DEI Resource Center for Contractors

Note: The DEI situation is constantly evolving. This page was last updated on 5/26/2026.

AGC of America Disclaimer: AGC provides these resources for informational purposes only and does not promise that the information is accurate, complete, or up-to-date. Given the legal issues involved and the evolving nature of federal policies in this area, AGC strongly encourages you to consult with qualified legal counsel to assess how these developments may impact your organization’s compliance responsibilities.

Overview

On March 26, 2026, President Trump signed a new Executive Order targeting diversity, equity, and inclusion (DEI) activities by federal contractors. The new executive order directs federal agencies and firms that contract with them to adopt new contract language certifying that the contractor does not engage in what the Trump administration refers to as “racially discriminatory DEI.”

  1. EO 14398: Addressing DEI Discrimination by Federal Contractors
    • Prohibits certain forms of race-based decision-making in employment, contracting, and program participation.
    • Applies to both prime contractors and subcontractors.
    • Requires federal agencies to include a new clause in contracts 
    • Requires contractors to certify compliance and provide access to records, reports, and internal materials, if requested.
    • Holds contractors responsible for subcontractor compliance, including an obligation to report known or suspected violations.
    • Gives federal agencies expanded authority to review contractor practices to verify compliance.
    • Makes compliance material to contract performance and payment, increasing enforcement risk.
    • Establishes potential consequences for noncompliance including False Claims Act liability, contract cancellation, termination, or suspension; and suspension or debarment from future federal work.

Previous Executive Orders

In 2025, President Trump issued several Executive Orders to dismantle diversity, equity, and inclusion (DEI) programs across the federal government, target federal contractors to ensure that taxpayer dollars are not used to fund programs perceived as discriminatory or ideologically driven, and target DEI programs in the private sector. Specifically, the three Executive Orders targeting DEI programs include:

  1. EO 14173: Ending Illegal Discrimination and Restoring Merit-Based Opportunity - rescinds affirmative action and nondiscrimination requirements under EO 11246, which was signed by President Lyndon B. Johnson in 1965. The Trump EO also requires federal contractors and grantees to certify they do not operate any "illegal" DEI programs, and directs the US Attorney General to create an enforcement plan to identify companies in the private sector the Administration believes violate federal antidiscrimination laws.
  2. EO 14168: Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government - defines sex as an "individual's immutable biological classification as either male or female" that "does not include the concept of gender identity." The EO also prohibits the use of federal funds to promote gender ideology, and seeks to remove gender identity protections in the federal government and private sector.
  3. EO 14151: Ending Radical and Wasteful Government DEI Programs and Preferencing - seeks to terminate all federal DEI programs, practices, and policies, including eliminating all DEI-related personnel and offices in the federal government.

For contractors, these EO's raise questions about compliance, risk exposure, and how to sustain inclusive workplace practices within the bounds of the law.

To help contractors navigate challenges related to DEI programs, AGC is creating resources and educating the construction community on the potential impacts as it relates to construction.

AGC of America is working to provide contractors with the most up-to-date information on the DEI-related Executive Orders. Make sure to continue to check this page for the latest resources created to help contractors navigate tariffs.

Latest News

Read the latest AGC news on the DEI Executive Orders.

What This Means for Contractors

Areas of Elevated Risk

While the following actions have always been risky or straight-out illegal under existing law, they are even more likely to come under fire in the current environment. Contractors should carefully evaluate practices such as:

  • Hiring or promotion policies that give explicit preference to certain demographic groups, including making selections for interviews.
  • Employee training content that could be interpreted as stereotyping or favoring specific groups.
  • Affinity groups or programs that limit employee participation based on protected characteristics.
  • Offering leadership development, training, mentoring or sponsorship programs, internships, or fellowships to individuals based on protected characteristics.
  • Supplier diversity programs that use quotas or are limited to certain demographic groups.
  • Policies that may limit employee speech or expression in a manner perceived as restricting certain viewpoints.
  • AI-driven hiring or evaluation tools that unintentionally embed or reinforce bias.

What Contractors Should Consider Now

Companies should consider consulting an attorney to conduct an attorney-client privileged legal review of DEI programs and related training materials to assess your programs for DEI practices that are likely to come under scrutiny. In addition, companies should:

  • Strengthen documentation supporting merit-based decision-making, especially in hiring, promotion, and compensation decisions
  • Evaluate subcontractor compliance expectations under new contract requirements
  • Train managers and HR teams on legally compliant practices that support your business objectives.
  • Frame workplace initiatives around inclusion, workplace culture, professional development, and merit-based access to opportunities as sustainable business practices.

Important Context

These developments do not eliminate existing anti-discrimination obligations under federal, state, or local law. Implementation and enforcement continue to evolve, and additional guidance and legal rulings are expected. AGC provides these resources for informational purposes only and does not promise that the information is accurate, complete, or up-to-date. Given the complexity and evolving nature in this area, contractors are strongly encouraged to consult with qualified legal counsel to assess how these developments may impact their specific operations and compliance responsibilities. 

Previous Developments

Lawsuits Challenging the DEI Executive Orders

Legal challenges to recent Executive Orders remain ongoing, and courts have allowed key provisions to move forward while litigation continues. Courts have also indicated that these policies should not be interpreted to prohibit all DEI efforts, and further legal and regulatory developments are expected.

Recent enforcement activity also signals how these policies may be applied in practice. In April 2026, the Department of Justice announced a $17 million False Claims Act settlement with federal contractor, IBM, related to alleged noncompliance with anti-discrimination requirements in federal contracts. The case involved allegations that employment, compensation, hiring, promotion, and workplace programs took protected characteristics into account in ways the government viewed as inconsistent with federal requirements. The matter was resolved through a monetary settlement, with no determination of liability.

Department of Justice (DOJ) Civil Rights Fraud Initiative

On May 19, 2025 the DOJ issued a Memorandum announcing the establishment of the Civil Rights Fraud Initiative. This initiative establishes an enforcement framework to investigate and bring False Claims Act cases against federal contractors and grant recipients who certify compliance with nondiscrimination laws while allegedly engaging in unlawful practices, particularly in relation to DEI programs. Specifically the memorandum states that:

  • Violations can result in substantial penalties, including treble damages and additional fines.
  • Individuals are encouraged to report non-compliance, with the False Claims Act qui tam provisions allowing whistleblowers to file lawsuits on behalf of the government. Whistleblowers can also potentially share in any financial recoveries, if the qui tam action is successful.
  • While the initial focus of this memorandum is on higher education institutions, it applies to all recipients of federal funds, including construction contractors.  
  • The DOJ's Civil Fraud Section and the Civil Rights Division will co-lead enforcement, with support from the Criminal Division, as well as with other federal agencies that enforce civil rights requirements for federal funding recipients, including the Department of Education, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Department of Labor. The Civil Fraud Section and the Civil Rights Division will also establish partnerships with support from all 93 U.S. Attorney's Offices.

Equal Employment Opportunity Commission (EEOC) Guidance 

In March, the EEOC issued new technical assistance documents specifically on what constitutes “unlawful discrimination” related to DEI in the workplace. While the guidance notes the type of conduct that has long been prohibited by existing federal law, it also provides a roadmap for employers to ensure their programs don’t run afoul of the Trump Executive Orders. Here are the key takeaways you should note from the guidance:

  • Title VII Compliance. The guidance reminds employers that Title VII prohibits employment actions based on race, sex, or other protected characteristics, no matter which employees or applicants are harmed.
  • No ‘reverse’ discrimination. “The EEOC’s position is that there is no such thing as ‘reverse’ discrimination,” according to the guidance, and emphasized that there is "no higher showing of proof for so-called 'reverse discrimination.'" This issue is also before the Supreme Court this term. You can read more about the case here.
  • No “business necessity” exception for DEI programs. Title VII allows for a bona fide occupational qualification (BFOQ) in very limited circumstances to excuse hiring or classifying an individual based on religion, sex, or national origin – but this exception excludes race and color. The EEOC’s new guidance highlights that Title VII does not provide any “diversity interest” exception to these rules.
  • Covered workers. The EEOC added that Title VII protects employees, potential and actual applicants, interns, and training program participants. 

Tools and Resources

Employer Resources

Association Resources

AGC of America Disclaimer: AGC provides these resources for informational purposes only and does not promise that the information is accurate, complete, or up-to-date. Given the legal issues involved and the evolving nature of federal policies in this area, AGC strongly encourages you to consult with qualified legal counsel to assess how these developments may impact your organization’s compliance responsibilities.