Tech Groups Urge Congress to Add Billions to TMF and Drop Some Repayments

The 12 biggest government-focused technology advocacy groups are urging lawmakers to increase the Technology Modernization Fund by billions of dollars, bolster the managing board with added staff and expertise, and eliminate the repayment structure for projects tackling the pandemic and the recent SolarWinds breaches.

In a letter Wednesday to congressional leadership—including House Speaker Nancy Pelosi, D-Calif., House Minority Leader Kevin McCarthy, R-Calif., Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky.—the tech advocacy groups wrote to confirm their support for a significant investment in TMF, to the tune of billions of dollars.

To date, Congress has only approved a maximum of $150 million for the fund: After an initial outlay of $100 million, lawmakers have declined to add more than $25 million per budget cycle.

Shortly before taking office, President Joe Biden released the American Rescue Plan, which, among other things, requested Congress add $9 billion to TMF as part of the broader $1.9 trillion spending package.

Wednesday’s letter—signed by the Alliance for Digital Innovation; BSA | The Software Alliance; the Center for Procurement Advocacy, or CPA; the U.S. Chamber of Commerce; the Computer Technology Industry Association, or CompTIA; the Information Technology Industry Council, or ITI; the Intelligence and National Security Alliance, or INSA; the Internet Association; the National Defense Industrial Association, or NDIA; the Professional Services Council, or PSC; the Security Industry Association, or SIA; and the Software and Information Industry Association, or SIIA—strongly recommended meeting that funding request and making changes to how the fund is managed and operates.

Along with funding, the letter calls on Congress to change how the TMF operates by allocating at least a portion of the new funding to be given away as grants instead of loans.

“We further recommend that a substantial portion of the total amount provided be exempt from the TMF’s usual reimbursement requirements to accelerate urgent IT upgrades,” the groups wrote.

The TMF—established as part of the Modernizing Government Technology Act of 2017—was designed to be a self-sustaining centralized pool from which agencies can apply for loans for technology upgrades.

The program works through a proposal-approval process, in which a board of federal technology officials review pitches from agencies and pick the projects they believe will have the greatest return on investment and ability to scale across government. The board also focuses on return on investment because the ability to repay the loan over a set period is key to the fund’s continued operations. Currently, agencies must repay the fund over three to five years. 

The letter cites the ongoing COVID-19 pandemic as a primary reason for the influx in cash and diversion from the payback model.

“Since the beginning of the pandemic, Americans, particularly the most vulnerable populations, have been unable to access most government services in person. Yet federal agencies still rely on many outdated and legacy IT systems and paper-based processes that have hampered the effectiveness of government operations and mission delivery,” the letter reads. “Updating these systems is not only critical to improving access to services but also to ensuring those who are most in need of government assistance receive the emergency funding Congress has appropriated.”

Along with outward-facing citizen services, the groups also noted the mass teleworking brought on by the pandemic has created new security concerns. Those concerns, coupled with the recent revelation that a sophisticated hacking campaign breached multiple federal agencies, have heightened the need for cybersecurity funding.

One of the entryways hackers used—compromising network management software from SolarWinds used widely across government—means it will take time to root out every corner of agency networks that might have been breached.

“The cyber remediation activities that will be necessary following recent compromises also create unavoidable and considerable unanticipated costs,” the group wrote. “Excusing repayment requirements can also help with federal recovery and ensure that security and resiliency against future critical events of all sorts are incorporated up-front in the technology transformation that will be enabled by these funds.”

While the groups recommend removing the reimbursement requirement for COVID-related programs and remediation of the SolarWinds breaches, the remaining funding should continue to be administered as it has been. That said, the groups suggested adding more support staff to the TMF Board.

“Additionally, to ensure the funds provided are directed to and used optimally for the government’s highest priority IT projects, we strongly recommend that Congress ensure that the TMF board is supported by professionals with the appropriate technical, financial, management, cyber, and acquisition expertise,” the letter states.