(a) Regulations Required.--Within 1 year of the date of
enactment of this Act, the Federal Acquisition Regulation shall
be revised to include regulations with regard to unsolicited
proposals.
(b) Content of Regulations.--The regulations prescribed
under subsection (a) shall require that before initiating a
comprehensive evaluation, an agency contact point shall
consider, among other factors, that the proposal--
(1) is not submitted in response to a previously
published agency requirement; and
(2) contains technical and cost information for
evaluation and overall scientific, technical or
socioeconomic merit, or cost-related or price-related
factors.
SEC. 835. [6 U.S.C. 395] PROHIBITION ON CONTRACTS WITH CORPORATE
EXPATRIATES.
(a) In General.--The Secretary may not enter into any
contract with a foreign incorporated entity which is treated as
an inverted domestic corporation under subsection (b), or any
subsidiary of such an entity.
(b) Inverted Domestic Corporation.--For purposes of this
section, a foreign incorporated entity shall be treated as an
inverted domestic corporation if, pursuant to a plan (or a
series of related transactions)--
(1) the entity completes before, on, or after the
date of enactment of this Act, the direct or indirect
acquisition of substantially all of the properties held
directly or indirectly by a domestic corporation or
substantially all of the properties constituting a
trade or business of a domestic partnership;
(2) after the acquisition at least 80 percent of
the stock (by vote or value) of the entity is held--
(A) in the case of an acquisition with
respect to a domestic corporation, by former
shareholders of the domestic corporation by
reason of holding stock in the domestic
corporation; or
(B) in the case of an acquisition with
respect to a domestic partnership, by former
partners of the domestic partnership by reason
of holding a capital or profits interest in the
domestic partnership; and
(3) the expanded affiliated group which after the
acquisition includes the entity does not have
substantial business activities in the foreign country
in which or under the law of which the entity is
created or organized when compared to the total
business activities of such expanded affiliated group.
(c) Definitions and Special Rules.--
(1) Rules for application of subsection (b).--In
applying subsection (b) for purposes of subsection (a),
the following rules shall apply:
(A) Certain stock disregarded.--There shall
not be taken into account in determining
ownership for purposes of subsection (b)(2)--
(i) stock held by members of the
expanded affiliated group which
includes the foreign incorporated
entity; or
(ii) stock of such entity which is
sold in a public offering related to
the acquisition described in subsection
(b)(1).
(B) Plan deemed in certain cases.--If a
foreign incorporated entity acquires directly
or indirectly substantially all of the
properties of a domestic corporation or
partnership during the 4-year period beginning
on the date which is 2 years before the
ownership requirements of subsection (b)(2) are
met, such actions shall be treated as pursuant
to a plan.
(C) Certain transfers disregarded.--The
transfer of properties or liabilities
(including by contribution or distribution)
shall be disregarded if such transfers are part
of a plan a principal purpose of which is to
avoid the purposes of this section.
(D) Special rule for related
partnerships.--For purposes of applying
subsection (b) to the acquisition of a domestic
partnership, except as provided in regulations,
all domestic partnerships which are under
common control (within the meaning of section
482 of the Internal Revenue Code of 1986) shall
be treated as I partnership.
(E) Treatment of certain rights.--The
Secretary shall prescribe such regulations as
may be necessary to--
(i) treat warrants, options,
contracts to acquire stock, convertible
debt instruments, and other similar
interests as stock; and
(ii) treat stock as not stock.
(2) Expanded affiliated group.--The term ``expanded
affiliated group'' means an affiliated group as defined
in section 1504(a) of the Internal Revenue Code of 1986
(without regard to section 1504(b) of such Code),
except that section 1504 of such Code shall be applied
by substituting ``more than 50 percent'' for ``at least
80 percent'' each place it appears.
(3) Foreign incorporated entity.--The term
``foreign incorporated entity'' means any entity which
is, or but for subsection (b) would be, treated as a
foreign corporation for purposes of the Internal
Revenue Code of 1986.
(4) Other definitions.--The terms ``person'',
``domestic'', and ``foreign'' have the meanings given
such terms by paragraphs (1), (4), and (5) of section
7701(a) of the Internal Revenue Code of 1986,
respectively.
(d) Waivers.--The Secretary shall waive subsection (a) with
respect to any specific contract if the Secretary determines
that the waiver is required in the interest of national
security.
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