Fact Sheet: President Donald J. Trump Addresses DEI Discrimination by Federal Contractors

On March 27, 2026, President Donald J. Trump signed an Executive Order aimed at eliminating "diversity, equity, and inclusion" (DEI) practices among Federal contractors and subcontractors. The administration characterizes the move as a return to merit-based hiring and a measure to ensure equal treatment under the law for all Americans. Key Mandates of the Executive Order: Contractual Prohibitions: All Federal contracts must now include a clause prohibiting contractors from engaging in racially discriminatory DEI activities. Enforcement and Accountability: Contracting agencies are authorized to cancel, terminate, or suspend contracts, as well as debar contractors who fail to comply with the new standards. Legal Action: The Attorney General is directed to prioritize False Claims Act cases against contractors who misrepresent their compliance with these non-discriminatory terms. Regulatory Oversight: The Office of Management and Budget (OMB) will identify sectors at high risk for DEI engagement, and the Federal Acquisition Regulatory Council will formally amend regulations to remove any conflicting DEI provisions. Rationale for the Policy: The administration argues that DEI programs: Increase Costs: By "artificially restricting the labor pool" and driving up operational expenses that are ultimately passed on to taxpayers. Reduce Efficiency: By prioritizing "immutable characteristics over job performance," which the administration claims harms employee collaboration and problem-solving. Lack Accountability: The order seeks to prevent entities from "concealing" ongoing DEI activities. Broader "America First" Context: This order is the latest in a series of actions taken since 2025 to remove DEI from the federal government, including similar bans within the Armed Forces, the Department of Homeland Security, the Foreign Service, the FAA, and federal AI procurement. The President reaffirmed his commitment to "terminate every diversity, equity, and inclusion program across the entire Federal Government."