FAR 52.204-21 requires contractors to provide basic safeguarding of contractor information systems that process, store, or transmit federal contract information (FCI); implementing strong multi‑factor authentication (MFA) and account controls is one of the most practical and high‑impact ways to meet those obligations. This post gives Compliance Framework–specific, actionable steps, real small‑business examples, and technical settings you can implement today to reduce risk and prepare evidence for an audit.
Understand the requirement in context
FAR 52.204-21 is not prescriptive about a single technology, but it does require contractors to implement "basic safeguarding" commensurate with the sensitivity of FCI. In practice that means: limiting access to authorized users and devices; authenticating users with something more than a password; controlling account lifecycle (creation, modification, deactivation); and recording evidence (logs, configuration screenshots) in your Compliance Framework artifact set. Treat MFA and account controls as foundational controls in your control set and map them to your Compliance Framework control IDs, evidence folders, and policy statements.
Step‑by‑step implementation in a Compliance Framework
1) Inventory accounts, classify access, and document scope
Start by inventorying identity sources (Azure AD, Google Workspace, Okta, local Active Directory, AWS IAM) and categorizing accounts into: privileged (admins, cloud owners), standard users, service/service‑account identities, and break‑glass. For a small business (25–50 staff) this can be a single spreadsheet or a small CMDB. Record owner, purpose, last login, authentication method, and whether the account accesses FCI. This inventory becomes required Compliance Framework evidence that shows you understood what must be protected.
2) Enforce MFA — technical options and recommended configuration
Require MFA for all accounts that access FCI and for all privileged accounts. Prefer phishing‑resistant factors (FIDO2 / WebAuthn hardware keys like YubiKey, built‑in platform authenticators) for privileged roles and executives. For general users, TOTP apps (Google Authenticator, Microsoft Authenticator) are acceptable; avoid SMS except as a temporary fallback. Example technical configurations: Azure AD Conditional Access — create a policy targeting All users (or scoped groups), assign Apps (All cloud apps or only those that host FCI), Conditions (exclude corporate IPs if you use network controls), and Grant control: Require multi-factor authentication; enable the policy. AWS — create IAM policies and SCPs that include a condition: "Bool": {"aws:MultiFactorAuthPresent":"true"} to block console actions unless MFA is present; ensure the root account has hardware MFA enabled. Google Workspace — require 2‑step verification and block legacy auth. Log the policy screenshots and policy export as Compliance Framework evidence.
3) Account controls and lifecycle rules (creation, password, lockout, deactivation)
Define and implement account policies: minimum password length (12 characters or passphrase), reject common passwords, enable account lockout after a configurable number of failed attempts (e.g., lock after 10 failures with a 15‑minute automatic unlock or admin reset), session timeout for web consoles (e.g., 30–60 minutes), and inactive account disablement (e.g., disable after 30 days inactivity and remove after 90 days). For service accounts: mark as non‑interactive, store credentials in a secrets manager (HashiCorp Vault, AWS Secrets Manager) and rotate keys programmatically (example: rotate every 90 days or when a deployer leaves). Map each of these settings to specific configuration artifacts in your Compliance Framework evidence repository (screenshots, policy exports, automation scripts).
4) Privileged access management and break‑glass scenarios
Implement least privilege and formalize privileged access (admin) processes. Use Just‑In‑Time (JIT) elevation where possible (Azure AD Privileged Identity Management, AWS IAM Access Analyzer + temporary STS tokens). For break‑glass accounts, create documented procedures: keep only one or two break‑glass accounts offline (hardware token + offline password), store credentials in a locked safe with access logs, require approvals for use, and rotate the credentials quarterly. Record the policy, the access log, and the post‑use incident review as Compliance Framework artifacts.
Logging, monitoring, and evidence collection
FAR compliance expects demonstrable controls. Enable and retain authentication logs: Azure AD sign‑in logs, CloudTrail for AWS, Workspace audit logs for Google Workspace, syslog from on‑prem AD. Configure your SIEM or centralized log store to alert on MFA bypasses, multiple failed logons, new privileged role assignments, and creation of new admin accounts. Example alert: "More than 5 failed admin logon attempts in 15 minutes" — route to IT and generate a ticket. Export log retention settings and alert rules as artifacts for the Compliance Framework. For small businesses without a SIEM, configure cloud-native alerts and daily digest emails to an operations mailbox and store them in the evidence folder.
Practical small‑business examples and scenarios
Example 1 — 25‑person subcontractor using Google Workspace + AWS: Enforce 2‑step verification in Google Workspace for all employees and block legacy auth; require hardware MFA for AWS root and enable MFA enforcement using an IAM policy that denies console actions if aws:MultiFactorAuthPresent is false. Store the AWS MFA device serials and policy JSON in your Compliance Framework evidence. Example 2 — small prime with Azure AD: Create an Azure Conditional Access policy requiring MFA for access to the contracting system app, enable Azure AD PIM for admin roles, and document the PIM assignments and approval workflow. These concrete steps are cheap to implement and yield quick compliance wins.
Compliance tips and best practices
Prioritize factors and controls based on risk: protect FCI‑holding systems and privileged accounts first. Use automated provisioning and deprovisioning (SCIM) to reduce orphaned accounts. Avoid password‑only remote access — require VPN + MFA or secure remote desktop gateways with SAML and MFA. Keep an evidence playbook: policy documents, screenshots of configuration, exported policy JSON/CSV, and an access inventory. Train staff with a short annual MFA and phishing exercise and keep a remediation log for failed or delayed enrollments. Finally, update your POA&M for any incomplete controls with remediation owners and dates.
Failing to implement strong MFA and account controls puts FCI at risk of unauthorized access, lateral movement, and exfiltration — outcomes that can lead to lost contracts, mandatory breach reporting, financial penalties, and reputational damage. By following the steps above and organizing evidence within your Compliance Framework, small contractors can meet FAR 52.204-21 expectations and demonstrate effective safeguarding of FCI.
