Technology Modernization Fund Tapped for Two More Projects

Aleksandr Rybalko/

The latest batch of grants leaves the fund with only about $24 million, less than 20% of its total endowment.

The federal leaders who head the Technology Modernization Fund on Monday selected two more IT improvement projects to receive extra injections of government cash, marking the first batch of TMF awards since February.

The latest round of grants, which total $12 million, will leave the fund operating at less than 20% of its full capacity, and it’s unclear whether Congress will refill its coffers next year.

Per Monday’s announcement, the Agriculture Department will receive $8 million to revamp the Agriculture Marketing Service’s Specialty Crops Program, which is responsible for inspecting and certifying more than 60 billion pounds of fruits and vegetables each year. Today, the program relies heavily on paper-based processes and legacy IT systems, and the additional funds will help the agency digitize its inspection program and migrate operations to the cloud. 

The board also gave the Equal Employment Opportunity Commission a $4 million grant to stand up a new cloud-based charge and case management system. The project is expected to both decrease software and operational costs for the commission and allow for more efficient customer services.

"It’s two projects that were operating on paper-based processes to serve citizens, one of them used triplicate copy forms—I don’t even know where to buy them anymore,” Federal Chief Information Officer Suzette Kent said Monday at an ACT-IAC conference in Philadelphia.

The board has previously handed out seven other grants through the TMF, including two awards to both Agriculture and the General Services Administration, and single awards to the Energy, Labor and Housing and Urban Development departments.

The Technology Modernization Fund, established in 2017 by the Modernizing Government Technology Act, originally included $100 million to support critical IT modernization efforts at agencies across government. Congress allocated the fund another $25 million last year, but its coffers could soon dry up without any new appropriations.

Less than $24 million remains in the TMF following this latest batch of awards, and lawmakers haven’t yet agreed to refill it. The House proposed allocating another $35 million to the fund in its 2020 appropriations bill, but the Senate didn’t include any additional resources in its own version of the legislation. 

And even if the board awards no additional grants, the TMF could see its resources dwindle down further due to an imbalanced cash flow. The fund was intended to be a self-sustaining pot of money, with agencies eventually paying back the grants they receive plus additional fees, but today the TMF program management office is spending more on overhead costs than it’s recouping from grantees.

Over the next five years, federal auditors expect the PMO to operate at an annual loss of roughly $1 million. The Government Accountability Office plans to release a complete audit of the TMF program in December.