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|Publication ID: Fall 2023
|Title: Assessing Contractor Implementation of Cybersecurity Requirements (DFARS Case 2019-D041)
DoD is amending an interim rule to implement the CMMC framework 2.0 in order to protect against the theft of intellectual property and sensitive information from the Defense Industrial Base (DIB) sector. The CMMC framework, as defined in Title 32 of the Code of Federal Regulations (CFR), assesses compliance with applicable information security requirements. This rule provides the Department with assurances that a DIB contractor can adequately protect sensitive unclassified information at a level commensurate with the risk, accounting for information flow down to its subcontractors in a multi-tier supply chain.
|Agency: Department of Defense(DOD)
|Priority: Section 3(f)(1) Significant
|RIN Status: Previously published in the Unified Agenda
|Agenda Stage of Rulemaking: Proposed Rule Stage
|Unfunded Mandates: No
|CFR Citation: 48 CFR 204 48 CFR 212 48 CFR 217 48 CFR 252
|Legal Authority: 41 U.S.C. 1303 Pub. L. 116-92, sec. 1648
Statement of Need:
The purpose of this DFARS rule is to ensure that Defense Industrial Base (DIB) contractors will adequately protect sensitive unclassified information at a level commensurate with the risk, accounting for information flow down to its subcontractors in a multi-tier supply chain.
Summary of the Legal Basis:
This rule is being implemented under the authority of 41 U.S.C. 1303 and section 1648 of the National Defense Authorization Act for Fiscal Year (FY) 2020 (Pub. L. 116-92). The USD (A&S) has the authority and responsibility for promulgating DoD procurement rules under the OFPP statute, codified at title 41 of the U.S. Code. Section 1648 of the National Defense Authorization Act for Fiscal Year 2020 (Pub. L. 116-92) directs the Secretary of Defense to develop a risk-based cybersecurity framework for the DIB sector, such as CMMC, as the basis for a mandatory DoD standard.
DoD considered and adopted several alternatives during the development of the interim rule that reduced the burden on small entities and still meet the objectives of the rule. DoD will consider similar alternatives for the amendment rule. One alternative considered includes exempting contracts and orders exclusively for the acquisition of commercially available off-the-shelf items.
Anticipated Costs and Benefits:
The annualized value of costs beginning in fiscal year 2021 (calculated in perpetuity in 2016 dollars at a 7 percent discount rate) associated with implementing the CMMC Framework in the published interim rule is $4 billion. The cost analysis for CMMC 2.0 is being handled in the Title 32 CFR rule (RIN 0790-AL49). The primary benefit of this rule is improving the protection of the Department's sensitive information and reducing the threat to DIB sector intellectual property by:
The theft of intellectual property and sensitive information from all U.S. industrial sectors due to malicious cyber activity threatens economic security and national security. Malicious cyber actors have and continue to target the DIB sector and the supply chain of the Department of Defense. These attacks not only focus on the large prime contractors, but also target subcontractors that make up the lower tiers of the DoD supply chain. Many of these subcontractors are small entities that provide critical support and innovation. The aggregate loss of intellectual property and certain unclassified information from the DoD supply chain can undercut U.S. technical advantages and innovation, as well as significantly increase risk to national security.
|Regulatory Flexibility Analysis Required: Yes
|Government Levels Affected: Federal
|Small Entities Affected: Businesses
|Included in the Regulatory Plan: Yes
|Initial (Administrative Startup and /or Capital) Cost: $0
|Yearly (Annual Operating) Cost: $0
|Base Year of the Dollar Estimates: 2021
|RIN Data Printed in the FR: Yes
|Related RINs: Split from 0750-AL68, Related to 0790-AL49
Jennifer D. Johnson
Office of the Under Secretary of Defense for Acquisition and Sustainment
Department of Defense
Defense Acquisition Regulations Council
Defense Pricing and Contracting, Defense Acquisition Regulations System, Room 3B938, 3060 Pentagon,
Washington, DC 20301-3060