Page 140 - Cyber Defense eMagazine March 2024

a false record or statement material to a false or fraudulent claim.” Material is defined as “having a natural
tendency to influence, or be capable of influencing, the payment or receipt of money or property.”

Given how the government has structured the CMMC program and its assessment requirements, it is
almost certain that the government will consider inaccurate CMMC certifications “material” for purposes
of the FCA. Contractors at the CMMC Level 1 and CMMC Level 2 tiers should be especially careful to
ensure they fully comply with all required security assessments. FCA penalties are considerable—
potentially up to three times the government’s damages, plus a statutory penalty linked to inflation—and
the Department of Justice has signaled an increased focus on the cybersecurity space by launching its
Civil Cyber-Fraud Initiative in 2021.

Conclusion

The proposed rule provides contractors with the structure in which the three-tiered certification program
will operate. Given the importance and complexity of the rule and the requirement to sift through more
than 230 submitted comments, a final rule is unlikely to be published for a few months and maybe
upwards of a year. However, contractors should begin digesting the requirements and consider
implementing the necessary measures to comply with the obligations now, many of which mirror already-
existing obligations, before the official rollout begins to ensure compliance.

About the Author

Richard W. Arnholt, a member at Bass, Berry & Sims PLC in Washington, D.C.,
advises government contractors on risk mitigation through ethics and compliance
programs and on allegations of procurement fraud or misconduct. He can be reached
online at [email protected] and at our company website
https://www.bassberry.com/professionals/arnholt-richard/

Adam Briscoe, an associate at Bass, Berry & Sims PLC in Washington, D.C.,
advises companies as they navigate the contracting process with federal, state, and
local governments. He can be reached online at [email protected] and
at our company website https://www.bassberry.com/professionals/briscoe-adam/

Cyber Defense eMagazine – March 2024 Edition 140
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