United States: The Shifting Sands Of Cybersecurity: DOD's Interim Rule Further Burdens Contractors

The Department of Defense (DOD) earlier today issued an interim rule, effective immediately, that significantly increases existing cybersecurity requirements for DOD contractors. The requirements in the interim rule, available here, have broad applicability to DOD contractors at both the prime and subcontract levels, including commercial item and small business contractors. Contractors can expect these requirements to begin showing up in new DOD contracts immediately and should begin taking steps to ensure compliance.

The interim rule contains a number of new and revised DOD cybersecurity requirements. The key issues are summarized below.

Scope of the DOD requirements

The interim rule significantly expands the scope of the prior unclassified controlled technical information (UCTI) clause's safeguarding and reporting requirements. Whereas the prior UCTI clause applied only to unclassified controlled technical information, the new clause—now titled "Safeguarding Covered Defense Information and Cyber Incident Reporting"—applies more broadly to all "covered defense information."

"Covered defense information" includes controlled technical information as well as export controlled information, critical information related to operations security and any other information marked or otherwise identified in the contract that requires safeguarding under relevant law and policy, including private and proprietary business information. The interim rule further clarifies that the definition of "controlled technical information" does not depend, as it did under the prior UCTI definition, on whether the information "is to be marked" with applicable DOD distribution statements.

This expanded definition, coupled with the clause's broad flowdown requirement, means that the revised clause requirements likely will apply to virtually all DOD contractors at the prime and subcontract levels. The interim rule also revises Part 212 of the Defense Federal Acquisition Regulation Supplement (DFARS) to clarify that the rule's requirements are applicable to commercial item contracts and subcontracts.

Security controls

Additionally, internal contractor information systems that contain covered defense information are subject to new safeguarding requirements. The interim rule removes the clause's previously required security controls from National Institute of Standards and Technology (NIST) Special Publication (SP) 800-53. DOD replaces those requirements with the controls from the recently-issued NIST SP 800-171, issued on June 18, 2015, and previously discussed here.

The National Archives and Records Administration (NARA) in May 2015 issued a proposed rule, discussed here, that would establish a government-wide policy related to the identification and safeguarding of controlled unclassified information. NARA stated in connection with that rule that it intended to promulgate a Federal Acquisition Regulation (FAR) clause that would apply the requirements of NIST SP 800-171 to contractors. The Office of Management and Budget (OMB) likewise recently proposed guidance seeking to require the use of these same NIST SP 800-171 controls on a government-wide basis for internal contractor information systems, discussed here. DOD's decision to use the same NIST standards proposed by OMB and NARA is a welcome step to achieve consistency in cybersecurity standards across the federal government.

DOD in the interim rule also creates a new clause, DFARS 252.204-7008, which states that a contractor prior to contract award can provide a written explanation to the government justifying deviations from the NIST SP 800-171 controls. The prior DFARS UCTI clause had a similar provision, although not required pre-award, allowing contractors to provide this written explanation related to the NIST 800-53 controls. Under the interim rule, if seeking a deviation, a contractor must explain: (i) how the company has in place alternative security controls that "compensate for the inability to satisfy a particular requirement" of the NIST SP 800-171 standards or (ii) that a particular control is inapplicable. The new clause likewise clarifies that the contractor may either comply with the NIST SP 800-171 requirements or provide for alternative but equally effective security measures, a determination which must be approved by DOD prior to contract award.

Reporting requirements

The interim rule also expands reporting obligations. The rule requires contractors that discover a cyber incident that affects a covered contractor information system or information contained therein to investigate and report that incident to DOD. As part of its implementation of Section 1632 of the 2015 National Defense Authorization Act, DOD also requires contractors to investigate and report a cyber incident that affects the contractor's ability to perform "operationally critical support" functions of a contract. Subcontractors are required to report cyber incidents to both the prime contractor and the government, with lower-tier subcontractors required to report cyber incidents up the chain of privity until the prime contractor is reached.

In addition, the rule modifies DFARS 252.204-7012 to permit DOD to release certain contractor information in a number of circumstances, including "to entities with missions that may be affected by such information" and "for national security purposes." This expands the permissible reasons for sharing included in the prior version of the clause, which had limited the government's use of contractor information only to "authorized persons for purposes and activities consistent with [the prior UCTI] clause." Because contractor information now may be disclosed outside the government, contractors should clearly mark information provided to DOD and carefully consider whether particular information should be disclosed in connection with a cyber incident.

The interim rule further establishes DFARS 252.204-7009, Limitation on the Use and Disclosure of Third-Party Contractor Reporting Cyber Incident Information. This clause is required in contracts that involve contractor support for government activities related to safeguarding covered defense information and cyber incident reporting. It imposes nondisclosure obligations on contractors handling reporting information and provides that a contractor's breach of its nondisclosure obligations may be subject to criminal, civil, administrative and contractual actions brought by the government, or, importantly, by the impacted reporting party.

Cloud computing requirements

And if the foregoing was not enough, the interim rule also contains a number of new requirements relating to the acquisition of cloud computing services. The interim rule adds a new DFARS subpart, 239.76, which formalizes DOD guidance in this area and mandates that DOD may only award contracts for cloud computing services to contractors that have obtained a provisional authority to operate from the Defense Information Systems Agency (DISA). The new subpart requires the inclusion of specifically enumerated government protections in any DOD cloud services purchase order.

The interim rule also establishes two new contract clauses, DFARS 252.239-7009, Representation of the Use of Cloud Computing, and DFARS 252.239-7010, Cloud Computing Services, for use in any acquisition for information technology services. These clauses require contractors to: (i) implement administrative, technical and physical safeguards and controls outlined in DISA's Cloud Computing Security Requirements guide; (ii) maintain all government data in the United States unless authorized otherwise in writing; and (iii) restrict access to government data. DFARS 252.239-7010 also mandates that contractors report all cyber incidents related to the cloud services provided under the contract and imposes reporting and compliance obligations that parallel the access and investigation cooperation requirements included in the new UCTI clause.

Comments on the interim rule are due by October 26, 2015. Dentons lawyers will continue monitoring key developments in this area. Additionally, starting in the fall of 2015, Dentons lawyers will be presenting on behalf of the Public Contracting Institute a six-part series addressing the detailed compliance requirements and best practices relating to government contracts cybersecurity. More information about the series can be found here or by contacting the authors of this client alert.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
26 Sep 2018, Conference, New York, United States

Dentons is delighted to support a global IT services and consulting firm Miratech as an event host partner at their annual conference called M-Force18 New York on September 27th. The event will be held at Dentons New York office in the heart of Midtown Manhattan, opposite Rockefeller Center.

2 Oct 2018, Seminar, Dallas, United States

We are pleased to offer a program of five sessions designed specifically for in-house counsel. Topics will include:

  • In-house corporate ethical issues
  • What recent Supreme Court decisions mean for business
  • Keeping lawyers out of your benefit plans
  • Litigation tactics for in-house counsel
  • Employment issues in the age of #MeToo
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions