The Government Accountability Office (GAO) has stated that the Technology Modernization Fund (TMF) costs more to operate than it receives in fees.
The General Services Administration (GSA) and the Office of Management and Budget (OMB) oversee the TMF, which grants federal agencies funds to replace outdated IT systems. Congress initially provided $ 175 million, of which 11 projects received $ 89 million. The American Rescue Plan Act of 2021 added $ 1 billion to the fund. The agencies reimburse the fund and pay a fee within five years of the award.
GAO found that of the initial $ 175 million Congress approved for TMF, the Technology Modernization Board had approved eleven projects totaling approximately $ 89 million by August 2021. Agencies could use these savings to meet the obligation to reimburse the TMF for all referrals within five years. Of the seven projects approved in 2018 and 2019, two reported that cost savings were achieved, but these savings are not documented. In the remaining five projects, two are no longer planning any savings, two are planning savings to start in one to three years, and one does not know when savings will begin.
One of the 11 projects is the US Customs and Border Protection’s Automated Commercial Environment Collections Module project, which aims to modernize the legacy platform of the automated trading system to improve customs enforcement, revenue collection, trade protection and the user experience through improved functionality and business capabilities. which in the long run reduces the operating and maintenance costs of the existing system. The agency expects to complete the project in fiscal year 2024.
In May 2021, OMB provided the authorities with updated TMF guidelines to fund the US $ 1 billion rescue plan. Among other things, the guide prioritizes projects that are cross-agency and close immediate cybersecurity gaps, and allow agencies to request a partial or minimal refund of the TMF funds made available.
On September 30, 2021, the GSA approved seven new projects totaling at least $ 311 million. In deciding on these seven, the Technology Modernization Board received 113 project proposals totaling more than $ 2.3 billion.
One of the seven new projects is the Department of Homeland Security’s Southwest Border Technology Integration Program. The project aims to enable standardized and secure data exchange throughout the federal enterprise and throughout the immigration lifecycle in order to improve border flow and capacity management and to increase the timeliness and reliability of the data used by decision-makers.
In terms of TMF operating costs and the fees charged to offset those costs, GSA had received total fee payments of approximately $ 810,000 by August 2021, or approximately 29 percent of its operating costs of $ 2.8 million. GAO noted that a primary reason for this deficit is that six of the seven originally approved projects have scaled back their scope. This resulted in lower allotment amounts being transferred to agencies, which in turn resulted in a reduction in expected fees of approximately $ 1.12 million. In this regard, OMB and GSA have not yet implemented the previous GAO recommendation to develop and implement a plan to fully reimburse operating expenses through charging.
The OMB funding guidelines require projects to provide a reliable estimate of all project-related savings. However, GAO noted that most of the savings estimates derived from cost estimates for the TMF projects remain unreliable. In particular, three of the four projects audited did not fully take into account the best practices for a reliable cost estimate.
Previously, in 2019, GAO issued two recommendations that were not met and that the Guard believes need to be implemented in order to improve adequate charging and the quality of cost estimates.
These recommendations call on the OMB and GSA to develop and implement a plan outlining the actions required to fully meet the operating expenses of the TMF Program Management Office through timely charging; and for the GSA to develop detailed guidelines to assist agencies in producing their TMF cost estimates.