IIB 

115TH CONGRESS 

1ST SESSION H. R. 2227 

IN THE SENATE OF THE UNITED STATES 

MAY 18, 2017 

Received; read twice and referred to the Committee on Homeland Security and 

Governmental Affairs 

AN ACT 

To modernize Government information technology, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Modernizing Govern3 ment Technology Act of 2017’’ or the ‘‘MGT Act’’. 

4 SEC. 2. FINDINGS; PURPOSES. 

5 (a) FINDINGS.—The Congress finds the following: 

6 (1) The Federal Government spends nearly 75 

7 percent of its annual information technology funding 

8 on operating and maintaining existing legacy infor9 mation technology systems. These systems can pose 

10 operational risks, including rising costs and inability 

11 to meet mission requirements. These systems also 

12 pose security risks, including the inability to use cur13 rent security best practices, such as data encryption 

14 and multi-factor authentication, making these sys15 tems particularly vulnerable to malicious cyber activ16 ity. 

17 (2) In 2015, the Government Accountability Of18 fice (GAO) designated Improving the Management 

19 of IT Acquisitions and Operations to its biannual 

20 High Risk List and identified as a particular con21 cern the increasing level of information technology 

22 spending on operations and maintenance, making 

23 less funding available for development or moderniza24 tion. The GAO also found the Government has spent 

25 billions on failed and poorly performing information 


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1 technology investments due to a lack of effective 

2 oversight. 

3 (3) The Federal Government must modernize 

4 Federal IT systems to mitigate existing operational 

5 and security risks. 

6 (4) The efficiencies, cost savings, and greater 

7 computing power offered by modernized solutions, 

8 such as cloud computing, have the potential to— 

9 (A) eliminate inappropriate duplication and 

10 reduce costs; 

11 (B) address the critical need for cybersecu12 rity by design; and 

13 (C) move the Federal Government into a 

14 broad, digital-services delivery model that will 

15 transform the ability of the Federal Govern16 ment to meet mission requirements and deliver 

17 services to the American people. 

18 (b) PURPOSES.—The purposes of this Act are the fol19 lowing: 

20 (1) Assist the Federal Government in modern21 izing Federal information technology to mitigate 

22 current operational and security risks. 

23 (2) Incentivize cost savings in Federal informa24 tion technology through modernization. 


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1 (3) Accelerate the acquisition and deployment 

2 of modernized information technology solutions, such 

3 as cloud computing, by addressing impediments in 

4 the areas of funding, development, and acquisition 

5 practices. 

6 SEC. 3. ESTABLISHMENT OF AGENCY INFORMATION TECH7 NOLOGY SYSTEMS MODERNIZATION AND 

8 WORKING CAPITAL FUNDS. 

9 (a) INFORMATION TECHNOLOGY SYSTEM MOD10 ERNIZATION AND WORKING CAPITAL FUNDS.— 

11 (1) ESTABLISHMENT.—The head of a covered 

12 agency may establish within such agency an infor13 mation technology system modernization and work14 ing capital fund (in this section referred to as the 

15 ‘‘IT working capital fund’’) for necessary expenses 

16 described in paragraph (3). 

17 (2) SOURCE OF FUNDS.—The following 

18 amounts may be deposited into an IT working cap19 ital fund: 

20 (A) Reprogramming and transfer of funds 

21 made available in appropriations Acts subse22 quent to the date of the enactment of this Act, 

23 including transfer of any funds for the oper24 ation and maintenance of legacy information 

25 technology systems, in compliance with any apVerDate Sep 11 2014 21:31 May 18, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2227.RFS H2227

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1 plicable reprogramming law or guidelines of the 

2 Committees on Appropriations of the House of 

3 Representatives and the Senate. 

4 (B) Amounts made available to the IT 

5 working capital fund through discretionary ap6 propriations made available subsequent to the 

7 date of the enactment of this Act. 

8 (3) USE OF FUNDS.—An IT working capital 

9 fund established under paragraph (1) may be used, 

10 subject to the availability of appropriations, only for 

11 the following: 

12 (A) To improve, retire, or replace existing 

13 information technology systems in the covered 

14 agency to enhance cybersecurity and to improve 

15 efficiency and effectiveness. 

16 (B) To transition legacy information tech17 nology systems at the covered agency to cloud 

18 computing and other innovative platforms and 

19 technologies, including those serving more than 

20 one covered agency with common requirements. 

21 (C) To assist and support covered agency 

22 efforts to provide adequate, risk-based, and 

23 cost-effective information technology capabilities 

24 that address evolving threats to information se25 curity. 


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1 (D) To reimburse funds transferred to the 

2 covered agency from the Technology Moderniza3 tion Fund established under section 4, with the 

4 approval of the Chief Information Officer of the 

5 covered agency. 

6 (4) EXISTING FUNDS.—An IT working capital 

7 fund may not be used to supplant funds provided for 

8 the operation and maintenance of any system within 

9 an appropriation for the covered agency at the time 

10 of establishment of the IT working capital fund. 

11 (5) PRIORITIZATION OF FUNDS.—The head of 

12 each covered agency shall prioritize funds within the 

13 IT working capital fund to be used initially for cost 

14 savings activities approved by the Chief Information 

15 Officer of the covered agency, in consultation with 

16 the Administrator of the Office of Electronic Gov17 ernment. The head of each covered agency may re18 program and transfer any amounts saved as a direct 

19 result of such activities for deposit into the applica20 ble IT working capital fund, consistent with para21 graph (2)(A). 

22 (6) RETURN OF FUNDS.—Any funds deposited 

23 into an IT working capital fund shall be available 

24 for obligation for 3 years after the last day of the 

25 fiscal year in which such funds were deposited. 


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1 (7) AGENCY CIO RESPONSIBILITIES.—In evalu2 ating projects to be funded from the IT working 

3 capital fund, the Chief Information Officer of the 

4 covered agency shall consider, to the extent applica5 ble, guidance issued pursuant to section 4(a)(1) to 

6 evaluate applications for funding from the Tech7 nology Modernization Fund established under that 

8 section that include factors such as a strong busi9 ness case, technical design, procurement strategy 

10 (including adequate use of incremental software de11 velopment practices), and program management. 

12 (b) REPORTING REQUIREMENT.— 

13 (1) IN GENERAL.—Not later than 1 year after 

14 the date of the enactment of this Act, and every 6 

15 months thereafter, the head of each covered agency 

16 shall submit to the Director the following, with re17 spect to the IT working capital fund for the covered 

18 agency: 

19 (A) A list of each information technology 

20 investment funded with estimated cost and 

21 completion date for each such investment. 

22 (B) A summary by fiscal year of obliga23 tions, expenditures, and unused balances. 


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1 (2) PUBLIC AVAILABILITY.—The Director shall 

2 make the information submitted under paragraph 

3 (1) publicly available on a website. 

4 (c) COVERED AGENCY DEFINED.—In this section, 

5 the term ‘‘covered agency’’ means each agency listed in 

6 section 901(b) of title 31, United States Code. 

7 SEC. 4. ESTABLISHMENT OF TECHNOLOGY MODERNIZA8 TION FUND AND BOARD. 

9 (a) TECHNOLOGY MODERNIZATION FUND.— 

10 (1) ESTABLISHMENT.—There is established in 

11 the Treasury a Technology Modernization Fund (in 

12 this section referred to as the ‘‘Fund’’) for tech13 nology-related activities, to improve information 

14 technology, to enhance cybersecurity across the Fed15 eral Government, and to be administered in accord16 ance with guidance issued by the Director. 

17 (2) ADMINISTRATION OF FUND.—The Commis18 sioner of the Technology Transformation Service of 

19 the General Services Administration, in consultation 

20 with the Chief Information Officers Council and 

21 with the approval of the Director, shall administer 

22 the Fund in accordance with this subsection. 

23 (3) USE OF FUNDS.—The Commissioner shall, 

24 in accordance with the recommendations of the 

25 Technology Modernization Board established under 


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1 subsection (b), use amounts in the Fund for the fol2 lowing purposes: 

3 (A) To transfer such amounts, to remain 

4 available until expended, to the head of an 

5 agency to improve, retire, or replace existing 

6 Federal information technology systems to en7 hance cybersecurity and improve efficiency and 

8 effectiveness. 

9 (B) For the development, operation, and 

10 procurement of information technology prod11 ucts, services, and acquisition vehicles for use 

12 by agencies to improve Governmentwide effi13 ciency and cybersecurity in accordance with the 

14 requirements of such agencies. 

15 (C) To provide services or work performed 

16 in support of the activities described under sub17 paragraph (A) or (B). 

18 (4) AUTHORIZATION OF APPROPRIATIONS; 

19 CREDITS; AVAILABILITY OF FUNDS.— 

20 (A) AUTHORIZATION OF APPROPRIA21 TIONS.—There is authorized to be appropriated 

22 to the Fund $250,000,000 for each of fiscal 

23 years 2018 and 2019. 

24 (B) CREDITS.—In addition to any funds 

25 otherwise appropriated, the Fund shall be credVerDate Sep 11 2014 21:31 May 18, 2017 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2227.RFS H2227

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1 ited with all reimbursements, advances, or re2 funds or recoveries relating to information tech3 nology or services provided through the Fund. 

4 (C) AVAILABILITY OF FUNDS.—Amounts 

5 deposited, credited, or otherwise made available 

6 to the Fund shall be available, as provided in 

7 appropriations Acts, until expended for the pur8 poses described in paragraph (3). 

9 (5) REIMBURSEMENT.— 

10 (A) PAYMENT BY AGENCY.—For a product 

11 or service developed under paragraph (3)(B), 

12 including any services or work performed in 

13 support of such development under paragraph 

14 (3)(C), the head of an agency that uses such 

15 product or service shall pay an amount fixed by 

16 the Commissioner in accordance with this para17 graph. 

18 (B) REIMBURSEMENT BY AGENCY.—The 

19 head of an agency shall reimburse the Fund for 

20 any transfer made under paragraph (3)(A), in21 cluding any services or work performed in sup22 port of such transfer under paragraph (3)(C), 

23 in accordance with the terms established in a 

24 written agreement described in paragraph (6). 

25 Notwithstanding any other provision of law, an 


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1 agency may make a reimbursement required by 

2 this subparagraph from any appropriation made 

3 available subsequent to the date of the enact4 ment of this Act for information technology ac5 tivities, consistent with any applicable re6 programming law or guidelines of the Commit7 tees on Appropriations of the House of Rep8 resentatives and the Senate. An obligation to 

9 make a payment under a written agreement de10 scribed in paragraph (6) in a fiscal year after 

11 the date of the enactment of this Act shall be 

12 recorded pursuant to section 1501 of title 31, 

13 United States Code, in the fiscal year in which 

14 the payment is due. 

15 (C) PRICES FIXED BY COMMISSIONER.— 

16 The Commissioner, in consultation with the Di17 rector, shall establish amounts to be paid by an 

18 agency and terms of repayment for use of a 

19 product or service developed under paragraph 

20 (3)(B), including any services or work per21 formed in support of such development under 

22 paragraph (3)(C), at levels sufficient to ensure 

23 the solvency of the Fund, including operating 

24 expenses. Before making any changes to the es25 tablished amounts and terms of repayment, the 


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1 Commissioner shall conduct a review and obtain 

2 approval from the Director. 

3 (D) FAILURE TO MAKE TIMELY REIM4 BURSEMENT.—The Commissioner may obtain 

5 reimbursement by the issuance of transfer and 

6 counterwarrants, or other lawful transfer docu7 ments, supported by itemized bills, if payment 

8 is not made by an agency— 

9 (i) within 90 days after the expiration 

10 of a repayment period described in a writ11 ten agreement described in paragraph (6); 

12 or 

13 (ii) within 45 days after the expiration 

14 of the time period to make a payment 

15 under a payment schedule for a product or 

16 service developed under paragraph (3)(B). 

17 (6) WRITTEN AGREEMENT.— 

18 (A) IN GENERAL.—Before the transfer of 

19 funds to an agency under paragraph (3)(A), the 

20 Commissioner (in consultation with the Direc21 tor) and the head of the requisitioning agency 

22 shall enter into a written agreement docu23 menting the purpose for which the funds will be 

24 used and the terms of repayment, which may 

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1 rector. An agreement made pursuant to this 

2 subparagraph shall be recorded as an obligation 

3 as provided in paragraph (5)(B). 

4 (B) REQUIREMENT FOR USE OF INCRE5 MENTAL DEVELOPMENT PRACTICES.—For any 

6 funds transferred to an agency under para7 graph (3)(A), in the absence of compelling cir8 cumstances documented by the Commissioner 

9 at the time of transfer, such funds shall be 

10 transferred only on an incremental basis, tied to 

11 metric-based development milestones achieved 

12 by the agency, to be described in a written 

13 agreement required under subparagraph (A). 

14 (7) REPORTING REQUIREMENT.—Not later than 

15 6 months after the date of the enactment of this 

16 Act, the Director shall publish and maintain a list 

17 of each project funded by the Fund on a public 

18 website, to be updated not less than quarterly, that 

19 includes a description of the project, project status 

20 (including any schedule delay and cost overruns), 

21 and financial expenditure data related to the project. 

22 (b) TECHNOLOGY MODERNIZATION BOARD.— 

23 (1) ESTABLISHMENT.—There is established a 

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1 mitted by agencies for funding authorized under the 

2 Fund. 

3 (2) RESPONSIBILITIES.—The responsibilities of 

4 the Board are the following: 

5 (A) Provide input to the Director for the 

6 development of processes for agencies to submit 

7 modernization proposals to the Board and to 

8 establish the criteria by which such proposals 

9 are evaluated, which shall include addressing 

10 the greatest security and operational risks, hav11 ing the greatest Governmentwide impact, and 

12 having a high probability of success based on 

13 factors such as a strong business case, technical 

14 design, procurement strategy (including ade15 quate use of incremental software development 

16 practices), and program management. 

17 (B) Make recommendations to the Com18 missioner to assist agencies in the further devel19 opment and refinement of select submitted 

20 modernization proposals, based on an initial 

21 evaluation performed with the assistance of the 

22 Commissioner. 

23 (C) Review and prioritize, with the assist24 ance of the Commissioner and the Director, 


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1 modernization proposals based on criteria estab2 lished pursuant to subparagraph (A). 

3 (D) Identify, with the assistance of the 

4 Commissioner, opportunities to improve or re5 place multiple information technology systems 

6 with a smaller number of information tech7 nology systems common to multiple agencies. 

8 (E) Recommend the funding of moderniza9 tion projects, in accordance with the uses de10 scribed in subsection (a)(3), to the Commis11 sioner. 

12 (F) Monitor, in consultation with the Com13 missioner, progress and performance in exe14 cuting approved projects and, if necessary, rec15 ommend the suspension or termination of fund16 ing for projects based on factors such as failure 

17 to meet the terms of a written agreement de18 scribed in subsection (a)(6). 

19 (G) Monitor operating costs of the Fund. 

20 (3) MEMBERSHIP.—The Board shall consist of 

21 eight voting members. 

22 (4) CHAIR.—The Chair of the Board shall be 

23 the Administrator of the Office of Electronic Gov24 ernment. 


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1 (5) PERMANENT MEMBERS.—The permanent 

2 members of the Board shall be the following: 

3 (A) The Administrator of the Office of 

4 Electronic Government. 

5 (B) A senior official from the General 

6 Services Administration having technical exper7 tise in information technology development, ap8 pointed by the Administrator of General Serv9 ices, with the approval of the Director. 

10 (6) ADDITIONAL MEMBERS OF THE BOARD.— 

11 (A) APPOINTMENT.—The other members 

12 of the Board shall be appointed as follows: 

13 (i) One employee of the National Pro14 tection and Programs Directorate of the 

15 Department of Homeland Security, ap16 pointed by the Secretary of Homeland Se17 curity. 

18 (ii) One employee of the Department 

19 of Defense, appointed by the Secretary of 

20 Defense. 

21 (iii) Four Federal employees primarily 

22 having technical expertise in information 

23 technology development, financial manage24 ment, cybersecurity and privacy, and ac25 quisition, appointed by the Director. 


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1 (B) TERM.—Each member of the Board 

2 described in paragraph (A) shall serve a term 

3 of 1 year, which shall be renewable up to three 

4 times, at the discretion of the appointing Sec5 retary or Director, as applicable. 

6 (7) PROHIBITION ON COMPENSATION.—Mem7 bers of the Board may not receive additional pay, al8 lowances, or benefits by reason of their service on 

9 the Board. 

10 (8) STAFF.—Upon request of the Chair of the 

11 Board, the Director and the Administrator of Gen12 eral Services may detail, on a nonreimbursable basis, 

13 any of the personnel of the Office of Management 

14 and Budget or the General Services Administration 

15 (as the case may be) to the Board to assist the 

16 Board in carrying out its functions under this Act. 

17 (c) RESPONSIBILITIES OF COMMISSIONER.— 

18 (1) IN GENERAL.—In addition to the respon19 sibilities described in subsection (a), the Commis20 sioner shall support the activities of the Board and 

21 provide technical support to, and, with the concur22 rence of the Director, oversight of, agencies that re23 ceive transfers from the Fund. 

24 (2) RESPONSIBILITIES.—The responsibilities of 

25 the Commissioner are the following: 


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1 (A) Provide direct technical support in the 

2 form of personnel services or otherwise to agen3 cies transferred amounts under subsection 

4 (a)(3)(A) and for products, services, and acqui5 sition vehicles funded under subsection 

6 (a)(3)(B). 

7 (B) Assist the Board with the evaluation, 

8 prioritization, and development of agency mod9 ernization proposals. 

10 (C) Perform regular project oversight and 

11 monitoring of approved agency modernization 

12 projects, in consultation with the Board and the 

13 Director, to increase the likelihood of successful 

14 implementation and reduce waste. 

15 (D) Provide the Director with information 

16 necessary to meet the requirements of sub17 section (a)(7). 

18 (d) AGENCY DEFINED.—In this section, the term 

19 ‘‘agency’’ has the meaning given that term in section 551 

20 of title 5, United States Code. 

21 SEC. 5. DEFINITIONS. 

22 In this Act: 

23 (1) CLOUD COMPUTING.—The term ‘‘cloud 

24 computing’’ has the meaning given that term by the 

25 National Institute of Standards and Technology in 


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1 NIST Special Publication 800–145 and any amend2 atory or superseding document thereto. 

3 (2) COMMISSIONER.—The term ‘‘Commis4 sioner’’ means the Commissioner of the Technology 

5 Transformation Service of the General Services Ad6 ministration. 

7 (3) DIRECTOR.—The term ‘‘Director’’ means 

8 the Director of the Office of Management and Budg9 et. 

10 (4) INFORMATION TECHNOLOGY.—The term 

11 ‘‘information technology’’ has the meaning given 

12 that term in section 3502 of title 44, United States 

13 Code. 

14 (5) LEGACY INFORMATION TECHNOLOGY SYS15 TEM.—The term ‘‘legacy information technology sys16 tem’’ means an outdated or obsolete system of infor17 mation technology. 

Passed the House of Representatives May 17, 2017. 

Attest: KAREN L. HAAS, 

Clerk. 


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