FAQ: What Is DFARS Compliance and How Does It Work? – Source: securityboulevard.com

The Defense Federal Acquisition Regulation Supplement, better known as DFARS, has significance for contractors working with the Department of Defense (DoD). Our intention is to offer a comprehensive perspective on DFARS in the context of cybersecurity, its various clauses, and the intricacies of maintaining compliance as these rules constantly shift and change over time. We’ll explain their mandates and their influence on your organization, hopefully demystifying some of these complicated terms and rules.

We put together this collection of frequently asked questions, along with easy-to-understand explanations, designed to simplify things for you. Let’s get started!

What is DFARS?

Let’s start with what DFARS is and why it’s important. The Defense Federal Acquisition Regulation Supplement was born in 1984, and its job is to keep an eye on the DoD’s purchasing habits. It makes sure that the way things are bought is both legal and fair to everyone involved. But it doesn’t stop there; it also focuses on keeping sensitive information safe and protecting our national security.

So, who does DFARS apply to, exactly? Well, these rules are meant specifically for any contractor or subcontractor working on a DoD contract. Size doesn’t matter – big global corporations and small local suppliers alike; if you’re part of a DoD purchasing process, then you need to stick to the DFARS rules.

You might be wondering if this seems familiar to your company’s operations. Have you, under a DoD contract, ever had to work out how to be compliant with DFARS?

To put it simply, DFARS acts like a guidebook that helps keep quality high and boosts competition and innovation within DoD buying. It covers a lot, from how things should be priced to what kind of tech is needed and even what to do about digital security.

And let me tell you, they’re not just any regular guidelines; if these DFARS rules are ignored, you could be getting into serious trouble, such as fines, penalties, and losing the contract altogether. We’ll cover that more in a bit.

So, it’s a must for all DoD contractors to really know these rules inside out.

What is DFARS 7008?

DFARS 252.204-7008 sets rules for keeping federal information safe. This means that contractors have a big responsibility to protect Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). The big focus here? Making sure information security is seriously enforced.

FCI means info made by or for the government as part of a contract. As for the CUI? That can be a little tricky to define. In simpler terms, CUI covers lots of data that needs protection and controls for spreading it around, as per laws or policies by the federal government. This rule is a must to keep the U.S. defense industry and its associated divisions going strong. After all, these sectors lean heavily on the safekeeping of unclassified info.

Compliance is a critical issue – and sometimes overlooked. But seriously, imagine a data leak messing up key defense jobs—definitely a no-go situation, right?

So, where does DFARS 252.204-7008 fit into a contractor’s duties? I’m talking about laying out their responsibilities and setting a standard to follow proper security steps. If we’re talking about national security, being ready for cyber threats in advance is important, wouldn’t you agree?

What is DFARS 7009?

DFARS 252.204-7009 represents a policy for contractors. This policy outlines specific rules to shield what’s called “Covered Defense Information.” But what is “Covered Defense Information”? It’s a basic term for unclassified controlled technical info, or CTI, and other military or defense-related data. This covers a wide range – from classified (not covered under CMMC program) and confidential details related to missile plans to delicate info about defense departments’ money matters.

So, do you wonder what a contractor has to do to meet these particular rules? Simply put, they have to stick to the guidelines from the National Institute of Standards and Technology (NIST), mentioned in their Special Publication 800-171. It might sound overwhelming, but really—it’s just a list of standards and steps for protecting sensitive defense-related details.

As a contractor, you might ask, why all the fuss? The answer is—because it’s all up to you. If you’re dealing with confidential defense-related info as part of your work, you need to ensure these measures are followed. Let’s get real; there’s no room for shortcuts here; contractors can’t only choose some simple-to-follow methods, but every measure has to be followed. It shows the essential need for total DFARS compliance.

So, what’s the bottom line? It’s about a process to protect defense-related info, stopping any unauthorized passing of data and informationdetails. If you’re involved in defense-related operations, you’re legally obliged to honor this duty.

What is DFARS 7012?

DFARS 252.204-7012 is a simple rule with a big purpose – it’s all about having those who partner with defense to beef up their cybersecurity, reducing chances that critical defense data might be exposed. To put it in plain terms, these partners need to adhere to a specific cybersecurity benchmark, dubbed NIST SP 800-171. But what does all this jargon really mean?

NIST SP 800-171 is a guideline drawn up by the National Institute of Standards and Technology. It revolves around safeguarding Controlled Unclassified Information (CUI). More often than not, you come across this kind of data in systems that aren’t federally controlled. Have you come across this term before?

In a nutshell, CUI is basically sensitive information that is created on behalf ofbelongs to the government and needs to be protected. Businesses that observe the NIST SP 800-171 rules can establish robust security measures to look after this information, hence fulfilling the DFARS 252.204-7012 requirement and ensuring the Controlled Defense Information (CDI) stays secure. Sounds pretty great, doesn’t it?

But the story doesn’t end with just sticking to the NIST SP 800-171 guidelines. No, no! Rule 7012 also calls for swift response in dealing with any cybersecurity hiccups. In the event of a security mishap, partners are given a tight three-day timeline to report the issue to the Department of Defense (DoD).

What Is The Difference Between These Three Clauses?

DFARS 252.204-7012 is the main player among all regulations, and it’s appropriately titled ” Safeguarding Covered Defense Information and Cyber Incident Reporting. “This rule is a must if you’re an organization partnered with the Department of Defense (DoD). Making a strong case for easy but tight security to protect Covered Defense Information (CDI), it stands its ground as a reliable benchmark. In simple terms, it checks that all contractors have enough cybersecurity measures to safeguard sensitive defense-related information.

Looking at DFARS 252.204-7008, you’re probably wondering where it fits into this line-up.

DFARS 252.204-7008 is pretty much the introduction to 7012, highlighting the Compliance with Safeguarding Covered Defense Information Controls. Think of it as your first step – it dishes out the requirements contained in clause 7012. The main idea here is the claim made by a contractor when they make a bid – they either stick to the cybersecurity rules or commit to following them before a contract is given.

You might be asking, is DFARS 252.204-7009 just a filler? Well, quite the opposite; DFARS 252.204-7009 lays down the law for Limitations on the Use or Disclosure of Third-Party Contractor Cyber Incident Information. In doing so, it protects reporting rules, stopping a contractor’s sensitive information from ending up in risky waters.

Now, let’s talk about the theme that ties these rules together. The main aim is to safeguard sensitive defense information and to lay out clear steps to achieve this. It’s extremely important to keep in mind the order in which they pop up: 7008 sets the bar for compliance, 7012 chalks out the security measures needed, and 7009 wraps up the set by adding a rule to protect a contractor’s data.

New Clauses: 7019, 7020, and 7021

DFARS clause 7019, rolled out in 2020, is all about ensuring annual cybersecurity system checks for contractors – this aligns with the rules set up in NIST SP 800-171. What this means is that contractors have to keep a record of these checks in the Supplier Performance Risk System (SPRS) every year; they play a key role in keeping everything safe and secure.

So, what about clause 7020? The keyword is “openness”. But let’s get real: can we trust self-assessments to be reliable every single time? The answer, under the 7020 structure, rests with the DoD or an authorized third party. Their job is to check self-assessments (you know, keeping them honest) and undergo a medium or high-level review when they spot anything fishy. The goal here is to find and fix cybersecurity weak spots, adding another layer of protection.

Now, onto the 7021 clause. It’s basically a roadmap for the upcoming Cybersecurity Maturity Model Certification (CMMC) structure, taking the requirements beyond what’s clarified in clause 7012. In plain words, it sets tougher standards, stating that both contractors and subcontractors need a go-ahead from a CMMC-endorsed third party before bagging a contract.

These new clauses all highlight the need for carefulness, being open, and accepting responsibility when it comes to cyber security.

Who Needs to Be DFARS Compliant?

DFARS rules apply to many groups rather than one single entity. A variety of these groups need to follow these predetermined regulations – and you might have questions about the identity of these groups.

Defense contractors need to follow DFARS rules the most. You might ask, who counts as a defense contractor? Any person, business, or contractor that signs a contract or is a subcontractor ofwith the U.S. Department of Defense (DoD) fits into this group. Even those businesses helping out with parts of a larger contract for DoD projects are known as defense subcontractorssub-contractors and have to stick to DFARS rules.

Anyone from freight services to aerospace makers, cyber security advisors, or base canteens – many businesses and contractors might find themselves working with the DoD. These rules also apply to subcontractors down to the entire sub suppliers way down the supply chain. Believe this is too strict? It can seem so sometimes, but it’s essential to make sure the CUIsecret and classified information involved in defense contracts is safe. Any possible leak or unauthorized access at any stage of the contract supply chain can greatly affect our national security. So whether you’re the main contractor or a subcontractor, if your job means dealing with covered defense information or controlled technical data, then you have to follow DFARS rules.

Do DFARS rules apply to your business or contract obligations? Figuring out what kind of data you work with is the first essential step to understanding if you need to follow DFARS rules. This way, you can make sure that you’re hitting the right legal and security standards, not to mention playing a key role in keeping our nation safe.

What if Your Company Doesn’t Maintain DFARS Compliance?

Contractors who want a good business image and no issues should work on being DFARS compliant. Ever wondered about the things that could go wrong if you don’t pay attention to these rules? It’s definitely worth thinking about the possible problems and punishments these businesses could run into if they skip the rules.

When DFARS rules are put to the side, things can get tricky. If contractors don’t take these rules seriously, they may face heavy monetary penalties that could mess up their financial stability in a big way. I’m talking about taking a hit to the wallet that could stretch into thousands or even millions; now, that’s a hole in your earnings you don’t want to have.

Here’s another serious downside – risking valuable business relationships or upcoming deals with government or defense industries. If DFARS rules aren’t followed, contractors could find themselves shut out from future government contracts; that’s not a good place to be.

If rules aren’t followed, contractors could also run into legal issues. If they end up on the wrong side of the law, they might have to shell out even more money in fines or, seriously, even end up serving time in jail. It’s a chilling thought and underscores the need to stick to DFARS rules.

Would you seriously put all your sweat and work at stake by ignoring these norms? Keep in mind that going against DFARS rules can result in harsh penalties and could throw a wrench in the reputation and future of your business.

How Often Does DFARS Compliance Change?

DFARS goes through regular updates annually, or even multiple times a year, to stay accurate and relevant. Changes in DFARS could happen for several reasons – a new policy guideline, tweaks in the law, or serious cybersecurity threats. For example, there was a fresh call for public opinion by the DoD about a potential new CMMC rule on December 26th, which I wrote about here.

This proposed rule expects a whole lot of changes, focusing majorly on stuff like CMMC Scoping and Intermediary Devices. The proposal spells out the expected compliance costs and nitty-gritty changes the contractors need to know. Legal compliance has many uses beyond the big stuff – you have to dig into these updates to comply with new rules and revamp your cybersecurity strategies.

By setting a deadline of 2025 DFARS, DoD has made it clear: these rules aren’t optional, and time’s ticking. They’ve even released an implementation guide that spreads over three years, giving room for making any necessary changes.

Now, there might be contractors worrying about how these changes will affect their work. But let’s get real – staying on top of the changes in Defense Department standards is not just important; it’s a must for smooth sailing in business. Put off dealing with them, and you’ll be left making frantic system modifications to meet compliance standards.

Keeping up with DFARS changes slices straight to the heart of the matter – it helps dodge missed contract bids or serious financial hiccups. Granted, tailing these changes might seem like climbing a mountain, but sticking to the Defense Department’s rules is not up for debate. Slip-ups could land you with heavy penalties or legal headaches.

Companies need to keep an eagle eye on DFARS changes – it’s not just a once-and-done assignment. In fact, it’s the opposite – it’s an endless cycle of spotting the changes and getting ready for them. Staying in line with the Defense Department’s standards isn’t about once-in-a-blue-moon updates – it demands your constant application, and the stakes are high if something slips through the cracks.

How Do DFARS and NIST SP 800-171 Intersect?

Cybersecurity rules that defense contractors must follow are laid out by DFARS, and the method to do this is outlined by NIST SP 800-171. Conforming to NIST SP 800-171 is a necessity for defense contractors to fulfill their DFARS duties and to safeguard valuable national information.

NIST SP 800-171 provides clear rules and demands that defense contractor data systems have to abide by. It houses 110 controls grouped under 14 categories, including access control and configuration management, providing step-by-step instructions for security plans.

DFARS makes sure all NIST SP 800-171 guidelines are properly followed, setting a high standard for federal contractors tasked with Controlled Unclassified Information (CUI) security. DFARS goes beyond simply suggesting; it takes a strong look at the commitment to these rules and the consistent protection of CUI. Any lapse in sticking to NIST SP 800-171 rules or meeting DFARS compliance could mean they lose out on federal contracts– a serious risk.

NIST SP 800-171 prepares the guidelines. Although DFARS will make sure these guidelines are followed, this cooperation boosts federal data security. When you understand how this partnership works, achieving DFARS compliance becomes a little less stressful.

The Ignyte Platform is an important tool when sticking to these key details, which is essential for compliance. Our knowledgeable team guides companies through the many stages of achieving DFARS compliance, making sure they match up with NIST SP 800-171 standards. We initiate the process by spelling out the prerequisites and then setting out a plan for action. Our goal has many uses beyond to ensure your company matches the standards, but to go above and beyond them. We make the intimidating task of federal compliance for contractors a whole lot easier.

For tailored advice and support on how to shield your data and secure your place in federal contracting, don’t be shy about connecting with us. Considering the Ignyte Platform? Well, look no further – click here to set up a demo!

*** This is a Security Bloggers Network syndicated blog from Ignyte authored by Max Aulakh. Read the original post at: https://www.ignyteplatform.com/blog/compliance/faq-what-dfars-compliance/