Industry groups call for TMF reforms following funding boost

Industry groups want changes to how the government operates the modernization fund now that it has grown to $1 billion.

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Ten technology industry groups are urging the federal government to change how it manages a revolving fund slated to receive $1 billion in American Rescue Plan Act funding.

The Technology Modernization Fund was created by the Modernizing Government Technology Act in 2017 and launched with $100 million. The Biden administration initially floated a coronavirus relief bill that would have appropriated $9 billion to TMF. While that plan did not come to fruition, the $1 billion the fund will receive is still a major boost from the $25 million annual additions it has received since its inception.

Industry and former government officials have cheered on the increased funding, but that excitement has also come with anxiety about whether the processes put in place to manage a relatively small amount of money will scale up.

"If you're getting a 40-times plus up in the amount of money that's going into the fund and that money is coming as part of a…relief and recovery package then you're going have to make substantial changes to the operating model -- use the repayment flexibilities and increase the staffing both on the front end and on the project delivery," said Matthew Cornelius, executive director for the Alliance for Digital Innovation, one of the signatories of a March 24 letter seeking changes to the way the TMF is managed to support the new influx of cash.

Other organizations that signed the letter include The Alliance for Commercial Technology in Government, Better Identity Coalition, Center for Procurement Advocacy, CompTIA, Cybersecurity Coalition, Digital Services Coalition, Information Technology Industry Council, the Internet Association and the Software and Information Industry Association.

The letter also raises questions about whether the submission process and "restrictive repayment requirements" will discourage agencies from submitting projects.

"If these onerous processes, which were well-intentioned when the TMF was created… remain in place, we fear agencies will remain reluctant to fully leverage the TMF to address critical immediate needs as Congress intended," the letter states.

TMF requires federal agencies to repay the funding they receive within a five-year period, but the law allows the director of the Office of Management and Budget to alter that timeline if necessary.

"I understand why at the beginning there was focus on documenting savings and paying it back," Jeremy Grant, executive director of the Better Identity Coalition, told FCW. "The reality is when you put that in place it puts real limitations on how you can move on a project where the benefits are harder to quantify,"

The letter calls on the General Services Administration increases the number of staff working to consider proposals and assist funding recipients with staff to help execute the projects they request.

"It is not enough to have a qualified team that simply accepts and analyzes projects before they are provided to the board for approval," the letter states. "It would be wise to make available to any award recipients, at their discretion, any technical, security, program management, or acquisition professionals that can help improve the likelihood of successful execution all the way through the lifecycle of a TMF investment."

Cornelius added TMF's pipeline for new projects appears to have slowed down more quickly than anticipated -- the program's website says 11 projects have been approved as of March 12 -- and he anticipated agencies may be more apt to submit larger and more complex proposals given the influx of new funding.

Grant also hopes to see TMF make larger awards to projects with more scale and reach than has previously been the case under the program.

"The size of the awards was dictated by how large the TMF was," Grant said. "I think this new funding gives you room to do things that are a little bit bigger and more ambitious and frankly more significant approaches in terms of the difference they can make in government."