Ginsu knives descend on OPM

For better or worse, the Office of Personnel Management appears headed for the shredder. But what a lurching, disjointed operation the OPM reoganization will have proven to be.

Not that these things are ever textbook cases for MBA schools, but contrast the OPM saga with that of another highly consequential reorganization. Congress passed the Internal Revenue Service Restructuring and Reform Act in 1998. It changed the IRS from a geographical arrangement to one aligned with taxpayer categories — individuals and businesses. It made the commissioner’s appointment into a term one. And it created the taxpayer advocate to help ensure taxpayers are treated fairly.

IRS reform followed controversial hearings conducted by then-Senator William Roth. The hearings had the quality of show trials that distorted what was actually going on at the IRS. Yet abuses had occurred, and in any case the resulting structure of the IRS seems to have worked. Messy and fraught with politics as the IRS reform effort was, at least that reorg proceeded from a vision for the agency. The Clinton administration had picked exactly the right person to steer the IRS into its new form, Charles Rosotti.

Under the Trump administration plan, OPM’s financial engine, the National Background Investigations Bureau, is headed to the Defense Department. Most of OPM’s funding will go with it. The divestiture wasn’t entirely the White House’s doing. Congress put the move into the 2018 National Defense Authorization Act.

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What’s left of OPM would go to General Services Administration. In its curious two-page case for reorganization, the administration asserts, “Transitioning OPM functions and workforce to GSA gives OPM a more structurally sound foundation to support OPM’s critical strategic human capital management mission, including a vastly more stable information technology infrastructure allowing a focus on creating improvements to addressing cyber risks and improving service quality.”

On the finance question, its almost as if OPM has been mugged, and now the mugger is telling everyone OPM needs money. With more hearings coming up, certain members of Congress will rail against the plan. Conceivably, they could pass a bill to keep OPM intact and vote the funds required to operate it. But will they?

As for IT, several alternative ways to skin that cat exist, but it seems logical for the operational elements of OPM to move into GSA. Especially in IT, OPM has struggled. GSA has a robust IT investment methodology using technology business management (TBM). In essence OPM is going the shared services route, only the service provider, GSA, is swallowing the whole agency.

On the service front, OPM does retirement annuity calculations, the Federal Employee Health Benefits Program, life insurance, and other services you’d associate with a corporate human resource organization. This could all work from GSA, presuming the people from OPM with relevant expertise go with it.

My question is what about the myriad of policy questions that come up with respect to the federal workforce. Those aren’t mechanical functions consisting of databases and applications. Policy lives in the give-and-take zone of politicians, unions, federal managers and administrations.

This is why I was surprised the justification document made no mention of the idea of moving OPM’s policy shop into the Office of Management and Budget. The precedent for this is the Office of Federal Procurement Policy. OFPP interacts with Congress, federal purchasing entities, and contractors and their associations. Traditionally OFPP hasn’t been overly doctrinaire or political. Government buys what it needs, industry doesn’t appear to be starving.

The Trump administration used what it saw as problems with OPM to justify moving the security investigations operations out. It also used the lack of security investigations operations income to justify the need to reorganize the remains of OPM.

Yet neither question — how will DoD improve a process it wasn’t great at the last time around, and what will GSA do to improve OPM — are still to be answered.

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