Trump Signs Order Ending Discriminatory DEI in Contracts

President Donald Trump signed an executive order on March 26 directing federal contractors and their subcontractors to eliminate diversity, equity and inclusion practices deemed racially discriminatory. The directive, which takes effect in 30 days, requires all new contracts to include a clause prohibiting such activities, marking the latest step in the administration's efforts to reshape federal procurement policies.

The order defines racially discriminatory diversity, equity and inclusion activities as any disparate treatment based on race or ethnicity in areas such as recruitment, hiring, promotions, vendor agreements, program participation or resource allocation. This includes internal programs like mentoring, training and leadership development. According to the White House, these practices impose artificial costs, limit labor pools and lead to inefficiencies that ultimately burden taxpayers through higher contract prices.

Under the new rules, executive departments and agencies must ensure the nondiscrimination clause is incorporated into contracts and passed down to subcontractors. The Office of Management and Budget, in coordination with the Justice Department and other...