As a government contractor, it’s important to know which sources to turn to when it comes to government requirements and regulations. One rulebook of compliance, especially for contractors in the Defense Industrial Base (DIB) is the Defense Federal Acquisition Regulation Supplement (DFARS), a set of regulations that any contractor doing business with the Department of Defense (DoD) must understand and adhere to.
For contractors with GSA Multiple Award Schedule (MAS) contracts who often have the opportunity to expand their business into the DoD sector, comprehending DFARS is not just an advantage—it’s necessity.
What is DFARS?
The Defense Federal Acquisition Regulation Supplement (DFARS) is a supplement to the Federal Acquisition Regulation (FAR), which is essentially the primary rulebook for executive agencies looking to acquire goods and services. The purpose of the FAR is to govern the "acquisition process" by which executive agencies of the United States federal government acquire solutions. So where does the DFARS fit in?
DFARS provides DoD-specific acquisition regulations that government acquisition officials - and those contractors doing business with DoD - must follow in the procurement process. The two regulations go hand in hand, but DFARS adds an extra level related to defense regulations.
Why DFARS Matters for GSA Schedule Contractors
As a GSA Schedule contractor, the opportunity to bid on DoD contracts can be a significant growth driver for your business. However, stepping into the DoD contracting space means stepping up compliance efforts to meet the more stringent requirements of DFARS. Below, we’ll talk about all the ways DFARS matters for contractors and why you should be familiar with it.
Cybersecurity Compliance
One of the most critical aspects of DFARS is its emphasis on cybersecurity. DFARS clause 252.204-7012, for example, mandates that contractors protect covered defense information and report cybersecurity incidents. With cyber threats growing in sophistication, the DoD requires that contractors maintain a robust cybersecurity plan to safeguard sensitive defense information. This is where requirements such as NIST 800-171 and Cybersecurity Maturity Model Certification (CMMC) comes into play. CMMC is a standard (in progress) for implementing cybersecurity across the defense industrial base and will eventually loop in DFARS.
Counterfeit Parts Prevention
Another important element is the prevention of counterfeit parts, which is addressed by DFARS clause 252.246-7007. The responsibility lies with contractors to ensure that the parts and components used in their products meet stringent standards and are genuine. This clause has significant implications for supply chain management and quality control practices and has become increasingly relevant.
Domestic Preference Requirements
DFARS also reinforces the Buy American Act (BAA) and the Berry Amendment through clauses that require contractors to give preference to domestic materials. This impacts procurement strategies and sourcing decisions, meaning contractors need to consistently conduct a thorough review of the manufacturer’s/company’s supply chain to ensure compliance.
When DFARS Applies to Subcontractors
GSA Schedule contractors must not only be aware of these overarching areas but must also understand the nuanced application of various DFARS clauses. For instance, depending on the contract, a contractor might need to flow down certain DFARS requirements to their subcontractors. This creates a ripple effect where the entire supply chain associated with a DoD contract must maintain compliance with these regulations.
The Importance of DFARS Compliance
Non-compliance with DFARS can lead to consequences. Contractors can face penalties ranging from monetary fines to the loss of contracting privileges. In extreme cases, non-compliance could lead to criminal charges if negligence or willful non-compliance with regulations like counterfeit part prevention is on the table.
It’s important to remember that compliance with DFARS is not static. The regulations are subject to change, and staying updated is crucial.
Having a Competitive Advantage
Understanding and implementing DFARS requirements can offer GSA Schedule contractors a competitive edge. Those who are already compliant can respond more quickly to solicitations, leading to a higher win rate for DoD contracts. Moreover, they are seen as less risky partners by the government, which can lead to more opportunities and a reputation as a reliable, secure, and compliant contractor.
Resources and Tools for DFARS Compliance
Recognizing the complexity of DFARS, the DoD provides various resources to assist contractors in navigating these requirements. For example, contractors can utilize the Procurement Technical Assistance Centers (PTACs), which offer training and one-on-one assistance to understand and comply with defense contracting requirements.
We also suggest sending one or more of your employees to free and paid courses that help contractors gain a better understanding of the FAR and DFARS. Learning how it’s structured, how to read each section, and how to conduct research within these governing bodies is essential and not always self-explanatory.
Staying Updated on Regulations
For GSA Schedule contractors, DFARS is not just a set of legal obligations, it's a important part of their business strategy and compliance when dealing with the DoD. The importance of DFARS stems from its role in national security, the supply chain, and the overall quality of products and services provided to the DIB.
If you want to learn more about the FAR and DFARS, check out our blogs:
- DFARS 101
- 13 Important Federal Acquisition Regulation (FAR) Clauses for GSA Contractors
- A Guide to Understanding the Federal Acquisition Regulation (FAR)
For more information on cybersecurity compliance and regulations, check out:
- The Importance of Cyber Hygiene in Government Contracts
- Top Cybersecurity Requirements for Government Contractors
If you need help maintaining your GSA Schedule, or are interested in acquiring one and want to know about all the applicable regulations, feel free to contact one of our experts today.
