Congress uses the Government Accounting Office as its watchdog. The GAO has done more than any other agency to expose the y2k threat to the U.S. government. Its
published documents are crucial for an accurate understanding of y2k and its effects.
This report singles out the Federal Aviation Administration as a laggard. If the FAA fails to complete the repair of its many systems, the economy faces a disaster.
The report warned that a failure by the FAA will undermine the y2k repairs of the entire airline industry: "FAA recently met with representatives of airlines, aircraft manufacturers, airports, fuel suppliers, telecommunications providers, and industry associations to discuss the Year 2000 issue. At this meeting participants raised the concern that their own Year 2000 compliance would be irrelevant if FAA were not compliant because of the many system interdependencies. Airline representatives further explained that flights could not even get off the ground on January 1, 2000, unless FAA was substantially Year 2000 compliant -- and that extended delays would be an economic disaster."
Note those ominous words, "economic disaster."
The report mentions the "domino effect." Let me sketch my FAA domino effect. The FAA will not make the deadline. Airline transportation will be shut down in the United States in January, 2000. I am not saying "if." I am saying it will be shut down. I am not qualifying my prediction in any way. The shutdown will bankrupt the U.S. airline industry. No airline will survive without a government bailout, and the government itself will be bankrupt. Similar airport shutdowns in other nations will bankrupt their airline industries. The travel industry will face widespread bankruptcies. If the banks are still open -- highly doubful -- they will suffer horrendous losses when their loans to the airline industry go sour.
The destruction of just-in-time air freight deliveries from Asia will bankrupt most of the U.S. microcomputer industry. Retail sales will be delayed, then lost. Just-in-time payment by customers will disappear. No more telephone order, "I'll pay by credit card now; then you build it for me" sales. It will be "build it for me; then I'll pay . . . if I decide I still want it." Massive forecasting risk will be shifted back to retailers, who are not prepared for it. That change will wipe out today's leaders in the industry, which are not set up to sell this way.
The world economy will crash in late 1999, if for no other reason than because of the FAA's failure to meet its deadline. Of course, there will be lots and lots of other reasons. But this report should be enough for any rational forecaster to predict a world depression, beginning in late 1999. But only Ed Yardeni is predicting a 60% chance of recession (not a depression).
The blindness of the forecasters in 1997 and 1998 will be heralded in generations of history textbooks. It is incredible that investors do not see what's obviously coming, but they don't.
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Year 2000 Computing Crisis: FAA Must Act Quickly to Prevent Systems Failures (Testimony, 02/04/98, GAO/T-AIMD-98-63). . . .
GAO noted that: (1) many of FAA's systems could fail to perform as needed when using dates after 1999, unless proper date-related calculations can be assured; (2) the implications of FAA's not meeting this immovable deadline are enormous and could effect hundreds of thousands of people through customer inconvenience, increased airline costs, grounded or delayed flights, or degraded levels of safety; (3) FAA's progress in making its systems ready for the year 2000 has been too slow; (4) at its current pace, it will not make it in time; (5) the agency has been severely behind schedule in completing basic awareness activities, including establishing a program manager with responsibility or its year 2000 program and issuing a final, overall year 2000 strategy; (6) further, FAA does not know the extent of its year 2000 problem because it has not completed key assessment activities; (7) specifically, it has yet to analyze the impact of its systems' not being year 2000 compliant, inventory and assess all of its systems for date dependencies, make final its plans for addressing any identified date dependencies, or develop plans for continued operations in case systems are not corrected in time; (8) until these activities are completed, FAA cannot know the extent to which it can trust its systems to operate safely using dates beyond 1999; (9) delays in completing awareness and assessment activities also leave FAA little time for critical renovation, validation, and implementation activities--the final three phases in an effective year 2000 program; and (10) with under 2 years left, FAA is quickly running out of time, making contingency planning even more critical.
YEAR 2000 COMPUTING CRISIS - FAA MUST ACT QUICKLY TO PREVENT SYSTEMS FAILURES
Statement of Joel C. Willemssen Director, Civil Agencies Information Systems Accounting and Information Management Division . . .
Hundreds of critical FAA computer systems make its operations possible; without these specialized systems, FAA could not effectively control air traffic, target airlines for inspection, or provide up-to-date weather conditions to pilots and air traffic controllers. However, many of these systems could fail to perform as needed when using dates after 1999, unless proper date-related calculations can be assured. The implications of FAA's not meeting this immovable deadline are enormous and could affect hundreds of thousands of people through customer inconvenience, increased airline costs, grounded or delayed flights, or degraded levels of safety.
FAA's progress in making its systems ready for the year 2000 has been too slow. At its current pace, it will not make it in time. . . .
Delays in completing awareness and assessment activities also leave FAA little time for critical renovation, validation, and implementation activities--the final three phases in an effective Year 2000 program. With under 2 years left, FAA is quickly running out of time, making contingency planning even more critical. . . .
Integral to executing each of FAA's programs are extensive information processing and communications technologies. For example, each of FAA's 20 en route air traffic control facilities, which control aircraft at the higher altitudes between airports, depends on about 50 interrelated computer systems to safely guide and direct aircraft. Similarly, each of FAA's almost 100 flight standards offices, responsible for inspecting and certifying various sectors of the aviation industry, is supported by over 30 mission-related safety database and analysis systems. Because of the complexity of these systems supporting FAA's mission, many of them are unique to FAA, not off-the-shelf systems that could be readily maintained by vendors.
FAA also has numerous, complex information processing exchanges with various external organizations, including airlines, aircraft manufacturers, general aviation pilots, and other government agencies, such as the National Weather Service (NWS) and the Department of Defense. Over the years, these organizations and FAA have built vast networks of interrelated systems. For example, airlines' flight planning systems are linked to FAA's Enhanced Traffic Management System, which monitors flight plans nationwide, controls high-traffic situations, and alerts airlines and airports to bring in more staff during busy periods. As another example, FAA facilities rely on weather information from NWS ground sensors, radars, and satellites to control and route aircraft.
It is easy to see, then, that should FAA systems not be Year 2000 compliant, the domino effect would be far-reaching. In fact, representatives of major airlines are concerned that even if their own systems are ready for the millennium, they could not fly until FAA's systems were Year 2000 compliant. . . .
On the basis of our discussions with FAA personnel, it is clear that FAA's ability to ensure the safety of the National Airspace System and to avoid the grounding of planes could be compromised if systems are not changed. FAA's organization responsible for air traffic control reported that 34 of the 100 mission-critical systems it initially assessed were likely to result in catastrophic failure if they were not renovated. FAA plans to renovate all of these systems. As of January 30, 1998, assessments of another 140 mission-critical air traffic control systems were continuing. . . .
External organizations are also concerned about the impact of FAA's Year 2000 status on their operations. FAA recently met with representatives of airlines, aircraft manufacturers, airports, fuel suppliers, telecommunications providers, and industry associations to discuss the Year 2000 issue. At this meeting participants raised the concern that their own Year 2000 compliance would be irrelevant if FAA were not compliant because of the many system interdependencies. Airline representatives further explained that flights could not even get off the ground on January 1, 2000, unless FAA was substantially Year 2000 compliant -- and that extended delays would be an economic disaster. Because of these types of concerns, FAA has now agreed to meet regularly with industry representatives to coordinate the safety and technical implications of shared data and interfaces. . . .
FAA has started to renovate some of the systems it has already assessed. However, because of the agency's delays in completing its awareness and assessment activities, time is running out for FAA to renovate all of its systems, validate these conversions or replacements, and implement its converted or replaced alternatives. . . .
But time is short. Should the pace at which FAA addresses its Year 2000 issues not quicken, and critical FAA systems not be Year 2000 compliant and therefore not be ready for reliable operation on January 1 of that year, the agency's capability in several essential areas -- including the monitoring and controlling of air traffic -- could be severely compromised. This could result in the temporary grounding of flights until safe aircraft control can be assured. Avoiding such emergency measures will require stronger, more active oversight than FAA has demonstrated in the past. . . .
Officials of both FAA and the Department of Transportation generally agreed with our findings, conclusions, and recommendations. FAA's CIO stated that FAA recognizes the importance of addressing the Year 2000 problem and plans to implement our recommendations.
This concludes my statement, and I would be pleased to respond to any questions that you or other Members of the Subcommittees may have at this time.
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