Modernization

Scott: ITMF paybacks won't be an issue

Federal CIO Tony Scott is backing a $3.1 billion revolving fund for IT modernization projects, but is facing headwinds in Congress.

If federal IT officials get access to a pot of money via a proposed $3.1 billion IT modernization fund, they're going to have to get used to the idea of paying the money back.

"I know paying back can be a weird concept for my federal friends," said federal CIO Tony Scott, because they're used to getting appropriated funding. However, agencies using the fund, will save more than enough to reimburse the fund, he said.

In June 29 remarks at Citrix's 2016 security summit, Scott said the fund, which is still awaiting action in Congress, would cause a dramatic shift in the cost model for IT spending at federal agencies.

The fund, proposed in the president's Cybersecurity National Action Plan, would require agencies to build business cases for replacing their aging, inefficient and expensive-to-operate legacy systems.  For proposals that meet the criteria, agencies would essentially get a loan from the fund to build out a more efficient and modern replacement.

Scott, who used to be Microsoft's CIO, said he had used a similar IT project capitalization program in the private sector. "I did it at Microsoft," he said. "We established an automatic replacement program for servers."

 "In five and a half years, we didn't need incremental funding," Scott said. "We rode the technological wave."

Speaking earlier that same day at a NextGov event on Federal IT Acquisition Reform Act implementation, Scott was even more more blunt about agencies' obligations to pay back into the fund. 

While he expressed confidence that savings would cover the costs "in most cases," Scott said the ITMF would essentially involve written loan agreements, and that "there is no student loan forgiveness in this program." 

"You've gotta get the commitment up front," Scott said at the NextGov event. "It's a contract that you write -- no matter what happens, the money is coming back."

He also noted that there are precedents for such arrangements, like the General Services Administration's building fund.  And he acknowledged that the Office of Management and Budget, GSA (which would manage the fund) and congressional appropriators would all need to commit to holding agencies accountable.

Other speakers at the NextGov event were more skeptical, however.   Dave Powner, the Government Accountability Office's point man for IT oversight, said, "There's a lot of questions with the fund about how the payback would work."  

And Madison Smith, and legislative assistant to Rep. Will Hurd (R-Texas), noted that "Congress' ultimate power is the purse strings." Legislators are warming to the idea of ITMF, he said, but "I think there needs to be better answers on how the money will go out and be paid back."

 When asked by FCW about the ITMF's progress on Capitol Hill, Scott said he was optimistic given the emergence of bipartisan support.

"The talk has changed about whether it's a good idea, to 'how do we pay for it?" he said. That shift in tone, he said, signals some headway.

Both Powner and Smith, however, said the chance of congressional approval for ITMF was 50-50 at best. Smith said alternative approaches were being discussed on Capitol Hill. 

Troy K. Schneider contributed to this report.

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at mrockwell@fcw.com or follow him on Twitter at @MRockwell4.


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