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House lawmakers to try again to extend TMF through NDAA
The Technology Modernization Fund is running out of time. In 10 days, the reauthorization will expire for the 8-year-old governmentwide account to help agencies update IT systems.
If Congress doesn’t act before Dec. 12, the TMF will not be able to make any new investments, freezing more than $150 million.
“The Technology Modernization Fund remains one of the federal government’s most effective tools for rapidly strengthening cybersecurity and improving high-impact systems. Reauthorizing the TMF is essential to ensuring stable, flexible funding that helps agencies deliver secure, modern services for the American people,” said a GSA spokesperson in an email to Federal News Network. “We look forward to working with Congress on the reauthorization effort.”
There is support in the House for reauthorizing the TMF. Rep. Nancy Mace (R-S.C.) and former Congressman Gerry Connolly (D-Va.) introduced the Modernizing Government Technology (MGT) Reform Act in April that included an extension of the fund to Dec. 31, 2031.
The bill hasn’t moved out of the House Oversight and Government Reform Committee and there is no Senate companion.
The House did pass a version of this bill in May 2024, but, again, the Senate never moved on the bill.
The Senate, however, did allocate $5 million for the TMF in its version of the fiscal 2026 Financial Services and General Government appropriations bill, released last week. This comes after Congress zeroed out new funding for the program over the last three years. The House version of the FSGG bill didn’t include any new money for the TMF.
Mace tried to include her TMF bill as a provision in the House’s version of the National Defense Authorization bill, but language didn’t make it in the version passed by the lower chamber. The Senate version of the NDAA also didn’t include the TMF extension, but there is still hope to get it in during the upcoming conference committee negotiations.
“Extending and reauthorizing the Technology Modernization Fund, which expires on Dec. 12, is a high priority for the committee and we have requested in a bipartisan manner that it be included in the final Fiscal Year 2026 National Defense Authorization Act,” said an Oversight and Government Reform Committee spokesperson. “This is a shared policy priority with the administration and the Office of Management and Budget. Extending the fund also has broad industry support, specifically the Committee has support letters from the Information Technology Industry Council (ITI), the Center for Procurement Advocacy (CPA), the Professional Services Council (PSC) and the Alliance for Digital Innovation (ADI).”
TMF: 69 investments, $1 billion
ADI wrote lawmakers a letter on Nov. 24 advocating for the TMF extension.
“To date, the TMF has catalyzed transformation across government, from strengthening cybersecurity defenses to improving citizen-facing digital services. By providing flexible capital through a merit-based process overseen by federal technology leaders, the Fund enables agencies to undertake complex modernization initiatives that would otherwise remain trapped in multi-year budget cycles. This structure ensures accountability while giving agencies the agility to respond to rapidly evolving technology landscapes and emerging threats,” the industry association said in its letter to House and Senate leadership. “The MGT Reform Act provides the right framework for the TMF’s next chapter. By extending authorization for seven years, Congress would provide agencies the long-term certainty needed to plan and execute substantial and transformational modernization programs. The legislation’s transparency provisions, including the establishment of a federal legacy IT inventory, will give policymakers greater visibility into modernization progress and priorities. These reforms strengthen oversight while preserving the operational flexibility that makes the TMF effective.”
GSA says in its fiscal 2026 budget justification that the TMF currently manages more than $1.07 billion worth of systems upgrades and modernization projects totaling 69 investments across 34 federal agencies. The TMF board has received and reviewed more than 290 proposals totaling about $4.5 billion in funding demand.
The TMF board made only one new investment in calendar year 2025. It awarded $14.6 million to the Federal Trade Commission in June to develop a cloud-based analytics platform that uses artificial intelligence tools and to train staff to handle data analysis in-house.
GSA says it had more than $231 million in available funding for 2025 and it expected to have more than $158 million for the TMF in 2026.
“The government needs updated technology, and those updates need to be done efficiently. I’m proud to co-sponsor the bipartisan Modernizing Government Technology Reform Act introduced by Cybersecurity Subcommittee Chairwoman Mace,” said Rep. Shontel Brown (D-Ohio), ranking member of the Cybersecurity, IT and Government Innovation subcommittee, in an email to Federal News Network. “The best course of action would be the Oversight Committee and Congress advancing this legislation before the authorization ends.”
Technical debt would increase faster
Former federal technology executives say letting the TMF expire would set back agency modernization efforts.
Larry Bafundo, the former executive director of the TMF program office, said without the TMF, agencies will have a more difficult time finding funding to modern legacy systems.
“We spend a vast majority of our funding on maintaining existing and outdated systems instead of adapting systems to meet changing needs. I think something is broken in the way we fund modernization of IT systems. Congress is incentivized to think in terms of projects instead of services that evolve over time. There is a huge disconnect between how the government works and how IT projects are funded,” said Bafuno, who is now president of Mo Studio, a digital services company. “There isn’t a clear, governmentwide IT modernization strategy, with a clear inventory of systems, to align programs like TMF against. As a result, we approach the problem piece-meal, rather than as part of a deliberate, or coordinated, plan. Similarly, agencies can sometimes lack incentives to modernize effectively. In many cases, they not only lack performance baselines to measure change against, but there are also very few senior executives in govt today who are evaluated based on the value of the services they provide the public. Instead, they are incentivized to preserve the status quo. All of this makes showing ‘return on investment’ difficult, along with the fact that Congress is not united in its understanding of what the return on investment looks like — is it cheaper, more secure, faster, etc.? We don’t have a common definition for success when it comes to programs like TMF.”
Bafundo said the TMF works because it provides agencies with guardrails or characteristics for the types of projects the board would invest in.
“We relied on good ideas or good proposals and someone who could defend their ideas, as opposed to a set of focal areas and show us what you can with seed funding. You can use that experience to unlock further funding,” he said. “That is how it should work instead of a 3-to-5 year plan that many programs have. In some ways the TMF because it relies on lengthy proposals instead of working software is more like a grant program than a seed fund.”
Gundeep Ahluwalia, a former Labor Department chief information officer, helped the agency win TMF funding for six different projects between 2018 and 2024.
Ahluwalia, who is now an executive vice president and chief innovation officer for NuAxis Innovations, said the TMF helped Labor pay down its technical debt.
“Whether it’s improving services to Americans or protecting against foreign adversaries, the cost of not doing anything here is just too large, especially considering the investment is paltry,” he said. “The TMF used an approach very similar to the private sector where you would make your business case, tell the board how much the company would get back from the investment. This business case is a no-brainer. For $500 million or even $250 million, it could give agencies the opportunity to improve services, reduce risks and become cyber strong.”
OMB seeks change to TMF
It’s unclear why support on Capitol Hill has been tepid a best for the TMF.
Ahluwalia said lawmakers still have trouble understanding why something like the TMF is needed and there isn’t an outspoken supporter like Connolly, who passed away in May, was for IT modernization funding.
“If you don’t understand something and there is a significant resistance to spending this becomes yet another government program. But this isn’t just another one, the TMF is a way out of our technical debt conundrums. It’s modeled after the private sector and I don’t think people may not understand that,” he said.
OMB, which didn’t respond to two requests for comments on the TMF expiring, proposed through GSA’s 2026 budget request a new funding model for the program. The White House wants to make it a revolving or working capital fund of sorts that would be authorized to collect up to $100 million a year in otherwise expired funding.
The legislative proposal would let “GSA, with the approval of OMB, to collect funding from other agencies and bring that funding into the TMF,” GSA wrote in its budget justification document. “This would allow agencies to transfer resources to the TMF using funds that are otherwise no longer available to them for obligation. This provision is essential to providing the TMF with the necessary funds to help the federal government address critical technology challenges by modernizing high-priority systems, improving AI adoption and supporting cross-government collaboration and scalable services.”
If the TMF authority expires, GSA would still be able to support existing investments with already approved funding and other program support services.
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