4 things you need to know about new contractor requirements for classified networks

The deadline is looming for contractors to comply with new requirements from the Defense Security Service governing how contractors use and interact with classified networks. Here are four critical things you need to know.

Contractors must “report relevant and credible information coming to their attention regarding cleared employees. Such reporting includes information indicative of a potential or actual insider threat …” as related to the 13 guidelines. Contractors “must have a written program plan in place to begin implementing insider threat requirements … no later than Nov. 30, 2016.” That’s right. The deadline is approaching rapidly. If contractors are not conforming to the new standards in time, they stand to lose out on a tremendous amount of business opportunities.

Over the years, I’ve sought to provide practical perspectives on the National Industrial Security Program Operating Manual from the Defense Security Service. Known as the NISPOM, the manual serves as a repository of “must do’s” for Department of Defense (DoD) contractors supporting classified programs.

Given that the protection of classified information and tech systems remains an increasingly complex and constantly evolving challenge, DSS updates NISPOM as requirements shift.

In May, the most recent update was issued in what was called an “Industrial Security Letter” which summarized a number of new, minimum standards referred to collectively as “Conforming Change 2.”

The letter states that contractors cleared for work involving classified information must establish and maintain a program “to detect, deter and mitigate insider threats.” The letter mandates the monitoring of user activity on classified information systems. For example, to track “activity indicative of insider threat behavior.”

User monitoring and other measures now have emerged as requirements – not recommendations – to pursue this line of business with the government.

With this in mind, here are four key changes/provisions in the “new” NISPOM, and what contractors should know about them:

1. Contractors must develop an insider threat program that is overseen by a senior official within the organization. The contractor needs to gather relevant insider threat information related to all stakeholders – human resources, security/information assurance teams, the legal department, etc. Procedures must be followed to access, share, compile, identify and collaborate among the cleared functional elements of the contractor to report relevant information that may indicate a potential or actual insider threat. In addition, the letter requires the training of all cleared employees for insider threat awareness, with records documenting both initial and refresher training.

2. User activity monitoring emerges as a very high priority here. “Contractors must implement the DSS-provided information system security controls on classified information systems in order to detect activity indicative of insider threat behavior,” according to the letter. These controls are based upon federal requirements and standards such as those mandated by the Federal Information Security Management Act (FISMA).

Today’s insider threat and mitigation solutions can greatly help contractors establish the described controls here. These products have grown very sophisticated, revealing actionable intelligence about a wide range of user behaviors/activities which could flag the misuse of IT systems. If contractors are already investing in solutions that compiled a long track record of exceeding – not just meeting – standards such as FISMA, then they are essentially “good to go” here. If not, they can quickly acquire and implement them to meet eligibility requirements for work. The solutions exist. They are proven. And they are readily available.


The emphasis on the word, “potential,” here is coming from me, not the DSS. As opposed to the very narrow language referenced above about “misuse of information technology systems,” this standard is extremely broad. A great deal of businesses may encounter significant difficulty in distinguishing “actual” from “potential” threats. This will force them to report much more than they have to. The simple use of a USB stick to export a sensitive document off-premises, after all, could be interpreted as a “potential” threat, couldn’t it?

But if an organization has invested in modern insider threat solutions which take advantage of the latest in analytics-driven technologies to deliver complete context, it will avoid such sticky situations. The solutions reveal key information related to the date and time of user activity, and the devices deployed and documents accessed. They will determine whether the user’s behavior is appropriate and/or authorized for his or her role. They may even feature video replay to lend additional context as to what’s going on, to further create an informative timeline of events. Thus, the contractor can easily remove “potential” out of the equation and conclude definitively whether a user constitutes a threat.


But, again, the deployment of a modern insider threat program will help meet the deadline. If they have the right kind of solution, they’re probably already satisfying all obligations stated within the Industrial Security Letter. If they don’t, they can acquire and adopt one quickly enough to remain eligible for work.

Complying with the DSS and its manual should not result in a burdensome task for organizations. As indicated, the aforementioned solutions are “out there” and ready for implementation. They have demonstrated exceptional performance time after time within the highest levels of federal agency operations.

With such an investment, contractors can go beyond merely meeting the letter’s minimum standards – they can stand out as valuable government partners for the long haul.