As PilieroMazza recently discussed, on February 13, 2025, Judge Amir H. Ali, of the United States District Court for the District of Columbia issued a temporary restraining order (TRO) requiring the Trump administration to restore funding for foreign assistance awards halted as a result of recent executive and agency actions. On February 20, 2025, Judge Ali partially granted a motion to enforce the TRO, criticizing the government for continuing its blanket suspension pending review of foreign assistance agreements—which is the very action the TRO blocked. Undeterred, the defendants, including State Department and budget aides, the U.S. Department of State, USAID, and the Office of Management and Budget (OMB), requested further clarification from the court as to whether—despite the TRO—they are prohibited from, among other things: (1) relying on other statutory or contractual bases for suspending or terminating contracts or grants or (2) conducting a payment integrity review process. In a ruling issued over the weekend, Judge Ali further clarified the TRO, which could help foreign aid contractors facing funding freezes, stop work orders, and terminations.
Specifically, Judge Ali clarified that the TRO does not permit the government to simply continue its blanket suspension of congressionally appropriated foreign aid pending a review of the agreements. As the court explained, “[t]hat is the very action that the Court temporarily enjoined . . .” Moreover, Judge Ali clarified, again, that to the extent the government has continued the blanket suspension, “they are ordered to immediately cease it and to take all necessary steps to honor the terms of contracts, grants, cooperative agreements, loans, and other federal foreign assistance awards that were in existence as of January 19, 2025, including but not limited to disbursing all funds payable under those terms.”
Notably, Judge Ali explained that the government cannot circumvent the TRO by coming up “with a new post-hoc rationalization in an attempt to justify the action that was temporarily enjoined[.]” The court underscored that “[u]nder the terms of the TRO, any such agreement that was in effect as of January 19, 2025, must be given effect and promptly receive disbursements only up until a suspension or termination taken pursuant to independent legal authority and justification.”
According to the Court, if terminations of such awards since January 19, 2025, stemmed from a general directive to suspend all aid—the very agency action temporarily blocked—”those terminations would violate the TRO and cannot be given effect.”
This ruling may allow contractors to challenge funding freezes, stop work orders, and terminations issued in connection with the government’s blanket suspension of foreign aid funding. It may also give contractors the ability to challenge those actions when they are based on pretext.
On February 25, 2025, the government submitted a notice of its decision to appeal the court’s decision to the DC Circuit, and a motion to stay the court’s order pending appeal.
If you have questions about the TRO, please contact Sam Finnerty or another member of PilieroMazza’s REAs, Claims, and Appeals or Government Contracts practice groups.
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