A View of HHS under Trump 2.0

The new Trump Administration is wasting little time making an impact at federal agencies. Below is an overview of the actions taken by HHS and its component agencies under Trump 2.0.

Adherence to Executive Orders

One of the earliest changes seen at HHS is the removal of data from various public facing CDC and FSA websites in response to the January 20th executive order (EO) 14168 on gender ideology. The data has since been restored due to a court order, though various HHS websites now contain a banner at the top referencing the EO and potentially conflicting information on the websites.

Moreover, HHS issued an internal memo on January 21st to department components to temporarily pause HHS policy and public communication processes to allow President Trump’s appointees and designees time to review and approve forthcoming regulations and other public documents. The memo included a pause on any HHS publication in the Federal Register, public speaking engagements, and public documents such as grant announcements and press releases.

MAHA Commission

In line with adhering to EOs, HHS is tasked with forming a commission to assess causes of decaying U.S. health, with a specific focus on childhood chronic diseases. According to the February 13th EO 14212, members from agencies focused on health, including the FDA, NIH, and CDC, will form the Make America Healthy Again (MAHA) Commission. The commission is required to produce a report to the president in 100 days summarizing the questions that remain in childhood chronic disease and provide a strategy in 180 days to improve U.S. children’s health. The EO also promotes transparency and open-source health data and healthy-sourced food, increased research in chronic diseases, and expanded treatment options and coverage for lifestyle changes and disease prevention.

Funding and Staff Reductions

The Trump Administration’s efforts to reduce the federal workforce and promote efficiency in spending and operations, led by the DOGE, is impacting nearly all federal agencies including HHS. In a February 8th NIH announcement, the agency stated it would reduce funding of indirect costs under its research grants. Specifically, “there will be a standard indirect rate of 15% across all NIH grants for indirect costs in lieu of a separately negotiated rate for indirect costs in every grant. For any new grant issued, and for all existing grants to [institutions of higher education] IHEs retroactive to the date of issuance of this Supplemental Guidance, award recipients are subject to a 15 percent indirect cost rate,” according to the document.

While staff reductions throughout federal agencies appear to be ongoing, an article by NPR cites CDC and NIH layoff totals at 1,300 and 1,500 employees, respectively. Moreover, the article reports that key leadership positions such as the head of ARPA-H are now vacant.

HHS Terminated Contracts as of February 20th

Each week, GovWin will pull a list of the terminated contracts to track the cancelled contracts that have taken place under the new administration. In an FPDS pull from January 20th to February 20th, 121 contracts were identified as terminated at HHS. Below are the agency and category breakdowns of those contracts.

Sources: Deltek, FPDS

Many contracts terminated under NIH include programs, research and training related to DEI and workforce diversity, particularly at the National Library of Medicine and National Cancer Institute. Other terminated contracts include those related to news and subscriptions and consulting services. At the FDA, a chunk of terminated contracts were related to news and subscriptions.  

Sources: Deltek, FPDS

 

As certain training, consulting and subscription are targeted for cancellation, it is understandable why professional services lead in HHS terminated category type. Those labeled as IT may raise an eyebrow or two but for clarity, appear to be related to unsupported programs by the new administration. Sample contracts identified as IT include:

• NIH: Digital Communication Services to Accelerate Improvement of NCIS Enterprise Web Properties and Support NCI Divisions, Offices and Centers
• NIH: Software Engineering Support for Biomedical and Bibliographic Information Resources
• NIH: System Administration and Management Support for Biomedical and Bibliographic Information Resources

New Secretary’s Priorities

Taking headlines by the storm it seems like, the new HHS Secretary, Robert F. Kennedy Jr. is poised to shake things up at the department. Based on past remarks by RFK Jr. as well as statements during his confirmation hearings, contractors can expect to see the following priorities and emphasis placed at the department:

• Expanded use of AI and health technology and telemedicine in rural hospitals. Source
• “Radical” transparency of health data, research and policy processes to promote public trust. Source
• Transition of NIH funds to preventive and holistic health methodologies and NIH staff reductions. Source
• Focus on revamping U.S. nutritional practices including nutrition labeling, oversight of ultra-processed foods, bans on certain food additives and chemicals. Source
• Additional oversight for vaccine projects, including suspension of a contract for an oral Covid-19 vaccine and cancelation of committee and subcommittee meetings on the upcoming flu vaccine. Source

Looking Ahead

Though an increase in canceled contracts, funding and reduction in staff is expected as the new administration attempts to shrink federal programs and the workforce, contractors should take note of the direction HHS may be headed under the new administration for upcoming opportunities. For example, IT contractors can expect to see opportunities out of HHS under the as the department explores tech advances to improve new priorities, support increased transparency efforts, and fulfill government efficiency demands. The fate of research-related funding remains influx, while some see the new administration investing less in medical and device research, the new secretary’s priorities indicate it may instead be a shift in funding to align with refocused healthcare interests.

It is also important to review the list of targeted programs in the spreadsheet posted weeks ago by Senator Martin Heinrich, which OMB is requesting further funding information on. HHS programs take up nearly 9 pages of the 52-page spreadsheet. Contractors should also continue to follow the installment of new leadership throughout HHS for indication on the direction the department and its agency components plan to take.

Be sure to stay informed on the impacts to federal contractors and opportunities from the new Trump Administration through Deltek’s GovWin’s First 100 Days Resource Center.