Executive Orders Impacting Federal Government Contractors

On President Trump’s first day in office, he signed 26 Executive Orders.  For a frame of reference, former President Biden signed an average of 40 Executive Orders per year.  

Let’s start with a little background first.  The President’s authority to issue EO’s is established in Article II of the U.S. Constitution. I won’t get any more granular to avoid losing readers.  The President cannot use executive orders to create new laws, appropriate funds, or override congressional legislation. Any EO that exceeds executive authority may be struck down by the courts. EO are published in the Federal Register. They are also being published by the White House.   https://www.whitehouse.gov/presidential-actions/  

In addition to EO’s, President Trump has also issued a number of memorandums.  Those are similar to EO’s but do not have to be published in the Federal Register. One of those is the return to work memoranda mandating that all federal employees return to their offices 5 days a week.  

Many of these EO’s impact federal government contractors. Here is a quick read summary of those:

• Ending Illegal Discrimination and Restoring Merit-Based Opportunity 

This order, rescinds Executive Order 11246, which had mandated affirmative action and prohibited discrimination by federal contractors. This revocation marks a departure from policies that have been in place since 1965.   

The new order prohibits private organizations from implementing Diversity, Equity, Inclusion, and Accessibility (DEIA) programs for jobs created through federal contracts. Consequently, federal contractors are now required to discontinue DEIA practices within 90 days of the order’s signing. Federal departments are tasked with reviewing the hiring practices of contracted organizations and deciding whether to continue, reassign, or cancel existing contracts based on compliance.

• Ending Radical and Wasteful Government DEI Programs 

This order states that “to the maximum extent allowed by law,” each federal agency should eliminate all federal DEI, DEIA, and “environmental justice” offices and positions, specifically including Chief Diversity Officer positions; equity action plans that were developed in the Biden administration; “‘equity’ actions, initiatives, or programs, ‘equity-related’ grants or contracts; and all DEI or DEIA performance requirements for employees, contractors, or grantees.” 

Agency heads are required to compile a list of all federal contractors and grantees who have provided such services or training to the federal government. 

• Suspension of Federal Grants and Loans (January 28, 2025) 

An executive order was issued to pause federal grants, loans, and other assistance programs to review their alignment with the administration’s objectives. This suspension raised concerns about the potential impact on various funding recipients. 

Following a legal challenge, the suspension was blocked by a federal judge due to potential First Amendment violations. Subsequently, the administration reversed the suspension, allowing the continuation of these financial assistance programs.  It remains to be seen whether or not the administration will appeal.  

My Advice to Federal Contractors 

1. Do not top work unless you receive a stop work order or a termination for convenience.  Many of the Executive Orders and Memorandums are facing legal challenges. 
2. Review your personnel manuals to ensure you comply with the above particularly on eliminating DEI training.  
3. Note that many of the anti-discrimination and socio-economic polices that have been eliminated are incorporated into the Federal Acquisition Regulations. These clauses are in all federal contracts. Continue complying until you are officially notified by the contracting officer of any changes. 

I’ll keep all of you updated on legal challenges, new EO’s and other directives impacting federal contractors as they come out. Should you have any questions, please contact me or the Centre Law attorney with whom you usually work.