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Ashden Fein advises clients on cybersecurity and national security matters, including crisis management and incident response, risk management and governance, government and internal investigations, and regulatory compliance.

For cybersecurity matters, Mr. Fein counsels clients on preparing for and responding to cyber-based attacks, assessing security controls and practices for the protection of data and systems, developing and implementing cybersecurity risk management and governance programs, and complying with federal and state regulatory requirements. Mr. Fein frequently supports clients as the lead investigator and crisis manager for global cyber and data security incidents, including data breaches involving personal data, advanced persistent threats targeting intellectual property across industries, state-sponsored theft of sensitive U.S. government information, and destructive attacks.

Additionally, Mr. Fein assists clients from across industries with leading internal investigations and responding to government inquiries related to the U.S. national security. He also advises aerospace, defense, and intelligence contractors on security compliance under U.S. national security laws and regulations including, among others, the National Industrial Security Program (NISPOM), U.S. government cybersecurity regulations, and requirements related to supply chain security.

Before joining Covington, Mr. Fein served on active duty in the U.S. Army as a Military Intelligence officer and prosecutor specializing in cybercrime and national security investigations and prosecutions -- to include serving as the lead trial lawyer in the prosecution of Private Chelsea (Bradley) Manning for the unlawful disclosure of classified information to Wikileaks.

Mr. Fein currently serves as a Judge Advocate in the U.S. Army Reserve.

This is the twenty-first in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through December 2022.  This blog describes key actions taken to implement the Cyber EO during January 2023.

GSA Announces That It Will Require Software Vendors to Submit Letters of Attestation Beginning in June 2023.

            On January 11, 2023, the General Services Administration (“GSA”) Senior Procurement Executive and Chief Information Officer jointly issued Acquisition letter MV-23-02, “Ensuring Only Approved Software Is Acquired and Used at GSA” (the “GSA letter”).  The GSA letter establishes a June 12, 2023 effective date for implementing the secure software acquisition requirements of Office of Management and Budget (“OMB”) Memorandum M-22-18, issued pursuant to Section 4 of the Cyber EO.  That OMB memorandum directs that agencies must only use software that complies with Government-specified secure software development practices.  These practices include obtaining self-attestations of conformity with secure software development practices and in certain cases as determined by agencies, artifacts such as Software Bills of Materials (SBOMs) from software vendors to verify that the acquired software[1] was developed and produced according to NIST security guidelines and best practices.

            The GSA letter directs GSA’s IT officials to update GSA’s policies by June 12, 2023 to reflect the process for collecting, renewing, retaining, and monitoring the self-attestation information mandated by OMB M-22-18.  For existing contracts that include the use of software, the GSA letter directs GSA IT to provide an internally accessible list of the software used for each contract and to collect vendor attestations by June 12, 2023.  For new contracts that include the use of software, the GSA letter directs the relevant acquisition teams to modify the acquisition planning process to ensure that performance of such contracts begins only after the requisite attestations have been collected and considered.  Finally, with respect to GSA-administered Government-wide indefinite delivery vehicles (e.g., Federal Supply Schedule contracts, Government-Wide Acquisition Contracts, and Multi-Agency Contracts), the GSA letter directs GSA contracting activities to allow, but not require, contractors to provide attestations at the base contract level rather than the task or delivery order level, and to make those attestations available to ordering activities to the extent possible.  With this said, the GSA letter specifies that ordering agencies will ultimately be responsible for complying with OMB M-22-18.

Continue Reading January 2023 Developments Under President Biden’s Cybersecurity Executive Order

The Federal Energy Regulatory Commission (“FERC”) issued a final rule (Order No. 887) directing the North American Electric Reliability Corporation (“NERC”) to develop new or modified Reliability Standards that require internal network security monitoring (“INSM”) within Critical Infrastructure Protection (“CIP”) networked environments.  This Order may be of interest to entities that develop, implement, or maintain hardware or software for operational technologies associated with bulk electric systems (“BES”).

The forthcoming standards will only apply to certain high- and medium-impact BES Cyber Systems.  The final rule also requires NERC to conduct a feasibility study for implementing similar standards across all other types of BES Cyber Systems.  NERC must propose the new or modified standards within 15 months of the effective date of the final rule, which is 60 days after the date of publication in the Federal Register.  

Background

According to the FERC news release, the 2020 global supply chain attack involving the SolarWinds Orion software demonstrated how attackers can “bypass all network perimeter-based security controls traditionally used to identify malicious activity and compromise the networks of public and private organizations.”  Thus, FERC determined that current CIP Reliability Standards focus on prevention of unauthorized access at the electronic security perimeter and that CIP-networked environments are thus vulnerable to attacks that bypass perimeter-based security controls.  The new or modified Reliability Standards (“INSM Standards”) are intended to address this gap by requiring responsible entities to employ INSM in certain BES Cyber Systems.  INSM is a subset of network security monitoring that enables continuing visibility over communications between networked devices that are in the so-called “trust zone,” a term which generally describes a discrete and secure computing environment.  For purposes of the rule, the trust zone is any CIP-networked environment.  In addition to continuous visibility, INSM facilitates the detection of malicious and anomalous network activity to identify and prevent attacks in progress.  Examples provided by FERC of tools that may support INSM include anti-malware, intrusion detection systems, intrusion prevention systems, and firewalls.   

Continue Reading FERC Orders Development of New Internal Network Security Monitoring Standards

On April 20, 2022, the cybersecurity authorities of the United States, Australia, Canada, New Zealand, and the United Kingdom—the so-called “Five Eye” governments—announced the publication of Alert AA22-110A, a Joint Cybersecurity Advisory (the “Advisory”) warning critical infrastructure organizations throughout the world that the Russian invasion of Ukraine could expose them “to increased malicious cyber activity from Russian state-sponsored cyber actors or Russian-aligned cybercrime groups.”  The Advisory is intended to update a January 2022 Joint Cybersecurity Advisory, which provided an overview of Russian state-sponsored cyber operations and tactics, techniques, and procedures (“TTPs”).

In its announcement, the authorities urged critical infrastructure network defenders in particular “to prepare for and mitigate potential cyber threats by hardening their cyber defenses” as recommended in the Advisory.

Overview.  The Advisory notes that “evolving intelligence” indicates that the Russian government is exploring options for potential cyber attacks and that some cybercrime groups have recently publicly pledged support for the Russian government and threatened to conduct cyber operations on behalf of the Russian government.  The Advisory summarizes TTPs used by five state-sponsored advanced persistent threat (“APT”) groups, two Russian-aligned cyber threat groups, and eight Russian-aligned cybercrime groups.  Additionally, it provides a list of mitigations and suggests that critical infrastructure organizations should implement certain mitigations “immediately.”

Russian State-Sponsored Cyber Operations.  The Advisory notes that Russian state-sponsored cyber actors have “demonstrated capabilities” to compromise networks; maintain long-term, persistent access to networks; exfiltrate sensitive data from information technology (“IT”) and operational technology (“OT”) networks; and disrupt critical industrial control systems (“ICS”) and OT networks by deploying destructive malware.  The Advisory details five Russian APT groups:
Continue Reading International Cybersecurity Authorities Issue Joint Advisory on Russian Cyber Threats to Critical Infrastructure

On February 4, 2022, the National Institute of Standards and Technology (“NIST”) published its Recommended Criteria for Cybersecurity Labeling for Consumer Internet of Things (IoT) Products (“IoT Criteria”).  The IoT Criteria make recommendations for cybersecurity labeling for consumer IoT products, in other words, for IoT products intended for personal, family, or household use.

The purpose of the publication, as described by NIST, is to identify “key elements of a potential labeling scheme.”  The publication makes clear, however, that the scheme would not be established or managed by NIST, but rather “by another organization or program,” referred to in the publication as the “scheme owner.”  The identity of the scheme owner is undetermined, but it “could be a public or private sector” entity.

The publication of the IoT Criteria represents another step toward a national cybersecurity labeling scheme for consumer IoT products.  We should expect that the framework established by NIST in this publication will serve as a model for these requirements.

IoT Criteria Framework.  The IoT Criteria establish recommended considerations for three key aspects of a potential cybersecurity IoT labeling program:

  1. Baseline Product Criteria
  2. Labeling
  3. Conformity Assessments


Continue Reading NIST Publishes Recommended Criteria for Cybersecurity Labeling for Consumer Internet of Things (IoT) Products

On January 4, 2022, the Federal Trade Commission published a warning to companies and their vendors to take reasonable steps to remediate the Log4j vulnerability (CVE-2021-44228).  The FTC provided a list of recommended remedial actions for companies using the Log4j software.  The FTC’s warning references obligations under the FTC Act and Gramm Leach Bliley Act

On December 15, 2021, the U.S. Department of Homeland Security Cybersecurity & Infrastructure Security Agency (“CISA”) announced the publication of a warning for “critical infrastructure owners and operators to take immediate steps to strengthen their computer network defenses against potential malicious cyber attacks” before the upcoming holiday season.  CISA’s warning emphasizes that “[s]ophisticated threat actors

In a December 2020 speech, Deputy Assistant Attorney General Michael Granston warned that cybersecurity fraud could see enhanced enforcement under the False Claims Act (“FCA”).  On October 6, 2021, Deputy Attorney General Lisa Monaco announced that the Department of Justice (“DOJ”) would be following through on that warning with the launch of the DOJ’s Civil

Almost a year after Assistant Secretary of the Navy James Geurts issued his September 28, 2018 memorandum (Geurts Memo) imposing enhanced security controls on “critical” Navy programs, the Navy has issued an update to the Navy Marine Corps Acquisition Regulations Supplement (NMCARS) to implement those changes more formally across the Navy.  Pursuant to this update, a new Annex 16 in the NMCARS provides Statement of Work (SOW) language that must be added into Navy solicitations and contracts where the Navy has determined “the risk to a critical program and/or technology warrants its inclusion.”  In addition to the technical requirements reflected in the Geurts Memo, the Navy has added Subpart 5204.73 to the NMCARS that, among other things, instructs Contracting Officers (COs) to seek equitable reductions or consider reducing or suspending progress payments for contractor non-compliance with the Annex 16 and DFARS 252.204-7012 (DFARS clause) requirements.

SUBPART 5204.73

Equitable Price Reductions/Suspension and Reduction of Progress Payments.  The Navy added Subpart 5204.73 “Safeguarding Covered Defense Information and Cyber Incident Reporting” to the NMCARS.  This Subpart provides direction to COs in three areas.  First, it provides that Annex 16 must be included in the SOWs of relevant solicitations, contracts and task or delivery orders.  Second, the Subpart directs COs to consider the DFARS clause, Annex 16 and the Geurts Memo as material requirements.[1]  Finally, if COs accept supplies or services with “critical or major non-conformances (e.g., failure to comply with material requirement)” they are directed to impose an equitable price reduction.  The Subpart identifies a “reasonable amount” for this reduction as 5% of the total contract value.  That amount can be increased if there is an increased risk from the non-conformance.  If the CO decides to require correction of nonconforming services or supplies rather than acceptance, the CO is directed to withhold/reduce or suspend progress payments if correction is not made in a timely manner.

This revision to the NMCARS represents a powerful enforcement mechanism for the Navy.  Until now, DOD has stated that the failure to comply with the DFARS clause requirements would be treated as a contract performance issue.  Although that basic concept continues, the Subpart explicitly defines the DFARS clause, Annex 16 and the Geurts Memo as “material requirements” of the contract.  A failure to comply with a material requirement would make contractors potentially liable for significant equitable reductions or for a suspension or reduction of progress payments.  Read literally, a contractor that reports a cyber incident 76 hours (and not 72 hours) after discovery may be violating a material requirement of the contract. Contractors may derive some comfort from the NMCARS’ reliance on FAR 32.503-6, “Suspension or reduction of payments,” which at least requires COs to “act fairly and reasonably” and “base decisions on substantial evidence.”  However, the nonconforming supplies or services provision  in FAR 46.407 does not impose a similar fairness requirement on COs.

ANNEX 16

The Navy’s Annex 16 covers five areas: (1) System Security Plans (SSPs) and Plans of Action and Milestones (POA&Ms) Reviews; (2) Compliance with NIST Special Publication (SP) 800-171; (3) Cyber Incident Response; (4) Naval Criminal Investigative Service (NCIS) Outreach; and (5) NCIS/Industry Monitoring.  The requirements of Annex 16 are similar to various requirements that have been included in various Navy solicitations over the past year.  As described below, although the Annex provides more detail than the Geurts Memo, significant questions remain about how each of these requirements will be interpreted by the Navy going forward.
Continue Reading Navy Modifies Acquisition Supplement to Tighten Cybersecurity Requirements and Implement the Geurts Memorandum