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RPTS SEBO
DCMN NORMAN
REVIEW RAIL AND TRANSIT ISSUES RELATED TO
THE YEAR 2000 COMPUTER
Y2K: WILL WE GET THERE ON TIME?
PROBLEM
Friday, October 2, 1998
House of Representatives,
Committee on Transportation
and Infrastructure,
Washington, D.C.
The committee met, pursuant to call, at 10 a.m., in Room 2167, Rayburn House Office Building, Hon. Bob Franks presiding.
Present: Representatives Franks, Petri, Duncan, Thune, Oberstar, Rahall, Wise, Norton, Johnson, Blumenauer, and McGovern.
Mr. FRANKS. [Presiding] Good morning, ladies and gentlemen.
First I would I would like to ask unanimous consent that we leave the hearing record of today's proceedings open for 30 days to allow members to make comments and submit written questions; and, secondly, unanimous consent that we make provision for the Chairman of the full committee, Mr. Shuster, to add a statement to the record of today's proceedings. Seeing no objections, so ordered.
[The information follows:]
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******** COMMITTEE INSERT ********
Mr. FRANKS. Good morning. This hearing this morning will be dedicated to the implications of the Y2K problem for the railroad industry and the Federal agencies that deal with railroad issues. We will be hearing from three Federal agencies: the Federal Railroad Administration, the Surface Transportation Board, and the Railroad Retirement Board. We will also be hearing from the Association of American Railroads.
What started as a very simple practice, using two digits instead of four when writing dates in computer programs, has mushroomed into one of the most important information management challenges the Nation has every faced. The Y2K problem demonstrates the degree to which we have come to depend on computers in virtually every facet of our lives. The problem exists in computer hardware, operating systems and system software, as well as in any equipment that contains embedded microprocessors such as fire alarms and telecommunications systems. Anyone who has a telephone or a bank account could be affected.
The Y2K problems has implications of varying degrees of seriousness for the three Federal agencies appearing before us today. The Federal Railroad Administration is responsible for administering and enforcing Federal rail safety laws. Y2K problems could hinder the FRA's ability to track enforcement cases internally and could disrupt its docket management.
The STB is responsible for the economic regulation of railroad rates, practices, and related matters and uses computers for internal communications and docket management.
The Railroad Retirement Board is the independent Federal agency responsible for determining eligibility for and disbursing benefits under the Railroad Retirement Act and the Railroad Unemployment Insurance Act. There are approximately three-quarters of a million railroad retirement beneficiaries who receive monthly benefit checks from the Railroad Retirement Board through electronic fund transfers. Y2K problems could affect the board's ability to maintain records of benefit eligibility.
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In addition, since benefits are transferred electronically, even if the board is fully Y2K compliant, if the banks are not, beneficiaries may not receive their checks on a timely basis. We will be interested today to hear from the witnesses from these particular agencies on the status of their efforts to come into compliance in advance of the year 2000.
Today we will also be hearing from the Association of American Railroads. Y2K compliance is a critical issue for the railroad industry. For the larger railroads, dispatching operations that control train traffic are largely computerized. Significant problems in this area could literally shut down the rail network or pose significant safety hazards.
Interchanges of traffic from one railroad to another are monitored through electronic data interchange. Railroads and shippers also use computers to track the location of shipments, and this information is often coordinated with port facilities or other origin and destination points.
Another important issue for the railroads is the degree to which their vendors have achieved Y2K compliance. Without access to critical supplies such as diesel fuel, the railroads could literally be crippled I will be very interested in hearing from the AAR on the steps that are being taken both internally and externally to ensure that safety is not compromised and that the rail network continues to run smoothly on and after January 1st, 2000.
These are very important issues, and I want to thank our witnesses in advance for sharing their knowledge with us today.
Now, I would like to recognize the distinguished Ranking Member of the subcommittee, Mr. Wise.
Mr. WISE. Thank you, Mr. Chairman. And I would ask as well, unanimous consent that the statement of the Ranking Member of our full committee, Mr. Oberstar of Minnesota, be made a part of the record.
[The information follows:]
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Mr. WISE. Mr. Chairman, I am pleased that the committee is meeting this week and next on the Year 2000 problem or, as it is known, Y2K. I approach these hearings with a little amount of trepidation. I have finally mastered a 5-year-old MacIntosh laptop, I know it can do e-mail, I can't go inter- and intraoffice. I am signed on to an Internet carrier and that is about it. And so these are fairly complex areas that we are into, but they are they are very important, and I think you are quite correct to schedule this hearing.
As I reviewed, the Clinton administration has seemingly established a sensible schedule for solving the problem in Federal agencies. The Office of Management and Budget has sent out guidance to all agencies. The guidance appears to make sense. I keep saying ''seemingly appears,'' because I am no expert on this, and I don't know that anybody is—although I guess we are all becoming. They have established a schedule for bringing computer systems into compliance. In particular, agencies are to identify with their mission-critical systems or determine whether any of them are not Year 2000 compliant and fix the ones that aren't.
After they are fixed, the OMB has set out a process of interest verification and validation, or IV&V, to test whether the fixes that have been made on these systems really work. The agencies that deal with the railroad industry, the FRA, the STB, the Railroad Retirement Board and the National Mediation Board, seem to be in pretty good shape in terms of getting their mission-critical systems Year 2000 compliant. I am going to be interested to see how many of these mission-critical systems there are and what progress has been made in getting them fixed.
I will also be interested in knowing what kind of independent verification and validation system each action has adopted. My understanding is that each agency has a considerable amount of discretion in what sort of IV&V you adopt. We need to know what they are doing so we can assess how sure we can be that it will really work.
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The key word I think is ''independent.'' It is essential that the verification and validation process be carried out by someone who is both knowledgeable about the technology and truly independent of whoever did the fix in the first place.
Carriers, of course, are important to this process. Some of the carriers I am sure are well organized and have the problem solved well within the deadline. But there are 550 railroads out there, and we need to know what confidence we can have that all of those railroads are ready.
You also point out another problem that I think could be in some ways most significant, Mr. Chairman, and that is of the Railroad Retirement Board that has a special problem that its operations depend not only on its own computer systems, but on the computer systems of the hundreds of banks that it deals with through electronic funds transfer. We need to know what assurance there are that these banks will be Year 2000 compliant.
Somehow we need to be talking to who is overseeing the banks to make sure that their systems are being fixed and verified. If the Federal Government fails to get these checks out on time to the hundreds of thousands of railroad retirees and widows, we will surely have failed to do our job.
You know, it is a bit ironic, Mr. Chairman, as I look around the committee room at the portraits of the different forms of transportation, this committee particularly through its highway bill, or through its TEA-21 legislation this year, is in the process of building many, many bridges into the 21st century; the only trouble is if Y2K becomes a problem, we may not be able to move anything over them.
Thank you very much.
Mr. FRANKS. Thank you, Mr. Wise.
Mr. Duncan?
Mr. DUNCAN. I have no opening statement.
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Mr. FRANKS. Ms. Norton.
Ms. NORTON. No opening statement.
Mr. FRANKS. Mr. Blumenauer?
Mr. BLUMENAUER. Thank you, Mr. Chairman.
I just must say that I am stunned at the technological proficiency of our friend from West Virginia. As the person who will have the last rotary dial phone in North America, I hope to take him aside after this hearing. What little I know about the Y2K problem is I think I would rather be on a railroad passenger train than in the air on the week that we turn the calendar. But I really appreciate your scheduling this hearing, and I look forward to learning from it so that I can maybe get up to the level of some of our more technically proficient members.
Mr. FRANKS. I would thank the members of the committee.
I would like to move now to the first panel of witnesses. We have with us Mr. Donald Itzkoff, who is the Department Administrator of the Federal Railroad Administration; Mr. Lee Gardner, the Director of the Office of Economics for the Surface Transportation Board; Mr. Robert Rose, the Chief Information Officer for the Railroad Retirement Board; and Mr. Jim Gardner, Technology Consultant to the Association of American Railroads.
I would like to thank all of you for attending this morning.
TESTIMONY OF DONALD ITZKOFF, DEPARTMENT ADMINISTRATOR, FEDERAL RAILROAD ADMINISTRATION; LEE GARDNER, DIRECTOR, OFFICE OF ECONOMICS, SURFACE TRANSPORTATION BOARD; ROBERT ROSE, CHIEF INFORMATION OFFICER, RAILROAD RETIREMENT BOARD; AND JIM GARDNER, TECHNOLOGY CONSULTANT, ASSOCIATION OF AMERICAN RAILROADS
Mr. FRANKS. And, Mr. Itzkoff, if we could begin with you.
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TESTIMONY OF DONALD ITZKOFF
Mr. ITZKOFF. Thank you. Chairman Franks, members of the committee, thank you for this opportunity to testify. In summary, I will discuss FRA's internal compliance with Y2K, our outreach with the railroad industry, and the status of the industry's Year 2000 efforts.
I am pleased to report that on August 28, FRA certified to OMB that our information systems have achieved Y2K compliance. Last month, the Department's Office of Inspector General concurred that FRA's mission-critical information systems are Y2K compliant today. Unlike the FAA or Coast Guard, FRA does not operate any computer systems actually managing transportation flows.
FRA's information systems primarily include supporting databases of networks. Nevertheless, our experience in bringing these internal information systems into compliance has enhanced our outreach efforts with the railroad industry.
FRA began to address Y2K compliance issues in 1997 as part of our safety assurance and compliance program. Last July, we convened a major railroad workshop on Y2K where Deputy Secretary Downey emphasized the importance of preparing for Y2K, stressed the need to share information and stressed the potential disruption of failing to achieve Y2K solutions. The meeting was productive and we intend to convene a follow-up meeting in early 1999.
In addition, FRA has also requested and received from the major Class I railroads specific reports addressing the status of Y2K activities in coordination with tenant commuter railroads and connecting short line and regional carriers. I ask that a copy of the August 13, 1998 letter of Administrator Molitoris on this subject and responses we have received be made a part of the hearing record.
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Overall, the Class I railroads, including Amtrak, have acknowledged the significance of Y2K and taken appropriate remedial steps. Coordination between Class I carriers and tenant commuter operators and short line regional railroads, however, requires additional work and we will concentrate on this task.
Recognizing the increasing profile of Y2K and the strong financial incentives each entity has to solve the problem, FRA has not had to question the veracity or the reliability of the information we have obtained to date. Let me assure the committee, however, that as we continue our monitoring activities, that should Administrator Molitoris or I become aware of a Y2K problem with implications for railroad safety, the agency will take immediate and appropriate action under existing statutory authority to prevent unsafe operations from taking place.
Our findings for the freight railroad industry can be summarized in several categories. First, because grade crossing signals are event-driven, rather than time- or date-driven, signal suppliers, railroads, and FRA staff have concluded that grade crossing signals generally do not face systemic Y2K issues.
Second, Y2K issues also do not appear to be made major concerns with respect to rolling stock or equipment. Only one-third of the diesel locomotive fleet utilizes microprocessors, and these systems are primarily event-driven.
Third, FRA does not anticipate Y2K problems would affect safety in connection with train control, communications and operating data, and business systems. However, the slowdown that would result from Y2K problems here, if not fully addressed, could indirectly affect safety. FRA will continue to monitor railroad progress in this area to assure that safety concerns are fully addressed.
Finally, with respect to commuter and passenger railroads, Amtrak has identified and validated its Y2K remediation program and expects its dispatch and business systems to be in compliance by the first quarter of 1999. Electric passenger and community railroads such as SEPTA and New Jersey Transit and others are working with their respective electric utilities to ensure that they are Y2K compliant, and will be able to provide uninterrupted power on January 1, 2000.
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In conclusion, Administrator Molitoris and I are pleased by the progress FRA has made to date in both assuring the compliance of FRA's own computer systems and in working with our railroad colleagues to help assure that railroad operations move seamlessly into the Year 2000. We recognize that significant issues remain ahead as we meet the Y2K challenge, and we look forward to working with the committee over the next 15 months on this issue.
Thank you, and I would be happy to answer any questions that you may have.
[The statement of Mr. Itzkoff follows:]
******** INSERT 1-1 ********
Mr. FRANKS. Thank you.
Mr. Lee Gardner, the Director of the Office of Economics for STB.
TESTIMONY OF LEE GARDNER
Mr. LEE GARDNER. Good morning. My name is Lee Gardner. I am here today representing the Surface Transportation Board. I am the Board's Director of Economics, Environmental Analysis and Administration.
Chairman Linda Morgan had planned to be here today, but unfortunately, due to a death in her family, she is not able to do so.
As requested by the committee, I will briefly summarize our progress in addressing Y2K problems as they relate to Board functions and describe outreach efforts that have been undertaken by the Board itself and in cooperation with the Federal Railroad Administration to monitor rail industry compliance.
Since its creation in 1996, the Board has made dramatic strides in utilizing computer technology and electronic media to improve internal and external communications and to increase the productivity of our staff. While computers have enhanced the efficiency and effectiveness of the Board, our increased dependence on this technology makes us more vulnerable to circumstances that might compromise the availability or dependability of these systems. Therefore, Chairman Morgan has made the Year 2000 problem a priority at the Board.
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The Office of Management and Budget has set March 1999 as the target date for all agencies to implement solutions and certify compliance with Y2K. The STB will meet that deadline. We have identified two systems at the Board that are mission-critical and three other systems that require modification in order to function properly in 2000. Mission-critical systems are the local area network, including individual workstations, and uniform railroad costing system, or URCS.
Our local area network provides a critical communication link among the staff at the Board and is a vital tool for accessing information outside the Board and providing information to Board constituents and the general public. All of the servers and workstations used for Board business processes have passed Year 2000 compliance tests.
The second mission-critical system at the Board is URCS. This is a set of data programs and procedures used to develop estimates of railroad movement or shipment costs. URCS has widespread application at the Board and is used for making jurisdictional threshold determinations for rail maximum rate cases and evaluating rail abandonment applications. In September of this year, we certified that URCS and all of its components were Year 2000 compliant.
Three other computer systems which are mission-enhancing but not mission-critical have been identified as susceptible to problems associated with the Year 2000. These are our fees and billing system, computer-assisted depreciation and life analysis system, and CASE, a computer database used to track proceedings before the Board. Necessary modifications have been made to CASE to make it Y2K compliant. We are in the validation phase for FAB, which should be certified as compliant not later than November of this year.
Finally, the software that operates CALDAS has been identified as vulnerable to Y2K problems. This system assists the Board in reviewing depreciation studies submitted by each
Class I railroad. We project that CALDAS will be fully
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completed by March of 1999. All of the costs associated with
Year 2000 efforts have been funded within our existing
budget.
The Board has also been monitoring the railroad industry's progress in making the necessary upgrades to their systems in order to ensure continuity of rail service and the safety of rail operations. In late 1997, the Board contacted all Class I railroads to assess the potential impact of the Year 2000 problem on their accounting, reporting, and general operating systems. Based on these contacts, we concluded that the railroad industry has made significant progress in developing and implementing plans to eliminate any Year 2000 malfunctions that could threaten safety or service.
In response to the survey, all of the major railroads indicated that all of their systems would be able to deal with the changeover to 2000. We also inquired about the projected costs for required modifications. Cost estimates ranged from 6 million to 46 million per railroad.
The Board has also participated in outreach efforts sponsored by the FRA. In July, the FRA convened a workshop that brought together representatives from the railroad industry, railroad suppliers, rail labor, and government agencies. The purpose of these meetings was to increase awareness of the Year 2000 issue in the railroad industry and provide the opportunity to share information and jointly discuss solutions to problems created by Year 2000. A second outreach meeting is planned for early 1999.
In summary, I am pleased to report that the Board has addressed all mission-critical systems issues related to Y2K and that we will be in full compliance with any remaining issues by March 1999. Further, based on our communications with the railroad industry, it appears that all segments of the industry have been aggressive in identifying Y2K issues and in making the necessary modifications to ensure that the service from and safety of this vital element of our transportation system is not compromised.
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Thank you very much, and I would be happy to answer any questions that you might have.
[The statement of Mr. Lee Gardner follows:]
******** INSERT 1-2 ********
Mr. FRANKS. Thank you, Mr. Gardner.
Mr. Rose, the Chief Information Officer of the Railroad Retirement Board.
TESTIMONY OF ROBERT ROSE
Mr. ROSE. Mr. Chairman, members of the subcommittee, good morning, my name is Robert Rose and I am the CIO for the Railroad Retirement Board. I am pleased to have this opportunity to testify about the status of our Year 2000 project.
The RRB is an independent agency in the executive branch of the United States Government which administers the Railroad Retirement and Railroad Unemployment Insurance Acts. Under the Railroad Retirement Act, the Board makes retirement, disability and survivor benefits based on employment with the railroad industry. During fiscal year 1997, the RRB paid $8.2 billion in retirement and survivor benefits to nearly 800,000 beneficiaries.
The agency has designated the Year 2000 issue as its highest priority project. Our primary goal is to complete the implementation of 100 percent of our mission-critical systems by the end of this calendar year, 3 months earlier than the goal established by the Office of Management and Budget. To demonstrate the strength of our commitment to this project, this goal is included as one of our key objectives in the agency's strategic plan. We have also established a goal to complete implementation of virtually all of our nonmission-critical systems by the end of fiscal year 1999.
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At this time, we are making very good progress and we are on or ahead of schedule for meeting these goals. The RRB has 124 mission-critical systems, of which 87, or 70 percent, are now Y2K compliant. Those 87 completed include 60 mainframe systems and 27 PC-based systems. All remaining mission-critical systems are scheduled for conversion by the end of this calendar year. Our most recent achievement was the completion of the renovation of all mission-critical systems by September 30th, 2 days ago, as scheduled.
Beginning in January 1999, we are planning a series of comprehensive integration tests for all major information systems. These tests, performed after each individual system has been revised and reintroduced into the production environment, will be geared toward ensuring that all interfaces, connections, and links between the various systems remain fully in sync and fully functional.
We have also developed an inventory of external data exchanges for both critical and nonmission-critical systems. These exchanges are generally conducted with other Federal and State agencies, railroads and financial institutions. We have contacted all of these organizations and, with few exceptions, have developed all required Y2K data formats. In the event that all data received from external sources is not fully compliant before the year 2000, we plan to implement bridge programs which will temporarily reformat the information as required. Most of these bridge programs have already been developed and tested.
In addition to the application systems area, we are also taking action to ensure Y2K compliance in three other areas. First, all proprietary system software packages used in our data center will be tested and certified to be compliant by the end of fiscal year 1999. Second, in the area of desktop computing, we are testing the agency's entire inventory of personal computers for Y2K compliance. The agency's goal is to equip each employee with a compliant PC prior to the end of fiscal year 1999, and funds have been identified in the President's 1999 budget specifically for this purpose. In the third area, which concerns office facilities such as telephones and elevators, we are taking follow-up actions in these few systems found to be noncompliant.
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The RRB's most significant external interface—which supports a payment of both Social Security benefits and Railroad Retirement benefits—is with the Social Security Administration. We have a close relationship with SSA and have exchanged test files with them to ensure that these interfaces will work smoothly in the Year 2000. We also exchanged information with the Department of Treasury related to the issuance of benefits checks, direct deposit transactions, return payments and other financial matters.
They serve as the conduit to most transactions between the RRB and the Federal Reserve Bank and other banks. Treasury officials have assured us that no revisions are required in the formats of our file exchanges with them. The RRB does not have any international direct deposit program and, therefore, is not concerned with Y2K banking issues outside of this country. The Department of Treasury has requested that we transmit our monthly benefit file via electronic data communication instead of by tape media to accommodate their Y2K conversion. We are complying with that request and expect a smooth transition in that area.
In summary, we are confident in our ability to achieve the agency's goals for the Year 2000 and that our transition to the next century will offer uninterrupted service and continuous high-quality operations.
Thank you. That concludes my remarks. I would be happy to answer any questions that you may have.
[The statement of Mr. Rose follows:]
******** INSERT 1-3 ********
Mr. FRANKS. Thank you, Mr. Rose.
And we will hear from Mr. Jim Gardner, Technology Consultant for the Association of American Railroads.
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TESTIMONY OF JIM GARDNER
Mr. JIM GARDNER. Mr. Chairman, the Association of American Railroads appreciates this opportunity to present its comments on the Year 2000 problem in the railroad industry including Amtrak. My background for this testimony is 30 years' experience in the railroad industry, of which the last 10 have been spent in executive positions in information technology.
I have attached a written summary by Amtrak on its efforts with regard to Y2K issues as well. The freight railroad industry, as some have mentioned here, is highly interdependent. Twenty-five percent of all freight traffic and 33 percent of all freight revenue involves interline movements over two or more railroads. In order to do this safely and efficiently, railroads depend heavily on computers both in operations and in information exchange. All segments of the railroad industry thus are very much aware of the critical importance of addressing the Y2K problems and consider it to be their top priority.
Railroads and rail suppliers are engaged at every level in identifying potential problems and preventing them. The major railroads expect to spend more than $250 million doing this. The two critical areas we need to focus on are safety and service continuity.
Our first priority is safety. The industry Y2K efforts in the safety-critical areas address mainframe computer systems, decision support systems, and components supplied by vendors, including embedded devices.
Of particular importance to railroad safety are the industry's signaling systems and grade crossing devices. Research and testing experience shows that these safety-critical aspects of signals and grade crossings do not employ date calculations and are not subject to Y2K problems. However, we plan to continue researching and testing until we assure that every safety-critical component and system will operate properly.
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The other area of critical importance is service. The operations of the large freight railroads and Amtrak depend heavily on information technology. Formal efforts to address Y2K problems have actually been underway for several years in the railroad industry. Railroads have developed a four-part process to deal with problems involving, one, inventory; two impact analysis or testing; three, remediation and testing; and, four, contingency planning.
One railroad estimates that roughly 3 to 4 percent of its core mainframe lines of code will need to be remediated. That is the extent of their problem. The AAR believes this is typical of the industry. Within their Year 2000 project offices, most railroads distinguish between their information technology or IT-related work and their enterprise or business work. The IT work, particularly addressing core mainframe systems, began before the enterprise work. We understand that our members, though, expect to complete the great majority of the IT work this year, 1998.
Enterprise work is also well underway, but some of that will stretch into next year. Although most Y2K work is being performed in individual railroads, there are also supportive activities at the industry level.
The North American Rail Industry Year 2000 Coordination Task Force was formed to manage industry-level activities, and includes representatives from both large and small railroads. Because so much rail freight, about one-fourth, as I mentioned earlier, involves movement by more than one railroad, there is extensive interaction among railroad information systems. This has led to the development of various central information system applications at rail link.
This task force has also developed plans for testing these systems to ensure that they will continue to work properly when the millennium arrives. The task force expects most of this testing to be complete this year.
In addition, the information gained by the task force will be offered to all North American railroads, large and small. There is a cooperative effort here.
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I thank you for this opportunity to testify before the committee, and I would be pleased to answer any questions.
[The statement of Mr. Jim Gardner follows:]
******** INSERT 1-4 ********
Mr. FRANKS. Thank you Mr. Gardner.
Mr. Itzkoff, you pointed out in your statement that FRA does not use its computers for any real-time transportation management, and you also pointed out that FRA is on the path to be Y2K compliant. I want to raise an issue that has appeared recently in some media accounts that indicate that some embedded chips may malfunction earlier than 1/1/2000, perhaps as early as 1/1/99 or 9/9/99, because these chips don't recognize either 99 as a digit sequence or 00 as a valid date.
Has this issue been raised in any of your discussions with DOT or specifically at the FRA?
Mr. ITZKOFF. Yes. With respect to our internal systems, we identified 19 different systems in the assessment phase that merited a Y2K review. Seven of those were mission-critical, three were central to our mission, and nine were noncritical. As part of the entire renovation process, we actually did subject all of these systems to the test that you described, such as 1/1/99 or 9/9/99. That was done by our contractor. We have then independently verified it through our information technology staff and then the Office of Inspector General, as I have said, has run an independent verification of our mission-critical systems as well. So I think that we have done that.
The other thing I would say is that our backup plan is a key component in dealing with this, and that is another element that we have pushed forward aggressively on.
Mr. FRANKS. Thank you.
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Mr. Gardner, this subcommittee received strong assurances from CSX and Norfolk Southern that their joint acquisition of Conrail would not result in the serious service disruptions that we have witnessed in the case of UPSP.
In your review of those applications, did the Board evaluate the CSX-Norfolk Southern strategies to be Y2K compliant?
Mr. LEE GARDNER. I don't think that was a central issue; however, following the approval of that application, as part of the approval of that application, there was a Conrail Transactions Council that was established. And we have been participating in that council, meeting monthly with representatives from the railroads as well as the shippers, to discuss a wide range of issues, and one of the issues, of course, is the interface of computer systems, not only for business purposes but also for operations.
It seems, or appears to us so far, based on the meetings that we have had and discussions that we have had with them, that that is something that they have identified as a necessary step.
As was mentioned by Mr. Jim Gardner, the railroads are very interdependent in the sense of movements that occur on more than one system. So it seems like this problem that they might have would be similar. Whether or not the systems were combined or separate, there would still be issues that would have to be dealt with in terms of coordination of movements and coordination of information. So I think that the work that has been done by the Transactions Council is certainly addressing this area.
Mr. FRANKS. Let me press, if I can, one more time. Mr. Gardner, there are many members of this subcommittee who hail from regions of the country that are serviced by Conrail. We are anxious about how that merger and that acquisition are going to affect service on the ground.
Can you tell us anything more specifically as to the readiness of CSX and Norfolk Southern to make certain that the Y2K issue does not become disruptive of service in the Northeast?
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Mr. LEE GARDNER. Well, Mr. Franks, I think that certainly both of those railroads have identified Y2K as a priority for them. And every indication we have is that they are making progress, as are all of the Class I railroads. And I do believe that from what I have observed in meetings that I have attended of the Transactions Council, that this is a very planned and intentional joining or disjoining of these systems, and they have considered every issue and every possible area of concern. And I am confident that Y2K will not be a problem.
Mr. FRANKS. Thank you.
Mr. Rose, the electronic benefit transfer of beneficiaries checks depends not upon only the Railroad Retirement Board to be Y2K compliant but the financial institutions that are used by retirees to access their benefits.
Have you run any tests with those financial institutions to get a sense of the level of preparedness of the financial institutions involved?
Mr. ROSE. We clearly recognize that that is the ultimate problem: Does it go to the individual recipients' banks successfully. We only deal with four international institutions ourselves directly. All the benefit payments go to the Department of Treasury, electronic transfer to the Department of Treasury. Naturally, that doesn't let us off the hook as far as we are concerned. We have had continuing meetings with Treasury for many, many months since we started our Y2K efforts.
First of all, there is no Y2K issue in our transfer. There is no date of reformatting. They do not do any date checking on what we send them. It is not necessary. It is a name, it is an amount, and it is a date of the check. But they assure us that they are dealing with the Federal Reserve and the Boards for the Y2K transfer from them to the banks. And in testimony back in April of this year before our Subcommittee on Appropriations, Treasury testified, or I mean—I beg your pardon—SSA testified, which is in the same mode that we are, as to what they are doing with the Federal Reserve and the Treasury. They were given assurances that the same things that we are—that Treasury is very confident. I have had conversations, as recently as 10 days ago, with our local Treasury officials and they say we are on schedule or ahead of schedule.
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We have three other financial institutions we deal with. They are for tax deposits and for the Federal Employees Thrift Savings Program with the National Finance Center. There are no other changes required in those that have—we have already fully compiled with that and tested them. So I think we have done everything we potentially can to ensure the benefit payments.
Mr. FRANKS. Thank you.
We have been joined by a number of members of the committee, and I want to particularly recognize and acknowledge the Ranking Member of the full committee, Mr. , Oberstar for joining. Jim, thank you very much.
Mr. OBERSTAR. Thank you very much, Mr. Chairman. This is a very important portion of our full committee hearings on the Y2K issue. And I think you addressed it very succinctly in saying that there are a great many members who are concerned about Conrail, about Amtrak and other East Coast rail operations that affect about one-third of the Nation's population. And it is important to know where you stand with your compliance initiatives to meet the goal of being fully Y2K compliant as we turn the corner on the next century.
Our last hearing was on the aviation sector—or our first hearing, I guess, the one we just previously conducted—and there we learned that as of yesterday, the FAA is 99 percent compliant. Now they have to test and fully evaluate all of the initiatives undertaken to ensure that the steps taken will meet all potential contingencies. Those matters are now being tested by three different entities. The problem, however, in rail and, as we will hear later, in transit is that so much of the Y2K issue is in embedded chips and embedded technology, but you also—and in fixed systems where it may be more difficult to attack and more costly to attack the problem.
But just as in aviation, you also have the issue in railroading of dispatch centers. And I have listed the Burlington Northern Dispatch Center in Fort Worth, and the Soo Line system as well, and see—and have seen how interrelated and how extraordinarily complex the computer guidance systems are in railroading. And while the number of people at stake is far fewer in railroading than in aviation, the movement of the Nation's freight, our economy is so intimately tied up with railroading that it is absolutely vital for us to know that you have addressed this problem and we will meet the Office of Management and Budget's objectives of all government and industry-related systems being compliant.
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It is good to hear the progress that is being made. I want to thank you for being with us today, and I appreciate your testimony. And thank you, Mr. Chairman, and Mr. Wise, for overseeing this very important economic sector.
Mr. FRANKS. Thank you.
Mr. Wise?
Mr. WISE. Thank you, Mr. Chairman. I am just curious, I see two Mr. Gardners, both spelled the same way. Is this a longstanding railroad family that we have got here, or is this just a —
Mr. JIM GARDNER. A distant cousin, I think.
Mr. WISE. Mr. Itzkoff, you describe in your testimony the validation testing that FRA has done of its systems starting in July of this year, responding to my opening statement.
Can you tell me how independent this testing has been?
Mr. ITZKOFF. Well, for the mission-critical systems that we have had—we have had three of them—for example, our local and wide area networks are enforcement case system, which helps us sort the data that our Office of Chief Counsel used for railroad enforcement and our safety information systems.
We use outside contractors for each of those systems to help with the renovation efforts. Those outside contractors have performed the validation tests and have certified to us directly that those systems are compliant. So we have that on record.
Secondly, FRA staff has independently implemented a testing program on each of these mission-critical systems to assure that we work. Finally, last month, the Office of Inspector General has performed an independent verification and assured us in writing that those systems are Y2K compliant, these mission-critical systems, so those are the steps that we have taken. I am confident that that illustrates the depth of work that we have done, that they are Y2K compliant today.
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Mr. WISE. What I am trying to understand, and I think you have answered it partly at least through the statement about the IG, but are the people testing the systems independent of the people who did the renovation of the systems?
Mr. ITZKOFF. That is right. Well, first of all, the contractor did the renovation, they provided the verification. FRA staff did not perform the renovation, but we have validated, independently tested, and the OIG has given us a third layer of assurance. So I am confident that we have taken every prudent step to assure that our systems are in fact compliant.
Mr. WISE. Mr. Lee Gardner with the STB, you mentioned in your testimony the survey done of Class I railroads to assess the Y2K problem, and you conclude from the survey that the railroad industry, and I put that phrase in quotes, ''railroad industry,'' has made significant progress in fixing the problems.
Are the survey results, though, on the over 500 railroads that are not in Class I railroads? What assurances do you have that these smaller railroads are addressing Y2K problems?
Mr. LEE GARDNER. Yes, sir. We have not surveyed the smaller railroads, but the smaller railroads have been included in the outreach efforts that FRA has initiated. They participated in the July meeting, and they will participate in the meeting coming up in early 1999. And I am certain that one of the issues that will be raised in that meeting in early 1999 would be a status report or a progress check on the smaller railroads. Certainly the larger railroads and the smaller railroads are interdependent.
I think your point is well taken that there needs to be some assurance that the smaller railroads will also be in compliance. But up to this point, we have not done any independent surveys of the smaller railroads.
Mr. ITZKOFF. Mr. Wise, if I could add on that—
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Mr. WISE. Certainly.
Mr. ITZKOFF. —point. We have concentrated primarily on the larger railroads, because they have the most extensive signaling networks and business and telecommunications systems, dealing with thousands of people and extending for thousands of miles. They represent the greatest threat in terms of Y2K if they are indeed noncompliant. Smaller railroads typically do not have those kinds of extensive signaling systems, their rolling stock is typically older and, therefore, they do not have the embedded chip technology in most of their diesel fleet.
And even if they do face compliance issues, they are smaller organizations. Dealing with hours of service records for 20 operating personnel is different than for 2000. So that is our next step.
You bring up an excellent point here. We will begin to turn to assuring that the information and the outreach extends to the smaller railroads and we will be raising this as we deal with them for the next 15 months.
Mr. WISE. I appreciate that.
Let me turn to Mr. Jim Gardner with AAR, and continuing along the same line, with your—are you appearing here, of course, representing AAR, but also representing the short lines?
Mr. JIM GARDNER. No, I am speaking on behalf again of the Class I railroads. The coordination of the industry task force I referred to, though, is overseen by the Association of American Railroads, and that is the group that coordinates with all the Class I's and is actively involving short line railroads and sharing information with short line railroads. But I am not speaking on behalf of the short line railroads.
I would echo Mr. Itzkoff's comments. In my experience, at least many of the short line railroads are less dependent on computer technology than on the Class 1's, which doesn't mean they don't have a problem, but the degree to which it could affect total transportation would be smaller than that of the class I's. And they do have programs; the larger ones have programs. I think, though, that the outreach program should go a long way in assuring they are compliant as well.
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Mr. WISE. How many short lines are participating in the task force?
Mr. JIM GARDNER. I would have to check to respond for the record on that. I am not familiar with the number of it personally.
Mr. WISE. What I would ask, Mr. Chairman, and I am not quite sure how we get it—I assume maybe we ask Mr. Gardner with the AAR—but I do think that this question of the short lines could become important later on. I appreciate obviously the fact that the Class I's are the ones that are important initially and you want to make sure they are operating.
But we could see some snarls develop in certain areas of the country. And so what I would ask is if—because as I understand it, short lines and AARs are now together in the association—if you would be able to supply additional information about what is being done on short lines, as well as, Mr. Itzkoff and Mr. Lee Gardner, because I thought that we would be hearing from short lines today, and we are not. So I think we need to get more information.
[The information follows:]
******** COMMITTEE INSERT ********
Mr. JIM GARDNER. One additional piece of information.
Mr. WISE. Yes, sir.
Mr. JIM GARDNER. Several of the Class I railroads are, as part of their program, identifying their largest short line railroad suppliers and connections and are developing plans to integrate those folks in their formal planning and testing.
Mr. WISE. Because it is to the Class I's as well, to make sure there is not a Y2K problem somewhere down the line with their suppliers.
Mr. JIM GARDNER. That is correct .
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Mr. WISE. Thank you. Thank you, Mr. Chairman.
Mr. FRANKS. Thank you.
Mr. Petri?
Mr. PETRI. No questions.
Mr. FRANKS. No questions.
Mr. Blumenauer appears to have stepped away briefly.
Mr. McGovern? No questions.
Mr. Rahall?
Mr. RAHALL. I have no questions, Mr. Chairman.
Mr. FRANKS. Ms. Johnson.
Ms. JOHNSON. No questions.
Mr. FRANKS. Okay. I want to thank the members of the panel very much. Thank you.
Now we will hear from the second panel on transit: Ms. Nuria Fernandez, Deputy Administrator of the Federal Transit Administration; Mr. Peter Benjamin, Assistant General Manager for Finance and Program Development, from the Washington Metropolitan Area Transit Authority; and Mr. Robert Hayward, Director of Management and Information Systems for the Metropolitan Transit Authority of Harris County, Texas.
TESTIMONY OF NURIA FERNANDEZ, DEPUTY ADMINISTRATOR, FEDERAL TRANSIT ADMINISTRATION; PETER BENJAMIN, ASSISTANT GENERAL MANAGER FOR FINANCE AND PROGRAM DEVELOPMENT, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; AND ROBERT HAYWARD, DIRECTOR, MANAGEMENT AND INFORMATION SYSTEMS, METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, TEXAS
Mr. PETRI (Presiding). Excuse us, we are having a little
change of the guard up here on the committee side as well as
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at the table.
And I would like to welcome the panel that has just been introduced and to say, in a way kind of setting the stage for your testimony, that there have been some concerns raised that many transit agencies have gotten off to a very late start in addressing the Year 2000 problem. With almost 6,000 transit agencies throughout the United States operating 136,000 transit vehicles, 9,500 miles of track and over 2,600 rail stations, it is clearly imperative that normal operations continue after January 1st, 2000.
In 1995, Americans throughout our urban and rural areas use public transportation 7.3 billion times. Without reliable bus and train service, traffic snarls would last all day long and our highway network would cease to provide the efficiency that we have come to expect. As many transit agencies rely heavily on automated systems to control trains, collect fares and monitor tracks, and provide a variety of comfort and security in their stations, all of these systems are vulnerable to the Y2K bug.
So I look forward to hearing from this panel and hope that the witnesses can shed some light on the part of the Transit Authority in addressing this problem. And before turning to the panel, I don't know, but I would like to ask if the senior Minority member of the Transportation Subcommittee, Mr. Rahall, has an opening statement.
Mr. RAHALL. No, I have no opening statement. Mr. Chairman, I commend you and Chairman Shuster for conducting these vital hearings. It is important that we start now to look ahead and hopefully alleviate many of the concerns that exist. I know it is not our desire to create a doomsday scenario in any of these modes of transportation come the Year 2000, but it is important that we examine and assure the American people that there will be no serious glitches in the systems that run our transportation modes. And I commend you and the Chairman for holding these hearings.
Mr. PETRI. Thank you.
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And we will begin with Ms. Fernandez.
STATEMENT OF NURIA FERNANDEZ
Ms. FERNANDEZ. Yes, sir. Good morning, Mr. Chairman, and distinguished members of the committee. My name is Nuria Fernandez. I am the Deputy Administrator for the Federal Transit Administration. And I would like to summarize my full statement that I ask be made a part of the record.
Mr. PETRI. Without objection, it will be.
Ms. FERNANDEZ. The Federal Transmit Administration's mission is to ensure personal mobility in America's economic and community vitality by supporting high-quality public transportation through leadership, technical assistance, and financial resources. FTA has been actively identifying and remedying actual and potential Year 2000, Y2K, problems since 1996. Since FTA began working on Y2K issues over 2 years ago our goals have been twofold; that is, to provide information, guidance, and assistance to the transit community and grant recipients—our customers—and ensure that our own systems become compliant.
We made it a priority to identify problems that would affect our technological interface with both our internal and external customers. Five years ago under the leadership of FTA Administrator Gordon Linton, FTA began working on a next generation of electronic enhancements. All our transit grant recipients have been trained on this new system. Full conversion from our earlier system, which was not Y2K compliant, will occur on November 2nd. The new system is Y2K compliant and FTA grant delivery processing will continue uninterrupted.
Our outreach to industry has been extensive and thorough. FTA personnel have trained and traveled to 30 cities and conducted hands-on training sessions which have attracted 1,200 industry transit professionals, with more sessions underway, until we reach everyone who uses our programs. We have provided copies of our new software to interface with our new computer system to all of our grant recipients.
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But managing our grant programs for Y2K compliance is just the beginning. FTA has been leading the industry in creating awareness of Y2K computer problems and readiness. In February, the FTA released a Dear Colleague letter to the transit community, over 4,000 individuals, representing senior levels of all transit grant recipients, and included the full text of the Chief Information Officer Council Subcommittee on Year 2000 Best Practices Manual. The manual outlines a five-step framework for assessing and addressing issues and provides in-depth guidance for dealing with Y2K readiness.
In that outreach, Administrator Linton raised awareness of the problem and shared effective strategies for dealing with the technical fixes. We have reached out to our partners and customers on the evaluation of their own technologies to ensure the system's safety performance.
FTA has distributed software that would allow for the detection of non-Y2K hardware, and we are helping our customers identify weaknesses in potential problem areas. We have also established a partnership with the American Public Transit Association in an effort to provide guidance to our customers. At Administrator Linton's request, the American Public Transit Association surveyed its membership, which includes virtually all of the major transit systems in the Nation. The survey queried the transit community on the status of the Y2K efforts directly related to automated data processing and intelligent transportation systems. The results indicated that 20 percent of the transit systems are now in compliance with Y2K requirements, and most of the rest, we believe, will be in timely compliance.
Our survey also identified one of the main concerns of our customers was that of the need for continued technical assistance. The results from this survey are helping us to provide the response to questions concerning Y2K readiness, as well as identifying areas of particular emphasis for our continuing efforts.
This Sunday, at the Public Transit Association's annual meeting in New York, Administrator Linton will be addressing the responsibilities of Transit Board members for oversight of their agencies' Y2K compliance. In another session, Mr. Linton will also be addressing the important role of transit industry suppliers and vendors in assuring their own operations, as well as their products, are Y2K compliant. And the following Tuesday, both the Federal Transit Administration, in cooperation with the American Public Transit Association, will be conducting a Y2K transit forum at the conference.
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The American Public Transit Association has focused on the information in their publications and made sure that it is an important issue on the agenda.
Mr. Chairman, we have included a number of extensive outreach with our own grantees, extensive outreach with the transit industry and the vendor.
Before I close, Mr. Chairman, I would like to highlight the important role this committee and the administration has played in assuring that the transit industry will be fully ready for the 21st century. The TEA-21 has afforded us with high levels of funding that would provide the opportunity for transit systems to invest and make their systems Y2K compliant.
All of the provisions in the TEA-21 that affect Federal assistance programs, Federal transit assistance programs, both for new capital investments, fixed guideways, fixed modernization formula programs, both at the rural, elderly and the handicapped transit programs, will be eligible for funds to make their systems Y2K compliant. This will give States and transportation providers the resources they need to make technical repairs so that our customers are not caught up in the calendar year 2000 track.
Thank you very much, and I appreciate the opportunity to address any comments you may have or questions.
[The statement of Ms. Nuria follows:]
******** INSERT 1-5 ********
RPTS MAZUR
DCMN NORMAN
Mr. PETRI. Well, thank you. And—let's see—Mr. Benjamin.
TESTIMONY OF PETER BENJAMIN
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Mr. BENJAMIN. Mr. Chairman, members of the committee, I am Peter Benjamin. I am the Assistant General Manager for Finance and Program Development of the Washington Metropolitan Area Transit Authority. I would ask that my remarks be entered into the record and I be given permission to make a few summary comments.
Mr. PETRI. Your remarks will be made a part of the current record and I would look forward to your summary.
Mr. BENJAMIN. Thank you, sir.
We at the Washington Metropolitan Area Transit Authority, here in Washington, really regard the Y2K problem as a management issue, not just an information technology issue, and therefore it really requires the direct attention of our entire management staff, and we have organized in order to try and approach it in that manner. We are dedicated to, number one, making absolutely certain that safety is maintained on our system in every way, and that in no way does the Year 2000 problem compromise the safety of our passengers and our employees. We, second of all, want to look at and make absolutely certain to the extent of our ability that we provide uninterrupted passenger service when January 1st, 2000 comes about. And finally, we want to make sure that all of the supporting systems, all of our business systems, also operate correctly so that we can provide the kinds of support to make our system operate properly and support the people who are making it work.
In the operational area, of course, we have to deal with all of the various components of our system, our trains, our fare card machines, our turnstiles, all of the control systems that allow our system to work effectively and efficiently. We also have to look at the infrastructure, the building and the environmental systems, our elevators, our escalators, our air-conditioning, our communications, our ventilation, our lighting, all of the things that support what makes our train system work as well as our buses.
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And, finally, we have to look at our business systems, the ones that operate everything else; that is, our payroll, our finance, our human resources system, maintaining our inventory, and make sure that all of those systems provide the support that let the major system work.
We have done this through a 7-step process. We are inventorying all of our systems—anything that could happen, embedded computer chip—that use a computer. We are assessing each and every one of those to determine the degree to which there is a Y2K issue and whether or not they are compliant.
As necessary, we are either renovating—that means we are finding a way to make a fix to a system that may have a problem—we are retiring and replacing—meaning we are taking an entire system out of operation and replacing it with a new one—or we are mitigating, we are finding some work-around that allows us either to operate without that system or to make that system work in such a way that that mitigation effect will minimize any effect on actual operations.
We are then doing validation and testing of those systems, we are certifying those systems. And just in case all of that doesn't work, we are also setting up contingency plans as to what we would do if any or some group of systems, for one reason or another, were not operational.
We have done this by setting up a management committee, an oversight committee, that is headed by our Chief Information Officer and that has all of the major managers within the Authority. This oversight committee is working with a whole series of subcommittees that are looking at various systems, various operations, various management approaches, and those committees are reporting on a weekly basis to our oversight committee, which is then directing the activities, and we are reporting on a monthly basis to our Board as to our progress in dealing with its oversight issue.
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We are absolutely certain that we have set up a system that calls for accountability of our managers and makes sure that we have, in fact, looked at everything we can think of that might create a Y2K problem. We are focusing extremely heavily on the issue of safety, to make absolutely certain that our passengers and employees are safe. And, of course, as I said before, we are putting together contingency plans so that if for any reason anything is missed, if for any reason we have not done what we need to do, we have an alternative way of running our system.
Thank you, sir.
[The statement of Mr. Benjamin follows:]
******** INSERT 2-1 ********
Mr. PETRI. Thank you. Mr. Hayward.
STATEMENT OF ROBERT HAYWARD
Mr. HAYWARD. Good morning, Mr. Chairman and members of the committee. My name is Bob Hayward. I am the Director of Management Information Systems for the Metropolitan Transit Authority of Harris County, better known as Houston METRO. Additionally, I serve as Chair of the Information Technology Committee for the American Public Transit Association.
I want to thank the committee for affording me this opportunity to share some of our experiences in dealing with the Year 2000 problem. Houston METRO is cognizant of the impact we can have on the greater Houston area, and we share this committee's concerns on Y2K and its impact on transit service.
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Houston METRO'S systems today provide support for the United States' 10th largest metropolitan transit system, covers a 1,281 square mile service area, deploys 1,360 transit vehicles, employees 3,600 people and serves 110 million boardings annually. Additionally, in partnership with local county and State organizations, we are actively involved in the operation of Houston TranStar, which is the region's state-of-the-art traffic and emergency management center.
Chairman Shuster, Ranking Member Oberstar, members of this committee have toured Houston facilities and Houston TranStar in the last year and are familiar with the size and sophistication of our operation. Houston METRO has completed its Y2K compliance on 90 percent of its mission-critical systems, nonmission-critical systems, networking and communication infrastructures. These numbers do not include embedded technology. Sixty percent of Houston TranStar systems are compliant today and they have approximately spent only $12,000 to date on this project.
Unlike many organizations today that have chosen to renovate systems, Houston chose to replace its systems. In early 1990, we began this replacement process by instituting a corporate long-range plan, and due diligence was incurred for Y2K compliance—excuse me, in early 1997. Success has been attributable to exercising due diligence by forming a committee empowered to deal with the Y2K issues, creating auditable plans, assessing the status of our computer-based systems in creating contingency plans in the event of failures.
As we have been approaching the millennium, most of our vendors have been correcting and installing Year 2000 compatible systems in our facilities, and we have also taken advantage of upgrades along the way to bring our systems into compliance.
Over the next 15 months, our emphasis will shift from being aware of the problem to preparing for survival to ensure that transit services are not interrupted. Houston METRO requires vendor Y2K compliance, and our corporate Y2K committee will be focusing on key issues like continuing to investigate our Y2K vendor status to ensure that supply chains are maintained. We will continue to assess our contingency plans for dealing with unexpected problems. We will prepare for future unknowns like litigation issues, and we will continue to provide testing and upgrades on embedded chip technologies.
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We anticipate completing our Y2K conversion for Houston METRO by the end of September 1999. Houston TranStar should be completed by the end of March 1999. Beyond the single resource problems of most people— excuse me, beyond the usual resource problems of finding people, money and time, our single most difficult problem over the past 2 years has been our vendor-client relationship. Due to poorly worded statements of compliance and vendors' unwillingness or vagueness in the sharing of information, our agency has had to increase testing and expand our contingency plans, all of which has increased our delays on ascertaining compliance.
I will conclude my testimony by answering a question on how this committee can best help with this problem. First, I suggest that legislation is enacted to provide liability for protection for those vendors who share information in good faith, but this must in no way relieve vendors from doing due diligence. Secondly, enactment of legislation to provide emergency funding for Year 2000 conversion activities would help ensure success within our industry.
Thank you for the opportunity to testify. I would be happy to answer any questions and provide any additional information.
[The statement of Mr. Hayward follows:]
******** INSERT 2-2 ********
Mr. PETRI. Thank you. We appreciate the specific recommendations to us and to the Congress as to how we can be helpful in moving through this problem.
Mr. Rahall, any questions?
Mr. RAHALL. I have no questions.
Mr. PETRI. Well, let me turn to the dean in Congress, the Paul Revere here, who has been leading hearings and trying in every way he can to alert our society to this looming problem, and that is our Representative Horn from Long Beach.
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Mr. HORN. Thank you, Mr. Chairman. I am impressed by what the Transportation and Infrastructure Committee and its subcommittees have done. It has been a very thorough series of witnesses, and I am very impressed by your statements. What I would like to do is just ask a couple of questions and see if all three of you can answer them.
In terms of the embedded chips in any segment of our society, what some groups are doing, such as the medical emergency people looking at their equipment, they have one common Web site that either the association that pulls them all together starts, perhaps a government agency starts, and they do the following: They look at if there is an embedded chip situation in the equipment, they try to track down the manufacturer, they try to see is there a substitute chip and what can be done to make it 2000 compliant.
Now, is anything like that going on within the transit industry in all its segments?
Ms. FERNANDEZ. Mr. Horn, I will speak for the outreach that the Federal Transit Administration has done with the majority of the transit agencies across the country. What we have heard, particularly from the New York City Transit Authority, which is the largest public transportation provider in this Nation, is that they have encountered some difficulties with the embedded chip, and the difficulty rests in the fact that a lot of the manuals that the suppliers had provided did not identify the chip component as—the chip component in specificity. So they are now going back to earlier manufacturers and determining if they should be repairing and replacing or retiring specific elements of their system as they are concluding their inventory systems assessment.
So that is one difficulty, is the actual manuals that were provided.
Mr. HORN. And is that pretty well known then, to get access to those data, within the transit industry?
Ms. FERNANDEZ. The information that the New York City Transit Authority provided to us is information that we will be sharing with the industry as part of our outreach and our best practices, identifying not only how transit systems are undertaking this major challenge but, as they encounter difficulties, making that information available to alert other transportation providers.
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Mr. HORN. Mr. Benjamin, Mr. Hayward, what do you do when you are checking the embedded chips out?
Mr. HAYWARD. Mr. Horn we have a 3-step process. The first is to acquire a certification from our primary vendor and identification of the particular problem of any embedded chip technology. Our second is to do all internal testing that we can to certify that in fact the certification is accurate. And then our third step is we will be using outside consulting to come in and provide further certification.
Mr. HORN. Mr. Benjamin?
Mr. BENJAMIN. Mr. Horn, we are doing pretty much the same thing that Houston is doing, and in addition we are talking with other transit authorities that may have similar equipment to make sure that if they have similar or identical equipment, we are coordinating those activities to make sure that we get similar results.
Mr. HORN. There are a lot of different associations, as we know, in this country. Everybody is recognized and has a group in Washington. Let me take the parallel of the short line railroads and what do you do with the very small transit companies? What do you do with the very small anything? Who are they depending on to give them some help?
Ms. FERNANDEZ. Mr. Horn, we at the Federal Transit Administration have been in full contact with the Community Transit Association of America. It is the association that represents small transportation providers, particularly in rural areas, and of transit services— that provide for transit services. The partnership that we have formed is one not only to jointly promote awareness, but also to provide technical assistance to State DOTs, offices which have offices of mass transit which are responsible, in fact, to administer our small and rural transportation programs. So the awareness facet has been completed.
We are now moving from an awareness to action. We are working together with them to identify those provisions contained within the Federal transit assistance programs that will allow for Y2K-compliant equipment to be eligible under the capital grants.
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Mr. HORN. Any comment on that, Mr. Benjamin? Mr. Hayward?
Mr. BENJAMIN. I just note that in the Washington area, the Council of Governments has put together a committee of the chief information officers throughout the area. We are not the only operator within the Washington Metropolitan Area. There are many others, somewhat smaller ones, and that committee is trading information back and forth, both on techniques and on results.
Mr. HORN. So we have had no problem on sharing information? Or have we?
Mr. BENJAMIN. If we are getting to the issue of certification of components, the problem that seems to be coming up at this point is when you ask for certification from a manufacturer or supplier, number one, they are at this point totally overwhelmed, with lots of people asking the question in a lot of different ways, and so they are having a problem in terms of responding and they are not always as forthcoming as we would wish they would be and not always as rapid as we would wish they would be. And also, because all of us are at different stages with different types of equipment in going through these discussions, although we are sharing information we aren't always certain that we are sharing matching information.
Mr. HORN. What the hospitals are doing is, obviously, get the actual number on the piece of equipment so you can tell whether this was a recent production or an earlier production and you don't have to reinvent the wheel. Now, do you do that within the transit industry so somebody can dial up a Web site and they get that information, and it is specified so you know what you are dealing with is apples—and not apples and oranges, it is the same apple or it isn't?
Mr. HAYWARD. Both AFTA and FTA have created jointly a Web site that is accessible, and the purpose of that is to share this kind of information. Hopefully, that will occur.
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Mr. HORN. Well, is it on line now?
Mr. HAYWARD. Yes, sir.
Mr. HORN. Okay.
Ms. FERNANDEZ. If I may, Mr. Horn, just to amplify on what Mr. Hayward shared with you, the American Public Transit Association, in partnership with the Federal Transit Administration, have a Web site that is accessible today on Y2K information. And what the Web site does, it affords the opportunity of transit authorities across the country to submit their most—the greatest challenges on the application and the compliance of Y2K on their computerized systems, and it also recognizes that the Y2K compliance issue is not one of a financial system. It takes into consideration areas in the field such as bus maintenance facility systems, looking at them and pump controllers, et cetera. So there is a data base that will be available of information.
Mr. HORN. Well, I understand that but you hear—we talk about the manufacturers besieged with requests across the country. It seems to me if you have a site where the manufacturer could put in the specific specifications that they have produced—now they might be out of business and that is a problem— that is what is going to save everybody a lot of time, including the manufacturer who is being besieged. And I am just simply wondering are we progressing that way, or is somebody over here doing something and somebody over there never talking to the manufacturer?
Ms. FERNANDEZ. The intent of the Web site is also—the American Public Transit Association has a Board of Governors, which is all of the manufacturers that supply services to the transit industry, and the intent would be for them to have their information available on the Web site.
Mr. HORN. Okay, one last question.
Federal Government, we ask the agencies to define their critical-mission systems and we don't even look at the rest of it, and all of this—as you know in the Federal Government, they can pull wool over our eyes and then the crunch day will come—but they deal with what is a critical system.
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Now, are we doing that at the local level? Are we saying, ''Look we can't do everything because maybe it's too late''? In the case of the executive branch here, they just procrastinated for years so they are playing catch-up.
Now a lot of people are in the same situation, especially the small and the rural areas. So what are you doing to prioritize what has to be done versus what is nice and there might just be a little bit of trouble or disruption if you don't do it? Or are you trying to do everything? And how successful are you?
Ms. FERNANDEZ. Let me start, if I may, with what we are doing in the Federal Transit Administration and then what we have asked our grant recipients to do in turn.
In the Federal Transit Administration, we have identified two mission-critical systems. One of our systems is the electronic clearinghouse system, which is the one that in fact releases funding to the grant recipients. The other one is our grant management information system that allows grant recipients to file their grant applications electronically. Those two have been identified as mission critical. We are in validation stage for completing the testing on those two systems. In addition to that, we have 43 other mission enhancement systems that will be required to be validated and fully implemented by March of 1999.
In regards to our grant recipients, we have asked that they—we have shared with them the best practices manual that we followed, with the five steps for not only assessing but also for validating and implementing, that puts a lot of emphasis on the fact that mission-critical systems, those that affect safety and reliability, and their ability of providing public transportation services be taken into account as a priority.
Mr. HORN. Mr. Benjamin, Mr. Hayward, any comment on that?
Mr. BENJAMIN. The thing that we have done is I believe very much along the lines, Mr. Horn, of what you suggested. We have established safety as the number one criterion. It is our top priority. Any system that we identify in our inventory that could affect the safety of either our passengers or employees is where we put our first focus. After that, it is the continuation of passenger service.
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As you know, the services that we provide in the Washington Metropolitan Area are very critical to getting people around this area, and if we were to suddenly stop operating, it would have a major effect upon them. So that is our number two priority. And our number three priority is the business systems and the infrastructure systems that support all of that.
Mr. HORN. Mr. Hayward?
Mr. HAYWARD. I concur pretty much with what Mr. Benjamin has said. We have formed, through our corporate Y2K committee, and taken pretty much the same steps to identify mission-critical and nonmission-critical systems.
Mr. HORN. Thank you, Mr. Chairman.
Mr. PETRI. Thank you.
I really have sort of a general question that doesn't probably require a particular response right at this hearing. But by way of asking the question, I commend to you an article by Ed Gardini who is the Chief Economist at Deutsch Bank Securities, and who is introduced by saying—well, he is not normally a pessimist, in fact he has been a bull—but he thinks there is going to be a worldwide depression starting in 2000 due to people not addressing the Y2K chip problem; that he is convinced there is a disaster in the making, and he criticizes people in the financial world and in government, like us, for accepting general answers rather than getting specific in asking what is being done.
And let me quote. He says, ''Institutional investors seem to be satisfied with what they are hearing from chief executives, which is, 'We've got a lot of people working on it and we think we are going to have this thing fixed.''' They should be asking much more specific questions: When did you become aware of the problem? When did you actually start to remediate? How many lines of code do you have? How many mission-critical systems do you have?
What we have to look at is our global systems, electricity, telecommunications, government services, transportation, shipping, manufacturing and distribution. We are trying to do that today and especially, Ms. Fernandez, you and people in the Department of Transportation have to drive this awareness through the system as urgently as you can and get people to not just talk about but actually come to grips with it as efficiently as possible.
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I want to commend Mr. Horn again for leading the charge here in the House of Representatives in respect to trying to get people to grapple with this effectively, and I thank all of you for your testimony. I don't know if you care to comment on that at all, but I would be happy to yield the floor.
Ms. FERNANDEZ. Mr. Petri if I may in closing, I just want to make all of you aware that the Administrator for the Federal Transit Administration, Gordon Linton, will be releasing a Dear Colleague letter to all of the transportation providers and vendors in the industry that outlines some specific recommendations where we start talking about moving from awareness to action.
We have a little under 2 years to get this situation under control and I think it is incumbent upon all of us so that we can continue providing a safe, reliable transportation system with safety being our top priority. So in the awareness phase, Mr. Chairman, we feel that we have in fact reached out to the industry and we now are working cooperatively in partnership with the industry to make sure that the action plans, the corrective action plans, any repair, retirement, or replacement of systems is taking place.
Mr. PETRI. Very good. And I hope in their fallback programs, we can operate as much of the system as possible without—if pieces of it aren't functioning— and work around those problems while we fix them, if we haven't fixed them in advance.
Ms. FERNANDEZ. Contingency plans are a requirement as part of the whole corrective action plan.
Mr. PETRI. Thank you all and with that this hearing is adjourned.
[Whereupon, at 11:25 a.m., the committee was adjourned.]
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