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H.R. 6004, Modernizing Government Technology (MGT) Act of 2016

Floor Situation

On­­­­ Tuesday, September 20, 2016, the House will consider H.R. 6004, the Modernizing Government Technology (MGT) Act of 2016, under suspension of the rules. H.R. 6004 was introduced on September 13, 2016, by Rep. Will Hurd (R-TX) and was referred to the Committee on Oversight and Government Reform, and the Committee on Appropriations.


H.R. 6004 establishes an IT working capital fund for each federal government agency to improve, retire, or replace existing information technology systems, to improve efficiency and effectiveness; transition to cloud computing innovative platforms and technologies. Federal agencies  may reinvest the savings realized by modernizing IT to capitalize the agency’s IT working capital fund and use for future modernization projects.  These funds will only be established in the 24 major federal agencies. 

The bill also establishes a centralized Information Technology Modernization Fund (ITMF) and Board to loan agencies funds repaid through the cost savings agencies would achieve by using newer, more efficient technology.  In addition, agencies that receive this funding will be held accountable for meeting project milestones and directed to use modern incremental software development techniques.  The board will evaluate proposals submitted by agencies for funding from the ITMF for IT modernization projects.  All executive branch agencies are eligible to apply for funding from the ITMF. 


Federal agencies rely on information technology (IT) to conduct their work, requiring extensive investments in both updating existing IT and developing new IT. The Government Accountability Office (GAO) has reported that the federal government annually spends more than $80 billion for IT and more than 75 percent of this spending is on legacy IT. In FY2017, federal IT spending  will be more than $89 billion. Unfortunately, these investments often incur "multi-million dollar cost overruns and years-long schedule delays," may contribute little to mission-related outcomes, and in some cases fail altogether.[1]  In addition, as the federal government is increasingly relying on legacy IT, the government is unable to realize the lower costs of modernized IT solutions and mitigate security and operational risks inherent in outdated and obsolete IT.  

According to the bill sponsor, “Last year, the federal government spent $80 billion on IT systems, 80 percent of which was spent maintaining outdated, legacy systems. We don’t have to be stuck in the Stone Age. A move to growing technologies like the cloud can help keep our information secure, while saving billions of dollars. It’s time to stop wasting tax dollars and move government into the 21st Century.”[2]


A Congressional Budget Office (CBO) cost estimate is currently not available.

Staff Contact

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.


[1] See CRS Report, “The Federal Information Technology Acquisition Reform Act (FITARA): Frequently Asked Questions,” June 1, 2016.
[2] See Rep. Will Hurd Press Release, “Hurd Takes Lead on Federal IT Reform,” September 15, 2016.

114th Congress