Federal agencies must bar race-based DEI practices in contracts

Federal agencies must add the order’s compliance clause to covered contracts. The clause covers contractors, subcontractors, and lower-tier subcontractors working on federal contracts. It applies to race- or ethnicity-based treatment in hiring, employment, contracting, program participation, or resource decisions. Contractors must provide information and access to records when the contracting agency requires it to check compliance. Contractors must report known or reasonably knowable violations by subcontractors and take remedial steps directed by the agency. The order defines program participation to include training, mentoring, leadership, educational, club, association, and similar opportunities sponsored or established by a contractor or subcontractor. Agencies must act within 30 days of March 26, 2026, subject to applicable law.

Contracting agencies must take enforcement action when a contractor or subcontractor violates the required clause. Enforcement may include canceling, terminating, or suspending all or part of a contract and suspending or debarring the responsible contractor or subcontractor from future federal contracts. Agencies must act consistently with guidance from the Office of Management and Budget. The Attorney General must consider possible False Claims Act cases and promptly review certain private lawsuits involving federal contracts, as far as practicable. The order does not itself create a private right or benefit enforceable against the United States. Each agency head must review implementation and report compliance within 120 days of March 26, 2026, with regular reviews afterward.

The Federal Acquisition Regulatory Council must issue interim guidance and amend federal purchasing rules for covered contracts. The changes apply to federal procurement solicitations and contracts subject to the order. The Council must remove rules that conflict with the required clause. The Council must act to the extent permitted by law and consistent with applicable law. Implementation remains subject to available appropriations and existing agency authority. The Council must issue deviation and interim guidance within 60 days of March 26, 2026. The order sets no deadline for completing the regulatory amendments.