The Goals Remain the Same: Continuing the Work of Community Impact while Navigating the False Claims Act  

November 4, 2025

Of the many Executive Orders (EO’s) issued in 2025, one which received significant media coverage is Ending Illegal Discrimination and Restoring Merit-Based Opportunity. This EO focuses on ending Diversity, Equity, and Inclusion (DEI) policies and practices in the federal government. However, easy to miss is Section 3 (b)(iv) which includes the following guidance (emphasis added): 

(iv)  The head of each agency shall include in every contract or grant award:  

(A)  A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code; and 

(B)  A term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws. 

The US Code referenced is the False Claims Act (FCA). The False Claims Act (31 U.S.C. §§ 3729 – 3733) was originally enacted in 1863 as a direct result of concerns about fraudulent claims made during the Civil War by suppliers to the Union Army. The law has been updated several times since but continues to be one of the most important tools the federal government possesses to deter and punish monetary fraud. In the simplest terms, anyone (with few exceptions, including tax fraud) submitting a claim to the federal government for funds (either up front or for reimbursement) who knowingly includes false information or certifies to facts which are false, is liable for various fines, including up to three times the amount of damages to the federal government.  

To increase the efficacy of the law, it also includes a qui tam provision which allows a person to file suit on behalf of the government for violations of the FCA. This person becomes the relator, and, if the suit is successful, the relator is eligible to receive a percentage of the fines as compensation. These individuals are also sometimes referred to as whistleblowers and have extensive protection under the law. The inclusion of the qui tam provision, the potential financial reward, and protection from retaliation combine to strongly incentivize whistleblowing against an organization which a person reasonably believes has violated the FCA, including their own employer.  

In effect, the EO stipulates that federal grantees are required to certify that their entire organization does not operate any DEI programs when they submit for payment or reimbursement on their federal grant. If the organization does operate these types of programs and submits for payment or reimbursement, they are violating the False Claims Act. In addition to payment of fines and damages, the organization is also at high risk of being suspended or debarred from receiving federal funds in the future. The ease of finding an organization’s DEI programs with a simple internet search, combined with whistleblower incentives, puts an organization at high risk of being caught for FCA violations and suffering potentially organization-ending consequences.  

Over the course of 2025, the Administration has expanded its application and enforcement of the False Claims Act to include violations of E-Verify requirements, the Personal Responsibility and Work Opportunity Reconciliation Act, and immigration enforcement. While some jurisdictions have managed to obtain injunctions against these conditions, many questions around the False Claims Act, and its application and limitations, still exist. Experienced federal grantees understand that federal executive agencies are given significant latitude to interpret and apply federal statutes to everyday practices, including those in grant management. (Check your grant agreements if you are in any doubt about the latitude given to federal funding agencies.) Some of these practices will fall under the authority of the Administrative Procedure Act, and some will not.  

In any case, these developments should not be taken as cause for panic. Balancing compliance while maintaining programmatic impacts is possible. We recommend recipients of federal funds begin to protect themselves by taking an inventory of current DEI programs and policies. Consider amending them according to the principles of evidence-based policymaking, and, particularly, the Foundations for Evidence-Based Policymaking Act. Larger jurisdictions will have some familiarity with provisions of this act by their inclusion in compliance and reporting requirements baked into the State and Local Fiscal Recovery Funds for Tier 1 recipients. Ensure that, regardless of the language or labels used, your organization’s policies and practices continue to serve the people most in need in your community, as supported by robust, reliable data and research. Work with your federal grant consultants and/or legal counsel to guide you through this process.  

What matters most now is keeping the big picture in mind. Federal grants exist for the purpose of improving communities. By awarding grants, the federal government gives agency to local governments, non-profits, and other grantees to both define the problems in their community and propose solutions. But the federal government does set overall policy and direction for these grants. Federal grants are a partnership that includes give and take on both sides. It is normal for policy and direction to change over time, both between and within administrations. Savvy grantees respond to change while continuing to focus on their larger goals—demonstrable, measurable impacts. By remaining forward-focused and solutions-oriented, federal grantees can continue to successfully do the “boots-on-the-ground” work of improving the lives of people in their communities.  

The team of federal grants experts at Witt O’Brien’s is comprised of experienced professionals who have personally navigated the practical and programmatic challenges of federal grant pursuance and management. We can assist you with any aspect of federal grant management, including the design and implementation of evidence-based policymaking practices, the creation of Learning Agendas, theories of change, and logic models, as well as evidence research, data analysis, and evaluations.  

Managing grants efficiently, without compromising compliance and integrity, can be a challenging task. If your organization is navigating the complexities of grant management, we can help you enhance oversight, streamline processes, ensure outcomes and reduce the risks of waste, fraud, and abuse. Reach out today to learn how our expertise in grants management can ensure your programs meet their goals, stay compliant, and make the best use of taxpayer dollars. 

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