Sorting Through the List of Potentially Paused Federal Funding

The first few weeks of the new Trump Administration have seen a firehose of executive orders and rescissions on issues such as immigration, foreign aid, energy, and the federal workforce.  In that time, the new administration has paused agency action and federal funding related to these and other areas of government operations (and in some cases, rescinded federal funding freezes!). The Deltek team continues to keep watch over this constantly evolving topic of temporarily halting federal funding and activities. Below are examples of both government-wide and agency specific announcements as of time and date of publish.  

OMB Memo M-25-13

On January 27th, an internal OMB memo titled, Temporary Pause of Agency Grant, Load, and Other Financial Assistance Programs, was issued to federal agencies instructing a freeze on federally funded programs.  Several news outlets, including the Washington Post, publicly supplied a copy of OMB Memo M-25-13. The memo led to much confusion across public, private and academic sectors. The memo was since rescinded by the White House on January 29th, according to news outlets such as the Washington Post. The rescission comes in response to the confusion and a January 28th court ruling which put a stay on the memo’s content (see below). According to the article, Press Secretary Leavitt, “acknowledged that the initial budget office memo has been suspended but said the administration’s broader efforts to block spending it opposes remain in effect.”

The topic of pausing federal funding is constantly changing these days. Case in point, when I started writing this piece, there was mass confusion about the OMB memo and before I could hit publish, it was rescinded.

Despite this recent turn of events, it is worth looking at what the original memo stated, particularly as the intent of it by the new administration remains. Specifically, each agency was instructed to, “complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders. In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” The guidance stated that programs providing direct benefits to individuals, such as Social Security and Medicare, were not subject to the pause. Agencies had until February 10, 2025, to submit to OMB the list of programs and activities that are subject to the pause.

According to the administration’s first press briefing on January 28th, White House Press Secretary Karoline Leavitt remarked that the purpose of the memo was to ensure federal money is not conflicting with the executive orders and actions of President Trump.

Since the memo left many confused regarding which federal programs would be impacted by it, the White House issued the OMB Q&A Regarding Memorandum M-25-13 on January 28th. The Q&A specifies that, “Any program not implicated by the President’s Executive Orders is not subject to the pause,” while reiterating the list of executive orders the guidance was limited to and clarifying that mandatory programs such as SNAP, student loans and Medicaid were excluded from the guidance.

Interestingly enough, there does seem to be a 50-something page spreadsheet floating around titled, Instructions for Federal Financial Assistance Program Analysis in Support of M-25-13, which several news outlets have obtained and in which Senator Martin Heinrich posted on his media page. The spreadsheet lists the specific federal programs which OMB is seeking further funding information from agencies on. It is safe to assume that the programs listed on those sheets are still under scrutiny by the Trump Administration.

According to several news outlets such as Government Executive, U.S. District Judge Loren AliKhan issued a temporary ruling late in the day on January 28th, after multiple groups brought a lawsuit against the funding freeze memo, and ordered that the Trump Administration not block awards or funds that were already slated for disbursement until February 3rd to maintain a status quo in funding and allow the courts time to consider the case further.

Defense

In response to OMB M-25-13, the Department of Defense issued a clarification statement on January 28th signaling contract awards out of the DOD are not impacted by the federal funding freeze. The department explicitly states that it will continue to award new contracts to fulfill mission needs. According to the statement, DOD will, “expeditiously analyze its financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President's executive orders. In the interim, and as directed by OMB, the Department will temporarily pause activities related to the obligation or disbursement of financial assistance, to the extent permissible under applicable law. The scope of the OMB M-25-13 memo on financial assistance instruments does not include contracts.”

Despite the DOD confirming the continuance of contract awards, the department did send an internal memo, as provided by Government Executive, to pause communications and social media posts beginning January 25th for ten days. The pause is to, “refocus communications for the DOD around the Commander-in-Chief’s priority of reorienting the Department around its core missions of Keeping America Safe…,” according to the memo. DOD specifies that the guidance does not apply to base conditions and activities, DOD education activities, recruiting, and Morale, Welfare and Recreation and Commissary operations.

Health and Human Services

In a memo issued to HHS and the department’s components on January 21st, the Immediate Pause on Issuing Documents and Public Communications - ACTION instructs those on the receiving end of the order to pause HHS policy and public communication processes until February 1st to allow the president’s appointees and designees time to review and approve forthcoming regulations and other public documents. The memo includes a pause on any HHS publication in the Federal Register, public speaking engagements, and public documents such as grant announcements and press releases.

State and USAID

In the Realigning United States Foreign Aid executive order (EO) signed on his first day in office, President Trump ordered a 90-day halt on U.S. foreign development assistance. Specifically, “The responsible department and agency heads, in consultation with the Director of OMB, will make determinations within 90 days of this order on whether to continue, modify, or cease each foreign assistance program based upon the review recommendations, with the concurrence of the Secretary of State,” according to the EO. Exceptions to the pause in funding include military aid to Israel and Egypt and emergency food programs. Subsequently, the State Department sent communication to U.S. diplomatic and consular posts on January 24th to pause all new obligations of funding for foreign assistance programs funded by State and USAID, according to an article by Crowell.

Energy

In an internal memo dated January 20th and seemingly picked up by news outlets, including Exchange Monitor, Acting Secretary Ingrid Kolb directed departmental heads to pause contract solicitations, reports and personnel moves at the agency. According to the article, contract procurements of $100K or more are to be put on hold until further notice.  This is in addition to the pause placed on funds appropriated through the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) as outlined by President Trump’s Unleashing American Energy order. In a clarification memo to departments and agencies, OMB stated that the pause on IRA and IIJA disbursement of funds, “only applies to funds supporting programs, projects, or activities that may be implicated by the policy established in Section 2 of the order,” such as electric vehicle charging stations and funds supporting the “Green New Deal.”

GSA

On January 24th, the GSA suppled a memo to agency acquisition staff titled, “Acquisition Pause,” as reported by Nextgov. The memo instructs all contracting officers and lease contracting officers to suspend any new GSA-funded obligations, including new awards, task and delivery orders, modifications. Exceptions to the pause include actions in support of the president, FEMA, emergency obligations under $50K, awards under the Federal Supply Schedule outside of DEI, federal fleet vehicles that are not zero emission vehicles, contracts supporting GSA Global Supply, and work orders related to building operations activities. While the memo provides a list of exceptions, many remain confused with how far the memo reaches. Not only does GSA conduct internal acquisition activities, the agency also procures on behalf of other federal agencies. The memo does not address if the pause reflects those procurements GSA is performing for other federal agencies. According to NextGov, industry groups have reached out to GSA and the White House administration with these concerns.

EPA

According to report from EHS Support and E&E News by Politico, EPA staff were instructed to halt external communications, including press releases and social media. Exceptions to the hold include EPA communication with state and federal agencies (sans discussion of enforcement issues), communication facilitating imports, and agency inspections. Despite these reports, Government Executive is reporting that an EPA spokesperson denied any issuance to pause external communications. A quick look at EPA’s press release site does reveal external communications continuing to come out of the agency, including some that are enforcement-related announcements. It is unclear the extent, if any, of a pause in communication activities at the agency at this point.

According to another article from E&E News by Politico, EPA sent letters on January 28th to participants in a nationwide solar program stating that grants had been paused. It is unclear if this was done in relation to the now rescinded OMB M-25-13. However, based on language in the Unleashing American Energy EO and the administration’s position on energy and enforcement, it will come as no surprise that there could be at least some enforcement funding and activities that remain in a holding pattern.  

Closing Thoughts

Understandably, contractors may find themselves confused and constantly on alert to which federal programs may have funding impacts by the Trump Administration. In sum, there appears to be different interpretations and lack of consistency in finding and understanding some of the guidance put out on federal funding and activities freezes. Hopefully time will tell if additional clarity and streamlined communication on such a topic will become clearer. In the meantime, contractors should reach out to respective acquisition officials if they feel one of their programs may be impacted by the new administration’s orders and priorities. Moreover, unless directly communicated to by agency clients, contractors should continue to meet program and procurement deadlines as instructed.

The SLED and Canadian teams are providing updates and analysis on key Trump Administration actions impacting state and local and Canadian contractors. View that analysis through the following links:

• Impact of Trump Administration 2.0 on Canada-U.S. Supply Chains
• The Impact of Trump's 2025 Executive Actions on State, Local and Education (SLED) Government Funding
• Headwinds Facing the SLED Market in 2025

Stay tuned for more Trump Administration analysis.