DOJ Issuing Civil Investigative Demand Letters to Federal Contractors and Grant Recipients

The Department of Justice (DOJ) is sending Civil Investigative Demand (CID) letters to some federal ...



The Department of Justice (DOJ) is sending Civil Investigative Demand (CID) letters to some federal contractors and grant recipients as part of the agency’s Civil Rights Fraud Initiative, which was announced in May as part of the Administration’s broader efforts to rely on the False Claims Act (FCA) to investigate the DEI and other employment practices of recipients of federal funds. 

When announcing the Initiative, the DOJ noted that it would rely on the FCA to investigate federal fund recipients who certified compliance with federal non-discrimination laws “while knowingly engaging in racist preferences, mandates, policies, programs, and activities, including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin.”

A CID is a legal tool used by the DOJ to gather information during civil investigations, often before a lawsuit is filed. It's a powerful pre-litigation tool, especially in cases involving potential violations of the FCA. CIDs allow the DOJ to demand documents, written responses, and oral testimony without needing court approval. The process for issuing CIDs is outlined by law at 31 U.S.C. Section 3733, and the DOJ can seek court enforcement if an organization fails to respond or otherwise cooperate. The DOJ’s actions stem primarily from Executive Order 14173 which revoked Executive Order 11246 and added a new certification requirement for federal contractors. The new certification requires that contractors certify they do not operate any programs promoting DEI that violate federal non-discrimination laws, and that compliance with all applicable federal anti-discrimination laws is “material” for purposes of the FCA.

Under the FCA, individuals are prohibited from “knowingly” providing false information for the purpose of obtaining payment from the federal government. The FCA defines “knowingly” to include “recklessly,” meaning that individuals would have an affirmative duty to perform some level of due diligence before certifying that their organization is not violating federal non-discrimination laws.

Since announcing the Civil Rights Fraud Initiative, the DOJ’s efforts primarily focused on investigating the admissions and employment practices of college and universities. However, as you may recall, EO 14173 specifically required the Attorney General to submit a report to the White House by May 21, 2025 that included information about “potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.” These organizations are also likely to be potential early targets for FCA claims, including these CID letters.

All federal fund recipients should watch for any communications from the DOJ or other federal agencies, including the federal agencies with whom your organization does business, related to EO 14173 compliance. As more details become available, we will share additional information with you. Berkshire, and our parent company Resolution Economics, have considerable experience responding to government EEO investigations and assessing DEI&A programs for risk. Our team of experts, which includes former government officials from the Equal Employment Opportunity Commission and Department of Labor, can support your organization in responding to any civil investigations initiated by DOJ or other federal or state enforcement agencies.

Lynn A. Clements, Senior Director, People Insights
Lynn A. Clements, Senior Director, People Insights
Lynn Clements, Esq., is the Senior Director of People Insights at Berkshire Associates, a division of Resolution Economics. The firm’s practice includes an interdisciplinary team of expert data scientists, labor economists, and Industrial/Organizational (I/O) psychologists who help organizations analyze and interpret workforce data to build compliant employment practices.

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