Improving Oversight of Federal Grantmaking
This Executive Order directs federal agencies to tighten oversight of discretionary grantmaking to ensure grants align with agency priorities and the “national interest.” Agencies must appoint senior political officials to review funding opportunity announcements and grant awards, add subject-matter and interagency review, simplify application requirements, limit indirect (facilities & administrative) costs, and give OMB authority to revise the federal grants “Uniform Guidance” to require termination-for-convenience clauses in discretionary awards. The order also sets substantive review principles (including prohibitions on funding racial preferences, programs denying a sex binary, or activities that “promote anti‑American values”) and encourages preference for institutions with lower indirect cost rates and for reproducible, “Gold Standard” science. If implemented, the order will increase senior-executive and political oversight of grant decisions, change how agencies draft terms and conditions, and shift incentives for applicants (favoring lower-overhead institutions and commitments to reproducible research). It could shorten or stop some existing grant activities, require agencies to rewrite terms in many awards, and create practical and legal tensions with longstanding peer-review practices, academic norms, and some statutory grant obligations.
Key Points
- 1Senior-appointee review process: Each agency must designate a senior appointee responsible for establishing a formal review of new funding opportunity announcements and discretionary grants. Reviews must include senior approval, continued OMB coordination, subject-matter expert input (as appropriate), interagency checks for redundancy, plain-language application forms, and pre‑issuance review/discussion by panels or program offices with the senior appointee or designee.
- 2Principles guiding award decisions: Senior appointees must exercise independent judgment (not merely rubber-stamp peer reviewers). Discretionary awards should advance Presidential priorities, include measurable benchmarks, favor institutions with lower indirect cost rates, diversify recipients (not concentrate awards among repeat players), and require commitments to “Gold Standard Science.” The order bans funding that supports specified activities: racial preferences, denial of the human sex binary, illegal immigration, or other initiatives the administration deems to compromise public safety or “promote anti‑American values.”
- 3Changes to Uniform Guidance and funding terms: The OMB Director is directed to revise 2 CFR Part 200 (the Uniform Guidance) and related guidance to streamline application rules; require that discretionary grants permit termination for convenience (so agencies can end awards that no longer advance priorities/national interest), subject to specified exceptions (e.g., certain statutory CHIPS/NDAA/Infrastructure provisions and international trade agreements); and limit the use of grant funds for facilities and administrative (indirect) costs.
- 4Agency reporting and retrofits: Within 30 days agencies must report to OMB on whether their standard grant terms permit termination for convenience, whether foreign-assistance terms allow termination on national interest grounds, count of active discretionary awards, and share of awards with termination provisions. Agencies are directed, consistent with law, to revise existing awards and future agreements to permit termination for convenience and to add tighter drawdown controls (agency authorization and written justification required for drawdowns).
- 5Implementation limits and legal framing: The order is to be implemented consistent with law and appropriations, preserves statutory authorities of agencies and OMB functions, does not create enforceable private rights, and contains a severability clause. Several statutory exceptions to the termination requirement are explicitly noted.