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Raz Rafaeli
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What Government Contractors Need to Know About NIST, DFARS Password Reqs

Organizations that fail to comply with these rules can get hit with backbreaking fines and class-action lawsuits.

Government contracts can be very attractive for organizations of any size. Just look at the fierce competition between large tech companies to win the bid for the Department of Defense's (DoD) JEDI project, earmarked at over $10 billion. 

Every organization that engages in work with a government agency must conform to a set of security standards and regulations. Key among them are rules set by the National Institute of Science and Technology (NIST), a body that sets standards for different areas of information processing, including identification, authentication, information storage and processing, and more. 

Organizations that want to work with the DoD — as well as any organization that handles this data on their behalf — must also comply with the Defense Federal Acquisition Regulation Supplement (DFARS), a set of standards that apply to civilian and defense agencies across the US.

Organizations that fail to comply with these rules, or suffer security incidents that result from poor compliance, can get hit with backbreaking fines and class-action lawsuits capable of driving them out of business.

The Balance Between Convenience and Security
For years, security experts have advised using long, complex passwords composed of lower- and-uppercase letters, digits, and symbols (requiring users to type strings like !V4Dv$hJUF2g%J on a daily basis) to avoid falling victim to brute-force attacks. Moreover, users are instructed to choose unique passwords for each account and change those passwords every few months.  

In reality though, complex passwords are hard to remember. The cognitive load is so great that most users don't bother and end up finding workarounds such as storing their passwords in plaintext computer documents or reusing them across different accounts.

It was for these reasons that NIST relaxed some of its rules surrounding password structure. It deemed complex passwords and periodic changes nonessential. Instead, NIST advised passwords be between 8 and 64 characters and changes be enforced in the case of a suspected breach. Before accepting new passwords, organizations were also tasked with checking them against available lists of compromised passwords, such as those on the popular website Have I Been Pwned?

NIST's guidelines show that password complexity has already reached its limits. Our computers become faster and more powerful every year, inevitably putting more effective weapons in the hands of hackers.

The Problem of Password Storage and Management
Once organizations address the issue of password complexity problems, they must deal with a greater problem: where and how to store passwords. Passwords must be hashed before storing them on company servers. In fact, plaintext passwords are even worse than simply constructed passwords. If breached, plaintext passwords can give hackers access to all the accounts an organization handles, whereas a breached simple password can give way to the accounts of just one user.

Today, most organizations store hashed passwords — that is, passwords that are converted into scrambled representations of themselves. But hashing alone is not enough. Organizations must also control employee access to those passwords and make sure unauthorized personnel can't extract user account passwords. As several security incidents have shown, mishandling of user credentials happens even with firm credential-handling policies. Plaintext password storage by Facebook, for example, reportedly made hundreds of millions of user passwords searchable to employees of the social media giant. 

Another challenge organizations face is detecting and blocking malicious attempts to access accounts. When the only thing protecting sensitive user data is a password, hackers can break into targeted accounts by staging brute-force or credential-stuffing attacks. Organizations must implement safeguards that detect and block multiple failed attempts to access an account. When they don't, things can get ugly.

The Mediocrity of Multifactor Authentication
Clearly, passwords alone are not enough to secure user identities. That's why many organizations implement multifactor authentication (MFA). In a nutshell, MFA verifies user identity by requiring them to provide something they know (for example, a password), and something they have (such as a mobile app or a security key) or something they are (for example, a biometric scan). 

DFARS certifies certain types of MFA, including certificates that are securely stored on an endpoint (such as using the keychain storage, TPM, or TEE). The key must also be strongly protected against unauthorized disclosure and only accessible to the relevant software components. Finally, organizations must make sure they prevent the propagation of keys across multiple devices or minimize instances if it is indeed necessary.

MFA adoption has hit its own hurdles too, though. Many users have issues with entering passwords every time they want to access their accounts. The added friction of entering an additional one-time passcode or producing a physical key in the login process is often off-putting, pushing them to disable MFA altogether if they have the option.

Gearing Up for Government Contracts
The ultimate goal of CISOs and IT security teams is to maximize security while keeping high accessibility and ease-of-use for employees. When adding the need to comply with strict cybersecurity and privacy regulations, this can become even harder to achieve, and certainly more costly. This conflict between convenience and security is perhaps best exemplified by the challenge of user authentication, and particularly large-scale password management. Luckily, various solutions today provide better security, easier compliance, and higher user satisfaction on all digital assets, and help organizations stay prepared for any business circumstance.

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Raz Rafaeli, CEO and Co-Founder at Secret Double Octopus, is a results-driven business executive with more than 25 years of technology and leadership experience in the software, security, semiconductor, and telecom industries. Previously, Raz was the CEO of MiniFrame and ... View Full Bio

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