Federal Government Contractors May No Longer Have 90 Days to Comply With Trump Administration’s DEI Executive Order

GSA FAR Class Deviations

Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued on January 21, 2025, caused immediate confusion for federal government contractors since their existing contracts mandated compliance with Executive Order 11246, “Equal Employment Opportunity.” The Trump administration’s new executive order revoked EO 11246 and expressly stated, “For 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.” Thus, federal contractors believed that compliance with EO 11246 was contractually required until April 21, 2025, and they should review whether any changes to their existing programs were needed during the 90-day grace period. However, on February 15, 2025, the U.S. General Services Administration (“GSA”) issued two Federal Acquisition Regulations (“FAR”) class deviations to “allow federal contracting officers to amend or modify current solicitations and contracts without penalty to the government or the contract holder.” Therefore, GSA now has the power to shorten that 90-day timeline by modifying existing government contracts to include EO 14173 before April 21, 2025.

U.S. Attorney General Pam Bondi Memorandum

In addition to GSA potentially reducing that 90-day grace period, U.S. Attorney General Pam Bondi issued a memorandum on February 5, 2025, titled “Ending Illegal DEI and DEIA Discrimination and Preferences,” which stated in relevant part, “To fulfill the Nation’s promise of equality for all Americans, the Department of Justice’s Civil Rights Division will investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs and activities in the private sector and in educational institutions that receive federal funds.” The memorandum specifically set forth a date of March 1, 2025, as the date by which personnel at the U.S. Department of Justice would jointly submit a report containing recommendations for enforcement actions and other measures to encourage the private sector to end illegal discrimination and preferences. According to this memorandum, the report will identify “the most egregious and discriminatory DEI and DEIA practitioners in each sector of concern” and will include a plan with “specific steps or measures to deter the use of DEI and DEIA programs or principles that constitute illegal discrimination or preferences,” including “proposals for criminal investigations.”

Recommendations for Federal Government Contractors

In light of the fact that federal government contractors likely won’t have the entire 90-day grace period that EO 14173 seemingly promised, there are certain steps that companies can and should take as soon as possible to minimize the risk of being subject to a false claims act claim under EO 14173.

• Provide comprehensive training to employees on relevant federal anti-discrimination laws and the implications of EO 14173 on DEI practices.
• Document all communication with federal contracting officers regarding any potential issues or questions related to DEI programs and compliance with EO 14173.
• Conduct a comprehensive review of existing federal government contracts and identify those that contain references to DEI programs.
• Assess whether and to what extent removing or eliminating those programs would implicate Title VII of the Civil Rights Act and Equal Employment Opportunity Commission guidelines.
• Review any DEI certifications submitted to the government, ensuring they accurately reflect the contractor’s practices and do not make any false claims about compliance.
• Consider modifications to information on the company’s website and social media platforms regarding DEI programs and initiatives.
• Maintain detailed records of all DEI initiatives, including decision-making processes, implementation steps, and data related to program effectiveness.
• Implement measures to address potential whistleblower concerns regarding DEI practices within the organization.
• Monitor the evolving legal landscape and stay informed about ongoing legal challenges and interpretations related to EO 14173 and DEI compliance.