Executive Order: Improving Oversight of Federal Grantmaking

On August 7, 2025, President Trump issued an executive order (EO) aimed at overhauling management and evaluation of federal grants. The order directs federal agencies to revise how they review, approve, and monitor discretionary grant programs, with the stated goal of ensuring that federal grants align with agency priorities and statutory requirements.  

Key Provisions 

• Centralized political appointee oversight: All discretionary grant decisions will be subject to review by senior political appointees, in addition to existing agency processes. The stated intent is to ensure that grants reflect current policy priorities. 
• Temporary pause in new grant programs: Agencies must pause initiation of new discretionary grant programs until updated oversight procedures are in place. 
• Expanded termination authority: Agencies are given explicit authority to cancel active grants if program objectives or priorities change.  
• Restriction on certain content areas: Agencies will not fund programs in specific areas identified in the EO, including certain diversity, equity, and inclusion activities; projects relating to gender identity; and certain immigration-related programs.  
• Plain language requirements: Funding opportunity announcements must be simplified to reduce reliance on legal or technical experts to make the process more accessible. 
• Review by subject-matter experts: Scientific research grants must be reviewed by qualified experts to ensure rigor and relevance. 
• Annual reviews and accountability: Agencies must conduct annual reviews of discretionary awards and implement accountability mechanisms for officials involved in the grant selection process. 
• Preference for low-overhead institutions: Grants should favor institutions with lower indirect cost rates and broaden the pool of recipients beyond traditional repeat grantees. 

Implementation Timeline 

• Agencies must halt new funding announcements until a senior appointee-led review process is in place. 
• Agencies must develop and submit compliance plans to the Office of Management and Budget (OMB) within thirty days. 
• New or revised oversight procedures must be implemented before resumption of new discretionary grant awards. 
• Starting within the next fiscal year, agencies will conduct yearly evaluations of grant effectiveness and alignment with policy goals. 

Potential Implications 

• Program review delays: The additional review layer could lengthen award timelines for both new and continuation grants. 
• Program eligibility changes: Certain types of programs may no longer be eligible for funding under the revised criteria. 
• Administrative adjustments: Agencies will need to update internal policies, grant guidelines, and communications to align with the EO.  

What Grant Recipients Need to Do 

1. Monitor agency guidance closely: Monitor agency guidance on how the EO will be applied to grants. 
2. Review active awards and proposed projects: Assess whether current and proposed projects fall within the scope of revised priorities and be prepared to provide additional justification, if requested. 
3. Adjust pipeline planning: Anticipate potential delays in grant opportunities and build contingencies into program timelines and budgets. 
4. Document alignment with stated priorities: Clearly document how activities for both active and proposed projects align with the funding agency’s current goals and statutory mandate. 
5. Engage in dialogue: Communicate with program officers early to understand how oversight changes may affect funding streams. 
6. Track legal developments: Stay informed about policy clarification that could affect implementation. 
7. Diversify funding sources: Institutions heavily reliant on federal grants should consider diversifying funding to mitigate potential disruptions. 

How Can BRG Help? 

BRG’s Government Contracts experts provide insights into how federal organizations can navigate and mitigate potential financial risks associated with grant terminations, frozen payments, funder diversification strategies, and process optimization. 

BRG’s Government Contracts Advisory Services (GCAS) group is a leading provider of consulting services to government contractors in the defense, construction, engineering, healthcare/health insurance, higher education, nonprofit, manufacturing, technology, hospitality and retail industries.

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