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Navigating DFARS 252.204-7012: A Comprehensive Guide for Manufacturers

Updated: Oct 25, 2023

Manufacturers working with the Department of Defense (DoD) or serving as subcontractors under a prime contractor often encounter the Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.204-7012. Whether it comes down from a prime contractor or directly from the DoD, this clause has critical cybersecurity implications. This article aims to guide manufacturers through the maze of DFARS 252.204-7012, enabling them to meet its requirements efficiently.

What is DFARS 252.204-7012?

DFARS 252.204-7012 specifies that manufacturers who process, store, or transmit Controlled Unclassified Information (CUI) must adhere to certain cybersecurity measures. These measures are built upon the National Institute of Standards and Technology (NIST) Special Publication 800-171, providing a roadmap for safeguarding sensitive data.

Importance for Manufacturers:

Manufacturers, whether large or small, that fail to comply risk the potential loss of federal contracts. The onus is on the manufacturer to ensure that not only they but also any subcontractors, meet these cybersecurity requirements.

Key Elements of the Clause:

1. Cybersecurity Standards: The clause demands compliance with NIST SP 800-171, which sets forth best practices and security controls for handling CUI. This is a significant requirement, as NIST SP 800-171 requires implementing, and documenting over 100 individual security controls.

2. Incident Reporting: Manufacturers are required to report cybersecurity incidents to the DoD within 72 hours of detection. Importantly, this means that they require the means, expertise, and a plan to not only detect an incident, but to contain a report it.

3. Flow-Down Provision: Whether you're a prime contractor or a subcontractor, the obligations of this clause extend down the contractual chain. This means that if you are the subcontractor, it applies to you. It also means that if you share CUI with your subcontractors, you MUST include language in your contract requiring they follow the guidelines as well.

Compliance Steps for Manufacturers:

1. Gap Assessment: Conduct a thorough assessment to identify gaps between your current practices and the NIST SP 800-171 standards.

2. Implementation Plan: Develop and execute a comprehensive plan to address those gaps.

3. Continuous Monitoring: Keep a vigilant eye on your systems for any security incidents and adhere to the 72-hour reporting requirement.

Expert Guidance:

Understanding and implementing the requirements of DFARS 252.204-7012 is a complex task, and not one that should be taken lightly. Violations of DFARS clauses, whether negligently or intentionally, can result in steep fines and loss of contracts. Consulting with experts who have years of experience in this specialized field can make the compliance journey more manageable, saving valuable time and money in the long run.


DFARS 252.204-7012 is not just another clause in your DoD contract; it's a requirement that holds significant weight in maintaining a secure and trustworthy supply chain. Whether the clause flows down from a prime contractor or comes directly from the DoD, compliance is non-negotiable for manufacturers.

Navigating DFARS 252.204-7012 is an intricate task that requires specialized knowledge. If you’re looking for assistance in ensuring compliance, or even wondering if this clause applies to your role in the supply chain, we at NexTier would be happy to offer a free introductory consultation to assess your specific needs. Reach out to find out how we can help.

Keywords: DFARS 252.204-7012, Manufacturers, DoD contracts, NIST SP 800-171, cybersecurity, CUI, subcontractors, compliance, flow-down provision.

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