President Trump has already signed more than 50 Executive Orders, reshaping policies, undoing previous administrations’ actions, and reinstating measures from his first term. One of the big ones ends a requirement that has been in place since 1965 for contractors to adopt affirmative action plans. But what about the others?

Let’s dive in.

Ending DEI Policies

Highlighting the need for “merit-based” practices, President Trump signed a series of orders aimed at dismantling diversity, equity, and inclusion (DEI) policies and programs within the federal government.

One executive order told the Office of Management and Budget (“OMB”) to “coordinate the termination of all discriminatory programs, including illegal DEI and ‘diversity, equity, inclusion, and accessibility’ (DEIA) mandates, policies, programs, preferences, and activities in the Federal Government, under whatever name they appear.”

Recognizing that “civil rights protections are the foundation of equal opportunity for all Americans,” the executive orders target federal DEI programs and preferences based on race or sex. The reasoning? These policies could “violate civil rights laws” and, prevent people from being “stigmatized, discriminated against, or shut out of opportunities because of their race or sex.”

Does This End the SBA’s 8(a) or WOSB Programs?

So, what do President Trump’s recent orders mean for 8(a), women-owned small businesses (“WOSBs”), or Disadvantaged Business Enterprises (“DBEs”) that currently qualify for federal set-aside contracts based on race or sex? The short answer: not much—at least for now. 

Federal contracting preferences and programs are statute-based and must therefore be eliminated by an act of Congress (or be found unconstitutional by a federal court).

It all started over 65 years ago when Congress passed the Small Business Act and created the Small Business Administration (“SBA”). SBA’s mission was to help small businesses compete with larger companies. In 1978, Congress amended the Small Business Act, giving the SBA explicit authority to run the 8(a) program which was designed to support socially and economically disadvantaged individual-owned businesses. Then, in 2000, the WOSB program was established by Congress to ensure the federal government awarded a portion of contracts to women-owned small businesses. These programs and set-aside mandates have trickled down to federal agencies who implement their own set-aside goals, all aimed at meeting the broader targets set by Congress.

Thus, the authority to change that belongs to the legislative branch alone.

However, in 2022, the Supreme Court effectively struck down affirmative action. As we have previously covered, this decision buoyed lawsuits challenging the constitutionality of the 8(a) and DBE programs. These legal battles have led to the removal of a presumption that individuals are automatically disadvantaged based on their sex or race. As a result, all applicants, regardless of race or gender, must now demonstrate their disadvantage in order to be admitted into the programs.

Given this landscape, opponents of these programs may feel that additional judicial challenges are warranted. Regardless, President Trump’s executive orders do not affect these socioeconomic programs.

The Buy-American Act Gets a Boost.

President Trump’s executive order titled “America First Trade Policy” reinstates policies from the president’s “Buy American and Hire American” executive order issued in 2017. Consistent with FAR Clause 52.225, the “America First” order implements an executive policy aimed at ensuring that federal procurements maximize the use of materials produced in the United States and that procurements “are being implemented in a manner that favors domestic workers and manufacturers, not foreign nations.” 

While certainly a win for “Made in America” businesses, those with foreign ownership, control, or influence (“FOCI”) may not be jumping for joy.

For instance, when a contract requires a contractor to have a security clearance, the Department of Defense (“DoD”) requires contractors with FOCI to mitigate potential FOCI risks. These mitigation plans undergo a heavily scrutinized evaluation process laid out by 32 C.F.R. § 117.11. In May of 2024, DoD published an updated FOCI Instruction that expanded the FOCI review process from solely government contractors who had access to classified information to all contractors performing on certain unclassified contracts with values exceeding $5 million. 

So, alongside President Trump’s “America First” order and other orders focused on national security (including one targeting TikTok), businesses that need a FOCI mitigation plan may face tougher hurdles when trying to secure contracts. As such, it may be time for these businesses to start preparing for a landscape that is becoming increasingly unfriendly to foreign-owned and controlled businesses.

Industries on the Move.

With the creation of the Department of Government Efficiency (“DOGE”), President Trump launched a Software Modernization Initiative aimed at boosting the quality and efficiency of government-wide software, network infrastructure, and information technology (“IT”) systems. The order empowers DOGE to “moderniz[e] Federal technology and software to maximize governmental efficiency and productivity.” 

As we have mentioned before, in 2023, the GAO sustained 93 protests related to the CIO-SP4 procurement alone—an IT services contract designed for government-wide use. So, as it stands, an IT overhaul might not be a bad idea. That said, over the next 120 days, IT businesses should closely monitor DOGE’s policies and agendas for any changes that could impact current and future opportunities. 

President Trump also signed a series of orders that are set to affect contractors working with the Department of Homeland Security. 

Declaring a national emergency at the southern border, one order gives the Armed Forces the authority to take “all appropriate action to assist the Department of Homeland Security in obtaining full operational control of the southern border.” Another order explained that “operational control” would include, among other things, establishing a physical wall that is monitored and supported by adequate personnel and technology, deterring and preventing entry of immigrants, and potentially detaining them.

U.S. companies supplying building materials or other ancillary services needed to detain, process, or hold immigrants may see an uptick in procurement opportunities as the Department of Homeland Security works to meet the president’s call to action.

Finally, President Trump’s order on Artificial Intelligence (“AI”) seeks to remove barriers to AI research and implementation to “promote human flourishing, economic competitiveness, and national security.” Contractors in this emerging field may see increased opportunities for research and development contracts in the coming months and years.

If you have any questions about how these orders could potentially impact your business, please don’t hesitate to reach out.

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