On Oct. 14, 2026, the U.S. District Court for the District of Maryland denied a request by a coalition of higher education and contractor associations to preliminarily enjoin Executive Order 14398, “Addressing DEI Discrimination by Federal Contractors” (the FAR DEI Order), and to stay the Federal Acquisition Regulatory (FAR) Council’s April 17, 2026, implementing memorandum, “Agency Implementation of Executive Order 14398, Addressing DEI Discrimination by Federal Contractors.”
As a result, the mandatory contract clause at the center of the FAR DEI Order remains in force: All federal contractors and subcontractors, including colleges and universities that hold federal contracts or subcontracts, will be required to accept a clause barring “racially discriminatory DEI activities,” backed by reporting and records-access obligations and termination and debarment remedies, as well as the risk of potential False Claims Act liability. At the same time, the court gave the clause a meaningfully narrow reading that contractors and subcontractors can rely on: The operative phrase, “disparate treatment based on race or ethnicity,” carries its settled legal meaning of intentional discrimination already prohibited by federal law.
Read on to learn more about the decision and what it means for higher education institutions.