Does your organization handle cui?
Most defense contractors don’t realize how often they come across CUI in everyday work. In two minutes, learn if your company may already handle CUI.
Executive Brief
CMMC compliance is no longer just a cybersecurity requirement. It’s a prerequisite for doing business with the Department of Defense (DoD), also known as the Department of War.
As the Cybersecurity Maturity Model Certification (CMMC) is phased into contracts, noncompliance can prevent contractors from new awards, delay awards, or remove them from prime contractor supply chains altogether.
Eligibility risk does not begin at assessment. It often starts earlier with inaccurate Supplier Performance Risk System (SPRS) scores, unsupported self-assessments, or incomplete implementation of National Institute of Standards and Technology Special Publication 800-171 (NIST SP 800-171) controls.
Understanding how CMMC noncompliance affects contract eligibility is critical for defense contractors that want to compete and remain viable.
Dig deeper below to see where eligibility is most commonly lost and how to reduce that risk.
How CMMC Ties Directly to Contract Eligibility
CMMC is enforced at the contract level. Once a required CMMC level is included in a solicitation or award, compliance becomes mandatory.
This means:
- Certification is a condition of award
- Noncompliance can disqualify a bid
- Gaps cannot be deferred unless explicitly allowed
Unlike earlier self-attestation models, CMMC requires evidence-backed implementation of security controls. Intent, future plans, or informal assurances are not sufficient.
For contractors handling Controlled Unclassified Information (CUI), this shifts cybersecurity from internal best practice to external eligibility requirement.
Where Contractors Commonly Lose Eligibility
Most eligibility issues stem from misunderstandings, not malicious intent.
Inaccurate or Unsupported SPRS Scores
SPRS scores are often reviewed before certification is required.
Problems arise when:
- Scores are submitted without a current System Security Plan (SSP)
- Control implementation is overstated
- Evidence does not align with scoring
An inflated or outdated SPRS score can flag an organization as high risk and raise False Claims Act concerns.
Assuming Self-Assessment Is Acceptable
CMMC Level 2 self-assessment is the exception, not the rule.
Self-assessment is only allowed when:
- The acquisition is non-prioritized
- The contract explicitly authorizes self-assessment
The DoD anticipates more than 95% of defense companies handling CUI will need a third-party assessment. Contractors that assume otherwise risk immediate ineligibility.
Partial or Incomplete Control Implementation
CMMC requires full implementation of all applicable NIST SP 800-171 controls.
Common gaps include:
- Multi-factor authentication enforcement
- Centralized audit logging and retention
- Role-based access controls
Policies alone do not satisfy assessment objectives. Controls must be implemented, operating, and supported by evidence.
Eligibility Risk Checklist
If you answer “no” or “not sure” to any of the questions below, your contract eligibility may already be at risk.
- Do you know exactly which systems handle Controlled Unclassified Information (CUI) in your environment?
- Is your System Security Plan current and aligned to your actual implementation?
- Can you defend your SPRS score with evidence today?
- Have you confirmed whether your contracts allow Level 2 self-assessment or require a Certified Third-Party Assessment Organization (C3PAO)?
- Are all 110 NIST SP 800-171 controls implemented, not just documented?
- Could you support an assessment request from a prime contractor within 30 days?
- Do you have a defined path and timeline to CMMC Level 2 certification?
ISI Insight: A quick way to determine whether or not a Level 2 (Self) certification will be allowed is by looking at contract awarded to your prime. If your prime has to be Level 2 (C3PAO) certified, a third-party assessment will be required.
Eligibility is not decided at audit time. It is often decided earlier during bid reviews, supply chain screening, and contract flow-downs.
The Role of Prime Contractors in Eligibility Decisions
Prime contractors are under increasing pressure to manage supply chain risk.
As a result, many primes now require subcontractors to demonstrate CMMC readiness before work begins.
This often includes:
- Current SPRS scores
- SSPs aligned to NIST SP 800-171
- Evidence of remediation progress
- Documented CMMC Certificate of Status or date of scheduled assessment
Even if the DoD has not yet required certification, primes may limit subcontractor participation to reduce their own exposure.
CMMC noncompliance can quietly remove contractors from opportunities without formal notice.
Timing Is the Hidden Risk
CMMC readiness is not a short-term effort.
Most organizations require time to:
- Perform a gap assessment
- Scope and segment environments
- Implement technical controls
- Develop defensible documentation
- Prepare for assessment
Waiting until a solicitation is released often means missing the eligibility window. By the time certification is required, preparation time is gone.
How Contractors Can Protect Contract Eligibility
Contractors that stay eligible treat CMMC as a business requirement, not a last-minute compliance task.
Key actions include:
- Confirm what CUI you handle and where it resides
- Validate the CMMC level required for your contracts
- Maintain an accurate and current SSP
- Keep SPRS scores honest and defensible
- Prepare for third-party assessment unless explicitly exempt
CMMC compliance is not about passing an audit. It is about maintaining access to DoD work.
FAQs
Does CMMC noncompliance automatically terminate existing contracts?
Not always. However, noncompliance can prevent contract renewals, block new task orders, and disqualify your organization from recompetes. Eligibility is often evaluated at award and option periods, not just during active performance.
Can a Plan of Action and Milestones (POA&Ms) keep us eligible?
Only if the contract explicitly allows POA&Ms. Even then, POA&Ms do not replace required control implementation and must be tied to documented remediation activities with defined timelines. If a POA&M is allowed, you will be given “Conditional Certification” which is only valid for 180 days.
If CMMC is not in our current contract, do we still need to prepare?
Yes. Many prime contractors already screen subcontractors based on CMMC readiness, even when certification is not yet contractually required. Additionally, these requirements could be added to option years in your contracts.
Can prime contractors waive CMMC requirements for subcontractors?
No. Prime contractors cannot waive DoD-mandated CMMC requirements once they are included or flowed down in a contract.
Does having cybersecurity tools mean we are compliant?
No. Tools can support compliance, but CMMC requires implemented, operating controls supported by policies, procedures, and evidence.
What happens if our SPRS score is outdated or inaccurate?
Inaccurate SPRS scores can raise red flags with the DoD or primes and may create False Claims Act exposure if unsupported by documentation and evidence.
How long does it typically take to become CMMC Level 2 ready?
Most organizations require several months to complete gap assessments, implement controls, update documentation, and prepare for assessment.
What is the safest approach to protect eligibility?
Assume third-party assessment will be required, maintain accurate documentation, and treat CMMC as an ongoing business requirement. Working with an expert partner can help you expedite your compliance journey and stay ahead of the ever-evolving regulations.
