The Federal Acquisition Regulatory Council has initiated the formal process for federal agencies to begin collecting all “books, records, and accounts” for assessing contractors’ compliance with Executive Order 14398. The new EO, Addressing DEI Discrimination by Federal Contractors, requires contractors to refrain from “racially discriminatory DEI activities” and provide the government access to the records and data needed to determine their compliance.

The FAR Council said it expects more than 6,000 agency inquiries into contractor DEI activities annually. However, there is no indication that these inquiries will be full DEI audits by agency contracting officers. There is no requirement for prime contractors to affirmatively collect certifications or other DEI information from subcontractors.

Federal contractors should prepare for enforcement of EO 14398 by:

  • Verifying that FAR 52.222-90 (which is often incorporated by reference) is being added to their contract awards, modifications, and renewals;
  • Flowing the clause down to subcontractors at all tiers; and
  • Continuing annual reviews of their DEI-related policies and programs.

CWC’s DEI Risk Assessment Package supports compliance planning for organizations wanting to proactively evaluate their risk. Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.