The Department of Justice (DOJ) recently announced a new “Cyber-Fraud Initiative” aimed at “developing actionable recommendations to enhance and expand [DOJ’s] efforts against cyber threats.” The initiative will be part of DOJ’s Commercial Litigation Branch, Fraud Section, and will use the False Claims Act (FCA) as a tool to combat “cybersecurity related fraud” among federal contractors and grant recipients. In light of DOJ’s efforts, government contractors and entities receiving federal funding should implement measures to reduce the risk of being sued by the government for failing to meet their regulatory and contractual cybersecurity obligations. Below are PilieroMazza’s key takeaways for government contractors, with details on how DOJ’s Cyber-Fraud Initiative could impact your business.
Cybersecurity and the FCA
Use of the FCA to address cybersecurity fraud is not new. Indeed, PilieroMazza discussed it previously here, and DOJ is already pursuing contractors for fraud relating to their non-compliance with the National Institute for Standards and Technology (NIST) Special Publication (SP) 800-171 controls. Additionally, contractors are required to make certain cybersecurity-related representations for federal contracts, such as the representations regarding their use of certain Chinese telecom products and services at Federal Acquisition Regulation (FAR) 52.204-24 and -26.
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