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May 1, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

Only 20 defense firms sought $17 billion in COVID loans. Now the Trump administration is weighing a fix.

By: Joe Gould

WASHINGTON ― Because fewer than 20 firms sought to apply for $17 billion in federal loans for Defense Department suppliers hurt by the coronavirus pandemic, the Trump administration is weighing how to broaden the eligibility requirements, a top Pentagon official said Thursday.

“The challenge is that this $17 billion worth of loans comes with some fairly invasive kind of riders, and I think companies have to think very carefully about whether that makes good business sense for them,” Under Secretary of Defense for Acquisition and Sustainment Ellen Lord said at a Pentagon news conference.

Treasury Secretary Steven Mnuchin, whose agency is implementing the loans, is requiring public companies seeking a share of $17 billion in coronavirus-related relief offer an equity stake to the government.

“It may not be as interesting as for private companies, so that's one of the differentiators I see,” Lord said.

The loans were intended for companies operating top secret facilities and with DX-rated contracts, which means the Pentagon deems them of highest national priority.

“I am not sure that companies with DX-rated contracts are the ones that have the most critical needs. They have had a little less than 20 companies reach out to date,” Lord said.

The Treasury Department has been in consultation with the Pentagon, and it's been open to ways the loan program could be expanded ― potentially to firms the Pentagon designates, Lord said.

“So I'm hoping that early next week, between the Treasury Department and the Department of Defense, we can come back with a little bit more fidelity to the defense industrial base to better identify who might most benefit from this particular money,” Lord said.

The agency had set a May 1 deadline for applications.

The $17 billion tranche in the CARES Act for COVID-19 relief was widely assumed to be targeted at Boeing, which is a prime defense contractor and had indicated that it might seek assistance. However, U.S. lawmakers have said the loans are intended to span the defense supply chain, said Andrew Hunter, director of the Center for Strategic and International Studies's Defense-Industrial Initiatives Group.

“I would just say the requirements under that program are pretty strict that," he said. "You have to be really in desperate need for financing and have no access to other forms of financing, you have to accept a lot of limits on how the business operates: [on] share buybacks, dividends, executive compensation. And so it's really been designed and set up as a lender of last resort to firms that really need that assistance.”

https://www.defensenews.com/congress/2020/04/30/only-20-defense-firms-sought-17-billion-in-covid-loans-now-the-trump-administration-is-weighing-a-fix/

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    August 12, 2020 | International, Aerospace

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  • HOW HACKED WATER HEATERS COULD TRIGGER MASS BLACKOUTS

    August 14, 2018 | International, C4ISR

    HOW HACKED WATER HEATERS COULD TRIGGER MASS BLACKOUTS

    WHEN THE CYBERSECURITY industry warns about the nightmare of hackers causing blackouts, the scenario they describe typically entails an elite team of hackers breaking into the inner sanctum of a power utility to start flipping switches. But one group of researchers has imagined how an entire power grid could be taken down by hacking a less centralized and protected class of targets: home air conditioners and water heaters. Lots of them. At the Usenix Security conference this week, a group of Princeton University security researchers will present a study that considers a little-examined question in power grid cybersecurity: What if hackers attacked not the supply side of the power grid, but the demand side? In a series of simulations, the researchers imagined what might happen if hackers controlled a botnet composed of thousands of silently hacked consumer internet of things devices, particularly power-hungry ones like air conditioners, water heaters, and space heaters. Then they ran a series of software simulations to see how many of those devices an attacker would need to simultaneously hijack to disrupt the stability of the power grid. Their answers point to a disturbing, if not quite yet practical scenario: In a power network large enough to serve an area of 38 million people—a population roughly equal to Canada or California—the researchers estimate that just a one percent bump in demand might be enough to take down the majority of the grid. That demand increase could be created by a botnet as small as a few tens of thousands of hacked electric water heaters or a couple hundred thousand air conditioners. "Power grids are stable as long as supply is equal to demand," says Saleh Soltan, a researcher in Princeton's Department of Electrical Engineering, who led the study. "If you have a very large botnet of IoT devices, you can really manipulate the demand, changing it abruptly, any time you want." The result of that botnet-induced imbalance, Soltan says, could be cascading blackouts. When demand in one part of the grid rapidly increases, it can overload the current on certain power lines, damaging them or more likely triggering devices called protective relays, which turn off the power when they sense dangerous conditions. Switching off those lines puts more load on the remaining ones, potentially leading to a chain reaction. "Fewer lines need to carry the same flows and they get overloaded, so then the next one will be disconnected and the next one," says Soltan. "In the worst case, most or all of them are disconnected, and you have a blackout in most of your grid." Power utility engineers, of course, expertly forecast fluctuations in electric demand on a daily basis. They plan for everything from heat waves that predictably cause spikes in air conditioner usage to the moment at the end of British soap opera episodes when hundreds of thousands of viewers all switch on their tea kettles. But the Princeton researchers' study suggests that hackers could make those demand spikes not only unpredictable, but maliciously timed. The researchers don't actually point to any vulnerabilities in specific household devices, or suggest how exactly they might be hacked. Instead, they start from the premise that a large number of those devices could somehow be compromised and silently controlled by a hacker. That's arguably a realistic assumption, given the myriad vulnerabilities other security researchers and hackers have found in the internet of things. One talk at the Kaspersky Analyst Summit in 2016 described security flaws in air conditioners that could be used to pull off the sort of grid disturbance that the Princeton researchers describe. And real-world malicious hackers have compromised everything from refrigerators to fish tanks. Given that assumption, the researchers ran simulations in power grid software MATPOWER and Power World to determine what sort of botnet would could disrupt what size grid. They ran most of their simulations on models of the Polish power grid from 2004 and 2008, a rare country-sized electrical system whose architecture is described in publicly available records. They found they could cause a cascading blackout of 86 percent of the power lines in the 2008 Poland grid model with just a one percent increase in demand. That would require the equivalent of 210,000 hacked air conditioners, or 42,000 electric water heaters. The notion of an internet of things botnet large enough to pull off one of those attacks isn't entirely farfetched. The Princeton researchers point to the Mirai botnet of 600,000 hacked IoT devices, including security cameras and home routers. That zombie horde hit DNS provider Dyn with an unprecedented denial of service attack in late 2016, taking down a broad collection of websites. Building a botnet of the same size out of more power-hungry IoT devices is probably impossible today, says Ben Miller, a former cybersecurity engineer at electric utility Constellation Energy and now the director of the threat operations center at industrial security firm Dragos. There simply aren't enough high-power smart devices in homes, he says, especially since the entire botnet would have to be within the geographic area of the target electrical grid, not distributed across the world like the Mirai botnet. But as internet-connected air conditioners, heaters, and the smart thermostats that control them increasingly show up in homes for convenience and efficiency, a demand-based attack like the one the Princeton researchers describes could become more practical than one that targets grid operators. "It's as simple as running a botnet. When a botnet is successful, it can scale by itself. That makes the attack easier," Miller says. "It's really hard to attack all the generation sites on a grid all at once. But with a botnet you could attack all these end user devices at once and have some sort of impact." The Princeton researchers modeled more devious techniques their imaginary IoT botnet might use to mess with power grids, too. They found it was possible to increase demand in one area while decreasing it in another, so that the total load on a system's generators remains constant while the attack overloads certain lines. That could make it even harder for utility operators to figure out the source of the disruption. If a botnet did succeed in taking down a grid, the researchers' models showed it would be even easier to keepit down as operators attempted to bring it back online, triggering smaller scale versions of their attack in the sections or "islands" of the grid that recover first. And smaller scale attacks could force utility operators to pay for expensive backup power supplies, even if they fall short of causing actual blackouts. And the researchers point out that since the source of the demand spikes would be largely hidden from utilities, attackers could simply try them again and again, experimenting until they had the desired effect. The owners of the actual air conditioners and water heaters might notice that their equipment was suddenly behaving strangely. But that still wouldn't immediately be apparent to the target energy utility. "Where do the consumers report it?" asks Princeton's Soltan. "They don't report it to Con Edison, they report it to the manufacturer of the smart device. But the real impact is on the power system that doesn't have any of this data." That disconnect represents the root of the security vulnerability that utility operators need to fix, Soltan argues. Just as utilities carefully model heat waves and British tea times and keep a stock of energy in reserve to cover those demands, they now need to account for the number of potentially hackable high-powered devices on their grids, too. As high-power smart-home gadgets multiply, the consequences of IoT insecurity could someday be more than just a haywire thermostat, but entire portions of a country going dark. https://www.wired.com/story/water-heaters-power-grid-hack-blackout/

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