What is DFARS: A Deeper Look at DoD Compliance

In the ever-evolving landscape of cybersecurity, compliance regulations play a critical role in safeguarding sensitive information handled by defense contractors. For companies engaged in contracts with the U.S. Department of Defense (DoD), understanding and adhering to the Defense Federal Acquisition Regulation Supplement (DFARS) is not just important—it’s mandatory. This blog article will take a deeper look at what DFARS is, why it matters, and how it impacts companies in the defense industrial base (DIB).

What is DFARS?

DFARS stands for Defense Federal Acquisition Regulation Supplement. It is a set of regulations that the DoD uses to supplement the Federal Acquisition Regulation (FAR). DFARS provides specific guidance on procurement processes, including stipulations for cybersecurity, which are critical for protecting controlled unclassified information (CUI) within the DIB.

Key Components of DFARS Compliance

DFARS Clause 252.204-7012

The cornerstone of DFARS compliance is Clause 252.204-7012, “Safeguarding Covered Defense Information and Cyber Incident Reporting.” This clause mandates that contractors implement security measures sufficient to protect Covered Defense Information (CDI). It is important to note that CDI encompasses CUI. NIST 800-171 serves as a common reference for achieving these security goals, but contractors may propose alternative controls with DoD approval. Key takeaways for contractors include:

  • Implementation of NIST 800-171: To comply with NIST 800-171, contractors must implement 110 security controls across 14 control families. These controls cover areas such as access control, incident response, and system and information integrity.
  • Cyber Incident Reporting: Contractors must report cyber incidents affecting CUI to the DoD within 72 hours. This rapid reporting helps mitigate potential damage and allows the DoD to respond promptly to threats.

DFARS Interim Rule

Introduced in September 2020, the DFARS Interim Rule added three new clauses to enhance cybersecurity requirements:

  • DFARS 252.204-7019- Notice of NIST SP 800-171 DoD Assessment Requirements: This clause establishes a system for contractors to self-assess and report their compliance with NIST 800-171 by submitting a Supplier Performance Risk System (SPRS) score to the DoD.
  • DFARS 252.204-7020- NIST SP 800-171 DoD Assessment Requirements: This clause ensures that the DoD can evaluate contractor compliance by conducting its assessments. These assessments are categorized as Basic, Medium, and High based on the sensitivity of the information handled.
  • DFARS 252.204-7021 – Cybersecurity Maturity Model Certification Requirements: This clause sets the stage for the implementation of CMMC and was published in January 2024. This clause details the subcontractor flow-down requirement which stipulates that prime contractors must include DFARS 7021 requirements in subcontracts to ensure subcontractors also meet the necessary CMMC level.

Why DFARS Compliance Matters

Protecting National Security

The primary objective of DFARS is to protect national security by ensuring that sensitive defense information is safeguarded against cyber threats. By adhering to DFARS, contractors play a crucial role in fortifying the cybersecurity posture of the DIB.

Business Imperatives

Non-compliance with DFARS can lead to severe consequences for contractors, including loss of contracts, financial penalties, and damage to reputation. Conversely, compliance can be a competitive advantage, demonstrating a company’s commitment to cybersecurity and its ability to handle sensitive defense information responsibly.

Steps to Achieve DFARS Compliance

Assess Current Security Posture

Conduct a thorough assessment of your current cybersecurity measures against the NIST 800-171 controls. Identify gaps and areas that require improvement.

Develop a System Security Plan (SSP)

Create an SSP that outlines how your organization will implement the necessary security controls. This plan should detail each control, the current state of implementation, and any plans for future enhancements.

Implement Required Controls

As a best practice, defense contractors should ensure that all 110 controls of NIST 800-171 are fully implemented. This may involve updating policies, deploying new technologies, and providing employee training on cybersecurity best practices.

Conduct Regular Audits and Reviews

Regularly audit your cybersecurity practices to ensure ongoing compliance. This includes internal reviews and external assessments as required by the DFARS Interim Rule.

Report and Respond to Cyber Incidents

Establish a robust incident response plan to detect, report, and respond to cyber incidents promptly. Ensure that all incidents involving CUI are reported to the DoD within the specified timeframe. DFARS compliance is non-negotiable for companies operating within the DIB. By understanding and implementing DFARS requirements, organizations not only contribute to national security but also enhance their competitive edge in the defense sector. IsI stands ready to support your organization with expert guidance, assessment services, and comprehensive solutions to achieve and maintain DFARS compliance.