Government Contracts FAR Rule Adds DD Form 254 Requirements
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Monday, July 27, 2020

FAR Rule Adds DD Form 254 Requirements

By Government Contracts Editorial Staff

The FAR Case 2015-002 final rule requires electronic submission of DD Form 254, Contract Security Classification Specification, which the government uses to convey security requirements to contractors when performance requires access to classified information. Prime contractors and subcontractors also use the form to convey security requirements to lower-tier subcontractors. The National Industrial Security Program Contracts Classification System, a module within the Procurement Integrated Enterprise Environment, provides a centralized repository for classified contract security requirements and automates DD Form 254 processes. The changes to FAR 4.402, FAR 4.403, and the FAR 52.204-16 clause, Commercial and Government Entity Code Reporting, streamline the submission process for DD Form 254 by allowing businesses to submit an electronic form once, instead of through repeated paper submissions. Nondefense agencies that have industrial security services agreements with the Department of Defense, and DoD components, must use the form to specify the security classification for a contract involving access to “confidential,” “secret,” or “top secret” information. The rule further requires each location of contractor and subcontractor performance on DD Form 254 to have a unique CAGE code. New Alternate I to FAR 52.204-16 requires prime contractors to ensure subcontractors under classified solicitations provide the location of subcontract performance to reflect a corresponding unique CAGE code for each listed location unless the work is performed at a government facility, in which case the agency location code must be used. Finally, new Alternate I to the FAR 52.204-18 CAGE code maintenance clause requires prime contractors to ensure subcontractors maintain their CAGE codes throughout contract performance, when access to classified information may be required. The final rule makes minor editorial changes to the proposed rule (¶70,006.339).

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