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The American Business for American Companies Act of 2026 prohibits federal agencies from awarding government contracts to "inverted domestic corporations"—foreign companies that acquired American businesses or assets since May 2014 while remaining primarily controlled by former U.S. shareholders. The ban applies to both civilian and defense contracts and extends to joint ventures where such inverted corporations hold more than 10 percent. For contracts exceeding $10 million, prime contractors are required to prevent subcontractors from circumventing these restrictions and face potential contract termination or debarment for violations. The legislation defines inverted corporations broadly to capture companies where U.S. management and control remain dominant or where the corporate group maintains significant domestic business activities (at least 25 percent of employees, compensation, assets, or income in the U.S.). Agencies can waive the prohibition only for national security reasons or critical public health programs, with waivers requiring congressional notification within 14 days. The restrictions apply to new contracts and task orders issued after enactment, with the Treasury Secretary required to issue implementing regulations.

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