Government Contracts FAR Rule Would Update Requirements for Use of DD Form 254
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Friday, August 9, 2019

FAR Rule Would Update Requirements for Use of DD Form 254

By Government Contracts Editorial Staff

The Department of Defense, General Services Administration, and National Aeronautics and Space Administration are proposing to amend the Federal Acquisition Regulation to require electronic submission of DD Form 254, Contract Security Classification Specification. The government uses DD Form 254 to convey security requirements to contractors when contract performance requires access to classified information. Prime contractors and subcontractors also use the form to convey security requirements to subcontractors and lower-tier subcontractors. The National Industrial Security Program Contracts Classification System, a module within the Procurement Integrated Enterprise Environment (formerly the Wide Area WorkFlow application), provides a centralized repository for classified contract security requirements and automates DD Form 254 processes. The rule proposes new procedures for use of DD Form 254 and the PIEE.

Streamlined Process. The proposed changes to FAR 4.402, FAR 4.403, and the FAR 52.204-16 clause, Commercial and Government Entity Code Reporting, would streamline the submission process for DD Form 254 by allowing businesses to submit an electronic form once, instead of repeated paper submissions. Nondefense agencies that have industrial security services agreements with DoD, and DoD components, would be required to use the form to specify the security classification for a contract involving access to “confidential,” “secret,” or “top secret” information. Also, agency preparation of DD Form 254 using the NISPCCS module would be required, unless a nondefense agency has an existing DD Form 254 information system. The rule further proposes to require each contractor and subcontractor location of performance listed on a DD Form 254 to have a unique CAGE code. Registration in the System for Award Management would not be required for contractor and subcontractor performance locations solely for the purposes of the form. A proposed new Alternate I to FAR 52.204-16 requires prime contractors to ensure that subcontractors under classified solicitations provide the location of subcontractor performance listed on DD Form 254 to reflect a corresponding unique CAGE code for each listed location unless the work is being performed at a government facility, in which case the agency location code must be used. Finally, a new Alternate I to the FAR 52.204-18 CAGE code maintenance clause would require prime contractors to ensure subcontractors maintain their CAGE codes throughout the life of the contract when access to classified information may be required. FAR 1.106, FAR 2.101, FAR 4.1801,FAR 4.1802, FAR 4.1804, FAR 52.204-17, FAR 52.204-20, and FAR 53.204-1 are the other regulations affected by the rule. Comments referencing FAR Case 2015-002 are due September 10, 2019. For the text of the proposed rule, see ¶70,006.339.

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