Pentagon Fears Foreign Intrusions Into Supplier Networks 

The United States military’s No. 2 officer Gen. Paul J. Selva was reticent when asked what he really worries about.

“It’s in the classified realm,” the vice chairman of the Joint Chiefs of Staff told an audience of defense logistics contractors last week. Implicit in the context of the discussion were well-known Pentagon concerns about the prospect of U.S. supplier networks being penetrated by foreign spies.

The cybersecurity of the supply chain is becoming a worrisome issue for the Defense Department. Not only are there fears of attacks against Pentagon suppliers that have access to secret data, but there is also uneasiness about more sophisticated types of espionage, such as the acquisition of American firms that do business with the military. This shines a light on how little control the Pentagon has over non-U.S. ownership of hundreds of corporations that may not be prime contractors or weapons manufacturers but still provide somewhat sensitive products and services to the military.

The issue hits home with Selva, who before his promotion to vice chairman was commander of U.S. Transportation Command, one of the military’s most frequent targets of cyber attacks, and a command that is heavily reliant on the private sector. According to officials, about 90 percent of Transcom’s activity takes place on commercial networks. Several intrusions in 2013 and 2014 against Transcom contractors were traced to China. The worry is that adversaries could penetrate networks that hold information about the movement of U.S. troops and equipment.

The command has taken preemptive measures such as requiring its contractors to certify the security of their networks and to report intrusions. The Defense Department across the board has stepped up cybersecurity and counterespionage efforts, but Selva cautioned that the Pentagon is becoming apprehensive about contractor mergers and acquisitions by foreign parent companies from countries that the United States doesn’t trust.

“One thing that worries me is the consolidation of most of our supply chain industries,” Selva said April 20 at the National Defense Industrial Association’s annual logistics forum in Washington, D.C.

This is now a reality of the global economy, Selva added. “We are going to consolidate. Consolidation is what stockholders want. It brings more efficiency and a net return on investment for stockholders.”

There is a problem, however, “in the way we depend on industry to support the military,” he said. “Consolidation also means there might be fewer options. It also means there is opportunity for foreign investments — either masked through companies that appear to be American or direct foreign investment,” Selva said. “There is a point where that foreign investment makes those commercial entities less likely to be ready to operate with us when we go to war. That worries me.” Click to read more from NDIA