Last week, the FAR Council issued two final rules designed to reinforce existing restrictions on corporations that relocate overseas in inversion transactions.  The rules, which were issued without change from the proposed and interim rules announced in December 2014, further tighten restrictions on government contracting with inverted domestic corporations (IDCs), but they also impose new tracking and self-reporting obligations on all contractors.  In this sense, and as discussed further below, the new inversion rules represent a continuing trend towards the shifting of compliance monitoring and reporting from government agencies to those in the contracting community.
Continue Reading Self-Reporting Provision at Heart of New Inversion Rules

The FAR Council recently announced two new rulemaking actions aimed at further tightening restrictions on the award of federal contracts to companies that have relocated overseas in inversion transactions.  The two rules — one interim, one proposed — would reinforce the existing ban on contracting with so-called “inverted domestic corporations” (IDCs), while also imposing new, more onerous reporting obligations on government contractors.  The FAR Council’s announcement represents only the latest development in a recent surge of inversion-related measures.  As discussed further below, the shifting rules and requirements envisioned by these myriad proposals carries the potential to trip up even sophisticated contractors.
Continue Reading FAR Council Proposes New Rules on Inverted Corporations; Congress Voices Support

Washington policymakers are criticizing corporate “inversions”—i.e., U.S. companies that reincorporate abroad under lower corporate income tax rates—and contractors should take note.  Currently, U.S. law bars an inverted domestic corporation (“IDC”) from receiving funds under a prime U.S. contract.  See Consolidated Appropriations Act of 2014 (H.R. 3547); see also FAR 9.108-2.  On July 29,