Foreign Subcontract Performance May Avoid Federal DEI Clause Flow-Down
A federal acquisition regulation clause implementing an executive order on DEI discrimination by federal contractors generally applies to subcontracts at any tier. The clause includes an exception when the subcontract's delivery or performance location is outside the United States. Because the exception uses 'or,' a subcontract performed entirely overseas may qualify even if the finished goods are delivered to a U.S. facility, though mixed global supply chains raise harder questions.
FAR 52.222-90 implements Executive Order 14398 and appears in the Revolutionary FAR Overhaul text of FAR Part 52 on Acquisition.gov. The FAR Council plans to finalize it through notice-and-comment rulemaking. The clause reaches subcontracts at all lower tiers, including commercial offerings, but includes a geographic exception.
That exception depends on where delivery or performance happens. Since the terms are joined by “or,” an overseas-performing supplier may qualify even if goods are delivered to a U.S. facility. The provision does not expressly resolve work split between U.S. and foreign locations.
This development may affect federal contractors, overseas suppliers, and commercial firms with global supply chains by changing how they assess subcontract compliance obligations. If the exception is read broadly, some foreign-performed subcontracts could avoid flowing down the DEI-related clause, potentially reducing administrative burdens abroad. At the same time, mixed-location work may create uncertainty, prompting companies to seek clearer contracting guidance. Workers, suppliers, and contractors could experience differing compliance expectations depending on where performance occurs.