Sponsor
Rosa L. Delauro
Representative · D-CT
Representative · D-CT
The bill favors protecting U.S. procurement, supply chains, and national-security interests by limiting participation of companies that shifted corporate residence abroad, while imposing higher compliance risks, legal uncertainty, potential price increases, and administrative burdens on contractors and procurement agencies.
Taxpayers and federal procurement officials: reduces the chance that prime contracts are awarded to companies that have shifted corporate residence abroad, protecting sensitive government purchases and U.S. supply-chain integrity.
Small businesses and U.S.-based contractors: requires that at least 90% (by value) of prime contract performance on large federal contracts remain with non-inverted entities, preserving domestic work and participation in the federal industrial base.
Government contractors and mission managers: permits agency heads to waive prohibitions for national security or critical health programs, allowing continued use of the most efficient suppliers when missions require it.
Government contractors and small-business subcontractors: face risk of contract termination, suspension, or debarment if a first-tier or structured lower-tier subcontract causes more than 10% of performance to be by covered (inverted) entities, increasing compliance costs and legal exposure.
Taxpayers and procurement officials: restricting participation by foreign‑incorporated firms may reduce bidder pools for some large procurements, which could raise contract prices and overall costs to taxpayers.
Government contractors and potential bidders: retroactive application of rules (back to May 8, 2014) combined with forthcoming Treasury regulations could create legal uncertainty and complicate bidding and corporate structuring decisions.
Based on analysis of 2 sections of legislative text.
Bars federal awards and large first‑tier subcontracts to certain foreign‑incorporated "inverted" firms, limits joint venture ownership to 10%, and requires Treasury rulemaking and narrow waivers.
Official title: To prohibit the award of Federal Government contracts to inverted domestic corporations, and for other purposes.
Introduced February 9, 2026 by Rosa L. Delauro · Last progress February 9, 2026
Bars federal civilian and defense agencies from awarding major contracts, first‑tier subcontracts, or joint venture stakes to foreign‑incorporated firms that qualify as "inverted domestic corporations" or to ventures more than 10% owned by those firms. It requires contract clauses for large procurements to prevent first‑tier subcontracts above 10% to such entities, defines tests for when a foreign corporation is treated as a U.S. company (including employee, pay, asset, and income thresholds), allows narrow national‑security or health‑efficiency waivers with brief congressional notice, and directs the Treasury to issue implementing regulations about control and management.