The Defense Federal Acquisition Regulation Supplement (DFARS) is the set of rules that governs DoD procurement. For small businesses entering the defense market, understanding key DFARS clauses is essential. This guide covers the most important requirements and how to comply with them.
What Is DFARS?
DFARS supplements the Federal Acquisition Regulation (FAR) with DoD-specific requirements. It covers everything from cybersecurity to domestic sourcing to intellectual property. Key DFARS clauses are incorporated into defense contracts, and compliance is mandatory.
Critical DFARS Clauses for Small Businesses
DFARS 252.204-7012: Safeguarding Covered Defense Information
What it requires:
Implement NIST SP 800-171 security controlsReport cyber incidents to DoD within 72 hoursPreserve images of affected systems for 90 daysFlow down requirements to subcontractors
How to comply:
Achieve CMMC certificationImplement incident response proceduresInclude the clause in subcontractsMaintain system security documentation
DFARS 252.204-7021: CMMC Requirements
What it requires:
Achieve specified CMMC level before contract awardMaintain certification throughout contract performanceEnsure subcontractors meet appropriate CMMC levels
How to comply:
Determine required CMMC level from the solicitationComplete certification before proposal submissionVerify subcontractor CMMC status
DFARS 252.225-7001: Buy American and Balance of Payments
What it requires:
Use domestic end products unless exceptions applyCertain items must be manufactured in the U.S.Report country of origin for all deliverables
How to comply:
Source materials domestically when possibleDocument country of origin for all componentsUnderstand qualifying country exceptionsMaintain supply chain records
DFARS 252.225-7012: Berry Amendment
What it requires:
Certain items must be 100% domestically producedApplies to food, clothing, fabrics, hand tools, and specialty metalsNo exceptions for qualifying countries
Items covered:
Clothing and textilesStainless steel flatwareHand or measuring toolsFoodSpecialty metals (in certain applications)
DFARS 252.227-7013/7014: Technical Data Rights
What it requires:
Defines government rights in technical dataDistinguishes between unlimited, limited, and restricted rightsRequires marking of data with appropriate legends
Key concepts:
Unlimited rights — Government can use, modify, and distribute freelyLimited rights — Government use only, no disclosure to third partiesRestricted rights — Most limited government accessGovernment purpose rights — Between unlimited and limited
DFARS 252.246-7007: Contractor Counterfeit Electronic Part Detection
What it requires:
Implement counterfeit part detection and avoidance systemSource electronic parts from authorized distributorsReport suspected counterfeit partsFlow down requirements to subcontractors
How to comply:
Establish approved supplier listImplement incoming inspection proceduresMaintain traceability recordsTrain personnel on counterfeit detection
Compliance Best Practices
1. Read Your Contract Carefully
Every contract is different. Read every clause and understand your obligations before signing.
2. Build a Compliance Matrix
Create a spreadsheet mapping each DFARS clause to:
Your compliance statusResponsible personEvidence of complianceReview date
3. Train Your Team
Everyone involved in contract performance should understand:
Key DFARS requirementsTheir specific responsibilitiesReporting obligationsConsequences of non-compliance
4. Document Everything
Maintain records that demonstrate compliance:
Sourcing documentationQuality recordsCybersecurity evidenceTraining recordsIncident reports
5. Flow Down Requirements
Ensure your subcontractors understand and comply with applicable DFARS clauses:
Include required clauses in subcontractsVerify subcontractor complianceMonitor ongoing performanceAddress non-compliance promptly
Common Compliance Pitfalls
Ignoring flow-down requirements — You're responsible for your subcontractorsInadequate record-keeping — If it's not documented, it didn't happenMisunderstanding data rights — Get legal advice on IP provisionsBuy American violations — Verify domestic sourcing before deliveryLate cyber incident reporting — 72 hours means 72 hours
Resources for Small Businesses
Procurement Technical Assistance Centers (PTACs) — Free counselingSBA District Offices — Small business supportDefense Contract Audit Agency (DCAA) — Accounting system guidanceDoD Office of Small Business Programs — Advocacy and resourcesKDM & Associates — Comprehensive defense contracting support
Conclusion
DFARS compliance may seem daunting, but it's manageable with the right approach. Start by understanding the key clauses that apply to your contracts, build a compliance system, and invest in training. The effort pays off in access to the world's largest procurement market.
Ready to Take the Next Step?
Whether you're a small manufacturer seeking defense contracts, a government buyer looking for qualified suppliers, or a business owner pursuing CMMC certification, KDM & Associates and the V+KDM Consortium are here to help.
Join the KDM Consortium Platform today:
Schedule a free introductory session to learn how we can accelerate your path to government contracting success.
Whether you're a small manufacturer seeking defense contracts, a government buyer looking for qualified suppliers, or a business owner pursuing CMMC certification, KDM & Associates and the V+KDM Consortium are here to help.
Join the KDM Consortium Platform today:
[Register as a Supplier (SME)](/register?type=sme) — Get matched with government contract opportunities, access capacity-building resources, and connect with prime contractors.[Register as a Government Buyer](/register?type=buyer) — Discover qualified, defense-ready small businesses and streamline your procurement process.
*Schedule a free introductory session to learn how we can accelerate your path to government contracting success.*
