Federal CIO: Limited TMF funding shrinks scope of IT modernization projects

New guidance from OMB this week prioritizes the optimization of existing data centers over further consolidation.

Five agencies saw higher scores this year under the eighth Federal IT Acquisition Reform Act (FITARA) scorecard released by the House Oversight and Reform Committee, and another five agencies posted lower scores. But members of the committee have expressed concerns with how the Office of Management and Budget will measure progress going forward.

New guidance released earlier this week from OMB no longer requires agencies to maintain inventories of the smaller, non-tiered data centers that make up about 80% of their inventory and would prioritize the optimization of existing data centers over further consolidation.

Carol Harris, the director of IT management issues at the Government Accountability Office, said the updated guidance would make it difficult for Congress and her office to track progress.

“If these changes are implemented as is, the committee will lose the ability to track and measure progress in this area since the initial scorecard, because the baseline for comparison will have changed,” Harris said, adding that the changes would “likely slow or even halt” progress agencies have made to consolidate and optimize their data centers.
Federal CIO Suzette Kent

Federal Chief Information Officer Suzette Kent said some agencies still don’t yet have a sense of whether some applications will move to the cloud or stay in on-premises data centers. But Oversight and Reform Subcommittee Chairman Gerry Connolly (D-Va.) said the focus on optimization gives agencies wiggle room to avoid consolidation.

“Our concern is that when OMB gives guidance on optimization and exempts 80% of the data centers from specific inventory plans, you’re skirting the intent of the law,” Connolly said. “The intent of the law was always to identify how many data centers we had, which was a struggle, and then cut them in half and then cut them in half again. That was the goal.”

Five agencies posted higher scores on this year’s FITARA scorecard: The departments of Agriculture, Defense, Justice and Treasury, as well as the Nuclear Regulatory Commission.

Another five agencies posted lower scores on FITARA: The departments of Energy, Homeland Security, Health and Human Services, the Environmental Protection Agency and NASA.

The House on Wednesday passed a “minibus” of spending bills that would give the Technology Modernization Fund $35 million, a sum that subcommittee ranking member Mark Meadows (R-N.C.) dismissed as a “rounding error” in the greater scheme of federal spending.

Connolly had proposed an amendment that would have increased the fund to $50 million for FY 2020, but the amendment failed to pass.

Del. Eleanor Holmes Norton (D-D.C.) asked Kent whether the TMF could remain solvent given its current funding levels. Kent told Norton that agencies remain on-track to pay back the funds loaned to them under the TMF, but lower funds limit what the fund can do.

“We have a plan for solvency, but it limits the number of projects and the acceleration of modernization that we can do going forward. That’s my concern,” Kent said.

Projects that have been awarded TMF funds, she added, have brought the chief information officer and chief financial officer communities together in a way not seen before.

“They had to reconcile the spend and the payback plan and what the benefits look like in a way that they have never been tasked to do before to ensure that it is cost recoverable,” Kent said.

The fund received $100 million in FY 2018 after passing the Modernizing Government Technology Act, and was awarded $25 million in FY 2019. The proposed funding level falls short of the $150 million proposed in President Donald Trump’s FY 2020 budget.

But Connolly said agencies that have created working capital funds, which hold the costs savings from IT modernization projects, have been unable to access those funds, even though the MGT Act authorized agencies to create those funds.

“We passed the law, it’s quite clear what the intent is,” Connolly said. “They have a sudden hurdle from inside agencies, attorneys saying, ‘Well no, you can’t do that.’”

Kent said a legislative fix would be needed, but said proposals to approve blanket language for all agencies had been rejected multiple times, which has led her office to focus on individual agencies and their authorizing committees. Right now, she said the focus is on clearing some of the hurdles on the Education Department accessing its working fund.

But GAO’s Harris said the intention of the law was clear that agencies would have the authority to create these funds. “When MGT was passed, the intent was that that transfer authority would be there. So while I’m not a lawyer, it kind of boggles the mind that you would need additional legislation in order to offer that transfer authority,” Harris said.

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