An executive order banning federal contractors from discriminating against lesbian, gay, bisexual and transgender employee goes into effect April 8.

The order prohibits federal contractors from discriminating on the basis of sexual orientation or gender identity. President Obama signed the executive order July 21.

The executive order applies to federal contractors and federally-assisted construction contractors who do over $10,000 in federal business in one year.

"This action not only ensures that LGBT Americans have a more inclusive environment to work and flourish, but also better positions our contracting community to attract and retain the best talent," said Anne Rung, the administrator of the Office of Federal Procurement Policy at the Office of Management and Budget.

Rung wrote in a blog post April 8 that a majority of contractors already have policies preventing discrimination against LGBT employees. Out of the top 50 federal contractors – which account for about half of federal spending - 86 percent prohibit sexual orientation discrimination and 61 percent prohibit discrimination based on gender identity.

The top five federal contractors all prohibit discrimination based on sexual orientation and gender identity, Rung said.

She said the executive order makes it clear the federal government will not do business with any company that discriminates against its LGBT workers.

"In the acquisition space, we know that policies that create an inclusive environment for employees to deliver on their missions, can improve productivity, support the bottom line, and strengthen the overall business model for both the company and its customers, including the federal government," Rung said.

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