Controversial Y2K Bill Exposes Industry Fault Lines</

The recent push in Washington to shield software vendors from Y2K lawsuits triggered an intense debate on who should ultimately bear the financial burden for Y2K. On one side, a coalition of 80 industry groups (both IT and non-IT) sought to stem a potential wave of lawsuits that could drive the costs of Y2K issues from the billions into the trillions of dollars. On the other side, opponents of the measure said corporate customers and consumers should not bear the brunt of paying for a programming error.

As of press time, the House had voted 236-190 in favor of the bill. This puts the onus on the Senate to vote on a compromise bill that will avert a likely Clinton veto. The administration has threatened to veto the bill on the grounds that it may strip consumers of their rights.

Such protection would "prove extraordinarily helpful in preventing Y2K problems from triggering chaos in the legal system and throughout the entire economy," says David LeDuc, spokesperson on Year 2000 issues for the Software & Information Industries Association (SIIA, Washington, D.C.), formed from the merger of the Software Publishers Association and the Information Industry Association. "People that deal with large systems know Y2K is a very complex issue. Most of our member companies are taking steps to fix the problems, and have made honest and extensive attempts to fix their products and reach out to their users, and make sure that everything goes smoothly." More will get accomplished by mitigating, not litigating, he emphasizes.

However, forces within and outside the industry equate date-deficient software to shoddy products, and feel their manufacturers should not be let off the hook. The Association of Trial Lawyers of America and various consumer groups have lined up against the legislation. Leon Kappelman, Ph.D., IS professor at the University of North Texas and co-chair for the Society for Information Management's Year 2000 Working Group, recently testified before Congress, arguing that the proposed bill shifts the cost of Y2K remediation to customer companies, "and is excessively harsh on small businesses who cannot afford to sit around while their vendors utter the right words to comply with the law and thereby get more time to stall."

Sadly, it appears that many vendors still aren't getting a grip on making their code ready for 2000. Infoliant Corp. (Pittsburgh, Pa.), which tracks Y2K readiness information from more than 500 manufacturers with more than 30,000 products, reveals that many products are not even being tested by software and hardware manufacturers. Nearly 600 changes in Y2K compliance were reported in March alone, which is a record rate, Infoliant reports. More than one-third of these were "negative changes," that is, a shift from compliant status to "Not Compliant," "Action Required," "Pending Evaluation" or "Vendor Will Not Test."

Already, fear seems to be overpowering the vendor community. Janet C. Wylie, president and CEO of HCL James Martin (Washington, D.C.), a Y2K remediation vendor, finds that her clients "are being bombarded with messages from attorneys, who have started entire practices centered around Year 2000 litigation, saying they can sue anybody and everybody who has touched their systems in the past several years." As a result, some firms are simply refusing to do Year 2000 work because of the threat of costly litigation.

"All of us in the business world understand our obligations to our clients to provide effective and safe products and services, and we understand our contractual liability for failing to exercise due care in performing these obligations," she adds.

However, Kappelman brands the IT business as "a wasteful mess of poor quality and low interoperability. Legalizing poor quality software and destruction of data assets benefits no one." In many cases, IT managers themselves allowed this situation to get out of control, he says. "What's needed is real dialogue between IT vendors and business people," Kappelman continues. "If the IT people in companies don't start representing the interests of their employers better, instead of chasing one geeky challenge after another, they may find that they have become powerless, or even worse, obsolete."