UPDATE: DoD withdraws the unpublished Advanced Notice of Proposed Rulemaking

On November 5, 2021, an Editorial Note was added to the Federal Register stating “An agency letter requesting withdrawal of this document was received after placement on public inspection. The document will remain on public inspection through close of business November 4, 2021. A copy of the agency’s withdrawal letter is available for inspection at the Office of the Federal Register.”   The reason for the Department of Defense withdrawal of the unpublished Advanced Notice of Proposed Rulemaking was not provided.

On Thursday, November 4, 2021, the Department of Defense (DoD) filed an Advanced Notice of Proposed Rulemaking (ANPRM) on Version 2.0 of the Cybersecurity Maturity Model Certification (CMMC).  The notice will published in the Federal Register on November 5, 2021.  DoD also provided a release regarding the enhanced CMMC 2.0.  We have discussed previous versions of the CMMC in earlier blog posts, and the changes discussed in this ANPRM represent a significant departure from those versions.

DoD’s announcement explains “the way forward” for the latest version of the CMMC.  The previous version, CMMC Version 1.0, was designed to protect the defense industry from malicious cyber actors threatening the security of federal contract information and controlled unclassified information (CUI).  CMMC Version 1.0 measured cybersecurity maturity at one of five levels, and required compliance with both “practices” (i.e., technical controls) and “processes” (i.e., measures of implementation).  CMMC Version 1.0 also included third-party certification requirements to ensure that defense contractors adopted these mandatory processes and practices, including those sufficient to protect CUI at Level 3 and above.  DoD had previously taken the position that compliance with the CMMC model represented effective safeguarding measures to protect information crucial to the Department’s mission and priorities.

Although CMMC 2.0 will remain generally consistent with DoD’s previously stated information safeguarding priorities, the ANPRM indicates that DoD will conduct two rulemakings—one in title 32 CFR (National Defense) and the other in title 48 CFR (the Federal Acquisition Regulation and agency supplements, including the Defense Federal Acquisition Regulation Supplement)—to implement a series of changes in the CMMC framework.  DoD has suspended the CMMC piloting efforts that began in December 2020 and will not approve inclusion of a CMMC requirement in DoD solicitations until rulemakings relating to CMMC 2.0 are effective.

The new CMMC Version 2.0 will include several modifications relative to the prior version.  According to Jesse Salazar, Deputy Assistant Secretary of Defense for Industrial Policy, these modifications “establish[] a more collaborative relationship with industry,” and “will support businesses in adopting the practices they need to thwart cyber threats while minimizing barriers to compliance with DoD requirements.” Modifications include:

  • Elimination of Levels 2 and 4 of the prior model. DoD has previously only referred to Level 2 as a step-stone to Level 3 and has grouped Levels 4 and 5 together as means to protect particularly sensitive information that may be the subject of advanced persistent threats.  Elimination of these Levels leaves contractors with only three levels of compliance, depending on the sensitivity of the information and the nature of the work that they perform:  Level 1 (the minimum necessary to protect Federal Contract Information), Level 3 (the minimum necessary to protect CUI), and Level 5 (the minimum necessary to protect CUI that may be the target of advanced persistent threats).
  • Bifurcation of Level 3 requirements to require independent assessment only for “prioritized acquisitions” and self-assessments for other procurements, and allowing for self-assessments for all contracts at Level 1. These are particularly notable changes, as DoD had previously required third party assessment at all certification levels.  Given the limited number of authorized third party assessors to date, this change will likely allow DoD to be significantly less constrained by the availability of assessors as CMMC is rolled out.
  • Development of a time-bound, enforceable Plan of Action and Milestone process (“POA&M”) and development of a time-bound waiver process. These changes are also notable, as DoD previously indicated that a significant driver of its shift to the CMMC model was to move contractors away from reliance on POA&Ms and to require contractors to achieve full implementation of required security controls in order to perform work on DoD contracts involving sensitive information.  As DoD did not elaborate on exactly how reliance on POA&Ms and a potential waiver process would function, further development of regulations in this area are likely to be of keen interest to contractors.  But it seems clear that DoD will want insight into contractors’ progress against their POA&Ms.
  • Elimination of “CMMC-unique practices and all maturity processes from the CMMC Model.” Although it is unclear what DoD considers to be “CMMC-unique” practices, this change could signal a shift, at least at the Level 3 and Level 5 certification levels, to remove those controls that were incorporated into the prior version of the CMMC model that were not included in the 110 security controls in NIST SP 800-171 (Level 3), NIST SP 800-53 (Level 5), or NIST SP 800-172 (Enhanced Security Requirements for Protecting CUI).  Additionally, removal of the maturity processes requirement could significantly simplify the requirements to achieve certification, shifting the focus away from documentation and towards technical implementation of required controls.

Overall, the proposed changes are a notable simplification of the CMMC model relative to Version 1.0 and represent a model that is much closer to existing requirements that contractors must comply with.  Given the significance of the changes, and questions that remain unanswered about how CMMC Version 2.0 will operate in practice, DoD contractors should consider whether to participate in the rulemakings that will accompany CMMC 2.0.  DoD explained that it would solicit public comments in connection with its title 32 CFR rulemaking establishing the CMMC 2.0 program and the subsequent title 48 CFR rulemaking establishing contractual requirements consistent with the new model.

Photo of Susan B. Cassidy Susan B. Cassidy

Susan is co-chair of the firm’s Aerospace and Defense Industry Group and is a partner in the firm’s Government Contracts and Cybersecurity Practice Groups. She previously served as in-house counsel for two major defense contractors and advises a broad range of government contractors…

Susan is co-chair of the firm’s Aerospace and Defense Industry Group and is a partner in the firm’s Government Contracts and Cybersecurity Practice Groups. She previously served as in-house counsel for two major defense contractors and advises a broad range of government contractors on compliance with FAR and DFARS requirements, with a special expertise in supply chain, cybersecurity and FedRAMP requirements. She has an active investigations practice and advises contractors when faced with cyber incidents involving government information, as well as representing contractors facing allegations of cyber fraud under the False Claims Act. Susan relies on her expertise and experience with the Defense Department and the Intelligence Community to help her clients navigate the complex regulatory intersection of cybersecurity, national security, and government contracts. She is Chambers rated in both Government Contracts and Government Contracts Cybersecurity. In 2023, Chambers USA quoted sources stating that “Susan’s in-house experience coupled with her deep understanding of the regulatory requirements is the perfect balance to navigate legal and commercial matters.”

Her clients range from new entrants into the federal procurement market to well established defense contractors and she provides compliance advices across a broad spectrum of procurement issues. Susan consistently remains at the forefront of legislative and regulatory changes in the procurement area, and in 2018, the National Law Review selected her as a “Go-to Thought Leader” on the topic of Cybersecurity for Government Contractors.

In her work with global, national, and start-up contractors, Susan advises companies on all aspects of government supply chain issues including:

  • Government cybersecurity requirements, including the Cybersecurity Maturity Model Certification (CMMC), DFARS 7012, and NIST SP 800-171 requirements,
  • Evolving sourcing issues such as Section 889, counterfeit part requirements, Section 5949 and limitations on sourcing from China
  • Federal Acquisition Security Council (FASC) regulations and product exclusions,
  • Controlled unclassified information (CUI) obligations, and
  • M&A government cybersecurity due diligence.

Susan has an active internal investigations practice that assists clients when allegations of non-compliance arise with procurement requirements, such as in the following areas:

  • Procurement fraud and FAR mandatory disclosure requirements,
  • Cyber incidents and data spills involving sensitive government information,
  • Allegations of violations of national security requirements, and
  • Compliance with MIL-SPEC requirements, the Qualified Products List, and other sourcing obligations.

In addition to her counseling and investigatory practice, Susan has considerable litigation experience and has represented clients in bid protests, prime-subcontractor disputes, Administrative Procedure Act cases, and product liability litigation before federal courts, state courts, and administrative agencies.

Susan is a former Public Contract Law Procurement Division Co-Chair, former Co-Chair and current Vice-Chair of the ABA PCL Cybersecurity, Privacy and Emerging Technology Committee.

Prior to joining Covington, Susan served as in-house senior counsel at Northrop Grumman Corporation and Motorola Incorporated.

Photo of Robert Huffman Robert Huffman

Bob Huffman counsels government contractors on emerging technology issues, including artificial intelligence (AI), cybersecurity, and software supply chain security, that are currently affecting federal and state procurement. His areas of expertise include the Department of Defense (DOD) and other agency acquisition regulations governing…

Bob Huffman counsels government contractors on emerging technology issues, including artificial intelligence (AI), cybersecurity, and software supply chain security, that are currently affecting federal and state procurement. His areas of expertise include the Department of Defense (DOD) and other agency acquisition regulations governing information security and the reporting of cyber incidents, the Cybersecurity Maturity Model Certification (CMMC) program, the requirements for secure software development self-attestations and bills of materials (SBOMs) emanating from the May 2021 Executive Order on Cybersecurity, and the various requirements for responsible AI procurement, safety, and testing currently being implemented under the October 2023 AI Executive Order. 

Bob also represents contractors in False Claims Act (FCA) litigation and investigations involving cybersecurity and other technology compliance issues, as well more traditional government contracting costs, quality, and regulatory compliance issues. These investigations include significant parallel civil/criminal proceedings growing out of the Department of Justice’s Cyber Fraud Initiative. They also include investigations resulting from False Claims Act qui tam lawsuits and other enforcement proceedings. Bob has represented clients in over a dozen FCA qui tam suits.

Bob also regularly counsels clients on government contracting supply chain compliance issues, including those arising under the Buy American Act/Trade Agreements Act and Section 889 of the FY2019 National Defense Authorization Act. In addition, Bob advises government contractors on rules relating to IP, including government patent rights, technical data rights, rights in computer software, and the rules applicable to IP in the acquisition of commercial products, services, and software. He focuses this aspect of his practice on the overlap of these traditional government contracts IP rules with the IP issues associated with the acquisition of AI services and the data needed to train the large learning models on which those services are based. 

Bob is ranked by Chambers USA for his work in government contracts and he writes extensively in the areas of procurement-related AI, cybersecurity, software security, and supply chain regulation. He also teaches a course at Georgetown Law School that focuses on the technology, supply chain, and national security issues associated with energy and climate change.

Photo of Ryan Burnette Ryan Burnette

Ryan Burnette is a government contracts and technology-focused lawyer that advises on federal contracting compliance requirements and on government and internal investigations that stem from these obligations. Ryan has particular experience with defense and intelligence contracting, as well as with cybersecurity, supply chain…

Ryan Burnette is a government contracts and technology-focused lawyer that advises on federal contracting compliance requirements and on government and internal investigations that stem from these obligations. Ryan has particular experience with defense and intelligence contracting, as well as with cybersecurity, supply chain, artificial intelligence, and software development requirements.

Ryan also advises on Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) compliance, public policy matters, agency disputes, and government cost accounting, drawing on his prior experience in providing overall direction for the federal contracting system to offer insight on the practical implications of regulations. He has assisted industry clients with the resolution of complex civil and criminal investigations by the Department of Justice, and he regularly speaks and writes on government contracts, cybersecurity, national security, and emerging technology topics.

Ryan is especially experienced with:

  • Government cybersecurity standards, including the Federal Risk and Authorization Management Program (FedRAMP); DFARS 252.204-7012, DFARS 252.204-7020, and other agency cybersecurity requirements; National Institute of Standards and Technology (NIST) publications, such as NIST SP 800-171; and the Cybersecurity Maturity Model Certification (CMMC) program.
  • Software and artificial intelligence (AI) requirements, including federal secure software development frameworks and software security attestations; software bill of materials requirements; and current and forthcoming AI data disclosure, validation, and configuration requirements, including unique requirements that are applicable to the use of large language models (LLMs) and dual use foundation models.
  • Supply chain requirements, including Section 889 of the FY19 National Defense Authorization Act; restrictions on covered semiconductors and printed circuit boards; Information and Communications Technology and Services (ICTS) restrictions; and federal exclusionary authorities, such as matters relating to the Federal Acquisition Security Council (FASC).
  • Information handling, marking, and dissemination requirements, including those relating to Covered Defense Information (CDI) and Controlled Unclassified Information (CUI).
  • Federal Cost Accounting Standards and FAR Part 31 allocation and reimbursement requirements.

Prior to joining Covington, Ryan served in the Office of Federal Procurement Policy in the Executive Office of the President, where he focused on the development and implementation of government-wide contracting regulations and administrative actions affecting more than $400 billion dollars’ worth of goods and services each year.  While in government, Ryan helped develop several contracting-related Executive Orders, and worked with White House and agency officials on regulatory and policy matters affecting contractor disclosure and agency responsibility determinations, labor and employment issues, IT contracting, commercial item acquisitions, performance contracting, schedule contracting and interagency acquisitions, competition requirements, and suspension and debarment, among others.  Additionally, Ryan was selected to serve on a core team that led reform of security processes affecting federal background investigations for cleared federal employees and contractors in the wake of significant issues affecting the program.  These efforts resulted in the establishment of a semi-autonomous U.S. Government agency to conduct and manage background investigations.

Photo of Darby Rourick Darby Rourick

Darby Rourick advises defense and civilian contractors on a range of issues related to government contracting and has particular experience in federal cybersecurity and information technology supply chain issues. She has an active investigations practice and has experience representing clients in internal and…

Darby Rourick advises defense and civilian contractors on a range of issues related to government contracting and has particular experience in federal cybersecurity and information technology supply chain issues. She has an active investigations practice and has experience representing clients in internal and government investigations, including conducting witness interviews and managing government subpoena and CID responses. She also counsels clients on cybersecurity incident response; compliance with federal cybersecurity laws, regulations, and standards; supplier and subcontractor security issues; and cybersecurity related investigations.