In October 2017 I wrote how the Defense Federal Acquisition Regulation Supplement (DFARS) Clause 252.204-7012 required contractors to implement NIST Special Publication 800-171 by December 31, 2017 regarding data protections and safeguards around Controlled Unclassified Information (CUI).

Similar to the first implementation of the Healthcare HIPAA regulations, we did not see an immediate attempt to audit and enforce the requirements of the mandate.  I stated then that failure to follow the requirements would result in breach of contract with the government (Department of Defense).  After the publication of NIST 800-171, there were many questions around what constituted CUI. Furthermore, if you read the language in government contracts, you will see how ambiguous the definitions of data protection requirements really are.  We’ve discovered that most contracts do not always follow the requirements of the rule; see 252.204-7012 (a);

1) Marked or otherwise identified in the contract, task order, or delivery order and provided to the contractor by or on behalf of DoD in support of the performance of the contract; or

(2) Collected, developed, received, transmitted, used, or stored by or on behalf of the contractor in support of the performance of the contract.

Many prime contractors have told us that they are waiting to see what enforcement steps would be implemented and/or until the regulations were fully ratified (The latest version, as of today’s date, can be found at; https://csrc.nist.gov/publications/detail/sp/800-171/rev-1/final and Revisions 2 will be published soon).  These “wait and see” companies felt their partial implementation of the regulation was “good enough.”  We have pushed existing and prospective customers on the fact that there are many risks beyond simply the contractual requirements to achieve compliance and that doing so early on could save them headaches, costs, fines, etc. in the long-term.  At Cyber Self-Defense, we’ve responded to many actual data breaches across many industries which were highly preventable, and we continue to encourage customers to become compliant as soon as possible.  We encourage our customers to get ahead of the curve and develop a risk-based cybersecurity program for the sake of enabling the business’ success; noting that compliance becomes easier and less expensive when done according to the needs of the business and implemented in a manner that is compliant with regulations and contractual requirements.

Well my friends, this discussion has just turned another corner!

In January of this year, the Under Secretary of Defense, Ellen M. Lord, sent a memorandum to a large number of organizations directing them to enforce the provisions of the contracts.  (Found here, https://www.acq.osd.mil/dpap/pdi/cyber/docs/USA000140-19%20TAB%20A%20USD(AS)%20Signed%20Memo.pdf

Lord asks these agencies to begin to audit ensuring compliance with the requirements.  Specifically;

To effectively implement the cybersecurity requirements addressed in DFARS Clause 252.204-7012 and NIST SP 800-171, I have asked the Director, Defense Contract Management Agency (DCMA) to validate, for contracts for which they provide contract administration and oversight, contractor compliance with the requirements of DFARS clause 252.204-7012. Specifically, DCMA will leverage its review of a contractor’s purchasing system in accordance with DFARS Clause 252.244-7001, Contractor Purchasing System Administration, in order to:

  • Review Contractor procedures to ensure contractual DoD requirements for marking and distribution statements on DoD CUI flow down appropriately to their Tier 1 Level Suppliers.
  • Review Contractor procedures to assess compliance of their Tier 1 Level Suppliers with DFARS Clause 252.204-7012 and NIST SP 800-171.

To ensure that a similar approach may be taken at companies for which DCMA does not administer contracts (such as the Secretary of the Navy’s ship building contracts), we will work with representatives of those communities to implement a similar solution.

So, what does this all mean?  We believe this will be similar to what happened with the implementation and enforcement of the HIPAA regulations.  Companies will wait for enforcement to begin, and there will be a mad rush to become compliant.  In the meantime, these companies will be the targets of cybercriminals, they will be the new “low hanging fruit,” and ultimately suffer the negative impact of a breach compounded by the heavy fines or contract cancellations.  We encourage you, if you are not following a cyber security plan which truly enables the business, to prioritize building a comprehensive program.  EVERYONE is an unfortunate target of criminals!

Please don’t delay. The longer you wait the greater the risk of non-compliance becomes. Let us help you solve the mystery of cybersecurity by assessing your current state program and designing and implementing compliance and data protection. Contact us today!

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