Impending TMF Sunset Redirects Federal Modernization Trajectories

The Technology Modernization Fund, the General Services Administration’s funding vehicle for federal IT upgrades, is set to expire Friday after Congress declined to extend its authorization in the final version of the National Defense Authorization Act.  

The lapse leaves nearly $200 million in available funds effectively frozen. GSA will continue to manage ongoing work but cannot issue new awards once the deadline passes. The freeze threatens future funding for cybersecurity improvements, AI adoption efforts and legacy system updates.  

“The TMF has saved 378 million work hours for Americans and delivered billions in cost savings. Without reauthorization, the administration’s priorities around shared services and AI adoption will falter, cybersecurity improvements will stall, and we risk losing critical modernization momentum,” a GSA spokesperson told GovCIO Media & Research. “We’re actively working with Congress to secure the authorization this program needs.” 

Background

Congress created the TMF in 2017 to address a long-recognized problem: federal agencies spending more to maintain outdated, failure-prone systems than modernizing them.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.  

“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 These outdated systems require rare skills to fix and maintain, are difficult to secure and scale, and stand in the way of agencies delivering on their missions,” according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. 

Since its launch, the fund has invested roughly $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 for the Department of Labor to update its system that processes health records and claims for 2.5 million federal workers. 

“The TMF has helped innovate across government through investments in artificial intelligence, shared services and cybersecurity, with projected cost savings of $1.2 billion,” now former GSA Acting Administrator and Deputy Administrator Stephen Ehikian told GovCIO Media & Research in April.

Earlier this year, the Trump administration proposed a new funding model for the program that would allow GSA, with approval from the Office of Management and Budget, to collect “unobligated balances of expired discretionary funds” from other federal agencies and put in the TMF.  

“This funding will help address critical technology challenges, and modernize high-priority systems, cybersecurity, public-facing digital services/customer experience improvements, and cross-government collaboration and scalable shared services,” according to the GSA’s fiscal year 2026 congressional justification.

Lawmakers’ Response 

Congressional reaction to TMF’s looming expiration has been mixed. While there is bipartisan support in the House for extending the program, disagreements over funding mechanisms and shifting legislative priorities have slowed progress.   

The House Oversight and Government Reform Committee, which has jurisdiction over the program, has repeatedly pressed for renewal. Committee leaders also sought to have TMF reauthorization included in the NDAA, but the proposal was dropped during negotiations.  

“We absolutely must reauthorize the Technology Modernization Fund, and I hope there’s bipartisan recognition in both the House and Senate that this has to get done now,” Rep. Shontel Brown (D-OH) said in a statement to GovCIO Media & Research. “If Congress lets it expire, nearly $200 million in funding for new projects will disappear overnight — and with it, our ability to tackle urgent technology upgrades across the federal government.” 

Brown, who serves as the ranking member on Oversight’s Cybersecurity, Information Technology, and Government Innovation Subcommittee, said she will “support any measure that moves reauthorization forward. The clock is ticking.”