Technology Modernization Fund Awaits Congress’ Next Move

The Technology Modernization Fund, a funding vehicle for federal tech upgrades, is due to expire at the end of September unless Congress acts.

The TMF has historically had bipartisan support, but Congress has struggled to pass long-term reauthorization since the fund temporarily expired in December 2025. Instead, Congress extended funding for the TMF through Sept. 30 as part of the overall spending package passed in January.  

Jessie Posilkin, acting TMF executive director, recently reiterated the fund’s importance for federal agencies and acknowledged the looming deadline.  

“TMF was made for moments like this, where agencies can’t afford to wait on budget and procurement cycles. Flexible forward funding means agencies can move faster and more efficiently,” she said. “We have a very narrow window between now and September 30, when our authorization to make new investments ends (absent congressional action, of course…). With more time, we could do even more — but we’ll meet as much of the agency need as we can, while we can.” 

The House returned to D.C. Monday after a five-week recess. Whether the TMF gets extended again depends on which version of Congress’ continuing resolution ultimately gets passed, and whether it gets passed before the end of the fiscal year on Sept. 30.  

A Tale of Two Stopgap Bills 

In July, the House passed a short-term measure that would extend federal funding through Dec. 4, but did not include appropriations for the TMF. The bill also did not extend the Cybersecurity Information Sharing Act of 2015 and the Federal Cybersecurity Enhancement Act of 2015, which also expire after Sept. 30. The measure was a non-starter in the Senate.  

In August, the Senate passed its own stopgap bill that would fund the government at current levels through Dec. 11, including the TMF and cybersecurity authorities. The House has the option of passing the Senate’s continuing resolution or going back to the drawing board.  

Background 

Congress established the TMF in 2017 under the Modernizing Government Technology Act. The goal was to address a long-recognized problem: federal agencies spending more to maintain outdated, failure-prone systems than to modernize them. The revolving-fund model was intended to give agencies a flexible way to pay for multi-year upgrades without being constrained by the annual appropriations cycle.    

Since its launch, the fund has invested more than $1 billion in 70 projects across 34 federal agencies. Major investments include $10 million for the National Institute of Standards and Technology to modernize cybersecurity systems, move legacy platforms to cloud services and develop AI-backed analytic tools; $45 million to the Department of Justice’s Antitrust Division to modernize its data analysis capabilities through AI and develop a new portal for citizens to report violations; and $42 million for the Department of Labor to update its system that processes health records and claims for 2.5 million federal workers. 

“The U.S. federal government is the largest purchaser of IT products and services in the world, spending over $100 billion each year. Nearly 80% is spent maintaining existing IT, including legacy systems that are decades old. These outdated systems require rare skills to fix and maintain, are difficult to secure and scale, and stand in the way of agencies delivering on their missions,” according to GSA.    

In July, the Government Accountability Office released a report pointing to the savings potential of modernizing aging IT systems. The report found that about $1.03 billion had been invested in 68 IT modernization projects, 24 of which were expected to save $1.06 billion combined and predicted several projects will see cost-saving “results further down the line.”