CMMC Certification Cost Explained: How to Budget for CMMC
EXECUTIVE BRIEF
As the urgency for CMMC compliance increases, contractors are looking for guidance on how to appropriately budget for compliance-related costs. Here is what contractors need to know:
- Implementation and remediation costs will largely depend on your current security posturing, size of your company, and complexity of your system/networks
- Additionally, contractors should budget for the cost of a C3PAO assessment which can also vary due to the aforementioned reasons
- For contractors who are just starting or are completely revamping their compliance posturing, the government estimates the first-year costs to be around $200,000 if handling in-house (salary, software and hardware, assessment fees)
Dig deeper and continue learning below!
The Cybersecurity Maturity Model Certification (CMMC) is a mandatory requirement for Department of Defense (DoD) contractors, with high-level backing from the government. CMMC standardizes cybersecurity practices throughout the defense industrial base for contractors handling Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). The program officially began on December 16, 2024, and is here to stay.
Proper budgeting for CMMC is critical for defense contractors as the rollout of contractual requirements is imminent. The government recently released its first comprehensive cost estimate for achieving NIST 800-171 compliance totaling $175,700 (estimate includes labor hours, hardware, and software).
Working with experienced partners like ISI can help contractors achieve CMMC compliance while potentially saving money, providing predictable outcomes, and gaining a competitive advantage in the marketplace.
What is CMMC?
CMMC is based on the National Institute of Science Technology (NIST) standards that establish security requirements for DoD environments. The Defense Industrial Base follows these guidelines, and CMMC was issued by the DoD to build upon those requirements, standardizing cybersecurity from a model maturity perspective and ensuring proper documentation.
CMMC 2.0 includes three different maturity levels:
- Level 1 | Foundational: For contractors handling FCI, requiring adherence to 17 cybersecurity controls outlined in NIST SP 800-53
- Level 2 | Advanced: For contractors handling CUI, requiring adherence to all 110 controls and 320 objectives outlined in NIST SP 800-171a Rev2
- Level 3 | Expert: Mainly for prime contractors, but also some subcontractors, handling particularly sensitive CUI. Requires a Level 2 certification as well as 24 additional controls from NIST SP 800-172
The CMMC 2.0 program is a simplified and streamlined version of its predecessor, CMMC 1.0. The original CMMC program was developed to provide a verification method to affirm a defense contractor's adherence to DFARS 7012 throughout the defense supply chain. However, there were originally 5 maturity levels requiring different standards. CMMC 2.0 reduces the maturity levels to three and allows for self-assessment for Level 1 contractors and a limited number of Level 2 contractors.
Is CMMC Certification Worth It?
Yes, CMMC certification is worth the investment on a multitude of levels. Here’s why:
- Certification will be required to accept award of new and continue working on current defense contracts
- The cybersecurity practices required are standard best practices to protect your sensitive information and reduce the risk of costly and reputation-damaging cyber attacks
- Mitigates the risk of False Claim lawsuits
- Early adoption can give your business a competitive edge against competitors, late adopters will be poised to be compliant with the upcoming FAR CUI rule
There is no denying that achieving your CMMC Certificate of Status requires an investment. But it’s an investment in yourself that will position your business for future success.
How Long Does CMMC 2.0 Certification Take?
The CMMC certification process typically takes 9-12 months to complete with an expert-managed service provider like ISI.
However, timelines depend on the maturity of your current cybersecurity posture. For example, if migration from a commercial to a government cloud environment is required, it can take over a year to become CMMC-ready.
Budgeting for CMMC
Budgeting for CMMC involves understanding various cost factors including assessment, preparation, and implementation/remediation costs.
Key Cost Factors to Consider
Assessment Costs
Certified 3rd-Party Assessment Organization (C3PAO) audit costs for small- to medium-sized defense contractors typically range from $30,000-$40,000+. However, costs largely depend on factors including:
- Size of the organization
- Complexity of your network and system configuration
- Organization of documents and artifacts
- Total number of assets in scope
For larger, more complicated environments assessment costs can rise to $100,000+.
Infrastructure and Technology Investments
As with many things relating to your CMMC readiness journey, your company size and current cybersecurity posturing have a huge influence on your technology costs.
For small- to medium-sized businesses, the government estimates that the initial cost for necessary hardware and software would be around $27,500, with a recurring cost of $5,000. For larger organizations, the estimated cost is $140,000 in the initial year of implementation and $80,000 in annual recurring costs.
Remediation Costs
Most defense contractors will likely be focusing on remediation efforts compared to implementing a DoD-compliant infrastructure from scratch. Preparation costs for addressing security vulnerabilities and implementing necessary fixes typically range from $15,000-$50,000 for small- to medium-sized businesses.
Employee Training
The CMMC 2.0 final rule requires contractors to provide cybersecurity and CUI best practices training to their employees. The government provides access to online learning modules but your business may need more technical training for your employees, especially if you plan on achieving compliance in-house.
Some common training or certification programs are:
- CMMC Certified Professional certification ($475 first year costs, $250 annual renewal fee)
- CompTIA A+ certification ($506 for first-time test taker)
ISI Insight: Stipends may be available to reduce or cover the cost of training and certifications for veterans.
How Much Does CMMC Compliance Cost?
There are a lot of factors that will determine your overall CMMC compliance costs, including:
- Size of your company
- Current cybersecurity posturing
- Number of employees who work on defense contracts
- Achieving compliance in-house or working with an expert partner
That said, we advise our customers that the first year of implementation, remediation, and a formal C3PAO assessment is like going to cost six figures. We highly defense contractors to budget for more and find a partner like ISI to help reduce costs.
Tips for Cost-Effective CMMC Compliance
Plan Ahead
If you have not started your compliance journey, you’re at risk of being behind. CMMC contractual obligations are already being flowed down to subcontractors and the government is expected to begin the programmatic rollout in mid-2025.
That said, don’t rush through your compliance journey. Take time to plan and get it right the first time around. C3PAOs are largely booked out until July and August, so start building your compliance timeline and budget to achieve certification by the end of this calendar year.
Assume Third-Party Assessment
When the final CMMC 2.0 rule became effective, one of the lingering gray areas was on Level 2 self-assessments. Since then, more guidance has come out surrounding this topic and the truth is contractors seeking Level 2 certification should plan on a C3PAO assessment.
Due to the types of CUI defense contractors handle, a CMMC Level 2 (Self) certification is not going to position your business to bid on the vast majority of defense contracts. Additionally, prime contractors are likely going to flow down Level 2 (C3PAO) requirements, making Level 2 self-assessments practically obsolete.
ISI Insight: If your business handles CUI that falls within a Defense Organizational Index Grouping, a CMMC Level 2 (Self) certification does not apply to you.
Partner with Experts
DoD-specific compliance regulations are complex and ever-evolving. It’s a full-time job that requires a lot of time and attention many defense contractors don’t currently have. Working with an expert partner can help ensure your compliance investment outcomes are more predictable and streamlined.
If you’re considering partnering with an industry expert like ISI, ask the prospective service provider the following questions:
- Do you have a Registered Provider Organization (RPO) certification from the Cyber AB?
- Have you provided completed NIST 800-171 implementation or remediation projects in the past? If so, how many?
- Have they gone through and passed a CMMC Level 2 (C3PAO) audit for their own company? If not, do they plan to and when is it scheduled?
If the prospective partner says yes to all of these questions, you can be assured you’re working with a true partner with the experience and ability to support your compliance journey.
How ISI Defense Can Help You with CMMC Compliance
ISI is committed to providing industry-leading, value-driven solutions to ensure your cybersecurity posture is better today than it was yesterday. Here is what we have done to ensure your confidence heading into a Level 2 assessment:
- Achieved CMMC Level 2 (C3PAO) status, passing along the same, verified tool stack to our customers
- Completed 100+ NIST 800-171 remediation projects for defense contractors
- Certified by the Cyber AB as a Registered Provider Organization (RPO) with several Registered Practitioners (RP) and CMMC Certified Professionals (CCP) on staff
>> Schedule your complimentary CMMC consultation with a trusted advisor here!
