Rep. Hurd unveils version 2 of IT modernization bill

The Modernizing Government Technology Act will let agencies keep savings for up to three years to reinvest in IT transformation projects.

Rep. Will Hurd (R-Texas) is taking a second bite at the IT modernization apple. Hurd introduced the Modernizing Government Technology (MGT) Act April 28 with minor tweaks to assuage any concerns by the Congressional Budget Office.

Hurd’s second version of the bill is almost identical to last session’s version, which while widely supported by the Obama administration and the House, lost steam in the Senate partly because of a high budget score by CBO.

The legislation includes a working capital fund that lets agencies “bank” savings and use them for up to three years for other IT modernization initiatives.

Hurd’s goal is to eliminate the “use it or lose it” approach agencies have faced for decades when it comes to IT savings.

“Our government needs to be able to introduce cutting edge technology into their networks to improve operational efficiency and decrease operational cost. The MGT Act does just that,” said Hurd who is the chairman of the Oversight and Government Reform IT subcommittee, in a release. “We’ve been fighting to get this bill signed into law because the American people deserve better from their government. A move toward modern technologies can keep our information and digital infrastructure secure from cyberattacks, while saving billions of taxpayer dollars.
This legislation is an innovation solution and another step forward in strengthening our digital infrastructure.”

Among the changes to version 2 of the bill:

  • The IT Modernization Fund is authorized at $250 million a year for two years and is managed the  General Services Administration’s Technology Transformation Service (TTS).
  • Through the working capital fund, agencies would have five years to pay back loans to the Technology Modernization Fund. In version one, the time for payback  was unlimited before.

Hurd said in an interview with Federal News Radio that the working capital funds create incentives for agencies to save money. He said agencies should already know their baseline of costs.

“Part of the oversight we will have to do is show how this is being used,” he said. “There are 24 CFO Act agencies and I guarantee not everyone will take advantage of this working capital fund idea, and there will be some who will do it well and some who will do it poorly. This is why I like the idea of a decentralized fund. Rather than having this one fund that everybody gets access to, it’s going to be implemented and used 24 different ways. I think that is better and we will learn from its use and some of its best practices.”

Hurd said MGT’s impact on federal cybersecurity and using the working capital funds and the ITMF to improve how agencies protect their systems and data maybe the better sell for the appropriators.

“I appreciate the commitment of Reps. Hurd and Connolly to IT modernization and applaud the reintroduction of the MGT Act. Importantly the bill authorizes seed funding for the IT Modernization Fund, which if provided through the appropriations process would jumpstart IT modernization,” said Mike Hettinger, a former Hill staff member and now president of Hettinger Strategies. “I look forward to working with these two members, Sens. Jerry Moran (R-Kan.) and Tom Udall (D-N.M.) who will introduce the Senate companion, as well as the other cosponsors to enact this important legislation.”


Hurd said the moving the ITMF to TTS came from the White House’s Office of American Innovation (OAI).

“The goal, and I think this is where the White House is  going to give probably some pretty clear direction, is to have TTS run the fund,” he said. “Now you have to start by getting appropriations into it. That is step one. That will be a debate that we have as we go through the fiscal 2018 appropriations process. TTS is  nimble, creative organization that has a proven track record of doing innovative things. I think that is what attracted everybody involved to ultimately manage this fund.”

Reed Cordish and Chris Liddell, assistants to the President and members of OAI said in a release that they are excited about the bill’s introduction.

“This important bipartisan work, led by Rep. Will Hurd and Rep. Steny Hoyer (D-Md.), will enable significant progress to be made toward creating a more effective, efficient, and accountable government for all Americans,” Cordish and Liddell said.

MGT already is receiving strong support from House leadership.

Rep. Kevin McCarthy (R-Calif.) said in a release that he will schedule the bill for a full vote as soon as it passes the Oversight and Government Reform Committee.

Hurd said he expects the House Oversight and Government Reform Committee to mark up MGT Act on May 2.

Additionally, the bill has bi-partisan and bicameral support.

Reps. Gerry Connolly (D-Va.) and Robin Kelly (D-Ill.) are co-sponsors.

Kelly, the ranking member of the IT subcommittee, said the bill is long overdue and will bring innovation to federal technology.

Connolly said MGT will help agencies move the cloud and builds on the Federal IT Acquisition Reform Act (FITARA).

“The working capital funds established by the MGT Act will create an incentive for agencies to find savings and reinvest them internally, creating a virtuous cycle. This reform has the potential to significantly speed up the federal government’s move to 21st century technologies,” Connolly said.

Moran and Udall also are expected to introduce the companion bill on Friday or early next week.

Lawmakers have been working on a fix for the bill since it fell short last session.

The CBO said the bill would cost $9 billion to implement — $3 billion for the Obama administration’s IT Modernization Fund and $6 billion in agency funding that otherwise would’ve been returned to the Treasury.

Hurd and others said they thought the CBO score was “ridiculous” and off base.

But the $9 billion estimated cost also stopped less knowledgeable members of the Senate from supporting the bill.

Hurd said his office addressed the CBO score challenges in several ways.  First, working with the OAI, they reduced the ITMF from $3.1 billion to $500 million over two years. Second, Hurd said they worked with CBO to modify the working capital fund concept.

“We feel good about it,” he said. “We have more time in order to talk to our friends on the Senate side. The White House is behind this firmly and will be working with us to make sure this gets passed.”

Whether or not the bill passes, the Office of Management and Budget is asking agencies to do the necessary research and analysis to modernize systems and networks. OMB released guidance in October detailing four phases to develop strategic plans.

It’s no surprise industry is supportive of MGT. Associations such as the Professional Services Council and the IT Alliance for Public Sector put out statements applauding Hurd’s introduction of the bill.

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