IT Modernization

Where the MGT money will go

Shutterstock images (honglouwawa & 0beron): Bitcoin image overlay replaced with a dollar sign on a hardware circuit. 

The Modernizing Government Technology Act is set to hit the House floor on May 17, but the Office of Management and Budget is already thinking about who is going to get the $500 million in upgrade funding the bill authorizes.

The bill sets up a $500 million central fund at the General Services Administration. Agencies apply to a "business board" run by the Office of Management and Budget that will review their  pitches to receive funding.

Acting Federal CIO Margie Graves is setting up the OMB review process, according to Rich Beutel, principal of Cyrrus Analytics.

"They want to make sure that who they give the money to can actually fulfill the objective," he said in a talk at the Advanced Technology Academic Research Center’s Cloud Security Alliance Summit on May 16.

"It's not a lot of money, and they don't want to give it to folks who would fail. So one of the biggest criteria for getting access to that money is that your shop is quality and capable and will be successful," Beutel said.

Former Federal CIO Tony Scott's draft policy for IT modernization is a helpful guide, Beutel said, but he added that "it's not clear if the new administration is going to adopt all of his criteria."  He expects that "cybersecurity needs and vulnerabilities are going to be a key attribute of that business case" agencies will need to make.

Beutel, who helped draft the Federal IT Acquisition Reform Act legislation as a senior staffer on the House Oversight and Government Reform committee, said that MGT "is not a panacea" for federal IT shortcomings, but added, "we think this is the last missing piece of FITARA."

Most of the modernization efforts envisioned by the MGT Act will take place at agencies via working capital funds. The bill incentivizes agency leadership to fulfill its objectives by allowing agencies to keep their savings from the IT upgrades for three years. 

Richard Spires, who served as the CIO at the IRS and the Department of Homeland Security, said he was a "big believer" in the bill's savings provision because agencies can bank savings, allowing them to worry less about annual appropriations -- and the almost yearly threat of continuing resolutions and possible shutdowns.

Former CIO of the Department of Health and Human Services Frank Baitman said that the idea of using agency working capital funds is "incredibly useful … because it provides flexibility" for the agencies to move money so they can tackle agency priorities, such as IT modernization.

Beutel said the bill would authorize agencies, "to the extent they don't have" capital funds for IT modernization, to stand them up. He added his support for using the working capital funds as a funding mechanism because "they're well known and understood" by agency leadership.

Beutel acknowledged that some chief financial officers and appropriators don't like the working capital funds because there's been "a history of abuse in certain agencies." However, he pointed out that this time around, there are protections in place -- including strict and intense oversight from OMB -- to help prevent the spending vehicles from turning into "a slush fund."

While the new, slimmed-down Congressional Budget Office score bodes well for House passage, there's still work to be done on the Senate side.

Beutel said that "there have been conversations with Senate appropriators," but galvanizing Senate support is ultimately incumbent on the Senate bill's co-sponsors, Jerry Moran (R-Kan.) and Tom Udall (D-N.M).

About the Author

Chase Gunter is a former FCW staff writer.


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