Year 2000 Computing Crisis: Status of Efforts To Deal With Personnel
Issues (Letter Report, 10/22/98, GAO/AIMD/GGD-99-14).
Pursuant to a congressional request, GAO reviewed workforce issues
associated with the year 2000 computing crisis, focusing on: (1) the
nature and extent of year 2000 personnel issues being reported by
federal agencies; and (2) what is being done by the government to
address reported federal personnel shortages related to the year 2000
problem.
GAO noted that: (1) about half of the 24 large agencies and a quarter of
the 41 small agencies and independent entities reporting to the Office
of Management and Budget (OMB) expressed concerns that the personnel
needed to resolve the year 2000 problem would not be available; (2)
generally, these concerns fall into the categories of difficulty in
finding and keeping qualified government personnel, and difficulty in
obtaining contractors; (3) while a significant number of agencies are
raising these concerns, their comments are largely anecdotal and a
comprehensive analytical assessment of the issue has not yet been made;
(4) as a result, the full extent and severity of the year 2000 workforce
issue across the government is not known; (5) the President's Council on
Year 2000 Conversion, the Chief Information Officers (CIO) Council, and
the Office of Personnel Management (OPM) have various initiatives
underway to address reported year 2000 personnel issues; (6) for
example, OPM has recently developed additional human resources
management aids to assist agencies in dealing with year 2000 workforce
issues; (7) while such initiatives have provided agencies with important
options to help address reported year 2000 personnel problems, it is not
yet clear that recent actions have enabled agencies to successfully
resolve all perceived personnel issues; (8) accordingly, it is essential
that OMB, as part of its monitoring responsibilities for the
government's year 2000 program, continue to solicit from agencies
whether they have any remaining year 2000 personnel problems and to help
provide specific assistance to individual agencies; and (9) moreover,
OMB should work with the CIO Council to expedite evaluations of the full
extent and scope of information technology personnel issues to help
formulate effective solutions.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD/GGD-99-14
TITLE: Year 2000 Computing Crisis: Status of Efforts To Deal With
Personnel Issues
DATE: 10/22/98
SUBJECT: Computer software verification and validation
Information resources management
Systems conversions
Strategic information systems planning
Federal employees
Personnel management
Human resources utilization
Interagency relations
Data integrity
IDENTIFIER: Y2K
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Cover
================================================================ COVER
Report to the Chairman, Committee on Banking and Financial Services,
House of Representatives
October 1998
YEAR 2000 COMPUTING CRISIS -
STATUS OF EFFORTS TO DEAL WITH
PERSONNEL ISSUES
GAO/AIMD/GGD-99-14
Year 2000 Personnel Issues
(511252)
Abbreviations
=============================================================== ABBREV
CIO - Chief Information Officer
GS - General Schedule
OMB - Office of Management and Budget
OPM - Office of Personnel Management
Letter
=============================================================== LETTER
B-280543
October 22, 1998
The Honorable James J. Leach
Chairman
Committee on Banking and Financial Services
House of Representatives
Dear Mr. Chairman:
With close to half the world's total computer capacity and 60 percent
of its Internet assets, the United States is the most advanced and
most dependent user of information technology.\1 Should these
information systems--which perform functions and services critical to
our nation--suffer disruption, a widespread crisis could result.
Accordingly, the upcoming change of century is a sweeping and urgent
challenge for public- and private-sector organizations. Correcting
this problem will be labor-intensive and time-consuming--and must be
done while systems continue to operate. However, many departments
and agencies\2 are expressing concern that the critical information
technology personnel needed to correct the Year 2000 problem are not
available.
Given the criticality of the Year 2000 problem and the importance of
having adequate resources to solve the problem, you asked us to
assist in assessing workforce issues associated with the Year 2000.
Our objectives were to (1) determine the nature and extent of Year
2000 personnel issues being reported by federal agencies and (2)
identify what is being done by the government to address reported
federal personnel shortages related to the Year 2000 problem.
Appendix I contains our scope and methodology.
--------------------
\1 Critical Foundations: Protecting America's Infrastructures
(President's Commission on Critical Infrastructure Protection,
October 1997).
\2 Departments and agencies will be referred to collectively as
agencies throughout this letter.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
About half of the 24 large agencies and a quarter of the 41 small
agencies and independent entities reporting to the Office of
Management and Budget (OMB) expressed concerns that the personnel
needed to resolve the Year 2000 problem would not be available.
Generally, these concerns fall into the categories of difficulty in
finding and keeping qualified government personnel, and difficulty in
obtaining contractors. While a significant number of agencies are
raising these concerns, their comments are largely anecdotal and a
comprehensive analytical assessment of the issue has not yet been
made. As a result, the full extent and severity of the Year 2000
workforce issue across the government is not known.
The President's Council on Year 2000 Conversion, the Chief
Information Officers (CIO) Council, and the Office of Personnel
Management (OPM) have various initiatives underway to address
reported Year 2000 personnel issues. For example, OPM has recently
developed additional human resources management aids, such as waivers
allowing agencies to rehire federal retirees without the usual
offsets, to assist agencies in dealing with Year 2000 workforce
issues.
While such initiatives have provided agencies with important options
to help address reported Year 2000 personnel problems, it is not yet
clear that recent actions have enabled agencies to successfully
resolve all perceived personnel issues. Accordingly, it is essential
that OMB, as part of its monitoring responsibilities for the
government's Year 2000 program, continue to solicit from agencies
whether they have any remaining Year 2000 personnel problems and to
help provide specific assistance to individual agencies. Moreover,
OMB should work with the CIO Council to expedite evaluations of the
full extent and scope of information technology personnel issues to
help formulate effective solutions.
BACKGROUND
------------------------------------------------------------ Letter :2
On January 1, 2000, computer systems worldwide could malfunction or
produce inaccurate information simply because the century has
changed. Unless corrected, such failures could have a costly,
widespread impact. The problem is rooted in how dates are recorded
and computed. For the past several decades, systems have typically
used two digits to represent the year--such as "97" for 1997--to save
electronic storage space and reduce operating costs. In such a
format, however, 2000 is indistinguishable from 1900. Software and
systems experts nationwide are concerned that this ambiguity could
cause systems to malfunction in unforeseen ways, or to fail
completely.
As we reported to you and testified to Congress earlier this year,
the public faces a risk that critical services could be severely
disrupted by the Year 2000 computing crisis.\3 Financial transactions
could be delayed, airline flights grounded, and national defense
affected. Also, the many interdependencies that exist among
governments and within key economic sectors could cause the failure
of a single system to have adverse repercussions across the nation
and internationally. While managers in the government and the
private sector are taking many actions to mitigate these risks, a
significant amount of work remains, and time frames are unrelenting.
One key concern in addressing the Year 2000 problem is the
availability of trained information technology personnel. We
reported in April 1998, that while various agencies stated that they
or their contractors had problems in obtaining or retaining
information technology personnel, no governmentwide strategy existed
to address recruiting and retaining the personnel with the
appropriate skills for Year 2000-related work.\4 We recommended that
the Chairman of the President's Council on Year 2000 Conversion
develop a personnel strategy which includes (1) determining the need
for various information specialists, (2) identifying any
administrative or statutory changes that would be required to waive
reemployment penalties for former federal employees, and (3)
identifying ways to retain key Year 2000 staff in agencies through
the turn of the century.\5
We reemphasized the need for such a strategy in a June 1998
testimony.\6
Within the executive branch, several executive councils and agencies
are responsible for the human resources aspect of the Year 2000
effort. These councils and agencies, and their respective Year 2000
responsibilities are described below:
-- The President's Council on Year 2000 Conversion is chaired by an
Assistant to the President and is comprised of one
representative from each of the executive departments and from
other federal agencies as determined by the chair. The chair of
the Conversion Council is tasked with the following Year 2000
roles: (1) overseeing federal agencies' Year 2000 activities,
(2) acting as chief spokesperson in national and international
forums, (3) providing policy coordination of executive branch
activities with state, local, and tribal governments, and (4)
promoting appropriate federal roles with respect to private
sector activities.
To date, the Conversion Council has established several working
groups to address Year 2000 concerns. One of these is the Workforce
Issues working group, which began meeting in May 1998. The working
group is chaired by the Deputy Secretary of the Department of Labor,
and includes officials from the Departments of Labor, Education,
Housing and Urban Development, Commerce, Defense, as well as OPM and
the Small Business Administration. The group's main objective is to
determine what the federal government can do to help meet the
country's needs for technically skilled personnel to address the Year
2000 problem, with special attention to small businesses, local
governments, and organizations in rural areas.
-- The CIO Council is comprised of CIOs and Deputy CIOs from 30
federal departments and agencies, representatives from OMB, and
the chairs of the Government Information Technology Services
Board and Information Technology Resources Board. It is the
principal interagency forum for improving the design,
modernization, use, sharing, and performance of information
technology resources. The Council's role includes: (1)
developing recommendations for information technology management
policy, procedures, and standards, (2) identifying opportunities
to share information resources, and (3) assessing and addressing
the needs of the federal government for an information
technology workforce. One of the committees reporting to the
CIO Council, the Education and Training Committee, is charged
with addressing issues in hiring, training, and maintaining an
effective federal information technology workforce.
-- OMB is responsible for overseeing federal agencies' responses to
the Year 2000 problem. In early 1997, OMB issued a broad Year
2000 strategy for the federal government and required that 24
major agencies submit quarterly reports on their Year 2000
progress.\7 On January 20, 1998, OMB added new quarterly
reporting requirements, specifically asking agencies to provide
a narrative description of progress, including a description of
any problems affecting progress and, in particular, any problems
in acquiring or retaining skilled personnel. In March and April
1998, OMB requested that an additional 31 small agencies report
their progress to OMB by April 30, 1998, and another 10 small
agencies and other entities, such as the Tennessee Valley
Authority and the United States Postal Service, report by May
15, 1998. Most recently, in July 1998, OMB revised its earlier
reporting requirements and asked that nine small and independent
agencies begin providing quarterly reports on progress in
addressing difficulties relating to the Year 2000 problem.
-- OPM, the federal government's human resources agency, provides
federal agencies with personnel services and policy leadership
including staffing tools, guidance on labor-management
relations, preparation of government's future leaders,
compensation policy development, and programs to improve
workforce performance. OPM is responsible for helping agencies
to equip themselves with the systems they need to manage their
human resources effectively, and in light of the Year 2000
problem, is providing tools that agencies may use to help
recruit and retain information technology professionals.
--------------------
\3 Year 2000 Computing Crisis: Strong Leadership and Effective
Public/Private Cooperation Needed to Avoid Major Disruptions
(GAO/T-AIMD-98-101, March 18, 1998); Year 2000 Computing Crisis:
Strong Leadership Needed to Avoid Disruption of Essential Services
(GAO/T-AIMD-98-117, March 24, 1998); and Year 2000 Computing Crisis:
Potential for Widespread Disruption Calls for Strong Leadership and
Partnerships (GAO/AIMD-98-85, April 30, 1998).
\4 GAO/AIMD-98-85, April 30, 1998.
\5 Shortly after a draft of our report was given to the Chairman for
comment, OPM issued a memorandum stating that the Year 2000 was an
"unusual circumstance" which would allow OPM to grant agencies
waivers, allowing them to rehire former federal personnel to work on
Year 2000 conversion efforts temporarily without a reduction in the
employee's salary or annuity.
\6 Year 2000 Computing Crisis: Actions Must Be Taken Now to Address
Slow Pace of Federal Progress (GAO-T-AIMD-98-205, June 10, 1998).
\7 Although 25 major agencies report to OMB, we are only reporting on
24. The Central Intelligence Agency's reports are classified, and so
are not included in this summary.
CONCERNS EXIST ABOUT THE
AVAILABILITY OF INFORMATION
TECHNOLOGY PERSONNEL
------------------------------------------------------------ Letter :3
Of the 24 large agencies reporting to OMB, 13 are expressing concerns
about the availability of information technology personnel.\8 Also,
10 of the 41 small agencies and independent entities expressed these
concerns.\9 These organizations' concerns generally fall into the
categories of difficulty in recruiting and retaining internal staff
and in obtaining contractor support. Appendix II identifies the
organizations reporting workforce issues and summarizes them. It
also identifies the organizations with no reported concerns.
--------------------
\8 Four of these agencies, the Department of Agriculture, the
Department of Commerce, the Department of Labor, and the Department
of the Treasury did not state these concerns in their August reports
to OMB, but told us of them in subsequent discussions.
\9 Three of these entities, the Farm Credit Administration, the
Federal Deposit Insurance Corporation, and the Neighborhood
Reinvestment Corporation did not state these concerns in their
reports to OMB, but told us of them in subsequent discussions.
AGENCIES REPORTING
DIFFICULTY IN FINDING AND
KEEPING NEEDED PERSONNEL
---------------------------------------------------------- Letter :3.1
Both large and small agencies and entities reported that retaining
key information technology staff and recruiting new staff were among
their greatest concerns in addressing the Year 2000 problem.
Agencies indicated that they had lost skilled information technology
employees through retirements and through increased recruitment by
the private sector. For example, in May 1998, the Department of
Agriculture reported that several of its agencies expressed
particular concern that the loss of staff would affect their ability
to meet Year 2000 deadlines. Specifically, the Farm Services Agency
reported that it lost 28 (7 percent) of its 403 information
technology staff in the first 6 months of fiscal year 1998.
Agencies have also reported that recruiting replacements for
information technology personnel is difficult. The Department of
Veterans Affairs noted that recruiting is very competitive for Year
2000 professionals in some geographic areas, and stated the concern
that with lucrative finders fees being advertised, government
employees may leave for the private sector. Also, the National
Credit Union Administration reported that it had experienced
difficulties in hiring senior Year 2000 program officials.
Among the various types of information technology workers needed,
computer programmers are reported to be in the shortest supply. For
example, in February 1998, the Justice Department reported that it
had difficulty hiring and retaining skilled COBOL\10 programmers. In
August, the Department reported that it continues to encounter these
problems. As another example, in its February, May, and August
reports, the Environmental Protection Agency stated that it
experienced problems finding PL/I\11 programmers.
--------------------
\10 COBOL (Common Business Oriented Language) is a common programming
language for business applications that was introduced in the 1960s.
\11 PL/I (Programming Language 1) is a programming language that was
introduced in the 1960s.
AGENCIES REPORTING
DIFFICULTY IN OBTAINING
CONTRACTOR SUPPORT
---------------------------------------------------------- Letter :3.2
Recruiting and retaining qualified contract personnel is another
issue frequently mentioned by agencies reporting staffing problems.
Once again, the specific type of information technology worker most
often mentioned as being in short supply is programmers. For
example, the Department of Justice reported in February, May, and
again in August that it is continuing to encounter problems in
obtaining contractor support with the necessary programming skills.
Agencies' concerns also include the high turnover rate of contractor
staff and the time it takes to recruit contractor staff. For
example, the State Department indicated in May 1998 that the
recruitment cycle for replacing contract systems programmers took
more time than in past years despite the use of professional
recruitment services by the contract vendors.
Also, several agencies noted problems with increasing contract labor
wage rates. These agencies reported that they are having to increase
the hourly rate they pay for contractor staff because contractors are
increasing their own staff salaries. For example, the Department of
Agriculture indicated that its agencies are experiencing contracting
delays as vendors find it increasingly difficult to bring on more
contract employees without substantial increases in contract dollars.
In addition, the Federal Deposit Insurance Corporation reported that
some of its contractors are losing personnel to higher salaries with
other contractors. When replacing these personnel, the contractors
are increasing their hourly rates.
Four agencies reported delays on six system development efforts
because of problems they had encountered in obtaining contractors to
address the Year 2000 problem. For example, the State Department
reported that the loss of key contractor personnel had delayed the
completion of one of its mission critical systems, the Management,
Policy and Planning Information System, by 3 months. The Department
of Commerce also reported that its Patent and Trademark Office
experienced a 3-month delay on one of its mission-critical system
development efforts, the Classified Search and Image Retrieval
system, when the contractor was unable to place qualified staff on
the task. The task order was terminated with that contractor, a new
task order was awarded to another contractor, and work is now
proceeding.
FULL EXTENT AND SEVERITY OF
YEAR 2000 WORKFORCE ISSUE IS
UNCLEAR
---------------------------------------------------------- Letter :3.3
Although a significant number of agencies are reporting concerns with
the availability of qualified Year 2000 staff, it is not possible to
determine the full extent or severity of personnel shortages from
these concerns because they are often anecdotal. For example, one
department notes that one of its agencies "has had difficulty" hiring
a particular type of programmer, while another reports that it is
encountering "some problems" hiring personnel. Also, only six
mission critical systems were reported to have "experienced delays"
in reaching Year 2000 compliance because of personnel issues.
Without more detailed information on the nature and extent of
personnel issues, it is difficult to determine how to best address
it.
EXECUTIVE COUNCILS AND OPM HAVE
BEGUN TO RESPOND TO REPORTED
YEAR 2000 PERSONNEL ISSUES
------------------------------------------------------------ Letter :4
OPM, the Conversion Council, and the CIO Council have various
initiatives underway to address Year 2000 personnel issues: OPM has
provided tools to assist agencies in dealing with Year 2000 workforce
issues; the Conversion Council is identifying solutions to personnel
shortages in both the government and the private sector; and the CIO
Council has initiated a broad study of information technology
workforce issues in the government and private sector.
OPM PROVIDES AIDS TO
AGENCIES TO HELP IN
OBTAINING NEEDED PERSONNEL
---------------------------------------------------------- Letter :4.1
Agencies currently have a number of aids they can use to help recruit
and retain needed personnel. Some have been available for years.
Others are new. These aids are summarized below:
Recruitment and relocation bonuses: Federal agencies have the
authority to make a lump-sum payment of up to 25 percent of basic pay
to a newly appointed employee, or to an employee who must relocate in
cases in which the agency determines that the position would
otherwise be difficult to fill. In return for this lump-sum payment,
the employee must sign a service agreement with the agency to
complete a specified period of employment.
Superior qualifications appointments: Agencies have the authority to
set pay for new appointments or reappointments of individuals to
General Schedule (GS) positions above step 1 of the grade\12 on the
basis of the candidate's superior qualifications or the agency's
special need.
Pay at highest previous rate: Upon reemployment, transfer,
reassignment, promotion, or change in type of appointment, agencies
can set an employee's basic pay by taking into account the employee's
previous pay rate while employed in another civilian federal position
(with certain exceptions).
Temporary and term appointments: Agencies can use temporary
appointments in the competitive service for positions not expected to
last longer than 1 year, but which can be extended for 1 additional
year. Agencies can use term appointments when positions are expected
to last longer than 1 year but not more than 4 years.
Retention allowances for individual employees: Agencies have the
authority to make continuing payments of up to 25 percent of basic
pay if the agency determines that (1) the unusually high or unique
qualifications of the employee or the agency's special need for the
employee's services makes it essential to retain the employee and (2)
the employee would be likely to leave federal service in the absence
of a retention allowance. Retention allowances must be paid in
accordance with the agency's previously established retention
allowance plan and must be reviewed and certified annually.
Performance and incentive awards: Agencies can provide employees a
lump-sum cash award on the basis of a fully successful or better
rating of record or in recognition of accomplishments that contribute
to the improvement of government operations. Awards based on the
rating of record can be up to 10 percent of salary, or up to 20
percent for exceptional performance, provided the award does not
exceed $10,000 per employee. With OPM review and approval, agencies
can grant awards over $10,000, up to $25,000. Any award that would
grant over $25,000 to an individual employee must be reviewed by OPM
for submission to the President for approval.
Quality step increases: Agencies have the authority to increase an
employee's pay by providing an additional step increase to an
employee who has received the highest rating of record available in
the agency's performance appraisal program.
Training and education costs reimbursement: Agencies can pay or
reimburse an employee for all or part of the necessary expenses for
training and education, including the costs for college tuition.
Agencies may require service agreements for training of long duration
or of high cost.
Advance payments for new appointees: Agencies may advance a new hire
up to two paychecks so that a new employee can meet living and other
expenses.
Special salary rates: Agencies may request a higher salary rate for
an occupation or group of occupations nationwide or in a local area
based on a finding that the government's recruitment or retention
efforts are, or would likely become, significantly handicapped
without those higher rates. The minimum of a special rate range may
exceed the maximum of the corresponding grade by as much as 30
percent. However, no special rate may exceed the rate for Executive
Level V (currently $110,700). A special rate request must be
submitted to OPM by department headquarters and must be coordinated
with other federal agencies with employees in the same occupational
group and geographic area.
Dual compensation waivers for retirees: On March 30, 1998, OPM
issued a memorandum announcing that agencies could reemploy federal
retirees (civilian and military) to work specifically on the Year
2000 conversion without the usually required reduction in the
retiree's salary or military annuity. With OPM's determination that
the Year 2000 computer conversion problem is an "unusual
circumstance," agencies can request delegated authority from OPM to
rehire former federal personnel (up to a maximum number of individual
exceptions approved by OPM) on a temporary basis through March 31,
2000.
Premium pay for employees performing emergency work: Agencies have
authority under the law and OPM regulations to make exceptions to the
biweekly limitation on premium pay (including overtime, night, and
holiday pay) when the head of an agency or his or her designee
determines that an emergency involving a direct threat to life or
property exists. In its March memorandum, OPM also encouraged agency
heads to exercise this authority in the case of any employee who
performs emergency work to resolve a direct threat to property
(including monetary errors or cost) in connection with updating
computer systems to prevent malfunction, erroneous computations, or
other problems associated with the Year 2000. By exercising this
authority, agencies will be able to compensate employees who perform
significant amounts of overtime work related to the Year 2000
problem, as long as the total of their basic pay and premium pay does
not exceed a certain rate.\13
Exclusions from early retirement programs: On June 15, 1998, OPM
issued interim regulations allowing agencies, with OPM approval, to
limit the scope of voluntary early retirement offers when separating
or downgrading employees in a major reorganization, a major reduction
in force, or a major transfer of functions. Agencies can limit their
retirement offers on the basis of (1) occupational series or level,
(2) organizational unit, (3) geographic area, (4) specific window
periods, (5) other similar nonpersonal factors, or (6) any
combination of these factors that the agency determines appropriate.
Using this tool, agencies can exclude critical Year 2000 positions
from any voluntary early retirement program it offers.
Retention allowances for groups or categories of employees: On June
23, 1998, OPM issued interim regulations allowing agencies to
authorize a retention allowance of up to 10 percent of an employee's
rate of basic pay (or up to 25 percent with OPM approval) for a group
or category of employees such as computer programmers and system
engineers. Retention allowances authorized for a category of
employees must be based on a written determination that (1) the
category of employees has unusually high or unique qualifications, or
(2) the agency has a special need for the employees' services that
makes it essential to retain the employees in that category, and (3)
it is reasonable to presume that there is a high risk that a
significant number of employees in the targeted category are likely
to leave federal service in the absence of the allowance.
--------------------
\12 In the federal government, grades represent levels of difficulty,
responsibility, and qualifications that are sufficiently similar to
warrant their inclusion within one range of basic pay. Each grade
includes 10 fixed rates of pay through which employees advance based
on satisfactory job performance and length of service.
\13 An employee's total annual salary is not to exceed the rate for
GS-15, step 10.
CONVERSION COUNCIL IS
IDENTIFYING SOLUTIONS TO
WORKFORCE ISSUES
---------------------------------------------------------- Letter :4.2
The Conversion Council's Year 2000 Workforce Issues working group
began meeting in May 1998 to address some of the Year 2000 workforce
issues in both the government and private sector, focusing on three
areas: (1) raising awareness of the Year 2000 problem, (2) helping
managers assess their particular situations, and (3) connecting
managers with solution-providers, including programmers, project
managers, and those familiar with embedded systems. In July 1998,
the working group released a draft sector action plan which lists key
activities that the group is undertaking. Specifically, the group
-- established an Internet site to link information technology
workers with the companies that need them to solve the Year 2000
problem;\14
-- is attempting to determine the effect of workforce issues on
local communities by surveying community colleges; and
-- is exploring outreach activities, such as having community
colleges raise awareness of the Year 2000 problem within their
communities and assist in solving the problem.
Although some of these initiatives may benefit the government, the
working group is clearly adopting a nationwide focus and is not
solely targeting the federal workforce issue.
--------------------
\14 This site is part of the Labor Department's electronic America's
Job Bank and America's Talent Bank (Internet databases).
CIO COUNCIL IS STUDYING THE
WORKFORCE CHALLENGE
---------------------------------------------------------- Letter :4.3
In March 1998, the CIO Council tasked its Education and Training
committee with crafting recommendations and legislation by May 1998
to help agencies recruit and retain information technology personnel.
However, the committee found that in order to develop
recommendations, it first needed more information about the problem.
In May, the committee formed five focus teams to study the federal
information technology workforce challenge. The focus teams will
address the following areas: (1) national workforce strategies, (2)
federal workforce planning, (3) recruitment, (4) retention, and (5)
executive development. Each team will present its findings at a
forum of CIO Council Members, Human Resource Council members, and OPM
personnel currently planned for November 1998. The committee expects
to prepare a final conference report to the CIO Council after the
November 1998 forum.
According to the Co-Chair of the Committee, part of the study will be
focused specifically on the Year 2000 personnel issue and determining
the extent and scope of the personnel problems that exist for the
Year 2000 problem.
It is unclear, however, that this committee will produce timely
recommendations because the final report is scheduled to be issued
after November 1998, which may be too late to address the Year 2000
workforce issues.
EFFECTIVENESS OF YEAR 2000
WORKFORCE INITIATIVES NOT
YET ASSURED
---------------------------------------------------------- Letter :4.4
While the executive councils and OPM have initiatives underway to
help resolve Year 2000 workforce issues, it is not yet known if these
efforts will effectively address federal agencies' concerns. OPM has
developed new human resources management flexibilities, the
Conversion Council working group is identifying solutions that are
applicable to private industry, and the CIO Council is studying the
problem. No organization, however, is working with individual
agencies to determine how significant their personnel concerns are,
and if they can be adequately resolved through existing human
resources management tools. Given that the potential consequences of
having an inadequate workforce to tackle critical Year 2000
conversions are severe, such an endeavor seems worthwhile.
CONCLUSIONS
------------------------------------------------------------ Letter :5
A significant number of agencies have reported concerns about the
availability of information technology personnel needed to address
their Year 2000 problems. Also, the executive councils and OPM have
a number of initiatives underway to address perceived personnel
shortages. However, it is not yet known whether these efforts will
ensure an adequate supply of qualified personnel to solve the
government's Year 2000 problem.
Various organizations have responsibilities in this arena. While
individual agencies are in the best position to determine if current
tools adequately resolve their own Year 2000 personnel issues, OMB is
responsible for overseeing federal agencies' responses to the Year
2000 problem, and OPM has both the knowledge of existing personnel
management options and, in some cases, the authority to waive
existing rules or develop new approaches.
The workforce issue could quickly become more complicated. As
awareness of the criticality of the Year 2000 problem grows
throughout government and industry, there is a chance that
competition for limited skilled personnel will increase. If this
more vigorous competition occurs, the government may find it
increasingly difficult to obtain and retain the skilled personnel
needed to correct its mission critical systems in time. Given the
adverse consequences of any staffing shortages, it is critical that
agencies be able to quickly determine if mechanisms currently exist
to resolve personnel issues or if additional solutions are needed.
RECOMMENDATIONS
------------------------------------------------------------ Letter :6
Given the likelihood that critical government operations will cease
if key systems are not made Year 2000 compliant, we recommend that
the Director of the Office of Management and Budget, as part of the
agency's monitoring responsibilities for the government's Year 2000
program, determine if recent OPM initiatives have satisfactorily
addressed agencies' reported personnel problems.
If these problems have not been addressed by existing OPM tools, the
Director of the Office of Management and Budget should designate an
OMB official who, together with OPM and the CIO Council, would
proactively and quickly help individual agencies resolve their Year
2000 workforce concerns.
We also recommend that the Director of the Office of Management and
Budget work with the CIO Council to expedite the portions of its
ongoing study that are relevant to the Year 2000 problem, with a goal
of issuing its Year 2000-related recommendations as soon as possible.
AGENCY COMMENTS
------------------------------------------------------------ Letter :7
The Chairman of the President's Council on Year 2000 Conversion, as
well as officials representing the CIO Council, OMB, and OPM provided
oral comments on a draft of this report. These officials concurred
with the report and our recommendations. They also offered several
technical suggestions which we have incorporated as appropriate.
---------------------------------------------------------- Letter :7.1
We are sending copies of this report to the Chairmen and Ranking
Minority Members of the Senate and House Committee on Appropriations
and the House Committee on Government Reform and Oversight; the
Ranking Minority Member of the House Committee on Banking and
Financial Services; the Co-Chairs of the House Year 2000 Task Force;
the Chairman of the President's Council on Year 2000 Conversion; the
Director of the Office of Management and Budget; and the Director of
the Office of Personnel Management. Copies will also be made
available to others upon request. If you have any questions about
this report, please contact us at (202) 512-6253 and (202) 512-8676,
respectively. We can also be reached by e-mail at
[email protected] and [email protected]. Major
contributors to this report are listed in appendix III.
Sincerely yours,
Joel C. Willemssen
Director, Civil Agencies Information Systems
Accounting and Information Management Division
Michael Brostek
Associate Director, Federal Management
and Workforce Issues
General Government Division
SCOPE AND METHODOLOGY
=========================================================== Appendix I
To determine the nature and extent of the Year 2000 personnel issues
being reported by federal agencies, we reviewed and analyzed the Year
2000 progress reports submitted to OMB by 24 large agencies in
February, May, and August 1998, by 40 of the 41 small agencies and
entities in April and May 1998,\1 and by 9 of those same small
agencies and entities that were requested to report in August 1998.
In addition, when personnel issues were not specifically addressed by
these agencies in their progress reports or when the progress reports
were not submitted to OMB, we conducted telephone interviews with
agency officials to determine if the agencies were experiencing
personnel problems related to the Year 2000 problem. Further, after
reviewing the August 1998 reports, we conducted telephone interviews
with agency officials when an agency was newly reporting it had no
personnel problems. We did this to determine if prior concerns had
been resolved. We did not independently assess the reliability of
the information provided by the agencies.
To identify what is being done to address personnel shortages related
to the Year 2000 problem, we evaluated the Year 2000 personnel
efforts of OPM, the Human Resources Technology Council, and the CIO
Council's Education and Training and Year 2000 Committees. We also
reviewed the efforts of the Workforce Issues Working Group of the
President's Council on Year 2000 Conversion. In addition, we
interviewed officials from each of these groups.
We conducted our review from May 1998 through August 1998 in
accordance with generally accepted government auditing standards. We
provided a draft of this report to the Chair of the President's
Council on Year 2000 Conversion, the Chair of the CIO Council, and
OPM and OMB management and incorporated their comments as
appropriate.
--------------------
\1 OMB did not receive a report from the Federal Home Loan Mortgage
Corporation.
AGENCIES' INFORMATION TECHNOLOGY
PERSONNEL CONCERNS
========================================================== Appendix II
Table II.1 summarizes the concerns identified by the various agencies
and other entities in their reports to OMB. In cases where the
agencies and entities did not specifically report on personnel
issues, we interviewed agency officials to determine if the agencies
were experiencing personnel problems related to the Year 2000
problem. Also, in cases where agencies newly reported that they had
no personnel problems in August 1998, we interviewed agency officials
to determine if prior concerns had been resolved. We did not
independently assess the reliability of the information provided by
the agencies. Table II.2 lists the agencies and entities that
identified no concerns with the availability of personnel to address
the Year 2000 problem.
Table II.1
Agencies Reporting Personnel Problems
Description of in-
house personnel Description of
Agency issue contractor issue
------------------------------ ------------------ ------------------
Large departments and agencies (13)
----------------------------------------------------------------------
Agency for International The agency is A contractor hired
Development experiencing to perform legacy
increased system maintenance
attrition, and and Year 2000
reported concern compliance
with the short services did not
supply of human supply the key
resources and the officials as
upward pressure on provided in the
salaries of key contract for 5
personnel. weeks.
Agriculture The department is Vendors are
encountering high finding it
turnover and is increasingly
finding it difficult to bring
difficult to on contract
compete with employees without
higher salaries substantial
being offered by increases in
private industry. contract dollars
and have lost
contract employees
who have left for
better paying
positions.
Commerce The department A key contractor
reported that it was unable to
continues to provide qualified
experience staff, causing
difficulties in contract delays.
finding and hiring
qualified
information
technology
personnel.
Energy The department Efforts to
reported that one contract for
facility has mainframe systems
experienced programmers at one
difficulty in facility have not
retaining and been successful.
recruiting
programming
resources for the
Year 2000 effort.
Environmental The agency While the agency
Protection experienced has located
Agency problems in contractor
finding resources, the
programmers needed costs are higher
to fix key payroll than the agency
systems. has historically
paid.
Interior The department
reported concern
that unforeseen
retirements could
affect its Year
2000 efforts.
Justice The department is The department is
experiencing encountering
difficulty problems in
acquiring and obtaining
retaining skilled contractor support
personnel, with necessary
particularly COBOL programming
programmers. skills.
Labor The department is The department
experiencing reported concerns
problems in with the
acquiring and availability of
retaining skilled trained contractor
programmers. staff and that the
turnover rate
tends to be high
due to current
market conditions.
National The Ames Research
Aeronautics and Space Center, located in
Administration the Silicon Valley
area, is finding
it a challenge to
hire qualified
contract
programmers.
State The department The department
experienced high reported that
turnover in recruiting to
systems support replace contract
personnel, and is systems
now facing severe programmers has
staffing taken more time
shortages. than in past years
and has resulted
in a labor rate
increase.
Transportation The department
reported that one
agency's
contractors have
experienced
problems in
finding qualified
programmers.
Treasury The department
encountered an
increased rate of
attrition of its
information
systems workforce.
It reported that
skilled
programmers,
especially those
with skills in
legacy platforms,
are in strong
demand with the
private sector,
which can pay
significantly
higher salaries
than the
government.
Veterans The department Contractors are
Affairs reported that having difficulty
recruiting is very finding and
intensive for Year retaining
2000 professionals personnel.
in some geographic
areas and
expressed the
concern that
government
employees may
leave for the
private sector
because of the
lucrative "finders
fees" being
advertised.
Small agencies and other entities (10)
----------------------------------------------------------------------
Farm Credit The agency
Administration reported that
retention and
recruitment could
become key issues
if key computer
programmers and/
or network
personnel decide
to leave the
agency.
Federal Communications The agency
Commission expressed concern
about retaining
sufficient
qualified
contractors to
carry out needed
work as the demand
for Year 2000
programmers
increases.
Federal Deposit The agency has
Insurance Corporation encountered
problems with
contractors who
are losing
personnel for
higher salaries at
other contractors.
When replacing the
contractor staff,
they are
increasing the
hourly rate.
National Archives and Records The agency
Administration reported that it
has insufficient
personnel
resources to
accomplish all
Year 2000
renovation,
testing, and
implementation
work in-house.
National Credit The agency
Union Administration experienced delays
in scheduling the
conversion of its
systems due to
competing
workloads. Also,
it has experienced
difficulties in
hiring senior Year
2000 program
officials.
Neighborhood The agency has
Reinvestment encountered
Corporation increased
competition for
skilled Year 2000
personnel, and has
had to settle for
Year 2000
contractors with
fewer skills than
needed because the
contractors that
possessed all the
desired skills
generally cost too
much. Also, the
agency reported
that its
consultants are
paying their
staffs more to
retain them, and
these costs are
being passed on to
the agency.
Office of Administration, The office The office
Executive Office of the reported that the reported that
President Year 2000 program finding contractor
is severely personnel with the
straining the appropriate skill
workload of level to analyze
existing legacy systems and
information to recommend
systems and alternatives
technology continues to be a
personnel, and problem.
that any diversion
of personnel to
the Year 2000
program creates a
potential support
problem for
ongoing or day-
to-day operations.
Peace Corps The corps reported
its concerns with
retaining
information
resources
management staff
and filling
vacancies.
Tennessee The agency has
Valley encountered
Authority problems matching
information
technology skill
sets with specific
Year 2000 needs
and has found that
there is a strong
employment market
for information
technology skills.
It also reported
that salaries have
increased for all
information
technology skills,
not just for Year
2000 staff.
U.S. Postal Service The service The service
reported that reported that
retaining skilled retaining skilled
resources needed contractor staff
for remediation continues to be a
and testing challenge.
continues to be a
challenge which is
exacerbated by a
limited labor
pool.
----------------------------------------------------------------------
Table II.2
Agencies Not Reporting Personnel
Problems in Their Latest Reports To OMB
----------------------------------------------------------------------
Large Departments and Agencies (11)
Defense
Education
Federal Emergency Management Agency
General Services Administration
Health and Human Services
Housing and Urban Development
National Science Foundation
Nuclear Regulatory Commission
Office of Personnel Management
Small Business Administration
Social Security Administration
Small Agencies and Other Entities (31)
Armed Forces Retirement Home Board
Commodities Futures Trading Commission
Consumer Product Safety Commission
Corporation for National and Community Services
Defense Nuclear Facilities Safety Board
Equal Employment Opportunity Commission
Export-Import Bank of the United States
Federal Election Commission
Federal Energy Regulatory Commission
Federal Home Loan Mortgage Corporation
Federal Housing Finance Board
Federal Reserve System
Federal Retirement Thrift Investment Board
Federal Trade Commission
John F. Kennedy Center for the Performing Arts
Legal Services Corporation
National Gallery of Art
National Labor Relations Board
National Mediation Board
National Transportation Safety Board
Overseas Private Investment Corporation
Pension Benefit Guaranty Corporation
Railroad Retirement Board
Securities and Exchange Commission
Selective Service System
Small Agencies and Other Entities, cont.
Smithsonian Institution
U.S. Arms Control and Disarmament Agency
U.S. Enrichment Corporation
U.S. Information Agency
U.S. International Trade Commission
U.S. Trade Representative, Executive Office of the President
----------------------------------------------------------------------
--------------------
\1 Four large and three small agencies did not state concerns in
their most recent reports to OMB, but told us of them in subsequent
discussions. These agencies are not included in this list.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C.
Colleen M. Phillips, Assistant Director
GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C.
K. Scott Derrick, Senior Evaluator
ATLANTA FIELD OFFICE
Glenda C. Wright, Senior Information Systems Analyst
*** End of document. ***