IB 
Union Calendar No. 611 
114TH CONGRESS 
2D SESSION 
H. R. 6004 
[Report No. 114–783, Part I] 
To modernize Government information technology, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 13, 2016 
Mr. HURD of Texas (for himself, Mr. CONNOLLY, Mr. CHAFFETZ, Mr. CUM-
MINGS, Ms. KELLY of Illinois, and Mr. TED LIEU of California) intro-
duced the following bill; which was referred to the Committee on Over-
sight and Government Reform, and in addition to the Committee on Ap-
propriations, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
SEPTEMBER 22, 2016 
Additional sponsors: Mr. MCCARTHY and Mr. HOYER 
SEPTEMBER 22, 2016 
Reported from the Committee on Oversight and Government Reform with an 
amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
SEPTEMBER 22, 2016 
The Committee on Appropriations discharged; committed to the Committee of 
the Whole House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on September 13, 2016] 
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A BILL 
To modernize Government information technology, and for 
other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Modernizing Govern-
ment Technology Act of 2016’’ or the ‘‘MGT Act’’. 
SEC. 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 infor-
mation 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 Of-
fice (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 
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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 secu-
rity 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 fol-
lowing: 
(1) Assist the Federal Government in modernized 
Federal information technology to mitigate current 
operational and security risks. 
(2) Incentivize cost savings in Federal informa-
tion technology through modernization. 
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(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 prac-
tices. 
SEC. 3. ESTABLISHMENT OF AGENCY INFORMATION TECH-
NOLOGY 
SYSTEMS 
MODERNIZATION 
AND 
WORKING CAPITAL FUNDS. 
(a) INFORMATION TECHNOLOGY SYSTEM MODERNIZA-
TION AND WORKING CAPITAL FUNDS.— 
(1) ESTABLISHMENT.—There is established in 
each covered agency an information technology system 
modernization and working capital fund (in this sec-
tion referred to as the ‘‘IT working capital fund’’) for 
necessary expenses for the agency described in para-
graph (3). 
(2) SOURCE OF FUNDS.—Amounts may be depos-
ited into an IT working capital fund as follows: 
(A) Reprogramming of funds, including re-
programming of any funds available on the date 
of the enactment of this Act for the operation 
and maintenance of legacy information tech-
nology systems, in compliance with any applica-
ble reprogramming law or guidelines of the Com-
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mittees on Appropriations of the House of Rep-
resentatives 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 discre-
tionary 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 effi-
ciency and effectiveness. 
(B) To transition to cloud computing and 
innovative platforms and technologies. 
(C) To assist and support covered agency ef-
forts to provide adequate, risk-based, and cost-ef-
fective information technology capabilities that 
address evolving threats to information security. 
(D) Reimbursement of funds transferred 
from the Information Technology Modernization 
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Fund established under section 4, with the ap-
proval 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 ap-
proved by the covered agency Chief Information Offi-
cer, in consultation with the Administrator of the Of-
fice of Electronic Government. The head of each cov-
ered agency may— 
(A) reprogram any amounts saved as a di-
rect 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 ap-
plicable 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 
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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 Commit-
tees on Appropriations of the House of Representa-
tives and the Senate. 
(7) AGENCY CIO RESPONSIBILITIES.—In evalu-
ating projects to be funded from the IT working cap-
ital fund, the covered agency Chief Information Offi-
cer shall consider, to the extent applicable, guidance 
established pursuant to section 4(a)(1) to evaluate ap-
plications for funding from the Information Tech-
nology Modernization Fund that include factors such 
as a strong business case, technical design, procure-
ment strategy (including adequate use of incremental 
software development practices), and program man-
agement. 
(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 re-
spect to the IT working capital fund for that covered 
agency: 
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(A) A list of each information technology 
investment funded with estimated cost and com-
pletion date for each such investment. 
(B) A summary by fiscal year of the obliga-
tions, expenditures, and unused balances. 
(2) PUBLIC AVAILABILITY.—The Director shall 
make the information required pursuant to para-
graph (1) publicly available on a website. 
(c) COVERED AGENCY DEFINED.—In this section, the 
term ‘‘covered agency’’ means each agency listed in section 
901(b) of title 31, United States Code. 
SEC. 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 Moderniza-
tion Fund (in this section referred to as the ‘‘Fund’’) 
for technology related activities, to improve informa-
tion technology, to enhance cybersecurity across the 
Federal Government, and to be administered in ac-
cordance with guidance established by the Director of 
the Office of Management of Budget. 
(2) ADMINISTRATION OF FUND.—The Adminis-
trator of General Services, in consultation with the 
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Chief Information Officers Council and with the con-
currence of the Director, shall administer the Fund in 
accordance with this subsection. 
(3) USE OF FUNDS.—The Administrator of Gen-
eral Services shall, in accordance with the rec-
ommendations of the Information Technology Mod-
ernization 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 agen-
cy to improve, retire, or replace existing infor-
mation technology systems to enhance cybersecu-
rity and improve efficiency and effectiveness. 
(B) For the development, operation, and 
procurement of information technology products, 
services, and acquisition vehicles for use by agen-
cies to improve Governmentwide efficiency and 
cybersecurity in accordance with the require-
ments of the agencies. 
(C) To provide services or work performed 
in support of the activities described under sub-
paragraph (A) or (B). 
(4) CREDITS; AVAILABILITY OF FUNDS.— 
(A) CREDITS.—In addition to any funds 
otherwise appropriated, the Fund shall be cred-
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ited with all reimbursements, advances, or re-
funds or recoveries relating to information tech-
nology or services provided through the Fund. 
(B) AVAILABILITY OF FUNDS.—Amounts de-
posited, 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 serv-
ice shall pay an amount fixed by the Adminis-
trator 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 
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agreement described in paragraph (6) in a fu-
ture fiscal year shall be recorded pursuant to sec-
tion 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 Gen-
eral 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, in-
cluding operating expenses. Before making any 
changes to the established amounts and terms of 
repayment, the Administrator of General Serv-
ices shall conduct a review and obtain approval 
from the Director. 
(D) FAILURE TO MAKE TIMELY REIMBURSE-
MENT.—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 writ-
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ten 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 consulta-
tion with the Director) and the head of the req-
uisitioning agency shall enter into a written 
agreement documenting the purpose for which 
the funds will be used and the terms of repay-
ment. An agreement made pursuant to this sub-
paragraph shall be recorded as an obligation as 
provided in paragraph (5)(B). 
(B) REQUIREMENT
FOR
USE
OF
INCRE-
MENTAL
DEVELOPMENT
PRACTICES.—For any 
funds transferred to an agency under paragraph 
(3)(A), in the absence of compelling cir-
cumstances documented by the Administrator of 
General Services at the time of transfer, such 
funds shall be transferred only on an incre-
mental basis, tied to metric-based development 
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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 de-
scription of the project, project status (including any 
schedule delay and cost overruns), and financial ex-
penditure 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’’) which shall evalu-
ate proposals submitted by agencies for funding au-
thorized under the Fund. 
(2) RESPONSIBILITIES.—The responsibilities of 
the Board are the following: 
(A) Provide input to the Director for the de-
velopment of processes for agencies to submit 
modernization proposals to the Board and to es-
tablish the criteria by which such proposals are 
evaluated, which shall include addressing the 
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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 Adminis-
trator 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 assist-
ance 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 Ad-
ministrator of General Services, opportunities to 
improve or replace multiple information tech-
nology systems with a smaller number of infor-
mation technology systems common to multiple 
agencies. 
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