False Claims Act Playbook

On March 26, 2026, President Trump signed a sweeping Executive Order titled “Addressing DEI Discrimination by Federal Contractors” (the EO) that attaches binding contractual consequences to diversity, equity, and inclusion (DEI) practices in federal contracting. By April 25, 2026, federal contractors, subcontractors, and lower-tier subcontractors should expect to be required to agree—as a term of their contracts—not to engage in “racially discriminatory DEI activities,” to open its books and records to government compliance audits, and to acknowledge that any violation is material to the government’s decision to pay—a critical element for False Claims Act (FCA) enforcement. In this blog, Winston lawyers analyze the new EO and weigh potential implications for contractors. 

On January 21, 2025, President Trump issued a sweeping executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EO). The EO targets diversity, equity, inclusion, and accessibility (DEI) programs in the public and the private sectors. The EO signals that organizations receiving federal funds, whether through government contracts or otherwise, may be liable under the False Claims Act (FCA)—one of the government’s most powerful anti-fraud enforcement tools providing for treble damages and steep penalties—if they maintain what the EO refers to as “illegal” DEI programs that violate federal anti-discrimination laws. Significantly, the EO includes provisions that are likely to make it easier to establish FCA violations.