NewPay Update, June 2020

Today’s federal payroll landscape provides the perfect case for change for the future business landscape.

Between 2003 and 2008, the federal government initiated the consolidation of 26 payroll systems to 4 shared services providers (SSPs), plus the State Department, and achieved over $1 billion in cost avoidance over 10 years. While the SSPs have remained focused on maintaining operations, they have not undertaken a coordinated major payroll modernization effort. As a result, the payroll technical environment includes components more than 40 years old, lacks data interoperability, and employs an SSP-specific approach to cyber security. Additionally, payroll policy interpretations and resulting business and technical changes are replicated 5 times - one for each provider’s solution. As a result of the current technical environment, federal employees do not benefit from a consistent user experience, a fact that is accentuated when an employee transitions from one SSP to another.

Under the President’s Management Agenda’s Cross Agency Priority Goal on Shared Services, the federal government launched the NewPay Program. The NewPay Program’s strategic objective is to modernize the way the federal government processes payroll and time and attendance by aligning policy, processes, data standards, and technology to enhance payroll calculation precision and facilitate a more consistent user/employee experience. In late fiscal year 2018, GSA awarded the 10-year NewPay blanket purchase agreement (BPA) to provide payroll and work schedule and leave management software as a service (SaaS) solutions and services. The BPA leverages the use of common, governmentwide standards built collaboratively with current payroll providers and subject matter experts from across government to facilitate development and adoption of commercial SaaS solutions in a FedRamp compliant environment.

The NewPay Program has set a goal of completing a technical minimally viable product (MVP) in the Fall of 2020 which will demonstrate the utilization of government-wide payroll data standards as a driver for a SaaS technical design. The NewPay Program, once fully mature, is expected to offer the following benefits:

● Common standards - NewPay is built on common capabilities tied to authoritative sources and designed to meet a variety of diverse agency IT requirements, including new and emerging technologies.
● Software as a service - Price is based on consumption and builds on economies of scale by pulling negotiating power of multiple agencies. Software updates will be included in subscription price, helping agencies predict expenses and stay modern.
● Long-term planning - NewPay SaaS solutions will have a ten-year base period and three one-year additional performance based award term periods.
● Constant innovation and modernization - SaaS by definition provides for constant modernization and updates; the federal government will continually be moved to the latest version of the software as updates are completed and not lag behind.
● Efficiency gains from common data standards - Common data standards will allow for a “build it once and reuse it many times” model. Common data standards will facilitate data exchange across multiple organizations.

The NewPay PMO has been engaging with its stakeholders since the program’s inception including routine communications with: the SSPs, the Human Resources Line of Business (HRLOB) and Office of Personnel Management (OPM), the Quality Services Management Organization (QSMO) community, agencies, the Office of Management and Budget (OMB) and the Hill. Additionally, we have:

● Hosted bi-weekly meetings and participated in many SSP customer forums.
● Participated in federal/industry events such as the AGA Shared Services Forum and the Shared Services Coalition.
● Partnered with the HRLOB and have invested significant staff resources to support development of government-wide data standards which drive our technical solution.
● Met monthly with OPM’s policy team to review and adjudicate policy matters specific to the technical MVP.
● Engaged with the QSMO community including briefings to the Shared Services Forum, Shared Services Governance Board; as well as participating in the monthly QSMO Roundtables and other joint-QSMO events.
● Briefed OMB and the Hill as needed.

The NewPay technical MVP’s target baseline will be configured for the 65 most common pay plans covering civilian payplans (~ 89% of federal executive branch employees). A phased testing and validation approach is planned to address requirements of the 65 pay plans. Testing will be conducted in a safe and secure environment, with an incremental and robust process, to include SSP data (as is made available) as well as user acceptance stories. To ensure the protection of data, the MVP and any subsequent releases will be certified FedRAMP-compliant.

The path to an end-to-end payroll environment modernization builds upon the use of common payroll data standards, with a goal to deliver a common experience for 2.2 million employees. Basing the technical design on common data standards which reflect agreed upon business practice, will allow the data to be repurposed to solve emerging business problems/opportunities as well as ensure the data is commonly understood, has common definition, and is interoperable. A data standards-driven technical solution facilitates interconnectivity with other human resources data, financial data, tax data, and other domain data.

Last Reviewed: 2020-06-10