Federal Judge Clarifies Scope of TRO Enjoining Federal Spending Freeze, PilieroMazza Client Alert, Samuel S. Finnerty
As we recently outlined, on January 31, 2025, U.S. District Judge John J. McConnell issued a temporary restraining order (TRO) that blocks the federal funding freeze outlined in the now-rescinded January 27, 2025, Office of Management and Budget (OMB) directive (Directive). On February 10, 2025, Judge McConnell clarified the scope of his TRO, explaining that it prohibits all categorical pauses or freezes in obligations or disbursements based on the OMB Directive or based on the President’s 2025 Executive Orders. Read more here.
Proposed Rule on Organizational Conflicts of Interest Signals Significant Changes for Contractors, PilieroMazza Blog, Jacqueline K. Unger, Katherine B. Burrows, Eric Valle, Christopher A. Jannace
Organizational conflicts of interest (OCIs) should be front of mind for any federal government contractor. The mere presence of an OCI may cause contractors to reconsider which contracting opportunities to pursue, reshape teaming and subcontracting arrangements, and revise mitigation policies, procedures, and plans in ways that impact company-wide systems and processes. Recently, the government published a proposed rule (Proposed Rule), which, if finalized, will significantly change how the government and contractors analyze OCIs and potentially avoid their draconian effects. Read more here.
Government Accountability Office (GAO) Report: Disaster Contracting, Opportunities Exist for FEMA to Improve Oversight
On February 6, GAO released a report finding that the Federal Emergency Management Agency (FEMA) staff have not been adequately trained or certified to oversee contracts to receive goods and services from contractors. Read more here.
Rep. Chip Roy (R-TX-21) Press Release: Rep. Roy Re-Introduces Legislation Aimed at Eliminating DEI Positions at the Department of Defense (DOD)
On February 7, Rep. Roy announced that he re-introduced The Restoring Military Focus Act. This bill would permanently eliminate the Chief Diversity Officer and Senior Advisors for Diversity and Inclusion positions at the Department of Defense, which were established under Section 913 of the FY21 National Defense Authorization Act (NDAA). Read more here.
Democrats Call Stop Work Order at CFPB ‘Illegal’, The Hill
Democrats are calling on Treasury Secretary Scott Bessent to cancel his stop work order for the Consumer Financial Protection Bureau (CFPB) after employees with Elon Musk’s Department of Government Efficiency (DOGE) targeted the agency as part of their overhaul of federal spending. Read more here.
American Bar Association (ABA) News Release: The ABA Supports the Rule of Law
On February 10, the ABA issued a news release emphasizing its support of the Rule of Law. The ABA condemns recent actions that are contrary to the Rule of Law, including dismantling USAID and DEI programs. Read more here.
Gutting of USAID Is Making It Harder to Monitor Aid Sent Abroad, Watchdog Says, Defense One
The Trump administration has decimated the U.S. government’s ability to spot fraud and abuse in the flow of aid to other countries, according to a Monday memo from the inspector general of the lead foreign aid agency. Read more here.
Trump Stops Enforcement Of Foreign Corrupt Practices Act, Law360
President Donald Trump signed an executive order Monday that puts a “pause” on enforcement of the federal Foreign Corrupt Practices Act, saying the law against U.S. companies bribing foreign officials to win business in other countries has made American companies less competitive. Read more here (subscription required).
US Small-Business Optimism Retreats From Highest Since 2018, Bloomberg News
US small-business optimism declined in January from a more than six-year high and a gauge of uncertainty climbed as companies weighed Trump administration policies and the Federal Reserve’s pause on interest-rate cuts. Read more here (subscription required).
Judges Curb Trump’s Sweeping Executive Actions, The Hill
Federal judges are curbing President Trump’s sweeping directives to reshape the government, issuing a flurry of rulings blocking his agenda from charging forward. Read more here.
White House Says Musk Will Police His Own Conflicts of Interest, Bloomberg News
The White House said Elon Musk, the billionaire leading President Donald Trump’s government cost-cutting efforts, will determine if there are conflicts of interest between his work reviewing federal spending and his overlapping empire of six companies. Read more here (subscription required).
Foreign Aid Lockout Pushes Contractors to Brink of Insolvency, Bloomberg Government
Funding shortfalls, furloughs, and the threat of closures have forced contractors and non-governmental organizations to rethink their relationship with the federal government after the US Agency for International Development cut off payments. Read more here (subscription required).
Trump Vows to Close Education Department, Wants Congress’ Help, Bloomberg News
President Donald Trump on Tuesday reiterated his preference to dismantle the Department of Education during his second term but indicated he preferred to build consensus around the idea rather than attempt the maneuver through executive fiat. Read more here (subscription required).
Steep Dropoff Looms for Role of Federal Small Business Vendors, Bloomberg Government
Small businesses represented more than three-fourths of the federal vendor base in fiscal 2024, boosted by government programs and set-aside contracts promoting their participation but those may provide fewer opportunities through the rest of fiscal 2025. Read more here (subscription required).
Senate Preparing to Move First on Budget Package Amid House Stalemate, The Hill
Senate Budget Committee Chair Lindsey Graham (R-SC) will brief Republican senators on Wednesday, February 5, about moving first on a budget resolution to lay the groundwork for a package focused on border security, energy, and defense that could pass the Senate with a simple majority while House Republicans remain deadlocked on how to move forward. Read more here.
Upcoming Government Contract Presentations
TRAINING: SBA Regulatory Updates, March 4, 2025, Isaias “Cy” Alba, IV
TRAINING: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, March 13, 2025, Katherine B. Burrows, Eric Valle
Upcoming REAs, Claims, and Appeals Presentations
PM WEBINAR: Navigating Executive Orders: Strategies for Managing Stop-Work Orders and Terminations, February 27, 2025, Lauren Brier
Judge Extends Pause on ‘Deferred-Resignation’ Offer, Defense One
A federal judge on Monday extended his order blocking the Trump administration from implementing Trump and Elon Musk’s controversial “deferred resignations” program, just hours before the new deadline for federal workers to accept the offer by Monday night. Read more here.
EPA Places 168 Environmental Justice Workers On Leave, Law360
Scores of U.S. Environmental Protection Agency workers who have been focused on environmental justice issues were placed on leave Thursday, in line with the Trump administration’s promise to largely abandon that area of work. Read more here (subscription required).
DIA, NGA Among Growing Number of Intel Agencies Offering Buyouts, NextGov/FCW
The Defense Intelligence Agency and the National Geospatial-Intelligence Agency offered their workforces a deferred resignation offer akin to a related offering recently sent to federal civilian agencies through the Office of Personnel Management, the spy agencies confirmed Wednesday. Read more here.
OPM Claims Agencies Can Ignore Union Telework Contracts, Government Executive
The Office of Personnel Management instructed agencies to unilaterally repudiate provisions in workforce collective bargaining agreements governing telework, citing a blanket assertion that such policies infringe on “management rights.” Read more here.
Trump’s Anti-DEI Efforts Damage National Security, Former Officials Say, NextGov/FCW
The rollback of diversity, equity, and inclusion initiatives weakens intelligence operations, erodes workforce morale, and limits the U.S. government’s ability to navigate global threats, former national security officials argue. Read more here.
Federal Judge Blocks USAID Leave Notices and Reinstates Workers, Government Executive
A federal judge in Washington, D.C., issued a temporary restraining order blocking the U.S. Agency for International Development from placing thousands of employees on administrative leave and hurriedly evacuating workers stationed overseas. The order also reinstates all employees placed on leave. Read more here.
VA Carves out Major Workforce Exemptions to OPM’s Deferred Resignation Offer, Federal News Network
The Department of Veterans Affairs is exempting large swaths of its more than 470,000-employee workforce from the Office of Personnel Management’s “deferred resignation” offer. Read more here.
Trump Administration Asks Agencies for Details on Low-performing Federal Employees, Federal News Network
The Trump administration is giving agencies a one-month deadline to hand over lists of federal employees with a less than “fully successful” performance rating. Read more here.
Agencies Ramp up Pressure on Their Workers to Quit, NextGov/FCW
New guidance continues to defend its deferred resignation program as legal, though it fails to address its apparent violation of the Anti-Deficiency Act. Agencies are again defending its legality and increasingly coaxing feds to take the deal. Read more here.
Air Force Keeps EEO Programs, Separating Them from DEIA Initiatives, Federal News Network
The Air Force is keeping its equal employment opportunity programs, stating in a new memo that these efforts are distinct from the service’s diversity, equity, inclusion, and accessibility programs, which have been rescinded by President Donald Trump’s executive orders. Read more here.
CFPB Workers File Grievance to Block Deferred Resignation Plan, Bloomberg Law
The union representing Consumer Financial Protection Bureau employees says that a deferred resignation proposal from the Office of Personnel Management is a violation of the law and their collective bargaining agreement. Read more here (subscription required).
Trump EOs Cast Doubt on Benefits for Transgender Federal Workers, Bloomberg Law
President Donald Trump’s rescission of executive orders protecting LGBTQ+ individuals in the federal workforce jeopardizes future coverage of gender-affirming care in federal health plans and sets up potential anti-discrimination legal battles. Read more here (subscription required).
US Labor Costs Rise From Year Earlier by Least Since 2021, Bloomberg News
US labor cost growth cooled in the fourth quarter from a year earlier, reassuring Federal Reserve policymakers that wage pressures are gradually diminishing and no longer a key driver of inflation. Read more here (subscription required).
Upcoming Labor & Employment Presentations
SEMINAR: Key Labor & Employment Rules, February 25, 2025, Nichole D. Atallah
CONFERENCE: Navigating HR Laws in the DMV Area: Your Must-Have Cheat Sheet (For Federal Contractors & More), February 25, 2025, Sarah L. Nash
TRAINING: Labor Rules & Regulations: Federal Market Compliance, February 26, 2025, Sarah L. Nash
PM WEBINAR: How to Comply with Trump’s Executive Order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, February 27, 2025, Nichole D. Atallah, Sarah L. Nash
Upcoming False Claims Act Presentations
PM WEBINAR: PilieroMazza Annual Review: What DOJ’s 2024 FCA Report Means for Government Contractors, February 26, 2025, Jacqueline K. Unger, Matthew E. Feinberg
CONSTRUCTION / LABOR & EMPLOYMENT
Department of Defense (DOD) Memorandum: Class Deviation, Waiver of Project Labor Agreement Requirements
On February 7, DOD issued a memorandum, effective immediately, banning contracting officers from using project labor agreements for large-scale construction projects.
Investor Urges US Steel To Dump Deal After Trump Comments, Law360
Activist investor Ancora Holdings Group on Monday urged U.S. Steel to abandon its proposed $14.9 billion merger with Japan’s Nippon Steel, stating that the deal has “no chance of being resurrected” in light of statements made by President Donald Trump on Friday. Read more here (subscription required).
Bipartisan Bill Requires Federal Contractors to Adopt Vulnerability Disclosure Policies, Modernize Cybersecurity Standards, Industrial Cyber
A bipartisan House bill has been reintroduced by Congresswoman Nancy Mace in an effort to close a critical loophole in federal cybersecurity standards. The bill would require the Office of Management and Budget (OMB) and the Department of Defense (DoD) to update federal acquisition policies to mandate all federal contractors, both civilian and defense, implement vulnerability disclosure policies (VDPs). Read more here.
CYBERSECURITY & DATA PRIVACY / LABOR & EMPLOYMENT
DEI Controversy Collides with State-level Cyber Workforce Needs, Route Fifty
Despite the federal government’s movement away from DEI practices, state agencies can still explore ways to broaden their cyber workforces to fill talent gaps. Read more here.
In Reversal, CISA Workforce Now Permitted to Take Deferred Resignation Offer, NextGov/FCW
Staff within the Cybersecurity and Infrastructure Security Agency are now permitted to take the Trump administration’s deferred resignation offer, reversing an exemption notice provided late last week saying CISA and other Department of Homeland Security bureaus would not qualify because of national security reasons. Read more here.
PRIVATE EQUITY & VENTURE CAPITAL
DeSantis Proposes Venture Capital Tax Credit, Gun Tax Holiday, Bloomberg Law
Florida Gov. Ron DeSantis’ 2025-26 budget plan would create a corporate tax credit to spur investments in science and innovation, repeal the sales tax on commercial real estate leases, and permanently extend the data center sales tax exemption. Read more here (subscription required).