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On January 20, 2025, President Trump issued an Executive Order titled Reevaluating and Realigning United States Foreign Aid, aimed at ensuring U.S. foreign assistance is “fully aligned” with the administration’s foreign policy goals. The Order called for an immediate 90-day pause on all foreign development assistance, applicable to all assistance funding for foreign countries, NGOs, international organizations, and federal contractors.

Consistent with that direction, on January 24, 2025, the State Department, in a communique to all U.S. diplomatic and consular posts, officially “pause[d] all new obligations of funding, pending a review, for foreign assistance programs funded by the Department and [the U.S. Agency for International Development (“USAID”)].” For existing foreign assistance awards, contracting officers and grant officers were directed to “immediately issue stop-work orders . . . until such time as the Secretary shall determine, following a review.” (The pause does not apply to foreign military financing to Israel and Egypt, or to emergency food assistance.) USAID country officers began issuing stop-work orders that same day. 

The State Department’s January 24, 2025 communique requires the contemplated review of all foreign assistance programs to be completed within 85 days—by April 19, 2025—resulting in a report “to be produced to the Secretary of State for his consideration and recommendation to the President.” To facilitate that review, by February 28, 2025, State Department officials—in consultation with the Office of Budget and Planning and the Office of Management and Budget—must develop “appropriate review standards” “to ensure that all foreign assistance is aligned with President Trump’s foreign policy agenda.” 

Neither the Executive Order nor the January 24, 2025 communique define or outline “President Trump’s foreign policy agenda.” But given President Trump’s longstanding skepticism of foreign assistance programs, coupled with the new administration’s efforts to cut government spending, contractors may find that even long-standing programs could be subject to significant streamlining. 

Contractors supporting State Department and USAID foreign assistance programs should follow these developments closely and anticipate myriad program-specific updates to be released in the coming weeks. And in response to forthcoming stop-work orders, contractors should document all costs incurred through the stop-work, as well as costs incurred to pause and/or wind down existing programs as may be necessary.

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Photo of Anuj Vohra Anuj Vohra

Anuj Vohra litigates high-stakes disputes on behalf of government contractors in federal and state court, and maintains an active bid protest practice before the U.S. Government Accountability Office and the U.S. Court of Federal Claims. He also assists clients with an array of…

Anuj Vohra litigates high-stakes disputes on behalf of government contractors in federal and state court, and maintains an active bid protest practice before the U.S. Government Accountability Office and the U.S. Court of Federal Claims. He also assists clients with an array of issues related to contract formation (including subcontracts and teaming agreements), regulatory compliance, internal and government-facing investigations, suspension and debarment, organizational conflicts of interest (“OCIs”), intellectual property and data rights, and the Freedom of Information Act (“FOIA”).

Prior to entering private practice, Anuj spent six years as a Trial Attorney in the U.S. Department of Justice’s Commercial Litigation Branch. At DOJ, he was a member of the Bid Protest Team—which handles the department’s largest and most complex protests—and served as lead counsel in dozens of matters representing the United States in commercial disputes before the U.S. Court of Appeals for the Federal Circuit, the Court of Federal Claims, and the U.S. Court of International Trade.

Photo of Issac Schabes Issac Schabes

Issac D. Schabes is an associate in the firm’s Washington, D.C. office, where he is a member of the Government Contracts Group.

Prior to joining the firm, Issac clerked for the Honorable Matthew H. Solomson on the U.S. Court of Federal Claims and…

Issac D. Schabes is an associate in the firm’s Washington, D.C. office, where he is a member of the Government Contracts Group.

Prior to joining the firm, Issac clerked for the Honorable Matthew H. Solomson on the U.S. Court of Federal Claims and the Honorable Robert N. McDonald on the Maryland Court of Appeals. Issac received his J.D., magna cum laude, from the University of Maryland Carey School of Law, where he graduated Order of the Coif and served as an executive editor for the Maryland Law Review. He received numerous awards, including the Judge Simon E. Sobeloff Prize for Excellence in Constitutional Law. During law school, Issac was a member of a low-income taxpayer clinic team that successfully appealed an IRS assessment resulting in a substantial tax liability reduction, and also interned for the Honorable Beryl A. Howell, Chief Judge, on the U.S. District Court for the District of Columbia and the Honorable Marvin J. Garbis on the U.S. District Court for the District of Maryland.