covered defense information

DFARS and DIB: Compliance Steps for DoD’s Newly Finalized Cybersecurity Rules for Contractors

Department of Defense Finalized Cybersecurity Rules for Contractors and Other Awardees. The First rule amends the Defense Federal Acquisition Regulation Supplement and went into effect on October 21, 2016 (“DFARS Rule”). The other rule modifies the previously voluntary DoD cybersecurity information sharing program (“DIB Rule”) and is set to come into effect on November 3, 2016. Aerial view of the Pentagon, the Department of Defense headquarters in Arlington, Virginia

For businesses that work with the U.S. Department of Defense (“DoD”), two important rules for safeguarding certain categories of sensitive information and reporting cyber incidents were recently finalized, updating the interim rules promulgated in late 2015. The first rule amends the Defense Federal Acquisition Regulation Supplement (“DFARS Rule”) and went into effect on October 21, 2016.  The second rule modifies the previously voluntary DoD cybersecurity information-sharing program in connection with the Defense Industrial Base (“DIB Rule”) and went into effect on November 3, 2016.

We previously explained the changes brought about by the interim rules. Here, we explain what changed after the rules’ comment periods, and provide suggestions for compliance.

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DoD Cybersecurity Rules Expand Contractors’ and Other DoD Awardees’ Obligations to Safeguard Sensitive Data and Report Cyber Incidents

Overview

The United States Department of Defense (“DoD”) recently published two new rules that impose broader obligations to safeguard information that falls within specified categories of sensitive data and to report cyber incidents to the government.  These rules generally apply to companies that have been awarded new DoD procurement contracts, that hold subcontracts under such DoD contracts, or, in some cases, that have been awarded other types of agreements with DoD.  The rules:

  • expand contractors’ and subcontractors’ safeguarding responsibilities and obligations to report and investigate cyber threats;
  • modify the scope of data that contractors and subcontractors must safeguard and the universe of contractors and subcontractors to which the requirements apply;
  • establish requirements for contractors and subcontractors using cloud computing to provide information technology services to DoD, including requiring such contractors to keep government data within the United States, implement DoD-approved safeguards, and limit disclosure of and access to government data;
  • expand and make mandatory DoD’s previously voluntary cyber incident reporting system for defense industrial base (“DIB”) agreement holders; and
  • open DoD’s voluntary cybersecurity information sharing program up to a greater range of agreement holders.

The new rules reflect DoD’s intensified focus on treatment of export controlled technology and other categories of sensitive data.  Awardees of DoD procurement contracts, subcontracts, and other types of instruments such as cooperative agreements are well-advised to make their data-security and export control compliance programs comport with these new requirements.

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