Your Guide to CMMC Level 3 Compliance for Defense Contractors

EXECUTIVE BRIEF

CMMC's Level 3 (Expert) offers the most stringent cybersecurity controls of all the program's maturity levels. However, the DoD estimates that less than 1,000 contractors will need to achieve Level 3 compliance as it is designed for prime contractors and subcontractors who handle particularly sensitive CUI. 

Here is what defense contractors need to know about Level 3 compliance:

• A Level 2 Certificate of Status is a prerequisite to Level 3 certification
• In addition to implementing all 110 controls and 320 objectives of NIST SP 800-171, Level 3 contractors must also implement 24 controls selected from NIST SP 800-172
• Level 3 assessments are conducted by the Defense Industrial Base Cybersecurity Assessment Center (DIBCAC)

Dig deeper and continue learning below! 

If you’re a small to mid-sized defense contractor, your work is more than just business—it’s a matter of national security. Whether you’re developing cutting-edge technology, manufacturing critical components, or simply handling Controlled Unclassified Information (CUI), your cybersecurity posture directly impacts the Department of Defense (DoD) supply chain.

The reality? Foreign adversaries are actively targeting the Defense Industrial Base (DIB). Advanced Persistent Threats (APTs)—the kind of state-sponsored cyberattacks that don’t stop until they’ve breached your systems—are a daily reality. If your information systems aren’t secure, you’re not just putting your business at risk—you’re exposing sensitive information that could compromise military safety, operations, intelligence.

This is why the Cybersecurity Maturity Model Certification (CMMC) exists. It standardizes cybersecurity across DoD contractors to safeguard sensitive data and protect against evolving cyber threats. The CMMC 2.0 models introduced 3 levels of compliance, and Level 3 is the highest there is: it’s the expert level of cybersecurity certification, designed for contractors working on high-risk, mission-critical projects. It requires you to:

✅ Achieve Level 2 certification by implementing and validating adherence to all 110 controls from NIST SP 800-171.

✅ Implement 24 additional controls from NIST SP 800-172 and defend against APTs with advanced risk management, penetration testing, and system security planning.

✅ Undergo a government-led assessment by the Defense Industrial Base Cybersecurity Assessment Center (DIBCAC).

How ISI Can Help

At ISI, we understand what’s at stake. While we don’t conduct CMMC Level 3 assessments, we help DoD contractors like you navigate compliance, strengthen security operations, and prepare for higher-level certification. With our guidance, you can:

• Confidently prepare for Level 2 assessment, required for Level 3 certification
• Anticipate challenges before they become roadblocks
• Develop the necessary documentation, policies, and cybersecurity controls

This blog examines what CMMC Level 3 compliance entails, how it compares to Level 1 and Level 2, and what you need to do to stay ahead of threats—and in the running for the contracts that matter.

Understanding CMMC Level 3 Compliance 

If you work with DoD contracts, you’ve probably heard of the National Institute of Standards and Technology’s Special Publication 800-171 (NIST SP 800-171). This document outlines the cybersecurity requirements for the CMMC framework. It outlines 110 security controls designed to protect CUI when it’s stored or processed on non-federal systems. The DoD introduced these controls because adversaries have been targeting CUI as a backdoor into U.S. military operations, stealing sensitive data about weapons systems, logistics, and emerging defense technologies.

For years, contractors were expected to self-assess their implementation of NIST SP 800-171 under DFARS 252.204-7012 and report their Supplier Performance Risk System (SPRS) scores. But self-attestation left gaps. The CMMC program was created to verify that contractors are actually implementing these controls, not just claiming compliance.

Under CMMC 2.0, CMMC Level 2 is directly aligned with NIST SP 800-171. But CMMC Level 3 raises the stakes. It builds on NIST SP 800-171 and adds 24 additional security practices from NIST SP 800-172. These additional controls are specifically designed to protect against APTs—highly sophisticated, stealthy cyberattacks often backed by nation-state actors.

To meet CMMC Level 3 standards, contractors need to implement advanced security techniques, such as:

• Penetration testing to simulate real-world cyberattacks and expose vulnerabilities before attackers do.
• Enhanced authentication mechanisms to ensure that only authorized users access CUI.
• Stronger access control policies to restrict and monitor who can interact with sensitive systems, using role-based access control (RBAC) and least privilege principles.
• Advanced threat hunting to proactively detect and neutralize APTs before they cause damage.
• Network segmentation to isolate sensitive systems from less secure areas of your network, limiting lateral movement in the event of a breach.
• Zero Trust Architecture (ZTA) to ensure that no user or device is automatically trusted, requiring continuous verification for access.

CMMC Level 3 contractors must undergo a government-led review conducted by the DIBCAC. This means that federal assessors—who have firsthand experience dealing with nation-state cyber threats—evaluate your security posture, incident response readiness, and ability to protect mission-critical data.

But here’s something new: to even be eligible for a Level 3 assessment, you first need to achieve a CMMC Level 2 Certificate of Status—a recently introduced designation from The Cyber AB that confirms your successful completion of a Level 2 assessment. In other words, you can’t jump straight to Level 3. You must first demonstrate that you’ve met the baseline security requirements for CMMC Level 2, proving that your System Security Plan (SSP), security controls, and overall cybersecurity framework are strong enough to build upon.

CMMC Level 3 vs. Level 2 vs. Level 1  

Here’s a quick overview of the major distinctions between CMMC Levels 1, 2, and 3.

Level 1

CMMC Level 1 is for defense contractors who handle Federal Contract Information (FCI) but not CUI. It requires adherence to 17 basic security practices drawn from FAR 52.204-21. Level 1 allows for annual self-assessment rather than audits by a third-party accreditation body. 

Level 2

CMMC Level 2 is for DoD contractors who handle (or are contractually required to be able to handle) CUI. This applies to the vast majority of contractors within the defense industrial base (DIB). Level 2 involves full implementation of the 110 practices and 320 objectives across 14 domains outlined in NIST SP 800-171 and mandates triennial certification by a C3PAO and an annual self-affirmation.

Level 3

CMMC Level 3 is designed for DoD contractors handling highly sensitive information that could impact national security if compromised. It mandates advanced, comprehensive cybersecurity measures focused on APT detection and elevated incident response and recovery mechanisms. A government-led DIBCAC assessment is required every three years for Level 3 certification.

Comparing Security Practices Across Levels 1, 2, and 3

The devil’s in the details. A lot of what makes Level 3 distinct is the way it builds upon and expands particular security measures. Let’s look at those in greater detail:

Preparing for the CMMC Level 3 Assessment  

Achieving CMMC Level 3 certification is no small task. Unlike Levels 1 and 2, CMMC Level 3 demands a full government-led assessment by the DIBCAC. This means your cybersecurity measures must not only be implemented but also proven effective against APTs—the most sophisticated cyber threats targeting DoD contractors today.

Here are the steps to follow to prepare for a Level 3 assessment.

Step 1: Get Your CMMC Level 2 Certificate of Status

Before you can even begin the CMMC Level 3 certification process, you must first obtain a CMMC Level 2 Certificate of Status—a new requirement introduced by The Cyber AB. This certificate proves that your company has already passed a CMMC Level 2 assessment and is fully compliant with NIST SP 800-171.

To obtain a Level 2 Certificate of Status, you must:

• Undergo a CMMC Level 2 assessment by a C3PAO accredited by The Cyber AB.
• Demonstrate full compliance with all 110 security requirements outlined in NIST SP 800-171.
• Achieve a passing score that meets or exceeds the DoD’s security expectations.
• Address any deficiencies noted during the assessment before certification is granted.

CMMC Level 3 builds on the foundation of Level 2, so if you have unresolved compliance issues at Level 2, they will only become bigger obstacles when you move to Level 3, where security requirements are even more stringent.

Getting CMMC Level 2 certification should be your first priority before taking any further steps toward Level 3 compliance. If you’re unsure where to start, visit The Cyber AB’s official website for a list of authorized C3PAOs and more details on the CMMC assessment process. You can find more information about preparing for a CMMC Level 2 assessment here:

• CMMC Level 2: An Expert Guide to Level 2 Requirements

• CMMC Level 2 Assessments: A First-Hand Perspective

Step 2: Conduct a Gap Analysis

A gap analysis will help you compare your existing security controls against CMMC Level 3 requirements and pinpoint weaknesses that need to be addressed.

• Assess your security documentation. Your policies, procedures, and security logs must be up to date and ready for federal scrutiny.
• Determine your Supplier Performance Risk System (SPRS) score. The DoD uses this score to measure how well you comply with NIST SP 800-171 requirements. If your score is low, it’s a red flag that you’re not ready for CMMC Level 3.
• Identify gaps in your security operations. This includes weaknesses in access controls, network segmentation, endpoint protection, and vulnerability management.

Step 3: Develop Your System Security Plan (SSP) and Plan of Action & Milestones (POA&M)

Your System Security Plan (SSP) is the blueprint of your cybersecurity program. It documents how your organization implements security requirements, including:

• What security controls you have in place
• How they are managed and maintained
• Who is responsible for them

A poorly written SSP can sink your CMMC Level 3 assessment before it even starts. Federal assessors will expect clear, detailed documentation demonstrating that your security measures are not only implemented but also effective.

If your gap analysis uncovers deficiencies, you’ll need a Plan of Action & Milestones (POA&M) to outline:

• What security issues need to be fixed
• How you plan to fix them
• A timeline for remediation

Keep in mind that CMMC Level 3 assessments do not allow for open POA&Ms—meaning that any gaps must be fully remediated before certification.

Step 4: Implement Advanced Cybersecurity Measures

Unlike lower CMMC levels, where basic security hygiene may be enough, CMMC Level 3 requires proactive defense strategies to counter nation-state-level threats. This includes:

• Penetration testing to simulate real-world cyberattacks and expose weaknesses before adversaries do.
• Zero Trust Architecture (ZTA) to ensure no user or device is automatically trusted and must be continuously verified.
• Advanced threat hunting to proactively detect and neutralize APTs before they infiltrate your network.
• Network segmentation to isolate sensitive information systems from less secure areas, preventing lateral movement in case of a breach.
• Continuous Security Monitoring (CSM) to detect and respond to security incidents in real time.

These measures go beyond compliance checklists—they require an ongoing investment in cybersecurity personnel, training, and tools. See the complete list of NIST SP 800-172 requirements.

Step 5: Conduct Internal Reviews and Mock Assessments

Before undergoing your official DIBCAC assessment, you need to test your readiness. Conducting internal reviews and mock assessments will help you:

• Identify weak points that may be flagged during the real assessment.
• Verify that security policies and procedures are actually being followed—not just documented.
• Ensure that your cybersecurity team knows how to respond to an audit.

Many companies choose to work with CMMC consultants or Registered Practitioner Organizations (RPOs) to conduct pre-assessments and remediation planning. These experts can simulate a DIBCAC audit, helping you spot potential failures before the real test.

Step 6: Establish a Timeline and Milestones for Certification

Achieving CMMC Level 3 is not something you can tackle overnight. It requires months—sometimes over a year—of preparation. Creating a timeline with clear milestones will help ensure that:

• All security measures are fully implemented before assessment.
• Internal reviews and mock assessments are conducted well in advance.
• Your organization is aligned with assessment scheduling requirements.

Most CMMC Level 3 contractors aim to complete their preparation within 6-12 months, though this timeframe depends on:

• The maturity of your existing cybersecurity program
• The resources available for remediation and documentation
• The complexity of your information systems and security architecture

The bottom line? Start preparing now. If you’re serious about Level 3 certification, you need to be proactive, strategic, and disciplined in your approach to cybersecurity compliance.

Who Needs CMMC Level 3 Compliance?  

Only about 1% of the Defense Industrial Base (DIB)—roughly 600 companies—will need CMMC Level 3 certification. The kinds of businesses that are required to meet Level 3 standards include:

• Prime contractors working on classified projects
• Companies handling highly sensitive CUI
• Organizations supporting national security initiatives
• Entities conducting critical R&D or advanced manufacturing

While subcontractors may not need Level 3 compliance, they must meet the security standards specified in their contracts.

Choosing the Right Security and Compliance Partner  

It’s very difficult for any contractor to meet CMMC Level 3 compliance without external assistance. Selecting a trusted service provider is crucial for success. When looking for a Level 3 compliance partner, you should look for:

✅ Industry Expertise – Deep understanding of CMMC model and DoD compliance

✅ Ongoing Support – Assistance beyond the CMMC certification process

✅ Proven Track Record – Experience helping DoD contractors navigate compliance challenges

Frequently Asked Questions (FAQs)  

Does CMMC Only Apply to DoD Contractors?  

Yes. The CMMC program applies to all DoD contractors and subcontractors handling FCI or CUI. If your company is part of the DIB and works with the DoD—either directly as a prime contractor or indirectly as a subcontractor—you must meet the required CMMC level specified in your contract. However, other federal agencies may adopt a similar cybersecurity framework, FAR CUI, in the future.

Do Subcontractors Need to Be Compliant with CMMC?  

Yes, subcontractors must comply with CMMC, but compliance level depends on contract requirements. Subcontractors handling CUI typically need at least CMMC Level 2. Subcontractors that only handle FCI may only need CMMC Level 1 compliance. The specific CMMC level required will be outlined in the flow-down clauses of the prime contract.

What Happens If You Fail the CMMC Level 3 Assessment?  

If you fail the CMMC Level 3 assessment, you won’t receive certification, meaning you cannot work on DoD contracts requiring Level 3 compliance. The DIBCAC may grant conditional approval, allowing remediation within a set timeframe through a POA&M, but only for minor, non-critical issues—and even then, the DoD has strict limits on POA&Ms at Level 3.

To avoid failure, you should conduct internal reviews, mock assessments, and work with cybersecurity experts before the official DIBCAC assessment. If you fail, you’ll need to correct security gaps and schedule a reassessment, which can be costly and delay contract eligibility.

How Long Does It Take to Prepare for Level 3 Compliance?

Preparing for CMMC Level 3 compliance typically takes 6 to 12 months, but the exact timeline depends on your current cybersecurity maturity, resources, and system complexity. If your company already meets NIST SP 800-171 requirements, the process may be faster, but implementing the additional 24 security controls from NIST SP 800-172 and preparing for a DIBCAC-led assessment can be time-intensive. 

Get Expert Guidance from ISI

Although ISI does not conduct Level 3 assessments, we provide strategic guidance to help contractors achieve the pre-requisite Level 2 certification by:

• Strengthening their security operations
• Implementing effective risk management strategies
• Preparing for CMMC Level 2 and higher compliance requirements

With over 300 years of combined industrial security experience, three Registered Practitioners on our team, and over 180 completed NIST certifications, ISI offers unmatched expertise in managing complex federal regulations. Contact us today to learn more about how we can assist you in achieving and maintaining CMMC compliance.