This is the thirtieth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various government agencies to implement the Cyber EO from June 2021 through September 2023.  This blog describes key actions taken to implement the Cyber EO, as well as the U.S. National Cybersecurity Strategy, during October 2023. 

Biden Administration Announces Artificial Intelligence (“AI”) Executive Order

On October 30, 2023, the Biden Administration issued its new Executive Order on Artificial Intelligence, setting out a comprehensive strategy to support the development of safe and secure AI.  According to the Administration’s Fact Sheet, the Executive Order establishes new AI safety and security standards, protects privacy, advances equity and civil rights, protects workers, consumers, and patients, promotes innovation and competition, and advances American leadership.  For example, as relevant to government contractors and critical infrastructure, the AI Executive Order:

·        Sharing Results – Will “require that companies developing any foundation model that poses a serious risk to national security, national economic security, or national public health and safety must notify the federal government when training the model, and must share the results of all red-team safety tests[,]” in accordance with the Defense Production Act.

·        AI Standards – Directs the U.S. National Institute of Standards and Technology (“NIST”) to “set the rigorous standards for extensive red-team testing to ensure safety before public release[,]” which will be applied to critical infrastructure sectors by the U.S. Department of Homeland Security (“DHS”). 

The AI Executive Order follows the administration’s earlier Blueprint for an AI Bill of Rights, which was published in September 2022, as well as other developments in the administration’s cybersecurity efforts more broadly, such as the Cyber EO and U.S. National Cybersecurity Strategy.  A more detailed discussion of the AI Executive Order is available in our prior post.

The U.S. Office of Management and Budget (“OMB”) Releases Implementation Guidance Following President Biden’s AI Executive Order

On November 1, 2023, OMB released draft guidance on Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence.  (While we know that November 1st is not part of October, we decided to include this update as part of this post to accompany the reporting on the AI Executive Order.)  The draft guidance would implement many of the provisions of the AI Executive Order.  For example, the draft guidance would direct federal agencies to: ·         “Designate Chief AI Officers, who would have the responsibility to advise agency leadership on AI[;]”

·        “Remove unnecessary barriers to the responsible use of AI, including those related to insufficient information technology infrastructure[;]” and

·         “Provide recommendations for managing risk in federal procurement of AI[,]” among other actions.

OMB is accepting public comments on the draft guidance until December 5, 2023. 

Federal Acquisition Regulation (“FAR”) Council Releases New Proposed Cybersecurity Rules

On October 3, 2023, the FAR Council released two new proposed cybersecurity rules on (1) Cyber Threat and Incident Reporting and Information Sharing and (2) Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems.  Both of these proposed rules arise under the Cyber EO.

The proposed cyber threat and incident reporting rule implements recommendations made by OMB and CISA concerning the cybersecurity incident reporting obligations of federal contractors.  Specifically, the cyber threat and incident reporting rule amends provisions of several existing FAR Subparts and introduces new FAR clauses for contracting officers to incorporate into future solicitations and contract actions.  The proposed rule also adds new FAR definitions and expands others.  For example, the proposed rule broadly expands the definition of “Information and Communications Technology (ICT)” by specifying that operational technology, such as industrial control systems, building management systems and physical access control mechanisms, are covered by the rule.  A more detailed discussion of the Cyber Threat and Incident Reporting and Information Sharing proposed rule is available here.  The second proposed rule, Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems, will be the subject of a forthcoming post. 

 

Photo of Robert Huffman Robert Huffman

Bob Huffman represents defense, health care, and other companies in contract matters and in disputes with the federal government and other contractors. He focuses his practice on False Claims Act qui tam investigations and litigation, cybersecurity and supply chain security counseling and compliance…

Bob Huffman represents defense, health care, and other companies in contract matters and in disputes with the federal government and other contractors. He focuses his practice on False Claims Act qui tam investigations and litigation, cybersecurity and supply chain security counseling and compliance, contract claims and disputes, and intellectual property (IP) matters related to U.S. government contracts.

Bob has leading expertise advising companies that are defending against investigations, prosecutions, and civil suits alleging procurement fraud and false claims. He has represented clients in more than a dozen False Claims Act qui tam suits. He also represents clients in connection with parallel criminal proceedings and suspension and debarment.

Bob also regularly counsels clients on government contracting supply chain compliance issues, including cybersecurity, the Buy American Act/Trade Agreements Act (BAA/TAA), and counterfeit parts requirements. He also has extensive experience litigating contract and related issues before the Court of Federal Claims, the Armed Services Board of Contract Appeals, federal district courts, the Federal Circuit, and other federal appellate courts.

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 items and services. He handles IP matters involving government contracts, grants, Cooperative Research and Development Agreements (CRADAs), and Other Transaction Agreements (OTAs).

Photo of Susan B. Cassidy Susan B. Cassidy

Ms. Cassidy represents clients in the defense, intelligence, and information technologies sectors.  She works with clients to navigate the complex rules and regulations that govern federal procurement and her practice includes both counseling and litigation components.  Ms. Cassidy conducts internal investigations for government…

Ms. Cassidy represents clients in the defense, intelligence, and information technologies sectors.  She works with clients to navigate the complex rules and regulations that govern federal procurement and her practice includes both counseling and litigation components.  Ms. Cassidy conducts internal investigations for government contractors and represents her clients before the Defense Contract Audit Agency (DCAA), Inspectors General (IG), and the Department of Justice with regard to those investigations.  From 2008 to 2012, Ms. Cassidy served as in-house counsel at Northrop Grumman Corporation, one of the world’s largest defense contractors, supporting both defense and intelligence programs. Previously, Ms. Cassidy held an in-house position with Motorola Inc., leading a team of lawyers supporting sales of commercial communications products and services to US government defense and civilian agencies. Prior to going in-house, Ms. Cassidy was a litigation and government contracts partner in an international law firm headquartered in Washington, DC.

Photo of Ashden Fein Ashden Fein

Ashden Fein advises clients on cybersecurity and national security matters, including crisis management and incident response, risk management and governance, government and internal investigations, and regulatory compliance.

For cybersecurity matters, Mr. Fein counsels clients on preparing for and responding to cyber-based attacks, assessing…

Ashden Fein advises clients on cybersecurity and national security matters, including crisis management and incident response, risk management and governance, government and internal investigations, and regulatory compliance.

For cybersecurity matters, Mr. Fein counsels clients on preparing for and responding to cyber-based attacks, assessing security controls and practices for the protection of data and systems, developing and implementing cybersecurity risk management and governance programs, and complying with federal and state regulatory requirements. Mr. Fein frequently supports clients as the lead investigator and crisis manager for global cyber and data security incidents, including data breaches involving personal data, advanced persistent threats targeting intellectual property across industries, state-sponsored theft of sensitive U.S. government information, and destructive attacks.

Additionally, Mr. Fein assists clients from across industries with leading internal investigations and responding to government inquiries related to the U.S. national security. He also advises aerospace, defense, and intelligence contractors on security compliance under U.S. national security laws and regulations including, among others, the National Industrial Security Program (NISPOM), U.S. government cybersecurity regulations, and requirements related to supply chain security.

Before joining Covington, Mr. Fein served on active duty in the U.S. Army as a Military Intelligence officer and prosecutor specializing in cybercrime and national security investigations and prosecutions — to include serving as the lead trial lawyer in the prosecution of Private Chelsea (Bradley) Manning for the unlawful disclosure of classified information to Wikileaks.

Mr. Fein currently serves as a Judge Advocate in the U.S. Army Reserve.

Photo of Michael Wagner Michael Wagner

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Combining deep regulatory knowledge with extensive investigations experience, Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government…

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Combining deep regulatory knowledge with extensive investigations experience, Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government investigations, including False Claims Act cases. He has particular expertise representing individuals and companies in suspension and debarment proceedings, and he has successfully resolved numerous such matters at both the agency and district court level. He also routinely conducts internal investigations of potential compliance issues and advises clients on voluntary and mandatory disclosures to federal agencies.

In his contract disputes and advisory work, Mr. Wagner helps government contractors resolve complex issues arising at all stages of the public procurement process. As lead counsel, he has successfully litigated disputes at the Armed Services Board of Contract Appeals, and he regularly assists contractors in preparing and pursuing contract claims. In his counseling practice, Mr. Wagner advises clients on best practices for managing a host of compliance obligations, including domestic sourcing requirements under the Buy American Act and Trade Agreements Act, safeguarding and reporting requirements under cybersecurity regulations, and pricing obligations under the GSA Schedules program. And he routinely assists contractors in navigating issues and disputes that arise during negotiations over teaming agreements and subcontracts.

Photo of Ryan Burnette Ryan Burnette

Ryan Burnette advises defense and civilian contractors on federal contracting compliance and on civil and internal investigations that stem from these obligations. Ryan has particular experience with clients that hold defense and intelligence community contracts and subcontracts, and has recognized expertise in national…

Ryan Burnette advises defense and civilian contractors on federal contracting compliance and on civil and internal investigations that stem from these obligations. Ryan has particular experience with clients that hold defense and intelligence community contracts and subcontracts, and has recognized expertise in national security related matters, including those matters that relate to federal cybersecurity and federal supply chain security. Ryan also advises on government cost accounting, FAR and DFARS compliance, public policy matters, and agency disputes. He speaks and writes regularly on government contracts and cybersecurity topics, drawing significantly on his prior experience in government to provide insight on the practical implications of regulations.

Photo of Matthew Harden Matthew Harden

Matthew Harden is a litigation associate in the firm’s New York office and advises on a broad range of cybersecurity, data privacy, and national security matters, including cybersecurity incident response, cybersecurity and privacy compliance obligations, internal investigations, and regulatory inquiries.