Fair Defense Competition Act - Directs the Secretary of Defense (DOD), in awarding a contract for any major defense acquisition program and conducting the cost or price evaluation of any proposal for that contract, to take into account any final panel report that concludes that an illegal subsidy (inconsistent with the Agreement on Subsidies and Countervailing Measures) has been provided with respect to: (1) any merchandise or major component of such program; or (2) the development of any merchandise or major component thereof.
Requires the Secretary, if the illegal subsidy has not been withdrawn, to increase the cost or price of the proposal by the amount of the subsidy.