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Workday received a contract from the American agency responsible for DOGE employee reductions, and there are no other offers

The Workday logo appears at the entrance of the company's temporary booth ahead of the World Economic Forum (WEF) in Davos, Switzerland, January 18, 2025. Reuters/Eve Herman/Archive photo Purchase licensing rights, opens a new tab

Summary

Companies

The Office of Personnel Management receives a new human resources system

Workday secured a contract without considering any competing offers

The Office of Personnel Management says Workday has a "unique" ability to meet the agency's needs

Current and former OPM employees describe the process as unusual

Washington May 8 (Reuters) - The federal human resources agency representing the core of Trump advisor billionaire Elon Musk's efforts to reduce the federal workforce awarded a contract for a new cloud-based human resources platform to Workday (WDAY.O), opens a new tab without seeking offers from competitors, raising questions among current and former agency employees.

Workers consulted on Thursday described the sole-source contract as unusual, given the competition in an industry that includes ADP and SAP (SAPG.DE), opens a new tab, and expressed surprise to see a largely successful internal human resources platform at OPM on track to be replaced.

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The Office of Personnel Management stated in a memo dated May 2 that granting the sole source was necessary due to an "urgent intersection of operational failures and mandatory federal mandates requiring immediate action," citing the strict deadlines set by President Donald Trump's administration for workforce restructuring and employment reforms.

"The fragmented and outdated human resources systems at the Office of Personnel Management have reached a critical failure point, resulting in payroll errors, benefits disruptions, and a manual workload that is no longer sustainable," the memo stated.

Announcement · Scroll to continue

Workday stated in a statement that it is "honored to partner with OPM" to update its human resources systems through a 12-month contract worth $342,200. OPM did not respond to a request for comment on the memo, which was first published by Washington Technology on Wednesday.

The contract, awarded on May 2, makes Workday responsible for human resources tasks such as payroll, recruitment, and time and attendance tracking.

The Department of Government Efficiency, led by Musk, said it is trying to reduce the federal workforce and cut contracts.

Announcement · Scroll to continue

The Department of Finance and Economic Planning (DOGE) led an unprecedented government reform, involving the resignation, dismissal, or early retirement of about 260,000 government employees, according to a Reuters tally. The department claims it has saved American taxpayers $160 billion so far, although its accounts were filled with errors and corrections.

Among those dismissed at the Office of Personnel Management were many officials responsible for managing award-winning federal human resources platforms like USA Performance and USA Staffing, which OPM spent millions of dollars developing for use across the federal government and which it seems the agency is now replacing with Workday.

Announcement · Scroll to continue

Two former employees familiar with the matter said these platforms could be disrupted due to the loss of dozens of key support staff, adding that most of the human resources platforms at the Office of Personnel Management have already been migrated to the cloud.

"Extraordinary and Urgent"

Typically, to obtain approval for a non-competitive bidding process, agencies must demonstrate "extraordinary and compelling urgency" and show that the selected vendor is uniquely capable of meeting the challenge.