Jacquelyn Martin/AP

Study: OPM-GSA Merger Proposal Would Not Have Solved Problems It Aimed to Fix

A team of analysts has recommended elevating OPM's role in human capital management and making it less involved in “transaction-by-transaction compliance” activities.

The Office of Personnel Management should be re-empowered as the leader in human capital management across the entire federal government, not relegated to offices within the White House and the General Services Administration, according to the recommendations from a long-awaited study on the future of the agency.

On Wednesday, the National Academy of Public Administration published its study, Elevating Human Capital: Reframing the U.S. Office of Personnel Management’s Leadership Imperative, which Congress commissioned when it formally put on hold the Trump administration’s controversial plan to abolish OPM and send the agency’s components to GSA and the Executive Office of the President. Although the study focused primarily on ways OPM can achieve its mission as stated in the 1978 Civil Service Reform Act, its authors concluded that the plan would not fix the federal government’s human capital challenges.

“The academy panel did not find that the problems or challenges identified in the proposal would be resolved by transferring OPM functions to [the Office of Management and Budget] and GSA,” the report stated. “[The] panel concluded that meeting the needs of a 21st century workforce will require a reinvigorated focus on strategic human capital management and performance. The need for an independent, enterprise-wide human capital agency and steward of the merit system principles is clear, as is the critical need to rebuild staff capacity, encourage innovation, and adopt a more data-driven, accountable and forward-looking human capital approach.”

A five-member panel of NAPA fellows recommended that the executive branch and Congress strengthen OPM’s standing as the leader on human capital issues across the entirety of the federal government—not just agencies covered by Title 5—and transform OPM’s approach to management from one that is focused on compliance on a transactional basis to a forward-looking, data-driven, customer-focused role.

“The OPM director—and human capital as a whole—needs a ‘seat at the table,’ ” the report stated. “The director should be the principal advisor to the president on human capital, as envisioned in the Civil Service Reform Act, and OPM should be that lead for federal civilian human capital, setting policy, establishing a framework for agencies to manage their workforces, facilitating innovation and the sharing of best practices and lessons learned, and both collecting and using data and data analytics.”

NAPA Fellow Peter Levine told reporters Wednesday that too often in recent years, OPM’s expertise has taken a back seat to OMB, in part due to the frequent “dual-hatting” of the OMB deputy director for management as acting OPM director and vice versa, as well as legislation that increased OMB’s role in performance management issues.

“A mix of too many voices undermines the government’s ability to point in a clear direction, and OPM’s relationship with OMB undermines that direction,” Levine said. “The advantage of OPM is its director is a full time person on human capital issues. While the OMB deputy director for management has that in her portfolio, she must cover other issues as well. And what we’ve seen in recent years is with the dual-hatting of the deputy director as director of OPM, whether acting or confirmed, it’s not clear whether that person is speaking for OMB or OPM or what the relation is to the human capital work of the government.”

A senior OPM official told Government Executive that both the White House and OPM are acutely aware of the often tense relationship between the two organizations in recent years, and are focused on developing a strong relationship that will empower OPM to act on issues within its purview.

“I can’t stress enough how really healthy and collaborative the relationship with leadership at OMB has been during these early weeks” of the Biden administration, the official said. “Multiple times a week we’ve had coordination meetings, our teams are collaborating on 12 or more initiatives at once, and we feel very empowered by this administration and very good about the relationship we’ve built with the OMB team.”

Levine said that the biggest transformation that OPM has to make is in how it oversees the HR operations of individual agencies. The report recommended that OPM delegate much of its compliance-focused responsibilities to individual agencies, moving from clearing individual decisions to doing periodic reviews of agency practices.

“Recognizing that we have a federated system, where agencies have significant responsibility in managing their own system, they can’t all be managed from a central point,” Levine said. “More decision-making and transactional decision-making should be delegated to agencies, which would be a significant structural shift, accompanied by a different view of oversight. Rather than a transactional compliance focus, [OPM could be] looking at agencies on perhaps an annual or biannual basis to review how they’re doing and issuing necessary course corrections.”

OPM should also look at its funding model, NAPA said. The administration should seek dedicated funding for the agency, both for major reforms like IT modernization, as well as to replace what the expert panel saw as misguided use of the fee-for-service model.

“There are areas where it’s appropriate for OPM to charge fees for services, like when they’re building something unique for agencies,” Levine said. “But we don’t think that charging agencies to interpret the rules that OPM writes helps agencies navigate the system. OPM should be helping agencies solve problems, and that means you can’t be in the position to be charging them to help . . . There’s a line between building something unique for an agency and building something that should be available to all.”

Although several of NAPA’s recommendations would require legislation, like amending the Civil Service Reform Act to grant OPM authority over all human capital management at civilian federal agencies, the study’s authors said they are hopeful that OPM can do much of what is needed on its own.

“The thing that pleased me coming out of the report is that we think OPM has a significant ability to right its own ship,” Levine said. “There are places where it will need help from Congress, but things can be done to change the culture and gain the flexibility to build up the human capital system just by reimagining OPM’s role without congressional action.”

NAPA President and CEO Terry Gerton said she was surprised at how well the panel was able to nail down precisely what can be done administratively.

“We’ve had a lot of reports in the past about what might be done administratively versus needing statutory changes and who needs to take what actions,” Gerton said. “This time, I think we’ve busted a bunch of myths about that and proven that OPM has the authority to re-envision itself.”