Tomorrow (July 24th) is the target date federal agencies were told to finish modifying every existing (federal) contract to add a new clause barring contractors from race-based DEI practices in hiring, vendor selection, and program participation.
Executive Order 14398 "Addressing DEI Discrimination by Federal Contractors," was published on March 31st, and the FAR Council created clause FAR 52.222-90 with the same title. It flows down to subcontractors at every tier, noncompliance is now grounds for suspension and debarment, and the promise is wired into the False Claims Act. That last part is not theoretical. In April, the DOJ announced a $17 million False Claims Act settlement over DEI practices.
Most of us in state or local procurement are not federal contractors - instead, the parallel obligation for recipients of federal funds is already in force through grant certifications, with no modification calendar and no deadline. And your vendors, many of whom do hold federal contracts, are signing that new clause right now. Which means they will start asking you how your local participation requirements square with the federal paper they just signed.
This marks changes that will flow to socioeconomic programs that require a remodel - the courts have constrained the means, not the goal, and there is a well-marked path to redesigning these programs around true small business characteristics that hold up.
I wrote a pretty wonky article on this last week, including where the momentum is pointing and how to take action. You can find it here.
Let me know if we can help!
