Navigating The Maze: A Comparison Of Selected Federal Cybersecurity Regulations

Cybersecurity requirements for contractors doing business with the U.S. federal government are nothing new. Yet, as cybersecurity threats continue to evolve, federal contractors have been continually confronted by a potentially confusing array of security regulations and requirements for protecting certain categories of information on federal and nonfederal information systems. Four active and proposed contract clauses relating to these cybersecurity requirements likely are top of mind for most government contractors doing business with the U.S. federal government:

• DFARS 252.204-7012, which addresses U.S. Department of Defense (DOD) requirements for protecting covered defense information¹ on covered contractor information systems and for reporting cyber incidents for covered contractor information systems processing covered defense information.
• HSAR 3052.204-72, which provides U.S. Department of Homeland Security contractor requirements for protecting CUI to which contractors have access or that they will maintain on behalf of the agency, and for federal information systems that include contractor systems processing CUI that are operated on behalf of the agency.
• FAR 52.204-XX, which is proposed by the FAR Council as a government-wide acquisition regulation for the protection of CUI.
• FAR 52.204-21, which is the "basic" government-wide acquisition regulation that applies to solicitations and contracts when a contractor or subcontractor may have Federal contract information² residing in or transiting through its information system.³

While these regulations share the common goal of improving the security of information and systems, they differ in their focus and requirements. For contractors working with multiple federal agencies, understanding these differences is important for achieving and maintaining compliance and avoiding potential penalties. Below is a review of selected aspects of these cybersecurity regulations to help contractors navigate their respective responsibilities.

Systems to Which the Regulations Apply

Both the DFARS and the FAR Basic Rule generally apply to nonfederal information systems and apply NIST SP 800-171 controls or, in the case of FAR 52.204-21, a loose subset of them. The Homeland Security regulations, on the other hand, generally apply to federal information systems and apply the NIST SP 800-53 framework. The proposed new CUI rule applies to both federal and nonfederal information systems and, accordingly, applies either NIST SP 800-171 or NIST SP 800-53, as the situation requires:

Incident Reporting Timelines

Aside from FAR 52.204-21, each of the regulations carries an affirmative obligation to report cyber incidents that may compromise protected information or systems. Reporting timelines and processes differ between each regulation:

Assessment and Certification Requirements

Similarly, aside from FAR 52.204-21, each of the regulations addresses (or is expected to address) requirements for assessments and certifications.

A Brief Note on FedRAMP

Currently 80% of cloud service provider applications for FedRAMP authorization are for the Moderate impact level, which is prescribed for situations "where the loss of confidentiality, integrity, and availability would result in serious adverse effects on an agency's operations, assets, or individuals," and "[s]erious adverse effects could include significant operational damage to agency assets, financial loss, or individual harm that is not loss of life or physical."⁶ FedRAMP baselines are based on NIST SP 800-53, and cybersecurity regulations that address the handling of CUI through commercial cloud services will reference FedRAMP. On March 24, 2025, the General Services Administration launched FedRAMP 20x.⁷ FedRAMP 20x presently has announced primary goals that include automation validation, continuous monitoring, improved relationships with industry, and more.⁸ FedRAMP 20x does not presently change its use of the FedRAMP Revision 5 baseline for new authorizations.⁹

Conclusion

As federal agencies move toward a unified cybersecurity framework, contractors must carefully study and understand the requirements and differences in the cybersecurity regulations.

DFARS 252.204-7012 remains the most stringent of the cybersecurity regulations, with mandatory third-party certification and strict reporting obligations. Meanwhile, the FAR proposed rule introduces a more aggressive eight-hour reporting window that may set a new government-wide standard. DOD contractors are arguably best situated to adjust to any new government-wide standards for nonfederal information systems, whereas non-DOD contractors will have a steeper learning curve. Any way you look at it, cybersecurity requirements are, or are soon to be, a competitive necessity for all government contractors, and all government contractors will be well served by devoting the time and attention necessary in order to understand, apply, and comply with these requirements. Below, for your convenience, we have provided a simple summary comparison chart of some of the cybersecurity aspects discussed in this blog.

Key Takeaways: Contractors should:

• review contracts to ensure that they understand how systems are being characterized and which standards apply;
• assess their current cybersecurity compliance posture against applicable NIST frameworks and agency-specific cybersecurity requirements;
• prepare for incident reporting variations, including complying with the proposed FAR rule's shorter timelines; and
• monitor upcoming FAR rule changes, as such changes may introduce additional certification or assessment requirements.

Footnotes

^{1 Covered Defense Information is defined in DFARS 252.204-7012 and is, in summary, unclassified controlled technical information or other Controlled Unclassified Information (CUI) that requires safeguarding or dissemination controls.}

^{2 FAR 52.204-21 defines Federal contract information as information, not intended for public release, that is provided by or generated for the government under a contract to develop or deliver a product or service to the government, but not including information provided by the government to the public (such as on public websites) or simple transactional information, such as information necessary to process payments.}

^{3 Some definitions in FAR 52.204-21 are proposed for change in the new FAR CUI Rule.}

^{4 FedRAMP is a government-wide program that evaluates and authorizes commercial cloud services for use by federal agencies. Under FedRAMP's evaluation scheme, commercial cloud service offerings can be authorized to handle data at either the Low, Moderate, or High impact level. The impact levels are based on the "potential impact on an agency's assets and operations should their information and information systems be compromised through unauthorized access, use, disclosure, disruption, modification, or destruction." As cloud services offerings move up in authorization level, the security requirements become more strict.}

^{5 DHS requires contractors to obtain an Authority to Operate, prior to collecting, processing, storing, or transmitting CUI, which will include completing a security authorization process and satisfying additional requirements. See, e.g.,HSAR 3052.204-72(h); see also DHS Policy Directive 4300A and Security Authorization Process Guide. Available at https://www.dhs.gov/dhs-security-and-training-requirements-contractors .}

^{6 Understanding Baselines and Impact Levels for FedRAMP Authorizations, Federal Risk and Authorization Management Program (last accessed April 3, 2025), https://www.fedramp.gov/rev5/baselines/ .}

^{7 https://www.gsa.gov/about-us/newsroom/news-releases/gsa-announces-fedramp-20x-03242025}

^{8 https://www.fedramp.gov/20x/}

^{9 https://www.fedramp.gov/20x/faqs/}

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.