A Summary of Appendix 3 of OMB Memorandum M-21-20

This blog will provide a detailed overview of what was outlined in the Improving Oversight of Federal Grantmaking Executive Order (EO) released by the White House on August 7, 2025.

The EO lays out new guidelines on how grant funding opportunity announcements (FOAs) will be monitored and released, how federal grant applications will be evaluated, and how federal grants will be awarded through the administration’s lens of “agency priorities and the national interest.” As noted below, several of the proposed regulatory requirements and administrative processes outlined in the EO are already mandatory.

What follows is a lengthy breakdown of the proposed changes.  

Proposed Changes to Grant Funding Opportunity Announcements

Per the EO, each grantmaking agency head will appoint a senior appointee who will be responsible for creating a process to review new FOAs and to review discretionary grant awards to ensure consistency with “agency priorities and the national interest.”

According to the EO, this new review process does not guarantee any level of review or consideration to funding applicants except as consistent with applicable law.

The senior appointees (and/or their designees) will also conduct an annual review to ensure agency adherence to the new proposed FOA review and award selection process.

The new process will:

1. 1. Involve coordination with the Office of Management and Budget, an office within the Executive Office of the President.
   2. Require that new grant FOAs are reviewed by designated subject matter experts (SMEs) when possible and appropriate.
   3. Result in FOAs and forms that are simplified, in plain language, and minimize the need for legal and technical expertise in drafting an application. 
   4. Aim to reduce redundancy by cross-checking with other agencies to see if the FOA has already been addressed by another agency.
   5. Ensure subject matter expert review to be undertaken for scientific research discretionary grants by a grant review panel, federal official or outside expert review
   6. Include a “pre-issuance” review of discretionary awards via in-person or virtual discussions that will now include the senior appointee or his/her designee. Note that many research grants already includes this process. The difference is that now the review will include the senior appointee.
   7. Ensure that FOAs will not be issued without prior approval from the designated senior appointee.
   8. Allow senior appointees to use their independent judgement; they do not need to ratify or defer to the recommendations of others.

NOTE: In many instances, federal SMEs are involved in the creation of the FOAs. In addition, new “plain language” and streamlined FOA standards were already outlined in the published 2024 revisions of Uniform Guidance. Finally, subject matter expert review is currently part of the review process for many scientific research discretionary grants. See NIH and CDC websites describing the peer review process for more details.

Proposed Changes for New Federal Grant Awards

Below is a summary of what is being proposed for the new application review and the awarding processes.

It should be noted that grant application evaluations or scoring rubrics will now include whether the proposed project “demonstrably advances the President’s policy priorities.”

Further, discretionary awards are not to be used to fund, promote, encourage, subsidize, or facilitate the following:

1. 1. racial preferences
   2. deviation from the sex binary
   3. illegal immigration
   4. other initiatives that compromise public safety or promote anti-America values

In addition:

1. 1. There will be preferences for institutions with lower indirect cost rates.
   2. The new process aims to broaden the recipient pool rather than providing awards to repeat players. 
   3. Awards must include clear benchmarks for measuring success and progress toward relevant goals
   4. Applicants should commit to complying with administration policies, procedures, and Gold Standard Science.
   5. Agencies should deprioritize historical reputation or perceived prestige of an applicant institution and prioritize those institutions that commit to “rigorous, reproducible scholarship” and demonstrated success in implementing Gold Standard Science.

What is Gold Standard Science?

According to an Executive Order released in May 2025, the White House defines Gold Standard Science as science that is conducted in a manner that is reproducible, transparent, communicative of error and uncertainty, collaborative and interdisciplinary, subject to unbiased peer review, without conflicts of interest, and more. 

Some scientific research advocates contend that this new standard does not prevent political interference before the dissemination of results.

Proposal to Modify Regulations

Uniform Guidance and “other relevant guidance” will be modified to streamline application requirements, require all discretionary grants to permit termination for convenience, and include limitations on the use of discretionary grant funds for facilities and administration (F&A) costs.

To implement these changes, agency heads will need to conduct a review of standard grant agreement terms and conditions and report to the OMB Director whether the agency’s standard grant agreement terms and conditions do the following:

1. 1. Permit termination for convenience and, if not, insert certain provisions.
   2. Permit termination based on the national interest.

Agency heads are also asked to:

1. 1. Summarize the number of active awards and those that contain the termination provisions noted above.
   2. Revise terms and conditions, to the extent permitted by law, of existing discretionary awards to permit termination for convenience or if the award “no longer advances agency priorities or the national interest.”
   3. Ensure noted terms are included in all future discretionary grants and revise all applicable regulations to ensure inclusion of those terms.
   4. Prohibit grantees from conducting drawdowns without authorization from the agency and
   5. Require grantees to provide specific, written explanations of each draw down request.

New “defend the spend” mandates as described in #4 and #5 above were rolled out in April 2025.

It should be noted that the EO ends by noting that nothing in it shall be construed to impair or otherwise affect the authority granted by law to an executive department or agency, the OMB’s role in budgetary, administrative and legislative functions, and that it must be implemented consistent with applicable law and subject to the availability of appropriations.

Grants Works is a team of federal grant specialists with over 80 combined years of experience. We are experienced federal grant managers, grant writers, grant accountants, and internal auditors. We also deliver engaging, certified training on how to manage and comply with federal grant requirements for teams around the country. Watch the video below to learn more. 

How the Grants Works Team Can Support Your Organization

The Grants Works team will continue to evaluate the EO and agency actions to determine how proposed and actual changes will impact our clients and other federal grantees. We will also further examine the EO and compare it to existing laws that govern federal grants that were signed by Congress to identify any inconsistencies.

If your organization is a federal grantee that wants to ensure adherence to current and proposed regulatory requirements, award terms, and program guidance, schedule a meeting with the Grants Works team today.

Grants Works is a federal grant consulting firm based in Atlanta, GA. We are federal grant administrators, grant accountants, and grant writers who have obtained or managed over $200 million in federal grants from 20+ federal agencies as a recipient, subrecipient, and pass-through entity.