OPM May Have Major Changes Under the Reorganization Plan

Jun 22, 2018

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The Office of Personnel Management may see major changes thanks to the Trump administrations’ reorganization plan. The agency may become a much smaller one and carry far less influence as the government’s’ independent entity responsible for administering merit principles, federal employee benefits, and human resource services.

Agencies have been preparing reorganization plans since President Trump signed an executive order last spring. Most agencies have kept the details of the plans concealed but the Departments of Agriculture, Health and Human Sciences, and Interior have been creating high profile programmatic moves.

Moving 2 of OPM’s largest programs—the National Background Investigation Bureau’s (NBIB), the governmentwide security portfolio, and HR Solutions—is expected to be a part of the reorganization plans.

To transfer the entire governmentwide security clearance program, the administration may direct the Pentagon to rename the Defense Security Service as the Federal Security Counterintelligence Agency (FSCA), which would serve as the primary governmentwide security clearance provider—a responsibility OPM held since the Pentagon first gave up the program in 2005.

HR Solutions, which currently offers products/services to help agencies with their HR needs, would move to the General Services Administration.

The plans also say that the reorganization may include a move of OPM’s healthcare and retirement service to GSA. GSA may get a name change as well, Government Services Agency—reflecting the new government services it would provide.

What remains of OPM, mainly policy offices may be moved as a new entity under the Office of Management and Budget. Losing both NBIB and HR Solutions would have a significant impact on OPM, which relies on a revolving fund and total appropriation of $261 million in FY2018. The agency would lose its highest earning activities, but the transfer could also create financial instability for OPM. HR Solutions brings about $206 million and NBIB generates $1.4 billion, according to OPM’s 2019 budget justification to Congress.

The loss of federal healthcare and retirement programs also would create a hole in OPM’s portfolio. They administer health and retirement benefits to more than 2.7 million active employees and 2.6 million annuitants, survivors, and their family members through Earned Benefits Trust Funds, which has close to $1 trillion in combined assets.

The administration didn’t make it clear how they expect to carry out an OPM reorganization. It’s also unclear whether the President would have executive authority to split various offices and functions from a statutory agency or if that would Congressional action.

The 2018 omnibus passed in March appears to complicate these initiatives. Agencies cannot simply cut or eliminate a specific program or office unless Congress has authorized the move in an appropriations bill.

“None of the funds made available in this or any other appropriations act may be used to increase, eliminate, or reduce funding for a program, project, or activity as proposed in the president’ budget request for a fiscal year until such proposed change is subsequently enacted in an appropriations act, or unless such change is made pursuant to the reprogramming or transfer provisions of this or any other appropriations act” the 2018 spending bill says.

The administration has a deep dissatisfaction with OPM due to 2 separate data breaches of OPM systems that compromised personally identifiable information for close to 22 million current and former federal employees, contractors, and others.

Under OPM, NBIB has struggled to resolve a backlog of roughly 700,000 pending background investigations. Since 2014, when OPM decided to drop the largest vendor performing security clearance work, it has been unable to recover and keep up with the workload.

The Trump administration recently named the security clearance program as one of its 14 key initiatives under the President’s Management Agenda.

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