Diversifying Defense Sales with Export Compliance Strategy

By Steven A. Casazza (President) and Chanel Miller (Director), Defense Trade Solutions

The federal services industry is no stranger to transition. But as we move deeper into the 2025 fiscal year under a shifting U.S. administration, defense contractors are navigating more turbulence than usual. For U.S. government services f irms, especially those in the defense sector, staying resilient means rethinking how and where business is conducted.

Budget Realignment: The Catalyst for Diversification
The Department of Defense (DoD) is undergoing a significant 8% year-over-year budget realignment. This reshuffling presents challenges for firms traditionally reliant on steady domestic contract vehicles. Reduced predictability in DoD spending is pushing many U.S. companies to diversify into Foreign Military Sales (FMS) and Direct Commercial Sales (DCS).

However, this pivot is not without risk. DCS introduce a more complex environment for U.S. exporters. Unlike FMS, where the U.S. government manages many aspects of the transfer, DCS places greater responsibility on companies to ensure compliance with all export control regulations. This includes complying with the International Traffic in Arms Regulations (ITAR), restrictions under the Missile Technology Control Regime (MTCR), and U.S. government policies governing how sensitive technologies can be shared with foreign partners, often referred to as Technology Security and Foreign Disclosure (TSFD). For companies that have invested in export compliance programs, navigating these complexities can become a significant strategic advantage for their international defense sales, resulting in greater market access, streamlined operations, and faster sales cycle timelines. 

Read the entire article in the Summer 2025 edition of Service Contractor magazine.
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