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Last week, President Donald Trump told the Federal Agencies to stop the funding of the Investment and Infrastructure jobs and the Infrastructure Law, and the inflation reduction law, including the money that the Congress already authorized. The movement has launched climate and infrastructure projects in various stages of development towards uncertainty, as its agenda on federal government contracts and aid continues to evolve rapidly.
Trump on January 20 ”Undo the American energy“The order to pause and review financing processes has” important implications for the implementation of IIJA and anger, “according to Washington, the DC, Crowell -based law firm, and Crowell, and can lead to project delays, endings and broader economic uncertainty.
Its accurate implications may not be completely understood for months, “ and this uncertainty is likely to interrupt infrastructure projects and give rise to claims, ” according to an alert Crowell Partners shared with customers on Monday.
“Whether the pause is temporary or becoming permanent, this action could stop billions of dollars in funding forced for infrastructure projects that are already underway, including those already under construction,” according to Crowell.
Another important announcement this week around funding has made more confusion. An internal Monday Memory of the Office of Management and Budget He paused for all federal grants and loans, from 5 pm on Tuesday. Federal agencies must temporarily stop funding activities and agency that may be involved by executive orders, “including, but without limiting, financial assistance for foreign aid, non -governmental organizations. , Dei, gender ideology and the new green agreement, “according to the new agreement,” according to the note.
Non -profit groups and a small business organization have already filed a lawsuit that challenged the board and asked a judge to temporarily block the freezing of funding, CNBC reported. In addition, New York, California, Illinois, Massachusetts, New Jersey and Rhode Island lawyers planned an announcement related to the funding break this afternoon.
There are many open questions about the scope and effects of Trump’s orders and how they will be implemented, but it is clear that they will affect the contractual rights and other legal rights of federal contractors, said Daniel Ramish, a member of the law firm with law firm. Headquarters in Dallas, Haynes Boone, he said. in an email.
“This will have a wide effect on federal contracts, grants and other attendance agreements in the specified areas and will take a long time,” according to Ramish. “Contractors and assistance recipients must closely follow these rapid movement actions and consider how their awards can be affected.”
Orders and clarifications
Section 7 of the Order of North -American Energy of Trump runs the federal agencies to stop all disbursements under the two laws while “reviewing their processes, policies and programs for issuing grants, loans, contracts Or any other financial disbursement of these appropriate funds for consistency with the law. ”
The writing of the order was not clear to many, which caused the Management and Budget Office to broadcast on January 21. Memory that limits the directive In the programs Trump has called part of a “new green agreement” in Section 2 and said that “the heads of the agency can pay the funds as they consider necessary after consulting – [OBM]. “”
However, Section 2 of the North -American Energy Order does not discreetly lists the portions of the two laws for which they should pause. Rather, he uses a broad language to direct the actions of the agency, touching issues such as energy exploration, minerals without fuel, the protection of economic and national security and “eliminating the term of electric vehicle”.
Section 7 specifically funds to build EV charging stations, such as the Discretionary Subsidies Program of $ 2.5 billion and the Discretionary Subsidies Program of Infrastructure and the National Formula of Electric Vehicle National Formula 5 billion. of dollars.
According to Ramish, the provisions of Trump’s executive orders will meet legal challenges in the coming months.
Project Freeze Scope is still unclear
Even with the clarification mark of January 21, the scope of the North -American Energy Directive of Trump is unclear if it is limited to certain types of infrastructure expressly identified in the order, or More widely on all projects funded by IIJA and IRA, according to Crowell.
“While the shade is [Jan. 21] The statement suggests that the executive order will only affect the financing of what it calls projects “New Deal Green”, neither the Shadow nor the executive order will clearly define the characteristics of these projects, leaving open to interpretation of whether projects of roads and bridges, broadband and other traditional infrastructures could be affected, at least in part, “according to Crowell.
From December, 294 billion dollars on Fund IIja remained unpudned. Although some experts expected the Trump administration to stop the expense that federal agencies do not yet have to waste, the executive order makes it clear if the Freeze will also cover the expense that is legally committed under contractaccording to an article by Canary Media.
In fact, Trump and the Director of the Shadow, Russell Vough, have argued that the The President has an expansive power to cancel According to Forbes, expenditure authorized by congresses, a movement known as imposing. This goes against the predominant interpretation of federal law: that presidents cannot unilaterally cancel the congressional funds.
Although at this time, Trump’s first term and his executive orders issued during the last week offer some clues to what federal contractors can expect, according to Ramish. Historically, Trump emphasized efficiency and accountability oriented to results in federal aid, and his administration has indicated that he intends to implement favorable policies in the American industry and to carry out a deregulatory agenda.
It Provisions of the triggered of north -American energy The order “aimed at the regulatory process of the Law of National Environmental Policy (NEPA), including the termination of the NEPA Regulation, is a early example of that agenda, which can benefit federal construction projects,” said Ramish. .
However, in some cases, contracts or aid may be terminated if they are not aligned with the priorities of the new administration, Ramish said.
Regardless of how orders end up shaking, any interruption of funding could have immediate effects on contractors and suppliers engaged in infrastructure projects funded by the IIJA and IRA, according to Crowell.
“Caixa flow interruptions to these projects will lead to uncertainty and increase several potential impacts”, including Crowell, including project delays and cancellations, various legal and contractual issues and continuous payment obligations despite the freezing of funding.
