Implementation of the Technology Modernization Fund (TMF) for Federal Agencies
May 15, 2018
According to the Office of Management and Budget’s Matthew Blum, “The stars are aligning for agencies to think about how to improve their acquisition preparations and plans.” Blum goes on to say that, “Despite a legislative and policy push to stimulate innovation there is still a considerable cultural undercurrent that blunts progress.”
First introduced in 2016, the Modernization Government Technology (MGT) Act was approved and funded with in a year at the end of 2017. It has been touted by officials such as CSRA CEO Larry Prior as “…an important step in the journey to a next-gen federal government,” and as “an unprecedented opportunity for U.S. Government agencies to improve operational efficiency and decrease operational cost” by Rep. Will Hurd. The MGT Act allows agencies to make technological investments with the same level of flexibility as their counterparts in the private sector, and move beyond the stifling requirements of the “use it or lose it” game that has plagued agencies in the past.
There are two main provisions of the MGT act to help agencies modernize their IT: the Technology Modernization Fund and the IT Working Fund.
Technology Modernization Fund
The Technology Modernization Fund was created at the end of 2017 and gives federal agencies access to approximately $2.5 Million for the fiscal years of 2018 and 2019. This effort was led by Federal CIO Suzette Kent with the support of Alan Thomas (commissioner of the Federal Acquisition Service and the General Services Administration); Mark Kneidinger (director of federal network resilience at the Department of Homeland Security); Matt Cutts (acting administrator for the U.S. Digital Service); Social Security Administration CIO Rajive Mathur; Small Business Administration CIO Maria Roat; and Charles Worthington (CTO for the Department of Veterans Affairs).
The fund, essentially a loan, is earmarked specifically for IT Transformation. Agencies must submit proposals to the Board, who will subsequently evaluate based on financial, technological and operational criteria. This is not “free” money, however: funds awarded to agencies from the TMF must be used for transformation, and must ultimately be repaid. As of today, four agencies have already submitted proposals that have been approved.
The Working Capital Fund
Thanks to the MGT act, agencies now have the ability to create a working capital fund, specifically for IT Modernization Funds. According to a memo issued by The White House, the Working Capital Fund can only be used for:
- The improvement, replacement or retirement of existing IT systems with the purpose of enhancing the cybersecurity of existing systems or to improve efficiency and effectiveness of current workloads.
- To transition legacy IT systems to innovative solutions like commercial cloud and other technologies.
- To support agency efforts to provide adequate and cost-effective IT modernization, specifically surrounding cybersecurity.
- Pay back funds borrowed from the Technology Modernization Fund (TMF).
- Any program or activity that has not been denied or restricted by Congress.
The working capital fund (WCF) allows agencies to create true transformative change. The combination of TMF and the working capital funds give agencies a leg up by providing an immediate boost of funds and the ability to carry over any funds not used or saved by modernizing IT Solutions.
TMC, WCF and Unified-Communications-as-a-Service (UCaaS)
If your agency has not already begun the process of applying for TMF, and WCF, it is imperative that you start now. Policies from the last few administrations have demonstrated that cloud computing is the key to agencies to modernize. Unified-Communications-as-a-Service and communications is a critical solution for any agency, and the benefits are numerous. You can read more about the benefits of UCaaS here.