New FAR Council Guidance: The ‘Teeth’ Behind the DEI Discrimination Ban for Federal Contractors
The FAR Council recently issued much-anticipated guidance implementing Executive Order (EO) 14398, “Addressing DEI Discrimination by Federal Contractors.” 00:00 11:12 Quick Hits New clause FAR 52.222-90 declares contractor compliance “material” to the government’s payment decisions, creating direct False Claims Act liability for contractors who maintain prohibited programs. Agencies must bilaterally modify existing contracts to include the new clause by July 24, 2026 , and if a contractor refuses, agencies are told to consider whether the contract should be terminated for convenience. Prime contractors must flow the clause down to all tiers and report any subcontractor’s “known or reasonably knowable” violations to the contracting officer. While EO 14398 , issued in March 2026, set the policy stage, this new memorandum provides the technical architecture and aggressive deadlines that federal contractors and subcontractors must navigate immediately. Below, w...