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What $9 billion would do for the Technology Modernization Fund

The Alliance for Digital Innovation's Matthew T. Cornelius looks at how a new administration's big investment could alter the fund he helped set up.

What $9 billion would do for the Technology Modernization Fund

The funding itself is only half the battle.

Photo: Joshua Sukoff/Unsplash

The Biden administration wants to give the Technology Modernization Fund a $9 billion payday. In doing so, they could change what the fund actually does.

Matthew T. Cornelius, now the Alliance for Digital Innovation's executive director, was instrumental in getting the fund off the ground back in 2018. As a senior adviser for technology and cybersecurity policy at the White House's Office of Management and Budget, he helped make some of the fund's first investments in government IT modernization. At the time, though, there was only about $100 million in the fund.

Now, as a part of the sweeping $1.9 trillion American Rescue Plan laid out last week, the Biden administration has shared its plan to increase that total almost 90-fold to $9 billion. For Cornelius, that kind of investment could give the TMF the power to effect change across the government's IT infrastructure instead of solving agency-specific challenges, as it has done to date.

But the funding itself is only half the battle. The other challenges Cornelius sees are figuring out new frameworks that agencies can use to repay the funds if the fund does have more cash on hand and communicating why the fund is more effective than traditional budgeting processes when it comes to tech investment.

"If President Biden's team gets this money for the TMF, what I would hope is that the [General Services Administration] and OMB communications teams loosen up some of their strings and allow the board to go out and talk about what they've done," Cornelius said. "Because even under the constraints it's operated under, where it's had very limited funding, the success stories are there."

In an interview with Protocol, Cornelius examined how the expansion of the fund could open the door to enterprise-level changes within government services and considered how the fund itself could take new shape if that money made it through Congress.

This interview has been edited and condensed for clarity.

Before we get into any details on how the fund might change with a new administration, what makes the Technology Modernization Fund an effective vehicle for creating change within the government?

Normal budget and appropriations processes take lots of time. Agencies will start preparing their budgets in the summer. They will submit them to OMB in the fall, and there will be a bunch of back and forth. A budget comes out in February, and then it takes another six to nine months, if you're lucky, to pass an appropriations bill.

By the time an agency has an idea for what they want to do in technology, it takes months, if not a year or a year plus, to get money to start actually working on it. So the project is already pretty much obsolete by the time it actually gets approved. The pace of technology innovation moves far too fast for normal government procurement cycles.

If the money were more flexible, if the oversight were more effective, and if OMB and agencies could work more closely together to drive real outcomes the way the TMF allows versus operating under the constraints of the normal funding of approaches, that could lead to dramatically better outcomes.

When you were working with the fund, how were you prioritizing which projects would have access to that kind of flexible funding?

The TMF was an idea that started in 2016, but it wasn't until the 2018 National Defense Authorization Act that the TMF was actually created. And it was appropriated with $100 million initial investment soon after. During that time, OMB and GSA worked a lot with technology experts across the government — with CEOs, with CISOs — to try to figure out what the high-priority projects were for individual agencies, as well as cross-agency problems.

The important thing about the TMF is there's no one person that has control over it. There's a board that sits over top of the fund that accepts project proposals and makes the determination on what should be funded. In that time leading up to when the fund was actually created and there was money available in it, we actually set up a mock board. We brought in some technology experts across government and [gave them] 25 different examples of potential projects and different characteristics of things that might come in front of you if you become a board member.

We had a lot of thinking that went behind it before the first project was even submitted for review, so that by the time the bill passed, you had a board that came up with their set of characteristics: Is the approach smart? Do you understand the technology market? Is there going to be a citizen service component? The board basically went out to the federal agencies and said, "Here's what we're looking for. If you think you can meet these criteria, submit projects and we'll take a look."

President Biden proposed last week that, as a part of the broader relief package, the TMF would get $9 billion in funding, a far cry from the $25 million allocated to it in FY 2020. If that were to pass, how do you see the fund's priorities changing?

There's two things here: One, if President Biden is able to work with Congress to get $9 billion, or even if they get $3 billion — the original amount that the Obama administration requested — the board is going to have to take a fundamentally different approach to how they look at projects.

Traditionally, the way the TMF has worked, agencies will come to the board and submit projects. Maybe it's to move some applications to the cloud, maybe it's to set up a new customer experience board or maybe it's to move some paper-based process to a digital process. Those are some things that the board has funded in the past, but with that amount of money, the board should instead be looking across the agency. They should be looking for widespread, common technology issues that they can invest in to drive a whole-of-government approach to technology modernization.

There are significant investments to make. I'm thinking of things like collaboration tools, so that agencies can talk and share information more easily across the departments. I think of secure remote work. The government's going to have a much more virtual footprint than a physical footprint when it comes to technology going forward. So how are you going to ensure that agencies have the right kind of telework capabilities that are both secure and highly functional? You're going to look at some large replacements of legacy systems.

I think you'll see a big push on things like unemployment insurance systems and other big infrastructure investments that you can make that will improve the way that the government does identity management. There's no common identity solution across the government.

In terms of the actual dollar amount, we've seen $1 billion, $3 billion and now $9 billion suggested. Those aren't small differences, and the price tag seems to be continually increasing. Is $9 billion the actual number to make the necessary changes?

Frankly, I think it's probably larger than $9 billion if you want to get true transformation out of the fund. The government spends somewhere between $90 billion and $100 billion on technology every year, so even $9 billion is essentially a 10% down payment on trying to get some long-term change.

I applaud the Biden team for thinking big or understanding that the challenges we face are enormous, that responding to COVID is difficult and that getting the economy back up and running is going to rely on government operations being more effective and more efficient. I think that's why they went with such a significant number. And I think the other numbers that you've seen have been driven more by political considerations and policy considerations and not so much about the need.

Let's say one of the larger-dollar figures makes it through Congress and the fund can focus on enterprise-wide change. If you were on the board making the funding decisions, where would the priority lie?

Investing in cloud is incredibly important. There's still far too many agencies that are laggards in comparison to a lot of commercial companies when it comes to the move into the cloud. And the amount of paper-based processes that you have in government and the amount of time it takes to move across multiple agencies slows down how government services work.

One of the investments that the TMF has already made is in improving the H-1B visa process. If you're a farmer and you want to hire a seasonal worker, you have to submit a form through the Department of Agriculture. It would go through a portal there, then it would go to the Labor Department to make adjustments and to make a determination on applicability. They would print it on this blue security paper and snail mail it to the Department of Homeland Security to check all of the immigrant databases and everything else. They would mail that determination with the blue security paper to the State Department so the state department could issue a visa, and [the State Department would] send a paper visa to the employer so they could give it to the seasonal worker.

The investment that TMF made to digitize that entire process made it easier for the business owner, made it easier for the seasonal worker, made it easier for the agencies to share data securely and effectively and line up all of that data in a structured way.

So viewing that example through the lens of more funding and through enterprise-wide change, would you then look at any process similar to the visa application and try to unify them?

Yeah, I think that's right. And when I say that, I don't mean that you just have to go to one solution. You don't just have to take a billion dollars and give it to vendor X and have them do everything.

But you also shouldn't have to provide the same amount of information in government documents nine different times in nine different forms. If you send that data in, you [should be] getting a visa, a social security card, something like that. It should be easy to make sure that data is shared to other agencies, so that when you're applying for benefits, when you're signing up for programs, when you're looking for services, that information can be safely and securely shared. When I tell [ADI's] members about how that works, that's the stuff that blows their mind that the government can't do.

Beyond the funding itself, the repayment period seems to be the other thorny issue. How do the ideas of a larger pot and less-strict repayment frameworks mesh?

Back when the TMF was originally stood up, we were still operating under the BCA. There were still strict budget caps. There were lots of spending fights between the Obama administration and the Republican Congress at the time. It was a much more acrimonious budget constraint environment, and part of the argument the Obama administration made was that [moving] people off these old systems would result in cost savings that they could pay back into the fund. And I still think that's true, but we're now operating in a different world. Those budget caps are gone. The government's gone on a multitrillion-dollar spending spree, and the work the government is doing is hampered even more dramatically at this scale because of this old technology.

If we are serious about truly changing some of the technology issues in government, we really need to get rid of the repayment strings, but keep all of the other oversight and accountability provisions.

Before any project is ever funded, the TMF board submits a spend plan to the appropriators, so they show Congress what we plan to invest in [and] the outcomes and how quarterly reporting is going to work. They go back and brief individual committees on projects on an as-needed basis. I think that level of commitment and that level of transparency is something you wouldn't get under the normal budget process.

That's what I would hope the appropriators understand. Of course they want tight strings on things. They want to make sure they have control, but the problem is too great. The need is too acute. And we really have to get that money moving as quickly as possible. Keep the accountability there, but give the executives flexibility to make smart investments the way that they want to. And don't artificially constrain their ability to match the right amount of money to the projects with the highest probability of success, because a lot of those repayment strings keep that from happening.

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