Remember in Coming to America when Eddie Murphy’s Prince Akeem shows up in Queens full of charm, optimism, and big dreams and somehow it all works out? Fast-forward 38 years (yes, it’s been that long) and European companies looking to sell into the US Department of Defense (DoD) and Department of Homeland Security supply chains will need much more than charm. Instead, they’ll need real strategy, a focused structure, and readiness for regulatory scrutiny that doesn’t end with an award notification. In the current climate, with a heightened domestic preference policy, new executive directives such as the “Prioritizing the Warfighter in Defense Contracting” executive order, and renewed focus on supply chain security and performance, it is essential for foreign companies and their counsel to clearly understand the terrain before landfall.

For many companies in Europe, the decision to establish a US presence or to use a US subsidiary as the vehicle for federal contracting is driven by market opportunities and the frequent challenges of selling from abroad. Unfortunately, without a clear road map, that decision can lead to compliance risks, responsibility concerns, and operational obstacles that slow bids, invite protests, or erode trust with contracting officers.

So let’s map out some key stops along the way.

Link to Ownership, FOCI, and the Meaning of Control Ownership, FOCI, and the Meaning of Control

There is no escaping how recent federal procurement policy is growing increasingly focused on Foreign Ownership, Control, or Influence (FOCI). Beyond the simple math of ownership percentages, FOCI examines whether a foreign parent or party has the capacity to influence a US entity in ways that impact performance, access to sensitive information, or decision-making. To dig into that inquiry, federal agencies will evaluate corporate documents, financing arrangements, contractual authorities, board rights, and veto powers to determine whether a US entity truly operates independently or remains subject to foreign leverage that could pose national security concerns (currently or in the future).

In this regard, the distinction between positive control and negative control is critical. Both are viewed as influencing control: with positive control, the ability to make decisions that shape operations, and with negative control, the ability to prevent decisions from being implemented. For example, a minority foreign shareholder with veto rights over budgets, hiring, technology transfers, or strategic initiatives can, in many cases, be just as problematic, in the eyes of federal reviewers, as majority ownership. As such, structuring governance documents to align clearly with US expectations is more than mere corporate housekeeping. It becomes an eligibility issue that, without clarity, can lead to a nonresponsive or non-responsible determination. Misalignment here can trigger extended, costly, and potentially detrimental FOCI mitigation requirements, delay clearances, or exclude entities from work that requires access to controlled information.

Link to Domestic Preference and Supply Chain Transparency Domestic Preference and Supply Chain Transparency

The current procurement environment focuses not only on where a product is assembled but also on where its components, subassemblies, and critical elements originate. This means that companies must thoroughly understand their supply chains and trace them with precision to demonstrate that final products meet US origin criteria where and how applicable. When rules change or enforcement posture shifts, assumptions based on past practices become unreliable and expensive. A certification that was once accepted without deep audit scrutiny can now trigger inquiries and audits that look back several years, placing pressure on compliance programs and supply chain mapping processes.

Incomplete or inaccurate origin documentation or failure to anticipate how domestic preference is interpreted at the statute and agency levels exposes companies to corrective actions, adverse responsibility determinations, and even allegations of misrepresentation.

Link to SAM Registration and Representation Integrity SAM Registration and Representation Integrity

There’s no escaping that registration in the System for Award Management (SAM) may feel like an administrative hoop, but it is, in fact, a formal set of representations. SAM data populates responsibility questionnaires, contract awards, and eligibility determinations. For newly incorporated US subsidiaries with foreign parents, aligning corporate reality with the representations made in SAM is critical. Inconsistent ownership disclosures, incorrect size status claims, or misaligned compliance assertions can lead to delays, corrective actions, or significant questions about corporate integrity and the company’s true ability to properly receive (and be paid for) federal contracts. When/if things go sideways, these companies might find themselves on the wrong side of a False Claims Act (FCA) investigation.

Link to Cybersecurity and Data Rights as Gatekeepers Cybersecurity and Data Rights as Gatekeepers

Selling into defense or homeland security supply chains increasingly involves handling Controlled Unclassified Information (CUI) or other sensitive data. Compliance with US cybersecurity standards and CUI/data protection requirements is measurable, ongoing, and frequently audited. Moreover, to the frustration of international companies, there is no presumption that foreign cybersecurity standards are equivalent. Companies must adopt and document compliance with the specific standards outlined in the federal clauses found in the Federal Acquisition Regulation, Defense Federal Acquisition Regulation Supplement (DFARS), Homeland Security Acquisition Regulation Supplement (HSAR), etc., which evolve regularly. The expectation is not static compliance but continuous evidence of adherence to the applicable controls.

Similarly, when attempting to sell into federal supply chains, intellectual property (IP) rights and technical data rights must be carefully documented and delivered in a manner that aligns with the government’s contractual rights. Missteps here may result in the government or a prime contractor unintentionally acquiring broader rights from an eager contractual newbie or disputes over rights assertions that slow delivery and cloud responsibility assessments.

Link to The New Contracting Playbook: Performance, Compensation, and Capital Allocation The New Contracting Playbook: Performance, Compensation, and Capital Allocation

The other issue that can’t be overlooked is the evolving, unstable landscape in which federal contractors are required to operate. The recent “Prioritizing the Warfighter in Defense Contracting” executive order, for example, attempts to formally tie contractor performance to broader corporate practices in ways that extend beyond traditional responsibility criteria. The order articulates a policy that defense contractors shouldn’t prioritize dividends or stock buybacks over on-time delivery, production capacity, or the prioritization of US government contracts. It directs the DoD to actively identify and remediate underperforming contractors and ensure that future contracts restrict stock buybacks and distributions during periods of underperformance while aligning executive compensation with operational outcomes such as on-time delivery and increased production rather than short-term financial results. The order also contemplates scrutiny of advocacy efforts tied to foreign military or direct commercial sales when underperformance issues arise. Taken together, these provisions reflect an emerging expectation that the US government must take precedence when resources, capacity, or management attention are constrained.

For new entrants from abroad, particularly those with public markets or shareholder return strategies, this shift means that financial policies can’t be treated as separate from contractual performance. Chances are, the way you handle executive pay and capital planning could shape how agencies view your priorities and reliability. More fundamentally, global companies may face heightened scrutiny if their governance or operating model makes it difficult to demonstrate that US defense requirements can be elevated above competing foreign government customers, commercial obligations, or parent-level strategic priorities in the event of conflicts.

Link to Enforcement Risk Remains Ready to Strike Enforcement Risk Remains Ready to Strike

Once a company enters the federal marketplace, it is subject to federal oversight mechanisms that extend beyond simple contract clauses. Audit rights, suspension and debarment authority, and FCA liability apply with full force, regardless of where a parent company is located. Performance problems, inaccurate certifications, or compliance gaps that might be overlooked in commercial contexts are magnified in the federal space. Problems that emerge after an award often reverberate across future opportunities and can lead agencies to apply enforcement tools ranging from withholdings to contract termination.

Link to Successful Arrival Requires Understanding, Not Assumption Successful Arrival Requires Understanding, Not Assumption

In the movie, Prince Akeem ultimately succeeds because he learns the rules of his new environment and adjusts accordingly. For companies coming to America to pursue federal contracts, the lesson is no less daunting but much more serious. Ownership structures, supply chains, registrations, cybersecurity programs, and IP strategies have to be designed with current policy realities in mind. After all, when the landscape is changing as much as it has been lately, doing it right the first time is paramount. It might be the only way to stay in the story long enough to reach the happy ending.