United States: DoD's Efforts To Secure Information On Contractor Systems Continues, But All Companies Are At Risk And Should Take Steps Now To Protect Themselves

Last Updated: December 18 2017
Article by Richard W. Arnholt and Anthony McFarland

As recent malware, ransomware and distributed denial of service attacks have made clear, the cyber threats posed to governments and commercial entities are real and growing. Critical infrastructure such as power plants, airports and communication systems are vulnerable to attacks on the cyber battlefield, as are banks, manufacturers, and law firms, among other commercial entities. In an attempt to address these risks, the U.S. government is imposing heightened cyber-security requirements on contractors, some of which are summarized below. But, in light of the growing cyber threats posed by nation states, subnational groups and bored teenagers, even companies that are not subject to these new requirements should evaluate the sufficiency of their current cyber security protocols and consider taking steps such as the simplified four-step "starter plan" – train, maintain, test and repeat – laid out below to address vulnerabilities.

Commercial organizations and governments, including the U.S. government, have begun to respond to these threats by standing to cyber commands and belatedly starting to harden the IT systems on which sensitive information is stored. Because of its reliance on contractors, a high volume of sensitive U.S. government data, both classified and unclassified, is stored on systems that are not owned or operated by the government. To address the risk of this information being compromised, as it has been repeatedly in the past, the U.S. Department of Defense (DoD) has been pushing out heightened security protocols for systems owned or operated by or for government contractors if those systems process, store or transmit certain types of unclassified but controlled technical information or other information that the government deems to require safeguarding (classified information stored on contractor systems is subject to stricter protections). Without these protections, the U.S. government would be forced to maintain such information, defined by the applicable regulations as "covered defense information," solely on U.S. government systems, an impossibility given the government's dependence on contractors.

As a result of these measures, DoD contractors that handle covered defense information will soon be required to comply with heighted cyber-security requirements. While the applicable regulations require compliance by the end of 2017, in June 2017 DoD clarified that the looming end-of-year deadline for implementation of the rigorous cyber security requirements set forth at National Institute of Standard and Technology (NIST) SP 800-171 could be satisfied by implementation plans that laid out the path for achieving those standards, even if they are not met by the end of the year. This was welcome relief to defense contractors, as DoD's interpretation is not clear related to the applicable regulations requiring contractors to represent that they will implement the security requirements in NIST SP 800-171 as soon as practical, but no later than December 31, 2017. One of the key provisions – DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting – which must be flowed down to subcontractors also includes cyber incident reporting regulations and media preservation obligations, among other requirements, that does not apply to commercial-off-the-shelf items, but is applicable to commercial item contracts awarded pursuant to FAR Part 12.

DoD issued some helpful responses to frequently asked questions about the these requirements in January 2017, available here, and is expected to issue additional FAQs after its clarification last month that a contractor need not be fully compliant with NIST SP 800-171 by the end of this year. While DoD's interpretation is a welcome relief, contractors should determine now whether they are subject to these heighted security requirements and, if they are, move post haste to implement them.

Even for contractors that are not at immediate risk of being subject to these heightened DoD requirements, the increasing frequency and impact of cyber-attacks highlights that need for every company to ensure its IT systems are protected. If your company relies on computer systems to conduct its business, you should immediately begin implementing cybersecurity best practices, including:

  • Adoption of security policies and procedures;
  • Preparation of an incident response plan;
  • Enforcing complex, revolving passwords;
  • Mandating multi-factor authentication;
  • Implementing mobile device management; and
  • Obtaining cyberliability insurance.

Whether your company is in the beginning stages of cybersecurity planning, or deep into updating an existing plan, it is easy to become overwhelmed researching and reviewing cybersecurity guidelines and recommendations, and then digesting and prioritizing the suggested practices. This is particularly true for businesses without dedicated IT departments. But doing nothing is neither a practical, nor regulatory, option.

Thankfully there is a simplified four-step starter plan that can be put into place quickly, at relatively low cost, by any company: Train. Maintain. Test. Repeat.

Train. The overwhelming majority of cyber incidents stem from social engineering attacks that infiltrate the system because of user error. The most prominent threats to companies continue to be phishing, and especially spear phishing, scams. There is no substitute for ongoing cybersecurity training, which should extend from the top of the organization – including general counsel, C-suite officers and senior leadership – to the newest hiree. Training should be continuous, beginning with the onboarding process. Dedicate an individual or group to be responsible for conducting due diligence on the various training sources and methods available, and making recommendations on which procedures to put in place.

Maintain. The recent WannaCry ransomware attack emphasized that cybersecurity training alone is not enough. Computer data was encrypted by WannaCry as a result of a Windows operating system security weakness – not a typical phishing attack. Organizations could have avoided, or at least minimized, the ransomware raid through a regular, diligent program of applying updates and patches as soon as they are made available.

Test. There are a number of valuable methods to test an organization's cybersecurity program. The most common is penetration testing (pen testing), where a third party is hired to try to gain unauthorized computer network access from outside the organization. Businesses should seriously consider undergoing a pen test on a regular, perhaps annual, basis. Testing should also extend to an institution's public-facing applications, which often are over-looked as an avenue for intrusion or infection.

Beyond vendor testing, businesses should implement their own internal pen testing on a periodic, more frequent interval. Because the organization's systems analysts and network administrators are the most familiar with the organization's own systems and network, they are uniquely situated to detect security issues. In addition, ongoing "table top" exercises can help pinpoint potential security weaknesses and educate technology associates on cybersecurity risks. Vacations occur, illnesses happen, and cell phone batteries die. To ensure internal tests simulate real world conditions, include scenarios where certain personnel are unavailable.

An additional testing method, which is a form of cybersecurity training, is to periodically cast phishing email lures to the business's own personnel, interns and CEO alike. This type of intentional phishing expedition will help raise cybersecurity awareness throughout the organization.

Repeat. Training, maintaining and testing are not boxes to be checked off or one-time activities. Regulations and guidances change, the workforce turns over, new testing methods develop, and most importantly, cyber threats evolve. Organizations must train, maintain and test on an ongoing basis as a part of a continuous and enhanced cybersecurity program.

Cybersecurity is a culture, not a cost center; a mindset, not a mine field. Fostering this cybersecurity culture is the single most effective defense against a cyber event, and therefore safeguard of the assets of an organization, its customers, employees, and shareholders.

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.

In association with
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
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

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