SSP and POAM Guidance for DFARS Compliance According to NIST

Defense federal acquisition regulation supplement (DFARS) Compliance has been top of mind for Prime contractors as well as Department of Defense (DoD) suppliers since before the initial deadline in 2017. With the first DFARS compliance audit underway and a new certification on the horizon, the road to ensuring that contractors are at least “adequately secure” to process controlled unclassified information (CUI) and win DoD contracts is certainly ongoing. 

The foundation of all DFARS reporting and audits to date are the system security plan (SSP) and plan of actions and milestones/mitigations (POAM). According to the DoD publication Assessing the State of a Contractor’s Internal Information System in a Procurement Action, “Plans of action, continuous monitoring and the system security plan (NIST SP 800-171 Security Requirements 312.2-3.12.4) must address all security requirements”. The same document states that one of the objectives in assessing a contractor for procurement is assessing NIST SP 800-171 implementation as a separate technical factor in addition to “adequate security”, therefore, the assessor will “incorporate the System Security Plan (SSP) and Plan of Action into the contract” itself. There are many ways to create an SSP and POAM, whether outsourcing the compliance process entirely or using an integrated risk management platform like CyberStrong, yet managing off of spreadsheets is no longer feasible. 

Another important objective to take note of is the organization which awards to contract will “Assess/track implementation of NIST SP 800-171 security requirements after contract award”. 

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Tracking implementation through a static GRC tool or spreadsheets makes this tracking almost impossible. Using a live, continuous compliance platform for DFARS compliance such as CyberStrong, that will make proving compliance and tracking progress easy, simple, and straightforward. Not only does the subcontractor need to track and prove compliance, but the Prime DoD contractors also has to track all of its facets and suppliers. CyberStrong makes it easy for both suppliers and primes to see the state of compliance and track their progress to show due diligence and prove “adequate security” if not better.

With that in mind, as a DoD contractor at any level, here is a list of risks sourced from the National Law Review that your organization takes when you push off compliance or are managing it in a way that makes the proving aspect of compliance difficult, such as spreadsheets. 

Bids: The DoD guidance talked about above is clear that SSPs and POAMs play a critical part of qualifying “adequate security”. The first draft guidance document says that the DoD can execute these actions based on these documents: it can make an acceptable/unacceptable determination based on implementation status to award the contract or not, or it can evaluate implementation “as a separate technical evaluation factor.” This indicates that SP 800-171 is the baseline and already we’ve seen a supplement draft published from NIST indicating that organizations further up the supply chain will be held to a higher standard.

As an organization in the bid process, you could be denied because of inconsistencies between your SSP and POAM and the state of your cybersecurity related to NIST 800-171. If the awardee’s implementation of NIST SP 800-171 is inconsistent with its documents, the DoD or Prime will likely choose another contract. Regardless, they will require the SSP and POAM for review, since those make a supplier conferment for the future. If you’ve received a questionnaire in the past, know that that document doesn’t make you compliant and these compliance documents are paramount to your success.

Termination: To evaluate compliance with your SSP and POAM, the guidance says that your contract must include contract data requirements (CDRLs) that “require delivery of System Security Plan and any Plans of action after contract award.” Again, if you don’t have a live, transparent and simple way of getting those documents ready for every new contract – automate them! The accuracy of your SSP and POAM, plus clearly showing that you’re tracking toward full compliance, is paramount. The SSP and POAM will be in your contract, thus, failure to comply could easily lead to termination.

DCMA Audits: DoD has made it clear in presentations and online that the DCMA will verify that the contractor has an SSP and POA&M. As we’ve seen, the first DFARS compliance audit is already underway, conducted by the DCMA. While the landscape is shifting to a certification model, those apart of or joining the DoD supply chain should be aware of that they could be subject to audit. 

False Claims Act: This risk is important to take note of. The use of the SSP to evaluate your security measures and using it as a deliverable related to a government contract can increase the potential risk of a False Claims Act violation for your company. Example: An SSP may misrepresent a contractor’s actual cybersecurity status, and the DoD may take action based on fraud in the inducement. The DoD can establish that the cybersecurity status of a contractor was included in the award decision, and this could potentially put all earnings under the contract at risk.