Compliance Stuff

Aside from potential legal trouble, new obligations could spark business and operational friction Executive Order 14398 represents a significant expansion of the government’s enforcement posture on DEI and creates an environment where the cost of delay could substantially exceed the cost of preparation, Andrew Turnbull of Morrison Foerster writes. Contractors should consider implementing certain steps to mitigate risks related to these new requirements. Federal contractors and subcontractors face sweeping new obligations under Executive Order 14398 that prohibit them from engaging in “racially discriminatory DEI activities” and requires reporting any “reasonably knowable” violations by subcontractors . The FAR Council has already issued a mandatory contract clause, FAR 52.222-90 . Agencies have begun inserting it into new solicitations, targeting a completion date of July 24 for modifying existing contracts. Enforcement is not waiting. With a $17 million DOJ DEI settlement already on...

On March 26, 2026, President Donald Trump signed an executive order (EO) titled “ Addressing DEI Discrimination by Federal Contractors ” that, for the first time, attaches direct contractual consequences to diversity, equity, and inclusion (DEI) practices in federal contracting. 00:00 10:59 Quick Hits On March 26, 2026, President Trump issued an executive order (EO) with broad applicability to federal contractors and subcontractors, but certain agreements would not likely be covered by the EO, including Other Transaction Agreements (OTAs), cooperative agreements, and grants. The EO defines “racially discriminatory DEI activities” as disparate treatment based on race or ethnicity across hiring , promotions, vendor agreements, training, and program participation—a notable departure from earlier EOs that used the phrase “unlawful DEI” without defining it. Enforcement authority appears to rest with individual contracting agencies, which may terminate or suspend contracts and initiate deba...