To kick off the New Year, Sheppard Mullin’s Governmental Practice Cybersecurity & Data Protection Team has prepared a cybersecurity-focused 2023 Recap (including links to all of the resources the team has put out over the past year) and 2024 Forecast (that previews what we expect to see in 2024). This Recap & Forecast covers the following five high-interest topic areas related to cybersecurity and data protection:Continue Reading Governmental Practice Cybersecurity and Data Protection, 2023 Recap & 2024 Forecast Alert

On December 12, 2023, the Department of Justice (“DOJ”) issued guidance related to the process by which companies may request the United States Attorney General authorize delays of cyber incident disclosures, pursuant to a new Securities and Exchange Commission (“SEC”) rule. As a reminder, the SEC rule (which went into effect on Dec. 18, 2023) requires companies to disclose material cyber incidents via Form 8-K within four days of making a materiality determination. Our colleagues previously discussed the SEC rule and its new cyber reporting requirements here.Continue Reading For Limited Use Only: Guidance on National Security Delay Determinations under the SEC Cyber Reporting Rule

On November 30, 2023, the Inspector General of the Department of Defense (“DoD IG”) released a Special Report: Common Cybersecurity Weaknesses Related to the Protection of DoD Controlled Unclassified Information on Contractor Networks (the “Report”). Between 2018 and 2023, the DoD IG reports it conducted five audits related to DoD contractors’ protection of Controlled Unclassified Information (“CUI”), in accordance with the cybersecurity requirements in National Institute of Standards and Technology (“NIST”) Special Publication (“SP”) 800-171. Additionally, the Report states that since 2022, the DoD IG has provided support/assessments for five investigations under the Department of Justice’s (“DOJ”) Civil Cyber Fraud Initiative (“CCFI”).[1] Continue Reading DoD IG Report Provides Insight Into Common Missteps When Protecting CUI

Well, the wait is over. Just as 2023 came to a close, on December 26, 2023, the Department of Defense (“DoD”) published the much-anticipated Proposed Rule for the DoD’s Cybersecurity Maturity Model Certification (“CMMC”) program (the “Proposed Rule”). It has been just over two years since “CMMC 2.0” was announced in November 2021 (which we previously discussed here). And while there is nothing particularly surprising in the Proposed Rule, there certainly are several notable additions and clarifications. Below we outline the key portions of the Proposed Rule that will be of particular importance to defense contractors.Continue Reading New Year, New Rules: The CMMC Proposed Rule is Here

The Cybersecurity and Infrastructure Security Agency (“CISA”) recently revised its Secure Software Development Attestation Common Form (after receiving over 110 comments on the initial draft), and is seeking additional comments through December 18, 2023. This is an important opportunity for software producers (and others) to provide input that will help shape the future of software supply chain regulations. At a time when the federal government is struggling to harmonize myriad rules on cybersecurity and supply chain, recommendations from industry will be key.Continue Reading Update: CISA Seeks Additional Input from Software Providers on Security Attestation Form

On October 5, 2023, the FAR Council released an Interim Rule on “Implementation of Federal Acquisition Supply Chain Security Act (FASCSA) Orders.” The Interim Rule implements requirements from Section 202 of the Federal Acquisition Supply Chain Security Act of 2018 (“FASCSA”), which will require contractors to ensure certain products and services are excluded from the U.S. Government supply chain as directed by the Federal Acquisition Security Council (“FASC”). The Interim Rule becomes effective 60 days after publication, requiring new FAR clauses to be incorporated into all solicitations and contracts (including orders and modifications) issued after December 4, 2023.Continue Reading Interim Rule Effective in December Establishes Requirements for Contractors to Remove Identified Products and Services from the U.S. Government Supply Chain

On October 3, 2023, the FAR Council released two long-awaited proposed rules for federal contractor cybersecurity stemming from the Biden Administration’s Cybersecurity Executive Order from May 2021 (Executive Order 14028). The proposed rules relate to Cyber Threat and Incident Reporting and Information Sharing (FAR Case 2021-017) and Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems (FAR Case 2021-019). The comment period for both rules is currently open and is scheduled to close on December 4, 2023.Continue Reading Two New Cybersecurity Proposed Rules Mean Big Changes for Federal Contractors

In recent weeks, there has been an uptick in news of cyber-related False Claims Act (“FCA”) activity. For example, on September 1, 2023, the court unsealed a qui tam lawsuit against Penn State University relating to allegations of non-compliance with Department of Defense (“DoD”) cybersecurity obligations. Separately, on September 5, 2023, the Department of Justice (“DOJ”) announced a multi-million dollar FCA settlement with Verizon under its Civil-Cyber Fraud Initiative (which focuses on leveraging the FCA to pursue cybersecurity related fraud by government contractors and grant recipients, as we previously discussed here). These and other cases suggest—as many had been speculating—that the number of enforcement actions and publicity associated with previously-sealed qui tam cases will continue to increase. They also signal that contractors and universities should brace for additional scrutiny and potential whistleblower claims in this area.Continue Reading Recent Cyber-Related False Claims Act Activity Signals Contractors and Universities Should Examine Their Cybersecurity Practices and Brace for an Uptick in Enforcement

On July 18, 2023, the Biden Administration announced the launch of the long-awaited cybersecurity labeling program, called the “U.S. Cyber Trust Mark,” aimed at providing consumers with a better understanding of the cybersecurity of the products they use daily. This labeling program seeks to enhance transparency and competition in the Internet of Things (“IoT”) device space, to “help differentiate trustworthy products in the marketplace,” and to incentivize manufacturers to meet higher cybersecurity standards.Continue Reading Cybersecurity Labeling is (Almost) Here! Biden Administration Announces the U.S. Cyber Trust Mark Program

On June 9, 2023, OMB released additional guidance on the implementation of OMB Memorandum M-22-18, Enhancing the Security of the Software Supply Chain through Secure Software Development Practice, which requires that federal agencies only use third-party software that is provided by software producers that attest compliance with the secure software development guidance issued by the National Institute of Standards and Technology (NIST). Agencies must obtain a self-attestation from the software producer before using any software that “affects” government information or will be used on government information systems. The requirements are discussed in more detail here.Continue Reading White House Provides New Guidance & Extends Deadline for Secure Software Attestations

The National Institute of Standards and Technology (NIST) has released an initial public draft of NIST SP 800-171, Revision 3, Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations. Compliance with the security controls in NIST SP 800-171 is required for Department of Defense contractors and is expected to be incorporated into a new Federal Acquisition Regulation (FAR) clause and required for all federal contractors that process, store, or transmit Controlled Unclassified Information (CUI). Continue Reading NIST Releases Initial Public Draft of NIST SP 800-171, Revision 3 for Protection of Sensitive Government Information