Labor & Employment Law Daily Wrap Up, WHITE HOUSE NEWS—Executive order requires written justifications for payments, freezes credit cards, (Mar 3, 2025)

By Patricia K. Ruiz, J.D.

The EO requires written justification for each payment submitted by agency employees who approve payment payments under certain contracts, grants, and loans.

An executive order (EO) from the Trump administration seeks to transform federal spending on contracts, grants, and loans to “ensure” transparency and accountability of government employees to the American public. The EO requires agency heads to implement processes for creating and publicly posting written justification for payments made by agencies under covered contracts and grants and non-essential travel. The EO further freezes certain credit cards held by government employees and requires agency heads to report on government-held real property.

Written justifications. Under the EO, each agency head is required to build a centralized technological system within the agency to seamlessly record every payment issued by the agency pursuant to each of the agency’s covered contracts and grants, along with a brief, written justification for each payment submitted by the agency employee who approved the payment. The centralized system must include a mechanism through which the agency head may pause and rapidly review any payment for which the approving employee has not submitted a written justification within the system. Once the system is in place, the agency head must issue guidance for relevant employees on the requirements of the written justification. The written justification, to the maximum extent permitted by law, and to the maximum extend deemed practicable by the agency head, will be posted publicly.

Agency heads must review existing covered contracts and grants and, where appropriate and consistent with law, terminate or modify such contracts and grants to reduce overall federal spending or reallocate spending to promote efficiency and advance the policies of the Trump administration. The EO requires agency heads to complete this review within 30 days of the date of the EO. Agency heads must also conduct a comprehensive review of each agency’s contracting policies, procedures, and personnel within 30 days of the EO.

Following these reviews, and prior to entering into new contracts, each agency head must issue guidance on signing new contracts or modifying existing contracts to promote government efficiency. The agency head may approve new contracts prior to the issuance of such guidance on a case-by-case basis. The DOGE team lead will provide the Administrator with a monthly informational report on the relevant agency’s contracting activities, including all payment justifications provided pursuant to the contract and grant justification process. The EO sets forth a similar justification process for non-essential travel.

Credit cards. The EO states that, to the maximum extent permitted by law, all credit cards held by agency employees will be treated as frozen for 30 days from the date of the EO. The EO excepts credit cards held by employees engaged in, or charges relating to employees utilizing the credit cards for, disaster relief or natural disaster response benefits or operations, or for other critical services as determined by the agency head.

Real property. The EO requires agencies to confirm, with seven days of the order, that the agency head has submitted updates to the Federal Real Property Profile Management system to ensure the system reflects a complete and accurate inventory of real property held by the agency. The EO further requires agency heads to identify termination rights under existing leases of government-owned real property and, within 60 days of the order, submit a plan to the director of the Office of Management and Budget for the disposition of government-owned real property deemed by the agency as no longer needed.

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