Overview
- The coalition of 20 attorneys general filed suit in the U.S. District Court for the District of Maryland on Wednesday asking the court to block the new contract terms and declare the agencies’ actions unlawful.
- The states allege agencies implementing President Trump’s March executive order added unclear prohibitions on “racially discriminatory” DEI activities without the notice-and-comment process required by the Administrative Procedure Act.
- Federal estimates cited by the plaintiffs say the changes could touch as many as 640,000 contracts and subcontracts and more than 34,000 unique vendors, risking contract cancellations, exclusion from future work, and False Claims Act exposure.
- A separate suit by university faculty and minority business groups already pending in the same court raises First Amendment challenges, creating overlapping litigation that could produce fast rulings on both statutory and constitutional claims.
- If the court does not block the terms, agencies are under a July 24, 2026 deadline to modify existing contracts, a timetable the states say pressures contractors and increases the likelihood of urgent motions for preliminary relief.