Sponsors (5)
The bill strengthens national security and keeps more federal procurement with U.S.-managed companies, but does so at the cost of higher compliance burdens and reduced competition that may raise procurement costs for taxpayers.
Government contractors and taxpayers will face reduced risk that large federal programs rely on firms that have shifted legal domicile abroad because the bill limits subcontracting by inverted (foreign‑incorporated) firms on contracts over $10 million.
Government contractors and small businesses effectively managed in the U.S. are more likely to win major federal procurement work because agencies will avoid awarding large contracts to firms that have reincorporated abroad, keeping more procurement business with U.S.-managed companies.
Federal employees and contractors retain needed flexibility because agency heads can waive the prohibitions for national security or essential health program administration, allowing urgent or specialized needs to be met.
Taxpayers and government contractors could face higher procurement costs and fewer choices because some firms that are effectively U.S‑managed but reincorporated abroad may be excluded from bidding, shrinking the pool of eligible contractors.
Government contractors, especially prime contractors and small firms, will face increased legal and administrative costs and risk of contract termination or debarment due to new compliance burdens around subcontracting to inverted firms.
Based on analysis of 2 sections of legislative text.
Introduced February 9, 2026 by Richard Joseph Durbin · Last progress February 9, 2026
Prohibits federal agencies from awarding contracts to so-called "inverted domestic corporations" (foreign-incorporated firms that acquired U.S. businesses in certain transactions on or after May 8, 2014) and restricts those firms' roles in joint ventures and subcontracts. The bill adds parallel rules for civilian and defense contracting, requires agencies to include contract clauses limiting first-tier subcontracts that exceed 10% of the prime award on large contracts, authorizes limited waivers for national security and certain health program administration, and directs Treasury to issue implementing regulations about management and control.