Will the government see readiness only in black and white? Or will it accept shades of
gray for commercial products such as Microsoft Windows NT 4.0, which Microsoft Corp. calls
“compliant, with minor issues”?

Last month a panel of experts dissected legal issues between the federal government and
its information technology contractors.

They came up with few answers but lots of good questions.

Washington contract lawyers John E. McCarthy Jr. of Crowell & Moring and John J.
Pavlick of Venable, Baetjer, Howard & Civiletti put their fingers on several trouble
spots where they think disputes might be unavoidable.

Precision parsing. The language of the Federal
Acquisition Regulation, which requires and defines year 2000 readiness, does not tell
agencies how to proceed. Nor does it tell them what to do after Jan. 1, 2000, if some of
the systems they bought fail to work as promised.

Agencies have tried to do the right thing by including year 2000 warranty clauses that
define failures as defects that require repair or replacement.

But not all agencies have stuck with the standard clause developed by the General
Services Administration.

Contractors are troubled by the proliferation of divergent contract language and
additional warranty requirements that they view as unfair. In that category are clauses
seeking guarantees against performance slowdowns or restricting manual intervention to
achieve operation—such as turning a computer off, then on again.

Changing in midstream. What has soured contractors even more, McCarthy said, are agency
efforts to add year 2000 requirements to existing contracts, including computer service
contracts. NASA directed its contracting officers last year to require that any IT
provided, operated or maintained under existing contracts be year 2000-ready.

The onus of proving readiness falls on the government as part of its acceptance

Contractors can file claims for adjusted compensation, or they can refuse to perform
the additional work and risk losing their contracts, McCarthy said. Some agencies have
coerced vendors into signing year 2000 contract modifications without offering extra
compensation, he said.

The situation has frayed the nerves of contractors already nervous because they can be
punished for claiming something is year 2000-ready, even if they know it is not.

—Florence Olsen

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