United States: The Government's Quest For A Uniform Approach To Safeguarding Controlled Unclassified Information

Almost five years after Executive Order ("EO") 13556 mandated a government-wide, uniform approach to safeguarding certain types of unclassified government information – referred to as "controlled unclassified information" ("CUI") – the National Archives and Records Administration ("NARA") recently proposed a rule that, along with final publication of National Institute of Standards and Technology ("NIST") Special Publication 800-171 (finalized June 2015) and a FAR clause (not yet proposed) (the "CUI Program"), is expected to replace the patchwork of protocols that the government has adopted over many years for protecting unclassified information.

The CUI Program consists of three primary components: (1) the proposed rule prescribing the procedures for how agencies are to designate and require contractors to designate and handle CUI; (2) implementation of security controls for contractor IT systems; and (3) the as yet unpromulgated contracting clause, which is expected to synthesize all CUI Program requirements into a single form of clause.

NARA, the government's cognizant agency for the CUI Program initiative, issued on May 8, 2015, the proposed rule establishing uniform policies for agencies on designating, safeguarding, disseminating, marking, decontrolling, and disposing of CUI. The proposed rule – if adopted in its present form – will apply to all executive agencies and their contractors that designate or handle CUI. Specifically, the proposed rule will:

  • Give rise to development of a public CUI Registry identifying 23 discrete categories and 82 subcategories of CUI (such as controlled technical information, critical infrastructure, financial, intelligence, and proprietary business information, among others);
  • Include standardized markings for CUI and mandate the use of such markings whenever CUI is disseminated outside of the government;
  • Establish a standardized CUI decontrol process; and
  • Require agencies to protect CUI using NIST standards.

The proposed rule will require agencies to include the CUI Program requirements in all contracts that involve contractor access to CUI. The proposed rule also contemplates that agencies will enter into formal information-sharing agreements with contractors which will require, among other things, that the contractors abide by the CUI Program requirements and selfdisclose to cognizant agency officials any instances of their noncompliance with those same requirements.

On June 19, 2015, NIST published the final version of NIST SP 800-171, which, standing alone, will not impose mandatory requirements on agencies or contractors; the standards in NIST SP 800-171 will operate as a collection of recommended agency requirements, the purpose of which will be to motivate agencies and their contractors to migrate toward a common set of best practices when handling CUI that resides on nonfederal, contractor owned-and-operated IT systems.

NIST SP 800-171 describes 14 categories of recommended security measures designed to protect the confidentiality of CUI residing on contractor information systems, consisting of (1) access control, (2) awareness and training, (3) audit and accountability, (4) configuration management, (5) identification and authentication, (6) incident response, (7) maintenance, (8) media protection, (9) personnel security, (10) physical protection, (11) risk assessment, (12) security assessment, (13) system and communications protection, and (14) system and information security.

Of course, there are subcategories associated with each of the foregoing broad security categories, the collective focus of which is directed at all components of IT systems that process, store, transmit, or receive CUI, or provide security protection for such components. Although the measures contemplated in NIST SP 800-171 are not applicable to contractors by operation of law or regulation, NIST has made it known that it intends for federal agencies to incorporate the measures into agreements with contractors, thereby making them applicable to contractors as arm'slength contracting requirements.

The final piece of the CUI Program will be a single FAR clause (not yet promulgated) that would require contractors to comply with the CUI Program requirements, including the implementation of the security controls embodied in NIST SP 800-171. NARA plans to sponsor such a rule sometime in 2016. Until the formal process of establishing the FAR rule occurs, NIST encourages agencies to reference SP 800 -171 in federal contracts, thereby contractually obligating contractor compliance.

Cybersecurity is one of the nation's most important economic and national security challenges. Given the increasing prevalence of cyber incidents – a 1,100 percent increase in the number of cyber incidents reported by federal agencies from 2006 to 2014 – contractors should adopt a sense of urgency in assessing and improving the security of their IT systems. In addition to liability resulting from a serious data breach (are there any data breaches that are not serious?), a data breach will almost certainly give rise to increased government scrutiny of a contractor's cybersecurity. Contractor shortfalls in those areas could drastically impact the contractor's ability to compete for future awards and, if substantial enough, could lead to termination and possible suspension or debarment. For those contractors that routinely encounter CUI, compliance with the new government protocols emerging from EO 13356 adds yet another layer of security to an ever-growing list of requirements associated with government-furnished information. Safeguarding CUI is one very important step in addressing vulnerabilities in the security of sensitive government information.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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