When Could Money Start Flowing from the Proposed $3.1B IT Modernization Fund?

Published: May 03, 2016


Federal contractors wondering when they will begin to see the impacts of the proposed $3.1 billion revolving Information Technology Modernization Fund (ITMF) included in the White House’s fiscal year (FY) 2017 budget request got a hint recently from a DHS official . . . and it may not be what was expected.

The ITMF was presented in the FY 2017 Budget from the White House under Strengthening Federal Cybersecurity.  This proposal would create a new $3.1 billion in revolving funding to “retire antiquated IT systems and transition to more secure and efficient modern IT systems, funding to streamline governance and secure Federal networks, and investments to strengthen the cybersecurity workforce and cybersecurity education across society.”

The fund would be managed by the General Services Administration (GSA) and would be the used as seed money to help agencies with their efforts.

Other elements of the proposal include:

  • A project review board that will review agency business cases and select projects for funding to ensure prioritization of projects with the highest risk profile, government-wide impact, and probability of success.
  • The board will identify opportunities to replace multiple legacy systems with a smaller number of common platforms, which would be difficult for agencies to accomplish individually.
  • A process that would support agencies in identifying and better securing their high-value information assets. It would also ensure that Federal agencies maintain the security posture of their critical systems throughout the IT lifecycle. 

The revolving fund would be self-sustaining by requiring agencies to repay the initial investment through efficiencies and savings gained from modernization.

At first reading, the ITMF called to mind the $56 billion Opportunity, Growth and Security Initiative in the FY 2015 budget request that received mixed reactions on Capitol Hill. To be fair, the ITMF is a more targeted effort (and much smaller). The White House and others have wasted no time in promoting the ITMF proposal, which has gotten at least a preliminary jump out of the gate through a partnership with Congressman Steny Hoyer (D-MD), who introduced legislation to create the fund.

“Show Me the Money”

Given the focus on modernizing and replacing IT systems it is natural for the IT contracting community to wonder what the impacts on agency spending might be, and when it might commence. At a recent Department of Homeland Security (DHS) industry day focused on their IT priorities and goals for the coming year and beyond, Chief Information Officer Luke McCormack received a question from the audience to that effect. He responded that the ITMF as a proposal would impact the FY 2018 budget.  Further, as far as the general impacts of whatever funds DHS sees from the total ITMV, industry should expect to see something more like 100 contracts for $1 million each versus 1 contract for $100 million.


So IF the ITMF makes it through Congress and receives both authorization and appropriations it will take time for the review board to reach operational capability and for funds to begin to flow to agencies. It will also take time for the agencies to identify applicable systems for consideration and develop plans for execution. As far as DHS is concerned it will be FY 2018 (…or possibly FY 2019) before we see much impact, assuming the plan reaches fruition.

Even if agencies begin planning now in anticipation of eventually going forward, the new process of getting approvals through GSA and the review board will naturally take time. And this all presupposes Congressional approval with the money behind it. If this is the expectation at DHS then I imagine it is similar at other agencies.  Guess we’ll have to wait and see.