Though it may not make for exciting reality television, the federal government’s own investment competition has put out a call for more agency proposals to use some of the money pooled in the new Technology Modernization Fund.
The TMF was established in December 2017 as part of the Modernizing Government Technology Act and holds $100 million in grant funds that agencies apply for to begin or hasten along IT modernization projects.
“The proposals with the greatest impact, strongest business case and highest probability of success are selected to receive funding from the TMF,” Elizabeth Cain, acting director of the TMF Program Management Office, said in a May 22, 2018, webinar on the TMF application process.
According to Cain, agencies have expressed initial confusion about what a good modernization proposal should look like, how the process for paying back TMF funds would play out and how best to coordinate within their agency to fill out an application.
Cain said that the application process for TMF funding formally begins when an agency submits a short, two-page proposal through its own investment review board to the Technology Modernization Board for consideration.
“Our template is pretty lightweight for that initial project proposal stage and we did that intentionally, because what we wanted was agencies to be able to draft it up quickly, get it to the board quickly, get the board’s feedback quickly, without a lot of work on the agency’s side,” Cain said.
The board then takes about a week to vote on the proposal, at which point an agency can receive one of three answers: the proposal has been approved for the next stage of consideration; the agency needs to answer some more questions before the board can make a decision; or that kind of proposal isn’t what the board is looking to fund at the time.
“After that, agencies have ... about four to six weeks to develop their full project proposal, which includes a narrative template, a financial template and finally an in-person presentation to the board, modeled on the television show ‘Shark Tank,’” said Cain.
According to Cain, there is no limit on how little or how much money an agency can request on their proposal, but the sweet spot for successful proposals is generally between $2 million and $10 million.
“What that shows is usually a project that the agency can deliver on in a shorter period of time,” Cain said.
“It’s an increment where the board can really see the change that investment is going to make in the agency’s system or process, and that also allows us to fund multiple proposals within our $100 million allocation.”
If a project is selected by the board, the agency would receive incremental payments as they reach certain project milestones, and the amount and spacing of those payments determines how an agency would pay back the fund.
“Your first repayment to the fund has to be within one year of your first transfer, and your last repayment to the fund, closing out your loan, has to be within five years of your last transfer. So the full repayment period will depend on how many transfers you do and how many fiscal years it crosses,” Cain said.
“The board has some skin in the game on these projects and is going to do everything they can to make that successful so that the agency doesn’t feel left out in the cold, holding the bag on that repayment.”
There are three general ways that agencies can think about their strategies to pay back the fund:
- Treating the project akin to remodeling a bathroom in your house and needing a loan to spread out the cost over a period of time. Agencies could pay back that loan as incremental funding comes in through regular appropriations over the years.
- Using savings incurred as a result of the newly modernized IT system to pay back the fund.
- Repaying funds through fee collections from a shared service that an agency creates with TMF funding for many other customer agencies to use.
But agencies that are uncertain whether their project ideas would merit TMF approval don’t have to play a guessing game.
According to Cain, anyone from an agency can schedule a meeting with her Project Management Office to do a “gut check” on whether their project would be likely to be granted funding. Agencies can submit as many project proposals as they want and could even team up with another agency to submit a proposal for a shared service program.
“The authorizing statute for this fund gives really broad authority to accept proposals from anywhere. We can accept proposals from small agencies, and it would be new to have one from [the Department of Defense], but I would be excited to receive it,” said Cain.
Resources on how to submit a proposal to the board are currently housed on the Office of the Federal Chief Information Officer website, though Cain said that a new site exclusive to the TMF is in the works.