Joint Webinar with KDIA Held
Key Considerations for Entering the U.S. Defense Procurement Market Discussed
As the global security environment deteriorates and the defense industry undergoes restructuring, interest in entering the U.S. defense procurement market is growing. There is a consensus that it is crucial to accurately understand U.S. procurement regulations, which must be followed from contract acquisition to execution, and to prepare for each stage accordingly when entering the local market.
On July 30, Samil PwC and the Korea Defense Industry Association (KDIA) announced that they had jointly hosted a webinar the previous day under the theme "Key Considerations for Entering the U.S. Defense Procurement Market." The webinar was attended by more than 150 participants, including export managers from defense companies. This was the second time the event was held, following the previous one in 2022, and it was organized to help participants understand the U.S. defense procurement market?the largest in the world?and to support successful market entry.
At the webinar titled "Key Considerations for Entering the U.S. Defense Procurement Market," jointly hosted by Samil PwC and Bangjinhoe on the 29th, Taesung Kim, leader of the Defense Industry Center at Samil PwC, is speaking. Samil PwC
In particular, government contract experts from PwC U.S. participated directly to explain the Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), the Buy American Act, and the Cybersecurity Maturity Model Certification (CMMC), and held a Q&A session.
Choi Byungro, Executive Vice Chairman of KDIA, stated in his opening remarks, "Entering the complex and sophisticated U.S. defense procurement market means more than simply expanding exports?it signifies becoming a strategic partner in the global defense supply chain." He added, "I hope this webinar will help domestic defense companies take a strategic and systematic approach."
In the first session, Phil Koos, Partner at PwC U.S., Corey Avery, Director, and Jess Popik, Manager, explained the U.S. defense procurement market and outlined the preparations required for market entry. First, Partner Koos covered the basic aspects of contracting with the U.S. federal government, including contract types, procedures, and oversight regulations, and then provided a detailed explanation of key regulations and laws.
He emphasized, "In particular, for prime contractors and subcontractors with contracts of USD 50 million or more, all 19 Cost Accounting Standards (CAS) are fully applicable, and a written policy describing cost accounting practices and procedures must be disclosed." He also pointed out that for the six business systems required by the Defense Federal Acquisition Regulation Supplement (DFARS), companies are subject to post-award audits by the Defense Contract Audit Agency (DCAA) or the Defense Contract Management Agency (DCMA), so it is essential to comply with all 18 accounting system standards for managing cost data to prepare for audits.
In the second session, Director Corey Avery explained the Fiscal Year 2025 National Defense Authorization Act (NDAA), the Infrastructure Investment and Jobs Act, the Buy American Act, and the Cybersecurity Maturity Model Certification (CMMC). Director Avery stated, "Although the burden of compliance for CMMC?which has recently attracted the attention of domestic defense companies?was somewhat reduced with the release of CMMC 2.0 in December 2023, there is still a risk of financial penalties such as loss of contracts or loss of new procurement eligibility if standards are not met, as CMMC will be fully implemented for all defense contracts from 2026 to 2028."
During the final Q&A session, presenters responded to questions from participants, such as whether it is necessary to establish a local corporation or joint venture (JV) to enter the U.S. market, and what difficulties companies commonly face. Partner Koos remarked, "Because the U.S. procurement market is extremely complex due to related regulations and conditions, it is necessary to seek expert assistance in appropriate situations."
Kim Taesung, Leader (Partner) of the Defense Industry Center at Samil PwC, who organized the webinar, said, "Reflecting the interest of many defense companies, we are planning to arrange face-to-face meetings with PwC U.S. experts for each company in September," and added, "We also plan to hold additional seminars on specific topics, including responses to Trump tariffs and security reinforcement measures."
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