Trump Signs Executive Order 14398 Requiring Federal Contracts to Bar Racially Discriminatory DEI Activities by Contractors
On March 26, 2026, President Donald Trump signed Executive Order 14398, "Addressing DEI Discrimination by Federal Contractors," at the White House in Washington. Issued under the Federal Property and Administrative Services Act, the order requires every federal agency to insert a new clause into government contracts and subcontracts at all tiers barring contractors from what the order defines as racially discriminatory DEI activities.
The order defines "racially discriminatory DEI activities" as disparate treatment based on race or ethnicity in recruitment, employment (including hiring and promotions), contracting (including vendor agreements), program participation, or the allocation or deployment of an entity's resources; "program participation" covers training, mentoring and leadership development programs, educational opportunities, clubs, and associations sponsored or established by the contractor. Within 30 days, agencies must ensure that contracts and contract-like instruments, including subcontracts and lower-tier subcontracts, include the six-point clause: the contractor agrees not to engage in such activities; to furnish information, books, records, and accounts so the agency can verify compliance; that noncompliance may lead to cancellation, termination, or suspension of the contract and debarment; to report subcontractor violations; to inform the agency of lawsuits putting the clause's validity at issue; and that compliance is material to the government's payment decisions for purposes of the False Claims Act.
For enforcement, the Director of the Office of Management and Budget is to issue guidance under which agencies may cancel or terminate noncompliant contracts and suspend or debar contractors, and, with the Attorney General and others, identify economic sectors at particular risk and issue additional guidance. The Attorney General is to consider False Claims Act actions against violating contractors. Each agency head must report on implementation to the Assistant to the President for Domestic Policy within 120 days. The Federal Acquisition Regulatory Council must amend the Federal Acquisition Regulation to include the clause and, within 60 days, issue deviation and interim guidance. The order was published in the Federal Register on March 31, 2026. This report covers the order's mechanisms and requirements; its policy characterizations are omitted.
Source: The White House
Published by GSM · USA (original Chinese edition)
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