GSA halts contract awards in sweeping memo, sparking questions and uncertainty

GSA has paused new awards and modifications of contracts funded by the agency, sounding alarms across the acquisition community. In a memo issued by acting administrator Stephen Ehikian, GSA contracting officers were directed to halt new obligations, including awards, task and delivery orders, modifications, and options, as tipped by NextGov.

The memo, however, has left many industry leaders perplexed about its scope and implications. Questions include whether obligations for projects funded on behalf of other agencies are subject to the pause, how “new” is defined for extensions or renewals, and whether already-obligated funds are exempt. Diversity, equity, and inclusion (DEI) initiatives were explicitly mentioned as paused, but spending through GSA Schedules may continue.

The uncertainty has sparked concerns about potential financial harm to small businesses, especially those relying on anticipated awards or extensions in Q1. Observers note this could hurt hiring and operations.

Adding to the tension, US Army has issued a similar halt on new solicitations and awards, possibly signaling broader procurement freezes. Questions have also surfaced about whether such pauses violate the Impoundment Control Act, which limits executive overreach on congressionally approved spending​​.