Trump Orders Federal Contractors to Certify They Run No 'Racially Discriminatory DEI' Programs

Trump signed Executive Order 14398, Addressing DEI Discrimination by Federal Contractors, on March 26, 2026. It directs every federal contracting agency, within 30 days, to insert a clause into contracts and subcontracts barring what the order calls racially discriminatory DEI activities, requiring contractors to agree not to engage in such practices and to furnish compliance information on request. Agencies may cancel, terminate or suspend contracts and debar noncompliant contractors, and must review compliance within 120 days; OMB is to issue implementing guidance. The mandatory clause requires contractors to acknowledge that compliance is material to the government's payment decisions under the False Claims Act, and the order directs the attorney general to consider bringing False Claims Act claims against violators. The order describes DEI initiatives as imposing artificial costs in hiring, promotion and operations.

The False Claims Act hook is the operative mechanism: it converts a contested policy definition into potential treble-damages liability and exposes contractors to whistleblower suits, without the order itself defining which programs are discriminatory.

The order took effect on signature. Contractors must be notified if a subcontractor challenges the clause's validity.