And if someone at the NSF decides to terminate the grant & 'recover all funds', does the dispute over the contract involve the same burden of proof and rights to appeal as a federal discrimation case?
Someone wrote it into the grant agreement. It's a fair bet that they think that has some effect beyond what the law already achieves.
The burden of proof is "on the balance of probabilities" in both cases as far as I know, and there's no limit in principle on how high a breach of contract case can be appealed.
Of course it has an effect, but that effect is giving the NSF the ability to sue over a grantee's alleged breaches of discrimination law, instead of that being limited to parties discriminated against and the EEOCs.
Someone wrote it into the grant agreement. It's a fair bet that they think that has some effect beyond what the law already achieves.