Overview
- The order, signed March 26, directs agencies to add a standard clause to new contracts and to flow it to subcontracts within 30 days, putting a late‑April cutoff in play.
- Contractors must certify they will not run “racially discriminatory DEI activities,” defined as treating people differently by race or ethnicity in hiring, promotions, vendor deals, access to programs, or how resources are allocated.
- Agencies gain access to company books and records to check compliance, primes must report subcontractor violations, and penalties can include termination, suspension or debarment, and False Claims Act liability with treble damages.
- Legal analysts say the contractual access to records could let investigators move faster than traditional civil investigative demands, which may speed False Claims Act probes tied to DEI practices.
- Guidance from OMB and the FAR Council is expected next, senior officials will flag high‑risk sectors, and agency heads owe a compliance report by July 24, while questions on scope and existing contracts remain unresolved.