The New DEI Executive Order: Risks and Requirements-The New DEI Executive Order Risk and Requirements Slides

The New DEI Executive Order Risk and Requirements Slides

Pdf Summary

This presentation explains the legal and compliance risks facing federal contractors under recent DEI-related executive orders, especially Executive Order 14398, “Addressing DEI Discrimination by Federal Contractors.” It also reviews the False Claims Act (FCA), Title VII, Title VI, and related federal anti-discrimination laws to show how DEI practices may create liability.<br /><br />Key points include:<br />- The FCA imposes treble damages and per-claim penalties for knowingly submitting false claims or false statements that are material to government payment decisions.<br />- Under the FCA’s implied certification theory, a contractor can be liable for claiming compliance with a requirement it is actually violating, but only if the noncompliance is material.<br />- Title VII prohibits discrimination in employment based on race, sex, religion, age, disability, and national origin; Title VI bars discrimination in federally funded programs.<br /><br />The presentation describes the current administration’s view that certain affirmative action and DEI programs may be unlawful if they involve race- or sex-based preferences. Examples discussed include targeted recruiting, hiring preferences, certain training or mentorship programs, and restricted employee resource groups.<br /><br />It then summarizes prior executive orders, including EO 14173, which revoked EO 11246 and required federal contracts to include certifications that anti-discrimination compliance is material under the FCA, plus EO 14151 and EO 14168, which reduced or prohibited certain DEI initiatives in federal agencies.<br /><br />EO 14398 is the central focus. Signed March 26, 2026, it requires a new FAR clause, FAR 52.222-90, prohibiting “racially discriminatory DEI activities” in federal contracts and subcontracts. Covered activities include race- or ethnicity-based recruitment, employment decisions, contracting preferences, resource allocation, and program participation. The clause also requires prime contractors to report subcontractor noncompliance and to flow the clause down to lower tiers. Compliance is expressly deemed material for FCA purposes.<br /><br />The presentation concludes with practical steps for contractors: review and revise DEI policies, affinity groups, recruiting and contracting preferences, update training, scrutinize new contracts and certifications, and ensure subcontractor flow-down and monitoring.

Keywords

federal contractors

DEI compliance

Executive Order 14398

False Claims Act

Title VII

Title VI

anti-discrimination laws

FAR 52.222-90

affirmative action

subcontractor flow-down