Proposed Rule2021-24299
VA Acquisition Regulation: Acquisition of Information Technology; and Other Contracts for Goods and Services Involving Information, VA Sensitive Information, and Information Security; and Liquidated Damages Requirements for Data Breach
Primary source
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Published
November 17, 2021
Issuing agencies
Veterans Affairs Department
Abstract
The Department of Veterans Affairs (VA) is proposing to amend and update its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency specific regulations or policies. This rulemaking revises the VAAR by adding a part covering Acquisition of Information Technology and revising coverage concerning Other Contracts for Goods and Services involving mandatory information, privacy, and security requirements to include policy concerning VA Sensitive Personal Information, information security, and liquidated damages requirements for data breach in the following parts: Administrative and Information Matters; Describing Agency Needs; Protection of Privacy and Freedom of Information, as well as Acquisition of Commercial Items. It also revises affected parts concerning Definitions of Words and Terms, and Solicitation Provisions and Contract Clauses.
Full Text
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<title>Federal Register, Volume 86 Issue 219 (Wednesday, November 17, 2021)</title>
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[Federal Register Volume 86, Number 219 (Wednesday, November 17, 2021)]
[Proposed Rules]
[Pages 64132-64158]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24299]
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DEPARTMENT OF VETERANS AFFAIRS
48 CFR Parts 802, 804, 811, 812, 824, 839, and 852
RIN 2900-AQ41
VA Acquisition Regulation: Acquisition of Information Technology;
and Other Contracts for Goods and Services Involving Information, VA
Sensitive Information, and Information Security; and Liquidated Damages
Requirements for Data Breach
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend
and update its VA Acquisition Regulation (VAAR) in phased increments to
revise or remove any policy superseded by changes in the Federal
Acquisition Regulation (FAR), to remove procedural guidance internal to
VA into the VA Acquisition Manual (VAAM), and to incorporate any new
agency specific regulations or policies. This rulemaking revises the
VAAR by adding a part covering Acquisition of Information
[[Page 64133]]
Technology and revising coverage concerning Other Contracts for Goods
and Services involving mandatory information, privacy, and security
requirements to include policy concerning VA Sensitive Personal
Information, information security, and liquidated damages requirements
for data breach in the following parts: Administrative and Information
Matters; Describing Agency Needs; Protection of Privacy and Freedom of
Information, as well as Acquisition of Commercial Items. It also
revises affected parts concerning Definitions of Words and Terms, and
Solicitation Provisions and Contract Clauses.
DATES: Comments must be received on or before January 18, 2022 to be
considered in the formulation of the final rule.
ADDRESSES: Written comments may be submitted through
<a href="http://www.Regulations.gov">www.Regulations.gov</a> or mailed to Mr. Rafael Taylor, 003A2A, Department
of Veterans Affairs, Procurement Policy and Warrant Management Services
(PPS), 810 Vermont Avenue NW, Washington, DC 20420. Comments should
indicate that they are submitted in response to ``RIN 2900-AQ41--VA
Acquisition Regulation: Acquisition of Information Technology; and
Other Contracts for Goods and Services involving Information, VA
Sensitive Personal Information, and Information Security, and
Liquidated Damages Requirements for Data Breach.'' Comments received
will be available at <a href="http://regulations.gov">regulations.gov</a> for public viewing, inspection or
copies.
FOR FURTHER INFORMATION CONTACT: Mr. Rafael N. Taylor, Senior
Procurement Analyst, Procurement Policy and Warrant Management
Services, 003A2A, 810 Vermont Avenue NW, Washington, DC 20420, (202)
714-8560. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION:
Background
This rulemaking is issued under the authority of the Office of
Federal Procurement Policy (OFPP) Act which provides the authority for
an agency head to issue agency acquisition regulations that implement
or supplement the FAR.
VA is proposing to revise the VAAR to add new policy or regulatory
requirements, to update existing policy, and to remove any redundant
guidance where it may exist in affected parts, and to place guidance
that is applicable only to VA's internal operating processes or
procedures in the VAAM. Codified acquisition regulations may be amended
and revised only through rulemaking. All amendments, revisions, and
removals have been reviewed and concurred with by VA's Integrated
Product Team of agency stakeholders.
The VAAR uses the regulatory structure and arrangement of the FAR
and headings and subject areas are consistent with the FAR content. The
VAAR is divided into subchapters, parts (each of which covers a
separate aspect of acquisition), subparts, sections, and subsections.
The Office of Federal Procurement Policy Act, as codified in 41
U.S.C. 1707, provides the authority for the Federal Acquisition
Regulation and for the issuance of agency acquisition regulations
consistent with the FAR.
When Federal agencies acquire supplies and services using
appropriated funds, the purchase is governed by the FAR, set forth at
title 48 Code of Federal Regulations (CFR), chapter 1, parts 1 through
53, and the agency regulations that implement and supplement the FAR.
The VAAR is set forth at title 48 CFR, chapter 8, parts 801 through
873.
Discussion and Analysis
VA proposes to make the following changes to the VAAR in this phase
of its revision and streamlining initiative. This rule adds a new VAAR
part 839 along with proposed revisions to other parts as described
below. Where necessary, procedural guidance has been considered for
inclusion in VA's internal agency operating procedures in accordance
with FAR 1.301(a)(2). Similarly, delegations of authorities will be
included in the VA Acquisition Manual (VAAM) as internal agency
guidance. These changes seek to streamline and align the VAAR with the
FAR and remove outdated and duplicative requirements and reduce burden
on contractors. The VAAM incorporates portions of the removed VAAR as
well as other internal agency acquisition procedures. VA will rewrite
certain parts of the VAAR and VAAM, and as VAAR parts are rewritten,
will publish them in the Federal Register. VA will combine related
topics, as appropriate. The VAAM is being created in parallel with
these revisions to the VAAR and is not subject to the rulemaking
process as the VAAM contains internal VA procedures and guidance.
Therefore, the VAAM will not be finalized and available online for any
new parts until corresponding VAAR parts are finalized.
VAAR Part 802--Definitions of Words and Terms
VA proposes to add the following 11 definitions in section 802.101
to reflect terms VA uses in more than one part as related to the
amendatory text, parts and clauses and provisions outlined in this VAAR
case: Business Associate, Business Associate Agreement (BAA), Gray
market items, Information system, Information technology, Information
technology-related contracts, Privacy officer, Security plan, Sensitive
personal information, VA Information Security Rules of Behavior for
Organizational Users, and VA sensitive information.
VAAR Part 804--Administrative and Information Matters
We propose to add the following authorities to part 804:
<bullet> 38 U.S.C. 5723, which requires all users of VA information
and information systems to (1) Comply with all VA security policies,
procedures, and practices; (2) Take security awareness training on at
least an annual basis; (3) Report all actual or suspected security and
privacy incidents immediately to the Information System Security
Officer (ISSO) or Privacy Officer of the facility and to their
immediate supervisor (in VA contracts contractors will be required to
report security incidents to the contracting officer and the contractor
officer's representative (COR), as identified or directed in the
contract, within one hour of discovery or suspicion); and (4) Sign and
acknowledge VA's Information Security Rules of Behavior for
Organizational Users (i.e., ``VA National Rules of Behavior'') on an
annual basis;
<bullet> 38 U.S.C. 5724, which requires VA, in the event the
Secretary determines there exists a reasonable risk for the potential
misuse of sensitive personal information involved in a data breach, to
provide credit protection services, as well as notification to the
affected individual; and
<bullet> 38 U.S.C. 5725(a)-(c), which requires the Secretary to
ensure that if a contract is entered into for the performance of any
Department function that requires access to sensitive personal
information include, as a condition of the contract, that a contractor
shall not, directly or through an affiliate of the contractor, disclose
such information to any other person unless the disclosure is lawful
and is expressly permitted under the contract. This statute also
requires the contractor, or any subcontractors under the contract, to
promptly notify VA (within one hour of discovery or suspicion) of any
actual or suspected data breach that occurs with respect to sensitive
personal information. It further requires that each such contract is
subject to liquidated damages to be paid by the contractor to VA in the
event of a data breach of any sensitive personal information
[[Page 64134]]
processed or maintained by the contractor or any subcontractor under
the contract. Such liquidated damages will be used for the purpose of
VA providing credit protection services.
VA proposes to amend part 804 by adding subpart 804.19, Basic
Safeguarding of Covered Contractor Information Systems, and sections
804.1900-70, Scope of subpart; 804.1902, Applicability; 804.1970,
Information security policy--contractor general responsibilities; and
804.1903, Contract clause.
In section 804.1900-70, Scope of subpart, it would state that the
subpart prescribes policies and procedures for information security and
protection of VA information, information systems, and VA sensitive
information, including sensitive personal information.
In section 804.1902, Applicability, VA stipulates that the subpart
would apply to all VA acquisitions, including acquisitions of
commercial items other than commercially available off-the-shelf items,
when a contractor's information system may contain VA information.
In section 804.1970, Information security policy--contractor
general responsibilities, VA provides policy requiring contractors,
subcontractors, business associates and their employees who are users
of VA information or information systems, or have access to VA
information and VA sensitive information to--
<bullet> Comply with all VA information security program policies,
procedures, practices and related contract requirements, specifications
and clauses;
<bullet> Complete VA security awareness training on an annual
basis;
<bullet> Complete VHA's Privacy and Health Insurance Portability
and Accountability Act of 1996 (HIPAA) Training on an annual basis when
access to protected health information (PHI) is required;
<bullet> Report all actual or suspected security/privacy incidents
and reporting information to the contracting officer, and COR as
identified or as directed in the contract, within one hour of discovery
or suspicion;
<bullet> Comply with VA policy as it relates to personnel security
and suitability program requirements for background screening of both
employees and non-employees who have access to VA information systems
and data;
<bullet> Comply with directions that may be issued by the
contracting officer or COR, or from the VA Assistant Secretary for
Information and Technology or a designated representative through the
contracting officer or COR, directing specific activities when a
security/privacy incident occurs;
<bullet> Sign an acknowledgment that they have read, understand,
and agree to abide by the VA Information Security Rules of Behavior for
Organizational Users (VA National Rules of Behavior) as required by 38
U.S.C. 5723, FAR 39.105, Privacy, and clause 852.204-71, Information
and Information Systems Security, on an annual basis. The VA
Information Security Rules of Behavior describe the responsibilities
and expected behavior of contractors, subcontractors, business
associates and their employees who are users of VA information or
information systems, information assets and resources, or have access
to VA information;
<bullet> Maintain records and compliance reports regarding HIPAA
Security and Privacy Rule compliance in order to provide such
information to VA upon request to ascertain whether the business
associate is complying with all applicable provisions under both rules'
regulatory requirements; and
<bullet> Flow down requirements in all subcontracts and Business
Associate Agreements (BAAs), at any level, as provided in the clause at
852.204-71, Information and Information Systems Security.
Section 804.1903, Contract clause, would require contracting
officers to insert clause 852.204-71, Information and Information
Systems Security, as further described in VAAR part 852 below in the
preamble, when FAR clause 52.204-1, Basic Safeguarding of Covered
Contractor Information Systems is required to be included in accordance
with FAR 4.1903.
VAAR Part 811--Describing Agency Needs
We propose to add the following authorities to supplement the
existing authorities for the proposed policies and procedures under
part 811 as follows:
<bullet> 38 U.S.C. 5723, which requires all users of VA information
and information systems to (1) Comply with all VA security policies,
procedures, and practices; (2) Take security awareness training on at
least an annual basis; (3) Report all actual or suspected security and
privacy incidents and report the information to the appropriate
Information System Security Officer (ISSO) or Privacy Officer of the
facility and to their immediate supervisor (in VA contracts contractors
will be required to report security incidents to the contracting
officer and the contractor officer's representative (COR), as
identified or directed in the contract, within one hour of discovery or
suspicion); and (4) Sign and acknowledge VA's Information Security
Rules of Behavior for Organizational Users (i.e., VA National Rules of
Behavior) on an annual basis.
<bullet> 38 U.S.C. 5724, which requires VA, in the event the
Secretary determines there exists a reasonable risk for the potential
misuse of sensitive personal information involved in a data breach, to
provide credit protection services, as well as notification to the
affected individual.
<bullet> 38 U.S.C. 5725(a)-(c), which requires the Secretary to
ensure that if a contract is entered into for the performance of any
Department function that requires access to sensitive personal
information include, as a condition of the contract, that a contractor
shall not, directly or through an affiliate of the contractor, disclose
such information to any other person unless the disclosure is lawful
and is expressly permitted under the contract. This statute also
requires the contractor, or any subcontractors under the contract, to
promptly notify VA (within one hour of discovery or suspicion) of any
actual or suspected data breach that occurs with respect to sensitive
personal information. It further requires that each such contract is
subject to liquidated damages to be paid by the contractor to VA in the
event of a data breach of any sensitive personal information processed
or maintained by the contractor or any subcontractor under the
contract. Such liquidated damages will be used for the purpose of VA
providing credit protection services.
We propose to add a new subpart 811.5, Liquidated damages,
including underlying sections as follows:
We propose to add 811.500, Scope, that would provide that the
subpart is to prescribe policies and procedures for using a liquidated
damages clause in solicitations and contracts that involve sensitive
personal information. It also states that it pertains to any
solicitations and contracts involving sensitive personal information
issued by another agency for or on behalf of VA through an interagency
acquisition in accordance with (IAW) FAR subpart 17.5 and VAAR subpart
817.5.
We propose to add 811.501-70, Policy--statutory requirement, that
provides that contracting officers are required to include a liquidated
damages clause pertaining to the protection of sensitive personal
information in accordance with 38 U.S.C. 5725(b), to be paid by the
contractor to the VA for the provision of credit protection services to
affected individuals pursuant to 38 U.S.C. 5724(b) in the event of a
data breach with respect to any sensitive personal
[[Page 64135]]
information processed or maintained by the contractor or any
subcontractor under the contract.
We propose to add 811.503-70, Contract clause, that would prescribe
new clause 852.211-76, Liquidated Damages--Reimbursement for Data
Breach Costs, as described in the section describing the proposed
revisions to part 852 in this preamble. The proposed clause would be
required to be incorporated in VA solicitations, contracts, purchase
orders, and other instruments (for both commercial and non-commercial
acquisitions, as well as when using the procedures of FAR parts 8 and/
or 12, or FAR part 13 as described in the Alternate versions of the
clause), when access to sensitive personal information (as defined in
38 U.S.C. 5727 and in part 839) is required whether as a contractor,
subcontractor, business associate or an employee of one of these
entities. The clause--
<bullet> Would prohibit the disclosure of sensitive personal
information to any other person or entity unless the disclosure is
lawful and is expressly permitted under the contract;
<bullet> Would require contractors, subcontractors, business
associates or their employees to promptly notify the contracting
officer and the contracting officer's representative (COR), of any
security incident that occurs involving sensitive personal information;
and
<bullet> Would require that if the contractor fails to protect
sensitive personal information, the contractor shall, in the event of a
data breach, in place of actual damages, pay to the Government
liquidated damages per affected individual in an amount to be specified
and inserted by the contracting officer in accordance with current VA
internal policy. The amount to be inserted by the contracting officer
would represent an estimate of the cost per affected individual for VA
to provide credit protection services (e.g., notification, credit
monitoring and related support) for individuals affected by a data
breach.
VAAR Part 812--Acquisition of Commercial Items
We propose to amend 812.301, Solicitation provisions and contract
clauses for the acquisition of commercial items, by removing a
prescription for clause 852.212-70. This clause, which required
contracting officers to review and check provisions and clauses that
apply, has been removed as unnecessary and redundant to the normal
selection process for provisions and clauses.
This section will also be amended by removing a prescription for
clause 852.212-71, Gray Market Items, and to add prescriptions for two
new clauses: 852.212-71, Gray Market and Counterfeit Items, and
852.212-72, Gray Market and Counterfeit Items--Information Technology
Maintenance Allowing Other-than-New Parts. The new clauses were
originally released as a VAAR Class Deviation and will be codified via
this rule.
VAAR Part 824--Protection of Privacy and Freedom of Information
We propose to add the following authorities to part 824:
<bullet> 38 U.S.C. 5723, which requires all users of VA information
and information systems to (1) Comply with all VA security policies,
procedures, and practices; (2) Take security awareness training on at
least an annual basis; (3) Report all actual or suspected security and
privacy incidents immediately to the Information System Security
Officer (ISSO) or Privacy Officer of the facility and to their
immediate supervisor (in VA contracts contractors will be required to
report security incidents to the contracting officer and the contractor
officer's representative (COR)), as identified or directed in the
contract, within one hour of discovery or suspicion); and (4) Sign and
acknowledge VA's Information Security Rules of Behavior for
Organizational Users (i.e., ``VA National Rules of Behavior'') on an
annual basis.
<bullet> 38 U.S.C. 5724, which requires VA, in the event the
Secretary determines there exists a reasonable risk for the potential
misuse of sensitive personal information involved in a data breach, to
provide credit protection services, as well as notification to the
affected individual.
<bullet> 38 U.S.C. 5725 (a)-(c), which requires the Secretary to
ensure that if a contract is entered into for the performance of any
Department function that requires access to sensitive personal
information include, as a condition of the contract, that a contractor
shall not, directly or through an affiliate of the contractor, disclose
such information to any other person unless the disclosure is lawful
and is expressly permitted under the contract. This statute also
requires the contractor, or any subcontractors under the contract, to
promptly notify VA (within one hour of discovery or suspicion) of any
actual or suspected data breach that occurs with respect to sensitive
personal information. It further requires that each such contract is
subject to liquidated damages to be paid by the contractor to VA in the
event of a data breach of any sensitive personal information processed
or maintained by the contractor or any subcontractor under the
contract. Such liquidated damages will be used for the purpose of VA
providing credit protection services.
We propose to amend VAAR part 824 under subpart 824.1, Protection
of Individual Privacy, by adding sections 824.103-70, Protection of
privacy--general requirements and procedures related to Business
Associate Agreements, and 824.103-71, Liquidated damages--protection of
information.
We propose to add 824.103-70, Protection of privacy--general
requirements and procedures related to Business Associate Agreements
(BAAs), to establish policy. This would ensure compliance with unique
responsibilities to protect protected health information, and require
contractors performing under VA contracts subject to unique PHI and
Health Insurance Portability and Accountability Act (HIPAA) to comply
with requirements in this section. It describes the requirement for a
Business Associate Agreement and when that applies. It describes that
the Veterans Health Administration (VHA) is a HIPAA Covered Entity. VHA
is the only administration of the Department of Veterans Affairs that
is a HIPAA Covered Entity under the HIPAA Privacy Rule. It would
further require that contractors or entities required to execute BAAs
for contracts and other agreements become VHA business associates. It
also describes those instances where other components within VA
Administrations may also provide certain services and support to VHA
and must receive PHI in order to do so. If these components award
contracts or enter into other agreements, purchase/delivery orders,
modifications and issue governmentwide purchase card transactions to
help in the delivery of these services to VHA, they will also fall
within the requirement to obtain a satisfactory assurance from these
contractors by executing a BAA. Basically, it would require
contractors, subcontractors, and their employees, where HIPAA protected
health information (PHI) is created, received, maintained, or
transmitted, or that will be stored, generated, accessed, exchanged,
processed, or utilized in order to perform certain health care
operations activities or functions on behalf of the Veterans Health
Administration (VHA) as a covered entity, to execute a BAA.
In 824.103-71, Liquidated damages--protection of information, it
reinforces the applicability of a liquidated damages clause as
prescribed at 811.503-70 when performance under a contract requires a
contractor to enter
[[Page 64136]]
into a business associate agreement with VHA because the contractor or
its subcontractor is required to create, receive, maintain, or transmit
VHA PHI or is required to store, generate, access, exchange, process,
or utilize PHI, for certain services or functions, on behalf of VHA.
The liquidated damages clause would be required to be added even in
situations where the prime contractor never directly receives VA's
sensitive personal information and the same flows directly to the prime
contractor's subcontractor.
VAAR Part 839--Acquisition of Information Technology
We propose to add part 839, Acquisition of Information Technology,
to implement and supplement FAR part 39, Acquisition of Information
Technology, to incorporate, in consonance and together with the FAR, VA
policies, procedures, and contract clauses necessary to control the
relationship between VA and contractors or prospective contractors
concerning unique aspects of the acquisition of information technology
or service contracts related to information technology.
We propose to include the following authorities as the authority
for the proposed policies and procedures under part 839: 38 U.S.C.
5723; 5724; 5725(a)-(c); 40 U.S.C. 121(c); 40 U.S.C. 11319(b)(1)(C); 41
U.S.C. 1121(c)(3); 1303 and 1702; and 48 CFR 1.301-1.304. The
authorities are described as follows--
<bullet> 38 U.S.C. 5723, which requires all users of VA information
and information systems to (1) Comply with all VA security policies,
procedures, and practices; (2) Take security awareness training on at
least an annual basis; (3) Report all actual or suspected security and
privacy incidents to the Information System Security Officer (ISSO) or
Privacy Officer of the facility and to their immediate supervisor (in
VA contracts contractors will be required to report security incidents
to the contracting officer and the contractor officer's representative
(COR), as identified or directed in the contract, within one hour of
discovery or suspicion); and (4) Sign and acknowledge VA's Information
Security Rules of Behavior for Organizational Users (i.e., ``VA
National Rules of Behavior'') on an annual basis;
<bullet> 38 U.S.C. 5724, which requires VA, in the event the
Secretary determines there exists a reasonable risk for the potential
misuse of sensitive personal information involved in a data breach, to
provide credit protection services, as well as notification to the
affected individual;
<bullet> 38 U.S.C. 5725(a)-(c), which requires the Secretary to
ensure that if a contract is entered into for the performance of any
Department function that requires access to sensitive personal
information include, as a condition of the contract, that a contractor
shall not, directly or through an affiliate of the contractor, disclose
such information to any other person unless the disclosure is lawful
and is expressly permitted under the contract. This statute also
requires the contractor, or any subcontractors under the contract, to
promptly notify VA (within one hour of discovery or suspicion) of any
actual or suspected data breach that occurs with respect to sensitive
personal information. It further requires that each such contract is
subject to liquidated damages to be paid by the contractor to VA in the
event of a data breach of any sensitive personal information processed
or maintained by the contractor or any subcontractor under the
contract. Such liquidated damages will be used for the purpose of VA
providing credit protection services;
<bullet> 40 U.S.C. 121(c), which authorizes the head of each
executive agency to issue orders and directives that the agency head
considers necessary to carry out the FAR;
<bullet> 40 U.S.C. 11319(b)(1)(C), which stipulates that a covered
agency other than the Department of Defense may not enter into a
contract or other agreement for information technology or information
technology services, unless the contract or other agreement has been
reviewed and approved by the Chief Information Officer (CIO) of the
agency, and that permits VA to use the governance processes of the VA
to approve such a contract or other agreement if the VA CIO is included
as a full participant in the governance processes. It also further
permits that for a contract or agreement for a non-major information
technology investment under this authority, the CIO may delegate the
approval of the contract or agreement to an individual who reports
directly to the CIO;
<bullet> 41 U.S.C. 1121(c)(3), which speaks to the authority of an
executive agency under another law to prescribe policies, regulations,
procedures, and forms for procurement that are subject to the authority
conferred to the Administrator of the Office of Federal Procurement
Policy, as well as other sections of Title 41, Public contracts, as
cited in (c)(3);
<bullet> 41 U.S.C. 1303, an updated positive law codification to
reflect additional authority of the VA as an executive agency to issue
regulations that are essential to implement Governmentwide policies and
procedures in the agency, as well as to issue additional policies and
procedures required to satisfy the specific needs of the VA;
<bullet> 41 U.S.C. 1702, which addresses the acquisition planning
and management responsibilities of Chief Acquisition Officers and
Senior Procurement Executives, to include implementation of unique
procurement policies, regulations and standards of the executive
agency; and
<bullet> 48 CFR 1.301 through 1.304, which authorizes agencies to
issue acquisition regulations that implement or supplement the FAR.
We propose to add 839.000, Scope of part, stating that the purpose
of the part is to prescribe acquisition policies and procedures for use
in acquiring information technology supplies, services and systems, and
that it applies to both VA procured information technology systems as
well as Interagency Acquisitions defined in FAR part 17 and VAAR part
817.
We propose to add subpart 839.1--General, with no text, and with
the following sections within the subpart:
We propose to add 839.101, Policy, which identifies directives,
security requirements, procedures and guidance that apply to all VA
contracts and to VA contractors and subcontractors providing products,
and contractors, subcontractors, and third-parties, in the performance
of contractual obligations to VA when providing information technology
related services.
We propose to add 839.105, Privacy, as a header only with no text.
We propose to add 839.105-70, Business Associate Agreements,
information technology-related contracts and privacy, to address a key
requirement that business associate agreements shall be executed
whether for VHA directly as the only VA ``Covered Entity'' or for other
contracts and agreements issued by other VA administrations and staff
offices in support of VHA where contractors, subcontractors, business
associates and their employees may have to access, receive or create VA
sensitive information or sensitive personal information, on behalf of
VHA, in order to provide certain health care operation services. (See
802.101 for the definition of information technology-related
contracts.)
We propose to add 839.105-71, Liquidated damages--protection of
information in information technology related contracts, in contracts
for goods and services, to address the statutory requirement to include
a liquidated damages clause as prescribed in
[[Page 64137]]
811.503-70(a) in contracts where access to sensitive personal
information is provided by the VA or on its behalf.
We propose to add 839.106-70, Information technology security and
privacy contract clauses, to prescribe the use of the following
clauses:
In paragraph (a), contracting officers shall insert the clause at
852.239-70, Security Requirements for Information Technology Resources,
and the clause 852.239-71, Information Technology Security Plan and
Accreditation, in all solicitations, contracts and orders exceeding the
micro-purchase threshold that include information technology services.
In paragraph (b), clause 852.239-72, Information System Design and
Development, would be required to be inserted in solicitations,
contracts, orders and agreements where services to perform information
system design and development are required.
In paragraph (c), clause 852.239-73, Information System Hosting,
Operation, Maintenance or Use, would be required to be inserted in
solicitations, contracts, orders and agreements where services to
perform information system hosting, operation, maintenance or use are
required.
In paragraph (d), clause 852.239-74, Security Controls Compliance
Testing, would be required to be inserted in solicitations, contracts,
orders and agreements when the clauses at 852.239-72 or 852.239-73 are
inserted.
We propose to add subpart 839.2--Information and Communication
Technology, with no text, and the following sections within the
subpart.
We propose to add 839.201, Scope of subpart, to state that the
subpart applies to all procurement of information and communication
technology (ICT) supplies, services, and information and to require
compliance with Section 508 standards. Section 508 standards now refer
to ICT in lieu of electronic and information technology, so VA is
adopting the same terminology.
We propose to add 839.203, Applicability, to require submission of
a VA Section 508 Checklist when required in VA solicitations, and to
provide a website to help businesses ensure compliance with VA Section
508 Standards. This would assist VA in the evaluation of offeror's
proposals when an acquisition involves the acquisition of information
technology or the furnishing of services related to acquisition of
information technology as defined in this part. The form will be
available either in solicitations or via the website link identified.
We propose to add 839.203-70, Information and communication
technology accessibility standards--contract clause and provisions, to
prescribe new solicitation provision 852.239-75, Information and
Communication Technology Accessibility Notice, and new contract clause
852.239-76, Information and Communication Technology Accessibility,
which requires the use of the VA Section 508 Checklists.
VAAR Part 852--Solicitation Provisions and Contract Clauses
We propose to add clause 852.204-71, Information and Information
Systems Security, that would require contractors, subcontractors, their
employees, third-parties, and business associates with access to VA
information, information systems, or information technology (IT) or
providing and accessing IT-related contracts (see 802.101), shall
adhere to VA Directive 6500, VA Cybersecurity Program, and the
directives and handbooks in the VA 6500 series related to VA
information (including VA sensitive information and sensitive personal
information and information systems security and privacy), as well as
those set forth in the contract specifications, statement of work, or
performance work statement. These include, but are not limited to, VA
Handbook 6500.6, Contract Security; and VA Directive and Handbook 0710,
Personnel Security and Suitability Program, which establishes VA's
procedures, responsibilities, and processes for complying with current
Federal law, Executive Orders, policies, regulations, standards and
guidance for protecting VA information, information systems (see
802.101, Definitions) security and privacy, and adhering to personnel
security requirements when accessing VA information or information
systems. It would describe in detail requirements for access to VA
information and VA information systems and appropriate security and
protection requirements; information on requirement for contractor
operations in the United States; Contractor/subcontractor employee
reassignment and termination notification requirements; VA information
custodial requirements to include release, publication, and use of
data, as well as media sanitization requirements; data retention,
destruction and contractor self-certification requirements and use and
copying of VA data and information; information with respect to
violation of information custodial requirements, encryption, firewall
and web services security controls, and disclosure of VA data and
information. The clause also would cover compliance with privacy
statutes and applicable regulations, as well as the requirement to
report known or suspected security or privacy incidents. It further
describes security incident investigation requirements and data breach
notification requirements. It goes on to detail specific annual
training requirements and the requirement to complete and such
mandatory training requirements and complete acknowledgement of the VA
Information Security Rules of Behavior for Organizational Users. A
specific subcontract flow down requirement is also included.
We propose to add clause 852.211-76, Liquidated Damages--
Reimbursement for Data Breach Costs, that provides that if the
contractor fails to protect VA sensitive personal information which
results in a data breach, the contractor shall, in place of actual
damages, pay to the Government liquidated damages in an amount per
affected individual, inserted by the contracting officer based on
internal VA policy, in order to cover costs related to notification,
data breach analysis and credit monitoring for such individuals. In the
event the contractor provides payment of actual damages in an amount
determined to be adequate by the contracting officer, the contracting
officer may forgo collection of liquidated damages. The contracting
officer would insert Alternate I in all solicitations or contracts, in
commercial items acquisitions awarded under the procedures of FAR part
8 or FAR part 12, and would insert Alternate II in all solicitations,
contracts, or orders, in simplified acquisitions exceeding the micro-
purchase threshold that are for other than commercial items awarded
under the procedures of FAR part 13 (see FAR 13.302-5(d)(1) and the
clause at FAR 52.213-4).
We propose to remove clause 852.212-70, Provisions and Clauses
Applicable to VA Acquisition of Commercial Items, as redundant to other
FAR clauses.
We propose to remove clause 852.212-71, Gray Market Items, and to
add a new clause in its place, 852.212-71, Gray Market and Counterfeit
Items. This new clause would require that no used, refurbished, or
remanufactured supplies or equipment/parts shall be provided. It would
state that any procurement where the clause is inserted is for new
Original Equipment Manufacturer (OEM) items only. No gray market items
shall be permitted to be provided. The clause would also specify that
no counterfeit supplies or equipment/parts shall be provided. Unlawful
or unauthorized substitutions are set forth in the clause and include
used items represented as new, or the
[[Page 64138]]
false identification of grade, serial number, lot number, date code, or
performance characteristics. The clause would also require that all
vendors under the solicitation or contract shall be an OEM, authorized
dealer, authorized distributor or authorized reseller for the proposed
equipment/system, and would be required to be verified by an
authorization letter or other documents from the OEM.
We propose to add 852.212-72, Gray Market and Counterfeit Items--
Information Technology Maintenance Allowing Other-than-New Parts. This
new clause would permit used, refurbished, or remanufactured parts to
be provided. However, no gray market supplies or equipment shall be
permitted to be provided. The clause would also require that no
counterfeit supplies or equipment shall be provided. The clause would
also require that all vendors shall be an OEM, authorized dealer,
authorized distributor or authorized reseller for the proposed
equipment/system and would be required to be verified by an
authorization letter or other documents from the OEM. Both proposed
clauses are VA clauses that were originally released via a Class
Deviation that we propose for codification as a part of this
rulemaking.
We propose to add clause 852.239-70, Security Requirements for
Information Technology Resources, to specify that contractors shall be
responsible for information technology security for all systems
connected to a Department of Veterans Affairs (VA) network or operated
by the contractor for VA, regardless of location. This clause is
applicable to all or any part of the contract that includes information
technology resources or services in which the contractor has physical
or electronic access to VA information that directly supports the
mission of VA. Examples of tasks that require security provisions
include--
(1) Hosting of VA e-Government sites or other information
technology operations;
(2) Acquisition, transmission, or analysis of data owned by VA with
significant replacement cost should the contractor's copy be corrupted;
and
(3) Access to VA general support systems/major applications at a
level beyond that granted the general public, e.g., bypassing a
firewall.
The clause would also require the contractor to develop, provide,
implement, and maintain an Information Technology Security Plan. This
plan shall describe the processes and procedures that the contractor
will follow to ensure appropriate security of information technology
resources developed, processed, or used under this contract. The clause
would require that within 30 days after contract award, the contractor
shall submit the Information Technology Security Plan to the
contracting officer for review. This plan shall detail the approach
contained in the offeror's proposal, sealed bid or quotation. Upon
acceptance by the contracting officer, the Plan will be incorporated
into the contract by contract modification. As required by current VA
policy, the contractor shall submit written proof of information
technology security accreditation to the contracting officer. It also
specifies specifically as pertains to information technology related
contracts that its employees performing services under this contract
complete VA security awareness training on an annual basis. This
includes signing an acknowledgment that they have read, understand, and
agree to abide by the VA Information Security Rules of Behavior for
Organizational Users (VA National Rules of Behavior) as required by 38
U.S.C. 5723; FAR 39.105, Privacy; clause 852.204-71, Information and
Information Systems Security, and this clause on an annual basis.
We propose to add provision 852.239-71, Information Technology
Security Plan and Accreditation, that would require that all offers
submitted in response to this solicitation or request for quotation
shall address the approach for completing the security plan and
accreditation requirements in clause 852.239-70, Security Requirements
for Information Technology Resources.
We propose to add clause 852.239-72, Information System Design and
Development, which would be required in all solicitations, contracts,
purchase orders and agreements where services to perform information
system design and development are required. The contractor/
subcontractor shall comply with the Privacy Act of 1974 (the Act)) and
VA rules and regulations issued under the Act in the design,
development, or operation of any system of records on individuals to
accomplish an agency function when the contract specifically
identifies-- (1) the Systems of Records (SOR); and (2) the design,
development, or operational work that the contractor/subcontractor is
to perform. During the development cycle a Privacy Impact Assessment
(PIA) must be completed, provided to the COR, and approved by the VA
Privacy Service in accordance with VA Directive 6508, Implementation of
Privacy Threshold Analysis and Privacy Impact Assessment.
We propose to add clause 852.239-73, Information System Hosting,
Operation, Maintenance, or Use, which would be required in all
solicitations, contracts, purchase orders and agreements where services
to perform information system hosting, operation, maintenance or used
are required. For information systems that are hosted, operated,
maintained, or used on behalf of VA at non-VA facilities, contractors/
subcontractors are fully responsible and accountable for ensuring
compliance with all applicable Health Insurance Portability and
Accountability Act of 1996 (HIPAA) regulations, the Privacy Act and
other required VA confidentiality statutes included in VA's mandatory
yearly training and privacy handbooks, Federal Information Security
Management Act (FISMA), National Institute of Standards and Technology
(NIST), Federal Information Processing Standards (FIPS), and VA
security and privacy directives and handbooks. This includes conducting
compliant risk assessments, routine vulnerability scanning, system
patching and change management procedures, and the completion of an
acceptable contingency plan for each system. The contractor's security
control procedures must be equivalent to or exceed, to those procedures
used to secure VA systems. A Privacy Impact Assessment (PIA) must also
be provided to the contracting officer's representative (COR) and
approved by VA Privacy Service prior to approval to operate. Adequate
security controls for collecting, processing, transmitting, and storing
of Personally Identifiable Information (PII), as determined by the VA
Privacy Service, must be in place, tested, and approved by VA prior to
hosting, operation, maintenance, or use of the information system, or
systems by or on behalf of VA. These security controls are to be
assessed and stated within the Privacy Impact Assessment and if these
controls are determined not to be in place, or inadequate, a Plan of
Action and Milestones (POA&M) must be submitted and approved prior to
the collection of PII. The contractor/subcontractor must conduct an
annual self-assessment on all systems and outsourced services as
required. Electronic copies of the assessment must be provided to the
COR. Media (e.g., hard drives, optical disks, CDs, back-up tapes) used
by the contractor/subcontractor that contain VA information must be
returned to the VA for sanitization or destruction or the contractor/
subcontractor must self-certify that the media has been disposed of per
VA Directive 6500 requirements and as required by current VA policy.
[[Page 64139]]
This must be completed within 30 days of termination of the contract.
We propose to add clause 852.239-74, Security Controls Compliance
Testing, which would be required in solicitations, contracts, orders
and agreements, when the clauses at 852.239-72 or 852.239-73 are
inserted. Clause 852.239-73 would provide notice that VA, including the
Office of Inspector General, reserves the right to evaluate any or all
of the security controls and privacy practices implemented by a
contractor under the clauses contained within the contract. Clause
852.239-73 provides that with 10 working-days' notice, at the request
of VA, the contractor must fully cooperate and assist in a government-
sponsored security controls assessment at each location wherein VA
information is processed or stored, or information systems are
developed, operated, maintained, or used on behalf of VA, including
those initiated by the Office of the Inspector General. VA may conduct
a security control assessment on shorter notice, to include unannounced
assessments, as determined by VA in the event of a security incident or
at any other time.
We propose to add solicitation provision 852.239-75, Information
Communication and Technology Accessibility Notice, and clause 852.239-
76, Information and Communication Technology Accessibility, that
require the use of the VA Section 508 Checklists to be submitted under
solicitations and contracts, and that provide additional information
regarding the VA Section 508 website.
Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
the costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). E.O. 13563 (Improving Regulation and Regulatory Review)
emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility. The
Office of Information and Regulatory Affairs has determined that this
rule is not a significant regulatory action under Executive Order
12866.
The Regulatory Impact Analysis associated with this rulemaking can
be found as a supporting document at www.<a href="http://regulations.gov">regulations.gov</a>.
Paperwork Reduction Act
This proposed rule includes provisions constituting collections of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) that require approval by the Office of Management and Budget
(OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of
this rulemaking action to OMB for its review.
OMB assigns control numbers to collections of information it
approves. VA may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. VA is describing four groups of new
collections of information in this rule under the Paperwork Reduction
Act of 1995 for four separate OMB Control Numbers related to--
VAAR Part 804 related information collection:
1. Proposed clause, 852.204-71, Information and Information Systems
Security, and section 804.1970, Information security policy--contractor
general responsibilities.
VAAR Part 811 related information collection:
2. Proposed section 811.503-70, Contract clause, and proposed
clause 852.211-70, Liquidated Damages--Reimbursement for Data Breach
Costs.
VAAR Part 812 related information collection:
3. Proposed section 812.301(f), Solicitation provisions and
contract clauses for the acquisition of commercial items, and proposed
clauses 852.212-71, Gray Market and Counterfeit Items, and 852.212-72,
Gray Market and Counterfeit Items--Information Technology Maintenance
Allowing Other-than-New Parts.
VAAR Part 839 related information collection:
4. Proposed section 839.106-70, Information technology security and
privacy clauses, and proposed clauses 852.239-70, Security Requirements
for Information Technology Resources; 852.239-72, Information System
Design and Development; and 852.239-73, Information System Hosting,
Operation, Maintenance or Use. If OMB does not approve the collections
of information as requested, VA will immediately remove the provisions
containing a collection of information or take such other action as is
directed by OMB.
Written comments and recommendations for the proposed collections
of information should be sent within 60 days of publication of this
proposed rule through Federal Docket Management System (FDMS) at
<a href="http://www.Regulations.gov">www.Regulations.gov</a> or to Rafael Taylor, Office of Acquisition &
Logistics, Procurement Policy & Warrant Management Services (003A2A),
Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC
20420 or email to <a href="/cdn-cgi/l/email-protection#1664777077737a3862776f7a796456607738717960"><span class="__cf_email__" data-cfemail="2351424542464f0d57425a4f4c516355420d444c55">[email protected]</span></a>.
OMB is required to make a decision concerning the collections of
information contained in this proposed rule between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not affect the
deadline for the public to comment on the proposed rule.
The Department considers comments by the public on proposed
collections of information in--
<bullet> Evaluating whether the proposed collections of information
are necessary for the proper performance of the functions of the
Department, including whether the information will have practical
utility;
<bullet> Evaluating the accuracy of the Department's estimate of
the burden of the proposed collections of information, including the
validity of the methodology and assumptions used;
<bullet> Enhancing the quality, usefulness, and clarity of the
information to be collected; and
<bullet> Minimizing the burden of the collections of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g., permitting
electronic submission of responses.
The collections of information contained in this proposed rule at
48 CFR chapter 8 are described specifically and immediately following
this paragraph, under their respective titles.
VAAR Part 804 related collections of information:
The collection of information contained in proposed clause,
852.204-71, Information and Information Systems Security and new
section 804.1970, Information security policy--contractor general
responsibilities, is described immediately following this paragraph.
Summary of collection of information:
We propose the use of clause 852.204-71, Information and
Information Systems Security, as prescribed at 804.1903; and propose
section 804.1970, Information security policy--contractor general
responsibilities.
New proposed section 804.1970 and VAAR clause 852.204-71,
Information
[[Page 64140]]
and Information System Security, would require contractors,
subcontractors, their employees, third-parties, and business associates
who perform under a contract with access to VA information, information
systems, or information technology (IT) or providing and accessing IT-
related goods and services, to be subject to the same Federal laws,
regulations, standards, and VA Directives and Handbooks as VA and VA
personnel regarding information and information system security. The
clause and information collection requirement would be inserted in
solicitations, contracts, purchase orders and agreements where VA
information, VA sensitive information (including sensitive personal
information or protected health information (PHI)), when the clause at
FAR 52.204-21, Basic Safeguarding of Covered Contractor Information
Systems, is required to be included in accordance with FAR 4.1903.
Description of need for information and proposed use of
information:
This information collection requirement is needed to protect the
safety and health of the nation's Veterans and to protect the security
and integrity of VA information and VA sensitive information.
Clause 852.204-71 and section 804.1970 contain the following
information collection requirements from the public:
------------------------------------------------------------------------
Information collection requirement Clause/section
------------------------------------------------------------------------
Contractor/subcontractor employee 852.204-71.
reassignment and termination
notification.
Report of known or suspected 852.204-71, 804.1970.
security/privacy incident and
data breach.
Provide an annual training 852.204-71.
certificate.
Submission of data retention, 852.204-71.
destruction plan and contractor
self-certification.
Maintain records and compliance 804.1970.
reports regarding HIPAA security
and privacy rule compliance.
Submission of a detailed security 852.204-71.
plan.
Report of all requests for, 852.204-71.
demands for production of, or
inquiries, including court
orders, about VA information and
information systems.
------------------------------------------------------------------------
Total Burden Hours: 4,069.
Total Number of Respondents: 8,223.
Average Number of Respondents: 1,175.
Total Annual Responses: 8,223.
Average Annual Responses: 1,175.
Total estimated annual cost to all respondents: $189,371 (4,069
hours at $46.54 per hour). This is based on the Bureau of Labor
Statistics May 2020 Occupational Employment and Wages code ``15-1231
Computer Network Support Specialists'' mean hourly wage of $34.16 plus
36.25% fringe benefits per OMB Memo M-08-13 dated March 11, 2008.
VA gathered data for FY 2018, 2019 and 2020 across 11 North
American Industry Classification System (NAICS) where such information
collection requirements may be inserted into solicitations and
contracts. Then VA looked at the types of information collection
requirements or burden may be required by the clause. Of the potential
pool of previously awarded contracts (to both large and small
businesses) during the three fiscal years where the proposed clause
would be required to be included in solicitations and resulting
contracts, VA calculated the average number of contracts awarded during
the three fiscal years. We then used the average number of awards and
estimated that for the purpose of identifying any potential information
collection burden for contractor/subcontractor employee reassignment
and termination notification of information collection requirements,
only 45% would contain potential information collection requirements.
The remaining information collection requirement categories are
estimated as follows:
<bullet> VA estimates that 30% of the average number of contracts
awarded during the three fiscal years in the identified 6 of 11 NAICS
codes would require the clause and potential information collection
requirement for report of known or suspected security/privacy incident
and data breach.
<bullet> VA estimates that 100% of the average number of contracts
awarded during the three fiscal years in the identified NAICS codes
would require the clause and potential information collection
requirement for the contractor/subcontractor employee training and
certificates, and would be applicable when employees are onboarded by
contractors.
<bullet> VA estimates no more than 15% of the average number of
contracts awarded during the three fiscal years in the identified NAICS
codes would require the clause and potential information collection
requirement for the submission of data retention, destruction plan and
contractor self-certification.
<bullet> VA estimates that 100% of the average number of contracts
awarded during the three fiscal years in the identified eight of 11
NAICS codes would require the clause and potential information
collection requirement for maintain records and compliance reports
regarding HIPAA security and Privacy Rule compliance.
<bullet> VA estimates that 100% of the average number of contracts
awarded during the three fiscal years in the identified NAICS codes
would require the clause and potential information collection
requirement for the submission of a detailed security plan.
<bullet> VA estimates no more than 5% of the average number of
contracts awarded during the three fiscal years in the identified NAICS
codes that would require the clause and potential information
collection requirement for the report of all requests for, demands for,
production of, or inquiries, including court orders, about VA
information and information systems, would be applicable.
Contractor/subcontractor employee reassignment and termination
notification.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
1,357............................... 1 5 .................... 113
----------------------------------------------------------------------------------------------------------------
[[Page 64141]]
Report of known or suspected security/privacy incident and data
breach.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
807................................. 1 180 .................... 2,421
----------------------------------------------------------------------------------------------------------------
Submission of contractor/subcontractor employee annual training
certificate.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
3,016............................... 1 2 .................... 101
----------------------------------------------------------------------------------------------------------------
Submission of data retention, destruction plan and contractor self-
certification.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
452................................. 1 5 .................... 38
----------------------------------------------------------------------------------------------------------------
Maintain records and compliance reports regarding HIPAA security
and privacy rule compliance.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
2,138............................... 1 30 .................... 1,069
----------------------------------------------------------------------------------------------------------------
Detailed security plan submission.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
302................................. 1 60 .................... 302
----------------------------------------------------------------------------------------------------------------
Report of all requests for, demands for, production of, or
inquiries, including court orders, about VA information and information
systems.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
151................................. 1 10 .................... 25
----------------------------------------------------------------------------------------------------------------
VAAR Part 811 related collections of information:
The collections of information contained in section 811.503-70,
Contract clause and proposed clause 852.211-70, Liquidated Damages-
Reimbursement for Data Breach Costs is described immediately following
this paragraph.
Summary of collection of information:
We propose the use of clause 852.211-70, Liquidated Damages-
Reimbursement for Data Breach Costs, as prescribed at 811.503-70,
Contract clause, for sensitive personal information that will be
created, received, maintained, or transmitted, or that will be stored,
generated, accessed, exchanged, processed, or utilized by a contractor,
subcontractor, business associate, or an employee of one of these
entities. This new proposed VAAR clause 852.211-70 requires the
[[Page 64142]]
contractor, subcontractor, their employees or business associates to
notify the VA through the contracting officer and the contracting
officer's representative (COR) of any security incident that occurs
involving sensitive personal information.
Description of need for information and proposed use of
information:
This information collection requirement is needed to protect the
safety and health of the nation's Veterans and to protect the security
and integrity of VA information and VA sensitive information.
Total Burden Hours: 6.5.
Average Number of Respondents: 13.
Average Annual Responses: 13.
Total estimated annual cost to all respondents: $308 (6.5 hours at
$47.42 per hour). This is based on the Bureau of Labor Statistics May
2020 Occupational Employment and Wages code ``13-1020 Buyers and
Purchasing Agents'' mean hourly wage of $34.80 plus 36.25% fringe
benefits per OMB Memo M-08-13 dated March 11, 2008.
VA gathered data for FY 2018, 2019 and 2020 across six North
American Industry Classification System (NAICS) where such information
collection requirements may be inserted into solicitations and
contracts. Then VA looked at the types of information collection
requirements or burden (i.e., notify the VA through the contracting
officer and the contracting officer's representative of any security
incident that occurs involving sensitive personal information.) Of the
potential pool of previously awarded contracts during the average of
the three fiscal years, VA calculated a rough estimate that 20% of six
NAICS codes of past contract awards could be reasonably calculated as a
rough estimate of a potential information collection requirement for
any such contracts awarded to both large and small businesses.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
13.................................. 1 30 .................... 6.5
----------------------------------------------------------------------------------------------------------------
VAAR Part 812 related collections of information:
The collections of information contained in section 812.301(f),
Solicitation provisions and contract clauses for the acquisition of
commercial items, and proposed clauses 852.212-71, Gray Market and
Counterfeit Items, and 852.212-72, Gray Market and Counterfeit Items--
Information Technology Maintenance Allowing Other-than-New Parts, are
described immediately following this paragraph, under their respective
titles.
Summary of collection of information:
We propose the use of clauses 852.212-71, Gray Market and
Counterfeit Items, and 852.212-72, Gray Market and Counterfeit Items--
Information Technology Maintenance Allowing Other-than-New Parts, as
prescribed at 812.301(f), Solicitation provisions and contract clauses
for the acquisition of commercial items.
New proposed VAAR clause 852.212-71, Gray Market and Counterfeit
Items, require that no used, refurbished, or remanufactured supplies or
equipment/parts shall be provided. It would state that any procurement
where the clause is inserted is for new Original Equipment Manufacturer
(OEM) items only. No gray market items shall be permitted to be
provided. The clause would also specify that no counterfeit supplies or
equipment/parts shall be provided. Unlawful or unauthorized
substitutions are set forth in the clause and include used items
represented as new, or the false identification of grade, serial
number, lot number, date code, or performance characteristics. The
clause would also require that all vendors shall be an OEM, authorized
dealer, authorized distributor or authorized reseller for the proposed
equipment/system and would be required to be verified by an
authorization letter or other documents from the OEM.
New proposed VAAR clause 852.212-72, Gray Market and Counterfeit
Items--Information Technology Maintenance Allowing Other-than-New
Parts, would permit used, refurbished, or remanufactured parts to be
provided under the solicitation and contract. However, no gray market
supplies or equipment shall be permitted to be provided. The clause
would also require that no counterfeit supplies or equipment shall be
provided. The clause would also require that all vendors shall be an
OEM, authorized dealer, authorized distributor or authorized reseller
for the proposed equipment/system and would be required to be verified
by an authorization letter or other documents from the OEM.
Description of need for information and proposed use of
information:
To prevent the inadvertent acquisition of gray market and
counterfeit medical equipment, medical supplies, and IT equipment and
to protect the VA supply chain.
The two clauses containing collections of information are described
below:
Clause 852.212-71, Gray Market and Counterfeit Items, is required
in solicitations and contracts for new medical supplies, new medical
equipment, new information technology equipment, and maintenance of
medical or information technology equipment that includes replacement
parts if used, refurbished, or remanufactured parts are unacceptable,
when the associated solicitation includes FAR provisions 52.212-1,
Instruction to Offerors-Commercial Items, and 52.212-2, Evaluation-
Commercial Items.
Clause 852.212-72, Gray Market and Counterfeit Items--Information
Technology Maintenance Allowing Other-than-New Parts, is required in
solicitations and contracts for the maintenance of information
technology equipment that includes replacement parts, if used,
refurbished, or remanufactured parts are acceptable, when the
associated solicitation includes FAR provisions 52.212-1, Instruction
to Offerors-Commercial Items, and 52.212-2, Evaluation-Commercial
Items.
Total estimated burden hours: 2,170.
Estimated average number of respondents: 4,342.
Total estimated annual responses: 13,026.
Total estimated annual cost to all respondents: $102,902 (2,170
hours at $47.42 per hour). This is based on the Bureau of Labor
Statistics May 2020 Occupational Employment and Wages code ``13-1020
Buyers and Purchasing Agents'' mean hourly wage of $34.80 plus 36.25%
fringe benefits per OMB Memo M-08-13 dated March 11, 2008.
VA gathered data for FY 2017, 2018 and 2019 across seven North
American Industry Classification System (NAICS) where such information
collection requirements may be inserted into solicitations and
contracts. Then VA looked at the types of information collection
requirements or burden (i.e., submitting an authorization letter or
other documents from the Original Equipment Manufacturer.) Of the
[[Page 64143]]
potential pool of previously awarded contracts during the average of
the three fiscal years, VA calculated a rough estimate the seven NAICS
codes as follows: Two at 10%, one at 15%, one at 20%, and three at 25%
of the past contract awards that could be reasonably calculated as a
rough estimate of a potential information collection requirement for
any such contracts awarded to both large and small businesses.
Additionally, VA estimated three proposals would be received for each
awarded contract, with the presumption that in some cases VA may only
have received one proposal, and in others, more than three.
Because both clauses require the same information collection, one
if for new OEM items and the other for other-than-new-parts and assumes
both clauses will not be included in one acquisition. Therefore, the
number of respondents for each clause is 50% the total of all NAICS
estimated respondents.
Clause 852.212-71, Gray Market and Counterfeit Items.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
2,171............................... 3 10 1,085
----------------------------------------------------------------------------------------------------------------
Clause 852.212-72, Gray Market, and Counterfeit Items--Information
Technology Maintenance Allowing Other-than-New Parts.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
2,171............................... 3 10 1,085
----------------------------------------------------------------------------------------------------------------
VAAR Part 839 related collections of information:
The collections of information contained in section 839.106-70 and
part 852 at proposed clauses 852.239-70, 852.239-72, and 852.239-73,
are described immediately following this paragraph, under their
respective titles.
Summary of collection of information:
We propose the use of 852.239-70, Security Requirements for
Information Technology Resources; 852.239-72, Information System Design
and Development, and 852.239-73, Information System Hosting, Operation,
Maintenance, or Use, as prescribed at 839.106-70, Information
technology security and privacy clauses.
New proposed clause 852.239-70, Security Requirements for
Information Technology Resources, would require contractors,
subcontractors, business associates and their personnel, when accessing
VA information and or information systems in order to perform under a
contract, to be subject to the same Federal laws, regulations,
standards, and VA Directives and Handbooks as VA and VA personnel
regarding information and information system security. The clause and
information collection requirement would be inserted in solicitations,
contracts, purchase orders and agreements where VA information, VA
sensitive information (including sensitive personal information or
protected health information (PHI))--
(1) Is created, received, maintained, or transmitted, or that will
be stored, generated, accessed, exchanged, processed, or utilized by a
VA contractor, subcontractor or third-party servicers or associates, or
on behalf of any of these entities, in the performance of their
contractual obligations to VA;
(2) By or on behalf of any of the entities identified in this
section, regardless of--
(i) Format; or
(ii) Whether it resides on a VA or a non-VA system, or with a
contractor, subcontractor, or third-party system or electronic
information system(s), including cloud services, operating for or on
the VA's behalf or as required by contract.
New proposed clause 852.239-72, Information System Design and
Development, is required in all solicitations, contracts, orders and
agreements where services to perform information system design and
development are required.
New proposed clause 852.239-73, Information System Hosting,
Operation, Maintenance, or Use, is required in all solicitations,
contracts, orders and agreements for contracts where information
systems are hosted, operated, maintained, or used on behalf of VA at
non-VA facilities.
Description of need for information and proposed use of
information:
Under the Federal Information Security Management Act (FISMA)
(2002), section 3544(a)(1)(A)(ii), and the Federal Information Security
Modernization Act of 2014, each agency of the Federal Government must
provide security for the information and information systems that
support the operations and assets of the agency, including those
provided or managed by another agency, contractor, or other source. VA
requires, based on Federal security requirements, that contractors and
subcontractors, including business associates, and employees, that
require access to VA information or information systems shall be
subject to the same Federal laws, regulations, standards, policies and
procedures as VA and VA personnel. This includes whenever it is
accessed, maintained, processed, or utilized; or when VA information
systems will be designed or developed at non-VA facilities. These three
clauses would enable VA to comply with its responsibilities under the
Federal Information Security Modernization Act of 2014. The three
clauses containing collections of information are described below:
Clause 852.239-70, Security Requirements for Information Technology
Resources, is required in all solicitations, contracts, purchase
orders, and agreements where VA sensitive information, including
sensitive personal information is accessed, maintained, processed, or
utilized as set forth in VAAR part 839. Contractors (including
subcontractors, employees, and business associates) would be required
to adhere to VA Directive 6500, VA Cybersecurity Program, and the
directives and handbooks in the VA 6500 series related to VA
information (including VA sensitive information and sensitive personal
information and information systems security and privacy), as well as
those set forth in the contract specifications, statement of
[[Page 64144]]
work, or performance work statement. These include, but are not limited
to, VA Handbook 6500.6, Contract Security; and VA Directive and
Handbook 0710, Personnel Security and Suitability Program, which
establishes VA's procedures, responsibilities, and processes for
complying with personnel security program management and contract
security in VA.
Clause 852.239-72, Information System Design and Development, is
required in all solicitations, contracts, purchase orders and
agreements where services to perform information system design and
development are required. The contractor/subcontractor shall comply
with the Privacy Act of 1974 (the Act) and VA rules and regulations
issued under the Act in the design, development, or operation of any
system of records on individuals to accomplish an agency function when
the contract specifically identifies--
(1) The applicable and existing VA Privacy Act systems of records
(SOR); and (2) the design, development, or operational work that the
contractor/subcontractor is to perform. During the development cycle a
Privacy Impact Assessment (PIA) must be completed, provided to the COR,
and approved by the VA Privacy Service in accordance with VA Directive
6508, Implementation of Privacy Threshold Analysis and Privacy Impact
Assessment.
Clause 852.239-73, Information System Hosting, Operation,
Maintenance, or Use, is required in all solicitations, contracts,
purchase orders and agreements where services to perform information
system hosting, operation, or maintenance are required. For information
systems that are hosted, operated, maintained, or used on behalf of VA
at non-VA facilities, contractors/subcontractors are fully responsible
and accountable for ensuring compliance with all applicable HIPAA
regulations, the Privacy Act and other required VA confidentiality
statutes included in VA's mandatory yearly training and privacy
handbooks, FISMA, NIST, FIPS, and VA security and privacy directives
and handbooks. This includes conducting compliant risk assessments,
routine vulnerability scanning, system patching and change management
procedures, and the completion of an acceptable contingency plan for
each system. The contractor's security control procedures must be
equivalent to or exceed those procedures used to secure VA systems. A
Privacy Impact Assessment (PIA) must also be provided to the COR and
approved by VA Privacy Service prior to approval to operate. Adequate
security controls for collecting, processing, transmitting, and storing
of Personally Identifiable Information (PII), as determined by the VA
Privacy Service, must be in place, tested, and approved by VA prior to
hosting, operation, maintenance, or use of the information system, or
systems by or on behalf of VA. These security controls are to be
assessed and stated within the Privacy Impact Assessment and if these
controls are determined not to be in place, or inadequate, a Plan of
Action and Milestones (POA&M) must be submitted and approved prior to
the collection of PII.
The contractor/subcontractor must conduct an annual self-assessment
on all systems and outsourced services as required. Both hard copy and
electronic copies of the assessment must be provided to the COR. Media
(e.g., hard drives, optical disks, CDs, back-up tapes) used by the
contractors/subcontractors that contain VA information must be returned
to the VA for sanitization or destruction or the contractor/
subcontractor must self-certify that the media has been disposed of per
VA Handbook 6500.1 requirements. This must be completed within 30 days
of termination of the contract.
Section 839.101-70 and these three clauses require the contractor/
subcontractor to submit the following information collections:
------------------------------------------------------------------------
Information collection requirement Clause/section
------------------------------------------------------------------------
Contractor/subcontractor employee 852.239-70.
reassignment and termination
notification.
Privacy Impact Assessment Report & 852.239-72, 852.239-73.
Plan of Action and Milestones.
Maintain and provide information 852.239-70.
technology security plan.
Submission of proof of information 852.239-70.
technology security accreditation.
Verification of annual IT security 852.239-70.
plan validation.
Submission of annual self- 852.239-73.
assessment.
Report of any deficiencies on 852.239-73.
annual FISMA security controls
assessment.
------------------------------------------------------------------------
Overall Total estimated burden hours: 4,815.
Overall Estimated average number of respondents: 2,198.
Overall Total estimated annual responses: 2,198.
Total estimated annual cost to all respondents: $228,327 (4,815
hours at $47.42 per hour). This is based on the Bureau of Labor
Statistics May 2020 Occupational Employment and Wages code ``13-1020
Buyers and Purchasing Agents'' mean hourly wage of $34.80 plus 36.25%
fringe benefits per OMB Memo M-08-13 dated March 11, 2008.
VA gathered data for FY 2018, 2019 and 2020 across 11 North
American Industry Classification System (NAICS) where such information
collection requirements may be inserted into solicitations and
contracts. Then VA looked at the types of information collection
requirements or burden that may be required across the three VAAR part
839 clauses. Of the potential pool of previously awarded contracts (to
both large and small businesses) during the three fiscal years where
the proposed clauses would be required to be included in solicitations
and resulting contracts, VA calculated the average number of contracts
awarded during the three fiscal years. We then used the average number
of awards and estimated that for the purpose of identifying any
potential information collection burden for Contractor/Subcontractor
Employee Reassignment and Termination Notification of information
collection requirements, only 45% would contain a potential information
collection requirements. VA estimates that 100% of the average number
of contracts awarded during the three fiscal years in the identified 11
NAICS codes would require the clause and potential information
collection requirement for maintain and provide Information Technology
Security Plan. Submission of proof of information technology security
accreditation, and verification of annual IT security plan validation:
VA also estimates 5% of the average number of contracts awarded during
the three fiscal years in the identified 11 NAICS codes would require
the clause and potential information collection requirement for report
of any deficiencies on annual FISMA security controls assessment.
Moreover, VA estimates that 100% of the average number of contracts
awarded during the three fiscal years in six of the identified 11 NAICS
codes would require the clause and potential information collection
requirement for
[[Page 64145]]
Privacy Impact Assessment report & Plan of Action and Milestones.
Finally, VA estimates that 100% of the average number of contracts
awarded during the three fiscal years in eight of the identified 11
NAICS codes would require the clause and potential information
collection requirement for submission of annual self-assessment.
<bullet> 852.239-70, Security Requirements for Information
Technology Resources.
Total Burden Hours: 2,375.
Average Number of Respondents: 2,601.
Average Annual Responses: 2,601.
Contractor/subcontractor employee reassignment and termination
notification.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
1,357............................... 1 5 .................... 113
----------------------------------------------------------------------------------------------------------------
Maintain and provide Information technology security plan.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
3,016............................... 1 30 .................... 1,508
----------------------------------------------------------------------------------------------------------------
Submission of proof of information technology security
accreditation.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
3,016............................... 1 10 .................... 503
----------------------------------------------------------------------------------------------------------------
Verification of annual IT Security Plan validation.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
3,016............................... 1 5 .................... 251
----------------------------------------------------------------------------------------------------------------
<bullet> 852.239-72, Information System Design and Development:
Privacy Impact Assessment Report & Plan of Action and Milestones.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
1,345............................... 1 30 .................... 673
----------------------------------------------------------------------------------------------------------------
Total Burden Hours: 673.
Average Number of Respondents: 1,345.
Average Annual Responses: 1,345.
<bullet> 852.239-73, Information System Hosting, Operation,
Maintenance, or Use:
Total Burden Hours: 1,767.
Average Number of Respondents: 1,211.
Average Annual Responses: 1,211.
Privacy Impact Assessment Report & Plan of Action and Milestones.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
1,345............................... 1 30 .................... 673
----------------------------------------------------------------------------------------------------------------
Submission of annual self-assessment.
[[Page 64146]]
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
2,138............................... 1 30 .................... 1,069
----------------------------------------------------------------------------------------------------------------
Report of any deficiencies on annual FISMA security controls
assessment.
----------------------------------------------------------------------------------------------------------------
x Number of
Number of respondents responses per x Number of / by 60 Number of burden
respondent minutes hours
----------------------------------------------------------------------------------------------------------------
151................................. 1 10 .................... 25
----------------------------------------------------------------------------------------------------------------
Regulatory Flexibility Act
The Secretary hereby certifies that this proposed rule would not
have a significant economic impact on a substantial number of small
entities as they are defined in the Regulatory Flexibility Act (5
U.S.C. 601-612). Therefore, pursuant to 5 U.S.C. 605(b), the initial
and final regulatory flexibility analysis requirements of 5 U.S.C. 603
and 604 do not apply.
This rulemaking does not change VA's policy regarding small
businesses and does not have a significant economic impact to
individual businesses. The overall impact of the proposed rule would be
of benefit to small businesses owned by Veterans or service-disabled
Veterans as the VAAR is being updated to provide needed guidance to
ensure VA's contractors properly protect and safeguard VA sensitive
information, which includes Veteran's sensitive personal information.
This rulemaking adds a new VAAR part concerning Acquisition of
Information Technology that codifies information collection burdens.
VA's requirement to collect the information is the result of existing
requirements to ensure compliance across the Federal government and
specifically when VA contractors, subcontractors, business associates
and their employees require access to VA information (including VA
sensitive information) or information systems. VA is merely adding
existing and current regulatory requirements to the VAAR and placing
guidance that is applicable only to VA's internal operation processes
or procedures into a VA Acquisition Manual. VA estimates no substantial
cost impact to individual businesses will result from these rule
updates already required to be considered by both large and small
businesses to receive an award from VA or another Federal agency. There
are costs associated with this rulemaking pertaining to the
codification of an information collection request in order to comply
with VA's responsibilities under the Federal Information Security
Modernization Act of 2014. Each agency of the Federal Government must
provide security for the information and information systems that
support the operations and assets of the agency, including those
provided or managed by another agency, contractor, or other source. By
statute, VA is required to ensure that its contractors, subcontractors,
business associates, and their employees operating under contracts at
VA shall be subject to the same Federal laws, regulations, policies or
procedures as VA and VA personnel. While this requirement adds some
burden in annual costs and hours to firms already awarded and
performing contracts at VA, the overall cost is considered de minimis,
for either large or small contractors, in relation to the potential
impact and harm to Veterans and VA information and information systems
should a contractor not comply. Properly setting forth the requirements
will provide clarity to the public and ensure appropriate safeguards
are in place to ensure protection of VA's information (in particular VA
sensitive personal information) and information systems. In total, this
rulemaking does not change VA's policy regarding small businesses, does
not have a substantial economic impact to individual businesses, and
does not significantly increase or decrease costs small business were
already required to bear when performing contracts which required the
access, maintenance, process, or utilization of VA sensitive
information or information systems.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal Governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This proposed rule would have no such
effect on State, local, and tribal Governments or on the private
sector.
List of Subjects
48 CFR Part 802, 804, 811, and 812
Government procurement.
48 CFR Part 824
Freedom of information, Government procurement, Privacy.
48 CFR Part 839
Computer technology, Government procurement.
48 CFR Part 852
Government procurement, Reporting and recordkeeping requirements.
Signing Authority
Denis McDonough, Secretary of Veterans Affairs, approved this
document on October 12, 2021, and authorized the undersigned to sign
and submit the document to the Office of the Federal Register for
publication electronically as an official document of the Department of
Veterans Affairs.
Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy &
Management, Office of General Counsel, Department of Veterans Affairs.
For the reasons set forth in the preamble, VA proposes to amend 48
CFR chapter 8 as follows:
PART 802--DEFINITIONS OF WORDS AND TERMS
0
1. The authority citation for part 802 is revised to read as follows:
Authority: 40 U.S.C. 121(c); 41 U.S.C. 1121; 41 U.S.C. 1303; 41
U.S.C. 1702; and 48 CFR 1.301 through 1.304.
Subpart 802.1--Definitions
0
2. Section 802.101 is amended by adding definitions for ``Business
associate'', ``Business Associate
[[Page 64147]]
Agreement'', ``Gray market items'', ``Information system'',
``Information technology'', ``Information technology-related
contracts'', ``Privacy officer'', ``Security plan'', ``Sensitive
personal information'', ``VA Information Security Rules of Behavior for
Organizational Users/VA National Rules of Behavior'', and ``VA
sensitive information'' in alphabetical order to read as follows:
802.101 Definitions.
* * * * *
Business associate (or associate) means an entity, including an
individual (other than a member of the workforce of a covered entity),
company, organization or another covered entity, as defined by the
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
(Pub. L. 104-191) Privacy Rule (45 CFR part 160), that performs or
assists in the performance of a function or activity on behalf of the
Veterans Health Administration (VHA) that involves the creating,
receiving, maintaining, transmitting of, or having access to, protected
health information (PHI), or that provides to or for VHA, certain
services as specified in the HIPPA Privacy Rule (45 CFR part 160) that
involve the disclosure of PHI to a contractor by VHA. The term also
includes a subcontractor of a business associate that creates,
receives, maintains, or transmits PHI or that stores, generates,
accesses, exchanges, processes, or utilizes such PHI on behalf of the
business associate.
Business Associate Agreement (BAA) means the agreement, as dictated
by the HIPPA Privacy Rule (45 CFR part 160), between VHA and a business
associate, which must be entered into in addition to the underlying
contract for services and before any release of PHI can be made to the
business associate, in order for the business associate to perform
certain functions or activities on behalf of VHA.
* * * * *
Gray market items means original equipment manufacturer goods
intentionally or unintentionally sold outside an authorized sales
territory or sold by non-authorized dealers in an authorized sales
territory.
* * * * *
Information system means, pursuant to 38 U.S.C. 5727, a discrete
set of information resources organized for the collection, processing,
maintenance, use, sharing, dissemination, or disposition of information
whether automated or manual.
Information technology (see FAR 2.101), also means Information and
Communication Technology (ICT).
Information technology-related contracts means those contracts
which include services (including support services) and related
resources for information technology as defined in this section.
* * * * *
Privacy officer means the VA official with responsibility for
implementing and oversight of privacy related policies and practices
that impact a given VA acquisition.
Security plan means a formal document that provides an overview of
the security requirements for an information system or an information
security program and describes the security controls in place or
planned for meeting those requirements.
Sensitive personal information means, with respect to an
individual, any information about the individual maintained by VA,
including but not limited to the following:
(1) Education, financial transactions, medical history, and
criminal or employment history.
(2) Information that can be used to distinguish or trace the
individual's identity, including but not limited to name, social
security number, date and place of birth, mother's maiden name, or
biometric records.
* * * * *
VA Information Security Rules of Behavior for Organizational Users/
VA National Rules of Behavior means a set of VA rules that describes
the responsibilities and expected behavior of users of VA information
or information systems.
VA sensitive information means all VA data, on any storage media or
in any form or format, which requires protection due to the risk of
harm that could result from inadvertent or deliberate disclosure,
alteration, or destruction of the information and includes sensitive
personal information. The term includes information where improper use
or disclosure could adversely affect the ability of VA to accomplish
its mission, proprietary information, records about individuals
requiring protection under various confidentiality provisions such as
the Privacy Act and the HIPAA Privacy Rule, and information that can be
withheld under the Freedom of Information Act. Examples of VA sensitive
information include the following: individually-identifiable medical,
benefits, and personnel information; financial, budgetary, research,
quality assurance, confidential commercial, critical infrastructure,
investigatory, and law enforcement information; information that is
confidential and privileged in litigation such as information protected
by the deliberative process privilege, attorney work-product privilege,
and the attorney-client privilege; and other information which, if
released, could result in violation of law or harm or unfairness to any
individual or group, or could adversely affect the national interest or
the conduct of Federal programs.
* * * * *
PART 804--ADMINISTRATIVE AND INFORMATION MATTERS
0
3. The authority citation for part 804 is revised to read as follows:
Authority: 38 U.S.C. 5723-5724; 5725(a)-(c); 40 U.S.C. 121(c);
41 U.S.C. 1702; and 48 CFR 1.301 through 1.304.
0
4. Subpart 804.19 is added to read as follows:
Subpart 804.19--Basic Safeguarding of Covered Contractor Information
Systems
Sec.
804.1900-70 Scope of subpart.
804.1902 Applicability.
804.1970 Information security policy--contractor general
responsibilities.
804.1903 Contract clause.
Subpart 804.19--Basic Safeguarding of Covered Contractor
Information Systems 804.1900-70 Scope of this subpart.
This subpart prescribes policies and procedures for information
security and protection of VA information, information systems, and VA
sensitive information, including sensitive personal information.
804.1902 Applicability.
This subpart applies to all VA acquisitions, including acquisitions
of commercial items other than commercially available off-the-shelf
items, when a contractor's information system may contain VA
information.
804.1970 Information security policy--contractor general
responsibilities.
Contractors, subcontractors, business associates and their
employees who are users of VA information or information systems, or
have access to VA information and VA sensitive information shall--
(a) Comply with all VA information security and privacy program
policies, procedures, practices and related contract requirements,
specifications and clauses, this includes complying with VA privacy and
confidentiality laws and implementing VA and VHA regulations (see 38
U.S.C. 5701, 5705, 5721-5728 and 7332; 38 CFR 1.460 through 1.496,
1.500 through 1.527, and
[[Page 64148]]
17.500 through 17.511), the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), and the Privacy Act of 1974 (as
amended);
(b) Complete VA security awareness training on an annual basis;
(c) Complete VHA's Privacy and Health Insurance Portability and
Accountability Act of 1996 (HIPAA) Training on an annual basis when
access to protected health information (PHI) is required;
(d) Report all actual or suspected security/privacy incidents and
report the information to the contracting officer and contracting
officer's representative (COR), as identified in the contract or as
directed in the contract, within one hour of discovery or suspicion;
(e) Comply with VA policy as it relates to personnel security and
suitability program requirements for background screening of both
employees and non-employees who have access to VA information systems
and data;
(f) Comply with directions that may be issued by the contracting
officer or COR, or from the VA Assistant Secretary for Information and
Technology or a designated representative through the contracting
officer or COR, directing specific activities when a security/privacy
incident occurs;
(g) Sign an acknowledgment that they have read, understand, and
agree to abide by the VA Information Security Rules of Behavior (VA
National Rules of Behavior) as required by 38 U.S.C. 5723, FAR 39.105,
Privacy, and clause 852.204-71, Information and Information Systems
Security, on an annual basis. The VA Information Security Rules of
Behavior describe the responsibilities and expected behavior of
contractors, subcontractors, business associates and their employees
who are users of VA information or information systems, information
assets and resources, or have access to VA information;
(h) Maintain records and compliance reports regarding HIPAA
Security and Privacy Rule compliance in order to provide such
information to VA upon request to ascertain whether the business
associate is complying with all applicable provisions under both rules'
regulatory requirements; and
(i) Flow down requirements in all subcontracts and Business
Associate Agreements (BAAs), at any level, as provided in the clause at
852.204-71, Information and Information Systems Security.
804.1903 Contract clause.
When the clause at FAR 52.204-21, Basic Safeguarding of Covered
Contractor Information Systems is required to be included in accordance
with FAR 4.1903, the contracting officer shall insert clause 852.204-
71, Information and Information Systems Security.
PART 811--DESCRIBING AGENCY NEEDS
0
5. The authority citation for part 811 is revised to read as follows:
Authority: 38 U.S.C 5723-5724; 5725(a)-(c); 40 U.S.C. 121(c);
41 U.S.C. 1303; 1702 and 48 CFR 1.301 through 1.304.
0
6. Subpart 811.5 is added to read as follows:
Subpart 811.5--Liquidated Damages
Sec.
811.500 Scope.
811.501-70 Policy--statutory requirement.
811.503-70 Contract clause.
Subpart 811.5--Liquidated Damages
811.500 Scope.
This subpart prescribes policies and procedures for using a
liquidated damages clause in solicitations and contracts that involve
VA sensitive personal information. This also pertains to any
solicitations and contracts involving VA sensitive personal information
issued by another agency for or on behalf of VA through an interagency
acquisition in accordance with FAR subpart 17.5 and subpart 817.5.
811.501-70 Policy--statutory requirement.
(a) Contracting officers are required to include a liquidated
damages clause in contracts for the performance of any Department
function which requires access to VA sensitive personal information
(see the definition in 802.101), in accordance with 38 U.S.C. 5725(b).
The liquidated damages are to be paid by the contractor to the
Department of Veterans Affairs in the event of a data breach involving
sensitive personal information maintained, processed, or utilized by
contractors or any subcontractors.
(b) The purpose of the liquidated damages to be paid for by the
contractor in the event of a data breach of personal sensitive
information is for VA to provide credit protection services to affected
individuals pursuant to 38 U.S.C. 5724(a)-(b).
811.503-70 Contract clause.
(a) Insert the clause at 852.211-76, Liquidated Damages--
Reimbursement for Data Breach Costs, in all solicitations, contracts,
or orders, where VA requires access to sensitive personal information
for the performance of a Department function where--
(1) Sensitive personal information (see 802.101, Definitions) will
be created, received, maintained, or transmitted, or that will be
stored, generated, accessed, or exchanged such as protected health
information (PHI) or utilized by a contractor, subcontractor, business
associate, or an employee of one of these entities; or,
(2) When VA information systems will be designed or developed at
non-VA facilities where such sensitive personal information is required
to be created, received, maintained, or transmitted, or that will be
stored, generated, accessed, exchanged, processed, or utilized.
(b) Insert the clause at 852.211-76 with its Alternate I in all
solicitations, contracts, or orders, in commercial items acquisitions
awarded under the procedures of FAR part 8 or 12.
(c) Insert the clause at 852.211-76 with its Alternate II, in all
solicitations, contracts, or orders, in simplified acquisitions
exceeding the micro-purchase threshold that are for other than
commercial items awarded under the procedures of FAR part 13 (see FAR
13.302-5(d)(1) and the clause at FAR 52.213-4).
PART 812--ACQUISITION OF COMMERCIAL ITEMS
0
7. The authority citation for part 812 continues to read as follows:
Authority: 38 U.S.C. 8127-8128; 40 U.S.C. 121(c); 41 U.S.C.
1702 and 48 CFR 1.301 through 1.304.
Subpart 812.3--Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items
0
8. Section 812.301 is revised to read as follows:
812.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(f)(1) Contracting officers shall insert the clause 852.212-71,
Gray Market and Counterfeit Items, in solicitations and contracts for
new medical supplies, new medical equipment, new information technology
equipment, and maintenance of medical or information technology
equipment that includes replacement parts if used, refurbished, or
remanufactured parts are unacceptable, when the associated solicitation
includes FAR provisions 52.212-1 Instruction to Offerors-Commercial
Items, and 52.212-2, Evaluation-Commercial Items.
[[Page 64149]]
(2) Contracting officers shall insert the clause 852.212-72, Gray
Market and Counterfeit Items--Information Technology Maintenance
Allowing Other-than-New Parts, in solicitations and contracts for the
maintenance of information technology equipment that includes
replacement parts, if used, refurbished, or remanufactured parts are
acceptable, when the associated solicitation includes FAR provisions
52.212-1, Instruction to Offerors-Commercial Items, and 52.212-2,
Evaluation-Commercial Items.
PART 824--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION
0
9. The authority citation for part 824 is revised to read as follows:
Authority: 5 U.S.C. 552a; 38 U.S.C. 5723-5724; 5725(a)-(c); 40
U.S.C. 121(c); 41 U.S.C. 1121(c); 41 U.S.C. 1702; 38 CFR 1.550
through 1.562 and 1.575 through 1.584; and 48 CFR 1.301 through
1.304.
Subpart 824.1--Protection of Individual Privacy
0
10. Sections 824.103-70 and 824.103-71 are added to read as follows:
824.103-70 Protection of privacy--general requirements and procedures
related to Business Associate Agreements.
To ensure compliance with unique responsibilities to protect
protected health information, contractors performing under VA contracts
subject to unique protected health information (PHI) and Health
Insurance Portability and Accountability Act of 1996 (HIPAA) shall
comply with requirements and the clause prescribed at 804.1903,
852.204-71, Information and Information Systems Security.
(a) HIPAA Business Associate Agreement requirement. Under the
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
Privacy and Security Rules, a Covered Entity (Veterans Health
Administration (VHA)) must have a satisfactory assurance that its
protected health information will be safeguarded from misuse. To do so,
a Covered Entity enters into a Business Associate Agreement (BAA) with
a contractor (now the business associate), which obligates the business
associate to only use the Covered Entity's protected health information
for the purposes for which it was engaged, provide the same protections
and safeguards as is required from the Covered Entity, and agree to the
same disclosure restrictions to PHI that is required of the Covered
Entity in situations where a contractor--
(1) Creates, receives, maintains, or transmits VHA PHI or that will
store, generate, access, exchange, process, or utilize such PHI in
order to perform certain health care operations activities or functions
on behalf of the Covered Entity; or
(2) Provides one or more of the services specified in the HIPPA
Privacy Rule to or for the Covered Entity.
(b) Veterans Health Administration (VHA)--a HIPAA Covered Entity.
VHA is the only administration of the Department of Veterans Affairs
that is a HIPAA Covered Entity under the HIPAA Privacy Rule.
(c) Contractors or entities required to execute BAAs for contracts
and other agreements become VHA business associates. BAAs are issued by
VHA or may be issued by other VA programs in support of VHA. The HIPAA
Privacy Rule requires VHA to execute compliant BAAs with persons or
entities that create, receive, maintain, or transmit VHA PHI or that
will store, generate, access, exchange, process, or utilize such PHI in
order to perform certain activities, functions or services to, for, or
on behalf of VHA.
(1) There may be other VA components or staff offices which also
provide certain services and support to VHA and must receive PHI in
order to do so. If these components award contracts or enter into other
agreements, purchase/delivery orders, modifications and issue
governmentwide purchase card transactions to help in the delivery of
these services to VHA, they will also fall within the requirement to
obtain a satisfactory assurance from these contractors by executing a
BAA.
(2) Contractors or other entities supporting VHA required to
create, receive, maintain, or transmit VHA PHI shall be required to
execute a BAA as mandated by the Privacy Rule and requested by the
contracting officer, the contracting officer's representative (COR) or
the cognizant privacy officer--
(i) Whether via a contract or agreement with VHA; or
(ii) Whether provided from or through another VA administration or
staff activity contract for supplies, services or support that involves
performing a certain activity, function or service to, for, or on
behalf of VHA (see VA Directive 6066, Protected Health Information
(PHI) and Business Associate Agreements Management).
(d) BAA requirement flow down to subcontractors. A prime contractor
required to execute a BAA shall also obtain a satisfactory assurance,
in the form of a BAA, that any of its subcontractors who will also
create, receive, maintain, or transmit VHA PHI or that will store,
generate, access, exchange, process, or utilize such PHI will comply
with HIPAA requirements to the same degree as the contractor. A
contractor employing a subcontractor who creates, receives, maintains,
or transmits VHA PHI or that will store, generate, access, exchange,
process, or utilize such VHA PHI under a contract or agreement is
required to execute a BAA with each of its subcontractors which also
obligates the subcontractor (i.e., also a business associate) to
provide the same protections and safeguards and agree to the same
disclosure restrictions to VHA's PHI that is required of the Covered
Entity and the prime contractor.
824.103-71 Liquidated damages--protection of information.
(a) Purpose. As required by 38 U.S.C. 5725 any contracts where
sensitive personal information such as protected health information
(PHI) must be disclosed to the contractor for the contractor to perform
certain functions or services on behalf of VHA shall include a
liquidated damages clause as prescribed at 811.503-70.
(b) Applicability to contracts requiring Business Associate
Agreements. A liquidated damages clause is required (see 811.503-70)
when performance under a contract requires a contractor to enter into a
Business Associate Agreement with VHA because the contractor or its
subcontractor is required to create, receive, maintain, or transmit VHA
PHI or that will store, generate, access, exchange, process, or utilize
such PHI, for certain services or functions, on behalf of VHA. The
liquidated damages clause shall be added even in situations where the
prime contractor never directly receives VA's sensitive personal
information and the same flows directly to the prime contractor's
subcontractor.
0
11. Part 839 is added to read as follows:
PART 839--ACQUISITION OF INFORMATION TECHNOLOGY
Sec.
839.000 Scope of part.
Subpart 839.1--General
839.101 Policy.
839.105 Privacy.
839.105-70 Business Associate Agreements, information technology-
related contracts and privacy.
839.105-71 Liquidated damages--protection of information in
information technology related contracts.
839.106-70 Information technology security and privacy contract
clauses.
Subpart 839.2--Information and Communication Technology
839.201 Scope of subpart.
[[Page 64150]]
839.203 Applicability.
839.203-70 Information and communication technology accessibility
standards--contract clause and provision.
Authority: 38 U.S.C. 5723-5724; 5725(a)-(c); 40 U.S.C. 121(c);
40 U.S.C. 11319(b)(1)(C); 41 U.S.C. 1121(c)(3); 1303 and 1702; and
48 CFR 1.301 through 1.304.
839.000 Scope of part.
This part prescribes acquisition policies and procedures for use in
acquiring VA information technology and information technology-related
contracts (see 802.101) and applies to both VA-procured information
technology systems as well as Interagency Acquisitions defined in FAR
part 17 and part 817.
Subpart 839.1--General
839.101 Policy.
(a)(1) In acquiring information technology, including information
technology-related contracts which may involve services (including
support services), and related resources (see the definition at FAR
2.101), contracting officers and requiring activities shall include in
solicitations and contracts the requirement to comply with the
following directives, policies, and procedures in order to protect VA
information, information systems, and information technology--
(i) VA Directive 6500, VA Cybersecurity Program, and the directives
and handbooks in the VA 6500 series, to include, but not limited to, VA
Handbook 6500.6, Contract Security, which establishes VA's procedures,
responsibilities, and processes for complying with current Federal law,
Executive orders, policies, regulations, standards and guidance for
protecting and controlling VA sensitive information and ensuring that
security requirements are included in acquisitions, solicitations,
contracts, purchase orders, and task or delivery orders.
(ii) The VA directives, security requirements, procedures, and
guidance in paragraph (a)(1)(i) of this section apply to all VA
contracts and to contractors, subcontractors, and their employees in
the performance of contractual obligations to VA for information
technology products purchased from vendors, as well as for services
acquired from contractors and subcontractors or business associates,
through contracts and service agreements, in which access to VA
information, VA sensitive information or sensitive personal information
(including protected health information (PHI))--
(A) That is created, received, maintained, or transmitted, or that
will be stored, generated, accessed, exchanged, processed, or utilized
by VA, a VA contractor, subcontractor or third-party servicers or
associates, or on behalf of any of these entities, in the performance
of their contractual obligations to VA; and
(B) By or on behalf of any of the entities identified in this
section, regardless of--
(1) Format; or
(2) Whether it resides on a VA or a non-VA system, or with a
contractor, subcontractor, or third-party system or electronic
information system(s), including cloud services, operating for or on
the VA's behalf or as required by contract.
(c) Contractors, subcontractors, and third-party servicers or
associates providing support to or on behalf of these entities, shall
employ adequate security controls and use appropriate common security
configurations available from the National Institute of Standards and
Technology (see FAR 39.101(c)) as appropriate in accordance with VA
regulations, directives, handbooks and guidance, and established
service level agreements and individual contracts, orders, and
agreements. Contractors, subcontractors, and third-party servicers and
associates will ensure that VA information or VA sensitive information
that resides on a VA system or resides on a contractor/subcontractor/
third-party entities/associates information and communication
technology (ICT) system(s), operating for or on VA's behalf, or as
required by contract, regardless of form or format, whether electronic
or manual, and information systems, are protected from unauthorized
access, use, disclosure, modification, or destruction to ensure
information security (see FAR 2.101) is provided in order to ensure the
integrity, confidentiality, and availability of such information and
information systems.
839.105 Privacy.
839.105-70 Business Associate Agreements, information technology-
related contracts and privacy.
In accordance with 824.103-70, Protection of privacy--general
requirements and procedures related to Business Associate Agreements,
contracting officers and contracting officer representatives (CORs)
shall ensure that contractors, their employees, subcontractors and
third-parties under the contract complete Business Associate Agreements
for--
(a) Information technology or information technology-related
service contracts subject to the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) where HIPAA protected health
information (PHI) is created, received, maintained, or transmitted, or
that will be stored, generated, accessed, exchanged, processed, or
utilized in order to perform certain health care operations activities
or functions on behalf of the Veterans Health Administration (VHA) as a
covered entity (see 802.101 for the definition of information
technology-related contracts); or
(b) Contractors supporting other VA organizations which support VHA
in this regard and which would therefore require Business Associate
Agreements in accordance with 824.103-70.
839.105-71 Liquidated damages--protection of information in
information technology related contracts.
Contracting officers shall insert in information technology related
contracts the liquidated damages clause as prescribed at 811.503-70.
839.106-70 Information technology security and privacy clauses.
(a) Contracting officers shall insert the clause at 852.239-70,
Security Requirements for Information Technology Resources, and the
clause 852.239-71, Information Technology Security Plan and
Accreditation, in all solicitations, contracts, and orders exceeding
the micro-purchase threshold that include information technology
services.
(b) Contracting officers shall insert the clause at 852.239-72,
Information System Design and Development, in solicitations, contracts,
orders, and agreements where services to perform information system
design and development are required.
(c) Contracting officers shall insert the clause at 852.239-73,
Information System Hosting, Operation, Maintenance or Use, in
solicitations, contracts, orders, and agreements where services to
perform information system hosting, operation, maintenance, or use are
required.
(d) Contracting officers shall insert the clause at 852.239-74,
Security Controls Compliance Testing, in solicitations, contracts,
orders, and agreements, when the clauses at 852.239-72 or 852.239-73
are inserted.
Subpart 839.2--Information and Communication Technology
839.201 Scope of subpart.
This subpart applies to the acquisition of Information and
Communication
[[Page 64151]]
Technology (ICT) supplies and services. It concerns the access to and
use of information and data, by both Federal employees with
disabilities, and members of the public with disabilities in accordance
with FAR 39.201. This implements VA policy on Section 508 of the
Rehabilitation Act of 1973 (29 U.S.C. 794d) and 36 CFR parts 1193 and
1194 as it applies to contracts and acquisitions when developing,
procuring, maintaining or using ICT.
839.203 Applicability.
(a) General. Solicitations for information technology (i.e.,
information and communication technology (ICT)) or IT-related supplies
and services shall require the contractor to submit a VA Section 508
Checklist (see <a href="http://www.section508.va.gov/">http://www.section508.va.gov/</a>).
839.203-70 Information and communication technology accessibility
standards--contract clause and provision.
(a) The contracting officer shall insert the provision at 852.239-
75, Information and Communication Technology Accessibility Notice, in
all solicitations.
(b) The contracting officer shall insert the clause at 852.239-76,
Information and Communication Technology Accessibility, in all
contracts and orders.
PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
12. The authority citation for part 852 continues to read as follows:
Authority: 38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C.
121(c); 41 U.S.C. 1121(c)(3), 41 U.S.C. 1303; 41 U.S.C. 1702; and 48
CFR 1.301 through 1.304.
Subpart 852.2--Texts of Provisions and Clauses
0
13. Section 852.204-71 is added to read as follows:
852.204-71 Information and Information Systems Security.
As prescribed in 804.1903 insert the following clause:
Information and Information Systems Security (DATE)
(a) Definitions. As used in this clause--
Business Associate means an entity, including an individual
(other than a member of the workforce of a covered entity), company,
organization or another covered entity, as defined by the Health
Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy
Rule, that performs or assists in the performance of a function or
activity on behalf of the Veterans Health Administration (VHA) that
involves the creating, receiving, maintaining, transmitting of, or
having access to, protected health information (PHI). The term also
includes a subcontractor of a business associate that creates,
receives, maintains, or transmits PHI on behalf of the business
associate.
Business Associate Agreement (BAA) means the agreement, as
dictated by the Privacy Rule, between VHA and a business associate,
which must be entered into in addition to the underlying contract
for services and before any release of PHI can be made to the
business associate, in order for the business associate to perform
certain functions or activities on behalf of VHA.
Information system means a discrete set of information resources
organized for the collection, processing, maintenance, use, sharing,
dissemination, or disposition of information whether automated or
manual.
Information technology (see FAR 2.101) also means Information
and Communication Technology (ICT).
Information technology-related contracts means those contracts
which include services (including support services), and related
resources for information technology as defined in 802.101.
Privacy officer means the VA official with responsibility for
implementing and oversight of privacy related policies and practices
that impact a given VA acquisition.
Sensitive personal information means, with respect to an
individual, any information about the individual maintained by VA,
including but not limited to the following:
(1) Education, financial transactions, medical history, and
criminal or employment history.
(2) Information that can be used to distinguish or trace the
individual's identity, including but not limited to name, social
security number, date and place of birth, mother's maiden name, or
biometric records.
Security plan means a formal document that provides an overview
of the security requirements for an information system or an
information security program and describes the security controls in
place or planned for meeting those requirements.
VA Information Security Rules of Behavior for Organizational
Users (VA National Rules of Behavior) means a set of VA rules that
describes the responsibilities and expected behavior of users of VA
information or information systems.
VA sensitive information means all VA data, on any storage media
or in any form or format, which requires protection due to the risk
of harm that could result from inadvertent or deliberate disclosure,
alteration, or destruction of the information and includes sensitive
personal information. The term includes information where improper
use or disclosure could adversely affect the ability of VA to
accomplish its mission, proprietary information, records about
individuals requiring protection under various confidentiality
provisions such as the Privacy Act and the HIPAA Privacy Rule, and
information that can be withheld under the Freedom of Information
Act. Examples of VA sensitive information include the following:
Individually-identifiable medical, benefits, and personnel
information; financial, budgetary, research, quality assurance,
confidential commercial, critical infrastructure, investigatory, and
law enforcement information; information that is confidential and
privileged in litigation such as information protected by the
deliberative process privilege, attorney work-product privilege, and
the attorney-client privilege; and other information which, if
released, could result in violation of law or harm or unfairness to
any individual or group, or could adversely affect the national
interest or the conduct of Federal programs.
(b) General. Contractors, subcontractors, their employees,
third-parties, and business associates with access to VA
information, information systems, or information technology (IT) or
providing and accessing IT-related goods and services, shall adhere
to VA Directive 6500, VA Cybersecurity Program, and the directives
and handbooks in the VA 6500 series related to VA information
(including VA sensitive information and sensitive personal
information and information systems security and privacy), as well
as those set forth in the contract specifications, statement of
work, or performance work statement. These include, but are not
limited to, VA Handbook 6500.6, Contract Security; and VA Directive
and Handbook 0710, Personnel Security and Suitability Program, which
establishes VA's procedures, responsibilities, and processes for
complying with current Federal law, Executive Orders, policies,
regulations, standards and guidance for protecting VA information,
information systems (see 802.101, Definitions) security and privacy,
and adhering to personnel security requirements when accessing VA
information or information systems.
(c) Access to VA information and VA information systems. (1)
Contractors are limited in their request for logical or physical
access to VA information or VA information systems for their
employees, subcontractors, third parties and business associates to
the extent necessary to perform the services or provide the goods as
specified in the contracts, agreements, task, delivery or purchase
orders.
(2) All Contractors, subcontractors, third parties, and business
associates working with VA information are subject to the same
investigative requirements as those of VA appointees or employees
who have access to the same types of information. The level and
process of background security investigations for contractors to
access VA information and VA information systems shall be in
accordance with VA Directive and Handbook 0710, Personnel Security
and Suitability Program.
(3) Contractors, subcontractors, third parties, and business
associates who require access to national security programs must
have a valid security clearance.
(4) HIPAA Business Associate Agreement requirement. Contractors
shall enter into a Business Associate Agreement with VHA, VA's
Covered Entity, when contract requirements and access to protected
health information is required and when requested by the Contracting
Officer, or the Contracting Officer's Representative (COR) (see VAAR
824.103-70). Under the Health Insurance Portability and
Accountability Act of 1996
[[Page 64152]]
(HIPAA) Privacy and Security Rules, a Covered Entity (Veterans
Health Administration) must have a satisfactory assurance that its
protected health information will be safeguarded from misuse. To do
so, a Covered Entity enters into a Business Associate Agreement
(BAA) with a contractor (now the business associate), which
obligates the business associate to only use the Covered Entity's
protected health information for the purposes for which it was
engaged, provide the same protections and safeguards as is required
from the Covered Entity, and agree to the same disclosure
restrictions to protected health information (PHI) that is required
of the Covered Entity in situations where a contractor--
(i) Creates, receives, maintains, or transmits VHA PHI or that
will store, generate, access, exchange, process, or utilize such PHI
in order to perform certain health care operations activities or
functions on behalf of the Covered Entity; or
(ii) Provides one or more of the services specified in the
Privacy Rule to or for the Covered Entity.
(A) Contractors or entities required to execute BAAs for
contracts and other agreements become VHA business associates. BAAs
are issued by VHA or may be issued by other VA programs in support
of VHA. The HIPAA Privacy Rule requires VHA to execute compliant
BAAs with persons or entities that create, receive, maintain, or
transmit VHA PHI or that will store, generate, access, exchange,
process, or utilize such PHI in order to perform certain activities,
functions or services to, for, or on behalf of VHA. There may be
other VA components or staff offices which also provide certain
services and support to VHA and must receive PHI in order to do so.
If these components award contracts or enter into other agreements,
purchase/delivery orders, modifications and issue governmentwide
purchase card transactions to help in the delivery of these services
to VHA, they will also fall within the requirement to obtain a
satisfactory assurance from these contractors by executing a BAA.
(B) BAA requirement flow down to subcontractors. A prime
Contractor required to execute a BAA shall also obtain a
satisfactory assurance, in the form of a BAA, that any of its
subcontractors who will also create, receive, maintain, or transmit
VHA PHI or that will store, generate, access, exchange, process, or
utilize such PHI will comply with HIPAA requirements to the same
degree as the Contractor. Contractors employing a subcontractor who
creates, receives, maintains, or transmits VHA PHI or that will
store, generate, access, exchange, process, or utilize such VHA PHI
under a contract or agreement is required to execute a BAA with each
of its subcontractors which also obligates the subcontractor (i.e.,
also a business associate) to provide the same protections and
safeguards and agree to the same disclosure restrictions to VHA's
PHI that is required of the Covered Entity and the prime Contractor.
(d) Contractor operations required to be in United States.
Custom software development and outsourced operations must be
located in the U.S. to the maximum extent practicable. If such
services are proposed to be performed outside the continental United
States, and are not otherwise disallowed by other Federal law,
regulations or policy, or other VA policy or other mandates as
stated in the contract, specifications, statement of work or
performance work statement (including applicable Business Associate
Agreements), the Contractor/subcontractor must state in its proposal
where all non-U.S. services are provided. At a minimum, the
Contractor/subcontractor must include a detailed Information
Technology Security Plan, for review and approval by the Contracting
Officer, specifically to address mitigation of the resulting
problems of communication, control, and data protection.
(e) Contractor/subcontractor employee reassignment and
termination notification. Contractors and subcontractors shall
provide written notification to the Contracting Officer and
Contracting Officer's Representative (COR) immediately, and not
later than four (4) hours, when an employee working on a VA
information system or with access to VA information is reassigned or
leaves the Contractor or subcontractor's employment on the cognizant
VA contract. The Contracting Officer and COR must also be notified
immediately by the Contractor or subcontractor prior to an
unfriendly termination.
(f) VA information custodial requirements. (1) Release,
publication, and use of data. Information made available to a
Contractor or subcontractor by VA for the performance or
administration of a contract or information developed by the
Contractor/subcontractor in performance or administration of a
contract shall be used only for the stated contract purpose and
shall not be used in any other way without VA's prior written
approval. This clause expressly limits the Contractor's/
subcontractor's rights to use data as described in Rights in Data--
General, FAR 52.227-14(d).
(2) Media sanitization. VA information shall not be co-mingled
with any other data on the Contractors/subcontractor's information
systems or media storage systems in order to ensure federal and VA
requirements related to data protection, information segregation,
classification requirements, and media sanitization can be met (see
VA Directive 6500, VA Cybersecurity Program). VA reserves the right
to conduct scheduled or unscheduled on-site inspections,
assessments, or audits of Contractor and subcontractor IT resources,
information systems and assets to ensure data security and privacy
controls, separation of data and job duties, and destruction/media
sanitization procedures are in compliance with Federal and VA
requirements. The Contractor and subcontractor will provide all
necessary access and support to VA and/or GAO staff during periodic
control assessments or audits.
(3) Data retention, destruction and contractor self-
certification. The Contactor and its subcontractors are responsible
for collecting and destroying any VA data provided, created, or
stored under the terms of this contract, to a point where VA data or
materials are no longer readable or reconstructable to any degree,
in accordance with VA Directive 6371, Destruction of Temporary Paper
Records, or subsequent issue. Prior to termination or completion of
this contract, the Contractor/subcontractor must provide its plan
for destruction of all VA data in its possession according to VA
Handbook 6500, and VA Cybersecurity Program, including compliance
with National Institute of Standards and Technology (NIST) 800-88,
Guidelines for Media Sanitization, for the purposes of media
sanitization on all IT equipment. The Contractor must certify in
writing to the Contracting Officer within 30 days of termination of
the contract that the data destruction requirements in this
paragraph have been met.
(4) Return of VA data and information. When information, data,
documentary material, records and/or equipment is no longer
required, it shall be returned to the VA (as stipulated by the
Contracting Officer or the COR) or the Contractor/subcontractor must
hold it until otherwise directed. Items returned will be hand
carried, securely mailed, emailed, or securely electronically
transmitted to the Contracting Officer or to the address as provided
in the contract or by the assigned COR, and/or accompanying BAA.
Depending on the method of return, Contractor/subcontractor must
store, transport, or transmit VA sensitive information, when
permitted by the contract using VA-approved encryption tools that
are, at a minimum, validated under FIPS 140-3 (or its successor). If
mailed, Contractor/subcontractor must send via a trackable method
(USPS, UPS, Federal Express, etc.) and immediately provide the
Contracting Officer with the tracking information. No information,
data, documentary material, records or equipment will be destroyed
unless done in accordance with the terms of this contract and the
VHA Records Control Schedule 10-1.
(5) Use of VA data and information. The Contractor/subcontractor
must receive, gather, store, back up, maintain, use, disclose and
dispose of VA information only in compliance with the terms of the
contract and applicable Federal and VA information confidentiality
and security laws, regulations and policies. If Federal or VA
information confidentiality and security laws, regulations and
policies become applicable to the VA information or information
systems after execution of the contract, or if the National
Institute of Standards and Technology (NIST) issues or updates
applicable Federal Information Processing Standards (FIPS) or
Special Publications (SP) after execution of this contract, the
parties agree to negotiate in good faith to implement the
information confidentiality and security laws, regulations and
policies for this contract as a result of any updates, if required.
(6) Copying VA data or information. The Contractor/subcontractor
shall not make copies of VA information except as authorized and
necessary to perform the terms of the contract or to preserve
electronic information stored on Contractor/subcontractor electronic
storage media for restoration in case any electronic equipment or
data used by the Contractor/subcontractor
[[Page 64153]]
needs to be restored to an operating state. If copies are made for
restoration purposes, after the restoration is complete, the copies
must be appropriately destroyed.
(7) Violation of information custodial requirements. If VA
determines that the Contractor has violated any of VA's information
confidentiality, privacy, or security provisions, it shall be
sufficient grounds for VA to withhold payment to the Contractor or
third-party or terminate the contract for default in accordance with
FAR part 49 or terminate for cause in accordance with FAR 12.403.
(8) Encryption. The Contractor/subcontractor must store,
transport, or transmit VA sensitive information, when permitted by
the contract, using cryptography, and VA-approved encryption tools
that are, at a minimum, validated under FIPS 140-3 (or its
successor).
(9) Firewall and web services security controls. The Contractor/
subcontractor's firewall and Web services security controls, if
applicable, shall meet or exceed VA's minimum requirements. VA
Configuration Guidelines are available upon request.
(10) Disclosure of VA data and information. Except for uses and
disclosures of VA information authorized in a cognizant contract for
performance of the contract, the Contractor/subcontractor may use
and disclose VA information only in two other situations: (i)
Subject to paragraph 10 of this section, in response to a court
order from a court of competent jurisdiction, or (ii) with VA's
prior written approval. The Contractor/subcontractor must refer all
requests for, demands for production of, or inquiries about, VA
information and information systems to the Contracting Officer for
response. If the Contractor/subcontractor is in receipt of a court
order or other request or believes it has a legal requirement to
disclose VA information, that Contractor/subcontractor shall
immediately refer such court order or other request to the
Contracting Officer for response. If the Contractor or subcontractor
discloses information on behalf of VHA, the Contractor and/or
subcontractor must maintain an accounting of disclosures. Accounting
of Disclosures documentation maintained by the Contractor/
subcontractor will include the name of the individual to whom the
information pertains, the date of each disclosure, the nature or
description of the information disclosed, a brief statement of the
purpose of each disclosure or, in lieu of such statement, a copy of
a written request for a disclosure, and the name and address of the
person or agency to whom the disclosure was made. The Contractor/
subcontractor will provide its Accounting of Disclosures upon
request and within 15 calendar days to the assigned COR and Privacy
Officer. Accounting of disclosures should be provided electronically
via encrypted email to the COR and designated VA facility Privacy
Officer as provided in the contract, BAA, or by the Contracting
Officer. If providing the Accounting of disclosures electronically
cannot be done securely, the Contractor/subcontractor will provide
copies via trackable methods (UPS, USPS, Federal Express, etc.)
immediately, providing the designated COR and Privacy Officer with
the tracking information.
(11) Compliance with privacy statutes and applicable
regulations. The Contractor/subcontractor shall not disclose VA
information protected by any of VA's privacy statutes or applicable
regulations including but not limited to: The Privacy Act of 1974,
38 U.S.C. 5701, confidential nature of claims, 38 U.S.C. 5705,
confidentiality of medical quality assurance records and/or 38
U.S.C. 7332, confidentiality of certain health records pertaining to
drug addiction, sickle cell anemia, alcoholism or alcohol abuse, or
infection with human immunodeficiency virus or the HIPAA Privacy
Rule. If the Contractor/subcontractor is in receipt of a court order
or other requests for VA information or has questions if it can
disclose information protected under the above-mentioned
confidentiality statutes because it is required by law, that
Contractor/subcontractor shall immediately refer such court order or
other request to the Contracting Officer for response.
(g) Report of known or suspected security/privacy incident. The
Contractor, subcontractor, third-party affiliate or business
associate, and its employees shall notify VA immediately via the
Contracting Officer and the COR or within one (1) hour of an
incident which is an occurrence (including the discovery or
disclosure of successful exploits of system vulnerability) that (A)
actually or imminently jeopardizes, without lawful authority, the
integrity, confidentiality, or the availability of its data and
operations, or of its information or information system(s); or (B)
constitutes a violation or imminent threat of violation of law,
security policies, security procedures, or acceptable use policies.
The initial notification may first be made verbally but must be
followed up in writing within one (1) hour. See VA Data Breach
Response Service at <a href="https://www.oprm.va.gov/dbrs/about_dbrs.aspx">https://www.oprm.va.gov/dbrs/about_dbrs.aspx</a>.
Report all actual or suspected security/privacy incidents and report
the information to the Contracting Officer and the COR as identified
in the contract or as directed in the contract, within one hour of
discovery or suspicion.
(1) Such issues shall be remediated as quickly as is practical,
but in no event longer than __ days [Fill in: Contracting Officer
fills in the number of days]. The Contractor shall notify the
Contracting Officer in writing.
(2) When the security fixes involve installing third party
patched (e.g., Microsoft OS patches or Adobe Acrobat), the
Contractor will provide written notice to VA that the patch has been
validated as not affecting the systems within 10 working days. When
the Contractor is responsible for operations or maintenance of the
systems, they shall apply the security fixes within __ [Fill in:
Contracting Officer fills in the number of days in consultation with
requiring activity].
(3) All other vulnerabilities shall be remediated in a timely
manner based on risk, but within 60 days of discovery or disclosure.
Contractors shall notify the Contracting Officer, and COR within 2
business days after remediation of the identified vulnerability.
Exceptions to this paragraph (e.g., for the convenience of VA) must
be requested by the Contractor through the COR and shall only be
granted with approval of the Contracting Officer and the VA
Assistant Secretary for Office of Information and Technology. These
exceptions will be tracked by the Contractor in concert with the
Government in accordance with VA Directive 6500.6 and related VA
Handbooks.
(h) Security and privacy incident investigation. (1) The term
``privacy incident'' means the unauthorized disclosure or use of VA
information protected under a confidentiality statute or regulation.
(2) The term ``security incident'' means an occurrence that (A)
actually or imminently jeopardizes, without lawful authority, the
integrity, confidentiality, or availability of information systems;
or (B) constitutes a violation or imminent threat of violation of
law, security policies, security procedures, or acceptable policies.
The Contractor/subcontractor shall immediately notify the
Contracting Officer and COR for the contract of any known or
suspected security or privacy incident, or any other unauthorized
disclosure of sensitive information, including that contained in
system(s) to which the Contractor/subcontractor has access.
(2) To the extent known by the Contractor/subcontractor, the
Contractor/subcontractor's notice to VA shall identify the
information involved, the circumstances surrounding the incident
(including to whom, how, when, and where the VA information or
assets were placed at risk or compromised), and any other
information that the Contractor/subcontractor considers relevant.
(3) With respect to unsecured protected health information, the
Business Associate is deemed to have discovered a security incident
as defined above when the Business Associate either knew, or by
exercising reasonable diligence should have been known to an
employee of the Business Associate. Upon discovery, the Business
Associate must notify VHA of the security incident immediately
within one hour of discovery or suspicion as agreed to in the
Business Associate Agreement (BAA).
(4) In instances of theft or break-in or other criminal
activity, the Contractor/subcontractor must concurrently report the
incident to the appropriate law enforcement entity (or entities) of
jurisdiction, including the VA OIG and the VA Office of Security and
Law Enforcement. The Contractor, its employees, and its
subcontractors and their employees shall cooperate with VA and any
law enforcement authority responsible for the investigation and
prosecution of any possible criminal law violation(s) associated
with any incident. The Contractor/subcontractor shall cooperate with
VA in any civil litigation to recover VA information, obtain
monetary or other compensation from a third party for damages
arising from any incident, or obtain injunctive relief against any
third party arising from, or related to, the incident.
(i) Data breach notification requirements. (A) This contract may
require access to sensitive personal information. If so, the
Contractor is liable to VA for liquidated damages in the event of a
data breach involving any VA sensitive personal information the
Contractor/Subcontractor
[[Page 64154]]
processes or maintains under the contract as set forth in clause
852.211-76, Liquidated Damages--Reimbursement for Data Breach Costs.
(B) The Contractor/subcontractor shall provide notice to VA of a
privacy or security incident as set forth in the Security and
Privacy Incident Investigation section of this clause. The term
`data breach' means the loss, theft, or other unauthorized access,
or any access other than that incidental to the scope of employment,
to data containing sensitive personal information, in electronic or
printed form, that results in the potential compromise of the
confidentiality or integrity of the data. The Contractor shall fully
cooperate with VA or third-party entity performing an independent
risk analysis on behalf of VA. Failure to cooperate may be deemed a
material breach and grounds for contract termination.
(C) The Contractor/subcontractor shall fully cooperate with VA
or any Government agency conducting an analysis regarding any notice
of a data breach or potential data breach or security incident which
may require the Contractor to provide information to the Government
or third-party performing a risk analysis for VA, and shall address
all relevant information concerning the data breach, including the
following:
(1) Nature of the event (loss, theft, unauthorized access).
(2) Description of the event, including--
(i) Date of occurrence;
(ii) Date of incident detection;
(iii) Data elements involved, including any PII, such as full
name, social security number, date of birth, home address, account
number, disability code.
(iv) Number of individuals affected or potentially affected.
(v) Names of individuals or groups affected or potentially
affected.
(vi) Ease of logical data access to the lost, stolen or
improperly accessed data in light of the degree of protection for
the data, e.g., unencrypted, plain text.
(vii) Amount of time the data has been out of VA control.
(viii) The likelihood that the sensitive personal information
will or has been compromised (made accessible to and usable by
unauthorized persons).
(ix) Known misuses of data containing sensitive personal
information, if any.
(x) Assessment of the potential harm to the affected
individuals.
(xi) Data breach analysis as outlined in 6500.2 Handbook,
Management of Breaches Involving Sensitive Personal Information, as
appropriate.
(xii) Whether credit protection services may assist record
subjects in avoiding or mitigating the results of identity theft
based on the sensitive personal information that may have been
compromised.
(xiii) Steps taken in response to mitigate or prevent a
repetition of the incident.
(j) Training. (1) All Contractor employees and subcontractor
employees requiring access to VA information or VA information
systems shall complete the following before being granted access to
VA information and its systems:
(i) On an annual basis, successfully complete the VA Privacy and
Information Security Awareness and VA Information Security Rules of
Behavior training.
(ii) On an annual basis, sign and acknowledge (either manually
or electronically) understanding of and responsibilities for
compliance with the VA Information Security Rules of Behavior for
Organizational Users, relating to access to VA information and
information systems.
(iii) Successfully complete any additional cyber security or
privacy training, as required for VA personnel with equivalent
information system access.
(2) The Contractor shall provide to the Contracting Officer and/
or the COR a copy of the training certificates and affirmation that
VA Information Security Rules of Behavior for Organizational Users
signed by each applicable employee have been completed and submitted
within five (5) days of the initiation of the contract and annually
thereafter, as required.
(3) Failure to complete the mandatory annual training and
acknowledgement of the VA Information Security Rules of Behavior,
within the timeframe required, is grounds for suspension or
termination of all physical or electronic access privileges and
removal from work on the contract until such time as the training
and documents are complete.
(k) Subcontract flow down. The Contractor shall include the
substance of this clause, including this paragraph (k), in
subcontracts, third-party agreements, and business associate
agreements, of any amount and in which subcontractor employees,
third-party servicers/employees, and business associates will
perform functions where they will have access to VA information
(including VA sensitive information, i.e., sensitive personal
information and protected health information), information systems,
information technology (IT) or providing and accessing information
technology-related contract services, support services, and related
resources (see VAAR 802.101 definition of information technology-
related contracts.)
(End of clause)
0
14. Section 852.211-76 is added to read as follows:
852.211-76 Liquidated Damages--Reimbursement for Data Breach Costs.
As prescribed in 811.503-70, Contract clause, insert the following
clause:
Liquidated Damages--Reimbursement for Data Breach Costs (DATE)
(a) Definition. As used in this clause, ``contract'' means any
contract, agreement, order or other instrument and encompasses the
definition set forth in FAR 2.101.
(b) Non-disclosure requirements. As a condition of performance
under a contract, order, agreement, or other instrument that
requires access to sensitive personal information as defined in VAAR
802.101, the following is expressly required--
(1) The Contractor, subcontractor, their employees or business
associates shall not, directly or through an affiliate or employee
of the Contractor, subcontractor, or business associate, disclose
sensitive personal information to any other person unless the
disclosure is lawful and is expressly permitted under the contract;
and
(2) The Contractor, subcontractor, their employees or business
associates shall immediately notify the Contracting Officer and the
Contracting Officer's Representative (COR) of any security incident
that occurs involving sensitive personal information.
(c) Liquidated damages. If the Contractor or any of its agents
fails to protect VA sensitive personal information or otherwise
engages in conduct which results in a data breach, the Contractor
shall, in place of actual damages, pay to the Government liquidated
damages of ____ [Contracting Officer insert amount] per affected
individual in order to cover costs related to the notification, data
breach analysis and credit monitoring. In the event the Contractor
provides payment of actual damages in an amount determined to be
adequate by the Contracting Officer, the Contracting Officer may
forgo collection of liquidated damages.
(d) Purpose of liquidated damages. Based on the results from
VA's determination that there was a data breach caused by
Contractor's or any of its agents' failure to protect or otherwise
engaging in conduct to cause a data breach of VA sensitive personal
information, and as directed by the Contracting Officer, the
Contractor shall be responsible for paying to the VA liquidated
damages in the amount of ____ [Contracting Officer insert amount]
per affected individual to cover the cost of the following:
(1) Notification related costs
(2) Credit monitoring reports.
(3) Data breach analysis and impact.
(4) Fraud alerts.
(5) Identity theft insurance.
(e) Relationship to termination clause, if applicable. If the
Government terminates this contract, purchase order, or agreement,
in whole or in part under clause 52.249-8, Default--Fixed-Price
Supply and Service, or any other related FAR or VAAR clause included
in the contract, in addition to the required liquidated damages for
data breach-related expenses specified in paragraph (c) above, the
Contractor is liable for excess costs for those supplies and
services for repurchase as may be required under the Termination
clause.
(End of clause)
Alternate I (DATE). In commercial items acquisitions awarded under
the procedures of FAR part 8, or FAR part 12, substitute this paragraph
(e) in lieu of paragraph (e) in the basic clause:
(e) Relationship to termination clause, if applicable. If the
Government terminates this contract in whole or in part under the
Termination for cause paragraph, FAR 52.212-4(m), Contract Terms and
Conditions--Commercial Items, the Contractor is liable for damages
accruing until the Government reasonably obtains delivery or
performance of similar supplies or services. These damages are in
addition to costs of repurchase as may be required under the
Termination clause.
[[Page 64155]]
Alternate II (DATE). In simplified acquisitions exceeding the
micro-purchase threshold that are for other than commercial items
awarded under the procedures of FAR part 13 (see FAR 13.302-5(d)(1) and
the clause at FAR 52.213-4), substitute this paragraph (e) in lieu of
paragraph (e) in the basic clause:
(e) Relationship to termination clause, if applicable. If the
Government terminates this contract in whole or in part under the
Termination for cause paragraph, FAR 52.213-4(g), Terms and
Conditions--Simplified Acquisitions (Other Than Commercial Items), or
any other applicable FAR or VAAR clause, the Contractor is liable for
damages accruing until the Government reasonably obtains delivery or
performance of similar supplies or services. These damages are in
addition to costs of repurchase as may be required under the
Termination clause.
852.212-70 [Removed and Reserved]
0
15. Section 852.212-70 is removed and reserved.
0
16. Section 852.212-71 is revised to read as follows:
852.212-71 Gray Market and Counterfeit Items.
As prescribed in 812.301(f), insert the following clause:
Gray Market and Counterfeit Items (DATE)
(a) No used, refurbished, or remanufactured supplies or
equipment/parts shall be provided. This procurement is for new
Original Equipment Manufacturer (OEM) items only. No gray market
items shall be provided. Gray market items are OEM goods
intentionally or unintentionally sold outside an authorized sales
territory or sold by non-authorized dealers in an authorized sales
territory.
(b) No counterfeit supplies or equipment/parts shall be
provided. Counterfeit items include unlawful or unauthorized
reproductions, substitutions, or alterations that have been
mismarked, misidentified, or otherwise misrepresented to be an
authentic, unmodified item from the original manufacturer, or a
source with the express written authority of the original
manufacturer or current design activity, including an authorized
aftermarket manufacturer. Unlawful or unauthorized substitutions
include used items represented as new, or the false identification
of grade, serial number, lot number, date code, or performance
characteristics.
(c) Vendor shall be an OEM, authorized dealer, authorized
distributor or authorized reseller for the proposed equipment/
system, verified by an authorization letter or other documents from
the OEM. All software licensing, warranty and service associated
with the equipment/system shall be in accordance with the OEM terms
and conditions.
(End of clause)
0
17. Section 852.212-72 is added to read as follows:
852.212-72 Gray Market and Counterfeit Items--Information Technology
Maintenance Allowing Other-than-New Parts.
As prescribed in 812.301(f), insert the following clause:
Gray Market and Counterfeit Items--Information Technology Maintenance
Allowing Other-Than-New Parts (DATE)
(a) Used, refurbished, or remanufactured parts may be provided.
No gray market supplies or equipment shall be provided. Gray market
items are Original Equipment Manufacturer (OEM) goods intentionally
or unintentionally sold outside an authorized sales territory or
sold by non-authorized dealers in an authorized sales territory.
(b) No counterfeit supplies or equipment shall be provided.
Counterfeit items include unlawful or unauthorized reproductions,
substitutions, or alterations that have been mismarked,
misidentified, or otherwise misrepresented to be an authentic,
unmodified item from the original manufacturer, or a source with the
express written authority of the original manufacturer or current
design activity, including an authorized aftermarket manufacturer.
Unlawful or unauthorized substitutions include used items
represented as new, or the false identification of grade, serial
number, lot number, date code, or performance characteristics.
(c) Vendor shall be an OEM, authorized dealer, authorized
distributor or authorized reseller for the proposed equipment/
system, verified by an authorization letter or other documents from
the OEM. All software licensing, warranty and service associated
with the equipment/system shall be in accordance with the OEM terms
and conditions.
(End of clause)
0
18. Section 852.239-70 is added to read as follows:
852.239-70 Security Requirements for Information Technology
Resources.
As prescribed in 839.106-70, insert the following clause:
Security Requirements for Information Technology Resources (DATE)
(a) Definitions. As used in this clause--
Information technology has the same meaning in FAR 2.101 and
also means Information and Communication Technology (ICT).
Security plan means a formal document that provides an overview
of the security requirements for an information system or an
information security program and describes the security controls in
place or planned for meeting those requirements.
(b) Responsibilities. The Contractor shall be responsible for
information technology security for all systems connected to a
Department of Veterans Affairs (VA) network or operated by the
Contractor for VA, regardless of location. This clause is applicable
to all or any part of the contract that includes information
technology resources or services in which the Contractor has
physical or other system access to VA information that directly
supports the mission of VA. Examples of tasks that require security
provisions include--
(1) Hosting of VA e-Government sites or other information
technology operations;
(2) Acquisition, transmission, or analysis of data owned by VA
with significant replacement cost should the contractor's copy be
corrupted; and
(3) Access to VA general support systems/major applications at a
level beyond that granted the general public, e.g., bypassing a
firewall.
(c) Information technology security plan. The Contractor shall
develop, provide, implement, and maintain an Information Technology
Security Plan. VA information system and platform information
technology systems must have a security plan that provides an
overview of the security requirements for the system and describes
the security controls in place or the plan for meeting those
requirements. Generally, this plan shall describe the processes and
procedures that the Contractor will follow to ensure appropriate
security of information technology resources developed, processed,
or used under this contract. The security plan should include
implementation status, responsible entities, resources, and
estimated completion dates. Security plans may also include, but are
not limited to, a compiled list of system characteristics or
qualities required for system registration, and key security-related
documents such as a risk assessment, PIA, system interconnection
agreements, contingency plan, security configurations, configuration
management plan, and incident response plan. The plan shall address
the specific contract requirements regarding information technology
and information technology-related support or services included in
the contract, to include the PWS or SOW. The Contractor's
Information Technology Security Plan shall comply with applicable
Federal Laws that include, but are not limited to, 40 U.S.C. 11331,
the Federal Information Security Modernization Act (FISMA) of 2014
and the E-Government Act of 2002. The plan shall meet information
technology security requirements in accordance with Federal and VA
policies and procedures, and as amended during the term of this
contract, and include, but are not limited to the following.
(1) OMB Circular A-130, Managing Information as a Strategic
Resource;
(2) National Institute of Standards and Technology (NIST)
Guidelines; and
(3) VA Directive 6500, VA Cybersecurity Program, and the
directives and handbooks in the VA 6500 series related to VA
information (including VA sensitive information and sensitive
personal information and information systems security and privacy),
as well as those set forth in the contract specifications, statement
of work, or performance work statement. These include, but are not
limited to, VA Handbook 6500.6, Contract Security; and VA Directive
and
[[Page 64156]]
Handbook 0710, Personnel Security and Suitability Program, which
establishes VA's procedures, responsibilities, and processes for
complying with current Federal law, Executive Orders, policies,
regulations, standards and guidance for protecting VA information,
information systems (see 802.101, Definitions) security and privacy,
and adhering to personnel security requirements when accessing VA
information or information systems.
(d) Submittal of plan. Within 30 days after contract award, the
Contractor shall submit the Information Technology Security Plan to
the Contracting Officer for review and approval.
(e) Security accreditation. As required by current VA policy,
the Contractor shall submit written proof of information technology
security accreditation to the Contracting Officer. Such written
proof may be furnished either by the Contractor or by a third party.
Accreditation shall be in accordance with VA policy available from
the Contracting Officer upon request. The Contractor shall submit
for acceptance by the Contracting Officer along with this
accreditation a final security plan, risk assessment, security test
and evaluation, and disaster recovery plan/continuity of operations
plan. The accreditation and accompanying documents, to include a
final security plan, risk assessment, security test and evaluation,
and disaster recovery/continuity of operations plan.
(f) Annual validation. On an annual basis, the Contractor shall
verify in writing to the Contracting Officer that the IT Security
Plan remains valid.
(g) Banners. The Contractor shall ensure that the official VA
banners are displayed on all VA systems (both public and private)
operated by the Contractor that contain Privacy Act information
before allowing anyone access to the system. The Office of
Information Technology will make official VA banners available to
the Contractor.
(h) Screening and access. The Contractor shall screen all
personnel requiring privileged access or limited privileged access
to systems operated by the Contractor for VA or interconnected to a
VA network in accordance with VA Directives and Handbooks referenced
in paragraph (c).
(i) Training. The Contractor shall ensure that its employees
performing services under this contract complete VA security
awareness training on an annual basis. This includes signing an
acknowledgment that they have read, understand, and agree to abide
by the VA Information Security Rules of Behavior (VA National Rules
of Behavior) as required by 38 U.S.C. 5723; FAR 39.105, Privacy;
clause 852.204-71, Information and Information Systems Security, and
this clause on an annual basis.
(j) Government access. The Contractor shall provide the
Government access to the Contractor's and subcontractors'
facilities, installations, operations, documentation, databases and
personnel used in performance of the contract. The Contractor shall
provide access to enable a program of information technology
inspection (to include vulnerability testing), investigation and
audit (to safeguard against threats and hazards to the integrity,
availability and confidentiality of VA data or to the function of
information technology systems operated on behalf of VA), and to
preserve evidence of computer crime.
(k) Notification of termination of employees. The Contractor
shall immediately notify the Contracting Officer when an employee
who has access to VA information systems or data terminates
employment.
(l) Subcontractor flow down requirement. The Contractor shall
incorporate and flow down the substance of this clause to all
subcontracts that meet the conditions in paragraph (a) of this
clause.
(End of clause)
0
19. Section 852.239-71 is added to read as follows:
852.239-71 Information Technology Security Plan and Accreditation.
As prescribed in 839.106-70, insert the following provision:
Information Technology Security Plan and Accreditation (DATE)
All offers submitted in response to this solicitation or request
for quotation shall address the approach for completing the security
plan and accreditation requirements in clause 852.239-70, Security
Requirements for Information Technology Resources.
(End of provision)
0
20. Section 852.239-72 is added to read as follows:
852.239-72 Information System Design and Development.
As prescribed in 839.106-70, insert the following clause:
Information System Design and Development (DATE)
(a) Design or development at non-VA facilities. Information
systems that are designed or developed for or on behalf of VA at
non-VA facilities shall comply with all VA directives developed in
accordance with the Federal Information Security Modernization Act
of 2014 and Federal Information Security Management Act (FISMA),
Health Insurance Portability and Accountability Act (HIPAA)
regulations, NIST, and related VA security and privacy control
requirements for Federal information systems. This includes
standards for the protection of electronic protected health
information (PHI), outlined in 45 CFR part 164, subpart C,
information and system security categorization level designations in
accordance with FIPS 199 and FIPS 200 with implementation of all
baseline security controls commensurate with the FIPS 199 system
security categorization and the Trusted internet Connections (TIC)
Reference Architecture).
(b) Privacy Impact Assessment. During the development cycle a
Privacy Impact Assessment (PIA) must be completed, provided to the
COR, and approved by the VA Privacy Service in accordance with VA
Directive 6508, Implementation of Privacy Threshold Analysis and
Privacy Impact Assessment.
(c) Security of procured or developed systems and technologies.
The Contractor shall ensure the security of all procured or
developed systems and technologies, including their subcomponents
(hereinafter referred to as ``Systems''), throughout the life of the
contract and any extension, warranty, or maintenance periods. This
includes, but is not limited to, workarounds, patches, hotfixes,
upgrades, and any physical components (hereafter referred to as
Security Fixes) which may be necessary to fix all security
vulnerabilities published or known to the Contractor anywhere in the
Systems, including Operating Systems and firmware. The Contractor
shall ensure that Security Fixes shall not negatively impact the
Systems.
(d) Subcontract flow down requirements. (1) The Contractor shall
include the clause at 52.224-1, Privacy Act Notification, in every
solicitation and/or subcontract awarded by the Contractor when the
clause FAR 52.224-1 is included in its contract.
(End of clause)
0
21. Section 852.239-73 is added to read as follows:
852.239-73 Information System Hosting, Operation, Maintenance, or
Use.
As prescribed in 839.106-70, insert the following clause:
Information System Hosting, Operation, Maintenance, or Use (DATE)
(a) Definitions. As used in this clause--
Assessment and Authorization (A&A) means the process used to
ensure information systems including Major Applications and General
Support Systems have effective security safeguards which have been
implemented, planned for, and documented in an Information
Technology Security Plan. The A&A process per applicable VA policies
and procedures is the mechanism by which VA provides an
Authorization to Operate (ATO), the official management decision
given by the VA to authorize operation of an information system (see
VA Handbook 6500 for additional details).
Security plan means a formal document that provides an overview
of the security requirements for an information system or an
information security program and describes the security controls in
place or planned for meeting those requirements.
(b) Hosting, operation, maintenance, or use at non-VA
facilities. For information systems that are hosted, operated,
maintained, or used on behalf of VA at non-VA facilities,
Contractors/subcontractors are fully responsible and accountable for
ensuring compliance with all applicable Health Insurance Portability
and Accountability (HIPAA) Act of 1996 (HIPAA) regulations, the
Privacy Act and other required VA confidentiality statutes included
in VA's mandatory yearly training and privacy handbooks, FISMA,
NIST, FIPS, and VA security and privacy directives and handbooks.
This includes conducting compliant risk assessments, routine
vulnerability scanning, system patching and change management
procedures, and the
[[Page 64157]]
completion of an acceptable contingency plan for each system. The
Contractor's security control procedures must be equivalent to or
exceed, those procedures used to secure VA systems. A Privacy Impact
Assessment (PIA) must also be provided to the COR and approved by VA
Privacy Service prior to approval to operate. All external internet
connections to VA's network involving VA information must be in
accordance with the Trusted internet Connections (TIC) Reference
Architecture and reviewed and approved by VA prior to
implementation. For Cloud Services hosting, the Contractor shall
also ensure compliance with the Federal Risk and Authorization
Management Program (FedRAMP).
(c) Collecting, processing, transmitting, and storing of PII.
Adequate security controls for collecting, processing, transmitting,
and storing of Personally Identifiable Information (PII), as
determined by the VA Privacy Service, must be in place, tested, and
approved by VA prior to hosting, operation, maintenance, or use of
the information system, or systems by or on behalf of VA. These
security controls are to be assessed and stated within the Privacy
Impact Assessment and if these controls are determined not to be in
place, or inadequate, a Plan of Action and Milestones (POA&M) must
be submitted and approved prior to the collection of PII.
(d) Annual FISMA security controls assessment. The Contractor/
subcontractor's system must adhere to all FISMA, FIPS, and NIST
standards related to the annual FISMA security controls assessment
and review and update the Privacy Impact Assessment. Any
deficiencies noted during this assessment must be provided to the
Contracting Officer for entry into VA's POA&M management process.
The Contractor/subcontractor must use VA's POA&M process to document
planned remedial actions to address any deficiencies in information
security policies, procedures, and practices, and the completion of
those activities. Security deficiencies must be corrected within the
timeframes specified by the VA in the performance work statement or
statement of work, or in the approved remediation plan through the
VA POA&M process. Contractor/subcontractor procedures are subject to
periodic, unannounced assessments by VA officials, including the VA
Office of Inspector General. The physical security aspects
associated with Contractor/subcontractor activities must also be
subject to such assessments. The results of an annual review or a
major change in the cybersecurity posture at any time may indicate
the need for reassessment and reauthorization of the system. If
major changes to the system occur that may affect the privacy or
security of the data or the system, the A&A of the system may need
to be reviewed, retested and re-authorized per VA Handbook 6500.
This may require reviewing and updating all of the documentation as
described in VA Handbook 6500.6 (e.g., System Security Plan,
Contingency Plan). See VA Handbook 6500.6 for a list of
documentation. The VA Information System Risk Management (ISRM)
office can provide guidance on whether a new A&A would be necessary.
(e) Annual self-assessment. The Contractor/subcontractor must
conduct an annual self-assessment on all systems and outsourced
services as required. Both hard copy and electronic copies of the
assessment must be provided to the COR. VA reserves the right to
conduct such an assessment using government personnel or another
Contractor/subcontractor. The Contractor/subcontractor must take
appropriate and timely action, as may be specifically addressed in
the contract, to correct or mitigate any weaknesses discovered
during such testing, at no additional cost to the Government to
correct Contractor/subcontractor systems and outsourced services.
(f) Prohibition of installation and use of personally-owned or
Contractor-owned equipment or software on VA networks. VA prohibits
the installation and use of personally-owned or Contractor/
subcontractor-owned equipment or software on VA networks. If non-VA
owned equipment must be used to fulfill the requirements of a
contract, it must be stated in the service agreement, PWS, SOW or
contract. All of the security controls required for government
furnished equipment (GFE) must also be utilized in approved other
equipment (OE) at the Contractor's expense. All remote systems must
be equipped with, and use, a VA-approved antivirus (AV) software and
a personal (host-based or enclave based) firewall that is configured
with a VA-approved configuration. Software must be kept current,
including all critical updates and patches. Owners of approved OE
are responsible for providing and maintaining the anti-viral
software and the firewall on the non-VA owned OE.
(g) Disposal or return of electronic storage media on non-VA
leased or non-VA owned IT equipment. All electronic storage media
used on non-VA leased or non-VA owned IT equipment that is used to
store, process, or access VA information must be handled in
adherence with VA directives and handbooks upon--
(1) Completion or termination of the contract; or
(2) Disposal or return of the IT equipment by the Contractor/
subcontractor or any person acting on behalf of the Contractor/
subcontractor, whichever is earlier. Media (e.g., hard drives,
optical disks, CDs, back-up tapes) used by the Contractors/
subcontractors that contain VA information must be returned to the
VA for sanitization or destruction or the Contractor/subcontractor
must self-certify that the media has been disposed of per VA
Handbook 6500.1 requirements. This must be completed within 30 days
of termination of the contract.
(h) Bio-Medical devices and other equipment or systems. Bio-
Medical devices and other equipment or systems containing media
(e.g., hard drives, optical disks) with VA sensitive information
will not be returned to the Contractor at the end of lease, for
trade-in, or other purposes. For purposes of these devices and
protection of VA sensitive information the devices may be provided
back to the Contractor under one of three scenarios--
(1) The Contractor must accept the system without the drive;
(2) A spare drive must be installed in place of the original
drive at time of turn-in if VA's initial medical device purchase
included a spare drive; or
(3) The Contractor may request reimbursement for the drive at a
reasonable open market replacement cost to be separately negotiated
by the Contracting Officer and the Contractor at time of contract
closeout.
(End of clause)
0
22. Section 852.239-74 is added to read as follows:
852.239-74 Security Controls Compliance Testing.
As prescribed in 839.106-70(d), insert the following clause:
Security Controls Compliance Testing (DATE)
On a periodic basis, VA, including the Office of Inspector
General, reserves the right to evaluate any or all of the security
controls and privacy practices implemented by the Contractor under
the clauses contained within the contract. With 10 working-days'
notice, at the request of the government, the Contractor must fully
cooperate and assist in a government-sponsored security controls
assessment at each location wherein VA information is processed or
stored, or information systems are developed, operated, maintained,
or used on behalf of VA, including those initiated by the Office of
Inspector General. The government may conduct a security control
assessment on shorter notice, to include unannounced assessments, as
determined by VA in the event of a security incident or at any other
time.
(End of clause)
0
23. Section 852.239-75 is added to read as follows:
852.239-75 Information and Communication Technology Accessibility
Notice.
As prescribed in 839.203-70(a), insert the following provision:
Information and Communication Technology Accessibility Notice (DATE)
(a) Any offeror responding to this solicitation must comply with
established VA Information and Communication Technology (ICT)
(formerly Electronic and Information (EIT)) accessibility standards.
Information about Section 508 is available at <a href="http://www.section508.va.gov/">http://www.section508.va.gov/</a>.
(b) The Section 508 accessibility standards applicable to this
solicitation are stated in the clause at 852.239-75, Information and
Communication Technology Accessibility. In order to facilitate the
Government's determination whether proposed ICT supplies meet
applicable Section 508 accessibility standards, offerors must submit
appropriate VA Section 508 Checklists, in accordance with the
checklist completion instructions. The purpose of the checklists is
to assist VA acquisition and program officials in determining
whether proposed ICT supplies, or information, documentation and
services conform to applicable Section 508
[[Page 64158]]
accessibility standards. The checklists allow offerors or developers
to self-evaluate their supplies and document--in detail--whether
they conform to a specific Section 508 accessibility standard, and
any underway remediation efforts addressing conformance issues.
(c) Respondents to this solicitation must identify any exception
to Section 508 requirements. If an offeror claims its supplies or
services meet applicable Section 508 accessibility standards, and it
is later determined by the Government, i.e., after award of a
contract or order, that supplies or services delivered do not
conform to the described accessibility standards, remediation of the
supplies or services to the level of conformance specified in the
contract will be the responsibility of the Contractor at its
expense.
(End of provision)
0
24. Section 852.239-76 is added to read as follows:
852.239-76 Information and Communication Technology Accessibility.
As prescribed in 839.203-70(b), insert the following clause:
Information and Communication Technology Accessibility (DATE)
(a) All information and communication technology (ICT) (formerly
referred to as electronic and information technology (EIT))
supplies, information, documentation and services support developed,
acquired, maintained or delivered under this contract or order must
comply with the ``Architectural and Transportation Barriers
Compliance Board Electronic and Information Technology (EIT)
Accessibility Standards'' (see 36 CFR part 1194). Information about
Section 508 is available at <a href="http://www.section508.va.gov/">http://www.section508.va.gov/</a>.
(b) The Section 508 accessibility standards applicable to this
contract or order are identified in the specification, statement of
work, or performance work statement. If it is determined by the
Government that ICT supplies and services provided by the Contractor
do not conform to the described accessibility standards in the
contract, remediation of the supplies or services to the level of
conformance specified in the contract will be the responsibility of
the Contractor at its own expense.
(c) The Section 508 accessibility standards applicable to this
contract are: ____ [Contracting Officer: Insert the applicable
Section 508 accessibility standards].
(d) In the event of a modification(s) to this contract or order,
which adds new EIT supplies or services or revises the type of, or
specifications for, supplies or services, the Contracting Officer
may require that the Contractor submit a completed VA Section 508
Checklist and any other additional information necessary to assist
the Government in determining that the ICT supplies or services
conform to Section 508 accessibility standards. If it is determined
by the Government that ICT supplies and services provided by the
Contractor do not conform to the described accessibility standards
in the contract, remediation of the supplies or services to the
level of conformance specified in the contract will be the
responsibility of the Contractor at its own expense.
(e) If this is an Indefinite-Delivery type contract, a Blanket
Purchase Agreement or a Basic Ordering Agreement, the task/delivery
order requests that include ICT supplies or services will define the
specifications and accessibility standards for the order. In those
cases, the Contractor may be required to provide a completed VA
Section 508 Checklist and any other additional information necessary
to assist the Government in determining that the ICT supplies or
services conform to Section 508 accessibility standards. If it is
determined by the Government that ICT supplies and services provided
by the Contractor do not conform to the described accessibility
standards in the provided documentation, remediation of the supplies
or services to the level of conformance specified in the contract
will be the responsibility of the Contractor at its own expense.
(End of clause)
[FR Doc. 2021-24299 Filed 11-16-21; 8:45 am]
BILLING CODE 8320-01-P
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</html>Indexed from Federal Register on November 17, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.