Insights

Earlier this month, the Department of Justice (DOJ) announced that Swiss Automation Inc., an Illinois-based precision machining company, agreed to pay $421,234 to resolve allegations that it violated the False Claims Act (FCA) by inadequately protecting technical drawings for parts delivered to Department of Defense (DoD) prime contractors.  This settlement reflects DOJ's persistent emphasis on cybersecurity compliance across all levels of the defense industrial base, reaching beyond prime contractors to encompass subcontractors and smaller suppliers.  The settlement is also a reminder to all contractors not to overlook the often confusing relationship between Controlled Unclassified Information (CUI) and export-controlled information.

On December 18, 2025, the Fiscal Year 2026 National Defense Authorization Act (FY 2026 NDAA) (P.L. 119-60) was signed into law. The Act makes significant changes to defense acquisition, sourcing restrictions, and interactions between the Defense Industrial Base (DIB) and the Department of Defense (DOD). 

On September 30, 2025, the Department of Justice (DOJ) announced that Georgia Tech Research Corporation (GTRC) agreed to pay $875,000 to settle allegations that it violated the False Claims Act (FCA) and federal common law by failing to meet cybersecurity requirements under certain Air Force and Defense Advanced Research Projects Agency (DARPA) contracts.  The settlement adds to the growing list of recoveries under DOJ’s Civil Cyber-Fraud Initiative and is yet another example of DOJ’s ongoing enforcement focus on cybersecurity obligations for federal contractors handling sensitive government information.  The settlement also provides insight into how government contractors may challenge FCA liability when faced with allegations of cybersecurity noncompliance.

After years of anticipation and a series of delays, implementation of the U.S. Department of Defense’s Cyber Maturity Model Certification Program (CMMC) is rapidly approaching. Though CMMC is not expected to enter into effect until early-to- mid 2025, DOD contactors can start taking steps now to ensure a smooth transition into this new regulatory era.

U.S. colleges and universities watched closely this summer when the DOJ, in a novel move, scrutinized the cybersecurity compliance of a research lab at an academic institution.

The Department of Defense (DoD) has released the highly anticipated second final rule for the Cybersecurity Maturity Model Certification Program (CMMC), ushering in its mandatory implementation that begins on November 10. CMMC is a unified assessment model released by the DoD in response to the growing threat of cyberattacks on and data theft from the Defense Industrial Base.  This program requires every DoD contractor that handles sensitive government data to certify compliance with certain cybersecurity controls.  CMMC brings greater scrutiny to contractors’ cybersecurity compliance and greater risks associated with compliance failures. To achieve certification, contractors must prove that their organizations can meet a myriad of security control obligations, a process that can be daunting without familiarity with the policies, procedures, and practices that will be required when the program is finalized.