How Government Agencies Can Best Utilize the Technology Modernization Fund to Meet IT Modernization Goals

The Technology Modernization Fund (TMF) was first created back in 2017 as part of the Modernizing Government Technology Act. Its purpose was to be a self-sustaining pool of funds where agencies could apply for loans for technology projects. In the years since, the fund has been underutilized at best, with only $175 million in funding made available ($100 million initially, followed by $25 million each in 2018-2020) and only ten small to medium-scale IT projects worked on using TMF dollars. Part of this was due to the need to pay back the loan in short order and since many critical IT projects’ base purpose is not to create revenue, funding was unavailable to pay back the loan.

However, in the beginning of 2021, this all changed with the passage of the American Rescue Plan Act, which provided a $1 billion infusion of cash, quintupling the size of the fund overnight. This sudden increase in visibility and available dollars for the TMF brought a great deal of attention to the renewed interest in the TMF, the huge influx of cash, and the emphasis on IT Modernization projects at the federal level. As a result, organizations faced the question—where do we start?

To help you get started, we ‘ll further break down these recent updates to the TMF and provide examples to show how these changes can impact your organization’s IT modernization efforts.

The possibilities of projects that can be funded with TMF funds are nearly endless, and the stimulus itself gave no direction on how the money should be used. Fortunately, the TMF Board issued guidance on the types of projects it intends to prioritize from a broad set of modernization needs. Of key interest are projects related to COVID-19 response and cybersecurity.

The TMF’s project priorities include:

  • Modernizing high priority systems
  • Cybersecurity
  • Public-facing digital services
  • Cross-government collaboration / scalable services

In addition, the TMF Board’s guidelines on the American Rescue Plan Funding calls for proposals that reach across the Agency’s shared services, with an emphasis on infrastructure that provides a foundation for the modernization of digital services. Proposals therefore should not only focus on the unique aspects of a given area, but also how they work together to advance the Agency’s mission. This can include tying TMF investment to an Agency’s overall strategic plan or recent budget planning proposals. Agencies will also want to focus on business process improvement and customer satisfaction. The integration of governmentwide modernization with agency-specific digital investment is an opportunity for investment in systems and applications that can provide an improved customer experience.

The TMF Board also adjusted repayment requirements because requiring full repayment was a high barrier for project submission. There are now three tiers of repayment (including partial and minimal), and Agencies can suggest the repayment model that best meets their needs during the initial proposal process. According to the Board: “If your agency has a project that would produce significant positive impact or would address critical security or capability gaps, we strongly encourage you to submit an initial proposal to the Board for consideration.”

One example of an agency that is proactively taking advantage of the new funding is the Department of Homeland Security (DHS) that recently sought TMF money in support of four projects. DHS is looking to identify common problems and challenges across the department and set up systems and structures that allow DHS to modernize in common, aligned ways, across components and systems. This approach capitalizes on the TMF Boards’ priority to select projects “that cut across agencies, address immediate security gaps, and improve the public’s ability to access government services.”

Another example that the Federal News Network reported on is the Federal Trade Commission. At the Professional Services Council’s Tech Trends conference in May, FTC CIO and CDO, Raghav Vajjhala, said that offering flexibility around the payback model provided more reason to submit a business case to the TMF board. “I think the new model that they put out for the modernization fund is trying to streamline the overhead and bureaucracy of the process so they are trying to encourage more good ideas up front as much as they can,” explains Vajjhala.

IT Modernization has more visibility in government policies, funding, and priorities than ever before. The TMF board recently added additional members and is working to review initial proposals in order to get money out the door quickly and will continue to analyze Agency business cases as they come in throughout the year. Government organizations should utilize the TMF to help expedite IT infrastructure improvements, especially given recent cyber-attacks such as SolarWinds and the Colonial Pipeline. The time to act is now.

If you need more assistance, the TMF offers help preparing your submission. Along with providing documents, templates, and a FAQ, the TMF also provides support with project selection and prioritization, strategic project planning, proposal development and review, and ongoing project support and oversight.

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