A lot of companies aren't sure if they're federal contractors. Maybe you signed one government contract years ago. Maybe you supply parts to a company that has a federal contract, and you've never thought about it. Maybe you're a third-tier vendor and you've never seen a federal solicitation in your life, but the work you're doing supports one anyway.
The new executive order, EO 14398, signed March 26, 2026, has made this question harder to ignore. The order extends compliance obligations to subcontractors at every tier of the federal supply chain, and it kicks in at a lower dollar threshold than the OFCCP rules most contractors are used to. If you want a quick read on what changed under the new order before doing the self-check, start here. Otherwise, here’s how to tell if you’re covered.
The short version: who EO 14398 covers
Two groups in scope:
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Companies with direct federal contracts above $15,000
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Subcontractors and lower-tier suppliers at any level of a federal supply chain that supports those contracts
If you're not sure which bucket you fall into, the rest of this post walks through it.
Are you a federal contractor?
This is the easy case. If your company signed a deal with a federal agency for goods or services, and it's worth more than $15,000, you're a federal contractor.
The direct-contract scenario typically looks like one of these:
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You won a competitive federal bid — i.e., Department of Defense, the VA, an executive agency
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You're on the GSA Schedule, the government's pre-negotiated catalog of products and services
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You hold an ongoing supply or service agreement with an agency, with smaller orders placed under it over time
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You're a sole-source provider for a specific federal need
The dollar threshold of the contract also matters. EO 14398 applies to contracts above $15,000 — what's called the micro-purchase threshold in federal procurement rules.
That $15,000 floor is specific to EO 14398. It's lower than the $20,000 threshold that triggers Section 503 obligations and well below the $200,000 threshold for VEVRAA. We'll get into how these stack later in the post.
What doesn't count for EO 14398:
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Federal grants and cooperative agreements — the rules are different for those
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Contracts performed entirely outside the United States
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Contracts under $15,000 — though other federal obligations may still apply
If you have a direct contract that fits, you're in scope.
Are you a subcontractor or supplier to a federal contractor?
This is where most companies get caught off guard. You don't have to deal with a federal agency directly to be in scope. If you supply goods or services to a company that has federal contracts, and your work supports their federal work, you're a federal subcontractor.
Some real-world examples:
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You manufacture components that go into a product a defense contractor ships to the Pentagon
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You provide IT services to a consulting firm that has a federal contract
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You're a staffing agency that places workers at a federal contractor doing federal work
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You make parts that get assembled into something your customer sells to the government
The flow runs in tiers. A prime contractor signs the deal with the federal agency. They contract with a first-tier subcontractor (that's you, if you sell to them directly). That sub may bring in a second-tier sub (that's you, if you sell to a sub). And so on down the chain. EO 14398 doesn't cap how far down it reaches.
Federal procurement rules already require prime contractors to pass certain obligations down to their subcontractors — that's called a flow-down clause, and it's a standard part of federal contracting. EO 14398 has been added to the list of things that flow down. Prime contractors are also responsible for reporting any “reasonably knowable” violations by their subs.
The line between “supports the federal work” and “doesn't” is one of the gray areas. A company making helicopter blades for the federal government is clearly doing federal work. But are the pencils that company buys also covered? Where it gets messy is the middle — software licenses, professional services, niche components that may or may not end up in the federal-bound product.
How EO 14398 compares to existing OFCCP thresholds
EO 14398 has a lower floor than the disability and veteran outreach obligations that have historically defined OFCCP compliance. Here's how the thresholds stack:
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$15,000+: EO 14398 / FAR 52.222-90 (DEI-related certification and audit obligations)
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$20,000+: Section 503 outreach to people with disabilities
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$50,000+ with 50+ employees: Section 503 written Affirmative Action Program
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$200,000+: VEVRAA outreach to veterans
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$200,000+ with 50+ employees: VEVRAA written Affirmative Action Program
OFCCP raised the Section 503 and VEVRAA thresholds effective October 1, 2025 as part of regular inflation adjustments. Some older guidance still references the previous numbers ($15,000 for Section 503, $150,000 for VEVRAA), so be careful if you're working from older training materials.
The practical implication: there's a band of federal contracts between $15,000 and $19,999 that are now subject to EO 14398 but not to OFCCP compliance under Section 503 or VEVRAA. If your company has a federal contract in that range, or you're a subcontractor with one, you have a new federal obligation under EO 14398 even though your traditional OFCCP responsibilities haven't changed. For the full federal contractor guide to EO 14398, see our breakdown of the order.
Why the gap? EO 14398 was tied to the micro-purchase threshold, which is a general federal procurement number. Section 503 and VEVRAA have their own separate thresholds adjusted on a different schedule.
For contracts above $20,000, EO 14398 sits on top of existing Section 503 obligations. For contracts above $200,000 with 50+ employees, you're juggling EO 14398 plus four distinct OFCCP-style obligations on the same contract.
How to know if you're a federal contractor or subcontractor
Run your company through these four quick checks:
1. Has your company signed any contract directly with a federal agency?
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Yes, above $15,000 → you're subject to EO 14398
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Yes, but under $15,000 → outside EO 14398, but worth checking other federal obligations.
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No → continue.
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2. Do you sell products or services to a company that has federal contracts
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Yes → you may be a federal subcontractor. The next question matters.
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No → you're probably not in scope.
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3. If yes, do your products or services support that company's federal contract work?
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Yes → you're likely a federal subcontractor.
- Not sure → ask your customer and consult legal advice.
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4. Are the relevant contracts performed entirely outside the United States
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Yes → you're excluded, even if otherwise in scope.
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No → standard rules apply.
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If any of your answers landed in “likely yes” or “may be,” it's time to act. The next section explains how EO 14398 stacks with the OFCCP obligations you may already have.
What to do if you are a federal contractor or subcontractor
Three immediate steps:
Review your existing contracts. Federal agencies started inserting the new clause (FAR 52.222-90) into solicitations and new contracts in late April 2026. If you've signed anything recently or have renewals coming up, the clause is probably already in there. Subcontractors should expect to see flow-down language in their agreements with prime contractors as well, with a bilateral modification deadline of July 24, 2026 for existing contracts.
Talk to legal about your DEI-related programs. The order targets disparate treatment based on race or ethnicity in hiring, promotions, vendor and contracting decisions, program participation (training, mentoring, ERGs), and allocation of resources. That's a wider net than most teams realize. Don't make changes unilaterally, get counsel involved.
Check your Section 503 and VEVRAA obligations if you're above those thresholds. Section 503 kicks in at $20,000 and VEVRAA kicks in at $200,000. If your federal contracts cross those thresholds, you have outreach and documentation obligations that are enforced separately from EO 14398 and didn't go away when EO 14398 was signed. If your contracts fall in the $15,001–$19,999 band, EO 14398 applies but Section 503 doesn't.
The federal contractor compliance landscape has gotten more complicated in the last 14 months. The teams that come out of this in good shape are the ones who figured out where they stood early and built the program around the rules.
If your existing OFCCP compliance setup wasn't built for automated VEVRAA and Section 503 compliance, check out JobTarget's Compliance Suite.
