On March 26, 2026, President Trump signed a sweeping Executive Order titled “Addressing DEI Discrimination by Federal Contractors” (the EO) that imposes binding contractual consequences to diversity, equity, and inclusion (DEI) practices in federal contracting. By April 25, 2026, federal contractors, subcontractors, and lower-tier subcontractors should expect to be required to agree—as an express term of their contracts—not to engage in “racially discriminatory DEI activities,” to open their books and records to government compliance audits, and to acknowledge that any violation of this new provision is material to the government’s decision to pay—a critical element for False Claims Act (FCA) enforcement.
This EO marks yet another escalation from the Trump Administration’s earlier executive actions. Prior orders eliminated DEI programs within the federal government and signaled enforcement intentions against specific private entities. This EO extends the DEI prohibition to the entire federal contracting ecosystem and arms the government and private whistleblowers with specific and powerful enforcement tools.
The EO targets what it defines as “racially discriminatory DEI activities”—disparate treatment based on race or ethnicity in any of the following areas:
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