The Office of Personnel Management (OPM) expects its governmentwide HR platform to eventually cost about $40 million annually, down from more than $2 billion spent each year across existing federal HR systems, OPM Director Scott Kupor said Aug. 31.
Speaking during a Federal News Network webinar, Kupor said the Federal HR 2.0 effort has cleared the contract protest period and is moving into implementation, with data cleanup and normalization underway alongside configuration of the Oracle environment.
“In this new world, we will take a $2 billion bill annually down to $40 million,” Kupor said. “There aren’t very many government projects, I think, where you have 96 plus percent cost reductions.”
The effort builds on OPM’s June 10 award of a nearly $400 million contract to Oracle to develop the Core Human Capital Management platform. The cloud-based system is intended to replace more than 100 legacy HR systems and serve roughly 2 million federal civilian employees, with governmentwide adoption targeted for fiscal 2028.
The first agencies are expected to begin moving onto the platform as the new fiscal year gets underway, and initial deployments are slated to go live between January and March.
OPM will serve as the systems integrator for the effort and plans to build an internal implementation team of roughly 130 to 150 employees, Kupor said.
Kupor acknowledged the risks involved in migrating agencies from their existing HR systems to a common platform.
“There’s an enormous amount of risks associated with this, so I certainly don’t pretend otherwise,” Kupor said. “We need to balance risk with the upside potential here. The upside potential to me is so great.”
OPM tightens performance standards
Beyond the HR IT consolidation, Kupor detailed OPM’s push to change how agencies evaluate employee performance, including new governmentwide standards aimed at creating greater differentiation among performance ratings.
The new performance standards will apply governmentwide fiscal year 2026. Kupor said rules are already in place for Senior Executive Service and General Schedule employees, while final regulations covering senior-level and scientific and professional employees are largely through the review process.
Kupor said more than 99% of federal employees have historically received ratings of three, four, or five, while only about 0.3% have been rated below expectations.
OPM’s goal, he said, is to increase accountability for employees at the lower end of the performance scale while more clearly distinguishing top performers. In addition to the new performance standards, the agency plans to establish a numerical limit on the share of employees who can receive ratings of four or five. Kupor said that threshold has not yet been published.
OPM also plans to issue implementation guidance to agency chief human capital officers and track performance ratings at the agency level to assess how the new standards are being applied, Kupor said.