Description
The U.S. Department of Transportation (DOT) has issued a notice of intent to implement Executive Order 14398, which addresses DEI discrimination by federal contractors. The order establishes that federal agencies should not do business with contractors that engage in racially discriminatory diversity, equity, and inclusion (DEI) activities. The DOT is updating its contract portfolio to incorporate the requirements of the executive order and is directing contracting officers to insert a new clause in all new solicitations and contracts valued above the micro-purchase threshold. The clause requires contractors to agree not to engage in any racially discriminatory DEI activities and to furnish information and reports as required by the contracting officer.
• The executive order applies to all DOT operating administrations, the Office of the Secretary of Transportation, and the Office of the Inspector General, excluding the Federal Aviation Administration.
• Contracting officers must make every effort to bilaterally modify existing contracts by July 24, 2026, to incorporate the new clause.
• The DOT is seeking clearance from the Office of Management and Budget for information collections related to the new clause.
• Contractors must report any subcontractor's known or reasonably knowable conduct that may violate the clause to the contracting officer and take any appropriate remedial actions directed by the contracting officer.