Key takeaways
- Executive Order 14219 empowers DOGE to exercise management oversight and control over federal contract and grant activity
- EO instructs agencies to review existing contracts and grants for efficiency and report activity, and to provide payment justifications
- Federal contractors and grant recipients should review contracts and grants that could be scrutinized and develop contingency plans as needed
Transformation in federal spending
On February 26, 2025, President Trump signed into law Executive Order (EO) 14219, titled “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative,” directing the newly created Department of Government Efficiency (DOGE) to review government spending under federal contracts and grants with the goal of reducing inefficiencies to save taxpayers money. Broadly defining “covered contacts and grants” to include all “discretionary spending through Federal contracts, grants, loans, and related instruments,” the EO’s key provisions include:
- Tracking payments. The EO directs federal agencies to build a centralized information technology (IT) system that tracks payments made under covered contracts and grants. Additionally, each proposed payment must be supported by a “brief, written justification” from the approving agency, which must be made publicly available. This “payment tracking system” must also “include a mechanism for the Agency Head to pause and rapidly review any payment for which the approving employee has not submitted a brief, written justification.”
- Reviewing contracts, grants and related policies. In consultation with the agency’s DOGE team lead, agency heads must – within 30 days of the Order – “review all existing covered contracts and grants” and either terminate or modify them “to reduce overall Federal spending to promote efficiency” as appropriate and consistent with applicable law. Agencies must also “conduct a comprehensive review of...contracting policies, procedures, and personnel” and issue revised guidance on the execution or modification of any contracts going forward.
- Agency travel expenditures. The EO also halts funding for any “conferences and other non-essential purposes” absent public written justification. It also imposes a 30-day freeze on government employees’ credit cards except for those engaged in critical services such as disaster response or relief. The EO further instructs agencies to develop a plan for the disposition of government-owned real property that is no longer needed.