20 projects vying for the remaining $55M in the Technology Modernization Fund

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You can’t quite say the Technology Modernization Fund Board has $55 million burning a hole in its pocket. But the chunk of change remaining in the TMF for fiscal 2018 is heading out the door over the next two months.

Alan Thomas, the commissioner of the Federal Acquisition Service at the General Services Administration and a member of the board, said last week another “slew of proposals” are going through the review process.

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Now what Thomas didn’t say, unfortunately, was how many and from which agencies.

For that information, we put on our reporter’s hat and opened up our “reporter’s notebook” to do some digging.

You see GSA and the Advanced Technology Academic Research Center (ATARC) hosted a TMF Summit on July 26 and decided to close it to the press. Now I understand there was some discussion and maybe even some disagreement about whether it was a good idea to close it to the media. Selfishly, let me say unequivocally, it was a bad idea.

The reasons are two-fold: First, the panel of TMF Board members and the industry panel weren’t going to say anything different in front of a mixed crowd of industry and government employees whether or not the press was there. Second, with more than 150 people in the room, of course details of the discussion would come out.

By the way, the Office of Management and Budget already is in a little bit of hot water for its struggles with communications about the fund with its congressional overseers, so the reluctance to “use” the press to explain what’s going on is more bewildering.

But I digress, back to the news.

20 projects seeks Technology Modernization funds

After talking to several attendees of the summit, Federal Chief Information Officer Suzette Kent and the board members said there are more than 20 proposals now vying for the remaining $55 million. But sources say the board offered no more details on what those projects were or which agencies submitted them. This is a big change from the first round where the board received only nine proposals from seven agencies.

Thomas, speaking at the AFFIRM event which was on the record and open to the press, admitted that most of the first set of proposals seeking extra funding fell far short of the board’s expectations.

“The review process was more rigorous than the typical agency program managers were used to,” he said. “We hope we raised their game. All proposals must be signed off by the agency’s CIO and CFO.  If it doesn’t look sharp, we aren’t hesitant to call the CFO and CIO and say is this what you really mean. The message is don’t just do it for us, but do it for all of your proposals.”

An industry source, who attended the TMF Summit and requested anonymity in order to speak about the “not for attribution” event, said Maria Roat, a TMF Board member and the CIO of the Small Business Administration, said the board said “no” to several proposals and to find money elsewhere.

The source said Roat said agencies struggled with the initial proposals to define why they chose a particular technology and what their major milestones would be tied to a realistic and clearly defined timeframe.

Charles Worthington, a board member and the CTO at the Veterans Affairs Department, said the panel was surprised it didn’t see more shared services or at least multiple agency proposals.

Thomas reiterated what Kent, board members and the TMF program management office have been saying for some time: The board wants projects that could be emulated across the government and that could be “flagship” or “lighthouse” projects where others easily can see the benefits.

One industry source, who also went to the summit and requested anonymity for the same reasons, said Kent said the three agencies that won funding in June — the departments of Agriculture, Energy and Housing and Urban Development — came with a clear vision and requirement, and received bonus points if they had done a pilot, or demonstrated a track record of success and were moving into scale and implementation to better ensure success.

Energy pushing for culture change

Interesting insights, but far from earth-shattering details that haven’t been talked about before.

In fact, Max Everett, the Energy CIO, said in June at an AFCEA Energy event, that the focus on moving the entire agency to cloud email and the extra money were part of the reasons for developing a business case proposal, but the overarching decision came down to addressing the fundamental way the agency manages technology.

“One of the other things that is really important about TMF is building a business case, having an holistic picture that you can present to leaders about where you are going and why,” he said. “It’s not just about we need a new thing or it’s time. It was lined up to all of our mission functions and priorities, and it told a story. That was really important because for us as a very federated department with dispersed capabilities all over the nation, this was about some other things. It was about collaboration, common baselines on security, enhanced mobile user experience. It will encourage us toward a true life cycle model for managing our IT.”

He said the cloud migration project represents “significant culture change” for the department.

And it’s that concept that attracted the board to fund Energy’s proposal, the board members said at the summit.

Sources say the board members highlighted the need to break down siloes when it comes to IT and the second order effects of culture change was highly attractive.

Kent said as part of the requirement to get the funding the board tasked DoE to create a playbook so other agencies could follow their model.

The first source said Kent highlighted the fact that Energy already had done the planning and needed money to accelerate it.

Everett said that planning started when he arrived at Energy more than a year ago.

“If there is no other value to cloud email, just being able to talk about a number that is associated with that service of a mailbox has some value by itself,” he said. “We spent a lot of time looking at what the costs are for all of these disparate systems across the department, understanding the costs and the experience we had with moving parts of the department into cloud email. We actually had a good idea of what those costs were, and we sought other agencies who had that experience as well. Then we started to push people to give us real numbers on what it cost to run their on-premise emails. That had been a little of a challenge, to be frank.”

He said too often Energy organizations didn’t account for all the assorted costs of energy, backups, storage, hardware, labor and other things.

Paying back the extra funding is the only option

A big issue for both government and industry at the summit was how HUD, Energy and USDA, and eventually others, would pay back the TMF loan.

The second source said they got a sense that agencies were complaining a lot about the requirement to pay back the loan, but Kent said OMB made it clear to agencies that once they were in for a dime, they were in for the whole dollar.

The sources said Kent made it clear that even if an agency fails, they still have to pay the loan back.

“They are being strict on that requirement,” the source said.

The first industry source said Kent also left no doubt that agencies cannot ask for more money in their budgets to pay back the loan.

The source said Kent said Congress expects that the modernization will run more efficient and cost less money, and has clear expectations about seeing a real dollar return on investment.

Kent said the board will work with teams about meeting payback expectations.

To that end, the second source also said the board is tying all projects to a reporting dashboard, detailing deliverables and milestones.

The source said Kent made it clear that once the project is accepted, the CFO, CIO and program manager must report back to the board on a regular basis that they are all working in the same direction. What is particularly important, said board member and Social Security Administration CIO Rajive Mathur, is that the CFO needs to understand the terms of repaying the loan.

The source added Kent underscored the fact that if the agency fails to meet its project deadlines, the board will stop the funding stream and the CIO and CFO still will be responsible for paying back the loan.

As for the new projects that Thomas referred to as in the cue, the first source said Kent emphasized that the board wants to see more “product based” proposals that are focused on commercial technology.

The source said they hadn’t heard board members talk so definitively before about the desire for agencies to bring in commercial innovations.

What’s ironic about all of these details is getting multiple stories in the press about the board’s oversight and rigor of the process would help alleviate lawmakers’ concerns about the program and help the Senate reinstate TMF funding for fiscal 2019. Instead, concerns about getting “clearance” and “approved talking points” continued the veil of secrecy around the fund that put OMB in this hot water in the first place.

Read more of the Reporter’s Notebook