DOE MAY FACE CUTS: OMB MEMO OUTLINES FURTHER REDUCTIONS IN FORCE TO PERSONNEL, PROGRAMS, AND CONTRACTORS
Yesterday, February 26, the Office of Management and Budget (OMB) and Office of Personnel Management (OPM) released a memo instructing federal agencies to submit “agency reorganization plans” plans by March 13, 2025, to enact “large-scale reductions in force (RIFs)” of personnel and programs prescribed by several of President Donald Trump’s executive orders (EOs). These orders are inclusive of the Department of Energy (DOE) and the offices and programs under its jurisdiction.
The directive also includes orders to cut “outside consultants and contractors” that make up the DOE workforce at most sites. Moreover, the RIFs outlined in the memo could affect a larger range of workers than the dismissals and voluntary separations seen in the past few weeks.
Phase 1 Agency Reorganization Plan
The agency reorganization plans, or “ARRPs” must be submitted by March 13 to OMB and OPM, described as “Phase 1” of the implementation of EO’s. The memo advises Agency heads to collaborate with their Department of Government Efficiency Team to develop the ARRP’s. Among other guidelines, the memo suggests that ARRP’s should strive to:
“…focus on the maximum elimination of functions that are not statutorily mandated while driving the highest-quality, most efficient delivery of their statutorily required functions.”
“…seek to consolidate areas of the agency organization chart that are duplicative…”
Consider “whether the agency or any of its subcomponents should be eliminated or consolidated…”
“…implement technological solutions that automate routine tasks while enabling staff to focus on higher-value activities.”
“…align closures and/or relocation of bureaus and offices with agency return-to-office actions.”
“…maximally reduce the use of outside consultants and contractors.”
The memo also suggests that agencies should make us of, among others, the following tools to effectively implement the President’s EO’s:
Compliance with the Government-wide hiring freeze and operating with the “general principle that, subject to appropriate exemptions, no more than one employee should be hired for every four employees that depart”
Guidance that “...statutes should be interpreted to cover only what functions they explicitly require.”
Instruction to “…consider changes to regulations and agency policies, including changes that must be pursued through notice-and-comment rulemaking, that would lead to the reduction or elimination of agency subcomponents or speed up the implementation of ARRPs...”
Attrition, whether it be regular, achieved through novel policies governing employee performance and misconduct, termination and non-renewal of term or limited positions, or RIF’s.
Eliminating non-statutorily mandated functions through RIFs
Removing underperforming employees or employees engaged in misconduct, and continuing to evaluate probationary employees;
Reducing headcount through attrition and allowing term or temporary positions to expire without renewal;
Separating reemployed annuitants in areas likely subject to RIFs; and
Renegotiating provisions of collective bargaining agreements (CBAs) that would inhibit enhanced government efficiency and employee accountability.
The memo states that ARRPs should also list the competitive areas for large-scale RIFs, the RIF effective dates (which may be a date prior to when the plan is submitted), the expected conclusion of the RIFs, the number of FTEs reduced, and additional impact of RIFs such as cancellation of related contracts, leases or overhead.
It encourages agencies to closely consider changes to regulations and agency policies, including changes that must be pursued through notice-and-comment rulemaking, that would lead to the reduction or elimination of agency subcomponents or speed up the implementation of ARRPs.
The memo reminds Agencies that they “should review their statutory authority and ensure that their plans and actions are consistent with such authority.”
Phase 2 ARRP
The memo outlines a “Phase 2”, which instructs agencies to submit a second AARP by April 14, 2025. Phase 2 plans are intended to “outline a positive vision for more productive, efficient agency operations going forward” with implementation targeted by September 30, 2025. Agencies must submit, among others, evidence and assurances of the following:
A proposed future organizational chart with a consolidated management hierarchy
“The programs and agency components not impacted by the ARRP, and the justification for any exclusion”
“Any changes to regulations and agency policies, including changes that must be pursued through notice-and-comment rulemaking, that would lead to the reduction or elimination of agency subcomponents, or speed up implementation of ARRPs
Post Phase 2, agencies will be expected to send monthly progress reports on May 14, 2025, June 16, 2025, and July 16, 2025.
To read the OMB-OPM memo, click here.
Restrictions on Agency Travel & Spending
Another step in this initiative, The President also issued an EO yesterday, “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative”, to transform agency spending and non-essential travel.
It instructs each agency to build out a technological system that centrally records approval for federally funded travel for conferences and other non-essential purposes. Once an agency’s system is in place, employees will be prohibited from engaging in federally funded travel for conferences or other non-essential purposes unless justification has been provided for travel within the system.
The order also mandated a 30-day freeze on all credit cards held by government employees, including DOE employees. The freeze effectively enforces restrictions on travel during that period as well.
To read the EO, click here.
ECA will continue to provide updates as the situation progresses and develops.