Last verified: August 16, 2026. This page tracks a genuinely fast-moving regulatory situation. The executive order itself is settled text (signed and published in 2025); everything downstream of it — OMB’s proposed rewrite of 2 CFR Part 200 and NSF’s draft replacement for the PAPPG — is still in progress and could change. Status flags are noted throughout; check the linked CASRAI tracking posts for the latest before relying on any date here.
TL;DR
- Executive Order 14332, “Improving Oversight of Federal Grantmaking,” was signed August 7, 2025, and published in the Federal Register August 12, 2025 (90 FR 38929, document 2025-15344). It is not a 2026 order — but its directives to OMB are the direct cause of two major 2026 developments research administrators are currently tracking.
- It directs agencies to add internal review layers before issuing discretionary grants, and directs the OMB Director to revise the Uniform Guidance (2 CFR Part 200) to (a) require termination-for-convenience language in discretionary awards and (b) limit the use of grant funds for facilities-and-administration (F&A/indirect) costs.
- That directive is why OMB published a 400-plus-page proposed rewrite of 2 CFR Part 200 in May 2026, and why NSF deferred its usual annual PAPPG revision in favor of a from-scratch draft replacement policy.
- None of the downstream regulatory changes are final. The OMB rewrite is a proposed rule with a closed comment period and no final text; a Senate-passed funding bill would bar OMB from finalizing it until December, but that bill has not been reconciled with the House’s competing version.
What Executive Order 14332 Actually Says
Executive Order 14332 is a short, seven-section order. Read it in full at the Federal Register (90 FR 38929) rather than relying on a summary for anything load-bearing. Its structure:
Section 1 — Purpose
The order’s stated rationale is that federal grantmaking has funded activity the administration considers wasteful, ideologically driven, or insufficiently scrutinized for scientific rigor and reproducibility, and that the grant-application and review process disadvantages applicants without legal/technical resources to navigate it. It states a goal of strengthening oversight, coordination, and accountability across agency grantmaking.
Section 2 — Definitions
Notably, the order defines “agency” to mean any entity with statutory authority to award, offer, or manage federal grants (excluding the Executive Office of the President) — so its reach is not limited to a named list of departments, it applies wherever grantmaking authority exists. It defines “discretionary award” by cross-reference to 2 CFR 200.1, explicitly excluding formula grants, entitlement programs, and disaster-recovery grants. “Grant” is defined to include grant agreements, cooperative agreements, and similar financial assistance, including foreign assistance awards.
Section 3 — Strengthening Accountability for Agency Grantmaking
Each agency head must designate a senior appointee (a presidential appointee, non-career SES member, or Schedule C/SL/ST employee) responsible for a new review process covering funding opportunity announcements and discretionary awards. That review must incorporate, at minimum: senior-appointee approval of funding announcements; continued OMB coordination; subject-matter-expert review; plain-language requirements review; interagency deduplication checks; and, for scientific research grants specifically, review by at least one subject-matter expert who may sit on the review panel. Until an agency has this process in place, it may not issue new funding opportunity announcements without prior senior-appointee approval, except where law requires otherwise.
Section 4 — Considerations for Discretionary Awards
This section sets substantive criteria senior appointees must apply, including in scoring rubrics, “as relevant and to the extent consistent with applicable law.” The order directs that discretionary awards should not fund activity using race as a selection criterion, should not fund positions inconsistent with a sex binary framing, and should not support illegal immigration or activity the order characterizes as compromising public safety or “anti-American values.” It also directs a preference, all else equal, for institutions with lower indirect cost rates; a broad-recipient-base preference over repeat awardees; and a commitment to what the order calls “Gold Standard Science” (a reference to the companion Executive Order 14303, “Restoring Gold Standard Science,” issued three months earlier). Section 4(c) explicitly preserves peer review as an input but states peer-review recommendations must remain advisory, not treated as binding.
Section 5 — Revisions to the Uniform Guidance
This is the section research administrators most need to track. It directs the OMB Director to revise the Uniform Guidance (2 CFR Part 200) to:
- Streamline application requirements, and
- Require that all discretionary grants permit termination for convenience — including termination when an award “no longer advances agency priorities or the national interest” — subject to carve-outs for certain international trade agreements and specifically named CHIPS Act, Infrastructure Investment and Jobs Act, and defense-authorization-linked Commerce Department awards; and
- Appropriately limit the use of discretionary grant funds for facilities-and-administration (F&A/indirect) costs.
Section 6 — Implementation and Termination Clauses
Within 30 days of the order (i.e., by roughly early September 2025), each agency head had to report to the OMB Director on whether its standard award terms already permit termination for convenience consistent with 2 CFR 200.340(a), and on what share of active discretionary funding carries such terms. Agencies must also move, “to the maximum extent permitted by law,” to revise existing awards’ terms to permit immediate termination for convenience and to build that language into all future discretionary grants and related regulations. A further provision directs agencies to require written, itemized justification before recipients draw down general grant funds.
Section 7 — General Provisions
Standard boilerplate: the order doesn’t create enforceable private rights, is subject to available appropriations, and doesn’t override statutory agency authority or OMB’s separate budgetary/legislative functions.
Which Agencies Does It Bind?
Every federal agency with statutory authority to award, offer, or manage grants — the order’s Section 2 definition is deliberately broad rather than a named list. In practice this reaches every major research funder: NIH, NSF, DOE, NASA, USDA/NIFA, DOD research components, and the rest of the federal grantmaking apparatus, plus every other agency (HUD, State, USAID successor functions, and so on) that issues discretionary grants or cooperative agreements. It does not reach formula/entitlement/block-grant programs or disaster-recovery grants, which Section 2(d) excludes from the “discretionary award” definition the rest of the order operates on.
The Downstream Effects, As of August 2026
EO 14332 itself doesn’t rewrite any regulation — it’s a directive to OMB and agency heads. Two concrete regulatory actions have followed from it, and neither is finished.
1. OMB’s Proposed Rewrite of 2 CFR Part 200
On May 29, 2026, OMB published a proposed rule, “Regulation for Federal Financial Assistance” (Federal Register document 2026-10817, docket OMB-2026-0034). The proposal’s own preamble cites EO 14332 repeatedly as its authorizing rationale, alongside the companion EO 14303 (“Restoring Gold Standard Science”). Structurally, it would convert OMB’s government-wide requirements from non-binding “guidance” into a formally binding regulation — described informally in legal and higher-ed-policy commentary as the “Uniform Grants Regulation,” though the formal name of 2 CFR Part 200 itself would not change.
Provisions directly traceable to EO 14332 Sections 5–6, confirmed against the proposed rule’s own text:
- 2 CFR 200.201 and 200.333 — elimination of fixed amount awards and subawards. OMB proposes to revise §200.201(b) to eliminate the use of fixed amount awards (introduced in 2014) unless a federal statute specifically authorizes them, and to revise §200.333 to remove the parallel authority for recipients to issue fixed amount subawards, citing transparency and oversight concerns. Existing fixed amount awards issued before any final rule’s effective date would not be affected.
- 2 CFR 200.340 — expanded, clarified termination-for-convenience authority. OMB proposes to revise §200.340(a) to give federal agencies additional, more explicit grounds for discretionary termination of an award, building on the existing “no longer effectuates program goals or agency priorities” authority already in the 2024 Uniform Guidance text at §200.340(a)(4). A companion revision to §200.211 would require every award to state its termination provisions explicitly rather than by reference.
- Facilities-and-administration cost limits. Consistent with Section 5(b) of the order, the proposal addresses limiting discretionary grant funds used for indirect/F&A costs — the specific mechanics are among the most-commented-on provisions and worth checking against the final Federal Register text directly rather than a secondary summary.
- Additional changes described by legal commentary (Ropes & Gray, Faegre Drinker, the National Association of Counties, and others) include embedding current administration policy priorities directly into standard award terms, an E-Verify participation requirement extending to recipient organizations broadly, and additional pre-issuance agency review steps.
Status: proposed rule only. The public comment period closed July 13, 2026. As of this page’s last-verified date, no final rule has been published. The proposal’s own text targets an effective date of October 1, 2026 if finalized as proposed — but see the funding-bill fight below, which would directly affect whether OMB can finalize it on that timeline at all. CASRAI tracks this proposal’s status in more depth, including comment-period reaction, at OMB Proposed 2 CFR 200 Rewrite: Current Status.
2. NSF’s Deferral of PAPPG 26-1 for a Draft “Guidance on Financial Assistance”
NSF ordinarily reissues its Proposal & Award Policies and Procedures Guide (PAPPG) on a roughly annual cycle. Citing EO 14332’s directive to streamline the Uniform Guidance, NSF deferred its planned PAPPG 26-1 revision and instead published a full draft replacement policy, the NSF Guidance on Financial Assistance (GFA), via a Federal Register notice dated June 24, 2026 (docket NSF-2026-OTR-0001). The current, in-force policy today remains PAPPG NSF 24-1, as amended by two supplemental policy notices (NSF 26-200, effective for awards made on/after December 8, 2025, and NSF 26-202, effective for awards made on/after January 22, 2026) — the draft GFA changes nothing yet. Public comment on the GFA closes August 24, 2026. NSF has stated its intent to implement the GFA in FY2027, tied to the effective date of OMB’s own 2 CFR 200 rewrite — meaning NSF’s timeline is itself contingent on the OMB proposal above being finalized. Full detail at CASRAI’s NSF Is Replacing the PAPPG: The Draft Guidance on Financial Assistance (GFA).
3. The Unresolved Fight Over Whether OMB Can Even Finalize Its Rule
Separately from the rulemaking process itself, a legislative fight over government funding has become entangled with the OMB rewrite’s timeline. The Senate passed its own continuing resolution 90-6 in the early hours of August 8, 2026; that bill’s text would bar OMB from finalizing or enforcing the 2 CFR 200 rewrite until December 11, 2026. But the House had already passed a different stopgap — H.R. 9770, the Continuing Appropriations Act, 2027 — by a vote of 220-205 on July 21, 2026, funding the government only through December 4, 2026 and containing no language touching OMB’s rulemaking at all. As of this page’s last-verified date, the two chambers have not reconciled these bills, and the OMB rule is therefore neither blocked nor final — its fate depends on which funding bill (if either, unamended) actually becomes law. Full detail, including the vote table, at CASRAI’s Senate Passes CR Blocking OMB Grant Rule — House Bill Doesn’t; Unreconciled.
Timeline
| Date | Event | Status |
|---|---|---|
| August 7, 2025 | President signs Executive Order 14332, “Improving Oversight of Federal Grantmaking” | In effect |
| August 12, 2025 | EO 14332 published in Federal Register (90 FR 38929) | In effect |
| ~September 6, 2025 | Section 6(a) 30-day agency reporting deadline (agency heads report to OMB on existing termination-for-convenience terms) | Passed |
| May 29, 2026 | OMB publishes proposed 2 CFR 200 rewrite, “Regulation for Federal Financial Assistance” (FR 2026-10817) | Proposed rule, not final |
| June 24, 2026 | NSF publishes draft Guidance on Financial Assistance (GFA), docket NSF-2026-OTR-0001 | Draft, not adopted |
| July 13, 2026 | OMB proposed-rule comment period closes | Closed |
| July 21, 2026 | House passes H.R. 9770 (Continuing Appropriations Act, 2027) – no OMB-rule provision | Passed House |
| August 8, 2026 | Senate passes its own CR, 90–6, with a provision barring OMB from finalizing the 2 CFR 200 rewrite until Dec. 11, 2026 | Passed Senate; unreconciled with House bill |
| August 24, 2026 | NSF GFA public comment period closes | Upcoming |
| October 1, 2026 (if finalized as proposed) | OMB’s proposed effective date for the 2 CFR 200 rewrite | Contingent / not guaranteed |
What This Means for Your Awards
Nothing in your existing award terms has changed because of EO 14332 by itself — it’s a directive to agencies and OMB, not a self-executing regulation. But it’s worth understanding what’s coming, and what to watch for now:
- Don’t assume termination-for-convenience language will suddenly appear in an active award. Section 6(b) directs agencies to revise existing award terms “to the maximum extent permitted by law,” but a modification to a signed award still generally requires the agency to actually issue it — check your award’s current terms and conditions rather than assuming a new clause applies retroactively.
- If your primary funder is NSF, PAPPG 24-1 (plus its two policy notices) is still the operative rulebook. The draft GFA is not policy yet. Don’t restructure a proposal in progress around draft GFA language.
- Watch your indirect/F&A cost rate exposure. Both the EO itself (Section 5(b)) and the OMB proposal single out F&A costs for tighter limits, and Section 4(b)(iii) directs a preference for lower-indirect-cost institutions in award decisions where discretion applies. This is one of the most consequential open questions for research-intensive institutions and is worth tracking through the rulemaking, not assuming settled either way.
- If your institution or program relies on fixed amount awards or subawards, the OMB proposal (not yet final) would eliminate that mechanism going forward except where a statute specifically authorizes it — worth flagging to anyone currently structuring a subaward budget around fixed amount terms. See CASRAI’s FDP subaward templates guide for how fixed amount subawards currently work.
- Track the funding-bill outcome, not just the rulemaking. Whether OMB can finalize its rule on the proposed October 1, 2026 timeline currently depends on unresolved legislative action, not just where the rulemaking itself stands.
- For terminated awards specifically, see CASRAI’s dedicated guide on NIH grant terminations: grounds, process, and appeal rights and the dictionary entry on grant termination for how termination-for-convenience and termination-for-cause currently differ under the existing (not-yet-rewritten) Uniform Guidance.
Frequently Asked Questions
What is Executive Order 14332?
It’s a presidential executive order, “Improving Oversight of Federal Grantmaking,” signed August 7, 2025 and published in the Federal Register at 90 FR 38929. It directs federal agencies to add internal review steps before issuing discretionary grants and directs OMB to revise the Uniform Guidance (2 CFR Part 200) to require termination-for-convenience language in discretionary awards and to limit facilities-and-administration cost usage.
Does Executive Order 14332 apply to my grant right now?
The order itself directs agency processes and an OMB rulemaking — it does not, by itself, rewrite the terms of any specific existing award. Whether your award’s actual terms have changed depends on whether your funding agency has since revised its standard terms and conditions (which Section 6 directs agencies to pursue) or on the outcome of OMB’s separate, still-proposed 2 CFR 200 rewrite.
Is the OMB 2 CFR 200 rewrite final?
No. As of this page’s last-verified date, it is a proposed rule (Federal Register document 2026-10817, published May 29, 2026) with a closed comment period (July 13, 2026) and no published final rule. A pending, unreconciled dispute between House and Senate continuing-resolution language could also affect when or whether OMB can finalize it.
Has NSF adopted the new Guidance on Financial Assistance (GFA)?
No. NSF’s current, in-force policy remains PAPPG 24-1 (as amended by Policy Notices NSF 26-200 and NSF 26-202). The GFA is a draft, open for public comment through August 24, 2026, and NSF has tied its planned implementation to the effective date of OMB’s own 2 CFR 200 rewrite.
Which agencies does EO 14332 bind?
Any federal agency with statutory authority to award, offer, or manage grants — a functional definition, not a named list, so it reaches essentially every federal grantmaking agency, including NIH, NSF, DOE, and the rest, for discretionary awards specifically (formula, entitlement, and disaster-recovery grants are excluded by the order’s own definitions).
Sources
- Executive Order 14332, “Improving Oversight of Federal Grantmaking,” 90 FR 38929 (Aug. 12, 2025) — full text at federalregister.gov.
- OMB, “Regulation for Federal Financial Assistance,” proposed rule, Federal Register document 2026-10817 (May 29, 2026) — full text at federalregister.gov; docket OMB-2026-0034 at regulations.gov.
- CASRAI, OMB Proposed 2 CFR 200 Rewrite: Current Status.
- CASRAI, NSF Is Replacing the PAPPG: The Draft Guidance on Financial Assistance (GFA).
- CASRAI, Senate Passes CR Blocking OMB Grant Rule — House Bill Doesn’t; Unreconciled.
