Cybersecurity Policy Template

Subcontractor Management Policy (DORA Compliant)

1. Introduction

1.1 Purpose and Scope: This policy outlines the framework for managing subcontractors engaged by [Organization Name] ("the Organization"). It ensures that all subcontractors involved in the provision of services impacting the organization's operational resilience and digital services, particularly those related to the handling of sensitive data and critical systems, meet the same stringent security and operational standards as primary third-party providers, aligning with the Digital Operational Resilience Act (DORA) requirements. This policy covers all subcontractors, regardless of their size, location, or the duration of their engagement.

1.2 Relevance to DORA: This policy directly addresses DORA's requirements for managing third-party risk, including the identification, assessment, and ongoing monitoring of subcontractors' resilience. It ensures compliance with Articles 3, 4, 5, 23, and 26 of DORA, specifically concerning ICT third-party risk management, incident reporting, and operational resilience.

2. Key Components

The key components of this Subcontractor Management Policy include:

  • Subcontractor Identification and Due Diligence: Identifying and vetting potential subcontractors.

  • Risk Assessment and Management: Evaluating the risks associated with each subcontractor.

  • Contractual Agreements: Establishing clear contractual obligations and responsibilities.

  • Ongoing Monitoring and Oversight: Regularly assessing the subcontractor's performance and compliance.

  • Incident Reporting and Management: Defining procedures for reporting and managing incidents.

  • Exit Strategy: Planning for the termination or transition of services.

3. Detailed Content

3.1 Subcontractor Identification and Due Diligence:

  • In-depth explanation: This involves identifying all subcontractors involved in activities critical to the organization's operational resilience, including those impacting ICT systems. This requires a comprehensive inventory and regular updates. Due diligence involves verifying the subcontractor's financial stability, technical capabilities, security posture, and compliance with relevant regulations.

  • Best practices: Utilize a standardized questionnaire, conduct site visits where appropriate, request third-party security audits and certifications (e.g., ISO 27001), and verify insurance coverage.

  • Detailed example: Before engaging a cloud storage provider subcontractor, the Organization will conduct a thorough review of their security certifications (e.g., ISO 27001, SOC 2), request evidence of their incident response plan, review their data breach history, and assess their geographical location and data sovereignty policies.

  • Common pitfalls: Failing to identify all subcontractors, relying solely on self-assessment questionnaires, and neglecting to verify provided information.

3.2 Risk Assessment and Management:

  • In-depth explanation: This entails identifying and assessing the potential risks associated with each subcontractor, including operational, security, and reputational risks. A risk matrix should be used to categorize and prioritize risks.

  • Best practices: Use a standardized risk assessment framework (e.g., NIST Cybersecurity Framework), leverage quantitative and qualitative data, and document the risk assessment process and mitigation strategies.

  • Detailed example: A subcontractor providing payment processing services will be assessed for risks related to data breaches, system downtime, and compliance with Payment Card Industry Data Security Standard (PCI DSS). Mitigation strategies might include requiring regular penetration testing, multi-factor authentication, and robust data encryption.

  • Common pitfalls: Conducting superficial risk assessments, failing to update risk assessments regularly, and neglecting to implement appropriate mitigation strategies.

3.3 Contractual Agreements:

  • In-depth explanation: Contracts should clearly define the scope of work, service level agreements (SLAs), security requirements (aligning with DORA), incident reporting procedures, data protection obligations, and termination clauses.

  • Best practices: Incorporate DORA-specific clauses addressing incident reporting, recovery time objectives (RTOs), recovery point objectives (RPOs), and business continuity management.

  • Detailed example: The contract with a subcontractor managing database infrastructure will explicitly state the RTO and RPO for database recovery, the procedures for incident reporting, the data encryption methods to be used, and the subcontractor’s liability in case of a data breach.

  • Common pitfalls: Using standard contracts without tailoring them to the specific subcontractor and services, neglecting to include key DORA-relevant clauses, and not clearly defining responsibilities.

3.4 Ongoing Monitoring and Oversight:

  • In-depth explanation: Regular monitoring and audits ensure the subcontractor continues to meet the agreed-upon standards and SLAs. This includes reviewing performance metrics, conducting security audits, and ensuring compliance with relevant regulations and the contract.

  • Best practices: Establish a regular schedule for monitoring (e.g., quarterly reviews), utilize automated monitoring tools where possible, and conduct periodic on-site audits.

  • Detailed example: The Organization will conduct quarterly performance reviews with its cloud security subcontractor, reviewing key performance indicators (KPIs) such as incident response times, security alert resolution times, and compliance with security policies.

  • Common pitfalls: Insufficient monitoring, lack of clear KPIs, and failing to take corrective action when necessary.

3.5 Incident Reporting and Management:

  • In-depth explanation: This section defines procedures for reporting and managing security incidents and disruptions related to the subcontractor's services, aligning with DORA’s incident reporting requirements.

  • Best practices: Establish clear communication channels, define escalation procedures, and ensure incident response plans are integrated.

  • Detailed example: If the subcontractor providing network connectivity experiences an outage, the incident must be reported immediately to the Organization's security team according to the defined escalation path. The incident report must include details of the incident, its impact, and the steps taken for remediation.

  • Common pitfalls: Lack of clear communication channels, inadequate incident response plans, and delays in reporting incidents.

3.6 Exit Strategy:

  • In-depth explanation: This outlines the process for terminating a subcontractor's services, ensuring a smooth transition and minimizing disruption to the Organization’s operations.

  • Best practices: Define clear criteria for termination, develop a transition plan, and ensure data security and confidentiality are maintained throughout the process.

  • Detailed example: The exit strategy for a subcontractor managing customer data includes a data transfer plan, a security audit to verify the completeness of data transfer, and a verification of the deletion of data from the subcontractor's systems.

  • Common pitfalls: Lack of a formal exit strategy, inadequate planning for data transfer, and potential security risks during the transition.

4. Implementation Guidelines

1. Develop a Subcontractor Inventory: Identify all subcontractors involved in critical activities.

2. Establish a Due Diligence Process: Develop a standardized process for vetting potential subcontractors.

3. Create a Risk Assessment Framework: Develop a standardized risk assessment methodology.

4. Develop Standardized Contract Templates: Create contracts that incorporate DORA-specific clauses.

5. Implement Monitoring and Oversight Procedures: Establish a schedule for monitoring and auditing subcontractors.

6. Define Incident Reporting Procedures: Establish clear procedures for reporting and managing incidents.

7. Develop an Exit Strategy Template: Create a template for managing the exit of subcontractors.

8. Training: Provide training to relevant personnel on this policy.

Roles and Responsibilities:

  • IT Security Department: Responsible for the oversight of the subcontractor management process, conducting risk assessments, and monitoring compliance.

  • Procurement Department: Responsible for negotiating contracts and ensuring they align with this policy.

  • Legal Department: Responsible for reviewing contracts and ensuring compliance with relevant laws and regulations.

5. Monitoring and Review

The effectiveness of this policy will be monitored through regular reviews of subcontractor performance, risk assessments, and incident reports. The policy will be reviewed and updated annually or as needed to reflect changes in DORA requirements, industry best practices, and the Organization’s risk profile.

6. Related Documents

  • Third-Party Risk Management Policy

  • Incident Response Plan

  • Data Security Policy

  • Business Continuity Plan

7. Compliance Considerations

This policy directly addresses DORA requirements regarding third-party risk management, incident reporting, and operational resilience. Specific clauses related to RTOs, RPOs, and incident reporting are key aspects of ensuring compliance with Articles 3, 4, 5, 23, and 26 of DORA. Furthermore, the policy must adhere to all relevant data privacy regulations (e.g., GDPR) and other applicable laws and regulations. Legal counsel should be consulted to ensure full compliance.

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