The board that reviews Federal agency applications for project funding provided by the Technology Modernization Fund (TMF) has been highly selective with the applications it receives and has sent most applicants back to the drawing board to improve their requests, said one of the board members at the AGA/AFFIRM CFO/CIO Summit held on May 7.
Maria Roat, CIO of the Small Business Administration and a member of the Technology Modernization Board, said the fund has received a total of 47 funding proposals since 2018, seeking more than $500 million in TMF funding. Of that total, the board considered 37 of the proposals and provided $89 millions of funding to seven of the proposals.
TMF was authorized by the Modernizing Government Technology Act of 2017 as a vehicle to finance Federal IT modernization projects that will generate financial savings that can then be repaid to the fund once approved projects start paying off.
Congress has approved $125 millions of funding for TMF since its inception; President Trump’s FY2020 budget request seeks $150 millions of new money for TMF.
Roat and two Federal agency IT leaders who were successful in obtaining TMF funding explained that the review process is rigorous, and unforgiving if a proposed project does not have sufficient agency buy-in, or does not look strong enough to generate the required repayments over time.
“There’s certainly not a lack of people submitting proposals,” Roat said Tuesday. She explained that the board’s first look at a proposal results in fairly quick thumbs-up or down, and in the latter case, the proposal is sent back to the agency.
That first review looks at agencies’ initial project proposals, and if the initial project is approved, then the agency is invited to submit a full project proposal detailing project milestones and funding schedules, as well as make an in-person pitch to the board.
High on the board’s list of review criteria, Roat said, is whether the proposed repayment schedule “passes the sniff test,” and whether the agency chief financial officer is on board with the project, not just the CIO. “We look for that integration across the agency,” she said.
Kevin Cooke, principal deputy CIO at the Department of Housing and Urban Development (HUD) – whose agency snagged $20 millions of TMF funding for a project to migrate critical systems from an on-premise mainframe environment to the cloud – said the process was “pretty tough” but also “very fair.”
He said the board liked that the HUD project was geared to helping citizens, and had the right payback profile, which he emphasized: “is not just cost avoidance, but real savings.”
Bryan Long, deputy CIO at the Department of Energy, discussed his experience in winning $15 million of TMF funding for an enterprise email project.
“It really comes down to you need a solid business case … And how you are going to repay the money,” he said. Long said in the case of the DoE project, savings will be generated by freeing up personnel, moving systems to the cloud, and avoiding further costs on a “tech refresh” for those systems.
Asked what might happen if an agency can’t repay the funding award, Roat replied, “I don’t know,” but emphasized that award winners sign a contract to repay. “We’ve not had anyone say we can’t repay,” adding, “we have to be very careful and judicious.”
“You’ve got to follow the money and make sure it comes back in,” she said. “We have a limited amount of money for this.”
Both Cooke and Long indicated they would go through TMF process again for other projects. “It’s a good way to accelerate a number of things,” Long said, while Cooke said his agency is reconsidering submitting a couple of proposals that it hopes to make a better case for to the board.