IB 

Union Calendar No. 326 

118TH CONGRESS 

2D SESSION H. R. 5527 

[Report No. 118–397] 

To amend section 1078 of the National Defense Authorization Act for Fiscal 

Year 2018 to increase the effectiveness of the Technology Modernization 

Fund, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 18, 2023 

Ms. MACE (for herself and Mr. CONNOLLY) introduced the following bill; 

which was referred to the Committee on Oversight and Accountability 

FEBRUARY 23, 2024 

Additional sponsor: Mr. KHANNA

FEBRUARY 23, 2024 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on September 18, 2023] 


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A BILL 

To amend section 1078 of the National Defense Authorization Act for Fiscal Year 2018 to increase the effectiveness of the Technology Modernization Fund, and for 

other purposes. 


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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Modernizing Govern5 ment Technology Reform Act’’. 

6 SEC. 2. REALIGNING USE OF FUNDS WITH ORIGINAL CON7 GRESSIONAL INTENT. 

8 Section 1078 of the National Defense Authorization 

9 Act for Fiscal Year 2018 (Public Law 115–91; 40 U.S.C. 

10 11301 note) is amended— 

11 (1) in subsection (b)— 

12 (A) by amending paragraph (3) to read as 

13 follows: 

14 ‘‘(3) USE OF FUNDS.— 

15 ‘‘(A) IN GENERAL.—The Administrator 

16 shall, in accordance with recommendations from 

17 the Board, use amounts in the Fund for the fol18 lowing: 

19 ‘‘(i) To transfer such amounts, to re20 main available until expended, to the head 

21 of an agency for the acquisition, procure22 ment, and operation of information tech23 nology, or the development of information 

24 technology when more efficient and cost ef25 fective, to— 


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1 ‘‘(I) modernize, retire, or replace 

2 legacy information technology systems 

3 used by the agency; 

4 ‘‘(II) enhance cybersecurity and 

5 privacy at the agency; 

6 ‘‘(III) improve long-term effi7 ciency and effectiveness of agency in8 formation technology; or 

9 ‘‘(IV) improve the ability of the 

10 agency to perform the mission of the 

11 agency and deliver services to the pub12 lic. 

13 ‘‘(ii) To provide services or work per14 formed in support of— 

15 ‘‘(I) the activities described in 

16 clause (i); and 

17 ‘‘(II) the Board and the Director 

18 in carrying out the responsibilities de19 scribed in subsection (c)(2). 

20 ‘‘(iii) To fund only programs, projects, 

21 or activities, or to fund increases for any 

22 programs, projects, or activities that have 

23 not been denied or restricted by Congress. 

24 ‘‘(iv) To transfer such amounts only 

25 for programs, projects, or activities that will 


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1 be reimbursed to the Fund to the extent nec2 essary to ensure total amounts in the Fund 

3 are no less than the amounts needed to keep 

4 the Fund operational until the Fund sun5 sets pursuant to subsection (g)(1). 

6 ‘‘(B) TERMINATION OR SUSPENSION OF

7 FUNDS.—The Administrator shall, in accordance 

8 with recommendations from the Board, suspend 

9 or terminate funding for any project with respect 

10 to which the head of an agency provided fraudu11 lent or misleading statements about such project 

12 (including fraudulent statements about technical 

13 design, the business case, or program manage14 ment with respect to the project) in the applica15 tion or proposal for amounts from the Fund for 

16 such project.’’; 

17 (B) in paragraph (4)(A), by striking 

18 ‘‘$250,000,000’’ and inserting ‘‘$50,000,000’’ and 

19 by striking ‘‘fiscal years 2018 and 2019’’ and in20 serting ‘‘fiscal years 2024 through 2030’’; 

21 (C) in paragraph (5)— 

22 (i) in subparagraph (A)— 

23 (I) in clause (i)— 

24 (aa) by striking ‘‘or (B)’’; 

25 and 


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1 (bb) by striking ‘‘(3)(C)’’ and 

2 inserting ‘‘(3)(A)(ii)’’; and 

3 (II) in clause (ii), by striking ‘‘, 

4 consistent with any applicable re5 programming law or guidelines of the 

6 Committees on Appropriations of the 

7 Senate and the House of Representa8 tives’’; and 

9 (ii) in subparagraph (B)(i)— 

10 (I) by striking ‘‘paragraph 

11 (3)(C)’’ and inserting ‘‘paragraph 

12 (3)(A)(ii)’’; and 

13 (II) by striking ‘‘the solvency of 

14 the Fund, including operating ex15 penses’’ and inserting the following: 

16 ‘‘total amounts in the Fund are no less 

17 than the amounts needed to keep the 

18 Fund operational until the Fund sun19 sets pursuant to subsection (g)(1)’’; 

20 (D) in paragraph (6)— 

21 (i) in subparagraph (A)— 

22 (I) in the matter before clause (i), 

23 by striking ‘‘subparagraphs (A) and 

24 (B) of paragraph (3)’’ and inserting 

25 the following: ‘‘paragraph (3)(A)(i) 


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1 and before any services or work are 

2 provided under paragraph 

3 (3)(A)(ii)(I)’’; 

4 (II) in clause (i)— 

5 (aa) by striking ‘‘unless ap6 proved by the Director’’; and 

7 (bb) by striking ‘‘; and’’ and 

8 inserting a semicolon; 

9 (III) by redesignating clause (ii) 

10 as clause (iv); and 

11 (IV) by inserting after clause (i) 

12 the following new clauses: 

13 ‘‘(ii) which shall include terms of re14 payment that require the head of the agency 

15 to reimburse the Fund for funds transferred 

16 under paragraph (3)(A)(i) at a level that 

17 ensures total amounts in the Fund are no 

18 less than the amounts needed to keep the 

19 Fund operational until the Fund sunsets 

20 pursuant to subsection (g)(1); 

21 ‘‘(iii) which shall include terms of re22 payment that require the head of the agency 

23 to fully reimburse the Fund for any services 

24 or work provided under paragraph 


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1 (3)(A)(ii) in direct support of the project; 

2 and’’; and 

3 (ii) in subparagraph (B)— 

4 (I) by striking clause (i) and in5 serting the following: 

6 ‘‘(i) for any funds transferred to an 

7 agency under paragraph (3)(A)(i), in the 

8 absence of compelling circumstances docu9 mented by the Administrator at the time of 

10 transfer, that such funds shall be transferred 

11 only— 

12 ‘‘(I) on an incremental basis, tied 

13 to metric-based development milestones 

14 achieved by the agency through the use 

15 of rapid, iterative, development proc16 esses; and 

17 ‘‘(II) after the head of the agency 

18 has provided the Director any informa19 tion the Director is required to report 

20 pursuant to paragraph (7)(A)(i); and’’; 

21 and 

22 (II) in clause (ii)— 

23 (aa) by striking ‘‘subpara24 graphs (A) and (B) of paragraph 


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1 (3)’’ and inserting ‘‘paragraph 

2 (3)(A)(i)’’; and 

3 (bb) by striking ‘‘paragraph 

4 (6)’’ and inserting ‘‘this para5 graph’’; 

6 (E) in paragraph (7)— 

7 (i) in subparagraph (A)(i)— 

8 (I) by inserting ‘‘the written 

9 agreement entered into under para10 graph (6),’’ after ‘‘description of the 

11 project,’’; and 

12 (II) by inserting ‘‘(including doc13 umented market research into commer14 cial products and services)’’ after 

15 ‘‘used’’; 

16 (ii) in subparagraph (B)— 

17 (I) in clause (i)— 

18 (aa) by striking ‘‘estab19 lishing’’; and 

20 (bb) by striking ‘‘the cost 

21 savings associated with the 

22 projects funded both annually and 

23 over the life of the acquired prod24 ucts and services by the Fund;’’ 

25 and inserting the following: ‘‘the 


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1 amount repaid to the Fund in ac2 cordance with the terms estab3 lished in the written agreements 

4 described in paragraph (6);’’; 

5 (II) in clause (ii)— 

6 (aa) by striking ‘‘reliability 

7 of the cost savings’’ and inserting 

8 ‘‘total cost savings’’; and 

9 (bb) by striking the semicolon 

10 and inserting ‘‘; and’’; and 

11 (III) in clause (iii), by striking ‘‘; 

12 and’’ and inserting a period; and 

13 (IV) by striking clause (iv); 

14 (2) in subsection (c)(2)— 

15 (A) in subparagraph (A)— 

16 (i) in clause (ii), by striking ‘‘the 

17 greatest Governmentwide impact; and’’ and 

18 inserting the following: ‘‘the greatest impact 

19 on modernizing, retiring, or replacing Fed20 eral legacy information technology systems; 

21 and’’; 

22 (ii) by redesignating clauses (i) 

23 through (iii) as clauses (ii) through (iv), re24 spectively; and 


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1 (iii) by inserting before clause (ii), as 

2 so redesignated, the following new clause: 

3 ‘‘(i) the ability for the head of the 

4 agency to ensure repayment of funds trans5 ferred from the Fund to the head of the 

6 agency, in accordance with subsection (b);’’; 

7 (B) in subparagraph (D), by striking ‘‘to 

8 improve or replace multiple information tech9 nology systems’’ and inserting the following: ‘‘to 

10 modernize, retire, or replace legacy information 

11 technology systems under subsection 

12 (b)(3)(A)(i)’’; and 

13 (C) in subparagraph (F), by inserting after 

14 ‘‘subsection (b)(6)’’ the following: ‘‘or the identi15 fication of fraudulent or misleading statements 

16 about the project (including fraudulent state17 ments about technical design, the business case, 

18 or program management with respect to the 

19 project) in the application or proposal for 

20 amounts from the Fund for the project’’; and 

21 (D) in subparagraph (G), by inserting after 

22 ‘‘operating costs of the Fund’’ the following: ‘‘to 

23 ensure total amounts in the Fund are no less 

24 than the amounts needed to keep the Fund operVerDate Sep 11 2014 23:32 Feb 23, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H5527.RH H5527

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1 ational until the Fund sunsets pursuant to sub2 section (g)(1)’’; 

3 (3) in subsection (c)— 

4 (A) in paragraph (5)— 

5 (i) in subparagraph (B) by striking 

6 the period at the end and inserting ‘‘; and’’; 

7 and 

8 (ii) by inserting after subparagraph 

9 (B) the following; 

10 ‘‘(C) a senior official from the Cybersecurity 

11 and Infrastructure Security Agency of the De12 partment of Homeland Security, appointed by 

13 the Director of the Cybersecurity and Infrastruc14 ture Security Agency, with the approval of the 

15 Director of the Office of Management and Budg16 et.’’; 

17 (B) in paragraph (6)(A)— 

18 (i) by striking ‘‘shall be—’’ and insert19 ing ‘‘shall be 4 employees of the Federal 

20 Government primarily having technical ex21 pertise in information technology develop22 ment, financial management, cybersecurity 

23 and privacy, and acquisition, appointed by 

24 the Director.’’; and 


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1 (ii) by striking clauses (i) and (ii); 

2 and 

3 (4) in subsection (d)(2)— 

4 (A) in subparagraph (A), by striking ‘‘sub5 section (b)(3)(A) and for products, services, and 

6 acquisition vehicles funded under subsection 

7 (b)(3)(B)’’ and inserting ‘‘subsection (b)(3)’’; and 

8 (B) in subparagraph (C), by inserting after 

9 ‘‘and reduce waste’’ the following: ‘‘and ensure 

10 total amounts in the Fund are no less than the 

11 amounts needed to keep the Fund operational 

12 until the Fund sunsets pursuant to subsection 

13 (g)(1)’’; 

14 (5) by redesignating subsections (e) and (f) as 

15 subsections (f) and (g), respectively; 

16 (6) by inserting after subsection (d) the following 

17 new subsection: 

18 ‘‘(e) RESPONSIBILITIES OF THE FEDERAL CHIEF IN19 FORMATION OFFICER; AGENCY CHIEF INFORMATION OFFI20 CERS.— 

21 ‘‘(1) AGENCY INVENTORY.—An agency Chief In22 formation Officer, in coordination with stakeholders 

23 and other agency officials, shall provide to the Fed24 eral Chief Information Officer— 


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1 ‘‘(A) on or before the first September 30 

2 that occurs after the date of the enactment of the 

3 Modernizing Government Technology Reform Act 

4 of 2023, a list of high-risk legacy information 

5 technology systems used, operated, or maintained 

6 by the agency, in accordance with the guidance 

7 issued under paragraph (4); and 

8 ‘‘(B) on or before September 30 of each year 

9 after the first year in which the list is provided 

10 under subparagraph (A), any updates to such 

11 list. 

12 ‘‘(2) LEGACY FEDERAL IT INVENTORY.—The Fed13 eral Chief Information Officer shall— 

14 ‘‘(A) on or before the first December 30 that 

15 occurs after the date of the enactment of the Mod16 ernizing Government Technology Reform Act of 

17 2023, compile a Legacy Federal IT Inventory on 

18 the basis of the each list provided by an agency 

19 Chief Information Officers under paragraph 

20 (1)(A) that includes information about each 

21 high-risk legacy information technology system 

22 used, operated, or maintained by an agency; and 

23 ‘‘(B) on or before December 30 each year 

24 after the year in which the Legacy Federal IT 

25 Inventory is compiled, update such Inventory on 


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1 the basis of each update to the list provided by 

2 an agency Chief Information Officer under para3 graph (1)(B). 

4 ‘‘(3) PRIORITIZATION LIST.— 

5 ‘‘(A) REQUIREMENT.—The Federal Chief 

6 Information Officer shall— 

7 ‘‘(i) not later than 90 days after the 

8 date on which the Federal Chief Informa9 tion Officer receives the list required by 

10 paragraph (1)(A) from each agency Chief 

11 Information Officer, compile, on the basis of 

12 each such list, a list of 10 legacy informa13 tion technology systems that present the 

14 greatest security, privacy, and operational 

15 risks to the Federal Government; and 

16 ‘‘(ii) not later than 90 days after the 

17 date on which the Federal Chief Informa18 tion Officer receives updates under para19 graph (1)(B) from each agency Chief Infor20 mation Officer, update the list required by 

21 subparagraph (A) on the basis of each up22 dates to the list provided by agency Chief 

23 information Officers under paragraph 

24 (1)(B). 


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1 ‘‘(B) REPORT TO CONGRESS.—Not later 

2 than 14 days after the date on which the Federal 

3 Chief Information Officer compiles the list re4 quired by subparagraph (A), or updates such 

5 list, the Director shall submit to the Committee 

6 on Oversight and Accountability of the House of 

7 Representatives, the Committee on Homeland Se8 curity and Governmental Affairs of the Senate, 

9 and the Comptroller General of the United 

10 States, a report (which may include a classified 

11 annex) containing— 

12 ‘‘(i) such list (including any update 

13 made to such list under subparagraph 

14 (A)(ii)); and 

15 ‘‘(ii) each list provided by an agency 

16 Chief Information Officer under paragraph 

17 (1)(A) (including any update made to any 

18 such list under paragraph (1)(B)). 

19 ‘‘(4) GUIDANCE.— 

20 ‘‘(A) IN GENERAL.—Not later than 180 

21 days after enactment of this Act, the Director 

22 shall issue guidance on implementing the re23 quirements of this subsection that shall, at a 

24 minimum— 


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1 ‘‘(i) prescribe an appropriate format 

2 for list to be provided under paragraph 

3 (1)(A); 

4 ‘‘(ii) prescribe the information to be 

5 included in the Legacy Federal IT Inven6 tory required by paragraph (2); 

7 ‘‘(iii) provide guidance on how an 

8 agency Chief Information Officer should 

9 identify high-risk legacy information tech10 nology systems that, at least, requires agen11 cy Chief Information Officers, in coordina12 tion with other agency stakeholders, to iden13 tify as a high risk legacy information tech14 nology system any outdated or obsolete sys15 tem of information technology that is crit16 ical to the agency such that the loss or deg17 radation of the system would create a secu18 rity, operational, or privacy risk to the 

19 agency or would otherwise impact the abil20 ity of the agency to perform the mission of 

21 the agency, effectively deliver programs, or 

22 conduct business; and 

23 ‘‘(iv) provide guidance on how existing 

24 reporting structures can be used to submit 


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1 the Legacy Federal IT inventory required 

2 by paragraph (2). 

3 ‘‘(B) UPDATES.—The Director may update 

4 the guidance issued under subparagraph (A) as 

5 the Director determines necessary. 

6 ‘‘(5) DEFINITIONS.—In this subsection: 

7 ‘‘(A) AGENCY CHIEF INFORMATION OFFI8 CER.—The term ‘agency Chief Information Offi9 cer’ means a Chief Information Officer des10 ignated under section 3506(a)(2) of title 44, 

11 United States Code. 

12 ‘‘(B) FEDERAL CHIEF INFORMATION OFFI13 CER.—The term ‘Federal Chief Information Offi14 cer’ means the Administrator of the Office of 

15 Electronic Government.’’; and 

16 (7) in subsection (g)(1), as so redesignated, by 

17 striking ‘‘On and after the date that is 2 years after 

18 the date on which the Comptroller General of the 

19 United States issues the third report required under 

20 subsection (b)(7)(B),’’ and inserting ‘‘After December 

21 31, 2030,’’. 


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Union Calendar No. 326 

118TH CONGRESS 

2D SESSION H. R. 5527 

[Report No. 118–397] 

A BILL 

To amend section 1078 of the National Defense 

ernization Fund, and for other purposes. crease the effectiveness of the Technology ModAuthorization Act for Fiscal Year 2018 to inFEBRUARY 23, 2024 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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