Overview
- The executive order, issued Thursday, directs agencies to add a new clause within 30 days that forbids racially discriminatory DEI and requires access to books and records.
- The order defines banned conduct as treating people differently by race or ethnicity in hiring, promotions, vendor deals, program participation, or how resources are allocated, and it covers internal programs like training and mentoring.
- Prime contractors must flow the clause down to all subcontracts, monitor for issues that are known or reasonably knowable, and report suspected violations to the contracting agency.
- Agencies may cancel, terminate, or suspend contracts for violations, and they can suspend or debar companies from future federal work.
- Compliance certifications are labeled material for payment under the False Claims Act, the attorney general will prioritize potential FCA cases and whistleblower suits, and the FAR Council has 60 days to issue interim guidance while OMB and the EEOC identify high‑risk sectors.