United States: DoD Addresses Cybersecurity Preparedness, Incident Reporting, And Cloud Computing Acquisitions With New DFARS Interim Rule

Announced and effective today, August 26, 2015, DoD has issued an interim rule that significantly expands existing DFARS provisions and clauses requiring contractors and subcontractors to report cyber incidents.  The interim rule will apply "to all contractors with covered defense information transiting their information systems," an estimated 10,000 contractors.  Additionally, in an effort to ensure acquisition uniformity across the Department, the interim rule implements DoD policies and procedures to be used when contracting for or utilizing cloud computing services.  Due to "urgent and compelling reasons," the rule was issued without an opportunity for public comment.

The interim rule is an amalgamation of multiple statutes, manuals, and policies and it affects numerous DFARS clauses and provisions in implementing and consolidating requirements found in:

  • Section 941 of the National Defense Authorization Act (NDAA) for Fiscal Year 2013;

    • Requiring cleared defense contractors to report penetrations of networks and information systems, and
  • Allowing DoD personnel access to equipment and information to assess the impact of reported penetrations
  • Section 1632 of the NDAA for FY 2015;
  • Requiring that a contractor designated as "operationally critical" must report each time a cyber incident occurs on that contractor's network or information systems.
  • A December 15, 2014, DoD Chief Information Officer (CIO) memorandum entitled "Updated Guidance on the Acquisition and Use of Commercial Cloud Computing Services"; and
  • The January 13, 2015 DoD Cloud Computing Security Requirements Guide (SRG) Version 1, Release 1.

A brief rundown of the key elements of the interim rule is found below. However, for the cybersecurity issues, contractors should focus their attention on the newly refined cyber incident reporting procedures (now found at DFARS 204.7302(a)(1) and clause 252.204-7012(c)), including more exacting report requirements (although the reporting period remains at 72 hours); the reporting requirements of all subcontractors (now found at DFARS 204.7302(a)(2)); and the inclusion of new contractual clauses when "covered defense information" is at issue (now found at DFARS 204.7304).

Cloud service providers and contractors wishing to employ cloud resources should be aware that DoD will only accept "cloud computing services using commercial terms and conditions that are consistent with Federal law, and an agency's needs." Accordingly, a cloud provider – be it as a prime or as a subcontractor – must have received "provisional authorization by Defense Information Systems Agency, at the level appropriate to the requirement" (now found at DFARS 239.7602-1(b)). Furthermore, any "Government data" stored in the cloud and not resident on a DoD installation must reside on servers in the United Sates unless otherwise authorized (now found at DFARS 239.7602-2(a)). Contractors will also be obligated affirmatively to advise the government of their intent to use cloud services for their government data (now found at DFARS 252.239–7009).

Here's an extremely brief rundown of what is new:

1. Definitions: The definition of "Cyber incident" is unchanged but has been moved from DFARS 204.7301 to DFARS 202.1. Two new terms, "compromise" and "media," are also included with the other definitions

a. cyber incident: "actions taken through the use of computer networks that result in a compromise or an actual or potentially adverse effect on an information system and/or the information residing therein."

b. compromise: "disclosure of information to unauthorized persons, or a violation of the security policy of a system, in which unauthorized intentional or unintentional disclosure, modification, destruction, or loss of an object, or the copying of information to unauthorized media may have occurred."

c. media: "as used in parts 204 and 239, means physical devices or writing surfaces including, but not limited to, magnetic tapes, optical disks, magnetic disks, large-scale integration memory chips, and printouts onto which covered defense information is recorded, stored, or printed within a covered contractor information system."

2. DFARS subpart 204.73, Safeguarding Unclassified Technical Information, is to be expanded now to address protection of a broader collection of data and information described as "covered defense information" and adverse effects on a "contractor's ability to provide operationally critical support." The previous definition of "controlled technical information" remains, but the expanded provision includes many new definitions, the most pertinent being Covered defense information. That term is defined as unclassified information that is "(i) provided to the contractor by or on behalf of DoD in connection with the performance of the contract; or (ii) Collected, developed, received, transmitted, used, or stored by or on behalf of the contractor in support of the performance of the contract" and that also falls into any of the following categories:

i. Controlled technical information.

ii. Critical information (operations security). Specific facts identified through the Operations Security process about friendly intentions, capabilities, and activities vitally needed by adversaries for them to plan and act effectively so as to guarantee failure or unacceptable consequences for friendly mission accomplishment (part of Operations Security process).

iii. Export control. Unclassified information concerning certain items, commodities, technology, software, or other information whose export could reasonably be expected to adversely affect the United States national security and nonproliferation objectives. To include dual use items; items identified in export administration regulations, international traffic in arms regulations, and munitions list; license applications; and sensitive nuclear technology information.

iv. Any other information, marked or otherwise identified in the contract, that requires safeguarding or dissemination controls pursuant to and consistent with law, regulations, and Government-wide policies (e.g., privacy, proprietary business information).

"Operationally critical support" is also a newly defined term, referring to "supplies or services designated by the Government as critical for airlift, sealift, intermodal transportation services, or logistical support that is essential to the mobilization, deployment, or sustainment of the Armed Forces in a contingency operation." Any "cyber incident" that affects such support is required now to be reported.

3. DFARS 252.204-7012 is to be renamed "Safeguarding Covered Defense Information and Cyber Incident Reporting." Reflecting the changes to DFARS subpart 204.73, the clause is expanded to address protection and reporting requirements related to "covered defense information" and will require contractors to report "cyber incidents" involving this new class of information as well as any cyber incident that may affect the ability to provide "operationally critical support." Not surprisingly, the clause's previous reference and use of cherry-picked security standards found in NIST SP 800-53 has been replaced by reference to NIST SP 800-171, a recently released publication specifically tailored for use in protecting sensitive information residing in contractor information systems.

4. DFARS 252.204-7008, Compliance with Safeguarding Covered Defense Information Controls, is a new provision intended to make offerors aware of the requirements of clause 252.204-7012, while also allowing contractors an opportunity to explain to the DoD CIO: (i) how the contractor's alternative security measures can compensate for the inability to satisfy a particular requirement; or (ii) why a particular requirement is not applicable. The DoD CIO will then approve or disapprove the request to deviate with any approved deviation incorporated into the resulting contract.

5. DFARS 252.204-7009, Limitations on the Use and Disclosure of Third-Party Contractor Reported Cyber Incident Information, is a new provision added to protect information submitted to DoD in response to a cyber incident.

6. DFARS subpart 239.76, Cloud Computing, is a new subpart added to implement policy for the acquisition of cloud computing services.

7. DFARS 252.239-7009, Representation of Use of Cloud Computing, is a new provision added that requires the offeror to indicate whether it intends to use cloud computing services in performance of the contract.

8. DFARS 252.239-7010, Cloud Computing Services, is a new provision added to provide standard contract language for the acquisition of cloud computing services, including access, security, and reporting requirements.

All of the above clauses and provisions will apply to the purchase of commercial items and are now included in DFARS subpart 212.3, Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items.

DoD is presently soliciting comments from "small entities" concerning the impact of these regulations on their business. However, in light of the statutory underpinnings and the previous DFARS provisions, large contractors should not expect to/hope to see any major changes in the final rule.

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.

Authors
Events from this Firm
13 Sep 2018, Other, Los Angeles, United States

Liisa will be giving opening remarks and presenting, "Big Data and Online Behavioral Advertising (OBA): An Advertiser’s Perspective Origins of big data and how to legally acquire data."

20 Sep 2018, Seminar, Los Angeles, United States

The annual seminar addressing changes and developments in state and federal wage and hour laws is a unique one-day program and hundreds of California employers, personnel managers, controllers, attorneys, payroll managers, and supervisors attend each year.

26 Sep 2018, Seminar, San Francisco, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series.

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
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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