Navigating defense department cyber rules.

• Author: Metzger, Robert S.
• Position: Viewpoint

Defense contractors by Dec. 31 are expected to provide "adequate security" to protect "covered defense information" using cyber safeguards.

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This obligation arises from a Defense Acquisition Regulation System Supplement clause, "Network Penetration Reporting and Contracting For Cloud Services," that was finalized last October and described in the National Institute of Standards and Technology (NIST) Special Publication 800-171. Thousands of companies who sell directly to the Defense Department, and thousands more who sell to its suppliers, are or will be, subject to the rule.

The Pentagon is well-justified to seek improved cyber protection of sensitive but unclassified technical information. Hackers have exploited network vulnerabilities in the defense supply chain for the unauthorized exfiltration of valuable and sensitive defense information. Senior defense officials have expressed alarm at this persistent and pervasive economic espionage.

Since 2013, the Defense Department has used acquisition regulations to protect controlled technical information significant to military or space. Other forms of information may not have direct military or space significance, but loss of confidentiality through a cyber breach can produce serious, even grave national injury.

The Defense Department is the leader among federal agencies in using its contractual power to cause its vendors to improve their cybersecurity. The principal instruments are two contract clauses, DFARS 252.204-7008, "Compliance with Safeguarding Covered Defense Information Controls," and DFARS 252.204-7012, "Safeguarding Covered Defense Information and Cyber Incident Reporting." Both were the subject of final rulemaking released Oct. 21.

Where the -7008 "compliance" clause is included in a solicitation, the offeror commits to implement the SP 800-171 safeguards by the end of this year. Defense Department contracts will include the -7012 "safeguards" clause, which defines the types of information that must be protected, informs contractors of their obligation to deliver "adequate security" using SP 800-171 controls, and obligates reporting to the department of cyber incidents.

Every responsible defense supplier supports the objectives of these cyber DFARS rules. But the requirements are complex and are not currently well-understood. Outside of a few of the largest, dedicated military suppliers, many companies in the defense supply chain view these rules with a mix...