March 26, 2026
President Issues EO Eliminating “Racially Discriminatory DEI Programs” by Federal (Sub)Contractors
On March 26th, President Trump issued an Executive Order (EO) that will impact private sector, federal (sub)contractors. The EO requires federal agencies to insert a new clause into federal (sub)contracts covered under Federal Property and Administrative Services Act (GSA contracts, generally). The order prohibits covered contractors from engaging in racially discriminatory DEI activities. Those activities are defined in the EO as, “disparate treatment based on race or ethnicity in the recruitment, employment (e.g., hiring, promotions), contracting (e.g., vendor agreements), program participation, or allocation or deployment of an entity’s resources.”
What is program participation? It is defined as “membership or participation in, or access or admission to: training, mentoring, or leadership development programs; educational opportunities; clubs; associations; or similar opportunities that are sponsored or established by the contractor or subcontractor.”
If you are a federal (sub)contractor, you may expect this new 6-point clause in your contracts with the federal government by April 25th. Non-compliance with the EO may result in a contract being “canceled, terminated, or suspended in whole or in part, and the contractor or subcontractor may be declared ineligible for further Government contracts.” The White House’s Fact Sheet about the order is here.
NOTE: This EO bars racially discriminatory DEO activities, not all DEI activities. If your company has a Diversity, Equity, Inclusion (DEI), related or similar program, policy, or practice, review it with your company’s legal counsel. Talk about the goals, objectives, and how they are practically implemented or achieved. Ensure no employment decisions are made based on race or national origin, or any other protected status in accordance with federal, state, and local laws.
Stay tuned. The EO directs the Federal Acquisition Council to amend the Federal Acquisition Regulations (FAR) within 60 days from the EO.
