This executive order addresses DEI activities by contractors and subcontractors of the federal government. It directs executive departments and agencies, subject to the Federal Property and Administrative Services Act, which created the General Services Administration, to ensure that contracts with contractors and subcontractors include a clause that the contractor (a) will not engage in any racially discriminatory DEI activities, including disparate treatment based on race or ethnicity in recruitment; employment; participation in training or mentoring programs; or allocation of its resources and (b) will furnish all information and reports including providing access to books, records and accounts for the purpose of ascertaining compliance with these contractual clauses. The executive order also provides penalties for its violation, including cancellation, termination or suspension of the contract as well as being declared ineligible for further government contracts.