The MGT Act is law. Now what?

Congressional appropriators still must allocate the money for agencies to use the central fund MGT creates. And if they do, how can agencies take advantage of the newly created modernization funds?

Shutterstock ID 623134292  By Dmitry Guzhanin.

As part of the 2018 National Defense Authorization Act, the Modernizing Government Technology Act finally concluded its long journey to the president’s desk, where it was signed into law Dec. 12.

The law creates working capital funds for IT projects at CFO Act agencies that don’t already have them, as well as a central modernization fund housed by the General Services Administration. While the White House’s budget proposed $228 million for such a fund, appropriators have yet to allocate the money -- and there's no guarantee they will do so.

In securing that funding for fiscal year 2018, “we’re not sure how successful we’ll be given the other priorities” facing legislators, said Mike Hettinger, a former Hill staffer and currently a lobbyist specializing in procurement and IT issues. “Fifty-fifty is probably a fair guess at this point.”

Rep. Will Hurd (R-Texas), the law’s chief sponsor, has said he thinks the “core part” of the law is the agency-level working capital funds, which agencies would fund with savings banked elsewhere. But if the central fund does receive its money for FY18, what kinds of projects can agencies tackle with it?

Former federal CIO Tony Scott told FCW the projects he’d prioritize would be replacing infrastructure and applications that pose a high cybersecurity risk, legacy systems that are costly to operate, and IT that “could have a significant positive impact on the [citizen] user experience”

“I would also favor projects that have some cross-agency impact, specifically where there is an opportunity to use a common solution,” he added.

The Office of Management and Budget, which will run the board to review and approve which projects receive funding under MGT, also offered some clues about what sorts of projects it would be prioritizing in its Report to the President on Federal IT Modernization. The final version of that report was released Dec. 13, and highlights network modernization and consolidation, cybersecurity, shared services, adoption of commercial cloud as priorities for improved service delivery.

As the MGT law itself is something of a proof of concept, OMB “is looking for quick wins,” said Hettinger. He added that agencies’ ability to align their proposals with the modernization report, as well as their track record in modernization projects, would factor into their approval.

Even for agencies don’t have a strong reputation for modernization success, MGT provides them the chance to turn that around, said former longtime CIO Steve Cooper. He suggested agencies convene working groups to come up with a business cases for simple, short-term projects they could tackle with a small funding boost to increase their chances of getting approved.

Cooper, whose federal resume includes stints as CIO of the Departments of Homeland Security and Commerce, said that based on his experience in IT acquisition and budgeting, his ceiling cost for MGT projects would generally be around $10 million, in order to make sure agencies don’t “bite off something that’s too big” for them to pay back.

To that end, he cautioned against using MGT to overhaul large, complex infrastructure, such as entire financial management or human resources systems.

In addition to moving to the cloud and improving continuous monitoring programs, Cooper suggested using MGT to deploy commercial tech in customer assistance — for instance, chat bots — as inexpensive ways to improve consumer-facing services, increase efficiency and reduce headcount, especially of contractors.

And despite the promise of the law, Cooper said he thinks there will be CIOs who won’t use funds.

“The repayment thing, I think, is daunting to some CIOs” whose plates may be full with lingering open oversight recommendations and pressure to improve Federal IT Acquisition Reform Act scores, he said. “Not because they don’t understand it or can’t figure it out. They’re uncertain about how to figure out a project that would enable enough combination of savings” and efficiency that they can pay back within the three-year window.

Cyrrus Analytics Principal Rich Beutel, who helped draft the FITARA legislation as a senior staffer on the House Oversight and Government Reform committee, said while he expects MGT will allow agencies to tackle more priorities than they would without it, he agreed that there will be some that choose not to.

“All you can do is give the carpenter the tools,” he said.

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