Federal agencies must begin incorporating a new contract clause implementing EO 14398 into new and existing contracts valued above $15,000, beginning April 24. The guidance from the White House Office of Management and Budget and the Federal Acquisition Regulatory Council introduces FAR clause 52.222-90, Addressing DEI Discrimination by Federal Contractors.
According to the guidance, agencies must “make every effort” to incorporate the clause by July 24. Prime contractors must ensure that the clause flows down to all subcontract tiers. Federal agencies cannot unilaterally impose the new FAR clause, but they may terminate a contract for convenience if a contractor does not agree to use the new clause to modify its existing contracts.
The guidance, paired with the FAR Council’s recent request for OMB’s permission to begin mandatory EO 14398 DEI disclosures, signals the imminence of EO 14398 enforcement. However, there is no indication that these inquiries will take the form of full DEI audits by agency contracting officers.
CWC’s DEI Risk Assessment Package supports compliance planning for organizations that want to proactively evaluate their risk.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.