Is $100 million enough to fund MGT projects?

NOTE: This article appeared first on FCW.com

It started off as $3 billion.

Then it was $250 million.

Ultimately, the passage of the fiscal year 2018 appropriations omnibus confirmed funding for the Modernizing Government Technology Act's central fund will debut at $100 million.

"I think it is a good start," said former Federal CIO Tony Scott, "and while small compared to the size of the problem, it will allow for some projects to be funded and prove out the underlying concepts."

In a joint statement, Rep. Will Hurd (R-Texas) and Sen. Jerry Moran (R-Kan.), MGT's co-sponsors, applauded the funding included in the omnibus. 

The $100 million, which covers the back half of the fiscal year, supports the Technology Modernization Fund, housed by the General Services Administration.

Compared to the roughly $90 billion in governmentwide IT spend, much of which goes to maintaining existing systems, "it's a drop in the bucket, but it's a step in the right direction," said Mike Hettinger, a former Hill staffer and currently a lobbyist specializing in procurement and IT issues.

As to why the final number in the bill was $100 million, rather than the $250 million authorized by MGT, Hettinger said "it's probably a combination" of the spending bill passing later into the fiscal year and appropriators wanting to make sure the central fund actually works as intended.

Money from the fund is open to any agency that applies to -- and receives approval from -- the seven-member TMF board, which will evaluate proposals, recommend funding and provide oversight for approved modernization projects.

Steve Cooper, longtime private- and public-sector CIO whose federal experience includes service at the Departments of Homeland Security and Commerce, called the appropriation an "excellent start," before cautioning there "may not be enough funding for all agencies."

Hettinger said he doesn't think the $100 million will hamstring the ultimate success of the fund or MGT, but he did note that the figure will lead to "fewer projects funded than many people expected."

"If all of the 24 CFO agencies submitted one $4 million project, it's gone," he said.

Cooper added the $100 million ceiling may limit the number and size of projects that will receive approval and even change the dynamic of agencies' applications.

"It will prevent agencies from submitting requests for large amounts of funding," he said.

As a result, "my guess would be projects will be under $5 million, and more likely in the $1-$3 million range," Cooper said. "This might enable faster approval and easier payback to the fund.

The Office of Management and Budget officially began accepting applications at the end of February. In its final MGT Act guidance, the OMB encouraged projects to consider feasibility, the reduction of the number of outdated and insecure systems, cost savings, improvements to security or projects that provide "demonstrable and visible impact to the public in alignment with the agency's mission."

With less money to go around, Cooper said it becomes more likely agencies whose projects closely follow this framework -- and are submitted sooner -- will be chosen.

"It's setting up a 'first-come, first-approved' scenario," he said. "Agencies need to move quickly" in submitting requests to secure funding.

From the beginning, the first crack at the centralized IT fund was more intended to be a proof of concept than the remedy for all problems posed by legacy tech. And what needs to be proved is not merely that that the funds can lead to modernization -- but also that agencies can pay back into the fund.

To that end, Scott said that while he agreed more and bigger projects could be taken on with a higher budget, "I think it is important to 'build muscle' by exercising the process to make sure it is well done."

"The idea of a 'business case' and repaying the fund are new concepts in this area, and I would not assume automatic success," he said. "[It's] really important to get these first few off the ground and successful if there is any hope for additional appropriations."

"The other good thing" about appropriators' validating the need to modernize government, Hettinger added, "is, in a lot of ways, MGT is not about money and working capital funds … It's about changing the mindset of the government."

However, to really change the way government does business and delivers service, he said, "any way you slice it, we need it to be successful."