With a $1 billion cash infusion, relaxed repayment guidelines and a surge in proposals from federal agencies, questions have been raised about whether the board overseeing the Technology Modernization Fund has been scaled to cope with its newfound popularity.
What would you do with a billion dollars?
The Technology Modernization Fund (TMF) used to be one small way the federal government could help a few agencies push along their modernization projects with some extra support. But the fund has now taken on an new significance following a $1 billion investment in the American Rescue Plan, along with relaxed repayment guidelines and an aggressive cybersecurity agenda put forth by the White House.
With the new money and an unprecedented surge in proposals, questions arise about whether the board overseeing the TMF has been adequately organized and scaled to efficiently identify and implement projects capable of revolutionizing government technology.
Lane Becker, a former General Services Administration (GSA) official who helped stand up the TMF during its initial launch, said "the missing opportunity here is to think about how we spend money on technology in a new way."
The TMF board "could use the money to thoughtfully architect a structure that transforms the way we spend money on technology," Becker, who now leads the education non-profit Wikimedia, told FCW in a recent interview. "Or, we can take the billion dollars and do what we always do: Try to get rid of as much of it as possible, as fast as we possibly can, and shove projects through the door."
"My frustration is that the latter one is what appears to be happening," he added.
TMF proposals surge following $1 billion cash infusion
Prior to the $1 billion investment, the TMF funded 12 medium- and small-scale IT projects across seven agencies. Federal CIO Clare Martorana said at a May event that she expected to receive less than 100 "pretty robust" proposals ahead of a June deadline to begin priority reviews.
By July, Martorana told Congress the board had received 108 proposals from 43 agencies, totaling $2.1 billion in requests for funding. The board has continued to receive additional proposals since then, while accepting projects on a rolling basis and releasing key guidance for agencies hoping to gain more clarity around the process.
To cope with the surge in proposals, Martorana and other top board members began meeting multiple days a week to review projects ranging across four main priorities: modernizing high-priority systems, cybersecurity, public-facing digital services and cross-government services. The board also announced it was adding several alternative members after an influx in proposals following the relaxed repayment guidelines.
"The board and the [program management office] are adjusting, and we're scaling very quickly to meet the demand of proposals as they're coming in," Deputy Federal CIO Maria Roat said at MITRE's Center for Data-Driven Policy event in June. "We need to make sure that we maintain the quality, the governance and the rigor that made all of the prior awarded projects successful."
In an April letter sent to GSA and the Office of Management and Budget (OMB), the House Oversight and Reform Committee pressed both agencies to develop a plan to address how the program management office (PMO) supporting the TMF "will be scaled appropriately to handle the volume of project proposals from agencies."
Government Operations Subcommittee Chairman Rep. Gerry Connolly (D-Va.), who signed onto the letter along with four of his colleagues, told FCW he wanted to learn how the Biden administration was planning to "increase the capacity of both the TMF Board and program management office in order to accommodate the influx of agency proposals for TMF funds."
Board operations continue to scale as funding and interest boom
GSA did not answer questions about how many staffers worked within the PMO, but a spokesperson told FCW the office was "actively adding additional staff members from within the agency" and "looking at options including detailees from across the government for surge and expertise support."
"The Technology Modernization Fund Program Management Office continues to scale to meet the needs of the TMF including the $1 billion provided in the American Rescue Plan," a GSA spokesperson told FCW in an emailed statement. "During the budget formulation process, budget requests are developed with information known at that time. GSA will continue to scale the PMO to support the full needs of the TMF."
Congress first allocated $100 million to the revolving fund in fiscal year 2018, followed by annual investments of $25 million over the next two years. Officials said the initial approach to building the fund allowed the board to begin putting in place efficient and rigorous oversight procedures, all while ensuring the several modernization projects it supported were successful and that loans were being repaid on time.
However, strict repayment requirements made applying to the TMF less enticing for many agencies, as lawmakers called for relaxed repayment guidelines and increased funding to help move along government-wide cybersecurity and modernization efforts.
Those calls were answered earlier this year when the new administration included a $1 billion investment for the TMF in the American Rescue Plan, and relaxed repayment guidelines were announced for projects addressing critical cybersecurity and modernization issues. After decades of underinvestment in IT across government agencies, the TMF became a symbol of hope for a consistent and increased cybersecurity investment -- and even a federal cloud modernization moonshot.
But questions still remained over how projects would be chosen and whether top board members had enough support from the PMO to focus on oversight rather than identification and testing. Another former GSA official who asked not to be identified also expressed concerns over whether the agency had appropriately scaled the PMO to cope with the surge in proposals following new investments and relaxed repayment guidelines.
That official said the Trump administration previously treated the TMF as "a risk to be managed, rather than an opportunity to be embraced," housing the PMO under the deputy administrator instead of within the Technology Transformation Service (TTS) offices, where some of the GSA's top talent resides.
Learning to scale from successful modernization efforts
Still, many observers continue to support a slower approach to scaling up the TMF board and PMO now that the fund has transformed into a much larger entity.
The most successful pattern for government modernization efforts have included hands-on involvement from senior-level staff, followed by effective scaling based on lessons from numerous cycles of learning and iteration, according to Rohan Bhobe, CEO and co-founder of the digital services firm Nava Public Benefit Corporation, who played a significant role in fixing the Healthcare.gov website following its botched rollout.
"Unsuccessful modernizations typically have a shape where they're trying to do everything at once, they spin up hard and fast, so you get a lot of new people in at the same time you're trying to build an organization," Bhobe said. "If instead you can have a more gradual, glide-path to successful outcomes, those have been much more consistently successful for the type of work and type of complexity these modernization projects have to deal with."
"You don't want to scale something that doesn't work, but it's important that Congress asks for a plan," he added.
GSA's 10x Program is one the agency could potentially model while considering how to scale up the PMO and TMF board, Bhobe suggested. Initially created in 2015 and launched in 2018, the program was established to fund innovative ideas from civil servants across the federal government and slowly expanded into the larger entity it is today.
The 10x program "created an environment in which people were comfortable taking risks," Becker said, noting how GSA allowed for projects the program was funding to fail in order to learn from those pitfalls.
Dave Wennergren, CEO of the American Council for Technology and Industry Advisory Council (ACT-IAC), said "it seems likely to me that more people will be needed" within the PMO to support the dramatic increase in funding, which he added "will represent a significantly increased pace of project review and approval."
"IT Modernization is still a crucial issue, with many agencies still spending the vast majority of their IT budgets sustaining aging legacy infrastructure and systems rather than implementing new, digital-age solutions," Wennergren told FCW. "The government should be applauded for rapidly requesting and reviewing new project proposals, but I do think that some process changes may be needed, both to accelerate and streamline the process for identifying, approving and implementing projects and also to consider a combination of 'push/pull,' considering some directed projects in addition to calls for proposals."
Whether the TMF is able to fund transformative projects while remaining a sustainable entity at current operating capacity remains to be seen. Last month, the White House urged Congress to dramatically increase the $50 million it proposed for the fund during the fiscal 2022 appropriations process. The administration previously requested $500 million.
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