President Donald Trump has signed an executive order requiring federal contractors and subcontractors to refrain from engaging in certain diversity, equity and inclusion, or DEI, practices described in the order as racially discriminatory.
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What Are the Key Provisions of the Executive Order?
In a fact sheet published Thursday, the White House said the EO mandates the inclusion of a clause in federal contracts prohibiting such DEI activities and establishes enforcement mechanisms to ensure compliance.
The order directs the Office of Management and Budget to release guidance to contracting agencies to ensure compliance and identify sectors at higher risk of engaging in prohibited DEI activities.
It authorizes contracting agencies to cancel, suspend, or terminate contracts and to suspend or debar contractors that fail to adhere to the requirements.
The directive also instructs the attorney general to prioritize potential claims under the False Claims Act involving contractors or subcontractors that violate the contractual provisions and to ensure prompt review of related civil actions.
In addition, the Federal Acquisition Regulatory Council will amend the Federal Acquisition Regulation to incorporate the required contract clause and remove provisions that conflict with the new policy.
How Does the EO Align With Previous Presidential Actions on DEI?
The White House said the order builds on prior actions taken by the administration to address DEI policies across the federal government.
In January 2025, Trump signed an executive order prohibiting race- or sex-based preferences within the armed forces, the Department of War and the Department of Homeland Security.
The administration also issued a series of actions, including a memorandum removing DEI-related policies from the Foreign Service; executive orders addressing disparate-impact liability and school discipline policies; and an order requiring federal agencies to procure artificial intelligence models that prioritize truthfulness and ideological neutrality.
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