Defense Department Issues Final Rule Requiring Safeguards For Unclassified Technical Information And Cyber Incident Reporting

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On November 18, 2013, the Department of Defense (DOD) published a Final Rule amending the Defense Federal Acquisition Regulation Supplement (DFARS). The new rule, which is effective immediately, is likely to have broad implications for defense contractors and subcontractors. It sets forth two new requirements.

First, the Final Rule requires government contractors to “provide adequate security” for technology systems “that may have unclassified controlled technical information [UCTI] resident on or transiting through them.” Without a separate system for UCTI, the rule is likely to apply to the contractor’s entire network. Second, the Rule requires contractors to report promptly to DOD a broad range of “cyber incidents,” which includes the “possible exfiltration, manipulation, or other loss or compromise of any unclassified controlled technical information resident on or transiting through Contractor’s, or its subcontractors’, unclassified information systems.”3 According to the Final Rule, these new requirements will be set forth in a specific clause in every DOD solicitation, contract, and subcontract, including those involving commercial items.

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