February 19, 2026
The future of the Technology Modernization Fund is at a pivotal moment, and on this episode of Fed Gov Today, Francis Rose explores what comes next with two leaders who helped shape it from the beginning: former Federal CIOs Tony Scott and Suzette Kent.
Congress includes $5 million in the latest funding bill to keep the TMF authorized through the end of the fiscal year. The fund still has roughly $200 million available to award, along with repayments continuing to come back from previously funded projects. That combination sets the stage for what Rose calls a “forward look” at the fund’s evolution.
A major focus of the conversation is artificial intelligence. The last project approved before the TMF’s authorization lapsed in December provides $28 million to the National Nuclear Security Administration, including funding to improve AI infrastructure to mitigate nuclear security threats and enhance cybersecurity posture. Rose notes that the TMF was not conceived in the AI era and asks whether AI changes how the fund should operate.
Scott, now in the cybersecurity sector, says AI is already one of the most impactful forces in cybersecurity—on both the defensive and offensive sides. If agencies are not modernizing constantly and considering AI, especially in cybersecurity, he says, they are “probably already way behind.” He calls AI a fertile area for new investments that can strengthen security across government.
Kent points out that the TMF’s authorizing language specifically references “new and emerging technologies.” AI clearly fits. She connects that mandate to the recent OMB memo requiring agencies to publish AI inventories. Some agencies have already posted theirs; others are in progress. Those inventories, she suggests, could generate strong proposals to the TMF—not just to test AI tools, but to operationalize them inside federal agencies. The technology may be promising, she says, but making it work in government environments is the hard part.
Rose also raises the question of scale. With about $200 million available, what size projects make sense? Scott recalls that early estimates suggested full federal IT modernization needs could approach $3 billion. While he never expected that full amount, he says the current funding level may not be enough long term. As agencies and lawmakers see the benefits of the TMF’s disciplined approach, he hopes the fund grows to meet the true scope of modernization needs.
Kent frames the issue as partly a budget process challenge. Ideally, the regular federal budget would drive technology transformation. The TMF exists, she says, because the traditional process often cannot move fast enough or accommodate multi-year investments aligned with how technology evolves. She emphasizes the importance of tracking repayments and maintaining a balance between new awards and money returning to the fund.
Both former CIOs highlight the TMF’s unusually high success rate compared to typical federal IT projects. They credit rigorous business cases, detailed execution plans, defined repayment structures, and secretary-level signoff. Agencies that win awards demonstrate clear alignment among CIOs, CFOs, and senior leadership.
Finally, Rose asks about working capital funds, which were authorized alongside the TMF. Scott explains that while they inspired the TMF model, they are generally limited to single agencies and lack the multi-agency flexibility the TMF offers. Kent adds that some agencies have used them well, though operational friction remains. With AI-driven automation offering measurable return on investment, she encourages agencies to explore every available mechanism to sustain modernization momentum.
Together, Scott and Kent paint a picture of a fund that proves its value—and now faces the challenge of scaling for the AI era.