The 2026 DEI Executive Order recently issued by the White House imposes new obligations on federal contractors and subcontractors, to prevent “artificial” and “unnecessary” DEI program costs from being passed on to the government in federal courts. It limits the definition of racially discriminatory DEI activities to employment decisions, contracting activities such as vendor agreements, program participation, or allocation or deployment of entity resources that results in disparate treatment based on race or ethnicity.

The new order applies not only to executive departments and agencies but also to independent agencies subject to the Federal Property and Administrative Services Act. By April 25, 2026, the covered departments and agencies must ensure that their contracts and similar instruments (such as cooperative, service, or concession agreements, and some grants) include clauses requiring compliance with specific terms.

To learn what these terms are, and how the new federal mandates will impact contractors and subcontractors, we encourage you to read more on The Contractor’s Perspective.