Agencies need to pay more attention to supply chain security

Government agencies seeking the lowest bidders typically overlook cybersecurity

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Amanda Walker

Government agencies seeking the lowest bidders typically overlook cybersecurity when awarding contracts, and data breaches are the result, says a security rating expert.

According to a review of 25 defense contractors by BitSight Technologies, the median security rating of these vendors is lower than that of the median score in the financial sector.

And these contractors are subject to higher security scrutiny than those at other agencies.

"Given the background and experience of the businesses involved, I would expect that the civilian agency government contractor ratings would be lower," said Jake Olcott, vice president at BitSight and a former cybersecurity adviser to the Senate Commerce Committee.

In fact, many government bidders never face any formal security review, he said.

"The vast majority of government contracts are not evaluated for cybersecurity at all, and that's a big problem," he added.

The most recent example of this was the June breach at the Office of Personnel Management, which involved a contractor, Colorado-based KeyPoint Government Solutions.

One issue is the focus on finding the lowest bidder, he said.

"In the government's effort to reduce costs, we may be undervaluing a very important element, which is cybersecurity," he said.

Efforts to set a minimal security standard for bids have been limited, he said.

"For many years, the government has not paid any attention at all to the cybersecurity of its supply chain," he said.

One exception is the Department of Defense, which not only has strict security rules for handling classified information, but also has a new requirement to improve security on sensitive but unclassified information.

The department is currently reviewing and updating the supplier contracts it has in place, Olcott said, and that process is about three-quarters of the way through.

Government agencies aren't alone in their vulnerability to vendors' cybersecurity shortfalls.

"Today's business environment means that we're all interconnected," he said. "We've seen a few cases that have come out. The source of the Target breach was its HVAC vendor."

In a report released late last year, BitSight found that nearly a third of all breaches at retail companies began with a compromise at a third-party vendor.

In the case of the government's vendor selection process, he said, the issue of cybersecurity has been completely ignored for years, except in small pockets such as agencies that deal with highly classified information.

BitSight currently rates more than 25,000 companies on their security, with the education sector having the lowest ratings of any of the industry verticals.

But regardless of the vendor's industry sector, Olcott recommends that government agencies and corporations both need to pay more attention to the security practices of any contractors.

This is particularly true for any critical vendor, or one who has access to sensitive data, he said.

"You're only as strong as your weakest link," he said.

Copyright © 2015 IDG Communications, Inc.

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