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May 22, 2001

GAO-01-769T

CRITICAL

INFRASTRUCTURE

PROTECTION

Significant Challenges in

Developing Analysis,

Warning, and Response

Capabilities

Statement of Robert F. Dacey

Director, Information Security Issues

Testimony

Before the Subcommittee on Technology, Terrorism and

Government Information, Committee on the Judiciary,

U.S. Senate

United States General Accounting Office

GAO
Page 1 GAO-01-769T

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss our review of the National

Infrastructure Protection Center (NIPC). As you know, the NIPC is an

important element of our government’s strategy to protect our national

infrastructures from hostile attacks, especially computer-based attacks.

This strategy was outlined in Presidential Decision Directive (PDD) 63,

which was issued in May 1998.

My statement summarizes the key findings in our report on the NIPC,

which you have released today.1

 That report is the result of an evaluation

we performed at the request of you, Mr. Chairman; Senator Feinstein; and

Senator Grassley. As you requested, the report describes the NIPC’s

progress in developing national capabilities for analyzing cyber threats and

vulnerability data and issuing warnings, enhancing its capabilities for

responding to cyber attacks, and establishing information-sharing

relationships with government and private-sector entities.

Overall, progress in developing the analysis, warning, and informationsharing capabilities called for in PDD 63 has been mixed. The NIPC has

initiated a variety of critical infrastructure protection efforts that have laid

a foundation for future governmentwide efforts. In addition, it has

provided valuable support and coordination related to investigating and

otherwise responding to attacks on computers. However, the analytical

and information-sharing capabilities that PDD 63 asserts are needed to

protect the nation’s critical infrastructures have not yet been achieved,

and the NIPC has developed only limited warning capabilities. Developing

such capabilities is a formidable task that experts say will take an intense

interagency effort. An underlying contributor to the slow progress is that

the NIPC’s roles and responsibilities have not been fully defined and are

not consistently interpreted by other entities involved in the government’s

broader critical infrastructure protection strategy. Further, these entities

have not provided the information and support, including detailees, to the

NIPC that was envisioned by PDD 63.

The NIPC is aware of the challenges it faces and has taken some steps to

address them. In addition, the administration is reviewing the federal

critical infrastructure protection strategy, including the way the federal

government is organized to manage this effort. Our report includes a

variety of recommendations that are pertinent to these efforts, including

 1 Critical Infrastructure Protection: Significant Challenges in Developing National Capabilities (GAO-01-

323, April 25, 2001).
Page 2 GAO-01-769T

addressing the need to more fully define the role and responsibilities of

the NIPC, develop plans for establishing analysis and warning capabilities,

and formalize information-sharing relationships with private-sector and

federal entities.

The remainder of my statement will describe the NIPC’s role in the

government’s broader critical infrastructure protection efforts, as outlined

in PDD 63, and its progress in three broad areas: developing analysis and

warning capabilities, developing response capabilities, and establishing

information-sharing relationships.

Since the early 1990s, the explosion in computer interconnectivity, most

notably growth in the use of the Internet, has revolutionized the way

organizations conduct business, making communications faster and access

to data easier. However, this widespread interconnectivity has increased

the risks to computer systems and, more importantly, to the critical

operations and infrastructures that these systems support, such as

telecommunications, power distribution, national defense, and essential

government services.

Malicious attacks, in particular, are a growing concern. The National

Security Agency has determined that foreign governments already have or

are developing computer attack capabilities, and that potential adversaries

are developing a body of knowledge about U.S. systems and methods to

attack them. In addition, reported incidents have increased dramatically in

recent years. Accordingly, there is a growing risk that terrorists or hostile

foreign states could severely damage or disrupt national defense or vital

public operations through computer-based attacks on the nation’s critical

infrastructures. Since 1997, in reports to the Congress, we have designated

information security as a governmentwide high-risk area. Our most recent

report in this regard, issued in January,2

 noted that, while efforts to

address the problem have gained momentum, federal assets and

operations continued to be highly vulnerable to computer-based attacks.

To develop a strategy to reduce such risks, in 1996, the President

established a Commission on Critical Infrastructure Protection. In October

 2 High-Risk Series: Information Management and Technology (GAO/HR-97-9, February 1, 1997); HighRisk Series: An Update (GAO/HR-99-1, January 1999); High-Risk Series: An Update (GAO-01-263,

January 2001).

Background
Page 3 GAO-01-769T

1997, the commission issued its report,3stating that a comprehensive effort

was needed, including “a system of surveillance, assessment, early

warning, and response mechanisms to mitigate the potential for cyber

threats.” The report said that the Federal Bureau of Investigation (FBI)

had already begun to develop warning and threat analysis capabilities and

urged it to continue in these efforts. In addition, the report noted that the

FBI could serve as the preliminary national warning center for

infrastructure attacks and provide law enforcement, intelligence, and

other information needed to ensure the highest quality analysis possible.

In May 1998, PDD 63 was issued in response to the commission’s report.

The directive called for a range of actions intended to improve federal

agency security programs, establish a partnership between the

government and the private sector, and improve the nation’s ability to

detect and respond to serious computer-based attacks. The directive

established a National Coordinator for Security, Infrastructure Protection,

and Counter-Terrorism under the Assistant to the President for National

Security Affairs. Further, the directive designated lead agencies to work

with private-sector entities in each of eight industry sectors and five

special functions. For example, the Department of the Treasury is

responsible for working with the banking and finance sector, and the

Department of Energy is responsible for working with the electric power

industry.

PDD 63 also authorized the FBI to expand its NIPC, which had been

originally established in February 1998. The directive specifically assigned

the NIPC, within the FBI, responsibility for providing comprehensive

analyses on threats, vulnerabilities, and attacks; issuing timely warnings

on threats and attacks; facilitating and coordinating the government’s

response to cyber incidents; providing law enforcement investigation and

response; monitoring reconstitution of minimum required capabilities

after an infrastructure attack; and promoting outreach and information

sharing.

 3 Critical Foundations: Protecting America's Infrastructures, the Report of the President's Commission

on Critical Infrastructure Protection, October 1997.
Page 4 GAO-01-769T

PDD 63 assigns the NIPC responsibility for developing analytical

capabilities to provide comprehensive information on changes in threat

conditions and newly identified system vulnerabilities as well as timely

warnings of potential and actual attacks. This responsibility requires

obtaining and analyzing intelligence, law enforcement, and other

information to identify patterns that may signal that an attack is underway

or imminent.

Since its establishment in 1998, the NIPC has issued a variety of analytical

products, most of which have been tactical analyses pertaining to

individual incidents. These analyses have included (1) situation reports

related to law enforcement investigations, including denial-of-service

attacks that affected numerous Internet-based entities, such as eBay and

Yahoo and (2) analytical support of a counterintelligence investigation. In

addition, the NIPC has issued a variety of publications, most of which

were compilations of information previously reported by others with some

NIPC analysis.

Strategic analysis to determine the potential broader implications of

individual incidents has been limited. Such analysis looks beyond one

specific incident to consider a broader set of incidents or implications that

may indicate a potential threat of national importance. Identifying such

threats assists in proactively managing risk, including evaluating the risks

associated with possible future incidents and effectively mitigating the

impact of such incidents.

Three factors have hindered the NIPC’s ability to develop strategic

analytical capabilities.

ï First, there is no generally accepted methodology for analyzing strategic

cyber-based threats. For example, there is no standard terminology, no

standard set of factors to consider, and no established thresholds for

determining the sophistication of attack techniques. According to officials

in the intelligence and national security community, developing such a

methodology would require an intense interagency effort and dedication of

resources.

ï Second, the NIPC has sustained prolonged leadership vacancies and does

not have adequate staff expertise, in part because other federal agencies

had not provided the originally anticipated number of detailees. For

example, as of the close of our review in February, the position of Chief of

the Analysis and Warning Section, which was to be filled by the Central

Intelligence Agency, had been vacant for about half of the NIPC’s 3-year

existence. In addition, the NIPC had been operating with only 13 of the 24

Multiple Factors Have

Limited Development

of Analysis and

Warning Capabilities
Page 5 GAO-01-769T

analysts that NIPC officials estimate are needed to develop analytical

capabilities.

ï Third, the NIPC did not have industry-specific data on factors such as

critical system components, known vulnerabilities, and interdependencies.

Under PDD 63, such information is to be developed for each of eight

industry segments by industry representatives and the designated federal

lead agencies. However, at the close of our work in February, only three

industry assessments had been partially completed, and none had been

provided to the NIPC.

To provide a warning capability, the NIPC established a Watch and

Warning Unit that monitors the Internet and other media 24 hours a day to

identify reports of computer-based attacks. As of February, the unit had

issued 81 warnings and related products since 1998, many of which were

posted on the NIPC’s Internet web site. While some warnings were issued

in time to avert damage, most of the warnings, especially those related to

viruses, pertained to attacks underway. The NIPC’s ability to issue

warnings promptly is impeded because of (1) a lack of a comprehensive

governmentwide or nationwide framework for promptly obtaining and

analyzing information on imminent attacks, (2) a shortage of skilled staff,

(3) the need to ensure that the NIPC does not raise undue alarm for

insignificant incidents, and (4) the need to ensure that sensitive

information is protected, especially when such information pertains to law

enforcement investigations underway.

However, I want to emphasize a more fundamental impediment.

Specifically, evaluating the NIPC’s progress in developing analysis and

warning capabilities is difficult because the federal government’s strategy

and related plans for protecting the nation’s critical infrastructures from

computer-based attacks, including the NIPC’s role, are still evolving. The

entities involved in the government’s critical infrastructure protection

efforts do not share a common interpretation of the NIPC’s roles and

responsibilities. Further, the relationships between the NIPC, the FBI, and

the National Coordinator for Security, Infrastructure Protection, and

Counter-Terrorism at the National Security Council are unclear regarding

who has direct authority for setting NIPC priorities and procedures and

providing NIPC oversight. In addition, the NIPC’s own plans for further

developing its analytical and warning capabilities are fragmented and

incomplete. As a result, there are no specific priorities, milestones, or

program performance measures to guide NIPC actions or provide a basis

for evaluating its progress.

The administration is currently reviewing the federal strategy for critical

infrastructure protection that was originally outlined in PDD 63, including
Page 6 GAO-01-769T

provisions related to developing analytical and warning capabilities that

are currently assigned to the NIPC. Most recently, on May 9, the White

House issued a statement saying that it was working with federal agencies

and private industry to prepare a new version of a “national plan for

cyberspace security and critical infrastructure protection” and reviewing

how the government is organized to deal with information security issues.

Our report recommends that, as the administration proceeds, the Assistant

to the President for National Security Affairs, in coordination with

pertinent executive agencies,

ï establish a capability for strategic analysis of computer-based threats,

including developing related methodology, acquiring staff expertise, and

obtaining infrastructure data;

ï require development of a comprehensive data collection and analysis

framework and ensure that national watch and warning operations for

computer-based attacks are supported by sufficient staff and resources;

and

ï clearly define the role of the NIPC in relation to other government and

private-sector entities.

PDD 63 directed the NIPC to provide the principal means of facilitating

and coordinating the federal government’s response to computer-based

incidents. In response, the NIPC has undertaken efforts in two major

areas: providing coordination and technical support to FBI investigations

and establishing crisis management capabilities.

First, the NIPC has provided valuable coordination and technical support

to FBI field offices, which have established special squads and teams and

one regional task force in its field offices to address the growing number

of computer crime cases. The NIPC has supported these investigative

efforts by (1) coordinating investigations among FBI field offices, thereby

bringing a national perspective to individual cases, (2) providing technical

support in the form of analyses, expert assistance for interviews, and tools

for analyzing and mitigating computer-based attacks, and (3) providing

administrative support to NIPC field agents. For example, the NIPC

produced over 250 written technical reports during 1999 and 2000,

developed analytical tools to assist in investigating and mitigating

computer-based attacks, and managed the procurement and installation of

hardware and software tools for the NIPC field squads and teams.

While these efforts have benefited investigative efforts, FBI and NIPC

officials told us that increased computer capacity and data transmission

NIPC Coordination

and Technical Support

Have Benefited

Investigative and

Response Capabilities
Page 7 GAO-01-769T

capabilities would improve their ability to promptly analyze the extremely

large amounts of data that are associated with some cases. In addition, FBI

field offices are not yet providing the NIPC with the comprehensive

information that NIPC officials say is needed to facilitate prompt

identification and response to cyber incidents. According to field office

officials, some information on unusual or suspicious computer-based

activity has not been reported because it did not merit opening a case and

was deemed to be insignificant. The NIPC has established new

performance measures related to reporting to address this problem.

Second, the NIPC has developed crisis management capabilities to support

a multiagency response to the most serious incidents from the FBI’s

Washington, D.C., Strategic Information Operations Center. Since 1998,

seven crisis action teams have been activated to address potentially

serious incidents and events, such as the Melissa virus in 1999 and the

days surrounding the transition to the year 2000, and related procedures

have been formalized. In addition, the NIPC has coordinated development

of an emergency law enforcement plan to guide the response of federal,

state, and local entities.

To help ensure an adequate response to the growing number of computer

crimes, we are recommending that the Attorney General, the FBI Director,

and the NIPC Director take steps to (1) ensure that the NIPC has access to

needed computer and communications resources and (2) monitor

implementation of new performance measures to ensure that field offices

fully report information on potential computer crimes to the NIPC.

Information sharing and coordination among private-sector and

government organizations are essential to thoroughly understanding cyber

threats and quickly identifying and mitigating attacks. However, as we

testified in July 2000,4 establishing the trusted relationships and

information-sharing protocols necessary to support such coordination can

be difficult.

NIPC efforts in this area have met with mixed success. For example, the

InfraGard Program, which provides the FBI and the NIPC with a means of

 4 Critical Infrastructure Protection: Challenges to Building a Comprehensive Strategy for Information

Sharing and Cooperation (GAO/T-AIMD-00-268, July 26, 2000). Testimony before the Subcommittee on

Government Management, Information and Technology, Committee on Government Reform, House of

Representatives.

Progress in

Establishing

Information-Sharing

Relationships Has

Been Mixed
Page 8 GAO-01-769T

securely sharing information with individual companies, has gained

participants. In January 2001, NIPC officials announced that 518

organizations had enrolled in the program, which NIPC officials view as an

important element in building trust relationships with the private sector.

However, of the four information sharing and analysis centers that had

been established as focal points for infrastructure sectors, a two-way,

information-sharing partnership with the NIPC had developed with only

one—the electric power industry. The NIPC’s dealings with two of the

other three centers primarily consisted of providing information to the

centers without receiving any in return, and no procedures had been

developed for more interactive information sharing. The NIPC’s

information-sharing relationship with the fourth center was not covered by

our review because the center was not established until mid-January 2001,

shortly before the close of our work.

Similarly, the NIPC and the FBI had made only limited progress in

developing a database of the most important components of the nation’s

critical infrastructures—an effort referred to as the Key Asset Initiative.

While FBI field offices had identified over 5,000 key assets, the entities

that own or control the assets generally had not been involved in

identifying them. As a result, the key assets recorded may not be the ones

that infrastructure owners consider to be the most important. Further, the

Key Asset Initiative was not being coordinated with other similar federal

efforts at the Departments of Defense and Commerce.

In addition, the NIPC and other government entities had not developed

fully productive information-sharing and cooperative relationships. For

example, federal agencies have not routinely reported incident

information to the NIPC, at least in part because guidance provided by the

federal Chief Information Officers Council, which is chaired by the Office

of Management and Budget, directs agencies to report such information to

the General Services Administration’s Federal Computer Incident

Response Capability. Further, NIPC and Defense officials agreed that their

information-sharing procedures need improvement, noting that protocols

for reciprocal exchanges of information had not been established. In

addition, the expertise of the U.S. Secret Service regarding computer

crime had not been integrated into NIPC efforts.

The NIPC has been more successful in providing training on investigating

computer crime to government entities, which is an effort that it considers

an important component of its outreach efforts. From 1998 through 2000,

the NIPC trained about 300 individuals from federal, state, local, and

international entities other than the FBI. In addition, the NIPC has advised

five foreign governments that are establishing centers similar to the NIPC.
Page 9 GAO-01-769T

To improve information sharing, we are recommending that the Assistant

to the President for National Security Affairs

ï direct federal agencies and encourage the private sector to better define

the types of information necessary and appropriate to exchange in order

to combat computer-based attacks and to develop procedures for

performing such exchanges,

ï initiate development of a strategy for identifying assets of national

significance that includes coordinating efforts already underway, and

ï resolve discrepancies in requirements regarding computer incident

reporting by federal agencies.

We are also recommending that the Attorney General task the FBI

Director to

ï formalize information-sharing relationships between the NIPC and other

federal entities and industry sectors and

ï ensure that the Key Asset Initiative is integrated with other similar federal

activities.

 * * * * * * * * * * * * * * * * *

In conclusion, it is important that the government ensure that our nation

has the capability to deal with the growing threat of computer-based

attacks in order to mitigate the risk of serious disruptions and damage to

our critical infrastructures. The analysis, warning, response, and

information-sharing responsibilities that PDD 63 assigned to the NIPC are

important elements of this capability. However, as our report shows,

developing the needed capabilities will require overcoming many

challenges. Meeting these challenges will not be easy and will require clear

central direction and dedication of expertise and resources from multiple

federal agencies, as well as private sector support.

Mr. Chairman, this concludes my statement. I would be pleased to answer

any questions that you or other members of the Subcommittee may have at

this time.

If you should have any questions about this testimony, please contact me

at (202) 512-3317. I can also be reached by e-mail at daceyr@gao.gov.

(310121)

Contact and

Acknowledgments