On April 20, 2026, the Office of Federal Procurement Policy (“OFPP”) and the FAR Council released updated model deviations for FAR Parts 9, 12, 22, and 52 to implement Executive Order (“EO”) 14398, Addressing DEI Discrimination by Federal Contractors. These updates significantly expand the government’s enforcement toolkit, making compliance contractually required and specifically enforceable through contractual remedies, FAR Part 9 suspension and debarment, and the False Claims Act.
What Changed: The Model Deviation Updates
FAR Part 9 — Debarment and Suspension
Perhaps the most significant development in the April 20 updates is the addition of DEI noncompliance as an express basis for debarment and suspension. FAR Subpart 9.4 (Debarment, Suspension, and Ineligibility) has been updated to provide that a contractor’s failure to comply with the requirements of new clause 52.222-90, Addressing DEI Discrimination by Federal Contractors, may serve as a basis for both debarment under FAR 9.406-2(b)(1)(viii) and suspension under FAR 9.407-2(a)(11).
By explicitly naming DEI noncompliance as a ground for debarment and suspension—remedies that can effectively bar a company from the federal marketplace—the government has removed any ambiguity about its intent to enforce compliance aggressively.
FAR Part 12 — Commercial Contracts
FAR Part 12 has also been updated, with Table 12-3 (Clauses to Include as Prescribed in 12.205) now expressly listing clause 52.222-90, Addressing DEI Discrimination by Federal Contractors. This means the new clause applies broadly—including to contracts for commercial products and commercial services—extending its reach across most of the federal contracting marketplace.
FAR Part 22 — New Subpart and Definitions
FAR Part 22 has been updated to add new Subpart 22.22, Addressing DEI Discrimination by Federal Contractors. Section 22.2201 introduces new definitions for “program participation” and “racially discriminatory DEI activities.” New clause 52.222-90, as prescribed in Section 22.2203, applies to contracts and subcontracts valued over the micro-purchase threshold, including those for commercial products and commercial services, where the place of delivery or performance is in the United States.
FAR Part 52 — New Clause and Subcontract Flowdown
FAR Part 52 has been updated to add new clause 52.222-90 and to add 52.222-90 to the clause table for FAR 52.244-6(b)(2), governing subcontracts for commercial products and commercial services.
The New Clause: What It Says and What It Means for Contractors
The full text of new FAR clause 52.222-90, Addressing DEI Discrimination by Federal Contractors, is available here.
Key Takeaways from the Clause
1. The Language Has Shifted—and It Matters
Earlier iterations of the government’s DEI executive order framework used the phrase “illegal DEI.” The new clause abandons that language in favor of “racially discriminatory DEI activities,” defined as disparate treatment based on race or ethnicity across a wide range of business activities, including recruitment, hiring, promotions, vendor agreements, program participation, and allocation of resources. The focus is no longer on whether a DEI activity is “illegal” in some broader legal sense, but on whether it involves race- or ethnicity-based disparate treatment. Contractors should review their programs with that specific lens in mind.
2. Serious Enforcement Sticks Are Built Into the Clause
Subsection (b)(3) makes clear that noncompliance comes with consequences. A contractor or subcontractor found to be noncompliant may face cancellation, termination, or suspension of the contract and a declaration of ineligibility for further government contracts. Read alongside the FAR Part 9 updates discussed above, this is significant and creates a clear, direct path from noncompliance to suspension or debarment.
3. The False Claims Act Is Expressly in Play
Subsection (b)(6) provides that “compliance with the requirements of this clause are material to the Government’s payment decisions for purposes of 31 U.S.C. 3729(b)(4).” This is a materiality provision, and it is a direct reference to the False Claims Act (“FCA”). By including this language in the clause itself, the government is putting contractors on notice that it views DEI noncompliance as a potential basis for FCA liability. As we wrote earlier this year, the Department of Justice has been explicit about its intent to use the FCA as an enforcement tool in this space. For more on that, see: DOJ Sheds Light on FCA Scrutiny of “Illegal DEI” and Discriminatory Practices in Federal Contracting.
4. Affirmative Obligation to Report Subcontractor Noncompliance
Subsection (b)(4) imposes an affirmative reporting obligation: contractors must report any subcontractor’s known or reasonably knowable conduct that may violate the clause to the Contracting Officer. This is not a passive obligation—contractors are expected to actively monitor their supply chains for potential noncompliance and report it up. The “reasonably knowable” standard is particularly noteworthy, as it suggests that willful ignorance will not be a defense.
5. Mandatory Flowdown to All Subcontracts at Every Tier
Subsection (c) requires contractors to flow down the substance of the clause—including the flowdown requirement itself—to all subcontracts at every tier, including those for commercial products and commercial services. The only carve-out is for subcontracts where the place of delivery or performance is outside the United States. In other words, if work is being performed on U.S. soil at any tier of the supply chain, the clause must be in the subcontract.
The Bottom Line
The April 20, 2026 model deviation updates confirm what many have been speculating about for months: the government is not treating its anti-DEI executive orders as aspirational policy statements. Rather, it is building out a full enforcement architecture—express debarment grounds, contractual termination rights, FCA materiality provisions, mandatory flowdowns, and affirmative reporting obligations. For federal contractors, this means that a passive or reactive compliance posture is not sufficient. Contractors should be proactively auditing their programs, reviewing subcontractor relationships, and ensuring that appropriate policies, training, and contract provisions are in place.
We will continue to monitor developments in this space closely and provide updates as additional guidance is issued.