The Daily Fuckup

The Trump administration’s new contracting rules for federal vendors are now in court. On June 10, a coalition of 19 states and the District of Columbia filed suit in federal court in Maryland, challenging the government’s implementation of Executive Order 14398, which was issued on March 26, 2026 and published in the Federal Register on March 31, 2026. California’s attorney general said agencies began adding the new terms to contracts in April and were directed to modify existing contracts by July 24, 2026. ([oag.ca.gov](https://oag.ca.gov/news/press-releases/attorney-general-bonta-sues-trump-administration-over-unlawful-confusing-new))

The complaint says the new terms were added in the name of purging “diversity, equity, and inclusion” practices, but were written so broadly that contractors could not tell what conduct was forbidden. The states argue that the agencies enforcing the order failed to give the public notice or take comments before imposing the requirements, exceeded their legal authority, and did not adequately explain the new rules. They say that leaves contractors facing a choice between guessing at compliance or risking penalties that can include cancellation of contracts, exclusion from future federal work, and False Claims Act exposure. ([oag.ca.gov](https://oag.ca.gov/news/press-releases/attorney-general-bonta-sues-trump-administration-over-unlawful-confusing-new))

The lawsuit is not about whether federal contractors may discriminate. It is about whether the administration can turn a presidential order into new procurement terms without following the steps federal law requires. The filing says existing antidiscrimination laws already bar racial discrimination, and that the new contract language creates uncertainty on top of those rules rather than replacing them. That is the core legal fight: whether the agencies wrote a lawful implementation, or whether they tried to impose a policy change through contracting language first and legal process later. ([oag.ca.gov](https://oag.ca.gov/news/press-releases/attorney-general-bonta-sues-trump-administration-over-unlawful-confusing-new))

The coalition asks the court to block the agencies from enforcing the terms. For now, the dispute puts the government’s contracting machinery under a microscope. If a contract condition is vague enough that companies cannot tell what it demands, then the rule is not just unpopular — it is vulnerable. That is the question the states have forced a judge to answer. ([oag.ca.gov](https://oag.ca.gov/news/press-releases/attorney-general-bonta-sues-trump-administration-over-unlawful-confusing-new))