4 May, 2018
The 2018 National Defense Authorization Act (NDAA) signed by President Donald Trump on December 12th, 2017, included a provision referred to as the Modernizing Government Technology Act (MGT), which could pave the way for the adoption of blockchain in the U.S. government.
The MGT provision was designed to update the federal government’s information infrastructure. This amendment to the NDAA is significant for agencies planning and budgeting for future modernization projects, as it will sanction the redirection of cost savings into internal working capital funds that can be used to modernize IT systems.
What about blockchain
Although blockchain is not specifically mentioned in the bill, Trey Hodgkins, senior vice president at the Information Technology Alliance for Public Sector, has clarified that the U.S. Congress expects blockchain to be explored by agencies in their quest for technological advances:
“Blockchain was clearly one of the technological capabilities that Congress meant for agencies to look at, and what they were trying to do was create dollars with some flexibility to them so that agencies would have their own discretion on what they invest in.”
Moving away from high-cost systems
The MGT provision outlines three categories of modernization: migrating legacy systems to the cloud, improving cybersecurity, and developing innovative technologies and platforms. Blockchain technology has proven applications for all these categories. Experts in the field are heralding the MGT as both approval and encouragement from Congress for agencies to pursue blockchain and smart contracts as viable options.
Blockchain technology boasts efficient, low-cost methods of security, smart contracts, and data storage. Since the modernization effort involves doing away with inefficient or low-performing legacy systems, federal agencies are essentially incentivized to adopt blockchain and smart contracts for IT infrastructures.
President and CEO Larry Prior of the CSRA—which provides IT services to U.S. government agencies—gave a statement addressing the MGT, saying that it “gives agencies more resources to modernize, helping to enable moving to the cloud, implementing shared services, and improving their cyber defenses.”
Senator Jerry Moran also stated that the legislation would help “bring our inefficient, outdated federal IT system into the twenty-first century.”
Federal agencies have already taken steps to identify and inventory systems and securities in dire need of modernization.