Cybersecurity’s Role in Winning Government Contracts

In the digital age, the public sector relies heavily on technology and digital services to fulfill its responsibilities. As a result, public sector vendors have become integral to the functioning of government. However, this dependence on technology also exposes these vendors to myriad cybersecurity threats.

Cybersecurity knowledge and awareness are key to public agencies’ and organizations’ security risk management and prevention strategies. Understanding cybercriminals’ tactics and how their attacks work can help direct prevention efforts as threats grow in volume, variety, and complexity. Local government bodies and smaller agencies or municipalities are more at risk from cyberattacks than ever before.

Per Verizon’s 2023 Data Breach Investigations Report, public administration was the sector most targeted by cybersecurity incidents in the prior year. Emsisoft research states more than 2,300 local governments, schools, and healthcare providers were impacted by financially motivated cyberattacks in 2021.

The Growing Significance of Public Sector Vendors
The public sector needs private-sector vendors to operate. Public sector vendors play a pivotal role in delivering essential goods, services, and technological solutions to government agencies. Their significance has been steadily growing, driven by factors such as the increasing complexity of government operations, the rapid pace of technological innovation, and the desire for cost-effective solutions.

The Diverse Landscape of Public Sector Vendors
Public sector vendors encompass a wide range of organizations, each specializing in various domains and industries. These vendors contribute to government operations in multiple ways:

1. 1. Infrastructure Development: Vendors provide critical infrastructure solutions, including transportation systems, energy grids, water treatment facilities, and public buildings. They design, build, and maintain these systems, ensuring their safety, efficiency, and reliability.
   2. Technology Services: Information technology vendors offer a broad spectrum of services, from software development and data management to network infrastructure and cybersecurity. They help government agencies leverage technology to improve service delivery, enhance security, and streamline operations.
   3. Healthcare Services: Healthcare vendors deliver medical services, manage healthcare facilities, and provide healthcare IT solutions. They play a crucial role in ensuring public access to quality healthcare services.
   4. Defense and Security: Defense contractors and security firms supply military equipment, intelligence solutions, and security services to safeguard national security interests. They assist in maintaining peace, deterring threats, and responding to crises.
   5. Education and Training: Vendors specializing in education and training offer curriculum development, teacher training, and e-learning solutions to enhance educational outcomes and workforce development.

Factors Driving the Growing Significance of Public Sector Vendors
Several key factors contribute to the increasing importance of public sector vendors:

1. 1. Complexity of Government Operations: Government agencies face an ever-expanding array of challenges and responsibilities. They often lack the in-house expertise and resources required to address these complexities comprehensively. Public sector vendors fill this gap by offering specialized knowledge and capabilities.
   2. Technological Advancements: Rapid technological innovation is reshaping government operations. Vendors provide access to cutting-edge technologies and solutions that enable government agencies to modernize their processes, improve efficiency, and enhance service delivery.
   3. Cost-Effective Solutions: Vendors often offer cost-effective alternatives to in-house development and operations. By leveraging the expertise and economies of scale provided by vendors, government agencies can reduce costs while maintaining or improving service quality.
   4. Resource Constraints: Many government agencies face budget limitations, staffing shortages, and competing priorities. Public sector vendors can help agencies stretch their resources by providing services and solutions on an as-needed basis.
   5. Specialized Knowledge: Some challenges faced by government agencies require highly specialized knowledge and skills. Public sector vendors bring this expertise, ensuring that agencies have access to the best available talent.

Why the Public Sector Uses Private Sector Vendors
The increasing reliance on public sector vendors has several noteworthy implications for government operations and society as a whole:

1. 1. Efficiency and Innovation: Public sector vendors drive efficiency and innovation within government agencies. They introduce new technologies, best practices, and fresh perspectives that can lead to improved service delivery and more cost-effective operations.
   2. Economic Impact: The growth of public sector vendor contracts has a significant economic impact. Vendors create jobs, stimulate economic growth, and contribute to the development of local and national economies.
   3. Access to Expertise: Vendors provide access to specialized expertise that government agencies may not possess internally. This access ensures that agencies can tackle complex challenges effectively and achieve better outcomes.
   4. Risk Mitigation: Vendors often assume specific risks associated with the delivery of goods and services. This can include risks related to project delays, budget overruns, and performance issues. By transferring these risks to vendors, government agencies can focus on their core missions.
   5. Innovation Ecosystem: Public sector vendors, particularly in the technology sector, help foster innovation ecosystems. They work alongside startups, universities, and research institutions, creating a fertile ground for technological advancement and entrepreneurship.

Challenges to Becoming a Public Sector Vendor
While public sector vendors offer numerous benefits, their growth also presents challenges and considerations:

1. 1. Vendor Accountability: Ensuring vendor accountability and performance is essential. Government agencies must have robust contract management and oversight mechanisms in place to monitor vendor compliance and address issues promptly.
   2. Transparency and Fair Competition: The selection of vendors through competitive bidding processes is critical to ensuring transparency, fairness, and value for money. Government procurement procedures must adhere to strict ethical and legal standards.
   3. Data Security and Privacy: Vendors often have access to sensitive government data. Protecting data security and privacy is of paramount importance. Government agencies must establish stringent cybersecurity and data protection measures.
   4. Vendor Lock-In: Overreliance on a single vendor or proprietary technologies can lead to vendor lock-in. Agencies should consider strategies to mitigate this risk and maintain flexibility in their operations.
   5. Contract Management: Managing a diverse portfolio of vendor contracts can be complex. Government agencies must invest in robust contract management systems and skilled personnel to ensure the effective delivery of goods and services.

The growing significance of public sector vendors reflects the evolving nature of government operations in a technologically advanced world. While the benefits of relying on vendors are substantial, it is essential for government agencies to strike a balance between leveraging vendor expertise and maintaining transparency, accountability, and data security. When managed thoughtfully, the relationship between government agencies and public sector vendors can drive innovation, enhance service delivery, and contribute to the well-being of society.

Top 5 Reasons Local Government is a Victim of Cyberattacks
While local governments are attacked for some of the same reasons that state and federal governments experience cyberattacks, there are some differences. According to a 2020 International City/County Management Association (ICMA) report, there are five key reasons local government agencies and organizations are targeted by cybercriminals:

1. 1. The Vast Number of Local Governments – There are more than 90,000 different local governments in the United States, each with its own unique needs and concerns, making it difficult to produce or implement any level of unified public-sector cybersecurity strategy nationwide.
   2. Massive Amounts of Sensitive Information – Across various agencies, state and local governments handle and store a considerable amount of citizens’ personal information (names, addresses, social security numbers, driver’s license info, credit card details, etc.) as well as billing and financial data for many vendors and other government agencies.
   3. Lagging Cybersecurity Measures – The IMCA’s report found many local government systems often aren’t well-defended, especially in relation to similar federal-level systems’ cybersecurity infrastructure.
   4. Financial & Staffing Constraints – More than three-quarters of survey respondents told the Information Systems Security Association and Enterprise Strategy Group that it’s “extremely or somewhat difficult” to recruit and hire necessary security professionals.
   5. Interconnectivity & the Internet of Things (IoT) – Smart cities adopting IoT technologies discover many benefits for both staff and citizens, but an increase in the number of connected devices also introduces new vulnerabilities and risks to the public sector.

The only constant in cybersecurity is change. Proactive providers must be positioned to quickly pivot and address shifting regulatory changes, always-evolving threats, advancements in cybersecurity technology, and more of the industry’s emerging trends.

Strong cybersecurity posture isn’t inexpensive, but the high dollar costs of recovering from a significant cyberattack are just the tip of the iceberg. Damage to an organization’s reputation after a security breach can make it difficult to recover financially and regain the public’s trust.

The Significance of Cybersecurity in Government Contracts
Government contracts are formal agreements between government entities and private sector organizations to procure goods, services, or construction work. These contracts cover a vast array of sectors, including defense, healthcare, transportation, and information technology.

At every level—federal, state, and local—public government agencies count on service providers (SPs) and other outside vendors to maintain essential systems, services, and operations. The scale and scope of government contracts are often substantial, involving billions of dollars and affecting millions of citizens, so any breach or compromise in these contracts can have far-reaching consequences.

To successfully secure highly competitive and potentially lucrative government contracts, service providers must address public agencies’ cybersecurity concerns and demonstrate an ability to meet their strict cybersecurity requirements.

Cybersecurity Vulnerabilities in Government Contracts
By their very nature, government contracts are high-value, data-rich, and often involve critical infrastructure. These factors make them prime targets for cyberattacks. Cybercriminals and foreign adversaries are drawn to the potential financial gains, sensitive information, and disruptive capabilities that government contracts offer.

Data Sensitivity: Government contracts frequently involve exchanging highly sensitive and classified information. This information can include national security data, classified research, personal records, and financial data. Cybercriminals and foreign adversaries often target this wealth of information for various nefarious purposes, including espionage, identity theft, and state-sponsored cyberattacks.

The compromise of sensitive information not only poses a direct threat to national security but also erodes public trust in government agencies. The consequences of such breaches can be far-reaching, affecting diplomatic relations, intelligence operations, and the privacy of citizens.

Critical Infrastructure: Many government contracts involve the maintenance and operation of critical infrastructure, such as energy grids, transportation systems, and healthcare networks. These systems are integral to a nation’s functioning, and their disruption can have severe consequences for public safety and well-being.

Cyberattacks on critical infrastructure can lead to power outages, transportation disruptions, and healthcare system failures. Such attacks can endanger lives, disrupt economies, and create chaos. The potential for catastrophic consequences makes government contracts associated with critical infrastructure particularly vulnerable to cyberattacks.

Complex Supply Chains: Government contracts often involve complex supply chains with multiple subcontractors and third-party vendors. These supply chains can introduce vulnerabilities if not adequately secured. Smaller subcontractors may have weaker cybersecurity measures, creating potential weak links in the overall security of the contract.

Cybercriminals may target subcontractors or vendors to gain access to the larger government contract network. Once inside, they can exploit these vulnerabilities to compromise sensitive data or critical infrastructure. The interconnected nature of government contract supply chains amplifies the risk of cyberattacks.

Regulatory Compliance: Government contracts are subject to stringent regulatory frameworks and compliance standards designed to ensure cybersecurity measures are in place. While these regulations are critical for enhancing cybersecurity, they can also create vulnerabilities. Compliance requirements may become outdated or fail to keep pace with rapidly evolving cyber threats.

Additionally, the complexity of complying with various regulations across different government contracts can be challenging for contractors. Cybersecurity measures may be implemented in a patchwork fashion, leaving vulnerabilities that cybercriminals can exploit.

Challenges in Implementing Cybersecurity in Government Contracts
Implementing robust cybersecurity measures in government contracts is essential to protect national security, sensitive data, and critical infrastructure. However, this endeavor comes with its own set of challenges.

Evolving Threat Landscape: The cybersecurity threat landscape is constantly evolving. Cybercriminals and state-sponsored actors are becoming more sophisticated and adaptable in their tactics. They employ advanced techniques such as zero-day exploits, social engineering, and ransomware attacks. Government contractors must continually update their defenses to stay ahead of these evolving threats, which require significant research, training, and technology investment.

Resource Constraints: Many government contractors, especially smaller businesses, face resource constraints when implementing robust cybersecurity measures. Cybersecurity technologies and expertise can be expensive, and smaller contractors may struggle to allocate the necessary resources. This resource gap can make them more vulnerable to cyberattacks.

Supply Chain Vulnerabilities: Government contracts often involve complex supply chains with multiple subcontractors and third-party vendors. Each entity within the supply chain presents a potential cybersecurity risk. Smaller subcontractors may have weaker cybersecurity measures, creating potential weak links in the overall security of the contract. Cybercriminals may target these weaker links to gain access to the larger network.

Balancing Security and Innovation: Government contracts frequently require the use of cutting-edge technology and innovation to deliver the best possible services and products. However, integrating new technologies can introduce security risks if not carefully managed. There is often a tension between the need for innovation and the requirement for robust cybersecurity. Striking the right balance is a significant challenge.

Compliance Complexities: Government contracts are subject to a complex web of cybersecurity regulations and compliance standards. Different agencies and contracts may have varying requirements, making it challenging for contractors to navigate and ensure compliance. Keeping up with changing regulations and standards adds another layer of complexity.

Third-party Risk Management: Government contractors often rely on third-party vendors and subcontractors to fulfill their contracts. These third parties can introduce additional cybersecurity risks. Contractors are responsible for ensuring that these vendors adhere to the same cybersecurity standards and practices. Managing and auditing third-party compliance can be a complex and time-consuming task.

Human Error and Insider Threats: Human error remains a significant cybersecurity challenge. Employees and contractors within government agencies and their contractors can inadvertently compromise security through actions such as clicking on phishing emails or mishandling sensitive data. Insider threats, where employees or contractors intentionally compromise security, are also a concern. Identifying and mitigating these threats requires a combination of training, monitoring, and robust access controls.

Legacy Systems and Infrastructure: Government agencies often rely on legacy systems and infrastructure that may not be easily updated or secured. These legacy systems can have known vulnerabilities that cybercriminals can exploit. Securing and modernizing these systems is a complex and expensive undertaking.

International and Geopolitical Considerations: Government contracts often involve international partners and vendors. International involvement introduces geopolitical complexities and considerations, as different nations may have varying cybersecurity standards and interests. Balancing international cooperation with cybersecurity imperatives can be challenging.

Public Scrutiny and Accountability: Government contracts are subject to public scrutiny and accountability. Any cybersecurity breaches or data leaks can have severe consequences, including damage to the reputation of both the government agency and the contractor. The public expects a high level of security and accountability in government contracts, adding pressure to ensure robust cybersecurity.

Government agencies and their contractors must work together to tackle these challenges effectively, as the consequences of cybersecurity failures in government contracts can be far-reaching, affecting national security, public trust, and critical infrastructure.

The Journey of Securing and Maintaining a Government Contract
The process by which providers obtain and maintain government contracts is nuanced and involves several steps with many key considerations. Securing public-sector work isn’t as straightforward as submitting a resume, preparing a proposal, or hashing out a negotiation with another private business. Government entities and public-sector organizations have protocols to follow in awarding contracts, as well as many cybersecurity stipulations their providers must be able to meet. This guide explores an overview of the journey companies must undergo to offer technology solutions, cloud services, and more to public-sector partners.

Research and Understanding
Research government agencies or departments that align with your services or products. Identify ones that frequently require contracts related to your offerings, working to understand their specific needs, requirements, and regulations, including compliance with procurement rules, certifications, security clearances, and other relevant criteria.

Establishing a solid cybersecurity infrastructure takes time and effort. It’s an ongoing process and requires investments of finances and time today to prepare for tomorrow’s emerging threats. Fortunately for providers of all sizes working at any scale, there are many helpful tools and smart systems to enhance your organization’s cybersecurity infrastructure for more robust, diverse, and advanced offerings.

Register and Obtain Necessary Certifications
Register your business with the appropriate government agencies, obtain a Dun & Bradstreet number, register with the System for Award Management (SAM), and potentially obtain a Small Business Administration (SBA) certification such as 8(a), Woman-Owned Small Business (WOSB), or Service-Disabled Veteran-Owned Small Business (SDVOSB). Explore the additional certifications or designations relevant to cybersecurity services, such as FedRAMP, StateRAMP, NIST frameworks and special publications, ISO 27001, or other industry-specific accreditations.

Government entities, public universities, and businesses within highly regulated industries must often impose strict compliance requirements on providers that manage and maintain the confidentiality, integrity, and availability of sensitive data. Guidelines and frameworks from the National Institute of Standards and Technology (NIST) are widely recognized as a gold standard in cybersecurity compliance.

Improve Your Cybersecurity Posture
A strong and capable cybersecurity infrastructure is just the beginning. The journey involved in building up your business to the point where it can confidently secure a government contract can be a challenge. From regulatory compliance, comprehensive risk management, and incident-response plans to managing critical relationships within a crowded, competitive marketplace, each step in the process makes you a more competent cybersecurity provider.

Build Relationships and Network
Attend government contracting events, conferences, and industry-specific trade shows to network with government officials, contracting officers, and other providers to gain insights into the government procurement and contracting landscape. Seek out any potential opportunities to engage in subcontracting or teaming arrangements with larger providers that have existing government contracts.

Identify and Pursue New Opportunities
Monitor the RAMPxchange marketplace, government procurement websites, state or local procurement portals, and specific agency websites for relevant contract opportunities. Develop a systematic process for reviewing solicitations, identifying opportunities that align with your capabilities, and conducting a bid/no-bid analysis. Go above and beyond in preparing and submitting compelling, compliant proposals, showing an understanding of the evaluation criteria while demonstrating your capability to meet the government’s requirements.

Contract Management and Performance
When awarded a government contract, ensure that you have the necessary resources, personnel, and processes in place to deliver on the contract requirements. Establish effective contract management procedures, including maintaining clear communication with the contracting officer, complying with reporting and documentation requirements, and adhering to performance metrics and deliverables.

Post-Contract Evaluation and Expansion
Assess the outcomes and lessons learned from each government contract to refine your strategies and improve future performance. Leverage successful contract experiences to pursue additional contracts within the same agency or expand into other public-sector agencies that may also benefit from your services. Continue to build relationships, network, and stay updated on changes in regulations and procurement practices to adapt and seize new opportunities.