October 1, 1999 Web posted at: 12:30 p.m. EDT (1630 GMT) by Daniel Verton

From...

(IDG) -- The Defense Department donated or sold hundreds of thousands of computers, medical devices and other electronic equipment to state and local agencies, hospitals and other public institutions that could fail to operate because of Year 2000 problems.

In a report released this week, the Pentagon's inspector general found that many of the 340,000 excess medical devices and 77,900 excess computer systems donated or sold by DOD between Oct. 1, 1998, and March 31, 1999, may not have been Year 2000-compliant and could fail to operate properly after Dec. 31.

"The medical property included devices critical to health and safety, such as anesthesia apparatus, fetal heart monitors and X-ray equipment," the report stated. However, auditors admitted that the list of 340,000 medical devices also included many items that are not deemed critical to public health and safety and do not rely on date-dependent computer microchips.

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In one case, the Naval Medical Center in Portsmouth, Va., transferred 9,000 pieces of equipment to the Defense Reutilization and Marketing Service -- the DOD agency responsible for disbursing equipment that is no longer needed -- for sale or donation to other institutions without assessing any of them for potential Year 2000 problems.

In fact, of the 9,000 items cited, 2,000 posed a high or medium health risk, the report stated. According to the IG, plans called for these items to be transferred or sold to the DOD Humanitarian Assistance Program, the Indian Health Service, state and local agencies and the general public.

In addition to medical devices, the Defense Information Systems Agency and the Defense Logistics Agency sold or donated more than 77,900 pieces of computer equipment to various federal, state and local law enforcement agencies that also may be at risk of Year 2000 failures.

"DISA did not notify recipients that equipment may not be Y2K compliant or provide a disclaimer that equipment was made available without warranty for fitness of use," the IG report stated. The equipment transferred to law enforcement agencies included various communications security and cryptologic devices, radio navigation equipment and electronic countermeasures equipment.

In his response accompanying the report, Marvin Langston, DOD's deputy chief information officer, said the department agrees with the findings of the IG report and is changing its Year 2000 Management Plan to address the disposal of Year 2000-sensitive equipment. "Because of the potential risk to the general public, this document also addresses biomedical equipment turned in to the Defense Reutilization and Marketing Service," Langston said.

However, Rear Adm. E.R. Chamberlin, deputy director of DLA, which oversees the various DRMS facilities throughout DOD, said the IG report "exaggerates" the Year 2000 risks associated with excess and surplus equipment, particularly medical equipment.

"We offer excess and surplus equipment on an 'as is, where is' basis, with no express or implied warranties for fitness of use," Chamberlin said. "DLA reviewed medical items [in the categories audited] and only .2 percent were found to have an embedded chip and none to be date-sensitive," he said.