TMF Pushes Agencies to Prove Value of Cloud Modernization

Federal agencies are increasingly being asked to demonstrate measurable mission outcomes and financial returns from cloud modernization projects as budget uncertainty complicates technology planning, officials said Friday.

General Services Administration Technology Modernization Fund Acting Director Jessie Posilkin pointed to a TMF-funded Department of Homeland Security cloud modernization effort that generated $30 million in annual savings from a $15 million investment, reduced call center inquiries by 75% and accelerated workflows by 25%.

Posilkin said agencies seeking modernization funding must increasingly justify projects through operational improvements and measurable value rather than technology upgrades alone.

“There is no clarity around what things will cost, and therefore, you need to think about how to create more of a financial value proposition. That’s not always clear, which is why the value you’re delivering is so important,” Posilkin said at GovCIO Media & Research’s Federal Tech Leaders Summit in Washington, D.C.

Posilkin added that TMF is authorized to invest in cloud and other modernization projects through Sept. 30 and urged Congress to reauthorize the program, which she said has generated an estimated $12 billion in cost savings and operational efficiencies across government.

“The proposals we’re evaluating are value-proposition driven. We want to see what services you’re going to improve as a result of this funding,” said Posilkin. “We want to see that you not only have a good plan up front, but as you are executing, you can communicate where you’re running into blockers, you’re candid about that, and that’s where the TMF can help remove roadblocks.”

Acquisition Reform for Cloud

President Donald Trump signed two executive orders in April 2025 directing agencies to prioritize competitive commercial offerings and streamline the Federal Acquisition Regulation (FAR). The initiatives are part of the administration’s broader effort to modernize federal procurement and accelerate technology adoption.

NASA Solutions for Enterprise-Wide Procurement Senior Deputy Director Theresa Kinney said at the event that the FAR overhaul has created new opportunities for government-wide acquisition contracts to support multi-cloud environments without locking agencies into a single provider.

Kinney added the FAR overhaul is enabling competition among cloud providers and helping agencies reduce costs, avoid vendor lock-in and maintain flexibility as technology evolves.

“Most of the cloud companies now are coming back saying that they’ll give you the base year and year one, because inflation is going through the roof,” said Kinney. “They don’t want to lock into these dollar amounts, but they will lock into a 40% cost decrease.”

Building Flexibility Into Modernization Efforts

Industry partners are looking at offering flexible contracting and modernization approaches, noted Christine Pacheco, federal civilian sales director at Equinix.

Pacheco said agencies can benefit from base and option year contract structures that allow organizations to adapt as technologies and mission requirements change. She encouraged vendors to provide greater cost transparency and work with agencies to build modernization strategies that account for rapid technological advances.

“We are constantly watching people shift to the next equipment, chip or whatever. If you’re trying to stay on top of the tools out there, it’s challenging to have these conversations that focus on upgrading all of your legacy equipment, which may or may not be obsolete in three to five years,” said Pacheco. “There has to be some openness to the conversation of this may be the environment that you are looking at today, with the strategy that, hey, this is probably going to look differently in a few years.”