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Modernizing Government Technology Act Of 2017

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Enacted in 2017, the provisions commonly referred to as the Modernizing Government Technology Act established the TMF in recognition of the challenges in modernizing federal information systems. OMB and GSA administer the TMF, and a Technology Modernization Board comprised of federal IT executives reviews agency project proposals.

Pursuant to the law, OMB’s 2018 TMF guidance directed agencies with approved projects to reimburse the amounts transferred from the fund and pay a fee, within 5 years of award. Fees were to be based in part on a percentage of award amounts transferred to the agency. GSA uses TMF appropriations to cover its operating expenses, and collects the fees from awarded projects to offset these expenses.

The act includes a provision for GAO to report biannually on the TMF. This second TMF report, among other things, identifies the status of the fund and approved projects, determines the TMF’s operating costs and fees collected to offset those costs, and assesses the reliability of selected projects’ cost saving estimates.

GAO identified projects approved for TMF funding and reviewed the extent to which selected projects were generating cost savings. GAO also reviewed OMB and GSA’s administrative fund processes, and GSA financial data on TMF operating costs.

Technology Modernization Fund: Implementation Of Recommendations Can Improve Fee Collection And Proposal Cost Estimates


The General Services Administration and Office of Management and Budget oversee the Technology Modernization Fund, which awards federal agencies funds to replace aging IT systems. Congress provided an initial $175 million in funding, from which 11 projects received $89 million.

The American Rescue Plan Act of 2021 added $1 billion to the fund. Agencies reimburse the fund and pay a fee within 5 years of award.

We found:

  • The fund continues to cost more to run than it collects in fees
  • Most of the projects’ reported savings estimates continue to be unreliable

Our prior recommendations address improving fee collection and proposal cost estimates.

Looking Back At A Landmark Law On Government It Modernization

08/10/2020 10:13 AM EDT

With help from Eric Geller and Martin Matishak

Editors Note: Weekly Cybersecurity is a weekly version of POLITICO Pros daily Cybersecurity policy newsletter, Morning Cybersecurity. POLITICO Pro is a policy intelligence platform that combines the news you need with tools you can use to take action on the days biggest stories. Act on the news with POLITICO Pro.

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Gao Sounds The Alarm On Legacy It

The Government Accountability Office has been sounding the alarm on the risks associated with outdated IT since at least 2015, when it added improving the management of IT acquisitions and operations to its biennial high risk list. This listidentifies federal programs and operations that are especially vulnerable to fraud, waste, abuse, and mismanagement, or particularly in need of transformation.

The federal government plansto spend more than $90 billion this fiscal year on information technology. Most of this money will be used to maintain existing systems, many of which are outdated, costly to maintain, and vulnerable to cyberattacks. For example, for years the Department of Defense system that coordinates the operation of U.S. nuclear forces ranon an IBM Series/1 computer system from the 1970s that used 8-inch floppy disks. The system was finally modernizedin 2019.

GAO has identifiedthe 10 most critical federal IT systems in need of modernization. These include a 19-year-old Department of the Interior system that supports the operation of certain dams and power plants a 36-year-old system at the Department of Transportation that contains sensitive aircraft information and a 47-year-old Department of Education system that contains personal student information.

How Do Agencies Submit Proposals To The Technology Modernization Board

The proposal process for the TMF involves two steps, according to the Technology Modernization Board, which manages the fund. An initial proposal, meant to give the board an impression of the project, is submitted first. The board sorts through the proposals and selects some to advance to the next phase. Those selected by the board then submit a full proposal for the funds, including project milestones.

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Modernizing Government Information Technology


  • Outdated legacy IT systems have hindered government response to the coronavirus pandemic at the federal, state, and local level.
  • In addition to working slowly and crashing frequently, these obsolete systems present significant cybersecurity and privacy risks.
  • Congress has conducted oversight and passed legislation to address the issue of outdated government technology, and President Trump has made modernizing technology a top priority of his administration.

As government at all levels works to respond to the coronavirus pandemic, outdated legacy information technology systems have hindered response efforts. While there is no set definition for what constitutes a legacy IT system, they are generally older, outdated, and are less able to perform their basic functions than newer versions of the technology. They may no longer be supported by the manufacturer or vendor who created the product. They may lack the latest security features or use software that is known to be vulnerable. As government works to fulfill some of its most basic functions in the digital age, it is critical that it use up-to-date technology and employ cybersecurity best practices.

Landmark Legislation Will Reduce Wasteful It Spending Strengthen Cybersecurity

WASHINGTON Today, U.S. Senator Jerry Morans Modernizing Government Technology Act was signed into law by President Trump as part of the conference report for the National Defense Authorization Act for FY2018. In September, Sen. Moran successfully included the MGT Actas an amendment to the NDAA for FY2018. This bipartisan legislation introduced along with U.S. Senator Tom Udall will encourage federal agencies to cut wasteful spending and modernize government information technology and security. Sen. Moran released the following statement after the president signed the legislation into law:Today, the president signed into law landmark legislation to reduce wasteful government IT spending and strengthen our nations cybersecurity. I applaud the administration and my colleagues on both sides of the aisle for their tireless work to get this legislation signed into law and to bring our inefficient, outdated federal IT system into the 21st century. The improved efficiencies from the MGT Act will empower agencies to modernize their legacy IT systems, better protect our data from cyber-attacks and ultimately save billions in taxpayer dollars by reducing long-term spending.Items to Note:

The Modernizing Government Technology Act:

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Modernizing Government Technology Act Of 201: Report Resource Informationthe Item Modernizing Government Technology Act Of 201: Report Represents A Specific Individual Material Embodiment Of A Distinct Intellectual Or Artistic Creation Found In San Francisco Public Librarythis Item Is Available To Borrow From All Library Branches

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Modernizing Government Technology Act of 2017
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Rept. / 115th Congress, 1st session, House of Representatives
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  • Administrative agencies
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Flexera Believes Modernizing Government Technology Act Of 2017 Adds Teeth To Megabyte Software Asset Management Law And Will Save Us Taxpayers Billions

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ITASCA, Ill., May 01, 2017 — On April 28, 2017, Representatives Will Hurd , Robin Kelly and Gerry Connolly introduced the Modernizing Government Technology Act of 2017 which provides funding for IT modernization projects aimed at efficiency and cost savings. Flexera believes the MGT Act gives teeth to other cost-cutting legislation, such as the Making Electronic Government Accountable by Yielding Tangible Efficiencies law , which mandates that federal agencies develop a plan to eliminate waste in Federal software spend — but does not fund the investment necessary to accomplish its objective.

Congress has been visionary through passage of laws like MEGABYTE in acknowledging opportunities for huge savings in Federal IT spend. But without funds agencies cant comply with MEGABYTE and realize those savings, said Steve Schmidt, Vice President of Corporate Development at Software Asset Management expert, Flexera. MGT Act does just that it funds IT projects envisioned by MEGABYTE that will reduce waste and increase efficiency and security. We congratulate Representatives Hurd, Connolly and Kelly for their efforts and wish them success as the bill works its way through the legislative process.


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Whats The Deal With Government It Modernization Funding

by Caleb Clarke | Apr 19, 2021

The stress the pandemic has put on government IT infrastructure is generating a great deal of public awareness around these core systems. But while there may be more widespread knowledge around the outdated technology that many local, state and federal agencies use, the problems they face are not new. In fact, Congress tried to tackle government IT modernization before COVID, but there are disagreements on the real value modernization funds bring to the table.

Heres a look at how recent IT modernization funding has unfolded.

Cyebrsecurity Risks Of Outdated Tech

In addition to these infuriating failures to function properly, obsolete IT systems may present significant cybersecurity and privacy risks. Ensuring the cybersecurity of the nation is also one of the priorities onthe GAO high-risk list, due to the dependence of federal agencies and our nations critical infrastructure on technology. Not only are these older computer systems more vulnerable to attacks, they also tend to be attractive targets because they contain large amounts of personal identifiable information. In the 2014 data breachat the Office of Personnel Management, hackers stole more than 21 million records.

State and local government have faced on onslaught of ransomware and other cyberattacks, even prior to the pandemic. Ransomware is a type of malicious software that seizes and encrypts data on a computer or network. Once a criminal has taken control of the data, he demands payment to return access to the owner. Many cities, hospitals, and retailers hit by these attacks have paid the ransoms, which are almost always less than the cost of restoring the data. Hospitals are reportedlybracing for an increase in ransomware attacks. Governments that have outdated systems in place may face increased risks of suffering a ransomware attack due to poor cybersecurity and other vulnerabilities.

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Whats The Point Of The Tmf

The TMF seeks to give government agencies greater flexibility in their projects to modernize information technology by providing incremental funding. According to the guiding principles published by the fund, this will enable agencies to reimagine and transform the way they use technology to deliver their mission and services to the American public in an effective, efficient, and secure manner.

Perfect Timing For It Modernization

With national cybersecurity taking the spotlight in recent weeks, the bill comes as timely. Earlier this month, President Donald Trump ordered the creation of a council of agency leaders to handle IT modernization efforts across all government agencies. The President also signed an executive order that mandated Federal agencies to implement best practices in cybersecurity.

These proved to be relevant steps in implementing necessary measures to address national IT-related concerns, especially with the recent global ransomware attack. Ransomware known as WannaCry swept computers of organizations across the globe, including USA’s FedEx, the Russian Interior Ministry, and multiple hospital systems in Great Britain.

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The future of the MGT Act

Having passed House proceedings, the next stop for the MGT Act is the Senate. The bill reached Senate level in 2016, but stalled and was ultimately scrapped due to cost concerns.

Should the MGT Act reach official legislation status, it would launch a revolutionary government-wide movement to keep up with the constant shift of technology. Not only does it promote a cutting-edge, interconnected state, it also gives government agencies the opportunity to streamline and enhances their operations to better serve American citizens.

Explore various approaches to IT modernization with this helpful guide.

Discover the approach that fits your IT modernization needs

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An Update On Ambitious Plans

The U.S. governments ambitious plan is not unlike any private sector technology transformation in that the investments are intended to give agencies additional ways to deliver services more quickly, better secure sensitive systems and data, and use taxpayer dollars more efficiently. And that will, in turn, enable them to deliver a higher quality of service to the constituents they serve. Thats a worthy ambition, and one that has strong bipartisan support. And so, it follows that a common question we hear discussed when working with our customers and partners in the federal sector is: how is the modernization effort progressing?

ScienceLogic wanted to know, too, and so we commissioned a study of IT leaders in federal government, conducted by the Government Business Council, to get answers. The resulting report, AI Operations-enabled Monitoring: Assessing Agency IT Modernization Challenges, Priorities, and Progress, exposes sentiments and perceptions among federal employees regarding their agencys IT modernization pain points, priorities, and progress. The reports findings are interesting and revealing.

Phase Two: Full Project Proposal

If the Board approves an IPP, the project team submits their Full Project Proposal to the Board. The FPP entails a more comprehensive description of the proposal, discrete project milestones, and funding schedule. The team may also prepare a pitch deck and in-person presentation for the Board.

Projects recommended for funding by the Board receive incremental funding contingent on the successful execution of milestones. The TMF provides greater flexibility to agencies funding technology modernization efforts by allowing for payback terms of up to five years and flexible repayment terms where determined appropriate by the GSA Administrator and OMB Director.

Proposal templates for the IPP and FPP phases are available in the Documents & Templates section of this site.

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Modernizing Government Technology Act Of 2017

In 2017, the Modernizing Government Technology Act was enacted as part of the 2018 National Defense Authorization Act. It established the Technology Modernization Fund and Board and authorized agencies to develop IT working capital funds to modernize and update systems over many years. However, thats not exactly how things worked out.

According to Federal News Network, lawmakers didnt anticipate how difficult it would be for government agencies to establish working capital funds. In fact, only the Small Business Administration was able to set up a working capital fund and successfully transfer unexpired funds to it. Besides the SBA, no other agency was able to persuade lawmakers, leaving other interested parties to either request the authority to expand existing funds or create new ones. To date, it appears only five other agencies have continued to pursue funds under the MGT Act.

How To Fund Continuous Modernization

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As IT experts know, modernization is a marathon and not a race. Funds appropriated with a time limit can prevent modernization projects from the thoughtful, long-term planning and execution needed to succeed.

In fact, Gartner recommends thinking about modernization as a continuous process. The question for lawmakers becomes what is the best way to fund efficient and effective modernization.

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Shown Here: Passed House Amended

Modernizing Government Technology Act of 2017 or the MGT Act

This bill authorizes each of specified agencies for which there are Chief Financial Officers to establish an information technology system modernization and working capital fund to:

  • improve, retire, or replace existing information technology systems to enhance cybersecurity and to improve efficiency and effectiveness
  • transition legacy information technology systems to cloud computing and other innovative platforms and technologies
  • assist and support efforts to provide adequate, risk-based, and cost-effective information technology capabilities that address evolving threats to information security and
  • reimburse amounts transferred to the agency from the Technology Modernization Fund , with the approval of such agency’s Chief Information Officer.

Each agency shall prioritize amounts within such fund to be used initially for approved cost savings activities.

The bill establishes a Technology Modernization Fund for technology related activities, to improve information technology, and to enhance cybersecurity across the federal government. The fund shall be administered by the Commissioner of the Technology Transformation Service of the General Services Administration in accordance with guidance issued by the Office of Management and Budget. The Commissioner shall:

The Commissioner shall support board activities and provide technical support to, and oversight of, agencies that receive transfers from the fund.

Modernizing Government Technology: How Federal Agencies Are Progressing On Technology Transformations

When the U.S. Congress passed the Modernizing Government Technology Act of 2017 as part of the 2018 National Defense Authorization Act, it established both funding and a process intended to help bring aging federal IT systems and infrastructure up-to-date with state-of-the-art technologies common in the private sector. According to the legislation, the goals of MGT are to:

  • Improve, retire, or replace existing information technology systems to enhance cybersecurity and to improve efficiency and effectiveness
  • Transition legacy information technology systems to cloud computing and other innovative platforms and technologies
  • Assist and support efforts to provide adequate, risk-based, and cost-effective information technology capabilities that address evolving threats to information security and,
  • Reimburse amounts transferred to the agency from the Technology Modernization Fund , with the approval of such agencys Chief Information Officer.

The total federal IT budget for civilian agencies for the 2022 fiscal year is $58.4 billion, not including $1 billion allocated for the TMF to support the programs intended to meet the goals of MGT. Agencies can apply for loans, drawn from the TMF, for investments in new systems and technologies, as well as associated integrations. Agencies receiving TMF loans are expected to pay them back, ostensibly from cost savings realized through modernization.

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