Federal Contractor Regulatory Shifts

Federal contractors are navigating significant regulatory shifts following the issuance of Executive Order 14173 in January 2025. This order rescinds longstanding affirmative action mandates under Executive Order 11246, eliminating requirements for nondiscrimination based on race, gender identity, and sexual orientation in federal contracting. Consequently, clauses such as the “Prohibition of Segregated Facilities” (FAR 52.222-21) have been removed from federal contracts, with agencies like the GSA and DoD implementing these changes. The order also directs agencies to terminate existing diversity, equity, inclusion, and accessibility (DEIA) mandates deemed discriminatory or unlawful.