The Technology Modernization Fund Board chose its first shared service to win a “loan” to accelerate its modernization efforts.

The board announced Feb. 11 that the General Services Administration’s NewPay proposal would receive $20.6 million to help agencies adopt a commercial, software-as-a-service (SaaS) approach for payroll.

“As the last proposal accepted in 2018, the board believes the NewPay proposal is a critical step forward to transform an antiquated technical and operational process,” said Federal Chief Information Officer Suzette Kent in a statement. “We are pleased to support a project that will accelerate the journey to make available modern payroll services for all agencies and drive efficiency across government.”

GSA awarded a blanket purchase agreement (BPA) in September to two teams of contractors to help move agencies to a modern payroll system. Under the BPA, GSA and the vendors will use common, governmentwide standards to adopt commercial solutions and gain efficiencies and economies of scale.

The TMF Board loan will help GSA complete the initial transition to a SaaS approach by the end of fiscal 2019. The agency said its goal is to complete the entire transition in two years.

“Without this funding, GSA would need to delay establishing the cloud-enabled SaaS solution until a future year when dedicated upfront funding could be secured from the current user base or other sources instead of paying for the investment over a period of years,” GSA said in its proposal to the board. “By the end of this project, GSA will be better positioned to serve as a federalwide shared service provider, will have migrated all of its 21,000 users to the NewPay payroll solution, and will have established a work schedule and leave management (WSLM) service integrated into the NewPay payroll solution.”

“This project clearly aligns to the President’s Management Agenda, particularly around our efforts to modernize technology and expedite towards shared services,” Margaret Weichert, deputy director for Management at the Office of Management and Budget, said in a statement.

The TMF Board made two earlier loans to five agencies, including GSA and the departments of Agriculture, Energy, Housing and Urban Development, and Labor. So far, only three projects received their initial disbursement of funds from the TMF.

The board still has $10.8 million remaining out of the initial $100 million Congress allocated in fiscal 2018.

It’s unclear what the TMF will look like in 2019. Initially, House lawmakers allocated $150 million, but their Senate counterparts zeroed out the funding.

The House passed in January a consolidated appropriations bill that included $25 million for the fund. The Senate never took up the bill. It’s unclear what the new spending deal will include for the fund.

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