Donald Trump has signed 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 move represents a major shift in federal contracting policy and signals the administration’s continued effort to eliminate DEI-related initiatives across government operations.
The order directs the Office of Management and Budget to develop detailed guidance for enforcing the policy and to identify industries where DEI programs are currently in place. Federal agencies are instructed to cancel, suspend, or terminate contracts with companies that refuse to comply with the directive, particularly those that continue to use what the administration describes as “racially discriminatory DEI activities.”
In addition, the order requires the U.S. attorney general to prioritize enforcement of contractual violations tied to DEI policies. It also calls for the swift review of civil rights complaints filed by individuals who claim to be affected by such practices. The Federal Acquisition Regulatory Council is tasked with revising procurement regulations to remove any provisions that conflict with the administration’s new stance.
The administration defines DEI initiatives as policies that may give preferential treatment based on race or ethnicity instead of merit. Trump argues that these practices reduce efficiency by limiting hiring and promotion decisions, ultimately shrinking the available talent pool. He also claims they contribute to higher workforce turnover and increase operational costs for federal agencies.
According to Trump, these additional costs are passed on to taxpayers through government contracts awarded to companies that maintain such policies. He further alleged that some contractors have attempted to continue or conceal DEI-related efforts despite previous directives aimed at eliminating them.
This action builds on a broader executive order issued shortly after Trump returned to office in January 2025, which required federal agencies to dismantle DEI offices, positions, and performance metrics. Trump has criticized earlier “Equity Action Plans,” arguing they encouraged wasteful spending and unfair practices.
Since resuming office, Trump has signed more than 240 executive orders, reflecting his reliance on executive authority to implement policy changes. The latest directive is expected to fuel ongoing national debate over the role of DEI in workplaces, with supporters viewing it as a return to merit-based systems and critics warning of potential impacts on diversity and equal opportunity.
