1. The Four Regulatory Frameworks Every Aerospace and Defense Company Must Know
The matrix below identifies the four principal regulatory frameworks and the primary compliance obligation each imposes on aerospace and defense companies.
| Regulatory Framework | Governing Body | Scope | Key Compliance Obligation |
|---|---|---|---|
| FAR and DFARS | DoD and civilian agencies | All federal government contracts for goods and services | Cost accounting, certified cost or pricing data, and mandatory flow-down clauses |
| ITAR | State Department Directorate of Defense Trade Controls | Defense articles, defense services, and technical data on the USML | License or exemption required for any export or deemed export |
| EAR | Commerce Department Bureau of Industry and Security | Dual-use items and technology on the Commerce Control List | Export Classification and license determination for each item and destination |
| CFIUS | Treasury-led interagency committee | Foreign investments in TID US businesses involving critical technology or infrastructure | Mandatory or voluntary notice and mitigation agreement negotiation |
Government contracts and aviation, aerospace and transportation counsel can evaluate the specific regulatory compliance requirements applicable to the company's aerospace and defense activities, assess which frameworks apply to its products, services, and partners, and advise on the most effective integrated compliance program structure.
2. Government Contract Performance: Far, Dfars, and Bid Protest Rights
FAR and DFARS govern every aspect of a federal government contract from proposal preparation through final payment, and a contractor who understands these rules is in the strongest position to win contracts and challenge improper award decisions.
Far Compliance Obligations and the Bid Protest Forum Options
The FAR requires contracting officers to evaluate proposals based solely on the factors stated in the solicitation, and a contractor who believes the agency deviated from those factors may file a bid protest at the Government Accountability Office within ten days, or in the Court of Federal Claims if a preliminary injunction is needed to halt contract performance during the protest period.
Bid protests and government contract disputes counsel can advise on the specific FAR and DFARS provisions applicable to the contract award, assess whether the procuring agency complied with the evaluation criteria in the solicitation, and develop the GAO protest or Court of Federal Claims litigation strategy.
Itar, Ear, and the Deemed Export Risk Every Defense Contractor Faces
ITAR controls defense articles, services, and technical data on the United States Munitions List, and a deemed export occurs when ITAR-controlled technical data is disclosed to a foreign national inside the United States, requiring the same license as a physical export to that country, while EAR separately controls dual-use Commerce Control List items and requires a technology control plan that documents access controls and license procedures for both regimes.
Export control law and Export Administration Regulations counsel can advise on the ITAR and EAR classification applicable to the company's hardware, software, and technical data, assess whether any transfer to a foreign national requires a license, and develop the technology control plan and deemed export compliance program.
3. Export Control Compliance and Supply Chain Sanctions Screening
ITAR, EAR, and OFAC sanctions impose overlapping compliance obligations on the defense contractor's products, technical data, and supply chain, and a violation of any one of these regimes can result in criminal penalties and suspension from government contracting.
Ofac Sanctions and the Denied Party Screening That Protects Every Transaction
OFAC administers sanctions programs prohibiting U.S. .ersons from transacting with designated countries and entities, and a defense contractor must screen all suppliers against the Specially Designated Nationals list, the Entity List, and the Denied Persons List before any transaction, because voluntary self-disclosure of an internally discovered violation results in substantially reduced penalties compared to a government enforcement action.
Export compliance law and economic sanctions counsel can advise on the OFAC sanctions obligations applicable to the company's supply chain, assess whether any supplier appears on a denied party list, and develop the supply chain due diligence and screening program.
Section 889 Ndaa Compliance and the Prohibited Chinese Equipment Supply Chain Audit
Section 889 of the NDAA prohibits defense contractors from using telecommunications equipment from designated Chinese companies anywhere in their supply chain, and compliance requires mapping the entire supply chain to identify China-origin prohibited components and developing alternative sources before contract performance begins.
Global supply chain risk management and international sanctions and trade tariffs counsel can advise on Section 889 and NDAA counterfeit parts compliance obligations, assess whether the supply chain contains prohibited Chinese telecommunications equipment, and develop the supply chain compliance remediation strategy.
4. Commercial Space Licensing, Cfius Review, and Defense IP Ownership
The commercial space sector, CFIUS foreign investment review, and Bayh-Dole IP rights allocation present the three most rapidly evolving legal challenges facing aerospace and defense companies in 2026.
Fcc, Faa, and Noaa: the Three Federal Licenses Required for Commercial Space Operations
A commercial satellite operator must obtain an FCC spectrum license, an FAA launch license from the Office of Commercial Space Transportation, and a NOAA remote sensing license for high-resolution earth imagery collection, and the Outer Space Treaty requires all such activities to be authorized and supervised by the national government, creating a federal authorization requirement for U.S. .rivate space operations.
Space and satellite and aviation and military services counsel can advise on FCC spectrum, FAA launch, and NOAA remote sensing licensing requirements applicable to commercial space activities, assess whether planned activities require additional federal authorization, and develop the regulatory approval strategy.
Cfius Mandatory Filing Requirements for Defense Technology Investments
CFIUS has mandatory jurisdiction over foreign investments in TID US businesses involving critical technology, critical infrastructure, or sensitive personal data, and a defense technology investment almost always triggers a mandatory filing, so a company receiving a foreign investment proposal should conduct a pre-filing CFIUS risk assessment because CFIUS has authority to unwind completed transactions not submitted for review.
Foreign investment law and global trade and national security counsel can advise on the CFIUS review process applicable to a foreign investment in a TID US business, assess whether the investment poses national security risks requiring mitigation, and develop the voluntary notice and mitigation negotiation strategy.
Bayh-Dole Act, Far Part 27, and How Government Contractors Own Their Inventions
Under the Bayh-Dole Act and FAR Part 27, a contractor retains title to inventions made in a federally funded contract but must grant the government a license to practice the invention and faces government march-in rights, and technical data rights depend on funding source, with the contractor required to assert the appropriate limited rights or restricted rights marking when delivering technical data to the government.
Intellectual property and Defend Trade Secrets Act counsel can advise on IP rights allocation under the Bayh-Dole Act and FAR Part 27, assess whether the contractor has properly marked limited rights and restricted rights technical data, and develop the IP protection and assertion strategy.
26 Mar, 2026
