VA Compliance with Executive Order (EO) 14398 Addressing DEI Discrimination by Federal Contractors
Overview
Buyer
Place of Performance
NAICS
PSC
Set Aside
Original Source
Timeline
Qualification Details
Fit reasons
- NAICS alignment with historical contract wins in similar service areas.
- Scope strongly matches core technical capabilities and delivery model.
Risks
- Past performance thresholds may require one additional teaming partner.
- Potential clarification needed on staffing minimums before bid/no-bid.
Next steps
Validate eligibility requirements, assign capture owner, and schedule partner outreach to confirm teaming strategy before submission planning.
Quick Summary
The Department of Veterans Affairs (VA) has issued a Special Notice to inform industry of a new VA Acquisition Regulation (VAAR) Class Deviation (CD). This CD mandates contractor compliance with Executive Order (EO) 14398, "Addressing DEI Discrimination by Federal Contractors," signed on March 26, 2026. This policy requires specific clause language in all federal contracts and subcontracts to prevent racially discriminatory DEI activities.
Purpose and Scope
This notification serves to alert federal contractors to the immediate requirement to incorporate new contract language stemming from EO 14398. The Executive Order directs all executive departments and agencies, including the VA, to ensure that all contracts, subcontracts, and lower-tier subcontracts include a specific clause. This clause aims to prevent contractors from engaging in racially discriminatory Diversity, Equity, and Inclusion (DEI) activities.
Required Contract Clause Details
The mandated clause language, which contractors must agree to, includes the following provisions:
- Prohibition: Contractors will not engage in any racially discriminatory DEI activities, as defined by Section 2 of EO 14398.
- Information & Reporting: Contractors must furnish all required information and reports, including access to books, records, and accounts, to the contracting agency to ascertain compliance.
- Non-Compliance Consequences: Non-compliance by the contractor or a subcontractor may lead to contract cancellation, termination, suspension (in whole or in part), and potential ineligibility for future Government contracts.
- Subcontractor Reporting: Contractors must report any known or reasonably knowable subcontractor conduct that may violate this clause and take appropriate remedial actions as directed.
- Legal Notification: Contractors must inform the contracting department or agency if a subcontractor sues the contractor and the suit challenges the validity of this clause.
- Materiality: Compliance with this clause is recognized as material to the Government's payment decisions under the False Claims Act (31 U.S.C. § 3729(b)(4)).
Timeline and Next Steps
- Published Date: April 9, 2026
- Information Cutoff/Response Date: May 9, 2026, at 4:00 PM EDT.
- Future Action: The VA will undertake formal rulemaking to permanently incorporate this Class Deviation into the VAAR. The public will be invited to participate in this rulemaking process once it commences.
Contact Information
For inquiries regarding this notice, please contact VA Procurement Policy at va.procurement.policy@va.gov.