On March 26, 2026, the Trump Administration released Executive Order 14398 – Addressing DEI Discrimination by Federal Contractors. The executive order mandates that, within 30 days, executive departments and agencies shall, to the extent permitted by law, ensure contracts and contract-like instruments include the following clause: 

“In connection with the performance of work under this contract, [the contractor/appropriate party (contractor)] agrees as follows: 

1.  The contractor will not engage in any racially discriminatory DEI activities, as defined in section 2 of the Executive Order of March 26, 2026 (Addressing DEI Discrimination by Federal Contractors); 

2.  The contractor will furnish all information and reports, including providing access to books, records, and accounts, as required by the contracting agency pursuant to the Executive Order of March 26, 2026 (Addressing DEI Discrimination by Federal Contractors), for purposes of ascertaining compliance with this clause; 

3.  In the event of the contractor’s or a subcontractor’s noncompliance with this clause, this contract may be canceled, terminated, or suspended in whole or in part, and the contractor or subcontractor may be declared ineligible for further Government contracts; 

4.  The contractor will report any subcontractor’s known or reasonably knowable conduct that may violate this clause to the contracting department or agency and take any appropriate remedial actions directed by the contracting department or agency; 

5.  The contractor will inform the contracting department or agency if a subcontractor sues the contractor and the suit puts at issue, in any way, the validity of this clause; and 

6.  The contractor recognizes that compliance with the requirements of this clause are material to the Government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code (False Claims Act).” 

Within 120 days of this order, each agency head is also mandated to review the agency’s implementation of the above clause and report to the Assistant to the President for Domestic Policy regarding its compliance with that clause. Contractor penalties for noncompliance with this order include contract cancellation, termination, or suspension and debarment. 

The March 26 executive order can be found here. 

To discuss this topic further or to explore its implications for your organization, please contact Kwe Parker, Associate Director, kweparker@hka.com.

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HKA’s Government Contracting Group