News
June 15, 2017

President Trump's Executive Order on Cybersecurity: Potential Impacts and Opportunities for Industry

Advisory

On May 11, 2017, President Trump signed a long-anticipated executive order entitled "Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure" (Executive Order). As addressed below, the Executive Order triggers a cyber policy review across critical infrastructure sectors (communications, defense industrial base, financial, IT, electric, transportation, health care, and others), as well as a focus on the federal Government securing its own systems. This review process, by definition, creates risks and opportunities for critical infrastructure companies. The focus on the Government's own systems also presents a clear opportunity for companies who are able to optimize their product and service offerings to match the Order's stated preference for shared IT services and consolidated network architecture in the federal Government.

The Executive Order triggers no less than 19 reports to be written by agency heads, covering a full range of topics affecting cybersecurity stakeholders, including private companies (both vertical and horizontal), universities, federal agencies, and other governments. While many of these reports are status reports to capture where agencies think we presently are on cyber topics, many are also forward looking with a potential to set the path for future cyber policies by the Administration. Most of the reports are to be submitted to the President without review by traditional intermediaries such as the Office of Management and Budget (OMB) or the Office of the Director of National Intelligence. While it is not clear how the 19 reports will be coordinated—or rationalized, given that different agencies and constituencies will no doubt have different priorities, approaches, and policy directions—stakeholders would be wise to take the reports seriously, and to recognize that the clock has started in the race to influence them.

Industry stakeholders, in particular, will want to map their interests to each of the 19 work streams, identify their core principles and care-abouts for a given stream, and create strategies for ensuring the drafters of the reports understand their worldviews, including the potential impact and importance of a given report's recitation of the current state of affairs and recommended path forward. This will be no small task, especially since the reports will trickle out on varying time schedules over a period of months and many may be classified. As usual in Washington, particularly with a new administration, stakeholders cannot assume the past to be prologue on policy direction and, therefore, should not underestimate the importance and power of the individual holding the pen. Views and directions will be debated, directions will be set, and there will be winners and losers.

A look at the main topics addressed in the Executive Order, which are discussed in greater detail below, reveals who from industry should be interested in the direction of the reports: (a) IT modernization and shared services affects IT companies, service providers (including Fintech), managed security services, cloud providers, AI firms, systems integrators, small innovators, foreign IT companies, and others; (b) cybersecurity for critical infrastructure affects the owners of Section 9 Entities and members of the defense industrial base, including its supply chain, platforms, and systems;1 (c) "transparency" affects all public companies; (d) the section on "botnets," by its terms, affects the entire "internet and communications ecosystem" (an expansive definition both vertically and horizontally); (e) the "electric subsector" concerns generation, transmission, distribution, and alternative energy; (f) deterrence and international cooperation affects all multinational companies; and (g) the section on the workforce affects traditional academia (universities and K-12 institutions), for-profit schools, and any company that benefits from a cyber skilled workforce.

This Advisory addresses these areas of interest. It is organized by each of the Executive Order's three substantive sections. First, it distills what each section says. Then it provides analysis of the section's key implications for industry.

Section 1. The Cybersecurity of Federal Networks

What The Executive Order Says

Section 12 begins with a finding that "antiquated" information technology (IT) is "difficult to defend."3 It adds that "known but unmitigated vulnerabilities," such as "using operating systems or hardware beyond the vendor's support lifecycle, declining to implement a vendor's security patch, or failing to execute security-specific configuration guidance," are "among the highest cybersecurity risks" that the Government faces.

To solve these problems, the Section observes that the Government must plan such that "maintenance, improvements, and modernization" of federal IT "occur in a coordinated way and with appropriate regularity," in addition to "protecting IT and data currently in place." This planning requires "information sharing," and agency heads "lead[ing] integrated teams of senior executives with expertise in IT, security, budgeting, acquisition, law, privacy, and human resources."

From a high-level policy standpoint, these ideas will be implemented through two mechanisms. First, the executive branch will manage cybersecurity risk as a Governmentwide enterprise "because risk management decisions made by [individual] agency heads can affect the risk to the executive branch as a whole." Second, the President will hold individual agency heads accountable for: (a) "implementing risk management measures commensurate with the risk and magnitude of the harm that would result from unauthorized access, use, disclosure, disruption, modification, or destruction of IT and data" at their agencies; and (b) "ensuring that cybersecurity risk management processes are aligned with strategic, operational, and budgetary planning processes."

In terms of concrete action, the Section prescribes the following workflows, which can be subdivided into three broad categories:

1. Procurement Preference for Shared IT Services

Effective immediately. Agency heads shall preference "shared IT services" in their procurement "to the extent permitted by law."

By August 9, 2017 (90 days from May 11, 2017). The Secretary of Homeland Security, Administrator of General Services, and Directors of OMB and the American Technology Council4 shall submit a report to the President describing both the "legal, policy, and budgetary considerations" relevant to and the "technical feasibility and cost effectiveness" of transitioning all or some federal agencies to "one or more consolidated network architectures" and "shared IT services, including email, cloud, and cybersecurity services." The report shall specifically consider consistency and compliance with policies and practices issued pursuant to FISMA, 44 U.S.C. §3553, and Section 227 of the Homeland Security Act, 6 U.S.C. §148. All agency heads "shall supply such information concerning their current IT architectures and plans as is necessary to complete [the] report on time."5

2. Risk Management Assessment and NIST Framework Implementation

Effective immediately. Agency heads shall manage their respective agency's cybersecurity risk using "The Framework for Improving Critical Infrastructure Cybersecurity" previously developed by the National Institute of Standards and Technology (NIST Framework) pursuant to Section 7 of Executive Order 13636 (Feb. 12, 2013).

By August 9, 2017 (90 days from May 11, 2017). Each agency head shall provide a "risk management report" to the Secretary of Homeland Security and the Director of OMB. These reports shall include "the strategic, operational, and budgetary considerations that informed" the agency head's "risk mitigation and acceptance choices," as well as documentation of "any accepted risk, including from unmitigated vulnerabilities." The reports shall also include an "action plan to implement" the NIST Framework. The reports "may be classified in full or in part, as appropriate."

By October 8, 2017 (60 days from August 9, 2017). The Secretary of Homeland Security and Director of OMB shall submit a meta report to the President determining "whether the risk mitigation and acceptance choices set forth in the [individual agency] reports are appropriate and sufficient to manage the cybersecurity risk" to the Government as a whole. The report shall also include a plan to address any identified insufficiencies and any relevant unmet budgetary needs both now and going forward. Finally, the report shall include a plan to "clarify, reconcile, and reissue, as necessary and to the extent permitted by law, all policies standards, and guidelines issued by any agency" in furtherance of FISMA, 44 U.S.C. §3551 et seq., and to align those policies, standards, and guidelines with the NIST Framework. As with the underlying individual agency reports, the meta report "may be classified in full or in part, as appropriate."

3. Deviation for National Security Purposes

By October 8, 2017 (150 days from May 11, 2017). The Secretary of Defense and the Director of National Intelligence shall provide a report to the President describing their implementation of Section 1 of the Executive Order with respect to National Security Systems, including "a justification for any deviation" from the Section's requirements. This report "may be classified in full or in part, as appropriate."

Key Implications For Industry

1. Procurement Preference for Shared IT Services

In seeking to modernize federal IT, Section 1 of the Executive Order enshrines a policy preference for "shared IT services" in procurement "including email, cloud, and cybersecurity services," "to the extent permitted by law." This is a potentially huge opportunity for industry players providing these services. 6

Nominally, a "cloud-first" policy has been favored since 2010. However, despite notable contract awards, such as the Department of Interior's 2012 contract with Google for Department-wide collaboration and cloud email services and the Central Intelligence Agency's 2013 contract with Amazon Web Services to build and implement a cloud computing platform, the "cloud-first" policy has been hamstrung by delays in authorizations for cloud offerings through the Federal Risk and Authorization Management Program (FedRAMP). 7 To the extent the Executive Order and subsequent Trump Administration actions ease FedRAMP bottlenecks, an advantage of the preference for shared IT services could be the eventual development of a single federal network infrastructure—at least for civilian agencies—with standardized defenses, minimized access points, and encryption layered over the cloud.8 All of this would likely be built in partnership with private industry.

Additionally, recent large-scale cyber attacks have often taken advantage of security glitches in outdated federal software. The executive order's emphasis on using more up-to-date versions of software, with current security patch support, should excite existing software vendors. Due to the realities of vendor lock-in, a move from lower value, "last generation" software to higher value, current versions would likely provide an opportunity for incumbent vendors to charge higher license fees from their federal customers.

Notwithstanding the above, it is not yet clear how the various Section 1 reports will be coordinated, or rationalized into a unified executive branch strategy. 9 It will therefore be difficult in the near-term for companies to predict the implications of the IT modernization process upon any particular procuring agency before future solicitations are issued.10 For this reason, to ensure access to potential opportunities, industry stakeholders should be sure to engage throughout the reporting process to ensure their core principles and care-abouts are reflected in the end results.

2. Risk Management Assessment and NIST Framework Implementation

The Executive Order also recognizes that modernizing federal IT is only part of the cybersecurity equation. The Order therefore also looks at the "risk mitigation and acceptance choices" each agency will need to make, and builds on the prior Obama Administration Executive Order 13636 (Feb. 12, 2013) by imposing the NIST Framework on federal agencies.

"Risk mitigation and acceptance choices" builds on the principle that, even for known or anticipatable vulnerabilities, the cost today of implementing a solution may outweigh the potential risk or vulnerability to be addressed. Under the Executive Order, agency heads will be expected to un-silo IT decisions from overall strategic budgeting, acquisition, operations, and security decisions, and will be accountable for the choices they make in doing so.11

In addition to agency-level accountability, the Executive Order also contemplates managing cybersecurity risk from the executive branch as a Governmentwide enterprise, including by clarifying, reconciling, and reissuing FISMA regulations "as necessary" to implement the NIST Framework, and by rationalizing the "risk mitigation and acceptance choices" of each individual agency into a coherent Governmentwide strategy. While this would be salutary, it may prove to be a difficult task as even standardizing the approach to IT within a single agency can lead to large turf wars.12 Moreover, the fragmented reporting process initiated by the Executive Order may, by its design, frustrate the creation of a unified strategy.

Section 2. The Cybersecurity of Critical Infrastructure

What The Executive Order Says

Section 2 of the Executive Order proclaims it is "the policy of the executive branch to use its authorities and capabilities to support the cybersecurity risk management efforts of the owners and operators of the Nation's critical infrastructure." To implement this policy, the Section prescribes the following workflows, which also can be subdivided into three broad categories:

1. Protection and Risk Management of Section 9 Entities and the Electric Subsector

By November 7, 2017 (180 days from May 11, 2017). The Secretaries of Homeland Security and Defense, the Attorney General, the Directors of National Intelligence and the Federal Bureau of Investigation (FBI), the "heads of appropriate sector-specific agencies," 13 and "all other appropriate agency heads, as identified by the Secretary of Homeland Security," shall "engage" with and "solicit input" from Section 9 Entities. The agency heads shall provide a report to the President "identify[ing] authorities and capabilities that agencies could employ to support the cybersecurity efforts" of Section 9 Entities, and "evaluat[ing] whether and how" these authorities and capabilities "might be employed to support cybersecurity risk management efforts" as well as "any obstacles to doing so." This report "may be classified in full or in part, as appropriate." The agency heads shall also provide a report to the President with updated findings and recommendations on an annual basis thereafter.

By August 9, 2017 (90 days from May 11, 2017). The Secretaries of Homeland Security and Energy—in consultation with the Director of National Intelligence and state, local, tribal, and territorial leaders—shall "jointly assess" (a) "the potential scope and duration" of a "prolonged power outage associated with a significant cyber incident . . . against the United States electric subsector"; (b) "the readiness of the United States to manage the consequences of such an incident"; and (c) "any gaps or shortcomings in assets or capabilities required to mitigate the consequences of such an incident."14 The Secretaries of Homeland Security and Energy shall provide the above assessment to the President. The assessment "may be classified in full or in part, as appropriate."

2. Promotion of Market Transparency of Risk Management Practices and Collaboration to Reduce Threats

By August 9, 2017 (90 days from May 11, 2017). The Secretaries of Homeland Security and Commerce shall provide a report to the President "that examines the sufficiency of existing federal policies and practices to promote appropriate market transparency of cybersecurity risk management practices by critical infrastructure entities, with a focus on publicly traded critical infrastructure entities."

By January 6, 2018 (240 days from May 11, 2017). The Secretaries of Homeland Security and Commerce—in consultation with the Secretary of Defense, the Attorney General, the Director of the FBI, the heads of sector-specific agencies, and the Chairs of the Federal Communications Commission and Federal Trade Commission—shall "identify and promote action by appropriate stakeholders to improve the resilience of the internet and communications ecosystem and to encourage collaboration with the goal of dramatically reducing threats perpetrated by automated and distributed attacks (e.g., botnets)." 15 The Secretaries of Homeland Security and Commerce shall make a "preliminary report" publicly available. They shall submit a "final report" to the President by May 11, 2018 (1 year from May 11, 2017).

3. Mitigation of Risks to the Defense Industrial Base

By August 9, 2017 (90 days from May 11, 2017). The Secretaries of Homeland Security and Defense, and the Directors of the FBI and National Intelligence, shall provide a report to the President on "cybersecurity risks facing the defense industrial base, including its supply chain, and United States military platforms, systems, networks, and capabilities," as well as "recommendations for mitigating these risks." The report "may be classified in full or in part, as appropriate."

Key Implications For Industry

1. Protection and Risk Management of Section 9 Entities and the Electric Subsector

The report due November 7 specifically anticipates that the designated agency heads shall "engage" with and "solicit input" from Section 9 Entities. In crafting their engagement strategies for this report, the owners of the Section 9 Entities should be mindful that the report will be updated on an annual basis thereafter. As a result, engagement with the reporting agency heads will likely become a continuous, ongoing relationship that would be in the interest of owners to be as collaborative and friendly as possible.

2. Promotion of Market Transparency of Risk Management Practices and Collaboration to Reduce Threats

The two reports discussed in this subsection stand out as among those most likely to be of interest to industry in the entire Executive Order. To recap, one report is specifically intended "to promote appropriate market transparency" of publicly trade entities. The other is to be made "publicly available" for the specified purpose of "identify[ing] and promot[ing] action by appropriate stakeholders . . . to encourage collaboration."

The reports highlight an important tension in that, on the one hand, private industry (particularly entities that are not Section 9 or otherwise critical infrastructure) may understandably be uncomfortable with Government-directed efforts to promote transparency and collaboration, especially to the extent such efforts devolve into public shaming or significant reporting mandates. On the other hand, there are important countervailing considerations emanating from the inherent interconnectedness of the internet and networked systems. For example, the user of one network (e.g., an employee's internet-connected workstation) may choose to use the same log-in credentials for another network (e.g., the employee's personal online banking portal). Because of this credential correlation tendency, the network security practices of one entity can substantially affect the network security of other entities. This is especially so in the case of botnets that leverage multiple networks at a time in their attacks. Likewise, the breach of a network providing application programming interfaces (APIs) (e.g., an online payments processor or a provider of embedded maps), could compromise other networks reliant on those APIs (e.g., a business accepting online payments or a comprehensive tool embedding real-time maps).

In crafting their engagement strategies with the Government, companies falling within the ambit of the two reports will want to be mindful of these tensions. Specifically, they might seek to emphasize a preference for voluntary, rather than coercive, regulation to increase industry sharing of threats and other relevant cyber information with each other and the Government.16

3. Mitigation of Risks to the Defense Industrial Base

Finally, the assessment of "cybersecurity risks facing the defense industrial base, including its supply chain," platforms, and systems will be of obvious interest to industry, and should be a focus of post-Executive Order engagement as well. The tension for industry will be between the opportunity for increased federal investment in industrial base IT and the risk of agencies imposing significant reporting mandates on companies for even the smallest of cyber incidents, non-compliance with which could be a predicate for suspension, debarment, or civil False Claims Act liability. This is particularly worrisome for commercial companies engaging in only a limited number of contracts with the Government—for example, a vendor to the Defense Logistics Agency—as a cyber incident on a non-segregated commercial system could conceivably trigger reporting obligations, and resultant liability, if the contractor also stores, transmits, or processes Government information on the system.17

Likewise, industry may want to pay closer attention to the treatment of cyber incidents in Contractor Performance Assessment Reports System (CPARS) assessments. To the extent the Executive Order succeeds in imposing agency-level accountability for cyber risk management practices, IT contractors could be exposed to CPARS-documented blame or criticism in the event of cyber incidents occurring on architecture the contractor sold, installed, or managed. As the Government push for IT modernization progresses, industry might consider pursuing regulatory or statutory safeguards for contractors challenging what they perceive as unwarranted, adverse CPARS assessments arising out of cyber incidents.

Section 3. Cybersecurity For The Nation

What The Executive Order Says

Section 3 of the Executive Order proclaims it is "the policy of the executive branch" (a) "to promote an open, interoperable, reliable, and secure internet that fosters efficiency, innovation, communication, and economic prosperity, while respecting privacy and guarding against disruption, fraud, and theft"; and (b) "to support the growth and sustainment of a workforce that is skilled in cybersecurity and related fields." To implement these policies, the Section prescribes the following workflows, which can be subdivided into two broad categories:

1. International Cybersecurity Threats and Strategy

By August 9, 2017 (90 days from May 11, 2017). The Secretaries of Homeland Security, Defense, State, Treasury, and Commerce, the Attorney General, the Director of National Intelligence, and the U.S. Trade Representative shall "jointly submit" a report to the President on "the Nation's strategic options for deterring adversaries and better protecting the American people from cyber threats."

By June 25, 2017 (45 days from May 11, 2017). The Secretaries of Homeland Security, Defense, State, Treasury, and Commerce, the Attorney General, and the Director of the FBI shall submit individual reports to the President on "their international cybersecurity priorities, including those concerning investigation, attribution, cyber threat information sharing, response, capacity building, and cooperation."

By September 23, 2017 (90 days from June 25, 2017). The Secretary of State, "in coordination with" the other agency heads named above, shall provide a report to the President "documenting an engagement strategy for international cooperation in cybersecurity."

2. The Nation's Cybersecurity Workforce

By September 8, 2017 (120 days from May 11, 2017). "In order to ensure that the United States maintains a long-term cybersecurity advantage," the Secretaries of Homeland Security, Defense, Commerce, Labor, and Education, the Director of the Office of Personnel Management, and the heads of "other agencies identified jointly" by the Secretaries of Homeland Security and Commerce shall "jointly assess the scope and sufficiency of efforts to educate and train the American cybersecurity workforce of the future, including cybersecurity-related education curricula, training, and apprenticeship programs, from primary through higher education." The agency heads shall provide a report to the President "with findings and recommendations regarding how to support the growth and sustainment of the Nation's cybersecurity workforce in both the public and private sectors." This report "may be classified in full or in part, as appropriate."

By July 10, 2017 (60 days from May 11, 2017). The Director of National Intelligence shall "review the workforce development efforts of potential foreign cyber peers in order to help identify foreign workforce development practices likely to affect long-term United States cybersecurity competitiveness" and provide a report to the President with the findings of that review. The report "may be classified in full or in part, as appropriate."

By October 8, 2017 (150 days from May 11, 2017). The Secretaries of Homeland Security, Defense, and Commerce, and the Director of National Intelligence, shall "assess the scope and sufficiency of [Government] efforts to ensure that the United States maintains or increases its national security-related cyber capabilities" and provide a report to the President with findings and recommendations of that assessment. This report "may be classified in full or in part, as appropriate."

3. Key Implications For Industry

Like Section 2 of the Executive Order, Section 3 focuses on the creation of a series of reports. Here, the reports concern the promotion of a secure, internationally connected internet and the growth of a sufficient cybersecurity-trained domestic workforce within the United States.

Industry will want to pay particular attention to the joint reports on (a) "strategic options for deterring [cyber] adversaries"; and (b) "how to support the growth and sustainment of the Nation's cybersecurity workforce." The former could include recommendations for additional federal spending on new cybersecurity programs, and the latter might include recommendations for incentives or subsidies to industry to invest in cybersecurity-related human capital.

Note as well that one piece which seems to be missing from the "International Cybersecurity Threats and Strategy" portion of Section 3 is any mention of building global cyber "norms" for countries in cyberspace. Although there is discussion of "strategic options for deterring adversaries" and "investigation, attribution, cyber threat information sharing . . . capacity building, and cooperation," a key concept—and point of focus—for recent past administrations has been building out "rules of the road" as to what is okay and not okay for state actors (or private actors with state blessing) to do in cyberspace or by cyber means. Private American industry may have an interest in the creation and solidification of such norms and, if so, may want to engage on this front, especially since a conversation concerning why global norms should or should not play a role may be occurring behind the scenes within the Administration.

Conclusion

Before concluding this discussion, it is worth taking a momentary step back to consider the bigger cybersecurity picture. On May 17, 2017, the Modernizing Government Technology (MGT) Act introduced by Representative Will Hurd (R-Tex.), H.R. 2227, passed the House of Representatives with bipartisan support, including the support of House Majority Leader Kevin McCarthy (R-Cal.). The MGT Act would create a General Services Administration-managed "Technology Modernization Fund" from which federal agencies could borrow to pay for upgrading outdated IT, subject to approval by an MGT Act-established board. Agencies would theoretically pay back the fund with savings resulting from the upgrades.18 Senator Jerry Moran (R-Kan.) has introduced a companion bill in the Senate, S. 990, that presently is pending before the Committee on Homeland Security and Governmental Affairs.

On May 18, 2017, a day after the House's passage of the MGT Act, a group of ten House Republicans, including Majority Leader McCarthy, met with President Trump and the Jared Kushner-led White House Office of American Innovation. Coming out of that meeting, the group called for a $500 million fund to update obsolete Government IT.19 The President's proposed budget for fiscal year 2018, released less than a week later on May 23, 2017, ultimately requested $228 million in appropriations for the Technology Modernization Fund envisioned by the MGT Act.20

In tandem with passage of the MGT Act and adequate funding for the Technology Modernization Fund, the Executive Order undoubtedly moves federal cybersecurity in the right direction. That said, it is important to emphasize that the Order is just one piece in a rapidly evolving federal cybersecurity landscape. As noted previously, a key for industry today will be to devise overarching engagement strategies of core principles and care-abouts to inform each of the 19 reports across the executive branch, and relevant actors within the halls of Congress. Another key will be to optimize product and service offerings to match the stated procurement preference for shared IT services and consolidated network architecture.

Industry will also want to ensure that Government efforts toward increased transparency, and mitigating risks to critical infrastructure entities and the defense industrial base, do not result in onerous new reporting requirements, particularly for companies that are largely commercial. Finally, industry should prepare for and attempt to shape the publicly available report concerning collaboration against common threats before it is issued.

  1. "Critical infrastructure" is defined as "systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters." USA Patriot Act, 42 U.S.C. § 5195c(e). "Section 9 Entities" refers to the critical infrastructure entities previously identified by Section 9 of Executive Order 13636 (Feb. 12, 2013) "to be at the greatest risk of attacks that could reasonably result in catastrophic regional or national effects on public health or safety, economic security, or national security."

  2. For "National Security Systems," as defined in the Federal Information Security Modernization Act of 2014 (FISMA), 44 U.S.C. §3552(b)(6), Section 1 workflows shall be implemented by the Secretary of Defense and the Director of National Intelligence, in place of the Secretary of Homeland Security and the Director of OMB, "to the maximum extent feasible and appropriate."

  3. "Information technology" is defined at 40 U.S.C. §11101(6). For purposes of the Executive Order, the codified definition is expanded to include "hardware and software systems of agencies that monitor and control physical equipment and processes."

  4. The American Technology Council was created by Executive Order 13794 (Apr. 28, 2017). Media reports have stated that it is a unit within the White House Office of American Innovation. See, e.g., The White House will meet with tech execs for advice on giving the government a digital upgrade, Recode (May 19, 2017, last visited May 24, 2017). That Office, helmed by President Trump's son-in-law Jared Kushner, was itself created by a recent Presidential Memorandum dated March 27, 2017. The Memorandum has not yet been numbered.

  5. "IT architecture" refers to "the integration and implementation of IT within an agency." "Network architecture" refers to "the elements of IT architecture that enable or facilitate communications between two or more IT assets."

  6. The shared services preference also might dovetail with recent Office of Federal Procurement Policy (OFPP) efforts to implement category management principles in federal procurement more generally. See Proposed New Office of Management and Budget Circular No. A-XXX, "Implementing Category Management for Common Goods and Services," 81 Fed. Reg. 69,860 (Oct. 7, 2016).

  7. See How New Cyber Executive Order Could Change Federal IT, GovTechWorks (May 17, 2017, last visited May 25, 2017).

  8. Id.

  9. The unifying center of IT modernization and preference for shared IT services may prove to be the White House Office of American Innovation, helmed by President Trump's son-in-law Jared Kushner, or that Office's American Technology Council. The Council will host a meeting with private sector technology leaders on June 19, 2017 whereupon its full role in the modernization process sketched out by the Executive Order may become clearer. See The White House will meet with tech execs for advice on giving the government a digital upgrade, Recode (May 19, 2017), supra.

  10. See Trump's cyber order excites government contractors, Bloomberg Gov't (May 17, 2017, last visited May 25, 2017).

  11. At least one observer has noted that this accountability will likely incentivize the filling of open agency CIO positions.See id.

  12. See How New Cyber Executive Order Could Change Federal IT, GovTechWorks (May 17, 2017), supra.

  13. "Sector-specific agencies" are defined and specified in Presidential Policy Directive 21 (Feb. 12, 2013).

  14. "Cyber incident" and "significant cyber incident" are defined in Presidential Policy Directive 41 (July 26, 2016).

  15. "Appropriate stakeholders" refers to "any non-executive branch person or entity that elects to participate in {the} open and transparent process" established by the Secretaries of Homeland Security and Commerce pursuant to the Executive Order.

  16. A related question is whether industry should encourage the development of a "bug bounty" program, wherein awards are made to individuals who discover cybersecurity glitches in federal or Section 9 Entity networks. See, e.g., Trump's cyber order excites government contractors, Bloomberg Gov't (May 17, 2017), supra. This topic may be raised by appropriate stakeholders when engaging in the two reports, or by other private sector technology leaders in the aforementioned American Technology Council meeting on June 19, 2017. Were the government to adopt a bug bounty or other "crowd sourced" program, an effort would need to be made by OFPP and the FAR Council, among others, to square such a program with pre-existing principles of procurement and appropriations law. Likewise, regulations and, ultimately, caselaw would need to be developed regarding who is eligible to receive a bug bounty. Such regulations or caselaw might borrow from the body of caselaw concerning the eligibility of qui tam relators in the context of recoveries under the civil False Claims Act, 31 U.S.C. § 3729(a).

  17. For example, Department of Defense contractors already are subject to a DFARS clause requiring them: (a) to safeguard "covered defense information," including by implementing NIST Special Publication 800-171; and (b) to "rapidly report" the "discovery of any cyber incident." See 48 C.F.R. §§ 252.204-7008, 252.204-7012. The scopes of "covered defense information" and "cyber incident" are somewhat uncertain but potentially quite broad. Depending on how these terms are interpreted by the Department, and civilian contracting agencies in the event of subsequent analogue provisions in the FAR, potentially significant compliance obligations and attendant liability for non-compliance could ensue.

  18. See House Passes IT Modernization Bill, Nextgov (May 17, 2017, last visited May 25, 2017). While not provided for in the proposed MGT Act legislation, there is a future potential for the role of the Technology Modernization Fund to be expanded to provide loans and/or grants to states and municipalities for IT upgrades, as well as to the owners of Section 9 Entities.

  19. See Trump and his top aides met with Republican lawmakers to discuss ways to modernize government, Recode (May 18, 2017, last visited May 25, 2017).

  20. See Trump Budget Creates $228M Technology Modernization Fund, Nextgov (May 23, 2017, last visited May 25, 2017).

Email Disclaimer