When Executive Order 14173 was issued in January 2025, revoking Executive Order 11246, many federal contractors took a sigh of relief. To some, it appeared that decades of affirmative action planning and federal oversight had come to an end. Yet eight months later, the reality has become unmistakable: EO 14173 did not eliminate compliance requirements. It transformed them.
Rather than a deregulation, EO 14173 represents a new compliance framework grounded in Title VII of the Civil Rights Act, focusing on certification, attestation, and accountability for nondiscrimination. Understanding this shift is now critical for every organization, especially federal contractors and subcontractors.
From Affirmative Action to Anti-Discrimination Certification
For more than 60 years, Executive Order 11246 required federal contractors to develop and maintain Affirmative Action Plans (AAPs). Those plans were the foundation of the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) enforcement system. EO 14173 dismantled that structure but it didn’t repeal the core principle behind it.
Under the new Order, contractors must certify that their employment practices are free from discrimination in accordance with Title VII. This new requirement is not a voluntary statement of good faith. It’s a legal attestation. When a company certifies compliance, it is declaring, under penalty of law, that its hiring, promotion, and compensation systems are nondiscriminatory.
In fact, recent federal solicitations now include an attestation clause requiring bidders to affirm that their organizations do not engage in employment practices or programs that grant preferences based on race, color, religion, sex, or national origin. This includes initiatives related to hiring, training, or other employment decisions.
By submitting an offer, each Offeror is asked to certify that it does not operate any diversity, equity, or inclusion (DEI) programs that would conflict with or violate applicable Federal anti-discrimination laws. The intent of this provision is to ensure that all federal contractors uphold the principles of equal opportunity and merit-based employment.
H-050 – Compliance with Federal Anti-Discrimination Laws – Certification (EO 14173 January 2025)
(a) Definition. As used in this provision – Program promoting diversity, equity, and inclusion means a program whose purpose is to promote preferences based on race, color, religion, sex, or national origins, such as in training or hiring. (b) Certification. By submission of its offer, the Offeror certifies that it does not operate any programs promoting diversity, equity, and inclusion that violate any applicable Federal anti-discrimination laws. (End of provision)
H-051 – Compliance with Federal Anti-Discrimination Laws (EO 14173 January 2025)
(a) The contractor shall comply with all applicable Federal anti-discrimination laws. (b) Compliance with applicable Federal anti-discrimination laws is material to eligibility for and payment under this contract for purposes of 31 U.S.C 3729(b)(4). (End of clause)
The Civil Rights Division of the Department of Justice (DOJ) and Equal Employment Opportunity Commission (EEOC) now share oversight and enforcement authority, and their approach has already begun to materialize: through post-certification investigations and False Claims Act reviews.
The Misunderstanding That Created Risk
Early in 2025, many federal contractors paused or even abandoned their AAPs, assuming that the revocation of EO 11246 freed them from compliance burdens. In reality, this assumption created a vacuum of documentation, just as federal agencies began requesting proof of nondiscrimination compliance.
By mid-year, the EEOC and DOJ issued joint guidance cautioning that any employment decision or program motivated by race, gender, or other protected characteristics even if labeled as “DEI” or “inclusion initiatives” could violate Title VII. In short, organizations are still required to ensure that their employment practices are fair, data-supported, and merit-based.
The first EEOC settlements after March 2025 have shown how quickly this new environment can turn costly. Cases involving biased hiring, promotion, or diversity preference practices have resulted in financial settlements reaching hundreds of thousands of dollars—and, in some instances, follow-up DOJ scrutiny of certification accuracy.
The New Reality: Accountability Through Certification
EO 14173 represents a cultural and operational shift from proactive documentation (AAPs) to affirmative accountability (attestations). Contractors now face three intertwined obligations:
- Certify Truthfully: Each attestation of nondiscrimination must be backed by verifiable evidence such as data analyses, policies, and internal audits.
- Maintain Evidence: Agencies can now request documentation supporting that certification at any time. “We thought we were compliant” is no longer a defense.
- Avoid False Claims Liability: A false certification, intentional or negligent, may expose organizations to False Claims Act penalties, which can exceed $25,000 per violation and lead to debarment.
This is not theoretical. The EEOC’s first financial settlements under EO 14173 have already laid the groundwork for cross-agency enforcement that combines civil rights compliance with federal contracting accountability.
What Contractors Should Be Doing Now
To stay ahead of the enforcement curve, contractors must move from reaction to prevention. The most prudent organizations are already taking these steps:
- Conduct a comprehensive Employment Practices Audit to identify potential disparate impact in hiring, promotion, and compensation.
- Document and retain findings that demonstrate good-faith compliance efforts.
- Update policies and training to emphasize merit-based opportunity and nondiscrimination rather than demographic targets.
- Engage counsel or certified compliance consultants to verify that certifications align with operational realities.
The message is clear: EO 14173 doesn’t reduce your responsibility, it redefines it.
Looking Ahead
Eight months after EO 14173, federal contractors face a new era, one defined not by paperwork, but by proof. The transition from affirmative action to nondiscrimination attestation has introduced both risk and opportunity. Those who take a proactive, data-driven approach can demonstrate integrity and resilience; those who wait may find themselves answering to regulators, auditors, and potentially, financial settlements and degraded reputation.
In this evolving landscape, the smartest move is to stay informed and act early. Join HR Unlimited’s upcoming Roundtable Discussion with former OFCCP and EEOC officials to hear firsthand how EO 14173 is being interpreted, enforced, and what your organization must do to remain compliant. Learn more about this webinar
At HR Unlimited Inc., we help federal contractors and employers navigate complex compliance requirements while building stronger, more inclusive workplaces. If you’re ready to strengthen your compliance and equity efforts, contact us today to learn how we can support your EEO and non-discrimination goals.