First Modernization Fund Winners Offer Cheat Sheet for Future Pitches

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The first three awardees of the Technology Modernization Fund offer a window into the kinds of projects and pitches the board is looking for.

The Technology Modernization Fund still has money up for grabs with more likely to come. Agencies developing their own pitches could learn from the first three proposals to win funding.

House appropriators Wednesday voted in favor of adding another $150 million to the TMF in 2019, supplementing the $55 million left in the account after the governing board awarded funding to its first three projects.

The fund—created as part of the Modernizing Government Technology Act—was established to help agencies with critical IT modernization efforts. While it was designed to supplement agency funding, the fund is not a handout: Agencies must pay back the loans within five years.

Along with a strong return on investment, prospective projects also had to show a significant impact, both for the agency pitching the project and the government at large.

“The first TMF awards are modernization bellwethers,” said Federal Acquisition Service Commissioner Alan Thomas, who sits on the TMF Board. These awards “signal a coming wave of transformation activity improving agency effectiveness and making a meaningful difference in the lives of the people we serve.”

As paragons of the modernization effort, these projects establish a template for other agencies interested in getting funding for their projects.

HUD Moves Away From Mainframe

The Housing and Urban Development Department is getting the largest chunk of the initial awards: $20 million to migrate five legacy systems from on-premise mainframe systems to the cloud. The project covers three applications used by the Federal Housing Administration, which ensures housing loans, and two apps used by the agency’s Office of the Chief Financial Officer.

The department will use the $20 million to fund the migration, including purchasing cloud services, contracting with a vendor to manage the move and, if needed, hiring additional HUD staff.

HUD is still early in the process, as officials have yet to hash out the acquisition strategy, including picking a vendor to do the migration work. However, once the mainframe is turned off, the agency expects to save approximately $8 million a year.

Mark Hayes, HUD CTO and point person for this project, said he believes that cost savings is what made this project stand out. He attributes that and the fact that it is “shovel-ready” to why the board decided to award the funding to HUD.

The TMF board added one more reason for picking this project: “This initiative will demonstrate a process that other agencies can use to modernize their similar systems,” its members wrote in one-sheet justifying the pick.

Hayes agreed.

“This is an opportunity that other agencies may be able to leverage,” he said. “As we go through this mainframe migration, they can look at how we did it, and other agencies may be able to replicate this process. There are many agencies with mainframes that would love to be off the mainframe.”

Chad Cowan, HUD acting CIO, offered another reason: impact on the department and the citizens it serves.

“When they were looking at our three proposals, they probably determined that the one that they selected to move up through the pitch process was probably the most impactful in the short term,” he said. “And probably something we could deliver on most easily. Get a quick win, not only for HUD and what we’re trying to do, but also for the fund itself.”

Once they have the right vendor and people in place, Hayes said the work should take about two years, with the $8 million annual savings kicking in a year later. If realized, those savings will make it easy for HUD to meet the five-year repayment schedule.

After that, Hayes plans to reinvest those savings in the department’s IT enterprise, most likely doing more of the same legacy migration work.

Energy Wants One Email Platform

The Energy Department will be getting $15 million to complete its migration to a cloud-based email system. Currently, the department hosts an array of different email systems. When the migration is complete, all Energy components will be using Microsoft Office 365.

That migration work was already underway before the TMF award, with the extra infusion of cash accounting for about one-third of the total work, according to Deputy CIO Bryan Long.

“This will move the department away from operating multiple systems using legacy infrastructure to a more secure, modern platform,” the TMF Board wrote in its justification, adding that the project will leverage commercial software rather than building in-house.

“We focused on this one for a couple reasons. One is it directly aligns with the White House’s IT modernization report and initiatives. We felt that that made a lot of sense,” Long said. “From the departmental perspective … we’re faced with the challenge of maintaining legacy infrastructure with those services. This moves us to not only a common platform across the department, we expect this will facilitate collaboration across the department as well as give us a common platform for enterprise security, interoperability and enhanced visibility across the enterprise.”

Along with greater collaboration and security, having a single system across the department will make it much easier to scale up or down in the future, depending on the needs of the department and its components.

“I think the board recognized that we’ve done this type of work before within the department, so we have some experience with it,” Long said. “And they felt we had a solid business case based on our experience…I think those were strong factors in why we were considered and chosen.”

Long declined to go into specifics on costs savings but cited expected efficiencies in areas like security assessments—they won’t have to authorize every new, distinct platform—and the lifecycle costs of managing so many disparate systems.

“We see efficiencies in all those areas,” he said. “We also see downstream efficiencies—cost efficiencies—that we get from the other capabilities within Office 365 that aren’t necessarily part of this project directly.”

Long lauded the process and encouraged other agencies to submit to the TMF Board early and often.

“This is the first of more that we plan to submit for TMF consideration,” he said. The department submitted a few proposals to the board initially, some of which they might try to pitch again, and has at least one more in the pipeline.

Farming Goes Digital

The smallest of the awards—$10 million—went to the Agriculture Department’s Farmers.gov portal, which is currently in development.

Currently, the mobile app shows farmers the nearest Agriculture office. Using the TMF board funding, the department plans to expand the capabilities to include an interactive calendar, online appointment systems, digitized forms and a dashboard with relevant business data.

The overall goal is to provide a better customer experience for farmers, ranchers, conservationists and private foresters.

“Farmers.gov will provide a user-friendly portal for connecting agricultural producers to the USDA services and programs they need,” said Bill Northey, undersecretary for farm production and conservation. “This new resource also will reduce the time farmers need to take away from their fields today to fill out paperwork.”

“It’s a big deal for us because we’re providing value to our customers and our citizens and we’re engaging farmers and ranchers in terms of the process in terms of developing something that will be useful to them,” Agriculture CIO Gary Washington said on the June 10 broadcast of “Government Matters.” “It’s not a lot of money. However, we are reusing technologies and we’re finding the best-of-breed so we can automate this process.”

Specifically, the new funding will be used to automate the financial services functions of the site, including reducing improper payments, resolving outstanding audit issues and connecting disjointed financial systems with the central department system.

“Without this funding, USDA would need to delay integrating this part of the process into the consolidated Farmers.gov Citizen Experience Portal in a later year when funds became available,” the board said in its award justification. “However, with support from the TMF the project can be conducted at the same time as other enhancements to the portal, faster.”