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Strengthening the Cybersecurity Posture of America's Small Business Community (House Small Business Committee hearing, July 20, 2021)

Summary

The printed record of a House Committee on Small Business hearing, Strengthening the Cybersecurity Posture of America's Small Business Community, held July 20, 2021, Small Business Committee Document Number 117–026. Chairwoman Nydia Velázquez and Ranking Member Blaine Luetkemeyer gave opening statements. Four witnesses testified: Tasha Cornish, Executive Director of the Cybersecurity Association of Maryland, Inc., Baltimore, MD; Sharon Nichols, State Director of the Mississippi Small Business Development Center; Kiersten Todt, Managing Director of the Cyber Readiness Institute, New York City; and Graham Dufault, Senior Director for Public Policy at ACT/The App Association. The appendix carries their prepared statements and additional material from the National Association of Federally-Insured Credit Unions and The National Cybersecurity Society.

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“Strengthening the Cybersecurity Posture of America's Small Business Community (House Small Business Committee hearing, July 20, 2021).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/strengthening-the-cybersecurity-posture-of-america-s-small-business-co-0675bf783a/, SHA-256 e416afb56f69770e08be30781b51f88b18b84c568fc3499eaa4c6092b463c069.

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                                                                   STRENGTHENING THE CYBERSECURITY POSTURE
                                                                     OF AMERICA’S SMALL BUSINESS COMMUNITY


                                                                                                  HEARING
                                                                                                         BEFORE THE


                                                                       COMMITTEE ON SMALL BUSINESS
                                                                              UNITED STATES
                                                                        HOUSE OF REPRESENTATIVES
                                                                             ONE HUNDRED SEVENTEENTH CONGRESS
                                                                                                       FIRST SESSION


                                                                                                       HEARING HELD
                                                                                                        JULY 20, 2021




                                                                                Small Business Committee Document Number 117–026
                                                                                  Available via the GPO Website: www.govinfo.gov




                                                                                           U.S. GOVERNMENT PUBLISHING OFFICE
                                                                    45–122                             WASHINGTON : 2021




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                                                                                    HOUSE COMMITTEE ON SMALL BUSINESS
                                                                                       NYDIA VELÁZQUEZ, New York, Chairwoman
                                                                                                JARED GOLDEN, Maine
                                                                                                JASON CROW, Colorado
                                                                                               SHARICE DAVIDS, Kansas
                                                                                              KWEISI MFUME, Maryland
                                                                                              DEAN PHILLIPS, Minnesota
                                                                                               MARIE NEWMAN, Illinois
                                                                                           CAROLYN BOURDEAUX, Georgia
                                                                                               TROY CARTER, Louisiana
                                                                                                 JUDY CHU, California
                                                                                            DWIGHT EVANS, Pennsylvania
                                                                                            ANTONIO DELGADO, New York
                                                                                          CHRISSY HOULAHAN, Pennsylvania
                                                                                                ANDY KIM, New Jersey
                                                                                               ANGIE CRAIG, Minnesota
                                                                                    BLAINE LUETKEMEYER, Missouri, Ranking Member
                                                                                               ROGER WILLIAMS, Texas
                                                                                              JIM HAGEDORN, Minnesota
                                                                                              PETE STAUBER, Minnesota
                                                                                              DAN MEUSER, Pennsylvania
                                                                                             CLAUDIA TENNEY, New York
                                                                                           ANDREW GARBARINO, New York
                                                                                                YOUNG KIM, California
                                                                                               BETH VAN DUYNE, Texas
                                                                                               BYRON DONALDS, Florida
                                                                                               MARIA SALAZAR, Florida
                                                                                            SCOTT FITZGERALD, Wisconsin

                                                                                          MELISSA JUNG, Majority Staff Director
                                                                                     ELLEN HARRINGTON, Majority Deputy Staff Director
                                                                                             DAVID PLANNING, Staff Director




                                                                                                                  (II)




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                                                                                                             CONTENTS
                                                                                                          OPENING STATEMENTS
                                                                                                                                                                                           Page
                                                              Hon. Nydia Veláquez ...............................................................................................           1
                                                              Hon. Blaine Luetkemeyer .......................................................................................                2

                                                                                                                     WITNESSES
                                                              Ms. Tasha Cornish, Executive Director, Cybersecurity Association of Mary-
                                                               land, Inc., Baltimore, MD ....................................................................................                5
                                                              Ms. Sharon Nichols, State Director, Mississippi Small Business Development
                                                               Center, University, MS ........................................................................................               7
                                                              Ms. Kiersten Todt, Managing Director, Cyber Readiness Institute, New York
                                                               City, NY ................................................................................................................     8
                                                              Mr. Graham Dufault, Senior Director for Public Policy, ACT/The App Associa-
                                                               tion, Washington, DC ...........................................................................................             10

                                                                                                                      APPENDIX
                                                              Prepared Statements:
                                                                  Ms. Tasha Cornish, Executive Director, Cybersecurity Association of
                                                                    Maryland, Inc., Baltimore, MD ....................................................................                      43
                                                                  Ms. Sharon Nichols, State Director, Mississippi Small Business Develop-
                                                                    ment Center, University, MS .......................................................................                     45
                                                                  Ms. Kiersten Todt, Managing Director, Cyber Readiness Institute, New
                                                                    York City, NY ................................................................................................          51
                                                                  Mr. Graham Dufault, Senior Director for Public Policy, ACT/The App
                                                                    Association, Washington, DC .......................................................................                     58
                                                              Questions for the Record:
                                                                  None.
                                                              Answers for the Record:
                                                                  None.
                                                              Additional Material for the Record:
                                                                  National Association of Federally-Insured Credit Unions (NAFCU) ...........                                               74
                                                                  The National Cybersecurity Society ................................................................                       77




                                                                                                                            (III)




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                                                              STRENGTHENING  THE     CYBERSECURITY
                                                               POSTURE OF AMERICA’S SMALL BUSINESS
                                                               COMMUNITY


                                                                                             TUESDAY, JULY 20, 2021

                                                                                       HOUSE OF REPRESENTATIVES,
                                                                                   COMMITTEE ON SMALL BUSINESS,
                                                                                                               Washington, DC.
                                                                 The Committee met, pursuant to call, at 10:01 a.m., in Room
                                                              2360 Rayburn House Office Building and via Zoom, Hon. Nydia
                                                              Velázquez [chairwoman of the Committee] presiding.
                                                                 Present: Representatives Velázquez, Crow, Davids, Mfume, Phil-
                                                              lips, Newman, Carter, Bourdeaux, Delgado, Houlahan, Mr. Kim,
                                                              Craig, Luetkemeyer, Williams, Hagedorn, Stauber, Meuser,
                                                              Tenney, Garbarino, Ms. Young Kim, Van Duyne, Donalds, and
                                                              Fitzgerald.
                                                                 Chairwoman VELÁZQUEZ. Good morning. I call this hearing to
                                                              order.
                                                                 Without objection, the Chair is authorized to declare a recess at
                                                              any time.
                                                                 Let me begin by saying that standing House and Committee
                                                              rules and practice will continue to apply during hybrid proceedings.
                                                              All Members are reminded that they are expected to adhere to
                                                              these standing rules including decorum.
                                                                 House regulations require Members to be visible through a video
                                                              connection throughout the proceeding, so please keep your cameras
                                                              on. Also, please remember to remain muted until you are recog-
                                                              nized to minimize background noise. If you have to participate in
                                                              another proceeding, please exit this one and log back in later.
                                                                 In the event a Member encounters technical issues that prevent
                                                              them from being recognized for their questioning, I will move to the
                                                              next available Member of the same party and I will recognize that
                                                              Member at the next appropriate time slot provided they have re-
                                                              turned to the proceeding.
                                                                 For those Members and staff physically present in the Com-
                                                              mittee today, we will continue to follow the most recent OAP guid-
                                                              ance. Masks are no longer required in our meeting space for Mem-
                                                              bers and staff who have been fully vaccinated. All Members and
                                                              staff who have not been fully vaccinated are still required to wear
                                                              masks and socially distance.
                                                                 As new technology has made America more dependent on digital
                                                              tools, malicious actors have been launching more frequent and se-
                                                              vere cyber attacks. In the early months of 2021, we have seen a
                                                                                                                  (1)




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                                                              wide array of headlines detailing attacks on institutions like large
                                                              corporations and municipal governments.
                                                                 Just yesterday, the Biden administration acknowledged that
                                                              hackers affiliated with the Chinese government were responsible
                                                              for hacking Microsoft email systems, compromising tens of thou-
                                                              sands of computers worldwide and exposing reams of sensitive
                                                              data. The fallout of the attack is still being evaluated, but it is esti-
                                                              mated the hack could have affected hundreds of thousands of small
                                                              businesses. Episodes like this exhibit the significant threat cyber
                                                              attacks pose to small businesses.
                                                                 This risk has increased in recent years as small businesses have
                                                              begun to rely more heavily on digital technologies. According to the
                                                              Connected Commerce Council, 72 percent of small firms increased
                                                              use of digital tools during the pandemic.
                                                                 Unfortunately, as digital adoption has increased, investment in
                                                              security measures has not kept pace. Small businesses often do not
                                                              have the resources to invest in an adequate cyber defense system
                                                              or hire a dedicated specialist. Guarding against cyber attacks often
                                                              comes with high implementation costs and substantial investments
                                                              of time and resources. Many are already operating on thin margins
                                                              and slim human resources.
                                                                 Failing to prepare for a cyber attack can have disastrous im-
                                                              pacts. Damage to information systems, regulatory fines, lost cus-
                                                              tomer trust, decreased productivity, and lost income are all poten-
                                                              tial consequences of a cyber breach.
                                                                 Because of their structural importance to the overall economy,
                                                              attacks on small firms can have severe impacts on larger enter-
                                                              prises and governments connected to them through the supply
                                                              chain. Given the greater risk cyber attacks pose to small employers
                                                              and their limited capacity to protect against them, this Committee
                                                              must find ways to help entrepreneurs strengthen their cybersecu-
                                                              rity posture.
                                                                 Today’s hearing gives us the chance to examine how existing
                                                              cyber resources can be enhanced and integrated into small business
                                                              support mechanisms.
                                                                 I also look forward to discussing new initiatives that can allevi-
                                                              ate the financial burden of cybersecurity preparedness. Small busi-
                                                              nesses are the foundation of our economy, so their vulnerability is
                                                              our nation’s vulnerability. Investment in their security will make
                                                              us all more secure.
                                                                 I would now like to yield to the Ranking Member for his opening
                                                              statement.
                                                                 Mr. LUETKEMEYER. Thank you, Madam Chairwoman.
                                                                 In preparing for today’s hearing, I am reminded of how pervasive
                                                              the use of the internet and information technology has become in
                                                              our society in such a short period of time. We bank online, we work
                                                              online, for the past year, we have held many congressional hear-
                                                              ings online. Our growing dependency on constantly evolving infor-
                                                              mation technology is fundamentally altering the way we live, and
                                                              the way businesses of all size operate.
                                                                 Although benefits springing from the utilization and adoption of
                                                              new technologies are incalculable, we are forced to contend with a
                                                              new threat, specifically, the explosive growth of a criminal industry




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                                                              seeking to steal valuable data and manipulate critical systems for
                                                              financial gain.
                                                                 As the world continues to embrace new technology, we increase
                                                              the attack surfaces through which cybercriminals can infiltrate and
                                                              wreak havoc to a devastating effect.
                                                                 These attacks are not without consequence. The cost of
                                                              cybercrime is absolutely overwhelming. Experts estimate global
                                                              damages totaling $6 trillion this year alone, projected to reach a
                                                              staggering $10.5 trillion annually by 2025.
                                                                 Because small businesses are the intended targets of
                                                              cybercriminals approximately half the time, the damage inflicted
                                                              upon small businesses is catastrophic. These attacks push many to
                                                              the brink with one in six businesses reporting the financial impact
                                                              materially threatening the company’s future. In addition to finan-
                                                              cial costs, many are unable to recovery from the loss of their intel-
                                                              lectual property, resources, and reputation following a cyber-attack.
                                                                 During my time with this Committee as a member and now as
                                                              Ranking Member, I have had the privilege to speak with many
                                                              small businesses in my district and beyond, and I say with cer-
                                                              tainty that many small businesses do not have the resources,
                                                              knowledge, and awareness to properly defend against such attacks
                                                              which is precisely what makes them attractive targets. Many lack
                                                              insufficient inhouse expertise to deal with these breaches, leaving
                                                              it up to the small business owners themselves to handle the matter
                                                              with predictable results.
                                                                 Make no mistake; this is asymmetrical warfare. Cybercriminals
                                                              expend little effort targeting small businesses that often have frag-
                                                              ile to nonexistent cybersecurity defenses, while small businesses
                                                              must allocate valuable time and precious resources to defend
                                                              against this faceless enemy. While attacks against large businesses
                                                              consistently make frontpage news, small businesses must not be
                                                              disregarded. The new reality is that large organizations are merely
                                                              sprawling networks of interconnected business partners consisting
                                                              of all sizes of companies including small businesses, each a viable
                                                              vector for attack.
                                                                 And one of the most effective means of shoring up cybersecurity
                                                              defenses is knowledge. Knowledge is power and we need to em-
                                                              power small businesses with the tools they need to protect them-
                                                              selves, and by extension, the wider network of businesses and orga-
                                                              nizations they touch.
                                                                 A critical component to knowledge is the need for information
                                                              sharing among the public and private sectors. As fast as cybersecu-
                                                              rity systems are established and patched, cybercriminals are al-
                                                              ready looking for and in many cases successfully finding new cre-
                                                              ative ways to infiltrate organizations’ internal networks. Having a
                                                              robust information sharing system is fundamental for a strong and
                                                              effective cybersecurity defense not just for small businesses but for
                                                              our country as a whole.
                                                                 Unfortunately, small businesses experience significant resistance
                                                              to participating in cybersecurity information sharing activities for
                                                              a variety of reasons. They may be reluctant to risk exposure to po-
                                                              tential legal liabilities resulting from the disclosure and they may
                                                              harbor doubts regarding the government’s ability to adequately
                                                              protect reported data and privacy information.




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                                                                 The federal government recognizes these concerns and has made
                                                              significant strides towards alleviating these fears. However, these
                                                              effects must continue to improve in order to make the most impact
                                                              on small businesses which derive the digital economy’s growth, in-
                                                              novation, and job creation.
                                                                 To that end, there are several pieces of bipartisan legislation in-
                                                              troduced by my colleagues on this Committee which attempt to
                                                              begin resolving some of the issues and reservations small busi-
                                                              nesses have. I hope we will engage in a fruitful dialogue with our
                                                              witnesses about this legislation today. Combatting cyber threats is
                                                              a vastly complicated issue that will require largescale coordination
                                                              across the entire federal government and private sectors.
                                                                 We must not let that complexity deter us from our goal. Rather,
                                                              we must redouble our efforts towards strengthening the cybersecu-
                                                              rity of our country starting with small businesses. I look forward
                                                              to hearing the testimony of the witnesses.
                                                                 And with that, Madam Chair, I yield back.
                                                                 Chairwoman VELÁZQUEZ. Thank you, Mr. Luetkemeyer. The
                                                              gentleman yields back.
                                                                 I would like to take a moment to explain how this hearing will
                                                              proceed. Each witness will have 5 minutes to provide a statement
                                                              and each Committee Member will have 5 minutes for questions.
                                                              Please ensure that your microphone is on when you begin speaking
                                                              and that you return to mute when finished.
                                                                 With that, I would like to introduce our witnesses.
                                                                 Our first witness is Ms. Tasha Cornish, the Executive Director
                                                              of the Cybersecurity Association of Maryland known as CAMI, lo-
                                                              cated in Baltimore, Maryland. CAMI is dedicated to enhancing the
                                                              local cybersecurity ecosystem by offering training, cyber career net-
                                                              working, and the Cyber SWAT team which is a free cybersecurity
                                                              incident hotline. Ms. Cornish has nearly a decade of nonprofit lead-
                                                              ership experience and she earned her master’s degree at Johns
                                                              Hopkins Bloomberg School of Public Health and holds a bachelor’s
                                                              degree in neuroscience from Cedar Crest College. Welcome, Ms.
                                                              Cornish.
                                                                 Our next witness is Ms. Sharon Nichols, the State Director for
                                                              the Mississippi SBDC. The state’s SBDC network provides business
                                                              services at 15 centers and sites, including the Mississippi State
                                                              University Center for Cyber Innovation. The MSU SBDC hosts a
                                                              cybersecurity project to help small businesses with data protection
                                                              in the wake of COVID-19. Before coming to Mississippi, Ms. Nich-
                                                              ols spent 10 years working for the Oklahoma SBDC. Ms. Nichols
                                                              has an MBA from the Northeastern State University and a bach-
                                                              elor’s degree from the University of Central Oklahoma. The Mis-
                                                              sissippi SBDC was named Resource Partner of the Year for 2020.
                                                              Congratulations, and welcome, Ms. Nichols.
                                                                 Our third witness is Ms. Kiersten Todt, the Managing Director
                                                              of the Cyber Readiness Institute known as CRI located in New
                                                              York City. CRI provides prescriptive, accessible, and free content
                                                              and tools to improve the resilience and readiness of small and me-
                                                              dium-sized enterprises. Ms. Todt has a master’s in public policy
                                                              from the John F. Kennedy School of Government at Harvard Uni-
                                                              versity and earned her bachelor’s degree at Princeton University.
                                                              We appreciate your time and expertise, Ms. Todt.




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                                                                 Now I yield to the Ranking Member to introduce our final wit-
                                                              ness.
                                                                 Mr. LUETKEMEYER. Thank you, Madam Chair.
                                                                 I would like to welcome our final witness, Mr. Graham Dufault.
                                                              Mr. Dufault is the Senior Director for Public Policy at ACT/The
                                                              App Association, representing more than 5,000 app makers and
                                                              connected device companies in the mobile economy. The app asso-
                                                              ciation gives voice to small technology companies and its mission
                                                              is to help members promote an environment that inspires and re-
                                                              wards innovation while providing resources to help them raise cap-
                                                              ital, create jobs, and continue developing incredible technology. Mr.
                                                              Dufault is no stranger to Capitol Hill having served as counsel for
                                                              the House Energy and Commerce Committee. He now leads a num-
                                                              ber of critical public policy initiatives on behalf of The App Associa-
                                                              tion members. He earned his JD with a concentration in commu-
                                                              nications law from George Mason University and a bachelor’s de-
                                                              gree in Economics from Emory University. Mr. Dufault, welcome
                                                              back to the Hill. And thank you for your participation today. We
                                                              look forward to your testimony. And you are parking at a very good
                                                              spot along the street this morning by the way, right across from
                                                              my apartment. So anyway, thank you, Mr. Dufault for being here.
                                                              I yield back.
                                                                 Chairwoman VELÁZQUEZ. The gentleman yields back.
                                                                 Ms. Cornish, you are now recognized for 5 minutes.

                                                              STATEMENTS OF TASHA CORNISH, EXECUTIVE DIRECTOR, CY-
                                                               BERSECURITY ASSOCIATION OF MARYLAND, INC.; SHARON
                                                               NICHOLS, STATE DIRECTOR, MISSISSIPPI SMALL BUSINESS
                                                               DEVELOPMENT CENTER; KIERSTEN TODT, MANAGING DI-
                                                               RECTOR, CYBER READINESS INSTITUTE; GRAHAM DUFAULT,
                                                               SENIOR DIRECTOR FOR PUBLIC POLICY, ACT/THE APP ASSO-
                                                               CIATION

                                                                                      STATEMENT OF TASHA CORNISH
                                                                 Ms. CORNISH. Great. Thank you again for the invitation to be
                                                              here.
                                                                 So CAMI is an approximately 580-member association based in
                                                              Maryland. We were founded in 2015 to grow the industry. About
                                                              80 percent of our members are cyber providers, providing products
                                                              and services to small businesses and the government. The other 20
                                                              percent supports the industry through cyber liability, data privacy
                                                              law, and other business building resources.
                                                                 So one of our main roles is to provide business building resources
                                                              to these cyber companies and the other is to educate small and me-
                                                              dium-sized businesses about cyber hygiene and to provide solu-
                                                              tions. So I am here specifically to talk about that. I am going to
                                                              cover three of our programs today: our Cyber SWAT team; our vari-
                                                              ety of curated directories of products and services; and our advo-
                                                              cacy work for financial incentives. Additionally, we do collaborative
                                                              workshops with our business partners and chambers of erce and
                                                              other trade associations, and we also do workforce development ini-
                                                              tiatives to build that critical pipeline of IT and other professionals
                                                              in cyber.




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                                                                 So our Cyber SWAT team came out of this huge shift to work
                                                              from home that happened last year. As mentioned before, it really
                                                              expanded the threat surface that our small businesses experienced.
                                                              Virtual machines, VPNs and remote access points are commonly
                                                              high targets for threat actors. So we developed the Cyber SWAT
                                                              team in partnership with the State of Maryland and it is a coordi-
                                                              nated breach response with all components—technology providers,
                                                              cyber providers, cyber insurance, legal and compliance, and com-
                                                              munication and PR. So businesses who are either experiencing a
                                                              breach or suspected breach can submit their request via email and
                                                              online form or via the phone. So within 1 hour, they will receive
                                                              a call from our triage team. We will triage their request to our best
                                                              fit cyber companies based on their size, location, industry, and
                                                              breach needs.
                                                                 So there is no cost to connect with this information, resources,
                                                              or referrals. They get that 1-hour free consultation. Of course, if
                                                              they do choose the services, they enter a contract and then pay for
                                                              those services. But this has helped greatly to assist companies in
                                                              Maryland and beyond really with external threats such as phishing
                                                              campaigns and ransomware. And also internal threats, including
                                                              when terminated employees have unauthorized access to systems.
                                                                 So moving further upline in the protect and defend section, we
                                                              provide an online directory of all of our member companies with
                                                              relevant designations, including minority-owned small businesses,
                                                              women-owned small businesses, service-disabled veteran-owned
                                                              small businesses, 8(a), et cetera.
                                                                 So this is helpful for prime contractors and others looking for
                                                              subs at government agencies, of course, but also private sector com-
                                                              panies who prioritize diverse vendor pools. We also do publications
                                                              with our local business guides and we are launching a program
                                                              now with Exelon, a Fortune 100 company that works in every stage
                                                              of the energy business. I do not need to tell you that there have
                                                              been some pretty high profile breaches within that industry, and
                                                              typically that is an industry that has not had a lot of regulations
                                                              and compliance. So we are working Exelon to connect them
                                                              through our new database with providers in our membership who
                                                              can help their vendors build security programs and complete as-
                                                              sessments to really secure that supply chain for the energy indus-
                                                              try. It is a very highly specialized industry so many of these ven-
                                                              dors are seeing this information for the first time so we are pleased
                                                              to partner with them to do that.
                                                                 Additionally, we will be doing something similar for our DOD
                                                              contractors as CMMC or Cybersecurity Maturity Model Certifi-
                                                              cations come down the pipeline to again provide those resources to
                                                              our small businesses who are doing government work.
                                                                 Lastly, I want to touch on some of the financial incentives that
                                                              we have advocated for. So in 2018, we actively advocated for the
                                                              Buy Maryland Tax Credit which was approved by the Maryland
                                                              General Assembly and signed by Governor Hogan. So it offers
                                                              qualified Maryland businesses fewer than 50 employees to receive
                                                              a tax credit, which is worth 50 percent of the purchase price when
                                                              they buy it from qualified Maryland cyber providers of products
                                                              and services. So qualified sellers are, again, small companies or
                                                              companies owned by the specific designations. And this offers up to




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                                                              $4 million worth of tax credits each year and has an active direc-
                                                              tory of about 50 companies.
                                                                Additionally, there are funds that come down from the federal
                                                              government. So, for example, the Defense Cybersecurity Assistance
                                                              program, which, again, being in Maryland, we have a lot of govern-
                                                              ment contractors who do work with the DOD so there are specific
                                                              funds that we help promote that those contractors can use for as-
                                                              sessments and remediation. Thank you.
                                                                Chairwoman VELÁZQUEZ. Thank you, Ms. Cornish.
                                                                Now we recognize Ms. Nichols for 5 minutes.
                                                                Ms. Nichols, you need to unmute yourself, please.
                                                                                     STATEMENT OF SHARON NICHOLS
                                                                 Ms. NICHOLS. It says that I am unstable. Can you hear me?
                                                                 Chairwoman VELÁZQUEZ. Yes, we can hear you now. Thank
                                                              you.
                                                                 Ms. NICHOLS. Thank you. Good morning.
                                                                 In order to survive the pandemic, many small businesses had to
                                                              quickly pivot to online platforms to sell their product and shift to
                                                              remote work. The small businesses of our nation are at high risk
                                                              for hackers due to the inadequate cybersecurity protection for their
                                                              data and intellectual property as was discussed before.
                                                                 Why are they at an increased risk? Just like it was said, owners
                                                              simply do not know how to protect their business or they lack the
                                                              funds to do so. Most hackers want money but that is not all that
                                                              is at risk here. No small business wants its customers or clients to
                                                              know that they have been breached and it is a fear that they will
                                                              lose the business or that hard-earned trust. And so many go unre-
                                                              ported.
                                                                 In 2016, it was estimated that 10 to 12 percent of all cybercrimes
                                                              were reported. In Mississippi alone, in the last couple of weeks,
                                                              there was a medical clinic in our small town that had to pay a ran-
                                                              som to get their data back. This was never reported in the news.
                                                              Just 2 weeks ago, our own office was hit by an email phishing scam
                                                              and I was given an email yesterday in regards to a heating and air
                                                              company that lost a couple of weeks of work due to a scan.
                                                                 My name is Sharon Nichols. I am the state director of the Mis-
                                                              sissippi SBDC where we offer connection, education and guidance
                                                              for thousands of businesses across the state.
                                                                 In response to the cybersecurity crisis, the MSBDC allocated a
                                                              portion of the CARES Act funds we received to develop a cyberse-
                                                              curity center to help Mississippi small businesses become cyber
                                                              aware and more prepared. This center that was developed offers
                                                              training based on the CMM model and the CMMC, but we call it
                                                              the CMM model because we do not do certification, offering action-
                                                              able steps any business owner can take. Also, access to trained cy-
                                                              bersecurity counselors for individual counseling, as well as on-de-
                                                              mand cybersecurity workshops that are available on our website.
                                                              Everything that we offer is for free.
                                                                 The Cybersecurity Maturity Model that we have implemented is
                                                              based on a program initiated by the U.S. Department of Defense
                                                              in order to measure their defense contractors’ capabilities, readi-
                                                              ness, and sophistication in the area of cybersecurity. And we have
                                                              adopted this model because it is a tool that can be personalized and




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                                                              expanded to meet each business’s unique levels. Levels one through
                                                              three, and there are five in the CMMC model, are considered at-
                                                              tainable by small businesses and are designed to make securing a
                                                              business affordable, yet very effective.
                                                                Please know, again, we do not offer the certification at the end
                                                              of each level but business owners can pursue that on their own if
                                                              they choose.
                                                                Collaboration and connection in all of our organizations is key
                                                              and it is the future. The Mississippi Cyber Initiative we call MCI
                                                              was created to offer a central location for the exchange of ideas and
                                                              beneficial information about the cybersecurity. The Air Force Base
                                                              on the Gulf Coast of Mississippi, Mississippi State University, and
                                                              Mississippi Gulf Coast Community College are part of MCI. Our or-
                                                              ganization, the Mississippi SBDC has been invited to explore ways
                                                              MCI resources can be shared with the business community. This is
                                                              an example of collaboration and connection.
                                                                The Mississippi SBDC serves the small businesses of our state
                                                              with connection, education, and guidance. And I would like to point
                                                              out how we have applied these guiding principles in response to the
                                                              cyber crisis. Through connection, we are connecting our business
                                                              owners with valuable cybersecurity resources via the MSU Cyber-
                                                              security Center and MSI into MCI and other collaborations. We are
                                                              acting as a conduit for the Federal, state, and local resources to the
                                                              small businesses in our state.
                                                                In education, we are utilizing the Cybersecurity Center to edu-
                                                              cate business owners so that they can evaluate the threat that they
                                                              have and their threat level and institute measures for protection.
                                                              We will be employing a variety of marketing platforms reaching
                                                              out through videos and PSAs and pushing awareness on all six of
                                                              our social medial channels. We are working to dismantle the idea
                                                              that small business owners are powerless to take charge of cyberse-
                                                              curity and make the process involved simple, yet effective.
                                                                Finally, through guidance, we actively supply support and guid-
                                                              ance via our one-on-one counseling with cybersecurity counselors at
                                                              no cost to business owners. By supplying one-on-one guidance,
                                                              business owners can get answers to specific questions and solutions
                                                              unique to their situations. There is no putting the genie back in the
                                                              bottle. Our lives and livelihoods are connected via the cyberworld.
                                                                Small businesses play a huge part in the welfare of our commu-
                                                              nities and the nation. We must put cybersecurity and cyber safety
                                                              of our businesses at the forefront of everything that we do and
                                                              equip them with every tool to succeed and protect their businesses.
                                                                I very much appreciate the opportunity to be a voice for the
                                                              small businesses of Mississippi, as well as the nation. Thank you
                                                              for inviting me to testify.
                                                                Chairwoman VELÁZQUEZ. Thank you, Ms. Nichols.
                                                                Ms. Todt, now you are recognized for 5 minutes.
                                                                                      STATEMENT OF KIERSTEN TODT
                                                                Ms. TODT. Thank you, Chairwoman Velázquez, Ranking Mem-
                                                              ber Luetkemeyer, and members of the Committee. Thank you for
                                                              the opportunity to testify before you today.
                                                                I currently serve as managing director of the Cyber Readiness
                                                              Institute, a nonprofit effort that convenes senior executives of glob-




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                                                              al companies to share resources and best practices that inform the
                                                              development of free cybersecurity tools for small businesses, includ-
                                                              ing the Cyber Readiness Program, a five-step, self-guided program,
                                                              several guides all based on human behavior.
                                                                 In 2016, I served as executive director of President Obama’s
                                                              Commission on Cybersecurity, and after the conclusion of the Com-
                                                              mission, several of the commissioners and myself came together to
                                                              launch this effort. Relevant to the hearing today, I also served as
                                                              a senior staff member on the Senate Homeland Security and Gov-
                                                              ernmental Affairs Committee before, during, and after 9/11 and
                                                              helped to draft the legislation to create DHS.
                                                                 The assaults on our nation’s digital infrastructure, particularly
                                                              over the last 12 months, underscore the urgent need to close a crit-
                                                              ical gap in our nation’s cyber defenses. When we think about cyber-
                                                              security, we tend to think at a macrolevel, about state actors and
                                                              state secrets, hacks of millions of online identities, and direct
                                                              threats to critical infrastructure. And when we think about rem-
                                                              edies, we tend to focus on digital giants and on national or multi-
                                                              national policy making. These policy solutions are necessary and
                                                              appropriate but they are not sufficient. The threats we face as a
                                                              nation and as individual consumers and citizens are not restricted
                                                              to the macro level.
                                                                 Given that over two-thirds of large businesses outsource a por-
                                                              tion of their functions and allow third-party access to their data,
                                                              insufficient cyber protection among SMBs can be consequential for
                                                              larger firms, too, as we saw with solar winds in Kaseya. SMBs,
                                                              which are constrained by limited resources and unable to invest
                                                              proportionately in cybersecurity expand our risk exposure signifi-
                                                              cantly. Eighty percent of America’s businesses have fewer than 10
                                                              employees, and 95 percent have fewer than 100.
                                                                 SMBs are the backbone of our economy but they are inherently
                                                              fragile. During the pandemic, according to the SBA administrator
                                                              at the time, a small business was closing every hour. These small
                                                              enterprises lacked the resilience to withstand a barrage of cyber at-
                                                              tacks. Small businesses do not have the safety nets that large busi-
                                                              nesses do. An attack of any size can challenge their viability.
                                                                 At the end of 2020 and earlier this year, we experienced the im-
                                                              pact of several high-profile attacks, with impacts across multiple
                                                              supply chains and critical infrastructure. We have been forced to
                                                              now understand that in addition to physical supply chains, all busi-
                                                              nesses, especially small businesses, must pay attention to their IT
                                                              supply chains.
                                                                 These events have brought us to another so-called inflection
                                                              point. So-called because we use this term frequently when it comes
                                                              to cybersecurity, yet we continue to fail to do what is necessary to
                                                              improve America’s cyber defenses. These events and attacks are
                                                              symptoms of the challenges we face. Policies are not enough, nor
                                                              can we simply shrink tools and techniques employed by major cor-
                                                              porations into compact versions for SMBs.
                                                                 Small businesses need access to cybersecurity resources and sup-
                                                              port from the federal government. They need prescriptive, easy to
                                                              adopt programs that strengthen their everyday operations while
                                                              not pinching their budget. Because a small business may not have
                                                              a department or even a single employee solely focused on cyberse-




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                                                              curity, approaches grounded in creating cultural change through
                                                              human behavior and education are critical to helping small busi-
                                                              nesses become more resilient.
                                                                 Human behavior can be a force multiplier for cybersecurity in
                                                              small businesses and larger ones as well. Small businesses must be
                                                              educated on the threats and the fundamental actions that they
                                                              need to be resilient.
                                                                 The federal government can play a critical role. Earlier this year,
                                                              the Cyber Readiness Institute released a white paper, The Urgent
                                                              Need to Strengthen the Cyber Readiness of Small and Medium
                                                              Sized Businesses: A Proposal for the Biden Administration, out-
                                                              lining actions to help small businesses. Here are five steps from the
                                                              white paper that the federal government can take to improve small
                                                              business cybersecurity defenses.
                                                                 My prepared testimony goes into greater detail and I am happy
                                                              to elaborate during our Q&A.
                                                                 1. Create a Small Business Cybersecurity Center. Today, no sin-
                                                              gle government agency curates cybersecurity resources from mul-
                                                              tiple vetted sources for SMBs. Given the ongoing work to support
                                                              SMBs by the Cybersecurity and Infrastructure Security Agency and
                                                              the recent allocation of additional resources to the agency. CISA is
                                                              a recommended agency to perform this function.
                                                                 2.Establish cybersecurity incentives. Tax credits to SMBs that in-
                                                              vest in cybersecurity can incentivize cybersecurity efforts.
                                                                 3.Set cybersecurity standards. We need minimum standards for
                                                              cybersecurity that all organizations must follow, including small
                                                              businesses.
                                                                 4.Launch national cyber squads. We should amplify the existing
                                                              cyber corps with government-funded cyber squads of student in-
                                                              terns to help minority-owned SMBs and to fill a desperately needed
                                                              talent pipeline.
                                                                 5.Roll out a national cyber readiness education campaign. Aware-
                                                              ness is critical for small businesses in the entire population. We
                                                              need an effective public service campaign that would focus on a sin-
                                                              gle, basic cybersecurity issue, such as using multifactor authentica-
                                                              tion which experts assert would reduce cyber attacks significantly.
                                                                 Our nation’s cybersecurity challenges are diverse. One
                                                              foundational way we can improve our defenses is by supporting
                                                              and investing in the cyber readiness of small businesses. America’s
                                                              hundreds of thousands of small businesses can be mobilized, edu-
                                                              cated, and supported to be our resilient frontline of cyber defense
                                                              and to become a great strength for our country. This critical invest-
                                                              ment in building that strong defense will pay major dividends for
                                                              our nation. Thank you.
                                                                 Chairwoman VELÁZQUEZ. Thank you, Ms. Todt.
                                                                 We recognize Mr. Dufault for 5 minutes.
                                                                                    STATEMENT OF GRAHAM DUFAULT
                                                                Mr. DUFAULT. Thank you, Chairwoman Velázquez, Ranking
                                                              Member Luetkemeyer, members of the Committee. My name is
                                                              Graham Dufault, and I am senior director for Public Policy at ACT/
                                                              The App Association. The App Association is the leading trade
                                                              group representing small, connected device and mobile software
                                                              companies in the app economy which is about a $1.7 trillion sector




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                                                              globally that supports about 5.9 million jobs in the U.S., including
                                                              in your districts.
                                                                 I am here to ask for your help to improve the cybersecurity re-
                                                              sources for small businesses that are the backbone of your districts.
                                                                 In Brooklyn, Ali Iberraken founded Chaperone, an app to help
                                                              teachers organize and manage fieldtrips. Jason Oesterly, a former
                                                              IBM and MasterCard developer created WASHMO Media in Wash-
                                                              ington, Missouri. So app economy innovators like Chaperone and
                                                              WASHMO deal with cyber threats all the time. Small companies,
                                                              even in industries associated with a higher level of technical exper-
                                                              tise, like our members, our favorite target is cybercriminals. In
                                                              fact, about 71 percent of companies reporting cyber attacks are
                                                              small firms. And around 80 percent of small firms say they are not
                                                              prepared for a cyber attack. Most of them are reticent to tell any-
                                                              one about the fact that they are victims as you have heard from
                                                              other testimony today.
                                                                 We want to highlight four main things for this hearing.
                                                                 1. While recent high-profile ransomware attacks are grabbing
                                                              headlines, it is difficult for small companies to share information
                                                              about threats, incidents, and defensive measures they use. Legisla-
                                                              tion like H.R. 1649 and 1649 from last Congress would help create
                                                              better conditions for information sharing and readiness. So we ap-
                                                              preciate the Committee’s work on those pieces of legislation and we
                                                              are pleased to see that at least one of them is being reintroduced
                                                              this week.
                                                                 2.Cybersecurity is a team sport in many ways. Small companies,
                                                              especially app makers, leverage the cybersecurity capabilities of
                                                              software platforms such as app stores, operating systems, and
                                                              Cloud services to protect their clients and customers. Federal policy
                                                              should enable these platforms to take protective measures and to
                                                              avoid undue interference with them on antitrust and other
                                                              grounds.
                                                                 3.Cybersecurity begins with good defenses. Small companies rely
                                                              on technical protection measures like encryption of data in transit
                                                              and at rest and on devices, so where is the Committee to push back
                                                              on proposals that would weaken encryption?
                                                                 And a bonus,
                                                                 4.I would be remiss if I did not mention the number one daily
                                                              issue my industry faces and that is finding and hiring enough
                                                              qualified people. With about 3.5 million unfilled cybersecurity jobs
                                                              globally, Federal investment in this area is necessary. So we sup-
                                                              port programs like the Master Teacher Corps and legislation like
                                                              the Computer Science for All Act, H.R. 3602.
                                                                 App Association members and our customers have everything to
                                                              lose when it comes to cyber threats. The onslaught of recent at-
                                                              tacks comes amid a global talent shortage so we cannot simply hire
                                                              our way out of the problem. Therefore, we need your help.
                                                                 Cybersecurity for mobile devices is important for everyone. For
                                                              example, Black and Hispanic Americans rely disproportionately on
                                                              mobile devices as opposed to desktop computers to access online
                                                              services. These devices now contain our most sensitive personal
                                                              data, including financial real-time location and health information.
                                                              Therefore, app makers in particular must leverage the security fea-
                                                              tures of software platforms and Cloud services. Unfortunately, in




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                                                              some proposals in Congress and in some states that prohibit these
                                                              gating functions ostensibly to help my member companies and your
                                                              constituents but in truth they would do much more harm than
                                                              good. So we urge you to reject those ideas as the make smart de-
                                                              vices much less secure and much more attractive targets. Why? Be-
                                                              cause cybercrime is a business after all. And cybercriminals benefit
                                                              also from the silence of their victims.
                                                                 If Congress’s goal is to make it harder for cybercriminals to do
                                                              business, information sharing plays a key role. We need to make
                                                              it too costly for cybercriminals to target small companies with
                                                              $15,000 ransoms. The attacks we see on small firms from real es-
                                                              tate investment to neighborhood bike shops are often well-designed
                                                              to ensnare specific kinds of victims. The attackers learn the lingo
                                                              of the sector they target and study everyday practices to disguise
                                                              phishing attempts so that they look legitimate. Understanding
                                                              these shifting forms of camouflage requires rapid intelligence shar-
                                                              ing and we need to counterbalance the potential legal exposure and
                                                              reputational harm of disclosure.
                                                                 While small companies often rely on outside support and exper-
                                                              tise for cybersecurity, it is impossible to contact away risk or ac-
                                                              countability for security. It is incumbent on small companies to de-
                                                              velop a level of independent working knowledge of cyber threats to
                                                              their business and information sharing best practices.
                                                                 The Committee is well-positioned to help improve cybersecurity,
                                                              literacy for small firms, and the conditions for information sharing,
                                                              and we look forward to assisting with those efforts.
                                                                 Thank you for the opportunity to share our views, and I look for-
                                                              ward to your questions.
                                                                 Chairwoman VELÁZQUEZ. Thank you, Mr. Dufault. I will begin
                                                              by recognizing myself for 5 minutes. I just want to say that it is
                                                              kind of scary listening to your stories and your expertise regarding
                                                              the threat of cybersecurity. I would like to ask Ms. Todt, based on
                                                              your own experience having worked for the federal government,
                                                              and now as the CEO of this institution, do you think that there is
                                                              an ongoing education throughout the federal government in terms
                                                              of different agencies as to the threat that they are exposed to? How
                                                              does that trickle down to those most vulnerable—in this case, small
                                                              businesses?
                                                                 Ms. TODT. Thank you, Madam Chairwoman.
                                                                 There is absolutely an education challenge. And when we talked
                                                              to small businesses, and I think this holds true certainly for large
                                                              businesses, the issue is not that they do not know, they do not
                                                              want to do anything, the issue is that they often do not know what
                                                              they should be doing and where the threat is.
                                                                 There was a survey done by Apple recently that said that many
                                                              small businesses asked, well, is this not part of my software pack-
                                                              age, the security piece? And so we have to be more prescriptive. So
                                                              when we are looking at the Federal agencies, and this is where I
                                                              think the increase in resources to CISA is going to play a signifi-
                                                              cant role as well as the new leadership working in collaboration
                                                              across agencies to create a synchronized effort that educates the
                                                              agencies on the priorities and also creates a unified government ap-
                                                              proach so that you do not have agencies looking to others to under-
                                                              stand what is happening but that there is leadership both within




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                                                              the White House and within CISA that helps to streamline what
                                                              needs to happen because the threats are certainly consistent across
                                                              all of our agencies and I think as Chris Inglis, the new national
                                                              cyber director said in the context of the international arena but it
                                                              certainly is in the domestic arena as well, in order to get one of
                                                              us you have to get all of us and I think that approach for govern-
                                                              ment needs to hold true.
                                                                 Chairwoman VELÁZQUEZ. Thank you.
                                                                 Ms. Nichols, what were the most common services requested by
                                                              small business owners in the transition to telework because of
                                                              COVID-19?
                                                                 Ms. NICHOLS. You know, I would like to say it was cybersecu-
                                                              rity but that was not it. It was mostly sources of capital because
                                                              they were concerned about how they were going to keep their doors
                                                              open. And confidence to survive, trying to find out how to handle
                                                              their financial projections as well as the logistics of employees,
                                                              Internet connections, suppliers, and commitments. Cyber was not
                                                              that one thing that they contacted us about. And so while it was
                                                              the greatest need, it was not what they contacted us about.
                                                                 Chairwoman VELÁZQUEZ. Ms. Nichols, the SBA rolled out sev-
                                                              eral COVID-19 programs in 2020. Did any of these programs pro-
                                                              vide cybersecurity specific guidance?
                                                                 Ms. NICHOLS. To my memory, neither the EIDL nor the PPP
                                                              programs provided cybersecurity specific guidance. The PPP was
                                                              primarily for payroll followed by other items, such as rent and util-
                                                              ities and the EIDL had an allowance for accounts payable and
                                                              other bills but not specific to cyber unless it was already a related
                                                              expense.
                                                                 Chairwoman VELÁZQUEZ. Thank you.
                                                                 Ms. Cornish, with respect to commerce directly, what is the im-
                                                              portance of including the designations or certifications small busi-
                                                              nesses may have as part of the company information?
                                                                 Ms. CORNISH. Sure. So part of it is for, you know, subcontrac-
                                                              tors and prime contractors and even government agencies to better
                                                              diversify the government contracting workforce. Additionally, when
                                                              our companies are looking at their own DEI plans, many of them
                                                              want to incorporate diverse vendors in that pool as well. So we are
                                                              excited to help support those efforts through our designations.
                                                                 Chairwoman VELÁZQUEZ. Thank you. Do you think that in-
                                                              cluding such designations can promote diversity and cybersecurity
                                                              contracting?
                                                                 Ms. CORNISH. Absolutely.
                                                                 Chairwoman VELÁZQUEZ. Mr. Dufault, recent security
                                                              breaches have heightened the importance of continuously moni-
                                                              toring against outside threats but the necessary technologies and
                                                              practices are too expensive for small firms. How much on average
                                                              is the cost to secure networks?
                                                                 Mr. DUFAULT. That is a great question. It is one of the main
                                                              areas of focus that a lot of our member companies have to pay a
                                                              lot of attention to. I am not sure exactly what the cost is per small
                                                              company. It probably varies as to what kinds of tools you want to
                                                              adopt. One of the observations of one of our member companies is
                                                              that for a lot of really specific cybersecurity focused tools that help
                                                              you manage your threats across your supply chain, the number of




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                                                              licenses that you have to buy is really high. And so it is kind of
                                                              you have to buy in bulk, and this particular member company just
                                                              signed up as a reseller so they could get access to a smaller num-
                                                              ber of licenses. And so that is potentially a problem and a potential
                                                              area of focus here to provide more Federal resources so that compa-
                                                              nies can buy smaller and not necessarily in bulk access.
                                                                 Chairwoman VELÁZQUEZ. What can SBA and its resource part-
                                                              ners do to remove barriers for small firms that want better protec-
                                                              tion?
                                                                 Mr. DUFAULT. That is a great question, Chairwoman. There are
                                                              a few things that you guys can do. We were really happy to see
                                                              Congress introduce H.R. 1648 and 1649 last Congress. These are
                                                              bipartisan bills that would help ensure that there are liability pro-
                                                              tections for information sharing with the government, but also to
                                                              provide more resources for small companies through the federal
                                                              government through the SBA to have access to cybersecurity coun-
                                                              selors. And so that was H.R. 1649 which has a certification pro-
                                                              gram for SBA employees. So access to that through the SBDCs is
                                                              something that we feel would be a great improvement and would
                                                              help them.
                                                                 Chairwoman VELÁZQUEZ. Thank you. My time has expired.
                                                                 Now we recognize the Ranking Member, Mr. Luetkemeyer.
                                                                 Mr. LUETKEMEYER. Thank you, Madam Chair.
                                                                 Mr. Dufault, you know, one of the things that is concerning to
                                                              me is the cost to be able to protect the small businesses out there.
                                                              And so it is a two-part question. The first part of it is what would
                                                              be the average cost that a small business would have to anticipate
                                                              occurring to be able to protect themselves? And then the problem
                                                              becomes, well, you have got to protect it today but there are a lot
                                                              of smart guys out there that are going to figure out how out how
                                                              to break into the security you have got right now so you are going
                                                              to have to continue to update your security and you are always be-
                                                              hind the curve, so to speak here in trying to protect yourself. And
                                                              so these ongoing costs are sometimes things that I think deter
                                                              small business from even, they throw their hands up and say, well,
                                                              I probably cannot afford the first set of security measures. I sure
                                                              cannot continue to pay money out the door when I think my expo-
                                                              sure is small. How would you answer that question?
                                                                 Mr. DUFAULT. So it is a great question, Congressman. I think,
                                                              you know, one of the member companies described the cost of just
                                                              trying to get penetration testing, which is kind of an entry level set
                                                              of services where an outside firm comes in and tests your network.
                                                              Tests the integrity of the security systems that you are using. And
                                                              that can cost between $10,000 and $30,000 according to the mem-
                                                              ber company. And that is just the one-time cost. And that is just
                                                              for that service. So if you want to buy the full suite of services it
                                                              goes up from there.
                                                                 Now, we also have member companies that have worked with
                                                              other customers that have had trouble putting together $200 to pay
                                                              for antivirus software which is the lowest, sort of the lowest level
                                                              tool that you can invest in. So it ranges quite a bit, I think, de-
                                                              pending on the kind of company you have and your focus and
                                                              whether or not you are seeing these threats.




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                                                                 Another thing I will point to is the IT sector coordinating council.
                                                              So DHS has various sector coordinating councils where they focus
                                                              on cybersecurity in different sectors. The IT sector coordinating
                                                              council did a survey of small businesses, and about 38 percent said
                                                              they do not expect to see a cyber incident in the next 2 to 3 years
                                                              which is a little bit of overconfidence I think. And so there is a
                                                              baseline level of sort of an appreciation that you have to have in
                                                              addition to the amount of money that comes along with the basis
                                                              for spending that kind of money on these protective measures. So
                                                              on an ongoing basis as you pointed out, it is even harder.
                                                                 Mr. LUETKEMEYER. Thank you.
                                                                 Ms. Cornish, you talked about a tax credit that was put together
                                                              by I think the State of Maryland I think you indicated, which is
                                                              intriguing to me. But I was curious, what kind of participation rate
                                                              was there among the small businesses? And what was the average
                                                              cost that they actually were able to get a credit for? Or do you
                                                              know that information off the top of your head?
                                                                 Ms. CORNISH. Sure. I can speak a little bit to that.
                                                                 So it certainly is not utilized to its full potential by our small
                                                              business community. So we know that there is work to do on our
                                                              end to help promote that as well. I think to Graham’s point, many
                                                              of the costs range between $5,000 to about $30,000. There are ways
                                                              to do continuous monitoring that is a little bit less expensive on the
                                                              defensive side. So then it only cost about $6,000 to $10,000 a year.
                                                                 Mr. LUETKEMEYER. One of the things I think, Mr. Dufault, I
                                                              think back to you again. I think somebody else mentioned, talked
                                                              about the number of folks within the industry worth 3.5 million
                                                              jobs, people short to be able to fill the number of folks. What is the
                                                              problem here? We just do not have enough people interested in the
                                                              field? The wages are too small to attract people into it? Nobody
                                                              likes to do that kind of work? What do you think?
                                                                 Mr. DUFAULT. There are a number of different factors. Some of
                                                              it is cultural. There is a lack of, I think, awareness of the available
                                                              jobs. When you are going into college and when I was going into
                                                              college there was not a whole lot of emphasis on sort of STEM
                                                              fields at that time. So there is sort of an outreach campaign that
                                                              can be done to make sure the folks know that this is where high-
                                                              paying jobs are. It is $89,000 median salary for this kind of work
                                                              here in the U.S. across the country.
                                                                 Mr. LUETKEMEYER. Let me interrupt. My time is about up
                                                              here.
                                                                 Is this something that Small Business Administration could do?
                                                              They could entice or enhance or send out information to the high
                                                              schools and folks, colleges, to let them know that there is avail-
                                                              ability of all this? I mean, we have to get the SBA engaged in this
                                                              somehow because this is a small business issue.
                                                                 Mr. DUFAULT. I think that is a great idea. I think that there
                                                              is definitely a role for the Small Business Administration there.
                                                              There are other Federal agencies that ought to be involved but the
                                                              Small Business Administration in particular because small compa-
                                                              nies do have trouble finding access to qualified folks.
                                                                 Mr. LUETKEMEYER. My time is expired. Thank you. I yield
                                                              back.




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                                                                 Ms. HOULAHAN. The gentleman’s time is expired and the gen-
                                                              tleman yields back.
                                                                 The gentleman from Colorado is now recognized for 5 minutes.
                                                                 Mr. CROW. Thank you, Madam Chair.
                                                                 For more than 20 years, the SBA Office of the Inspector General
                                                              has listed IT security as one of the most serious management and
                                                              performance challenges facing the SBA. So this is not obviously a
                                                              new thing but it is more acute and becoming more of a problem as
                                                              particularly nation state actors and others weaponize the ability to
                                                              go after our small businesses.
                                                                 Recently, I reintroduced the bipartisan SBA Cyber Awareness
                                                              Act which would direct the agency to issue an annual report as-
                                                              sessing its cybersecurity infrastructure. It also requires the SBA to
                                                              report cyber threats, breaches, and cyber attacks to the respective
                                                              House and Senate Small Business Committees. And then to notify
                                                              affected individuals within 30 days because we know that notifica-
                                                              tion is one of the biggest issues, is the required notification.
                                                                 So that is part of it. But even after the notification then there
                                                              is the issue of what happens next? And in all of your testimonies
                                                              you referenced the challenges particularly facing small businesses
                                                              that just do not have the resources.
                                                                 So Ms. Cornish, starting with you, can you describe, flush out for
                                                              me a little bit more what resources are available, could have the
                                                              biggest impact on providing resources or support to small busi-
                                                              nesses particularly in high tech sectors? Like, I have a lot of de-
                                                              fense, aviation, and aerospace within my district and a lot of those
                                                              are small businesses and they are prime targets of hacking and in-
                                                              tellectual property theft. What is out there and what could make
                                                              the biggest impact that is not out there?
                                                                 Ms. CORNISH. Sure. So in the defense industry, specifically,
                                                              there is the Defense Cybersecurity Assistance Program which pro-
                                                              vides funding for assessments, and honestly, you know, investing
                                                              in the assessment and the protection phase is really where you are
                                                              going to get the largest ROI for the SBA and others. So I would
                                                              certainly encourage investment there. When companies are
                                                              breached, you know, definitely it varies by the situation, but cer-
                                                              tainly shoring up interventions to improve your chances moving
                                                              forward are critically important there.
                                                                 So I would love to see that the DCAP comes down from DOD.
                                                              I would love to see other agencies also do something similar
                                                              through their Office of Small Business work.
                                                                 Mr. CROW. Thank you.
                                                                 Ms. Todt? Mr. Dufault?
                                                                 Ms. TODT. Thank you. One of the key issues that we focus on
                                                              at the Cyber Readiness Institute is human behavior because it rec-
                                                              ognizes that regardless of the sector that you are in or the re-
                                                              sources that you have you have got to start by creating these cul-
                                                              tures of behavior. And if we make the analogy to safety, creating
                                                              cultures of safety that we did with businesses particularly following
                                                              9/11, it helps us to understand that while this is all new to us and
                                                              it is somewhat foreign and uncomfortable, we often say security is
                                                              not convenient, we can create those cultures. And by doing so, you
                                                              have force multipliers in your companies when every individual
                                                              recognizes that he or she can be an access point to the network,




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                                                              that he or she can be the strength that actually prevents an attack
                                                              or can be the opportunity. And I think that is one of the pieces in
                                                              the education that we have got to be focusing on to help employees
                                                              have that accessibility to those resources and the knowledge.
                                                                Mr. DUFAULT. Yeah, Congressman. And I agree 100 percent
                                                              with the comments of Ms. Todt because all it takes is one weak
                                                              point in a company or an organization and that is why you saw
                                                              with some of the recent cyber attacks they used the password spray
                                                              where they try really common passwords on a large number of ac-
                                                              counts because chances are in an organization of a couple hundred
                                                              people or a couple thousand people somebody will use password123.
                                                              And so creating that culture that Ms. Todt described is extremely
                                                              important. And also understanding which kinds of threats are
                                                              being directed to your specific industry because they are kind of,
                                                              as I said in the oral statement just a minute ago, the attackers are
                                                              studying the everyday habits and trying to mimic those and they
                                                              do a pretty good job of that based on specific sectors. So, info shar-
                                                              ing within sectors is extremely important.
                                                                Mr. CROW. Thank you.
                                                                And Ms. Nichols, to you, and I guess to that last point since you
                                                              are with an SBDC, on the training piece, training of employees and
                                                              others, how can we better do that or assist small businesses in con-
                                                              ducting the training?
                                                                Ms. NICHOLS. So we are basing our model on the DOD cyberse-
                                                              curity model, the CMMC, but just using the CMM portion of it.
                                                              And I liken it to the Maslow’s Hierarchy of Needs. Basically, on
                                                              level one through three is basic cyber hygiene, and it is all about
                                                              education and awareness, where also I think it is very imperative
                                                              that we look at what is our consistent voice and what is that con-
                                                              sistent messaging because there are a lot of resources out there
                                                              and a lot of organizations, and I believe that the consistent mes-
                                                              saging and education and training is very key not only just for em-
                                                              ployees but for potential employees because there needs to be that
                                                              standard base and education.
                                                                Mr. CROW. Thank you. My time is expired. I yield back.
                                                                Ms. HOULAHAN. Thank you. The gentleman’s time is expired
                                                              and the gentleman yields back.
                                                                The gentleman from Texas, Representative Roger Williams, the
                                                              Vice Ranking Member of the Committee is now recognized for 5
                                                              minutes.
                                                                Mr. WILLIAMS. Thank you, Madam Chair.
                                                                A 2021 Cybersecurity Trend Report shows that phishing is the
                                                              top cyber threat for small businesses as we have talked today. In
                                                              this type of attack, simply clicking on a link or opening an attach-
                                                              ment can compromise an entire company’s network. Rather than
                                                              target a vulnerability within the cyber network, this tactic targets
                                                              unknowing employees. Regardless of what additional resources or
                                                              best practices are shared to the industry, we must ensure that we
                                                              are not leaving out the socially engineered attacks that can occur
                                                              on untrained employees.
                                                                So Ms. Nichols, first of all, Mississippi State has a great baseball
                                                              program.
                                                                Ms. NICHOLS. Yes, they do.
                                                                Mr. WILLIAMS. That is good.




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                                                                 Secondly, can you discuss the training that SBDCs, and we have
                                                              talked about this a little this morning, have to ensure employees
                                                              are aware that they could be targets of these phishing attacks?
                                                                 Ms. NICHOLS. Specifically attacking employees, is that what
                                                              you are asking?
                                                                 Mr. WILLIAMS. Yes.
                                                                 Ms. NICHOLS. Yes. And it is just a matter of awareness. Just
                                                              like I said in my presentation, our organization had been phished.
                                                              And it is raising awareness of that basic, what to be ready for and,
                                                              you know, what are the very basic minimal things that you have
                                                              to look for. And that is what we want to show our small businesses
                                                              is how to prepare their employees to work remotely but also keep
                                                              their intellectual property and their information safe. So the social
                                                              engineering is really the focus of most training that is going on
                                                              right now. And while it is at a higher level and you hear about the
                                                              big ones like the pipeline and different things that have happened,
                                                              it is the smaller phishing that is really affecting the smaller busi-
                                                              nesses. So education is key.
                                                                 Mr. WILLIAMS. Thank you.
                                                                 When small businesses are targeted with cyber attacks, it may
                                                              not make the news like some of the more high-profile cases we
                                                              have seen lately such as the Colonial Pipeline or Microsoft attacks.
                                                              Unfortunately, since many of these smaller companies operate on
                                                              tighter budgets, they are often easier targets and then the intrud-
                                                              ers can go undetected for long periods of time than some of the
                                                              more established businesses.
                                                                 So Mr. Dufault, you mentioned in your testimony that smaller
                                                              firms could leverage the cybersecurity capabilities of Cloud serv-
                                                              ices. Can you elaborate on the advantages of using this service and
                                                              why it may be a more attractive option for smaller firms who do
                                                              not have as large of a budget to dedicate to cyber defense?
                                                                 Mr. DUFAULT. Absolutely, Congressman. It is a great question.
                                                                 As there was testimony earlier this year in the Homeland Secu-
                                                              rity Committee where witnesses sort of elaborated on the capabili-
                                                              ties that Cloud providers have in contradistinction to where you
                                                              are using on-premises hosted servers. Right? Where if you have
                                                              your own servers there at the small business, it is incumbent upon
                                                              you, the small business, to install updates that could have security
                                                              patches. It is also incumbent on you to sort of on your own go out
                                                              and find threat indicators and indicators of compromise whereas all
                                                              that stuff sort of happens quickly and efficiently if you are using
                                                              Cloud-hosted servers where the updates are sent automatically,
                                                              that patch potential vulnerabilities, and you also sort of benefit in
                                                              real time and quickly from indicators of compromise that other
                                                              folks are seeing that are using the same Cloud services. And so
                                                              that is sort of what I am referring to when I say the ability to le-
                                                              verage those capabilities.
                                                                 Mr. WILLIAMS. Very good.
                                                                 Cybersecurity breaches are only going to become more common
                                                              as we know and technology continues to advance and criminals get
                                                              more sophisticated. While small businesses do what they can to
                                                              protect themselves from attacks that never happened in the first
                                                              place, it is ultimately the government’s responsibility to track down
                                                              and hold these bad actors accountable. If we use every tool at our




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                                                              disposal to hold these criminals accountable, it will deter these at-
                                                              tacks in the future.
                                                                 Ms. Cornish, are there any roadblocks that are preventing the
                                                              federal government from more aggressively prosecuting
                                                              cybercrimes?
                                                                 Ms. CORNISH. To my understanding, no. But I do——
                                                                 Mr. WILLIAMS. You believe that?
                                                                 Ms. CORNISH. I am encouraged by the partnership, the public-
                                                              private partnership that we are continuing to discuss because I do
                                                              also believe that that is part of it. But I do not feel like I can speak
                                                              to the roadblocks specifically at the Federal level blocking that.
                                                                 Mr. WILLIAMS. Well, public-private partnerships only work bet-
                                                              ter. No question.
                                                                 I yield my time back, Madam Chair. Thank you.
                                                                 Ms. HOULAHAN. Thank you. The gentleman’s time is expired
                                                              and the gentleman yields back.
                                                                 The gentleman from Maryland, Representative Mfume, the
                                                              Chairman of the Subcommittee on Contracting and Infrastructure
                                                              is now recognized for 5 minutes.
                                                                 Mr. MFUME. Thank you very much, Madam Chair. Good morn-
                                                              ing, everyone.
                                                                 I have got a question for any of you or either of you who may
                                                              know the answer should feel free to address. With respect to cyber
                                                              attacks, what do you estimate the average loss to be as a percent-
                                                              age of overall revenues to small businesses regardless of their size?
                                                                 Ms. TODT. So based on research and studies that we have con-
                                                              ducted with some of our member partners and the larger global
                                                              companies, we estimate that a cyber breach can cost about $4 mil-
                                                              lion per small business. So when you think about the revenue that
                                                              small businesses have, sometimes that does not even cover their
                                                              revenue. And the number of employees, whether it is 2, 20, or 200,
                                                              the significance of that piece. And I think the challenge for small
                                                              businesses is their awareness that they are an access point to larg-
                                                              er companies but that they also hold data. And data a couple years
                                                              ago surpassed oil as the most valuable global commodity. And I
                                                              think these issues for small businesses require the education so
                                                              that they are not in a position where they are paying $4 million
                                                              to respond because the recovery takes quite a long time.
                                                                 Mr. MFUME. And so how many small businesses does that wipe
                                                              out on an average per year?
                                                                 Ms. TODT. So there are different statistics around this but what
                                                              we saw with the pandemic is that over 65 percent of small busi-
                                                              nesses that suffered a breach did not go back online 6 months
                                                              later. So that given a 6 month recovery time, those small busi-
                                                              nesses did not recover.
                                                                 And I think one of the things that we have learned again, a lot
                                                              from our large member companies is that the recovery piece to this,
                                                              it is like a hurricane. We get very involved in the crisis response.
                                                              It is on the front page of the paper. We are looking to see how ev-
                                                              erybody is doing. But when you go back 6 months later into the
                                                              community, or 12 months later, you are seeing long-term and dev-
                                                              astating impact. The same is true for businesses, particularly with
                                                              ransomware attacks because of the impact it has.




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                                                                 Mr. MFUME. And what about 5 years ago. What would you have
                                                              said that same dollar amount would have been?
                                                                 Ms. TODT. So I would say it would have been a lot less. I cannot
                                                              estimate but I think, you know, and I do not even believe that
                                                              small businesses were the target that they are today. What has
                                                              happened with IOD and the interdependencies of the digital econ-
                                                              omy is that small businesses are such critical parts of global supply
                                                              chains that now to the point that we have all discussed, they are
                                                              a target because they are the weakest link.
                                                                 Mr. MFUME. And because of that, do any of you know or are
                                                              aware of the number of states that offer the kind of tax credit that
                                                              Ms. Cornish referenced earlier?
                                                                 Ms. TODT. I am not aware of others. I do not know if——
                                                                 Ms. CORNISH. I am not either.
                                                                 Ms. TODT. I do think it is something the federal government
                                                              could look at.
                                                                 Mr. MFUME. So let’s talk about Maryland since we know about
                                                              that, Ms. Cornish. You said that that tax credit is being underuti-
                                                              lized.
                                                                 Ms. CORNISH. It is.
                                                                 Mr. MFUME. Why do you think that is?
                                                                 Ms. CORNISH. I think partially there is an under awareness
                                                              among users as well as cybersecurity companies. So we certainly
                                                              have a cybersecurity audience, so we will continue to promote
                                                              among our membership and also among our strategic partners and
                                                              other trade associations and such.
                                                                 Mr. MFUME. I think it would have to be an aggressive sort of
                                                              promotion. If you have been around offering a tax credit and people
                                                              are not taking advantage of it and yet they are being hit by these
                                                              attacks that we just heard could just completely wipe them out.
                                                              How are you going to do that over the next few months?
                                                                 Ms. CORNISH. Yeah. I can certainly reach out to our close part-
                                                              ners at the Department of Commerce because I do believe it is a
                                                              state-driven approach as well.
                                                                 Mr. MFUME. And I do not know how much time I have left but
                                                              what, if any of you think the SBA should be doing to lower the
                                                              threat level? Have you got some concrete suggestions for us?
                                                                 Mr. DUFAULT. I will take that one, Congressman. That is a
                                                              great question.
                                                                 I think the SBA could, number one, provide personnel and a cer-
                                                              tification program for SBA personnel to get up to speed on the lat-
                                                              est cyber threats and be in a position to counsel companies from
                                                              SBDCs and then provide some funding for those programs on an
                                                              ongoing basis. That is a great way to do it because SBDCs are a
                                                              great resource that folks use quite a lot. And then the SBA could
                                                              also create sort of a hub for information sharing, a little bit like
                                                              what CISA does through NCCIC at the Department of Homeland
                                                              Security. And so those are two ways that small businesses could be
                                                              better supported and help them on a more cost-effective basis deal
                                                              with——
                                                                 Mr. MFUME. Mr. Dufault, I get the sense that you have more
                                                              than two ways to suggest. So could you write those down and
                                                              transmit those to the Committee? I want to specifically try to fol-




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                                                              low up with the SBA to make sure that those sort of suggestions
                                                              get heard outside of this Committee room.
                                                                 Mr. DUFAULT. That is excellent. Absolutely. We will do that.
                                                                 Mr. MFUME. Thank you. I yield back, Madam Chair.
                                                                 Ms. HOULAHAN. Thank you. The gentleman’s time is expired.
                                                              The gentleman yields back.
                                                                 The gentleman from Minnesota, Representative Hagedorn and
                                                              the Ranking Member of the Subcommittee on Underserved, Agri-
                                                              cultural, and Rural Business Development is now recognized for 5
                                                              minutes.
                                                                 Mr. HAGEDORN. I thank the Chair and the Ranking Member
                                                              for holding this Committee. Thanks to the witnesses. And Mr.
                                                              Dufault, one of your members is in our district in Rochester, Min-
                                                              nesota, Southern Minnesota, Advantage Software, and it sounds
                                                              like they have had a great business for going on 40, 50 years pro-
                                                              viding farmers with real-time data and inventory and doing all
                                                              sorts of things that production agriculture really makes a big dif-
                                                              ference in that type of thing. So we appreciate that work and all
                                                              the other members that you have going quite something. It seems
                                                              to me this might be one of these areas again where big govern-
                                                              ment, some politicians think let’s impose standards. Let’s force the
                                                              small businesses to do all these things to comply in order to do
                                                              business with the government and it becomes unreasonable, the
                                                              mandates. And then they turn around and say, well, let’s subsidize
                                                              it. That is kind of a typical pattern that we see.
                                                                 But one of the things that bothers me is I am concerned that the
                                                              agencies sometimes require the contractors, the smaller businesses
                                                              to comply and do things that they themselves do not do. I mean,
                                                              I am one of 21 million Americans who had their records stolen from
                                                              OPM. The Communist Chinese, I guess, know whatever they want
                                                              to know about me and yet nobody could be sued. There was no li-
                                                              ability. The government has a different standard than they impose
                                                              to others. Do you think small businesses who work in good faith
                                                              with the government provide the information, do what they can in
                                                              order to protect themselves and the business operations? Do you
                                                              think they should have a liability standard similar to the govern-
                                                              ment where they are not sued?
                                                                 Mr. DUFAULT. Congressman, it is a great question. I think it
                                                              points to two things. One, Federal agencies need to probably do a
                                                              better job when it comes to securing their networks. And I think
                                                              that points then to whether or not my member companies and
                                                              other businesses across the nation are willing to share threat data
                                                              and share sensitive, potentially sensitive information that shows
                                                              what the threats might be with Federal agencies. They do not want
                                                              that information to be breached.
                                                                 And then secondly, the other point that you made, whether or
                                                              not there ought to be some sort of liability protection for informa-
                                                              tion sharing and other measures that my member companies and
                                                              other companies like them take to make sure that other companies
                                                              are ready and that other folks in the sector are ready. Absolutely.
                                                              I think CISA is a great start. I think that other legislation that
                                                              was introduced last Congress and I think hopefully will be intro-
                                                              duced again this Congress would ensure that there is additional li-
                                                              ability protections for small businesses because we have to over-




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                                                              come the reputational damage, not just as my fellow witnesses
                                                              pointed out, the initial problems.
                                                                 Mr. HAGEDORN. I think most businesses have real incentive to
                                                              make sure that they can protect their customers and do work. They
                                                              do not want to lose business. They do not want to go broke. They
                                                              like to be able to continue to build their business. So your industry
                                                              is quite fascinating. You said something like $1.7 trillion, all these
                                                              millions of employees, and that there is all these open jobs—3, 4
                                                              million open jobs, some of which are paying $50,000, $60,000,
                                                              $70,000, $80,000 just to get going.
                                                                 Can you walk us through what the average person in your indus-
                                                              try would do in order to be trained up or get education? And how
                                                              are some of the small businesses, are they working with them to
                                                              try to bring them in and pay for some of that?
                                                                 Mr. DUFAULT. That is a great question, Congressman.
                                                                 Some of our member companies have just developed their own
                                                              training programs because they need access to more folks that will
                                                              write software. And so one of our member companies in Denver
                                                              created a coding academy and they sort of focus on cybersecurity
                                                              measures and secure coding. I think that is one of the things that
                                                              training programs are trying to emphasize right now but write soft-
                                                              ware that is secure at the beginning. It is sort of like what the Fed-
                                                              eral Trade Commission says about privacy by design. If you are de-
                                                              signing a software product, build security into it. And so they have
                                                              developed training program that have specific focuses like that. We
                                                              also have a member company, Bit Source in Kentucky that sort of
                                                              specialized in training former coal miners to code so that they
                                                              would have a bigger workforce base.
                                                                 Mr. HAGEDORN. So one bill that we have introduced, I have in-
                                                              troduced, is the American Workforce Empowerment Act which
                                                              would enable people who have 529 education savings accounts to
                                                              use that for an array of different purposes, not just to go to a 4-
                                                              year college or whatever. It seems like there could be areas here
                                                              where folks could utilize those types of money in order to get into
                                                              your industry. So I would encourage folks to cosponsor that bill and
                                                              try to get things moving for you. Thanks very much.
                                                                 Mr. DUFAULT. Thank you.
                                                                 Chairwoman VELÁZQUEZ. The gentleman yields back.
                                                                 Now we recognize the gentleman, Mr. Phillips from Minnesota,
                                                              Chairman of the Subcommittee on Oversight, Investigations, and
                                                              Regulations for 5 minutes.
                                                                 Mr. PHILLIPS. Thank you, Madam Chair.
                                                                 Ms. Cornish, you mentioned the DOD program that makes fund-
                                                              ing available to contractors to perform assessments and take steps
                                                              to defend against cyber threats, of course. And we all know that
                                                              large firms like Intel and Google engage in what are called bug
                                                              bounty programs that provide rewards for identifying security
                                                              threats and vulnerabilities on their own platforms. And just last
                                                              month, CISA had launched the first Federal Civilian Security Vul-
                                                              nerability Disclosure program—boy, that needs an acronym, I
                                                              think—to work with the hacker community to secure its networks.
                                                              So would you support the establishment of a fund at SBA or NIST
                                                              or CISA to support small businesses that want to partner with bug




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                                                              bounty programs and identify and repair weaknesses in their cyber
                                                              defenses?
                                                                Ms. CORNISH. Certainly. That is a wonderful idea.
                                                                Mr. PHILLIPS. I like those easy answers. Thank you.
                                                                Ms. Todt, how do you feel about that notion?
                                                                Ms. TODT. I can continue to make it easy for you. Absolutely,
                                                              because I think small businesses need to be told not only what to
                                                              do but what is going on and the reasons behind that. And I think
                                                              the bug bounty programs help to demonstrate where the threats
                                                              are coming from. And as Graham said earlier, if they can under-
                                                              stand that approach, then they have a better education for their
                                                              employees, as well as for the businesses themselves.
                                                                Mr. PHILLIPS. Wonderful. I appreciate that and happen to feel
                                                              the same.
                                                                Ms. Nichols, I want to thank you for your services that you are
                                                              providing to your community. You are bridging the gap for a lot of
                                                              businesses who need guidance about how to protect themselves and
                                                              their customers from malicious attacks.
                                                                Not long ago I Chaired an Oversight and Investigations Sub-
                                                              committee hearing that examined the challenges facing small busi-
                                                              nesses seeking to adopt a CMMC certification and enter into De-
                                                              fense Department contracts. At that hearing, we learned that when
                                                              the initiative is fully implemented, it has the potential, the likeli-
                                                              hood to shut out small firms who lack the expertise or resources
                                                              to navigate that certification process. So if this Committee con-
                                                              siders legislation empowering SBDCs to lead cybersecurity out-
                                                              reach to small businesses, how would you recommend that we in-
                                                              struct SBDCs to incorporate guidance about CMMC into their out-
                                                              reach and training?
                                                                Ms. NICHOLS. Thank you for the question.
                                                                So last year, our association embraced the CMM model and we
                                                              recognize that we would not ever provide the certification piece of
                                                              that but we felt that their levels one through three is something
                                                              that we could embrace on the education piece. And so we have
                                                              worked with our association to develop a training model to prepare
                                                              the small businesses so that they will be prepared, maybe not just
                                                              for the DOD or defense contracts or contracts with the federal gov-
                                                              ernment, but also just the general small businesses.
                                                                So to prepare the SBDCs, I think that we are already on that
                                                              pathway because we did recognize that this would be a good part-
                                                              nership and I hope that answered that question.
                                                                Mr. PHILLIPS. No, it did. Absolutely.
                                                                And I just want to thank our Chairwoman and Ranking Member
                                                              for holding this hearing. I cannot help but think that this issue is
                                                              going to grow in importance and it is our responsibility to ensure
                                                              that small businesses can defend themselves and, of course, their
                                                              customers.
                                                                So with that, I yield back.
                                                                Chairwoman VELÁZQUEZ. The gentleman yields back.
                                                                Now we recognize the gentleman from Pennsylvania, Mr.
                                                              Meuser, Ranking Member of the Subcommittee on Economic
                                                              Growth, Tax, and Capital Access for 5 minutes.
                                                                Mr. MEUSER. Thank you, Madam Chairman. And thank you to
                                                              our Ranking Member.




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                                                                 So, certainly an interesting conversation. Interesting hearing. In
                                                              2020, I think it is no surprise to any of us that ransomware attacks
                                                              were up double, over 102 percent. So let me ask, let me start with
                                                              Mr. Dufault, if I can.
                                                                 The cyber attack, cybersecurity insurance I understand is
                                                              through the roof as far as expense goes. So is there any group plan
                                                              that any of your organizations perhaps work to try to bring down
                                                              that cost and create that as an opportunity for businesses?
                                                                 Mr. DUFAULT. I think, absolutely, thank you for the question,
                                                              Congressman. Cybersecurity insurance is very expensive. I think
                                                              Ms. Todt might have a good handle on this as well. But for our
                                                              member companies, they are looking for affordable options here
                                                              and they are looking for—and also as Ms. Todt pointed out, $4 mil-
                                                              lion is what it costs a small company to have a cyber incident. So
                                                              the level of investment and the frequency with which our member
                                                              companies are targeted kind of leads us to believe that we are
                                                              going to have to invest a little bit more, even though we are small
                                                              companies. And so I will just say that, you know, they are willing
                                                              to invest a lot in cybersecurity insurance and in other measures
                                                              but we are definitely looking for those plans that will be group
                                                              plans or other ways of making the risk pool a little more affordable.
                                                                 Ms. TODT. If I may add to that. So I think cyber insurance, it
                                                              is a challenging sector right now. The Cyber Readiness Institute
                                                              has focused a lot on it this year. The challenge is that if you are
                                                              a small business and you do not have cyber insurance you are often
                                                              seen as being negligent. But if you are truly evaluating on an ROI
                                                              perspective, it does not always make financial sense.
                                                                 There is a great opportunity for the insurance industry to step
                                                              up to say you have to do these basics in order to be covered. That
                                                              will both help the premiums stay down and it will also create a mo-
                                                              mentum shift in doing the basic cyber standards without having to
                                                              talk about regulation or anything like that. It is the choice. It is
                                                              like a good driver discount. If you do well by these standards then
                                                              we will cover you. And I think that is where the insurance industry
                                                              really has an opportunity to improve what it is doing.
                                                                 Mr. MEUSER. I imagine the IT companies as well would find
                                                              some protection measures by charging for added security. And I
                                                              know that is certainly occurring as well.
                                                                 In my district it is not like any other. I have many small busi-
                                                              nesses, medium sized businesses, large businesses getting hit, some
                                                              more than once. Some pay, some do not. And they work their ways
                                                              around it but usually at quite a cost. Sometimes just being shut
                                                              down for 6, 7, 8 days. So it is a serious issue.
                                                                 I want to just backtrack for a moment. We had a hearing with
                                                              the Department of Defense, Cybersecurity Maturity Model a few
                                                              weeks back and we saw that small businesses that made for the
                                                              defense industry, it was very difficult to get the type of levels of
                                                              security that they wanted. In fact, I have one business in my busi-
                                                              ness that spent over $100,000 and they are not even exactly sure
                                                              what level that they are. They think they are at level three. So it
                                                              is discussed in the Mississippi SBDC how small businesses would,
                                                              or I guess my question is, are your models helping gain compliance
                                                              for the DOD?




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                                                                 Ms. NICHOLS. So ours is through education and training be-
                                                              cause we cannot, and we can also provide guidance so that we can
                                                              say, you know, here is our situation. We can give them some infor-
                                                              mation. Again, we cannot provide that certification but the edu-
                                                              cation piece, and we have really outlined it so that it is very clear.
                                                              We have created training specifically right now. All it is posted is
                                                              for level one because we believe that is basic hygiene. And it is
                                                              raising that awareness. And to reiterate, it is important that they
                                                              have that basic understanding so that they can get that certifi-
                                                              cation. A lot of people do not think it is attainable because they do
                                                              not understand. And if you can educate them that it can be very
                                                              simple but yet very effective to get them to that level one through
                                                              level three.
                                                                 Mr. MEUSER. Okay. All right. Thanks, Ms. Nichols.
                                                                 Ms. TODT. Congressman, if I may just add a quick point to that
                                                              because we are actually working with Cyber Hawaii and the De-
                                                              partment of Defense to create a primer to help small businesses get
                                                              ready for CMMC. And it is taking that point where most small
                                                              businesses are, which is with no understanding, and getting them
                                                              ready for CMMC. And it is a model that we hope to be able to rep-
                                                              licate across the country because it addresses the points that you
                                                              are calling out which it can be very costly and take a lot of time
                                                              without the right preparation.
                                                                 Mr. MEUSER. Last quick question. I am out of time.
                                                                 Does cryptocurrency affect this whole situation?
                                                                 Ms. TODT. I think an unregulated monetary currency that is
                                                              being used for a malicious and criminal act cannot be expected to
                                                              be a positive force. If we are using cryptocurrency, it should be reg-
                                                              ulated along other international monetary sources.
                                                                 Mr. MEUSER. Thank you, Madam Chairwoman, I yield back.
                                                                 Chairwoman VELÁZQUEZ. The gentleman yields back.
                                                                 The gentlelady from Illinois, Ms. Newman, is recognized for 5
                                                              minutes.
                                                                 Ms. NEWMAN. Thank you, Madam Chair, and thank you Rank-
                                                              ing Member for putting this discussion together. Very helpful. And
                                                              thank you to our guests, illuminating and really helping us under-
                                                              stand the gravity and depth and width of this problem.
                                                                 So mine is pretty simple, my line of questioning, and I think it
                                                              is likely for Mr. Dufault or Ms. Todt. So we are looking at all these
                                                              things to help small businesses. I think all the suggestions today
                                                              have been fantastic and we should look at it as a Committee for
                                                              sure to see if there is legislation there to support small business.
                                                                 My question is the other lane. So deterrence. Right? So how is
                                                              the SBA and all of these organizations represented here working
                                                              with law enforcement, whether it is FBI or CIA, once these attacks
                                                              occur, are they following them? Are they tracking them? Are they
                                                              investigating? What is happening there? And then do you have any
                                                              suggestions around deterrents? And what would that model look
                                                              like?
                                                                 I will ask Mr. Dufault first.
                                                                 Mr. DUFAULT. Thank you for the question, Congresswoman.
                                                                 I think when it comes to the deterrents, one idea that we talked
                                                              about here and some of the witnesses mentioned was sort of cre-
                                                              ating a clearinghouse for information sharing through SBA but per-




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                                                              haps co-locating it with Department of Homeland Security so that
                                                              it is rapid intelligence sharing and that the Federal agencies are
                                                              on the same page. With that kind of apparatus that kind of says
                                                              to cybercriminals, well, I guess there is a good mechanism in place
                                                              for folks to learn about what I am trying to do to deceive my in-
                                                              tended targets. And that, in and of itself, can be a little bit of a
                                                              deterrent because suddenly you are talking, back to cybercrime as
                                                              a business, you are increasing the cost of the attack because you
                                                              might have to do a little bit more to try and trick that one person
                                                              that you need to fool to get into the network. So that can go to-
                                                              wards deterrence. And sort of co-locating the SBA center with DHS
                                                              can help advance threat sharing and SBA’s role as just sort of a
                                                              facilitator of information getting to law enforcement agencies is
                                                              maybe the appropriate role for SBA as well.
                                                                 Ms. NEWMAN. And then Ms. Todt?
                                                                 Ms. TODT. Yes. Building off of that, I think when we can share
                                                              the techniques, tactics, and procedures, the TTPs with other busi-
                                                              nesses then they are aware of what needs to happen. And I think
                                                              that is one of the challenges that we have had, and we saw this
                                                              with Colonial Pipeline when Colonial did not share what was going
                                                              on the government was not able to then distribute that TTP that
                                                              was being used. And, oftentimes, what we learn from large busi-
                                                              nesses we can apply to small businesses. And so to Mr. Dufault’s
                                                              point, sharing the TTPs.
                                                                 Also, when we talk about deterrence, we have to prosecute crimi-
                                                              nals. The biggest challenge we have right now is that ransomware
                                                              is going to continue to be a very lucrative business because you can
                                                              do it without getting prosecuted and having any repercussions. And
                                                              so particularly for small businesses, this is one of the challenges.
                                                              And this is also why reporting incidents and also when there is
                                                              ransomware that particularly small businesses have to pay to stay
                                                              viable, being able to share that with the government so that you
                                                              can help to prosecute the criminals, this gets us to a better place.
                                                              Obviously, we have talked about all the liability protections that
                                                              come with that but we are only going to be better if we have better
                                                              exchange of the attacks that are being used and the tactics and the
                                                              techniques.
                                                                 Ms. NEWMAN. So if I may follow up, and either of you can an-
                                                              swer, is it that companies, small businesses are not reporting
                                                              these? Or is it that when reported they cannot be investigated for
                                                              whatever reason or are not being investigated? Is it both or is it
                                                              either?
                                                                 Ms. TODT. You go first.
                                                                 Mr. DUFAULT. Yeah, Congresswoman, I think it is both. There
                                                              is a real reluctance I think among small companies to notify au-
                                                              thorities and to notify maybe others of either an unsuccessful or a
                                                              successful attack, especially the successful attacks because they are
                                                              sort of an automatic conclusion that folks draw fairly or unfairly
                                                              that the company that is subject to a successful breach was not
                                                              taking the proper measures to secure their networks. And so there
                                                              is a lot of underreporting I think.
                                                                 Ms. NEWMAN. I think that needs to be a part of any commu-
                                                              nication or kit that any of your organizations put out, SBA puts
                                                              out, and we can follow up. And if you can include those rec-




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                                                              ommendations in the recommendations that Congressman Mfume
                                                              talked about, I think that that would be great for the Committee
                                                              to take up as a whole. So I do appreciate your work and thank you
                                                              for sharing today. And I yield back.
                                                                 Chairwoman VELÁZQUEZ. The gentlelady yields back.
                                                                 Now we recognize the gentlelady from New York, Ms. Tenney, for
                                                              5 minutes.
                                                                 Ms. TENNEY. Thank you, Chair Velázquez and Ranking Mem-
                                                              ber Luetkemeyer for this, and to our witnesses. I really appreciate
                                                              you being here.
                                                                 I have a couple of questions. First, Ms. Cornish, in your testi-
                                                              mony you described your newest initiative surrounds the critical
                                                              lack of skill diverse cybersecurity professionals to protect critical
                                                              infrastructure and essential services. Do you find that this shortage
                                                              is in urban and rural communities? And how can we meet those
                                                              needs? And I am particularly curious because we are looking at
                                                              rural broadband in our communities and trying not do, based on
                                                              a municipal level, just like we have municipal electricity and oth-
                                                              ers, and that is going to be particularly interesting to us as we
                                                              move into that realm. And how is that going to be something your
                                                              taskforce is going to be looking into?
                                                                 Ms. CORNISH. Certainly. I think that is a huge challenge, the
                                                              lack of broadband, especially in rural communities, especially when
                                                              you are thinking about small and medium-sized businesses. And
                                                              really, how the workforce is distributed; right? You want to make
                                                              sure that your rural areas are still competitive for that.
                                                                 So our main task in the workforce initiatives is really to connect
                                                              the dots. We have 17 centers of excellence in Maryland alone for
                                                              cybersecurity, yet we have 19,000 unfilled positions. So for us, it
                                                              is really creating comprehensive and wraparound services and con-
                                                              necting those who are doing the training with those who really
                                                              need the work. And to the point made already, in small businesses
                                                              it can be really challenging to take on that training yourself. It can
                                                              be challenging to have the manpower to do that training and to
                                                              support that. So we are really looking to see how we as an associa-
                                                              tion can take away and kind of pool together all of our resources
                                                              to put less onus on the small businesses who really need that work-
                                                              force.
                                                                 Ms. TENNEY. More and more small businesses are going to be
                                                              depending on this rural broadband that we are trying to explore,
                                                              and actually, we have a test site in my own community of
                                                              Sherburne, New York, where we are going to be having municipal
                                                              broadband opportunities which we are trying to do anything to
                                                              minimize the risk of cyber attacks which is my concern, and also
                                                              on this, and I would like to address it to the other witnesses. I
                                                              know that SBA is going to be designated as the single Federal enti-
                                                              ty for the small business cybersecurity information sharing.
                                                                 I have a concern though. I come from New York State and there
                                                              was a point in time where we consolidated all of our services, in-
                                                              cluding all banking and insurance into the New York State Depart-
                                                              ment of Financial Services and we felt that that could put us at
                                                              great risk for cyber hacks because the government typically does
                                                              not have, and the taxpayers are paying for maintenance of this
                                                              when banks were spending billions of dollars to protect their cus-




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                                                              tomers. Because of the liability and insurance was referenced be-
                                                              fore, how can we make sure that SBA is going to be able to handle
                                                              this kind of burden and making sure that our small businesses are
                                                              going to be protected when you are consolidating this type of issue?
                                                              I do not know if you want to address it, either Mr. Dufault or——
                                                                 Mr. DUFAULT. Sure, Congresswoman. It is a great question.
                                                              That is one of the reasons that you see some hesitancy among the
                                                              member companies and other small companies that are being
                                                              asked to share data with Federal agencies. The question is, well,
                                                              we have seen the recent headlines where other Federal agencies
                                                              and maybe SBA have been the victims of compromise. So they
                                                              want to be assured, basically, that these Federal agencies are tak-
                                                              ing the steps that they need to take to ensure that that data is pro-
                                                              tected adequately and that all of the personnel that work at these
                                                              agencies are observing the proper protocols because as we have dis-
                                                              cussed throughout this hearing, all it takes is just the one em-
                                                              ployee that has the weak password or that otherwise makes the
                                                              wrong move to compromise the network. And so, anything that the
                                                              Committee can do to ensure that there are greater resources, more
                                                              accountability and other levers that would ensure that the agency
                                                              is taking the proper precautions, those would help our cause quite
                                                              a lot.
                                                                 Ms. TENNEY. Yeah. Thank you. Because I have concern as a
                                                              small business owner. We obviously spend a lot of money in mak-
                                                              ing sure we do not get hacked. We have a lot of heavy data
                                                              downloads in our business. And so to be hacked at some point and
                                                              finding out that it is SBA without any duplication of protections or
                                                              redundant storage areas, where are we going to be? And that con-
                                                              cerns me.
                                                                 I do not know if anyone else wanted to weigh in on it.
                                                                 Ms. TODT. If I may, Congresswoman. Yes.
                                                                 Ms. TENNEY. I have got 30 seconds left.
                                                                 Ms. TODT. Yes. Absolutely. I think certainly when we talk about
                                                              a single point of success, it is also a single point of failure. But that
                                                              is really what the new money and the new authorities for CISA are
                                                              supposed to address. And I believe if we look at agencies, SBA is
                                                              not going to be the only agency that has this type of responsibility
                                                              and this type of challenge. And so what we should expect and you
                                                              are seeing some of the beginnings of this happen already, which is
                                                              looking at how CISA will work with the agencies to ensure that
                                                              there is that redundancy and that resilience built in. Because, as
                                                              we know, small businesses cannot afford to not have that safety
                                                              net. But again, with those additional authorities, this is not going
                                                              to be SBA on its own. It will be SBA in collaboration with the other
                                                              cybersecurity infrastructure and the federal government.
                                                                 Ms. TENNEY. Thank you. I appreciate it. Great testimony.
                                                              Thank you.
                                                                 Chairwoman VELÁZQUEZ. The gentlelady yields back.
                                                                 Now we will recognize the gentlelady from Pennsylvania, Ms.
                                                              Houlahan, for 5 minutes.
                                                                 Ms. HOULAHAN. Thank you, Madam Chair. And thank you to
                                                              everybody for joining us today. And I think I would like to follow
                                                              up on many of the different lines of questions that we have heard
                                                              today. They all seem to have a real common thread. One is to try




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                                                              to understand how much of all of this has to do with just changing
                                                              culture and changing the ways that people perceive their responsi-
                                                              bility and their role in cybersecurity for their companies. I am try-
                                                              ing to cess out, you know, that seems to be a very large part of the
                                                              problem. And then kind of the other 20 percent of the problem
                                                              seems to be what kind of software and hardware that you should
                                                              have and you should invest in the types of teams that you should
                                                              have to be able to protect from the rest of the 100 percent of the
                                                              universe. My understanding is that is in the thousands of dollars
                                                              of range in cost. My understanding is that the consequences is in
                                                              the millions of dollars of range in cost. My other understanding
                                                              having run and owned and operated a lot of businesses and been
                                                              responsible for IT is that there is a need for seats or logins for
                                                              some subset of software that people do not have the ability to af-
                                                              ford. Is there any sort of universe where, imagine a cloud, imagine,
                                                              you know, certified or approved vendors that are part of that cloud
                                                              that the Small Business Administration can administer or some
                                                              other organization can administer that would allow you to pick up
                                                              logins rather than seats so to speak, you know, to be able to defray
                                                              the costs that small businesses are experiencing in their cybersecu-
                                                              rity? Is that something that already exists and I just do not know
                                                              about it? Is that something that could be useful to design is sort
                                                              of a clearinghouse of software that would defray the costs for small-
                                                              er businesses?
                                                                 And I guess, Mr. Dufault, you seem to be doing most of the con-
                                                              versation on that. And we will start there.
                                                                 Mr. DUFAULT. Thanks, Congresswoman.
                                                                 It is a good idea. And I think there could be a role for SBA there,
                                                              whether it is providing just a grant program or funding or some-
                                                              thing more hands-on where the agency is sort of designing a ful-
                                                              some sort of program. So I think it is worth discussing. It is a good
                                                              idea and I think we would want to just continue to engage on this
                                                              because it is a need that was identified sort of by a couple of our
                                                              member companies and that, you know, I think it is worth further
                                                              discussion probably at this point. Yeah.
                                                                 Ms. HOULAHAN. Okay. Thank you.
                                                                 Ms. Todt?
                                                                 Ms. TODT. Thank you. It is actually something that we are hear-
                                                              ing from small businesses at the Cyber Readiness Institute because
                                                              we do not advocate for vendors but we are hearing we need to have
                                                              a clearinghouse to know which ones to turn to or at least the gen-
                                                              eral categories. And it is something that we are looking at this year
                                                              because we want to be prescriptive and not leave everybody in the
                                                              dark and recognize that when you outsource the function as a
                                                              small business, you still have a responsibility and you do not
                                                              outsource the responsibility.
                                                                 If I may address your question about culture. I do think this is
                                                              the 80 percent component of cybersecurity, particularly for small
                                                              businesses. And cultural change takes a lot of time. If we think
                                                              about, we have all heard the analogies, seatbelts. It was inconven-
                                                              ient for a long time and then you saw the safety requirements. Or
                                                              if you even make the analogy to physical hygiene and health, we
                                                              are not doctors, but we have learned over time from doctors that
                                                              we should have certain tests taken on a regular basis. And so you




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                                                              do not need to be an ID specialist to know that these are the basics
                                                              that need to happen.
                                                                 And we have talked a lot about workforce training. And to your
                                                              point about culture, I think it is important when we see all these
                                                              cybersecurity positions that people out there recognize it is not just
                                                              about math and science. Cybersecurity is interdisciplinary and we
                                                              need capabilities and qualifications in sociology, history, politics,
                                                              psychology, that those all play into this so that the workforce that
                                                              we are talking about for cybersecurity is much larger than I think
                                                              we conceptualize because it is not just math and science.
                                                                 Ms. HOULAHAN. Ms. Cornish, anything?
                                                                 Ms. CORNISH. Certainly. We have experience curating these
                                                              lists by business protocols and also specific needs. So if you would
                                                              like to speak further about building this clearinghouse, I would be
                                                              happy to answer that more specifically.
                                                                 Ms. HOULAHAN. Thank you. I appreciate that.
                                                                 And with what is left of my time, I want to focus on a piece of
                                                              legislation that I am a co-sponsor of, the Small Business Develop-
                                                              ment Center Cyber Training Act of 2021, which would certify 5 or
                                                              10 percent of the number of employees of a small business develop-
                                                              ment center to provide cybersecurity assistance to small busi-
                                                              nesses. If enacted into law, this program would provide expertise
                                                              to small business owners on the proper steps towards cybersecu-
                                                              rity.
                                                                 With my last remaining seconds, what are some of the best prac-
                                                              tices that SBA could showcase their cybersecurity efforts on? Do
                                                              you know also similarly of best practices that the DOD has had?
                                                              How can we encourage interagency best practice sharing?
                                                                 Ms. TODT. If I may, this is what the Cyber Readiness Program
                                                              is. We focus on four issues. Strong authentication, which is a pass
                                                              phrase of 15 characters or more. Phishing training. Not using
                                                              USBs but instead looking at the cloud. And software updates. Help-
                                                              ing individuals understand that every 24 hours they should actu-
                                                              ally download the patch. Those are our foundation and I am cer-
                                                              tainly happy to talk to you more about that because this is the core
                                                              of how we can help small businesses and I commend the act and
                                                              the legislation.
                                                                 Ms. HOULAHAN. Thank you.
                                                                 And with that, I yield back, Madam Chair.
                                                                 Chairwoman VELÁZQUEZ. The gentlelady yields back.
                                                                 Now we recognize the gentlelady from California, Ms. Young
                                                              Kim, Ranking Member of the Subcommittee on Innovation, Entre-
                                                              preneurship, and Workforce Development.
                                                                 Ms. KIM of California. Thank you, Chairwoman Velázquez and
                                                              Ranking Member Luetkemeyer for holding this important hearing.
                                                              And I want to thank the witnesses for being with us today to dis-
                                                              cuss the ways of strengthening our cybersecurity for small busi-
                                                              nesses.
                                                                 I am very troubled by the increase of cyber attacks. They just
                                                              seem to be designed not only for monetary purposes but also to in-
                                                              still distrust in our economic system and our institutions. Just be-
                                                              tween 2019 and 2020, our country saw 400 percent in cyber intru-
                                                              sions. Successful cyber attacks on our small businesses also dis-
                                                              courage future entrepreneurs from establishing a small business




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                                                              and creating jobs. Some estimate that 60 percent of small busi-
                                                              nesses go out of business within 6 months of a cyber incident.
                                                                 So let’s think about that. Cyber attacks are putting 6 out of 10
                                                              of our entrepreneurs out of business. So given this urgency of the
                                                              moment, I was happy to join my colleague, Representative Crow,
                                                              to introduce the SBA Cyber Awareness Act to find ways to improve
                                                              the SBA’s cybersecurity infrastructure and share information with
                                                              Congress if there is a reasonable basis to believe that a cybersecu-
                                                              rity incident occurred at the administration.
                                                                 Let me pose the question to all witnesses. Let me start with Mr.
                                                              Dufault.
                                                                 In your testimony, you indicated that threat-sharing for small
                                                              companies is complicated because usually they lack the resources
                                                              to join and participate in information sharing at analysis centers.
                                                              Can you elaborate on what can Congress do to incentivize higher
                                                              participation of small businesses in NCCICs?
                                                                 Mr. DUFAULT. Thank you, Congresswoman. It is a difficult task
                                                              to create an incentive that would really cause small companies to
                                                              participate in a robust way in these information sharing enter-
                                                              prises. One of the ways that we can at least start on that task is
                                                              to provide potentially additional liability protections at least, right,
                                                              because the couple of issues that small companies face when they
                                                              are being asked to share information about the threats that they
                                                              receive or even incidents that they are victims of is that, number
                                                              one, the reputational fallout will cost quite a lot of money, over and
                                                              above the cost of actually remediating the breach, and then number
                                                              two, it is just a matter of am I going to be liable for anything asso-
                                                              ciated with sharing this information? Whether it is a privacy cause
                                                              of action or just simply that they did not take the precautions nec-
                                                              essary to protect their networks. And therefore, they run afoul of
                                                              data security laws in the states or at the Federal level, the Federal
                                                              Trade Commission Act. So it is the liability and the reputation.
                                                              And so a good start is to help them defray some of that potential
                                                              liability.
                                                                 Ms. YOUNG KIM. Ms. Todt, could you briefly elaborate on that,
                                                              too?
                                                                 Ms. TODT. Thank you.
                                                                 I think the other piece is that when we look at the supply chains
                                                              that small businesses are a part of, there is a responsibility on the
                                                              larger companies to work with them to incentivize because those
                                                              large companies, as we saw with solar winds in Kaseya, can be
                                                              taken down if the small businesses are vulnerable. And there is a
                                                              better infrastructure of support that can happen within supply
                                                              chains. And I think as we have seen the interdependencies grow
                                                              with the digital economy, this is another opportunity to incentivize
                                                              that engagement, that threat sharing. We work with large manu-
                                                              facturing companies and one of them has put out very specific ef-
                                                              forts and information to their small businesses to help them under-
                                                              stand where the threats are but also to facilitate that sharing be-
                                                              cause they know that as a large company, if their small businesses
                                                              get taken down that will affect them. So there is more responsi-
                                                              bility and collaboration that can happen across supply chains than
                                                              we have seen before.
                                                                 Ms. YOUNG KIM. Thank you very much.




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                                                                 You know, I am a big proponent of advancing STEM education,
                                                              especially with underrepresented communities to increase our 21st
                                                              Century talent pipeline and our economic competitiveness. So I am
                                                              sure you understand the importance of STEM education and com-
                                                              puter science in training and expending our cybersecurity work-
                                                              force.
                                                                 How could our small businesses and our economy benefit from in-
                                                              creasing the cyber workforce?
                                                                 Mr. DUFAULT. Thank you, Congresswoman.
                                                                 One of the most significant problems my member companies face
                                                              is access to folks that are trained in software development or com-
                                                              puter science more generally. And so my member companies would
                                                              benefit quite a bit I think from investments in K-12 education, but
                                                              also in workforce development programs.
                                                                 I mentioned earlier that some of our member companies devel-
                                                              oped these training programs on their own but there is a role for
                                                              Federal investment as well and that is why we support the Com-
                                                              puter Science for All Act and also the Master Teacher Corps, which
                                                              is a training program for K-12 educators to provide computer
                                                              science education.
                                                                 Ms. YOUNG KIM. Thank you. I see that my time is up. I yield
                                                              back.
                                                                 Chairwoman VELÁZQUEZ. The gentlelady yields back.
                                                                 Now we recognize the gentleman from Louisiana, Mr. Carter, for
                                                              5 minutes.
                                                                 Mr. Carter, you need to unmute.
                                                                 Mr. CARTER. Yes, thank you.
                                                                 Madam Chair and Ranking Member, thank you very much for
                                                              giving us this opportunity for this hearing. Much has been said and
                                                              many questions have been answered. But Ms. Cornish, if you could
                                                              perhaps touch on this and any other member, maybe Ms. Todt can
                                                              as well.
                                                                 We know that we obviously are concerned about small businesses
                                                              and making sure that they have the security to operate their busi-
                                                              nesses via Internet, and cybersecurity is certainly an issue that
                                                              touches us all. I know my credit card has been breached several
                                                              times with large companies. I will not say what the company is but
                                                              I will say that it has been breached. And I know that they have
                                                              all of the algorithms, all of the security known to man to secure
                                                              them. I know that cities have had their systems breached. The City
                                                              of New Orleans has had ransomware. What have we learned from
                                                              what the large companies are doing that we can pass on to our
                                                              smaller businesses, best practices, if you will. Even at their highest
                                                              level of security they have still been caught in ransomware and cy-
                                                              bersecurity threats.
                                                                 Ms. CORNISH. So I would reiterate the importance of human be-
                                                              havior and training of our staff and our employers because in addi-
                                                              tion to being our largest threat, they are also our largest defenders.
                                                              So we can empower them to treat data care instead of cybersecu-
                                                              rity and empower them to protect the data they are entrusted with.
                                                                 Additionally, I think the thing that has not been belabored here
                                                              a lot but as documented policies and procedures, there are many
                                                              holes that we are missing simply because there are not checklists




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                                                              or we do not really understand all of our assets that we are man-
                                                              aging. So I think documentation and training is key in this.
                                                                 Mr. CARTER. But could you elaborate? If we talk about the larg-
                                                              er companies that have a robust security system where they are
                                                              empowered with significant tools to counteract these threats, yet
                                                              they are still caught in the lurch, if you will, what can we as Con-
                                                              gress, what can SBA, what suggestions would you give us that we
                                                              can aid in this battle? Because obviously, on many fronts we are
                                                              losing.
                                                                 Ms. CORNISH. Sure. I think Ms. Todt’s outline of the Cyber
                                                              Readiness Institute does a great job of how we can empower our
                                                              employees because, again, that is really our biggest threat.
                                                                 Mr. CARTER. Ms. Todd, can you weigh in, please?
                                                                 Ms. TODT. Sure. I think, you know, the good news and the bad
                                                              news is that these large companies are getting breached by very
                                                              basic attacks. So when we look at Colonial Pipeline, they were
                                                              breached because they were not using multi-factor authentication,
                                                              and they actually did not need to shut down the pipeline. They
                                                              were just worried about getting paid because their payment system
                                                              shut down. And so that showed the interdependency of the systems
                                                              and the importance of separating IT technology with your oper-
                                                              ations. And so those lessons, the sophisticated attack of a nation
                                                              state adversary is separate and distinct, but when we have seen
                                                              the other issues with solar winds and others, those are getting
                                                              breached through authentication. Through network access. And so
                                                              what we are talking about for small businesses, obviously at a
                                                              smaller level, really holds true for the large businesses as well.
                                                              And that is where I think we have learned the most from these
                                                              breaches over the last 6 to 12 months is that we have got to create
                                                              those basic standards in helping businesses do all of those. And
                                                              this is, again, we talked earlier about where I think insurance com-
                                                              panies can play a role and others to have those incentives so that
                                                              those basics become a requirement for further resilience.
                                                                 Mr. CARTER. And real quickly before my time expires. As a
                                                              member of Congress with tons of small businesses throughout my
                                                              congressional district, what can we do in the way of Town Hall
                                                              meetings or ways of better educating our small businesses in our
                                                              communities to utilize these resources? Are there leave behinds?
                                                              Are there handouts? Are there things that we can do? We often do
                                                              Town Hall meetings for various issues. This could be one that cer-
                                                              tainly can benefit our small businesses. What suggestions would ei-
                                                              ther of you have as to how we could better serve and provide re-
                                                              sources? You have about 43 seconds.
                                                                 Ms. TODT. What we have seen, what we are hoping to see with
                                                              CISA and with SBA is this collaboration of resources focused on
                                                              human behavior. So taking the work of the nonprofits and making
                                                              those available to you so that when you go to these town meetings
                                                              there is a simple, accessible, basic protocol. These are the things
                                                              you need to be doing on your personal devices as well as your pro-
                                                              fessional devices, an education campaign that does this.
                                                                 One of the points in my testimony talks about an awareness
                                                              campaign. If we get every business to use multifactor authentica-
                                                              tion, the decrease in cyber attacks would be exponential.
                                                                 Chairwoman VELÁZQUEZ. The gentleman’s time has expired.




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                                                                 Mr. CARTER. Fantastic. Thank you very much.
                                                                 Chairwoman VELÁZQUEZ. Now we recognize the gentleman
                                                              from New York, Mr. Garbarino, for 5 minutes.
                                                                 Mr. GARBARINO. Thank you, Madam Chair and Mr. Ranker for
                                                              holding this hearing.
                                                                 As the Ranking Member on the Cybersecurity Subcommittee, De-
                                                              partment of Homeland Security Committee, I have learned a lot
                                                              over the last 6 months about cyber attacks and ransomware, which
                                                              is why I have worked on several pieces of legislation.
                                                                 Ms. Nichols, this question is for you. Yesterday, I introduced
                                                              H.R. 4515, the Small Business Development Center Cyber Training
                                                              Act. I am honored to have the support of my fellow colleagues on
                                                              the Committee here, Mr. Evans and Ms. Houlahan, and I encour-
                                                              age others on the Committee to co-sponsor this bipartisan piece of
                                                              legislation.
                                                                 Small businesses often lack the resources or technical knowledge
                                                              to prevent cyber attacks, and with the high cost of hiring special-
                                                              ized employees and cybersecurity experts, it can be difficult to
                                                              bridge the sizeable education gap. My bill would help small busi-
                                                              nesses get the information they need to implement their own cyber
                                                              strategy and take appropriate steps in the event of a cyber attack
                                                              against their business.
                                                                 Ms. Nichols, given your position as the state director of the Mis-
                                                              sissippi SBDC, would you share your thoughts and provide feed-
                                                              back on the bill, the Small Business Development Center Training
                                                              Act, please?
                                                                 Ms. NICHOLS. Thank you. I have not reviewed the whole bill.
                                                              I was given a little bit of information this morning in regards to
                                                              that. However, just like Ms. Todt and several of the other people
                                                              said, communication and education and the consistent messaging is
                                                              very key. And I think that raising the awareness to be able to be
                                                              that voice for the small businesses and given that information, I
                                                              think we are at this time where we need to create those base
                                                              standards and create an information—I do not want to say an over-
                                                              load—but be very consistent in how we provide the information to
                                                              our small businesses.
                                                                 And as an SBDC, we have to serve all 82 counties of Mississippi
                                                              and so it is not just rural. It is every aspect. And it does not matter
                                                              if it is a small business, medium-size business, or large business,
                                                              they are still at risk. And I think it is very important and we ap-
                                                              preciate that the government is passing this legislation or is at-
                                                              tempting to in proposing these bills because it is so imperative that
                                                              our companies are prepared for cyber.
                                                                 Mr. GARBARINO. And we feel that since you already have the
                                                              employees and have been coming up with this program where your
                                                              employees, or at least a number of them are trained to address
                                                              these cyber issues with small businesses, especially ones that you
                                                              are helping develop and create and get started up, that this would
                                                              be very helpful.
                                                                 I want to move to Ms. Cornish and Ms. Todt. You talked about,
                                                              in your testimony, Ms. Todt, you talk about doing a tax Credit. Ms.
                                                              Cornish, you run an agency that deals with tax credits. One thing
                                                              I have seen is major corporations and governments can spend a lot
                                                              of money on cybersecurity. Small businesses, they cannot. They




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                                                              cannot hire a dedicated person. And it is not just about best prac-
                                                              tices. You know, okay, making sure that you change your pass-
                                                              word. That is one thing that we have to do and CISA has been
                                                              great with that in coming up with best practices and what busi-
                                                              nesses and small governments should do, local governments should
                                                              do. But there is also a cost of keeping your system upgraded. You
                                                              cannot just buy a good piece, the best piece of equipment today be-
                                                              cause 6 months from now or 3 weeks from now it is going to be
                                                              outdated. That is a heavy cost especially for small businesses. Is
                                                              a tax credit the best way to help offset that cost? What is the best
                                                              way to do this? And Mr. Dufault, you can jump in, too, if you have
                                                              an answer.
                                                                 Ms. CORNISH. For us, it was a great place to start, but cer-
                                                              tainly, I think there needs to be more incentive, financial incentive,
                                                              perhaps I heard some mention of grants, projects to get that off the
                                                              road because, as you mentioned, it does take money to maintain it
                                                              but there is certainly a lot of startup costs that that could help de-
                                                              fray as well.
                                                                 Ms. TODT. Tax incentives are certainly not the only answer. One
                                                              of the things that we were looking at particularly with the pan-
                                                              demic was could you use some portion of the PPP loans that could
                                                              turn into a grant if it were used towards cybersecurity. And so
                                                              looking at the tools available to small businesses for money to
                                                              incentivize them to allocate a percentage towards cybersecurity.
                                                              And I think it is a piece of the pie in all of this and we have just
                                                              got to find those tools that together can help incentivize small busi-
                                                              nesses to be motivated to invest and to understand why they need
                                                              to be, the role that they have and their vulnerabilities.
                                                                 Mr. DUFAULT. I will mention, Congressman, it is a great ques-
                                                              tion and we are supportive of H.R. 4515. When we were preparing
                                                              it did not have an H.R. number yet but happy to see that. And we
                                                              are supportive. We were supportive last Congress, too, of substan-
                                                              tially similar legislation. So tax credit is a great idea. I also do not
                                                              want to underappreciate what our member companies rely on when
                                                              it comes to a software platform. So app stores and operating sys-
                                                              tems and the ways in which they harden those systems and ensure
                                                              that unvetted software is not accessing personal data, not accessing
                                                              device features and things like that, these are baseline practices
                                                              that software platforms use and that our member companies sort
                                                              of rely on at this point to ensure that there is protection from
                                                              threats in the mobile space in particular. And so that is a piece
                                                              that I think we want to make sure is on the record here. And so
                                                              to ensure that the Committee is sort of on the lookout for proposals
                                                              that would make it harder for companies to use those measures.
                                                                 Chairwoman VELÁZQUEZ. The gentleman’s time has expired.
                                                                 Now we recognize the gentlelady from Georgia, Ms. Bourdeaux,
                                                              for 5 minutes.
                                                                 Ms. BOURDEAUX. Thank you so much. And thank you to our
                                                              witnesses for joining us to discuss an issue that really is top of
                                                              mine for many small business owners, and large business owners,
                                                              which is cybersecurity.
                                                                 In my home state of Georgia, we saw what happens when critical
                                                              infrastructure is not secured from cyber attacks when the Colonial
                                                              Pipeline attack left many of my constituents high and dry at the




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                                                              gas pump for several days. But the Colonial Pipeline is just one
                                                              rather extreme result of cyber vulnerability. The Department of
                                                              Homeland Security, Secretary Mayorkas said at a recent event that
                                                              50 to 70 percent of cyber attacks are aimed at small to medium-
                                                              sized companies, costing an estimated $350 million in 2020. And
                                                              this threat is not going anywhere anytime soon. Ransomware at-
                                                              tacks against smaller businesses have increased 300 percent over
                                                              the past year.
                                                                 Listening to some of the testimony and discussions today, it oc-
                                                              curs to me that there are several ways that you can approach this.
                                                              And there are a lot of great ideas out there about how to change
                                                              the behaviors of small businesses, training, you know, all of that
                                                              kind of outreach. And that is very, very important. But one other
                                                              way to approach all of this is to require the software that is sold
                                                              to small businesses or the products that are sold to them to be
                                                              more conscious of security and ways to protect from breaches.
                                                                 Ands o I just wanted to check in with I guess Ms. Todt might
                                                              be a good person to talk on this, are there recommended practices
                                                              for software developers or for people who are selling to small busi-
                                                              nesses to help protect them from cyber attack?
                                                                 Ms. TODT. It is an important question and it is something that
                                                              we have spent a lot of time looking at. So to your point, right now,
                                                              the market does not incentivize security. It prioritizes first to mar-
                                                              ket, convenience, ease of use, before security. As a result, we are
                                                              seeing software go to market that has holes and bugs in it that is
                                                              not being secure. When you look at the research that has been
                                                              done, it is absolutely possible to build secure software but the eco-
                                                              nomic incentives are not there.
                                                                 So I commend what the Biden administration has done in the ex-
                                                              ecutive order, which is to look at software transparency, a software
                                                              bill of materials to understand what goes into it, but as a nation
                                                              and as a government, we have to create. This is where I do think
                                                              regulations and standards around building secure software need to
                                                              be discussed because right now if you look at where the
                                                              vulnerabilities are coming from, often it is because of holes in the
                                                              software. The Kaseya attack most recently was a result of that.
                                                              And we have an opportunity to—we call it secure by design, choose
                                                              your phrase—but the idea is building that safety and security.
                                                              Again, if we use the car analogy, we would not think about build-
                                                              ing a car without an airbag anymore. And we have got to be think-
                                                              ing about safety and security when it comes to software and hard-
                                                              ware development.
                                                                 Ms. BOURDEAUX. Thank you. It is very, very difficult to change
                                                              individual behavior at massive scale to deal with security. It is
                                                              much quicker if we could catch it early on through the product
                                                              itself.
                                                                 Just kind of on that vein, and I do not know, Ms. Todt, maybe
                                                              you would have an answer on this or Ms. Cornish, what has been
                                                              done in terms of the policing side of things? So one of the things
                                                              we see an awful lot of is we have these attacks and then, you
                                                              know, we get out from under it somehow, we deal with the
                                                              ransomware situation, and then what kind of policing capacity do
                                                              we have or do we need to build up in order to bring people who
                                                              do this to justice?




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                                                                 Ms. TODT. This is a huge gap in our defense right now because
                                                              criminal actors are getting away with a lot of attacks. And whether
                                                              it is a simple lone wolf in the United States or it is a nation state,
                                                              but we have to be able to prosecute criminals who are committing
                                                              these types of actions. If you think about Colonial Pipeline again,
                                                              if someone had put a bomb in that pipeline to prevent the gas and
                                                              jet fuel from going to the East Coast, we would have no qualms
                                                              about what to do with that individual. Essentially by shutting
                                                              down—I live in Virginia so I had a similar—we saw the lines a few
                                                              blocks down the road. There was an impact and it was a psycho-
                                                              logical impact because people were afraid. And when we look at
                                                              that type of impact, we have to think about what are the repercus-
                                                              sions for these types of actions? And I think this is something that
                                                              the United States just should not do by itself. This is where we
                                                              would look to cooperate with our likeminded economic partners, our
                                                              allies, to understand what are the boundaries and the lines that
                                                              are being crossed for criminal actors, and what are the con-
                                                              sequences for this type of activity? Because even though we are not
                                                              seeing the immediate devastating effect if we look at solar winds,
                                                              the repercussions continue to cascade. And this is why we have to
                                                              create those boundaries and the definitions around what is a crimi-
                                                              nal act and what are the consequences for that act?
                                                                 Ms. BOURDEAUX. Thank you so much.
                                                                 I yield back the balance of my time.
                                                                 Chairwoman VELÁZQUEZ. The gentlelady yields back.
                                                                 Now we recognize the gentleman from Minnesota, Mr. Stauber.
                                                                 Mr. STAUBER. Thank you, Madam Chair and Ranking Member
                                                              Luetkemeyer for holding this. And to the panelists who spoke with
                                                              us today. Very informative.
                                                                 As we have seen over the last few years, cybercrime is becoming
                                                              more and more common. The cyber attacks affect our small busi-
                                                              nesses both directly and indirectly. Most recently as we talked
                                                              about, the Colonial Pipeline was hacked by the Russians and cre-
                                                              ated a huge gas shortage in the nation. Small businesses that re-
                                                              lied on any sort of transportation or travel for daily operations
                                                              were adversely impacted. While big businesses have the capital to
                                                              proactively protect themselves from cyber attacks, as well as re-
                                                              cover from them, small businesses do not have that same luxury.
                                                                 And so to the panelists, what can the federal government do to
                                                              help small businesses protect themselves from and/or recover from
                                                              cyber attacks? And does this assistance need to look different for
                                                              small businesses with 10 employees versus 100 employees and so
                                                              on?
                                                                 Mr. Dufault, go ahead.
                                                                 Mr. DUFAULT. Congressman, that is a great question. Congress-
                                                              man Garbarino and Congresswoman Houlahan mentioned a bill
                                                              that they just introduced which urged folks to support H.R. 4515,
                                                              which would require the Small Business Administration to develop
                                                              a certification program for SBA employees and then to deploy them
                                                              to SBDCs (small business development centers), and to provide cy-
                                                              bersecurity expertise and counseling for small companies in the
                                                              area that they cover.
                                                                 That is one thing that the federal government can do, and a little
                                                              can go a long way in that respect because a lot of small companies




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                                                              use SBDCs as sort of a clearinghouse for help in a number of dif-
                                                              ferent ways. Now, if you had personnel there that could help with
                                                              cyber readiness but also, as you said, remediating after a breach,
                                                              that would be very helpful and that is something that the federal
                                                              government can do specifically for small companies.
                                                                 Mr. STAUBER. And I think that it is important to get that small
                                                              business back up and running as soon as practicable because the
                                                              days, I mean, you are losing a lot of money each day.
                                                                 If the other two witnesses would like to comment on that ques-
                                                              tion, please?
                                                                 Ms. TODT. Sure. In addition to the piece of legislation that was
                                                              introduced, which just to reiterate, I think really calls upon the re-
                                                              sources of the Small Business Administration by using SBDCs and
                                                              the effectiveness of that. One of the things that we recommend in
                                                              a white paper at the Cyber Readiness Institute earlier this year
                                                              was an opportunity to curate the resources that are out there.
                                                              There are a lot of nonprofits, a lot of organizations that are looking
                                                              to help small businesses. But if you are a small business, and this
                                                              goes to another question, that has been attacked, you often do not
                                                              even now who the first call should be. Is it an IT provider? Is it
                                                              the local police? And just being able to provide a prescriptive road-
                                                              map for small businesses on incident response plans as well as
                                                              what to do when attacked, I think that this is something that
                                                              CISA, in coordination with the SBA, could just provide a resource
                                                              and curate those tools to help small businesses.
                                                                 Mr. STAUBER. Well said.
                                                                 Ma’ am?
                                                                 Ms. CORNISH. I would just add to that, having a documented
                                                              incident plan as mentioned is not often enough. People are in
                                                              panic. They are not taking the proper channels. So supporting
                                                              something or exploring something like we have in Maryland as a
                                                              Federal Cyber SWAT team or, you know, even organizing it maybe
                                                              at the SBDC level to have a response line to support small busi-
                                                              nesses when they are going through a breach, to connect them to
                                                              the different types of resources they need.
                                                                 Mr. STAUBER. Yeah.
                                                                 And my last question, and this is specific to cybersecurity, spe-
                                                              cific. What would you caution the government from doing?
                                                                 Mr. Dufault?
                                                                 Mr. DUFAULT. One thing that comes to mind for us is, I men-
                                                              tioned this a minute ago where a lot of our member companies are
                                                              specifically concerned with security in the mobile space. So what
                                                              measures are we taking to harden our devices and to prevent un-
                                                              wanted software on our mobile devices? Because these mobile de-
                                                              vices now have very sensitive personal information on them.
                                                              Health care information, financial information, and then real-time
                                                              location data. So all of the measures that software platforms take,
                                                              (software platforms like the app stores and the operating systems)
                                                              to ensure that unvetted software and software that has not been
                                                              reviewed for security flaws is not inadvertently downloaded via
                                                              clickbait or some other vector. Those are really important measures
                                                              to be able to take. So I would caution the federal government not
                                                              to overreach on antitrust, for example, because these are compa-
                                                              nies that are larger firms that have a lot of customers and they are




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                                                              sort of in the crosshairs right now when it comes to antitrust.
                                                              There are proposals in House Judiciary that would make it illegal
                                                              to take those measures to prevent access to personal data on anti-
                                                              trust grounds. And we are very concerned with those.
                                                                Mr. STAUBER. Thank you. My time is up. And thank you very
                                                              much, and I appreciate this opportunity.
                                                                Madam Chair, I yield back.
                                                                Chairwoman VELÁZQUEZ. The gentleman yields back.
                                                                The gentlelady from Texas, Ms. Van Duyne, Ranking Member of
                                                              the Subcommittee on Oversight, Investigations, and Regulations, is
                                                              recognized for 5 minutes.
                                                                Ms. VAN DUYNE. Thank you. Thank you much, very much,
                                                              Chairwoman Velázquez and Ranking Member Luetkemeyer.
                                                                Yesterday, the Biden administration announced China was to
                                                              blame for the sweeping cyber attack on Microsoft earlier this year
                                                              that left hundreds of thousands of small businesses vulnerable to
                                                              cyber intrusion. And then just a month ago Russian hackers were
                                                              able to cripple operations at both the world’s largest meat supplier
                                                              and one of the largest pipelines in the United States. In 2021
                                                              alone, cybercrimes could cost $6 trillion, which would make it the
                                                              third largest global economy.
                                                                Cybersecurity, for a number of reasons, is very, very important
                                                              for small businesses, both real and rapidly intensifying as we have
                                                              heard today. It is a new way for our adversaries to wage war. Com-
                                                              panies need to be ready and we must determine the appropriate
                                                              role for the federal government in prepping the businesses that we
                                                              serve as the engine of our economy. And while the need for im-
                                                              proved cybersecurity is clear, adding too many requirements can be
                                                              overly complicated and counterproductive. And one example is the
                                                              DOD’s new cybersecurity assessment framework (CMC). Last
                                                              month, the Oversight Committee, which I serve as the Ranking
                                                              Member, we held a hearing to review this program. And one image
                                                              that just stuck in my mind is the sheer amount of paperwork that
                                                              was needed for a small business to complete just be certified. One
                                                              of the witnesses held up this three-ring binder that I swear took
                                                              him two hands to hold up because it was just so intense. And pret-
                                                              ty much most of their guidance was coming from LinkedIn because
                                                              DOD and SBA simply were not helpful.
                                                                So moving forward, we have to make sure that we have simple
                                                              framework, which is easy to understand, but also , companies need
                                                              to know how they can be secure, who they can turn to for help and
                                                              how to respond when they are attacked.
                                                                I want to thank the witnesses all for being here today, but I also
                                                              want to reiterate my concern that we are discussing such a signifi-
                                                              cant small business issue without a representative from SBA
                                                              present. And if we are going to have a collaborative solution to ad-
                                                              dress this matter, it is crucial that SBA is here to at least dem-
                                                              onstrate their willingness to discuss their plans. And I hope they
                                                              can join us in the future.
                                                                Ms. Nichols, in your experience working with small businesses,
                                                              when they have an issue regarding cybersecurity or they get
                                                              breached, who do they typically turn to for help? Is it the SBA or
                                                              a private partner? And who do you believe they should turn to?
                                                                Ms. NICHOLS. That is a good question.




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                                                                When they get to us, they are really not sure who to talk to.
                                                              They do try to reach to a private industry and to have help with
                                                              that. Because they do not initially think to refer to the government,
                                                              specifically SBA, because they do not know the resources that are
                                                              there and we would like to change that.
                                                                Ms. VAN DUYNE. Okay. That makes a lot of sense.
                                                                In your testimony, you said the average time—and this will still
                                                              be for Ms. Nichols—you said the average time to identify and con-
                                                              tain breaches is around 120 days. I am sorry, 280 days. Can you
                                                              explain why it takes this long and how Congress can help to short-
                                                              en that period?
                                                                Ms. NICHOLS. Well, it has to do with they have to find it and
                                                              they may not be prepared to figure out how to do that so they have
                                                              to hire and it is very expensive. And it is just like any other IT
                                                              issue. You have to rule out everything that is going on. And again,
                                                              I am going to default to this. I am a state director. I do not run
                                                              the department. And it is very challenging because when you deal
                                                              with a small business who knows nothing and they have a data
                                                              breach, that was not what their initial concern is because they are
                                                              delivering a service. They are trying to make money. And so they
                                                              are trying to still stay in business and mitigate that data breach
                                                              and get past that. So that is just going alongside the business. And
                                                              I am looking at this as a business approach. It does take a long
                                                              time because they are not going to shut down while they try to deal
                                                              with this. They are going to try to keep it as far under the table
                                                              as possible and just keep moving forward. And it does take time.
                                                              So it does take time for any other type of disaster.
                                                                Ms. VAN DUYNE. So, no, I was not being critical that it took
                                                              so long. I am asking how can Congress help to shorten that period?
                                                                Ms. NICHOLS. Oh, I do not know. I do not know. Any other sug-
                                                              gestions?
                                                                Ms. VAN DUYNE. Yeah. I was not being critical. This is just
                                                              how long it takes so what can we do to help?
                                                                Mr. Dufault, overall small businesses are unprepared when it
                                                              comes to cybersecurity. A recent report said that 70 percent of
                                                              small businesses are unprepared for a cyber attack and only about
                                                              half are allocating any money towards cybersecurity. With small
                                                              businesses running on such tight margins, especially after a pan-
                                                              demic, how can we make it easier for small businesses to be pre-
                                                              pared without breaking the bank?
                                                                Mr. DUFAULT. It is a great question, Congresswoman. And
                                                              again, I go back to H.R. 4515, which would provide some expertise
                                                              via the Small Business Development Centers for cybersecurity. And
                                                              by creating a certification program inhouse at the SBA, you are
                                                              creating a Federal resource that can be, sort of that can reach a
                                                              lot of small companies via on-the-ground folks that are at the
                                                              SBDCs. And so that would go some distance toward helping ensure
                                                              that folks are aware of the current cyber threats but also the best
                                                              practices that Ms. Todt has referred to on authentication, software
                                                              updates, and just training around social engineering and phishing
                                                              scams. So that is what I would point to.
                                                                Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
                                                                Now we recognize the gentleman from Wisconsin, Mr. Fitzgerald.




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                                                                 Mr. FITZGERALD. Thank you, Madam Chair. Thank you very
                                                              much.
                                                                 I do not want to rehash some of the earlier questions and kind
                                                              of discussions but let me go back to the idea of the cloud and the
                                                              applications associated with it. So maybe, Mr. Dufault, you could
                                                              comment.
                                                                 Obviously, when COVID-19 struck, many of the businesses
                                                              moved to remote work and it seemed like the only way for them
                                                              to kind of survive what was going on. But they did switch up kind
                                                              of their cloud applications at the time. And you know, in some in-
                                                              stances that may have helped them streamline kind of their busi-
                                                              ness practices and they may adopt those permanently now; right?
                                                              But it also increased the security risk is the assumption that is
                                                              being made by some, not all, who think maybe that is not the case.
                                                              But you know, do you share those concerns? And you know, I think
                                                              it is something that small business specifically struggles with be-
                                                              cause of not necessarily having the resources and the personnel
                                                              and the ability to kind of track this on a regular basis. So I just
                                                              wanted you to maybe comment on that.
                                                                 Mr. DUFAULT. Well, thank you for the question, Congressman.
                                                              And it is something that we are concerned about. As more work is
                                                              being done, more education is happening remotely, certainly during
                                                              the pandemic, and as you said, going forward, more commerce I
                                                              think, in general is going to be transacted in the cloud and on
                                                              smart devices. And so it does point to the need as I mentioned ear-
                                                              lier for us to allow software platforms, like the app stores and the
                                                              operating systems to take measures to remove and keep out
                                                              sideloaded software. That is where you click a link accidentally and
                                                              it downloads something onto your devices. Those measures in place
                                                              to keep that software off of the device are really important.
                                                                 I would also point to the fact that, for example, we have got a
                                                              member company in the Minneapolis area, Vemos, that provides re-
                                                              mote services for restaurants. So you can split a check just with
                                                              one click on your handheld device. I think there is an assumption
                                                              that if more of that is happening online and over the Internet, that
                                                              there are more potential attack surfaces, and so I think that obser-
                                                              vation is correct and that that should cause us and your Committee
                                                              to look closely at what the opportunities are to ensure that the
                                                              threats are adequately being dealt with and that small businesses
                                                              are taking precautions.
                                                                 Mr. FITZGERALD. And some of these managed service pro-
                                                              viders, you know, they are going to have to adapt kind of new,
                                                              standard operating procedures when it comes to cyber hygiene;
                                                              right? So I am just wondering, you know, how far behind the 8-ball
                                                              are we on this stuff? Because it came at us so quickly and now try-
                                                              ing to adapt to it, it is probably going to take a while; right? I
                                                              mean, we just do not have the ability to make this kind of do a
                                                              180 like small business is being asked to do.
                                                                 Mr. DUFAULT. Well, one thing that came up earlier in the dis-
                                                              cussion was, you know, are people at greater risk if they are using
                                                              on-premises servers? And that is not necessarily true. And to your
                                                              point that folks are using the Cloud a little bit more, one of the
                                                              aspects I pointed to in my written testimony was the fact that if
                                                              you are using off-premises Cloud services, then you do have access




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                                                              to a faster patches and updates, software updates that can address
                                                              the newest threats and the newest vulnerabilities. Whereas, if you
                                                              have on-premises servers, you are manually installing those up-
                                                              dates and you are trying to keep up with those threats manually
                                                              and on your own. And you also do not have access to sort of the
                                                              real-time updates for indicators of compromise that others are ex-
                                                              periencing that are using the same Cloud service.
                                                                And so from that perspective, we may be in a little bit better of
                                                              a position to the extent that we are relying more on Cloud services
                                                              because we have better access to real-time threat sharing and we
                                                              have better access to real-time updates to software. So that is one
                                                              dynamic that sort of cuts the other way that I wanted to point out.
                                                                Mr. FITZGERALD. Very good. Thanks for being here today. I
                                                              yield back, Madam Chair.
                                                                Chairwoman VELÁZQUEZ. The gentleman yields back.
                                                                Well, thank you again to our witnesses for being here today to
                                                              testify on this critical topic. Your words have highlighted the sig-
                                                              nificant risks that small businesses face without adequate cyberse-
                                                              curity measures. With more entrepreneurs online and more bad ac-
                                                              tors looking for targets, cyber preparedness has never been more
                                                              important. Today’s hearing has made it clear that Congress must
                                                              take an aggressive approach to shield small businesses from cyber
                                                              attacks. It is also vital that federal agencies and the private sector
                                                              continue to collaborate on resources, training, and technical assist-
                                                              ance to understand and reduce small businesses’ cyber
                                                              vulnerabilities.
                                                                I look forward to working with my colleagues on both sides of the
                                                              aisle to make this happen as we consider three cybersecurity bills
                                                              at our markup next week.
                                                                I would ask unanimous consent that Members have 5 legislative
                                                              days to submit statements and supporting materials for the record.
                                                                Without objection, so ordered.
                                                                If there is no further business to come before the Committee, we
                                                              are adjourned. Thank you.
                                                                [Whereupon, at 12:11 p.m., the committee was adjourned.]




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                                                                                                   APPENDIX




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