Administration introduces ‘more flexible’ TMF repayment model

Agencies that take money from the federal Technology Modernization Fund will now have more flexibility in how they repay those investments, the Biden administration announced Tuesday.

The Office of Management and Budget and General Services Administration, which lead the administration of the fund with the TMF Board, introduced “an updated and more flexible model” for distributing the $1 billion recently appropriated to the TMF.

Under that, there will now be three categories of repayment for TMF projects:

• Full repayment: For projects that yield direct financial savings that can be used to fully repay the TMF.
• Partial repayment: For projects with strong positive impact and which will yield some financial savings, but where the proposing agency doesn’t expect to reach full cost recovery.
• Minimal repayment: For projects aimed at tackling the most urgent IT issues facing the government, including critical cybersecurity improvements and initiatives that help agencies meet the demands of the COVID-19 pandemic, but which are unlikely to create direct cost savings.

The original TMF repayment model, which required the repayment of all funds within five years, had been a major source of contention and a reason many agencies didn’t want to participate in the program, despite the opportunity for additional funding. The changes also come after lawmakers have urged administrators to update the fund to be more flexible for agencies to use.

“The TMF enables multi-year transformational projects by ensuring Federal agencies have resources that exist throughout the lifecycle of modernization,” said Federal CIO Clare Martorana in a statement. “We plan to use these resources to enable the Federal Government to better respond to SolarWinds and the COVID-19 crisis, and to support the economic recovery.”

On top of this, the board will also now prioritize selecting and funding projects “that cut across agencies, address immediate security gaps, and improve the public’s ability to access government services,” said a release from OMB and GSA. The board will give top priority to projects focused on modernizing high-priority systems, cybersecurity, public-facing digital services and cross-government services and infrastructure.

“The updated TMF model provides the clarity and flexibility necessary to encourage Federal agencies to prioritize technology modernization while transforming the relationship between the Federal Government and the public we serve,” Acting GSA Administrator Katy Kale said in a statement. “It is more aggressive – to meet the urgent technology needs of the Federal Government today, as well as more ambitious – to anticipate the demands of tomorrow.”

The board “encourages” agencies to submit proposals that might fit these prioritized categories by June 2.