FAR Council moves rapidly to implement EO 14398

Federal contractors are facing immediate changes to implement stepped-up efforts to restrict diversity, equity, and inclusion (DEI) programs, including new mandatory contract clauses, expanded audits, and significant potential legal exposure. These far-reaching changes will affect prime contractors and all tiers of subcontractors. Any employer that is a federal contractor should immediately prepare for these new compliance obligations. 

The Federal Acquisition Regulatory (FAR) Council— which sets government-wide procurement policy and regulation for all federal agencies—has moved quickly to implement Executive Order (EO) 14398, Addressing DEI Discrimination by Federal Contractors. 

Specifically, the FAR Council issued government-wide implementation guidance and class deviation language for all federal agencies to incorporate a mandatory contract clause, as prescribed in EO 14398, as soon as April 24, 2026, in new solicitations and by July 24, 2026, for bilateral modifications of existing contracts. The class deviation authorizes agency-wide implementation of new requirements in federal contracts before the Federal Acquisition Regulations are amended formally. The FAR Council also requested emergency approval, under the Paperwork Reduction Act (PRA), to allow immediate enforcement of EO 14398’s information collection and reporting requirements. 

New mandatory contract clause  (FAR 52.222-90)