Modernizing Government Technology Act of 2016

To modernize Government information technology, and for other purposes. 1. Short title This Act may be cited as the Modernizing Government Technology Act of 2016 MGT Act 2. Findings; purposes (a) Findings The Congress finds the following: (1) The Federal Government spends nearly 75 percent of its annual information technology funding on operating and maintaining existing, legacy information technology systems. These systems can pose operational risks, including rising costs and inability to meet mission requirements. These systems also pose security risks, including the inability to use current security best practices, such as data encryption and multi-factor authentication, making these systems particularly vulnerable to malicious cyber activity. (2) In 2015, the Government Accountability Office (GAO) designated Improving the Management of IT Acquisitions and Operations to its biannual High Risk List and identified as a particular concern the increasing level of information technology spending on Operations and Maintenance making less funding available for development or modernization. The GAO also found the Government has spent billions on failed and poorly performing IT investments due to a lack of effective oversight. (3) The Federal Government must modernize Federal IT systems to mitigate existing operational and security risks. (4) The efficiencies, cost savings, and greater computing power, offered by modernized solutions, such as cloud computing, have the potential to— (A) eliminate inappropriate duplication and reduce costs; (B) address the critical need for cyber security by design; and (C) move the Federal Government into a broad, digital-services delivery model that will transform the Federal Government’s ability to meet mission requirements and deliver services to the American people. (b) Purposes The purposes of this Act are the following: (1) Assist the Federal Government in modernized Federal information technology to mitigate current operational and security risks. (2) Incentivize cost savings in Federal information technology through modernization. (3) Accelerate the acquisition and deployment of modernized information technology solutions, such as cloud computing, by addressing impediments in the areas of funding, development, and acquisition practices. 3. Establishment of agency Information Technology Systems Modernization and Working Capital Funds (a) Information technology system modernization and working capital funds (1) Establishment There is established in each covered agency an information technology system modernization and working capital fund (in this section referred to as the IT working capital fund (2) Source of funds Amounts may be deposited into an IT working capital fund as follows: (A) Reprogramming of funds, including reprogramming of any funds available on the date of the enactment of this Act for the operation and maintenance of legacy information technology systems, in compliance with any applicable reprogramming law or guidelines of the Committees on Appropriations of the House of Representatives and the Senate. (B) Transfer of funds, including transfer of any funds available on the date of the enactment of this Act for the operation and maintenance of legacy information technology systems, but only if transfer authority is specifically provided for by law. (C) Amounts made available through discretionary appropriations. (3) Use of funds An IT working capital fund established under paragraph (1) may be used only for the following: (A) To improve, retire, or replace existing information technology systems to improve efficiency and effectiveness. (B) To transition to cloud computing and innovative platforms and technologies. (C) To assist and support covered agency efforts to provide adequate, risk-based, and cost-effective information technology capabilities that address evolving threats to information security. (D) Reimbursement of funds transferred from the Information Technology Modernization Fund established under section 4, with the approval of the agency Chief Information Officer. (4) Existing funds An IT working capital fund may not be used to supplant funds provided for the operation and maintenance of any system already within an appropriation for the covered agency at the time of establishment of the IT working capital fund. (5) Reprogramming and transfer of funds The head of each covered agency shall prioritize funds within the IT working capital fund to be used initially for cost savings activities approved by the covered agency Chief Information Officer, in consultation with the Administrator of the Office of Electronic Government. The head of each covered agency may— (A) reprogram any amounts saved as a direct result of such activities for deposit into the applicable IT working capital fund, consistent with paragraph (2)(A); and (B) transfer any amounts saved as a direct result of such activities for deposit into the applicable IT working capital fund, consistent with paragraph (2)(B). (6) Return of funds Any funds deposited into an IT working capital fund must be obligated not later than 3 years after the date of such deposit. Any funds that are unobligated 3 years after such date shall be rescinded and reported to the Committees on Appropriations of the House of Representatives and the Senate. (7) Agency CIO responsibilities In evaluating projects to be funded from the IT working capital fund, the covered agency Chief Information Officer shall consider, to the extent applicable, guidance established pursuant to section 4(a)(1) to evaluate applications for funding from the Information Technology Modernization Fund that include factors such as a strong business case, technical design, procurement strategy (including adequate use of incremental software development practices), and program management. (b) Reporting requirement (1) In general Not later than one year after the date of the enactment of this Act, and every 6 months thereafter, the head of each covered agency shall submit to the Director the following, with respect to the IT working capital fund for that covered agency: (A) A list of each information technology investment funded with estimated cost and completion date for each such investment. (B) A summary by fiscal year of the obligations, expenditures, and unused balances. (2) Public availability The Director shall make the information required pursuant to paragraph (1) publicly available on a website. (c) Covered agency defined In this section, the term covered agency 4. Establishment of Information Technology Modernization Fund and Board (a) Information technology modernization fund (1) Establishment There is established in the Treasury an Information Technology Modernization Fund (in this section referred to as the Fund (2) Administration of Fund The Administrator of General Services, in consultation with the Chief Information Officers Council and with the concurrence of the Director, shall administer the Fund in accordance with this subsection. (3) Use of funds The Administrator of General Services shall, in accordance with the recommendations of the Information Technology Modernization Board established under subsection (b), use amounts in the Fund for the following purposes: (A) To transfer such amounts, to remain available until expended, to the head of an agency to improve, retire, or replace existing information technology systems to enhance cybersecurity and improve efficiency and effectiveness. (B) For the development, operation, and procurement of information technology products, services, and acquisition vehicles for use by agencies to improve Governmentwide efficiency and cybersecurity in accordance with the requirements of the agencies. (C) To provide services or work performed in support of the activities described under subparagraph (A) or (B). (4) Credits; availability of funds (A) Credits In addition to any funds otherwise appropriated, the Fund shall be credited with all reimbursements, advances, or refunds or recoveries relating to information technology or services provided through the Fund. (B) Availability of funds Amounts deposited, credited, or otherwise made available to the Fund shall be available until expended and without further appropriation for the purposes described in paragraph (3). (5) Reimbursement (A) Payment by agency For a product or service developed under paragraph (3), the head of an agency that uses such product or service shall pay an amount fixed by the Administrator of General Services in accordance with this subsection. (B) Reimbursement by agency The head of an agency shall reimburse the Fund for any transfer made under paragraph (3)(A) in accordance with the terms established in the written agreement described in paragraph (6). Notwithstanding any other provision of law, an agency may make a reimbursement required by this subparagraph from any appropriation available for information technology activities. An obligation to make a payment under an agreement described in paragraph (6) in a future fiscal year shall be recorded pursuant to section 1501 of title 31, United States Code, in the fiscal year in which the payment is due. (C) Prices fixed by Administrator of General Services The Administrator of General Services, in consultation with the Director, shall establish amounts to be paid by an agency and terms of repayment for use of a product or service developed under paragraph (3) at levels sufficient to ensure the solvency of the Fund, including operating expenses. Before making any changes to the established amounts and terms of repayment, the Administrator of General Services shall conduct a review and obtain approval from the Director. (D) Failure to make timely reimbursement The Administrator of General Services may obtain reimbursement by the issuance of transfer and counterwarrants, or other lawful transfer documents, supported by itemized bills, if payment is not made by an agency— (i) within 90 days after the expiration of a repayment period described in the written agreement described in paragraph (6)(A); or (ii) within 45 days after the expiration of the time period to make a payment under a payment schedule for a product or service developed under paragraph (3). (6) Written agreement (A) In general Before the transfer of funds to an agency under paragraph (3)(A), the Administrator of General Services (in consultation with the Director) and the head of the requisitioning agency shall enter into a written agreement documenting the purpose for which the funds will be used and the terms of repayment. An agreement made pursuant to this subparagraph shall be recorded as an obligation as provided in paragraph (5)(B). (B) Requirement for use of incremental development practices For any funds transferred to an agency under paragraph (3)(A), in the absence of compelling circumstances documented by the Administrator of General Services at the time of transfer, such funds shall be transferred only on an incremental basis, tied to metric-based development milestones achieved by the agency, to be described in the written agreement required pursuant to subparagraph (A). (7) Reporting requirement Not later than 6 months after the date of the enactment of this Act, the Director shall publish and maintain a list of each project funded by the Fund on a public website to be updated not less than quarterly, that includes a description of the project, project status (including any schedule delay and cost overruns), and financial expenditure data related to the project. (b) Information technology modernization board (1) Establishment There is established an Information Technology Modernization Board (in this section referred to as the Board (2) Responsibilities The responsibilities of the Board are the following: (A) Provide input to the Director for the development of processes for agencies to submit modernization proposals to the Board and to establish the criteria by which such proposals are evaluated, which shall include addressing the greatest security and operational risks, having the greatest Governmentwide impact, and having a high probability of success based on factors such as a strong business case, technical design, procurement strategy (including adequate use of incremental software development practices), and program management. (B) Make recommendations to the Administrator of General Services to assist agencies in the further development and refinement of select submitted modernization proposals, based on an initial evaluation performed with the assistance of the Administrator of General Services. (C) review and prioritize, with the assistance of the Administrator of General Services and the Director, modernization proposals based on criteria established pursuant to subparagraph (A). (D) Identify, with the assistance of the Administrator of General Services, opportunities to improve or replace multiple information technology systems with a smaller number of information technology systems common to multiple agencies. (E) Recommend the funding of modernization projects, in accordance with the uses described in subsection (a)(3), to the Administrator of General Services. (F) Monitor, in consultation with the Administrator of General Services, progress and performance in executing approved projects and, if necessary, recommend the suspension or termination of funding for projects based on factors such as failure to meet the terms of the written agreement described in subsection (a)(6). (G) Monitor operating costs of the Fund. (3) Membership The Board shall consist of 8 voting members. (4) Chair The Chair of the Board shall be the Administrator of the Office of Electronic Government. (5) Permanent members The permanent members of the Board shall be the following: (A) The Administrator of the Office of Electronic Government. (B) A senior official from the General Services Administration, who shall be appointed by the Administrator of General Services. (6) Additional members of the Board (A) Appointment The other members of the Board shall be appointed as follows: (i) One employee of the National Institute of Standards and Technology of the Department of Commerce, appointed by the Secretary of Commerce. (ii) One employee of the National Protection and Programs Directorate of the Department of Homeland Security, appointed by the Secretary of Homeland Security. (iii) One employee of the Department of Defense, appointed by the Secretary of Defense. (iv) Three Federal employees primarily having technical expertise in information technology development, financial management, cybersecurity and privacy, and acquisition, appointed by the Director. (B) Term Each member of the Board described in paragraph (A) shall serve a term of one year, which shall be renewable up to three times, at the discretion of the appointing Secretary or Director, as applicable. (7) Prohibition on compensation Members of the Board may not receive additional pay, allowances, or benefits by reason of their service on the Board. (8) Staff Upon request of the Chair of the Board, the Director and the Administrator of General Services may detail, on a nonreimbursable basis, any of the personnel of the Office of Management and Budget or the General Services Administration (as the case may be) to the Board to assist it in carrying out its functions under this Act. (c) Responsibilities of the Administrator of General Services (1) In general In addition to the responsibilities described in subsection (a), the Administrator of General Services shall support the activities of the Board and provide technical support to, and, with the concurrence of the Director, oversight of, agencies that receive transfers from the Fund. (2) Responsibilities The responsibilities of the Administrator of General Services are to— (A) provide direct technical support in the form of personnel services or otherwise to agencies transferred amounts under subsection (a)(3)(A) and for products, services, and acquisition vehicles funded under subsection (a)(3)(B); (B) assist the Board with the evaluation, prioritization, and development of agency modernization proposals; (C) perform regular project oversight and monitoring of approved agency modernization projects, in consultation with the Board and the Director, to increase the likelihood of successful implementation and reduce waste; and (D) provide the Director with information necessary to meet the requirements of subsection (a)(7). (d) Agency defined In this section, the term agency 5. Definitions In this Act: (1) Cloud computing The term cloud computing (2) Director The term Director (3) Information technology The term information technology (4) Legacy information technology system The term legacy information technology system September 22, 2016 Reported from the Committee on Oversight and Government Reform September 22, 2016 The Committee on Appropriations

Summary: Modernizing Government Technology Act of 2016 or the MGT Act (Sec. 3) This bill establishes in each covered agency (specified agencies for which there are Chief Financial Officers) an information technology system modernization and working capital fund which may be used for necessary expenses for the agency to: improve, retire, or replace existing information technology systems to improve efficiency and effectiveness; transition to cloud computing and innovative platforms and technologies; assist and support efforts to provide adequate, risk-based, and cost-effective information technology capabilities that address evolving threats to information security; and reimburse amounts transferred from the Information Technology Modernization Fund (ITMF) (established under this bill), with the approval of the agency's Chief Information Officer (CIO). Deposits into such fund may include reprogrammed or transferred amounts available for the operation and maintenance of legacy information technology systems. Each agency shall prioritize amounts within such fund to be used initially for cost savings activities approved by the agency's Chief Information Officer. Amounts deposited into an IT working capital fund shall be available for obligation for three years after the date of such deposit. Each agency, by one year after this Act's enactment and every six months thereafter, shall submit to the OMB a list of each information technology investment funded by, and a summary of the obligations, expenditures, and unused balances of, the agency's IT working capital fund. The OMB shall make such information publicly available on a website. (Sec. 4) The bill establishes the ITMF for technology related activities, to improve information technology, and to enhance cybersecurity across the federal government. The ITMF shall be administered by the General Services Administration (GSA) in accordance with guidance established by, and with the concurrence of, the Office of Management and Budget (OMB). The GSA shall: transfer amounts from the ITMF to an agency to improve, retire, or replace existing information technology systems to enhance cybersecurity and improve efficiency and effectiveness; use amounts in the ITMF for the development, operation, and procurement of information technology products, services, and acquisition vehicles for use by agencies to improve efficiency and cybersecurity; and use amounts in the ITMF to provide services or work performed in support of such activities. An agency shall: (1) reimburse the ITMF for any such transfer, and (2) pay prices to be fixed by the GSA for such products or services the agency uses at levels sufficient to ensure the solvency of the ITMF. The GSA may obtain reimbursement by the issuance of transfer and counterwarrants if timely payment is not made by an agency. The OMB shall publish on a public website and and update quarterly a list of each project funded by the ITMF. The bill establishes an Information Technology Modernization Board, which shall: evaluate proposals submitted by agencies for funding authorized under the ITMF; provide input to the OMB for the development of processes for agencies to submit modernization proposals to the board and to establish the criteria by which such proposals are evaluated; make recommendations to the GSA to assist agencies in the further development and refinement of select proposals; review and prioritize such modernization proposals; identify opportunities to improve or replace multiple information technology systems with a smaller number of information technology systems common to multiple agencies; recommend the funding of modernization projects; monitor progress and performance in executing approved projects and, if necessary, recommend the suspension or termination of funding; and monitor operating costs of the ITMF. The GSA shall support board activities and provide technical support to, and oversight of, agencies that receive transfers from the ITMF.