What Your Business Needs to Know About DFARS

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Companies in the United States that compete for contracts with the government must adhere to the Defense Federal Acquisition Regulation Supplement or DFARS. Both contractors and their subcontractors who work with the Department of Defense must adhere to these regulations.

That said, it can be unclear what a company must do to adhere to DFARS. Here is everything you need to know about this regulation, whether you must adhere to it or not, and how to get started with compliance.

What Is DFARS?

DFARS was established as a supplement to the Federal Acquisition Regulation because of the differences in meeting the requirements for national defense. It sets a wide range of limitations that address requirements for contractors looking to work with the Department of Defense. For example, where they must store materials, security requirements if they work with digital data, and more. These regulations promote security and competition within the United States’ economy.

This regulation is constantly changing through amendments and other defense supplements to FAR. Despite these changes, potential contractors must demonstrate that they adhere to all the requirements to become DFARS compliant. This can mean changing their security protocols, proving where they sourced materials and making other alterations to how they do business. These regulations are unavoidable if you plan to work with the Department of Defense.

What Companies Does It Affect?

Any company that must fulfill a Department of Defense contract is subject to the DFARS regulations. That means that suppliers, subcontractors, and direct contractors must all meet these regulations. Since the federal government contracts out hundreds of billions of dollars worth of work each year, DFARS affects hundreds of thousands of companies. For example, it can affect manufacturers, staffing firms, universities, data processing companies, cybersecurity firms, and more.

How Does It Handle Specialty Metals?

One of the more frequently asked questions about DFARS revolves around the stipulations of where specialty metals can be sourced from due to the efforts to protect the supply chain from reliance on foreign materials. One of the main things to think about is what type of metal it is and what specific restrictions DFARS puts on it. The other thing to think about is where it came from. This is because you can only source from inside the United States and NATO countries.

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Are There Specialty Metals Exceptions?

The only exceptions to the specialty metals rule are when used in cybersecurity electronics, off-the-shelf commercial items, small purchases necessary for an agreement with a foreign government, support United States combat, unavailable from the United States or a NATO country, or are necessary for national security. Other than these circumstances, non-compliant metals cannot make up more than two percent of the product.

How Can You Ensure Compliance?

Basically, if you are competing for a government contract, you need to ensure compliance. The easiest way to do this is to follow the best practices and guidelines laid out in DFARS. Often, this means working with a transparent supply chain. This way you know exactly where all of your materials are coming from. In addition, if you are handling digital data for the Department of Defense, it means passing a security audit. After passing you obtain your Cybersecurity Maturity Model Certification.

If your company plans on doing contract work for the Department of Defense, you will need to ensure that you comply with DFARS and its cybersecurity clauses. These regulations affect a wide variety of businesses and impose strict guidelines for security and acquisitions. However, you can easily comply with some minor changes to your business. By following the information in this guide, you will be well on your way to adhering to these regulations.

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