Thu May 08 15:10:00 UTC 2025: ## OPM Awards $342,200 Sole-Source Contract to Workday to Fix Crumbling HR Systems

**WASHINGTON, D.C. –** Facing a “systemic breakdown” in its HR infrastructure, the Office of Personnel Management (OPM) has awarded a one-year, $342,200 sole-source contract to Workday to overhaul its federal employee payroll, benefits, and performance management systems. The agency cites a confluence of factors, including an influx of retirement applications, workforce restructuring mandates from the Trump administration, and outdated technology, as justification for the emergency measure.

OPM’s existing systems are struggling to handle the increased workload resulting from programs like the Voluntary Early Retirement Authority (VERA) and the deferred resignation program (DRP), alongside impending changes to the federal performance management and recruitment systems. The agency claims its current systems are unable to process the expected surge in retirement applications and efficiently manage reductions in force (RIFs).

The contract with Workday, a cloud-based HR services company, will encompass HR and personnel processing, payroll and benefits systems, time and attendance tracking, talent acquisition, and performance management. OPM stated that Workday’s single, integrated platform and real-time data capabilities are crucial for meeting immediate needs and complying with federal mandates. No other vendor, OPM claims, could meet these requirements with the same speed and scale.

While OPM intends to hold an open competition for a longer-term contract after this initial year, internal concerns exist regarding Workday’s ability to handle the complexity of federal payroll systems.

Concurrently, OPM is mandating the electronic submission of all retirement paperwork through its Online Retirement Application (ORA) starting June 2nd, eliminating paper submissions entirely after July 15th. This aggressive push towards digitalization reflects OPM’s broader effort to modernize its HR systems and streamline the retirement process. Agencies utilizing the National Finance Center (NFC) or Interior Business Center (IBC) for payroll and HR services are being directed to begin staff training immediately.

The move comes as OPM prepares for the lifting of the government-wide hiring freeze on July 15th, emphasizing the urgency of the situation. While OPM defends its decision, some employees express skepticism about the potential for the new system to improve, rather than worsen, the current situation.

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