Category: Grants and Cooperative Agreements

Where Grant Litigation Stands After the Supreme Court’s Jurisdictional Ruling in NIH

Dominique L. Casimir●

The Supreme Court issued a fractured, 4-1-4 ruling on its emergency docket in National Institutes of Health v. American Public Health Association, No. 25A103, 606 U.S. ____ (2025) (per curiam) (“NIH”) on August 21, 2025.

The Court’s ruling left behind a complex legal landscape, because four justices wrote that a district court has jurisdiction to hear both a challenge to agency guidance alleged to be arbitrary and capricious, and challenges to grant terminations based on that guidance. Four other justices wrote that the entire case (i.e., both the challenge to the agency guidance and the challenge to grant terminations based on that guidance) belongs in the Court of Federal Claims. In the end, the outcome was controlled by a single justice (Justice Barrett), who decided the jurisdictional issue in a manner inconsistent with the views of eight justices. In her controlling concurrence, Justice Barrett ruled that a district court has jurisdiction to hear a challenge to agency guidance, but lacks jurisdiction to hear challenges to grant terminations based on that guidance because grant termination challenges are subject to the Tucker Act and therefore belong in the Court of Federal Claims.

Two lower opinions handed down since NIH show lower courts falling in line with Justice Barrett’s ruling in NIH:

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Supreme Court Weighs in for a Second Time on Jurisdiction over Grant Termination Cases

Dominique L. Casimir and Sara N. Gerber ●

The Supreme Court recently ruled for the second time that federal district courts likely lack jurisdiction under the Administrative Procedure Act (“APA”) to hear challenges to terminations of federal grants. The first such ruling came in April of this year, when the Court granted an emergency stay in California v. Department of Education. On August 21, 2025, the Supreme Court issued another emergency stay, in NIH v. American Public Health Association, reaffirming the view that challenges to grant terminations are, in substance, breach of contract actions for money damages that belong in the Court of Federal Claims under the Tucker Act.

Since California, several lower courts have nevertheless asserted jurisdiction over grantee lawsuits seeking reinstatement of terminated grants, often distinguishing California on procedural or factual grounds. We have previously written about some of those cases (including Massachusetts v. Kennedy, which was later consolidated with NIH). Although the Supreme Court’s decision in NIH is an interim order, the jurisdictional question may now be functionally settled, particularly given Justice Gorsuch’s admonishment to lower courts that even if they “sometimes disagree with this Court’s decisions…they are never free to defy them. When this court issues a decision, it constitutes a precedent that commands respect in lower courts.” Following NIH, we expect terminated grantees will largely be forced into the Court of Federal Claims, which generally does not have authority under the Tucker Act to grant the equitable relief—reinstatement of grants—that many of them are seeking.

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Trump Administration Increases Oversight of Federal Grants

Dominique L. Casimir and Shane M. Hannon ●

President Trump issued an Executive Order (“EO”) on August 7 that overhauls the federal grantmaking process. Titled “Improving Oversight of Federal Grantmaking,” the EO identifies deficiencies in the federal government’s current approach to issuing discretionary grants. The EO criticizes some existing federal grants as an “offensive waste of tax dollars” and promoting “anti-American ideologies,” and contends grants have been issued to “organizations that actively work against American interests abroad.” It also identifies defects in the grant approval process, noting that drafting grant applications is “notoriously complex” and therefore too costly for smaller institutions. The EO seeks to align federal grants with the Administration’s policy preferences and give the Administration greater control to select grant recipients. Here are the relevant highlights and takeaways:

The EO expands the federal government’s ability to terminate grants.

A core feature of the EO is requiring all discretionary grants, current and future, to include termination for convenience clauses. Discretionary grants are those where an agency exercises its own judgment to select both the funding amount and the grantee, such as by basing award on the merits of grant applications via a competitive process. Historically, discretionary grants have not included termination for convenience clauses. For example, the Uniform Guidance, 2 C.F.R. § 200, does not include a provision that permits the federal government to terminate a discretionary grant at its leisure. This is in contrast to typical federal contracts, which invariably include termination for convenience provisions, such as FAR 52.249-2.

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Webinar: Impacts on Government Contractors: 180 Days of the Trump Administration—Quick Hits on Executive Orders, Actions, and Policies

Blank Rome-Hosted Live Webinar
July 29, 2025
12:00–1:00 p.m. EDT | 9:00–10:00 a.m. PDT


Please join Blank Rome Government Contracts attorneys Justin A. Chiarodo, Dominique L. Casimir, Robyn N. Burrows, and Sara N. Gerber for this timely webinar with key updates for government contractors navigating the first 180 days of the Trump Administration, and the days ahead.

Topics include:

  • Civil rights enforcement / diversity, equity, and inclusion
  • Federal Acquisition Regulation update
  • Contract and grant terminations 

This session is part of Blank Rome’s summer live webinar series 180 Days of the Trump Administration—Quick Hits on Executive Orders, Actions, and Policies (ending on Wednesday, August, 13, 2025), where our interdisciplinary Trump Administration Resource Team is unpacking the most pressing legal, regulatory, and policy developments from the Trump administration’s first 180 days.

Click here to register for the July 29 government contractor session and for any future sessions: Summer 2025- Trump 180 Day Webinar Series | RSVP Blank.

You may also view any past sessions on demand here: On-Demand Webinar Series: 180 Days of the Trump Administration.

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 ●

Jennifer A. Short headshot image

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.

A Roadmap for Terminations for Convenience in the DOGE-Era

Elizabeth N. Jochum, Robyn N. Burrows, and Sara N. Gerber ●


The Department of Government Efficiency’s (“DOGE”) scrutiny of federal contracts has resulted in a spike in notices of termination for convenience. Given DOGE’s broad mandate to reduce federal spending, we expect a sustained increase in the use of terminations for convenience to end contracts the administration considers “wasteful” or not aligned with its priorities.

But while termination notices make one thing clear—the contract is over—it can leave contractors with questions about their rights and obligations.

What Is a Termination for Convenience and Can I Challenge It?

The right to terminate for convenience is included expressly in almost all government contracts—and is generally considered to be a government right even when not expressly included.[1] Terminations for convenience allow the federal government to unilaterally end a contract (or a portion of a contract) immediately and without alleging contractor fault. The government typically invokes a termination for convenience after determining the contract is no longer in its best interests, and this can occur for a wide variety of reasons, such as budget cuts, or changes in government priorities or project requirements. Typically, the government does not explain why it is terminating a contract for convenience.

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Fixed Price Contracts: Government Contractors Beware

Merle M. DeLancey, Jr. ●

Many predict that, among other procurement and regulatory reforms, the new administration will implement policies favoring the award of fixed-price government contracts and grants. Throughout the years, the procurement pendulum has swung back and forth in favor of and against fixed-price contracting. For example, in 2017, the Department of Defense (“DoD”) implemented a preference for fixed-price contracting and required approval of cost-reimbursement contracts in excess of $25 million by the head of the contracting agency. In 2022, DoD reversed course and removed both the preference and approval requirement. 

For taxpayers, fixed-price contracting may seem appealing; however, for government contractors, fixed-price contracts present significant risk. Fixed-price contracting is often criticized because it deprives the government from receiving the best solutions and performance and instead results in awards to the lowest price, technically acceptable offeror. The federal government typically prefers fixed-price contracts because of budget and funding certainty, and because a fixed-price contract assigns all performance risk to the contractor. 

Absent actual or constructive changes to the contract requirements, a contractor generally is not entitled to a cost or price increase under a fixed-price contract. This applies to large and small business contractors. A large government contractor recently reported it will recognize a significant loss on fixed-price space and defense programs, which already caused the company years of losses, due to issues such as increased production costs and disruptions from a recent strike. However, the impact on small businesses that cannot absorb the level of losses of a large business can have much more dire consequences. 

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What Contractors Facing Terminations, Stop-Work Orders, and Suspension of Work Orders Directed by the Trump Administration Need to Know

Stephanie M. Harden, Jennifer A. Short, Justin A. Chiarodo, Shane M. Hannon, and Amanda C. DeLaPerriere ●

The Trump administration’s directives to “pause” grant funding and to terminate certain grants and contracts sent shock waves through the government contracts and non-profit sectors. Although the “pause” in grant funding has been temporarily halted by a federal court (as of January 28), other terminations and suspensions have not been blocked. We summarize below the steps entities can take to preserve their rights as they navigate these emerging directives.

But First: What Happened? 

Immediately after his inauguration on January 20, President Trump began ordering federal agencies to pause funding for certain projects or initiatives. A January 20 Executive Order (“EO”) titled “Unleashing American Energy” encouraged energy exploration and production and eliminated electric vehicle mandates. It directed agencies to “immediately pause” all disbursements under the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act.

Another EO titled “Ending Radical and Wasteful Government DEI Programs and Preferencing” directed the Office of Management and Budget to terminate DEI programs (see our prior analysis of this EO here). Consequently, the new Department of Government Efficiency announced on January 24 that approximately $420 million in current or impending contracts, most of which related to DEI programs, were cancelled.

Consistent with these orders, the Office of Management and Budget (“OMB”) on January 27 directed federal agencies to pause, as of January 28 at 5:00 PM ET, all payments and obligations to disburse any federal financial assistance, including financial assistance for nongovernmental organizations. The two-page OMB policy memo stated that the paused programs will be assessed to determine whether they are consistent with the administration’s new policy objectives. This directive has led to widespread chaos, prompting the administration to issue additional guidance on January 28 regarding the scope and purpose of the January 27 funding freeze. The freeze on grant funding was then temporarily halted by a federal district court later in the day.

Federal contractors performing contracts or projects subject to these EOs or OMB instructions have or likely will soon receive stop work orders or, in some cases, notices that the government is terminating for convenience. A “suspension of work” or “stop-work” order pauses performance for a period of time, after which the government may decide either to resume performance or terminate the contract. A notice of termination for convenience, as its name suggests, is the mechanism by which the government unilaterally terminates the contract as of right.

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What Is “Knowing” under the FCA? Supreme Court to Consider Impact of Ambiguous Regulations

Jennifer A. Short, Bridget Mayer Briggs, and Tjasse L. Fritz ●

Jennifer A. Short headshot image
Bridget Mayer Briggs headshot image
Tjasse L. Fritz headshot image

A successful False Claims Act (“FCA”) claim must show that the defendant submitted a false claim or statement “knowingly.” The “knowing” element—the scienter prong—depends on whether the defendant actually knew that the claim or statement was incorrect, or recklessly disregarded the facts or legal requirements that rendered the claim “false.” But, of course, government regulations, contract terms, and grant requirements can be incredibly complex and difficult to understand. When the ground rules are unclear, how does a company “know” that its claims for payment may be false under the FCA?

What does the FCA say about “knowing”?

The FCA defines “knowing” as (1) having “actual knowledge of the information;” (2) acting “in deliberate ignorance of the truth or falsity of the information;” or (3) acting “in reckless disregard of the truth or falsity of the information.” 31 U.S.C. § 3729(b). A “specific intent to defraud” is not required for liability under the FCA. 

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New White House Guidance Details Infrastructure Spending Priorities 

Brian S. Gocial

With the passage of the Infrastructure Investment and Jobs Act (“IIJA”), America is preparing for a flood of infrastructure spending not seen since the New Deal. Indeed, the IIJA allocates funding to over 350 distinct programs across more than a dozen federal departments and agencies. Attention now turns to the federal agencies, and state and local officials who are responsible for implementing these new programs. To that end, the Biden administration recently released A Guidebook to the Bipartisan Infrastructure Law for State, Local, Tribal, and Territorial Governments, and Other Partners to assist state, local, and tribal leaders to “know what to apply for, who to contact, and how to get ready to rebuild.”

Notably this is only the first version of this guidance and interested parties should continue to monitor the guidance in the coming weeks to stay up to date on the latest deadlines and details. In addition, the Biden administration released an accompanying data file on Build.gov that allows users to quickly sort programs funded under the law by fields like agency, amount, eligible recipient, or program name.

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