Investigations, Enforcement, & Compliance Alerts

On March 14, 2025, in a late Friday decision, a panel of judges from the U.S. Court of Appeals for the Fourth Circuit ruled that, for the time being, the Trump Administration is permitted to enforce Executive Orders (EOs) 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing) and 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity), which prohibit Diversity, Equity, and Inclusion (DEI) (also referred to as Diversity, Equity, Inclusion, and Accessibility, or DEIA in the EOs) efforts within the federal government and by federal contractors, respectively.

On February 15, 2025, the acting administrator of the United States General Services Administration (GSA), Stephen Ehikian, announced on X (formerly Twitter) that the GSA issued several new deviations from the Federal Acquisition Regulation (FAR) intended to implement key Trump Executive Orders that aim to end illegal discrimination, restore merit-based opportunity, and eliminate the forced use of paper straws in procurement.

The early days of the Trump Administration have caused nothing less than a complete shake-up of the federal procurement system, with impacts on federal contractors, subcontractors, and recipients of federal financial assistance, such as grants and loans. Through a series of Executive Orders and Agency Memoranda issued by the heads of the Office of Management and Budget (OMB), General Services Administration (GSA), Department of State, and others, the government is suspending work and, in some cases, terminating federal awards. For example, GSA issued a complete “Acquisition Pause,” the State Department issued a pause on U.S. foreign assistance funded by or through the State Department and U.S. Agency for International Development (USAID) and is actively terminating contracts and grants, and other agencies, including Department of Energy, Veterans’ Affairs, Department of Housing and Urban Development, and National Institute of Health are issuing stop-work orders and/or termination of contracts and grants, in whole or in part.

On January 21, 2025, President Trump issued a sweeping executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EO). The EO targets diversity, equity, inclusion, and accessibility (DEI) programs in the public and the private sectors. The EO signals that organizations receiving federal funds, whether through government contracts or otherwise, may be liable under the False Claims Act (FCA)—one of the government’s most powerful anti-fraud enforcement tools providing for treble damages and steep penalties—if they maintain what the EO refers to as “illegal” DEI programs that violate federal anti-discrimination laws. Significantly, the EO includes provisions that are likely to make it easier to establish FCA violations.

On January 27, 2025, the White House published Memorandum M-25-13, titled “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs.” In an unprecedented move, the initial Memo appeared to suspend all funding for all federal grants, cooperative agreements, noncash contributions or donations of property, direct appropriations, food commodities, other financial assistance, loans, loan guarantees, interest subsidies, and insurance that may be implicated by his executive orders. Amidst a national outcry in response to the memorandum, OMB released a subsequent Memorandum on January 28, 2025, in which OMB appeared to walk back the broad freeze on most federal financial assistance. We summarize here the details of the Memos well as the rights and remedies of recipients that may be affected by this action.