Douglas A. Criscitello
New York City Independent Budget Office
Preparing The City's Computer Systems For The Year 2000
The New York City Council
Task Force On Technology In Government
June 6, 1997
NEW YORK CITY'S YEAR 2000 CHALLENGE
Thank you for the opportunity to appear before the Task Force
on Technology in Government to present the views of the New York
City Independent Budget Office (IBO) on City's computer challenge
for the Year 2000. My testimony today will focus on our survey
of how other entities are dealing with the date recognition problem
- including the governments of other cities and states, federal
agencies, a private financial services firm, as well as some of
the covered agencies in the City (BOE, CUNY, HHC, and NYC Transit).
Based on the survey, we'd like to identify what we believe to
be important but less obvious planning considerations.
- In compiling the inventory during the assessment stage,
it is important to be comprehensive and look beyond just applications
software. Date compliance problems can arise in other forms of
code and in hardware and non-computer durables that employ processing
- Securities Industry News surveyed information technology
(IT) managers in the financial information industry and suggested
including the following when surveying: (1) operating systems;
(2) compilers; (3) communications equipment (e.g., PBXs); (4)
networking hardware and software; (5) computer hardware like BIOS
(basic input-output system) chips. We were told by some IT managers
that many 486 PCs and even some early Pentium PCs utilize non-compliant
BIOS (basic input-output software) chips. In general, PC-based
code is a less obvious potential source of non-Year 2000 compliance.
- The General Accounting Office (GAO), which is helping to support
and audit the federal government's management of the Year 2000
problem, pointed to hardware compliance as a particularly important
issue. Elevators in federal office buildings and even missiles
in silos have computer chips that may have to be upgraded. The
GAO has found that the cost of repairing this embedded software
is as much as four times as expensive as repairing program code.
Local examples might include traffic lights or elevators in City-owned
- All workload should be prioritized following risk assessment,
especially if there is a possibility that not all repairs will
be made in time to meet the deadline.
- The NYS Governor's Task Force on Information Resource Management
(Governor's Task Force) is preparing a risk assessment to identify
the most critical systems, help set compliance deadlines, and
evaluate the consequences of non-compliance. They believe this
exercise will help them allocate limited resources more efficiently
by focusing on mission critical functions.
- One dominant aspect of the scope of the Year 2000 problem
is the need to ensure system compatibility between internal and
external systems and programs and data from vendors and interaction
with third party users. Virtually every organization we spoke
to commented on this issue.
- The financial services firm we contacted emphasized that it
has worked closely with industry user groups to ensure effective
communication. Further, the firm has requested vendor certification
of product compliance in writing.
- To avoid data corruption, the Social Security Administration,
as well as all other federal agencies, are required to adopt expansion
as their only means of repairing external interfaces.
- New York City faces less complicated concerns related to this
problem than the financial services industry, where firms regularly
maintain on-line contact with external organizations. For the
most part, the City's contact with external systems is largely
limited to off-line data transfers.
- We found that the primary ways that Year 2000 compliance
has been achieved is expansion of date fields or the application
of "windowing" logic. Windowing is a change in programming
logic to enable applications to properly interpret two-digit year
fields. The choice between the two appears to be based not just
on organizational needs but on differences of opinion on future
- The federal government's requirement that all agencies use
field expansion is based on concerns about the need for system
compatibility and the discretion available when windowing is applied.
- The State of Nebraska is using field expansion because they
want a permanent solution. Windowing repairs necessarily expire
at some point in the coming century.
- The financial services firm believes that expansion is too
costly, potentially introduces new complexities and failure points,
while windowing provides for an adequate period of working condition
of 50 to 80 years, depending on the window that is set up.
- The Governor's Task Force has yet to make a final decision
on methodology. They, like the City, will have to consider compatibility
issues for the programs that interact with federal agencies or
any other outside entities.
- We found that testing is considered the most time-consuming
step in the Year 2000 repair process because of the amount of
intra- and inter-system coordination that is necessary to ensure
data accuracy and compatibility.
- The Governor's Task Force estimates that 45 percent of total
project resources may be consumed by testing alone. Both the
financial services firm and GAO suggested that the testing and
debugging phase was more in the range of 50 percent and above
for them. However, the issue of systems interface is less important
for the City, which unlike the financial services sector, does
not share data under real time conditions.
- The financial services firm emphasized the need to include
external parties during the testing phase to ensure compatibility
and data integrity.
- The Social Security Administration, the Board of Education,
and CUNY plan to be testing by the end of 1998. The financial
services industry as a whole also plans to begin testing by 1998
because of the tremendous level of inter-system communication.
- As the deadline for compliance approaches, and demand for
programming services increases, it is believed that costs may
- In our research, we found reports of labor costs increasing
30 percent in the past year alone, from $1.10 per line of code
to $1.50 per line of code (LOC).
- The Year 2000 project manager in the county of Milwaukee pointed
out that they had signed longer-term contracts to ensure consistent
and predictable labor costs.
- In general, there was universal agreement among those surveyed
concerning the need to procure vendor services as quickly as possible
as a safeguard against rising labor costs. Efforts by the Task
Force on Technology in Government, in conjunction with the Contract
Committee, to facilitate the City's procurement process is thus
helpful in this regard.
- Strategic use of scanning and scenario simulation tools
can greatly reduce the amount of work needed for code conversion
- According to a project manager at IBM, up to 95 percent of
"date," "current date," and Julian date calculations
can be identified, depending on the tool. Industry experts agree
that up to 70-80 percent of the manual work associated with code
conversion can be accomplished with automated tools.
Year 2000 repairs will also cause the City to incur costs at covered
agencies. We have also collected the following information.
Board of Education
- BOE has been continuously upgrading its computer systems over
the past few years, reducing the number of non-compliant applications
and lines of code that must be adjusted. Of the 150 applications
that warrant repair, containing 15 million lines of code (LOC),
the vast majority of date instances will be expanded. According
to BOE's Year 2000 project manager, the organization believes
in obtaining the most permanent solution available and is confident
that full expansion can be accomplished by the deadline. BOE
is currently in the midst of conducting its impact assessment,
and expects to begin code conversion in October. The testing
phase is planned for the first quarter of 1999. The Board has
budgeted $5 million for the repair.
- Transit began its Year 2000 compliance initiative in 1996,
and also expects to finish by the deadline. Out of the 15,500
programs (18 million LOC) that need repair, about 9,500 programs
(7 million LOC) will be replaced/retired, at a cost of $3 million,
while the remaining 6,000 programs (11 million LOC) will be modified,
at a cost of $5 million. The $0.42 cost to repair each line of
code is low in comparison to industry standards due to a number
of earlier upgrades to the central system, as well as extensive
use of existing staff.
City University of New York
- CUNY reports that it is in good standing as well with regard
to its Year 2000 project, which began three and a half years ago.
The University has used the Year 2000 project as an opportunity
to centralize several information systems. For example, instead
of repairing the student information and financial accounting
systems at each of the eighteen colleges, these systems have been
or will be brought into a central system that has been made Year
2000 compliant. CUNY believes that this strategy has simplified
the repairs greatly and allowed for improved efficiency. The
fact that its computer systems operate largely in isolation from
other systems allows CUNY to concentrate solely on code compliance
without the added complexity of compatibility. The testing phase
is planned for 1998. All work associated with code modification
is being done by four full-time, in-house personnel.
Health and Hospitals Corporation
- HHC is also addressing its Year 2000 compliance needs. We
are currently looking into its progress, and expect to complete
an assessment in the next few weeks.
This concludes my testimony. I will be pleased to answer any
questions you may have.