EO 14398 and Federal AEC Proposals: What to Do by April 25

What Changes on April 25, 2026

Executive Order 14398 was signed on March 26, 2026 and requires federal agencies to insert a new mandatory clause into all new federal contracts, subcontracts, and contract-like instruments within 30 days of signing. That deadline is April 25, 2026 — the Saturday after this post publishes. Every federal A/E proposal that touches a solicitation, task order, or teaming agreement on or after that date will reference a contract governed by the new clause.

Most of the published analysis so far has come from employment attorneys writing for general federal contractors. This post is for the person assembling SF330 packages, GSA IDIQ task orders, VA MATOC responses, and USACE A-E submittals who needs to know what to update and in what order.

What the Clause Actually Requires

Section 3 of EO 14398 directs agencies to add a clause that does four things.

1. A certification against "racially discriminatory DEI activities"

Contractors must agree not to engage in what the order defines as "disparate treatment based on race or ethnicity in the recruitment, employment (e.g., hiring, promotions), contracting (e.g., vendor agreements), program participation, or allocation or deployment of an entity's resources." The operative term is "disparate treatment." The order does not prohibit DEI terminology, training, or programs in general — it prohibits race-based differential treatment in the enumerated areas.

2. Cooperation with agency information requests

Contractors must furnish information, reports, and access to records as requested by the contracting agency for compliance verification. This is an audit-rights expansion. Agencies can request documentation of hiring, promotion, vendor-selection, and program-participation practices as part of contract administration — not just during disputes.

3. Prime contractor monitoring of subconsultants

Prime contractors must report any subcontractor's known or reasonably suspected violations to the contracting agency and implement remedial actions directed by the agency. Primes carry an oversight obligation for their team. On AEC pursuits, this includes every subconsultant named in Section C of the SF330, every teaming partner on a design-build joint venture, and every small-business or DBE firm included for participation credit.

4. False Claims Act materiality

The clause explicitly states that compliance is "material to the Government's payment decisions for purposes of section 3729(b)(4)" of the False Claims Act. This is the legal hook. A firm that submits an invoice on a covered contract while knowingly in violation of the clause can face False Claims Act liability — treble damages plus per-claim penalties — and qui tam lawsuits from relators. Multiple legal advisories (Wiley, Skadden, Dentons, Perkins Coie, Ogletree) have flagged this as the most significant enforcement shift in the order.

What the FAR Council Memo Added on April 17

The clause is no longer abstract. On April 17, 2026, the FAR Council issued an implementation memo and a class deviation that converted EO 14398 into specific FAR provisions every federal contracting officer is now using.

The two clause numbers proposal teams should know:

• FAR 52.222-90 — Addressing DEI Discrimination by Federal Contractors (Apr 2026). This is the operative clause. It applies to all new federal contracts over the $15,000 micro-purchase threshold with U.S. place of performance, including commercial products and commercial services. It became effective April 24, 2026.
• Revised FAR 52.244-6 — Subcontracts for Commercial Products and Commercial Services. This is the flow-down. The revision adds FAR 52.222-90 as a required flow-down to subcontracts at any tier, including commercial-item subcontracts.

Three details from the memo that change the practical posture for AEC proposal teams:

The July 24, 2026 modification window

EO 14398 itself attached the new clause to new contracts and contract-like instruments. The FAR Council memo went further: agencies are directed to modify existing federal contracts to incorporate FAR 52.222-90 by July 24, 2026.

For AEC firms with active IDIQs, MATOCs, BPAs, and option-year contracts, this is the more important date than April 25. Every active federal contract on your firm's books will receive a contract modification adding the clause sometime in the next 90 days. That modification triggers the same certification, flow-down, and monitoring obligations as a new contract — on contracts your firm already has and is performing.

Class deviations across FAR parts 9, 12, 22, and 52

The memo directed agencies to update class deviations across four FAR parts by April 27, 2026. The agency-specific deviation language is what shows up in your next solicitation. Watch for new Section K provisions, new representations, and new flow-down clauses on Corps, GSA, VA, and DOT solicitations issued the week of April 28 forward. The wording will not be uniform across agencies in the near term.

Debarment and suspension authority

The memo amended FAR 9.406-2 (debarment) and FAR 9.407-2 (suspension) to add a new enumerated cause: violation of FAR 52.222-90 is now an explicit basis for both. Suspension and Debarment Officials have express authority to pursue these remedies against contractors and subcontractors found in violation.

For proposal teams, the practical read is that FAR 52.222-90 compliance is no longer just a False Claims Act exposure — it is also a present and responsible standard issue. A firm cited under FAR 52.222-90 risks a finding that affects future solicitations under FAR 9.104-1.

What "reasonably knowable" means for primes

The flow-down through FAR 52.244-6 carries the prime's monitoring obligation downstream. The FAR Council memo clarified that primes are responsible for subcontractor conduct that is "reasonably knowable" — a higher standard than "actually known." The memo's intent is that primes implement compliance programs and contractual protections sufficient to detect subcontractor violations a reasonable prime would have surfaced through normal contract administration.

For an AEC prime managing a Section C subconsultant team, the practical mechanics are:

• Add FAR 52.222-90 flow-down language to every standard subconsultant agreement template
• Collect a compliance certification from each subconsultant at teaming-agreement formation
• Document a process for surfacing complaints, audit findings, or news reports that could indicate subconsultant violations
• Document a process for reporting once a violation becomes known or reasonably knowable

The "reasonably knowable" standard does not require investigations of every subconsultant's hiring practices on every pursuit. It does require that the prime cannot defend itself by claiming it never bothered to look.

Which A/E Proposals Are Affected

The clause applies to federal contracts, subcontracts, and contract-like instruments issued on or after April 25. For A/E firms, that covers:

The practical read: anything you submit to a federal agency or prime contractor from April 25 forward will either contain the clause or will reference a contract that does.

What Proposal Teams Need to Update

Representations and certifications

Every federal submittal includes a representations-and-certifications package. Existing certifications (Buy American, small-business classifications, SAM.gov registration, and past-performance reps) remain. The EO 14398 clause adds a new line-item certification. When new FAR provisions are released implementing the EO, your firm's SAM.gov reps will need to be updated to reflect compliance. Until the implementing provisions are final, proposal teams should expect agency-specific class deviations that insert the clause directly into solicitations.

Section H narratives and teaming agreement templates

Many firms include boilerplate language in SF330 Section H and teaming agreement templates covering equal opportunity, affirmative action, and DEI commitments. Legal advisories from Wiley, Skadden, Dentons, Perkins Coie, and Ogletree have flagged two areas worth a legal-review pass before the next federal submittal:

• Forward-looking claims about specific DEI program outcomes — statements describing race-based differential treatment in hiring, promotion, vendor selection, or program participation. These are the category the advisories have identified as highest-risk for FCA exposure.
• Teaming rationales where demographic criteria are primary — Selection for capability and past performance, with small-business or DBE participation credit, remains an established federal procurement practice and is not the target of the order. The review question is narrower: whether the selection rationale for any teaming partner reads as primarily demographic.

This is a legal-review pass, not a proposal-team pass. Route the boilerplate to general counsel or outside employment counsel once.

Subconsultant flow-down

If you are a prime, the clause flows to every lower-tier subcontract. Update:

• Your standard subconsultant agreement template to include the flow-down
• Your subconsultant onboarding checklist to collect the subconsultant's certification
• Your teaming agreement boilerplate to reflect the monitoring obligation

The "known or reasonably suspected" standard creates a duty to act on information a prime actually has. It does not require investigations of every subconsultant's hiring practices. It does require that, if a prime becomes aware of a subconsultant violation — through a complaint, an audit, a news report, or a referral — the prime notify the contracting agency and take the remedial action the agency directs.

Past-performance narratives

If your firm has cited specific DEI-related accomplishments in past-performance narratives for federal pursuits — awards received, demographic metrics, program outcomes — review those references. Past performance is factual reporting, not a commitment, so existing narratives about completed work are lower risk than forward-looking commitments in Section H. But the language should be reviewed in the same pass.

The Five-Day Checklist for A/E Proposal Managers

If you are assembling a federal submittal this week, work through this list before April 25:

1. Pause any federal submittal not going out before Friday and review Section H, teaming agreement, and representations language for diversity-outcome claims that describe race-based differential treatment. Rewrite where needed.
2. Send your standard subconsultant agreement template to outside counsel for a flow-down review. Ask specifically for EO 14398 language.
3. Update your proposal boilerplate library to flag any DEI-outcome claims for legal review before reuse.
4. Brief your BD and proposal coordinators on the "known or reasonably suspected" standard. They are the people most likely to hear about a subconsultant issue first — they need to know that the firm has a duty to report.
5. Add a line item to your proposal checklist for EO 14398 compliance review on every federal pursuit until your reps-and-certs and boilerplate are updated.

What About Proposals Submitted Before April 25?

Submittals that go to contracting officers before April 25 are evaluated under the pre-EO framework. The clause attaches to new contracts and new contract-like instruments — not to existing submittals awaiting award. However, if a pre-April 25 submittal results in a contract award after April 25, the resulting contract will contain the clause. Plan as if every federal contract your firm signs from this point forward is subject to it.

Agency heads must review implementation within 120 days of the order and report to the Assistant to the President for Domestic Policy — that review deadline is July 24, 2026. Expect agency-specific implementation guidance (class deviations, solicitation provisions, or contract modifications) to continue rolling out over the next 90 days.

Frequently Asked Questions

Does EO 14398 apply to state DOT contracts funded by federal grants?

The clause flows through federal funds to subrecipients and to contracts awarded using federal funds. State DOT A/E contracts funded by IIJA, BUILD, FEMA BRIC, or similar federal discretionary grants will typically incorporate the clause through grant terms. Purely state-funded DOT contracts are not covered.

Does the order prohibit saying the word "diversity" in a proposal?

No. The order prohibits race-based disparate treatment in enumerated areas. It does not prohibit DEI terminology, training programs, or outreach. Statements of general commitment to equal opportunity remain permitted. Claims that describe specific race-based differential treatment are the risk area.

Is my subconsultant required to sign the flow-down before April 25?

The clause applies to subcontracts entered into or modified on or after April 25. Existing subcontract agreements already in performance do not automatically flip to the new clause. New subcontracts issued under federal contracts after April 25 — including task orders issued to subconsultants under an existing teaming agreement — will carry the clause.

What happens if a subconsultant violates the clause?

If the prime becomes aware of a known or reasonably suspected violation, the prime must report to the contracting agency and implement the remedial action the agency directs. This could include replacing the subconsultant on the contract, additional reporting, or other corrective actions. Failure to report once a violation becomes known to the prime is where False Claims Act exposure grows.

Where can I find the actual clause language?

The operative clause is FAR 52.222-90 — Addressing DEI Discrimination by Federal Contractors (Apr 2026), established by the FAR Council's April 17, 2026 implementation memo and effective for new contracts over $15,000 starting April 24, 2026. The flow-down clause is revised FAR 52.244-6. The underlying executive order text is Section 3 of EO 14398 on whitehouse.gov. Watch acquisition.gov for ongoing FAR implementation and agency-specific class deviations. Legal primers from Dentons, Wiley, Skadden, Perkins Coie, and Ogletree cover the legal detail.

What if my firm is found in violation of FAR 52.222-90?

The FAR Council memo amended FAR 9.406-2 (debarment) and FAR 9.407-2 (suspension) to add violation of FAR 52.222-90 as an explicit basis for both. Beyond False Claims Act exposure, a violation finding can affect a firm's present and responsible determination under FAR 9.104-1, which is part of every federal source-selection decision. For proposal teams, that means the compliance posture is not only an enforcement question after a contract is awarded — it is a responsibility-determination input on the next pursuit.

EO 14398 is a compliance deadline, not an evaluation-criteria change. SF330 selection is still governed by the Brooks Act and qualifications-based selection. What changes on April 25 is the contract your firm signs after winning — and the representations, flow-downs, and monitoring obligations that go with it.

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