U.S. Government Contracts: Can Turkish Companies Compete?

The U.S. federal government spends more than $700 billion per year on contracts for goods and services — making it the single largest buyer in the world. From information technology and professional services to construction, manufacturing, logistics, and research, the federal government buys virtually everything.

Turkish companies with competitive capabilities in these sectors have a genuine opportunity to access this market. Foreign companies are generally eligible to compete for U.S. government contracts, subject to certain restrictions. But the federal procurement system operates under a complex regulatory framework — the Federal Acquisition Regulation (FAR) and its agency supplements — that differs fundamentally from commercial contracting.

This guide explains the U.S. government contracting landscape, eligibility rules for Turkish companies, the registration and certification process, key compliance requirements, and practical strategies for market entry.

The U.S. federal government awards contracts through hundreds of agencies, including:

• Department of Defense (DoD) — the largest contracting agency (~$400 billion/year), covering Army, Navy, Air Force, Marines, and defense agencies
• Department of Homeland Security (DHS) — cybersecurity, border security, emergency management
• Department of State — diplomatic facilities, IT, professional services
• General Services Administration (GSA) — government-wide procurement vehicle for commercial products and services
• Department of Energy (DOE) — energy technology, nuclear, research
• NASA — aerospace, technology, research
• Health and Human Services (HHS)/NIH — healthcare, research, IT

A significant portion of federal contracts are set aside for specific categories of businesses:

• Small Business Set-Asides — businesses meeting SBA size standards
• 8(a) Program — socially and economically disadvantaged businesses
• HUBZone — businesses in historically underutilized business zones
• SDVOSB — service-disabled veteran-owned small businesses
• WOSB — women-owned small businesses

Foreign-owned companies generally cannot qualify for these set-aside programs, as they require U.S. ownership and control. However, Turkish companies can compete for full and open competition contracts, which represent the majority of federal spending by dollar value.

Foreign companies — including Turkish companies — are generally eligible to compete for U.S. government contracts. There is no blanket prohibition on foreign participation. However, eligibility depends on:

1. The specific agency and contract
2. The nature of the goods or services
3. National security and export control considerations
4. Trade agreements and reciprocity

The Trade Agreements Act (TAA) requires that products purchased by the U.S. government be manufactured or "substantially transformed" in the U.S. or a TAA-designated country. Turkey is a TAA-designated country — meaning products manufactured or substantially transformed in Turkey are eligible for U.S. government procurement under TAA-covered contracts.

This is a significant advantage for Turkish manufacturers. Products made in Turkey can be sold to the U.S. government on the same basis as U.S.-made products under TAA-covered contracts.

The Buy American Act applies to direct government purchases of supplies for use within the U.S. It requires that manufactured products be produced in the U.S. with at least 55% domestic content (increasing to 65% in 2024 and 75% in 2029 under recent executive orders).

However, the BAA is waived for TAA-covered contracts (which cover most large federal procurements) and can be waived when domestic products are not available or are unreasonably priced. Turkish companies should analyze BAA applicability on a contract-by-contract basis.

Certain sectors have restrictions or additional requirements for foreign companies:

Defense and National Security

• Classified contracts require security clearances, which are generally not available to foreign nationals or foreign-owned companies
• Contracts involving sensitive defense technology may be restricted to U.S. companies or require mitigation agreements
• The Committee on Foreign Investment in the United States (CFIUS) reviews foreign acquisitions of U.S. defense contractors

ITAR-Controlled Items The International Traffic in Arms Regulations (ITAR) controls the export of defense articles and services. Turkish companies seeking to supply ITAR-controlled items to the U.S. government face significant compliance requirements, including registration with the State Department's Directorate of Defense Trade Controls (DDTC).

Telecommunications Section 889 of the 2019 National Defense Authorization Act prohibits federal agencies from procuring telecommunications equipment from certain Chinese companies (Huawei, ZTE, etc.) and from contracting with companies that use such equipment. Turkish companies should ensure their supply chains are compliant.

Nuclear Contracts involving nuclear materials or facilities have additional security and regulatory requirements.

System for Award Management (SAM.gov) is the primary federal contractor registration database. Registration in SAM.gov is mandatory for any company seeking to receive a federal contract or grant. Without an active SAM.gov registration, you cannot be awarded a federal contract.

SAM.gov registration requires:

• DUNS Number / UEI (Unique Entity Identifier): Obtain a UEI through SAM.gov (replaced DUNS in April 2022)
• EIN (Employer Identification Number): U.S. tax identification number, obtained from the IRS
• NAICS Codes: North American Industry Classification System codes identifying your business activities
• Banking information: For electronic funds transfer (EFT) payments
• Representations and certifications: Compliance certifications required by FAR

For foreign companies:

• Turkish companies can register in SAM.gov
• An EIN is required — obtainable by filing IRS Form SS-4
• A U.S. bank account is required for EFT payments (or a waiver must be obtained)
• Registration must be renewed annually

Timeline: 2–4 weeks for initial registration.

A Commercial and Government Entity (CAGE) Code is a 5-character identifier assigned to entities doing business with the U.S. government. CAGE codes are assigned automatically through SAM.gov registration for U.S. entities; foreign entities receive a NCAGE (NATO CAGE) code through NATO.

Select the appropriate NAICS codes for your business activities. These codes determine which contracts you are eligible to bid on and whether you qualify as a "small business" under SBA size standards (which vary by NAICS code).

The GSA Multiple Award Schedule (MAS) — formerly called the GSA Schedule or Federal Supply Schedule — is a long-term government-wide contract that allows federal agencies to purchase commercial products and services at pre-negotiated prices. It is one of the most important procurement vehicles in the federal government.

Benefits of GSA Schedule contract:

• Streamlined purchasing for agencies (no need for full competitive procurement on each order)
• Pre-negotiated pricing and terms
• Visibility on GSA Advantage! (the government's online shopping portal)
• Access to $40+ billion in annual Schedule purchases

Turkish companies can obtain GSA Schedule contracts. Foreign companies are eligible, subject to TAA compliance requirements.

1. Determine eligibility — confirm your products/services are TAA-compliant
2. Register in SAM.gov — active registration required
3. Prepare offer — pricing, terms, past performance, technical capabilities
4. Submit through eOffer — GSA's online offer submission system
5. Negotiation — GSA contracting officer reviews and negotiates
6. Award — Schedule contract issued (typically valid for 5 years, renewable)

Timeline: 6–12 months from application to award. Cost: No fee to apply; GSA charges an Industrial Funding Fee (IFF) of 0.75% on Schedule sales.

The FAR is the primary regulation governing federal procurement. It applies to virtually all federal contracts and covers:

• Contract formation and administration
• Contractor representations and certifications
• Cost accounting requirements
• Subcontracting requirements
• Termination procedures
• Disputes and appeals

Turkish companies must understand and comply with FAR requirements applicable to their contracts. Key FAR clauses for foreign contractors include:

• FAR 52.225-5 (Trade Agreements) — TAA compliance
• FAR 52.222-26 (Equal Opportunity) — non-discrimination requirements
• FAR 52.215-2 (Audit and Records) — government audit rights
• FAR 52.203-13 (Contractor Code of Business Ethics) — ethics and compliance program requirements

Larger cost-reimbursement contracts may require compliance with Cost Accounting Standards (CAS), which govern how contractors account for costs. CAS compliance can be complex and requires dedicated accounting systems.

The Department of Defense is implementing CMMC — a cybersecurity certification framework for DoD contractors. Turkish companies seeking DoD contracts must achieve the appropriate CMMC level (1, 2, or 3) based on the sensitivity of the information handled. CMMC Level 2 and above require third-party assessment.

Federal contractors are subject to strict anti-kickback, anti-bribery, and ethics requirements. The Foreign Corrupt Practices Act (FCPA) applies to U.S. government contractors and prohibits bribery of foreign officials. Turkish companies must implement robust compliance programs.

Contracts over $750,000 (construction: $1.5 million) with large businesses require a subcontracting plan committing to use small businesses as subcontractors. Turkish prime contractors must develop and comply with subcontracting plans.

Research which federal agencies buy what you sell:

• USASpending.gov — database of all federal contract awards; search by product/service code, agency, and contractor
• SAM.gov — current contract opportunities (solicitations)
• beta.SAM.gov — successor to FedBizOpps; all federal opportunities over $25,000 are posted here

Identify the Product Service Codes (PSC) and NAICS codes relevant to your offerings. Analyze historical award data to understand which agencies buy your products/services, at what volumes, and from which contractors.

While foreign companies can technically bid on federal contracts without a U.S. presence, a U.S. subsidiary or office provides significant practical advantages:

• U.S. bank account (required for EFT payments)
• U.S. address for correspondence
• Ability to hire U.S. employees (important for contracts requiring security clearances)
• Credibility with contracting officers
• Eligibility for certain contract vehicles

A U.S. LLC or corporation is the typical structure. Consider establishing the U.S. entity before pursuing federal contracts.

Past performance is a critical evaluation factor in federal source selections. Agencies want to see that you have successfully performed similar contracts. For Turkish companies new to U.S. government contracting, building past performance is a chicken-and-egg challenge.

Strategies to build past performance:

• Subcontracting — partner with established prime contractors as a subcontractor; build a track record
• Small contracts first — pursue smaller contracts (simplified acquisitions under $250,000) where past performance requirements are less stringent
• State and local government contracts — state and local government experience can be cited as relevant past performance
• Commercial contracts — strong commercial performance in similar work can be cited

Teaming agreements allow Turkish companies to partner with U.S. companies to pursue federal contracts:

• Prime/subcontractor relationship — U.S. company is the prime; Turkish company is a subcontractor providing specific capabilities
• Joint venture — Turkish and U.S. companies form a joint venture to compete as the prime contractor
• Mentor-protégé programs — SBA and DoD offer mentor-protégé programs pairing large and small businesses

Teaming with an established U.S. government contractor is often the fastest path to market for Turkish companies.

The federal procurement system is complex. Engaging a U.S. government contracts attorney or consultant can help:

• Navigate registration and certification requirements
• Identify relevant contract opportunities
• Review solicitations and draft proposals
• Negotiate contract terms
• Ensure ongoing compliance

The Department of Defense is the largest federal contracting agency. Turkish companies in defense-related sectors — aerospace, electronics, materials, logistics, IT — may have opportunities with DoD. However, defense contracting involves additional requirements:

Security Clearances Many DoD contracts require personnel security clearances. Security clearances are generally available only to U.S. citizens and, in limited circumstances, foreign nationals with permanent resident status. Turkish companies seeking classified DoD contracts must typically establish a U.S. subsidiary with U.S. citizen employees who can obtain clearances.

Foreign Ownership, Control, or Influence (FOCI) DoD and the Defense Security Service (DSS) scrutinize foreign ownership of U.S. defense contractors. A Turkish-owned U.S. subsidiary seeking classified contracts must mitigate FOCI through a Special Security Agreement (SSA), Security Control Agreement (SCA), or other mitigation measures.

ITAR Compliance Turkish companies supplying defense articles or services must register with DDTC and comply with ITAR. Unauthorized export of ITAR-controlled items carries severe criminal and civil penalties.

Turkey is a NATO member, which creates additional opportunities. NATO procurement is conducted through the NATO Support and Procurement Agency (NSPA) and other NATO bodies. Turkish companies can compete for NATO contracts, which are subject to NATO procurement rules rather than U.S. FAR.

The U.S. federal government market is large, stable, and accessible to Turkish companies with the right capabilities and compliance infrastructure. The path to market requires investment — in registration, compliance systems, U.S. presence, and relationship-building — but the rewards are substantial: long-term contracts, reliable payment, and a prestigious customer reference.

The most successful foreign companies in U.S. government contracting share a common approach: they start with thorough market research, establish a proper U.S. presence, build past performance through subcontracting, and invest in compliance from day one.

ULF New York advises Turkish companies on all aspects of U.S. government contracting — from entity formation and SAM.gov registration to proposal support, contract negotiation, and compliance. Contact us to discuss your federal market entry strategy.

This article is for informational purposes only and does not constitute legal advice. U.S. government contracting law is complex and fact-specific. Consult qualified U.S. government contracts counsel before pursuing federal contracts.