TMF-backed projects to bring $1B in cost savings in coming years, watchdog finds

Most of the Technology Modernization Fund’s projects have yet to achieve expected cost savings, according to the Government Accountability Office, but there’s big money to be saved on the horizon. 

Two dozen projects are expected to reach savings of more than $1 billion, a figure that exceeds  total TMF investments across its broader 68-project portfolio. Nearly a dozen of those have realized a combined $13.5 million in savings, while another 13 have not achieved savings at all, according to the GAO audit published Thursday. 

“While savings thus far have been small, the amount is not unexpected given that 21 projects — with expected savings of about $1.04 billion, or 98.3 percent of the total — anticipate achieving their savings in fiscal year 2027 or later,” the watchdog said in its report.  

Six TMF-funded projects that expected cost savings have been completed. Two were on track to meet their cost savings target. The watchdog found that the others missed the mark.

A General Services Administration project went through “a major change that descoped planned work and reduced expected savings,” per the report. At least one other project met a similar fate, leading to less savings than initially planned.  

Higher-than-expected migration and transition costs led another project’s predicted savings to not materialize. Seven other projects were cancelled. 

The audit comes weeks before TMF’s authorization is set to expire. At the end of September, TMF cannot make new investments — and help is unlikely to come soon. 

The appropriations bill that would give $5 million for the fund has yet to receive a floor vote in either chamber. Even if Congress passed the bill, it would need to be signed by the president before funding can take effect. 

Despite money running low, TMF is open for proposals amid a quickly narrowing window that closes Friday. The group will be prioritizing proposals centered on permitting technology and AI adoption.

TMF was created in 2017 to fund tech projects across the federal government, fueling a number of initiatives, including modernizing COBOL systems, redeveloping websites and implementing machine learning. The group has also put more than $52 million into classified projects.  

While cost savings was one of GAO’s focuses in the audit, TMF has other goals. Nearly 40 of its projects do not anticipate bringing cost savings at all, instead focusing on improved security or operational efficiencies. 

GSA told the watchdog that distinguishing between cost savings and cost avoidance in its report  “understates the full financial benefit generated by TMF investments.” The auditors agreed that the cost savings noted in the report would be higher if other factors were added in.