On January 21, 2025, President Trump signed an Executive Order (“EO”) purporting to “End[ ] Illegal Discrimination and Restoring Merit-Based Opportunity.” This wide ranging EO contains several provisions directly affecting government contractors—one of which appears to open up government contractors to False Claims Act (“FCA”) liability relating to DEI activities.

The “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” Executive Order generally requires Federal departments and agencies to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements. Among the EO’s many provisions it:

• rescinds executive orders and Presidential memoranda related to federal actions and initiatives to promote diversity and inclusion, including Executive Order 11246 (Equal Employment Opportunity, September 24, 1965), which required government contractors to adhere to equal employment and affirmative action requirements;
• directs the Office of Federal Contract Compliance Programs to immediately cease promoting diversity and holding federal contractors and subcontractors responsible for taking affirmative action; and
• requires each agency head to include in every contract or grant award a term/provision that makes compliance with all applicable Federal anti-discrimination laws material to the government’s payment decisions, which includes a certification that the...

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