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Y2K Blip Cost Region Plenty By Matthew Mosk and Stephen C. Fehr Washington Post Staff Writers Monday, July 10, 2000; Page B02

While the momentous flip of the calendar six months ago rendered Y2K a dud, the passage of time is revealing that, in some places, the cure might have been more meddlesome than the disease.

In one Maryland county, expensive computers and software bought to fortify against disaster have been plagued by embarrassing glitches. In the District, $10 million in cost overruns from Y2K fixes at one point threatened to undo the city's balanced budget.

"It appears as though [the Y2K effort] has been terribly mishandled," said Barbara Samorajczyk (D-Annapolis), a member of the County Council in Anne Arundel, where officials were recently asked to cough up $2.5 million more to cover the latest unexpected computer costs. "Now we are paying for it."

Fast-growing Anne Arundel--a suburban county that entertains dreams of becoming the region's next high-tech hub--has experienced more computer difficulties than most: One bug in Arundel's new software prompted computers to count $11 million in assets as money that the county still owed contractors. The glitch led an outside auditor to mistakenly report that the county's books were woefully out of balance.

Another blunder--committed while data was manually transferred from the old system--prevented scores of checks from going out to county vendors, leaving suppliers angry over delinquent bills.

Then county officials got a look at the latest estimates for the Y2K work. According to the county auditor, costs have reached $12.6 million--50 percent more than initially budgeted.

Costs for Y2K upgrades also have soared in the District, where a $171 million computer conversion began later than in other jurisdictions in the area and only after federal officials intervened. The District replaced most of its obsolete computer system.

In the race to make the Dec. 31 deadline, officials worked so fast that they did not track spending, according to a recent outside audit of D.C. finances.

That prompted International Business Machines Corp., a chief contractor in the project, to sue the District in February, seeking $28 million that had reportedly gone unpaid for months.

D.C. officials disputed the bill but agreed to pay after IBM threatened to cut off some data processing services, including printing unemployment checks.

Officials in the District and in Anne Arundel have acknowledged their post-Y2K problems but have quickly noted that they undertook drastic reconstruction of antiquated computer networks over a very short time.

"There's no question we've had trouble," said John R. Hammond, Anne Arundel's budget director, who oversaw the county's computer upgrade. "But in large part, that's because this was a very ambitious overhaul."

Officials in Montgomery, Prince George's and Howard counties, as well as in the Virginia suburbs, all said their computers were working smoothly and within budget.

"We were right on target," said George Kohut, an information technology program manager who oversaw Fairfax County's $4 million Y2K effort.

In 1995, when Anne Arundel officials heard gloomy forecasts about the Year 2000 bug, they decided to replace the county's entire billing and accounting systems.

At the time, salaries for the county's 4,200 employees still were being recorded on 3-by-5-inch index cards, and county computers looked like relics.

"These were the old green screens," Hammond said. "When it came time to start training people, they didn't know a mouse from something a cat chases."

In 1997, Anne Arundel signed contracts with IBM and with Denver-based consultant J.D. Edwards & Co. to install a new payroll system, new financial management software and a new tax and utility billing system. Trouble set in almost immediately, county officials said.

First, county computers were not powerful enough to handle the new software. Then the software needed to be customized to meet county needs. With New Year's Eve approaching, Hammond said, there was tremendous pressure to get a completed system up and running.

Even without the time pressure, such sizable upgrades are notorious for snags, he said. When Maryland officials spent $35 million to install new purchasing systems in 1995, they encountered so many bugs that three state buildings nearly had their water shut off by mistake, and a Georgia oil company cut off heating fuel to 40 Highway Administration buildings because the state had stacked up $50,000 in overdue invoices.

Anne Arundel's problems were comparable. With computers failing to handle the purchase orders, contractors started flooding county officials with phone calls, complaining that they had not been paid.

"We heard from vendors in every county department," said Andrew Carpenter, a spokesman for County Executive Janet S. Owens (D). "It became a widespread problem."

While most glitches have been addressed, Anne Arundel has not completely resolved its Y2K financial problems, and the District only recently has.

Spokesmen for J.D. Edwards and IBM said their companies did not contribute to the problems, and they said the initial cost estimates were not set in stone. Hammond said he plans to confront the companies for "promising the system would do things that it just didn't do" and ask for renumeration.

District officials said last week that they used money from a tax settlement to cover the $10 million in overruns, which initially posed problems when they tried to balance the fiscal 2000 budget.

In both jurisdictions, officials have tried to focus on the upside of Y2K.

D.C. chief technology officer Suzanne Peck said the Y2K program led to a technology revolution in city government that would not have happened otherwise. The purchase of computers, for example, will speed the implementing of electronic government, through which residents will be able to register vehicles and renew parking permits, among other things.

"Y2K has given technology a momentum and visibility that hopefully will continue," Peck said


-- Martin Thompson (mthom1927@aol.com), July 10, 2000

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