Performance Management

OPM’s FY2026 guidance caps ratings of 4 or 5 at 40% of General Schedule employees, prompting agencies including the IRS to adjust review processes. Contractors should monitor potential effects on government staffing, oversight, and service continuity, but the reports identify no solicitation or defined contract action.

Employee discussions suggest FY2026 performance awards may vary by agency and could fall below minimums recommended by the Office of Personnel Management (OPM). The reports are unconfirmed and do not establish government-wide policy, but uncertainty over award funding and criteria may affect workforce planning and continuity for federal acquisition teams.

Federal agencies are introducing or expanding forced distribution and peer-ranking in performance reviews, affecting 1,400 specialized employees across 60 agencies. The change is not a procurement action, but contractors supporting specialized government functions may need to monitor workforce continuity and knowledge-transfer risks.