Where supply chain security breaks down

While large defense contractors typically have robust security measures in place, the smaller and medium-sized companies they subcontract with do not, making them prime targets of nation-state hackers.

Vendors that don't fully understand federal cybersecurity contracting standards along with the inability of large defense contractors to monitor into their own supply chains have led to widespread targeting and theft of U.S. economic and national security secrets by nation-state hackers, industry experts told Congress.

Less than 60 percent of small and medium-sized defense contractors responding  to a survey conducted by the National Defense Industrial Association said they read the Defense Federal Acquisition Regulation Supplement (DFARS) that lays out minimum security standards for contractor information systems. Nearly half of those who did said they found it hard to understand. About 45 percent of respondents hadn't read National Institute of Standards and Technology guidelines for protecting controlled unclassified information.

The research found that many small and mid-sized contractors tend to have "uneven awareness of cybersecurity risks and prevention" and are more likely to view requirements as just another regulatory box to check to win government business. There is also a perception of uneven enforcement of DFARS regulations, with complaints that poor metrics for measuring compliance do not do enough to reward companies that align their practices to DFARS over those that don't.

Christopher Peters, CEO of the Lucrum Group and co-author on the NDIA report, told lawmakers at a March 26 Senate Armed Services Committee that while large defense contractors typically have "robust" security measures in place, the smaller and medium-sized companies with whom they subcontract do not, making them "prime targets" for nation states. This is particularly true when it comes to industrial control systems and software that run machinery on the plant or shop floor.

"Manufacturers have to have confidence that their investments in cybersecurity are going to meet DOD requirements," Peters told the committee. "Large manufacturers also need a means to quickly and cost effectively assess the cybersecurity readiness of each manufacturer in their supply chains. That requires the establishment of meaningful metrics that can be readily certified, whether by a customer, the government or an independent third party."

The big five defense contractors -- Boeing, General Dynamics, Lockheed Martin, Northrop Grumman and Raytheon -- frequently subcontract out portions of their work to smaller firms, who in turn subcontract further with other entities. At a certain point, prime contractors lose visibility into who their third-, fourth- or fifth-tier subcontractors are, a challenge that the Office of the Director of National Intelligence has encountered while examining supply chain security threats.

Michael MacKay, CTO for defense contractor Progeny Systems, told the committee there were a variety of reasons for that lack of visibility, ranging from a reluctance of prime contractors to lay out the details behind their proprietary supply-chain business strategies to a lack of transparency inherent in a contracting field that is often fluid and opaque.

"If I hand a document over to somebody to create a part, then I have to make -- I have to ask them how they are going to managing that document and who they are going to give it to," said MacKay. "They could lie to me … they could say, yes, we're going to do this and at that last minute, hand it off to somebody that came in at a lower bid and not tell me."

Policymakers have long fretted over the potential for adversarial nations to steal U.S. secrets by targeting contractors. However, two incidents over the past year have spurred greater urgency around the topic: reports that in 2018, Chinese hackers stole "massive" amounts of sensitive data from the unclassified networks of a contractor working for the Naval Undersea Warfare Center, and a 2019 internal review by the Navy that found Chinese hackers were pilfering so much Intellectual property and classified secrets from the defense industrial base that it was "materially eroding" U.S. economic and military advantages.

Sen. Joe Manchin (D-W.Va.) called the lack of visibility down the supply chain "absolutely unbelievable" and said Congress needed to rewrite contracting standards to ensure subcontractors are held to the same security requirements as primes.

"Somebody has to be held accountable," Manchin said. "A blind person can follow this. We wonder why we've been hacked so much, why they've copied everything? You all just explained it. There's no checks and balances .… It looks like to me that we're … protecting a business model more than we are the security of our country."

This article was first posted on FCW, a sibling site to GCN.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.