For Situational Awareness only at this time. Stay tuned for further information.

The Office of Management and Budget (OMB) has proposed a wide-ranging rule aimed at reworking the federal funding award process for local governments, organizations, and institutions. Building on previous executive orders, specifically Executive Order 14332, “Improving Oversight of Federal Grantmaking", the regulation would allow federal agencies to terminate grants when the award no longer advances Federal agency priorities or the national interest, or withhold funds from organizations promoting specific diversity concepts while placing greater emphasis on political appointees’ roles in the grantmaking process.

The administration is providing a 45-day comment period on the rule, which is expected to be published in the Federal Register on Friday, and is aiming to issue a final rule by October 1. The October date would allow the federal government to determine what requirements FY27 awards are subject to.

OMB Director Russ Vought is likely to testify before the House Appropriations Committee this summer, where he is expected to receive questions about the proposed rule.