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What Is CMMC and How Much Will It Cost My Company?

If you’re looking to win and work on Department of Defense contracts, you’ve probably heard of CMMC version 2.0 compliance. But what exactly is CMMC? Why is it so important? And ultimately, how much is it going to cost your company to qualify for these contracts?

Today we’ll cover the basics, go over the costs, and share some tips for managing expenses. We’ll also define some of the common three letter acronyms the DOD loves to use, just to provide clarity and avoid any confusion.

Breaking Down CMMC Into Understandable Terms

CMMC, or the Cybersecurity Maturity Model Certification, is a cybersecurity standard created by the Department of Defense to protect sensitive data within the DIB, the Defense Industrial Base, which is the public and private organization that comprises the DOD contractor network.

In October 2024, the CMMC version 2.0 draft was officially signed into law, making it a formal requirement for any company working with the DOD; essentially, compliance is no longer optional. CMMC compliance is required if you’re working to secure government contracts. All government contracts include FCI, Federal Contract Information, which is sensitive data not intended for public release. A broader classification of sensitive data is CUI, Controlled Unclassified Information. This includes all FCI plus additional information that requires stricter handling and safeguards.

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CMMC 2.0: A Breakdown of the Different Levels

So what does CMMC 2.0 involve? The compliance standard includes three levels:

Level One

Level one covers basic cyber hygiene for smaller contractors with low-risk information. It includes 17 basic technical controls and allows for an organization to self-assess against these controls, producing a score which the organization can publish to SPRS, the Supplier Performance Risk System. This is the system the government uses to rate organizations on their risk of handling contract data.

Level Two

Level two applies to companies handling CUI. This level includes 110 controls in 14 families, which is quite a step up from the previous level. This second level certification is generally what most organizations will need to target for bidding, winning, and serving DOD contracts. Certifying compliance to this level will require an audit by a third party. HRCT has helped many organizations in different industries and of varying sizes prepare for this audit.

Level Three

Level three is for contractors with the most sensitive data, and in addition to the 110 controls, this level requires certification by a DOD employed auditor. Most small and medium businesses will not be required to achieve level three compliance. Each level naturally has different requirements and costs based on the level of protection needed for the sensitivity of the data that they’re handling.

Level one is the most affordable, ranging from $3,000 to $10,000, depending on your current cybersecurity setup. As it is based on a self-assessment, establishing the policies and procedures to meet the 17 controls is a pretty low target from most organizations.

Level two is a bit of a bigger commitment, with costs typically ranging from $20,000 to $100,000. This level includes third party audits and more rigorous security practices. These organizations are actually handling CUI and have to meet each of the 110 controls in the level two compliance target.

Level three is reserved for companies handling highly sensitive information and costs easily exceed $100,000 for custom assessments, specialized technical tools, and intensive security measures—not to mention the preparations of policies and procedures that have to be documented and formalized. These qualifying organizations have to produce evidence to prove they’re following these guidelines with each employee they have.

Costs Associated With Each Level

The compliance process gets complicated quickly, hence the huge jump in cost between each level. Fortunately, most companies will target level two and will be able to manage those costs related to the level two compliance target. But what specific line items contribute to these costs? Here’s a basic breakdown: 

The Initial Assessment

This examination evaluates your current cybersecurity posture and might cost a few thousand dollars. This type of engagement typically produces a POAM, a plan of action and milestones. This is basically a roadmap which establishes who is responsible in the organization for meeting requirements and determining a timeline. Information technology and information security upgrades like firewalls, encryption, and monitoring software can range from $5,000 to $50,000.

Some considerations for these elements include whether to host files and services yourself on your own servers in your own facilities or whether you use a commercial cloud provider or in GCC, the Government Community Cloud, which is a more rigorously controlled cloud hosted operating environment, which meets more security requirements by default. Employee training is essential for all levels of certification, but particularly for higher levels. This training can range from a few hundred to several thousand dollars.

Implementing Tools and
Operational Procedures

Once HRCT performs the initial assessment, we’ll then help create a plan to implement security tools and operational procedures and remediate any of the gaps that we discovered in the plan. Fixing any identified gaps could cost anywhere from $5,000 to $20,000 or more based on your organization size and existing security setup.

Remember: achieving compliance isn’t simply a one-time item you cross off your checklist. It represents a vital part of the organization and requires the implementation of a formal and ongoing security program, including establishing responsibilities for staff roles in the security team, along with documented policies and procedures. Hardware and software require regular maintenance and your team will require regular training to stay secure against constantly evolving threats and malicious actors.

HRCT Is Here to Help

HRCT can help you manage the expenses of becoming compliant with CMMC, whether it’s level one, level two or level three. Here are some tips we’d like to provide: 

  • You can leverage your existing security investments to use the cybersecurity tools you already have, such as user identity and cloud services that you’ve already invested in.
  • You can check for government grants or credits. Some programs offer financial support to offset some of these compliance expenses.
  • Choose a scalable solution. Select tools and licensing that can scale with your business needs, especially if you’re aiming for level one or level two compliance.
  • Hire a CMMC consultant. An expert such as a fractional chief information security officer, or FCISO, can streamline the process and help you avoid overspending by identifying what needs to be in scope for compliance and what can remain out of scope.

HRCT has helped many organizations build out their security program to become compliant and maintain compliance. We look forward to helping you do the same for your business. We can help you assess your budget, look for ways to reduce costs, and stay up to date on evolving requirements.

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