Navigating the Cybersecurity Landscape: Preparing Federal Contractors for CMMC Compliance

Today, the headlines are relentless: ransomware attacks, state-sponsored espionage, AI-powered phishing campaigns. Cyber threats used to feel like someone else’s problem – many still believe breaches are confined to big tech, global banks, or multinational conglomerates. Not anymore.

This is where federal contractors come in.

The Department of Defense (DoD) is under constant attack, and securing its supply chain is a matter of national security. According to the Federal Register, of the DoD’s estimated 221,000+ contractors, roughly 164,000 are small businesses with varying levels of cybersecurity maturity. When even a single contractor in that vast network lacks adequate cybersecurity, it creates a vulnerable entry point into the entire defense supply chain. Multiply that risk across tens of thousands of contractors, and the threat to national security becomes systemic.

For the Defense Industrial Base (DIB), cybersecurity is now a non-negotiable mandate called “CMMC” or the Cybersecurity Maturity Model Certification. This framework requires contractors to prove their cybersecurity maturity and ability to safeguard sensitive or controlled information, or lose revenue from government contracts.
For years, contractors in the DIB supply-chain operated under a model of inherent trust, self-attesting their compliance with cybersecurity requirements imposed by the federal government. However, it soon became clear that trust without verification left critical gaps in the cybersecurity posture of the DIB, leading to the exfiltration of sensitive information crucial to national security. Now there’s CMMC, a framework that signifies the Department of Defense’s shift from “trust” to “trust but verify.”

Why Cybersecurity Is Critical for Federal Contractors

As a CMMC Registered Practitioner Organization (RPO), Abacode supports defense contractors nationwide and we’ve seen one hard truth repeat itself: the cyber battlefield doesn’t just occur on the front lines. It also starts in supply chains, especially in the digital backdoors of federal contractors.

The Department of Defense (DoD) and other federal agencies have become prime targets for persistent and increasingly sophisticated cyberattacks. And more often than not, attackers aren’t going after the agency directly, they’re going after an extensive list of federal contractors, including small-to-mid-sized aerospace manufacturers.

These attackers are after Controlled Unclassified Information (CUI) and Federal Contract Information (FCI). These are two types of data that, while not classified, are crucial to national defense. FCI refers to information provided by or generated by the government under contract, not meant for public release. CUI is a more sensitive category of information that includes technical documentation, weapon system designs, performance reports, and export-controlled information. While not classified, it is information that is meant to be ‘controlled’ in terms of who sees it and who it can be shared with. It’s the kind of data that, in the wrong hands, can dismantle competitive advantage and threaten operational security.

The consequences are critical and measurable if adversaries are to gain access to CUI and FCI. For example:

• Mission execution can be compromised.
• Warfighting capabilities can be delayed or diminished.
• Intellectual property can be exfiltrated and used to leapfrog U.S. innovation.
• America’s technological superiority can begin to erode.

These aren’t hypothetical risks. Earlier this year, Stark Aerospace, a key supplier to the U.S. Missile Defense Agency, Navy Sea Systems Command, Boeing, and General Dynamics, was reportedly breached by the Russian-linked ransomware group INC Ransom. According to Cybernews, the attackers claimed to have exfiltrated 4 TB of sensitive data, including UAV source code, technical schematics, firmware, and supply chain documentation, which are all classified as Controlled Unclassified Information (CUI). The incident not only jeopardized intellectual property and operational readiness but also exposed critical vulnerabilities across the defense supply chain. This is the new reality: adversaries are targeting the aerospace industry at its edges to gain access to data and information from larger players.

Today’s cyber threat landscape is moving at breakneck speed. We’re seeing a dramatic rise in: Generative AI-powered attacks, vishing, deepfake-enabled social engineering, zero-day exploits, and faster breakout times. This is a technical problem as well as a business continuity problem. For federal contractors, non-compliance can mean losing a bid, halting a program, or even being removed from the supply chain altogether.

Understanding the CUI Program and the Rise of CMMC

The federal government recognized over a decade ago that inconsistent information handling across agencies and contractors was a major security liability. To address that, Executive Order 13556, signed in 2010, established the Controlled Unclassified Information (CUI) Program: a government-wide initiative to standardize how sensitive but unclassified information is categorized and protected.

For the Department of Defense, this is enforced through DFARS 252.204-7012, which requires contractors to safeguard Covered Defense Information (CDI), a DoD-specific subset of CUI that includes controlled technical data and export-controlled materials. Contractors must comply with NIST SP 800-171, which outlines 110 security controls across 14 control families specifically designed to protect CUI in non-federal systems and organizations. In higher-risk environments, enhanced protections from NIST SP 800-172 may also apply.

Under the previous self-attestation model, some contractors inflated their scores, mostly due to misunderstanding or to remain eligible for DoD contracts. This created a false sense of cybersecurity compliance across the defense supply chain. To move beyond inconsistent self-attestation, the DoD introduced the Cybersecurity Maturity Model Certification (CMMC) in 2019. This model transforms NIST requirements into a tiered, auditable framework that demands third-party certification for contractors handling CUI.

The DoD published CMMC 2.0 in late 2024, streamlining the model from five to three levels while allowing for more flexibility in self-assessment at Level 1, and third-party assessments for Levels 2 and 3. It aligns more tightly with NIST SP 800-171 for Level 2 and adds enhanced security requirements from NIST SP 800-172 for contractors operating in high-risk environments.

The entity that acts as a central authority for the CMMC framework, The Cyber AB, is a non-profit organization authorized by the DoD to manage the CMMC program. They are focused on accreditation, training and certification, and maintaining standards. The Cyber AB authorizes and accredits CMMC Third Party Assessment Organizations, or C3PAOs to conduct official CMMC assessments – these certified organizations can be found in the CMMC Marketplace on the Cyber AB website.

CMMC 2.0 isn’t just a compliance checkbox, it enables small businesses to continue working with the DoD. The model reinforces trust between the federal government and the defense industrial base and ensures compliance from the top of the supply-chain to the bottom through flow-down requirements. With millions of dollars and mission-critical data on the line, many prime contractors are already starting to prioritize subcontractors and partners who are compliant or on the path to compliance.

Fortunately, the tools and resources available today are better than ever:

• FedRAMP-authorized platforms allow companies to host sensitive workloads in secure, government-verified cloud environments.
• GCC High environments offer secure collaboration across email, file sharing, and identity management, purpose-built for federal compliance.
• CMMC enclaves enable companies to separate CUI/FCI workflows into secure, auditable spaces without overhauling their entire IT ecosystem.

There are a few key components that are central to a successful CMMC compliance program that contractors should be aware of:

1. System Security Plans
2. Plan of Action and Milestones
3. SPRS Score

For Organizations Seeking Certification (OSC)

CMMC compliance is not a one-time task, it’s an ongoing, organization-wide effort that takes time and commitment. Many contractors find the process complex and challenging to manage alone. While some providers offer help during early stages, partnering with experienced professionals who stay involved throughout the entire compliance lifecycle can provide lasting value and support.

Guiding Principles To What Works: 8 Steps to CMMC Compliance and Ongoing Management

1. Define Level

Your goal is to understand the type of information your organization processes. Before you begin constructing your cybersecurity program, you must determine the applicable CMMC Level based on contractual requirements and the type of information being handled. Will you need the walls of a basic fortress to protect FCI (Level 1), or reinforced bastions to guard CUI data that is critical to national security (Level 2-3)?

2. Determine Scope

Mapping your boundary means understanding and visualizing where CUI and FCI flows within your organization. Clearly document and define your organization’s CMMC boundary based on where sensitive information is processed, stored, and transmitted and who needs access to it. An accurate and complete CMMC assessment boundary is essential to your compliance program’s success.

3. Perform Gap Assessment

The goal is to evaluate current security measures in place against the CMMC practices to determine where your organization falls short. This step is critical to understanding both technical and procedural weaknesses.

4. Develop Documentation

Here is where you will build the structural foundations of your compliance program by developing the required documentation, including policies, procedures, a System Security Plan (SSP), and a Plan of Action and Milestones (POA&M).

5. Implement and Remediate

Use the findings from the gap assessment to implement technical, administrative, and physical safeguards and resolve identified deficiencies. Leverage the POA&M to track progress and ensure that all CMMC practices are implemented and that your defenses are secure.

6. Monitor

Implement a continuous monitoring program to assess system health, detect anomalies, and respond to threats on an ongoing basis. Activities such as log management, vulnerability scanning, user access reviews, and incident response testing ensure that controls within your environment remain effective.

7. Certify

Once you’ve addressed all gaps and ensured that all controls have been implemented, engage a CMMC Third-party Assessment Organization (C3PAO) to perform a formal assessment. Upon successful completion, you’ll receive your Level 2 certification which is valid for 3 years.

8. Maintain

CMMC compliance is an ongoing commitment, not a final destination. Maintain compliance through annual internal audits and control reviews and regularly update system documentation. Organizations must re-certify compliance with a C3PAO triennially.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.