Controlled Unclassified Information (CUI) is a category of sensitive information that, while not classified, still requires protection under federal regulations. The Cybersecurity Maturity Model Certification (CMMC) framework ensures that companies within the Defense Industrial Base properly handle CUI to protect national security interests.

This article delves into data classification, focusing on how businesses can ensure the proper handling of CUI.

What is Controlled Unclassified Information?

Controlled unclassified information encompasses sensitive but not classified data. It includes information the federal government or contractors produce, possess, or use critical to national security but not assigned a classified designation. Examples include legal, financial, and personal data, technical specifications, or proprietary information related to defense projects.

For businesses in the DIB, ensuring the protection of CUI is crucial because unauthorized disclosure could undermine national security. Mismanagement of CUI could lead to legal consequences, loss of contracts, and reputational damage.

Data Classification and Its Role in CMMC Compliance

Effective data classification is critical to CMMC compliance, particularly at Level 2. Organizations must identify, categorize, and safeguard CUI as part of their security strategy. Proper data classification involves:

• Identifying CUI: Businesses must first understand what constitutes CUI and ensure they can locate it within their systems. This includes marking and labeling CUI appropriately to differentiate it from other data types.
• Categorizing Data Sensitivity: Not all CUI is equally sensitive. Organizations should evaluate the potential risks associated with different categories of CUI, focusing resources on protecting the most critical data. High-sensitivity CUI may require additional security controls such as encryption and access management.
• Ensuring Proper Access Control: Only authorized personnel should have access to CUI. Data classification supports role-based access control, ensuring that individuals with the appropriate clearance levels and job responsibilities can view or modify CUI.
• Managing Data Throughout Its Lifecycle: CUI must be handled appropriately from creation to destruction. A robust data classification policy helps ensure that CUI is tracked, monitored, and ultimately destroyed in a way that minimizes the risk of unauthorized access.

What Is the Difference Between CUI and Federal Contract Information (FCI)?

CUI and FCI differ primarily in sensitivity and the required level of protection.

• CUI refers to sensitive, unclassified information regulated by laws or government policies and requires safeguarding to prevent national security or privacy risks. Examples of CUI include technical military data, personally identifiable information (PII), and proprietary business information. 
• On the other hand, FCI encompasses information generated or provided under government contracts that is not intended for public release but is less sensitive than CUI. Examples of FCI include essential contract deliverables, project timelines, and non-sensitive financial information. The protection requirements for FCI are less stringent, falling under CMMC Level 1, which focuses on basic cybersecurity practices like strong passwords and system patching. 

CUI Handling Best Practices

To comply with CMMC, businesses should implement various security practices designed to protect CUI effectively. Below are key strategies to ensure proper handling:

1. Implement Strong Access Controls: Limit access to CUI to only those employees or contractors who need it. Secure user accounts with multifactor authentication and strong password policies.
2. Encrypt Sensitive Data: Encryption ensures that CUI is protected from unauthorized access at rest or in transit. It should be applied consistently across all devices and networks.
3. Regularly Update Security Systems: Ensure all software and hardware are patched and updated to protect against vulnerabilities. This includes firewalls, antivirus software, and intrusion detection systems.
4. Employee Training and Awareness: Employees should be educated on the importance of protecting CUI and the specific procedures for handling it. This includes identifying potential phishing attacks, secure file sharing, and proper data disposal methods.
5. Conduct Regular Audits and Assessments: Regular audits are essential to identify gaps in cybersecurity practices and ensure compliance with CMMC standards. Periodic assessments by internal or third-party auditors can verify that established security policies are handling CUI.

The Impact of Mishandled CUI

Failure to comply with CMMC can have severe consequences for businesses. Non-compliance can lead to penalties such as:

• Loss of Government Contracts: Businesses that fail to meet CMMC requirements may be disqualified from bidding on DoD contracts, severely impacting their revenue streams.
• Legal and Financial Repercussions: Non-compliance can result in fines and legal action, mainly if a data breach or CUI compromise occurs.
• Reputational Damage: A company’s inability to protect sensitive information could harm its reputation, making it harder to secure future business inside and outside the defense sector.

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• FedRAMP
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• And dozens more!

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Continuum GRC is a proactive cyber security® and the only FedRAMP and StateRAMP-authorized cybersecurity audit platform worldwide. Call 1-888-896-6207 to discuss your organization’s cybersecurity needs and learn how we can help protect its systems and ensure compliance.