.................   113
    Langston, Marvin J., Deputy Assistant Secretary of Defense 
      for C3I and year 2000, Department of Defense, prepared 
      statement of...............................................    62
    Lorentz, Norman E., senior vice president, Chief Technology 
      Officer, U.S. Postal Service, prepared statement of........    91
    Morella, Hon. Constance A., a Representative in Congress from 
      the State of Maryland:
        Letter dated October 15, 1999............................   102
        Prepared statement of....................................     3
    Spotila, John, Administrator, Office of Information and 
      Regulatory Affairs, Office of Management and Budget, 
      prepared statement of......................................    36
    Turner, Hon. Jim, a Representative in Congress from the State 
      of Texas, prepared statement of............................     8
    Willemssen, Joel C., Director, Civil Agencies Information 
      Systems, U.S. General Accounting Office, prepared statement 
      of.........................................................    14


 Y2K AND CONTINGENCY AND DAY 1 PLANS: IF COMPUTERS FAIL, WHAT WILL YOU 
                                  DO?

                              ----------                              


                        FRIDAY, OCTOBER 29, 1999

        House of Representatives, Subcommittee on 
            Government Management, Information, and 
            Technology of the Committee on Government 
            Reform, joint with the Subcommittee on 
            Technology of the Committee on Science,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Connie Morella 
(chairwoman of the Subcommittee on Technology) presiding.
    Present: Representatives Morella, Davis, and Turner.
    Staff present from the Subcommittee on Government 
Management, Information, and Technology: J. Russell George, 
staff director and chief counsel; Matt Ryan, senior policy 
director; Bonnie Heald, communications director and 
professional staff member; Chip Ahlswede, clerk; Rob Singer, 
staff assistant; P.J. Caceres and Deborah Oppenheim, interns; 
Trey Henderson, minority counsel; and Jean Gosa, minority staff 
assistant.
    Mr. Davis. This hearing will come to order. I would ask 
unanimous consent that the cochair of the House Task Force on 
the Year 2000 Problem, the Honorable Connie Morella of 
Maryland, chairwoman of the House Science Subcommittee on 
Technology, chair today's meeting.
    Without objection, so ordered.
    Mrs. Morella. Thank you. Thank you, Mr. Davis.
    I want to welcome all of you on, the past 3\1/2\ years, my 
Science Committee Technology Subcommittee and the Government 
Reform Committee's Government Management, Information, and 
Technology Subcommittee, chaired by Steve Horn of California, 
who incidentally couldn't be here this morning. We have been 
engaged in the review of the year 2000 computer problem with a 
series of joint hearings and initiatives. Our two 
subcommittees, which comprise the House Y2K Working Group, have 
been pushing for greater Federal Y2K focus to correct the 
millennium bug.
    Since we first began our oversight hearings, we've seen 
vast and significant progress from our Federal agencies. And in 
most instances, Y2K was finally mandated as an agencywide 
priority. Management leadership was required where previously 
there was none, and we're very pleased with the results we've 
seen.
    We have been comforted by the actions of a greater majority 
of Federal agencies. But unfortunately, with only 63 days 
remaining before the January 1st, 2000, deadline, there still 
remains some concern about certain agencies, especially with 
regard to their contingency and day 1 plans. To be fully 
prepared for Y2K, every organization must ensure that their day 
1 strategies are ready and that practical contingency plans are 
in place.
    Contingency plans provide assurance that a Federal agency 
has covered all predictable possibilities to ensure that its 
mission-critical operations can continue without disruption.
    Our day 1 strategy provides a comprehensive set of actions 
to be executed by a Federal agency during the last days of 1999 
and the first days of 2000. For those who may have watched the 
recently concluded World Series on television, you may have 
seen an advertisement, teaser, for an upcoming network movie on 
Y2K. In an effort to hype the movie and to create interest in 
viewers, in the teaser an ominous voice boomed, Y2K, what if 
they're wrong?
    Despite its questionable entertainment value, I think the 
movie is the one that will actually have it all wrong. One of 
the most effective methods, however, to survive the movie's 
hype and to calm any fears that may result is for Federal 
agencies to have effective contingency plans and day 1 
strategies that provide all Americans adequate assurances our 
Federal Government will not be adversely attacked and affected 
by Y2K.
    Recently, the Office of Management and Budget [OMB], 
provided guidance to assist Federal agencies in preparing day 1 
plans. These plans are prepared for finite timeframes, like the 
end of December through early January, to help mitigate any 
problems that may arise. They should address the full scope of 
agency activity that will be underway during that period.
    For example, agencies must prepare to mitigate the impact 
of possible failures in internal systems, buildings and other 
infrastructures. Furthermore, the plan should include agency 
efforts to assess the Y2K impact on its business partners, such 
as State and local governments, in delivering the Federal 
programs.
    I'm pleased to welcome representatives of a number of 
Federal agencies to discuss and review the status of their 
contingency plans and day 1 strategies. And I look forward to 
the testimony from the Social Security Administration, the 
Department of Defense, the Department of Energy, the Internal 
Revenue Service and the Postal Service. And in our first panel, 
we will hear from the General Accounting Office and the Office 
of Management and Budget.
    [The prepared statement of Hon. Constance A. Morella 
follows:]

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    Mrs. Morella. And it's now my pleasure to recognize the 
ranking member on the Subcommittee on Government Management, 
Information, and Technology, the gentleman from Texas Mr. 
Turner.
    Mr. Turner. Thank you, Madam Chairman. I want to commend 
you and Chairman Horn, the chairman of my subcommittee, for 
your diligence in trying to be sure that we are ready in the 
Federal Government for January 1, 2000.
    We all know that the public faces some risk that critical 
services provided by both the government and the private sector 
may be disrupted by the Y2K computer problem. And as we get 
closer to January 1st, we need to redouble our efforts to be 
sure that any disruption is reduced to a minimum.
    Because this is the first time we've ever dealt with a 
problem of this nature and magnitude, I'm sure that we should 
expect the unexpected. And for that reason, we've asked every 
Federal agency to have in place a business continuity and 
contingency plan, and a day 1 strategy to reduce the risk of 
failures occurring in their systems, programs, and services.
    Without such plans, when unpredicted failures occur, 
agencies would not be able to have a well-defined response, nor 
have adequate time to remedy whatever problem may arise. So I'm 
confident that the review of the agencies' efforts today will 
be productive. I think if the Federal Government reaches 
January 1st, 2000, without significant disruptions, a large 
part of that credit will be due to the work of these two 
subcommittees that for many months now have diligently worked 
to be sure that the Federal Government is prepared and ready.
    Thank you, Madam Chairman. I look forward to hearing the 
testimony today.
    Mrs. Morella. Thank you very much, Mr. Turner. And I 
appreciate your being here, too.
    [The prepared statement of Hon. Jim Turner follows:]
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    Mrs. Morella. There's recognition that Congress on the 
House side is not in session today; therefore, a number of the 
members of the subcommittees will be reading the testimony and 
discussing it upon their return.
    It's now my pleasure to recognize for an opening statement 
Mr. Davis, who is the chairman of one of the subcommittees of 
Government Reform, the District of Columbia Subcommittee, and 
is a member of the Subcommittee on Government Management, 
Information, and Technology.
    Mr. Davis. Thank you very much.
    This is the 23rd hearing of the year on the year 2000 
computer problem that this subcommittee has held during the 
first session of the 106th Congress. Over the last 3 years, the 
subcommittees have spent countless hours discussing mission-
critical systems and embedded chips. Federal departments and 
agencies have spent far more hours attempting to fix these 
potential problems.
    Most recently we have looked at the Federal programs, such 
as Medicare and Medicaid, that affect millions of the Nation's 
most vulnerable citizens, the elderly, the impoverished and the 
sick. But now with only 63 days remaining until the January 1st 
deadline, it's time to talk about the contingencies, the what-
ifs.
    What if, despite the best efforts, some computers fail? 
What if they continue working but spew out erroneous data? How 
prepared are Federal departments and agencies to cope with 
these possible situations? What are their plans? What are their 
plans for day 1, the critical days leading up to midnight 
January 1st and the days immediately afterwards?
    I'm concerned to hear that the Internal Revenue Service has 
found some unsolved problems with its inventory. Could other 
Federal agencies find similar discrepancies? Just, frankly, the 
IRS under their leadership at this point, I think, is one of 
the most progressive in terms of dealing with the computers and 
the like. The head of the IRS comes out of that industry.
    Clearly, we need to have a candid discussion on contingency 
plans today. We need to ensure that the Federal Government and 
the services it provides will not fail, whether the date is 
December 31st, 1999, or January 1st, 2000.
    Thank you.
    Mrs. Morella. Thank you, Mr. Davis.
    [The prepared statement of Hon. Thomas M. Davis follows:]
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    Mrs. Morella. And now as we usually do, we will swear in 
our witnesses, and on the first panel, Mr. Willemssen and Mr. 
Spotila.
    [Witnesses sworn.]
    Mrs. Morella. The record will show that the panelists have 
sworn to tell the truth.
    And now, as is, again, our tradition, we will give you each 
about 5 minutes, approximately, to give your testimony, knowing 
full well that your entire testimony will be included verbatim 
in the record.
    And so we will start now, as usual, with Mr. Willemssen. I 
don't know how many hearings you've been at, sir, but you 
really have been stalwart. We feel that you're part of the 
committee. Thank you, Mr. Willemssen.

  STATEMENTS OF JOEL C. WILLEMSSEN, DIRECTOR, CIVIL AGENCIES 
 INFORMATION SYSTEMS, U.S. GENERAL ACCOUNTING OFFICE; AND JOHN 
 SPOTILA, ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY 
            AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET

    Mr. Willemssen. Thank you, Chairwoman Morella, Ranking 
Member Turner, Congressman Davis. Thank you for inviting GAO to 
testify today on Y2K business continuity and contingency 
planning and day 1 planning.
    As requested, I will briefly summarize our statement. We've 
previously testified on the importance of Y2K business 
continuity and contingency planning. No one knows exactly for 
sure what the rollover period will bring, and, therefore, such 
planning is essential to helping ensure continued agency 
operations in the event that disruptions occur.
    Over time we've seen major improvements in the Federal 
agencies' efforts in business continuity and contingency 
planning. For example, in early 1998, we testified that several 
agencies reported that they plan to develop contingency plans 
only if they fell behind schedule in completing their Y2K work. 
By contrast, less than a year later, in January 1999, we 
testified that many agencies had reported that they had either 
completed or had drafted contingency plans. These improvements 
continue. For example, we reviewed agencies' most recent 
submissions to OMB of updated continuity and contingency plans 
and found that all agencies had identified key business 
processes as called for in our guidance. A key aspect of 
business continuity and contingency planning is validating or 
testing plans. It's one thing to develop a written plan, but 
quite another to see whether the plan will actually work as 
envisioned. That's why we've emphasized the need for testing of 
contingency plans.
    In reviewing the high-level plans submitted to OMB, we were 
able to identify 20 agencies that discussed their validation 
strategies. These strategies encompassed a range of activities, 
including desktop exercises and simulations. In addition to 
reviewing these high-level plans, we've previously reported on 
the business continuity and contingency planning of agencies 
and their components, and we found some uneven progress. For 
example, we found some agencies have instituted key processes, 
while other agencies still have a ways to go.
    Another important element of business continuity and 
contingency planning that has not yet been adequately addressed 
is the potential cost of implementing plans. Our guide calls on 
agencies to assess the costs and benefits of identified 
alternative contingency strategies. We also testified in June 
that OMB's assessment of agency plans should consider whether 
agencies provided estimated costs, and, if not, OMB should 
require that this information be submitted so that it is 
available on a governmentwide basis. However, OMB has not yet 
required agencies to provide these cost estimates, although we 
did identify five agencies which did so in their submissions.
    Regarding day 1 planning, earlier this month we did issue a 
guide to assist agencies in implementing their strategies. 
Briefly the objectives of a day 1 strategy are to, one, 
position the organization to readily identify year 2000 induced 
problems, take needed corrective actions, and minimize adverse 
impact on agency operations and key business processes. And 
second, it's very important that the organization be in a 
position to provide information on their Y2K condition to their 
top executives, other business partners and to the public. Our 
guidance provides a conceptual framework for helping agencies 
address those objectives.
    For the day 1 plans that were due on October 15th, OMB 
asked agencies to address seven key elements, elements such as 
a schedule of activities, contractor availability, 
communications with the work force, and communications with the 
public. A review of the submissions found that about 40 percent 
of the agencies addressed all required elements.
    Another important part of day 1 planning is ensuring that 
the day 1 strategy can actually be executed; therefore, day 1 
plans and their key processes and timetables should be reviewed 
and, if feasible, rehearsed. Our review of day 1 plans found 
that 19 agencies discussed rehearsing their strategies, 
although some did not provide specific dates of their planned 
or completed rehearsals.
    That completes a summary of my statement. And I would be 
pleased to address any questions you may have. Thank you.
    Mrs. Morella. Thank you Mr. Willemssen.
    [The prepared statement of Mr. Willemssen follows:]

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    Mrs. Morella. We now look forward to hearing from Mr. 
Spotila.
    Mr. Spotila. Good morning, Chairwoman Morella and 
Congressman Turner and Congressman Davis. Let me start by 
thanking you for your continuing interest in the Y2K problem. 
As I indicated to you in my testimony on October 6th, your 
early and continued involvement in this issue has made a 
dramatic difference in the Federal Government's preparedness.
    Before discussing our day 1 planning efforts, let me update 
you on the status of our other work. As of October, the 
agencies report that 99 percent of Federal mission-critical 
systems are compliant, an increase from the 98 percent that I 
reported earlier this month.
    This reflects notice from five more departments; 
Agriculture, Commerce, Energy, Health and Human Services and 
Transportation, that their critical systems are ready. Although 
a small number of critical systems are still not quite done, in 
all cases the agencies involved have assured us that they will 
complete their work before the end of the year. Moreover, they 
all have contingency plans in place for these systems. Compared 
to where we were just last year, this is a huge accomplishment.
    Even though we expect all of our mission-critical systems 
to be ready by January 1st, it is still important that every 
agency have a business continuity and contingency plan, or 
BCCP, in place, including a detailed day 1 plan. These plans 
describe the steps each agency will take to prepare for the 1st 
of January. They should address the full scope of agency 
activity with steps to mitigate the impact of any failures 
involving internal systems, buildings or other infrastructure.
    Agencies must be ready to assess the impact of any Y2K 
problem on their partners and constituencies and to provide 
them with appropriate assistance. They must also be ready to 
provide information about any Y2K problem to their management 
partners and the public.
    As GAO's day 1 guidance notes, effective day 1 planning 
will position an agency to identify year 2000 induced problems, 
take corrective action and minimize adverse impact on agency 
operations and key business processes. We are working closely 
with the agencies and GAO to share information about how best 
to develop effective plans. GAO and OMB have issued coordinated 
guidance to the agencies.
    My staff has reviewed agency plans and is working with 
agencies to improve those plans. We are all learning as we go. 
The work we are asking agencies to do has never been done 
before. In an organization as large and diversified as the 
Federal Government, there is no one-size-fits-all solution, and 
given this challenge, the agencies have responded well.
    Based on our initial review of agency plans, we believe 
most large agencies are on track. While they need to add more 
detail to the plans, most do address all of the critical 
elements of effective day 1 planning. A few of the larger 
agencies have had more difficulty. Here we have engaged them at 
a senior level to ensure that their efforts improve. I have 
already spoken personally with several agencies to see that 
their plans are revised to address our concerns.
    OMB staff are following up these discussions with each 
agency individually. While a few of the small and independent 
agencies have done excellent work, a number of them have 
provided incomplete plans or none at all. To help speed their 
work, we are meeting with them next week. We will have one or 
two of the agencies that provided excellent plans describe what 
the plans should entail. I note that GAO has agreed to 
participate in that meeting as well. Their work has been 
invaluable to agency progress in this area.
    After further work with the agencies, we will ask them to 
provide us with revised plans next month. From our review of 
the existing day 1 plans, we are beginning to see some patterns 
of best practices. The importance of good communications cannot 
be underestimated. If unforeseen problems arise, agencies must 
be able to communicate with their work force, their partners 
and the public.
    Assuring the ability to communicate is so important that a 
redundant communications capability should be put into place. 
The best plans provide a detailed schedule of activities that 
will take place during the rollover period. They anticipate the 
sequence and timing of such activities as shutting down 
computer systems and bringing them back up, checking their 
viability and contacting key business partners.
    The best plans ensure that the right personnel will be 
available at the right time, whether on duty or on call and 
whether on or offsite. Such personnel may be contractors or 
employees and may include building technicians, computer 
programmers, telecommunications experts, program staff, 
contracting officers, legal counsel, public affairs staff and 
senior management.
    Finally, we are aware that the Y2K transition is an 
opportunity for those who might want to disrupt agency 
activity, whether mischiefmakers or those with criminal intent. 
The best plans describe additional steps to guard against such 
security risks, whether to facilities, personnel or systems.
    We are all on a learning curve here. As we identify other 
best practices, we will share them across agencies. Such 
cooperation will continue to be essential to our success in 
preparing for Y2K. We are entering the home stretch of our year 
2000 efforts. As in any race, it is time to begin sprinting 
toward the finish. Day 1 plans are the critical last piece of 
our preparations. There will be no letup in our efforts during 
the remaining 63 days.
    Thank you for the opportunity to continue to share 
information with you on the administration's progress. I would 
be pleased to answer any questions you may have.
    Mrs. Morella. Thank you, Mr. Spotila.
    [The prepared statement of Mr. Spotila follows:]

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    Mrs. Morella. I am particularly pleased having both of you 
here, because you have been partners in trying to make sure 
that the Federal agencies, as well as the outreach and end-to-
end testing, has been taking place.
    As we start our questioning, I will start off with Mr. 
Willemssen. In your statement you mention several agencies at 
risk of not having solid, well-tested contingency plans, 
including the IRS, that will be testifying today, Federal 
Bureau of Investigations, Drug Enforcement Agency, Agency of 
International Development.
    I would like to have you tell us what you see the real-life 
consequences of not having plans ready.
    Mr. Willemssen. To the extent that agencies do not have 
contingency plans and continuity plans ready, and to the extent 
that those plans haven't been well tested, those agencies run 
the risk that in the event that disruptions occur, their 
responses to those disruptions will be more ad hoc and chaotic 
in nature, rather than very well planned with a clear roadmap 
on who is to do what and when, and who to report to who on what 
is going on.
    That is the whole basis of having these plans in place and 
testing these plans. To the extent that that isn't there, we do 
run this risk of an untrained response that is a more ad hoc in 
nature, that may not be the right response, and, therefore, the 
response may not address the Y2K problem that may have 
occurred.
    Mrs. Morella. So the planning is critically necessary even 
though that may not be the end either, there may be some other 
implications and consequences resulting from it, but far better 
than to have what could happen without those contingency plans.
    You mentioned also in your statement the Y2K risk facing 
State-run programs--this concerns me greatly--like Medicaid and 
unemployment insurance. Again, what are the consequences of not 
having those plans ready?
    Mr. Willemssen. The likely consequences in those kinds of 
benefit-driven programs is that, in the event that there are 
Y2K disruptions and contingency plans aren't ready to be 
implemented, benefits could be delayed or benefit amounts could 
be inaccurate. And, therefore, it's critically important that 
the contingency plans be pursued and be tested.
    I'm more optimistic actually in this area now because of 
some of the fine efforts of the lead Federal agencies in 
understanding that this is a critical issue, and States are 
beginning--even those States that were lagging behind--are 
beginning to address this very forcefully. So I think there's 
reason for much more optimism, even compared to just a few 
weeks ago.
    Mrs. Morella. Agencies should not be advising the public, 
should they, of possible consequences in terms of enlightening 
them?
    Mr. Willemssen. I think agencies have to make a very 
reasoned decision on what they announce to the public and what 
they don't. As a side note, many of the business continuity and 
contingency plans and day 1 strategies do have some level of 
classification such as for official use only. One of the 
reasons for that relates to something you had mentioned early 
on. There's a possible security risk to the extent that 
agencies publish too much information about what they plan to 
do in the event of a Y2K disruption. So that's something that I 
think agencies have to make a reasoned decision on.
    I think the bottom line is making sure that plans are in 
place, that they have been tested, and that all the agencies 
are poised during the rollover period to address any 
disruptions that may result.
    Mrs. Morella. Thank you.
    Mr. Spotila, according to OMB--and I very much appreciate 
your coming out with the requirement that by October 15th, the 
agencies have their day 1 plans and contingency plans in 
effect. But according to OMB, day 1 plans should include 
specific data such as personnel that should be on call or on 
duty. And I wonder, what do you believe will be the number of 
Federal employees that will be on call or on duty, as the 
statement designates, on January 1st, 2000?
    I guess what I'm asking you is, how does this compare, 
January 1st, 2000, with a regular day for the Federal 
Government?
    Mr. Spotila. We don't yet have a specific number of people 
that we anticipate will be on duty in this effort. One of the 
general comments that I made in my testimony concerning the day 
1 plans was that a number of the agencies need to supply more 
detail than they have. To some degree this is a process where 
we think we will get more specific information very quickly in 
the weeks to come.
    Certainly not everyone will be working. We anticipate in 
each case that core staffs will be available, targeted much 
more at the specific needs of agencies on an individual basis. 
Some of those needs relate to verifying that the systems are 
going to work, bringing them down, bringing them back up again. 
Some of them involve response capability. In some cases, there 
will be people on call who will not physically be onsite as the 
rollover occurs.
    We will have better information as we get closer to the end 
of the year in this regard, but we don't quite have it yet.
    Mrs. Morella. But obviously there will be a tremendous 
number of people who will be ready who will be on call, as you 
say--.
    Mr. Spotila. That's true.
    Mrs. Morella [continuing]. Ready to respond? It would be 
interesting as you continue on in the remaining couple of 
months to keep us apprised of that, too.
    And one final question, before I turn to Mr. Turner for his 
line of questioning, is that Mr. Willemssen mentioned something 
that I think you would agree with, and that is that we don't 
really have the cost estimates of what implementation is going 
to cost. And I'm curious about what you're going to do to 
require it.
    I don't think you've required it at this point, cost 
estimates. And I think they should be something that we should 
be able to scrutinize.
    Mr. Spotila. We have had discussions with the agencies on 
this subject. Our sense has been that the most important focus 
for the agencies right now should be getting their plans, their 
detailed plans, ready so that we know what it is they're going 
to do or what they feel they will need to do.
    From a costs standpoint, the agencies understand at the 
moment that they are expected to absorb these costs initially; 
they all have resources, we think, to do that. We made sure to 
tell them that if any feel that budget considerations are 
interfering with their plans, they need to let us know, and we 
will make sure that resources are available.
    We certainly will come back to the question of cost 
estimating, but we need to do it after the plans are ready in 
more detail so we know what it is that we are actually dealing 
with. It's not something we're insensitive to, but it is true 
we have not made this a priority equal to getting ready for the 
event itself.
    Mrs. Morella. You might consider having at least some 
estimates submitted to scrutinize, because it was my 
understanding that it was in August 1999 when I think it was 
Department of Health and Human Services estimated that it would 
cost about $99 to implement contingency and day 1 plan.
    Mr. Spotila. I think that we will, in fact, ask for 
estimates. We've actually gotten some of them in already. We've 
encouraged agencies to give us estimates as they are ready to 
do so, and I think as we proceed closer to the end of the year, 
that is something we will be asking of them.
    Mrs. Morella. Thank you.
    I am now pleased to recognize Mr. Turner for his line of 
questioning.
    Mr. Turner. Thank you, Ms. Morella.
    In my opening comments I made reference to the fact that we 
probably should all put ourself in the state of mind where we 
are ready to expect the unexpected. And one of the things that 
has concerned me, even after all of our efforts to prepare for 
Y2K it still seems to be very possible whether it's through 
efforts by those who would do harm to our country or simply 
from those who are on some college campus disseminating 
information over the Internet, that perhaps we could have on 
January 1st a lot of misinformation designed with ill intent or 
simply out of a spirit of being a prankster to try to mislead 
people and to cause people to take certain actions they might 
not otherwise take based on the information that that is 
disseminated.
    I was wondering whether or not we have considered, or 
perhaps Mr. Koskinen in his efforts has considered creating 
some type of rapid response team that would act as a 
clearinghouse as we enter the new year to provide a source of 
credibility regarding misinformation or information that may 
circulate, whether it be over the Internet or through some 
other medium, about the existence or nonexistence of Y2K 
problems.
    It seems to me that that type of panel would need to be 
people of some renown who bear credibility, perhaps a three-
member panel of members who would be the spokespersons 
regarding Y2K problems. Madam Chairman, I know you get the same 
kind of e-mail I do. There's always some kind of rumor 
circulating on the Internet about something the government is 
about to pass or put a tax on the Internet or something like 
that, and we all end up writing these letters back saying 
that's just a rumor, there's no basis, there's no legislation 
pending on that subject.
    It just strikes me that on January 1st, there's a 
possibility that some may try to circulate misinformation that 
might cause people to take actions that otherwise they would 
not take. If we had a panel in place of credible individuals 
through which all of that information could clear, then they 
could turn to the agencies and turn to the private sector to 
get the truth, and then be in a position to respond through the 
media regarding what are the facts. Perhaps, we could avoid 
some problems that might otherwise occur.
    Have we given any thought to that, or have any of the 
efforts of Mr. Koskinen directed in that way?
    Mr. Spotila. Actually, Congressman, we've been giving quite 
a bit of thought to that. Let me address it in two respects. 
First of all, as I mentioned in my testimony, from a security 
standpoint we're asking each agency in its day 1 plan to 
address the question of protecting systems from anyone who 
would cause mischief. That's an element here.
    With respect to misinformation that might be put out, here, 
too, agencies will be focused on how that information might 
relate to them individually. In a coordinated way, the 
Information Coordination Center will help, John Koskinen and 
the President's Council on Year 2000 Conversion have a plan for 
collecting and exchanging information in this area, working 
closely with their private sector coordinators and others 
throughout State and local government to be in a position to 
verify what information is true and to be able to disseminate 
it.
    The Coordination Center will play a key role in terms of 
overall coordination, even though we are also looking at 
individual agencies to be prepared to address agency specific 
concerns.
    Mr. Turner. Well, I would urge you to maybe pursue it a 
little bit further, because I think if we could enlist the 
assistance of some high-profile personalities who have 
credibility, a Walter Cronkite type who would be a 
spokesperson, along perhaps with one or two others. I don't 
think it's going to help if there's some rumor or 
misinformation floating, say, on the Internet, and it's 
reported that the government denies the report. Unfortunately, 
we all know the government oftentimes does not have the 
credibility that we might need.
    So it would seem to me if we could attach a personality to 
that effort that would be known to be trustworthy by the 
American public, perhaps we could avoid some problems that 
otherwise might occur.
    Mr. Spotila. I think that's a very constructive suggestion. 
We certainly will bring that up with John Koskinen and see what 
can be done in that area.
    Mr. Turner. Thank you. I don't have any other further 
questions.
    Mrs. Morella. What are you going to be doing, Mr. Spotila, 
on that day? Where are you going to be?
    Mr. Spotila. I think I will--actually, I asked my staff to 
tell me where they think I should be.
    Mrs. Morella. Never leave yourself so wide open.
    Mr. Spotila. I'm certainly making myself available to be 
right on duty here. But we're trying to determine whether that 
would be positive or negative in the view of the people that 
are actually going to be dealing with our problems.
    Mrs. Morella. But I appreciate Mr. Turner asking that 
question because as we go on, I would like to find out, you 
know, specifically how that ICC is going to operate.
    Mr. Spotila. Yes.
    Mrs. Morella. I have a question, the same question actually 
for both of you. IRS is going to be a witness on our next 
panel, and recently IRS reported that the poor quality of its 
computer inventory poses a high risk to its Y2K effort. I quote 
that exactly. That was quoted in a letter to Mr. Archer, the 
chairman of the Ways and Means Committee. And it says the 
quality of the IRS's inventory currently poses a high risk to 
the Y2K effort.
    Therefore, my question to both of you is, in your opinion, 
what can be done to--or what can the IRS do to mitigate that 
potential Y2K problem, those failures, and does the IRS have a 
practical contingency plan in place? They will have an 
opportunity to respond, but I wanted to hear from you before we 
dismiss this first panel.
    Mr. Willemssen. Well, one, Chairwoman Morella, I think it 
is of concern to hear a major Federal agency still talking 
about the term ``inventory'' at this late date. In testifying 
on the IRS, which I did as far back as February 1997, I know 
the IRS has a far-flung information systems structure, many of 
their systems out in the field, many of the systems homegrown, 
so it is a difficult endeavor to get a handle on all of those.
    In terms of your direct question on what should they do, I 
think it's just ensuring that their key business processes, 
whether they're tax refunds or tax processing, however IRS has 
defined them, that they have thoroughly decomposed those 
processes and identified their key systems that they need to be 
ready in order to do business as usual come the turn of the 
year.
    Mrs. Morella. Do they have time to do that?
    Mr. Willemssen. I think one thing in their favor is given 
the background of the Commissioner of the Internal Revenue 
Service, he's made it very clear this has been a top priority 
for him for some time, and he also made it clear, I think, in 
hearings I've been at with him that this was a massive 
undertaking, that it had risks associated with it. And I think 
there is time to focus again on those most important business 
processes and decompose them and focus on the supporting 
systems.
    Mrs. Morella. Mr. Spotila.
    Mr. Spotila. From our perspective, I agree completely with 
Mr. Willemssen in all of those respects. We're concerned. We 
have not had quite as much information of IRS as we would like 
to see. We recognize the importance of this, and we certainly 
are going to do what we can do to help the situation.
    Mrs. Morella. Well, we will be interested to also hear from 
IRS about, you know, what they are doing, particularly in light 
of that rather frightening statement.
    Let me ask you about GAO, you recently reported that only 
40 percent of Federal agencies submitted complete contingency 
plans with information on the seven criteria that you have 
established. What are you going to do to make sure that 
agencies complete these plans?
    Mr. Willemssen. Well, in terms of their day 1 strategy and 
the required seven elements of OMB, I would concur with Mr. 
Spotila's comments that OMB is working with these agencies to 
followup where there are holes and where more information is 
needed. I think we also have to keep in mind that many agencies 
were out front and had a lot of this detail all pulled 
together; many did not.
    The requirement for day 1 strategies was initially 
contained in OMB's September 13th quarterly report summary. So 
that was the first time a requirement was sent out. OMB's 
guidance on what to include, I believe, came out on October 
13th, and then the strategies were due 2 days later.
    So we're talking about a very compressed time. I think we 
have to give the agencies that did get a late start some 
recognition that they have time to improve, but this has to be 
a top priority at this point in time. I think OMB shares that 
view, and through our reviews and evaluations, we have not seen 
evidence of agencies resisting day 1 concept. What they don't 
have in many cases are all the details worked out yet, and 
that's what they have to focus on now.
    Mrs. Morella. I know that GAO is the one who has suggested 
that OMB come up with the criteria, which they did so well, 
established the October 15th deadline. Now, in light of the 
question that I asked Mr. Willemssen, which is directed to you 
now, do you have another deadline that you have established 
where you say you now must get the responses, your contingency 
plans in effect by another deadline?
    Mr. Spotila. We're proceeding on two levels: one, 
individually with agencies, based on what they have submitted 
to us, or in a couple of instances where they have not 
submitted to us, to work with them to get this fixed.
    We've also told them informally that we will be asking them 
for a new updated report next month, so there is going to be a 
new November deadline for them. That has not formally gone out 
yet, but they have all been advised that it is coming. Our 
priority has been working with GAO and working with the 
agencies to get these plans in their proper shape.
    Mrs. Morella. It appears as though they may be working very 
long days in order to do it, and I think you should set an 
early November deadline for that, too.
    Mr. Spotila. We intend to.
    Mrs. Morella. I guess I just have one more question so we 
can get on to our next panel. And I know that you have always 
been available to respond to other questions that we may 
submit.
    Another day 1 strategy requirement is to include data on 
contractor availability. Do you believe that this requirement 
is being followed, being overlooked? Because I think it's 
exceedingly important, and we've discussed this in a number of 
our other hearings, exceedingly important for interoperability 
and for the successful operation of many of the Federal 
mission-critical systems.
    What have your investigations revealed thus far with 
respect to Federal contractors?
    Mr. Willemssen. In taking a look at the strategies that 
have been submitted thus far, it's a bit of a mix. Some of the 
agencies haven't addressed the issue, and don't know the 
availability. Other agencies are still working on this. I think 
this is a fairly critical issue, and it's critical from a 
couple respects. One is making sure from a governmentwide basis 
that not everyone thinks they have a relationship with the same 
vendor, and making sure that that vendor isn't overextended. 
And then second is laying out in specified detail exactly who 
to contact with that contractor or vendor should disruptions 
occur.
    Mrs. Morella. Mr. Spotila, would you like to comment on 
that?
    Mr. Spotila. Yes. Once again I would agree. I think in 
general, with most of the agencies, we need more detailed 
information on this subject. One of our observations is that a 
number of the agencies need to do more in this area. Some have 
done real well. Social Security whom you will be hearing from, 
has done an excellent job. NASA and the Department of 
Transportation have done very well. But there are a number of 
agencies that need to add considerable detail here, and that's 
one of the areas we're pressing.
    Mrs. Morella. This is going to be one of the questions 
we're going to ask to our second panel what they're doing, and 
I'm glad that you're both very aware of it and continue to ask 
for that response.
    Just finally the issue of computer security, this is one, 
as you know, I think is critically important as it relates to 
Y2K and even beyond that. How certain are you that the 
remediation efforts of the Federal systems have been conducted 
by firms that are U.S.-owned, and then if you would like to 
comment on what the risks might be that foreign agents or those 
with antigovernment views might have access to sensitive 
computer data. If I could ask both of you if you can answer 
that.
    Mr. Willemssen. I will answer that in two ways. One is to 
give you my nonscientific answer that I think overall if you 
compare what has happened on remediation to what we thought 
would happen in the 1996 or 1997 timeframe, we've been a little 
surprised that more of the remediation work was actually done 
in-house and by existing contractors as it pertains to Federal 
agencies than we would have thought. There really wasn't as 
much work that went outside of the existing agency-contractor 
relationships as we would have envisioned.
    Point two, we share your concern about Y2K security risks. 
Frankly, we haven't at this point done a lot of work on this. 
We do have some ongoing work looking at that right now with 
some high-profile agencies, such as the Federal Aviation 
Administration and Department of Energy. At these agencies we 
are pursuing the issue to see what kind of controls and 
processes the agencies have in place.
    Overall, I think that the executive branch is very, very 
aware of this particular issue, and it's brought up in almost 
every meeting I'm in on Y2K over the last couple of months.
    Mr. Spotila. I would echo those comments. In general, OMB 
does not have individual agency information in this regard. 
We've relied on the agencies and their decisionmaking process. 
We have worked in coordination with the National Security 
Council, with the President's advisor on counterterrorism Mr. 
Clark, and the CIAO office. This is something we are sensitive 
to. We have looked at security concerns here, and we think that 
the right steps are being taken, but it certainly is not 
something that we are taking for granted.
    Mrs. Morella. Well, I'm glad to hear that because I think 
it's critically important. We focus on it because this whole 
concept of the potential for the computer security could dwarf 
the problems of Y2K.
    Mr. Turner, do you have any final comments?
    Mr. Turner. No final questions, thank you.
    Mrs. Morella. I want to thank panel one for the work you've 
done not only in your presentations and responses today, but 
continuously that you've done. Thank you very much.
    Mr. Willemssen. Thank you.
    Mr. Spotila. Thank you.
    Mrs. Morella. Now we will ask the second panel to come 
forward. Mr. Dyer, Mr. Langston, Mr. Gilligan, Mr. Cosgrave, 
Mr. Lorentz.
    Gentlemen, before you get comfortable, as we did with the 
first panel, I would ask you kindly to stand and raise your 
right hand.
    [Witnesses sworn.]
    Mrs. Morella. Again, the record will demonstrate 
affirmative response to that.
    So we're pleased to have on our second panel John Dyer, 
Principal Deputy of the Social Security Administration; Dr. 
Marvin J. Langston, Deputy Assistant Secretary of Defense for 
C31 and the Year 2000, Department of Defense; John Gilligan, 
Chief Information Officer of the Department of Energy; Mr. Paul 
Cosgrave, who is the Chief Information Officer of the Internal 
Revenue Service; Mr. Norman E. Lorentz, Senior Vice President, 
Chief Technology Officer of the United States Postal Service.
    Gentlemen, I'm glad you're here, it's very important that 
we hear from you. And I think it was appropriate that you also 
heard the testimony of GAO and OMB preceding you. And again, 
following sort of a 5-minute rule, we're very flexible about 
it.
    We will start off, and I will let you know that we will 
hope to have time for questioning and that your entire 
statement will be in the record, so you can give us a synopsis, 
if you desire. So we will start off with you then.
    Mr. Dyer, thank you for being here.

  STATEMENTS OF JOHN DYER, PRINCIPAL DEPUTY, SOCIAL SECURITY 
ADMINISTRATION; MARVIN J. LANGSTON, DEPUTY ASSISTANT SECRETARY 
   OF DEFENSE FOR C3I AND YEAR 2000, DEPARTMENT OF DEFENSE, 
   ACCOMPANIED BY REAR ADMIRAL BOB WILLARD AND BILL CURTIS, 
    DEPARTMENT OF DEFENSE; JOHN GILLIGAN, CHIEF INFORMATION 
OFFICER, DEPARTMENT OF ENERGY; PAUL COSGRAVE, CHIEF INFORMATION 
   OFFICER, INTERNAL REVENUE SERVICE; AND NORMAN E. LORENTZ, 
 SENIOR VICE PRESIDENT, CHIEF TECHNOLOGY OFFICER, U.S. POSTAL 
                            SERVICE

    Mr. Dyer. Madam Chairwoman and Representative Turner, I 
appreciate the opportunity to discuss the Social Security 
Administration's day 1 and business continuity and contingency 
plans for the year 2000 changeover. As a recognized leader in 
Y2K readiness, we are confident that our monthly payments to 50 
million people and the earnings records of 145 million workers 
will not be affected; however, in the case of the unexpected, 
we are prepared.
    To begin with, all of our mission-critical systems are 
certified as year 2000 compliant, along with all of the State 
disability determination services referred to as DDSs. 
Additionally, joint testing of payment files and direct deposit 
procedures have been successfully completed, as is the Federal 
Reserve Board testing with financial institutions, including 
Social Security transactions. Last, as for trading partners, 
Treasury and the Postal Service are also on board to handle 
ongoing and incoming exchanges.
    At this point I would like to review step by step our plans 
for the last days of 1999 and the first days of 2000. For 
December 30th to January 3rd, designated personnel will 
inspect, evaluate and report on virtually every office. Social 
Security headquarters will stop receiving on-line transactions 
from field offices at 5 p.m. Eastern Standard Time on December 
30th, allowing all officials to collect all of our 1999 
computer transactions.
    On December 31st, our computer systems will finish updating 
SSA's master files. Just before midnight, the Social Security's 
main data center in Baltimore will switch to jet fuel 
generators until the power company notifies the agency that 
everything is fine.
    Immediately after midnight, December 31st, 1999, teams will 
begin assessing our systems' capability to process transactions 
for the year 2000. Later that day, staff at selected offices 
across the country will enter data. We will also test the 800 
number. Throughout New Year's Day, a group of programmers will 
run checks on the computer systems for our 1,400 facilities.
    Social Security managers will report to their offices, 
checking all equipment and reporting their findings to regional 
offices, which will then forward the data to the command center 
in Baltimore. Approximately 100 sites will serve as barometer 
offices, including the 55 that do the disability 
determinations.
    Agency technical staff will test software systems by 
conducting a series of typical transactions. The Baltimore 
command center will monitor the processing. If problems are 
found, teams will be dispatched to make the necessary repairs. 
Besides assessing Social Security's infrastructure, our command 
center will communicate with several non-SSA sites, such as the 
Treasury command center, to be alerted to any problems that 
banks may have in posting electronic fund transfers. Moreover, 
we will advise the White House Information Coordination Center, 
the media and the Congress of SSA's status. Then on January 
3rd, Social Security will open for business as usual.
    SSA's day 1 strategy is part of our overall business 
continuity and contingency plan. The plan prepares the agency 
to avoid a possible crisis if its automated systems are unable 
to recognize the year 2000. Within this larger plan, we have 
local plans for each field office, teleservice centers, 
processing centers, hearing offices and the State DDSs. We have 
developed contingencies for benefit payment delivery, building 
operations, human resources and communications.
    For over a year both Social Security and SSI payments have 
been made with year 2000 compliant systems. Furthermore, we 
have developed a benefit payment delivery plan with the 
Treasury Department and the Federal Reserve. In November 1999, 
next month, field office employees will receive training as to 
the actions and procedures they are to follow if such an 
unanticipated problem occurs. SSA also has contingency plans 
that deal with unforeseen emergencies, such as inclement 
weather, natural disasters, accidents or equipment failure.
    We want the public to understand that we're prepared for 
the year 2000 conversion. We want the public to have accurate 
information. Misinformation and confusion could generate 
overwhelming workloads and cause disruptions. Therefore we 
appreciate the Congress and others updating the American public 
about the actions Social Security and other Federal agencies 
have taken to prepare for the year 2000.
    For our part we're committed to informing Members of 
Congress if serious problems develop. If a service to any of 
our local offices is interrupted, and contingency plans are 
implemented, the manager of the affected office will call the 
congressional office with specific information on how it will 
provide service to the congressional representative, 
congressional offices and to the constituents normally served 
by that office.
    In fact, on September 23rd, we sent a letter to the 
Congress outlining these steps and listed the names and phone 
numbers of the managers of each local office in each State 
responsible for calling you.
    Because of our early planning and testing, Social Security 
fully expects that all of our processes will function properly 
in the new millennium, and that we will continue to provide 
world-class service to the American people.
    I'm happy to answer any questions you might have. Thank 
you.
    Mrs. Morella. Thank you, Mr. Dyer. I know that Social 
Security Administration started in 1989 in their preparation.
    [The prepared statement of Mr. Dyer follows:]

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    Mrs. Morella. Mr. Langston, Dr. Langston.
    Mr. Langston. Chairwoman Morella, Mr. Turner, thank you 
very much for your continued interest in this subject. The 
Department of Defense is very proud of the progress that we 
have made over the past 15 months of this ongoing year 2000 
preparation effort.
    I'm joined this morning by Rear Admiral Bob Willard, who 
has been spearheading this effort in our unified forces and 
services, and also Mr. Bill Curtis, who has been our full-time 
person leading and directing the year 2000 event for the past 
period of time.
    We have addressed this issue in four major activities. 
Those activities comprise systems compliance, operational 
evaluation and testing, contingency planning, leadership 
preparation and a transition period which has begun. I will 
just spend a few minutes outlining the activity in these areas 
for you.
    In the systems compliance area we are tracking and 
repairing over 7,500 systems. Over 2,000 of those are mission-
critical systems. The rest are non-mission-critical systems. 
And in addition, we have 600 installations and 350 domains 
among our main megacenter mainframe computers that we have 
worked to repair. Of those systems we are confident that all of 
them will be repaired and ready to go for this event, and 
currently we are over 98 percent of our mission-critical 
systems.
    In the operational evaluation and testing area, this is the 
largest effort in DOD's history. We have never conducted such 
an integrated and large operational evaluation of our systems. 
We have done it in two major ways. We have enlisted the 
uniformed services through the support from the chairman of the 
Joint Chiefs of Staff to conduct operational evaluations, which 
are threaded evaluations of systems operations that support our 
primary military functions. And we've also conducted functional 
evaluations of all of the support operations that foundation 
the Department; for example, financial systems, logistics 
systems, and personnel systems.
    We have also conducted a whole series of service 
integration tests which are specific to each of our military 
services and verify that those systems of systems among the 
services are capable of supporting our needs.
    In the contingency planning and leadership preparation 
area, the chairman of the Joint Chiefs of Staff has conducted a 
series of chairman contingency assessments personally led by 
the chairman and supported by our four-star uniformed 
commanders. They address mobilization, deployment operations 
and sustainment. And these evaluations were 2 week-long periods 
of removing tens of major systems from each of those areas to 
evaluate the impact of the loss of those systems and the 
support of the contingency plans that would be put in place 
should those systems be removed on military operations.
    In each of those cases we determined that our contingency 
plans were an important element of what was needed, and that 
we, in fact, could conduct military operations should we lose 
those large number of systems.
    We also conducted business continuity planning in terms of 
both systems continuity plans and operational continuity plans, 
meaning that we have a continuity plan for every system, and we 
have a continuity plan for every operational functional area 
that is a combination of systems or a larger function, and 
therefore we have a way to support loss of capability in any 
one of these events.
    We've also enlisted the support of all of our inspector 
generals, both the service inspector generals and the DOD 
inspector generals, on all of our assessment agencies to make 
sure that we have prepared good contingency plans and they are 
in good shape for these operations.
    And finally, in preparation for our leadership, we have 
conducted a series of table top exercises which were literally 
day-long workshops that prepared the senior leaders to explore 
an enormous amount of unknown, what-if types of questions to 
determine how we would operate the Department through any kind 
of unknown surprise events.
    Finally, the fourth area is a transition day 1 operations 
period which we did begin in September, the 1st of September, 
and we will operate through the 1st of March or the end of 
March of this coming year. A major part of this activity has 
been the preparation of a consequence management plan to help 
all of our warfighting commanders and base commanders 
understand how they can respond to situations and external 
requests from the Department for aid and support throughout the 
United States or other nations in the world. And in that 
process, we have also established a posture-level instruction 
which allows across five posture levels each of our commanders 
to understand how we are postured and how they are to respond 
specifically to those posture levels.
    For example, in this consequence management activity our 
first priority is, as Dr. Hamre, the Deputy Secretary, has 
reiterated several times, is to support national command 
authority or military operations in any form. Our second 
priority is to support standing operations. Our third priority 
is to support civil authorities and public health and safety. 
And our fourth priority is to support civil authorities in 
support of economic or national quality of life. These are all 
well laid out and detailed plans which we continue to refine 
wherever we find the need for such.
    Finally, I would point out that we have had an ongoing 
operation with foreign nations and our NATO allies with a large 
amount of effort concentrated on the Russians and their 
interaction with us for early warning events and for mitigating 
any nuclear mishaps or missteps related to nuclear weapons. We 
are currently planning to put in place our Center for Year 2000 
Strategic Stability in Colorado Springs. We have conducted 
successful negotiations with the Russians for them to 
participate in this event. They will be arriving in Colorado 
Springs on the 22nd of December and working with us through the 
15th of January for that particular operation.
    So in conclusion, I would suggest that we have conducted a 
very extensive activity over this past year. The activity 
actually transformed when Secretary Cohen and Dr. Hamre tasked 
the uniform commanders and the under secretaries of the 
functional support areas to be personally responsible for the 
operations and mission continuity through this period of time. 
I believe that it's fair to say that the Department literally 
does contingency planning all the time because of the nature of 
our business. We do continuously report activities on a 24 by 7 
basis throughout the normal year, and the year 2000 event for 
us is a significant event that we do not take lightly, but it 
does fit directly into our normal operations, and we feel that 
we will be ready and prepared to support any national security 
situation throughout this period. Thank you.
    Mrs. Morella. Thank you, Dr. Langston.
    [The prepared statement of Mr. Langston follows:]

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    Mrs. Morella. Mr. Gilligan, pleasure to hear from you sir.
    Mr. Gilligan. Thank you, Madam Chairwoman Morella and 
Congressman Turner. I welcome this opportunity this morning to 
discuss the Department of Energy's contingency, business 
continuity and zero day plans. As Chief Information Officer for 
the Department of Energy, I am responsible for the oversight, 
coordination and facilitation of the Department's ongoing 
efforts to address year 2000 issues.
    The Department has made great progress since the last time 
we testified before this subcommittee in June 1998, and I am 
pleased to be here to discuss our progress with you. Achieving 
100 percent year 2000 compliance has been one of Secretary 
Richardson's top goals for the Department. When I joined the 
Department in October 1998, the Department was the recipient of 
a failing grade on its year 2000 progress from this committee, 
and turning around the year 2000 program was my highest 
priority.
    As you are aware, we were able to rapidly improve our 
progress to a B grade in early 1999. I am pleased to report to 
you today that 100 percent of the Department's 420 mission-
critical systems are year 2000 compliant and have approved 
contingency plans, and that the Department is more than 99.8 
percent complete in remediating over 200,000 non-mission-
critical systems, embedded chips, telecommunications systems, 
data exchanges and work stations.
    The Department has taken a phased approach similar to other 
large government agencies to its year 2000 preparation 
activities. Phase I of our program focused on remediating the 
Department's 420 mission-critical systems and approximately 
200,000 non-mission-critical systems.
    Phase II focused on implementation of additional risk 
reduction and mitigation measures to help ensure that no 
Department mission is compromised due to year 2000 transition, 
and development of business continuity and zero day plans to 
ensure the continuation of the Department's core business 
processes in the event of a year 2000 related failure.
    Phase III of our program is now focusing on refining our 
business continuity and zero day plans that we have developed. 
This will ensure that we have clear processes to deal with 
potential year 2000 induced problems and that we have 
identified individual roles and responsibilities for 
monitoring, evaluating and responding to year 2000 related 
events across the Department.
    As I mentioned earlier, phase I of our year 2000 program is 
nearly 100 percent complete. During the course of our phase I 
year 2000 activities, the Department has also focused 
particular attention on the systems that protect the health and 
safety of the public, our workers and the environment. As of 
the 1st of October, all of our more than 540 health and safety-
related systems are either year 2000 compliant or year 2000 
ready, and we will continue to focus close attention on these 
systems. Furthermore, positive validation of the functionality 
of all operational health and safety systems will be required 
within 12 hours of the year 2000 transition to ensure the 
continued safety of the public, our workers and the 
environment.
    Phase II of our year 2000 program is almost fully complete 
as well. During phase II we focused on implementation of 
additional risk reduction and mitigation measures to help 
ensure that no departmental mission is compromised due to the 
year 2000 transition. We have conducted external independent 
verification and validation of the year 2000 remediation 
efforts as well as end-to-end testing for all mission-critical 
systems and health and safety-related systems with year 2000 
date-related issues. I am pleased to report that external IV&V 
and end-to-end testing activities are complete for more than 99 
percent of these systems.
    Phase II of our program also focused on developing business 
continuity and zero day plans to ensure the continuation of our 
core business processes in the event that year 2000 failures 
occur. Due to the complexity and diversity of the Department's 
missions and activities and the recognition that the year 2000 
transition poses a unique risk for each site, the Department 
required business continuity plans for each of our 42 sites. 
Sites have exercised their contingency and continuity plans 
during phase II of our program. Our first formal readiness 
exercise was conducted on April 9th and resulted in lessons 
learned and best practices on contingency plans. On September 
8th and 9th, 42 sites participated in our second year 2000 
exercise. Sites tested failure scenarios and their planned 
response to year 2000 related events, rehearsed their zero day 
procedures and tested the Department's procedures for reporting 
year 2000 events to our headquarters. Sites reported that the 
exercise was very helpful in evaluating contingency and 
business continuity plans and shared with my office a 
significant number of lessons learned.
    We also sponsored two Department-wide workshops on business 
and continuity planning in May and October to share our year 
2000 lessons learned and best practices.
    We are now implementing phase III of our program, which 
involves refining our business continuity and zero day plans. 
In our review of site and business continuity plans, we have 
found that they have addressed many of the elements contained 
in the General Accounting Office's day 1 planning guidance. 
However, we recently received comments from the Office of 
Management and Budget that our headquarters business continuity 
plan had some weaknesses, in particular with respect to lack of 
prioritization of key processes, inadequate discussion of our 
cybersecurity efforts and insufficient detail on our procedures 
and responsibilities during the rollover period.
    I have reviewed the plan and concur with OMB's assessment. 
Fortunately, with the solid foundation of contingency planning 
already completed, these weaknesses can be corrected quickly. I 
have directed actions to revise our headquarters business 
continuity plan by November 12th and resubmit it to OMB.
    However, even after November 12th, we will continue to 
fine-tune our plans to reflect final staffing decisions and the 
results of year 2000 preparation drills within the Department 
and with the President's Information Coordination Center.
    At the Department's headquarters our zero day procedures 
include the coordination of the Department of Energy as well as 
national and international energy sector year 2000 monitoring 
and reporting activities. We have developed plans with the 
electricity, oil and natural gas industries to receive reports 
of year 2000 related events as well as to analyze potential 
impacts of any disruptions, including potential cybersecurity 
incidents.
    Our Emergency Operations Center at the Forrestal Building 
will operate as the year 2000 command center for the 
collection, compilation and analysis and reporting of 
departmental site and energy sector year 2000 status 
information to the President's Information Coordination Center.
    Since March 1999, my staff and I have visited more than 30 
departmental sites to assess their progress toward implementing 
OMB and departmental guidance, to assess the compliance of the 
status of their systems and to share year 2000 best practices 
and lessons learned. I can say firsthand that all of the 
Department's employees are focused on year 2000 and continue to 
work aggressively that we will have a successful and smooth 
transition. In my opinion, each site is well-positioned to 
manage the risk potential of year 2000 related failures. Final 
efforts over the next 63 days will ensure that we will 
effectively handle any year 2000 events regardless of source.
    Secretary Richardson and I are proud of the Department's 
efforts to ensure that 100 percent of our systems are year 2000 
compliant, and we are confident in our planning efforts for the 
year 2000 transition. Our focus and commitment will continue as 
we complete our preparation efforts. I look forward to your 
questions. Thank you.
    Mrs. Morella. Thank you, Mr. Gilligan.
    [The prepared statement of Mr. Gilligan follows:]

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    Mrs. Morella. Now pleased to recognize Mr. Cosgrave.
    Mr. Cosgrave. Thank you, Madam Chairwoman, and thank you, 
Representative Turner. I'm very happy to be here today to 
discuss the status of the Internal Revenue Service's Y2K 
business continuity and contingency plans and day 1, or as we 
refer to it, our end game plans. I'm joined to as well by Bob 
Albicker, my deputy. Mr. Albicker along with myself and our 
Commissioner Mr. Rossotti have all personally made this our No. 
1 priority. I am also joined today by Mr. John Yost, who is our 
full-time executive managing this program. This is a program 
that he oversees consisting of approximately 100 people that 
are directly in his program office, plus he directly oversees 
the thousands of people in the Internal Revenue Service who 
engage in Y2K activities on a daily basis.
    In order to save time, I'll refer you to our general update 
on the overall status of our program which is in my written 
testimony, and I'll focus just on contingency planning and day 
1 planning.
    The IRS is taking every step it can to mitigate the risks 
that are involved with the Y2K challenge. Two ways that the IRS 
is a prepared to address risks are through business continuity 
and contingency plans as well as day 1 plans. With respect to 
contingency plans, the IRS has developed 40 individual 
contingency plans that are aligned with the 40 most critical 
business processes that outline the necessary procedures to 
follow in the event any of our mission-critical tax-processing 
systems suffers a major failure.
    We followed the planning format suggested to us last year 
by the General Accounting Office. We've completed testing all 
but two of those plans and have addressed GAO's suggestions 
from a recent review of those plans. These contingency plans 
concentrate on those areas that have the greatest impact on 
tax-processing activities in addition to areas that could be 
particularly affected by the Y2K problem. Because of the 
extensive renovation and testing work that we have performed, 
we do not anticipate a major failure; however, we have 
developed the necessary contingency plans, and we are ready in 
the event they are needed.
    These plans address such issues as preserving files and 
data, how to handle personnel, and procedural issues and 
delivery of service until computer systems are restored. I must 
emphasize, however, that these plans do not provide replacement 
computer systems for our existing computer systems, and instead 
they rely on alternative manual processes. Because we have 
performed extensive end-to-end testing, we believe that it is 
highly unlikely that we will need to invoke such plans; 
nevertheless, we have tested them and are prepared to implement 
them if necessary.
    As for day 1 or end game planning, the IRS has devised an 
end game strategy that will guide our activities during the 
critical rollover weekend of December 31st, 1999, through 
January 2, 2000. The end game strategy builds on our current 
information system problem reporting resolution process and 
identifies specific validation checklists to be used during the 
rollover weekend.
    The plan also recognizes a unique problem facing the IRS. 
This problem is a result of the annual startup of the filing 
season, which this year occurs simultaneous with the millennium 
rollover weekend.
    To ensure maximum risk reduction, therefore, the IRS is 
taking the following actions. No. 1, we are backing up and then 
quiescing the systems beginning at 10 p.m. On December 29th, 
1999. This means the systems will be turned on, but will not be 
running business applications. On January 1, 2000, the systems 
will be brought back up to their normal operating status, this 
time updated with our filing season 2000 programs and validated 
against quality control checklists prior to the first day of 
business on January 3rd, 2000.
    Second, we are ensuring that sites and systems are 
operational before the first business day of the new year by 
conducting a validation check of all systems end facilities at 
over 500 different posts of duty.
    Third, we are reporting any problems that are encountered 
throughout the weekend through our existing problem reporting 
channels. All our organizations will be required to affirm that 
they have checked critical facilities and systems at their 
sites to our year 2000 command center, which will serve as the 
IRS nerve center during the rollover weekend. Reports will be 
provided to the Commissioner, myself, Mr. Albicker, et cetera, 
on a regular basis as well as to the Department of Treasury 
every 4 hours during the rollover weekend.
    Please keep in mind the successful rollover weekend is just 
a small part, however, of meeting the Y2K challenge. Problems 
for us may arise well into the new year impacting the filing 
season. For example, our computers may generate erroneous 
notices to taxpayers as late as March or April. However, we 
have procedures in place to resolve any problems that arise, 
including scanning for large erroneous dollar amounts and dates 
specifying 1900. Additionally, the command center will continue 
to operate through April 15th, 2000, or longer if necessary, 
depending on the status of the filing season. We will rehearse 
our rollover weekend plan on November 20th, 1999, to prepare 
participants for this event and to fine-tune our end game 
strategy.
    In conclusion, we're confident the IRS will be capable of 
fulfilling its mission in the year 2000 and beyond. While we 
recognize that risks still exist, we believe we are taking the 
necessary steps to address them. Thank you.
    Mrs. Morella. Thank you, Mr. Cosgrave.
    [The prepared statement of Mr. Cosgrave follows:]

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    Mrs. Morella. I'm now pleased to recognize Mr. Lorentz of 
the Postal Service.
    Mr. Lorentz. Good morning, Chairwoman Morella and 
Representative Turner. With me this morning are Nick Barranca, 
who is the Vice President of Operations Planning, and Rick 
Weirich, who is our Vice President of Information Systems and 
our Chief Information Officer.
    I'm pleased to report this morning that we have completed 
all the technical work on our mission-critical systems, 
including independent verification, testing, and implementation 
of a system freeze.
    We began testing our mail processing equipment in 1998 and 
extended to other sites last year. In August, at our Merrifield 
northern Virginia site, we started a 6-week test of critical 
mail processing equipment. This equipment ran continuously in a 
year 2000 calendar mode, in a live processing environment, 
testing all equipment types and all mail types. This facility 
handles 5 million pieces of mail a day, and we have experienced 
no problems.
    We have also created plans to protect against potential 
disruptions of other systems and processes. We respond to 
disruptions every day. In the last 2 weeks we've dealt with 
Hurricane Irene in Florida and the Hector Mines earthquake in 
Los Angeles. Locally, last year's storm in Montgomery County 
left 48 of 60 Montgomery County delivery units that were 
without power, and we delivered mail. I know in my home in 
Bethesda, all 3 days that we were without power, I got normal 
mail delivery even though I had to walk outside to read it.
    Our business continuity plans and contingency plans are 
building on our experience and formalizing our response to 
disruption, both internal and external. Our continuity plans 
deal with the external infrastructure. Our internal contingency 
component plans deal with the infrastructure all the way from 
timekeeping to mail processing. Our plans includes working with 
customers, with other Federal agencies, and particularly with 
agencies that deliver benefit payments to the American people.
    We anticipate that some of the mailers may divert 
electronic communications to hard copy mail. With that in mind, 
we're holding the enlarged infrastructure that we normally put 
in place for the holiday season, including staff, 
transportation, and sorting capability, through January.
    So what is day 1 going to look like for us? First of all, 
it's going to be business as usual, but prepared for whatever 
might occur. Robust day 1 plans are developed to preempt any 
kind of problems. Systems are in place to identify, report, 
track, resolve any Y2K issues.
    To communicate internally, with customers, with employees 
and with all stakeholders, we have emergency communication 
capability. Our network operations center has been converted 
into an internal ICC. Our national and field operations centers 
will operate 24 by 7 to assess USPS status and provide resource 
and decision support.
    Our day 1 activities will also involve onsite participation 
at the President's Council's Information Coordination Center 
and Joint Public Information Center. At a recent meeting of the 
President's Council on Year 2000, Chairman John Koskinen 
recognized us as the early warning beacon. We are the only 
organization that goes everywhere, every day, and we'll be very 
happy to perform in that role.
    Our plans have focused on Y2K as a business problem. And we 
have three very simple goals: To protect our customers by 
delivering the mail, to protect our employees' safety and pay; 
and to protect our business by collecting the money due and 
paying what we owe.
    We also have a heightened awareness to security problems. 
We have engaged reputable contractors with full security 
background checks and clearances, and we are providing 
instructions to the field to protect against any viruses. In a 
forward-looking mode, we're also working with the President's 
Council on cyber assurance issues. Protecting our work protects 
America's mail.
    We believe that the United States Postal Service is ready, 
and I look forward to answering your questions.
    Mrs. Morella. Thank you, Mr. Lorentz.
    [The prepared statement of Mr. Lorentz follows:]

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    Mrs. Morella. I won't ask you about whether those ponies 
are ready. But it's interesting, as I scrutinized the panel, 
that it was planned that we picked those five agencies that--I 
don't mean to prioritize as the most important, but have the 
greatest influence or effect on our American economy and our 
Nation: Social Security, Department of Defense, Department of 
Energy, Internal Revenue Service and the Postal Service. And I 
appreciate your being here. I think I'll try to ask each of you 
maybe one question and then see if it evolves into others.
    First of all, as I mentioned, Mr. Dyer, I commend you on 
having started looking to Y2K and what needed to be done back 
in 1989. We have recognized your leadership in this regard. And 
yet what if the computers fail; what specific plans does Social 
Security Administration have to ensure that its millions of 
recipients receive their Social Security checks? I mean, you 
are very close to the people.
    Mr. Dyer. We are, of course, concerned, and we are 
committed to delivering those checks. The Supplemental Security 
Income checks go out before the end of the year. They'll be 
issued on Thursday. So they're before we turn over. The regular 
Title II or Social Security checks, they go out on Monday. We 
have worked very closely with the Federal Reserve, the 
Department of Treasury and the Postal Service to assure that we 
can get the direct deposit or the checks that go through mail 
there on time. We're positioning the checks and the tapes in 
advance. We worked through and tested it from beginning to end.
    So we're very confident that the payments are going to go. 
If, however, some areas, checks do not reach it, we have fall-
back plans. If it's with a financial institution with a direct 
deposit, where the bank fails to be able to push through the 
direct deposit, we would find another bank that could do the 
direct deposit, and if not, we would work out how to get a 
paper check to the individual.
    If it's in terms of the paper checks, we're very confident 
because we've worked out contingency plans with the Postal 
Service, and, as you know, in hurricanes and other disasters, 
we've always been able with the Postal Service to be right 
there onsite and get the checks to the people.
    Mrs. Morella. So we can tell the viewers, listeners, our 
constituents, do not worry, the check is in the mail or you 
will get the check.
    Mr. Dyer. You will get your check, or you will get your 
direct deposit in your bank.
    Mrs. Morella. Exactly. And we will be continuing to watch 
to make sure that that you can continue that way, and feel 
confident that you will.
    With regard to, Dr. Langston, the Department of Defense, it 
really is--you're really the largest Federal entity in terms of 
personnel and Y2K mission-critical systems. I think you have 
like 37 percent of all the mission-critical systems are within 
the Department of Defense. Consequently your mission-critical 
contingency plans or your contingency plans for all of your 
missions have got to be very detailed. I wonder how many 
personnel that you're planning to have ready on December 31st 
to implement the day 1 plan? And do you have any idea what the 
cost might be to implement your day 1 plan? Have you estimated?
    Mr. Langston. I thought about both of those questions when 
you asked them earlier. In terms of our contingency planning 
personnel operations, as I mentioned earlier, we are, of 
course, on duty 24 hours a day, 7 days a week, around the 
world. That operation is actually just being augmented by folks 
that support the year 2000 systems. So in other words, we have 
compiled detailed lists of technical experts or operational 
experts that support any of the contingency plans; those names, 
telephone numbers, all the contact points have been 
established. We are establishing augmentation cells for the 
year 2000 to support any of our normal watch stations or 
command centers, if you will, in major command areas like our 
unified commanders, and like our Pentagon command center, and 
for the service command centers as well as the Joint Chiefs.
    In terms of my--I do not have an actual number for you. My 
estimate is that we're operating--we will be operating 5 to 10 
percent more personnel in a duty--nonduty status than we 
normally operate. In terms of how many--how much money we have 
spent to support contingency planning, we, of course, continue 
to report to OMB the expenditures for Y2K. Our most recent 
report, I believe, specified that we will spend by the time 
we're through with this transition phase about $3.6 billion on 
the year 2000. My estimate, although I do not have this broken 
out exactly in the reports, is that approximately 25 percent of 
our effort has been toward consequence management, contingency 
planning or preparation other than the remediation and testing 
events that we have conducted.
    Mrs. Morella. Do you think that money, that you could find 
that within your budget?
    Mr. Langston. Could we have found that money?
    Mrs. Morella. Have you thought about finding that money 
within the budget that's already been allocated?
    Mr. Langston. Well, of that $3.6 billion, all of it was DOD 
money with the exception of the $1.1 billion augmentation 
budget that we were provided. We have been committed all along 
to doing whatever we had to do to find the money to support 
this. This has been Dr. Hamre and Secretary Cohen's No. 1 
priority for the Department other than national security.
    Mrs. Morella. So your financial planning has been done 
satisfactorily up to this point.
    Mr. Langston. Yes, ma'am.
    Mrs. Morella. All right. I'm interested in how we connect 
with Russia and what we are doing to help Russia. I know you've 
got the command station that you mentioned in Colorado and in 
the Denver area. When will that U.S.-Russia strategic command 
be ready?
    Mr. Langston. It's actually ready now. And as I mentioned, 
we will have Russian people arriving on the 22nd of December 
and staying in this operational sense through the 15th. We have 
been conducting a series of meetings with Russia, both in 
Russia and in the United States. The most recent meeting was on 
the 18th through the 21st of October in Russia. And we will 
continue to interact with them as much as possible to do 
everything we can to prepare for this event.
    Mrs. Morella. Have they been cooperating?
    Mr. Langston. Yes, ma'am. They have been very cooperative 
with the exception of the period of time through the Kosovo 
operations when we were, for political reasons, stopped for 
this activity.
    Mrs. Morella. Do you have any interface with the other--as 
they call them, the NIS, the newly emerging States? That would 
be like Georgia, Armenia, Azerbaijan.
    Mr. Langston. We have not had extra activity associated 
with those folks. We have had a large host nation support 
interaction ongoing. We cooperate and work with the State 
Department on that, and we have also been working with all of 
our NATO allies in support of their preparations for these 
events. And our local base commanders, wherever they reside in 
foreign countries, are working with those local organizations 
to ensure the support or verify as much as possible how much 
support we will get through this period of time. That has been 
part of our host Nation support activity.
    Mrs. Morella. You have a tremendous task, and I commend you 
and want you to know that we really want to help whenever we 
can and stay with it.
    With regard to Mr. Gilligan and Energy, I'm curious. This 
afternoon I'm going to be going to the Nuclear Regulatory 
Commission for the swearing in of the new Director. And I'm 
just wondering how do you, Department of Energy, coordinate 
with the Nuclear Regulatory Commission to ensure that our 
nuclear power plants will be ready for the year 2000? I know 
that it's not within your jurisdiction, NRC specifically, but 
your interconnection?
    Mr. Gilligan. The Nuclear Regulatory Commission, as you 
know, has the regulatory legal authority over the domestic 
nuclear power plants, and so they have been issuing guidance, 
and that guidance has been implemented within the plants. We 
have been monitoring those activities through two means: One, 
we have a relationship with the North American Electric 
Reliability Council, NERC, which has been assigned domestically 
for electricity and to coordinate the Y2K activities.
    As the nuclear plants are part of our electricity 
generators, they are being monitored through the reporting 
activities, and those activities are then reported to us.
    Second, we have established a relationship, we actually 
have an ongoing relationship, with the Nuclear Regulatory 
Commission. We have participation in their emergency operations 
facilities, and we are continuing to track their progress, and 
we expect that one of the key partnerships that we will have 
during the rollover will be with their command centers, as well 
as, we will have Nuclear Regulatory Commission participation at 
our energy sector desk in the Information Coordination Center.
    Mrs. Morella. I think you also said in your statement that 
you have found that you are all 100 percent compliant?
    Mr. Gilligan. For our mission-critical and health and 
safety systems, that's correct.
    Mrs. Morella. That's great. How about your liaison with 
contractors, would you like to comment on that?
    Mr. Gilligan. Sure. As you may know, the Department of 
Energy is structured where we have very heavy reliance on 
contractors. So of our roughly 120,000 employees, about 110,000 
are contractors. And so we have an in-house, if you will, body 
of contractors, and it has been those contractors that we rely 
on day in and day out who have done the vast majority of our 
Y2K remediation activities. We have brought in external 
independent verification and validation contractors to help 
oversee the process to ensure that we were getting objectivity, 
and that's worked very well. We only have isolated incidents 
where we have brought in new contractors for the purpose of 
doing Y2K remediation at our sites.
    Mrs. Morella. So you feel the selection of your validation 
crew is adequate for total assurance that the contractors are 
following through?
    Mr. Gilligan. We believe that this was critical to our 
process, because of the potential danger of a contractor who 
does this work day in and day out potentially missing 
something, that we require the external and independent 
verification and validation. We defined a process for 
conducting that. We defined a reporting process that went 
through line management at each of our sites for each of our 
mission-critical and health and safety systems. So this became 
a very important part of our confidence building through the 
line management chain that our remediation activities had been 
done properly. And I'm pleased to report that we found very few 
discrepancies or items of concern in our independent 
verification and validation.
    Mrs. Morella. I'm glad to hear that.
    Mr. Turner's been very kind to let me continue to ask each 
of you a question, then I'll turn to him.
    And, Mr. Cosgrave, you knew--you knew we were coming to you 
with regard to what I had posed to the first panel and that 
letter that was written to Bill Archer on October 15th that you 
reported that the quality of your computer systems' inventory 
currently poses a high risk to the Y2K effort. You addressed it 
a little bit in your statement, your oral statement. I just 
wondered if you would give us an update of the status to 
complete the inventory process. I wonder when it will be 
completed, why did it take so long. I mean, were there some 
glitches here that if could you go back you would have changed? 
And how would you adequately plan contingencies in the event 
of--given the fact that you're still determining the systems 
that you now have, how would you adequately plan contingencies 
in the event of a Y2K problem or failure?
    Mr. Cosgrave. Thank you for asking the question. Let me try 
to answer the questions. Let me try to hit them all. I need to 
first explain some background on this.
    Tracking inventory in a large enterprise such as the 
Internal Revenue Service is a major problem for any large 
enterprise. It's significantly more difficult for us because of 
the highly decentralized nature of the way the Internal Revenue 
Service has historically operated and, frankly, because of the 
level of detail at which we are now trying to track this data.
    Based on my 25 years of working in private industry, I 
don't think the problem is different for anybody else on the 
panel or anybody else in private industry. It is just made more 
difficult at the IRS by the highly decentralized nature of our 
operations. To give you an example of how complicated this is, 
we have recognized this problem as a material weakness in the 
Internal Revenue Service dating back to 1984. So it has been 
recognized as a 15-year-old problem we still haven't been able 
to solve.
    Specifically for Y2K purposes we are tracking about 800,000 
items in our inventory, 800,000. To give you an example, we 
would track every PC, every piece of equipment, every piece of 
software that is on that equipment, and for Y2K purposes we 
have to track every release version of every piece of software 
that's on every computer. So it gets extremely detailed when 
you're up to 800,000 individual items.
    However, maybe this is a good example of where Y2K has 
finally given us the push to solve a long-standing problem. In 
fact, prior to starting our Y2K program, we were probably in 
many cases at best 50 percent accurate in our inventories. I 
can report to you today that based on some of our most recent 
tests, we're now over the 90 percent level. However, there 
still are issues.
    We have a three-step process in place right now to bring 
this together and make sure it's in place not only for January 
1st, but also for October 1st, which was a critical date for 
establishing a year-end evaluation for the fiscal year for 
financial purposes. So we're working both those problems 
simultaneously for the financial records as well as for the Y2K 
inventory.
    We are addressing the problem now with three specific 
actions. We're doing on-the-ground, wall-to-wall inventories in 
all our computing centers, all our service centers and 11 of 
our 33 districts. We, furthermore, are doing independent 
verification and validation of those results here at the 
national office for all our largest computers, our tier 1, tier 
2 computers, and doing detailed comparisons between what's 
recorded from the inventory and what we have actually on the 
floor.
    And then third, we have started the independent audit and 
readiness verification, which is also going out to all our 
computer centers, all our service centers, and, again, 13 of 
the 33 districts, different ones this time, to essentially make 
sure that we, in fact, can validate, get as close as 100 
percent.
    What's different now most importantly is that the CIO is 
now 100 percent responsible for the inventory. That was not the 
case prior to my arrival last July. The inventory 
responsibility was a decentralized responsibility, and as a 
result we were not able to adequately get our hands around 
this. Longer term the solution to this problem will clearly be 
automatic tracking, which we're in the process of implementing 
so that, in fact, we can automatically record everything that's 
on our network.
    Mrs. Morella. Could--I know the people who are listening 
and watching would like to know could IRS computer problems 
result in more citizens being audited?
    Mr. Cosgrave. I'm not sure that that would be a concern. I 
think from the perspective of the individual person looking at 
this testimony, I would think their major concern would be 
probably around whether they're going to get their refund on 
time. So we're implementing special processes, much like the 
ones that Social Security described, to make sure that refund 
checks are processed on a timely basis. Of course, our process 
for sending out refunds would start toward the end of January 
rather than the beginning of January. So we have a little more 
ample time to make sure that everything is working properly. 
But we go through exactly the same processes that SSA described 
in working with FMS and the Postal Office to make sure that 
those checks get distributed. So I think probably that is the 
thing that your viewers would be most concerned about.
    Mrs. Morella. Is there anything that the public should do 
to protect themselves against possible IRS computer failure?
    Mr. Cosgrave. What the public needs to do is what the tax 
preparers would recommend they do every year, and that is keep 
tax records at home. I mean, they will need tax records if, in 
fact, they are summoned in for an examination, and therefore 
they need to keep good, accurate records like they would any 
other year.
    Mrs. Morella. Thank you. I'm going to ask unanimous consent 
that the letter from IRS sent to Chairman Archer be included in 
the record. Without objection, it will be so ordered. Thank 
you.
    [The information referred to follows:]

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    Mrs. Morella. Now for our Postal Service. At the hearing we 
had back in February of this year, Mr. Lorentz, you stated that 
the Postal Service's contingency plan was itself. And you kind 
of implied that today, too; that is, there is no other 
organization that can deliver mail in the event of unforeseen 
computer failures. And you say that mail will be delivered. I 
wonder who can deliver the mail in the event of unforeseen 
computer problems? And what are your main contingency plan 
risks, and what have you done then to mitigate your risks?
    Mr. Lorentz. The answer to the first issue is that for our 
own computer systems, we have focused on the severe and 
critical systems. For severe and critical systems, 33 percent 
of the functionality has already been tested with the fiscal 
year turn. We have experienced no operational failures at all. 
We've had 17 anomalies where the wrong data appeared on a 
screen or perhaps printed on a piece of paper, but no 
operational failures whatsoever in the system so far. And as I 
mentioned previously, we have tested our mail processing 
equipment in many locations under full volume, so we're very 
confident that those systems have been mitigated. We are the 
ultimate contingency.
    So how will the mail be delivered? It wasn't too many years 
ago that our sortation and delivery was done manually with 
little mechanization. We have not forgotten those tool sets. I 
think the major risk that we have that we've also addressed in 
our continuity plans is loss of major infrastructure 
capabilities, power, telecommunications, et cetera. We have 
detailed plans in place to mitigate that. We do that as a 
normal manner of course. We just did it in Florida. We just did 
it in North Carolina. We had to do it in L.A. We're used to 
working with without those capabilities. So we can do that just 
like anyone else. If it was a more of a general failure, that 
would be the highest risk.
    Mrs. Morella. And you would probably take care of that by 
manually making sure the mail is--.
    Mr. Lorentz. Absolutely.
    Mrs. Morella [continuing]. Delivered. I thank you.
    I now would like to turn to the distinguished ranking 
member, Mr. Turner, for his turn at any questioning or 
statements.
    Mr. Turner. Thank you, Madam Chairman.
    You know, I've often wondered when we go through January 
1st if we go through it with relatively minor disruption, if we 
want to look back and wonder if we avoided one of the greatest 
threats to our domestic tranquility and threats to national 
security that we've ever experienced in this country, or 
whether we'll look back and think, well, we dealt with one of 
the most overstated, overstudied, overdiscussed problems that 
cost us literally billions of dollars in both the public and 
private sector.
    I thought it would be helpful in terms of trying to allow 
the general public to understand what all of this study, all 
these contingency plans, all these validation efforts have been 
about if I could ask each of you to give us an example of one 
specific problem that you did discover, that you did fix, and 
if you haven't fixed it, what would have been the significant 
consequence of the failure to have discovered it and fixed it?
    And I'll give you a little time to think about that. I have 
a few other questions I want to address. I'll leave that for my 
last question for each of you, because I think if we could come 
up with a good example from each of you, it might help the 
public understand what all this effort and expenditure was 
really all about. You know, it's all well and good to hear 
we're checking our systems, we validate, we know there's not 
going to be a problem, but I think it's also helpful to know 
what problem was really found and fixed.
    One long-term consequence, I think, of the effort that 
you've made that will have lasting value is in terms of our 
national security. We all know that we talk a lot about the 
threat of nuclear warfare, the threat of chemical warfare, the 
threat of biological warfare. But we also know that at the end 
of this century we also face the threat of cyber warfare. And I 
want to address this question to Dr. Langston because I think 
that it is important for us, having gone through the effort to 
address the Y2K problem, that once we hopefully successfully 
move through it, that we not take all of our contingency plans 
and throw them in the wastebasket. But recognize that they do 
perhaps have some long-term benefit in terms of being prepared 
for the threat of cyber warfare.
    Dr. Langston, if you would, just address the implications 
of what you have done in the Department of Defense which would 
obviously be directly related to the issue I raised as well as 
what you might see as the benefits of the efforts that have 
been made all across the public and private sector with regard 
to preparation for cyber warfare.
    Mr. Langston. Thank you sir for that question. We currently 
operate, as I mentioned, with year 2000 as our highest priority 
in the Department short of military operations, and we also 
operate with cyber threat as our second highest priority for 
everything that relates to the movement of information within 
the Department. We have in this past year stood up what we call 
a Joint Task Force for Computer Network Defense, which has now 
been moved under the Unified Commander for CINC Space, 
signifying the importance of this operation. In other words, we 
believe that it is an operational four-star commander's 
importance level, level of importance for supporting and 
monitoring and preparing for computer network defense. That's 
an indication that our operational forces have realized that 
these computer networks are critical and integral part of all 
our war-fighting operations, and they include, of course, 
support operations, logistics, finance, personnel, as well as 
direct military mission operations.
    So therefore, we plan to continue on through the 
preparation and development of cyber warfare defensive 
measures. We posture and are working right now on what we call 
an information assurance architecture, which is literally a 
defense in-depth architecture that will allow us to specify for 
all of our operational forces and systems how we want them to 
use the technologies of today and the technologies that emerge 
for information assurance.
    In addition, we have already put policy in place--I'm 
talking about policy signed out by Dr. Hamre, the Deputy 
Secretary, to install key infrastructure. These are encrypted 
certificates that will allow us to understand who it is that is 
at the end of every computer transaction, both internal to our 
Department and external to the Department, and to put these in 
place in the next 3 years. And in addition, we have taken a 
step to move toward using the new smart card technology, which 
are literally credit cards with a chip in them, as a part of 
this security network defense operation to allow these smart 
card chips to become hardware stanchions of these encrypted 
certificates to represent who we are.
    So we take it all very seriously. We believe that the 
pressure that has been applied through both the executive 
branch and the congressional legislative branch for critical 
infrastructure protection is vitally important to all of us. 
And we work very hard with judicial department and State 
Department and others to help put in place these efforts and 
make them a major part of what we do.
    Mr. Turner. It seems obvious to me that our technological 
superiority which has caused us to be the world's greatest 
military force perhaps is also our greatest vulnerability.
    What about my suggestion that the other agencies of 
government and perhaps the private sector are not simply 
putting all of their plans in the wastebasket, but remember 
that there is an ongoing national security threat to all of us 
that perhaps those plans would be useful in preparing for?
    Mr. Langston. Thank you for reminding me of that question. 
I meant to suggest as we went through our--what I call our 
chairman's contingency assessment where we took major systems 
off line from our operational forces, in every one of those 
events, the unified commanders came back and said to the 
chairman, this was a very useful exercise, it was money and 
energy well spent. It allowed us to update our contingency 
plans, and it reminded us that we need to refine and continue 
to exercise those plans.
    We, of course, in the military have always had contingency 
plans and always had back-up plans for everything we do. But 
like any organization, it's easy to not exercise them as often 
as you might need to given the press of ongoing business. So we 
plan to continue to use the contingency plans as an operation. 
And, in fact, working with the GAO and recent legislation in 
the appropriations bill, we plan to follow on with our year 
2000 data base to support the tracking of these information 
systems and the evolution of this entire information assurance 
architecture that I suggested.
    Mr. Turner. Let me ask the question that I posed at the 
outset, and starting with Mr. Dyer, could you cite for us one 
problem that was discovered that you fixed and share with us 
the consequence that may have resulted had you failed to fix 
it? When we started out this effort many months, years ago, we 
all heard there wasn't enough computer programmers available to 
fix all these problems. Some months ago we asked at one hearing 
whether or not that was still the case, and we learned that 
really wasn't a real problem. So, obviously we've been able to 
cope thus far with the available personnel. I still assume that 
it took many man-hours of computer programmers to check out 
these systems, and in the process they found some things that 
they fixed. If you would, Mr. Dyer, give us a good example from 
your agency of something you found and fixed.
    Mr. Dyer. As Madam Chairwoman said, we started back in 
1989, so we've had a long time to do it. As we've been updating 
software over the years, we've been continuously doing it. I'll 
give you the major problems that would have happened. If the 
software was not adjusted, when the software ran, the computers 
would get the dates and everything confused; which would have 
meant that the calculations for what our beneficiaries would 
have been paid for the month would be all wrong and, on top of 
that, would probably stop the messages from going through to 
actually print out the checks and send the direct deposits.
    In terms of very small kinds of things, as we went through 
telecommunications systems and looked at them, what would have 
happened is that certain data that we would have been 
transmitting over satellites to move various things around the 
country would just not have happened.
    Mr. Turner. Dr. Langston, without breaching national 
security or revealing anything that might be top secret, could 
you give us an example of something that was found and fixed 
and the consequence of failure to do so?
    Mr. Langston. Yes, sir. An indication of how critical this 
has become for us is that many people in the early days of the 
year 2000 problem dismissed it as not a very significant or 
real problem. And as each of our folks, including our very 
senior managers and leaders, have gotten involved with it, they 
have all been very--become very serious about the importance of 
it as they've discovered what kinds of examples have come 
forward.
    Let me just give you a couple of examples. In our finance 
and accounting systems, we have found that we would not have 
been able to move money between ourselves and our vendors our 
through the financial system, and we would not have been able 
to make payment to our retirees without fixing those systems.
    In our medical equipment systems, we have found many 
examples of where we would have not been able to support the 
medical records or even the medical processes that distributed 
medical activity to the medical recipients. In a very vivid 
example, our communications switches, which are commercial 
switches, but which we purchase over long periods of time, 
often don't keep them up to date with the latest changes in the 
commercial switch market. We found over 120 switches that would 
have gone down during the Y2K period of time and literally 
taken down all of our telephones within the Department and 
therefore rendered us virtually without communications to 
support anything we've done.
    And even in the weapons systems area, we have weapons 
planning systems that support the distribution of plans out to 
our weapons platforms, and there were Y2K problems in those 
systems that would have created a need for contingency backups.
    Mr. Turner. Thank you. Mr. Gilligan.
    Mr. Gilligan. As you know, the Department of Energy has a 
range of missions, from nuclear missions to academic oriented 
research. The example that I would like to discuss is at one of 
our nuclear waste processing plants at our Savannah River site 
in Aiken, SC. We have a series of systems that are 
interconnected that provide for processing and treatment of 
nuclear waste, high level nuclear waste products, 
containerizing them and shipping them. In the course of the 
analysis and the inventorying of those systems, we found that 
many of the embedded processor chips that were involved with 
the process control of moving the waste from one station to 
another, as well as those computers that monitored the exhaust 
stacks for possible increased levels of radiation, had Y2K 
related problems.
    Those were, in many cases, easily fixed. In some cases, 
they redesigned new special-purpose computers in order to be 
able to fix the problems. And so--and those systems then were 
installed. They had to be installed during downtimes of the 
process so they would not disrupt operations. Now, many would 
fear that a possible Y2K failure would result in a nuclear 
accident.
    That is not, in fact, the case. In all of those 
circumstances, what would have happened if we had not repaired 
those systems is that the processor would have failed, would 
have triggered automatic shut-down procedures. But the 
automatic shut-down procedures, while they protect against any 
nuclear release of contamination, they do cost money because we 
would have an approximately $3 million a day impact in cost of 
lost opportunity if, in fact, those systems had not been 
prepared. That is an example where obviously there is high 
visibility because of the nuclear processing. We felt 
confident, even though these problems existed, they would not 
have caused a health and safety consequence; but they would 
have had a fairly significant financial impact if we had not 
repaired them prior to January 1st.
    Mr. Turner. Thank you. Mr. Cosgrave.
    Mr. Cosgrave. Mr. Turner, if I may, I would like to give 
you three quick examples, all stemming, frankly, from the 
neglect that allowed us to have an antiquated infrastructure 
that hadn't been addressed in a long time.
    The first example, probably the most important, is we have 
replaced the entire submissions and remittent processing system 
that operates in our service centers for processing the tax 
returns when they come in. The system was, in many cases, 15- 
and 20-year-old hardware that, frankly, we couldn't even get 
replacement parts that were Y2K compliant to meet the needs. So 
we had no choice but to replace that entire system with modern 
technology. So we literally would not have been able to process 
tax returns.
    The second example is with respect to security. We have 
been running a fairly old security environment that was 
decentralized like many things at the IRS, and it was very 
clear that we needed to bring that up to speed and up to date. 
So we have made a major improvement in our security environment 
as a result of the Y2K effort.
    The third example, and probably the most dramatic to people 
listening in, is that when our revenue agents went out and 
visited taxpayers, they were often embarrassed because they 
were carrying with them either a PC that was of 286- or 386-
type vintage. If you don't follow the Intel market, they were 
issued back in the early 1980's. Quite honestly, that is not 
adequate given what they are facing when they deal with the 
taxpayers today who quite often have much more sophisticated 
technology. So we have replaced all of those PCs with modern 
Pentium computers and now at least are on an even par with the 
taxpayers.
    Mr. Turner. Thank you. Dr. Lorentz.
    Mr. Lorentz. I guess I would answer the question two ways. 
The two specific examples I would give are: First of all, we 
identified an accounts payable problem, one that if it hadn't 
been identified, if the process hadn't pointed it out to us, 
would have resulted in late or no payments at all going to some 
of our suppliers.
    The second example is our air dispatch system. In that 
case, we have an automated system that literally takes the mail 
once it has been sorted and prepared and dispatches it to 
aircraft. A substantial portion of the mail is airborne now. So 
it would have given us an inability to do that in a mechanized 
way.
    Those were two significant areas that were very 
constructive. The second answer to the question is that this 
has caused us to put process discipline in our business and we 
now have business owners of these issues, not just technology 
owners. So we literally have--we are going to leverage this in 
how we look at security.
    Security is not a chief technology officer issue. It is a 
business issue. To give you an example in a more pedestrian 
way, we had the best close of our financial books that we have 
had in recent memory because we had significant configuration 
management in place. So the discipline that has been caused by 
going through Y2K preparation, as well as the retirement of 
unneeded systems, has given us a positive outcome.
    Mr. Turner. Thank you. I must say that listening to all of 
you, the direct and secondary benefits of the efforts seem to 
be very apparent. Thank you, Mr. Chairman.
    Mrs. Morella. Thank you, Mr. Turner. Following up on the 
questions that you asked, I thought that was excellent, did any 
of you have any trouble with 9-9-99? Can we just very quickly, 
did you have any trouble?
    Mr. Langston. No, ma'am; but I would point out that in our 
testing efforts, we have found as many problems in the leap 
year rollover period which will occur the end of February as we 
have in the Y2K period, the rollover date.
    Mrs. Morella. So you are preparing for that. I think that 
we all should--.
    Mr. Langston. That is why our transition period includes 
that.
    Mrs. Morella. Mr. Gilligan.
    Mr. Gilligan. We had no problems on the 9th of September. 
We did, in fact though, have one system at the beginning of our 
fiscal year of October 1st that experienced a failure. This was 
a failure of a subportion of our procurement data tracking 
system. It was fixed within about a half hour, and the 
transactions were rerun and the permanent fix was done within 
about 24 hours. But it did give us clear indication that we 
need to have processes in place to be able to respond.
    Mrs. Morella. OK. Mr. Cosgrave.
    Mr. Cosgrave. Our experience was very similar to what the 
Department of Defense is experiencing. I would reiterate the 
leap-year problem because we are focused on that as part of our 
testing as well.
    Mr. Lorentz. Not to our knowledge we didn't have any 9-9-99 
problems. We did have a couple of cases where we printed the 
wrong dates, but it didn't do anything to the internal code.
    Mrs. Morella. Several of you have already commented on the 
information computer security problem. Not only is it enormous 
with DOD, but obviously very important with all of you. I just 
wondered if you are taking precautions. Now, I heard what you 
said that is being done, Dr. Lorentz. You talked a little bit 
about it, Mr. Cosgrave. I wondered if the others might want to 
comment. Are you taking any precautions for this day 1 plan in 
terms of the information technology security?
    Mr. Dyer. We are quite concerned about security. We are 
going to be doing extra monitoring of all of our systems. We 
have a special team in place to concentrate totally on all of 
the security issues.
    Mrs. Morella. Mr. Gilligan.
    Mr. Gilligan. We have an organization called the Computer 
Incident Advisory Capability that is co-located at Lawrence 
Livermore Laboratory. They are our cyber-security investigation 
and response cell. They will be active as will their points of 
contact at all of our sites. We have established reporting 
procedures. They will be part of our emergency operations 
center contingent active through this rollover period.
    Mr. Lorentz. We have put in place all of the industry 
standard firewalls and virus protection on our case-hardened 
side. We have given specific special instructions to the field 
on what to look for in the intervention of viruses. The 
additional area that we are looking at both as far as the day 1 
as well as the future, is more e-commerce exposure.
    We have, so far, issued 150,000 digital certificates for 
the online stamp capability. We see potential exposure 
certainly in e-commerce along with everybody else. We are 
especially monitoring those aspects of the business. We are 
also participating in the cyber assurance effort as part of the 
Y2K council in partnership with other agencies.
    Mrs. Morella. Thank you. I think you have all done a great 
job of sharing the experiences looking back, looking ahead, but 
more needs to be done of your agencies. I want to announce 
that--do you have any other questions or comments?
    Mr. Turner. No.
    Mrs. Morella. It has been an excellent hearing. Please note 
that all of the members of the subcommittee again will get the 
full testimony. We would like your permission to be able to 
submit any further questioning to you from ourselves and other 
members of the subcommittee.
    I am going to ask unanimous consent that Chairman Horn's 
opening statement be included in the record. If no objection, 
it will be so ordered.
    [The prepared statement of Hon. Stephen Horn follows:]

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    Mrs. Morella. The next hearing of the House Y2K working 
group is going to be held next Thursday, November 4. It will be 
at 2 o'clock in the afternoon, room 2318 of this building. The 
hearing is going to be entitled ``Y2K Myths and Realties; What 
Every American Needs to Know in the Remaining 50 days.'' it is 
now count down 63 today, but it will be 50 at that time. The 
hearing is designated to be the culmination of our over 3\1/2\ 
years and over 100 congressional hearings on the Y2K computer 
glitch.
    I just want to thank the following people who have been 
involved in some way in putting this hearing together: The 
majority staff of the Government Reform Committee: J. Russell 
George, staff director and chief counsel; Matt Ryan, senior 
policy advisor; Bonnie Heald, the communications director and 
professional staff member; Chip Ahlswede, clerk; Rob Singer 
staff assistant; P.J. Caceres, an intern; Deborah Oppenheim, an 
intern; the Technology Subcommittee: Jeff Grove, staff 
director; Ben Wu, professional staff member; Joe Sullivan, 
staff assistant; minority staff of Government Reform: Trey 
Henderson, minority counsel; Jean Gosa, staff assistant; of the 
Technology Subcommittee minority staff: Michael Quear, 
professional staff assistant; Marty Ralston, staff assistant; 
the court reporters: Cindy Sebo and Randy Sandefer who has come 
on the scene here, too.
    And so I thank all of them. I want to thank Congressman 
Turner for being with us for the entire hearing. I want very 
much to thank both of our panels. We appreciate it very much. 
Thank you very much.
    The subcommittee is now adjourned.
    [Whereupon, at 12:12 p.m., the subcommittee was adjourned.]

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