Summary of S 3811: Bill to Prohibit Federal Contracts for Inverted Domestic Corporations

Overview

This bill, introduced in the Senate on February 9, 2026, seeks to prohibit the Federal Government from awarding contracts to inverted domestic corporations. An inverted domestic corporation is a company that was originally based in the United States but has since reincorporated in a foreign country, often to avoid U.S. taxes.

Key Provisions

• Prohibits federal agencies from awarding contracts, subcontracts, or task orders to inverted domestic corporations.
• Defines an "inverted domestic corporation" as a company that was originally based in the U.S. but has since reincorporated in a foreign country, with 80% or more of the company's stock now owned by former shareholders of the U.S. company.
• Requires companies bidding on federal contracts to certify that they are not inverted domestic corporations.
• Allows the head of a federal agency to waive the prohibition on a case-by-case basis if it is in the best interest of the United States.

Impact and Affected Parties

• This bill targets large U.S. corporations that have relocated their headquarters to foreign countries, often to take advantage of lower tax rates. By prohibiting these "inverted" companies from receiving federal contracts, the bill aims to discourage the practice of corporate inversions.
• The bill would impact any company seeking to do business with the federal government that meets the definition of an inverted domestic corporation. This could result in some major U.S. companies losing access to lucrative government contracts.
• Federal agencies would be responsible for enforcing the certification requirement and upholding the ban on awarding contracts to inverted domestic corporations, unless a waiver is granted.

Next Steps

The bill was introduced in the Senate on February 9, 2026 and has been referred to the Committee on Homeland Security and Governmental Affairs for further consideration. No additional legislative action has been taken yet.