On October 28, 2026, the plaintiffs in National Association of Diversity Officers in Higher Education v. Trump, No. 8:26-cv-01532 (D. Md.) (“NADOHE case”), filed a notice voluntarily dismissing without prejudice their facial challenge to Executive Order (“EO” or the “Order”) 14398, Addressing DEI Discrimination by Federal Contractors, and its Federal Acquisition Regulation (“FAR”) implementation. The notice followed Judge Adam B. Abelson’s October 14 opinion denying a preliminary injunction. Although the plaintiffs did not obtain an injunction, they secured a narrowing construction every federal contractor should understand.

What EO 14398 Requires

Issued March 26, 2026, EO 14398 directs agencies, “to the extent permitted by law,” to include a clause in contracts and contract-like instruments, including subcontracts and lower-tier subcontracts. The FAR Council’s April 17, 2026, guidance directed agencies to implement the clause, through class deviations, as FAR 52.222-90. “[I]n connection with the performance of work under this contract,” the contractor must:

  • not engage in “racially discriminatory DEI activities,” defined as “disparate treatment based on race or ethnicity in the recruitment, employment (e.g., hiring, promotions), contracting (e.g., vendor agreements), program participation, or allocation or deployment of an entity’s resources”;
  • furnish information and reports, including access to books, records, and accounts, as the contracting agency requires;
  • report any subcontractor’s “known or reasonably knowable conduct that may violate this clause”; and
  • recognize that compliance is material to the government’s payment decisions for purposes of the False Claims Act (“FCA”).

Read the full post on our Government Contracts Navigator blog.