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DFARS Compliance

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The Defense Federal Acquisition Regulation Supplement (DFARS) is a set of regulations meant to ensure that defense contractors maintain adequate cybersecurity measures.
Defense contractors that are not compliant with DFARS can face severe consequences including contract suspension, termination, or fines. In addition, failing to comply with DFARS can damage a company’s reputation and make it more challenging to do business.
Compliance can be complex, but understanding these requirements and incorporating them into cybersecurity planning enables contractors to successfully navigate the DoD’s cybersecurity landscape.
As a Cyber AB Registered Provider Organization (RPO), Alluvionic offers tailored DFARS compliance support to help contractors meet and exceed these requirements efficiently.

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WHAT IS DFARS COMPLIANCE,
AND WHY DO YOU NEED TO COMPLY?

The Defense Federal Acquisition Regulation Supplement (DFARS) is a set of regulations meant to ensure that defense contractors maintain adequate cybersecurity measures. The DFARS Clause 252.204-7012 requires contractors to protect covered defense information (CDI) and controlled unclassified information (CUI). This clause also requires contractors to establish and maintain controls over the dissemination of information within their organizations and take steps to protect the confidentiality of such information. Contractors who violate this clause may be subject to criminal and civil penalties.

The rule established a DoD Assessment Methodology and Cybersecurity Maturity Model Certification (CMMC) framework to evaluate contractor compliance with cybersecurity standards and increase the security of unclassified data throughout the DoD supply chain.

WHAT ARE THE CONSEQUENCES
OF NOT COMPLYING WITH DFARS?

Defense contractors that are not compliant with DFARS can face severe consequences including contract suspension, termination, or fines. In addition, failing to comply with DFARS can damage a company’s reputation and make it more challenging to do business.

Deciphering DFARS Cybersecurity Clauses for Defense Contractors:
A Guide to DFARS 252.204-7012, 7019, 7020, and 7021

The Department of Defense (DoD) has implemented a series of clauses within the Defense Federal Acquisition Regulation Supplement (DFARS) aimed at strengthening cybersecurity for contractors and subcontractors who handle sensitive DoD information. These DFARS clauses are essential for safeguarding Controlled Unclassified Information (CUI) and protecting the defense supply chain from cyber threats. Compliance with these clauses is mandatory for contractors working on DoD contracts and helps to ensure their systems and processes meet the rigorous standards required to secure federal information. Here, we’ll cover each clause’s primary objectives and requirements, along with insights into how they work together to support the DoD’s cybersecurity goals.

DFARS Clause 252.204-7012: Protecting CUI and Reporting Cyber Incidents (Effective December 2017)

The DFARS clause 252.204-7012, titled “Safeguarding Covered Defense Information and Cyber Incident Reporting,” mandates specific protections for Controlled Unclassified Information (CUI) and requires reporting of cyber incidents. Here are the key points:

Implementation of NIST SP 800-171 Standards: Contractors and subcontractors must implement the NIST SP 800-171 rev2 security controls to safeguard CUI. This publication outlines a set of 110 security controls designed to protect information systems and networks, covering areas like access control, incident response, and system monitoring. By adopting these standards, contractors can protect DoD CUI residing on or transiting through their information systems.
Cyber Incident Reporting: If a cyber incident occurs that affects the contractor’s or subcontractor’s ability to perform operationally critical functions, reporting is required within 72 hours. This prompt reporting process involves uploading incident data to the DoD’s Defense Industrial Base Cybersecurity Program (DIBNet) portal, enabling the DoD to understand and respond to threats quickly.

Information Sharing and Analysis: In some cases, contractors must provide the government with access to information related to the incident. This clause underscores the DoD’s commitment to understanding the nature of cyber incidents affecting contractors and ensuring continuity in national defense operations.

DFARS CLAUSE 252.204-7019:

NIST SP 800-171 DOD ASSESSMENT REQUIREMENTS (EFFECTIVE NOVEMBER 2020)

Clause 252.204-7019, titled “Notice of NIST SP 800-171 DoD Assessment Requirements,” adds an extra layer of cybersecurity requirements to contractors by formalizing the need for an assessment of NIST SP 800-171 compliance.

Basic NIST SP 800-171 DoD Assessment: Contractors must undergo at least a Basic NIST SP 800-171 Assessment before being awarded a DoD contract, which includes implementing the controls from DFARS 252.204-7012. This Basic Assessment is a self-assessment where contractors rate their adherence to NIST SP 800-171 standards.
Posting in SPRS: The results of this assessment must be uploaded to the Supplier Performance Risk System (SPRS) and remain current, not exceeding three years in age unless a shorter timeframe is specified in the contract. This process enables the DoD to maintain visibility into contractor cybersecurity practices and ensure they align with the necessary security framework.

DFARS Clause 252.204-7020:

Government Access for Higher-Level Assessments (Effective November 2020)

The DFARS clause 252.204-7020, titled “NIST SP 800-171 DoD Assessment Requirements,” outlines additional measures beyond the Basic Assessment for contractors who may be required to submit to a Medium or High NIST SP 800-171 DoD Assessment based on contract requirements. This clause focuses on government oversight and the ability to verify contractors’ compliance at a higher level when needed.

Higher-Level Assessment Access: When conducting a Medium or High Assessment, the government may require access to the contractor’s facilities, personnel, and systems to complete the evaluation. These assessments involve detailed inspections and validation of security controls to ensure contractors meet the heightened standards required for certain contracts.
Flow-Down to Subcontractors: Contractors are also responsible for ensuring that subcontractors comply with this clause. This requirement means that contractors must not only uphold DFARS compliance but also verify that their subcontractors have conducted and posted their assessments in SPRS.

Documentation and Cooperation: Contractors must be prepared to provide evidence of their cybersecurity controls, including system logs, policies, and procedures. Maintaining up-to-date documentation is essential for successful compliance in the event of a government-led Medium or High Assessment

DFARS Clause 252.204-7021: Cybersecurity Maturity Model Certification (CMMC) Requirement (Effective 2021)

The Cybersecurity Maturity Model Certification (CMMC) program introduced through DFARS clause 252.204-7021 establishes a cybersecurity framework specifically designed to protect CUI within the defense industrial base. The clause formalizes requirements for contractors to achieve CMMC certification at the level designated by the contracting activity, depending on the sensitivity of the information they handle.

CMMC Certification Requirement: Contractors must obtain the CMMC certification level specified in the Request for Information (RFI) or Request for Proposal (RFP). For example, contracts involving basic FCI may require Level 1 certification, while contracts handling sensitive CUI may require Level 2 or 3 certification.
Artifacts and Deliverables: Contractors must develop and update cybersecurity artifacts (e.g., policies, processes, incident response plans) and deliverables as outlined in the contract. These materials provide a documented record of DFARS compliance and serve as a roadmap for achieving and maintaining the necessary security controls.
Annual Affirmation and Flow-Down Requirements: Each year, contractors must affirm their continued DFARS compliance by updating their information in SPRS. Contractors must also ensure that subcontractors meet CMMC requirements by flowing down the clause to applicable subcontractors. Subcontractors must obtain the required level of CMMC certification and submit assessments where applicable.
C3PAO or DIBCAC Assessments: Depending on the data sensitivity, contractors can conduct self-assessments for lower-level CMMC certifications or engage a Certified Third-Party Assessment Organization (C3PAO) for higher-level certifications. For certain critical contracts, the DoD’s Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) may conduct assessments directly.

Why Understanding and Complying with DFARS Cybersecurity Clauses is Essential

Complying with these DFARS cybersecurity clauses is not only a contractual obligation for DoD contractors but also a strategic business necessity. Non-compliance can result in lost contracts, penalties, and potential exclusion from future DoD contract opportunities. Furthermore, by adhering to these clauses, contractors strengthen their cybersecurity posture, protect sensitive defense information, and contribute to national security.

These clauses work together as a comprehensive security strategy:

DFARS 252.204-7012 focuses on implementing basic safeguards for Controlled Unclassified Information (CUI) and ensures prompt reporting of cyber incidents. Contractors must also maintain a written System Security Plan (SSP) to document how they implement the required controls, and, where gaps exist, create Plans of Action and Milestones (POA&Ms) to address and mitigate these deficiencies.
DFARS 252.204-7019 and 7020 establish the assessment structure, with contractors required to conduct Basic, Medium, or High NIST SP 800-171 Assessments based on contract specifics.

DFARS compliance can be complex, but understanding these requirements and incorporating them into cybersecurity planning enables contractors to successfully navigate the DoD’s cybersecurity landscape.

HOW CAN YOU STAY UP-TO-DATE ON THE LATEST INFORMATION ON DFARS?

Keep track of the General Services Administration (GSA) updates. The GSA provides regular updates on DFARS compliance, including changes to the regulations and helpful resources like fact sheets and guidance documents. Companies can find this information at www.acquisition.gov.
Sign up for email alerts from your favorite news sources. Automated tools such as Google Alerts provide tailored access to breaking news and analysis on cybersecurity issues, including updates on DFARS compliance.
Attend industry events and webinars. Industry events allow networking with other professionals and learning about the latest compliance issues. Webinars offer convenient online access to expert insights on various topics.

Need Help with Compliance?

Navigating DFARS compliance can be a complex, time-intensive process, especially when dealing with multiple layers of assessment and reporting. As a Cyber AB Registered Provider Organization (RPO), Alluvionic offers tailored DFARS compliance support to help contractors meet and exceed these requirements efficiently. Contact us today at Alluvionic’s Cybersecurity Services to discuss your DFARS compliance needs and learn how we can support your journey to secure DoD contracts.

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