Federal Acquisition Regulation (FAR) Cybersecurity Implications for NIST 800-171
If you are new to Federal Acquisition Regulation (FAR) 52.204-21, it is a contract clause (52.204-21) to the FAR “for the basic safeguarding of contractor information systems that process, store, or transmit Federal contract information." FAR 52.204-21 imposes a set of fifteen (15) “basic” cybersecurity controls for contractor information systems upon which “Federal contract information” is stored, processed or transmitted. Federal contract information is defined as information provided by or generated for the Government under a contract to develop or deliver a product or service for the US Government.
One thing to keep in mind is that while the current requirements (shown below) are quite basic, there is a a pending change with FAR to compel all US government contractors, not just DoD contractors, to comply with NIST 800-171.
These current, fifteen (15) basic cybersecurity requirements for FAR include:
- Limit access to authorized users.
- Limit information system access to the types of transactions and functions that authorized users are permitted to execute.
- Verify controls on connections to external information systems.
- Impose controls on information that is posted or processed on publicly accessible information systems.
- Identify information system users and processes acting on behalf of users or devices.
- Authenticate or verify the identities of users, processes, and devices before allowing access to an information system.
- Sanitize or destroy information system media containing Federal contract information before disposal, release, or reuse.
- Limit physical access to information systems, equipment, and operating environments to authorized individuals.
- Escort visitors and monitor visitor activity, maintain audit logs of physical access, control and manage physical access devices.
- Monitor, control, and protect organizational communications at external boundaries and key internal boundaries of information systems.
- Implement sub networks for publicly accessible system components that are physically or logically separated from internal networks.
- Identify, report, and correct information and information system flaws in a timely manner.
- Provide protection from malicious code at appropriate locations within organizational information systems.
- Update malicious code protection mechanisms when new releases are available.
- Perform periodic scans of the information system and real-time scans of files from scans of files from external sources as files are downloaded, opened, or executed.
FAR vs DFARS - ISO 27002 or NIST 800-53 Frameworks
NIST 800-171 isn’t just for Department of Defense (DoD) contractors. Representatives from the National Institute of Standards and Technology (NIST) and DoD officials have recently been putting this information out in webinars and other training seminars on NIST 800-171. This means that only the NIST 800-53 framework is going to meet FAR requirements - ISO 27002 and the NIST Cybersecurity Framework are going to be insufficient in coverage.
This coming requirement for FAR cybersecurity compliance is specified on page v of NIST 800-171:
Executive Order 13556, Controlled Unclassified Information, November 4, 2010, establishes that the Controlled Unclassified Information (CUI) Executive Agent designated as the National Archives and Records Administration (NARA), shall develop and issue such directives as are necessary to implement the CUI Program. Consistent with this tasking and with the CUI Program’s mission to establish uniform policies and practices across the federal government, NARA is issuing a final federal regulation in 2016 to establish the required controls and markings for CUI government-wide. This federal regulation, once enacted, will bind agencies throughout the executive branch to uniformly apply the standard safeguards, markings, dissemination, and decontrol requirements established by the CUI Program.
With regard to federal information systems, requirements in the federal regulation for protecting CUI at the moderate confidentiality impact level will be based on applicable policies established by OMB and applicable government-wide standards and guidelines issued by NIST. The regulation will not create these policies, standards, and guidelines which are already established by OMB and NIST. The regulation will, however, require adherence to the policies and use of the standards and guidelines in a consistent manner throughout the executive branch, thereby reducing current complexity for federal agencies and their nonfederal partners, including contractors.
In addition to defining safeguarding requirements for CUI within the federal government, NARA has taken steps to alleviate the potential impact of such requirements on nonfederal organizations by jointly developing with NIST, Special Publication 800-171 — and defining security requirements for protecting CUI in nonfederal systems and organizations. This approach will help nonfederal entities, including contractors, to comply with the security requirements using the systems and practices they already have in place, rather than trying to use government-specific approaches. It will also provide a standardized and uniform set of requirements for all CUI security needs, tailored to nonfederal systems, allowing nonfederal organizations to be in compliance with statutory and regulatory requirements, and to consistently implement safeguards for the protection of CUI.
Finally, NARA, in its capacity as the CUI Executive Agent, also plans to sponsor in 2017, a single Federal Acquisition Regulation (FAR) clause that will apply the requirements contained in the federal CUI regulation and Special Publication 800-171 to contractors. This will further promote standardization to benefit a substantial number of nonfederal organizations that are attempting to meet the current range and type of contract clauses, where differing requirements and conflicting guidance from federal agencies for the same information gives rise to confusion and inefficiencies. The CUI FAR clause will also address verification and compliance requirements for the security requirements in NIST Special Publication 800-171. Until the formal process of establishing such a FAR clause takes place, the requirements in NIST Special Publication 800-171 may be referenced in federal contracts consistent with federal law and regulatory requirements. If necessary, Special Publication 800-171 will be updated to remain consistent with the federal CUI regulation and the FAR clause.
Cost of Non-Compliance With FAR 52.204-21
What can possibly go wrong with non-compliance in a contract with the U.S. Government?
- Contract Termination. It is reasonably expected that the U.S. Government will terminate contracts with prime contractors over non-compliance with FAR requirements since it is a failure to uphold contract requirements. Subcontractor non-compliance will cause a prime contractor to be non-compliant, as a whole.
- Criminal Fraud. If a company states it is compliant when it knowingly is not compliant, that is misrepresentation of material facts. This is a criminal act that is defined as any act intended to deceive through a false representation of some fact, resulting in the legal detriment of the person who relies upon the false information.
- Breach of Contract Lawsuits. Both prime contractors and subcontractors could be exposed legally. A tort is a civil breach committed against another in which the injured party can sue for damages. The likely scenario for a FAR-related tort would be around negligence on behalf of the accused party by not maintaining a specific code of conduct (e.g., FAR cybersecurity controls).
As you can see from those examples, the cost of non-compliance is quite significant. As always, seek competent legal counsel for any pertinent questions on your specific compliance obligations.
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The NIST version of the Written Information Security Program (WISP) is a comprehensive set of IT security policies and standards that is based on the National Institute of Standards & Technology (NIST) 800-53 rev4 framework and it can help your organization become compliant with FAR 52.204-21 requirements
This NIST-based WISP is a comprehensive, customizable, easily-implemented Microsoft Word document that contains the NIST 800-53 rev4-based policies, control objectives, standards and guidelines that your company needs to establish a robust cybersecurity program. Being a Microsoft Word document, you have the ability to make edits to suit your company's specific needs.
NIST 800-53 is the de facto standard for cybersecurity requirements that is issued by the US government. Therefore, government agencies, defense contractors, telecom service providers, health care providers, financial companies or any organizations that contract with the government tend to adopt NIST-based best practices over all other frameworks, based on regulatory requirements.
You can see an example of the NIST 800-53 WISP here.