October 07, 2021


Technology continues to change each individual's way of living, including how we interact with the government. In 2001, only 30% of the American public e-filed their taxes; in 2019, the number rose to over 90%. As technology quickly develops, so do its uses within the federal government to better serve the American public with creative and innovative front-facing solutions. However, federal information technology (IT) has not been able to keep up with the private sector or our increasingly digital way of life.

Congress looked to address many of these issues through the passage of the "Modernizing Government Technology Act" (MGT Act), which created a fund within the Department of Treasury for agencies to apply for loans to update their antiquated IT systems.

Last week, the board that oversees the Technology Modernization Fund (TMF) made the first round of awards of the $1 billion Congress appropriated through the American Rescue Plan. This funding was directed to address the urgent need to modernize federal IT, including cybersecurity defenses, and improve the delivery of COVID-19 resources. Of the one billion appropriated, the technology modernization board awarded $311 million to six different projects, close to one-third of the money. These include three zero trust cybersecurity projects, two programs run by the General Service Administration (GSA), and one by the Department of Homeland Security (DHS).

While the technology modernization board reviews each project individually on its specific merits, the recent awards follow the congressional support for the funds to be used for cybersecurity modernization within the federal government. While improving cybersecurity is important to protect national and economic security, it is alarming that the board did not award projects within the other two major impetus for the TMF—improving COVID-19 pandemic resources and updating federal legacy systems.

After almost two full years of government trying to adapt to pandemic requirements, the American public is keenly aware of the many inadequacies of federal IT systems. From Internal Revenue Service (IRS) checks being sent to the deceased to the Small Business Administration (SBA) lacking enough server capacity to meet the demands of providing Paycheck Protection Program loans, the pandemic highlighted how the current government IT infrastructure often fails to fulfill its duties and obligations to the American people.

To assist federal agencies and help them work through many of these issues, many private companies were immediately brought in as contractors. They worked together to provide solutions and help get federal resources to the public quickly and in an orderly manner. As the COVID-19 pandemic has shown, the government must fully embrace cutting-edge technology and data analytics to effectively generate economic growth and resilience against future crises.

The other emphasis of these funds needs to be on updating legacy systems, which is in line with the original directive of the MGT Act. The recent awards lacked any directed spending to address outdated or legacy systems within the federal government. A 2019 report of the Government Accountability Office (GAO) highlighted that the federal government spends $337 million annually to operate and maintain these legacy systems. With every passing year, these systems have become more costly to the American taxpayer. At the same time, there is a brain drain within the federal government as those who understand these systems exit the federal workforce.

In conclusion, the U.S. Chamber supports using TMF awards for investing in necessary pandemic information technology that enhances security but also replaces expensive and outdated legacy systems – which are in line with the MGT Act.