After years of gestation, a final rule was promulgated May 16, 2016 to mandate minimum cyber defenses for companies that do government business. This Federal Acquisition Regulations rule – “Basic Safeguarding of Contractor Information Systems” 81 Fed. Reg. 30439 – seeks to protect the confidentiality and integrity of federal contract information (FCI) that resides in or transits through any contractor information system.
Why this rule?
Agencies are required by the Federal Information Security Modernization Act (FISMA) to protect federal information. The obligation extends to nonpublic information provided by the federal government to its contractors. Unauthorized cyber extraction of federal information has caused genuine injury to national interests. Using this new FAR provision, every federal agency now will require minimum cyber protection for FCI.
What is federal contract information?
FCI is defined as nonpublic information that is “provided for or generated for the government” under a contract to “develop or deliver a product or service to the government, but not including information provided to the public or simple transactional information. The new rule protects “information systems” rather than carefully defined information types, however. If a contractor processes stores or transmits any FCI, its information system becomes subject to minimum enumerated safeguards. Where a contractor information system hosts FCI and other, non-federal information, the rule applies to the whole system.