If your company handles Controlled Unclassified Information (CUI) for defense contracts, you’ve likely encountered DFARS and its key cybersecurity clauses: 7012, 7019, 7020, and 7021. But what exactly is DFARS, why is compliance crucial, and how can your business ensure it meets the requirements?

This guide provides a high-level overview of DFARS compliance, including its purpose, global impact, and essential steps to achieving compliance.

What Does DFARS Stand For?

The Defense Federal Acquisition Regulation Supplement (DFARS) is an extension of the Federal Acquisition Regulation (FAR) that adds specific regulations for the Department of Defense (DoD). DFARS governs how the DoD acquires goods and services and includes cybersecurity requirements to protect sensitive defense information.

Companies contracting with the DoD must comply with DFARS cybersecurity clauses to safeguard CUI and prevent cyber threats.

Understanding DFARS Compliance

DFARS includes critical cybersecurity clauses that impact how defense contractors handle CUI. These clauses establish a cybersecurity framework to protect sensitive data and maintain the integrity of the defense supply chain.

Key DFARS Cybersecurity Clauses

  • DFARS 7012 – Requires compliance with NIST SP 800-171, mandates cyber incident reporting, and enforces FedRAMP Moderate (or equivalent) security for cloud-stored CUI.
  • DFARS 7019 – Requires contractors to conduct and report a self-assessment of their NIST 800-171 compliance through the Supplier Performance Risk System (SPRS).
  • DFARS 7020 – Allows the DoD to conduct audits on contractor systems and mandates that these requirements flow down to subcontractors.
  • DFARS 7021 – Establishes the Cybersecurity Maturity Model Certification (CMMC), requiring contractors to obtain third-party certification of their cybersecurity practices.

DFARS Compliant Countries

While DFARS primarily applies to U.S.-based contractors, its reach extends to international companies involved in the DoD supply chain. This includes organizations operating in countries with defense agreements or partnerships with the U.S.

Key Countries Subjected to DFARS Compliance

  • United States: As the primary enforcer of DFARS, all U.S. defense contractors and subcontractors must comply.
  • NATO Member Countries: Companies in NATO countries involved in U.S. defense contracts must adhere to DFARS requirements.
  • Five Eyes Alliance Members: This includes the U.S., Canada, the U.K., Australia, and New Zealand, which share intelligence and defense collaboration.
  • Other Allied Nations: Countries with defense trade agreements with the U.S., such as Japan and South Korea, are also subject to DFARS if involved in DoD contracts.

Why International Compliance Matters

Even if your business is not based in the U.S., you could be required to meet DFARS standards if you provide products, services, or technology related to DoD contracts. Non-compliance could result in contract termination, financial penalties, or damage to business reputation.

The Importance of Being DFARS Compliant

Compliance with DFARS’ cybersecurity clauses is not just a requirement for protecting your CUI—it’s a strategic necessity for businesses involved in defense contracting. Here’s why it’s so important to achieve DFARS compliance:

  • Protecting Sensitive Data – Compliance prevents cyber espionage and unauthorized access to CUI.
  • Securing DoD Contracts – Compliance is required to win and retain defense contracts.
  • Strengthening Cybersecurity – DFARS enhances protection against cyber threats like phishing and ransomware.
  • Building Business Credibility – Demonstrating compliance improves trust with defense clients and partners.
  • Avoiding Legal & Financial Penalties – Non-compliance can lead to contract loss, fines, and legal consequences.

Achieving DFARS Compliance

To align with DFARS cybersecurity clauses, contractors must:

  • Implement security controls to protect CUI (DFARS 7012).
  • Assess NIST 800-171 compliance and submit SPRS scores (DFARS 7019).
  • Prepare for DoD audits and ensure subcontractor compliance (DFARS 7020).
  • Obtain CMMC certification (DFARS 7021).

Staying proactive with continuous monitoring, training, and security enhancements ensures long-term compliance.

Conclusion

DFARS compliance is essential for protecting CUI, securing DoD contracts, and maintaining cybersecurity resilience. By understanding its requirements and implementing the necessary controls, your business can confidently navigate DoD cybersecurity regulations.

At Preveil, we specialize in advanced email encryption solutions that align with DFARS requirements, safeguarding your communications and ensuring data security. Contact us today to learn how we can support your compliance journey.

Ready to Become DFARS Compliant?

Contact us today for a free consultation on DFARS compliance and to discover our secure email encryption solutions designed for defense contractors.