GAO Reviews the Technology Modernization Fund

Ever since its inception several years ago, the General Service Administration’s Technology Modernization Fund (TMF) has proved to be a lightning rod for champions and critics alike. Now the Government Accountability Office (GAO) has carried out a review of the program, writing that it “analyzed and summarized TMF financial data and documentation associated with 37 projects awarded funds.” In addition, “the GAO analyzed cost estimate documentation … [and] compared the difference between estimated and realized cost savings to the Office of Management and Budget’s variance threshold of 10 percent.” Lastly, the GAO analyzed procurement procedures and completed projects to determine their cost savings, too. The result is a varied picture.

Cost Savings

Deriving cost savings was one of the hoped-for outcomes driving the creation of the TMF. The GAO examined this issue in particular, therefore, to see what results could be gleaned from the data. To that end, the GAO found that of 37 contracts awarded for TMF projects only “eight have realized cost savings totaling $14.8M. In addition, the GAO found that “five of these anticipate further savings totaling $2.6M. An additional 16 projects anticipate $738.6M in combined savings. Thirteen projects neither anticipate nor have realized any cost savings.”

These figures are sure to fuel criticism of the TMF in Congress. After all, the GAO found that “As of February 2023, the TMF had received approximately $1.23B in appropriations, of which the Technology Modernization Board had awarded $636M” in contracts. The result, opined the GAO, is a disconnect between the planned cost savings and the actual cost savings of TMF projects, with the latter being unrealized to date.

Competitive Procedures

The other issue investigated by the GAO involved the competition type used by the GSA for awarding TMF contracts. “As required under the Competition in Contracting Act of 1984,” noted the GAO, “all procurements, with certain exceptions, must use full and open competition so that any qualified entity can submit an offer. From September 2021 through February 2023, 45 of 52, or 87%, of contracts used competitive procedures that are considered as achieving full and open competition. The remaining seven contracts were not competed using full and open competition, but appropriately documented authorized exceptions.” As a result, the GAO concluded that “All TMF project acquisitions used full and open competition or appropriately documented authorized exceptions.”

Concluding Thoughts

As someone who tracks the federal cloud market very closely I can say without hesitation that while unrestricted competition procedures may have been used, the reporting of TMF awards and spending is not clear at all. TMF contract numbers are nearly impossible to locate, and they are not clearly reported in the Federal Procurement Data System (FPDS).

For example, a search of FPDS using the term Technology Modernization Fund in quotation marks to specify that term yields only 3 hits at the National Transportation Safety Board (NTSB). In other words, a conscientious contracting official at the NTSB chose to add the term to the description of the award and it is for that reason alone that the efforts can be identified.

Good luck trying to identify other TMF awards in the same fashion. The GAO even acknowledged this difficulty, although they did not call it a challenge, observing that they investigated contracting information provided to them by the GSA itself. So, GSA gave them the contract numbers. They then investigated. Why aren’t these contract numbers reported on the TMF investments landing page? Are Department of Agriculture web portal efforts now classified information to be kept behind a veil of secrecy? Apparently so, because the information is not reported.

If the GSA truly wants the TMF to be a respected program resilient to congressional critique it should make an effort to report and clearly identify TMF award contract numbers. Not doing so gives the impression that the GSA has something to hide.