On March 26, 2026, President Trump signed Executive Order (“EO”) 14398. 91 Fed. Reg. 16,147 (Mar. 31, 2026) (“EO 14398”). The EO is titled “” This was the second EO President Trump signed about diversity, equity, and inclusion (DEI) in federal contracting.¹ On January 21, 2025, the day after he took office, President Trump signed EO 14173. 90 Fed. Reg. 8,633 (Jan. 31, 2025) (“EO 14173”). That order also set rules limiting how government contractors use certain DEI programs. EO 14398 does not replace or supersede EO 14173. As a result, government contractors and subcontractors now face an added layer of complexity from the new EO. The following aims to simplify that complexity. It also highlights issues that may deserve further review by government contractors and subcontractors.

I. Background: EO 14173

Last year, EO 14173 signaled a strong stance against DEI programs in the federal government and in federal contracting. EO 14173 suggested a shift in how the executive branch will interpret existing antidiscrimination law. But its main impact on federal contractors was to link future violations of existing federal antidiscrimination law to potential liability under the False Claims Act (FCA), a federal law that imposes penalties for submitting false claims to the government. In relevant part, EO 14173 required as follows.

The head of each agency shall include in every contract or grant award:

(A) A term requiring the contractual counterparty or grant recipient to agree...

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