Abolish OPM? What The Administration’s Proposal Would Do

What does the administration’s proposal for agency reorganization mean for OPM? The author provides an analysis.

On Thursday the Administration released its report on government reorganization. The recommendations (all 130 pages of them) cover a wide range of federal activities, from agriculture programs to research grants to energy programs.

One of the proposals that is getting a lot of attention is the proposal to disestablish the Office of Personnel Management and move its functions to the Executive Office of the President and to the General Services Administration, which would be renamed as the Government Services Agency. Since word of the proposal was first reported by Federal News Radio on Wednesday, I have been getting questions about what it means and how feasible it is.

I have made suggestions in the past regarding the structure of OPM, the potential for conflict of interest in the agency selling services where it makes policy, and the way in which OPM’s overly broad responsibilities detract from its core mission of formulating government wide workforce policy.

In one of those posts in 2016 I said “OPM’s most critical missions are policy and oversight. They are the reason the agency and its predecessor, the Civil Service Commission, were created. I believe policy and the advisory services that go with it have gotten a bit lost in the shuffle in OPM. Policy initiatives that could make a tremendous difference for the government, such as simplifying job classification and hiring, improving performance management, improving the SES, and other reforms that can be done through better and more flexible regulations, do not get the attention they deserve.”

My recommendations focused more on strengthening OPM and getting it out of some of the businesses that detract from its core mission. The biggest of those distractions is background investigations. Half of OPM’s people and dollars are devoted to those. They are so large that the OPM Director has to either (a) expend serious time dealing with them, or (b) ignore a billion dollar program that makes up half of the agency. Neither of those options is good for the core mission of workforce policymaking. I suggested moving background investigations to another agency, so I am pleased to see the Administration’s proposals going in that direction.

The proposals go much farther than that and disestablish OPM and move all of its work elsewhere. That is where reasonable people may disagree about what it really means. The Administration’s proposal says the move will elevate the policymaking function by moving it into the Executive Office of the President. The report says:

The 2.1 million-person civilian workforce represents one of the Federal Government’s largest and most impactful investments. Like any large corporation, the Government is only as effective as its people. Yet the Government Accountability Office has designated strategic human capital management as a high-risk area since 2001, because the Federal Government does not do an effective job attracting, managing, and retaining a skilled workforce. An extensive literature review documents these failings. The causes are varied, but addressing them effectively requires an optimized management structure that is centrally situated, empowered to view the Federal workforce holistically, and free to focus on core strategic and policy concerns …

This proposal is an opportunity to elevate the Federal workforce management function and maximize the operational efficiency of human capital services. The civil service system is overdue for an overhaul, and that overhaul would best be implemented under a new management structure that is more focused on core priorities and that has not been molded around the existing, archaic framework of civil service rules and regulations.

Once complete, a transition into the EOP could create a more streamlined personnel management unit that is less expensive to operate. Such a unit would also support centralized coordination of all personnel policies for Federal employees, eliminating the confusing matrix of who does what today, as well as several key gaps in policy that are inhibiting the streamlining of mission support services. Centralizing human capital operational services at the General Services Administration (GSA) should provide economies of scale and significant cost-avoidance based on reductions in contract and IT duplication as well as increased data sharing and availability.

The proposal would move OPM’s core policymaking responsibility into the Executive Office of the President as a separate organization. Other EOP organizations include the Office of Management and Budget, the Council of Economic Advisers, and the National Security Council.

That move is one aspect of the proposal that some find troubling. Federal News Radio reports that the American Federation of Government Employees, the largest union representing government workers, called the move “a straightforward attempt to politicize the civil service.”

The Senior Executives Association supports the move, and told me they view it as elevating the workforce policy functions. If we dig into it a bit more, I think we will find that it is less political than it might appear.

Today, OPM’s Director is a Senate-confirmed presidential appointee, as are the Deputy Director and the General Counsel. The OPM Director reports to the president. In the proposed organization, the workforce policy chief would do the same.

President Obama’s OPM Director, John Berry, told me once that the Office of Management and Budget was the “big dog” and OPM was the flea. Putting workforce policy in EOP will make it the organizational peer (although probably with less status) of the Director of OMB, promoting it to “big dog” or at least “medium dog” status.

I believe that may be a good move, if the office is actually staffed with enough people to do the work. I have believed for many years that OPM does not devote enough resources to policy and analysis. If that work does move to EOP, it needs to be resourced properly. To reduce the likelihood that it would be politicized, the new office should be run by a Senate-confirmed presidential appointee and, like the current role of OPM Director, serve a fixed 4-year term.

Moving the rest of the work to GSA is not what I proposed, but if done carefully and with significant planning, it could work. The most critical functions other than policy and background investigations are insurance and retirement programs.

OPM’s insurance programs are excellent and many would argue that the Federal Employees Health Benefits program is a best in class operation. The retirement services group is much better than it gets credit for being. While everyone focuses on the retirement backlog, they pay less attention to the fact that these folks are working with old paper records that are housed in a cave.

The Administration is still considering exactly how to handle those functions, including perhaps moving them to a different agency (such as the Social Security Administration). Because they are so critical to the federal workforce, I suggest they move to the newly constituted GSA intact. If all of the work that moves to GSA remained intact, under a new Commissioner of Workforce Services, they could continue to function effectively.

The reimbursable services currently housed in the HR Solutions group at OPM would also transfer into GSA. They include services such as advertising vacancies for agencies, running the government’s job posting site, USAJobs, and a wide variety of fee-for-service HR services.

While some of its products and services could eventually transition to the private sector, others could function effectively in GSA. One of the most critical is OPM’s Center for Leadership Development, which includes the Federal Executive Institute and other leadership training programs. Because the quality of leadership in government is essential to successful performance, I believe that group should remain intact. If moved to GSA, it should be a separate unit within the workforce services group.

The Administration’s proposal is not what I recommended, but it addresses most of my concerns and I believe it could result in workforce policy getting the attention it deserves. It would also create a greater focus on digitization and data, which is essential to management of a 21st century workforce. I might disagree with some of the details, but there is enough goodness in the proposal that I believe it should not be reflexively dismissed.

I do think the proposal might have gotten a more open-minded response if it did not follow proposals to cut federal benefits and curtail collective bargaining. If we want to elevate workforce policy, how we handle benefits, pay and collective bargaining would be more appropriately handled by the proposed office. Because those proposals are unlikely to be fully implemented soon (if at all), it is not too late to approach pay and benefits from a bipartisan perspective with the intent to bring the civil service system into the 21st century.

I do not expect these proposals to sail smoothly through Congress. OPM was created by statute (the Civil Service Reform Act of 1978), and it cannot be disestablished by Executive Order.

We are likely to hear that these are radical proposals that will destroy the civil service. We will also hear that they do not go far enough and we should be doing much more to downsize government. If we try to separate the politics from the good government solutions we should be pursuing, we may find that this proposal can be implemented in a way that would make a positive difference for the American people and the public servants who work on their behalf every day. It is worth considering.

This column was originally published on Jeff Neal's blog, ChiefHRO.com, and has been reposted here with permission from the author. Visit ChiefHRO.com to read more of Jeff's articles regarding federal human resources and other current events along with his insights on reforming the HR system.

About the Author

Jeff Neal is author of the blog ChiefHRO.com and was previously the chief human capital officer at the Homeland Security Department and the chief human resources officer at the Defense Logistics Agency.