Following the U.S. Department of Energy's (DOE) announcement of a new project review process in May 2025, the Office of Clean Energy Demonstrations (OCED) issued the first round of DOE grant terminations under the Trump Administration.1 In anticipation of potential additional grant termination notices, the Holland & Knight Energy Technology team is sharing information regarding the grant termination process.
At a high level, there are three paths to pursue following receipt of a grant termination notice: 1) proceed with closeout of the award without contesting the termination notice, 2) dispute the termination notice using DOE's regulatory process or 3) bring judicial action against DOE to contest the termination notice. Based on Holland & Knight's experience to date, if a grant recipient receives a termination notice and wants to proceed with the aspects of the project that align with the Trump Administration's agenda and priorities, Option 2 can provide a path to explore a mutually beneficial resolution with DOE.
Closeout
If a grant recipient decides to accept termination and proceed with closeout, it is important to consult the award's Federal Assistance Reporting Checklist (FARC) and coordinate with DOE regarding the required closeout reporting. Depending on progress in completing the requirements of the award and the status of the project, it is possible that DOE will be amenable to waiving or minimizing certain reporting requirements.
Regulatory Dispute Process
The DOE regulatory dispute process is governed by 2 C.F.R. § 910.128. Section 910.128(a), Informal Dispute Resolution, says:
Whenever practicable, DOE shall attempt to resolve informally any dispute over the award or administration of Federal financial assistance. Informal resolution, including resolution through an alternative dispute resolution mechanism, shall be preferred over formal procedures, to the extent practicable.
Given the broad language, DOE has latitude to shape its informal dispute resolution process. Based on Holland & Knight's experience to date, basic steps included in the informal dispute resolution process could include:
- Notifying DOE that the termination is being disputed and invoking the informal dispute resolution process. Typically, these notifications are submitted within a week of termination, though the regulation has no firm deadline.
- Providing DOE with written information regarding the basis of disputing the termination and requesting DOE's reconsideration and withdrawal of the termination notice. Based on Holland & Knight's experience to date, written submissions can include background project information, an explanation of how a project aligns with Trump Administration and agency priorities, and strong legal arguments to dispute the termination's validity and reasonableness.
- Meeting with DOE to present arguments and information. During this meeting, DOE may discuss the different options available to resolve the dispute such as closeout, settlement, reinstatement or adjustment (i.e., rescoping the awarded grant project). DOE may ask for follow-up information or recommend next steps.
Judicial Dispute Process
As mentioned above, the third option following receipt of a grant termination notice is to pursue litigation against the government to dispute the termination, including, for example, a potential claim under the Administrative Procedure Act or Tucker Act.
For more information on the DOE termination process and how best to work with the DOE to navigate the process based upon the specifics of your project and award, please reach out to the authors.
Notes
1 For this alert, "grant" refers to grants, cooperative agreements and other DOE financial assistance awards.
