Special Report: Validation of the Fund for the Modernization of Technological Advantages

The Technology Modernization Fund meets targets set in 2016 when the Obama administration first proposal the concept of working capital.

New data collected by Federal News Network shows that the six agencies that took out the loans are accelerating the modernization of existing systems and, hang on your hats, repaying the loan to the TMF board of directors.

“The TMF respects the spirit and intent of the law,” said Alan Thomas, former Federal Acquisition Service commissioner at the General Services Administration and a member of the TMF board of directors, in an interview with Federal News Network. “We put the processes and the infrastructure in place and demonstrated some results. He is in a better position today to explain why it makes sense to put $ 1 billion in the TMF. There were a bunch of different directions he could have taken, but it went pretty well and continues to move in the right direction. He has a solid foundation.

Thomas, who is now the COO of IntelliBridge, said the TMF is in the exploration and walking development stages and is ready to go.

Thomas and other observers said the success of the TMF model shows that it’s not just about spending more money after a problem, but that board oversight and accountability within the agency are the main drivers of success.

Matthew Cornelius, executive director of the Alliance for Digital Innovation, an industry association, and the first TMF project manager for the Office of Management and Budget, said the fund’s success really depends on the process. . He said OMB has put together a diverse team of experts and established the program management office at GSA to assist agencies on a regular basis.

“There has been and still is tremendous talent on the board. They all provide valuable information and are prepared and thoughtful. The board takes an interest in what it has funded and takes a serious interest in the health and well-being of the projects. They are serious about receiving regular updates from the teams and dealing with any issues that arise, ”he said. “It was one of the most incredibly successful programs to come out of this administration. Even with all the constraints of limited funding and all the visibility of the press, the process worked. There are a lot of promises for the future. “

Observers said the $ 100 million upfront Congress allocated during the 2018 financial year and $ 25 million in 2019 and 2020 for a total of $ 150 million over the past three years was, in the end, a good approach to ensure that the board had the right governance and the right processes in place.

But now, with the success of the TMF, experts have said the appropriators should join in the suggestions of House and Senate lawmakers to add to at least $ 1 billion in the program.

Kelly Morrison, director of digital transformation and management at Grant Thornton Public Sector and former performance analyst in the Federal CIO office of OMB, said the projects funded by TMF to date have shown the concept to work. meaning and that more funding is needed. so that the program can really work as intended, ie with a large sum of money which could lead to the modernization of all the agencies on a larger scale.

Projects that have received TMF loans have also demonstrated that a rapid infusion of funding focused on specific results is an approach that should be emulated.

Mike Hettinger, a former Hill staffer and now managing director of Hettinger Strategy Group, said agencies have shown time and time again that if you can set project parameters and make incremental progress with a specific amount of money. , achieving a positive result is more likely. He said that over the past few years, the TMF has made it clear that the “big bang” funding approach is not working and that it could even hamper the agency’s modernization efforts.

Cornelius added another benefit of TMF, in some cases agencies have used the application process to obtain the OMB’s “seal of approval” to gain in-house traction.

“The TMF helped CIOs who wanted to do some of these things but for some reason the ideas never got through their own internal budget processes,” he said. “If they got $ 1 billion, the OMB and GSA could look at the landscape to see longer term projects. The OMB is already seeing these opportunities across government due to the response to COVID. OMB could target these investments to make company-wide investments.

Recovery model improvements

While agencies receiving loans in the first two years have repaid at least $ 8.4 million of the $ 64.3 million committed in 2018 and 2019, many experts agree that the repayment model is the only area. where the TMF could improve.

“I think the agencies don’t want to participate so easily because of the conditions that come with it, with the reimbursement requirement,” Hettinger said. “Identifying the savings is difficult to do. Some agencies took that money and didn’t save anything, but improved their operations and modernized their system or applications. To make it work and get people to jump on it, I think they need to find a simpler process to pay it off. Maybe that means there is no process to pay it off. It could just be a sum of money for IT modernization that agencies ask for and need to demonstrate results. Rather, it is a venture capital fund used to accelerate IT modernization projects.

Cornelius of ADI added that initially the way to get Congress to join the TMF was to make it a revolving fund. But now, with spending caps no longer of great concern and the success of current TMF projects and IT modernization more broadly during the coronavirus pandemic, a loosening of the recovery model may make sense.

“If he got rid of the recovery model and focused it more on company-wide projects, they could see better results,” he said. “By doing this the OMB and GSA have more credibility to go back to Congress and explain what other projects or issues need to be addressed and how much it will cost. This is more of the normal credits than the cat and mouse game that is currently taking place in the TMF funding. “

Next step: company-wide projects

Thomas of Intellibridge said the recovery model is important, but it’s not the only metric that shows these projects are successful.

“There is a benefit to an agency that may not save money but create a positive benefit, so how do you reflect that? ” he said. “That’s why giving agencies extra flexibility, maybe something like avoiding costs or reducing time for citizens. The board decided to be tougher on ROI because there was a lot of scrutiny and visibility. We didn’t want to be accused of “fun math” because that’s how the program could get damaged. “

Grant Thornton’s Morrison said investing in government-wide or multi-agency projects rather than agency-specific projects could make sense for the TMF.

“Yes, they will require a larger investment and the impact and benefits will far outweigh the value and impact achieved to date, ”she said. “In addition, sharing successes around the projects themselves so that other agencies working on similar modernization initiatives can potentially apply the successes to their projects or even leverage the solution to extend it to others.” agencies. Also share successful TMF funding requests – why they are selected. “

It is clear that the TMF is bringing real change to the agencies that use it. OMB must now do more to share these successes in order to convince homeowners to open their wallets. While $ 1 billion might seem like huge, providing the board of directors with $ 500 million to further prove the value of the program would be the next logical step in getting much-needed help from more agencies to accelerate. projects.

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