By Alexandra Alper
WASHINGTON (Reuters) -The U.S. federal human resources agency at the heart of billionaire Trump adviser Elon Musk’s efforts to slash the federal workforce on Friday canceled a contract it had awarded to Workday (NASDAQ:WDAY) and which had excluded other bidders.
The contract for a new cloud-based HR platform, signed on May 2 and awarded without seeking bids from rivals, had raised eyebrows among current and former employees of the Office of Personnel Management.
They had described the sole-source contract as irregular, given the competition in an industry that includes ADP and SAP, and expressed surprise to see OPM’s largely successful in-house HR platform on track to be replaced.
On Friday, a federal contracting website page about the award was updated to state that the award opportunity was canceled, without elaborating.
OPM and Workday did not respond to requests for comment. OPM said earlier this month that the sole-source award was necessary due to "operational failures" and federal mandates that required immediate action.
The Workday project, while small at $342,200, had the potential to set the stage for a much larger award, since many federal agencies rely on the OPM HR platforms that the new project sought to replace.
The award drew criticism as running counter to the mission of the Department of Government Efficiency, which was set up by Musk to make the government more efficient by firing workers and cancelling contracts as well as by cracking down on waste and abuse.
"This procurement undermined the integrity of DOGE, who was supposed to root out fraud waste and abuse," said John Weiler, director of the Information Technology Acquisition Advisory Council, a government-chartered nonprofit group that makes recommendations to improve federal IT contracting.
"This was a blatant disregard of the rule of law," he added, citing federal contracting law and regulations.