Note: The following is current as of February 5, 2025.
Presidential Actions
The new Administration has begun its new term with multiple Executive Orders (EO). Many of the Orders will have direct impact across various industries including infrastructure, foreign assistance, energy and environmental projects.
- The Executive Order titled “Unleashing American Energy” will have a significant impact on current projects and what projects continue to receive federal funding in the energy sector.
- EO titled “Reevaluating and Realigning United States Foreign Aid” has put an immediate stop on all foreign assistance programs including acquisition and assistance for a period of 90 days to give the government an opportunity to review programmatic efficiencies and consistency with United States foreign policy.
- Offshore wind leasing will also be impacted by a separate Executive Order titled “Temporary Withdrawal from all areas on the outer continental shelf from offshore wind leasing and review of the federal government’s leasing and permitting practices for wind projects”.
- Two Executive Orders titled “Reforming the federal hiring process and restoring merit to government service” and “Ending Illegal Discrimination and restoring Merit-based opportunity” related to Diversity Equity Inclusion (DEI) programs will also impact federally-funded programs and recipients.
While the freeze in grant payments initially announced by the Office of Management and Budget (OMB) has been rescinded, the administration is focused on reviewing ongoing and announced financial assistance programs in order to ensure alignment with the Executive Orders.
BDO is maintaining a list of Executive Orders that may impact our clients by sector. Agencies have been working actively since January 20, 2025, to ensure all federal spending is in compliance with the Executive Orders.
Implementing the Executive Orders
OMB has been leading this effort and has been issuing guidance to Agencies on a regular basis to provide next steps and to keep stakeholders informed. The table below provides a summary of the activities since the EOs were first published on January 20, 2025, and will be updated as new information is announced.
Date of OMB Memo | Number/Title | Summary | Agency Actions | Notes for Recipients |
January 21, 2025 | This memo provides clarification related to EO titled “Unleashing American Energy” and clarifies that all funding under IRA[1] and IIJA[2] is not impacted by the immediate pause required by Section 7 of the EO. The pause only applies to programs and activities that may be implicated by the policy objectives listed in section 2 of the EO. | All federal agencies that are involved in disbursement of funds under IRA and IIJA will be required to review those programs to see if they are impacted by the policy established in Section 2 of the order. | If you have a program that receives funding under IRA and IIJA, please review Section 2 of the EO carefully. Further clarification was also provided by OMB as summarized below. | |
January 26, 2025 | Secretary of State ordered an immediate pause on all foreign aid programs to implement EO titled “Reevaluating and Realigning United States Foreign Aid”. | Department of State (State) and United States Agency for International Development (USAID) has since issued Stop work Orders (SWO)/Suspension notices to ALL programs that use foreign aid funding. | State and USAID have been sending SWO notices to all implementers. Notices were also issued via Implementing Partner Notices Portals (IPN). Please stay on top of all communication from your relevant agency. | |
January 27, 2025 | This memo was ordered a temporary pause on ALL federal financial assistance payment with noted exceptions for benefits paid directly to individuals, Medicare and social security benefits. | Per the instruction provided, each agency must provide information to OMB by February 7, 2025, for all programs related to financial actions that can be expected under each program before March 15, 2025. A list of questions have been included to assist in determining if the program activities may be in non-compliance with any of the EOs issued. |
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January 28, 2025 | OMB shared a list of all current projects with agencies and provided a deadline of February 7, 2025, to complete information requested for each program. |
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January 28, 2025 | OMB issued clarification regarding M-25-13 to explain that all federal assistance is not paused, and only programs that are in non-compliance with EOs are paused. The list of exceptions was also broadened to include Medicaid, SNAP benefits, PELL grants, federal loans and rental assistance. |
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January 28, 2025; 4:00 PM | Federal Judge blocks the freeze on federal assistance that was ordered under OMB M-25-13 through an “administrative stay” | The order was issued to block the temporary pause on federal assistance till Feb 3, 2025, when the judge had scheduled a second hearing. |
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January 28, 2025 | As a part of the review process, Secretary of State issued a temporary waiver for life-saving foreign assistance programs including PEPFAR. | This is a temporary waiver. It also includes exceptions for abortion, DEI, migrant and refugee assistance activities (other than repatriation activities) | New contracts are not covered under this waiver. The waiver only allows continuing work under current projects. | |
January 29, 2025 | This memo rescinded M-25-13 with immediate effect and instructs Agencies to contact their General Counsel with any questions regarding implementing the EOs. |
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January 31, 2025 | Temporary Restraining Order (TRO) by US District Court, Rhode Island | A judge in Rode Island issued a TRO for 14 days expiring on February 14,2025 when the judge may rule on a preliminary injunction. During the TRO period, the judge has ordered the US government to refrain from pausing, freezing, blocking or canceling any legal obligations under existing federal financial awards. | This order is not a decision on merit of the matter, and did not refer to a OMB memo. This is a temporary measure to give both sides time to prepare and argue the matter on merit. |
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February 02, 2025 | Treasury Access by DOGE | DOGE now has access to the federal payments systems for all federal payments. Multiple posts and news media have been reporting that DOGE will be stopping federal payments. | It is yet to be seen which payments are actually being stopped considering the TRO is still in place. |
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OMB and federal agencies are working quickly to implement these actions and the situation is evolving. We will update this page with new information as it is released.
What Does This Mean for Ongoing Projects
The Executive Orders lay out policy objectives for the agencies. OMB’s instructions to the agencies has provided direction on next steps to start reviewing all existing programs to ensure compliance with EOs. The Agencies may contact specific projects with questions to assist them with completing the information requested by OMB. The best action for implementers and recipients is to be responsive to their program officers and OAA communication.
What to Except in the Review Process
Below is a list of questions that OMB has asked agencies for current projects.
- Anticipated obligations or disbursements before March 15, 2025, including any statutory requirements for such obligation/disbursements?
- Does the program provide any direct or indirect support to removable illegal aliens?
- Does the program provide assistance overseas?
- Does the project have funding under the U.S. International Climate Finance Plan?
- Does the program put an undue burden on identification, development or use of domestic energy resources (including programs under IRA and IIJA)?
- Does the program have DEI or Community Benefits Program (CBP) related activities?
- Does the program promote gender ideology?
- Does the program promote or support abortion?
While the review will be done by the agency at the program scale, these questions may prepare you on possible requests for information that the agency may need to respond to the OMB request in a timely manner and provide insight into the potential future for the program.
What Does a Suspension/Stop Work Order (SWO) Mean for the Project
If you are one of the projects that have already received a suspension or a Stop Work Order (SWO), this does not mean a full suspension of all activities. Each project should carefully read the instructions received from the Agreement Officer and discuss which costs are considered legally or operationally essential during the suspension. In your internal review, take into consideration the questions listed above in addition to any legal obligations that have been made, fixed operational costs, costs of termination, impact on subcontractors and awards, and third-party commitments. Staff considered essential and mandatory, and any legal obligations toward such staff, should be taken into consideration as well.
The review, suspension and stop work process will be very specific to each project, so it is advisable to cooperate and engage actively with your government counterparts to avoid missteps.
How BDO Can Help
BDO is available to provide ongoing support and guidance to its clients on how to maneuver through the review process. Our grants management professionals can help you navigate the specific implications and impacts to your federal awards, while also providing support for broader considerations on the impacts to your organization’s strategy and financial health, including:
- Review budgetary impacts;
- Analyze SWO instructions and impact to project;
- Liquidity strategies;
- Indirect rate implications;
- Subcontractor/Subagreement impact and evaluation;
- Business model and sustainability analysis.
[1] Inflation Reduction Act
[2] Infrastructure Investment and Jobs Act