An executive order bars 'racially discriminatory DEI activities' by every federal contractor.

The President of the United States, on Thursday afternoon, in the Oval Office, surrounded by Cabinet officers and a small contingent of selected supporters, signed Executive Order 14398, “Addressing DEI Discrimination by Federal Contractors.” The order requires every federal contract entered into after April 24, 2026, valued above the federal micro-purchase threshold, to include a clause prohibiting the contractor and any subcontractor from engaging in “racially discriminatory DEI activities.”

The order does not, in its text, define the phrase “racially discriminatory DEI activities.”

The absence of a definition is, by the standards of contracting law, a problem. A clause requiring a contractor to refrain from a class of conduct must, in the standard practice of federal procurement, define the class of conduct with sufficient specificity to permit the contractor to know whether it is in compliance. The clause set forth in the order does not. The order, instead, instructs the Office of Management and Budget to issue guidance to contracting agencies “to ensure compliance and identify economic sectors that pose a particular risk of engaging in racially discriminatory DEI activities.”

The contracting officer, by the order’s language, is empowered to “cancel, terminate, or suspend contracts” and to “suspend or debar contractors” for failure to comply. The contracting officer is, in the documentary record of these matters, a federal civil servant operating at a wide range of agencies and seniorities. The decision, by the order’s language, rests with the contracting officer’s reading of the OMB guidance, which has not yet been issued, of a phrase that has not been defined, in connection with conduct that has not been identified.

The result, in the operational sense, is a class of clauses inserted into a class of contracts in which the contractor is bound to refrain from conduct neither party can specify in advance. The first such clause must be added to a new solicitation, by the order’s text, on April 24. Existing contracts must, “to every effort,” be bilaterally modified by July 24. The order, in its closing paragraphs, anticipates and instructs the parties to attempt the modification.

The legal challenge filed in the United States District Court for the District of Maryland, on April 20, by the National Association of Diversity Officers in Higher Education, will name the order’s vagueness, the absence of a definitional limit, and the discretion granted to contracting officers as the principal grounds for invalidation. The lawsuit will, in its First Amendment claim, name the chilling effect on protected speech as a basis for an injunction. The lawsuit will, in its Fifth Amendment claim, name the due-process implications of contract termination on undefined grounds. Several similar lawsuits will follow.

The administration, on the day of the signing, framed the order as a corrective to a pattern of unlawful conduct by federal contractors. The administration did not, on the day of the signing, identify any specific contractor whose conduct had triggered the order. The administration did not, on the day of the signing, identify the conduct itself. The administration’s framing, in the absence of those specifics, is a rhetorical commitment to a general principle, the practical effect of which is the insertion of an undefined termination trigger into the entire federal contracting base.

A serious country, in a serious moment, would have defined its terms. A less serious country would do what is being done: sign the order in the Oval Office, post the text on the Federal Register, and let the courts work out what the order means.

Calmly documenting the decline.