X-SciTech

Y2K Fix To Cost Feds $5.4B

September 4, 1998 / 6:35 PM EDT / AP

The federal government said Friday it will cost at least $5.4 billion to fix the Year 2000 problem in its most important computers, about $400 million more than previously estimated.

And President Clinton's Year 2000 chief, John Koskinen, said the figure almost certainly will go higher.

"It will probably still go up as we move into the last year," said Koskinen, chairman of the Year 2000 Conversion Council. "We're going to discover as we move through this last 15 months more things that need to be done."

In its latest report on the "millennium bug," the federal Office of Management and Budget said half the government's 7,343 mission-critical computers already have been fixed, replaced or were originally unaffected.

Of those 3,692 systems already prepared, just over half were never affected by the problem. In its previous report, in May, the OMB said 40 percent of all the government's important computers were ready for 2000.

OMB said seven of the government's largest agencies aren't making adequate progress and will miss President Clinton's deadline to have their most important computers fixed by March 1999 unless they improve.

The State Department, for example, has fallen further behind in the past three months and now "faces a significant challenge in managing its extensive Y2K project," the OMB report said.

The other agencies lagging are Defense, Education, Energy, Health and Human Services, Transportation and the Agency for International Development. The report said HHS and the AID don't believe they will make Clinton's deadline.

Experts have warned for years that many computers originally programmed to recognize only the last two digits of a year will fail on Jan. 1, 2000, when machines will assume it is 1900.

Some computers can be reprogrammed through tedious rewriting of their software code, but many devices have embedded microchips that must be physically replaced.

Estimates to fix the problem in corporate computers range from $40 billion to $200 billion in America, with worldwide estimates as high as $600 billion.

Friday's OMB report follows a meeting earlier this week among Vice President Al Gore and senior officials of the seven agencies making inadequate progress.

Some Republicans have suggested that Gore, expected to run for president in 2000, is politically vulnerable to criticism that he didn't do more to prevent potential problems stemming from the computer glitch.

Koskinen noted that even the seven agencies behind the deadline have some of their computers fixed.

In its report, OMB estimated the State Department's cost at $167.6 million, higher than the agency's own estimate from May of $153 million. The Defense Department's costs were highest, just under $2 billion alone.

A report last week from the General Accounting Office warned that if the State Department's computers aren't prepared, the systefor screening visa applicants for criminal or terrorist background might fail, and the agency might not be able to send messages to diplomats overseas.

The State Department didn't respond to the OMB report, but it has said previously that its computers to verify passports and visas will be repaired, and that it's successfully tested its message systems.