The Technology Modernization Fund has saved little — but big savings are expected later — GAO finds

Agency projects financed by the Technology Modernization Fund have only realized about $13.5 million in savings through June 2025, according to a Government Accountability Office report released Thursday, but the program is expected to eventually yield roughly $1.06 billion.

Between fiscal year 2018 and 2025, TMF has spent $1.03 billion on 68 unclassified projects across 40 agencies. Of that total, 24 projects expect to eventually yield savings totaling about $1.06 billion, 37 did not expect to yield savings and seven were cancelled before June 2025, GAO found.

Over half of those estimated savings — $578.76 million — are expected to come from the Department of Agriculture’s Network Modernization. The Department of Veterans Affairs’ Veteran Identity Modernization program accounts for another 19.8% of estimated savings and the Office of Personnel Management’s modernization of federal retirement systems accounts for 5.7% of estimated savings, GAO found.

But only 11 of the 24 projects that expect to save the federal government money have actually realized savings as of June 2025, GAO found. The Department of Agriculture’s Network Modernization, for example, has only realized $4 million in savings in that time.

Some of that comes down to ongoing modernization work. By June 2025, six of the cost-saving projects were completed. Of those projects, only two met or were on track to meet expected savings. The other four did not meet or were not on track to meet expected savings, GAO found. Project officials told GAO estimated savings were not achieved for a variety of reasons, such as narrower project scope and higher system migration costs than expected.

In response to the GAO report, the head of the General Services Administration penned a letter explaining that the TMF has financial benefits beyond savings described in the report.

“Distinguishing between cost savings and cost avoidance understates the full financial benefit generated by TMF investments, as significant amounts of money that agencies did not have to spend are categorized as cost avoidance, rather than included in realized savings totals,” wrote Administrator Edward Forst. He added that TMF saves time, enhances security and improves other operations.

TMF is set to expire on Sept. 30, 2026 unless Congress reauthorizes the program. Jessie Posilkin, acting TMF executive director, recently urged Congress to reauthorize the program beyond fiscal year 2026 and provide long-term certainty in its funding. TMF has long enjoyed bipartisan support in Congress and is widely championed by trade groups representing technology companies, Nextgov/FCW reported. 

The Federation of American Scientists, Foundation for American Innovation Action, Partnership for Public Service and other organizations urged lawmakers Thursday to pass a bipartisan bill currently under consideration in both chambers of Congress that extends TMF through 2032 and reforms its governance. The House version of that bill may be considered under suspension of the rules this week, according to the Congressional Budget Office.