On February 26, 2025, a new executive order was issued aimed at restructuring federal grants and contracts to enhance transparency and accountability in government spending (See The Executive Order Here). While the order’s goal is efficiency, it introduces new administrative hurdles that may lead to delays in funding disbursements and increased scrutiny of existing and new awards.
For startups, small businesses, universities, and other organizations reliant on federal funding, these changes could have significant implications. Here’s what you need to know and how to prepare.
Key Changes in the Executive Order
- More Scrutiny on Payments – Each payment under a federal contract or grant now requires a written justification. This additional step may slow down disbursements, making it essential for recipients to maintain clear and well-documented financial records.
- Review of Existing Agreements – Agencies are conducting a 30-day review of ongoing contracts and grants to ensure compliance with the administration’s policies. Some agreements may be modified or even terminated, especially those linked to educational institutions and foreign partnerships.
- Delays in New Awards – Agencies are expected to take longer to issue new grants and contracts as they develop new compliance procedures.
- Increased Oversight on Agency Spending – Federal agencies are facing stricter rules on expenditures, including travel, credit cards, and real estate costs, which may indirectly affect funding recipients.
How to Prepare for These Changes
- Anticipate Delays and Adjust Plans Accordingly: Organizations seeking federal grants or contracts should plan for extended processing times. If funding is critical, consider seeking alternative non-dilutive funding sources to maintain cash flow while waiting for federal awards.
- Strengthen Documentation and Justifications: With an increased focus on payment justification, recipients should ensure that all expenses are well-documented. Develop detailed budgets, maintain comprehensive financial records, and be ready to provide strong justifications for grant expenditures.
- Review Existing Contracts and Grants: If you currently have a federal grant or contract, monitor communications from the awarding agency. If modifications or terminations are possible, be prepared with contingency plans.
- Stay Updated on Changing Compliance Requirements: As agencies roll out new administrative requirements, staying informed will be crucial. Monitor federal grant portals, attend agency webinars, and seek guidance from experts in federal funding compliance.
How E.B. Howard Consulting Can Guide You
At E.B. Howard Consulting, we specialize in helping organizations navigate the complexities of federal funding. Whether you need assistance preparing strong justifications for funding, identifying alternative funding sources, or ensuring compliance with changing policies, we are here to support you.
If you have questions about how these changes might affect your funding strategy, reach out to our team today.
Don’t let administrative hurdles slow your progress—let’s work together to keep your funding goals on track.
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We assist our clients in locating, applying for, and evaluating the outcomes of non-dilutive grant funding. We believe non-dilutive funding is a crucial tool for mitigating investment risks, and we are dedicated to guiding our clients through the entire process—from identifying the most suitable opportunities to submitting and managing grant applications.