An amendment numbered 55 printed in House Report 110-666 to revise the Federal Acquisition Regulation by requiring each contract awarded by the Department of Defense to contain a clause prohibiting the contractor from performing the contract using a subsidiary or subcontractor that is a foreign shell company if the foreign shell company will perform the work of the contract or subcontract using United States citizens or permanent residents of the United States. A foreign shell company is an entity that is incorporated outside the United States or Canada and does not amnage, direct, or exercise operational control over personnel performing work under a contract of the entity.

In the appropriate place in title VIII, insert the following:

SEC. 8__. REQUIREMENT FOR DEFENSE CONTRACT CLAUSE PROHIBITING CERTAIN USES OF FOREIGN SHELL COMPANIES.

(a) Contract Clause Requirement.--Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to require each contract awarded by the Department of Defense to contain a clause prohibiting the contractor from performing the contract using a subsidiary or subcontractor that is a foreign shell company if the foreign shell company will perform the work of the contract or subcontract using United States citizens or permanent residents of the United States.

(b) Foreign Shell Company.--In this section, the term “foreign shell company” means an entity--

(1) that is incorporated outside the United States or Canada; and

(2) that does not manage, direct, or exercise operational control over personnel performing work under a contract of the entity.

(c) Applicability.--The contract clause required by this section shall apply to contracts in amounts greater than the simplified acquisition threshold (as defined in section 2302a of title 10, United States Code) entered into after the 210-day period beginning on the date of the enactment of this Act.