New FAR Council Guidance on DEI Discrimination Ban

What’s New?

• The Federal Acquisition Regulatory (FAR) Council recently issued new guidance implementing EO 14398, “Addressing DEI Discrimination by Federal Contractors” (see Arbor’s previous Client Alert for more information.)

• The new FAR clause 52.222-90, requires government agencies to include the clause in all new solicitations and by July 24, 2026, work bilaterally to modify existing contracts to include the new clause.

• Refusal to modify a contract may result in termination of the contract.

• Exceptions: the clause does not apply to contracts at or below the micro-purchase threshold ($15,000) or for those where the place of delivery or performance is outside the United States. Contracts that expire on, or before, December 31, 2026, may be modified at the contracting officer’s discretion.

What to Do Now

• For more information on the requirements, exceptions, enforcement, and penalties: Connect with Arbor (over 30 years of experience with federal agencies and contractors) to partner with your internal, or external counsel, to review any DEI initiatives, outreach, mentorship programs, succession plans, vendor diversity initiatives and resource allocations, to assure compliance with the FAR Clause.

• Review present federal contracts/subcontracts for any possible exceptions to the FAR Clause.

• Evaluate your supply chain for revised subcontractor flow-down language in subcontracts and purchase orders. Consider subcontractor education, possible monitoring and reporting obligations.