U.S. Postal Service: Subcommittee Questions Concerning Year 2000 Challenges Facing the Service

Published by the Government Accountability Office on 1999-04-23.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States

GAO   General Accounting Offfice
      Washington, D.C. 20548

      Accounting and Information
      Management Division


      April 23,1999

      The Honorable John M. McHugh
      The Honorable Chaka Fattah
      Ranking Minority Member
      Subcommitteeon the Postal Service
      Committee on GovernmentReform
      House of Representatives

      Subject: U.S. Postal Service: SubcommitteeQuestions Concerning Year 2000
               ChallengesFacing the Service

      In responseto your March 16,1999, request,this letter provides answersto questions
      rela,ing to our February 23,1999, testimony on challenges facing the U.S. Postal Service in
      addressingthe Year 2000 problem.’ As we noted in our testimony, the Service has been
      working hard to addressits Year 2000 problem and has recently revamped its management
      approach. If successfullyimplemented,its approach can provide significant support and
      oversight to Year 2000 efforts. However, the Postal Service has been running behind the
      Office of Managementand Budget’s (OMB) schedulefor system renovation and still must
      addressmajor issuesto correct and test system and mail processing equipment, ensure the
      readinessof thousandsof local facilities, and determine whether and when its key suppliers
      and interface partnerswill be Year 2000 compliant. The questions and our responsesfollow.

      l Year 2000ComrmtinzzCrisis Challenves Still Facine the U.S. Postal Service (GAO!I’-AlMD99-86,
      February 23,1999).

                                       /6&U&                 GAO,MMD!39-15ORPostal Service Year 2000

I.   What is the 1999 problem ? Will this impact the Postal Service? Will the Postal Service
     be impacted by other dates? Please explain.

The Year 2000 problem, which is rooted in the way dates are recorded and computed in
automatedinformation systems, is primarijy associatedwith dates on or after January I,
2000. However, computer systems using two digits to denote the year may be vulnerable to
“special dates”in 1999 as well. For example, April 9, 1999, when written in the Julian
calendar, and September 9, 1999, when written in the Gregorian calendar, are representedas
9999. This could cause systems to malfunction because9999 is often assigneda special
meaning, such as invalid date or end file. As noted in our testimony, these problems could
disrupt the delivery of mail or other critical Postal Service business processessuch as
financial and personnel management. To our knowledge, April 9,1999, however, did not
prove to be problematic for the service.

In addition, because2000 is a leap year, some computer systemsmay incorrectly process the
last day of February 2000 (February 29,2000), and the first day following the last day in
February 2000 (March I, 2000). The Postal Service has determined that its systemsare
susceptibleto September 9, 1999, as well as 25 other “special dates,” and it is testing its
“critical and severe”systems2to ensure that they can correctly handle these dates.

2. At what point should the Postal Service plan to make permanentfies to its systems?
   What sort of timeframes should be considered? What might it cost to make permanent
   repairs? Is the Postal Service looking at this issue?

Like many orgar5zations with older computer systems,the Postal Service is currently
pursuing a “windowing” approach to date conversion rather than expanding date fields from
two to four characters. Under this approach, software is written to associatea fixed or sliding
period of years with either the 20th or the 21st centuries. Many organizations with older
computer systemsare pursuing this approach because,in some cases,especially where data
sets are large and date dense and available storage is limited, it presents a quicker and less
costly solution to the Year 2000 problem. Also, becauseas much as several decadescan be
covered by the fixed or sliding window. permanent system fixes or replacementsmay not be
immediately required.

 The Postal Service Year 2000 officials have advised us that windowing fixes will remain
 viable beyond the year 2048 for all but two systems,which will remain viable until the year

 2These are systems the Postal Service has determined that it must assess, correct, and verify to ensure
 acceptable service to the public. They include, for example, the Postal Metering System, Money Order
 System, Mail Diibution     Requirements system, and Air Contracting Support System.

 Page 2                                                     GAO/AIMD-99-150R Postal Service Year 2000

2019. According to the Postal Service, replacement scheduleshave already been developed
for permanent fixes for thesetwo systems.

3. What happens to the Postal Service and its systems beyond the Year 20&I? Will they
   suffer from increased vulnerabilities of patched systems? Or will they benefit from
   strengthened and updated infrastructures?

If the Postal Service is able to effectively correct its systems,then the systems should
continue to operate without Year 2000-related problems until the period covered by the
sliding of fixed windows expires. As we testified, if these fixes are not done effectively, then
systemscould malfunction and disrupt critical postal operations.

According to the Postal Service Year 2000 program manager, the Postal Service has realized
significant benefits from their Year 2000 efforts. These include the elimination of
unnecessary software code; replacement of antiquated, locally developed software
applications; and modernization of information technology equipment, including mainframe
computer systems,mid-range computer systems,and desktop workstations. In addition,
according to Postal Service officials, the Service is implementing improved processesfor
documenting software, testing, quality control, and configuration management. We did not
assessthe Service’s implementation of these actions. However, while these steps should
enhance information technology management well beyond 2000, they represent fundamental
management practices that should have been in place long before the Year 2OQOproblem was

4. Is GAO specifically !ooking at the extent to which federal agencies are hiring contractors
   for Y2K and the amount of money being paid out for services? Are you monitoring
    contractors performing Y2K efforts to ensure that the agencies are receiving timely and
    quality services? If not, why not?

We are not monitoring or assessingcontractor efforts at federal agencies. We are reviewing
agency progress in achieving Year 2000 compliance based on self-reported data provided to
OMB and discussions with agency Year 2000 program management officials. The Inspector
General of the Postal Service, however, is planning a Year 2000 conversion contract
examination as part of the IG’s continuing audits of Year 2000 issues within the Postal

Page 3                                                GAO/AIMD99-15OR Postal Service Year 2000
5. What types of parameters are needed by the Postal Service in devising a national-based
   contingency plan ? What items must it consider as part of a contingency plan? What
   happens ifit runs into something it didn’t anticipate?

The Postal Service is following our BusinessContinuitv and Contingency Planning guide,
which provides a conceptualframework for managing the risk of potential Year 2000-
induced disruptions to operationsand incorporatesbest practices in contingency planning and
disasterrecovery. Our guide describesa structured approach for (1) initiating a business
continuity project, (2) assessingthe potential impact of mission-critical failures on agency
core businessprocesses,(3) identifying and documenting contingency plans and
implementation modes, and (4) validating the businesscontinuity strategy. It recommends
that agenciesdevelop a businesscontinuity plan consisting of a set of contingency plans-
with a single plan for each core businessprocessand infrastructure component (e.g., power
and telecommunicationsservices). Each plan should provide a description of the resources,
staff roles, procedures,and timetables neededfor its implementation.

The Postal Service’s Chief Operating Officer has recently started to work with individual
businessareamanagersto develop contingency and business continuity plans. In developing
these plans, Postal Service officials have told us that they intend to follow our guidance.
However, we also testified that this planning did not begin until December 1998, whereas our
Year 2000 AssessmentGuide recommendsthat it begin before August 1997, toward the end
of the assessmentphase, Further, contingency plans are not scheduled to be completed and
tested until June 30, 1999, and continuity plans are not scheduled to be completed and tested
until August 1999 and tested again in November 1999. This schedule will leave the Service
with little room for slippage or for making adjustmentsto ensure that contingency and
continuity plans are practical and cost ,:ffective. And, as we testified, this challenge is further
exacerbatedby the fact that the Service anticipates a surge in workload beginning in
 Septemberdue to the holiday businessrush, which typically requires greatel management

6. Can the Postal Service control the external supplier problem? If so, how?

As noted in our testimony, the Postal Service is heavily dependent on 271 key vendors and
suppliers, such as airlines, which provide goods and services necessaryto mail delivery. If
their systemsare not Year 2000 compliant in time, postal operations could be severely
disrupted. However, the Postal Service’s ability to control its suppliers is limited and,
therefore, it must rely on statementsof assuranceof Year 2000 compliance by its suppliers.
As of April 23, 1999, according to the Service, 265 suppliers had reported that they are or

  Year 2ooOCo D tinp crisis: Business Continuitvand Contingencv Pkmninq (GAO/A&ID-10.1.19).
 Issued as an eG0:ux-e draft in February 1998;issued in final in August 1998.

 Page 4                                                 GAO/AIMD-9915OR Postal Service Year 2000
will be compliant by January 1,200O. The Service is pursuing the readinessstatus of the
remaining 6 suppliers. According to the Service, any critical suppliers assessedas non-
compliant or for which the readinessstatushas not been determinedwill be part of Postal
Service contingency planning activities.

7. What can you tell us about the Postal Service “core business processes?” What are they
   and why are they important?

According to the Postal Service’s Year 2000 Initiative Proiect Plan, the primary objective of
its Year 2ooOeffort is to enable the continuous delivery of mail. To meet this objective, it is
placing particular emphasis on four core businessprocesses: (1) collecting, processing,and
delivering the mail, (2) paying employeesand suppliers, (3) collecting revenue,and (4)
protecting the safety and well-being of postal employees. Some of these are clearly more
Year 2000 dependentthan others, and, as such, will require greaterattention from Postal
Service management. As we noted in our testimony, in many respects,the Postal Service
provides critical services that are as ubiquitous as telecommunicationsor electrical power. A
Year 2000-baseddisruption in mail delivery would have a serious impact acrossevery sector
of the American economy. Further, reliance on the Postal Service is part of the contingency
plans for many organizations that require a backup processfor electronically delivered
transactionsand services. Therefore, it is essentialthat the Service maintain continuity in its
core businessprocesses.

To respondto these questions, we reviewed and analyzed documentsdescribing the Postal
Service’s Year 2000 compliance efforts as well as its annual report. We conductedour work
from March 1999 through April 1999 in accordancewith generally acceptedgovernment
auditing standards. In developing this report, we discussedour findings with and obtained
commentson a draft of this letter from the Postal Service’s Year 2000 program manager.

Page 5                                                GAOMMD-9Sl5OR Postal Service Year 2000

We are sending copies of this letter to Representative Steven Horn, Chairman, and
RepresentativeJim Turner, Ranking Minority Member, Subcommittee on Government
Repreie;Gili$ Information, and Technology,
               y?fg &f;i;iia;    cptri;z.hg, House   Com.m@eeon j-Ges
                                               .A& jytiisk;ltative Gcvemment
Minority Member, Subcommittee on Technology, House Committee on Science. We are also
sending copies of this report to William J. Henderson, PostmasterGeneral, as well as other
interested parties. If you have any questions regarding this report, please contact me or Carl
Urie, Assistant Director, at (202) 512-6240.

Director, Govkmmentwide and Defense
 Jnf9rmation Systems


 Page 6                                               GAOMMD-99-15OR Postal Service Year 2000
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