Federal contractors are scrambling to determine how far they should go in changing policies they’ve used to recruit and retain employees in light of the Trump administration’s crackdown on Diversity, Equity, and Inclusion (DEI) policies. Agencies reported spending more than $770 Billion in prime contracts in 2024, and the new administration is now cutting all such DEI efforts and removing any DEI-related work from ongoing contracts. This has raised questions as to what constitutes DEI and how best to react. Some companies have received partial terminations to end all DEI-related aspects of the contracts, but this has raised the question of what constitutes DEI and how best to proceed. Isaias “Cy” Alba spoke with Bloomberg recently about this dilemma and the risks companies need to tackle, as both cutting too little and cutting too much of an ongoing contract carries risk.
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Both overly and insufficiently risk-averse approaches carry risk, said Isaias “Cy” Alba, a partner at PilieroMazza. If a contractor decides something isn’t DEI and keeps doing it, the government could argue it was—and refuse to pay the company. But if a company goes too far and stops something it needn’t have, the government could say it was in breach of contract, and terminate the contract or refuse to pay.
Excerpt taken from the article “Trump’s DEI Order Creates Dilemma for Federal Contractors” by Isabel Gottlieb for Bloomberg Law. Visit this link to view the full article (subscription required).
About Isaias “Cy” Alba, IV
Cy counsels clients in a broad range of government contracting matters before government agencies and federal courts, including overall regulatory compliance with numerous regulatory schemes, including FAR and DFARS requirements. He also represents companies of all sizes with compliant corporate structuring, mergers and acquisitions, and small business rules and regulations. Cy handles the prosecution and defense of small business size and status protests and appeals, as well as bid protests and claims and appeals before administrative agencies and federal courts. Read more here.
