[Senate Hearing 106-344]
[From the U.S. Government Printing Office]


                                                        S. Hrg. 106-344


 
                 WILL Y2K SNARL GLOBAL TRANSPORTATION?

=======================================================================

                                HEARING

                               before the

                        SPECIAL COMMITTEE ON THE
                      YEAR 2000 TECHNOLOGY PROBLEM
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   on

   PREPAREDNESS NOT ONLY WITH RESPECT TO AVIATION, BUT ALSO MARITIME

                               __________

                           SEPTEMBER 30, 1999

                               __________

                  Printed for the use of the Committee

                               

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate



                      U.S. GOVERNMENT PRINTING OFFICE
 62-346 CC                   WASHINGTON : 2000
------------------------------------------------------------------------------
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                        SPECIAL COMMITTEE ON THE
                      YEAR 2000 TECHNOLOGY PROBLEM

         [Created by S. Res. 208, 105th Cong., 2d Sess. (1998)]

                   ROBERT F. BENNETT, Utah, Chairman

JON KYL, Arizona                     CHRISTOPHER J. DODD, Connecticut,
GORDON SMITH, Oregon                   Vice Chairman
SUSAN M. COLLINS, Maine              JOHN EDWARDS, North Carolina
TED STEVENS, Alaska, Ex Officio      DANIEL PATRICK MOYNIHAN, New York
                                     ROBERT C. BYRD, West Virginia, Ex 
                                     Officio

                    Robert Cresanti, Staff Director
              T.M. (Wilke) Green, Minority Staff Director

                                  (ii)



                            C O N T E N T S

                                 ------                                

                     STATEMENT BY COMMITTEE MEMBERS

Robert F. Bennett, a U.S. Senator from Utah, Chairman, Special 
  Committee on the Year 2000 Technology Problem..................     1
Christopher J. Dodd, a U.S. Senator from Connecticut, Vice 
  Chairman, Special Committee on the Year 2000 Technology Problem     2

                    CHRONOLOGICAL ORDER OF WITNESSES

Mortimer L. Downey, Deputy Secretary, Department of 
  Transportation.................................................     5
Kenneth M. Mead, Inspector General, Department of Transportation.     7
Hon. Jane Garvey, Administrator, Federal Aviation Administration.    17
Thomas Windmuller, Director, IATA Year 2000 Project, 
  International Air Transport Association........................    20
David Z. Plavin, President, Airports Council International-North 
  America........................................................    22
Peter Cooke, Year 2000 Coordinator, British Airways..............    24
Edward Smart, ICAO Representative, International Federation of 
  Air Line Pilots Organizations..................................    26
Rear Admiral George N. Naccara, Chief Information Officer, United 
  States Coast Guard.............................................    38
Richard T. du Moulin, Chairman & CEO, Marine Transport 
  Corporation....................................................    42

              ALPHABETICAL LISTING AND MATERIAL SUBMITTED

Bennett, Hon. Robert F.:
    Opening statement............................................     1
    Prepared statement...........................................    49
Cooke, Peter:
    Statement....................................................    24
    Prepared Statement...........................................    50
Dodd, Hon. Christopher J.:
    Statement....................................................     2
    Prepared statement...........................................    52
Downey, Mortimer L.:
    Statement....................................................     5
    Prepared statement...........................................    53
Garvey, Hon. Jane:
    Statement....................................................    17
    Prepared statement...........................................    58
    Responses to questions submitted by Chairman Bennett.........    61
Mead, Kenneth M.:
    Statement....................................................     7
    Prepared statement...........................................    64
    Responses to questions submitted by Chairman Bennett.........    75
du Moulin, Richard T.:
    Statement....................................................    42
    Prepared statement...........................................    76
Naccara, Rear Adm. George N.:
    Statement....................................................    38
    Prepared statement...........................................    78
    Responses to questions submitted by Chairman Bennett.........    80
Plavin, David Z.:
    Statement....................................................    22
    Prepared statement...........................................    83
Smart, Edward:
    Statement....................................................    26
    Prepared statement...........................................    86
Windmuller, Thomas:
    Statement....................................................    20
    Prepared statement...........................................    88

Note: Responses to questions submitted by Chairman Bennett to 
  Peter Cooke, Mortimer L. Downey, Richard T. de Moulin, David Z. 
  Plavin, Edward Smart, and Thomas Windmuller were not received 
  at the time the hearing was published.



                 WILL Y2K SNARL GLOBAL TRANSPORTATION?

                              ----------                              


                      THURSDAY, SEPTEMBER 30, 1999

                               U.S. Senate,
                 Special Committee on the Year 2000
                                        Technology Problem,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:43 a.m., in 
room 192, Dirksen Senate Office Building, Hon. Robert F. 
Bennett (chairman of the committee), presiding.
    Present: Senators Bennett and Dodd.

  OPENING STATEMENT OF HON. ROBERT F. BENNETT, A U.S. SENATOR 
    FROM UTAH, CHAIRMAN, SPECIAL COMMITTEE ON THE YEAR 2000 
                       TECHNOLOGY PROBLEM

    Chairman Bennett. The committee will come to order.
    I apologize to the witnesses and to those observing the 
committee for our tardy start. We had an emergency conference 
called by the Republican leader, the Majority Leader, and I 
have been attending that. And I am told that we have a series 
of roll call votes this morning.
    One of the frustrations of working in the Senate is that 
sometimes the Senate does not pay attention to your schedule 
and insists on doing its own business, in addition to the 
committee business. So we will try to work around that. I 
apologize to the witnesses. We have a number of witnesses who 
have come here from great distance, from out of the country, 
and we're very grateful to them for being here and want to 
apologize for any inconveniences that be caused by the 
insistence on Senate votes.
    In the interest of time, I will forego my formal opening 
statement and have it printed in the record. I will make this 
kind of introduction.
    Of all the discussions relating to Y2K and Y2K 
interruptions, potential interruptions, none has been more 
persistent or come up more often than the question of travel. 
As Senator Dodd and I said quite facetiously, but with a tinge 
of seriousness, fairly early on in this process, the three 
places you don't want to be on New Year's Eve are in an 
elevator, an airplane, or a hospital.
    I am now very comfortable about elevators. I am now very 
comfortable about hospitals that are connected with large 
suburban chains--I'm a little nervous about inner city 
hospitals or rural hospitals--and I now tell people I will be 
happy to fly on an airline if it is a responsible airline and 
they are willing to put the plane in the sky, that they 
understand their risks as much as I do.
    While proportionately this is not true, in the aggregate 
they have more to lose than I do. So if they're willing to take 
that risk, I would be willing to fly with them.
    Now, there are some international airlines that have 
announced they will not have an airplane in the sky over that 
weekend, unless they change their plans between now and then. I 
think that's an indication of the seriousness with which they 
take this.
    There are some countries that have said they're going to 
solve the problem by insisting that all of their airline 
executives be flying that day, and I would just as soon not fly 
on those planes, either. But in a properly certificated 
international carrier, that has checked out not only the air 
traffic control system that it will interact with, but also the 
terminals from which it will take off and land, as well as its 
own equipment, who is willing to take the risks, I am now 
willing to fly. I have no plans, I assure you. I'm going to be 
in Salt Lake City.
    Nonetheless, I think we ought to make it clear that we have 
made tremendous strides in aviation, and Senator Dodd and I are 
now telling people that aviation, in most of the world, will be 
safe.
    So we're going to discuss preparedness not only with 
respect to aviation, but also maritime. We welcome our 
witnesses here today.
    [The prepared statement of Chairman Bennett can be found in 
the appendix.]
    Chairman Bennett. Senator Dodd, I understand we've got some 
votes starting around 10 o'clock.
    Vice Chairman Dodd. Right.
    Chairman Bennett. I think maybe we ought to do the ``tag 
team'' thing, where one of us votes early and then the other 
votes late, whatever, to try to keep this going, if you can be 
here most of the morning.
    Vice Chairman Dodd. I would be happy to do that as well and 
accommodate the chairman.
    We've got a hearing on Russia in the Foreign Relations 
Committee, and I wanted to participate to some degree. But 
we'll try and work around that added dimension. That's just a 
couple of floors upstairs, so it shouldn't be too difficult.
    Chairman Bennett. OK, good. You're up.

  STATEMENT OF HON. CHRISTOPHER J. DODD, A U.S. SENATOR FROM 
CONNECTICUT, VICE CHAIRMAN, SPECIAL COMMITTEE ON THE YEAR 2000 
                       TECHNOLOGY PROBLEM

    Vice Chairman Dodd. Thank you, Mr. Chairman. This is a very 
important and worthwhile hearing. I heard your comments as I 
came in the door and I certainly subscribe to those sentiments 
and opinions.
    The first question that probably Senator Bennett and I get 
asked by groups in our respective States around the country, if 
they can think of one issue that comes to mind, it is air 
travel. Both of us, and I think others who have been involved 
and paid attention to this issue, have indicated our conclusion 
that, based on everything we've seen, the safety of air travel 
around the millennium dates in this country certainly is 
nothing for anyone to be concerned about. The airlines 
themselves are very much aware and conscious of this issue and 
are monitoring it very, very carefully. Even international 
travel, you will not have to be deeply concerned about picking 
a carrier that's willing to go someplace that hasn't made a 
determination that this is going to be perfectly safe.
    So, on that issue alone, I agree entirely with the 
Chairman's comments. We will continue to monitor and watch it 
and make sure that those statements are borne out by even 
better information as we get closer to the millennium dates.
    The airline and travel industries have gone to great 
lengths in my view to ensure that travel on the air, sea and 
land is going to be safe. There continues to be some genuine 
Y2K-related problems in foreign countries that I suggested.
    Recently, the State Department prepared a detailed travel 
advisory characterizing the level of safety for 194 countries. 
Each country has dealt with the approach of the new millennium 
in a different way and will carry in Y2K readiness come January 
1. The State Department's public advisories indicate that 
certain countries will be much safer than others. The United 
States, Canada, England and Australia are expected to fare very 
well during and after the date change occurs.
    Other countries, such as India, China and Russia may be 
more susceptible to Y2K problems. Again, we've talked about 
these countries in the context of other issues, so it shouldn't 
come as any great surprise, when there are shortcomings in 
energy or telecommunications, it shouldn't be a great surprise 
to discover that there may be some shortcomings in 
transportation. In fact, a number of Asian-based airlines are 
drawing up plans for alternative routes to Europe in order to 
avoid flying over India, for instance, during that period of 
time. It seems that India's own Air Traffic Controllers' guild 
is worried about the Y2K readiness status in its own country.
    When the State Department issues an advisory for an entire 
area of the world, factors such as the continuing availability 
of medical services, telecommunications, and utilities are 
equally important to travel as actual transportation systems. 
Therefore, just because planes will not fall out of the sky and 
ships are not going to sink doesn't mean necessarily that all 
is going to go well. We must look at the picture as a whole 
before making a decision about where to go during this date 
transition.
    Recently, warnings have circulated within Japan and Great 
Britain about the risks involved with traveling during Y2K. In 
fact, the British Airline Pilots Association, a union with some 
7,000 members, stated this past July that they will not fly to 
areas they regard as unsafe. This means that pilots must be 
trained and briefed on flying alternative routes, given that 
some skies are potentially not as friendly as others.
    Indeed, the Department of Transportation's Inspector 
General tells us that 34 of 185 nations have not yet responded 
to the International Civil Aviation Organization's request for 
information. We will want to explore that with you here today. 
Approximately one million passengers flew between these 34 
countries and the United States last year.
    An interagency committee, made up of the Department of 
Transportation, Defense and State, reviewing the ICAO 
information about the 89 countries that account for 97 percent 
of U.S. international passengers, has determined that there is 
insufficient information available for assessing the Y2K 
readiness of 28 of the countries.
    And even in this country, while again we feel pretty strong 
about where we are, almost 2,000 of the 3,300 air carriers 
surveyed by the FAA did not respond to the FAA's survey. All 
were smaller carriers, I might point out. But nonetheless, with 
less than 100 days to go, in my view, any carrier, I don't care 
how small or big, that didn't respond to these things, there 
ought to be immediate, direct contact with them as to why that 
hasn't occurred. And if it goes on much longer, I would get 
warnings that they're not going to fly. I want to hear what 
you're prepared to tell those small airlines today if you don't 
get answers back from them.
    Despite this last statistic, the United States is more 
prepared than any other country in the world, as the Chairman 
has indicated. Problems in this country are more likely to 
create inconveniences rather than safety issues. A major 
concern of the Federal Highway Administration is how ready 
State and local governments' traffic management systems, 
traffic signal systems, and other intelligent transportation 
systems are that make road travel convenient and delay-free.
    Mr. Chairman, I was in Stamford, CN a week ago visiting the 
corporate headquarters of Champion, International, which I know 
you're familiar with. During the lunch on the 13th floor, all 
the lights went out. We thought it was just in the building and 
it turned out that a construction company in Stamford had gone 
through the major cable that provided all the electrical power 
for downtown, with all the traffic lights and everything shut 
down.
    I was leaving that meeting to have a press conference with 
the mayor of Stamford, and the fire department, the police 
department, about Stamford's Y2K readiness in city hall, what 
they had done in conjunction with the local newspaper. 
Actually, we had a great crowd, obviously, because everyone was 
out of the buildings.
    It made the point that while this was not an anticipated 
event--we didn't orchestrate it--you got a good idea of what it 
could be like when traffic signals and police officers had to 
rush into intersections and move traffic around. So it's more 
than just air travel, as the Chairman has suggested, and we 
want to talk about those issues as well. It's the train 
systems, mass transit systems, all matters of concern to us, 
and hopefully we'll get into some of that with you today.
    Again, I want to congratulate the Chairman for hosting this 
important hearing, and to examine some of these issues that are 
critically important to consumers in this country and abroad.
    [The prepared statement of Vice Chairman Dodd can be found 
in the appendix.]
    Chairman Bennett. Thank you.
    I would want to make one additional comment that was in my 
prepared statement, but I think it's important for those who 
are following this by television.
    Here is a picture that looks very prosaic and unimpressive 
of a ship. That is the Susan Maersk, a container ship. It is 
the largest to call in an American port, 1,138 feet long, and 
it transports the equivalent of 6,600 20-foot trainers. It 
doesn't look like the great majestic Man of War of the Yankee 
Clipper days, but as bulky and awkward as it looks, it is an 
enormously efficient means of transporting goods across water.
    I am stunned to realize and report to you that it has a 
crew of 15. That demonstrates how dependent we are on computers 
in today's world. The ship, we're assured, is Y2K compliant, 
but it's just an illustration of how serious this can be in 
international commerce if it's not under control.
    Vice Chairman Dodd. I'll tell you, I sail a lot, as you 
know, in New England waters. I'll tell you something. If you're 
out sailing and it's a little hazy and misty--and I've had this 
occur--and all of a sudden as the haze lifts and the mist and 
the fog pull up, and on your horizon is one of these container 
ships, you are convinced you're directly off course and you're 
sailing into a city, they are so imposing to see on the water.
    Chairman Bennett. Very good.
    With that, at 92 days, 14 hours, 1 minute and fifty 
seconds, Connecticut time, prior to Y2K, we welcome our 
witnesses.
    Our first panel will be from the Department of 
Transportation, the Honorable Mortimer Downey, who is the 
Deputy Secretary and a frequent witness to this committee, a 
great friend of this committee. We welcome you, sir, and 
congratulate you on your diligence here.
    He is accompanied by the Honorable Kenneth Mead, who is the 
Inspector General of the Department of Transportation, and 
likewise, General Mead, the work that's been done in DOT has 
been truly heroic to get us to the point where we're all 
feeling as good as we are.
    With that, we welcome you as witnesses. Secretary Downey, 
we will hear from you first.

STATEMENT OF MORTIMER DOWNEY, DEPUTY SECRETARY, U.S. DEPARTMENT 
                       OF TRANSPORTATION

    Mr. Downey. Thank you, Mr. Chairman, Vice Chairman Dodd, 
for this chance to report on the Department of Transportation's 
progress and accomplishments.
    The President has made addressing the year 2000 problem a 
top priority for the administration, and I am proud to say that 
as a result of concerted effort, all 609 mission-critical 
systems of DOT are fully 100 percent Y2K ready and have been 
verified as such.
    Over the next 92 days, we will continue to test, we'll 
continue to monitor these systems, to keep them compliant. But 
considering where we stood with this complex task a year ago, 
or 2 years ago, I think our readiness is a tribute to 
extraordinary efforts within the Department. In addition to the 
departmental efforts, we have worked with the transportation 
industry to assure a safe transition.
    Let me briefly summarize the status of some of the 
transportation sectors. Federal Highway has conducted extensive 
outreach to State and local officials, through conferences, 
through regional meetings, through their day-to-day work. We 
continue to have confidence about the efforts of larger 
organizations to manage traffic control and related systems. 
We're still working with some smaller communities. We have 
enlisted State and local participation to be part of the 
monitoring and reporting system during the transition.
    The major automobile manufacturers have reported to our 
National Highway Traffic Safety Administration that they expect 
to Y2K related problems in their vehicles.
    The Federal Transit Administration has required a Y2K 
status report from all of its grant recipients, and as of 
September 21, all but four of the 593 transit agencies in the 
United States said they are compliant, or have contingency 
plans. The four remaining are in Puerto Rico and we're working 
with them. FTA is also requiring operational testing of these 
measures, including the contingency plans.
    The Federal Railroad Administration has hired a consulting 
firm for further review and analysis of the Y2K status of the 
major management systems of the nation's four major freight 
railroads. Having seen computer problems with their mergers, we 
wanted to be sure that their systems will work and that we 
don't get into a backup and congestion problem. We'll have that 
precautionary evaluation result ready early next month. The 
safety issues on the railroads we believe are settled, with 
grade crossings and switches not showing any problems.
    Administrator Garvey and Admiral Naccara will provide you 
with information on aviation and maritime readiness, and it is 
generally good, although there is more work to be done in both 
areas. I will stay to hear what they have to say.
    Let me now address your questions about our plans to 
provide information to the public about Y2K status in 
international airline travel. Our interagency evaluation 
process has reviewed information on the Y2K readiness of 
foreign civil aviation entities. Individual country information 
is now available as of this morning, at a DOT website. It's 
www.fly2K.dot.gov, and it includes all that we know about air 
traffic control, carriers serving U.S. routes, and airports 
handling international flights. Today there are 90 countries' 
information represented on the website, and we'll have some 
more in a few weeks.
    At this point, the FAA does not anticipate making specific 
recommendations as to whether or not individuals should travel, 
but we have that information available so that they can make 
their judgments.
    Safety is the top priority, always, for all of us. The FAA 
has found that Y2K problems in civil aviation, to the extent 
they may develop, appear more likely to cause disruptions of 
service than a serious safety risk. I believe you will hear the 
same, and you both mentioned the testimony from the 
International Air Transport Association. Their on-the-ground 
surveys have found the same. Safety appears to be in good 
condition. If not, those airlines will not operate, but one of 
the issues that might develop would be congestion.
    Should a serious safety consideration arise, or appear to 
be arising, involving international aviation, you can be 
assured the U.S. Government will take appropriate steps.
    At this point we can say, with some confidence, that eight 
of the top 20 locations that have direct service from the U.S., 
including the top three--Canada, the United Kingdom and Japan--
are very likely to be ready. The rest of the top destinations 
have strong programs underway, but we do not have enough 
information to gauge their rate of progress.
    We are still working to get more information about other 
places that either did not respond to the international survey, 
or had gaps in their information, and we will make that 
available. But in those cases, travelers should exercise 
prudence in making travel plans. We have been in close contact 
with State on these issues, and the Department of Defense has 
been part of the international evaluation.
    Jumping forward to our information dissemination on the 
millennium weekends, the DOT headquarters crisis management 
center will be linked directly to the interagency coordination 
center. We will have liaisons at DOD and State.
    As to your question on actions the Congress or others 
should take to address Y2K issues, I encourage your continued 
efforts in promoting informed awareness of the Y2K issue as you 
have done to date.
    In conclusion, we are strongly committed to ensuring that 
all DOT systems will operate properly. We recognize and will 
discharge our responsibility to the public and the need to 
continue our efforts to reach out to industry and to the many 
public and private entities that operate the transportation 
system.
    This concludes my testimony. We have a longer written 
statement that we provided for the record, and I would be happy 
to answer any questions.
    [The prepared statement of Mr. Downey can be found in the 
appendix.]
    Senator Dodd [presiding.] Thank you, Mr. Secretary.
    Mr. Mead.

     STATEMENT OF KENNETH M. MEAD, INSPECTOR GENERAL, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Mead. Thank you, Senator Dodd.
    I can relate to your experience sailing. I'm from 
Connecticut as well, and I can tell you that sailing outside 
the Thames River, in the New London area, you come upon 
submarines there. It's an equally frightening experience.
    I'm going to summarize my testimony and cover three 
subjects: departmental readiness, domestic transportation 
industry readiness, and international aviation and maritime 
readiness.
    First, departmental readiness. Just over a year ago, many 
of us had serious concerns about the Department, especially 
FAA, and its Y2K progress. Our office has worked closely with 
senior departmental officials, Secretary Slater, Deputy 
Secretary Downey, FAA Administrator Garvey, and Commandant Loy 
on the Y2K program.
    We could not have asked for more support, Senator Dodd. It 
was an extremely constructive working relationship. I think 
this committee's oversight, as well as that of the House, and 
hard work by departmental employees has resulted in a situation 
where we can report an extremely positive situation.
    Two cautionary notes about readiness in the Department. In 
safeguarding systems that have already been made compliant, by 
making changes or upgrades to them, we don't want to make them 
noncompliant.
    Second, business and contingency plans need to be finalized 
with proper training and testing and coordination with labor 
unions. At FAA, the controllers' union is participating. To 
date, the maintenance technicians have not participated, 
although they have been invited to do so.
    Moving to domestic-industry readiness, the Department 
relies heavily on self-reported data as a key measure of 
industry readiness. The responses to departmental surveys have 
been mixed, ranging from 36 percent in marine, and 41 percent 
for air carriers--although all large air carriers have 
responded--to over 90 percent for transit.
    Based on survey results, our sense is that large domestic 
providers in all transportation modes are making good progress 
and they ought to be ready in time. We are disappointed, 
though, at the lack of information concerning the readiness of 
smaller providers.
    An important point here is that getting information from 
nonresponding organizations and filling the voids is going to 
remain a major challenge for the remainder of the year. 
However, it can be done, as Mr. Koskinen mentioned yesterday.
    Let me overview the situation by mode. In aviation, all 
larger carriers responded to FAA's survey, and 1,900 smaller 
carriers did not respond. This is just unacceptable. At this 
late hour, the FAA is pursuing these nonresponding carriers, 
including a planned action to publish their names after 
November 15.
    Frankly, Senator, I agree with you. If they want to fly in 
this country, they can at least respond to a questionnaire 
about whether they're Y2K compliant.
    Vice Chairman Dodd. This was a questionnaire from the FAA.
    Mr. Mead. Yes, sir.
    Vice Chairman Dodd. It wasn't from some congressional 
office or a newspaper making inquiry. These are carriers that 
have already been approved by the FAA to fly, and you're the 
regulatory body that gives them that permission to carry 
passengers, isn't that correct?
    Mr. Mead. Yes, sir. And I think that's an important point 
for another reason, too. You're going to hear today about 
international readiness and how we want more information from 
these foreign countries. Certainly we have to have our own 
house clean if we're going to be asking foreign countries to 
come forward with statements about their readiness.
    Vice Chairman Dodd. Let me just tell you, we're maybe only 
in session another 3 weeks, but I will use the forum here to 
say that if within the week you haven't heard back from these 
people, I will offer a piece of legislation on a continuing 
resolution that prohibits any airline that has not provided 
information to the FAA about its readiness, that will not allow 
them to fly after December 31 in this country. I hope they hear 
that. But I'm going to draft a bill today, have it ready, and 
if they don't respond to the FAA within a week, then I'm going 
to introduce the bill. Anyone who has not responded by the 
middle of November--As far as I'm concerned, I'm worried about 
that point, whether or not the information would be accurate. 
So let that be a service and notice here today, that they're 
not going to be flying airplanes in this country come December 
31 if they can't respond to the Federal regulatory body 
responsible for passenger safety.
    Mr. Mead. Yes, sir.
    In maritime, the Coast Guard has received information from 
43 percent of vessels visiting U.S. ports. I would like to 
commend the Coast Guard here because that response rate was not 
sufficient, and the Coast Guard has demonstrated that there 
will be consequences for failure to respond. In fact, in early 
September, the Coast Guard stopped 175 ship movements due to 
lack of Y2K-readiness.
    In the surface areas, all transit operators, except four 
which are in Puerto Rico, responded. They were required to 
respond and did so.
    For freight railroad companies, the seven largest companies 
reported they will be ready by today. We still need information 
from a large number of regional and local railroad companies.
    I would like to move to international. As of today, 
information about some foreign countries' readiness is still 
sketchy or too incomplete for to allow assessment, although the 
picture has been improving, and clearly so in the last several 
weeks.
    Just as an illustration, we testified a couple of weeks 
ago--and at that point 54 of 185 member countries had not even 
responded. When we wrote our testimony, it was down to 34, and 
today it's down to 30----
    Mr. Downey. Twenty-nine.
    Mr. Mead. Twenty-nine. So I think these hearings and the 
efforts of the Department are beginning to bear fruit in that 
area.
    Vice Chairman Dodd. We'll offer a similar admonition to 
international carriers who want to fly to the United States.
    Mr. Mead. Yes, sir.
    FAA plans to impose flight restrictions only if there's a 
known, verifiable problem. But significant uncertainties 
continue to exist, where we simply don't know enough to make a 
judgment.
    I'm not persuaded that approach is going to be sufficient, 
because you just won't be able to say, ``well, we know there's 
a problem'' if you have incomplete information. So I think it's 
becoming exponentially important that we get a complete package 
of information. This is not just a case of not having 
information from countries where people won't go at that time 
of year. Some of the countries where the information is 
incomplete are, in fact, places where people will go.
    With regard to international maritime readiness, there's a 
lack of publicly available international information. I would 
recommend you get a classified briefing. The Admiral who will 
testify on this later will offer you one, and I think you'll 
find that quite useful Thank you, sir.
    [The prepared statement of Mr. Mead can be found in the 
appendix.]
    Chairman Bennett [presiding.] Thank you.
    I apologize for having missed your formal testimony, but 
having read your testimony, we do have some questions that we 
will like to ask of you.
    I want to start by congratulating the Department once again 
on the tremendous work that has been done. If you go back and 
look at statements made by this committee, by me, Senator Dodd, 
a year or year-and-a-half ago, we expressed great, great 
concern. The fact that we're all feeling as good as we are 
right now is a tribute to the work that's been done.
    Of course, the ultimate responsibility is the Secretaries, 
and we acknowledge that and pay tribute to the Secretary, 
because as I've said repeatedly in this format, this is a CEO 
problem, not a CIO problem. If the man at the top doesn't take 
it seriously, it doesn't get done.
    Secretary Downey, we recognize that you have been the one 
within the Department to whom the Secretary has delegated this 
responsibility. We extend this congratulation to you.
    It's clear from your testimony that you're now a little 
more concerned with rail than you are with air. Aviation is the 
one that everybody thinks about because we personally fly now, 
but from the standpoint of the economy, if the rail system were 
to shut down, the impact on goods throughout the country would 
be enormous.
    Can we talk a little bit more specifically about rail and 
where you think the rail situation may be, either one of you?
    Mr. Downey. We will know better in a week or two when our 
review is completed of the four major freight railroads. I hope 
we will be able to say things will be fine. We are comfortable 
now with the safety issue. Switches, grade crossings and the 
like will operate.
    What we had concern about was the experience we all went 
through with the various mergers, particularly most recently 
the Conrail transaction, where Norfolk Southern and CSX took 
over Conrail. We saw again how much the interdependence of the 
major railroads is driven by their computer systems. There was 
a small problem in the Norfolk Southern on the day of the 
takeover. They didn't quite program the computer right and it 
cascaded throughout the system because freight cars could not 
be sent to the right destination. Trains could not be made up. 
This has immediate economic consequences and, when not 
corrected, could develop into safety consequences.
    The railroads, the major freight railroads, assure us that 
they have been working on these systems and that they will be 
compliant. But as a precautionary measure, we asked to go in--
and they invited us in--to review the progress that's been 
made. We will have a specific report on that very shortly.
    Chairman Bennett. Thank you.
    Mr. Mead. The only thing I would add is that Amtrak, which 
is Y2K ready, is reliant on the rail companies outside the 
northeast corridor, where Amtrak doesn't own the track. The 
rail companies own the track and the basic infrastructure.
    Also, in transit rail, additional work is needed. We had 
hoped all of them would be compliant now. All of them are 
reporting they will be compliant in the coming months, but 
there is still attention needed in transit rail.
    Chairman Bennett. That anticipated my next question, which 
has to do with transit.
    Your recent report said that of the top 30 transit 
grantees, which account for 75 percent of the ridership, only 
four were Y2K compliant, with the rest saying they would be. Is 
that still the latest information you have?
    Mr. Mead. Yes, sir, that's our latest information.
    Chairman Bennett. Of course, the one that immediately comes 
to mind--and we get this question all the time--what about 
Metro? Are our staffs going to be able to get to work in 
January of 2000? Are your staffs going to be able to get to 
work?
    Mr. Downey. Metro is one of those that is not yet compliant 
but will be there by the end of the year.
    One of the things we have reminded the transit operators of 
is that they will be one of the first public services to be put 
to a full-scale test over the millennium weekend, in downtown 
Washington, in downtown Boston, in New York, where thousands, 
if not hundreds of thousands, of people will be coming to 
community celebrations--and they're all going to want to get 
home. And they're going to need to get home on the subways.
    So if they hadn't thought that through to this point, we 
had a meeting at the White House with the major transit 
operators, and they're now facing up to it. That is a real 
challenge. They have their contingency plans in place, and 
they're also working through their compliance and they should 
be there.
    Many of the rail systems will pause service for five or 10 
minutes before and after midnight. That's preplanned. People 
should understand that and plan their trips accordingly. But 
it's part of their contingency effort.
    Chairman Bennett. What's the purpose of service 
interruption?
    Mr. Downey. In the off chance that something might go wrong 
in their dispatch system--We saw it the other morning on the 
Metro, the first time in the 20 years of its history, the 
computer didn't startup and the trains on the Red Line didn't 
startup. So rather than take any risks, they just feel 5 
minutes out of their schedule, with each train stopping at a 
station, would be a useful precaution.
    Chairman Bennett. We're going to hear later from the Coast 
Guard, but do you have any general comment about maritime 
shipping and the problems--this is not strictly a DOT problem, 
but it is connected with transportation. I would hope you would 
have some connection with the folks who do handle it.
    The computers at Customs need to handle the paperwork, as 
container ships like this show up. You don't press hard and 
make three carbons as you do the paperwork on 6,600 trailers 
packed on that ship. It's got to be done by computer. That's 
all part of the international transportation system.
    Do you have a sense as to where we are in that?
    Mr. Downey. Customs and Immigration have been part of our 
transportation Y2K task force. They've been working on their 
systems, which are, incidentally, old and somewhat fragile. But 
they believe they will be ready.
    The maritime side continues to be a bit problematic, in 
that there are so many different ships, so many different 
owners, so many different configurations. I think the Coast 
Guard has done a terrific job of organizing internationally to 
set a code of good practice in place. All the major port and 
maritime countries have adopted that. The IMO usually takes 5 
years to do anything, but got this done in less than a year.
    As General Mead said, in the 9-9-99 test that we went 
through, the Coast Guard actually stopped a number of ships and 
said, ``Let's see your Code of Good Practice compliance 
certificate.'' When they didn't have it, they were not 
permitted entry until they could get it. So we know how ships 
and terminals should be operating, and we are prepared to take 
action.
    The Coast Guard has also scheduled and carried out drills 
in our major ports, on how to deal with any problems that 
develop. We also have invited port and maritime officials from 
around the world to join us on those drills, and then to go 
back and do them in their countries. But there will be a high 
state of alert in our ports over the millennium period so the 
Coast Guard is ready to deal with any eventualities.
    Mr. Mead. The American Association of Port Authorities did 
a survey of 83 ports, and the response rate was not what you 
would like to see. There were about 33 responses. So it's quite 
critical that we get these different transportation entities to 
respond as to their readiness.
    I again would like to endorse the Coast Guard action, in 
which they actually restricted ship movements to show the 
consequences of not responding.
    Chairman Bennett. One final question going to the area of 
vulnerability that has become part of my education with respect 
to Y2K.
    Do you anticipate, or have you seen any signs at all of any 
malicious attempts, either on the part of hackers who want the 
thrill, or those who wish this country ill, who want to inflict 
some kind of damage, to try to break into the air traffic 
control system, produce a malicious result, perhaps under the 
guise of a Y2K problems? So that it would be more difficult to 
trace the source of that attack and cause you to think, ``Gee, 
this is a Y2K failure'' when, in fact, it's a terrorist group 
or someone else that wants to disrupt us?
    Have you done anything with respect to that, or seen any 
signs of that?
    Mr. Downey. We're sensitive to that as a potential. We have 
seen no signs, but FAA and our other entities will be 
monitoring their systems over that period for any potential 
intrusions.
    We have done some exercises within the Department to be 
prepared, and that's the kind of a scenario we have thrown on 
the table, to be sure that people are sensitive to it and ready 
to respond quickly, and ready to do, in every case, what would 
restore safety to the system first, and then restore economic 
performance.
    Mr. Mead. We are aware of one incident, not involving air 
traffic control. It involved involving a pipeline, which is 
under the Department's jurisdiction. An individual was 
allegedly going to blow up a pipeline. It would masquerade as a 
Y2K problem. The reason he was going to do this was to purchase 
stock options.
    Mr. Downey. Oil futures.
    Mr. Mead. Yes, to get oil futures, and then the pipeline 
would go up on January 1 and it would look like a Y2K problem. 
So this is something we all need to be mindful of in all modes.
    Chairman Bennett. The criminal or terrorist mind can be 
very inventive sometimes, and we need to be equally inventive 
in protecting ourselves against it.
    Senator Dodd, if you have no further questions--or did you 
not get to ask any?
    Vice Chairman Dodd. I didn't get any. We were going to 
recess, but the statements were finished.
    Chairman Bennett. OK, go ahead.
    Vice Chairman Dodd. I understand you raised a couple of 
points that I was going to raise, and I will talk with staff 
about the responses to them. Let me bring up a couple more, if 
I can.
    I think it was you, Mr. Mead, who mentioned that flight 
restrictions would only be imposed where there was a known, 
verifiable safety problem. What I'm curious about is when the 
survey was done by an interagency committee, as I mentioned, 
assessing foreign nations Y2K readiness, 28 of the 29 countries 
most frequently visited by the United States have not provided 
sufficient information to adequately assess their Y2K 
readiness, 31 percent of those countries.
    The question is, is it safe to assume that all the other 
almost 70 percent did provide sufficient information, and how 
does the interagency committee plan on evaluating countries 
with insufficient information, particularly in the statement 
that it has to be known, verifiable safety problems?
    Am I phrasing that properly enough for you to----
    Mr. Mead. Yes, and Mr. Downey will probably want to amplify 
on my response.
    The Department has five categories of readiness that the 
different countries, based on the assessment of their 
responses, are plugged into. The first two categories are good 
categories. The third category is the country says they're not 
going to be ready. I don't think there are any in that category 
now. There were last week.
    Another category is, ``well, progress is being made, but we 
don't have a sufficient package of information to indicate the 
complete status of Y2K readiness.'' A fifth category is there 
is simply insufficient information available at this time to do 
any assessment.
    There were, as you said, 28 countries--and this is as of 
September 13--that were in that bottom category, and there were 
45 that were in the next-to-the-bottom category, and in the 
last several weeks that 28 figure has dropped to 18, which is a 
very good sign.
    But still, the awkward situation, it places the----
    Vice Chairman Dodd. The ten, where did they move to? Did 
they move to the top category or just one step up?
    Mr. Downey. Some moved right to the top category. Others 
moved up----
    Vice Chairman Dodd. Right to the top?
    Mr. Downey. Yeah.
    Mr. Mead. And I think this places FAA in an awkward 
situation. Having known, verifiable information of a problem is 
one thing. But you can't say you have known, verifiable 
information about a problem if you don't have any information. 
That's the point of concern that we were raising in our 
testimony, sir.
    Mr. Downey. If I could just add to that, I think you'll 
hear from the international air carriers on this. If we know 
that a particular country--and there are 17 now in this 
category--is one where we have insufficient information, the 
airline will still make a judgment as to whether or not they 
should fly to that country. My understanding is they would 
appropriately protect themselves, enough fuel to get to another 
destination, certainty as to when they make the approach to the 
country, how they would make the landing. This is not unlike 
what they do on any given day, in terms of landing at foreign 
destinations. So it is not as if they fly off into a black 
hole. They fly to a known destination and they may not have all 
the services available that might normally be available, and 
they need to be prepared in that circumstance to make a safe 
and graceful recovery.
    Vice Chairman Dodd. There are a number of recommendations 
we may hear from the Federation of Air Line Pilots Association, 
representing 120,000 pilots in the country. I see here they 
made about five or six recommendations, and you mentioned one 
or two of them here.
    Do you agree with all of those?
    Mr. Downey. I have not seen the five specifically, but in 
general, the idea of more training and----
    Vice Chairman Dodd. Increasing flight crew contingency 
training, do you agree with that?
    Mr. Downey. We think that would be a good idea.
    Vice Chairman Dodd. Refresher training for aircraft 
collision avoidance systems?
    Mr. Downey. That sounds to me like something that's always 
a good thing to do.
    Vice Chairman Dodd. I was hoping you would say that.
    Aircraft should have an extra 30-minute fuel supply, which 
you just mentioned.
    Mr. Downey. Yes.
    Vice Chairman Dodd. Noncritical military flights should be 
curtailed.
    Mr. Downey. I would leave that to DOD to react to.
    Vice Chairman Dodd. An extra pilot should be in the cockpit 
during this rollover period, how do you feel about that?
    Mr. Downey. I think I would defer to FAA on that.
    Vice Chairman Dodd. I raised earlier--and you weren't in 
the room, Mr. Chairman--but I was sort of stunned once again. 
We've been through this with a number of other industries, and 
the pharmaceutical industry was one back a couple of months 
ago.
    I was rather surprised to learn how many of our airlines 
have not responded to the surveys requested by the FAA. As 
suggested, I'm going to draft some legislation and I'm going to 
give them a little bit of time to respond to these surveys--
very quickly, not much. Then I will be prepared to submit 
legislation which would prohibit any airline that had not 
submitted information to the FAA about its Y2K status from 
flying after December 31st.
    What I want to get at here is, if you don't get this 
information quickly--I mean, I can see someone now just saying 
``Let's fill out the survey and tell them what they need to 
hear''. I want to make sure there's enough time to make an 
independent assessment as to whether or not the information 
you're getting is good.
    How much time would you need? You get these surveys back, 
and then I presume someone is going to verify what information 
you're receiving; is that correct? Do you verify?
    Mr. Mead. They don't directly verify, but the questionnaire 
that the FAA has prepared, I think it is pretty good. It will 
take them some time. I would defer to them as to how long it 
will take. But it's a pretty good questionnaire. You can tell a 
lot from the answers, and the questions are not so general that 
you could drive a truck through them.
    Vice Chairman Dodd. Who is required to sign the survey? Is 
the CEO of the company required to sign?
    Mr. Mead. I don't know, sir. I would defer to FAA.
    Vice Chairman Dodd. I would like to know, because for the 
ones who have not responded, I would like to see the CEO's 
signature on that. I don't want to see some third or fourth 
level accountant doing it. I want the boss's name on that.
    Mr. Downey. Senator, in our surveys of the public transit 
agencies, which as I noted we have received 99.9 percent 
response, that is what we require, the chairman of the agency 
to give us his or her assurance.
    Vice Chairman Dodd. You know, I have made the suggest that, 
if you don't hear back from these people, I'm prepared to try 
to put something in that would prohibit these guys from flying.
    Now, do you disagree with that?
    Mr. Downey. No.
    Mr. Mead. I can't speak for FAA or the Department, but 
speaking for myself, this recommendation was made months ago. 
FAA chose to proceed with a voluntary survey, rather than an 
attestation. That was their call. And now, at the 11th hour, 
they find themselves in a situation in which all the large 
carriers have responded, but 1,900 or so that haven't.
    Vice Chairman Dodd. What's the number again that have not 
responded?
    Mr. Mead. About 1,900, sir.
    Vice Chairman Dodd. Out of how many?
    Mr. Mead. About three thousand. And these are small 
carriers, not to give a misleading impression.
    Vice Chairman Dodd. I understand.
    Mr. Downey, do you want to----
    Mr. Mead. No one is required to sign them.
    Vice Chairman Dodd. What's that?
    Mr. Mead. No one is required to sign the questionnaire, I'm 
advised.
    Vice Chairman Dodd. I would want somebody who gets held 
accountable. I would suggest that, given the timeframe here, I 
would almost recommend that these be signed, maybe a--I would 
like the boss to sign those.
    Chairman Bennett. Ask Jane Garvey. She's next.
    Vice Chairman Dodd. Jane is coming up. All right, we'll ask 
Jane. So you know the question is coming. [Laughter.]
    Ms. Garvey. I'm worried about the answer, though.
    Vice Chairman Dodd. Good.
    Mr. Downey, I'll ask Ms. Garvey. But I appreciate your 
answer on this. Again, I obviously have to draft something and 
have you take a look at it. We'll run the draft piece of 
legislation by you.
    But I would feel irresponsible, knowing what I know, that 
1,900 carriers have failed to respond to the agency responsible 
for regulating them, about whether or not they're Y2K ready. 
Candidly, frankly, knowing that and not taking some action here 
would cause this Congress to be held accountable for lacking 
responsibility on this issue. I don't like doing it, but I 
don't know how else to get their attention.
    What I want to know is, when they send this stuff back, 
that there's some way to verify to determine they're OK. It 
makes me nervous. An airline that would not fill out a survey 
is telling you something. I don't like what I'm hearing on 
this. An awful lot of Americans fly on these small airlines 
every day, and----
    Mr. Mead. That approach worked very effectively in transit. 
The reason we are able to report to you today on the status of 
all the transit properties in this country is because the 
Federal Transit Administration said, if you want to continue 
getting money, you will respond.
    Vice Chairman Dodd. Yeah. And it worked, didn't it?
    Mr. Mead. They did respond.
    Vice Chairman Dodd. Just the last thing I would like to do. 
Mr. Downey, you mentioned DOT's interface with the Y2K 
Information Center. I wonder if you could briefly describe how 
the status information will flow among the Department of 
Transportation, the ICC, and the transportation industry.
    For instance, where should a concerned consumer go for Y2K 
status information? Do they go to DOT, ICC, or some other place 
to get information as this thing gets closer to the date?
    Mr. Downey. As we get closer, we will certainly make 
information available through our media outlets, including the 
Web. The ICC will duplicate that. The ICC is not generating any 
independent information on transportation. We're basically 
providing it to them. But that gives them a broader picture of 
electric power, communication, transportation and all of the 
issues.
    But it is a seamless system of information. We have 
developed computer programs to store it and display it, and as 
we get closer to that time period, we will make the public 
aware of how to get it, where to get it, and what it will look 
like, so that they can make their judgments.
    Vice Chairman Dodd. Thank you both, very much.
    Thank you, Mr. Chairman.
    Chairman Bennett. Thank you.
    Mr. Downey. Thank you, Mr. Chairman.
    Chairman Bennett. We appreciate your testimony and all of 
your work.
    Our second panel is the Honorable Jane Garvey, who has been 
sitting there taking notes, the Administrator of the FAA; Mr. 
Peter Cooke, who is the Year 2000 Coordinator for British 
Airways; Mr. David Z. Plavin, who is President of Airports 
Council for International-North America; Mr. Thomas Windmuller, 
who is the Y2K Project Director for IATA, the International Air 
Transport Association; and Mr. Edward Smart, Representative to 
ICAO, for the International Federation of Air Line Pilots 
Organizations.
    We appreciate your being here. You have heard all of the 
questions and comments up till now, and we look forward to 
hearing your testimony.
    Mr. Windmuller, we'll begin with you. Well, let us begin 
with Administrator Garvey. She is the ``rose amidst the 
thorns''. [Laughter.]
    Then we'll start at the end and go down.
    Administrator Garvey.

   STATEMENT OF HON. JANE F. GARVEY, ADMINISTRATOR, FEDERAL 
                    AVIATION ADMINISTRATION

    Ms. Garvey. Thank you very much for both the introduction 
and for allowing us to be here, Mr. Chairman. I appreciate it 
very much. I am really delighted to be with so many of my 
colleagues, all of whom we've worked very closely with 
particularly over the last year.
    The Deputy Secretary has reported on the entire Department, 
but I will just make a brief comment or two about the FAA, if I 
could.
    Let me say, as you have acknowledged--and I appreciate it 
very much--the last time I appeared before this Committee I 
promised that the FAA would complete its Y2K readiness by June 
30th, and I am delighted to say, as the Deputy Secretary 
indicated, that we have delivered on that commitment.
    Each of our components in which a Y2K fix was required has 
undergone multiple testing and validation. On April 10th of 
this past year we conducted an end-to-end testing. During this 
test, our air traffic control systems were set forward to 
December 31 and rolled over to January 1, 2000. The testing 
demonstrated that our operational fixes transitioned 
flawlessly.
    As the Deputy Secretary indicated, the challenge for us now 
is to maintain the integrity of our Y2K status by making sure 
that any changes that we make to our systems in the normal 
course of business are Y2K compliant. We certainly want to stay 
the course here.
    Moreover, we have established a moratorium on changes to 
the National Airspace System during the critical periods of 
this transition. That moratorium will be effective from mid-
November through very early January, as well as during 
February--because, you know, we have the leap year issue, so we 
have a couple of periods where there will be a moratorium on 
any changes.
    In addition, as the Inspector General has mentioned, we 
have developed a comprehensive business continuity and 
contingency plan. The plan really builds on our existing 
contingency plans to specifically address potential disruptions 
caused by Y2K. The contingency plan has been developed with the 
participation of our labor workforce. That's been critical from 
my perspective. Certainly having that at the table with us has 
been very important and very, very helpful.
    That's the status of where we are at the FAA, but we 
certainly recognize that our efforts do not end at the FAA's 
doors. What I would like to do is just briefly outline what we 
at the FAA have been doing with the industry over the past 18 
months or so.
    I know that you're going to hear a great deal from David 
Plavin about our domestic airports. I would only say that we've 
been monitoring and working very closely with the airports. We 
are very focused on 20 computer systems on airports that may be 
used to comply with our regulatory safety requirements, so 
there are 20 airports system that we really are focused on. 
Seven of those have a direct impact on safety, things having to 
do with lighting, things having to do with fire trucks, things 
of that sort.
    We have notified all of our airport operators, our 
certificated airport operators, that by October 15 they are 
expected to have those systems Y2K compliant. But I will say we 
have been very pleased with the kind of relationship and the 
kind of work we've been able to do with them.
    We visited 150 of the top airports, and they account for 
about 97 percent of all the enplanements. We're very pleased 
with the progress made in those airports in particular. I'm 
sure Mr. Plavin will have more to say on that.
    With respect to the U.S. aircraft fleet and airlines, the 
FAA, as the IG and Deputy Secretary have mentioned, has 
conducted extensive surveys with our certificate holders. 
Again, I listened very carefully to the comments and the 
questions that you all raised. We have gotten responses to 
date, but we are, as you have indicated, concerned about the 
ones we have not yet heard from.
    Just incidentally, our managers and many of our field 
inspectors are in Washington today. Each one of them is very, 
very focused on this issue. They are responsible for a certain 
number of our certificate holders, and they're going to be 
looking at three issues today: what do we know, what 
information do we have, what areas are we concerned with, what 
specific certificate holders have we not heard from or are we 
concerned about the information, and what are we going to do 
about it? We are going back to them individually, and quite 
honestly, Senator, I think the idea of legislation could be 
very helpful to us.
    We have worked with the IG on the November 15 deadline. We 
are going to tell them categorically that they must get back to 
us, that we must have that information early in November, so 
that we can analyze it and know quite clearly on November 15 
what the----
    Vice Chairman Dodd. Just to jump in quickly, what I hear 
you saying, then--and obviously, you will want to see what we 
draft, and I would run it by your staff and so forth. But the 
idea of prohibiting an airline from flying that has not 
responded to a survey from the FAA is something you would agree 
with?
    Ms. Garvey. I certainly think that could be very helpful. I 
will tell you that I continue to remain optimistic, that we 
will get the information back. But I think there is nothing----
    Vice Chairman Dodd. But in a timely fashion, I would 
presume, as well.
    Ms. Garvey. Absolutely.
    Vice Chairman Dodd. Getting information on December 30----
    Ms. Garvey [continuing]. Will not be helpful. That's right.
    The FAA has been working, as you will hear, with the 
International Civil Aviation Organization in raising the whole 
issue internationally. I will shift to that, if I could.
    We have been very supportive of the efforts of the 
International Air Transport Association [IATA]. We are 
promoting the IATA Airports Council International airline-
airport business contingency plan, and again, that's very 
similar to the contingency plans that we have undertaken 
domestically.
    We are also doing, as the Deputy Secretary mentioned, 
extensive international testing. By December, we will have 
conducted testing with 23 countries to ensure adequate 
communication exchanges for those countries with which we have 
direct interfaces. We already have schedules in place to test 
both the voice and the data systems in order to validate the 
connections between our air traffic control systems.
    We work very closely with the Departments of 
Transportation, with Defense and with State, on the interagency 
working group to review the information, and the Deputy 
Secretary has spoken about that in some detail. I want to make 
it clear, as we move forward, should we gain any knowledge at 
any point that causes us to be concerned about the safe 
operations of the civil air fleet, we are prepared to act 
appropriately. If it means issuing Notice to Airmen, we will 
take that action.
    Again, I think that from what we've heard and the work 
we've done internationally with our colleagues there, I think 
we are encouraged to date. But I think all of us have said 
we'll be very vigilant and be prepared to take whatever 
appropriate actions are necessary.
    Let me just summarize, because I know we have a very full 
panel today and we would like to hear from all of them.
    The question you asked in the letter about what Congress 
can do, I think I speak for all of us at the FAA. We think that 
we owe Congress a debt of gratitude for keeping this issue very 
much on the forefront, keeping it very much in the public 
domain. We appreciate that enormously.
    I also want to publicly again thank the Secretary and the 
Deputy Secretary. I don't think I have met with the Deputy 
Secretary once in the past year where he hasn't asked about our 
Y2K efforts. So they are very, very focused on that. And the 
IG's as well. I think we've had an extraordinarily cooperative 
relationship with him in working these issues through.
    Finally, it is always wonderful to be able to say publicly 
how much I appreciate the efforts of the men and women of the 
FAA. To meet that deadline of June 30 was an extraordinary 
effort. People really worked around the clock to get that done. 
I am very proud of the agency and proud of the men and women 
who saw that through.
    So we're very pleased with our progress to date, but as we 
said earlier, we've not overconfident. We will stay vigilant, 
stay very watchful. We know that we really can't rest until 
we're well into the year 2000.
    With that, I will conclude my testimony. Thank you very 
much.
    Chairman Bennett. Thank you.
    [The prepared statement of Ms. Garvey can be found in the 
appendix.]
    Chairman Bennett. Mr. Windmuller.

   STATEMENT OF THOMAS WINDMULLER, DIRECTOR, IATA YEAR 2000 
        PROJECT, INTERNATIONAL AIR TRANSPORT ASSOCIATION

    Mr. Windmuller. Good morning, Mr. Chairman and Mr. Vice 
Chairman.
    I would like to start this morning by thanking this 
Committee for providing IATA with an opportunity to explain 
what we, on behalf of the international air transport industry, 
have been doing to prepare for the year 2000. The international 
airline community and the civil aviation industry at large have 
a good story to tell about their work in this field.
    Having submitted a written statement to the Committee in 
advance of today's hearing, I will confine my verbal remarks to 
a few highlights, first, with respect to airlines and the Year 
2000 problem. In 1996 IATA established the Year 2000 Group, a 
forum in which our 265 member airlines could meet regularly to 
discuss the Year 2000 preparations in a non-competitive 
environment. Participants exchange information about problems 
encountered, solutions identified and best practices 
established. IATA has also collected information on the 
readiness of aircraft systems from the major airframe 
manufacturers, Western and Russian, and made this information 
available to member airlines, as well as to other airlines 
participating in our Year 2000 work. IATA has also been in 
contact with the major computer reservation systems. Since 
early 1999 they have been accepting reservations for dates 
after the rollover. At last count our member airlines are 
expected to spend at $2.3 billion in preparing for the 
millennium change.
    It is with airports and air traffic service providers that 
IATA has concentrated the bulk of its work. IATA has been 
tracking their progress in preparing for the millennium 
transition for the past 15 months. To increase Y2K awareness 
amongst airports and air traffic service providers around the 
world, we have distributed over 2,500 industry Y2K tool kits in 
eight different languages, a copy of which I have brought with 
me here today. We have also conducted a series of 26 training 
seminars that attracted over 2,000 participants, and I am very 
pleased to report that we do not believe there is any major 
international airport or provider of air traffic services in 
the world that is not aware of the Year 2000 problem and its 
potential impact on the air transport industry. We have carried 
out visits to the overwhelming majority of the world's air 
traffic service providers and to the top 71 airports outside of 
North America. Individual airlines, working on behalf of the 
entire airline industry, have conducted independent visits to 
several hundred more airports. As of last week we had obtained 
data covering more than 175 ATS sites around the world, and 
from over 1,200 airports.
    Based upon this data, we are generally satisfied with the 
progress we are seeing amongst all sectors of the air transport 
industry. Some 326 airports, for example, report that they have 
completed their Y2K preparations on 100 percent of all systems. 
Several hundred more report they are nearing completion on 100 
percent of all systems. However, IATA will continue, through 
the end of the year, to track the progress of those entities 
that have not yet completed their work.
    IATA has also played a proactive in helping states, ATS 
providers and airports to adapt their existing business 
continuity and contingency plans to a Y2K environment. 
Contingency planning is something the air transport industry 
undertakes every day. The aviation industry is committed to 
providing safe, dependable service to our passengers and 
shippers. Therefore, airlines, airports and ATS providers 
always have contingency plans available to cover almost every 
conceivable scenario. We implement these plans regularly due to 
weather problems, labor strife and other disruptive events, and 
we are very accustomed to working with these plans, often with 
no discernible impact on the service we provide.
    During the rollover ICAO and IATA personnel will jointly be 
manning a network of regional coordination units in every 
region of the world. These centers will track developments 
across the globe as each time zone flips over from December 
31st to January 1st.
    In summary, Mr. Chairman, IATA is confident that the 
international civil aviation industry has solutions to this 
challenge in hand. The confidence is based on the good progress 
we are seeing amongst our industry partners on the existence of 
robust contingency plans, and on the real-time tracking of 
developments that will take place during the rollover period. 
Our confidence notwithstanding, we are not complacent. We will 
continue and even accelerate our work on all fronts over the 
remaining 92 days of 1999 and during the first quarter of 2000.
    IATA is also confident that sufficient air space capacity 
will be available to enable those airlines that choose to do so 
to operate their normal year-end schedules, even with the 
implementation of contingency plans that have been agreed by 
states under the auspices of ICAO.
    Notwithstanding all the efforts by airlines, airports and 
ATS providers, it would be unwise to predict a flawless 
transition into the next millennium. There may be some flight 
delays, some cancellations or other disruptions. In the days 
that follow the rollover, we will be tracking the lifting of 
these contingency measures, as the number of passengers wishing 
to travel increases and airlines begin to ramp up their 
schedules. We hope and expect that these inconveniences will 
not be significantly greater than they are on any other winter 
weekend. And it's important to emphasize that these are 
inconveniences. We are very confident that there will be no 
compromise on safety.
    To paraphrase one of my industry colleagues, Mr. Chairman, 
if any of your constituents has real concerns about the Year 
2000 problem, tell them to book a flight. The one place I know 
they will be safe from the bug is on an airplane.
    Before closing, Mr. Chairman, I would like to take this 
opportunity to recognize the outstanding Y2K work performed by 
the Federal Aviation Administration, by our colleagues at the 
Air Transport Association, and by the major US carriers. The 
very high level of Y2K readiness throughout the airport 
industry in this country is to a great extent the result of the 
strong programs that these parties have implemented. Equally 
significant, however, is the strong leadership that 
Administrator Garvey and her team, the Air Transport 
Association and the major US airlines have exercised in the 
international arena. All of them have extended strong support 
to the IATA industry initiative, and the work of all these 
entities deserves to be recognized by this Committee.
    IATA would also like to commend this Committee, Mr. 
Chairman, for its leadership in obtaining congressional passage 
earlier this year of the so-called Safe Harbor Legislation. 
This legislation serves as a model for other national 
legislatures, a model that has been followed by an 
unfortunately small number of countries. We would respectfully 
request that Members of the Congress use their contacts with 
legislators from other countries, through the North Atlantic 
Assembly, for example, to encourage their national legislatures 
to enact similar laws.
    Mr. Chairman, we are grateful for the opportunity to appear 
here today to discuss one of the largest challenges ever faced 
by civil aviation. We appreciate the continued interest of this 
Committee in the problems faced by those who fly planes around 
the world and in the welfare of those who are flown.
    I would be pleased to respond to any questions that you or 
the Vice Chairman might wish to pose.
    [The prepared statement of Mr. Windmuller can be found in 
the appendix.]
    Chairman Bennett. Thank you very much.
    Mr. Plavin.

   STATEMENT OF DAVID Z. PLAVIN, PRESIDENT, AIRPORTS COUNCIL 
                  INTERNATIONAL-NORTH AMERICA

    Mr. Plavin. Thank you, Mr. Chairman, Vice Chairman Dodd.
    ACI-North America, the Airports Council International, is a 
trade association representing about 400 airports, 150 airport 
operators, and we handle about 97 percent of the domestic and 
virtually all of the international passenger and cargo activity 
in the United States and Canada.
    Because of the nature of this industry and because of the 
nature of the business, we have worked very closely with the 
air carriers and with FAA in trying to be sure that our member 
airports will be ready for the rollover. We have participated 
with FAA and with the carriers in creating seminars and other 
forums for airports to exchange information, both with 
themselves and with the carriers and with the FAA. We have been 
operating this in that mode for about 2 years now.
    Because the 18,000 airports in the United States are 
locally owned and operated, it has been somewhat difficult to 
form a single view of the readiness of the industry. Unlike the 
major airlines or the regional airlines, with their relatively 
smaller number of operators, this diverse ownership makes it 
rather difficult. However, having said that, many attempts were 
undertaken by FAA, by the Inspector General, by the General 
Accounting Office, and we found that in general the airports 
are not only ready, but that they are well ahead of their 
original schedules. By and large, we found that at the 
commercial airports, at least 80 percent of the systems that 
have been identified as critical, have been found to be Y2K 
compliant, and the rest are expected to be compliant by the end 
of the month of November.
    However, having said that, I think there are a couple of 
important points to keep in mind. One of them is the 
contingency plan approach, which Tom Windmuller referred to. It 
is common practice among our member airports to conduct 
extensive testing to assure that every affected system will be 
made fully compliant. It is also common practice to develop 
contingency plans to assure continuation of the functions in 
the unlikely event of a failure. Airports do contingency 
planning all the time. They have emergency drills. They 
participate for disruptions, dislocations of all kind 
throughout the course of their business. And so it is natural 
to expect that this contingency planning process will be in 
place and will be tested in a number of occasions between now 
and the rollover date. So we are confident that a high quality 
of contingency planning has been done and will continue to be 
done between now and the Y2K rollover.
    The other part that is important to note is that there are 
not very many airport systems that are critical to the 
functioning of the system. The aviation system has been 
subjected, I would argue, to unwarranted speculation regarding 
potential for Y2K failures having an impact on safety, and 
fortunately, that speculation is not warranted; unfortunately, 
that speculation continues.
    ACI has worked with the Air Transport Association of the US 
and with the Air Transport Association of Canada, and 
particularly with FAA to prepare and distribute to certificated 
airports a list of approximately 150 systems commonly owned by 
airports that might be susceptible to Y2K failure. Many of the 
important systems that people think about are not operated by 
airports, but the ones that are have been viewed by FAA and by 
the airports and the airlines that use the systems. In FAA's 
judgment there were 48 systems that were initially identified 
as either critical to airfield operations or useful in 
fulfilling some regulatory requirement. We believe that very 
few of these actually have the potential for either 
significantly affecting operation or safety. Many of the 
systems merely serve to increase efficiency by automating 
functions formerly performed manually. Others provide 
information, or data bases, or record keeping in nature and do 
not control operational functions. 3 of these 48 systems have 
been the subject of frequent speculation and are worthy of 
additional discussion here.
    The first of those is the airfield lighting control 
systems. These are tools for controlling the thousands of 
lights used on a typical airport runway and the taxiway system. 
Newer systems are computer controlled. Some of them have been 
found to have the possibility of failing in the Y2K 
environment. These systems generally have been replaced or 
repaired by our members, and subsequent testing indicates that 
they are free from risk. However, the important point here is 
that airports can still flip the switch and turn them on if 
they fail.
    The second one of these I think which is important to talk 
about are airfield access control systems from a security point 
of view. These are used to regulate the secure portion of the 
airfield, over many doors that are required to be controlled 
for the purpose of protecting the security of the operation. As 
is the case with the airfield lighting systems, they have been 
repaired or replaced, tested for Y2K readiness, and are felt to 
be fully reliable. However, if failure were to occur despite 
this testing, they are designed to fail in a closed mode, and 
FAA has been providing guidance to airports on how to manually 
control access to airport secure areas. Assuming that any 
failure could not be quickly repaired, the consequence would be 
an increased requirement for staffing and a reduction in the 
number of access points to the aeronautical area, all of which 
have been planned for, and the contingency plans to accommodate 
those are in place.
    The third system is the airport rescue and fire fighting 
vehicles. The airports have been working with the manufacturers 
to identify some of the equipment which may have the 
possibility of being affected by Y2K. To this point the 
manufacturers have provided fixes to the equipment, and the 
testing of those goes on. We are comfortable that the 
overwhelming bulk of the equipment will not fail, and that to 
the extent that it does, the support equipment, that is in 
place at all airports that are required to have it, will be 
able to function reliably.
    I am comfortable, therefore, that, as Mr. Windmuller said, 
the airport system will be able to fulfill its part of the 
services required for the continuation of a safe, secure and 
effective airport and aviation operation.
    We appreciate the kind of direction that we have been 
getting from the FAA, which has actually been putting in place 
the opportunity to verify the effectiveness of Y2K compliance 
measures, and we expect that by the time Year 2000 rolls 
around, if there is a failure in the system, it will be because 
we have got snow.
    [The prepared statement of Mr. Plavin can be found in the 
appendix.]
    Chairman Bennett. And we cannot blame snow on Y2K.
    Mr. Plavin. Right.
    Chairman Bennett. Mr. Cooke, welcome, sir.

   STATEMENT OF PETER COOKE, YEAR 2000 COORDINATOR, BRITISH 
                            AIRWAYS

    Mr. Cooke. Thank you, Mr. Chairman, and good morning, Mr. 
Chairman and Vice Chairman.
    I would like to thank the Senate Special Committee for 
inviting me, and for this opportunity to add to public 
knowledge and confidence on this very important challenge for 
the international aviation industry. The position taken by 
British Airways on Year 2000 is detailed in our written 
submission, but I would like to highlight the following 
aspects.
    First, some words on the British Airways internal Year 2000 
program. British Airways takes the Year 2000 issue very 
seriously, and has been working on the investigation, 
identification and remediation of its own systems, equipment, 
and supplier chains for about 4 years. This has been a 
significant task with some 3,000 systems, 800 applications, 
30,000 PCs, and 40,000 suppliers in our data base. Throughout 
the program the emphasis has been on not simply remediating IT 
functions, but insuring that all critical business processes 
will continue to operate. Hence we have had line management 
involvement and accountability at all levels. Some 70 million 
pounds, $112 million, has been committed over the length of the 
project, and up to 200 people have been involved in the effort. 
The main board takes a keen interest in the project and receive 
regular updates.
    We have worked closely with our major partners, British 
Airports Authority at Heathrow, Gatwick, and other UK airports, 
aircraft manufacturers, the national air traffic services, 
travel agents and CRS's, banks and many other suppliers. Where 
appropriate, joint testing has been undertaken. We have also 
cooperated closely with Action 2000, which is the UK Government 
agency responsible for reassuring the British public as to the 
Year 2000 readiness of key components of the UK economy and 
infrastructure. It covers utilities, financial services, fuel 
and food distribution, transport and public services. In July 
we publicly received their highest rating following an 
assessment of our program.
    We have currently completed the installation and testing of 
contingency plans for our mission-critical and important 
business systems and processes. We are by no means complacent, 
and we will continue our work up to and through the millennium 
period, but we are confident that British Airways is now ready 
to meet this unique challenge.
    Second, some words about the external environment. Critical 
components of our supplier chain are, of course, the air space 
we fly through and over and the airports we operate to 
throughout the world. This forms a particular challenge to a 
global airline like British Airways which is interested in some 
150 of the 185 member states ICAO, and which operates to 160 
airports in 6 continents with technologies ranging from the 
simple to the extremely sophisticated. Our investigations have 
included cooperation with ICAO, participation in the IATA 
industry project, closely liaison with the CAA and Eurocontrol, 
collaboration with our reliance partners in oneworld, and 
overlain by our own investigations, knowledge, experience and 
assessments.
    I would particularly highlight our participation in the 
IATA industry project, in which we have been very active since 
its initiation and of which we are a very strong supporter. We 
have had observers present at many of the site visits, both to 
air traffic service providers and to airports. However, we do 
not rely solely on the IATA data. We have conducted our own 
assessments, and we have engaged a small team of air traffic 
systems experts who have provided us with in-depth knowledge 
and expertise for our assessment process. We have worked with 
air operator committees at airports and have made our own 
evaluations of the readiness of airport customer related 
systems, including their contingency plans to insure that 
regular business continues over the millennium. Finally, we 
have devised former routines to analyze data and soft 
information from all sources in order to make our assessments.
    And last, some words on our conclusions. We are confident 
that the methodology and assessment processes we have put in 
place are appropriate and adequate to address the Year 2000 
challenge. We are very pleased with the progress being made and 
reported in all parts of the world. It should be recognized 
that not all providers in all countries have yet reported 
conclusions to their programs, and these providers will 
continue to be monitored and reviewed, both through the IATA 
project and by ourselves. I am happy to say that it is a small 
and diminishing number that fall into this category, and 
looking forward, we do not believe that there will be an 
adverse effect on our planned operations. I should say that we 
are receiving unprecedented cooperation from industry partners 
in all parts of the world in this unique exercise.
    On September the 20 we announced our planned schedule of 
operations for the millennium. While bookings are some 29 
percent up on last year for the last few days in 1999 and the 
first week of 2000, the millennium eve itself is quiet, as is 
usual on New Year Eves. We shall therefore be operating a 
reduced program over the millennium night with no short-haul 
flights after 6 p.m. until the next morning. There will be a 
long-haul operation, however, with 20 aircraft flying during 
the rollover period. Although we have determined the residual 
risk is low, since safety is of paramount concern, we will 
continue to monitor and review progress up to the rollover 
period, including using our operations control center at London 
to take any necessary operational decisions on the night 
itself, as is our normal practice. We cannot say, of course, 
that no delays or disruptions will occur. They are a normal 
occurrence in airline life. We believe, however, that we have 
adequate experience-based plans to cope with all eventualities 
and to mitigate their consequences.
    In conclusion, therefore, British Airways approaches the 
millennium with confidence. Thank you.
    [The prepared statement of Mr. Cooke can be found in the 
appendix.]
    Chairman Bennett. Thank you very much for being here and 
sharing that with us. We appreciate it.
    Mr. Smart.

 STATEMENT OF EDWARD SMART, ICAO REPRESENTATIVE, INTERNATIONAL 
          FEDERATION OF AIR LINE PILOTS ORGANIZATIONS

    Mr. Smart. Thank you, Mr. Chairman, Vice Chairman Dodd. I 
am the air line pilot representative to the International Civil 
Aviation Organization.
    Chairman Bennett. Can you talk a little more into the 
microphone?
    Mr. Smart. Of course, Mr. Chairman.
    Chairman Bennett. Thank you.
    Mr. Smart. Our organization, the International Federation 
of Air Line Pilots Associations is made up of just under 100 
national member pilot associations, and we have 120,000 pilot 
members, as you said before. Our basic aim is the development 
of a safe and orderly system of air transportation.
    IFALPA is aware of the efforts expended by states and 
international organizations to increase public awareness of the 
Y2K problem, as well as their assistance in eliminating or 
minimizing its impact. We have full confidence in assurances 
given to us by the major aircraft manufacturers that there is 
nothing within the aircraft themselves which will jeopardize 
flight safety. We are also confident that the measures already 
taken or yet still pending will insure continued flight safety 
for operations in North America, the Eastern and South Pacific, 
and the North Atlantic oceanic regions, and in Western Europe.
    We are somewhat less confident about what might occur in 
Eastern Europe, and within the air space eastward to 
Vladivostok. We noted the recent announcement by the head of 
Russian Air Traffic Control of his serious concerns that 
Russian flight safety system has been weakening since the early 
1990's and may soon become critically deficient. Similar 
concerns apply to the former Soviet republics to the north of 
Iran and Pakistan.
    Also of concern is the fact that the air traffic control 
contingency plans developed for Western Europe include the idea 
that some states may close their air space in the event of 
communications failure. This procedure already exists, but has 
rarely been used and never on a large scale. If this occurs for 
any extended period of time and involves many aircraft, we 
believe that flight safety problems could emerge. There are 
some 420 morning daily flights inbound to Europe from overseas.
    We were also told that some air space and aerodromes along 
the main routes to Europe from Asia could be closed, and we 
understand there is a possibility that routes over Afghanistan 
and Turkey and that airports in Cyprus, Syria and Turkey might 
also be closed if communications fail.
    Today over large areas of sub-Saharan Africa, the air 
traffic control system is not and has never been fully 
functional. Pilots must rely on a do-it-yourself form of air 
traffic control, called In-flight Broadcast Procedure, IFBP. 
They broadcast their presence and altitude in the blind. Other 
aircraft then hopefully hear these calls and minimize the 
chances of collision by changing their altitude. This normally 
works fairly well in low traffic density areas, but there are 
difficulties. Not all aircraft are aware of or use the 
procedure, and not all pilots use the English language.
    ICAO's Y2K regional contingency plans contain a version of 
the In-flight Broadcast Procedure as a primary means for 
preventing midair collisions if and when air traffic control 
does fail. Pilots will then be expected to revert to 
essentially a do-it-yourself air traffic control system.
    Vice Chairman Dodd. Mr. Smart, I thought all pilots had to 
know English, that it was the international language?
    Mr. Smart. No, sir, that is incorrect. It is the 
international norm, but it is not a standard. Within South 
America, for instance, about all you hear is the Spanish 
language, except from North American pilots flying through the 
area and European pilots, of course. It is very common in West 
Africa they use French while they are airborne as well, and it 
does present difficulties for us.
    It could be said that at least we still have a last ditch 
electronic means for avoiding midair collisions by using the 
Onboard Airborne Collision Avoidance Systems, when neither ATC 
nor the In-flight Broadcast Procedure worked. But in order to 
detect a potential collision, ACAS requires that the threat 
aircraft be equipped with an altitude-reporting transponder. 
Unfortunately, there is no regional requirement for its 
installation until the year 2003. Even then ACAS will not be 
required for cargo aircraft. It is also not required for small 
commercial or non-commercial aircraft, nor is it required for 
the military.
    Russian radar transponders used in their domestic aircraft 
also cannot be seen by our ACAS. There have been near misses, 
and in 1996, a Saudia 747 equipped with ACAS and a Kazakh 
Ilyushin 76 cargo plane without a compliant transponder, had a 
midair collision over India and we lost 350 people.
    Recommendations, which we recently made to ICAO during the 
second Global Y2K Contingency Planning Meeting, included the 
measures indicated on the chart. These measures were all 
accepted except for the additional flight crew manning 
recommendation which we had made.
    In conclusion, Mr. Chairman, we agree with the view that 
both ICAO and IATA have taken all reasonable measures that are 
within their means in dealing with Y2K types of events. We are 
most appreciative of this opportunity to have presented the 
views of the international air line pilot to this eminent 
national legislative body. Thank you very much for your kind 
attention.
    [The prepared statement of Mr. Smart can be found in the 
appendix.]
    Chairman Bennett. Thank you very much, Mr. Smart, for your 
testimony. In reacting, Mr. Plavin, to some of the comments you 
made about over-reaction, I've had the experience, and I'm sure 
Senator Dodd has as well, when I have been out trying to 
reassure people that things are all right with respect to Y2K, 
of having my own speeches quoted back to me. Some people who 
have a psychological vested interest in seeing Armageddon, tell 
me I am now lying to them deliberately when I say things have 
gotten better, and, look, my early alarms were the correct 
information and nothing has changed. It is very difficult to 
break through that kind of mentality.
    I think the panel, as a whole, has gone a long way to go in 
that direction as we have heard from a number of different 
sources, each one affirming the other that the overall system 
has made extraordinary progress here. The early warnings were 
not improper. The possibility of failure was there, and it was 
serious, but the work that has been done has been Herculean, 
and we should all recognize that and rejoice in that instead of 
being disappointed that we are not going to see the huge 
disaster that a lot of people, frankly, are still hoping for.
    Now, the first thing I would do would be to ask any member 
of the panel if you have any comment on any other member of the 
panel's presentation, either correction or amplification. Now, 
if you are just going to say, ``Gee, they are all right'', you 
can do that very quickly, and we will be happy to have that, 
but is there anything any one of you has said that strikes a 
button in the other, so we can get a conversation going among 
you experts as to where we are?
    Vice Chairman Dodd. Or anything that Mr. Downey or Mr. Mead 
may have said in the panel before you.
    Chairman Bennett. Yes, yes.
    Mr. Plavin. Mr. Chairman?
    Chairman Bennett. Yes?
    Mr. Plavin. If I may, I want to take exception to you 
having exempted the administrator from the description of the 
rest of us as ``thorns.'' Chairman Bennett. I see. I can live 
with that.
    Mr. Plavin. From the airports' point of view, I just want 
to say that one of the things that has made it possible for the 
airports to do what they have done is very significant 
oversight by the FAA in making sure that the systems are 
compliant as they seem to be. And the second part of that is to 
make it clear that the air carriers have taken a very, very big 
role in--because they have a network which is able to spread 
across most of the airports in the world, they have been the 
logical place, and they have stepped up to the table to take 
that responsibility of sharing information and assessing 
information. I have trouble saying that because airports and 
air carriers are not supposed to be doing things in the same 
direction, but in this case at least, we are.
    Chairman Bennett. Yes, sir?
    Mr. Windmuller. Thank you, Mr. Chairman. If I can just 
build on Mr. Plavin's point, I think there is something that 
you have touched on, Mr. Chairman, that was implicit in a lot 
of what we were saying but bears further scrutiny because I 
think there is a lesson to be learned here.
    I think you were right about the early warnings being 
justified. I think you were equally right about the progress 
that has been made, and the result of that progress being that 
it is a very different world out there from what it was a year 
ago or even just a few months ago, but I think one of the 
reasons for that is the way in which this industry has 
approached this issue. The cooperation that we have all seen 
amongst regulators, airlines, air traffic control providers, 
airports, pilots, air traffic controllers, in my personal view, 
has been either unprecedented or unsurpassed, and matched only 
by our common approach toward safety. That I think is not only 
to be commended, but also to be remembered and built upon when 
we have other issues like this, non-competitive issues, to face 
in the future. Thank you.
    Chairman Bennett. Thank you.
    Yes, sir, Mr. Smart?
    Mr. Smart. Thank you, Mr. Chairman. Just to comment on a 
previous statement that was made with regard to the paucity of 
information available. We feel that this is an important aspect 
and perhaps we have learned a lesson from all this. The final 
authority for insuring the safety of flight rests properly with 
the pilot in command, and we have to have the information that 
is required in order to make that final decision, and it is 
sometimes terribly difficult to dig it out. We hear 
generalities for the most part with regard to the important 
airports, the important aviation states, the important 
aerodromes, the information there are no difficulties involved. 
I am afraid that if I was flying on an unimportant airline in 
an unimportant aviation state, I would still feel relatively 
important and that it was necessary for me to get the proper 
information. So I do think we have perhaps learned a lesson 
here. We have not yet, I do not believe, solved the problem, 
but at least I have identified the problem.
    For the pilot, the information that we need is available in 
flight publications. We have the Airman's Information 
Publication, AIPs and AICs, but they are not available in the 
cockpit to us. We rely on major chart producers to produce, of 
course, in making that available. Time is becoming very, very 
short. We are now under 90 days. Thank you.
    Chairman Bennett. I have been interested in Senator Dodd's 
indication of drafting legislation and your reaction to that, 
Administrator Garvey. I think that will have a salutary effect, 
and we have never had to issue a subpoena in this Committee to 
get any witnesses, but I have threatened to issue a subpoena on 
occasion, and it is amazing how quickly the use of that word 
changes some people's attitude toward cooperation with the 
Committee. And I think the dreaded word ``legislation'' can 
have the same impact here. But do you not have some authority 
in the FAA to shut down an airline if you come to the 
conclusion that they are in fact stonewalling you on 
information? Can you not, administratively, without 
legislation, take some action in this area?
    Ms. Garvey. Well, certainly. Let me answer that in two 
ways. First of all, our major focus, as everyone at the table 
has said, and as the Deputy Secretary said this morning, is 
safety. So at any point, if we believe that an action being 
taken, or we have enough concern raised, we can certainly take 
very strong action, so we absolutely have that. I think that is 
an important distinction to make. We have heard a lot of 
discussion early on, well, if a company or an airline is not 
Y2K compliant, should we take an action? We have said we should 
take an action if safety is affected, because, for example, 
someone could have very appropriate contingency plans, or it 
maybe, as Mr. Plavin said, it may be a system that is not Y2K 
compliant, but quite frankly does not affect the safety. So we 
want to stay within what is regulatorily responsible, I 
believe, and I think we absolutely can take the action.
    The second point I wanted to make is that our inspectors, 
which--and I mentioned that many of them, in fact, nearly all 
of them are in town today to really talk about the Y2K, the 
managers and so forth. They are out there working with these 
certificate holders weekly, sometimes daily. So we have a very 
good sense--and I think a lot of the discussion we are going to 
hear today is, ``Well, you know, maybe the information may not 
be sufficient, but we have got a good sense of what is 
happening with that particular certificate holder.'' So, we are 
really building on a structure which I think has served us very 
well in aviation safety, and I want to make that point, because 
we have some very good folks out there who are working these 
issues daily.
    But to answer your question, we absolutely can take some 
strong action. The Inspector General has made the point that 
sometimes even just the exposure on the website, knowing you 
are going up because you have not provided the information, is 
very compelling, and we are going to do that. But certainly any 
encouragement, and we certainly appreciate the offer to work 
with you on the legislation so that we are making sure it is 
within the bounds of what we think is appropriate from a 
regulatory point of view, but you are right. I remember a great 
quote from a Senator from this body, who once said that, ``When 
I feel the heat, I see the light.'' And that may be a little 
bit of what the Senator is talking about. That certainly does 
have an effect.
    Chairman Bennett. Yes. Mr. Cooke.
    Mr. Cooke. Yes. Can I just add to what the FAA 
Administrator said. I agree entirely that the issue that should 
concern legislators is one whether any airline is likely to be 
indulging in unsafe practices. If an airline just has not got 
its act together and has not produced a very good Y2K program, 
it is most likely not to be able to operate itself. So I think 
the main issue is whether it is unsafe, not whether or not it 
has got a good business program going.
    Chairman Bennett. Senator Dodd?
    Vice Chairman Dodd. Mr. Chairman, thank you.
    Let me just pick up on the last part, Ms. Garvey. We are 
working on drafting this, and I would like to get the names, by 
the way, of the 1,900 airlines, because I want to put them in 
the congressional record today. And I find it does--I mean I 
understand you have the authority. My concern would be, 
obviously, from a customer point of view, that you get down 
here toward the end and people have made plans to travel and so 
forth, and all of a sudden they find at the last minute 
airlines are not going to be able to fly. I would like an 
earlier termination for the benefit of the flying public here 
as well.
    I take this very, very seriously. I appreciate the fact 
that they may be operating well and fine and it may not be a 
problem, but I am not going to take that chance. My view here, 
if someone is not doing the basic thing of responding to the 
Federal Aviation Administration's request for a survey on 
whether or not they are going to be compliant when dealing with 
a problem that has raised tremendous concern with the American 
public, I think we would be tremendously recalcitrant. So my 
concern would be, in the absence of legislation, and of course 
you have the authority I think in a lot of areas, but I presume 
that decision may also be subject to some legal action, where 
it could be contested, I suppose, and you could end up with 
courts and decisions in courts, whereas a piece of legislation 
might have a more beneficial impact.
    I hope it does not come to this. I hope the 1,900 are 
getting the message today, and that before the week is out or 
the early part of next week, you are going to find full 
compliance here. But I just want to make it very clear that 
from my standpoint alone, I am not going to sit here wondering 
for the next 92 days or 94 days, whatever we have got left 
here, whether or not constituents of mine get on an airline 
someplace, and I knew that they had not complied with a survey 
on Y2K, and the question comes back, ``Senator, what were you 
thinking of?'' So I am hopeful this can be resolved.
    Ms. Garvey. Senator, one point I will just add, that a 
staff person, as I was coming to the table, said, ``You know, 
sometimes even when the airlines want to''--and this gets to 
your point about the legality--``sometimes even the corporate 
structure says, ''Well, there are legal issues and we perhaps 
should not give information out.``'' And so the staff person 
said, ``You know, the legislation is helpful in that sense.'' 
And I think sometimes this is the case for even very big 
corporations.
    Vice Chairman Dodd. No, that is a good point. I actually 
found that happened in the past. You know, ``If I share any 
information, then I am subjecting''--I have co-authored the Y2K 
legislation on tort issues here to try and minimize the 
possibility of just an overwhelming amount of litigation in 
this area. So I have tried to do my best over there to minimize 
this specifically so it would reduce the kind of argument that 
some people are making about how do you not share information. 
I mean, that to me is just so unacceptable, particularly with 
something where the American public, during a holiday season, 
where people have to sit there. I have made the statements over 
and over again, ``I think they are perfectly safe and you ought 
to be flying if you want to fly.'' But I did not know about 
1,900 airlines that had not complied with the survey.
    Ms. Garvey. Just to be correct, it is a number of very 
small ones.
    Vice Chairman Dodd. Yes. I appreciate that.
    Let me jump, if I can, to--there is the survey, the 
Airports Council International, Mr. Plavin, states that the 
most authoritative data on US airports rests with survey 
information that the FAA gathered in the spring and summer of 
this year. Now, in spite of the fact--I do not think that was 
originally collected with the idea of confidentiality in mind, 
at least I know of nothing that indicates that. You can correct 
me if that is the case. I wonder if you might clarify it for 
the Committee, is there not some point when that information 
should be released to the traveling public? We have made 
similar requests of other surveys that have been done across 
the board so that we get an idea here. This information will 
become public at some point, and I would be, again feel 
negligent, if that information becomes available after January 
1, and for some reason there were problems in some place and 
that information had not been made available to the public. 
Now, is there some reason why it cannot be made available?
    Mr. Plavin. Mr. Chairman, I think there are two separate 
sets of information streams that are at issue here. One of them 
is a body of work that the ACI has been doing with the airlines 
that actually looks at certain kinds of systems within airports 
that airports and airlines use jointly. It is that package that 
was gathered with the assurance of confidentiality.
    Vice Chairman Dodd. Why?
    Mr. Plavin. Because of--the point you made a moment ago, 
because are saying, ``I do not want that information to be used 
in legal action against me. I want to share it in a way so that 
in the interest of everybody knowing what everybody else is 
doing, but I do not want to give that to somebody else as a 
basis for saying, ''We are going to sue you.``'' Now, having 
said that thought, the more important issue is the work that 
FAA has been doing. That is clearly not gathered under the 
assumption of confidentiality. The airports have responded in 
the spirit, I think, in which you identified earlier, that FAA 
is the regulatory body, they are the ones who have to make the 
determination whether the airport is operating safely and 
properly in accordance with its certificate, and it is FAA's 
responsibility, and the airports know they have an obligation 
to respond and to respond timely and accurately. So I do not 
think that there is any assumption that failure to respond is 
not going to be public.
    Vice Chairman Dodd. You know, we worked very hard to pass 
the Y2K Litigation Reform Bill, and I found very hard. It took 
a week of activity, and the President, to his credit, signed 
it, despite a lot of opposition in doing so. I do not buy the 
argument that because someone is afraid of maybe some legal 
action here, that that information, the consuming public would 
like to know. And if you have information that some airport is 
not safe, somehow that information ought to be made to the 
public. I do not buy the argument any longer. I think you had a 
good case before, but today, the idea that that information 
should be kept in-house and not shared with the consuming 
public, I do not think is right. I do not know what deals were 
struck to get that information, but is there some problem in--
--
    Ms. Garvey. Senator, actually, we are going to be putting 
that information up on the website. Mr. Plavin is right, we did 
the site surveys of the 150. We have additional information 
that is coming by October 15th, and that information, as we 
analyze it, will be up on the website for the reasons that you 
stated.
    Vice Chairman Dodd. Thank you. Let me jump if I can. I do 
not want to take too much time, but I raised the issue of the 
Pilots Association had that list, and again, Mr. Downey 
properly threw the ball to you, Ms. Garvey, in terms of 
responding to a couple of those question. How do you feel about 
the--I gather the extra pilot in the aircraft is the one that 
you are least attracted to, is it not?
    Ms. Garvey. That may be, and I would like a little bit more 
time to take a look at that. That was not one I was familiar 
with. Some of the others though, additional training, as the 
Deputy Secretary said, in fact we are doing that with our 
controller work force. Extra fuel and so forth, those are 
definitely, yes.
    Vice Chairman Dodd. Well, great. That is very helpful.
    A couple of more here if I could. You had a directive. The 
FAA has given a certified--I understand that the FAA has given 
certified airports until October 15 to be compliant or to have 
alternate means of compliance. And I am just wondering how you 
expect that situation to evolve, initiating action? Again, the 
suggestion was made earlier about funding and so forth to make 
the point clear. What do you do on October 16, I guess is what 
I am asking, if you do not have compliance?
    Ms. Garvey. Well, if we do not have compliance, we have 
some teams ready. We would be going out and doing individual 
visits. We have regional offices where there are airports 
people. So we are prepared to take action if we have to, if we 
were convinced that those 7 or so systems where safety is 
really affected have not been satisfied. We would be prepared 
to take action, but we certainly have time between October 15, 
or after October 15 for the site visits to work with the 
airports. And our hope is, as you indicated earlier, that 
everything will be in compliance.
    Vice Chairman Dodd. I would be very interested, and I feel 
the Committee would be, to get a briefing as to--shortly 
thereafter as to what the status is with regard to that 
information.
    I mentioned earlier, it has been mentioned here that 28 of 
the 89 countries providing data to the ICAO did not provide 
sufficient information to allow adequate Y2K readiness. Again, 
the obvious question here, and the lack of information raises 
obvious concerns in these areas, although I gather things may 
be improving almost as we speak, but nonetheless, our concern 
here is the absence of information. To what extent does that 
raise warning signs to you as the Administrator?
    Ms. Garvey. Well, Senator, I think any time that you do not 
have adequate information, it does give you pause, and I think 
the next few weeks or the next several weeks are going to be 
critical and very important as we are gathering the 
information. As we have said before, and as the Deputy 
Secretary has also testified, we will take appropriate action 
if either because insufficient information leads us to believe 
that there are problems, focused again on the safety problems 
as opposed to whether or not there may be some flight 
disruptions. But if we have cause for concern, we can issue the 
notice to travelers, the Notice to Airmen, which is something 
that the FAA is able to do, obviously, very much in 
consultation with the State Department and of course with the 
Secretary's Office. But we would not take that lightly, but we 
have that ability.
    And the Inter-Agency Committee is working very hard and 
analyzing the material, looking at it, and as you suggested, it 
is changing daily. We are getting new information every day.
    Vice Chairman Dodd. That's great.
    Mr. Cooke, I must say I was deeply impressed with what 
British Airways has been doing, and I really appreciate your 
presence here today. This is very, very helpful. I wonder if 
you might just comment on what Mr. Smart and his organization 
have recommended in the area during the rollover period as some 
of the safety precautions. Are these the ones up over here? 
Yes. Do you have any reaction to those?
    Mr. Cooke. Yes, sir, I have seen them. My first reaction is 
that I am absolutely confident that within the normal training 
procedures of an airline, as they are required to do, they will 
take account of--they will make sure that air crews are 
absolutely adequately trained to operate all the equipment that 
they have on board the aircraft. Nevertheless, I do note the 
points that Mr. Smart has raised, and I will check with my 
organization to make sure that all of these are incorporated in 
our plans. But I am absolutely confident they are, because I 
think they are part of the duty of an air operator to insure 
that we comply with those.
    Vice Chairman Dodd. You have done something that the 
Chairman and I and others have recommended across the board, 
not just in dealing with travel, but in every area, and that is 
the independent assessments. I guess we do it sort of naturally 
here in this country, that institutions that want an assessment 
made will do in-house, but it is not uncommon for us to ask 
others to take a look over our shoulder to determine whether or 
not what we have concluded is in fact appropriate and proper, 
and I was impressed with the fact that British Airways had an 
independent done, as I understand it anyway, of its Y2K 
program, which I applaud you for. Can you tell us if this 
practice is being widely used by other airlines; are you aware 
of that?
    Vice Chairman Dodd. Well, it certainly applies--if you are 
referring to the UK Government audit in the UK, that applies to 
all UK operators; they are all being audited.
    Vice Chairman Dodd. What about outside of the UK?
    Mr. Cooke. I honestly do not know what the position is in 
other countries. I think it is probably patchy. I think some 
countries, their governments have instituted audits; others 
have not, so I really do not know the specifics.
    Vice Chairman Dodd. How about airports and air traffic 
services around the world, independent audits?
    Mr. Cooke. There again, I do not know whether independent 
audits are being carried out. I think Tom might be able to give 
you better data on that from an audit point of view.
    Vice Chairman Dodd. How widespread is that?
    Mr. Windmuller. Mr. Vice Chairman, first of all, on the 
subject of air carriers on the international scene, we are not 
systematically tracking them one-by-one in this area. But the 
kind of independent audit that Mr. Cooke has referred to is not 
at all uncommon amongst the IATA member airlines.
    With respect to the airports and air traffic service 
providers, while we are not undertaking formal audits of these 
entities through the IATA program, we are independently 
visiting these entities, independently gathering data, and we 
feel pretty confident about the thoroughness of it, and the 
accuracy of it, because we do not simply take an air traffic 
service provider's word for it, for example; we cross-check the 
data we get from an air traffic service provider with that that 
we receive from the manufacturer of the equipment that he uses, 
from what his national safety regulatory authority is saying in 
the AICs being delivered to ICAO and so forth. So we are cross-
checking the information that we get from a number of different 
sources, looking for inconsistencies and then following up with 
the air traffic provider organization if and when we see one.
    Vice Chairman Dodd. Mr. Cooke, coming back to you a second 
if I can. You partner with a number of airlines around the 
world.
    Mr. Cooke. Yes.
    Vice Chairman Dodd. And I wonder if the assessments that 
you have done, the independent assessments and so forth that 
you have done with British Airways, does that also apply to 
your partners?
    Mr. Cooke. Yes. We have, as part of our program of working 
together, we have conducted an assessment of each of our 
partner airlines. Each one has assessed each of the other 
partners, and we have all agreed to methodology and satisfied 
ourselves with the degree of readiness of all our partners.
    Vice Chairman Dodd. That is very good, appreciate that.
    Just again coming back to Mr. Windmuller, again I 
appreciate your last comment there. You made it clear that the 
IATA and ICAO have gathered an enormous amount of information 
about the readiness of the air transport industry, and I 
appreciate that, and I do appreciate the confidentiality 
questions. I mean, I am not unmindful of those concerns, but 
you have to weigh those concerns versus others, and I am trying 
to balance them here. Is not there some way that we can offer 
more concrete and specific assessments of troubled areas in the 
industry at this time, with a few days to go; is not that 
possible, without violating--I mean there has got to be some 
way of doing this.
    Mr. Windmuller. I fully take on board the concerns you 
express, and we recognize that there is also a very legitimate 
interest by national safety regulatory authorities in knowing 
what their partners are doing. For example, for two states 
which adjoin one another, to carry out a regional contingency 
plan. They have to have a pretty high degree of confidence in 
each other. And it was for that reason that IATA and ICAO 
agreed that all of the information that we collect now 
concerning air traffic service providers is now being conducted 
as joint ICAO/IATA information. We make all the information 
that we collect on these visits available directly to ICAO, 
whether they are with us or not. ICAO then takes that into 
account in terms of the information that it passes on to each 
individual state to its national safety regulatory authorities.
    On the airport side as well, we have an obvious interest in 
insuring safety above all. And I think our only hesitancy about 
the confidentiality of information from airports is mainly in 
the area of business confidentiality. In addition to these 
safety systems, we have been collecting quite sensitive 
business confidential information from airports, which outside 
the US is an increasingly competitive business. If in Europe--
you take the example of Europe, Heathrow, Charles de Gaulle, 
Frankfurt, Amsterdam, are all fierce competitors now for 
traffic, especially transit traffic. And the information they 
have quite openly been providing us is information about 
individual components and systems they have that they would not 
want their competitors to be privy to, and it was for that--it 
has nothing to do with Y2K; it really is to do with their 
competitiveness as a business. And it was for that reason that 
we were willing to undertake these often written pledges of 
confidentiality with them, that we would only use this for Y2K 
purposes, that we would only share it with our member airlines, 
and that we would not be using this type of information, for 
example, on airports and user charges negotiations that we 
carry out with them.
    Vice Chairman Dodd. As someone who may fly to Europe around 
that time, I sure as hell would like to know. If I had a choice 
of airports to fly into, and you had information that indicated 
that one of those airports was a cause of concern for you, that 
you had information, Y2K information that raised concerns in 
your mind about it, and that was being held and not shared, and 
something happens, I do not need to tell you what the reaction 
is going to be.
    Mr. Windmuller. That is absolutely right, Senator, and the 
best assurance I can give you is that if any airline has 
concerns about safety at an airport, you will not be flying 
into that airport because that airline will not be landing 
there.
    Vice Chairman Dodd. But if I choose the wrong airline who 
decides not to make that decision.
    Mr. Windmuller. I cannot imagine that any one of our member 
airlines would ever compromise on safety.
    Vice Chairman Dodd. No, no, I know. But I would like to 
know as a consumer. Can I not have--should I not know that too? 
I mean I appreciate the airline knowing it, but should I not 
know that you have concerns about certain airports?
    Mr. Windmuller. Yes, by all means. We are not trying to 
withhold information about concerns we might or might not have 
at airports. And as I have said, we feel very good about the 
progress we are seeing in every region of the world. That is 
not any kind of information that we would withhold.
    Vice Chairman Dodd. Are there areas of the world you do 
have concerns about?
    Mr. Windmuller. No, there are not. Right now we feel very 
confident about the progress we are seeing in every region of 
the world.
    Vice Chairman Dodd. OK, all right. Mr. Chairman, let them 
move along. There are a lot more questions, but I will submit 
them to you in writing. But I thank you very much. And I thank 
you, Ms. Garvey, for being very forthcoming.
    Let me make this--I would like the list of the 1,900 
companies. I would like to get that today. Today is what, 
Thursday?
    Chairman Bennett. Yes.
    Vice Chairman Dodd. I will tell you what. I will be back on 
Monday, back in session on Monday, and I will use it today and 
over the next three or 4 days--in fact, I will wait until 
Tuesday morning, but I will not put that list in the 
congressional record until Tuesday morning, to give those 1,900 
companies--I am sure they will find out today; there are plenty 
of people sitting in the audience who know who they are--today 
is Thursday. You have got till Tuesday morning, and if you have 
been in touch with the FAA and complied, then that list does 
not go in the record. But I am still going to draft the bill, 
and I do not want to cause undue embarrassment to a company 
that may have submitted the survey, you have not received it 
yet, so apply a little lag time here for them to comply without 
necessarily embarrassing someone who is complying with your 
request, but Tuesday morning that list--and I would like to 
have an updated list by Tuesday morning.
    Chairman Bennett. I had to step out, was interviewed. And 
the first question I was asked was, ``Is any one of those 1,900 
in Utah?'' I will have to wait until Tuesday morning to find 
out.
    Ms. Garvey. None of them are in Utah or Connecticut.
    Chairman Bennett. OK. We thank you all very much.
    Our final panel will change subjects totally. While our 
panel is sitting down, Paul Hunter, boy, you have done a great 
job. It is a very well prepared hearing. Good work.
    If we could have a little more order in the room.
    As I said, this last panel is going to change the subject, 
totally, except that I do remember, when I worked at the 
Department of Transportation, flying on Coast Guard I. Now we 
called it Coast Guard I for a while, until they found out we 
were doing that from the White House, and they told us, ``No, 
it's Coast Guard I only when the President is flying on it, not 
when the rest of you are flying on it.'' But it was a 
Gulfstream III, I think at the time, II or III, back in the 
1960's, a very luxurious airplane, and made me want to be 
Secretary of Transportation at some point in my life. I do not 
think I want to do that anymore.
    Do you still have Coast Guard I, or----
    Admiral Naccara. Yes, sir, we do. It's a Gulfstream III, 
currently. It was probably a Gulfstream I, I think back then, 
sir.
    Chairman Bennett. Yes. OK.
    Well, so you do have an air force of some sort concerned 
about air traffic.
    Chairman Bennett. But we are here today to talk about the 
Y2K preparedness in the maritime world, and we welcome Admiral 
George Naccara, who is the Chief Information Officer for the 
Coast Guard, and Mr. Richard Du Moulin who is Chairman and CEO 
of Marine Transport.
    Admiral Naccara, we appreciate your leadership on Y2K. We 
understand you have some family members with you here today and 
we want to welcome them as well as you, and tell them they 
should be proud of their daddy, or whatever, cousin, brother, 
and so on, husband, for the work that you have done. We will 
start with you, Admiral.

STATEMENT OF REAR ADMIRAL GEORGE N. NACCARA, CHIEF INFORMATION 
               OFFICER, UNITED STATES COAST GUARD

    Admiral Naccara. Thank you very much, Mr. Chairman.
    Good morning, sir. Good morning, Mr. Vice Chairman.
    I have responsibility for the Coast Guard's Year 2000 
Project, and as you said, I am the Chief Information Officer 
for the Coast Guard.
    I certainly welcome this opportunity to give the Committee 
an update on the Coast Guard's Y2K preparedness, and the 
readiness of the global Marine Transportation System, which 
have steadily improved since I last testified before you in 
April.
    As Mr. Downey mentioned earlier, I am happy to report 100 
percent completion of all of the Coast Guard's 74 mission-
critical systems, and despite this, we will not relax our 
efforts. We will continue our end-to-end testing as well as 
work on non-mission-critical systems. We have contingency plans 
in place for all of our mission-critical systems and we have 
business continuity contingency plans in place for 100 percent 
of our operational units, and we will continue to update these 
as we exercise them.
    We used the recent end-of-week rollover of the Global 
Positioning System and the rollover of computers to 9-9-99 to 
test and modify our Incident Command Center organization and 
our communications procedures.
    At the end of the year, the Coast Guard intends to be ready 
to perform its missions in a Y2K environment, whatever that 
environment proves to be.
    In addition to our own readiness, we have pursued a 2-year 
ambitious strategy of outreach to the Marine Transportation 
System, both domestically and internationally. This outreach 
has included an Assessment of the readiness of the Global 
Marine Transportation System. Government and private sector 
assessments of the readiness of this Global Transportation 
System have been completed, including one, recently, from the 
CIA, with a section on maritime shipping and ports.
    Additionally, the Coast Guard has been partnering with the 
United States Transportation Command [TRANSCOM], in collecting 
information on the readiness of some key world ports. Summed 
up, the studies show a high level of Y2K preparedness in the 
shipping industry, and a steadily improving picture in the 
world's ports.
    I will not review these classified assessments in detail, 
here, because they are available to the Committee. While we are 
guardedly optimistic about the emerging picture for world 
ports, I will continue to sound a cautionary note that this 
Marine Transportation System is a very complex, fragmented, and 
intermodally connected system.
    Of course, particularly because of the wide dependence on 
technology, as you mentioned before concerning the M/V SUSAN 
MAERSK, we have so many embedded chips in this industry, a 
level of uncertainty will remain until the new century arrives.
    Next is our outreach to the Marine Transportation System. 
As I have said, the Coast Guard has pursued a 2-year program of 
outreach to the industry. This has included many Y2K 
conferences; special industry days around the country; 
distribution of nearly 500,000 brochures to ships' masters, 
port facility operators, marina operators, and recreational 
boaters; as well as a busy schedule of speaking engagements, 
both domestically and internationally.
    We also maintain numerous Web sites and an 800 info line 
for mariners. Characteristically, we took many additional steps 
to inform the public during the GPS end-of-week rollover in 
August.
    Next, our Y2K enforcement policy. Our goal in enforcement, 
in addition to safety on the waterways, has been to minimize 
disruptions to commerce. This explains the active role that we 
took in developing the Year 2000 Code of Good Practice, which 
was issued by the International Maritime Organization as its 
Circular Number 2121.
    This circular fosters an open exchange of information among 
many elements of the Marine Transportation System and the 
stakeholders. In fact, a growing number of nations, including, 
among many others, Canada, the U.K., Japan, Germany, the 
Netherlands, Russia, Australia, Singapore, and many others, 
have adapted the enforcement policy in Circular 2121.
    The Coast Guard published the U.S. enforcement policy in a 
Federal Register notice back in June, and we based our approach 
on this information exchange from the IMO Circular.
    We also issued policy guidance to each of our Captains of 
the Port, including a risk assessment matrix and a risk 
management process.
    In essence, our Captains of the Port take the information 
provided by the companies and determine the level of risk 
associated with each vessel movement, or each terminal cargo 
operation.
    When our Captains of the Port used this matrix during the 
first designated Y2K critical period of September 7 through 
September 9, incomplete information from many ships and 
facilities really was the principal cause for our issuing the 
175 Captain of the Port Orders to Ships, and about 85 Orders to 
Facilities. Many of these Orders, which reflected some level of 
restriction on vessel movement or cargo operations, were 
quickly rescinded as these outstanding issues were resolved. It 
was extremely beneficial. I must emphasize that.
    While the Coast Guard took no pleasure in requiring even 
brief delays of this type, which I know are very costly to 
industry, I felt it demonstrated the seriousness of our intent 
to ensure safety, and will really enhance preparation for the 
industry at the end of the year.
    It did prove that U.S. ports can remain open, with commerce 
proceeding safely. It also sent a clear message to other 
nations that a viable process is available, and it also 
reinforced our international leadership in Y2K readiness.
    Last, the port exercise program. As mentioned earlier, we 
have led port-level exercises in a large number of U.S. ports. 
However, since our view is cast on a global industry, we have 
urged other world ports to carry out similar Y2K exercises.
    Some, such as Hong Kong and Singapore, already have done 
so. To further this approach, we invited representatives from 
several nations, including all the G8 member nations, and our 
primary oil supplying countries of Saudi Arabia, Mexico, and 
Venezuela, as well as China and Korea, to attend our port 
exercises in New Orleans, in San Francisco, and in New York.
    Just last week in Berlin, I urged maritime representatives 
of the G8 nations to hold their own exercises. I distributed a 
playbook which we have compiled from our exercises, with 
guidelines on how to develop an exercise, as well as best 
practices and lessons learned.
    Subsequently, I met with the Secretary General of IMO in 
London, just the very next day, and I am happy to report that 
he has distributed these materials as another IMO Circular, 
2158, which urges all IMO member nations to hold similar port 
exercises.
    By the way, IMO published both of those documents the very 
next day after I delivered them. I think it really was a very 
clear example of the seriousness with which they address the 
Y2K issue.
    The Coast Guard will not relax its efforts during the 92 
days remaining until December 31. We will continue to 
reevaluate systems and refine contingency plans. Port exercises 
will continue and we will assist all Marine Transportation 
System stakeholders who request our help with their own 
exercises.
    We will continue our DOT interagency and interdepartmental 
cooperation to maximize responsiveness. All the tools that we 
have developed, including our playbook, our data base of 
industry readiness information, and our risk assessment matrix, 
will be made available to any public entity who desires to use 
them.
    On December 31, the Coast Guard will be in a heightened 
state of readiness, nationwide, to respond to any threat of 
maritime emergency or disruption to the marine environment.
    I also want to thank Mr. Downey and the Department for 
their constant support and belief in the Coast Guard. I want to 
thank the Department of Transportation Inspector General and 
his staff as a constant source of constructive comments. I 
should thank Administrator Garvey as being the lightning rod, 
perhaps, in the Department, for what they have done.
    I want to thank, mostly, the men and women of the Coast 
Guard who took the challenge of Y2K on, as we do just any other 
emergency. Thank you for the opportunity, sir.
    [The prepared statement of Rear Admiral Naccara can be 
found in the appendix.]
    Vice Chairman Dodd. Mr. Chairman would you mind if I just, 
for 1 second----
    Chairman Bennett. No; go ahead.
    Vice Chairman Dodd. I am going to scoot. But I just want 
to--I am not objective about the Coast Guard at all. I 
represent, you know, the State of Connecticut, the home of the 
Coast Guard Academy, and over the years it was my congressional 
district, and, now, of course, in the state----
    Chairman Bennett. We do not have a lot of Coast Guard----
[Laughter.]
    Vice Chairman Dodd. Well, we are prepared to help out. I 
been out. You have got Lake Utah, you have got the Great Salt 
Lake. I think you could make a case. Of all the Western states, 
we could make a case with Utah. But they just do a fabulous, 
fabulous job, and I was on the Board of Visitors there for a 
number of years, but urged my colleagues to come up and to meet 
these young cadets, and now we have incorporated at the 
Academy, in fact, consolidation here. We have the NCO's who are 
going through training there as well, which I think was a great 
move to have, and just done a wonderful job.
    I particularly, Admiral, want to commend you for what you 
did with regard to these vessels and facilities that were not 
complying. I mean, that's exactly the thing to do, and I am 
just curious. Staff tells me--and you want to maybe update 
this. I do not know if this is as of today, or whether it was 
back earlier. That you still have only 36 percent of the 5,000 
marine facilities, and 43 percent of the 33,000 vessels that 
come to U.S. ports, have complied with your survey as of this 
date in September.
    Is that an accurate number?
    Admiral Naccara. It is accurate as of last week, Senator, 
but there have been improvements. I am concerned about that 
number, but I feel we have the necessary mechanism in place to 
take appropriate action.
    Vice Chairman Dodd. I am prepared to add what I want to do 
with these airlines, particularly; but if you have got some 
ideas and you question whether or not the Department of 
Transportation or the Coast Guard has the authority, for 
instance, to deny a vessel access to our ports, or to close 
down a facility because of your concerns, I would like to know 
that. If you have any doubts about that, and you think you may 
need some legislative authority to do so--I do not know how the 
Chairman feels, but I think we would be prepared--we are going 
to leave here soon and we will be out of here when these events 
occur.
    But if you are lacking any authority to take any action 
that could jeopardize our facilities, or our marine 
environment, or a variety of other issues, then we would like 
to know it. I would like to know it in the next few days.
    Admiral Naccara. Yes, sir. Absolutely. Thank you very much 
for that offer, sir. We have absolutely no doubt that we have 
that authority. We did just that. We denied entry to a number 
of vessels. We denied departure to a number of vessels on 9-9-
99.
    Vice Chairman Dodd. Yes.
    Admiral Naccara. We also shut down many facilities. I think 
the value in running through the 9-9-99 date was that people 
got a very clear message the Coast Guard is serious about this, 
and as we mentioned before, noncompliance can result in very 
substantial, costly penalties.
    Vice Chairman Dodd. Well, I commend you, again, for it.
    Admiral Naccara. Yes, sir.
    Vice Chairman Dodd. A job well done.
    Admiral Naccara. Thank you very much.
    Vice Chairman Dodd. I apologize to you, Mr. Du Moulin, but 
I have read your testimony and will submit some questions to 
you. Thank you, Mr. Chairman.
    Chairman Bennett. Thank you.
    Mr. Du Moulin, we appreciate you being here. I understand 
you wear several hats, so you might want to explain in whose 
behalf you are testifying.

  STATEMENT OF RICHARD T. DU MOULIN, CHAIRMAN AND CEO, MARINE 
                     TRANSPORT CORPORATION

    Mr. Du Moulin. First of all, I am Chairman and CEO of 
Marine Transport Corporation which is a New Jersey-based owner-
operator of 35 ships, mostly U.S. flag. None of them call on 
Utah, though they do pass by Connecticut. I recently completed 
a 3-year term as Chairman of INTERTANKO, which is the 
International Association of Independent Tanker Owners. It is 
made up of about 600 members, over 2,000 tankers, and about 70 
percent of the oil imports to the United States, crude oil 
products, come in on our ships.
    I am also, now that I am retired from that, I am still 
Chairman of the North American panel, so we stay involved with 
Coast Guard, and other parts of the U.S. Government.
    I am serving on the President's Council on Y2K, headed by 
John Koskinen, also, and in working with the President's 
Council and with the Coast Guard, I think it is a very good use 
of Federal leadership and they are doing a very good job.
    As far as Y2K and how it relates to shipping, first of all, 
the shipping I am talking about are ocean-going vessels trading 
to and from the United States and along the coast of the United 
States. These could be container ships, passenger vessels, 
tankers, dry cargo.
    My specialty is tankers but I will try to be general when I 
make my comments.
    You cannot think of ships only when you look at Y2K and 
shipping. You have to look at the Marine Transportation System 
[MTS], as Department of Transportation has coined it.
    It is a chain of people, equipment, facilities, services, 
that's a logistics chain, and looking at the elements of the 
chain, reviewing them briefly to see areas of potential 
disruption, first, obviously, is on board the ship, mainly 
navigational and operating systems, navigating systems such as 
radar, GPS, Loran, communications systems, radio, satellite, 
both voice and telex, propulsion and maneuvering systems.
    The goal for a ship obviously is to get from point A to 
point B without colliding with anything, without going aground. 
So this is really the area one would think of in terms of 
safety.
    The other element of the system would be the port system. 
Four years ago, INTERTANKO did a port and terminal safety study 
looking at ports in the United States, more related to safety 
and preventing pollution, and that became one of the initial 
building blocks of the MTS initiative by the Secretary of 
Transportation.
    In that, we pointed out that safe navigation, including 
Y2K-related safe navigation, depends on the role of the pilots, 
the navigational aids in the channels, vessel traffic control 
systems, third party traffic in the waterways, terminals, and 
then the intermodal hookups to rail and road. For the Y2K, it 
is the same, that these are the areas that have to coordinate 
for the system to work.
    There are also support systems that deal with cargo 
booking, documentation, tracking, financial services, movement 
of funds. These are not necessarily marine. They are really for 
the entire U.S. infrastructure but the shipping business does 
depend on them.
    In terms of the status, I would say the bad news is it is 
very difficult to quantify where the shipping industry stands. 
We have the interdependence of the elements, of the chain I 
described. We have a lot of fragmentation, meaning there's 
many, many participants in each of the elements of the chain.
    The tanker industry, in our membership, we have over 600 
members in INTERTANKO, but in dry cargo, there is even more 
fragmentation. Container shipping is not quite as fragmented, 
but still many companies, and so on and so forth.
    So you have many, many companies domiciled in many parts of 
the world, all operating to and from, around the United States. 
So it is hard to determine, statistically, where things stand.
    The good news is we have had the leadership of the U.S. 
Coast Guard, of the International Maritime Organization, trade 
associations like INTERTANKO, the Chamber of Shipping here in 
the United States. So the shipping industry is very aware of 
the Y2K problem and it has been for a few years.
    Charterers who charter ships, such as the oil companies 
chartering ships, have also been aware of it. So there has been 
a lot of attention paid to Y2K.
    The companies doing business in the United States tend to 
be the bigger, more sophisticated, more serious operators in 
the world, and they are the ones who I believe are dealing the 
best with Y2K.
    So from the U.S. point of view, we tend to be dealing with 
the best companies. Shipboard, I think we are in good shape. 
Shipping companies and crews of ships are trained to deal with 
routine crises. That is the nature of being out on the ocean.
    So whether it is an oil pollution situation or a collision, 
or a breakdown of a piece of equipment, shipping companies are 
always responding to needs of the ship and Y2K would be the 
same thing.
    So I think that shipping companies are prepared to deal 
with the situation, if it develops.
    Over the past few years the shipping industry has adopted 
International Safety Management [ISM], which is a documented 
form of total safety management, and this has also set up the 
shipping industry to be better prepared with Y2K or any other 
event.
    Finally, ultimately, the crew of the ship rely on their 
seamanship to handle a vessel. Systems such as gyro compasses, 
magnetic compasses, charts, parallel rules, binoculars, 
anchors, are not Y2K dependent. So the basic means of 
navigating a ship, based on traditional seamanship, is still 
what one can fall back on, if needed.
    In terms of United States' dependence on resources and 
manufactured goods, fortunately, there is a diversification of 
sources for most of what comes into the United States.
    Finally, the U.S. ports, AAPA, the American Association of 
Port Authorities, has also done a lot to make its members aware 
of the situation.
    Looking at each of the basic sectors of shipping 
individually, just to look at a particular vulnerability, again 
my expertise is tankers but I will take a shot at the others 
also.
    With cruise and ferry, the issue here is the safety of the 
passengers. The Coast Guard is very aware of this and they are 
focusing on this industry. Probably the biggest challenge for 
the cruise industry is their very high technology, modern, 
large cruise ships which would be susceptible to a Y2K type 
glitch.
    Fortunately, these large, very-well-capitalized companies 
do business regularly in the United States, many of them 
headquartered here, and it would be my estimation that they are 
doing a pretty good job on it. But, again, I do not have any 
statistics.
    As far as crews and ferry, just one other interesting note 
is those who are out on these vessels on New Year's Eve, when 
the lights go out at midnight to sing ``Auld Lang Syne,'' if 
they come back on, they know they passed through the Y2K OK.
    In terms of container ships, almost a 100 percent of our 
manufactured goods come in and out of the United States via 
container ships, and this is intermodal. It is very logistics-
oriented, very dependent on the chain of communication, 
financial services, and ports.
    Fortunately, there you have some very large, very 
sophisticated companies who make up the bulk of the container 
ship industry, and they are definitely aware of Y2K, and I am 
pretty confident they are in good shape.
    In terms of tankers, my special area, our industry's been 
very aware of the problem, we've been working on it, and 
INTERTANKO's efforts are focused on awareness. It's up to each 
individual owner to look at their specific ship, and systems, 
to make sure they comply. Generalizations really don't work. 
You have to get very specific into each piece of equipment, and 
each vessel.
    The GPS which most ships nowadays use to navigate has 
already gone through its Y2K, and, again, that's just one 
method of navigation. It's not the only one. I am optimistic 
the ship side will be OK. One interesting possibility, though 
unlikely for a problem, is not so much with the ship, but it is 
with the logistics chain that brings oil into the United 
States, and that is, we are dependent largely on Third World 
countries for our oil, and it is very hard to determine where 
they stand in their ports, in their internal pipeline systems 
for Y2K.
    If you remember, 1974, the lines, the gasoline crisis, or 
the perception of a gasoline crisis. The year 2000, it is 
theoretically possible the same thing would happen. We have 
high oil prices today. We have low crude oil inventories, and 
consumers cannot plan ahead. You cannot stockpile your gasoline 
other than by filling your tank, and, again, much of our oil 
comes from third parties, Third World countries.
    If there was a serious export stoppage from Venezuela, or 
Mexico, or Nigeria, or the Middle East, in theory, you could 
have a public perception of an oil problem, even though our 
sources are very diversified.
    We have the Strategic Petroleum Reserve and we have oil 
companies who are very well organized to deal with crises 
themselves. But one area that would be an interesting 
possibility or problem would be a perception of a gasoline 
shortage, and it probably would not be a bad idea for the oil 
industry to start building up its inventories as we approach 
the end of the year. Thank you.
    [The prepared statement of Mr. Du Moulin can be found in 
the appendix.]
    Chairman Bennett. I want to pick up on your last comment 
because one of the issues that we are having a very hard time 
getting our arms around, here, on the committee, is this whole 
question of stockpiling, and how much is going on, and will it 
produce an economic impact in the first quarter of 2000.
    Theoretically, Y2K could cause a classic inventory 
recession, where everybody builds up his inventory in 
anticipation of it, in the last quarter of 1999, and then says 
to his suppliers, ``Well, I have to work off this excess 
inventory, so I will not be buying anything in first and second 
quarter 2000.'' That is the core of the ``gloom and bust'' 
cycle that we have learned to live with and hate during the 
Industrial Revolution.
    Now, do you see--INTERTANKO members handle shipments--do 
you see any stockpiling going on by virtue of demand being 
higher than normal in this quarter? Any indication of that 
going on, that would come through your members?
    Mr. Du Moulin. That is a good question, Senator. First of 
all, INTERTANKO members serve the customers. Their ships carry 
the oil owned by, whether it's exporting countries, oil 
companies, traders. So our ships go wherever they're ordered to 
go, based on the contract we have with the charterer.
    But what we have seen in terms of the oil markets in recent 
months is that the Asia economy has picked up, they seem to be 
through the worst of their crisis, so demand there has picked 
up for crude oil and refined products.
    The United States economy is still very strong and 
consuming quite a bit. There is really no significant recession 
anywhere, perhaps other than Russia, and so there is a high 
demand for oil.
    OPEC has gotten its act together, so the prices are now up 
over $25 for the first time in over 3 years. So that what we 
have seen is a draw-down of oil inventory, probably due to the 
buyers of oil trying to wait till prices drop off a little bit. 
That is just my guesstimate.
    With winter coming, and Y2K lurking at the end of the year, 
it is my opinion that it is not a great time to have lower 
inventories. It is a better time to have normal or solid 
inventories.
    In terms of the oil industry, high or low inventories of 
itself I do not think can trigger the kind of recession you are 
talking about, because it is not the consumer that holds 
inventory. It is really an industrial inventory.
    I think that it is not a convenient time, if there were a 
problem in the Third World, to have low inventories. So one 
would hope inventories would buildup both for the winter and 
for Y2K. Building of inventories would not of itself be any 
economic hardship on the consuming public.
    Chairman Bennett. Well, go out of the oil industry for a 
minute into container ships. Here are some quotes from an 
``Information Week'' survey.
    ``Cargo shipments that would have normally been scheduled 
for the first quarter of 2000 are being booked for the second 
half of this year.'' A shipping company official said, ``Eighty 
percent of our customers want to import now rather than take a 
chance early next year.'' Are you seeing any indication of that 
by virtue of traffic?
    Mr. Du Moulin. I am not an expert at the statistics and 
container ship industry, so I cannot comment on that. I do know 
the industry has lots of capacity to move cargo. But what you 
are interested in is really the effect on the consumer and the 
manufacturers. The shipping industry itself I am sure could 
handle the load, but I cannot speak to the other part of the 
issue. I do not know whether the Coast Guard may have any data 
on that.
    Admiral Naccara. Mr. Chairman, I do not have hard data on 
it, but I know from many of my conversations with senior 
executives in the shipping industry, that they have repeatedly 
said they would not be operating on the critical dates. They do 
not want me to repeat their names or their companies for 
competitive reasons, but I suspect that they are planning to 
work around that issue. Given that as part of their contingency 
plan, they do not intend to be in restricted waters, they do 
not intend to be moving within harbors on the critical dates. 
So that may result in the stockpiling or the planning around 
that. That is as much as I have on that.
    Chairman Bennett. That would be a matter of a day or two, 
and I realize this is a question that is almost impossible for 
you to answer. I am not expecting any kind of hard numbers.
    There is a sense of smell out there, that tells me that 
more stockpiling is going on than anybody wants to admit. All 
of the evidence for that is anecdotal. I have not been able to 
get my hands around any kind of firm information that says we 
are seeing worldwide a major inventory buildup. We had the 
gentleman from British Airways. I have reports from business 
associates who tell me that there is a fairly significant 
amount of stockpiling going on in the United Kingdom. Very 
quietly, companies are building their inventories, so that they 
will not be vulnerable.
    I have no way of, as I say, quantifying it, but I am just 
looking to see if there is any more anecdotal information that 
goes in that direction, or goes in the opposite direction, and 
I would think traffic in international maritime facilities 
would be part of the anecdotal evidence that would suggest that 
maybe some of that stockpiling is going on.
    But neither one of you can give me a sense of smell, either 
way?
    Admiral Naccara. Not at the moment, Mr. Chairman, but what 
we can do is to check on port entry data and we can compare 
that to previous years' benchmarks, perhaps. I can also check 
with pilots' associations to get a sense for the number and the 
capacity of cargo being moved and compare it to previous years.
    Chairman Bennett. Yes, I think it probably would be more of 
a capacity issue than number issue, that they just fill the 
ship up a little more.
    Admiral Naccara. Yes, sir. I will look into that and report 
back to the Committee.
    [The information referred to can be found in the appendix.]
    Mr. Du Moulin. I am just advised by one of my companions, 
there is some selective placement of cargos in the fourth 
quarter rather than the first quarter in the container ship 
industry. This is not my own knowledge but my companions have 
some better ideas on this. But it does not sound like massive 
amounts we talked about.
    Chairman Bennett. Around the world, there are some choke 
points to marine navigation--Suez Canal, Panama Canal, Straits 
of Hormuz, and so on. I am sure there are others that I am not 
familiar with.
    Do you have any comment on these various choke points, and 
what you are looking for there?
    Mr. Du Moulin. I have a comment. I would like the Admiral 
to follow me because he may know more on certain of these. I 
have been down to Panama, and what impressed me there was the 
seriousness they are taking the hand-over. What also I found 
fascinating was that much of the control equipment dates back 
to the first 10 years of the 20th Century, and so maybe that's 
a good defense against Y2K.
    Chairman Bennett. The ghost of Teddy Roosevelt is still 
there.
    Mr. Du Moulin. So I would hope the canal is all right. In 
terms of Suez Canal, for crude oil shipments, there is a choice 
of going around Africa or going through the canal. It is really 
an economic choice of an extra week of steaming versus the cost 
of the transit of the canal.
    So it would certainly be somewhat disruptive if the Suez 
Canal ever closed, but it would not be a catastrophe if it 
closed. There is a lot of tanker capacity out there now.
    In terms of other navigational bodies, like Straits of 
Singapore or others, it is not a matter of physical closure as 
much as the advice you can get from some vessel traffic control 
facilities that are located in some of these areas.
    I would think that the ships operating with their own due 
diligence would be able to still navigate.
    Admiral Naccara. Sir, on an interdepartmental basis, the 
Coast Guard attempted to identify the critical ports in the 
world for military purposes and as our key trading partners, 
and all of the key choke points as you just mentioned.
    We have taken this list to TRANSCOM, and together with a 
contractor, they have developed an assessment of most of these 
critical ports and the choke points.
    That is part of their classified assessment. I can say, 
generally, that we have seen through three briefings, during 
the last 8 months, that there has been a great improvement in 
awareness of Y2K and preparedness, and generally actions have 
been taken in all of our critical ports and choke points.
    I can have arrangements made for that briefing to be made 
to you, sir, and your staff.
    Chairman Bennett. We would appreciate receiving that 
information.
    [The information referred to can be found in the appendix.]
    Finally, the same kind of general question that I have 
asked before of the aviation people. One of the concerns in the 
Department of Defense is that someone who wishes us ill will 
try to slip some sort of computer problem into the system, 
disguising it as a Y2K system, when in fact it is a computer 
attack.
    Now the Department of Defense is the center of most of the 
computer attacks against this country that are going on. Some 
of them have turned out to be 16-year-old boys who are simply 
out to prove that they can do it, and do not realize the 
enormous damage that they cause.
    But some of them are coming from much more sophisticated 
and powerful sources. It would seem to me that if there were a 
source that wished this country ill and wanted to create 
disruption in the Western world, generally, for whatever 
reason--religious ideology or fundamentalist zeal, or whatever 
reason--that disrupting shipping would be a very, very good 
thing for them to do to achieve their goal.
    How secure do you think some of the critical systems are? 
Mr. Du Moulin, you probably have not focused on this as much as 
the military people, but I would like you to think about it, if 
you have not, and get your various associates to do the same.
    How secure, Admiral, do you think you are against some kind 
of an attack that would be made over the Y2K period, to try to 
create this disruption and make it look as if it were something 
other than an attack?
    Admiral Naccara. A difficult question to answer, Mr. 
Chairman. I can say, through experience, that we have rather 
sophisticated intrusion detection equipment installed on Coast 
Guard software systems. In fact, we are probably susceptible to 
about 40 attempted intrusions per month, most of which have 
been unsuccessful, I must say, during the last 6 months.
    We will have a heightened state of awareness and have more 
people on watch and prepared, looking for those types of 
problems, as we pass the millennium.
    I would like to think that we are fairly secure in the 
Coast Guard. That does not ensure that level of security on 
those systems that are beyond our control. The other key 
systems that are operated by other Government agencies I would 
believe have similar intrusion detection equipment in place.
    Chairman Bennett. Are you in touch with DOD and the work 
that they are doing?
    Admiral Naccara. Yes, sir; absolutely.
    Chairman Bennett. I would assume that would be the case, 
that the uniformed services----
    Admiral Naccara. Yes, sir. Interoperability and 
compatibility are very critical to all of our services.
    Chairman Bennett. Thank you very much for your patience. We 
appreciate you sitting through a long morning, but we learned a 
great deal on the committee through the morning, and your 
testimony, the two of you, was very, very helpful. Thank you, 
again.
    The Committee stands adjourned.
    [Whereupon, at 12:20 p.m., the Committee was adjourned.]
                            A P P E N D I X

              ALPHABETICAL LISTING AND MATERIAL SUBMITTED

                                 ______
                                 

            Prepared Statement of Chairman Robert F. Bennett

    The movement of people and goods safely, rapidly, efficiently, and 
economically is both a major accomplishment and an essential 
requirement of modern times. People can now take short trips to far off 
destinations for personal or business reasons that in the earlier part 
of this century would have required the commitment of many days or even 
weeks. Businesses have now developed more efficient means of production 
that rely on just-in-time inventories and lean manufacturing where 
trains, trucks, and tankers serve as moving warehouses of supplies and 
finished goods. And the transportation infrastructure makes possible 
the rapid deployment of US armed forces--power projection forces--in 
times of conflict to any part of the world as needed, precluding the 
need for greater ``forward deployment'' of American troops on foreign 
shores.
    However, transportation vehicles and systems increasingly rely on 
automation and information technology as many other industries do. 
Everyone is aware of the computers that manage air traffic, and we are 
increasingly reminded of the computers in our automobiles, but few of 
us have experience with other modes of transportation that are also 
heavily dependent on information technology and embedded systems.
    A good example of this is the ``Susan Maersk,'' a container ship 
operated by the Maersk Line (shown in a poster on my right). This ship, 
the largest to call on an American port, is 1,138 feet long and 
transports the equivalent of 6,600 twenty-foot trailers. Amazingly, 
through technology, it manages to accomplish its tasks with a crew of 
only 15. It does so with a computer system that connects and monitors 
some 8,000 sensors in the engine room, cargo-containers, and elsewhere 
that enables safe navigation and operations.
    This computer dependence has made transportation systems 
potentially vulnerable to the Y2K bug unless the technology is fixed. 
So far, this sector has been faring well, having passed several suspect 
dates in the past year with minor problems at best. The problems that 
have shown up so far could be classified as nuisances, such as lost 
luggage, broken taxi meters, erroneous traffic citations, premature 
cancellation of registrations, and failure of GPS receivers in a small 
number of automobiles last August. However, we know the potential is 
there for much greater problems. We've seen what can happen to air 
traffic when the radar systems and computers fail, and we've 
experienced in this city the commuting headaches that occur when the 
computers that control the D.C. Metro fail.
    Today, we will examine how the Y2K problem may interfere with the 
global network of transportation systems and what steps Governments, 
industry, and trade associations are taking to minimize Y2K's impact. 
We will focus mainly on international issues, having looked at the 
domestic issues in detail last year. It is very important that air, 
sea, and land transportation systems be ready in other nations for 
Americans to travel safely as well as for the uneventful import and 
export of raw materials and finished products that our economy depends 
upon. Nonetheless, there are a few loose ends in the domestic area, 
such as the readiness of domestic airports and marine terminals, which 
we expect our witnesses will address today.
    Information that has only recently surfaced concerns us that there 
may be a lack of serious attention to Y2K by many entities within the 
transportation sector. For instance, the Coast Guard received only a 
43% response to its request for Y2K status information from the 33,000 
vessels that visited U.S. ports over the last two years and only a 36% 
response from the 5,000 marine facilities surveyed. Also, only 33 of 
the 83 U.S. members of the American Association of Port Authorities 
responded to its August 1999 survey. Finally, 22 of 168 U.S. airlines 
providing international service did not respond to the International 
Civil Aviation Organization's request to member states to publish 
information on the Y2K readiness of their aeronautical services, while 
another 27 of the 168 failed to report Y2K completion dates. I could 
cite further examples, but I think the trend is clear.
    Finally, with New Year's Eve just three months away, it is 
important to understand how Government and industry plan to manage the 
transition to the new century at the end of the year in a way that 
keeps the public appropriately informed while minimizing the potential 
for panic. The Department of Transportation is fulfilling several key 
roles to this end. For example, it is leading the team evaluating 
foreign aviation systems, working with the Department of State on 
travel guidance for U.S. travelers, and assisting the Information 
Coordination Center under the President's Council on Y2K Conversion to 
assess the transportation sector's response to Y2K at the end of this 
year. We look forward to hearing how the Department will accomplish 
these difficult and critical tasks.
                               __________

                   Prepared Statement of Peter Cooke

    I am Peter Cooke, appearing on behalf of British Airways Plc. I 
would like to thank the Committee for offering British Airways the 
opportunity to explain the steps we are taking to deal with the unique 
challenge posed by the Year 2000 issue.
    BRITISH AIRWAYS READINESS FOR THE YEAR 2000
    The British Airways Year 2000 programme began in 1995. The 
programme encompasses computer systems, applications and equipment for 
which the airline is responsible, as well as embedded chip technology, 
business partners and supplier chains. The two basic programme 
principles are:
            the application of rigid project management 
        disciplines and
            line management accountability for business 
        continuity.
    The project is regarded as a business issue rather than purely an 
IT problem, hence the appointment of myself, a generalist line manager 
rather than an IT specialist, as Project Director. Our Director of 
Customer Service and Operations sponsors the project at executive 
management level and I have open access to the Chief Executive. The 
Main Board is keenly interested in the project and receives regular 
reports both verbally and in writing.
    We have had up to 200 staff assigned to the programme both in the 
Central Project Office and across Departments and our estimated spend 
over the length of the project amounts to 70 million sterling 
(approximately $112 million). Specialist consultanices have been 
engaged, principally in the fields of business continuity and embedded 
chip technology, All findings have been subjected to independent 
quality audit.
    Current Status
    Over 99% of British Airways systems and infrastructures have 
finished their compliance projects and are back in production. This 
programme has involved more than 3,000 systems and environments, over 
800 applications and some 30,000 PCs. The small number of systems 
remaining are either not business critical or have tested business 
continuity plans.
    Successful large-scale tests of our business processes, with system 
clocks set in 2000 mode, have been carried out. These include such 
routine airline operations as check-in, reservations, ticket sales, 
cargo, crew scheduling, airport arrivals and departures and flight 
tracking across the network. Systematic and close liaison has been 
established with major business partners such as British Airports 
Authorities (BAA Plc) with joint testing of common systems at our base 
airports of Heathrow and Gatwick--e.g. baggage delivery systems.
    Our Engineering Department, in conjunction with Boeing, Airbus and 
avionics suppliers, has undertaken a thorough audit of aircraft systems 
inclusive of British Airways originated modifications. Flight tests 
have been conducted on each aircraft type. As expected, normal system 
and aircraft operation has been demonstrated.
    With regard to supplier chains, our database originally comprised 
some 40,000 entries worldwide. All have been categorized according to 
business importance, investigated and certified compliant or 
alternative arrangements put in place.
    We have monitored and will continue to monitor the Year 2000 
programmes of our franchise and codeshare partners.
    As safety regulator the Safety Regulation Group of the United 
Kingdom Civil Aviation Authority (CAA) is required to be satisfied that 
UK airlines are addressing the Year 2000 issue, that adequate resources 
are provided and that airlines provide safety assurances of readiness 
in respect of services and products covered by the UK CAA approval held 
by the Operator. No safety concerns have been raised.
    British Airways has collaborated closely with Action 2000, the 
United Kingdom Government Agency established to ascertain Year 2000 
readiness of key components of the United Kingdom economy and 
infrastructure. In July, following audit of our programme by 
independent assessors appointed on Action 2000's behalf, we were 
accorded their highest rating--BLUE--which means that we met the 
following criteria for business processes of importance to UK 
infrastructure.
            the organization's critical systems programme is 
        complete.
            the organization has addressed its exposure to 
        suppliers and has an adequate and on-going supplier assurance 
        programme in the judgement of the assessor.
            the organization has reasonable risk based 
        continuity plans in place or on course to be in place and fit 
        for purposes by 1 January 2000 in the judgment of the assessor.
    A freeze on all systems implementation has been in place since the 
beginning of September 1999. This will continue until end of January 
2000.
    In conclusion, therefore, British Airways is satisfied that it is 
ready for the new Millennium as far as all systems and processes that 
it controls are concerned.
    READINESS OF AIR TRAFFIC SERVICES AND AIRPORTS
    Air Traffic Services
    Ensuring Year 2000 readiness of overseas air traffic service 
providers has been a significant exercise for an airline with global 
operations like British Airways. there are over 180 ICAO States of 
which some 150 are of relevance to British Airways. Our process has 
included co-operation with the International Civil Aviation 
Organization (ICAO), participation in the International Air Transport 
Association (IATA) industry project, collaboration with our alliances 
partners (oneworld) and our own assessments, knowledge and experience.
    Firstly, an assessment has been made of State responses to the ICAO 
request for assurances of programmes to audit date sensitive systems, 
action taken by States and declarations of readiness.
    Secondly British Airways has been a very active supporter and 
participant in the IATA industry Year 2000 programme, unanimously 
adopted at the Annual General Meeting in May 1998. In fact, I have the 
honor of being the Chairman of the Steering Group of airlines who have 
given direction to the IATA programme as it has developed, and 
continues to develop. Our Flight Operations department was involved in 
developing the ATS programme methodology and we have had observers at 
many site visits, either our own Flight Ops personnel or specialist ATS 
consultants under contract to us. We have also taken into account 
report from the IATA Regional Technical Offices. In some cases very 
positive discussions have been held directly with suppliers to ATS 
authorities.
    In some areas we have conducted our own assessments and have also 
taken reports from our oneworld partners.
    A formalized company assessment process has been developed to 
determine degree of readiness, that contingency plans are in place or 
being formalized within the region and the potential impact on safety. 
The scope of assessment comprised:--
          a) Air Traffic Service Providers.
          b) Operational systems related to Air Traffic services at 
        airports.
          c) Destinations and Alternates.
          d) Focus on Millennium transition period 31st December to 4th 
        January.
          e) Safety and Operational viability.
    To determine the potential impact to aircraft in flight a database 
was created with assessment criteria for each ICAO State. A computer 
routine was developed to determine the location of British Airways 
flights (en-route and the ground) at midnight local time and GMT.
    The monitoring of readiness will remain on-going up to 31st 
December and the assessment code given to each State will be reviewed 
and revised as further information is received. Our normal Operations 
Control Centre at London, which controls our operations on a 24 hour 
basis, 365 days a year, will be responsible for monitoring and taking 
any necessary decisions on flights during the Millennium rollover 
period. It will begin to receive information from early on 31st 
December through direct communication links which are being established 
with ICAO, IATA, Eurocontrol and oneworld partners. These links are 
currently being defined, installed and tested.
    Airports
    With regard to the operational readiness of airports worldwide, 
British Airways has also been a very active supporter and participant 
in the IATA industry Year 2000 investigation. British Airways 
representatives have observed many of the site visits, and we have been 
lead airline, responsible for ensuring data collection, at a number of 
airports both in the UK and overseas.
    Our assessments have been based on IATA data, and on information 
gained through the Regional Task Forces which have been instituted by 
IATA to assemble regular meetings of regional airlines and to pool all 
available knowledge on Year 2000 readiness. We have also taken account 
of reports from our own overseas managers at each airport and 
collaborated with our oneworld partners. We have concentrated in our 
assessments on contingency plans at each airport we operate to and we 
have participated, wherever possible, in the testing of such plans. We 
have developed a route-by-route database to co-ordinate all 
assessments.
    Conclusions
    We continue to track progress worldwide and will do so up to the 
Millennium itself.
    Our assessment is that we are very satisfied with progress being 
made in all parts of the world and we do not currently anticipate that 
our planned Millennium period operating schedules will be impacted by 
Year 2000 readiness issues at ATS providers or airports.
    CONTINGENCY PLANS
    The British Airways Year 2000 programme calls for Business 
Continuity Plans to be in place, confirmed and tested by the end of 
September 1999 for mission critical and important processes. We are 
also taking into account the regional contingency plans being put in 
place by ICAO and, as mentioned, the BCPs of individual airports. Our 
conclusion that there are currently no impediments to operating our 
planned schedules takes into account our assessment of the contingency 
plans of key suppliers and business partners.
    RELATIONS WITH ICAO, IATA AND OTHER ORGANIZATIONS
    British Airways believes that the Year 2000 programme undertaken by 
IATA with participation, support and funding from all member airlines 
(and including some non IATA carriers) is a striking example of the 
airline community taking the lead, collaboratively and proactively, in 
an important initiative in the public interest. Some $28 million has 
been provided by airlines for this programme and we believe that no 
other international industry has demonstrated a more responsible 
approach to the Year 2000 challenge.
    The programme has received unprecedented co-operation from our 
industry partners and a vast amount of relevant and useful data has 
been assembled.
    The industry programme has worked closely with ICAO, Airports 
Council International (ACI), Air Transport Association of America (ATA) 
and other representative international organizations from related 
industries and service providers. British Airways is pleased with the 
co-operation offered by all concerned.
    SUMMARY
    British Airways is confident that its methodology and assessment 
process is appropriate to address the safety related issues posed by 
Year 2000. We have determined that the residual risk to operations is 
low and that adequate contingency plans are in place. On September 20th 
we announced our schedule of operations for the Millennium. There will 
be a reduced schedule over the Millennium eve, reflecting expected 
demand. New Year's eve is traditionally a time of reduced passenger 
loads. However, there will be a worldwide operation including some 
flights during the rollover period.
    We shall, of course, keep all aspects of our assessment of Year 
2000 readiness under continuous review up to and during the rollover 
period and, since safety is of paramount importance, we will not 
hesitate to review our planned operations in the light of latest 
information and will take appropriate action if necessary. This is 
normal practice for an airline with global operations 24 hours a day. 
It is never possible to say that no delays or operational disruption 
will occur but we have well established procedures to mitigate both the 
likelihood and the consequences of any disruption to our passengers.
                               __________

        Prepared Statement of Vice Chairman Christopher J. Dodd

    Thank you, Mr. Chairman. Y2K has the capacity to severely disable 
the transportation industry. Luckily, however, the airline and travel 
industries have gone to great lengths to ensure that travel on the air, 
sea, and land will be safe and uninterrupted on New Year's Day. To a 
very great extent, I believe this will be the case. However, there 
continues to be genuine Y2K-related problems in foreign countries that 
are significantly less prepared.
    Recently, the State Department prepared a detailed travel advisory 
characterizing the level of safety for 194 countries. Each country has 
dealt with the approach of the new millennium in a different way, and 
will vary in Y2K readiness come January 1. The State Department's 
public advisories indicate that certain countries will be much safer 
than others. The U.S., Canada, England and Australia are each expected 
to fare well during and after the date-change. Other countries such as 
India, China and Russia may be more susceptible to Y2K problems, 
therefore it would be appropriate to caution people against traveling 
to those areas. In fact, a number of Asian-based airlines are drawing 
up plans for alternative routes to Europe in order to avoid flying over 
India. It seems India's own Air Traffic Controllers' Guild is worried 
about the Y2K readiness status of its aviation and airport industry.
    When the State Department issues an advisory for a certain area of 
the world, factors such as the continuing availability of medical 
services, telecommunications, and utilities are equally important to 
travel as actual transportation systems. Therefore, just because planes 
will not fall out of the sky and ships will not sink, it does not 
necessarily mean that all will go well. We must look at the picture as 
a whole before making a decision about where to go during the date 
transition. Recently, warnings have circulated within Japan and Great 
Britain about the risks involved with traveling during Y2K. In fact, 
the British Airline Pilots Association (BALPA), a union which has 7,000 
members, stated this past July that they will not fly to areas they 
regard as unsafe. This means that pilots must be trained and briefed on 
flying alternative routes given that some skies are potentially not as 
friendly as others.
    Indeed the Department of Transportation's Inspector General tells 
us that:
      34 of 185 nations have not yet responded to the 
International Civil Aviation Organization's request for status 
information on aeronautical services (airlines, airports, and air 
traffic control). Approximately one million passengers flew between 
these 34 countries and the U.S. last year.
      An interagency committee (DOT, DOD, and DOS) reviewing 
ICAO information about the 89 countries that account for 97% of U.S. 
international passengers, has determined that there is insufficient 
information available for assessing the Y2K readiness of 28 (or almost 
1/3) of the countries.
      And, even in this country, almost 2,000 of 3,300 U.S. air 
carriers surveyed by FAA did not respond to the FAA survey. All were 
smaller carriers.
    Despite this last statistic, the United States is more prepared 
than any other country in the world. Problems in this country are more 
likely to create inconveniences rather than safety issues. A major 
concern of the Federal Highway Administration (FHWA) is how ready state 
and local governments traffic management systems, traffic signal 
systems, and other Intelligent Transportation Systems are that make 
road travel convenient and delay-free. These systems are operated 
solely by state and local governments, and do not depend on the Federal 
government for supervision or maintenance. This is not to say that 
travel should be avoided over the holiday season, only that you should 
factor Y2K into travel plans much as you would factor in other 
potential problems such as bad weather or holiday traffic.
    Here in the District, and in other large cities across the nation, 
people will use trains as part of their means of holiday 
transportation. The railway system is a highly interconnected system 
and citizens should be aware of potentialities that may exist there. 
During Hurricane Floyd the central operations center of CSX railway was 
understaffed, causing a total shutdown of commuter trains as far as 
eight hundred miles away. Though Y2K related problems are not 
necessarily expected to occur in this area, no one can really be sure 
until we get there, and even then, no one can be sure how far-reaching 
problems may be. The possibility always exists for unanticipated 
problems to erupt in one place, causing disruptions in another, which 
is the very nature of the Y2K problem. A more thorough assessment will 
be provided by the Department of Transportation, which will give us a 
better understanding of how contingency plans would be followed in the 
case that disruptions actually occur. In any case, people should 
remember that Y2K could cause normally heavy travel days to be wrought 
with disruptions and delays.
    A hundred million Americans travel to work everyday in planes, 
trains and automobiles. Millions of students depend on buses and trains 
to get to school. During and after the New Year there will be 
potentially millions of people traveling to various destinations 
nationwide and worldwide. There is no question of the importance of 
this issue. We look forward to hearing from our witnesses today. Thank 
you, Mr. Chairman.
                               __________

                Prepared Statement of Mortimer L. Downey

    Chairman Bennett, Vice-Chairman Dodd, and Members of the Committee: 
thank you for this opportunity to report on the Department of 
Transportation's (DOT, or the Department) accomplishments in resolving 
the Year 2000 (Y2K) challenge. I appear before you today fully 
confident that all of DOT's vital computer systems will effectively 
make the transition on January 1, 2000.
    Over the past two years, the Department has put forth a concerted 
effort to ensure that its mission-critical systems will function as 
expected before and after the century change. The safety and well-being 
of the traveling public, and the crucial role that the transportation 
industry plays in our Nation's commerce, have been uppermost in our 
minds as we've gone about the business of remediating the Department's 
vital systems.
    Today, I am pleased to report to you that the Department has 
completed remediation efforts on 100% of its 609 mission-critical 
systems. These systems function in every Operating Administration (OA) 
in DOT: the Federal Aviation Administration (FAA), the U.S. Coast Guard 
(USCG), the Federal Highway Administration (FHWA), the Federal Railroad 
Administration (FRA), the Federal Transit Administration (FTA), the 
Maritime Administration (MARAD), the National Highway Traffic Safety 
Administration (NHTSA), the Research and Special Programs 
Administration (RSPA), the St. Lawrence Seaway Development Corporation 
(SLSDC), the Surface Transportation Board (STB), the Transportation 
Administrative Service Center (TASC), the Bureau of Transportation 
Statistics (BTS), the Office of the Inspector General (OIG), and the 
Office of the Secretary (OST).
    Considering where we stood with this complex task a year or so ago, 
this achievement is a testament to the extraordinary efforts of a truly 
dedicated team of professionals determined to ensure that our 
transportation system remains ready and safe.
    We are still working hard to complete work on our non mission-
critical systems. In our August quarterly status report we reported 
that remediation has been completed for 100% of these systems operated 
by the Federal Aviation Administration, the Federal Highway 
Administration, the Federal Railroad Administration, the Federal 
Transit Administration, the National Highway Traffic Safety 
Administration, the St. Lawrence Seaway Development Corporation, and 
the Surface Transportation Board. The remaining OAs continue to make 
progress with their non mission-critical systems, and most project 
completion of this work by October.
    We recognize that despite our best efforts, some services provided 
by business partners and the public infrastructure may be disrupted 
during the millennium rollover due to Y2K system failures. We must be 
prepared to deal with system failures that could disrupt vital 
services, whether or not they are within our control. Therefore, the 
Department's OAs have developed Business Continuity and Contingency 
Plans (BCCP) so that our core business functions will continue 
uninterrupted. Our OAs are in the process of testing their contingency 
plans and making necessary adjustments to these plans. Current versions 
of each plan have been provided to you.
    In addition, the Department has conducted two tabletop exercises 
with the Secretary, OA Administrators, and myself, and we plan to 
conduct an additional such exercise in November. During these 
exercises, various failure scenarios are introduced to the participants 
and they are required to elaborate on how their contingency and 
staffing plans might deal with these failures. These exercises are 
proving very useful for identifying problems and circumstances that 
might arise, and the strategies to deal with them.
    While we feel confident about the Department's own remediation and 
contingency planning activities, we recognize the need to continue 
vigorous outreach activities with our domestic and international 
industry partners. Under the auspices of the President's Council on 
Year 2000 Conversion, I chair the Transportation Sector Working Group. 
This group includes the Department of Defense, the Department of 
Agriculture, the Department of the Interior, the Department of State, 
the National Aeronautics and Space Administration, the Customs Service, 
and the U.S. Postal Service. The group is charged with promoting action 
on the Y2K problem and gathering information on Y2K readiness of 
entities in the transportation sector. This sector includes air 
carriers, airports, shipping companies, port operators, freight 
railroads, automobile manufacturers, trucking companies, and mass 
transit authorities. Through this group, there has been a full exchange 
of information on many levels across the globe, and from this exchange 
we have been able to determine several common themes regarding the 
transportation sector's readiness:
            there is a high degree of awareness of the problem 
        and its potential consequences;
            there are aggressive efforts being made to address 
        the problem, although better progress is reported by large 
        organizations than by small and medium-sized organizations;
            possible disruptions are expected to be generally 
        local in nature; and,
            there is a greater potential for international 
        failures that could adversely affect our own domestic and 
        cross-border operations (many of the world's smaller and 
        emerging nations are struggling to meet the challenge).
    More specific information regarding the transportation sector has 
been included in the Quarterly Summaries of Assessment Information 
issued by the President's Council on Year 2000 Conversion. The most 
recent Summary was issued in August, and the final Summary will be 
issued in November. The following represents transportation sector 
status information as of the August report:
    Highway--Automotive/Trucking
    A spring 1999 National Highway Traffic Safety Administration 
(NHTSA) survey of major automobile manufacturers did not identify any 
potential Y2K impacts for the safe operation of motor vehicles. Auto 
manufacturing companies representing approximately 90 percent of cars 
and light trucks sold in the United States all stated that the Y2K 
problem would not affect the safety or performance of their motor 
vehicles.
    Many manufacturers voluntarily submitted Y2K Readiness Disclosures 
in addition to their survey responses. These disclosures, available to 
the public on the NHTSA web site, indicate that most manufacturers are 
addressing all aspects of the automotive industry with their Y2K 
efforts, including coordination with business partners such as vendors, 
suppliers and dealers.
    The American Trucking Associations, Inc. (ATA) surveyed its 3,600 
member companies in February 1999. The 190 respondents represented a 
cross-section of the industry, from small regional companies to large 
national and international companies. A summary of responses showed 
that 95 percent of respondents had Y2K plans in place. Of 170 
respondents, system assessments, on average, were 89 percent complete 
with over half reporting 100 percent completion. Renovation was 
reported as 74 percent complete; validation 61 percent complete; and 
implementation 61 percent complete. Eighty-one percent reported having 
designed contingency plans, 56 percent said they had tested those 
plans. ATA distributed another survey to its members in September and 
results are expected in October.
    Within the trucking industry, large and small businesses are 
expected to be the most prepared for the date change (small businesses 
in the industry are not heavily automated), while mid-sized companies 
are thought to be vulnerable due to a lack of funding and experts to 
make Y2K repairs to business systems. There are no known Y2K problems 
for truck engines. Members of the major trucking associations were 
alerted to the Global Positioning System (GPS) end-of-week rollover 
issue that could have affected some GPS receivers after August 21, 
1999. No GPS incidents were reported to us by trucking associations. We 
recognized that the GPS, which is operated by the Defense Department, 
is relied on by virtually every mode of transportation and by 
recreational users such as hikers, and campers. Therefore, the DoD and 
DOT worked together and with many other organizations, to ensure that 
GPS users were aware of this date-related GPS event and avoided any 
situations where loss of the GPS could cause a hazardous condition. I 
am pleased to report we were successful--GPS anomalies were few and 
minor and we know of no incidents arising from this event.
    Rail
    In general, because of the design of safety-critical railroad 
signaling, dispatching, and telecommunications systems and the 
operating rules that accompany them, the railroad industry does not 
anticipate that there will be any Y2K problems associated with these 
systems. The systems are all event-driven. Similarly, no Y2K problems 
are expected with grade crossing signals because they are event-driven, 
rather than time- or date-driven. Electronic event recording systems 
keep track of grade crossing signal operation, but the signals 
themselves are designed to operate even if the event recorders 
malfunctioned due to a Y2K problem.
    Amtrak and the commuter railroads examined their mission-critical 
operating systems (dispatching, signals, grade crossings, etc.) and 
their mission-critical business systems (ticketing, reservations, 
scheduling) and reported that they successfully corrected those few 
systems where a Y2K problem existed. They anticipate that trains will 
run as planned on Jan. 1, 2000 and the following days, and that 
customers will continue to be able to obtain information, tickets, and 
reservations. However, Amtrak and most of the commuter railroads carry 
out operations on tracks by the major freight railroads and are 
therefore dependent on the Y2K readiness of these railroads.
    Serious Y2K problems are not anticipated in the short-line 
railroads since they are primarily small businesses that rely on older, 
less technology dependent, equipment. For example, most short line 
railroads do not have signal systems and operate older locomotives that 
do not have on-board computers. However, they also rely on the larger 
railroads with which they connect to provide them with traffic data and 
other automated support.
    Because of the dependence of the smaller railroads on the larger 
ones, as well as the serious safety issues that have arisen as a result 
of computer problems occurring in connection with railroad mergers in 
recent years, the Federal Railroad Administration (FRA) is taking a 
more proactive role with regard to potential Y2K-related computer 
issues with the major railroads. FRA hired a consulting firm with a 
background in Y2K conversions to visit the nation's four major 
railroads (Burlington Northern Santa Fe, CSX, Norfolk Southern, and 
Union Pacific), which together account for almost 90 percent of freight 
revenues. The consulting firm was tasked with the following: to review 
the steps the railroads have taken to make their operating data 
systems, yard management systems, dispatching systems, and electronic 
data interchange systems Y2K compliant; to analyze what steps remain to 
be taken at each company before full compliance is achieved; to review 
logs and records regarding the railroads' Y2K compliance activities in 
terms of independent validation and verification, remediation, testing, 
and implementation; to observe end-to-end tests; and to review each 
railroad's contingency plans and evaluate their likely effectiveness. 
The results of this effort will be available at FRA's upcoming Y2K 
Readiness Workshop on October 8, 1999.
    Transit
    In July 1999, the President's Council on Year 2000 Conversion 
convened a meeting to gather information on the Y2K efforts of transit 
providers and suppliers. DOT, the Federal Transit Administration (FTA), 
and a cross-section of transit industry representatives identified the 
following issues affecting the industry:
            transit will be one of the very first public 
        services to be utilized in the New Year, serving everyone from 
        revelers to shift workers conducting Y2K coverage;
            some authorities in metropolitan areas have 
        extensive contingency plans to address unprecedented ridership 
        increases expected for the New Year's celebrations;
            Y2K does not appear to pose any insurmountable 
        technological hurdles for the transit industry and, as a 
        general business practice, most transit providers have existing 
        contingency plans (non-Y2K specific) addressing various 
        scenarios; and,
            some transit providers are planning to pause either 
        rail or rail/bus operations briefly around midnight until it is 
        clear they may safely resume normal operations.
    The participants at the July meeting agreed that Y2K readiness 
remains a major focus of top-level management attention in the transit 
industry, requiring the continued personal direction of transit agency 
board chairs and chief executive officers as well as Federal, state and 
local officials through January 1, 2000 and beyond.
    For its part, FTA has accelerated its industry outreach, management 
oversight and survey of the Y2K compliance of the nation's transit 
systems. FTA transit agencies unable to meet a June 30, 1999, Y2K 
compliance deadline established for Y2K grantees were required to 
submit a contingency letter outlining their plans for continuation of 
system operations while repairing or replacing non-compliant elements. 
Of 550 grant recipients required to report, all but four have responded 
that they are either Y2K compliant or have required contingency plans. 
Of those responding, 403 (73%) reported Y2K compliance, and the 
remaining 143 reported that they will be complaint by 12/31/99. The 
remaining four grantees (all in Puerto Rico) either did not respond to 
the survey or responded incorrectly. FTA is following up with these 
recipients.
    Air and Maritime
    Administrator Garvey and Admiral Naccara will provide you with 
detailed information regarding their agencies' readiness and the 
readiness of the FAA's and Coast Guard's domestic and international 
industry partners. Both organizations have been working Y2K issues 
aggressively and extensively with the aviation and maritime 
communities.
    However, I would like to take this opportunity to address your 
specific questions regarding our strategy for advising the public of 
Y2K related problems in the airline industry, particularly in the 
international arena. In cooperation with the President's Council on 
Year 2000 Conversion, the Office of the Secretary of Transportation, 
the Federal Aviation Administration, and the Department of Defense have 
reviewed available information gathered through the International Civil 
Aviation Organization (ICAO) and other sources on the Y2K readiness of 
foreign civil aviation entities. Information on whether an individual 
country is Y2K ready is available on the DOT website at the following 
address: www.dot.gov/fly2k.
    The whole Y2K phenomenon is characterized by uncertainty as to its 
effects and we cannot fully predict what will happen during the 
millennium transition. Y2K non-compliance in a system or entity does 
not necessarily translate into a safety problem or regulatory 
violation. To date, FAA's analysis of available data has not identified 
any aircraft safety problem associated with Y2K that would justify 
prohibition of aircraft from U.S. airspace.
    Furthermore, civil aviation is inherently capable of addressing 
contingencies every day. Before any flight is conducted by U.S. 
carriers/crews they must carefully assess all information pertaining to 
the flight including weather, Notice to Airmen advisories, performance 
data, suitability of destination airfield, and other factors affecting 
safe operations. In the event adverse conditions are expected, 
contingency plans are required which might include additional fuel, use 
of alternate airports, restrictions on operations to daylight only, or 
any other number of possibilities. It is expected that the millennium 
transition will be no different, and contingency plans will be in place 
at each facility and for each flight to address Y2K impacts. 
International contingency planning efforts and our encouragement of 
business continuity planning at international airports should mitigate 
potential disruptions in service. The current expectation is that 
conditions related to Y2K transition will give rise to isolated service 
disruptions that could subject passengers to inconvenient delays or 
diversions.
    However, if the FAA has credible, verified information that 
aviation operations in a foreign country would not be safe due to Y2K 
problems, the Administrator would take appropriate action. FAA can 
proscribe flights to an area and provide notices about conditions, if 
the responsible aviation authority for that area for some reason 
doesn't. However, flight proscriptions or other proscriptions on air 
carriers traveling to foreign destinations will not be made solely on 
the basis of Y2K compliance statements which cannot be verified through 
first hand inspection and whose effects cannot be clearly identified or 
measured. The FAA would also provide information concerning unsafe 
conditions to the Department of State, which is responsible for issuing 
Travel Advisories.
    You also asked me to address our plans to coordinate with the 
Information Coordination Center (ICC), the Department of State, and the 
Department of Defense regarding assessments of the international travel 
situation. Both the FAA and the U.S. Coast Guard will closely 
monitoring international activities through a variety of information 
networks. The FAA has normal operational links with the Department of 
State and Defense whereby information affecting civil aviation is 
reported and acted on as appropriate. We will be increasing our 
vigilance for the millennium rollover. This increased activity will 
include direct contact with the ICAO Y2K Global Command in Montreal, 
which, in turn, will be contact with the seven ICAO Y2K Regional 
Information Centers around the world. We are also reviewing our links 
to DOD and DOS to ensure exchange of Y2K information related to foreign 
air traffic service, airports and air operators.
    The U.S. Coast Guard has established a large and diverse set of 
international partners. These partners range across the entire industry 
and include international terminal operators, shipping companies, 
indemnity clubs, appropriate government agencies and bodies such as the 
International Maritime Organization. Meetings were held this past week 
with the G-8 nations and international trade organizations to establish 
the turn of the century communications plans, as well as to share 
preparation information for the event. In addition, the Coast Guard has 
personnel stationed in Rotterdam, Guam, Japan, and the Panama Canal who 
will report on scene information. Similarly, liaisons will be at the 
DOD and State Department command centers during the event to observe 
conditions and report relevant information.
    The FAA's Communication and Information Center (CIC) and the Coast 
Guard's Incident Management Team (IMT) will be linked to the DOT 
Headquarters Crisis Management Center (CMC), which, in turn, will be 
the direct line of communication with the ICC. Key personnel will be on 
duty at all locations to augment normal staffing to ensure flow of 
information and appropriate response to any problem caused by Y2K.
    Overall, we have been working closely with the ICC and the Federal 
Emergency Management Agency (FEMA) to establish a coordinated 
information management capability for the days immediately preceding 
and following key date changes. We have a full-time detailee assigned 
to the ICC office as of September 1, 1999, through the end of February 
2000. It is anticipated that we will have an additional five 
individuals assigned for the rollover period. In addition, we are also 
working with the Public Affairs component of the ICC, the Joint Public 
Information Center (JPIC), which will be operational during the 
rollover period. We have already participated in two exercises 
conducted jointly with the ICC and we anticipate that we will 
participate in additional readiness exercises conducted by the ICC 
beginning in mid-October. In addition, ICC representatives attended the 
two DOT tabletop exercises conducted with our OA Administrators.
    We also serve on two policy bodies organized by the ICC--the 
Interagency Domestic Working Group and the Interagency International 
Working Group. In the international arena, DOT will be collecting 
supplemental information through our FAA offices and Coast Guard 
liaisons located in a number of world capitals. In addition, we have 
operational ties to Transport Canada through our Crisis Management 
Center and its Canadian equivalent and we participated in Canada's 
major national exercise held September 27-28. We will continue to fully 
support the activities of the ICC.
    In response to the question regarding actions the Congress or 
others should take to address international Y2K issues, I encourage 
your continued diligence in emphasizing the importance of the issue and 
the general state of readiness. With respect to Y2K in general, I would 
like to acknowledge this Committee for its pragmatic approach to the 
problem and its realistic portrayal of the status of Y2K efforts. 
Considerable misinformation regarding Y2K status has been generated on 
a variety of fronts, but this Committee has consistently sought to 
provide an accurate and objective picture of the facts.
    In conclusion, I would like to reiterate that we are committed to 
ensuring that all DOT systems will operate properly before, during, and 
after the millennium change. Further, we recognize our responsibility 
to the traveling public and the need to continue our efforts to reach 
out to the transportation industry and all those responsible for our 
transportation infrastructure.
    This concludes my testimony. I would be happy to answer any 
questions you may have.
                               __________

                  Prepared Statement of Jane F. Garvey

    Chairman Bennett, Senator Dodd, and Members of the Committee:
    Thank you for the opportunity to appear before you this morning to 
discuss the status of the Federal Aviation Administration's (FAA) Year 
2000 (Y2K) compliance efforts. I had the honor of appearing before you 
last year to apprise the Members of our efforts, and it gives me great 
pleasure to inform you today that the FAA has completely implemented 
all Y2K fixes in our systems as of June 30, 1999, the date that we 
promised we would.
    We have worked tirelessly to ensure that the transition of air 
traffic services to the new year would be as smooth as possible. All 
FAA computer systems, mission-critical and non-mission-critical, are 
now Y2K compliant. An independent contractor has reviewed the 
documentation on the repairs we have performed on all of these systems 
and verified our work based on engineering judgment. The Office of the 
Inspector General (OIG) of the Department of Transportation (DOT) has 
also validated our compliance. I am confident that the FAA will make 
the transition to the year 2000 smoothly and without compromising 
aviation safety in the National Airspace System (NAS).
    Our confidence in this was reinforced by one of our most important 
checks on our Y2K efforts. On April 10 of this year, we conducted an 
``end-to-end' test of our systems at the FAA's operational facilities 
in Denver, Colorado. This event used an FAA flight check aircraft to 
fly from Colorado Springs to Grand Junction to Denver International 
Airport. During this flight, the FAA's air traffic control systems were 
set forward to December 31, 1999, and rolled over to January 1, 2000. 
We recorded all of the tracking data, examined the data, and discovered 
that there were no problems attributable to the Y2K transition. This 
was a particularly important step in our testing, since it provided us 
with the assurance that our individual system fixes were able to work 
together in an operational environment.
    Although our systems are Y2K compliant, we all know that the FAA 
must continue to conduct business from now through the new year, and 
that as our business needs change, so will our systems. Hence, we have 
added a Post-Implementation phase to our Y2K repair approach. During 
this phase, we will ensure that as changes are applied to our systems, 
the system will remain Y2K compliant. Additionally, we are 
strengthening our efforts in testing and quality assurance to ensure 
that NAS will continue to function through the year 2000.
    We are committed to making sure the NAS will remain safe and 
efficient through the Y2K change. We are keeping a vigilant eye on our 
systems, testing and retesting them to assure ourselves, you the 
Congress, and the traveling public, that our Y2K repairs really do 
work. We continue to perform interface and system integration tests. 
Again, our focus is the maintenance of the integrity of our Y2K-
compliant status. All enhancements, changes to the system, and 
deployment of new systems that the FAA would normally undertake are 
closely monitored to ensure continued Y2K compliance. We will maintain 
this focus until March 30, 2000, one month after the date of the last 
potential Y2K problem, the leap year date of February 29, 2000.
    As an added precaution, the FAA has hired two independent 
contractors, one to conduct additional analyses of high-profile 
systems, such as the Common Automated Radar Tracking System (Common 
ARTS) and the Display System Replacement (DSR), to ensure that there 
are no obscure problems that we may have missed. The other independent 
contractor is currently auditing our change management process to 
ensure that retesting and recertification for Y2K is conducted where 
necessary. Moreover, we have developed a moratorium on changes to the 
NAS around the critical year-end period. This is yet another precaution 
to maintain the stability and the Y2K integrity of the NAS during 
potentially risky time frames.
    In our ongoing Y2K efforts, our contingency planning continues to 
develop. The FAA published a Business Continuity and Contingency Plan 
(BCCP) Version 1.0 on April 15, 1999, and published Version 2.0 on July 
15, 1999. Despite our confidence in the Y2K fixes implemented at the 
FAA, the BCCP details what actions the FAA would take should problems 
associated with Y2K arise. The FAA has always had strong contingency 
plans in place to deal with eventualities, such as inclement weather 
and power outages, and the BCCP builds on those contingency plans to 
address potential Y2K-specific problems. We will publish Version 3.0 of 
the BCCP by October 15, 1999. As the BCCP develops, we have made sure 
that our labor partners are fully informed and invited to contribute to 
that development.
    The FAA has been reviewing and testing the BCCP, making sure that 
the various operational functions of the FAA work individually and 
coherently. We have identified the personnel and communications 
structures required to support ``Day One'' (January 1, 2000) operations 
as defined in the FAA BCCP, developing and executing the contingency 
plan by training and testing to the level suitable to various 
operations. This effort ranges from a review of existing manual methods 
to full ``war games.'' Local facility contingency plans continue to be 
tested on a regular basis. We conducted a tabletop exercise earlier 
this month to practice sharing of Y2K information throughout the 
agency, recording of Y2K incidents, and reporting of aviation 
infrastructure failures to DOT.
    I should note at this point the invaluable service that the OIG and 
the General Accounting Office (GAO) have rendered us in validating our 
systems. We have asked them to continue to conduct site visits to our 
field facilities, and they bring to our attention any concerns or 
issues they may find.
    But our efforts do not end at our own front door. As our confidence 
in the compliance status of our own systems grows, we have aggressively 
increased our efforts related to our aviation industry partners, not 
just from a regulatory role, but by providing leadership and 
facilitation in the industry. I would like to take this opportunity to 
tell you about the status of some of our work with airports, air 
carriers, and foreign countries.
    As of July 31, 1999, the FAA completed visits to the top 150 
airports in the United States. The vast majority of those reported to 
us that they plan to complete their Y2K repairs by the end of 
September, and all of them expect to be completed by December. The FAA 
has identified 20 systems that may be used to comply with Part 139 
regulatory requirements. We have also identified which of these systems 
exist at each airport. Of the 20 systems, we have identified 7 that 
could have an immediate impact on safety. We have told airport 
operators that we expect these systems to be Y2K compliant by October 
15, or that an alternate means of compliance needs to be developed to 
meet the requirements of the regulations. For example, FAA regulations 
require the control of runway lighting. If that lighting is controlled 
by a computer system, we would expect that computer system to be Y2K 
compliant. The airport operator may, however, decide to control runway 
lighting manually in order to successfully maintain compliance with FAA 
regulations. We also have a plan in place for continued contact with 
airport operators on a regular basis to monitor the status of their 
systems. For those operators that do not meet the October 15 date, we 
will take the necessary steps to ensure that safety will not be 
impaired. This may involve restricting or suspending air carrier 
operations at the airport.
    With respect to our certificate holders, the aircraft manufacturers 
and the airlines, the FAA developed aggressive Y2K plans to address 
issues that may arise over the critical date change. These plans stress 
the importance of safety and continued regulatory compliance. Our 
primary focus was on raising awareness among manufacturers and airlines 
that there may be Y2K errors that result in regulatory non-compliance 
and that may have safety impacts.
    With that in mind, the FAA developed questionnaires that were sent 
to all their airlines, manufacturers and other certificate holders 
(approximately 15,000 total). There was a 98% response rate to the 
questionnaire that was sent to manufacturers. Those results indicated 
there were no impacts to safety based on Y2K for airborne products with 
embedded software or digital hardware, or aviation products utilizing 
tools controlled by digital systems. Aircraft certification inspectors 
will conduct pre- and post-Y2K audits of manufacturers to evaluate any 
risk that may be associated with the turn of the century.
    For aircraft operations, we developed a detailed questionnaire that 
sought specific data on the status of automated systems that may be 
impacted by Y2K. The questionnaire specifically asked for information 
on 44 systems, including aircraft systems, computer record systems, 
flight operations systems, and others. We designed the questionnaire to 
gain information on the operator's Y2K planning, their Y2K program 
status, and whether they anticipated requesting the FAA to approve 
changes or deviations to their approved programs. There is a 42% 
response rate to the questionnaire that was sent to more than 13,000 
certificate holders, including the airlines and repair stations. I 
should note that many of the non-respondents represent operators which 
have unsophisticated systems and we anticipate the Y2K impacts will be 
minimal to none. The top ten air carriers however, all reported they 
would be Y2K ready by September 1999.
    Based on the data we have gathered, our inspectors are contacting 
operators who have not responded or have raised Y2K concerns. In many 
cases, inspectors will visit certificate holders to discuss potential 
issues or concerns. We have categorized all the questionnaire responses 
and established deadline dates when inspectors must complete their 
follow-up with certificate holders. By October 1, our inspectors will 
contact any certificate holder who did not respond to the 
questionnaire. By October 15, inspectors will follow-up with those 
certificate holders whose responses have been analyzed in which we 
identified a Y2K concern. By November 15, our inspectors will follow-up 
with those certificate holders whose responses were analyzed and we 
identified possible risks that need additional clarification. When we 
complete these inspections, our inspectors will determine whether we 
need to focus additional attention on particular operators.
    We have also informed our manufacturers and air carrier certificate 
holders that we expect them to meet their regulatory requirements on 
and after January 1, 2000, and that we are working with them to 
minimize Y2K impacts that could affect their compliance. It does not 
appear, based on the data that we have gathered and analyzed so far, 
that Y2K problems are likely to result in the need for drastic action 
such as suspending certificates. We expect the need for enforcement to 
be minimal if the need exists at all. We are prepared, however, to 
issue emergency airworthiness directives over the critical holiday time 
frames, if necessary, to inform aircraft owners and/or operators that a 
safety issue has arisen as a result of a design problem.
    Supplementing these efforts, the agency chairs an FAA-Industry Y2K 
Outreach Steering Committee, formed at the request of the President's 
Council on Y2K Conversion. This committee includes members from six key 
organizations representing the major segments of the aviation 
community: air carriers, airports, and manufacturers. This Steering 
Committee provides a crucial gateway to 23 other aviation industry 
partners. The resulting partnership provides an arena for exchanging 
information and identifying and resolving major issues that could 
impact the safety, security, and efficiency of the aviation and 
commercial space transportation sectors.
    A critical focus of the Steering Committee is the need for 
coordinated contingency planning across the aviation industry. The 
committee has published a guide, the Airline-Airport Operations 
Contingency Planning Guide, that provides a self-assessment template to 
ensure the industry is prepared and can provide a uniform response to 
situations which may arise. This guide was distributed to trade 
association members as well as to some international entities, and is 
also available on the FAA's Y2K website. In addition, the Steering 
Committee has sponsored two workshops, the first of which focused on 
presenting the FAA's BCCP. The second workshop, conducted on July 19-
20, 1999, brought together major service providers such as electrical 
power and telecommunications with airport and airline operators to 
discuss in-depth the process for coordinating contingency planning. The 
workshop helped to define the core elements of an airline-airport 
contingency plan for use at the national, regional, and local levels 
and for coordinating contingency plans across government and industry.
    With less than 100 days to the new year, we know that there is an 
increased awareness and concern with the readiness of international 
aviation. The FAA has been a global leader in creating awareness of the 
problem and of supporting programs to mitigate any impact of Y2K 
problems. We have widely distributed information about our Repair 
Process and GAO's Business Continuity Planning process. A year ago last 
June, I spoke to the world's airlines and encouraged them to support 
the International Air Transport Association (IATA) Y2K program. IATA 
and the FAA worked together to have the International Civil Aviation 
Organizations (ICAO) address the Y2K problem. The FAA sponsored the 
resolution that lead to ICAO's Y2K assessment criteria and the 
reporting of Y2K readiness. The FAA has supported ICAO's international 
regional contingency planning. We are promoting the IATA-ACI airline-
airport business continuity planning project which parallels the effort 
of the FAA-Industry Y2K Steering Committee domestically.
    The FAA is also conducting extensive international testing. By 
December, we plan to have conducted testing with 23 countries to ensure 
adequate communication exchange for those countries with which we have 
direct interfaces. We already have schedules in place to test both 
voice and data systems in order to validate the connectivity of air 
traffic control communication systems. This is an aggressive schedule 
intended to provide an extra measure of assurance for ourselves and our 
foreign counterparts.
    In order to better inform the public, the FAA, the Office of the 
Secretary of Transportation, and the Department of Defense are 
reviewing available information gathered through ICAO and other sources 
on the Y2K readiness of foreign civil aviation entities. The purpose of 
this review is to provide useful travel planning information to the 
American public.
    This effort is in support of the President's Y2K Conversion Council 
which is looking at global impact of Y2K. Based on the information we 
have seen and collected to date, it appears that if any Y2K impact is 
felt, it would take the form of limited disruption of service in some 
locations. Should a serious safety consideration arise involving 
international aviation, you may be assured that the FAA, in conjunction 
with other government agencies, will take appropriate steps to mitigate 
the problem. Since civil aviation is inherently capable of addressing 
potential problems, it is unlikely that serious safety issues would be 
a problem. In addition, international contingency planning efforts and 
our encouragement of business continuity planning at international 
airports should mitigate potential disruptions in service.
    The FAA has worked diligently, not only to ensure Y2K readiness of 
our own systems, but to do whatever we can to help our industry 
partners and counterparts, domestically and internationally, to 
experience a smooth transition into the next year 2000. As I have told 
you in the past, I am proud of our accomplishments, and I have already 
booked my coast-to-coast flight on the evening of December 31, 1999, to 
demonstrate my confidence in these accomplishments. We are continuing, 
more aggressively than ever, to continue our outreach activities to 
ensure a seamless transition to the year 2000.
    Knowing of your interest about further actions that the Congress 
may take, I would simply reiterate what the Deputy Secretary has 
already stated: continue the efforts of this Committee to publicize the 
importance of this issue. Indeed, the Committee's efforts, through 
these hearings and its reports, have been instrumental in keeping this 
issue on the forefront of our public policy.
    Thank you, Senator Bennett, Senator Dodd, and Members of the 
Committee. I appreciate the opportunity to address the Committee this 
morning, and I would be pleased to answer any questions you may have.
                               __________

         Responses of Jane F. Garvey to Questions Submitted by

                            Chairman Bennett

    Question 1. The FAA is to be commended for successfully pulling off 
what seemed, a year ago, to be an impossible task. Very few people 
believed that so many systems could be fixed, tested, and fielded in 
the time remaining. The FAA personnel who made this happen should be 
very proud of themselves for their accomplishment. It now seems the 
challenge will be to keep the system fixed through the changeover; that 
is, care must be taken in making changes or incorporating new 
technology so that components of the National Airspace System don't 
reacquire a vulnerability to the Y2K bug. Please describe how the FAA 
will manage the Air Traffic Control system so this problem will not 
occur.
    Answer. The FAA ensures that certified systems remain compliant by 
enforcing rigorous change management processes and revalidating changed 
systems. The deployment of new systems and components is also monitored 
in order to ensure that they satisfy the same Y2K compliance criteria 
used for the existing systems. Finally, in order to minimize potential 
disruption system change, moratoria are being implemented for the 
National Aerospace System around the century transition (November 17-
January 7) and around the leap year transition (February 1-March 8).
    Question 2. The Airports Council International witness, Mr. Plavin, 
states that the most authoritative data on U.S. airports rests with 
survey information that the FAA gathered in the spring and summer of 
this year. It is our understanding that this information has not been 
made public, in spite of the fact that it was not originally collected 
with promises of confidentiality to the parties that provided the data. 
Please clarify this situation for the Committee. Isn't there some point 
when this information should be released to the traveling public? 
Doesn't it make sense to provide travelers with the best information 
available before they make their travel plans for the end of the year?
    Answer. Airport information was originally posted on the web 
(www.dot.gov/fly2k) as of November 2, 1999 and is updated regularly.
    Question 3. The witness from the International Federation of Air 
Line Pilots' Association has called for several actions to be taken, 
such as more flight crew contingency training, more fuel on board, and 
an extra pilot flying in the jump seat--although IFALPA says this 
shouldn't be necessary for flights over North America. What is FAA's 
position on its recommendations for American airlines that may be 
operating in December and January in regions where IFALPA believes this 
is the prudent course?
    Answer. The airlines are well aware of the matters IFALPA raises. 
The International Civil Aviation Organization (ICAO) international 
contingency planning included such operations considerations. Airlines 
and their trade association, the International Air Transport 
Association (IATA), have participated in the ICAO international 
contingency planning efforts. The FAA considers that operational 
decisions such as those suggested by IFALPA are best left to the 
airlines, who are in the best position to determine what needs to be 
done on a specific route for safe operations.
    Question 4. Mr. Mead stated in his testimony that the DOT Office of 
Inspector General recommended that the FAA require Y2K compliance of 
the entire aviation industry. The FAA did not follow this suggestion. 
Would you explain to us why this was not done? Is it practical to still 
do it at this time and to ``require Year-200 readiness statements from 
the air carriers'' as he suggests?
    Answer. The FAA did not require Y2K certification by the aviation 
industry because doing so would not improve the FAA's position to take 
enforcement action against Y2K-related incidents. If an industry 
component is not Y2K compliant by January 1, 2000, the FAA's current 
regulatory authority is more than sufficient to take enforcement action 
and effectively deal with Y2K-related contingencies or emergencies. 
Furthermore, the relevant FAA lines of businesses (airports, flight 
standards, civil aviation security) have been surveying their industry 
components for Y2K status, and have assurances that all entities 
currently are, or will be, Y2K compliant before the end of 1999. 
Accordingly, the actions that have been taken by the FAA effectively 
fulfill the purpose of an industry certification.
    Question 5. The Committee understands that the FAA has given the 
certified airports until October 15, 1999 to be compliant or to have 
alternate means of compliance. Would you tell us how you expect the 
situation to evolve after the date for airports that may not comply to 
your directive? How soon would they know that the FAA was initiating 
action? At what point would the traveling public and airlines know? Do 
you envision that it is going to take firm action such as the Coast 
Guard did on September 9, 1999 with vessels who had not responded to 
their requirement for Y2K information to show that the FAA is seriously 
going to act on this?
    Answer. As of November 2, 1999, all airports surveyed had their 
critical systems certified Y2K-compliant or had developed alternate 
plans for meeting regulatory safety requirements. Consequently, no 
enforcement action is necessary with regard to the October 15, 1999 
deadline.
    Question 6. The Inspector General of the Department of 
Transportation pointed out in his statement the fact that the FAA plans 
to impose flight restrictions only in those cases in which there are 
known, verifiable safety concerns. He has voiced his opinion that he 
does not believe this approach will be sufficient in light of all that 
is unknown or uncertain regarding Y2K readiness in foreign countries. 
In fact, twenty-eight of the eighty-nine countries providing data to 
ICAO did not provide sufficient information to allow adequate Y2K 
readiness assessments by the DOT, State Department, and DOD. Shouldn't 
this lack of information serve as a serious warning sign to which the 
FAA should actively respond? In the absence of information, can we 
afford to take a risk where safety may be concerned? Are there other 
ways we can get at this information so that FAA can make truly well-
informed decisions in this area?
    Answer. In issues such as Y2K readiness, where the direct impact on 
safety or security is unclear, the FAA requires U.S. airlines to ensure 
their operations are conducted in a safe and secure manner, whether 
domestic or international. To accomplish this, U.S. air carriers, 
through the International Air Transport Association (IATA), have 
developed information worldwide on specific air traffic and airports 
where they operate. While not available to government regulators like 
FAA due to confidentiality issues, IATA has shared this with over 300 
airlines worldwide. U.S. airlines, with this verified information, are 
well positioned to ensure the responsibility for their passengers' 
safety and will not fly anywhere safety is believed to be compromised, 
regardless of the reason. The FAA remains ready to impose flight 
restrictions as necessary to respond appropriately to known safety and 
security problems.
    Additionally, actions taken by FAA internationally have not only 
raised awareness, but has greatly influenced Y2K preparedness around 
the world. Direct actions taken by FAA influenced the International 
Civil Aviation Organization (ICAO) to establish a worldwide Y2K program 
that encouraged compliance action and gathered considerable Y2K 
preparedness information about most of its 185 member States. Our 
direct actions with ICAO resulted in the development and harmonization 
of a worldwide Y2K contingency plan. That, accompanied by a strong Y2K 
program exercised by the International Air Transport Association 
(IATA), has greatly reduced any potential major impact on aviation 
operations around the world. As noted above, IATA has gathered first-
hand information from most all countries regarding the Y2K preparedness 
of each country. This information is only being shared directly with 
over 300 member airlines.
    With the proactive approach taken by the international aviation 
community, as well as the fact that there has been no clear indication 
within the aviation industry that a Y2K problem equates to a safety 
risk, we are confident that US passengers flying over the millennium 
will not be put at risk. Given the inherent safety of the system and 
the continuing indications that the Y2K problem is being successfully 
addressed, the FAA does not believe that flight prohibitions made 
solely on the basis of foreign country Y2K readiness information which 
cannot be independently verified by the FAA through direct inspection 
are justified.
    Question 7. What benefits have been learned from Y2K projects and 
can they be applied to current or future projects? Please be specific.
    Answer. A full report detailing the lessons learned from the FAA 
Year 2000 Program is being finalized and will be made available in 
January 2000.
    Question 8. The industry response to your certification survey is 
less than 50%. With less than 100 days to go, wouldn't it make sense to 
take the Inspector General's suggestion to require compliance 
certification from the parties you regulate similar to what the Federal 
Transit Administration has done to transport operators?
    Answer. As of November 30, 1999, the industry response to FAA's 
Flight Standards questionnaire (which was sent to 13,708 certificate 
holders) was sixty-three (63) percent. However, seven (7) percent of 
the 13,708 are no longer operating (i.e., out of business). Please see 
the response to question number 4 regarding the issue of the FAA 
requiring Y2K compliance certification from the aviation industry.
    Question 9. What is the status regarding international testing? 
Will FAA be able to complete all planned interface testing with foreign 
air traffic control service providers?
    Answer. Overall FAA has had a strong response from our 
international partners for international testing of voice and data 
circuits with those countries where we have direct connectivity. 
However, we have learned that some countries cannot test because their 
equipment is not date sensitive or they do not have test bed facilities 
and therefore cannot separate tests from live traffic. There are also 
some countries who have upgraded to compliant systems, completed their 
internal Y2K tests, and do not want to test further with us. The lack 
of testing in these few instances does not impact international Y2K 
readiness because they have satisfactorily completed internal testing 
or their equipment does not have date issues. Also the Y2K contingency 
plans are in place to address any unforeseen problems.
    Question 10. ICAO Assembly Resolution A32-10, which I believe you 
introduced last year, calls for countries to publish appropriate 
aeronautical information on the Y2K compliance status of their 
aeronautical services, air navigation services, and aerodrome services 
of designated international and alternate aerodromes. ICAO is 
collecting and reporting on their web site the compilation of the 
reported country assessments. Because individual countries are 
voluntarily reporting their Y2K compliance, what confidence do you have 
in the self-assessments survey results reported by ICAO? Once you have 
finished, I would like to invite the other panels to share their 
confidence level.
    Answer. FAA has been able to collect information on 136 of 138 
countries it is tracking for Y2K readiness. This represents 99.4 
percent of the commercial aviation operations worldwide. While A32-10 
has been the best source of information, other sources such as 
Department of State, the International Air Transport Association 
(IATA), and FAA-lead international contingency planning efforts has 
netted a tremendous amount of information which the agency has used to 
cross-check that provided under A32-10 to the International Civil 
Aviation Organization (ICAO). Our findings to date indicate factual 
reporting which has greatly raised the agency's confidence level. The 
sense within the international aviation community is one of trust with 
the understanding that if the problem is not solved prior to the 
rollover, it certainly will be evident immediately.
                               __________

                 Prepared Statement of Kenneth M. Mead

    Mr. Chairman, Vice Chairman, and Members of the Committee:
    We appreciate the opportunity to testify today on the Department of 
Transportation's (DOT) Year-2000 readiness for safe and efficient 
operations. We also will comment on the readiness of the aviation, 
maritime, and surface transportation industries. Our testimony 
addresses these areas:
            Status and issues concerning DOT's readiness,
            Status and issues concerning aviation, maritime, 
        and surface transportation industries' readiness,
            Status and issues concerning international aviation 
        and maritime readiness.
    Overall, DOT has fixed all mission-critical systems used to support 
critical functions such as separating aircraft, searching for and 
rescuing ships, and performing safety inspections. DOT has responded 
positively and promptly to nearly all of our recommendations. Our 
validation work has consistently received the support of top DOT and 
agency management.
    Although it is unlikely that there will be major Year-2000 related 
system failures in DOT's own systems, we know there are no absolute 
guarantees because of the interdependency among computers, both 
internal and external. Therefore, DOT needs to continue testing its 
contingency plans and be prepared to activate them.
    While DOT has first hand knowledge about its own systems, it 
primarily relies on industry self-reporting to assess industry 
readiness. We agree with the Committee that there is an inherent 
concern with self-reported data because it tends to represent the 
proactive and well-prepared organizations' work, and obviously cannot 
be counted on to represent non-responding organizations or 
organizations whose Year-2000 readiness data are sketchy or incomplete. 
Getting information from non-responding organizations and filling the 
voids will remain a major challenge for the rest of this year.
    Based on survey results, our sense about industry readiness is that 
most large domestic providers in all transportation modes are making 
good progress and should be ready in time. Since large providers handle 
the majority of transportation services, Year-2000 related failures or 
disruptions are likely to be isolated local events in the U.S., 
provided that external interfaces such as power grids and fuel lines 
operate satisfactorily.
    We are disappointed at the lack of information concerning the 
readiness of many smaller providers. This information void needs to be 
filled, particularly for those in aviation, maritime, and railroad 
transportation modes.
    We also share the Committee's concern about international 
readiness. Over the past year, we raised concerns about Year-2000 
readiness in the context of international air travel. With only 93 days 
to go, there is little time left to obtain credible information about 
Year-2000 readiness in the international arena. A major issue now 
facing FAA is what action, if any, it will take when a foreign country 
does not provide sufficient information for independent assessment.
    DOT Systems: DOT had 609 mission-critical systems, 310 of which had 
Year 2000 problems that had to be fixed. These include 152 aviation-
related, 87 maritime-related, and 34 surface transportation-related 
systems. With strong congressional oversight, leadership by the 
Secretary and Deputy Secretary of Transportation, modal administrators, 
and hard work on the part of DOT employees, DOT has fixed all 310 
mission-critical systems. With the repair work done, DOT now is 
focusing on safeguarding compliant systems and finalizing business 
continuity and contingency plans.
    Upgrades continue to be made to Year-2000 compliant systems after 
they were installed at field sites. For example, after Year-2000 fixes, 
FAA modified the Oceanic Automation System software to achieve a better 
data transfer. Coast Guard also modified the Vessel Traffic System, 
which is used to direct ship movement at major domestic ports, to fix 
software glitches. DOT must exercise extreme caution to ensure these 
upgrades do not ``undo'' the compliance work. DOT is putting plans in 
place to ensure this does not happen.
    It is impossible to guarantee that there will be no system 
failures. Therefore, having workable contingency plans should be an 
area of focus. For FAA, air traffic controllers need refresher training 
on non-radar procedures, all key labor unions should be participating 
in contingency planning, and more hands-on testing of contingency plans 
should be accomplished. The controllers' union has been participating 
in this effort; although invited, the major union representing system 
maintenance employees are not.
    Domestic Transportation Industry: DOT has adopted a dual approach 
to ensure the private sector's Year-2000 readiness. In areas where DOT 
has regulatory responsibilities, it has done independent readiness 
surveys. The response rates were mixed, ranging from 36 percent for 
marine facilities, to 41 percent for air carriers (all large carriers 
responded), to over 90 percent for public transit. The Federal Transit 
Administration (FTA) took the commendable step of requiring transit 
operators to provide support for their Year-2000 readiness, and this 
accounts for the high response rate in the transit area.
    In March 1999, we stated that our confidence level with respect to 
the entire aviation industry, particularly small carriers and 
suppliers, would be stronger if certification of Year-2000 readiness 
was required of them. FAA chose not to do this, and at this late stage, 
is now trying to obtain some assurance that smaller providers are ready 
for the Year 2000.
    DOT also relies on transportation trade association surveys of 
their members' readiness. These associations generally represent the 
larger service providers that are responsible for the majority of 
transportation services. However, information concerning the status of 
smaller service providers is limited because they frequently do not 
belong to trade associations conducting surveys of their members' 
readiness.
            Aviation: Based on associations' reporting, the 
        airports handling about 90 percent of passenger enplanements 
        will be ready by the end of the year. Air carriers handing 
        about 95 percent of passenger and cargo services reported they 
        should be ready as of September 30, 1999. However, more 
        information about smaller airport/air carrier operators is 
        needed. As part of its regulatory role, FAA surveyed the 
        readiness of about 500 airports' safety systems and 3,300 air 
        carriers. FAA received information from all airports it 
        surveyed. While all large carriers responded, over 1,900 
        smaller carriers did not respond. It still is not too late for 
        FAA to take action on our recommendation and require Year-2000 
        readiness statements from the air carriers.
            Maritime: Ships rely on computer systems for 
        communication, navigation and ship movement. The U.S. Coast 
        Guard (Coast Guard) requested shipping companies to provide 
        information about their Year-2000 readiness. The response rate 
        of 43 percent was not sufficient. However, Coast Guard has 
        demonstrated that failure to respond will have consequences. On 
        September 9, 1999, Coast Guard took 175 actions against ship 
        movements based on lack of required Year-2000 paperwork. Coast 
        Guard is to be commended for this action. It is prepared to 
        restrict high-risk vessels from moving into, or from, U.S. 
        ports when transitioning to the new millennium.
          Port operations, such as crane movement and cargo transfers, 
        are highly automated. There are over 300 U.S. ports, of which 
        about 100 are managed by port authorities. The American 
        Association of Port Authorities--an association of port 
        authorities in North and South America--surveyed its members' 
        readiness, including 83 U.S. port authorities. Thirty-three 
        U.S. port authorities reported they are making good progress. 
        However, there was insufficient information as to when their 
        work will be completed and how much traffic they handle for 
        U.S. maritime commerce. The remaining 50 U.S. port authorities 
        did not respond. Coast Guard also surveyed readiness of marine 
        facilities located at U.S. ports. The response rate was 36 
        percent. More information about ports' readiness, both large 
        and small, is needed.
          Coast Guard, port authorities, and shipping companies have 
        been conducting joint port exercises. To mitigate the unknown 
        about ports' readiness, the scope of future port exercises 
        should be expanded to cover contingencies for not only ship 
        movement but also port operations supporting cargo movement.
            Surface: Both railroad and transit operators rely 
        on computers to dispatch and operate trains. FTA surveyed over 
        500 transit operators. All but four operators (all in Puerto 
        Rico) responded, 73 percent of which reported being ready, and 
        the rest reported they would be ready in time. All commuter 
        railroad companies provided responses to FTA's survey. Amtrak 
        (the National intercity passenger railroad), which was not 
        included in the FTA survey, recently reported its mission-
        critical systems are Year-2000 ready.
          There are about 550 freight railroad companies in the U.S. 
        The Association of American Railroads surveyed the seven large 
        companies. The Federal Railroad Administration (FRA) also 
        surveyed four of the largest companies and plans to release the 
        results in early October. Information about regional and local 
        freight railroad companies is needed.
    International Aviation and Maritime: DOT has taken an active role 
working with international associations in raising Year-2000 awareness 
and assessing international aviation and maritime readiness. As 
examples, FAA helped the International Civil Aviation Organization 
(ICAO) prepare its members for business continuity and contingency 
planning, and Coast Guard took a lead role in helping the International 
Maritime Organization (IMO) prepare its members to do Year-2000 risk 
assessments and contingency planning. The international maritime 
industry accounts for over 90 percent of U.S. overseas trade. The only 
association survey was by the International Association of Ports and 
Harbors. It surveyed 224 members and received 110 responses, but did 
not make the results public.
    Since March 1999, DOT has established an interagency committee with 
the Departments of Defense and State to evaluate foreign countries' 
aviation Year-2000 readiness and make recommendations on international 
air travel. However, significant challenges still exist with 
international air travel. First, 34 of the 185 ICAO member countries 
have not responded to the ICAO survey as of September 23, 1999. Most of 
these countries are in Africa and Asia. Secondly, numerous other 
countries that responded to the survey did not provide sufficient 
information to allow for adequate Year-2000 readiness assessments. 
According to the DOT/Defense/State interagency committee, 28 of the 89 
countries most frequently visited by U.S. carriers fall into this 
category.
    As pointed out in the Deputy Secretary's statement, the whole Year-
2000 phenomenon is characterized by uncertainty as to its effects. This 
is especially true if Year-2000 readiness on the part of a foreign 
country is unknown, sketchy, or known to be inadequate. As we 
understand the approach FAA plans to take, flight restrictions will 
only be imposed if there is a known, verifiable safety problem. Where 
there are significant uncertainties about a foreign country's Year-2000 
readiness, we are not persuaded this approach will be sufficient 
because FAA is not likely to have verified evidence of problems until 
after December 31, 1999.

                    Status and Issues Concerning DOT

    As of September 30, 1999, DOT has fixed all 310 of its mission-
critical systems that had Year-2000 problems. We verified, on a sample 
basis, that documentation supported system implementation, validation 
problems had been resolved, independent verification and validation was 
performed for critical systems, data exchange issues were resolved, 
vendor-supported systems were compliant, acceptance testing was 
performed, and affected databases had been addressed. With the repair 
work done, DOT now is focusing on safeguarding compliant systems, 
finalizing business continuity and contingency plans, and preparing for 
unexpected emergencies.
    Modifications to Year-2000 Compliant Systems
    Upgrades continue to be made to Year-2000 compliant systems after 
they have been installed. For example, FAA modified the Oceanic 
Automation System software, after being made Year-2000 compliant, to 
achieve better data transfer between the Oceanic and Host computers. In 
June 1999, the Coast Guard also made changes to its Vessel Traffic 
System, which is used to direct ship movement at major domestic ports, 
to fix software glitches.
    DOT has issued policy on modifications to Year-2000 compliant 
systems. This policy advises, when a Year-2000 compliant system is 
modified, that stringent management controls should be applied to 
include testing for Year-2000 compliance. FAA issued its own guidance 
requiring the monitoring of changes made to Year-2000 compliant 
systems. FAA's policy requires, when a Year-2000 compliant system is 
modified, that the system owner assess the modification to determine if 
it affects Year-2000 compliance. If the assessment identifies problems, 
the system owners need to revalidate and re-certify the system. During 
our on-site review of 10 FAA systems, we found 3 systems were modified 
subsequent to the Year-2000 modification without support to show the 
changes did not ``undo'' the compliance work. FAA is working on 
strengthening controls over system modifications and will now place a 
moratorium on changes to the National Airspace System from November 
1999 to January 2000, and February to March 2000.
    Coast Guard's Chief Information Office did not issue separate 
guidance. However, we found Coast Guard system owners were not aware of 
the DOT guidance requiring comprehensive testing when Year-2000 
compliant systems are modified. We were told Coast Guard system 
modifications were being reviewed to ensure Year-2000 compliance.
    Business Continuity and Contingency Plans
    No matter how extensive the review efforts, there are no guarantees 
that all Year-2000 glitches have been found in internal systems, or 
external systems such as network service providers. Each Operating 
Administration has developed a business continuity and contingency plan 
for its critical missions such as air traffic control, maritime search 
and rescue, and vessel traffic movement. DOT continues to refine and 
test its contingency plans.
    FAA developed a business continuity and contingency plan to ensure 
continued air traffic operations in the unlikely event of major Year-
2000 related system failures. The plan is composed of two parts--FAA's 
existing contingency procedures and a newly developed Business 
Resumption Process. We found improvements are needed concerning non-
radar procedures training, union participation, and testing.
    The air traffic control systems contain six core processes--
automation, surveillance, communications, navigation, traffic flow 
management, and infrastructure, such as public utilities. All core 
processes are supported by automated systems subject to potential Year-
2000 failures. Major system failures in automation and surveillance 
areas would have the most significant impact on air traffic control 
operations.
    In the unlikely event of major Year-2000 related system failures in 
either automation or surveillance areas, FAA plans to rely on non-radar 
procedures to direct air traffic. According to FAA, non-radar 
procedures are rarely used to support normal traffic operations, let 
alone high traffic volume. Representatives of the National Air Traffic 
Controllers Association (NATCA) have expressed concern that its members 
are not proficiently trained to use non-radar procedures on a large-
scale basis.
    FAA's Business Resumption Process calls for each system failure, 
regardless of type or impact, to be resolved quickly. FAA established a 
business resumption team that is responsible for determining causes of 
system failures, the severity of failures, and the actions to restore 
operations. Union participation in development of this plan is 
important to FAA's success. NATCA is now participating. Although 
Professional Airways System Specialist (PASS)--a major union 
representing employees responsible for maintaining air traffic control 
systems--has been invited to participate in this important effort, it 
has not yet played a significant role. In the event of Year-2000 
related system failures, these union members will have to restore the 
systems.
    FAA, with the assistance of contractors, recently conducted a 
small-scale contingency planning exercise. Preliminary results indicate 
the exercise went well. However, this exercise provided no hands-on 
practice for controllers. FAA is in process of preparing a lessons-
learned document to incorporate the information learned to be used for 
a larger-scale exercise. FAA should use these opportunities to test the 
use of non-radar procedures.
    The Coast Guard is in the process of completing and testing 
contingency plans for over 600 facilities nationwide. To date, 
contingency exercises have been useful and informative.
    Emergency Preparedness
    DOT has taken an active role in preparing for emergency responses 
to unexpected disruptions of transportation services during the 
millennium rollover. DOT used its Crisis Management Center (CMC) to 
conduct exercises such as activating the CMC during two sensitive date 
periods (The 99th day of the year 1999 and 9/9/99), and conducted 
contingency exercises at the senior management level to test its 
response capabilities based on specified Year-2000 failure scenarios. 
These exercises provided training for people who will monitor and 
report on the operational status of critical facilities during the 
transition to the next millennium. The exercises also have resulted in 
valuable ``lessons learned'' regarding responsibility assignment, 
contingency plans, and resource allocation. One critical success factor 
for emergency response is to have the technical expertise to quickly 
determine differences among non-Year-2000 related operational failures, 
genuine Year-2000 failures, or other problems masqueraded as Year-2000 
failures. Only then can DOT response appropriately.
    Actions Needed for DOT Year-2000 Readiness
            To ensure Year-2000 compliant systems remain 
        compliant, FAA needs to continue working with its system owners 
        to adequately assess modifications to Year-2000 compliant 
        systems. The Coast Guard needs to issue its own policy or 
        quickly deliver the Department's policy to its system owners. 
        The Coast Guard also should consider a moratorium on system 
        modifications, similar to the policy issued by FAA, to ensure 
        that compliance is maintained.
            FAA needs to provide adequate non-radar procedures 
        training to the controller workforce. This training is 
        necessary since FAA's contingency plan relies on non-radar 
        procedures in the event of major loss of surveillance and 
        automation capabilities. Both FAA and its unions need to 
        develop a plan acceptable to, and agreeable by, all parties. 
        DOT Operating Administrations need to continue testing of the 
        contingency plan, including hands-on practice, and resolve any 
        deficiencies that are found.
            As part of its emergency preparedness, DOT needs to 
        ensure technical expertise is available to quickly determine 
        whether system failures, if any, are genuinely related to the 
        Year-2000 roll-over and take actions accordingly.

             Status and Issues Concerning Domestic Industry

    To ensure the transportation industry's Year-2000 readiness, DOT 
has adopted a dual approach. In areas where DOT has regulatory 
responsibilities, it has done independent readiness surveys. The 
response rate percentages were mixed, ranging from 36 percent for 
marine facilities, to 41 percent for air carriers (all large carriers 
responded), to over 90 percent for public transit. FTA took a 
commendable step of requiring transit operators to provide assurances 
of their Year-2000 readiness, which accounts for the high response rate 
in the transit area. In our March testimony before the House 
subcommittees, we recommended that our confidence level with respect to 
the entire aviation industry, particularly small carriers and 
suppliers, would be stronger if certification of Year-2000 compliance 
was required of them. FAA chose not to do this, and at this late stage, 
is now trying to obtain some assurance that smaller providers are ready 
for the Year 2000.
    DOT also relies on transportation trade associations' surveys of 
their members. These associations generally represent larger service 
providers that are responsible for the majority of transportation 
services. However, information concerning the status of smaller service 
providers is limited because they frequently do not belong to trade 
associations conducting surveys of their members.
    Associations' Survey of Aviation Readiness
    Under the direction of the President's Council on Year 2000 
Conversion, an FAA-Industry Year-2000 Steering Committee was formed to 
coordinate industry-wide progress reporting. Major airport associations 
include the American Association of Airport Executives (AAAE) and 
Airports Council International-North America (ACI-NA). AAAE and ACI-NA 
surveyed their member airports.
    Major air carrier associations in the FAA-Industry Year-2000 
Steering Committee include the Air Transport Association (ATA) 
representing major carriers, Regional Airline Association (RAA) 
representing regional air carriers, and the National Air Carrier 
Association (NACA) representing charter and small airlines. ATA, RAA, 
and NACA surveyed their member carriers.
    Table 1 and 2 on the next page show the break down between member 
and non-member airports and U.S. carriers. Table 1 shows the 728 member 
airports account for 14 percent of U.S. public airports. Table 2 shows 
the 101 member carriers account for 3 percent of the 3,343 U.S. air 
carriers.



    Based on the AAAE/ACI-NA status report to the Steering Committee, 
and FAA's status report for submission to ICAO, the most current status 
is that airports handling about 90 percent of U.S. passenger 
enplanements reported they should be ready by December 31, 1999. 
However, there are two issues concerning airports:
            Of the 579 non-hub and general aviation airports, 
        only 107 reported completion of Year-2000 work as of March 15, 
        1999. More current information is needed.
            Other than getting a letter from FAA alerting them 
        to Year-2000 problems, the 4,624 public airports not associated 
        with AAAE/ACI-NA were not surveyed by either FAA or the trade 
        associations. Year-2000 readiness of these smaller airports 
        still needs to be reported.
    For air carriers, the most current status indicated major carriers 
handling about 95 percent of U.S. passenger and cargo services reported 
they should be Year-2000 ready by September 30, 1999. While ATA and 
NACA reported when their members plan to complete Year-2000 work, RAA 
had not yet provided such information.
    FAA's Survey of Airports and Carriers
    In June 1998, FAA sent a letter to over 5,300 public airport 
operators to alert them to Year-2000 computer problems. Of these, under 
the Federal Aviation Regulation, about 500 airports are required to be 
certified by FAA for safe operations, adequate airport security, and 
adequate screening of passengers, baggage, and cargo. Automated systems 
often are used to meet these objectives.
            Airport Safety Systems: In October 1998, FAA sent a 
        letter to 563 public airport certificate holders indicating FAA 
        was going to conduct on-site visits or telephone interviews of 
        Year-2000 readiness of systems used to ensure safe airport 
        operations, such as runway lighting. FAA performed on-site 
        reviews at the top 150 airports and conducted telephone 
        interviews with the remaining 413 airport operators.
          As of September 23, 1999, survey results showed 83 percent of 
        airport safety systems are Year-2000 compliant. The remaining 
        systems are still being evaluate. In November 1999, FAA plans 
        to issue warning letters to airport operators, who failed to 
        provide the readiness assurance by October 15, 1999, that FAA 
        will consider appropriate actions on January 1, 2000, including 
        emergency certificate suspension or issuance of a Notice to 
        Airmen restricting airport operations.
          FAA also has proposed a rulemaking requirement for airports 
        to perform a one-time readiness test of systems critical to 
        airfield safety and efficiency, such as airport lighting and 
        emergency services. These tests would be performed within the 
        first few hours on January 1, 2000 to confirm that the Year 
        2000 rollover had no impact on these critical systems. FAA is 
        analyzing suggestions and plans to finalize the requirement by 
        early October 1999.
            Airport Security Systems: In 1998, FAA collected 
        information from 459 certified airport operators relating to 
        Year-2000 readiness of computer systems used to support airport 
        security, such as access systems. As of September 23, 1999, 51 
        airport operators still are working on their security systems 
        to become Year-2000 compliant.
          In recent years, FAA has sponsored development of three 
        advanced security systems to enhance airport security, 
        including two explosive detection systems and one trace 
        detection equipment. One of the explosive detection systems had 
        to be upgraded to become Year-2000 compliant. According to FAA, 
        all detective explosive systems requiring a Year-2000 upgrade 
        are compliant.
    In April 1999, FAA sent a questionnaire to all 3,343 certified air 
carriers requesting information about their systems and components that 
may be affected by Year-2000 computer problems. Submission of the 
information is voluntary. As of September 23, 1999, all large carriers 
had reported. However, FAA received an overall response rate of only 41 
percent.



    The 100 percent response rate from large carriers confirmed the 
general observation that they are managing the Year-2000 preparation 
well. The large carriers provide about 95 percent of U.S. passenger 
service. Status of many medium and small carriers still needs to be 
reported.
    FAA is in process of compiling the data it received. FAA has not 
yet determined how to report the survey results, but plans to provide 
specific guidance to its inspectors for follow-up review. FAA will 
concentrate its activities on air carriers not responding to the 
survey, air carriers that submitted inconsistent data, or air carriers 
identified as having significant Year-2000 problems. With 93 days left 
to go, obtaining Year-2000 readiness assurance from the non-responding 
certificate holders will be a very challenging plan to accomplish.
    Coast Guard's Survey of Vessels and Marine Facilities
    Coast Guard established temporary regulations to require U.S. 
owners and operators of marine facilities and vessels to report Year-
2000 readiness information based on the Year-2000 questionnaire issued 
by the International Maritime Organization (IMO). The survey results 
were due to the Coast Guard by August 20, 1999. As of September 23, 
less than 50 percent of the marine facilities and vessel owners had 
responded.
            Vessels: Vessels rely on computer systems for 
        communications, navigation, and ship movement. The Coast Guard 
        controls how, when, and where the commercial vessel can move in 
        the ports. For example, the Coast Guard can direct that the 
        movement of the commercial vessel be under control of tugboats 
        or be restricted to daylight hours. For the 33,000 vessels 
        which visited U.S. ports in the past 2 years, Coast Guard 
        received a 43 percent response rate. However, Coast Guard has 
        demonstrated that failure to respond will have consequences. On 
        September 9, 1999, the Coast Guard took 175 actions against 
        ship movements based on vessel or ship operators not submitting 
        required Year-2000 paperwork to the Coast Guard. Coast Guard is 
        to be commended for this action. It is prepared to restrict 
        high-risk vessels from moving into, or from, U.S. ports when 
        transitioning to the new millennium.
            Marine facilities: Marine facility equipment, such 
        as cranes for loading/unloading cargo, are highly automated. 
        The Coast Guard surveyed over 5,000 facilities and received 
        only a 36 percent response rate (see table 4). This information 
        will assist the Coast Guard's Captains of the Port assessments 
        of potential Year-2000 related malfunctions of equipment and 
        systems.

        
        
    Associations' Survey of Port Authorities
    Ports provide critical infrastructure (e.g., power, security, 
intermodal connections to rail) enabling efficient cargo shipment. 
There are 326 U.S. public ports, with port authorities established at 
about 100 larger ports. The American Association of Port Authorities 
(AAPA)--representing port authorities in the United States, Canada, the 
Caribbean and Latin America--surveyed its members' readiness, including 
83 U.S. Port authorities.



    Only 33 of the 83 U.S. port authorities responded to AAPA's August 
1999 survey. These 33 reported 81 percent completion of Year-2000 
preparation work. However, the survey did not ask the important 
question of whether the port expects to be ready by December 31, 1999. 
There also is no indication about the volume of maritime traffic 
handled by these 33 port authorities since AAPA did not require the 
respondents to identify themselves. More information about domestic 
ports' readiness, both large and small, is needed. Coast Guard has been 
working with port authorities and shipping companies in conducting port 
exercises. These exercises have been successful in testing contingency 
for ship movement in case of breakdowns of communications or ship 
operating systems. However, contingency for port operations, such as 
port infrastructure or connection with other transportation modes 
(e.g., trucking, rail) has not been included. Expanding the scope of 
future port exercises could help mitigate the unknowns of port 
readiness.
    Survey of Transit Readiness
    FTA assists in developing improved mass transportation systems for 
cities and communities nationwide. FTA provides financial, technical, 
and planning assistance to about 550 public transit authorities. FTA 
required these grant recipients to report their Year-2000 readiness. 
All but four (all in Puerto Rico) responded to FTA's request--403 (73 
percent) grantees reported being compliant, and 143 grantees reported 
they should be ready by December 31. FTA is following up with the four 
grantees. FTA's analysis of the top 30 grantees, handling 75 percent of 
transit ridership, showed 4 were reported compliant and 26 should be 
ready by the end of the year.
    Survey of Rail Readiness
    The seven major freight railroads were surveyed by the Association 
of American Railroads (AAR) in September 1999. These railroads, 
accounting for 91 percent of U.S. freight revenue and 71 percent of 
miles operated, reported they should be ready by September 30, 1999. 
The other 541 railroads, made up of regional and local freight 
railroads, have not been surveyed regarding their Year-2000 readiness.
    In response to safety issues that arose as a result of computer 
problems with a recent railroad merger, the Federal Railroad 
Administration hired a contractor to perform a Year-2000 Preliminary 
Readiness Review for four of the seven largest freight railroads. The 
results are expected in early October 1999.
    There are 15 commuter rail companies in the U.S. All are FTA grant 
recipients, and responded to FTA's survey. Amtrak, the national 
intercity passenger rail company, recently reported its mission-
critical system as being compliant.
    Actions Needed for Continued Industry Outreach
    The following actions are needed to ensure the transportation 
industry's readiness:
            FAA needs to take action to obtain information on 
        nearly 2,000 carriers that did not respond. It still is not too 
        late for FAA to take action on our recommendations and require 
        Year-2000 readiness statements from air carriers.
            Coast Guard needs to direct the non-responding 
        marine facility and vessel owners to answer the Year-2000 
        questionnaire specified in the temporary regulations.
            Coast Guard needs to consider expanding the scope 
        of port exercises to include contingencies for port operations.

    Status and Issues Concerning International Aviation and Maritime

    DOT has taken an active role working with international 
associations in assessing international aviation and maritime 
readiness. As examples, FAA helped the International Civil Aviation 
Organization (ICAO) prepare its members for business continuity and 
contingency planning, and the Coast Guard took a lead role in helping 
the International Maritime Organization (IMO) prepare its members to 
perform Year-2000 risk assessments and contingency planning. DOT also 
established an interagency committee with the Departments of Defense 
and State to evaluate foreign countries' aviation Year-2000 readiness 
and make recommendations on safety of international air travel.
    International Aviation
    In March 1999, we recommended that FAA develop a policy as to 
whether U.S. carriers will be allowed to fly to countries that are not 
known to be Year-2000 compliant. FAA has since developed the 
International Year-2000 Civil Aviation Readiness Information Review 
process. DOT is leading an interagency committee, with the Department 
of Defense and the State Department, to evaluate the Year-2000 
readiness for flying to foreign countries.
    DOT's interagency committee developed a comprehensive process which 
places emphases on collecting information from multiple sources, having 
representatives from multiple agencies review the information, sharing 
evaluation results (scoring) with all related parties, and giving 
countries the opportunity to enhance Year-2000 readiness through the 
consultation process described in the table below.



    ICAO Survey on Year-2000 Status
    ICAO surveyed its 185 member countries to identify Year-2000 issues 
and readiness. DOT's interagency committee plans to rely on ICAO's 
survey as a key information source for evaluating the international 
aviation community's readiness for the Year 2000. Survey results were 
due from ICAO member countries by July 1, 1999. ICAO planned to issue a 
report summarizing members' status by the end of July 1999. Significant 
uncertainties still exist regarding foreign countries' readiness and 
how DOT and FAA evaluate safety of international air travel. First, 34 
of the 185 member countries have not responded to the ICAO survey as of 
September 23, 1999. About one million passengers were flown between the 
United States and the 34 countries in 1998. These countries are located 
in the regions specified in Table 7.



    The interagency committee planned to issue its first review results 
for the 89 countries (accounting for 97 percent of U.S. international 
travel passengers) by September 30, 1999. However, based on preliminary 
review results, the committee concluded that 28 of the 89 countries 
most frequently visited by U.S. carriers did not provide sufficient 
information to allow for adequate Year-2000 readiness assessment. These 
countries are in the Caribbean and Central America (14), South America 
(5), Asia and Pacific (4), former Soviet Union (3), Africa (1), and 
Europe (1).
    With only 93 days left to go, providing timely and quality 
information to the traveling public remains a challenge to DOT and FAA. 
As pointed out by the Deputy Secretary, the whole Year-2000 phenomenon 
is characterized by uncertainty as to its effects. This is especially 
true if Year-2000 readiness on the part of foreign countries is 
unknown, sketchy, or known to be inadequate. As we understand the 
approach FAA plans to take, flight restrictions will only be imposed if 
there is a known, verifiable safety problem. Where there are 
significant uncertainties about a foreign country's Year-2000 
readiness, we are not persuaded this approach will be sufficient 
because FAA is not likely to have verified evidence of problems until 
after December 31, 1999. A major issue now facing FAA is what action, 
if any, it will take when a foreign country does not provide sufficient 
information for independent assessment.
    International Maritime
    The international maritime industry accounts for over 90 percent of 
U.S. overseas trade. The Coast Guard has done a commendable job 
reaching out to the international maritime industry making them aware 
of the Year-2000 problem. For example, as a result of the IMO meeting 
coordinated by the Coast Guard in March 1999, IMO Circular 2121 was 
issued to all its members. The circular contains a Year-2000 readiness 
questionnaire recommended by the Coast Guard for assessing Year-2000 
related risks associated with vessels and port facilities.
    Notwithstanding the Coast Guards outreach efforts, the Year-2000 
readiness of foreign ports is largely unknown. In February 1999, the 
International Association of Ports and Harbors (IAPH) conducted a Year 
2000 survey with its 224 harbor authority members and received 110 
responses. The results for individual ports were not made public.
    Actions for International Year 2000 Readiness
            ICAO needs to continue working with its member 
        countries to obtain information from the 34 countries that did 
        not report on their Year-2000 readiness.
            FAA should reconsider its planned approach--i.e., 
        only imposing flight restrictions when there are known, 
        verifiable safety problems--where a foreign country does not 
        provide sufficient information about its Year-2000 readiness 
        for independent assessment.
            The Coast Guard should continue working closely 
        with international organizations to obtain more information on 
        the international maritime industry, especially for port 
        readiness.
    Mr. Chairman and Vice Chairman, this concludes our statement. I 
would be pleased to answer any questions.
                               __________

         Responses of Kenneth M. Mead to Questions Submitted by

                            Chairman Bennett

    Question 1. You noted that DOT has fixed all mission-critical 
systems used to support critical functions. However, you also noted its 
need to continue contingency plan testing. What is the status of DOT 
continuity of operations and contingency plan testing? Are there any 
particular weaknesses found during testing that should be highlighted? 
How prepared is DOT to activate these plans if necessary?
    Answer. DOT's continuity of operations and contingency plans 
continue to be tested through tabletop exercises, war games, and port 
exercises. DOT's Crisis Management Center (CMC) conducted tabletop 
exercises with its senior management (Secretary/Deputy Secretary and 
heads of operating administration) in May and September. FAA has 
conducted ``war games'' to test its contingencies and plans to conduct 
a dry run in its command center in early December. All Coast Guard 
captains of U.S. ports have conducted some form of Y2K drill or 
exercises. DOT continues to modify contingencies based on these 
exercises. Areas for improvement include communication coordination, 
availability of back-up power supplies (such as generators), and the 
need to have subject-matter experts on hand. DOT is well prepared to 
activate contingency plans.
    Question 2. The Committee has struggled with the difficulty in 
getting information, of any type, on the Y2K readiness of small and 
medium-sized enterprises across all industries creating serious gaps in 
the collective Y2K knowledge base. You have mentioned this same 
difficulty a number of times in your testimony. Do you have any 
recommendations on what can be done to fill the information void in 
this area or an assessment of the risk posed within each mode due to 
this void?
    Answer. Important actions to obtain necessary Y2K information 
include DOT maintenance of ongoing communication with trade 
associations and attaching consequences to regulated-industry 
enterprises that do not respond to Y2K information requests. This has 
worked well, for example, with the Federal Transit Administration (FTA) 
in requiring transit authorities to provide certificates of Y2K 
readiness.
    Question 3. One area that is outstanding for DOT, as for other 
federal agencies, is that of instituting a policy to ensure compliance 
work is not ``undone'' and compliant systems are ``safeguarded.'' Your 
testimony noted examples of management control issues. Are you now 
satisfied that management controls are in place to ensure that the DOT 
Y2K modification policy is adhered to and that there is sufficient 
awareness of the policy within DOT?
    Answer. We are satisfied that management controls are in place. DOT 
has issued ``post-implementation'' policy addressing the need to ensure 
that compliance is maintained on certified Y2K-compliant systems. FAA 
and Coast Guard have also issued their own guidance advising their 
organizations how to handle and report on all modifications made to 
Y2K-compliant systems. FAA has issued a moratorium on any changes to 
the National Airspace System during critical Y2K periods to ensure 
compliance is maintained. We found they were controlling modifications.
    Question 4. Looking domestically, you commend the Federal Transit 
Administration's efforts to assess Y2K readiness. What were the key 
factors that you attribute to its success? Are these applicable to 
other areas with poor response and is there sufficient time remaining 
to leverage these ideas?
    Answer. We found a key success factor for gathering information on 
Y2K readiness is to attach consequences to non-responders. FTA 
stipulated that a response from transit authorities was necessary to 
continue funding. Similarly, Senator Dodd's mentioning that air 
carriers non-responsive to FAA's request for information about their 
Y2K status would not fly resulted in non-respondents going from 1,758 
to 31 as of November 17, 1999.
    Question 5. Your testimony indicated that the Federal Railroad 
Administration was planning to release survey results from four of the 
largest railroad companies in early October (results were expected this 
month). Tomorrow is October 1, do you have any preliminary information 
on this survey? If not, why is it taking so long to assess results of 
four companies? What is being done to refine the status information on 
regional and local freight railroad companies--an information problem 
area you pointed out?
    Answer. An independent assessment of Y2K readiness of the four 
major freight railroads (Burlington Northern Santa Fe, CSX, Norfolk 
Southern, and Union Pacific) in the United States was issued on October 
8, 1999. According to the report, all four companies had well-managed, 
well-funded Y2K compliance programs. We are following up with the 
Federal Railroad Administration on the status of regional or local 
freight-railroad companies.
    Question 6. I must say, your testimony paints a dark picture of 
areas that are cause for concern. This stands in stark contrast to the 
picture painted by the President's Council on Y2K Conversion and to an 
extent, that of this Committee. How do you reconcile these differences? 
How would you characterize the transportation industry preparedness and 
how concerned Americans and US businesses should be?
    Answer. Our view is similar to that of the President's Council on 
Y2K Conversion and that of the committee. Overall, we believe that the 
transportation industry is prepared for Y2K. DOT systems are ready and 
transportation industry preparedness is good in that large providers 
have reported they will be ready in time. However, there might be 
isolated events with smaller providers. Although the number of small 
providers not responding has been high, they represent only a small 
fraction of the total transportation picture.
    Question 7. Has the Office of the Inspector General performed any 
work on assessing US port readiness and what is your overall 
assessment?
    Answer. Our work in this area was limited to observing three port 
exercises conducted by the Coast Guard, at the ports of Los Angeles/
Long Beach, New York/New Jersey, and Hampton Roads, Virginia. These 
exercises were successful in testing ship-movement contingencies. We 
recommended the Coast Guard expand port exercises to cover port-
operation contingencies to help mitigate the unknowns of port 
readiness. We will provide you with the Coast Guard's action plans upon 
receipt of this information.
    Question 8. In your testimony, you mentioned a need to distinguish 
between operational failures, Y2K failures, and problems masqueraded as 
Y2K failures. What failures, other than Y2K should we be considering 
during the critical periods surrounding the millennium rollover?
    Answer. A critical area for consideration during the millennium 
rollover is that of terrorist activities, including cyber-attacks, 
perpetrated under the guise of Y2K problems. The Crisis Management 
Center at DOT needs to ensure it has the right expertise available for 
early recognition of potential terrorist attacks.
    Question 9. To date the Department has spent over $425 million for 
Y2K repairs. Has your office assessed whether the money has been 
properly spent? If so, what have the results been?
    Answer. Our office is conducting a review of FY 1999 Y2K funding in 
FAA and Coast Guard. We will provide our results upon completion.
    Question 10. Based on the Y2K work that you have done and the 
apparent successful implementation of the FAA project, do you see any 
lessons learned that could be used in future or ongoing FAA projects?
    Answer. Yes. The successes of the Y2K project include the 
communications structure, the way multiple FAA organizations 
successfully worked together to ensure Y2K compliance, and the support 
and commitment of top management to the project's success. These same 
communications lines, organizational structure, and top management 
support could be used for managing the next critical area in the 
information-technology field-information security.
                               __________

               Prepared Statement of Richard T. Du Moulin

    My name is Richard du Moulin. I have recently completed my tenure 
as Chairman of the International Association of Independent Tanker 
Owners (``INTERTANKO'') and now serve as Chairman of INTERTANKO's North 
American Panel. INTERTANKO consists of approximately 300 tanker owners 
and operators and another 300 related organizations around the world. 
The INTERTANKO fleet is comprised of approximately 2000 tank vessels. 
We estimate that roughly 70 percent of all the petroleum and petroleum 
products imported by the United States are carried by INTERTANKO. I 
also am the Chairman, President and Chief Executive Officer of Marine 
Transport Corporation. We are the nation's oldest shipping company and 
operate a mixed fleet of U.S. and foreign flag vessels.
    Like every other industrial sector, the maritime community faces 
significant potential for business disruption as a result of the Y2K 
problem. Like other sectors of the maritime industry, the tanker sector 
which I represent through INTERTANKO has developed action plans 
intended to identify vulnerabilities and to put in place hardware, 
software and procedures that will avoid adverse Y2K impacts. The major 
difficulty we face with Y2K is that it is easy to see the potential for 
harm, but it is very difficult to know whether the impacts will be as 
dire as some predict. The only prudent course is to be as thorough as 
possible identifying the potential problems while at the same time 
methodically replacing systems elements that might be vulnerable.
    The Y2K issue is of particular concern to tanker owners because of 
their commitment to and responsibility for the safe operation of 
vessels and the avoidance of casualties that could result in the loss 
of human life and the despoliation of the marine environment. The 
tanker industry has made tremendous strides in the last 15 years 
through industry-driven reforms toward eliminating mechanical fault and 
human error. Much of this progress has come from revisions of training 
and operating regimes. We also have explored changes in vessel design, 
construction and procedures. The spill response capabilities of most 
major maritime nations, including the United States, have increased 
dramatically in the last 10 years.
    The Y2K issue is an excellent example of the interdependence of 
transport systems and their components. INTERTANKO has encouraged its 
members to promote attention to all links in what we call the ``Chain 
of Responsibility.'' This chain includes not only the tanker owner but 
government agencies responsible for marine safety and waterways 
management, insurers, charterers, pilots, classes, societies, terminal 
operators, and the salvage industry. A failure at any link of this 
chain, while unlikely as a matter of statistical probability, can 
compromise other elements of the system. We are fully aware that these 
links, if damaged, can lead to serious safety and environmental 
threats.
    Modern vessels, like modern aircraft, depend on an intricate series 
of sensors, monitors, and activators that are in turn linked to the 
operation of many systems that navigate, propel, steer and monitor a 
ship. This chain can be extremely intricate. It has many small links, 
many of its links are obscured from ready view beneath other system 
elements and, like the very visible components of Chain of 
Responsibility, a failure at particular points in this chain can expose 
the vessel to risk.
    The Y2K problem, despite its high-tech origin, requires decidedly 
low-tech values in order to be countered. Good organization practices, 
thoroughness, and attention to detail are the ways the maritime 
industry, like every other industry, will avoid catastrophic impact 
from this potentially dangerous issue.
    The primary concern for mariners and internal management is to 
identify accurately the sources of exposure. Our member companies and 
their consultants have spent untold hours locating system software and 
equipment that are potentially affected by Y2K. We have accompanied 
this inventory approach with the establishment of new and different 
relationships with vendors and consultants. Tanker owning companies 
face precisely the same kinds of concerns about Y2K as any other 
business concern with regard to the internal management of their 
companies. However, I believe these issues are well appreciated by the 
Committee and will be well covered by other witnesses. It is the search 
for vulnerabilities aboard the ship and in closely related systems that 
is the focus of this testimony. Our members have cooperated with the 
U.S. Coast Guard and other national safety agencies overseas to think 
through potential sources of problems and to make vessels available for 
testing.
    It has been estimated that a typical tank vessel may contain 
between 50 and 200 micro-processors. This is a relatively low number 
compared to aircraft or even some other vessel types. As you might 
expect, systems controlled by Y2K-vulnerable micro-processors include 
the following:
            navigational systems
            telecommunication systems
            real time process controls such as engine room and 
        cargo monitoring systems
            strength and stability monitors
            alarm systems
    Within our industry, there have been reports of documented Y2K 
failures of ship main control, radar mapping, ballast monitoring, cargo 
loading, engine room vibration, and ship performance monitoring 
systems. None of these failures to date has resulted in major losses 
and some were intentionally induced as part of Y2K assessment 
procedures.
    As has been the case with other industrial sectors, the 
identification of Y2K problems and their fix has been enormously 
expensive. About 80 percent of the costs incurred to date have arisen 
in the equipment and chip replacement area.
    We are very concerned about problems that may occur at the links 
between different sectors of our industry both here and abroad. A 
tanker company may successfully resolve its Y2K problems, but find that 
a terminal cannot load or receive a cargo discharge. Aids to navigation 
and vessel traffic control systems could be affected in ways that will 
adversely impact our abilities to navigate safely. I cite these 
examples to indicate that there will be no partial victories in the 
race to identify and resolve Y2K problems. We will only succeed if 
everyone in every sector succeeds. We won't know until early in the 
year 2000 how well we have done. If there is a major spate of costly 
damages caused by Y2K, the absence of insurance coverage and the 
complex debates over fault that will ensure could have significant 
negative consequences for the world's economy.
    Among our member companies, the matter is receiving attention at 
the highest level. We are receiving incentives, positive and negative, 
and prods from insurers, class societies, flag state authorities and 
port state control authorities. Every one of these entities not only is 
trying to make sure that vessel owners meet this challenge, but must at 
the same time see to its own Y2K needs. INTERTANKO notes that the U.S. 
Coast Guard has provided an excellent outreach and public awareness 
program to the industry. They have provided the industry with an 
information resource and a stimulus to be thorough in our systems 
review.
    Communications between industry and maritime authorities around the 
world have, on this subject, generally been positive and open. For 
better or worse, industry and government are equally afflicted by 
potential problems of Y2K. We are truly all in this together. 
INTERTANKO appreciates the attention that this Committee has brought to 
the problem.
    I will be pleased to answer any questions that the Committee may 
have.
                               __________

          Prepared Statement of Rear Admiral George N. Naccara

    Good morning, Mr. Chairman and distinguished members of the 
Committee. I am Rear Admiral George Naccara, the Coast Guard's Chief 
Information Officer (CIO). I have responsibility for the Coast Guard's 
Year 2000 (Y2K) project.
    I welcome the opportunity to give this committee an update on the 
Coast Guard's Y2K readiness and the readiness of the global marine 
transportation system (MTS), which have steadily improved since I last 
testified before you in April.
    The Coast Guard reports the status of 74 mission-critical systems 
to the Office of Management and Budget (OMB) quarterly. As of today, we 
are happy to report 100 percent completion of Coast Guard mission-
critical systems. Additionally, I have ordered a special tertiary level 
of verification on the majority of these systems, and this initiative 
will continue until shortly before the end of the year. This is our CIO 
verification program, a comprehensive test performed with a contractor 
and our own Coast Guard personnel. Successful end-to-end testing of 
several of our systems has been accomplished. I plan to conduct several 
more end-to-end tests before the end of the year. We are continuing 
work on other, non-mission-critical systems to absolutely minimize Y2K 
impact on those that serve primarily administrative functions. 
Contingency plans are in place for all the mission-critical systems, 
and Business Continuity Contingency Plans (BCCPs) are in place at 100 
percent of our operational units. Our units have been directed to 
exercise their plans and modify them as necessary in the time that 
remains. Though the recent end-of-week rollover of the Global 
Positioning System (GPS), and the rollover of computers to 9/9/99 
proved to have very little impact on our systems or our ability to 
operate, we used both events to test and modify our incident command 
center watchstanding approach, as well as our procedures for passing 
information up and down the chain of command. At the end of the year, 
the Coast Guard intends to be ready to perform ``Coast Guard missions 
in a Y2K environment,'' whatever that environment proves to be. As I 
stated to you in April, our motto is ``Semper Paratus''--Always Ready--
and in keeping with that, we will ensure that our systems and 
equipment, as well as all our processes, are ready.
    As I also stated to you in April, we are keenly interested in the 
Y2K readiness of the industry we regulate, not only because we are 
charged with maintaining safety on our waterways and protection of the 
marine environment, but also because we are aware of the impact of this 
industry on the global economy. In keeping with this, we have pursued 
an ambitious 2-year strategy of outreach to the MTS, both domestically 
and internationally. The outreach has consisted of the following 
elements:
          a) Assessment of the readiness of the global MTS. A number of 
        initiatives are underway both in the government and private 
        sector to assess the readiness of the MTS. Some government-
        contracted surveys have been completed, (such as one we 
        recently received from the Central Intelligence Agency, which 
        has a section that specifically assess maritime shipping and 
        ports). The Coast Guard has also partnered with the United 
        States Transportation Command (USTRANSCOM) in collecting 
        information on the readiness of some key world ports. Summed 
        up, the studies show a high level of Y2K preparation in the 
        shipping industry, and a steadily improving picture in the 
        world's ports, an area I will address further when I summarize 
        our port exercise program. Some areas of the world do raise a 
        slightly higher level of concern than I have for U.S. ports. I 
        do not intend to review these assessments in detail here 
        because they have been prepared with a security classification, 
        but they are available to this committee. Should that not be 
        the case for some reason, I will be happy to assist you in 
        obtaining releasable portions of them, and I also invite any 
        member who is interested to attend, or send an appropriate 
        representative to attend, the next classified briefing I 
        receive from USTRANSCOM. While I am guardedly optimistic about 
        the emerging picture for world ports, I will continue to sound 
        the cautionary note that the MTS is a tremendously complex and 
        fragmented, intermodally connected system. I believe, 
        particularly because of the wide dependence on technology 
        (particularly embedded chips) in the industry, that a level of 
        uncertainty will remain when the new century arrives.
          b) Outreach to the MTS. As I have reported previously, the 
        Coast Guard has pursued a multi-faceted, 2-year program of 
        outreach to the industry. This has included: Y2K conferences 
        and industry days on all coasts, the Great Lakes, and the 
        inland rivers; the distribution of nearly 250,000 brochures to 
        ships' masters and port facility operators, and another 250,000 
        to recreational boaters; and an ambitious and continuing 
        schedule of speaking engagements by myself and senior Coast 
        Guard officers domestically and internationally. We also 
        maintain websites and an (800) infoline where mariners can 
        obtain relevant Y2K information. Characteristic of our level of 
        effort, we undertook an especially aggressive informational 
        campaign, including additional Notices to Mariners and press 
        releases, concerning the GPS end-of-week rollover in August.
          c) Y2K Enforcement Policy. The Coast Guard has recognized 
        from the start of its Y2K outreach program that a consistent 
        approach to enforcement in the global MTS is crucial, given the 
        tremendous impact this industry can have on the world economy. 
        Our goal, in addition to our primary focus of safety on the 
        waterways, has been to minimize disruptions and interruptions 
        in commerce. That is why we agreed to host the meeting of 16 
        international maritime trade organizations at the International 
        Maritime Organization (IMO) in London last March. This group 
        was representative of virtually all shipping interests and 
        ports in the world. I have already reported to you the success 
        of this meeting in producing a Year 2000 Code of Good Practice, 
        which the IMO immediately issued as its IMO Circular Letter 
        2121. Central to the philosophy of the Circular is the open 
        exchange of information among MTS stakeholders. I am now 
        pleased to report that a growing number of nations have adapted 
        their enforcement policies to Circular 2121, including among 
        others Canada, the United Kingdom, Japan, Germany, the 
        Netherlands, Russia, Australia, and Singapore. The Coast Guard 
        published its enforcement policy in a Federal Register notice 
        in June, also basing its approach on the required exchange of 
        information using the questionnaires in the INO Circular. We 
        also issued policy guidance to our Captains of the Port, which 
        contained a risk assessment matrix and risk management process. 
        In essence, the Captain of the Port takes the information 
        provided by the company and scores the level of risk associated 
        with the vessel's movement or the cargo operations of a 
        terminal. A large number of shipping companies and facilities 
        operators have now filed their information with us. I should 
        point out, however, that not all had filed, or filed 
        completely, as of the 20 August filing date. So when our 
        Captains of the Port assessed risk using the matrix during the 
        first designated Y2K critical period of September 7-9, 
        incomplete information was the principal cause for the issuance 
        of 175 Captain of the Port orders to ships and 85 to 
        facilities. Many of these orders, which reflected some level of 
        restriction on vessel movement or cargo operations, were 
        rescinded as the outstanding issues were resolved to our 
        satisfaction. While the Coast Guard takes no pleasure in 
        requiring even brief delays of this sort, which are costly to 
        industry, we felt it served as an indication of the seriousness 
        of our intent to ensure safety, and will prove beneficial in 
        the overall preparation of the industry for the end of year. I 
        am convinced this proved that U.S. ports can remain open, and 
        that commerce can proceed safely in and out of our ports. It 
        also sent a clear message to other nations that a viable 
        process is available and reinforced our international 
        leadership in Y2K readiness.
          d) The port exercise program. As I told you in April, I was 
        successful in ensuring that contingency planning information 
        was included in IMO Circular 2121. The Coast Guard does not 
        view these plans as passive instruments. Just as we require an 
        operator of a passenger vessel to actually launch lifeboats 
        when we carry out their annual inspection, we have taken a 
        strong position on the exercise of Y2K contingency plans on 
        ships and in ports. As of this date, we have carried out port-
        level exercises in a large number of U.S. ports, including 
        some, such as Los Angeles/Long Beach, New Orleans, San 
        Francisco, and New York, which have received considerable media 
        attention. However, since our view is cast on a global 
        industry, we are interested in seeing other world ports carry 
        out Y2K port exercises. Some, such as Hong Kong and Singapore, 
        have already done so. To further champion this approach, we 
        invited representatives from several nations, both G-8 nations 
        and our primary oil supplying countries of Saudi Arabia, 
        Mexico, and Venezuela, as well as China and Korea, to attend 
        our port exercises in New Orleans, San Francisco, and New York. 
        Last week in Berlin, I made a presentation advocating port 
        exercises to representatives of G-8 countries attending a 
        workshop on maritime and aviation contingency planning. I 
        distributed to these representatives a playbook we have 
        compiled from our U.S. port exercises, containing information 
        on how to design an exercise, as well as some best practices 
        and lessons learned from our exercises. A week ago, I met with 
        the General Secretary of the IMO in London and presented him 
        with a summary of our meeting in Berlin, and a copy of the 
        playbook. I am happy to report that he has distributed these 
        materials as IMO Circular 2158 that urges IMO member states to 
        consider holding port exercises of their own during October and 
        November. We also distributed copies of the contingency plan 
        exercise playbook to 13 Caribbean countries last week. In 
        addition, I will make the playbook widely available to any 
        other MTS interests who desire it.
    The Coast Guard will not relax its efforts during the 91 days that 
remain until December 31. If one were to view the Coast Guard in a 
corporate perspective, our primary commodity is readiness and 
responsiveness, and we will ensure our commodity is available to the 
American taxpayer. We will continue to re-evaluate all systems, both 
mission-critical and non-mission-critical, and continue to refine our 
own contingency plans. We will hold a major port exercise in Hampton 
Roads on October 28 in cooperation with the Navy. We will continue to 
assist MTS stakeholders who request our help with port exercises or 
other contingency planning issues, providing training, guidance, and 
even a Coast Guard planner as necessary to our trading partners. And we 
will continue our DOT interagency and interdepartmental cooperation to 
maximize the responsiveness and information sharing of the Federal 
government. All of the tools that we have developed, including the 
playbook, our database of industry readiness information, and our risk 
assessment matrix, will be made available to those public entities who 
desire to use them. And on December 31, the Coast Guard will be in a 
heightened state of readiness nationwide to respond to any threat of 
maritime emergency or disruption in the marine environment.
    Thank you for the opportunity to discuss this important issue with 
you today. I will be happy to answer any questions you may have.
                               __________

 Responses of Rear Admiral George N. Naccara to Questions Submitted by

                            Chairman Bennett

    Question 1. The Maritime Safety Committee of the International 
Maritime Organization (IMO) has promulgated a number of guidance 
documents--really advice--for worldwide Y2K readiness of the shipping 
industry that are non-binding. Have these been effective in causing 
shippers to take notice of the need for Y2K remediation? Could you 
estimate to what extent these have been followed by the industry?
    Answer. There have been four IMO Y2K Circulars calling for 
increased attention to resolving potential problems related to the 
year-end roll over. The IMO circulars are effective and are a very 
positive component of the international maritime Y2K awareness effort, 
which must be seen in the context of a much larger effort undertaken on 
multiple fronts worldwide to alert the maritime industry. Major 
international corporations have given serious attention to the issue 
and leadership has been displayed by a large number of international 
maritime trade associations and maritime nations. Notable efforts 
include:
          a) Worldwide seminars on Y2K issues by the United Kingdom 
        Group of Protection and Indemnity (P&I) Clubs; this 
        organization also participated in the creation of the Ship2000 
        website, along with several other major maritime trade 
        associations;
          b) Distribution at the above mentioned seminars, and 
        elsewhere, of a Ship2000 Toolkit for the design of a maritime 
        Y2K project, by the United Kingdom P&I Clubs;
          c) Conferences and industry days around the United States led 
        by the U.S. Coast Guard, focused on Y2K;
          d) Distribution by the Coast Guard of a Y2K brochure to all 
        vessels calling at U.S. ports, as well as to facilities and 
        recreational boaters;
          e) A publication on Y2K contingency planning for ships by 
        Lloyd's Register in cooperation with a number of other trade 
        associations;
          f) A publication on Y2K contingency planning for ports 
        sponsored principally by the International Association of Ports 
        and Harbors;
          g) Worldwide seminars by the International Energy Agency on 
        Y2K and the oil industry, including a maritime component;
          h) A meeting convened by the U.S. Coast Guard of 16 major 
        international maritime trade organizations at the IMO in March 
        1999, which produced the Year 2000 Code of Good Practice (later 
        issued as IMO Circular 2121);
          i) Addresses by the U.S. Coast Guard Chief Information 
        Officer to two United Nations meetings of national Y2K 
        coordinators in December 1998 and June 1999; and
          j) Y2K port contingency exercises in 26 U.S. ports, several 
        of which received considerable press attention, and some of 
        which were attended by foreign observers.
    These are just a sampling of the many efforts that have contributed 
to a high level of attention to the Y2K issue in the maritime industry. 
It would be difficult to determine which of the many forms of guidance 
on maritime Y2K projects have most influenced industry. Though the IMO 
has doubtless played a significant leadership role, it has likely been 
the combined influence of all these initiatives that have led to the 
industry's serious efforts on Y2K.
    Question 2. Please describe the nature of projected/likely failures 
at ports, the level of seriousness, and anticipated duration?
    Answer. The Coast Guard expectation is that U.S. ports will be open 
and operating during Y2K critical periods. Captain of the Port surveys 
indicate that self-imposed curtailment of operations by industry at the 
century rollover may run above 50 percent, but only for a few hours 
during the actual rollover period. As to the nature of failures that 
may occur in ports, it is extremely difficult to predict what might 
fail. Port information technology and infrastructure reflect many of 
the same risks that affect other sectors of the economy. Port 
businesses have complex IT systems and embedded processors, and some 
level of failure in such systems continues to be predicted by leaders 
in the industry. Ports are also vulnerable to disruptions in power, 
water, telecommunications, financial services, and supply chains to the 
extent that any of these occur. Minor, not major, disruptions are 
anticipated. An important difference is that ports are key intermodal 
nexus points, and disruptions in other modes, such as rail or 
transport, can cause slowdowns in the movement of cargo through ports. 
While it is impossible to predict where such disruptions might occur, 
the intermodal factor may have a slight magnifying effect. It is 
equally difficult to predict the anticipated duration of any 
disruptions that ports might experience, other than to say that they 
are more likely to be of short duration, since the overall state of 
readiness of the industry will undoubtedly allow affected parties to 
correct failures they encounter fairly quickly.
    Question 3. Will the Coast Guard have additional monitoring to 
watch for pollution from ships with malfunctioning systems in U.S. 
coastal waters?
    Answer. No. The Coast Guard already maintains a high state of 
vigilance for pollution incidents 365 days a year on a 24-hour, 7 days-
a-week basis. All incidents from a minor sheen to a major spill that 
come to Coast Guard attention, usually through our National Response 
Center, are quickly investigated. As the Coast Guard intends to be at a 
high state of readiness for the Y2K critical periods, our vigilance 
will, if anything, be slightly enhanced by our increased attention to 
all activities in our ports and waterways. In addition, since we are 
reviewing the risk associated with all vessel and cargo movements in 
ports during the critical periods, these activities will be subject to 
an added level of scrutiny. In cases where factors such as weather, 
hazardous cargo, or previous vessel history generate a high risk 
rating, operational restrictions may be imposed by the Coast Guard 
Captain of the Port to further mitigate that risk. On balance, the 
potential increase in risk posed by the Y2K problem is being met with 
monitoring and measures that mitigate that risk.
    Question 4. What confidence is there in the efficacy of commercial 
shipper remediation and contingency planning? That is, is it generally 
perceived to be thorough and effective, or cursory and ineffective?
    Answer. Captains of the Port have confidence that the remediation 
and contingency planning actions of most of industry are thorough and 
effective. Coast Guard Headquarters surveyed Captains of the Port to 
determine the level of preparation of the industry in their zones. The 
latest in a series of surveys was conducted at the end of September. 
Responses were based upon extensive cooperation in preparing for Y2K 
between Coast Guard personnel and other port stakeholders, which 
included representatives of maritime associations, port safety advisory 
groups, piloting associations, state and Federal agencies, and 
individual companies doing business in the port. The responses reflect 
a high level of awareness of the problem within the industry, and a 
better than 80 percent completion rate for repair, testing, and 
Business Continuity Contingency Planning actions. In addition, 56 
percent of those surveyed considered their ports at a low state of 
risk, 41 percent at a medium level of risk, and 3 percent did not 
respond; no ports were rated at a high state of risk.
    Question 5. Does a central Y2K data remediation coordinating or 
data collection authority (similar to ICAO or IATA) exist for ports? If 
so, where and how is its information made available?
    Answer. Yes, a central Y2K data authority (similar to the 
International Civil Aviation Organization [ICAO] or the International 
Air Transport Association [IATA]) exists for ports. The Coast Guard 
established itself as a central Y2K data collection authority for 
carriers and facilities operating in U.S. waters for a 48-hour period 
surrounding January 1, 2000 and February 29, 2000. This was done 
through publication of an Interim Rule on June 23, 1999 requiring the 
filing of Y2K readiness information by shipping companies and certain 
facilities operators. This data, which is being stored on a Coast Guard 
database, is now virtually complete for companies that plan to operate 
during the designated Y2K critical periods. However, a word of caution 
is necessary since this data only represents a percentage of the total 
number of stakeholders operating in the maritime environment. This 
information is based on International Maritime Organization (IMO) 
Circular 2121 and represents self-reporting by the Marine 
Transportation System (MTS). As such, it has limited value for overall 
calculation but provides good ``due diligence'' information for Coast 
Guard Captains of the Port in performing risk assessments.
    On an international scale, the Coast Guard is unaware of any 
central data collection initiative in the maritime industry that 
corresponds to the comprehensive data collection for the aviation 
industry recently undertaken by ICAO. Though an agency of the United 
Nations like ICAO, the International Maritime Organization has 
undertaken no similar assessment, undoubtedly due to the vastly more 
diverse and complex nature of the MTS. Numerous MTS trade associations 
have polled their membership, but the data, mostly incomplete even for 
the segment of the industry in question, cannot represent comprehensive 
data for all of the MTS.
    Question 6. What kinds of delays might develop at the nation's 
ports if maritime traffic must be slowed down due to Y2K problems with 
ships or traffic systems? Are we talking days or hours of delays?
    Answer. If delays occur at all, they are more than likely to be 
measured in hours. Extensive contingency plans have been prepared to 
deal with potential failures on board vessels and in systems and 
equipment ashore. For this reason, even if minor failures and 
disruptions occur, invocation of contingency plans should permit ship 
and port operations to continue at near to normal levels with little 
delay. A ship with a failure on the bridge, for example, should still 
be able to get to the dock even with Coast Guard imposed operational 
restrictions, such as a requirement for tugs alongside. Further, since 
more than 50 percent of industry has indicated that it is likely to 
voluntarily curtail or halt operations during Y2K critical periods, 
this will serve to lower the level of operations in the ports and lower 
the impact of any disruptions that do occur, thus mitigating delay 
factors. Should individual operators have more extensive disruptions to 
their systems, they might experience correspondingly longer delays to 
their operations, but in most cases these would not delay overall port 
operations. An important additional factor is that ports are key 
intermodal nexus points, and disruptions in other modes, such as rail 
or transport, can cause slowdowns in the movement of cargo through 
ports. While it is impossible to predict where such disruptions might 
occur, if they do, they might result in delays in the port. But only if 
the disruptions were major would we expect intermodally caused delays 
of more than several hours. A larger unknown for U.S. port operations, 
of course, is the potential impact of more significant disruptions 
offshore. Delays in key international ports could clearly delay cargoes 
bound for U.S. ports, as well as delay outbound cargoes.
    Question 7. Where is your biggest Y2K concern in regards to 
international maritime activity and what is the Coast Guard doing to 
mitigate the risk to the U.S.?
    Answer. The Coast Guard's two biggest Y2K concerns in regards to 
international maritime activity are:
          a) The unknown impact of embedded technology. These 
        uncertainties posed by the extensive use of embedded chips in 
        modern ships have undergone public discussion in the past 
        months and require no additional review. The only way to ensure 
        Y2K compliance of an embedded microprocessor assembly is to 
        replace these components in favor of assemblies whose 
        functionality is absolutely known. This uncertainty will 
        remain, and could possibly account for some disruption in the 
        Marine Transportation System (MTS). We have, through 
        discussions within the MTS, learned that many larger carriers 
        and facilities have performed extensive testing of embedded 
        systems and replaced non-compliant processors.
          b) The interconnectivity of the complex MTS. Multiple modes 
        and many stakeholders have a role in getting cargo to its 
        destination through the MTS. Disruptions in any segment of the 
        domestic or international transportation system, or in the 
        worldwide infrastructure that supports the MTS, can cause 
        disruptions elsewhere in the chain.
          Extensive Coast Guard outreach activities to the 
        international MTS continue. Recognizing early on that the MTS 
        had to be approached as an organic whole, the Coast Guard 
        encouraged all segments of the international MTS to prepare for 
        Y2K.
    Question 8. During the period of September 7-9, the Captains of 
Port issued 175 orders to ships related to Y2K. What does the Coast 
Guard expect will happen as it relates to vessels' movements at U.S. 
ports over the period of December 30, 1999 to January 1, 2000? Do you 
have any expectations for February 29, 2000 to March 1, 2000?
    Answer. The majority of the Captain of the Port orders issued 
during the September 7-9 period were the result of incomplete 
information on file with the Coast Guard for the ships in question. As 
a result of the September 9 enforcement actions, ship and port 
information is being provided at an increasing rate, and the Coast 
Guard anticipates all companies that plan to operate during the next 
two critical periods will file the appropriate information by early 
December. A high percentage of companies have indicated that they 
intend to curtail or halt operations during the next two critical 
periods. For those that do operate, there is now widespread familiarity 
in the industry with the Coast Guard risk assessment process. These 
operators are expected to have corrected any known problems before 
attempting operations in the critical period, and ensure executable 
contingency plans are available. For this reason, though some 
disruptions may occur, they are expected to be manageable.
    Question 9. The port exercises conducted by the Coast Guard and the 
maritime industry have been successful. However, as we have heard from 
the Inspector General, the scope has been limited to testing the 
contingency for shipment movement. Are there plans for future port 
exercises? Do you plan to expand their scope?
    Answer. Contingency plans for more than ship movements have been 
tested during U.S. port exercises. Contingency plans for 
communications, vessel traffic services, power loss, police and fire 
department response, chemical facility spills, customs systems failure, 
and U.S. Navy interface, among others, have been exercised around the 
country over the summer and fall. Most of the exercises in the U.S. 
have now been completed, though a few remain to be conducted. For 
example, a joint Y2K spill exercise will be conducted with the 
Canadians in Detroit on November 22, 1999 and a small number of 
exercises in foreign ports will occur in the time remaining until the 
end of the year. The Coast Guard will also have representatives at a 
port exercise to be conducted by the Mexicans in Altamira on November 
27, 1999. As the need arises, we will continue to assist trading 
partners with port exercises upon their request through the end of the 
year. And though the major U.S. port exercise phase is now virtually 
past, we will continue not only to test and refine our own contingency 
plans, but continue to encourage, or in some cases require, our 
industry partners to do the same.
                               __________

                 Prepared Statement of David Z. Plavin

    The Airports Council International-North America (ACI-NA) 
represents local, regional and state governing bodies that own and 
operate commercial airports in the United States and Canada. ACI-NA 
Member airports enplane more than 97 percent of the domestic and 
virtually all the international airline passenger and cargo traffic in 
North America. We are pleased to be able to share our thoughts on the 
issue of Y2K readiness with the committee.
    Our association's Y2K activity began in the spring of 1997 with the 
first of a series of educational seminars organized to assist our 
members in developing their Y2K awareness and implementing programs 
leading to assure readiness of our nation's airports. During the 
intervening two years, we organized Y2K informational meetings in 
Denver, Detroit, San Francisco, Cincinnati, Orlando, Washington, 
Dallas/Fort Worth, Seattle, Phoenix and Tampa. Many of the meetings 
were conducted jointly with the Air Transport Association and 
individual air carriers in support of an agreement between ACI-NA and 
ATA to cooperate extensively in this area.
    ACI-NA is represented on the President's Council on Year 2000 
Readiness and participates with other industry associations in the FAA 
Y2K Industry Steering Group. The steering group has representatives of 
the major airlines, regional airlines, general aviation, aviation 
manufacturers, and airports and is fulfilling a particularly effective 
role by providing a mechanism for the various elements of the aviation 
industry to coordinate their Y2K activities.
    We would like to make several points, which often go unrecognized 
in discussing airports' readiness for the year 2000 transition.
    STATUS OF AIRPORTS' READINESS
    Because the nation's 18,000 airports are locally owned and operated 
it is more difficult to form a single view of their readiness status 
than is the case in many other industries that are more concentrated. 
Unlike the major airlines or the regional airlines, with their limited 
numbers of operators, this diverse ownership makes it infinitely more 
difficult to track readiness status.
    Several attempts to survey airports during the past year have been 
unsuccessful, in part because of the large numbers of airports involved 
and, in part, because of the rapidly changing status of airports' 
readiness. In the beginning of this year the General Accounting Office 
reported on the status of airports based on a large survey conducted by 
GAO during 1998. However, that survey data was badly outdated by the 
time the GAO analysis was completed and the results did not accurately 
reflect airports' status at the time the report was published. We 
joined with the American Association of Airport Executives in several 
attempts at surveying our members earlier this year and also found that 
the status was changing so rapidly that consistent results were 
difficult to obtain. The FAA Office of Airports Safety and Standards 
conducted a survey in June of this year that was updated as recently as 
mid-August. We believe that survey will provide the most comprehensive 
information on the status of certificated airports. Finally, the Air 
Transport Association is attempting to maintain information on the 
status of airline suppliers, including airports. The ATA data is 
collected under assurances of confidentiality and has not been released 
to anyone other than their airline members. However, based upon 
discussions with ATA and FAA staff, as well as through frequent contact 
with our member airports, we believe the overwhelming majority of 
airports have completed the bulk of the remediation and testing of 
their affected systems and they will all be ready for the year-end date 
rollover.
    CONTINGENCY PLANNING
    It is common practice among our member airports to conduct 
extensive testing to assure that each affected system has been made 
fully Y2K compliant. It is also common practice to develop a 
contingency plan to assure continuation of the functions of computer 
systems in the unlikely event that a failure occurs that was undetected 
during the testing.
    Many segments of American industry seldom experience large-scale 
disruptions of their operations and, therefore, do not regularly 
conduct contingency planning on the scale required for Y2K readiness. 
This is not the case with our nation's airports. Airports regularly 
develop and test contingency plans for disruptions caused by major 
winter storms, airfield construction programs and emergency response to 
accidents. These plans are formally coordinated with airlines, other 
airport tenants, FAA and outside emergency response agencies and are 
updated frequently. It is common for an airport to conduct live drills 
of its snow removal and emergency response plans each year. Planning 
major construction programs to minimize airfield disruptions has also 
become an annual process at many of our major airports. Y2K contingency 
plans are but a variation on existing emergency response, construction 
and winter storm plans. We are confident that high quality contingency 
plans will be in place at our member airports in the unlikely 
circumstance of an unanticipated Y2K failure.
    FEW AIRPORT SYSTEMS ARE CRITICAL
    The aviation industry has been subjected to unwarranted speculation 
regarding the potential for Y2K failures having an impact on safety. 
Fortunately, that speculation is completely false. Unfortunately, the 
speculation continues.
    FAA has prepared and distributed to certificated airports a list of 
approximately 150 systems commonly owned by airports that might be 
susceptible to Y2K failure. Many other important systems (such as 
navigation or landing aids, baggage and fueling systems are commonly 
owned either by FAA or by airlines, rather than airports). Included on 
that list are approximately 48 systems that, in FAA's judgement, are 
considered critical to airfield operations or might be used in 
fulfillment of regulatory requirements. We believe that very few of 
these systems actually have potential for either significantly 
affecting operations or safety. Many of the systems merely serve to 
increase efficiency by automating functions formerly performed 
manually. Others provide information, are databases or record keeping 
in nature and do not control operational functions. Three of the 48 
systems have been the subject of frequent speculation and are worthy of 
additional discussion here.
    Airfield Lighting Control Systems: These are tools for controlling 
the thousands of lights used on a typical airport runway and taxiway 
system. Newer systems are controlled by computers, some of which have 
been found to exhibit Y2K failure modes. Those systems generally have 
been replaced or repaired by our members and subsequent testing 
indicates that they are free from risk. However, given the speculation 
about lighting failures having the potential for catastrophe, you 
should understand how the regular procedures that are in place to 
assure safety would be applied in this case.
    Even if one of these computerized systems were to fail the 
electrical switching gear could be operated manually, to restore 
airfield lights. Furthermore, if the system were to fail, aircraft 
would not be dispatched to that airport, flights in progress would be 
diverted to the alternate airport filed in the flight plan and flights 
on final approach would perform a missed approach if a lighting failure 
were to occur. In the case of low visibility landings, current 
requirements call for automatic switching to emergency generator within 
15 seconds, if critical lighting system fails. These emergency 
generators are typically not controlled by computers.
    Because these systems have been thoroughly assessed and tested and 
because the lighting can be manually operated, we feel that the risk of 
disruption due to a Y2K failure is minimal.
    Airfield Access Control Systems: These are used to regulate access 
to the secure portion of the airfield by the thousands of airport, 
airline and other employees at a typical large airport. These systems, 
too, use computers to activate the hundreds of doors involved and some 
have been found to be subject to Y2K failure modes. As in the case of 
the airfield lighting control systems, the susceptible systems have 
been repaired or replaced, tested for Y2K readiness and are felt to be 
fully reliable. However, if a failure were to occur, despite this 
testing, FAA has provided guidance to airports on how to manually 
control access to secure areas. Assuming that any failure could not be 
quickly repaired, the consequence would be increased staffing and 
manual operation of access doors.
    Airport Rescue and Fire Fighting (ARFF) Vehicles: These may contain 
microprocessors used in their diesel engine fuel controls or to perform 
data collection for maintenance functions. There has been speculation 
that Y2K failures may affect their performance. As in the other case 
described, the affected vehicles have been identified and repaired with 
the help of the manufacturers involved. Many airports maintain more 
than the minimum numbers of vehicles and, if an unanticipated failure 
were to occur would continue to meet the minimum regulatory 
requirements with spare fire engines. Even if an airport does not have 
a spare vehicle, the impact of a failure would most likely be the 
reduction in the number of vehicles available, not the loss of all fire 
fighting services, since few airports have fleets composed of entirely 
the same make and model of vehicle. Given the extremely low probability 
of ever needing the full fire fighting capability available at an 
airport and the remarkably low accident rate at our nations' airports, 
we are confident that the potential for a Y2K problem is minuscule, 
even if a failure were to occur.
    However, we are concerned that a proposed change to the regulations 
governing ARFF preparedness being considered by FAA would increase the 
potential for disruption if a vehicle failure should occur at an 
airport without a spare vehicle. FAA is proposing to eliminating the 
48-hour grace period currently allowed by 14 CFR Part 139.319(h)(3) 
during the first few days of the year 2000, presumably to address 
potential Y2K failures. The 48-hour provision is intended to allow 
airport operators sufficient time to acquire parts to repair a required 
ARFF vehicle or arrange for a replacement vehicle. By eliminating the 
grace period, FAA would force cancellation of flights at those airports 
without spare vehicles, if a failure were to occur...even if the 
failure is unrelated to Y2K. Perversely, rescinding the grace period 
would reduce the chances that an airport without a backup ARFF vehicle 
would be able to arrange to borrow an excess vehicle from a neighboring 
airport if they experienced a failure. Under FAA's proposal, the lender 
would also be at immediate risk of flight cancellations, should they 
have an unanticipated ARFF vehicle failure and would, therefore, be 
much less likely to lend their spare vehicle as a replacement to a 
neighbor.
    SUMMARY
    As we noted above, we feel confident that our nation's airports are 
fully prepared for the millennium date roll over. We feel that even if 
failures occur, despite the extensive testing that has been done, 
airport contingency plans will prevent significant disruption. We are 
strongly convinced that there is no safety risk from potential Y2K 
problems because of the excellent system of redundant safety measures 
that are used in aviation. We are, however, concerned that FAA should 
not remove the 48 hour grace period for the repair of ARFF vehicles 
because that would increase the potential for disruption in the event 
of failure.
    Finally, we are concerned that an increased public perception of 
risk from the millennium date change could negatively affect travel if 
past misperceptions of Y2K readiness is allowed to continue. It is our 
opinion that the US aviation system is fully prepared for the year 2000 
date change, and airports have contributed their share to that success.
                               __________

                   Prepared Statement of Edward Smart

    Thank you, Mr. Chairman. My name is Ed Smart and I am the air line 
pilot representative to the International Civil Aviation Organization 
(ICAO) where we, along with IATA, have a Permanent Observer seat on the 
Air Navigation Commission. Our organization, the International 
Federation of Air line Pilot Associations (IFALPA) is made up of just 
under 100 national member pilot associations, has approximately 120,000 
air line pilot members out of the estimated 150,000 active pilots who 
are flying the line today. Our relations with other international 
organizations includes affiliation with the International Flight 
Engineer Organization, and we maintain a close working relationship 
with the International Federation of Air Traffic Controllers 
Associations.
    While our member associations are often air line pilot unions, 
IFALPA is not a union, nor is it a union of unions. It has as its basic 
aim the development of a safe and orderly system of air transportation 
as well as the protection of the professional interests of air line 
pilots, focusing its attention and efforts on matters involving 
aviation related technical, safety and security issues. It may be of 
interest to note that IFALPA is also the trusted agent of the 
membership of the International Airline Passenger Associations for the 
detecting and reporting of safety and security deficiencies on the air 
side and outside of the aircraft cabin.
    IFALPA is well aware of and most appreciative of all of the fine 
efforts which have been expended by the world's States and 
international organizations in increasing public awareness of the 
potential threat posed by Y2K related problems and in providing 
valuable assistance to national and international authorities, the 
world's airlines and airports in their efforts in taking the proactive 
measures necessary to eliminate or to at least minimize the potential 
for flight safety problems. We have received, and we have full 
confidence in, the assurances given to us by the major aircraft 
manufacturers, both in the western world and in the Former Soviet 
Union, that there is nothing internally within today's civil air 
transport aircraft or its essential which will jeopardize fundamental 
flight safety when the date rollovers occur.
    Outside of the aircraft, we are confident that the measures already 
taken and still pending for completion by the end of the year will 
ensure continued safe flight safety for operations in the North 
American, and the Eastern and south Pacific and North Atlantic Regions. 
However, some concerns remain regarding other Regions of the world.
    While we are reasonably confident that the Y2K situation is well 
under control regarding air traffic in the Western European area, we 
are somewhat less confident that the same situation exists in Eastern 
Europe which includes airspace eastward to Vladivostok. We noted with 
some consternation the recent announcement by Col. Gen. Anatoly 
Kornukov, who heads Russian Air Traffic Control, of his serious 
concerns that Russia's air traffic control system has been in critical 
condition since the early 1990s; and that, in his view, flight safety 
levels will continue to fall drastically until they are 80% below the 
levels of the western world. ICAO and IATA have been in the process of 
opening up new trans-Arctic air traffic control routes which transit 
remote areas over Russia and we now have some concerns as to their 
continued viability in light of the recent Russian government, 
particularly in light of the potential for additional Y2K 
complications. These same concerns also apply to former Soviet 
Socialist Republics to the north of Iran and Pakistan. The old adage 
that a chain is only as strong as its weakest link is also applicable 
in the instance of international flights.
    Among our concerns is the fact that the Y2K air traffic control 
contingency plans developed for western Europe include the idea that 
some European States may close their airspace in the event of a failure 
of air-to-ground communications. This is something which already exists 
but has only rarely used and has never been employed on a large scale. 
In the event of implementation of this procedure for an extended time 
period and involving large numbers of aircraft, we believe that flight 
safety problems could occur due to the fact that there are some 300 
daily flights inbound from North America via the North Atlantic and an 
additional 30 or so flights each coming across from South and Central 
America, and another 60 or so daily flights inbound to Europe from 
Asia.
    We also understand that the airspace and aerodromes along the 
limited number of main routes between Asia and Europe could also be 
closed in the event of air-ground communications failure and that there 
is also a possibility that the routes over Afghanistan and Turkey might 
become unavailable and that aerodromes in Cyprus, Syria and Turkey 
might also become unavailable. We are suggesting that pilots require 
carriage of a minimum of an extra 30 minutes of fuel over and above the 
normal and contingency fuel usually carried in order to assist them in 
coping with Y2K induced delays and diversions.
    Moving outside of the areas already mentioned, we become a little 
less sure of the air traffic control systems in some areas to cope with 
the Y2K events. Over large areas of sub-Saharan Africa, for instance, 
the air traffic control system has never become fully functional and 
pilots rely on a ``do it yourself'' form of air traffic control called 
In-flight Broadcast Procedure (IFBP) by broadcasting their flight's 
crossing times and altitudes ``in the blind'' on a common radio 
frequency. Other aircraft then listen for these broadcasts and to 
minimize potential conflicts by changing their altitude so as to avoid 
the other aircraft.
    IFBP normally works in low traffic density areas such as Africa but 
still there but there are difficulties. Firstly, not all aircraft are 
aware of or use the blind broadcast procedure as in the instance of 
State aircraft. This actually happened when a US Air Force C-141 and a 
Luftwaffe Tupelov aircraft which had a mid-air collision off the coast 
of Namibia some time back. Neither aircraft was aware of the existence 
of the IFBP procedure or of each other's presence, primarily because 
the procedure is not recognized or promulgated by State authorities for 
fear that it would be a de facto admission that their air traffic 
control systems were critically deficient. Secondly, not all pilots 
using the blind broadcast procedure use the English language, so the 
effectiveness of the procedure is degraded.
    The reason that I am dwelling on this particular procedure as it 
applies to the airspace over Africa is because it is in the ICAO Y2K 
regional contingency plans as the primary means which will be 
implemented to prevent midair collisions if and when the Y2K problem 
becomes real and results in a complete collapse of air traffic control 
occurs. If ground based air traffic control does fail, pilots will be 
expected to revert to what is essentially a ``do it yourself'' air 
traffic control system.
    One might say that we at least have a last ditch electronic means 
for detecting other aircraft which pose a threat and avoiding midair 
collisions through the use of on board Airborne Collision Avoidance 
Systems (ACAS) in the event air traffic control fails and the In-flight 
Broadcast Procedure doesn't work. However, again, there are impediments 
to its full effectiveness even when ACAS is installed. In order to 
detect a potential collision, ACAS requires that the threat aircraft be 
equipped with an ICAO compliant altitude reporting radar transponder; 
and, at present there is no mandatory requirement for the carriage of 
this equipment by all aircraft. Internationally, the system is not 
required for installation until 2003. Even then, ACAS will not be 
required for cargo aircraft, nor is it required for installation in the 
smaller commercial and non-commercial aircraft or in the instance of 
State aircraft which are all aircraft in use for military, police or 
customs purposes.
    Aircraft manufactured in the Former Soviet Union (FSU) and flown 
domestically and in national airspace where ICAO compliant transponders 
are not required simply cannot be detected by ACAS. Russian 
transponders are coded differently and utilize meters instead of feet 
as their basis. As a result, there have been several near-misses in 
former Soviet Union airspace and there was a tragic midair collision 
between a Saudia 747 ACAS equipped aircraft and a Kazakh Illyushin 76 
cargo airliner over India in 1996 which 350 fatalities.
    In response to the unsure nature of what will occur during Y2K type 
of rollovers, and as a means for facilitating a safe landing at 
unplanned diversion airports, it was suggested to States via ICAO that 
during sensitive times that they consider making military aerodromes 
available to civil aircraft which require their unanticipated use and 
that civil aerodromes which have limited times of normal use extend 
their availability so as to make them immediately available to aircraft 
which are experiencing difficulties.
    Our specific recommendations made to ICAO during their 7 to 9 
September Second Global Y2K Contingency Planning Meeting aimed at 
dealing with potential flight safety problems during the Y2K rollover 
dates were accepted by the meeting for inclusion in an ICAO State 
Letter. I commend them to you for consideration:
    --Additional flight crew training for crews engaging in 
international flights which are specific to the Y2K contingency 
measures that will be implemented should be undertaken. These 
procedures will have subtle differences in application between 
different ICAO Regions. The training should also cover alternative air-
ground communications methods and procedures such as the use of HF 
radio patches and ACARS for communicating with ATC through the company;
    --In consideration of the fact that there are currently several 
versions of ACAS equipment and software now in existence and that audio 
and visual warnings displayed to flight crews can vary widely, it is 
believed that special emphasis should be given to flight crew training, 
to include flight simulator training so as to ensure that currently 
installed systems and indications are covered;
    --Aircraft which are flying during the rollover dates and times 
should carry an extra fuel reserve, perhaps an additional minimum of 30 
minutes, over and beyond the normal and contingency fuel which is 
normally carried so as to permit flight crews to deal with situations 
such as diversions around closed airspace and landing at unanticipated 
aerodromes;
    --An extra pilot should occupy the ``jump seat'' on the flight deck 
during rollover flights to assist in coping with the increased 
communications load during the potential application of ATS contingency 
measures and to assist in visually detecting potential traffic 
conflicts, particularly in areas where aircraft without Mode C 
transponders are permitted to operate and to mix with civil air 
transport traffic;
    --States will be encouraged by ICAO to curtail non-essential 
flights by military aircraft during the rollover period in order to 
minimize potential traffic conflicts;
    --States will also wish to maintain their guard against any 
possible rollover type failures associated with the unscheduled leap 
year rollover occurring on 28-29 Feb 99.
    We agree with the view that both ICAO and IATA have taken all 
reasonable measures that are within their means in dealing with the Y2K 
type of events. Mr. Chairman, we are most appreciative for the 
opportunity to have presented the views of the international airline 
pilot profession to this eminent national legislative body.
                               __________

                Prepared Statement of Thomas Windmuller

    I am Thomas Windmuller, appearing on behalf of the International 
Air Transport Association (IATA). I would like to thank the Committee 
for providing IATA with an opportunity to appear here today and explain 
what we and the international air transport industry have been doing to 
prepare for the Year 2000. The international airline community and the 
civil aviation industry at large have a good story to tell about their 
work in this field.
    The International Air Transport Association (IATA)
    IATA is the trade association of the world's airlines. Its 265 
Member airlines account for 98% of scheduled international traffic. 
Virtually every major international scheduled carrier, including all 
the major US carriers that provide international service, are Members 
of IATA. Many other carriers regularly use IATA standards and services. 
IATA's mission is to represent and serve the airline industry and to 
promote improvements in aviation safety and security.
    IATA and Y2K
    IATA has had a Y2K project underway since 1998 involving a range of 
both internal \1\ and external activities. The Committee has asked that 
we focus today on the readiness of airlines, airports and air traffic 
service providers around the world to meet Y2K disruptions. These are 
the subject areas that we, too, have at the top of our priority list 
since each is critical to the safety of flight.
---------------------------------------------------------------------------
    \1\ In regard to the internal activities, IATA provides a number of 
services to the international airline community, including several 
technical, operational, and financial services like the settlement 
systems in which airlines settle accounts with passenger and cargo 
agents. It is vital, both to consumers of airline services and to the 
airline industry itself, that these systems continue to operate 
smoothly through the millennium change. In addressing the Year 2000 
problem we have used widely-accepted methodologies and standards. IATA 
fully anticipates that all of its services will continue to operate 
smoothly through the millennium transition.
---------------------------------------------------------------------------
    IATA Member Airlines
    Although IATA is not systematically tracking individual airline Y2K 
readiness, we have been working with our Member airlines on the Year 
2000 issue for more than three years. In 1996, we established the Year 
2000 Group, a forum in which Member airlines could meet regularly to 
discuss their Year 2000 preparations in a non-competitive environment. 
Participants exchange information about problems encountered, solutions 
identified, and best practices established. Over the past three years 
the size of this group has grown steadily, and we now have Y2K contacts 
at all of our Member airlines, as well as at many non-Member airlines.
    IATA has collected information on the readiness of aircraft systems 
from the major airframe manufacturers, Western and Russian, and made 
this available to Member airlines as well as to other airlines 
participating in our Year 2000 work. IATA has also been in contact with 
the major computer reservation systems, which since early in 1999 have 
been accepting reservations for dates after the rollover.
    The IATA Year 2000 Industry Project
    In early 1998, IATA's Member airlines were already making 
substantial progress with their own Y2K preparations. However, 
knowledge about counterpart action by their key air transport industry 
partners was not widely available. The airlines realized that unless 
these partners--airports, air traffic service (ATS) providers, 
manufacturers and other key suppliers--were similarly active in their 
own Y2K preparatory work, the efforts of individual airlines would be 
insufficient by themselves. The Year 2000 problem is one that affects 
the entire air transport industry. Given the complex network of 
interlocking dependencies within the industry, it is important to 
ensure that all parts of the industry are moving forward together on 
this critical issue.
    It was with this objective that a group of airlines united behind a 
proposal to ask IATA to undertake a global, industry-wide initiative 
with our key air transport industry partners. In June 1998, the IATA 
Members at the Annual General Meeting voted unanimously to fund this 
initiative and to open participation in it not only to IATA Member 
airlines but also to non-Member airlines as well. Presently, about a 
dozen non-Member carriers, scheduled and charter alike, are 
participating in the project.
    Goals
    IATA's overriding goals for its Y2K Project are:
    First, to maintain the safety of the international aviation 
industry. Safety is always the air transport industry's highest 
priority. This is true of every aspect of our work. This priority will 
not change on December 31st. There will be no compromise on safety 
during the transition period, just as there is no compromise on safety 
on any other day of any year.
    Second, to ensure business continuity. To the maximum extent 
possible, consistent with safety, we want airlines to be able to meet 
the needs and preferences of their customers on January 1st as on any 
other day. While the evening of December 31st is traditionally a 
relatively ``slow'' period for the industry, there are always people 
who must or wish to fly on any given day for a variety of reasons. 
IATA's goal, as always, is to help our airlines provide a service that 
is responsive to this demand and to do so safely, reliably and 
conveniently.
    Third, to minimize inconvenience. Congestion and delays have become 
a regrettably increasing part of air travel, especially in regions of 
the world such as North America and Western Europe. Airport and air 
traffic control delays, snowstorms and other weather disturbances are 
problems that airlines face every day, particularly during the holiday 
season. Mechanical problems, labor disputes and other factors also play 
a role in the life of this industry on a daily basis. We know we will 
face these problems on January 1, 2000, just as we do on every other 
day. Our goal, therefore, is simply to minimize any additional impact 
on the industry--and more particularly on the passengers and shippers 
that rely upon this industry--by the so-called Millennium Bug.
    Specific Objectives
    When IATA first began this project in June 1998, we established 
five specific objectives:
      Create awareness amongst airports and ATA providers \2\ 
served by IATA Member airlines as well as amongst key industry 
suppliers;
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    \2\ For those unfamiliar with the term, ``ATS provider'' is an 
acronym for Air Traffic Service provider. It is usually a government 
entity, like the FAA, that provides air traffic control services to 
aircraft operators making use of its airspace. This space typically is 
above sovereign territory, but may include oceanic airspace or even 
space above adjacent territory, if that space has been assigned to it 
by specific international agreement. An ATS provider's tools include 
surveillance radars and telecommunications systems that permit the 
provider to observe, communicate with, and direct the operations of the 
aircraft flying in its airspace.
---------------------------------------------------------------------------
      Provide a common methodology to airports, ATS providers 
and cargo customs authorities to help them recognize and assess the 
impact of Y2K on their operations;
      Collect data from these industry partners about the Y2K 
programs they have in place and track their progress toward full Y2K 
readiness;
      Present this data to participating carriers in an 
electronically accessible form; and
      Encourage all industry partners to address and resolve 
these issues as quickly as possible.
    In June 1999, the IATA Member airlines unanimously voted to extend 
and expand the program through the first quarter of 2000. As is 
appropriate at this stage, we are now focusing our efforts on:
      Tracking the progress of our key industry partners in 
every area of the world;
      Encouraging airports and ATS providers to fulfill their 
responsibilities for ensuring the Y2K readiness of their operations;
      Working closely with the International Civil Aviation 
Organization (ICAO) and individual countries to develop or adapt 
existing ATS contingency plans to a Y2K environment;
      Promoting the development of airport business continuity 
plans as a joint activity between airports and the airlines that serve 
them; and
      Establishing ``Regional Coordination Units'' around the 
world to track developments on a real-time basis as each time zone 
rolls over on New Year's Eve.
    Project Partners
    Since its inception, the IATA industry initiative has been 
conducted with the full support of the ICAO. Over the past 15 months 
this cooperation has intensified, and we are now sharing all ATS-
related data with ICAO. Since Spring 1999, all visits to ATS providers 
have been conducted as joint ICAO/IATA visits, and the results have 
been shared with both organizations.
    IATA's key industry ally throughout this process has been the Air 
Transport Association of America (ATA). The ATA, in close cooperation 
with the Air Transport Association of Canada, is monitoring the 
progress of airports and ATS providers (FAA and NAV Canada) in the 
United States and Canada while IATA is performing this work throughout 
the rest of the world. All information collected under the auspices of 
ATA, ATAC or IATA is posted in a common database and is available to 
the Members of all three associations and other participating airlines.
    IATA has also developed a special relationship with the Airports 
Council International (ACI) on Year 2000 issues. ACI has been a firm 
supporter of the IATA initiative, promoting strong airline-airport 
cooperation on Y2K issues. Our ``Airline-Airport Liaison Program,'' 
which promotes the development of airport business continuity plans by 
airports and the airlines that serve them, is a joint IATA/ACI 
initiative.
    This project would not have been nearly as successful as it has 
been without the active support and participation of a number of other 
important industry players. These include various regional airline 
associations, such as the Association of Asia Pacific Airlines (AAPA), 
AITAL in Latin America, AFRAA in Africa and AACO in the Middle East. 
Several regional governmental organizations, including the European 
Civil Aviation Conference (ECAC) and EUROCONTROL in Europe, as well as 
the Latin American Civil Aviation Conference (LACAC), have also played 
very helpful and constructive roles. In the United States, ACI--North 
America, the Regional Airline Association (RAA) and other industry 
groups have actively supported the ATA's Aviation Millennium Project.
    Finally, and most importantly of all, it must be emphasized that 
this IATA program is not one that has been carried out exclusively by 
the Association on behalf of its Members, but through a team effort 
that had the active support and participation of our Member airlines 
themselves. Our Members not only funded the project, but committed 
staff, time and a great deal of hard work to carry out the data 
collection visits. These participating carriers continue to follow up 
with our industry partners to ensure that the information flows back to 
IATA on a regular and ongoing basis.
    Results to Date
    Raising Awareness: IATA does not believe there is any international 
airports that is not aware of the Y2K problem and its potential impact 
on the air transport industry. On the air traffic service provider 
side, we are certain that every ATS provider in every region of the 
world is aware of the problem.
    Common Methodology: IATA has distributed over 2,500 ``toolkits'' to 
airlines, airports and ATS providers around the world. These toolkits 
not only provide these organizations with the preferred IATA 
methodology--a methodology which conforms to all the widely accepted 
international standards on Y2K--but also includes an explanatory video 
to help these organizations through the Y2K preparatory process. These 
toolkits and videos were provided in a number of major world languages 
including English, French, Spanish, Portuguese, Russian, Chinese 
(Mandarin), Korean and Japanese.
    Throughout the second half of 1998, we also conducted 26 training 
seminars for airports and ATS providers on each of the major 
continents, attracting over 2,000 participants. These seminars were 
conducted in each of the eight previously mentioned languages plus 
German, Italian and Greek.
    Data Collection: To track the progress of our major industry 
partners as they address the Y2K problem, IATA has been collecting data 
on airports, air traffic service providers and cargo customs 
authorities around the globe. IATA's role is to serve as a central 
point of collecting this data and providing it to participating 
airlines. We do not provide an independent assessment of the data 
collected. Over the past 15 months, IATA teams, including airline 
representatives and specially trained external consultants, carried out 
visits to a majority of the world's ATS providers and to the top 71 
airports (as measured by annual passenger throughput) outside North 
America. Individual airlines, working on behalf of the entire airline 
industry, have carried out independent visits to several hundred more 
airports. North American airports were covered by our colleagues at the 
Air Transport Association (ATA) and the Air Transport Association of 
Canada (ATAC).
    As of early September we had obtained data covering more than 175 
ATS sites around the world, well over 1,200 airports (including North 
America) and over 100 cargo customs authorities. Information on many 
other key industry suppliers is also available to participating 
airlines in this rapidly growing database. The 1,200 airports from 
which we have received information include well over 90% of the top 330 
airports outside North America. (These figures were as of 3 September; 
additional airport information is being received and entered into the 
database.) One of the most important current objectives of the project 
is to obtain regular follow-up progress reports from each of the 
participating airports and ATS providers so that the data available to 
airlines is as accurate, complete and up-to-date as possible.
    All of this data is stored on a password-protected database that is 
jointly owned by the ATA and IATA. Participating carriers can access 
the database either through the worldwide web or with CD-ROMs that are 
updated twice per month. IATA's pledge to maintain the confidentiality 
of this database and disclose this information only to airline users 
has been critical to the success of our work in this area. It has 
enabled airports and ATS providers to be remarkably open with us about 
their Y2K programs. They have provided us with a great deal of 
confidential business information about their systems and individual 
components in these systems--information that they would not normally 
provide even to one another, let alone to their airline customers. This 
pledge of confidentiality has been respected throughout the project, 
thereby adding to the trust and cooperation that has grown with this 
initiative. IATA has not and will not publish any data, nor create any 
``blacklists'' or travel advisories, which would compromise the pledge 
of confidentiality we have given to all parties that have cooperated 
with our requests for information.
    We recognize the legitimate interest of national ATS authorities in 
each country, on behalf of their publics, in receiving information 
regarding neighboring states, particularly in the context of developing 
regional contingency plans. Therefore, and with the consent of the ATS 
provider organizations, we have been sharing with ICAO the information 
we obtain on ATS providers since the Spring of 1999.
    Contingency Planning: Over the past six months the breadth of the 
IATA industry initiative has increased significantly from data 
collection and updating to a number of new areas, one of the most 
important of which is business continuity and contingency planning. 
Contingency planning is something that the air transport industry 
undertakes every day of every year. Since this is an industry for which 
safety is the highest priority and which is committed to providing 
dependable service to its passengers and shippers, airlines, airports 
and ATS providers always have contingency plans covering almost every 
conceivable scenario.
    The existence of such plans provided this industry with a 
significant advantage in preparing for the millennium transition. 
Nonetheless, in every sector of the industry the existing plans have 
had to be adapted to a Y2K environment to envision the possibility in 
which multiple failures may occur and where the fallback for a failed 
piece of equipment cannot be an identical make and model on ``hot 
standby''.
    In the air traffic services arena, regional contingency plans, 
developed by sovereign states under the auspices of ICAO, have been 
finalized. ICAO and IATA have worked together in the development and 
adaptation of these plans in each of the major world regions. We are 
now working with ICAO to ensure that these regional plans fit together 
into a global network. Bilateral and multilateral letters of agreement 
will enable these contingency plans to be implemented, even across 
national boundaries, quickly and seamlessly from a pilot's perspective. 
To enable our participating airlines to remain informed about the 
development of the contingency plans, we have recently made available 
to them a contingency planning database which gives details on the 
ICAO-approved plans in each region.
    IATA is also working with major international airports around the 
world to ensure that they, too, are reviewing their existing 
contingency plans and adapting them to a Y2K scenario. It is important 
that this work be done in close coordination with the airlines serving 
an airport and with other key industry suppliers, such as those 
providing telecommunications, electrical power, aviation fuel and so 
forth. This ``Airports-Airlines Liaison Program,'' developed jointly by 
IATA and ACI, seeks to ensure that airports have the necessary business 
continuity plans in place, that they have been tailored to a Y2K 
environment in which multiple failures have been envisaged and planned 
for, and that these plans have been coordinated with the airlines 
serving the airport. A business continuity-guidelines booklet has been 
developed and distributed globally, both by IATA and by ACI.
    Rollover Coordination: During the actual transition period December 
31, 1999-January 1, 2000, ICAO and IATA personnel will be jointly 
manning a network of ``Regional Coordination Units'' in every part of 
the world. These centers, located in Bangkok, Brussels, Cairo, Dakar, 
Nairobi, Lima and Miami, will track developments across the globe as 
each time zone flips over from December 31, 1999, to January 1, 2000. 
ICAO's role in these regional centers will be to ensure an efficient 
flow of aviation-related information through official channels, from 
individual nations to ICAO and then out to all countries. IATA's role, 
in parallel with that of ICAO, will be to ensure that airlines, many of 
which will have aircraft in the skies at the time, will have access to 
this information as soon as possible. ICAO and IATA will each be 
manning their own ``Global Coordination Units'' in Montreal. These 
global centers will not only coordinate the work of the regional 
centers but will also maintain links with other global command centers, 
including one in Herndon, Virginia, that will be manned by the FAA, by 
our colleagues at the Air Transport Association (ATA) and by IATA. 
Other links will be established with the major aviation manufacturers, 
providers of services such as telecommunications, and the International 
Y2K Coordination Center.
    What we are Finding
    Based upon the data available to us, we are generally satisfied 
with the progress we are seeing amongst all sectors of the air 
transport industry. With regards to ATS providers, there has been a 
remarkable effort and progress in all regions of the world toward Y2K 
readiness. As part of the ongoing tracking of progress, IATA will 
continue to pay particular attention to the steadily declining number 
of ATS providers who have yet to complete their programs to ensure 
there are no significant operational concerns during the rollover.
    Similarly, approximately 70% of the airports that have provided us 
with information report that Y2K readiness work has been completed on 
over 60% of all systems. Indeed, 326 airports have already reported 
that they have completed work on 100% of all systems, and other 
airports are waiting until they have completed their work to report 
their status. IATA will continue updating this database until the end 
of 1999.
    IATA has a high level of confidence that the data we are collecting 
and updating is comprehensive. For example, in addition to the reports 
we receive from individual governments on air traffic services, we have 
also obtained information from the ATS providers themselves, from the 
manufacturers and suppliers of ATS equipment and from more than 140 
individual site visits we ourselves conducted. We are constantly cross-
checking our facts and our sources to ensure that our information is as 
accurate, complete and current as possible.
    Conclusions
    In summary, IATA is confident that the international civil aviation 
industry has solutions to this challenge well in hand. This confidence 
is based on the good progress we are seeing amongst our industry 
partners, on the existence of robust contingency plans--many of which 
get implemented successfully on a regular basis--and on the real-time 
tracking of developments that will take place during the rollover 
period. Nonetheless, we are not complacent. We know many organizations 
have not yet completed their Y2K preparations, and we will continue to 
monitor their progress through the end of the year.
    IATA is also confident that sufficient airspace capacity will be 
available under the ICAO ATS contingency plans for airlines to meet the 
projected levels of traffic during the rollover period. Airlines that 
choose to do so will be able to operate their normal year-end 
schedules.
    Notwithstanding all efforts by airlines, airports and ATS 
providers, it would be unwise to predict a flawless transition into the 
next millennium. There may be some slight delays, cancellations or 
other disruptions. We hope and expect that these inconveniences will 
not be significantly greater during the initial stages of the new 
millennium than they are on any other winter weekend in the Northern 
hemisphere. In the days that follow the rollover, as airlines begin to 
ramp up their schedules, congestion and delays could increase if these 
contingency plans are still in effect. IATA will therefore be pressing 
for an early return to normal operations as soon as we are confident 
this can be achieved without any compromise to safety.
    It is important to emphasize that these are inconveniences. We are 
very confident that with the progress being made by the air transport 
industry and the contingency plans that will be in place should 
anything unforeseen arise there will be no compromise on safety. As the 
head of one European air traffic service provider was quoted as saying 
recently, ``If anyone has real concerns about the Year 2000, tell them 
to book a flight. The one place I know they will be safe is on an 
airplane.''
    A role for the United States Congress
    IATA would like to take this opportunity to recognize the 
outstanding Y2K work performed by the Federal Aviation Administration. 
Above and beyond the excellent work FAA has carried out with its own 
Y2K program, Administrator Garvey and her team, including Ray Long, 
Mary Powers-King, Joe Morgan and Craig Lindsay, should be congratulated 
for the leadership they have demonstrated in the global arena. We are 
deeply grateful for the unwavering support they have provided to the 
industry worldwide on Y2K.
    IATA would also like to salute the work of our colleagues at the 
Air Transport Association (ATA) here in Washington. The very high level 
of Y2K readiness on the part of the air transport industry in this 
country is to a great extent the result of the leadership ATA has 
demonstrated through its Aviation Millennium Project. Both the ATA and 
the FAA deserve to be recognized by this Committee for their highly 
successful Y2K initiatives.
    Finally, IATA also wants to commend this Committee for its 
leadership in obtaining Congressional passage earlier this year of the 
so-called ``safe-harbor'' legislation, which provides limited liability 
protection for companies that voluntarily disclose the work they are 
undertaking to prepare for the millennium change. This legislation 
serves as a model for other national legislatures, a model that we have 
cited repeatedly over the past months. While a handful of countries, 
such as Australia, have passed similar legislation, their number is all 
too few. We would ask that members of the U.S. Congress use their 
contacts with legislators from other countries, through the North 
Atlantic Assembly for example, to encourage their assemblies to enact 
similar legislation.
    We appreciate the opportunity to appear here today to discuss one 
of the largest challenges ever faced by civil aviation, and we thank 
you for your continued interest in the problems faced by those who fly 
planes around the world and in the welfare of those who are flown.
                               __________