,,ii  #aaf? ,,congress  #a/ ,session    
,s4 #baci  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,july #ag1 #bjai,mr4   
,durb9 7= himself1 ,mr4 ,re$1 ,mr4      
,:iteh\se1 ,ms4 ,duckwor?1 & ,mr4 ,s&]s7
 introduc$ ! foll[+ bill2 :i* 0 read    
twice & ref]r$ to ! ,committee on       
,homel& ,security & ,gov]nm5tal ,affairs
  ,a ,,bill  ,to prohibit ! aw>d (      
,f$]al ,gov]nm5t contracts to inv]t$    
dome/ic corporations1 & = o!r purposes4 
#a4 ,%ort title ,?is ,act may be cit$ z 
! ,am]ican ,bus9ess = ,am]ican          
,companies ,act ( #bjai4  #b4           
,prohibition on aw>d+ contracts to      
inv]t$ dome/ic corporations  7a7        
,civilian contracts  7#a7 ,9 g5]al      
,*apt] #dg ( title #da1 ,unit$ ,/ates   
,code1 is am5d$ by add+ at ! end !      
foll[+ new section3  #dgad4 ,prohibition
 on aw>d+ contracts to inv]t$ dome/ic   
corporations  7a7 ,prohibition  7#a7 ,9 
g5]al ,! head ( an executive ag5cy may n
 aw>d a contract = ! procurem5t (       
prop]ty or s]vices to--  7,a7 any =eign 

incorporat$ entity t su* head has       
det]m9$ is an inv]t$ dome/ic corporation
 or any subsidi>y ( su* entity2 or  7,b7
 any jo9t v5ture if m ?an #aj p]c5t ( ! 
jo9t v5ture 7by vote or value7 is held  
by a =eign incorporat$ entity t su* head
 has det]m9$ is an inv]t$ dome/ic       
corporation or any subsidi>y ( su*      
entity4  7#b7 ,subcontracts  7,a7 ,9    
g5]al ,! head ( an executive ag5cy %all 
include 9 ea* contract = ! procurem5t ( 
prop]ty or s]vices aw>d$ by ! executive 
ag5cy ) a value 9 excess ( #aj1jjj1jjj1 
o!r ?an a contract = exclusively        
comm]cial items1 a clause t prohibits ! 
prime contractor on su* contract f--    
7i7 aw>d+ a fir/-ti] subcontract ) a    
value great] ?an #aj p]c5t ( ! total    
value ( ! prime contract to an entity or
 jo9t v5ture describ$ 9 p>agraph 7#a72  
or  7ii7 /ructur+ subcontract ti]s 9 a  
mann] design$ to avoid ! limitation 9   
p>agraph 7#a7 by enabl+ an entity or    
jo9t v5ture describ$ 9 p>agraph 7#a7 to 
p]=m m ?an #aj p]c5t ( ! total value ( !

 prime contract z a l[]-ti]             
subcontractor4  7,b7 ,p5alties ,!       
contract clause includ$ 9 contracts     
pursuant to subp>agraph 7,a7 %all       
provide t1 9 ! ev5t t ! prime contractor
 violates ! contract clause--  7i7 !    
prime contract may be t]m9at$ = default2
 &  7ii7 ! matt] may be ref]r$ to !     
susp5sion or deb>m5t (ficial = !        
appropriate ag5cy & may be a basis =    
susp5sion or deb>m5t ( ! prime          
contractor4  7b7 ,inv]t$ dome/ic        
corporation  7#a7 ,9 g5]al ,= purposes (
 ?is section1 a =eign incorporat$ entity
 %all be treat$ z an inv]t$ dome/ic     
corporation if1 pursuant to a plan 7or a
 s]ies ( relat$ transactions7--  7,a7 ! 
entity completes on or aft] ,may #h1    
#bjad1 ! direct or indirect acquisition 
(-- 7i7 sub/antially all ( ! prop]ties  
held directly or indirectly by a dome/ic
 corporation2 or  7ii7 sub/antially all 
( ! assets (1 or sub/antially all ( !   
prop]ties con/itut+ a trade or bus9ess  
(1 a dome/ic p>tn]%ip2 &  7,b7 aft] !   

acquisition1 ei!r-- 7i7 m ?an #ej p]c5t 
( ! /ock 7by vote or value7 ( ! entity  
is held--  7,i7 9 ! case ( an           
acquisition ) respect to a dome/ic      
corporation1 by =m] %>ehold]s ( !       
dome/ic corporation by reason ( hold+   
/ock 9 ! dome/ic corporation2 or  7,,ii7
 9 ! case ( an acquisition ) respect to 
a dome/ic p>tn]%ip1 by =m] p>tn]s ( !   
dome/ic p>tn]%ip by reason ( hold+ a    
capital or pr(its int]e/ 9 ! dome/ic    
p>tn]%ip2 or  7ii7 ! managem5t & control
 ( ! exp&$ affiliat$ gr\p :i* includes !
 entity occurs1 directly or indirectly1 
prim>ily )9 ! ,unit$ ,/ates1 z det]m9$  
pursuant to regulations prescrib$ by !  
,secret>y ( ! ,treasury1 & su* exp&$    
affiliat$ gr\p has significant dome/ic  
bus9ess activities4  7#b7 ,exception =  
corporations ) sub/antial bus9ess       
activities 9 =eign c\ntry ( organization
  7,a7 ,9 g5]al ,a =eign incorporat$    
entity describ$ 9 p>agraph 7#a7 %all n  
be treat$ z an inv]t$ dome/ic           
corporation if aft] ! acquisition !     

exp&$ affiliat$ gr\p :i* includes !     
entity has sub/antial bus9ess activities
 9 ! =eign c\ntry 9 :i* or "u ! law (   
:i* ! entity is creat$ or organiz$ :5   
comp>$ to ! total bus9ess activities (  
su* exp&$ affiliat$ gr\p4  7,b7         
,sub/antial bus9ess activities ,!       
,secret>y ( ! ,treasury 7or !           
,secret>y's delegate7 %all e/abli%      
regulations = det]m9+ :e!r an affiliat$ 
gr\p has sub/antial bus9ess activities =
 purposes ( subp>agraph 7,a71 except t  
su* regulations may n treat any gr\p z  
hav+ sub/antial bus9ess activities if   
su* gr\p w\ld n be consid]$ to h        
sub/antial bus9ess activities "u !      
regulations prescrib$ "u section #ghgd (
 ! ,int]nal ,rev5ue ,code ( #aihf1 z 9  
effect on ,janu>y #ah1 #bjag4  7#c7     
,significant dome/ic bus9ess activities 
7,a7 ,9 g5]al ,= purposes ( p>agraph    
7#a77;,b77ii71 an exp&$ affiliat$ gr\p  
has significant dome/ic bus9ess         
activities if at lea/ #be p]c5t (--  7i7
 ! employees ( ! gr\p are bas$ 9 !      

,unit$ ,/ates2  7ii7 ! employee         
comp5sation incurr$ by ! gr\p is incurr$
 ) respect to employees bas$ 9 ! ,unit$ 
,/ates2  7iii7 ! assets ( ! gr\p are    
locat$ 9 ! ,unit$ ,/ates2 or  7iv7 !    
income ( ! gr\p is d]iv$ 9 ! ,unit$     
,/ates4  7,b7 ,det]m9ation ,det]m9ations
 pursuant to subp>agraph 7,a7 %all be   
made 9 ! same mann] z su* det]m9ations  
are made = purposes ( det]m9+ sub/antial
 bus9ess activities "u regulations      
ref]r$ to 9 p>agraph 7#b7 z 9 effect on 
,janu>y #ah1 #bjag1 b appli$ by treat+  
all ref]5ces 9 su* regulations to =eign 
c\ntry & relevant =eign c\ntry z        
ref]5ces to ! ,unit$ ,/ates4 ,!         
,secret>y ( ! ,treasury 7or !           
,secret>y's delegate7 may issue         
regulations decreas+ ! ?re%old p]c5t 9  
any ( ! te/s "u su* regulations =       
det]m9+ if bus9ess activities con/itute 
significant dome/ic bus9ess activities =
 purposes ( ?is p>agraph4  7c7 ,waiv]   
7#a7 ,9 g5]al ,! head ( an executive    
ag5cy may waive subsection 7a7 ) respect

 to any ,f$]al ,gov]nm5t contract "u !  
au?ority ( su* head if ! head det]m9es t
 ! waiv] is--  7,a7 requir$ 9 ! int]e/ (
 national security2 or  7,b7 necess>y = 
! effici5t or effective adm9i/ration (  
,f$]al or f$]ally fund$--  7i7 programs 
t provide heal? b5efits to individuals2 
or  7ii7 public heal? programs4  7#b7   
,report to ,congress ,! head ( an       
executive ag5cy issu+ a waiv] "u        
p>agraph 7#a7 %all1 n lat] ?an #ad days 
aft] issu+ su* waiv]1 submit a writt5   
notification ( ! waiv] to ! relevant    
au?oriz+ committees ( ,congress & !     
,committees on ,appropriations ( !      
,s5ate & ! ,h\se ( ,repres5tatives4  7d7
 ,applicability  7#a7 ,9 g5]al ,except z
 provid$ 9 p>agraph 7#b71 ?is section   
%all n apply to any contract ent]$ into 
be=e ! date ( ! enactm5t ( ?is section4 
7#b7 ,task & deliv]y ord]s ,?is section 
%all apply to any task or deliv]y ord]  
issu$ aft] ! date ( ! enactm5t ( ?is    
section pursuant to a contract ent]$    
into be=e1 on1 or aft] su* date (       

enactm5t4  7#c7 ,scope ,?is section     
applies only to contracts subject to    
regulation "u ! ,f$]al ,acquisition     
,regulation4  7e7 ,def9itions & special 
rules  7#a7 ,def9itions ,9 ?is section1 
! t]ms exp&$ affiliat$ gr\p1 =eign      
incorporat$ entity1 p]son1 dome/ic1 &   
=eign h ! mean+ giv5 ^? t]ms 9 section  
#hce7;c7 ( ! ,homel& ,security ,act (   
#bjjb 7#f ,u4,s4,c4 #cie7;c774  7#b7    
,special rules ,9 apply+ subsection 7b7 
( ?is section = purposes ( subsection   
7a7 ( ?is section1 ! rules describ$ "u  
#hce7;c77#a7 ( ! ,homel& ,security ,act 
( #bjjb 7#f ,u4,s4,c4 #cie7;c77#a77 %all
 apply4  4  7#b7 ,cl]ical am5dm5t ,!    
table ( sections at ! beg9n+ ( *apt] #dg
 ( title #da1 ,unit$ ,/ates ,code1 is   
am5d$ by ins]t+ aft] ! item relat+ to   
section #dgac ! foll[+ new item3 #dgad4 
,prohibition on aw>d+ contracts to      
inv]t$ dome/ic corporations44  7b7      
,def5se contracts  7#a7 ,9 g5]al ,*apt] 
#acg ( title #aj1 ,unit$ ,/ates ,code1  
is am5d$ by add+ at ! end ! foll[+ new  

section3  #bcci4 ,prohibition on aw>d+  
contracts to inv]t$ dome/ic corporations
  7a7 ,prohibition  7#a7 ,9 g5]al ,!    
head ( an ag5cy may n aw>d a contract = 
! procurem5t ( prop]ty or s]vices to--  
7,a7 any =eign incorporat$ entity t su* 
head has det]m9$ is an inv]t$ dome/ic   
corporation or any subsidi>y ( su*      
entity2 or  7,b7 any jo9t v5ture if m   
?an #aj p]c5t ( ! jo9t v5ture 7by vote  
or value7 is own$ by a =eign incorporat$
 entity t su* head has det]m9$ is an    
inv]t$ dome/ic corporation or any       
subsidi>y ( su* entity4  7#b7           
,subcontracts  7,a7 ,9 g5]al ,! head (  
an executive ag5cy %all include 9 ea*   
contract = ! procurem5t ( prop]ty or    
s]vices aw>d$ by ! executive ag5cy ) a  
value 9 excess ( #aj1jjj1jjj1 o!r ?an a 
contract = exclusively comm]cial items1 
a clause t prohibits ! prime contractor 
on su* contract f--  7i7 aw>d+ a        
fir/-ti] subcontract ) a value great]   
?an #aj p]c5t ( ! total value ( ! prime 
contract to an entity or jo9t v5ture    

describ$ 9 p>agraph 7#a72 or  7ii7      
/ructur+ subcontract ti]s 9 a mann]     
design$ to avoid ! limitation 9 p>agraph
 7#a7 by enabl+ an entity or jo9t v5ture
 describ$ 9 p>agraph 7#a7 to p]=m m ?an 
#aj p]c5t ( ! total value ( ! prime     
contract z a l[]-ti] subcontractor4     
7,b7 ,p5alties ,! contract clause       
includ$ 9 contracts pursuant to         
subp>agraph 7,a7 %all provide t1 9 !    
ev5t t ! prime contractor violates !    
contract clause--  7i7 ! prime contract 
may be t]m9at$ = default2 &  7ii7 !     
matt] may be ref]r$ to ! susp5sion or   
deb>m5t (ficial = ! appropriate ag5cy & 
may be a basis = susp5sion or deb>m5t ( 
! prime contractor4  7b7 ,inv]t$ dome/ic
 corporation  7#a7 ,9 g5]al ,= purposes 
( ?is section1 a =eign incorporat$      
entity %all be treat$ z an inv]t$       
dome/ic corporation if1 pursuant to a   
plan 7or a s]ies ( relat$               
transactions7--  7,a7 ! entity completes
 on or aft] ,may #h1 #bjad1 ! direct or 
indirect acquisition (-- 7i7            

sub/antially all ( ! prop]ties held     
directly or indirectly by a dome/ic     
corporation2 or  7ii7 sub/antially all (
 ! assets (1 or sub/antially all ( !    
prop]ties con/itut+ a trade or bus9ess  
(1 a dome/ic p>tn]%ip2 &  7,b7 aft] !   
acquisition1 ei!r-- 7i7 m ?an #ej p]c5t 
( ! /ock 7by vote or value7 ( ! entity  
is held--  7,i7 9 ! case ( an           
acquisition ) respect to a dome/ic      
corporation1 by =m] %>ehold]s ( !       
dome/ic corporation by reason ( hold+   
/ock 9 ! dome/ic corporation2 or  7,,ii7
 9 ! case ( an acquisition ) respect to 
a dome/ic p>tn]%ip1 by =m] p>tn]s ( !   
dome/ic p>tn]%ip by reason ( hold+ a    
capital or pr(its int]e/ 9 ! dome/ic    
p>tn]%ip2 or  7ii7 ! managem5t & control
 ( ! exp&$ affiliat$ gr\p :i* includes !
 entity occurs1 directly or indirectly1 
prim>ily )9 ! ,unit$ ,/ates1 z det]m9$  
pursuant to regulations prescrib$ by !  
,secret>y ( ! ,treasury1 & su* exp&$    
affiliat$ gr\p has significant dome/ic  
bus9ess activities4  7#b7 ,exception =  

corporations ) sub/antial bus9ess       
activities 9 =eign c\ntry ( organization
  7,a7 ,9 g5]al ,a =eign incorporat$    
entity describ$ 9 p>agraph 7#a7 %all n  
be treat$ z an inv]t$ dome/ic           
corporation if aft] ! acquisition !     
exp&$ affiliat$ gr\p :i* includes !     
entity has sub/antial bus9ess activities
 9 ! =eign c\ntry 9 :i* or "u ! law (   
:i* ! entity is creat$ or organiz$ :5   
comp>$ to ! total bus9ess activities (  
su* exp&$ affiliat$ gr\p4  7,b7         
,sub/antial bus9ess activities ,!       
,secret>y ( ! ,treasury 7or !           
,secret>y's delegate7 %all e/abli%      
regulations = det]m9+ :e!r an affiliat$ 
gr\p has sub/antial bus9ess activities =
 purposes ( subp>agraph 7,a71 except t  
su* regulations may n treat any gr\p z  
hav+ sub/antial bus9ess activities if   
su* gr\p w\ld n be consid]$ to h        
sub/antial bus9ess activities "u !      
regulations prescrib$ "u section #ghgd (
 ! ,int]nal ,rev5ue ,code ( #aihf1 z 9  
effect on ,janu>y #ah1 #bjag4  7#c7     

,significant dome/ic bus9ess activities 
7,a7 ,9 g5]al ,= purposes ( p>agraph    
7#a77;,b77ii71 an exp&$ affiliat$ gr\p  
has significant dome/ic bus9ess         
activities if at lea/ #be p]c5t (--  7i7
 ! employees ( ! gr\p are bas$ 9 !      
,unit$ ,/ates2  7ii7 ! employee         
comp5sation incurr$ by ! gr\p is incurr$
 ) respect to employees bas$ 9 ! ,unit$ 
,/ates2  7iii7 ! assets ( ! gr\p are    
locat$ 9 ! ,unit$ ,/ates2 or  7iv7 !    
income ( ! gr\p is d]iv$ 9 ! ,unit$     
,/ates4  7,b7 ,det]m9ation ,det]m9ations
 pursuant to subp>agraph 7,a7 %all be   
made 9 ! same mann] z su* det]m9ations  
are made = purposes ( det]m9+ sub/antial
 bus9ess activities "u regulations      
ref]r$ to 9 p>agraph 7#b7 z 9 effect on 
,janu>y #ah1 #bjag1 b appli$ by treat+  
all ref]5ces 9 su* regulations to =eign 
c\ntry & relevant =eign c\ntry z        
ref]5ces to ! ,unit$ ,/ates4 ,!         
,secret>y ( ! ,treasury 7or !           
,secret>y's delegate7 may issue         
regulations decreas+ ! ?re%old p]c5t 9  

any ( ! te/s "u su* regulations =       
det]m9+ if bus9ess activities con/itute 
significant dome/ic bus9ess activities =
 purposes ( ?is p>agraph4  7c7 ,waiv]   
7#a7 ,9 g5]al ,! head ( an ag5cy may    
waive subsection 7a7 ) respect to any   
,f$]al ,gov]nm5t contract "u ! au?ority 
( su* head if ! head det]m9es t ! waiv] 
is requir$ 9 ! int]e/ ( national        
security or is necess>y = ! effici5t or 
effective adm9i/ration ( ,f$]al or      
f$]ally fund$ programs t provide heal?  
b5efits to individuals4  7#b7 ,report to
 ,congress ,! head ( an ag5cy issu+ a   
waiv] "u p>agraph 7#a7 %all1 n lat] ?an 
#ad days aft] issu+ su* waiv]1 submit a 
writt5 notification ( ! waiv] to !      
congressional def5se committees4  7d7   
,applicability  7#a7 ,9 g5]al ,except z 
provid$ 9 p>agraph 7#b71 ?is section    
%all n apply to any contract ent]$ into 
be=e ! date ( ! enactm5t ( ?is section4 
7#b7 ,task & deliv]y ord]s ,?is section 
%all apply to any task or deliv]y ord]  
issu$ aft] ! date ( ! enactm5t ( ?is    

section pursuant to a contract ent]$    
into be=e1 on1 or aft] su* date (       
enactm5t4  7#c7 ,scope ,?is section     
applies only to contracts subject to    
regulation "u ! ,f$]al ,acquisition     
,regulation & ! ,def5se ,supplem5t to ! 
,f$]al ,acquisition ,regulation4  7e7   
,def9itions & special rules  7#a7       
,def9itions ,9 ?is section1 ! t]ms exp&$
 affiliat$ gr\p1 =eign incorporat$      
entity1 p]son1 dome/ic1 & =eign h !     
mean+ giv5 ^? t]ms 9 section #hce7;c7 ( 
! ,homel& ,security ,act ( #bjjb 7#f    
,u4,s4,c4 #cie7;c774  7#b7 ,special     
rules ,9 apply+ subsection 7b7 ( ?is    
section = purposes ( subsection 7a7 (   
?is section1 ! rules describ$ "u        
#hce7;c77#a7 ( ! ,homel& ,security ,act 
( #bjjb 7#f ,u4,s4,c4 #cie7;c77#a77 %all
 apply4  4  7#b7 ,cl]ical am5dm5t ,!    
table ( sections at ! beg9n+ ( *apt]    
#acg ( title #aj1 ,unit$ ,/ates ,code1  
is am5d$ by ins]t+ aft] ! item relat+ to
 section #bcch ! foll[+ new item3 #bcci4
 ,prohibition on aw>d+ contracts to     

inv]t$ dome/ic corporations44  7c7      
,regulations reg>d+ managem5t & control 
7#a7 ,9 g5]al ,! ,secret>y ( ! ,treasury
 7or ! ,secret>y's delegate7 %all1 =    
purposes ( section                      
#dgad7;b77#a77;,b77ii7 ( title #da1     
,unit$ ,/ates ,code1 & section          
#bcci7;b77#a77;,b77ii7 ( title #aj1     
,unit$ ,/ates ,code1 z add$ by          
subsections 7a7 & 7b71 respectively1    
prescribe regulations = purposes (      
det]m9+ cases 9 :i* ! managem5t &       
control ( an exp&$ affiliat$ gr\p is to 
be treat$ z occurr+1 directly or        
indirectly1 prim>ily )9 ! ,unit$ ,/ates4
 ,! regulations prescrib$ "u ! prec$+   
s5t5ce %all apply to p]iods aft] ,may   
#h1 #bjad4  7#b7 ,executive (fic]s &    
s5ior managem5t ,! regulations prescrib$
 "u p>agraph 7#a7 %all provide t !      
managem5t & control ( an exp&$ affiliat$
 gr\p %all be treat$ z occurr+1 directly
 or indirectly1 prim>ily )9 ! ,unit$    
,/ates if sub/antially all ( ! executive
 (fic]s & s5ior managem5t ( ! exp&$     

affiliat$ gr\p :o ex]cise day-to-day    
responsibility = mak+ decisions involv+ 
/rategic1 f9ancial1 & op]ational        
policies ( ! exp&$ affiliat$ gr\p are   
bas$ or prim>ily locat$ )9 ! ,unit$     
,/ates4 ,individuals :o 9 fact ex]cise  
su* day-to-day responsibilities %all be 
treat$ z executive (fic]s & s5ior       
managem5t reg>dless ( _! title4