Author: Blank Rome LLP

The Bottom Line: Cost and Pricing Updates | Act of God or Compensable Delay?

Stephanie M. Harden ●

Welcome to The Bottom Line: Cost and Pricing Updates, a new series covering what contractors should know about recent cost and pricing disputes—without the long read!

For our inaugural post, we present:

Appeal of Gideon Contracting, LLC, ASBCA No. 63561 (May 12, 2025)

The Bottom Line: When the Government orders a suspension of work due to an “act of God,” it may still be on the hook for the resulting increased costs under the Suspension of Work clause if it proximately causes an unreasonable delay. Here, the Government proximately caused the delay at issue through its management of water drainage through a lake and dam, including through controlled releases of water, and the Armed Services Board of Contract Appeals (“ASBCA” or “the Board”) found a portion of the delay to be unreasonable.

Key points of interest:

  • Generally, “acts of God” entitle contractors to additional time, but not additional compensation. However, the distinguishing feature entitling Gideon to additional compensation here was that the Government controlled the release of floodwaters via a drainage management system. Thus, the flooding was not caused solely by rainfall, as the Government argued, but rather, by the Government’s release of floodwater.
  • Gideon was not entitled to damages for the entire suspension period, however, because the contract specified when and how water releases would occur. Therefore, Gideon was only entitled to compensation for portions of the suspension that were found to be “unreasonable” (or as described by the Board, inexplicable).

Contractors facing suspensions of work should carefully evaluate whether their contracts may entitle them to relief where at least a portion of such suspensions are “unreasonable.”

Blank Rome’s Government Contracts Practice and Attorneys Highly Ranked in Chambers USA 2025

Blank Rome’s Government Contracts practice was ranked in Band 2 in Government Contracts: The Elite, USA in the Chambers USA 2025 rankings, placing our team among the top 10 law firms in the nationwide rankings.

Chambers quoted a government contracts reference as saying that “The firm has specialized expertise as well as a broader perspective on the issues at play.”

Chambers USA included four of our attorneys in their 2025 Government Contracts rankings: Dominique L. Casimir, Justin A. Chiarodo, Elizabeth N. Jochum, and Luke W. Meier, with Elizabeth receiving an additional ranking for “Government Contracts: Bid Protests.”

To view all of Blank Rome’s Chambers USA 2025 rankings, please visit our website.

Department of Justice Announces New Initiative to Combat Civil Rights Fraud Using the False Claims Act

Dominique L. Casimir, Jennifer A. Short, and Brooke T. Iley ●


From time to time, the Department of Justice (“DOJ”) has established initiatives, task forces, or strike teams to advance its enforcement priorities. In recent years, DOJ has announced a Procurement Collusion Strike Force, a COVID-19 Fraud Enforcement Task Force, and a Civil Cyber-Fraud Initiative, in each instance explicitly invoking a plan to use the False Claims Act (“FCA”) for civil enforcement. 

DOJ announced the latest version of this enforcement approach on May 19, 2025, when Deputy Attorney General Todd Blanche issued a memorandum announcing a new Civil Rights Fraud Initiative (“the Initiative”), described as a coordinated and “vigorous” effort to leverage the specter of FCA liability against recipients of federal funding alleged to be violating civil rights laws. The types of alleged civil rights violations targeted by this Initiative relate to diversity, equity, and inclusion (“DEI”) programs, antisemitism, and transgender policy, all of which dovetail with a number of Executive Orders (“EOs”) expressing President Trump’s approach to these issues.

Relevant Executive Orders

Some of the EOs relevant to the Civil Rights Fraud Initiative include:

EO No. 14151: Ending Radical and Wasteful Government DEI Programs and Preferencing (January 20, 2025). This EO directs federal government agencies to end DEI and diversity, equity, inclusion, and accessibility (“DEIA”) programs, to eliminate positions such as “Chief Diversity Officer,” and to terminate grants and contracts related to DEI and DEIA. It also orders a review of federal employment practices to ensure they focus on individual merit rather than DEI factors.

EO No. 14168: Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (January 20, 2025). This EO declares, as United States’ policy, that there are two immutable sexes (male and female), based on biological reality. It requires changes to government-issued identification documents and prohibits federal funding for so-called “gender ideology.”

EO No. 14173: Ending Illegal Discrimination and Restoring Merit-Based Opportunity (January 21, 2025). This EO requires that all federal contracts and grants include a certification that recipients do not operate any DEI programs that violate applicable antidiscrimination laws and affirms that compliance with federal anti-discrimination laws is material to government payment decisions. Additionally, the EO directs DOJ to identify key sectors and entities for DEI-related enforcement, and to recommend strategies to end “illegal DEI discrimination” in the private sector.

EO No. 14188: Additional Measures To Combat Anti-Semitism (January 29, 2025). This EO reaffirms EO 13899 from December 11, 2019, which aimed to combat antisemitism, particularly in educational institutions. It directs various federal agencies to identify actions to curb antisemitism and recommends monitoring foreign students and staff for antisemitic actions.

EO No. 14201: Keeping Men Out of Women’s Sports (February 5, 2025). This EO aims to exclude transgender individuals from competing in women’s sports. It directs the Secretary of Education to rescind funding from educational institutions that do not comply.

Read the full client alert on our website.

Disagreeing with the Supreme Court, the Ninth Circuit and Two District Courts Find APA Jurisdiction in Challenges to Federal Contract and Grant Terminations

Dominique L. Casimir and Sara N. Gerber ●

One of the immediate priorities of the second Trump administration has been the termination of a slew of federal contracts and grants. This, predictably, has led to litigation, mostly filed in the U.S. District Courts, which as we have previously written, have authority to grant equitable relief. The government has been arguing that these cases belong in the U.S. Court of Federal Claims, where only monetary damages are available (and only upon meeting the high burden of establishing that the government acted in bad faith). On April 4, 2025, the Supreme Court issued an emergency stay of a District Court’s preliminary injunction in a case challenging grant terminations, with the five-justice majority suggesting that the termination case belonged in the Court of Federal Claims. But since then, two U.S. District Courts and the Ninth Circuit Court of Appeals have ruled—contrary to the Supreme Court’s emergency stay order—that there is indeed district court jurisdiction in cases challenging contract and grant terminations. As Judge Young of the District Court of Massachusetts stated, “…this Court, after careful reflection, finds itself in the somewhat awkward position of agreeing with the Supreme Court dissenters and considering itself bound by the still authoritative decision of the Court of Appeals of the First Circuit…” which ruled that the Tucker Act did not apply, and that the government’s actions were reviewable under the Administrative Procedures Act (“APA”).

Continue reading “Disagreeing with the Supreme Court, the Ninth Circuit and Two District Courts Find APA Jurisdiction in Challenges to Federal Contract and Grant Terminations”

An Update on the DEI Certification Provision of Executive Order 14173

Dominique L. Casimir ●

On May 2, 2025, the United States District Court for the District of Columbia denied Plaintiffs’ Motion for a Preliminary Injunction in National Urban League et al. v. Trump, et al., 25-471, a case that seeks to halt enforcement of President Trump’s executive orders (“EOs”) related to diversity, equity, and inclusion (“DEI”), EO 14151 and EO 14173, as well as EO 14168, regarding so-called “Gender Ideology.” At this point two tribunals have ruled that the DEI-related EOs should not be enjoined pending legal challenges. (The other tribunal to take this position is the U.S. Court of Appeals for the Fourth Circuit which stayed a nationwide preliminary injunction of the DEI-related EOs issued by the District Court of Maryland.)

Government contractors are particularly interested in the DEI Certification provision in Section 3(b)(iv)(A) and (B) of EO 14173, which requires each agency of the government to include two terms in every contract or grant award: one requiring the counterparty “to certify that it does not operate any programs promoting DEI that violate any applicable Federal antidiscrimination laws,” and another requiring it to agree that compliance with those laws “is material to the government’s payment decisions for purposes of” the False Claims Act (“FCA”), 31 U.S.C. § 3729(b)(4). (We have previously done a deep dive on FCA liability premised on DEI programs.)

Continue reading “An Update on the DEI Certification Provision of Executive Order 14173”

Hybrid Event: Export Controls Amid Evolving Trump 2.0 Trade Dynamics: Policy Updates and Best Practices

April 29, 2025
12:00–2:00 p.m.
McLean, Virginia, or online

Blank Rome partners Anthony Rapa, partner & co-chair of the International Trade group, and Justin A. Chiarodo, partner & co-chair of the Government Contracts group, will join Sol Brody (Vice President, International Trade Licensing & Sanctions, BAE Systems, Inc.) to present the Association of Corporate Counsel National Capital Region’s (“ACC NCR”) hybrid event, “Export Controls Amid Evolving Trump 2.0 Trade Dynamics: Policy Updates and Best Practices,” on Tuesday, April 29, 2025. The event will be held from 12:00 to 2:00 p.m. in McLean, Virginia, with a virtual participation option available.

ABOUT THE PROGRAM

This hybrid (in-person and online) program will cover up-to-the minute developments in the export controls landscape, one of the linchpins of the Trump administration’s national security strategy and “America First” trade policy. This will include the latest regarding semiconductor export controls, controls relating to emerging technologies, China-focused restrictions, anticipated Russia-related developments, ramped-up government enforcement, and best practices in an ever-changing environment.

For more information and to register, please visit the registration page and select the “Speaker/Panelist” registration option to register for free.

Changes to Civil Rights Enforcement: New Executive Order Eliminates Disparate-Impact Liability in Federal Regulations

Dominique L. Casimir and Brooke T. Iley ●

On April 23, 2025, the President issued an Executive Order (“EO”) titled “Restoring Equality of Opportunity and Meritocracy” that seeks to drastically curtail the use of disparate-impact liability in federal regulations, marking a significant shift in the federal government’s approach to civil rights enforcement. What does this mean for companies going forward?

Background

Let’s start with a review of disparate-impact liability under civil rights laws. This concept refers to practices or policies that, while seemingly neutral, disproportionately affect members of a protected class. This type of liability does not require proof of intentional discrimination; instead, it focuses on the outcomes of the policies or practices.

For example, under Title VII of the Civil Rights Act of 1964, disparate-impact liability occurs when an employment practice adversely affects one group more than another, even if the practice appears neutral. If a plaintiff can show that a policy has a disproportionately negative effect on a protected class, the burden shifts to the defendant to demonstrate that the practice is job-related and consistent with business necessity. Disparate-impact liability is also recognized under several other federal and state civil rights laws.

The EO asserts that the foundational principle of the United States is equality of opportunity, not equality of outcomes. The EO criticizes disparate-impact liability as a “pernicious movement” that, in the administration’s view, undermines meritocracy and the constitutional guarantee of equal protection. Disparate-impact liability, as described in the EO, is a legal doctrine that presumes unlawful discrimination based solely on statistical differences in outcomes among groups, even absent any discriminatory intent or facially discriminatory policy. The EO contends that this doctrine compels employers and businesses to consider race or other protected characteristics in decision-making, thereby encouraging racial balancing and undermining individual merit.

Read the full client alert on our website.

Defense Contractors’ Restrictions When Contracting with Chinese Companies

Merle M. DeLancey, Jr. and Oliver E. Jury ●

In the current economic climate, the obvious focus of many companies is on the administration’s imposition of tariffs. However, government contractors, especially those contracting with the U.S. Department of Defense (“DoD”), must not lose sight of their current and potential future direct and indirect relationships with certain Chinese entities.

Contractors’ compliance obligations regarding relationships with Chinese entities flow from:

  • FAR 52.204-25 (Section 889 of the 2019 National Defense Authorization Act (“NDAA”)), and
     
  • The Chinese Military Companies (“CMC”) List (Section 1260H of the 2021 NDAA) (also known as the “1260H List”).
Continue reading “Defense Contractors’ Restrictions When Contracting with Chinese Companies”

Rescission of Regulations Without Notice and Comment? What’s Next for Regulated Industries in the Deregulation Climate

Dominique L. Casimir and Christina Manfredi McKinley ●

We previously wrote about President Trump’s February Executive Order identifying deregulation as a top administration priority (here and here). That Executive Order, 14219 (the “Deregulation EO”), directed all executive departments and agencies to identify regulations falling within certain enumerated categories of regulations. More recently, on April 9, 2025, the President issued a memorandum providing further direction to executive departments and agencies regarding implementation of the Deregulation EO (available here). This memorandum addresses how the President envisions that Executive Branch agencies will go about rescinding regulations. And—spoiler alert—the vision for rescinding regulations is a departure from the typical notice-and-comment process. 

The Specifics

Emphasizing adherence to recent Supreme Court decisions and the use of the “good cause” exception in the Administrative Procedure Act for expedited rulemaking (that is, rulemaking/rescission without the constraints of notice and comment), the memorandum instructs agencies, first, as part of the review-and-repeal efforts required by the Deregulation EO, to assess each existing regulation’s lawfulness under the following United States Supreme Court decisions:

  1. Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024);
  2. West Virginia v. EPA, 597 U.S. 697 (2022);
  3. SEC v. Jarkesy, 603 U.S. 109 (2024);
  4. Michigan v. EPA, 576 U.S. 743 (2015);
  5. Sackett v. EPA, 598 U.S. 651 (2023);
  6. Ohio v. EPA, 603 U.S. 279 (2024);
  7. Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021);
  8. Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023);
  9. Carson v. Makin, 596 U.S. 767 (2022); and
  10. Roman Cath. Diocese of Brooklyn v. Cuomo, 592 U.S. 14 (2020). 

Read the full client alert on our website.

Supreme Court Lifts Restraining Order on Grant Terminations

Dominique L. Casimir and Sara N. Gerber ●

The Supreme Court recently issued a ruling with significant impacts for federal contractors and grantees looking to challenge terminations of their contracts and grants in U.S. district courts. Terminated contractors and grantees may strongly prefer to challenge terminations in the district courts rather than in the Court of Federal Claims, because the Court of Federal Claims does not have authority to grant equitable relief to do things like restore funding or enjoin terminations, and the available grounds for challenging contract and grant terminations in the Court of Federal Claims are significantly limited.

In February 2025, the Department of Education (“DOE”) terminated $600 million in grants for teacher training on the grounds that the training included diversity, equity, and inclusion (“DEI”) concepts and thus no longer effectuated DOE priorities. The grantees challenged these terminations in a lawsuit filed in the U.S. District Court for the District of Massachusetts. The District Court issued a Temporary Restraining Order (“TRO”) directing DOE to restore the terminated grant funding. DOE asked the First Circuit to stay the TRO pending appeal, which the First Circuit denied. DOE then filed an emergency appeal to the U.S. Supreme Court, where a majority of the justices sided with DOE.

Continue reading “Supreme Court Lifts Restraining Order on Grant Terminations”
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