The Federal Acquisition Regulation (FAR) — the primary rulebook governing U.S. government procurement — is undergoing its most comprehensive restructuring since the regulation was consolidated in 1984. The overhaul, driven by executive directives issued in early 2026, affects every company that sells goods or services to the U.S. federal government, either directly or as a subcontractor in the supply chain.

For Turkish companies and international suppliers with existing or prospective U.S. government contracts, the changes create both compliance obligations and strategic opportunities. This analysis examines the most significant modifications, their practical implications, and the steps international businesses should take now.

The FAR is codified at Title 48 of the Code of Federal Regulations and is jointly administered by the Department of Defense (DoD), the General Services Administration (GSA), and NASA. It governs the acquisition of supplies and services by federal agencies and applies to prime contractors and, through flow-down clauses, to subcontractors at every tier.

The current overhaul was initiated by Executive Order 14,XXX (2026), which directed the FAR Council to streamline acquisition procedures, reduce regulatory burden on small and mid-sized suppliers, and modernize provisions governing foreign participation in federal procurement.

The simplified acquisition threshold — below which agencies may use streamlined procurement procedures — has been raised from $250,000 to $500,000. This change significantly expands the pool of contracts accessible to international suppliers without full FAR compliance overhead, particularly for commercial item acquisitions.

The revised FAR Part 12 broadens the definition of "commercial items" to include a wider range of technology products and professional services. This is significant because commercial item contracts carry substantially reduced compliance requirements compared to standard government contracts — fewer mandatory clauses, simplified cost accounting, and less extensive audit rights.

The revised FAR includes updated provisions addressing Foreign Ownership, Control, or Influence (FOCI). Companies with ownership or management connections to certain foreign jurisdictions face enhanced disclosure requirements and, in some cases, mandatory mitigation agreements before award. Turkish companies should review their ownership structures carefully against the updated FOCI framework.

The Buy American Act provisions in FAR Part 25 have been revised to increase the domestic content threshold for manufactured products from 55% to 65%, with a further increase to 75% scheduled for 2028. For Turkish manufacturers supplying components to U.S. government prime contractors, this change may affect the competitiveness of their products and requires supply chain analysis.

The revised FAR formally integrates CMMC requirements into standard contract clauses. Companies handling Controlled Unclassified Information (CUI) — including many defense subcontractors — must now demonstrate CMMC Level 2 or Level 3 certification as a condition of contract award. Turkish defense industry suppliers should assess their current cybersecurity posture against CMMC requirements.

The revised FAR expands the list of clauses that prime contractors must flow down to subcontractors, including new provisions on supply chain transparency, conflict minerals reporting, and forced labor certifications. Turkish companies operating as subcontractors should expect their U.S. prime contractor customers to request updated certifications and compliance documentation.

The FAR Council published the final rule in the Federal Register on [date], with an effective date of [date]. A 180-day transition period applies to contracts awarded before the effective date. New solicitations issued after the effective date must incorporate the revised clauses.

The DoD has separately issued a Defense Federal Acquisition Regulation Supplement (DFARS) update that applies additional requirements to defense contracts, including enhanced supply chain security provisions and updated restrictions on certain foreign-manufactured telecommunications equipment.

Defense Industry Suppliers: Turkish defense companies supplying components, systems, or services to U.S. defense prime contractors face the most significant compliance burden. CMMC certification, updated FOCI disclosures, and enhanced supply chain documentation requirements all apply. Companies should begin CMMC gap assessments immediately, as certification timelines can extend six to twelve months.

Commercial Technology Suppliers: The expanded commercial item definition benefits Turkish technology companies. Products that previously required full FAR compliance may now qualify for the streamlined commercial item track, reducing administrative burden and improving competitiveness.

Manufacturing Subcontractors: The increased Buy American domestic content threshold requires supply chain analysis. Turkish manufacturers should work with their U.S. prime contractor customers to determine whether their products remain compliant and, if not, whether domestic content can be increased or a waiver is available.

Professional Services Firms: Turkish consulting, engineering, and professional services firms operating as subcontractors should review the expanded flow-down clause list and update their compliance programs accordingly.

International suppliers entering new U.S. government subcontracts should ensure their agreements:

• Clearly define which FAR clauses are flowed down and the scope of each obligation
• Include representations and certifications that are accurate as of the date of execution
• Address CMMC certification requirements and the timeline for achieving compliance
• Specify the governing law and dispute resolution mechanism for subcontract disputes
• Include change-of-law provisions addressing future FAR amendments

The primary risks for non-compliant international suppliers are contract termination for default, suspension or debarment from future federal procurement, and potential False Claims Act liability for false certifications. The False Claims Act carries treble damages and civil penalties — a risk that should not be underestimated.

FOCI-related non-disclosure carries additional risk: failure to disclose foreign ownership or control connections can result in security clearance revocation and permanent exclusion from classified programs.

1. Conduct a FAR compliance audit of all existing U.S. government subcontracts to identify clauses affected by the overhaul
2. Assess CMMC certification requirements for any contracts involving Controlled Unclassified Information
3. Review ownership and management structures against updated FOCI disclosure requirements
4. Analyze supply chain domestic content against the revised Buy American thresholds
5. Update subcontract templates to incorporate revised flow-down clauses
6. Train compliance personnel on the new requirements before the transition period expires

• The FAR overhaul is the most significant restructuring of U.S. government procurement rules in four decades
• Turkish defense industry suppliers face the most immediate compliance obligations, particularly around CMMC and FOCI
• The expanded commercial item definition creates new opportunities for technology and professional services suppliers
• The increased Buy American domestic content threshold requires supply chain analysis for manufacturing subcontractors
• Non-compliance carries serious consequences including contract termination, debarment, and False Claims Act liability
• The 180-day transition period is shorter than it appears — compliance programs should begin immediately