OMB's user guide to the MGT Act

The Office of Management and Budget is working on a rules-of-the-road document to cover how agencies can seek funds under the Modernizing Government Technology Act.

In a 19-page draft memorandum to agency heads obtained by FCW, OMB lays out what information agencies should include in their project proposals to receive money from the centralized modernization fund, housed by the General Services Administration, as well as how to navigate using their IT working capital funds.

The draft dates to January 2018. It specifies that the deadline for submissions for the first round of MGT funding is Feb. 16, after which time projects "may not be eligible for primary consideration."

It's not clear if this deadline is still in effect, or if it has been extended pending the publication of the final guidance or because of the brief government shutdown and the threat of more appropriations lapses to come.

While the MGT Act was authorized in the 2018 defense bill, money cannot be disbursed unless the central fund at GSA called for in the MGT Act is funded in an appropriations bill.

OMB did not immediately respond to FCW's request for comment.

The document provides a framework for projects to apply to be funded, and guidance on what to do if agencies aren't able to pay back funds into the general fund after five years. Additionally, the document lays out a path for agencies to use MGT funded projects with common applications as shared services across agencies.

While the goal of MGT is to jump start projects that will generate future savings for agencies, the document makes clear that reimbursement is a condition of accepting MGT funds and is "not contingent upon the achievement of project-related savings." Reimbursement funds can come from any budget account supporting IT activities.

The seven-member Technology Modernization Fund Board -- which will include the federal CIO, a senior GSA official "with technical expertise in information technology development,” a member of the Department of Homeland Security’s National Protection and Programs Directorate and four at-large members appointed by OMB Director Mick Mulvaney -- is scheduled to be established March 12, 2018. All project proposals are subject to the board’s evaluation and approval.

Even after the board initially approves a project, the OMB guidance states that the board will have the authority to conduct regular reviews of each project and to vote whether to recommend to the GSA administration to withhold future funding. 

The guidance advises that funding requests should not be disproportionately back-loaded and should include between two and six incremental funding transfers throughout the lifecycle of the project. Agencies will not be allowed to "incrementally fund non-severable services contracts using transferred TMF funding," the guidance states.

Agencies can request to become shared-services providers using the GSA-housed central fund.  These so-called "managing partners" would receive money from the central fund to host a "common solution for which the managing partner charges a fee-for-service to participating agencies."

The OMB chief is tapped as mediator if an agency fails to reimburse the central fund and if GSA and the agency in question can't resolve the issue. The memo said that the TMF Board charter will include project oversight guidance "to identify where corrective action or revocation of committed funds is warranted."

Agencies that plan to launch their own working capital funds to support IT modernization are required to notify OMB within 21 days of the memo's release. The memo reminds agencies that transfers to any fund allowed for under the MGT Act are subject to reprogramming and transfer restrictions in current appropriations law.

OMB will have a strong hand in oversight of projects conducted with agency-based working capital funds. Agencies are to report to OMB every quarter all planned uses of the working capital funds, all transfers and reprogramming actions with a brief justification, any updates to the IT dashboard, as well as a summary of actual obligations, expenditures, and unused balances each fiscal year.

The document also lays out the template for agencies to submit project proposals. Agencies are to describe the project, what it plans to address, the impact of completion and how impact will be measured, the amount being requested, plus all costs and benefits -- pre-modernization, during modernization and post-modernization -- associated with the project.