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Executive Order 14173

Cease of federal DEIA contracts From Wikipedia, the free encyclopedia

Executive Order 14173
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Executive Order 14173, titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity", is an executive order signed by Donald Trump, the 47th President of the United States, on January 21, 2025.[1]

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The order revoked Executive Order 11246, as amended by Executive Orders 11375, 12086, 13279, 13280, 13496, 13665, and 13672, which had required federal contractors and subcontractors with contracts exceeding $10,000 to refrain from discrimination in hiring, promotion, compensation, and other employment practices on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin.[2]

Federal Acquisition Regulation (FAR) clauses 52.222-9, 52.222-21 through 52.222-27, and 52.222-29, as well as FAR Subpart 22.8, were rendered unenforceable under new or modified federal contracts, subcontracts, and solicitations. Executive Order 14173 also revoked Executive Orders 12898 and 13583, as well as the Presidential Memorandum of October 5, 2016.

The order centralized authority for enforcing anti-discrimination requirements in procurement to the Department of Labor (DOL)'s Office of the Assistant Secretary for Policy, stripping interpretive authority from the Office of Federal Contract Compliance Programs (OFCCP), Environmental Protection Agency, and civil rights offices of other federal agencies.[3]

It revoked the amendment made by Executive Order 13672 to Executive Order 11478, thereby eliminating the provision that equal employment opportunity shall be provided to federal civilian employees without discrimination based on gender identity. As a result, the U.S. Office of Personnel Management (OPM) lost its regulatory authority to issue regulations, guidance, or technical assistance specific to nondiscrimination based on gender identity in federal hiring, promotion, or personnel practices. It also no longer has the authority to evaluate agency compliance with such protections, develop training or diversity initiatives to support transgender and gender non-conforming individuals, or require agencies to report demographic data related to gender identity. Additionally, OPM's ability to coordinate with the Equal Employment Opportunity Commission (EEOC) on gender identity-related matters in the federal workforce has been curtailed.

The order also required agencies to terminate existing diversity, equity, inclusion, and accessibility (DEIA or DEAI) mandates that were deemed discriminatory or unlawful. The Office of Management and Budget and the United States Attorney General were tasked with reviewing and revising acquisition, grant, and assistance procedures to remove DEI-related language. Agency heads were directed to promote merit-based principles, and the United States Department of Justice and United States Department of Education were instructed to issue new guidance consistent with the Supreme Court of the United States' decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College.

Some critics argued that the order could reduce protections for minority groups and diminish diversity initiatives in federal contracting and employment. Commentators suggested it may make it more difficult for underrepresented individuals to access equal employment opportunities.[4][5]

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Provisions

  • Revocation of the following executive orders and presidential memorandum:
  • Federal contractors are permitted to continue following the regulatory framework that was in place as of January 20, 2025, until April 21, 2025.
  • Direct all executive departments and agencies to eliminate any discriminatory or unlawful preferences, mandates, policies, programs, activities, guidelines, regulations, enforcement actions, consent orders, and requirements
  • Instruct all agencies to uphold established civil rights laws and address unlawful diversity, equity, and inclusion (DEI) practices in the private sector.
  • The federal contracting process will be simplified to improve speed and efficiency, lower costs, and ensure that federal contractors and subcontractors adhere to civil rights laws.
  • The Office of Federal Contract Compliance Programs within the Department of Labor is directed to immediately stop:
    • Promoting "diversity"
    • Requiring federal contractors and subcontractors to implement "affirmative action" measures
    • Permitting or encouraging federal contractors and subcontractors to adjust their workforce composition based on race, color, gender, sexual orientation, religion, or national origin
  • As outlined in Executive Order 13279 of December 12, 2002 (Equal Protection of the Laws for Faith-Based and Community Organizations), federal contractors and subcontractors must ensure that their employment, procurement, and contracting practices do not consider race, color, gender, sexual orientation, religion, or national origin in any manner that violates the nation's civil rights laws.
  • The head of each agency must include the following provisions in every contract or grant award:
    • A clause stating that the contractor's or grant recipient's full compliance with all applicable federal anti-discrimination laws is a key factor in the government's payment decisions, as outlined in section 3729(b)(4) of title 31, United States Code; and
    • A clause requiring the contractor or recipient to certify that it does not run any programs promoting DEI that conflict with any applicable federal anti-discrimination laws.
  • The Director of the Office of Management and Budget (OMB), with support from the Attorney General as needed, shall:
    • Review and update all government-wide processes, directives, and guidance as necessary;
    • Remove references to DEI and DEIA principles—regardless of how they are labeled—from federal acquisition, contracting, grants, and financial assistance procedures to streamline these processes, enhance speed and efficiency, reduce costs, and ensure compliance with civil rights laws; and
    • Eliminate all mandates, requirements, programs, or activities related to "diversity," "equity," "equitable decision-making," "equitable deployment of financial and technical assistance," "advancing equity," and similar concepts, as appropriate.
  • The heads of all agencies, with support from the Attorney General, must take all necessary actions within their operations to promote in the private sector the principles of individual initiative, excellence, and hard work outlined in Section 2 of this order.
  • To assist in developing effective civil-rights policies for Trump administration, the Attorney General, within 120 days of this order, in consultation with relevant agency heads and in coordination with the Director of OMB, shall provide a report to the Assistant to the President for Domestic Policy. This report will include recommendations for enforcing federal civil-rights laws and measures to encourage the private sector to eliminate illegal discrimination and preferences, including DEI-related practices. The report will include a proposed strategic enforcement plan that identifies:
    • Key sectors of concern under each agency's jurisdiction;
    • The most egregious and discriminatory DEI practitioners within each sector of concern;
    • A detailed plan outlining specific steps to deter DEI programs or principles (whether labeled as "DEI" or otherwise) that involve illegal discrimination or preferences. As part of this plan, each agency will identify up to nine potential civil compliance investigations targeting publicly traded corporations, large nonprofit organizations, foundations with assets of $500 million or more, state and local bar and medical associations, and institutions of higher education with endowments exceeding $1 billion;
    • Additional strategies to encourage the private sector to eliminate illegal DEI discrimination and preferences while ensuring compliance with federal civil-rights laws;
    • Potential litigation for federal lawsuits, interventions, or statements of interest; and
    • Possible regulatory actions and sub-regulatory guidance.
  • Within 120 days of this order, the Attorney General and the Secretary of Education shall jointly provide guidance to all state and local educational agencies that receive federal funding, as well as to all institutions of higher education that receive federal grants or participate in the federal student loan assistance program under Title IV of the Higher Education Act, 20 U.S.C. 1070 et seq. This guidance will outline the measures and practices necessary to comply with the decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023).
  • If any part of this order, or its application to a specific person or situation, is found to be invalid, the rest of the order and its application to other individuals or circumstances will remain unaffected.
  • This order does not apply to lawful employment or contracting preferences for U.S. armed forces veterans or individuals protected under the Randolph-Sheppard Act, 20 U.S.C. 107 et seq.
    • This order does not restrict state or local governments, federal contractors, or federally funded state and local educational agencies or institutions of higher education from engaging in speech protected by the First Amendment.
    • This order does not prohibit educators at federally funded institutions of higher education from advocating for, endorsing, or promoting the employment or contracting practices prohibited by this order, as part of broader academic instruction.
  • Nothing in this order shall be interpreted to:
    • Limit or alter the authority legally granted to any executive department, agency, or their leadership; or
    • Interfere with the responsibilities of the Director of the Office of Management and Budget regarding budgetary, administrative, or legislative matters.
    • This order shall be carried out in accordance with applicable laws and is subject to the availability of appropriations.
    • This order does not create any rights or benefits, whether substantive or procedural, that are enforceable by any individual or entity against the United States, its departments, agencies, officers, employees, agents, or any other person.
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Implementation

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On January 23, 2025, the Office of Federal Contract Compliance Programs (OFCCP) issued a bulletin that for 90 days, until April 21, 2025, federal contractors may voluntarily keep following the same regulatory rules that were in place on January 20, 2025, even though those rules are no longer required. The bulletin also directed the agency to immediately cease promoting diversity initiatives, enforcing affirmative action obligations, and encouraging workforce balancing based on race, sex, sexual preference, religion, or national origin.[6] On January 24, 2025, Acting Secretary of Labor Vince Micone issued Secretary's Order 03-2025, which directed all United States Department of Labor employees to cease and desist all investigative and enforcement activities under the rescinded Executive Order 11246 and its implementing regulations.[7]

On February 15, 2025, William Clark, Chair of the Civilian Agency Acquisition Council (CAAC), issued CAAC Letter 2025-01 and on February 18, 2025, he issued CAAC Letter 2025-01 Supplement 1, which supersedes CAAC Letter 2025–01. The letter allows federal agencies to issue a class deviation to follow Executive Order 14173. If they do, contracting officers must apply the changes outlined in this letter.

The following Federal Acquisition Regulation (FAR) clauses and provisions listed in CAAC Letter 2025-01 Supplement 1 are to be revoked (reserved) if a federal agency issues a class deviation for new solicitations or contracts:

  • FAR 52.222-9 – Apprentices and Trainees
  • FAR 52.222-21 – Prohibition of Segregated Facilities
  • FAR 52.222-22 – Previous Contracts and Compliance Reports
  • FAR 52.222-23 – Notice of Requirement for Affirmative Action To Ensure Equal Employment Opportunity for Construction
  • FAR 52.222-24 – Preaward On-Site Equal Opportunity Compliance Evaluation
  • FAR 52.222-25 – Affirmative Action Compliance
  • FAR 52.222-26 – Equal Opportunity
  • FAR 52.222-27 – Affirmative Action Compliance Requirements for Construction
  • FAR 52.222-29 – Notification of Visa Denial
  • FAR Subpart 22.8 – Equal Employment Opportunity

The following FAR clauses and provisions listed in CAAC Letter 2025-01 Supplement 1 are to be revised to remove the references to the clauses and provisions that were revoked if a federal agency issues a class deviation for new solicitations or contracts:

  • FAR 52.204-8 – Annual Representations and Certifications
  • FAR 52.212-3 – Offeror Representations and Certifications—Commercial Products and Commercial Services
  • FAR 52.212-5 – Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Products and Commercial Services
  • FAR 52.213-4 – Terms and Conditions—Simplified Acquisitions (Other Than Commercial Products and Commercial Services)
  • FAR 52.222-6 – Construction Wage Rate Requirements
  • FAR 52.222-11 – Subcontracts (Labor Standards)
  • FAR 52.222-12 – Contract Termination—Debarment
  • FAR 52.244-6 – Subcontracts for Commercial Products and Commercial Services
  • FAR 14.405(e) – Minor informalities or irregularities in bids
  • FAR 19.602-1(a)(2)(ii) – Certificate of Competency referrals
  • FAR 4.1202(a) – Solicitation provision and contract clause list
  • FAR 1.106 – OMB Control Numbers
  • FAR 2.101 – Definitions

The letter empathized that contractors must still follow all current U.S. civil rights and anti-discrimination laws, even if they aren't doing business with the federal government. For contracts that are already in place, the letter states federal agencies should decide how best to follow Executive Order 14173. The letter also states federal agencies might have to take further actions to fully meet the requirements of Executive Order 14173.[8][9]

On February 15, 2025, the General Services Administration issued class deviations for the revoked or revised FAR clauses and provisions in CAAC Letter 2025–01.[10][11]

The following federal agencies have issued class deviations for the revoked or revised FAR clauses and provisions in CAAC Letter 2025-01 Supplement 1:[12]

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Effects

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More information Federal contract compliance enforcement process prior to January 21, 2025 ...

The order requires the government departments to review the hiring practices of businesses and organizations that have been contracted, as well as consider any remedies done after the signing of this order. Federal contractors were given 90 days from the signing of the order to stop DEIA practices.[27] After the review, the departments are to determine whether to continue the contract with the current organization, give the contract to another party, or to cancel the contract.[1][5]

Due to this many organizations are worried if they might end up losing money from partially completed contracts, if the federal government were to rescind their contract.[4] Because of this, many lawyers have suggested to contracted organizations to be in touch with a law firm immediately.[5][28]

GSA spokesperson Will Powell stated FAR 52.222-21 was "duplicative" of the Civil Rights Act of 1964 and removed to "streamline" the FAR.[29]

Kara Sacilotto, an attorney at Wiley Rein LLP, a law firm that focuses on federal contracting, believes FAR 52.222-21 was likely flagged by the GSA because of the regulatory amendment on April 8, 2015, which was revised to include protections based on gender identity. This update was part of the implementation of Executive Order 13672 under the Obama administration. However, she notes that President Trump rescinded that executive order via Executive Order 14173. Given Trump's other executive orders about gender identity policies, she suspects that's likely why this particular provision was singled out for removal.[30]

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