Accelerating modernization with an extra $1B

tech budget 

The passage of the American Rescue Plan Act of 2021 provided good news to those who care about accelerating government mission outcomes, with significant funding made available for technology modernization, cybersecurity, digital services and customer experience. Of particular note was the provision that added a billion dollars in funding for the Technology Modernization Fund (TMF). 

The TMF was initially established as a part of the Modernizing Government Technology Act in December 2017 to help accelerate information technology modernization efforts at federal agencies. At the time, many federal agencies were spending 80% or more of their annual IT budgets on sustaining aging legacy infrastructure and systems rather than implementing new, digital-age solutions. The premise was sound; by providing a cash infusion to help jump-start modernization efforts at an agency, the TMF could help organizations break free from legacy solutions that consumed their budgets and anchored them to infrastructure and software no longer supported by the manufacturer. While the $175 million provided to the TMF in its first few years of operation may seem like a drop in the bucket compared to the $90 billion annual Federal IT budget, the projects funded through the TMF have focused on important efforts to advance the modernization plans of several agencies.

Given this backdrop, the announcement that the TMF would receive an almost tenfold infusion of cash has captivated the interest of the federal technology market and is worthy of some attention as to how to effectively use these available funds.

It’s important to first focus on suitable ways to spend modernization funding. While a list of potential funding priorities is extensive, great good would come from focusing on investing in: 

  • further accelerating the migration to the cloud;
  • addressing the thousands of legacy systems and applications that still exist;
  • digital transformation efforts (with a focus on customer experience);
  • data availability/analytics;
  • system resiliency; and
  • the adoption of emerging technologies to include intelligent automation, artificial intelligence, the Internet of Things, augmented/virtual reality, etc.

Regardless of the exact priority order, all modernization efforts must ensure that enhanced cybersecurity is indeed “baked in” to the solution, rather than “bolted on” as an afterthought.

Second, with a set of priorities well-articulated, it is crucial that the process for identifying, approving and successfully implementing projects that use the funds be accelerated and streamlined. With less than $100M cumulatively awarded in TMF projects, the process must be optimized to ensure the timely flow of funds for new projects.

Finally, it is crucial that our collective goal is a focus on mission outcomes. TMF projects must deliver results that matter and demonstrate measurable improvements in the delivery of services.

We are at an inflection point. After years of funding the TMF in small bites, Congress has dramatically increased the funding and priority of this work. Investments must be made and measurable outcomes achieved in rapid fashion. 

If the fund is only drawn down by a small percentage a year from now, or if quantifiable improvements can’t be celebrated, it is doubtful that there will be any appetite for future significant additional funding. While a billion dollars should make a noticeable difference, we should remember that it will take far more than that to transform the entire federal technology business. IT modernization must keep up with the pace of technology change. We have an opportunity today that we must seize and not let pass us by.

About the Author

David M. Wennergren is the CEO of ACT-IAC, the national non-profit public-private partnership dedicated to advancing the business of government through the application of technology. Follow him on Twitter at @davewennergren.


  • FCW Perspectives
    remote workers (elenabsl/

    Post-pandemic IT leadership

    The rush to maximum telework did more than showcase the importance of IT -- it also forced them to rethink their own operations.

  • Management
    shutterstock image By enzozo; photo ID: 319763930

    Where does the TMF Board go from here?

    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.

Stay Connected