The Office of Personnel Management (OPM) – which acts as the human resources services arm of the Federal civilian government – has awarded a sole-source, one-year contract to Workday, Inc., to roll out a new cloud-based human capital management system for the agency with a delivery date prior to mid-July.
OPM disclosed the contract in a May 2 posting on SAM.gov, along with a frank explanation of why it needs the new system in place quickly, and why the contract for it cannot be subject to wider competition from vendors.
Those reasons include breakdowns in OPM’s current IT infrastructure, pressing deadlines imposed by White House executive orders, and fresh waves of Federal employee retirements.
In choosing Workday – which provides HR, financial management, and student information systems – OPM said it needs an “integrated, cloud-based Human Capital Management (HCM) solution that can be rapidly deployed to meet urgent operational and regulatory needs.”
“The required solution must provide end-to-end HR lifecycle support within OPM, including but not limited to: Core HR and personnel action processing; Payroll and benefits integration and audit-ready reporting; Time and attendance tracking; Talent acquisition and performance management; Compliance with federal-specific requirements, including Title 5, electronic SF52 routing, and audit trails,” the agency said.
“The solution must be fully interoperable with existing federal IT systems and must be compliant with FISMA, FedRAMP, and other applicable standards,” OPM added.
OPM also explained the compelling need to get the Workday solution up and running as soon as possible.
“A sole-source award to Workday is necessary due to an urgent confluence of operational failures and binding federal mandates that require immediate action,” the agency said.
“OPM is experiencing a systemic breakdown in its HR, payroll, and benefits infrastructure, evidenced by payroll errors, retirement processing delays, grievance filings, and serious data reconciliation failures,” it added.
“These challenges are further compounded by the Presidential Hiring Freeze Memorandum (January 20, 2025), Reforming the Federal Hiring Process and Restoring Merit to Government Services Memorandum (January 20, 2025) and Implementing The President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative Memorandum (February 11, 2025), which mandates the submission of a fully compliant, merit-based hiring plan within 120 days and limits new hires to a 4:1 attrition ratio,” the agency explained.
“Additionally, increased retirements due to federal workforce reductions place a strain on OPM’s paper-based retirement system, a process which normally takes 3-5 months, a problem an integrated system will help solve,” the agency said, adding, “Compliance with these mandates requires real-time visibility into workforce attrition, authorizations, vacancies, and onboarding—all of which are impossible to achieve with the agency’s current fragmented systems.”
“Any delay beyond July 15, 2025, the date the hiring freeze is scheduled to end (Extension of Hiring Freeze Memorandum, April 17, 2025) and 4:1 ratio to begin, would result in failure to comply with OMB deadlines, disruption to retirement services, and over $600 thousand in labor-intensive workaround costs,” OPM said.
Elsewhere in the document, OPM said that a delay in awarding the contract could lead to “millions of dollars in additional costs and reduced service delivery to employees and retirees.”
OPM also said that the estimated cost of the Workday contract “is more than a 70% decrease compared to OPM’s current HR technology stack.” It added that “Workday consolidates all of these functions into one unified platform, providing not only savings but also substantial operational efficiencies.”
According to OPM, the agency’s need for the services Workday will provide “is of such an unusual and compelling urgency that the Federal Government would be seriously injured unless the executive agency is permitted to limit the number of sources from which it solicits bids or proposals.”
The agency said that “no other vendor currently offers the combination of immediate deployability, federal compliance, and total HCM integration necessary to meet OPM’s urgent operational and regulatory needs.”
OPM also said that its need to act quickly on the award to Workday “is not the result of poor planning, but rather a response to an unanticipated acceleration of operational crises and federally imposed deadlines.”
Finally, OPM said it “intends to conduct a full and open competition following this one-year contract. If no justifiable sole-source condition exists at the conclusion of this period, OPM will open the requirement to competition for subsequent acquisitions.”