Every Federal Grant Recipient Must Now Certify Against "Illegal DEI." Here Is What That Actually Requires.

On February 18, the General Services Administration quietly published a proposed rule that could reshape the compliance landscape for every organization in America that receives federal financial assistance. The proposal adds three new certifications to the System for Award Management — SAM.gov — covering diversity, equity, and inclusion programs, immigration, and national security. Because SAM registration is a prerequisite for receiving any federal grant, cooperative agreement, or loan, the rule's reach is effectively universal: every nonprofit, university, hospital, research institution, state agency, and small business that touches federal money would be required to sign.

As Granted News reported, the proposal is currently in its public comment period, with a deadline of March 30, 2026. It has not been finalized. But the direction is unmistakable, the legal stakes are already real, and organizations that wait until the final rule publishes to assess their exposure will be starting late.

What the Certifications Actually Say

The proposed rule adds three distinct certification categories to SAM.gov registration. Each operates independently, and each carries its own compliance implications.

The DEI certification requires organizations to affirm that they "do not operate programs promoting illegal DEI" or "discriminate on the basis of race or color" in violation of federal anti-discrimination laws. The draft language specifically prohibits "preferential treatment based on race or color, such as race-based scholarships or preferential hiring," segregation by race in trainings or program eligibility, using race as a selection criterion in hiring or contract decisions, training programs that "stereotype, exclude, or single out individuals based on protected characteristics," and retaliation against individuals who raise discrimination concerns.

The phrasing "illegal DEI" does not appear in any federal statute. It originates from Executive Order 14173, signed in January 2025, which directed agencies to combat what the administration characterizes as illegal discrimination conducted under the banner of diversity, equity, and inclusion. The certification effectively requires grantees to affirm compliance with the executive order's interpretation of existing civil rights law — an interpretation that remains legally contested.

The immigration certification requires recipients to affirm they will not "knowingly transport, conceal, harbor, shield or hire an illegal alien." This language mirrors provisions of 8 U.S.C. § 1324 (harboring and transporting undocumented immigrants) but applies it as a condition of grant funding rather than as a standalone enforcement mechanism. For organizations that serve immigrant populations — refugee resettlement agencies, community health centers, legal aid organizations — this certification raises immediate questions about whether providing services to undocumented individuals could be construed as a certification violation.

The national security certification requires recipients to affirm they will not "fund, subsidize, or facilitate violence, terrorism, or threaten public safety or national security." This language is broad enough to encompass nearly any activity that a future administration might characterize as a security concern, but its practical enforcement boundaries remain undefined.

Why This Is Different From Existing Requirements

Federal grants have always carried compliance requirements. Recipients must comply with Title VI of the Civil Rights Act, OMB's Uniform Guidance (2 CFR Part 200), and dozens of program-specific conditions. What makes the proposed SAM.gov certifications distinct is their scope, their mechanism, and their legal consequences.

Scope. Existing compliance requirements are typically attached to specific grants or programs. The SAM.gov certifications apply to registration itself — meaning they are a precondition for receiving any federal financial assistance, regardless of which agency or program provides it. An organization that cannot truthfully sign the certifications cannot maintain its SAM registration, and an organization without SAM registration cannot receive any federal award.

Mechanism. Most grant compliance requirements are monitored through reporting, audits, and program reviews that assess actual performance. The SAM.gov certifications are self-attestations. The organization's authorized representative signs a statement affirming compliance at the time of registration or renewal. There is no pre-certification review. There is no guidance document interpreting what constitutes compliance. The organization signs, and the government takes its word — until it doesn't.

Legal consequences. This is where the stakes escalate sharply. A false certification on SAM.gov is a false statement to a federal agency, which triggers potential liability under both the False Claims Act (31 U.S.C. § 3729) and the criminal false statements statute (18 U.S.C. § 1001). The False Claims Act allows the government — or private whistleblowers filing qui tam lawsuits — to recover treble damages and penalties of up to $27,894 per false claim. The criminal statute carries up to five years imprisonment.

This is not theoretical. The False Claims Act generated $2.9 billion in settlements and judgments in FY2025. It is the government's most active civil fraud enforcement tool, and it relies heavily on whistleblowers who receive a percentage of recovered funds. An employee, former employee, or competitor who believes an organization falsely certified its DEI compliance on SAM.gov has a financial incentive to file a qui tam complaint.

The Narrow Framing Problem

Legal analysts have noted a significant oddity in the draft DEI certification: it focuses exclusively on race and color, omitting sex, age, disability, and veteran status — all of which are federally protected categories under existing civil rights law. This narrow framing creates confusion about the certification's actual scope.

Does a university that offers gender-based scholarships face certification risk? The draft language does not address sex-based programs. Does a nonprofit that gives hiring preference to veterans — a practice explicitly authorized by federal law — need to assess whether that preference conflicts with the certification? The language is silent.

This ambiguity is not incidental. It reflects the certification's origin in an executive order targeting a specific category of programs (those the administration characterizes as "illegal DEI") rather than in a comprehensive statutory framework. The result is a certification whose boundaries are unclear, whose enforcement triggers are undefined, and whose interaction with existing law is untested.

What Organizations Should Do Before March 30

The comment period closes March 30. Whether or not your organization submits public comments, the following steps apply.

Conduct a privileged internal review. Have legal counsel — not program staff, not HR — review every program, initiative, training, scholarship, fellowship, hiring practice, and procurement process that involves race or color as a factor. Do this under attorney-client privilege so the review itself is protected from discovery. The goal is to identify any program that could be characterized as providing "preferential treatment based on race or color" under the certification's language.

This review will not be simple, because the certification's definition of prohibited conduct is broader than existing case law. Title VII permits race-conscious programs under certain circumstances. The certification appears to prohibit them categorically. Until courts or agencies resolve that tension, organizations must assess their programs against the certification's plain language — not against their understanding of what current law permits.

Map your program inventory against the certification language. For each program identified in the legal review, determine whether it can be restructured to achieve its objectives without using race or color as an explicit factor. Many programs that were designed as race-conscious can be redesigned around socioeconomic criteria, geographic targeting, or first-generation status that correlate with the populations they were intended to serve without triggering the certification's race-and-color language.

This is not a recommendation to abandon equity-focused work. It is a recommendation to separate the program's objectives from its targeting mechanisms, so the organization can truthfully certify compliance while continuing to serve the communities it was created to serve.

Assess your immigration exposure. If your organization serves immigrant populations in any capacity, have counsel assess whether your service delivery model could be characterized as "harboring" or "shielding" under the certification's immigration language. Legal aid organizations, community health centers, schools, refugee resettlement agencies, and workforce development programs all need this assessment. The certification does not distinguish between organizations whose missions inherently involve serving immigrant populations and those that incidentally encounter them.

Submit comments. The proposed rule is subject to notice-and-comment rulemaking under the Administrative Procedure Act. Comments submitted before March 30 become part of the administrative record and must be addressed in the final rule. Organizations with specific concerns about how the certification language interacts with their programs, their statutory mandates, or existing law should document those concerns in the record. The final rule's legal vulnerability in court depends partly on whether the agency adequately responded to substantive comments.

The Timeline After March 30

GSA must review all public comments and publish a final rule before the certifications take effect. Based on typical rulemaking timelines, the final rule could appear as early as June 2026 or as late as Q4 2026. The final language may differ from the proposed language based on comments received.

However, organizations should not assume the final rule will be materially softened. The administration has finalized other contested rules — including the Schedule Policy/Career reclassification and the DOE indirect cost rate cap — with minimal changes despite overwhelming negative comment volume. The comment period is a legal requirement, not a negotiation.

Once the final rule takes effect, every SAM.gov registrant will need to affirm the new certifications at their next registration renewal. SAM registrations expire annually, so within 12 months of the final rule, every federal grant recipient in America will have signed.

The Broader Context

The SAM.gov certifications are one element of a comprehensive restructuring of federal grant conditions that includes Executive Order 14332's senior appointee review, the DOE indirect cost rate cap, new transportation grant scoring criteria, and the Schedule Policy/Career reclassification of grant-making staff. Each mechanism operates independently, but together they represent the most significant shift in federal grantmaking conditions since the Uniform Guidance was codified in 2013.

Organizations that track these changes individually will miss the pattern. The pattern is that federal discretionary funding is being conditioned — at the application stage, the award stage, and the registration stage — on alignment with administration policy priorities in ways that have no precedent in modern grantmaking.

That does not mean organizations should abandon federal funding. Federal grants remain the largest single source of funding for research, social services, education, and public health in the United States. But it does mean the compliance cost of federal funding is rising, and every organization needs to weigh that cost against its mission, its risk tolerance, and the availability of alternative funding sources that do not carry the same conditions.

Granted tracks both federal and private funding opportunities, helping organizations build diversified grant pipelines that reduce dependence on any single funding source — and any single set of political conditions.