TMF invests $83.4M in 4 AI-enabled projects

The Technology Modernization Fund has awarded millions of dollars to support artificial intelligence projects at the departments of State, Transportation and Agriculture, according to a Wednesday website update.

The new projects include efforts to boost federal AI adoption and streamline burdensome permitting processes, which TMF specifically sought in a June call for proposals. They also come several weeks after Congress extended authorization for TMF through Dec. 11 in its most recent stopgap funding bill, preventing the program from expiring on Sept. 30. 

Of the roughly $83.4 million total, $17.3 million will help the State Department implement agentic AI to streamline desk processes, support foreign policy staff’s research and launch a secure environment where employees can build their own agents, according to the website update. 

“A person will review every automated decision and minimum risk management practices will be followed, as federal rules on oversight require,” the website added. 

State expects the investment to save help desk staff and policy teams more than 100,000 hours a year and achieve about $15 million in timing savings in its first year, rising to about $20 million the following year. The project has seen 57% of the $17.3 million transferred since the TMF Board notified the department it had voted to invest in their proposal in July. 

TMF previously spent $18.2 million to bring generative AI tools to State's network but “employees still lack a way to connect the systems that stand between them and their work,” the website said.

The Transportation Department will receive nearly $3.8 million to automate air travel complaint categorization, identify trends across complaint categories beyond statutory minimums and pull records faster for congressional and other inquiries.

TMF says the Transportation Department project will use “secure AI features” but will have a person review every automated decision and ensure minimum risk management practices are followed.

The Transportation Department expects the project to achieve 80% to 85% accuracy in automated complaint classification, identify complaint trends up to 80% faster and decrease record request response time by up to 75%. The TMF award follows a previous $8 million project to replace a 30-year-old database platform with a modern one called ACERS, making it easier for travelers to file complaints and allowing airliners to respond in real time.

“While ACERS improved public intake and real-time carrier access, staff still spend critical hours on manual administrative tasks such as manually searching records, verifying complaint categories, and checking for complaint duplicates, leaving little time for anything beyond what the law requires,” according to TMF’s website.

The Department of Agriculture received awards for two of its initiatives in the most recent funding announcement. 

The first is a roughly $52.3 million replacement of “high-risk” USDA payroll technology serving nearly a third of the federal workforce with an AI-enabled cloud platform. 

“Without immediate action, the risk of system failure or cyber threats will escalate, potentially jeopardizing the delivery of paychecks and benefits to hundreds of thousands of federal employees,” according to TMF’s website.

The new platform will consolidate more than 50 separate applications into one environment that meets FedRAMP requirements, applies layered security controls, launches through early test runs and aligns with the Office of Personnel Management’s HR 2.0 initiative. 

“OPM has reviewed and endorsed the plan, confirming it aligns with HR 2.0, and both agencies have committed to coordinating milestones as implementation moves forward,” according to TMF’s website.

The second award is a $10 million consolidation of 10 USDA environmental review systems into one shared platform. 

The platform will also use AI to identify applications eligible for the “fastest review path” and build the first centralized reporting and oversight system USDA has had in its environmental review portfolio, according to TMF’s website.

The project is expected to save an estimated 1.8 million labor hours a year, process about 78% of fast-track applications “in near real time,” and align with the Trump administration’s April 2025 permitting technology priorities, the website adds.

“It is great to have the TMF focused on products that matter, and I'm excited for more to come in the quarter ahead,” Jessie Posilkin, acting TMF executive director, posted on LinkedIn.

A July Government Accountability Office report found that the TMF has only realized $13.5 million in savings through June 2025, but the office expects the program to yield roughly $1.06 billion in savings in the future.