Stop-Work Order on US Foreign Aid

You will be aware of the Stop-Work Order issued by the Trump administration. This directive effectively puts an immediate sweeping freeze on US foreign aid worldwide.

It is a 90 day pause in disbursements of foreign aid for existing grants and contracts and an immediate pause on new foreign aid spending. A review will follow to ensure that foreign assistance is aligned with the administration’s foreign policy agenda. This will then lead to decisions on continuation, modification or termination of programmes. There is a waiver process for a limited number of situations.

Some agencies may have received the Order from their Officer or Prime and some may not have but this will nevertheless potentially apply to all agencies receiving US federal funding (grants or contracts) from State Department and USAID. There is a risk of this being extended to other departments. We understand that a suspension of award clause was inserted into some agreements that allows this extension or termination clauses are being used.

It may be obvious but for the avoidance of doubt, a Stop-Work Order, means stop. We understand that this may extend to submitting new proposals or submitting reports and this may lead to a challenge of not meeting deadlines for submissions and then being timed out; so the general advice is to go ahead and submit but understand that you may not be able to recover costs/time spent on submissions, which may not be ‘started’ later.

Steps to consider

There is not much information available at the moment and there is a great deal of uncertainty. It is therefore imperative for those agencies in receipt of US funding:

• to ascertain their exposure and consider their obligations (contractual and moral) to employees, contractors and third parties
• review your agreements and understand what your rights are
• consider how you can comply with the order and minimise costs: where possible do not spend
• do a review of your cashflows and an analysis of the impact
• scenario plan
• communicate with your Prime or your sub-recipients
• communicate internally as applicable.

The challenge with continuing work without the USAID funding may be around recovering costs incurred or putting a case for continuation if you have been able to fund it from other sources.

Learn more about the U.S. foreign aid realignment under the President's Executive Order here.

We will let you know if we have more information in due course.