Defense bill heightens supply-chain scrutiny

If the House-passed bill becomes law, DOD officials would have to look closely at contractor networks, with two specific manufacturers in the crosshairs.

Airman using DCO

Military security officials would get greater access to information about intrusions into contractor networks under the Defense Authorization bill that recently passed the House. (File photo)

The Defense authorization bill that passed the House of Representatives on June 14 seeks to give military security officials greater access to information about intrusions into the unclassified networks of contractors that maintain classified networks, and directs the Pentagon to develop a plan to report the presence of gear from Chinese companies Huawei and ZTE in the computer networks of military contractors.

These are requests for reviews contained in a committee report attached to the bill, but some in industry are worried that they augur a new policy direction when it comes to oversight of the corporate networks of military contractors. The report states, "the committee believes that intrusions on the unclassified networks of cleared contractors may be the very first indicator that a foreign entity is attempting to compromise or exploit cleared personnel, or to obtain illegal or unauthorized access to sensitive information and technology resident in the cleared industrial base," and that "there is insufficient governance, monitoring, and reporting of cyber attacks on the unclassified networks of the cleared contractors." Information gleaned from intrusions into unclassified networks could yield sensitive information to an attacker.

On their face, the actions sought in the committee report are modest. The secretary of defense and the director of national intelligence are charged with the review of a key document that guides the efforts of the Defense Security Service to protect sensitive and classified information and technology to make sure that DSS is, "not being hampered by a lack of access to information regarding intrusions on the unclassified networks of cleared contractors," and report back to Congress on their findings.

The Obama administration has been seeking mandatory reporting of intrusions on private networks as part of its overall cybersecurity strategy, but so far it's been a non-starter legislatively. Scott Bousum, a senior manager for national security at the trade association TechAmerica, sees the language in the committee report as an effort to push these cybersecurity directives more narrowly to apply to cleared contractors. The problem, he said, is that new requirements would "cost billions of dollars" collectively in compliance for contractors. This would be felt especially keenly by companies that get only a small share of their revenue from defense contracts, Bousum said.

On the hardware side, the committee is also concerned that equipment manufactured by Huawei and ZTE, "could be could potentially be resident in the networks of cleared defense contractors," and wants the DSS to create a plan to "enhance awareness" of potential consequences arising the use of gear from firms with links to the Chinese government and military. An Armed Services Committee request in the FY 2013 Defense authorization bill led to the discovery and replacement of Chinese-made equipment in nuclear research facility at Los Alamos. A committee staffer told FCW, "we're just moving the search on to look at other parts of the system....This is not a witch hunt against anything made in China. These two companies are known bad actors."

The bill would have to pass in the Senate and be signed by the president for the committee report to take effect. President Obama has indicated he would veto the bill in its present form for a multitude of reasons, none having to do with contractor network cybersecurity or concerns about the IT supply chain.

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