DOJ’s Reality Show: Cybersecurity Compliance or Face the Music – No One is Safe!

Welcome to the DOJ’s newest reality show: “FCA Cybersecurity Compliance Enforcement.” The stakes? Avoiding fines and public embarrassment. The twist? Participation isn’t optional. From Penn State to Verizon, the Civil-Cyber Fraud Initiative sees all. Government contractors, pray you’ve not been slacking, because the spotlight is on you!

Hot Take:

It seems like the Department of Justice (DOJ) has opened a new season of “Who’s Got the Best Cybersecurity?” and the prizes are not your regular gold trophies. Instead, it’s a chance to avoid hefty fines and public shaming. From Penn State University to Verizon, no one is safe from this new reality TV. The catch is, the game is not optional! So, if you’re a government contractor or a recipient of federal grants, it’s time to take a close look at your cybersecurity practices. If you’ve been slacking off, better shape up, because the DOJ’s Civil-Cyber Fraud Initiative is watching!

Key Points:

  • The DOJ’s Civil-Cyber Fraud Initiative is ramping up regulatory activity related to cybersecurity.
  • Recent actions include a qui tam action against Penn State University and a $4 million settlement with Verizon over alleged cybersecurity shortcomings.
  • The Federal Acquisition Regulatory Council published two proposed rules increasing cybersecurity requirements for government contractors.
  • Government-contracted tech companies and organizations receiving government funds must comply with these standards to avoid being hit with fraud allegations under the FCA.
  • Recent cases highlight that noncompliance with cybersecurity requirements can lead to substantial litigation and enforcement risk.

Need to know more?

The Alphabet Soup of Cybersecurity

The DOJ has been using the False Claims Act (FCA) to combat allegations of cybersecurity-related fraud in government contracts and federal grants. Ever since the introduction of the Civil Cyber-Fraud Initiative, federal agencies have been issuing new cybersecurity requirements and reporting obligations. So, if you're a government contractor, brace yourself for more scrutiny!

The High Price of False Promises

Two recent cases highlight the risks of non-compliance. Florida-based healthcare provider Comprehensive Health Services LLC had to cough up $930,000 for allegedly misrepresenting its compliance with security contract requirements. Defense contractor Aerojet Rocketdyne, Inc. agreed to a $9 million settlement for similar allegations. The message is clear: honesty is the best policy when it comes to cybersecurity compliance.

Learning From Others' Mistakes

The DOJ's ongoing case against Penn State University and its settlement with Verizon signal a focus on cybersecurity compliance for FCA liability. These cases should serve as a wake-up call for all companies dealing with the government. To avoid getting caught in the FCA's net, government contractors should be vigilant about their cybersecurity practices and responsive to internal complaints.

Proposed Cyber Rules: A Bigger Net

The Federal Acquisition Regulatory Council recently proposed two rules to increase cybersecurity requirements for federal contractors. These rules could make noncompliance even more costly. So, if you're a federal contractor, it's time to fine-tune your cyber threat response and reporting systems.

Lessons for Federal Contractors

In a nutshell, the cybersecurity compliance landscape is evolving rapidly, and federal contractors need to keep up. Continuous internal monitoring and a robust system for handling complaints can go a long way in avoiding FCA liabilities. And remember, the DOJ's eyes are always watching!