On August 7, 2025, President Donald J. Trump issued an executive order titled “Improving Oversight of Federal Grantmaking” (Executive Order) directing agencies to take steps towards reforming the federal grantmaking process, with the goal of streamlining processes, enhancing executive branch oversight and control of federal financial assistance, and aligning federal financial assistance with agency priorities and the national interest. The Executive Order will impact organizations, companies, and projects receiving federal financial assistance by implementing political appointee-level oversight of decision-making and providing federal agencies with termination-for-convenience rights over many existing and future federal awards.

Political Appointee-Led Review Process

The Executive Order directs all agency heads to promptly designate a senior appointee—a presidential appointee, a non-career member of the Senior Executive Service, or certain Schedule C employees—to establish a process for reviewing and approving new notice of funding opportunity (NOFO) announcements and discretionary grants. Effective immediately, no new NOFO may be issued without prior approval from the designated senior appointee. Once the process for reviewing and approving new NOFOs and discretionary federal grants is established, such designated senior appointees will be responsible for conducting such review to ensure that the grants align with agency priorities and the national interest. The Executive Order mandates that senior appointees approve or disapprove NOFOs and discretionary grants in their independent judgment, without deferring to the recommendations of others, in accordance with a review process and principles generally taking into consideration the following requirements:

• Senior appointees must review all new NOFOs and discretionary grants;
• Grantmaking must be coordinated with the Office of Management and Budget (OMB);
• Designated subject-matter experts identified by the agency head or the agency head’s designee should be involved in the review to the extent appropriate to the subject matter of the NOFO;
• Reviews should ensure that NOFOs include only such requirements as are necessary for an adequate evaluation of the application and are written in plain language with a goal of minimizing the need for legal or technical expertise in drafting grant applications;
• Reviews should include interagency coordination to determine whether the subject matter of the NOFO has already been addressed to promote consistency and eliminate redundancy;
• Discretionary grants should be reviewed before issuance to ensure that the awards are consistent with applicable law, agency priorities, and the national interest;
• Discretionary grants should be reviewed on an annual basis for consistency with agency priorities and substantial progress, including accountability mechanisms for federal officials responsible for selection and granting of the awards;
• Discretionary grants must advance the President’s policy priorities, where applicable, including policy priorities related to nondiscrimination, science, immigration, and social values;
• Agencies should give preference to institutions with lower indirect cost rates, all else being equal; and
• Agencies should award discretionary grants to a wide array of recipients rather than a select group of repeat players.

Termination-for-Convenience Requirements

The Executive Order directs the Director of the OMB to revise the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 C.F.R. Part 200) (Uniform Guidance) and other relevant guidance to streamline application requirements and require that all discretionary grants permit the relevant agency to terminate the award for convenience, subject to appropriate exceptions and certain exemptions. The guidance will also be revised to limit the use of financial assistance for costs related to facilities and administration.

Further, within 30 days of the issuance of the Executive Order, agency heads must review their standard grant terms and conditions and submit a report to the Director of the OMB detailing, among other things, whether the agency’s standard terms and conditions permit termination-for-convenience and the number of active discretionary grants that contain termination-for-convenience provisions. Agency heads are directed to take steps, to the maximum extent permitted by law, to revise the conditions of existing discretionary grants to permit immediate termination-for-convenience or clarify that termination is permitted if the grant no longer advances agency priorities or the national interest.

In addition, each agency head must ensure that all future discretionary grants contain termination-for-convenience rights in favor of the agency and include terms that prohibit recipients from directly drawing down general grant funds for specific projects without the affirmative authorization of the agency and require grantees to provide written explanations or support, with specificity, for requests for each drawdown.

Implications and Conclusion

The Executive Order elevates the level of review required for NOFOs and discretionary grants to the political appointee level to ensure closer control by and alignment with the President. Companies and organizations seeking discretionary grants should expect greater scrutiny of the financial assistance process, particularly with respect to how a potential grant aligns with agency priorities and the national interest. In general, the energy, infrastructure, and mining and minerals industries have engaged with these programs to a greater extent since the passage of the Infrastructure Investment and Jobs Act in 2021 (also known as the Bipartisan Infrastructure Law) and the Inflation Reduction Act in 2022. Many industry participants are exploring, have sponsored, or are otherwise involved with projects that are at various stages in the financial assistance process and are affected by the Administration’s evolving policies in this area. For example, on August 13, 2025, the Department of Energy (DOE) announced plans to issue NOFOs totaling nearly $1 billion to advance and scale mining, processing, and manufacturing technologies across key stages of the critical minerals and materials supply chains. Nuclear energy projects are also active in this space. Whether the additional level of review required under the new Executive Order becomes a source of delay will largely depend on the process for reviewing and approving the grantmaking process that is proposed and implemented at each agency.

The Executive Order, once implemented, will introduce termination risk for many projects receiving discretionary grants that were not previously subject to such a condition. While this risk may be negligible in some contexts, the inclusion of termination-for-convenience provisions may present enhanced risk for long-term construction projects whose sponsors seek to utilize federal grant funds as part of their financing strategy. As OMB undertakes the revisions to the Uniform Guidance and other applicable regulations required by the Executive Order, project participants will need to closely monitor the extent to which a termination-for-convenience in certain contexts may affect the bankability of their projects and the availability of exceptions.

Additionally, grant recipients should familiarize themselves with the post-termination reporting, audit, and compliance requirements under the Uniform Guidance (2 C.F.R. § 200.344 and 2 C.F.R. § 200.345), which can impose administrative costs after a grant is terminated, even if the recipient received minimal or no funding prior to termination.

We expect that further information regarding the implementation of the Executive Order will be forthcoming over the next several months, including the grantmaking review process to be proposed for each relevant agency and the revisions to the Uniform Guidance to be proposed by OMB.