As cyber attacks become more frequent and sophisticated, addressing tighter security needs has become a priority for the federal government. Enforcement of “Controlled Unclassified Information” (CUI) protection continues to intensify as private contractors and organizations are now required to upgrade their cyber security systems and overall procedures to keep up with these increasing threats. On April 24, 2018, the Department of Defense (DoD) issued draft guidance for assessing contractors’ System Security Plans (SSPs) and the implementation of security controls in NIST Special Publication (SP) 800-171.  If you’re a defense contractor, you’re required to comply with these regulations, and provide “adequate security” for networks where covered defense information (CDI) is processed, stored, or transmitted. DoD issued two draft guidance documents. The first, “Assessing the State of a Contractor’s Information System,” provides guidance on four different objectives.  They include what must be in an RFP, how the source selection authority would evaluate the requirement, what resources are available for that evaluation, and the contract provisions that will be needed to implement the requirement during performance. The second draft guidance document, “DoD Guidance for Reviewing System Security Plans and the NIST SP 800-171 Security Requirements Not Yet Implemented,” was developed by DoD to determine the risks that an unimplemented security control has on an information system, and which of the unmet controls need to be prioritized. What does “adequate security” mean? At a minimum, defense contractors must implement the requirements in NIST SP 800-171 to become compliant. Contractors need to provide an SSP to prove implementation of the security requirements, and also develop plans of action and milestones (POA&M) that describe how any unimplemented security requirements will be met.

Unimplemented Controls Receive a Value Rating

NIST 800-171 is comprised of 110 technical controls to ensure the best security policies and procedures.  DoD has decided to assess the risk of unimplemented controls by assigning a “DoD Value” for each security requirement ranging from 5 (highest impact on the cyber security system) to 1 (lowest impact on the cyber security system). These priority codes are used for priority rankings that NIST assigns to the NIST SP 800-53 Revision 4 security controls that are used for government information systems and which form the basis for NIST SP 800-171.

Non-Compliance is Not an Option 

In 2018, proposed DOD guidance is already moving to full enforcement of compliance. Compliance failures can lead to more serious consequences than a data breach.  Failure to comply with DFARS can lead contractors to incur penalties either by the United States Government (civil, criminal, contractual actions in law and administrative), or by individuals and private organizations that were damaged by lack of compliance (actions for damages).

  • Bid Protests: While SSPs and POA&Ms are important for determining “adequate security,” it’s still unclear the exact part they’ll play in bid protests and the implementation of NIST SP 800-171. After reviewing the implementation status during the pre-award stage, the DoD can make an unacceptable or acceptable determination, and ultimately decide if the contract should be rewarded. Another option is to evaluate implementation as a “separate technical evaluation factor.” During the pre-award process, contractors may choose to protest terms where a solicitation’s treatment of NIST SP 800-171 implementation fails to be consistent with DoD’s guidance. On the other hand, if a contract was rewarded to another contractor, disappointed offerers may consider challenging the award to another offeror where the assessment of the protester’s or awardee’s implementation of NIST SP 800-171 is inconsistent with the guidance documents. If the DoD notices inconsistencies between implementation of NIST SP 800-171 and your SSP and POA&M, they could award the contract to another contractor. During 2018, contract protests awarded to higher priced bidders were based in part on compliance with cyber security and employing more than the minimum security requirements in NIST SP-800-171.
  • Termination Risk: The accuracy of your SSP and POA&M, along with providing proof that you’re moving toward full compliance, is crucial. For the most accurate evaluation, draft guidance states that solicitations and contracts must include contract data requirements (CDRLs) to “require delivery of System Security Plan and any Plans of action after contract award.” Now that both SSPs and POA&Ms are a contractual obligation, failure to be in compliance may provide a basis for termination if compliance isn’t completed. Or, if the SSP does not accurately state the implementation status of the contractor’s cyber security.
  • DCMA Audits: DoD has recently stated that as part of its audit function, DCMA will pull out all the stops to confirm all contractors have an SSP and POA&M.  However, DCMA will not be providing an analysis if the SSP fully complies with the NIST 800-171 security requirements. It’s unknown at this point if the DCMA would leverage any of DoD’s guidance in its review.
  • False Claims Act: If a contractor is audited by DoD and found not to have implemented DFARS/NIST 800-171, the contractor can be on the receiving end of numerous penalties. For example, if your SSP misrepresents your actual cyber security status, DoD can bring an action based on fraud, which is a False Claims Act violation. DoD may also be able to prove that the original SSP was key to the Department’s award decision. If DoD’s argument is successful, your earnings under the original contract are at risk, along with the reputation of your organization.

Make Compliance a Priority Before it’s Too Late!

At CyberSheath, we know that implementing these new security controls can seem like a daunting undertaking. We’ve successfully assessed and implemented the required NIST 800-171 controls for leading organizations in the defense industrial base supply chain.

FREE Webinar

We’d like to invite you to our upcoming free webinar that will explain in greater detail the cyber security requirements in NIST 800-171, and what they mean for your organization. Our webinar will help you better understand the new DFARS guidelines, consequences for not complying, and how to fast-track your compliance without risk of penalties.

Contact Cybersheath

By completing this form, I consent to receiving calls, texts and/or emails from Cybersheath regarding services and programs.