Executive Order 14173: Rescission of prior DEI executive orders
Citation: EO 14173, 'Ending Illegal Discrimination and Restoring Merit-Based Opportunity' (Jan 21, 2025) Primary source ↗
Full explanation
Executive Order 14173, 'Ending Illegal Discrimination and Restoring Merit-Based Opportunity,' was issued January 21, 2025 and rescinded several prior executive orders that had directed federal agencies to pursue DEI initiatives in contracting, hiring, and program management. Notably rescinded: EO 11246 (Equal Employment Opportunity, originally signed by President Johnson in 1965, which had required federal contractors to maintain affirmative action programs), and a series of more recent EOs from the Biden and Obama administrations directing agency-level DEI programming.
**What the EO did NOT do:**
- Did not amend the Small Business Act (15 USC §631 et seq.), which authorizes the federal small-business contracting goals (23% of prime contract dollars to small businesses, with sub-goals for SDB, WOSB, HUBZone, SDVOSB).
- Did not amend 13 CFR Part 124 (the 8(a) program regulations), 13 CFR Part 126 (HUBZone), 13 CFR Part 127 (WOSB), or 13 CFR Part 128 (SDVOSB).
- Did not amend 49 CFR Part 26 (the DBE program for federally-funded transportation).
- Did not affect VA Veterans First Contracting Program, which is statutorily separate.
- Did not affect state-level or corporate supplier diversity programs.
**What the EO did do operationally:**
- Rescinded affirmative action and EEO compliance requirements for federal contractors that had been administered by the OFCCP (Office of Federal Contract Compliance Programs).
- Directed agencies to terminate DEI-branded programs, training, and reporting.
- Directed agencies to submit reports identifying and unwinding 'illegal' DEI programs.
**The federal small-business contracting framework continues.** SBA Certify (certify.sba.gov) continues to accept and process 8(a), HUBZone, WOSB, and SDVOSB applications. Federal agencies continue to set aside contracts under all four programs. Goal-attainment reporting continues.
What this means for diverse contractors
**Federal small-business set-aside programs continue.** The 8(a), HUBZone, WOSB / EDWOSB, SDVOSB programs all remain in force because they're authorized by statute (the Small Business Act), not by executive order. SBA Certify continues to process applications. Federal agencies continue to obligate contract dollars under all four programs.
**Affirmative action / EEO compliance for federal contractors has changed.** Federal contractors no longer need to maintain affirmative action programs under the rescinded EO 11246 framework. This affects companies that contract with the federal government but is not an SBA small-business program issue.
**Agency DEI programming has been rolled back.** Many federal agencies had stood up DEI offices, programs, and reporting frameworks under prior EOs. Those have been or are being unwound. This may affect agency-level supplier outreach activities (industry days, mentor-protégé matchmaking, supplier development sessions) that were previously branded as DEI initiatives.
**Litigation continues.** Several legal challenges to federal small-business set-aside programs (separate from the rescinded EOs) continue to work through the courts. The Ultima Services Corp v. USDA ruling on 8(a) racial presumption is one example; HUBZone and WOSB face their own pending challenges.
Federal supplier diversity policy moves fast.
Browse the full policy tracker for executive orders, FAR clauses, court cases, and CFR amendments affecting how diverse business owners contract with the federal government.