The Federal Aviation Administration announced Friday it has upgraded more than two thirds of its most important air traffic control computers for compliance with the year-2000 problem. The announcement, which puts the FAA has well ahead of its own milestone of 60 percent compliant by August 1998, makes it significantly less likely that critical systems will fail as a result of the Y2K bug. The FAA has said it plans to be in full compliance by June 1999. The announcement also marks a dramatic turnaround for the FAA, which fell under intense criticism from the Clinton Administration earlier this year for failing to properly assess the issue. The Y2K problem arises because early computer programmers designed systems to record dates using only the last two digits of the year. At the time, memory was extremely expensive, and shaving each mention of a specific date from four digits to two saved a significant amount of space. If left uncorrected, these systems may interpret the year 2000 as 1900, resulting in critical errors and system crashes. Analysts attribute at least part of the FAA's progress in part to a huge break the agency got in July when technicians addressing the problem found that one of its most critical IBM mainframe computers will not be affected by the Y2K bug. The discovery came despite indications from the computer's manufacturer that repairs could be made to the system. That computer, which is used in the nation's largest air traffic control system, doesn't store dates in a two-digit format and will not experience problems when calendars roll over to the year 2000. It is, however, expected to fail in the year 2007, when dates will roll back the year 1975. The Clinton Administration has set a goal of total Y2K compliance by all government agencies by Sept. 30. That date, which allows for at least nine months of testing, also permits a certain amount of leeway for unanticipated problems. But since even a minor, unforeseen glitch in a critical computer system could ground aircraft from coast to coast, the FAA still plans to approach the new year with extreme caution. Even if the FAA reaches total compliance, the agency plans to limit air traffic on Dec. 31, 1999, spelling significant ground delays at the end of what promises to be a banner holiday travel season. The FAA also expressed concerns that despite its best efforts, noncompliance in other countries could undermine passenger safety abroad. Experts have estimated that even if a small percentage of computer systems fail as a result of the bug, services and utilities could be adversely affected. In a recent survey of managers in virtually every government sector, nearly respondents said they expected some degree of disruption as a result of the bug.