Key Details: In January 2026, the U.S. General Services Administration (GSA) proposed a significant new compliance requirement for organizations receiving financial assistance such as grants, cooperative agreements, and loans. Under this proposal, these organizations would need to certify that they do not operate any “illegal” diversity, equity, and inclusion (DEI) programs that violate federal anti-discrimination laws. This new DEI-related certification is to be added to the System for Award Management (SAM.gov) and is required during the registration process. This stems from recent executive actions and the Department of Justice (DOJ) guidance, reflecting heightened federal scrutiny of DEI initiatives. A false certification could potentially trigger penalties, including False Claims Act liability or criminal liability. While this proposal appears to target grant and financial aid recipients such as universities and nonprofits, federal contractors should also watch closely for potential future requirements. Additionally, public comments are open until March 31, 2026. Interested parties are encouraged to submit comments ahead of rule finalization. Organizations are encouraged to speak with their legal counsel and trusted advisors to determine their best plan of action.
The push for this change can be traced to shifting federal policies in 2025. Executive Order (EO) 14173 titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” was issued in January 2025 and directed federal agencies to ensure that recipients of federal funds uphold merit-based principles and comply with anti-discrimination laws. Specifically, Section 3(b)(iv)(B) of the EO instructed agencies to require grant or contract recipients to certify that it does not operate programs promoting DEI that violate applicable Federal anti-discrimination laws.
Soon after the EO, the DOJ issued a memorandum titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.” This guidance detailed how federal anti-discrimination laws apply to DEI and related initiatives and cautioned that some programs might not comply with civil rights laws if they involve preferences or exclusions based on protected characteristics.
SAM.gov is the government’s central online registry for entities seeking federal funds. Any organization that wants to receive federal contracts or financial assistance (such as grants and loans) must maintain an active SAM.gov registration. As part of registration (which must be renewed annually), entities provide identifying information and agree to various representations and certifications regarding federal compliance requirements.
For entities seeking financial assistance under grants, cooperative agreements, loans, or other non-contract funding, registration in SAM.gov includes a financial assistance representations and certifications section tailored to laws governing grants and assistance programs. For entities pursuing federal procurement contracts, the contract representations and certifications section covers requirements such as lobbying and procurement integrity.
The proposed DEI certification is an addition to the financial representations and certifications section in SAM.gov. It would apply directly to all new and renewing SAM registrants for federal financial assistance. Per the GSA’s estimate, about 222,760 entities registered as financial assistance recipients would be subject to the new requirements. This includes a large number of colleges, universities, and nonprofits.
Notably, some organizations may be considered hybrid recipients (such as a defense contractor also receiving research grants). If such an entity indicates in SAM.gov that it also seeks federal financial assistance, it must complete the financial assistance certifications as well. As such, federal contractors could also be affected immediately by the DEI certification if it is implemented.
Under the proposal, organizations registering or renewing in SAM.gov for financial assistance would see new certification clauses added to their representations and certifications section. The most prominent addition is the DEI related certification which would require an authorized official of the entity to affirm compliance with all applicable anti-discrimination laws and attest that none of the entity’s programs or activities involve unlawful discriminatory practices.
The draft certification text provided a non-exhaustive list of examples of problematic practices that may violate federal anti-discrimination laws. These include activities primarily focused on race-based preferences or separations, for example:
The DEI certification is grounded in EO 14173 and the July 2025 DOJ guidance. If the DEI certification is implemented, organizations found to have falsely certified could potentially face severe penalties. As such, organizations and encouraged to speak with legal counsel to ensure future compliance.
While the DEI certification was the focus, the proposal also included two other new certification requirements for assistance recipients:
For organizations that receive federal grants or other financial assistance, this proposed change has direct, near-term implications. Organizations that fall under this category will likely be required upon their next SAM.gov registration or annual renewal thereafter to answer the new certification questions about DEI-related policies. Organizations should expect scrutiny of DEI programs and may need to alter or discontinue certain DEI practices to comfortably sign the certification.
Although the certification is initially aimed at grant recipients, federal contractors should not dismiss this development. Federal contractors that also receive any grants or federal aid could also see the new certification if implemented. As such, any contractor that currently also engages in grant-funded projects or other assistance should start preparing for the SAM certification. This includes evaluating corporate policies across both grant administration and HR practices.
The GSA’s proposed DEI-related certification marks a new compliance era for recipients of federal funds. Organizations in the federal grants arena will face pressure to scrutinize their internal programs and affirmatively demonstrate their compliance with applicable laws. As such, organizations are encouraged to review the action plan below and to speak with advisors to maintain compliance:
For further information and expertise, contact Ryan & Wetmore today.
About Peter Ryan
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Peter T. Ryan co-founded Ryan & Wetmore in 1988 with business partner Michael J. Wetmore. Peter provides clients with the best strategies for success. His expertise extends across various industries. Peter obtained a Master of Business Administration in Finance from the University of Baltimore and a Bachelor of Arts in Accounting from the Catholic University of America.
About Rosie Cheng
Senior Finance Consultant
Rosie Cheng is a Senior Finance Consultant at Ryan & Wetmore. She focuses on government contracting services and produces many of the firm’s government contracting newsletters. Rosie earned her Master of Science in Management from Georgetown University and a BBA from William and Mary.