The Office of Personnel Management awarded Workday a sole-source, one-year contract to overhaul its human resources management systems. The agency cited urgent operational failures and requirements stemming from Trump administration directives as reasons for bypassing an open competition for the CONTRACT contract award notice.
OPM stated its current HR infrastructure faces a breakdown resulting in payroll errors, benefits disruptions, and a manual workload the agency cannot sustain. Simultaneous mandates require real-time workforce data and integrated HR capabilities OPM's existing systems do not offer.
The Workday contract worth $342,200 will cover services for HR and personnel processing, payroll and benefits systems, time tracking, talent acquisition, and performance management. Compliance with federal requirements is included in the scope of work.
OPM determined Workday was the only vendor capable of meeting immediate, multifaceted requirements due to its cloud-based platform, ability to provide real-time data dashboards, and alignment with federal mandates. Market research and inter-agency consultation found no other provider met this combination of needs with the required speed and scale. The agency stated the acquisition was a response to an unanticipated acceleration of operational issues and federally imposed deadlines, not poor planning.
The WORKDAY sole-source contract aims to field a new cloud-based HR system by July 15. This date coincides with the expiration of the federal hiring freeze and the implementation of new requirements tying hires to attrition at a 4-to-1 ratio. Compliance demands immediate visibility into workforce data, which OPM's current systems cannot provide.
Processing federal retirement applications, reductions in force, and other workforce changes have increased the HR work burden. OPM stated its current systems would require extensive manual labor without an immediate contract to manage tasks like developing RIF registers and processing an expected doubling of the retirement application backlog.
In parallel with the Workday award, OPM is pushing agencies to modernize their own HR systems and move to electronic retirement submissions. Users of the National Finance Center and Interior Business Center must submit all retirement paperwork electronically starting June 2. After July 15, OPM will accept retirement applications only through its Online Retirement Application.
Dennis Johnson, OPM's chief strategy and innovation officer, signed the May 2 memo outlining the contract justification. The memo claimed the Workday platform would yield cost savings versus the manual processes required to meet executive order mandates, projecting savings of $600,000.
OPM plans to conduct an open competition for the next iteration of the HR IT contract after the one-year term concludes, unless a sole-source condition persists. The agency's decision sets a precedent for other federal agencies considering commercially available, cloud-based human capital platforms.
Charles Ezell, OPM Acting Director, stated the move to digital applications is part of a broader effort to modernize systems.
"Legacy systems, with outdated technology and cumbersome procedures, have delayed retirements and frustrated employees who have dedicated their careers to public service," Ezell wrote in new guidance to agencies. "By harnessing modern technology and inter-agency collaboration, OPM has been working to deliver a retirement process that is fast, user-friendly and responsive to the needs of our employees."
