Workday gets contract from US agency behind DOGE's staff cuts without competitive tender

Yahoo

08-05-2025

By Alexandra Alper
WASHINGTON (Reuters) - The federal HR agency at the heart of billionaire Trump advisor Elon Musk's efforts to slash the federal workforce says it has awarded a contract for a new cloud-based HR platform to Workday without seeking bids from rivals.
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 Office of Personnel Management said in a memo uploaded on May 2, citing strict deadlines from the Trump administration for workforce restructuring and hiring reforms.
"OPM's fragmented and outdated HR systems have reached a critical failure point, resulting in payroll errors, benefits disruptions, and a manual workload that is no longer sustainable," said the memo.
OPM did not respond to a request for comment on the memo, which was first reported by Washington Technology on Wednesday. Workday said in a statement that the company was "honored to partner with OPM" to modernize its HR systems.
The contract, awarded on May 2, comes even as the Musk-helmed Department of Government Efficiency has sought to cut the federal workforce and slash contracts.
DOGE has led an unprecedented government overhaul in which some 260,000 civil servants have resigned, been fired or taken early retirement, according to a Reuters tally. It also claims to have saved U.S. taxpayers $160 billion to date, although its accounting has been riddled with errors and corrections.
News of the single source award came as a shock to some current and former employees, who described OPM's HR system as functional and mostly migrated to the cloud already. They described the single source award as unusual, given the competition in an industry that includes ADP and SAP.
Dayforce, another competitor, expressed interest in the project, the memo said, but argued that Workday's work for Walmart, the largest private U.S. employer, and other Fortune 500 companies showed it was "unique" in its ability to scale up to meet OPM's needs.
Usually, to win approval for a non-competitive bidding process agencies need to demonstrate "unusual and compelling urgency" and show that the chosen vendor is uniquely up to the challenge. OPM argued in the memo that a "full and open competition" would delay the project by six to nine months.
The document did not include a value for the project but OPM said Workday's pricing for the HR-related tasks such as payroll, hiring, time and attendance tracking, had been "determined fair and reasonable," describing it as 70% more affordable than the existing system.
Workday CEO Carl Eschenbach has made no secret of the possibilities he sees in DOGE.
"We see it as a massive opportunity for Workday ... Spending time in DC, everyone is pulling for Workday. They want to move to our platform," Eschenbach said in a CNBC interview earlier this year.