On May 29, 2026, the Office of Management and Budget (OMB) published a proposed rule that would significantly restructure the governmentwide requirements in 2 CFR governing federal grants, cooperative agreements, and other forms of federal financial assistance. The proposal represents one of the most consequential revisions to the Uniform Guidance since its adoption, and federal funding recipients across sectors should begin assessing exposure now.
Perhaps the most fundamental change is structural. The proposed rule would convert the Uniform Guidance from non-binding guidance into a binding OMB regulation. While agencies have long incorporated the Uniform Guidance into their own regulations, elevating it to a binding governmentwide rule materially changes the compliance posture for recipients and subrecipients. Provisions that have historically been interpreted through agency implementation would carry direct regulatory force, increasing both legal risk and the stakes of internal compliance programs.
The proposal also introduces new substantive content restrictions. It targets programs associated with diversity, equity, and inclusion (DEI) and what the rule characterizes as gender ideology, and it would condition federal awards on compliance with these restrictions. Recipients should anticipate that programmatic design, training materials, subaward terms, and even internal policies could come under heightened scrutiny depending on how the final rule defines and enforces these restrictions.
In addition, the proposal would require political-appointee pre-issuance review of discretionary grants. This procedural layer is likely to affect award timelines, the predictability of funding decisions, and the terms ultimately incorporated into awards. Applicants planning around historical timing assumptions should prepare for potential delays and additional review considerations.
The window for stakeholder engagement is short. Public comments are due July 13, 2026. Affected grantees, subrecipients, applicants, pass-through entities, and institutional stakeholders should promptly evaluate their programmatic exposure, identify provisions that warrant comment, and consider whether to submit individual or coalition-based responses. Early review will also help organizations prepare for compliance changes if the rule is finalized in substantially its proposed form.
This update is provided for general informational purposes only and does not constitute legal advice. Organizations potentially affected by the proposed rule should consult qualified counsel for tailored guidance addressing their specific circumstances, funding streams, and compliance obligations.