Within hours of being sworn in, President Trump issued executive orders that may imperil a number of government contracts and grants. This alert covers what contractors and grant recipients should do if they are concerned about the continued viability of their federal funding.
The Executive Orders
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- Unleashing American Energy – This Executive Order, at Section 7, Terminating the Green New Deal, directs all agencies to “immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act (Public Law 117-58)” and review their “processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of such appropriated funds for consistency with the law and [the policy goals outlined in the Executive Order].” Funds may be disbursed again once “the Director of OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review recommendations they have chosen to adopt.”
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- Ending Radical and Wasteful Government DEI Programs and Preferencing – This Executive Order calls for a coordinated effort to terminate “all discriminatory programs, including illegal DEI and ‘diversity, equity, inclusion, and accessibility’ (DEIA) mandates, policies, programs, preferences, and activities in the Federal Government, under whatever name they appear.” This includes terminating “to the maximum extent allowed by law” relevant grants or contracts. The Executive Order also includes a demand for agencies to provide the Office of Management and Budget director a list of all federal contractors that provided DEI training or training materials to the federal government, and all federal grantees that received funds to provide or advance DEI or “environmental justice” programs, services, or activities over the past four years.
These are early efforts of the new administration to remake the federal government contracting and grants landscape, and as such, they are of great interest to recipients of federal funds. We expect this will be the first of many efforts to impact ongoing government expenditures. Retroactively changing or terminating contracts and grants is likely to be a consistent theme in the coming months.
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