Government contractors selling to the US Department of Defense (DoD) bidding on future contracts must determine whether they or any subcontractors anticipate using cloud computing services and,  if so, must take steps to ensure the security and confidentiality of government information, according to an interim rule issued by DoD August 26, 2015.

Overview of the Interim Rule

DoD issued the interim rule to implement previously issued guidance and policy for the acquisition of cloud computing services.  The rule, which largely implements prior DoD guidance, provides standard contract language for the acquisition of cloud computing services, including access, security and reporting requirements.

The interim rule also stipulates that cloud services can only be provided by a cloud service provider (contractor or subcontractor, regardless of tier) that has been granted provisional authorization by Defense Information Systems Agency, at the level appropriate to the requirement, to provide the relevant cloud computing services.

Lastly, the interim rule mandates that cloud computing service providers are required to maintain within the 50 states, the District of Columbia, or outlying areas of the United States, all government data that is not physically located on DoD premises, unless specifically otherwise authorized.

Details of the Interim Rule

The interim rule largely implements the policies and procedures set forth under both:

  • Cloud Computing Security Requirements Guide (SRG) Version 1, Release 1 , issued on January 13, 2015, for cloud service providers to comply with when providing the DoD with cloud services (see http://iase.disa.mil/cloud_security/Pages/index.aspx  –  note  that both a draft of Release 2, issued July 24, 2015, and supplemental guidance issued August 7, 2015 and August 27, 2015, are also available at this link).
  • The DoD Chief Information Officer’s memo of December 15, 2014, titled “Updated Guidance on the Acquisition and Use of Commercial Cloud Computing Services.” (See http://iase.disa.mil/ cloud_security/Pages/docs.aspx).

As part of the implementation, the interim rule provides definitions for a number of key terms critical to understanding and complying with its requirements:

  • Cloud computing: a service model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This includes other commercial terms, such as on- demand self-service, broad network access, resource pooling,  rapid elasticity, and measured service. It also includes commercial offerings for software-as-a-service, infrastructure-as-a-service, and platform-as-a-service.
  • Government data: extremely broadly defined to include any information, document, media, or machine readable material regardless of physical form or characteristics, that is created or obtained by the government in the course of official government business.
  • Government-related data: also broadly defined to include any information, document, media, or machine readable material regardless of physical form or characteristics that is created or obtained by a contractor through the storage, processing,  or communication of government data. This does not include a contractor’s business records (e.g., financial records, legal records, etc.) or data such as operating procedures, software coding, or algorithms that are not uniquely applied to the government data.
  • Spillage: a security incident that results in the transfer of classified or controlled unclassified information onto an information system not accredited (i.e., authorized) for the appropriate security level.
  • Authorizing official: the senior federal official or executive with the authority to formally assume responsibility for operating an information system at an acceptable level of risk to organizational operations (including mission, functions, image, or reputation), organizational assets, individuals, other organizations, and the nation (this is as described in DoD Instruction 8510.01, “Risk Management Framework (RMF) for DoD Information Technology (IT),” a copy of which is available at https://rmf.org/index.php/ what-is-rmf/65-rmf-dod.html).

Specific Requirements of the Interim Rule

Changes to the Defense Acquisition Regulations System (DFARS) as a result of this interim rule include:

  • A new provision in DFARS 252.239–7009: Representation of Use  of Cloud Computing is added, requiring contractors responding to any solicitation must indicate whether or not they anticipate cloud computing services will be used in the performance of the contract or any subcontract. If the anticipated usage of cloud services is  not indicated by a contractor but the contractor subsequently desires to utilize cloud services, then the contractor is required to obtain approval from the contracting officer prior to utilizing cloud computing services in performance of the contract.
  • New DFARS 252.239-7010 requires that if cloud services are used, then the contractor must implement and maintain administrative, technical, and physical safeguards and controls with the security level and services required in accordance with the Cloud Computing SRG (version in effect at the time the solicitation is issued or as authorized by the contracting officer found at http:// iase.disa.mil/cloud_security/Pages/index.aspx).
  • DFARS 252.239.7010 also requires that all government data that is not physically located on DoD premises must be maintained within the United States or outlying areas, unless the contractor receives written notification from the contracting officer to use another location.
  • Under the interim rule, limitations are imposed on access to, use and disclosure of, government data and government-related data maintained via cloud services.  These include requirements to (i) limit access, use, or disclosure of government data strictly to purposes specified in the applicable contract, task order or delivery order, (ii) ensure that contractor employees are subject to all such access, use, and disclosure prohibitions and obligations, and use government-related data only to manage the operational environment that supports the government data, and not for any other purpose. No exceptions to the foregoing are permitted  unless specifically authorized. These obligations extend beyond the expiration or termination of the applicable contract.
  • Contractors are mandated to report all cyber incidents related to the cloud computing services to the DoD via http://dibnet.dod.mil/. Contractors using cloud services are also subjected to newly issued companion interim cyber incident reporting rules that apply to both cloud computing as well as other information systems cyber incidents.
  • DFARS 252.239.710(l) mandates that contractors are required to flow-down the cloud service requirements to all subcontractors if the contract involves or may involve cloud services, including subcontracts for commercial items.

Actions Government Contractors Must Undertake in Order to Comply

  • When bidding on future government contracts, whether as a primary contractor or subcontractor, determine if the use of cloud services is anticipated and ensure that the correct representation is made in any response to a solicitation.
  • If a contractor will use or provide cloud services that it owns and operates rather than use a subcontractor, then the contractor should seek to become established with provisional authorization and secure listing at http://www.disa.mil/ Computing/Cloud-Services/Cloud-Support. If a contractor desires to use a subcontractor to provide cloud services, then ensure that the subcontractor has provisional authorization and is listed at that site.
  • Include the mandated contract clause in all future subcontracts where cloud services may be used.
  • Ensure that the physical storage location of cloud services is within the United States or outlying areas of the United States.
  • Ensure that employees, as well as employees of subcontractors, are aware of and bound by appropriate confidentiality  obligations.
  • Establish appropriate verification systems and processes to ensure that subcontractors have implemented similar compliance procedures.