The American Business for American Companies Act of 2026 prohibits federal agencies from awarding contracts to "inverted domestic corporations"—foreign companies that acquired U.S. businesses since May 2014 and maintain substantial U.S. operations or ownership. The ban applies to these corporations and their subsidiaries, as well as joint ventures in which they hold more than 10 percent ownership. For federal contracts exceeding $10 million, prime contractors must ensure that lower-tier subcontractors do not exceed 10 percent of contract value through inverted corporations, with violations subject to contract termination and debarment. Agency heads may waive the restriction only for national security or public health program reasons and must notify Congress within 14 days of doing so. The legislation is intended to prevent companies from avoiding U.S. taxes by relocating their legal headquarters overseas while continuing to operate domestically and benefit from federal contracts.
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