How to help agencies fund critical IT modernization projects

Contractors have an important role to play in shaping proposals that go before the Technology Modernization Fund board. Here's what you need to do.

Fending off immediate cybersecurity threats by bad actors is a priority for all government agencies. Consequently, there is a dire need for IT modernization products and services. IT modernization is not only critical to agency mission, but a key category in Congress’ FITARA scorecard.

Unfortunately, agencies often don't have the appropriated funds to acquire the necessary IT to meet their missions. Enter the Technology Modernization Fund (TMF).

TMF aims to bridge the gap between the critical need and the true IT modernization solutions that agencies want to implement and what Congress expects. The TMF has received over $1 billion through the American Rescue Plan and the annual budget. In the last several months alone, the TMF board has approved seven new projects totaling over $300M in new funding.

Suppliers working with agencies to address immediate security and capability gaps – or to respond to immediate public needs – need to understand how the TMF approval process operates. They then can help customers be successful in securing TMF funds. Suppliers can do this by outlining how their products and services map to agency and TMF priorities, and how those products and services provide solutions to address their most pressing IT issues. 

Understanding the TMF – Shaping the proposal

TMF is an "innovative funding vehicle" authorized by the Modernizing Government Technology Act of 2017. It provides agencies with resources to secure systems and data, and to deliver services to citizens.  

The Technology Modernization Board of TMF evaluates project proposals, provides funding recommendations and monitors progress and performance of approved projects. Project proposals are submitted through a two-phased approval process, consisting of an Initial Project Proposal (IPP) and a Full Project Proposal (FPP). 

Getting these proposals right is the difference between securing timely funding for agencies’ critical projects and having to put their most-needed project on hold. To prevent projects from ending up on the TMF's cutting room floor, the first step is to strategically complete the IPP. 

The TMF has identified four special emphasis categories:  Modernizing High Priority Systems, Cybersecurity, Public-Facing Digital Services and Cross-Government Collaboration/Scalable Services. Clearly articulating how the project fits into these special emphasis categories is critical in ensuring that a project makes it to the FPP stage.

Interestingly, we are seeing a focus on security in recent project selections, with five out of seven approved TMF-funded projects including a cyber component. Projects that help agencies address immediate security gaps, improve the public's access to government services, or engage in shared services with other agencies have the best chance to catch the TMF Board's attention. 

Other attention-getting project plans might detail an urgent problem that may not otherwise be solved or would provide a significant risk to an agency. Persuasive plans might include outlining commercial capabilities, showing sponsorship by agency leadership, detailing key milestones for project success and clearly demonstrating any cost savings that may result from the proposed project. The more detailed and targeted an agency IPP is when it comes to meeting selection criteria, the better its chances are of making to the next round.

Repayment terms: Be clear about value

Another key consideration revolves around repayment terms. Historically, the TMF has operated under a full repayment model with flexible terms that typically apply to single agency investments. However, the TMF board is increasingly aware that full repayment may be difficult or impossible for some projects that otherwise align with TMF priorities. For these special projects, the TMF Board will consider partial and minimal repayment options.

The key for obtaining the most flexible payment options is clear communication. If a project addresses an urgent cyber problem that leaves agency or citizen data vulnerable to outside attack or provides a solution to meet an immediate citizen need, the potential risk of not moving forward with the project should be carefully explained.

Supporting an IT project proposal with all the essentials (such as cost breakdown, project schedule, acquisition strategy, approach to agency deliverables and proposed outcome metrics) will go a long way in helping ensure a project captures TMF board attention. The TMF board also is willing to review proposals that do not have a financial return that will allow for full repayment – if they are aligned to identified special emphasis categories and clearly demonstrate impactful outcomes, with a map to achieving success.

The best odds for hitting the mark when it comes to TMF proposals are those that are mapped to designated special emphasis categories, with all the necessary supporting data and metrics to readily demonstrate the urgency of the project. For example, accelerated funds may help an agency fast-track its goals to meet zero trust architecture security requirements, to help meet agency compliance obligations and avoid costly data breaches. 

TMF can be a real win-win for agencies and suppliers alike, if both can do their homework and come to the table prepared to demonstrate the value.

Tara Franzonello is program development manager at Arrow’s public sector practice, operated as immixGroup. She can be reached at