Trump Executive Order Calls for Sweeping Review of Government Contracts

Source:PERKINSCOIE

On February 26, 2025, President Trump issued an Executive Order (EO) calling for a sweeping review of government contracts over the next 30 days and directing that contracts be terminated or modified to reduce overall federal spending or reallocate spending to promote efficiency and “advance the policies” of the administration.

The EO also directs agencies to adopt systems to track, justify, and publicize “every payment” under government contracts and grants. The EO carves out narrow exceptions for certain types of contracts, including contracts related to the “military.”

The EO—titled “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative”—will set in motion a series of steps across the federal government with a direct and immediate impact on large swaths of the government contracting industry. Heads of procuring agencies are tasked with undertaking significant steps in coordination with the Department of Government Efficiency (DOGE). Numerous questions remain as to the implications of the 30-day review and its implementation, including the EO’s call for a new system for tracking payments to contractors. Contractors should be prepared for potential terminations and changes and be mindful of their contractual remedies.

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