President Donald Trump has issued a new executive order prohibiting federal contractors and subcontractors from engaging in diversity, equity, and inclusion (DEI) practices, according to a White House fact sheet. The order directs the Office of Management and Budget to develop compliance guidelines and identify sectors where such practices are currently in use.
Under the directive, federal agencies are required to cancel, suspend, or terminate contracts with companies that refuse to eliminate what the administration describes as “racially discriminatory DEI activities.” The order also instructs the attorney general to prioritize enforcement of contract violations linked to DEI policies and to ensure swift review of civil rights complaints submitted by private individuals.
In addition, the Federal Acquisition Regulatory Council must revise federal procurement rules to remove any provisions that conflict with the administration’s stance. The administration defines DEI initiatives as practices that factor race or ethnicity into hiring or promotion decisions rather than focusing solely on merit.
Trump argued that these policies contribute to higher workforce turnover and unnecessary costs. He stated that limiting hiring pools based on DEI considerations reduces efficiency and ultimately increases expenses for federal agencies, with those costs passed on to taxpayers. He also claimed that some contractors have continued or concealed DEI-related practices despite prior directives.
This move builds on a broader executive order issued shortly after Trump returned to office in January 2025, which eliminated DEI programs across federal agencies. That earlier action required agencies to dismantle DEI offices, roles, and performance standards tied to diversity efforts. Trump criticized the previous administration’s “Equity Action Plans,” calling them wasteful and discriminatory.
Since resuming office, Trump has signed more than 240 executive orders, often relying on executive authority as Congress struggles to pass legislation.
Separately, Trump has raised concerns about name, image, and likeness (NIL) payments in college athletics. At a White House summit, he warned that the current system could disrupt not only sports programs but also the broader higher education system, signaling that further action may follow.
