Enforcement of CMMC 2.0 Compliance

Posted September 26, 2023 by Philip Duplisey

One of the most often asked topics we get at Business Lens is: The DOD has been saying for a long time that CMMC compliance is essential; how will they enforce it this time?

True, since it was first released in early 2020, defense subcontractors have seen multiple updates to the certification, but they have not been forced to comply.

But times have changed! We’re observing from our more recent customers that prime contractors are employing various methods to encourage their subcontractors to become compliant, such as keeping them out of vendor portals and withholding invoices.

A significant component of the CMMC enforcement procedure is the DoD’s emphasis on prime contractors requiring compliance from their subcontractors.

Here are some of the methods prime contractors can use to ensure that their subcontractors achieve and maintain CMMC 2.0 compliance:

Contractual Requirements: The most straightforward way for prime contractors to enforce CMMC 2.0 compliance is by including specific language in their contracts and subcontracts. They can make compliance with the appropriate CMMC level a contractual requirement for subcontractors. Failure to meet this requirement can result in breach of contract.

Flow-Down Clauses: Prime contractors can include “flow-down” clauses in their subcontracts, which mandate that subcontractors adhere to the same cybersecurity requirements, including CMMC compliance, as specified in the prime contract. This ensures that the compliance requirements cascade down the supply chain.

Prequalification and Vendor Assessment: Prime contractors can implement a prequalification process for potential subcontractors. They can assess the cybersecurity capabilities and CMMC compliance status of subcontractors before entering into agreements with them. Subcontractors may need to provide evidence of their compliance or a plan for achieving it, (POAM – plan of actions and milestones).

Third-Party Audits: Prime contractors can require subcontractors to undergo third-party CMMC assessments conducted by certified CMMC Third-Party Assessment Organizations (C3PAOs). This independent evaluation ensures that subcontractors meet the necessary cybersecurity standards.

Withholding Payments: In extreme cases of non-compliance, prime contractors may withhold payments to subcontractors until they demonstrate CMMC compliance. This can serve as a strong incentive for subcontractors to prioritize compliance efforts.

Termination of Subcontracts: Prime contractors retain the right to terminate subcontracts if subcontractors consistently fail to meet CMMC compliance requirements. Termination clauses should be explicitly outlined in contracts.

Documentation and Reporting: Clear documentation of compliance requirements and regular reporting mechanisms can help prime contractors ensure that subcontractors are meeting CMMC compliance standards.

It is vital to emphasize that CMMC 2.0 compliance is a shared responsibility of all supply chain partners, and communication between prime contractors and subcontractors is critical. Effective communication, clear expectations, and mutual support are critical to establishing and sustaining supply chain compliance. Furthermore, the specific tactics employed by prime contractors to ensure compliance may differ depending on contract terms and the importance of the subcontractor’s participation.

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