03.17.01: Supply Chain Risk Management Plan

03.17.01 requires you to create, approve, and operate a documented Supply Chain Risk Management (SCRM) Plan for the system that processes, stores, or transmits CUI. To operationalize it fast, define scope (system and suppliers), set SCRM roles, embed supplier controls into procurement and change management, and collect recurring evidence that the plan runs in practice. (NIST SP 800-171 Rev. 3)

Key takeaways:

• A “plan” must be executable: roles, workflows, decision points, and records, not just principles. (NIST SP 800-171 Rev. 3)
• Scope must cover the system’s supply chain, including third parties, products, services, and supporting infrastructure that can affect CUI. (NIST SP 800-171 Rev. 3)
• Audit readiness depends on artifacts: supplier inventory, risk assessments, contract clauses, review minutes, and exception tracking tied back to the SCRM Plan. (NIST SP 800-171 Rev. 3)

Compliance leaders get stuck on 03.17.01 because “supply chain risk” spans procurement, IT, security engineering, and legal. The requirement is still straightforward if you treat it as a system-level management plan with clear operating rhythms and evidence. Your assessor will look for a single plan that names accountable owners, defines what “in scope” means for the CUI environment, and drives consistent decisions about third parties and components that touch that environment. (NIST SP 800-171 Rev. 3)

This page is written for a Compliance Officer, CCO, or GRC lead who needs requirement-level implementation guidance you can put into motion immediately. The practical goal is to avoid the most common finding: having supplier due diligence activities scattered across teams with no unifying SCRM Plan, no consistent risk criteria, and no repeatable evidence trail. (NIST SP 800-171 Rev. 3)

If you already run a third-party risk management (TPRM) program, 03.17.01 usually requires two upgrades: (1) explicitly anchoring TPRM controls to the CUI system boundary and (2) documenting the full supply chain beyond “vendors,” including product components, hosting layers, integrators, and outsourced IT functions. (NIST SP 800-171 Rev. 3)

Requirement: 03.17.01 supply chain risk management plan requirement (operator view)

Plain-English interpretation: You must have a written Supply Chain Risk Management Plan for the covered system, and you must run your supply chain controls the way the plan says you do. The plan should let a third party reviewer trace how you identify supply chain threats, assess supplier risk, set requirements in contracts, monitor performance, handle changes, and approve exceptions for anything that can affect CUI confidentiality. (NIST SP 800-171 Rev. 3)

Think of the SCRM Plan as the “source of truth” that ties together:

• your supplier inventory for the CUI system,
• your due diligence and onboarding gates,
• your contracting standards and flow-downs,
• your ongoing monitoring and incident processes,
• your change management and component approvals,
• your exception process and compensating controls. (NIST SP 800-171 Rev. 3)

Regulatory text

Excerpt provided: “NIST SP 800-171 Rev. 3 requirement 03.17.01 (Supply Chain Risk Management Plan).” (NIST SP 800-171 Rev. 3)

What the operator must do: Maintain a documented plan for managing supply chain risk for the system handling CUI, then implement the plan with repeatable processes and evidence. A plan that exists but is not used becomes an assessment problem because auditors test operating effectiveness through records, not intent. (NIST SP 800-171 Rev. 3)

Who it applies to

Entities: Federal contractors and other organizations operating nonfederal systems that handle CUI. (NIST SP 800-171 Rev. 3)

Operational context (what “in scope” means in practice):

• The specific information system boundary that processes, stores, or transmits CUI (including enclaves and shared services). (NIST SP 800-171 Rev. 3)
• Third parties that can impact that system’s confidentiality of CUI, including managed service providers, cloud services, SaaS used in the enclave, IT outsourcers, and consultants with privileged access. (NIST SP 800-171 Rev. 3)
• Products and components whose integrity and provenance affect the system (hardware, firmware, software libraries, appliances), especially where compromise could expose CUI. (NIST SP 800-171 Rev. 3)

What you actually need to do (step-by-step)

Step 1: Set the plan scope and boundary

1. Name the covered system(s) and explicitly reference the boundary used for your NIST SP 800-171 assessment. (NIST SP 800-171 Rev. 3)
2. Define “supply chain” for this plan: third parties, products, and services that support the system, not just procurement vendors. (NIST SP 800-171 Rev. 3)
3. Publish the in-scope inventory rule: “If it stores/processes/transmits CUI, administers the enclave, or can materially affect confidentiality, it is in scope.” (NIST SP 800-171 Rev. 3)

Deliverable: SCRM Plan section “Scope and Applicability,” linked to your system security plan boundary language. (NIST SP 800-171 Rev. 3)

Step 2: Assign owners and decision rights

1. Name accountable roles: plan owner (often GRC), procurement owner, IT owner, security owner, legal/contracts owner, and system owner. (NIST SP 800-171 Rev. 3)
2. Define decision points: who can approve onboarding, who can approve high-risk exceptions, and who can accept residual risk for the CUI system. (NIST SP 800-171 Rev. 3)
3. Set escalation triggers: examples include access to CUI, privileged admin access, subcontractor chains, or material outages affecting the enclave. (NIST SP 800-171 Rev. 3)

Deliverable: RACI table inside the plan plus a documented risk acceptance authority. (NIST SP 800-171 Rev. 3)

Step 3: Build and maintain the CUI supply chain inventory

1. Create a “system supplier register”: list third parties and critical products/components tied to the CUI system. (NIST SP 800-171 Rev. 3)
2. Classify each entry by access and impact: CUI access, privileged access, hosting/network dependency, and whether they provide security-relevant functions. (NIST SP 800-171 Rev. 3)
3. Map dependencies: which services rely on which third parties (including fourth parties, if contractually visible). (NIST SP 800-171 Rev. 3)

Deliverable: Versioned supplier register with owner, service description, access type, and review dates. (NIST SP 800-171 Rev. 3)

Step 4: Define your supplier risk assessment and onboarding gate

1. Set minimum due diligence requirements by risk tier (for example: questionnaires, security addendum, incident notification terms, access restrictions, and evidence review). This is your “gate” before access or integration. (NIST SP 800-171 Rev. 3)
2. Add engineering checks where supply chain threats matter: approved integration patterns, least privilege for third-party access, and segmentation for the CUI environment. (NIST SP 800-171 Rev. 3)
3. Document exceptions: required compensating controls, time-bound remediation, and the approver who accepted the risk. (NIST SP 800-171 Rev. 3)

Deliverable: Written onboarding workflow and risk assessment template tied to the plan. (NIST SP 800-171 Rev. 3)

Step 5: Embed SCRM requirements into contracts and procurement

1. Standardize contract clauses for in-scope third parties: security requirements, confidentiality, incident reporting, subcontractor controls, audit/support rights where feasible, and termination/return of CUI. (NIST SP 800-171 Rev. 3)
2. Align purchasing with the plan: purchase requests for in-scope services must route through the SCRM gate before signature or provisioning. (NIST SP 800-171 Rev. 3)
3. Control “shadow IT”: require procurement intake or a technical control that blocks unsanctioned tools for CUI work. Document the chosen control path. (NIST SP 800-171 Rev. 3)

Deliverable: Contracting playbook and procurement checklist referencing the SCRM Plan. (NIST SP 800-171 Rev. 3)

Step 6: Ongoing monitoring, changes, and offboarding

1. Set monitoring signals: reassess suppliers on a defined cadence, and reassess on trigger events such as scope changes, incidents, ownership changes, or major service changes. (NIST SP 800-171 Rev. 3)
2. Tie change management to supplier risk: if a supplier changes hosting region, adds subprocessors, or changes access method, require review against the plan. (NIST SP 800-171 Rev. 3)
3. Offboarding: remove access, return/destroy CUI, and retain evidence of completion. (NIST SP 800-171 Rev. 3)

Deliverable: Monitoring log, change review records, and offboarding checklist completion evidence. (NIST SP 800-171 Rev. 3)

Required evidence and artifacts to retain (audit-ready list)

Maintain artifacts that prove both design (the plan exists and is approved) and operation (the plan is followed):

Plan and governance

• Approved SCRM Plan with version history and review/approval records. (NIST SP 800-171 Rev. 3)
• RACI and risk acceptance authority documentation. (NIST SP 800-171 Rev. 3)

Inventory and classification

• System supplier register tied to the CUI system boundary. (NIST SP 800-171 Rev. 3)
• Dependency maps or architecture diagrams showing third-party touchpoints. (NIST SP 800-171 Rev. 3)

Due diligence and onboarding

• Completed supplier risk assessments, evidence requests/results, and approval records. (NIST SP 800-171 Rev. 3)
• Exception requests with compensating controls and approvals. (NIST SP 800-171 Rev. 3)

Contracting

• Security addenda / contract templates and executed agreements for in-scope suppliers. (NIST SP 800-171 Rev. 3)
• Procurement intake tickets showing SCRM gate completion prior to provisioning. (NIST SP 800-171 Rev. 3)

Ongoing monitoring

• Reassessment records, monitoring notes, and risk register updates. (NIST SP 800-171 Rev. 3)
• Incident communications involving suppliers and post-incident corrective actions. (NIST SP 800-171 Rev. 3)
• Offboarding evidence: access removal, CUI return/destruction attestations. (NIST SP 800-171 Rev. 3)

Common exam/audit questions and hangups

Assessors tend to press on traceability. Expect questions like:

• “Show me your SCRM Plan, and show me where it is approved and reviewed.” (NIST SP 800-171 Rev. 3)
• “Which third parties are in scope for the CUI system, and how do you know the list is complete?” (NIST SP 800-171 Rev. 3)
• “Pick one high-impact supplier. Show onboarding due diligence, contract requirements, and monitoring records.” (NIST SP 800-171 Rev. 3)
• “How do you control supplier changes such as new subprocessors or access model changes?” (NIST SP 800-171 Rev. 3)
• “How are exceptions handled, and who signs risk acceptance?” (NIST SP 800-171 Rev. 3)

Hangup to watch: teams show an enterprise TPRM policy, but cannot show a system-scoped SCRM Plan connected to the CUI boundary and operating records. (NIST SP 800-171 Rev. 3)

Frequent implementation mistakes (and how to avoid them)

1. Mistake: treating SCRM as procurement-only.
   Fix: write the plan as a joint security/procurement/IT operating model with explicit technical controls for third-party access. (NIST SP 800-171 Rev. 3)

2. Mistake: inventory = “our vendors in AP.”
   Fix: include MSPs, cloud/SaaS in the enclave, consultants, and any service that can affect CUI confidentiality, even if paid via corporate card. (NIST SP 800-171 Rev. 3)

3. Mistake: questionnaires with no decisions.
   Fix: define pass/fail criteria, required remediations, and an exception path that creates a durable record. (NIST SP 800-171 Rev. 3)

4. Mistake: contracts don’t match the plan.
   Fix: implement required clause sets by risk tier and require legal review for deviations with documented approval. (NIST SP 800-171 Rev. 3)

5. Mistake: no evidence of monitoring.
   Fix: establish a recurring review rhythm and keep minutes/records. If you cannot evidence it, auditors will treat it as not operating. (NIST SP 800-171 Rev. 3)

Enforcement context and risk implications

No public enforcement cases were provided in the source catalog for this requirement, so this page does not cite enforcement outcomes. Practically, the risk is assessment failure and downstream contractual or customer consequences if you cannot demonstrate a functioning SCRM Plan for CUI handling. (NIST SP 800-171 Rev. 3)

Practical execution plan (30/60/90-day)

Because timelines are highly dependent on supplier count and contract cycles, treat these as phased outcomes rather than guaranteed durations.

First 30 days (Immediate)

• Draft the SCRM Plan with defined scope, roles, supplier inventory rule, onboarding gate, contracting requirements, and exception process. (NIST SP 800-171 Rev. 3)
• Build the first version of the system supplier register for the CUI boundary and validate it with IT and procurement. (NIST SP 800-171 Rev. 3)
• Pick a small set of critical suppliers and run the new workflow end-to-end to generate evidence. (NIST SP 800-171 Rev. 3)

Next 60 days (Near-term)

• Formalize contract templates/addenda aligned to the plan and begin applying them to new/renewing in-scope third parties. (NIST SP 800-171 Rev. 3)
• Implement a single intake path (ticketing or procurement workflow) that prevents in-scope purchases from bypassing SCRM review. (NIST SP 800-171 Rev. 3)
• Stand up an exception register and risk acceptance process tied to the CUI system owner. (NIST SP 800-171 Rev. 3)

Next 90 days (Operationalize)

• Expand due diligence coverage across all in-scope suppliers; prioritize by access to CUI and privilege. (NIST SP 800-171 Rev. 3)
• Run a monitoring cycle and document outcomes: reassessments, triggered reviews, and offboarding events where applicable. (NIST SP 800-171 Rev. 3)
• Prepare an “assessor packet” that maps plan sections to evidence folders. Daydream can help by mapping 03.17.01 to your policy, control implementation, and recurring evidence collection so you can stay assessment-ready without rebuilding the trail each time. (NIST SP 800-171 Rev. 3)

Frequently Asked Questions

Does 03.17.01 require a separate SCRM Plan if we already have a third-party risk management policy?

You can reuse enterprise policy content, but you still need a system-scoped plan that covers the CUI environment’s supplier inventory, gates, and evidence. Assessors will test the plan against the specific system boundary. (NIST SP 800-171 Rev. 3)

What counts as “supply chain” for this requirement—only vendors we pay?

Treat supply chain broadly for the CUI system: third parties, cloud services, MSPs, consultants, and security-relevant products/components that can affect CUI confidentiality. If it can impact the system, it belongs in scope. (NIST SP 800-171 Rev. 3)

How do we show the plan is operating, not shelfware?

Keep onboarding tickets, due diligence results, contract artifacts, exception approvals, and monitoring logs that tie back to the plan’s steps. Auditors want traceability from the plan to real decisions and records. (NIST SP 800-171 Rev. 3)

What’s the minimum viable supplier inventory for audit?

A register tied to the CUI system boundary that identifies each in-scope third party, what service they provide, how they connect, and what access they have. Completeness and linkage to the boundary matter more than fancy tooling. (NIST SP 800-171 Rev. 3)

How should we handle urgent purchases that can’t wait for a full assessment?

Define an expedited path in the plan with temporary controls, time-bound remediation requirements, and documented risk acceptance by the authorized approver. Auditors generally accept urgency if the decision trail is clear. (NIST SP 800-171 Rev. 3)

Can we rely on a supplier’s SOC 2 report as our whole assessment?

A report can be useful evidence, but your plan should still define how you evaluate fit for your CUI system, including access model, incident terms, and any gaps requiring compensating controls or exceptions. Keep the decision record. (NIST SP 800-171 Rev. 3)