Since President Trump took office a little over ten days ago, he has issued a flurry of Executive Orders (EO) aiming to further his policy objectives and rescind certain policies set by the Biden Administration. Many of these EOs affect government contractors working on federal contracts, as well as contractors working on state and local projects that receive federal assistance. On February 12, 2025, PilieroMazza will host a webinar addressing these Executive Orders in-depth and provide cost recovery strategies for affected contractors (register here). In this client alert, we highlight key Executive Orders and summarize their purpose and impact on government contractors.
Initial Rescissions of Harmful Executive Orders and Actions, January 20, 2025
This EO revoked 78 executive orders from the prior administration that do not align with President Trump’s policy objectives. Notably, this EO rescinds EO 14055, “Nondisplacement of Qualified Workers Under Service Contracts,” which required certain federal contractors to provide a right of first refusal to employees of the predecessor contractor. Other Biden Administration EOs revoked include those furthering policies on COVID-19, climate, diversity, equity, and inclusion (DEI), and immigration. This EO requires that the directors of the Domestic Policy Council, the National Economic Council, and the National Security Advisor submit additional orders to be revoked by March 6, 2025.
America First Trade Policy, January 20, 2025
The America First Trade Policy EO highlights the President’s intent to establish “a robust and reinvigorated trade policy that promotes investment and productivity, enhances our Nation’s industrial and technological advantages, defends our economic and national security, and—above all—benefits American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses.” This EO has three distinct topics requiring a number of reports and recommendations under each: (1) Unfair and Unbalanced Trade, (2) Economic and Trade Relations with the People’s Republic of China (PRC), and (3) Additional Economic Security Matters.
The first topic signals that changes to domestic preference requirements applicable to federal procurements (as implemented through the Buy American Act and Trade Agreements Act) may be on the horizon, as the EO requires the U.S. Trade Representative to “review the impact of all trade agreements . . . on the volume of Federal procurement covered by Executive Order 13788 of April 18, 2017 (Buy American and Hire American),” and “make recommendations to ensure that such agreements are being implemented in a manner that favors domestic workers and manufacturers, not foreign nations.” The EO also requires investigations into the causes of annual trade deficits, the feasibility of establishing an External Revenue Service to collect tariffs, unfair trade practices by other countries, and the loss of tariff revenues and the risks from importing counterfeit products and contraband drugs. It also directs a review of the United States-Mexico-Canada Agreement (USMCA) to “assess the impact of the USMCA on American workers, farmers, ranchers, service providers, and other businesses and make recommendations regarding the United States’ participation in the agreement.”
The second topic requires a review of the Economic and Trade Agreement Between the Government of the United States of America and the People’s Republic of China (PRC), legislative proposals regarding Permanent Normal Trade Relations with the PRC, and U.S. intellectual property rights conferred upon PRC persons. It also directs an investigation into other acts, policies, and practices by the PRC that may be unreasonable or discriminatory and that may burden or restrict U.S. commerce.
The final topic addresses a variety of matters ranging from directing a full economic and security review of the U.S.’s industrial and manufacturing base to an assessment on migration and fentanyl flows from outside the U.S. It also requires a review of the U.S. export control system and for the Office of Management and Budget (OMB) to assess any impact of foreign government financial contributions or subsidies on U.S. federal procurement programs.
Unleashing American Energy, January 20, 2025
The Unleashing American Energy EO (accompanied by OMB Memorandum M-25-11) encourages energy exploration and production on federal lands and waters and seeks to establish the U.S. as the leading producer and processor of non-fuel minerals. It also aims to secure a readily accessible supply of reliable energy, eliminates the electric vehicle mandate, and terminates the Biden Administration’s “Green New Deal.” The EO requires the development of an action plan by February 19, 2025, to rescind or revise any policies, programs, and regulations that are inconsistent with the aforementioned goals. The EO will have significant impacts on many contracts (as well as grants, cooperative agreements, loans, and other awards) that are funded by either the Infrastructure Investments and Jobs Act of 2021 (IIJA) or the Inflation Reduction Act of 2022 (IRA).
For more details on this EO, see our prior coverage here.
Executive Orders Targeted at Affirmative Action Programs
President Trump released three EOs targeting affirmative action programs in his first week back in office: Ending Radical and Wasteful Government DEI Programs and Preferencing, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, and Restoring America’s Fighting Force largely eliminate all DEI and affirmative action-based programming for both the federal government and its contractors.
Ending Radical and Wasteful Government DEI Programs and Preferencing (January 20, 2025) instructs the Office of Management and Budget (OMB) and Office of Personnel Management (OPM) to coordinate the termination of all “discriminatory” programs, including DEI and “diversity, equity, inclusion, and accessibility” (DEIA) mandates, policies, programs, preferences, and activities in the federal government, under whatever name they appear (including in relation to “environmental justice”).
For more details on this Executive Order, see our prior coverage here.
Ending Illegal Discrimination and Restoring Merit-Based Opportunity (January 21, 2025) rescinds all DEI practices or programs across all executive departments and agencies. It also revokes numerous EOs from prior administrations. Pertaining to contractors, this EO ends affirmative action programs and policies in government contracting, requires agencies to provide a list of contractors who provided DEIA training or training materials to the OMB Director by February 20, 2025, and requires agencies to terminate all equity-related grants or contracts and all DEI performance requirements for contractors and grantees.
For more details on this Executive Order, see our prior coverage here.
Restoring America’s Fighting Force (January 27, 2025) focuses on eliminating DEI offices at all defense agencies. It further requires the Secretary of Defense to submit a review of all actions taken in pursuit of DEI initiatives, including all instances of race and sex discrimination and activities designed to promote a race- or sex-based preferences system by April 27, 2025.
Reevaluating and Realigning United States Foreign Aid, January 20, 2025
This EO seeks to ensure that no further foreign assistance is obligated or disbursed in a manner that is not fully aligned with President Trump’s foreign policy. As such, it implements a 90-day pause on all foreign development assistance to allow department heads and agencies, in conjunction with the OMB, to reevaluate such assistance. Contractors that perform federal contracts related to the provision of foreign aid may receive stop-work notices and find their funding suddenly paused.
Hiring Freeze, January 20, 2025
The Hiring Freeze EO freezes all hiring for federal civilian agencies and expressly prohibits circumventing the freeze through contracting. The intent behind the freeze is to work towards reducing the federal workforce. The freeze will remain in effect until the OMB and OPM submit a plan to reduce the size of the federal workforce, which is due by April 20, 2025. In furtherance of a workforce reduction, federal employees were presented with a deferred resignation offer on January 28, 2025. The offer permits employees to resign effective September 30, 2025, while retaining all pay and benefits regardless of daily workloads and allows exemption from in-person work requirements. The offer is available to all full-time federal employees except for military personnel of the armed forces, employees of the U.S. Postal Service, and those in positions related to immigration enforcement and national security until February 6, 2025.
A significant reduction in the federal workforce could lead to disruptions and delays in performance and administration of government contracts as there may be insufficient personnel to oversee contract execution and invoice processing.
Rescinded. Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs: OMB Memorandum M-25-13, January 27, 2025
OMB Memorandum M-25-13 was rescinded by OMB Memorandum M-25-14 on January 29, 2025, just two days after its issuance. M-25-13 was originally issued to implement President Trump’s EOs and instructed agencies to pause all federal financial assistance, including all activities associated with open Notice of Funding Opportunities, on programs implicated by any of the EOs. Additionally, the memo directed agencies to submit a review of each federal financial assistance program and related activity concerning their compliance with the President’s existing EOs and policies. Exceptions to the pause include: Medicare, Medicaid, SNAP, Social Security, and, to the extent required by law, certain administrative actions, such as closeout of federal awards or recording obligations. Prior to its rescission, on January 28, 2025, the D.C. District Court issued a temporary restraining order enjoining OMB’s directive to freeze federal financial assistance until February 3, 2025.
Regulatory Freeze Pending Review, January 20, 2025
Similar to an executive order in place during the prior Trump Administration, the Regulatory Freeze Pending Review instructs agencies to (1) not propose or issue any rule until a department or agency head appointed by President Trump reviews and approves the rule, (2) immediately withdraw any rules from the Biden Administration not yet published in the Federal Register, and (3) consider a 60-day postponement for any rules that have been published but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.
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Contractors should stay informed of new EOs and how they will be implemented to understand the requirements being imposed, potential risks, and strategies for protecting their interests. PilieroMazza continues to track President Trump’s EOs and will provide updates as they are issued.
If you have questions about President Trump’s EOs and how they may impact your business, please contact Jackie Unger or Lauren Brier, or another member of PilieroMazza’s Government Contracts Group. Special thanks to Krissy Cralle for her assistance with this client alert. Also, register here for the webinar “Government Contracts and New Mandates: Executive Orders and Cost Recovery Strategies Explained” for an in-depth discussion of the Executive Orders and their implications for government contractors.
If you’re seeking practical insights to gain a competitive edge by understanding the government’s compliance requirements, tune into PilieroMazza’s podcasts: GovCon Live!, Clocking in with PilieroMazza, and Ex Rel. Radio.
