President Donald Trump signed an executive order Wednesday evening to implement the Department of Government Efficiency (DOGE) cost efficiency initiative, which will begin cutting federal grants and contracts, travel spending and federal property costs immediately.
The executive order says the effort to cut costs will save taxpayers money. Like the federal funding freeze, which has been blocked by a judge, the cost efficiency initiative excludes direct assistance to individuals.
Agency heads will be making cost cutting and cost justification decisions with the agency’s DOGE Team Lead, which is an informal position. The initiative will first target contracts and grants to educational institutions and foreign entities to identify existing waste, fraud and abuse .
At the Department of Health and Human Services, Secretary Robert F. Kennedy Jr. will review all federal grants and contracts, write new guidance for federal contracting, and require employees to provide “brief, written justifications” for each contract and grant that disburses payments. The written justifications will be posted publicly, unless prohibited by law.
Before entering new contracts, Kennedy must issue guidance on signing new contracts or modifying existing contracts. Kennedy will conduct a comprehensive review of the agency’s contracting policies, procedures and personnel within 30 days, during which “new contracting officer warrants” cannot be issued or approved. He can make exceptions on a case-by-case basis.
Agency heads will also review all existing grants and contracts and decide to keep, modify or terminate, “to reduce overall federal spending or reallocate spending to promote efficiency and advance the policies of my Administration,” the EO reads.
DOGE team lead will give a monthly report on contracting activities, including the written contract and grant justifications by employees.
The DOGE cost efficiency initiative requires agencies to build centralized technological systems to record every payment for covered contracts and grants within 30 days of the order. The system must include a mechanism by which the agency head can pause and rapidly review payments that lack a written justification in the internal system.
The initiative will also axe non-essential federally funded travel to conferences permanently unless the employee provides an acceptable written justification. DOGE will take inventory of federal real property for termination and freeze government credit cards for 30 days.
The order also excludes funds for immigration enforcement, law enforcement, the military, public safety, and the intelligence community and emergency spending.