20 Key Takeaways from the CMMC Final Rule for SMBs

The U.S. Department of Defense (DoD) has recently finalized the Cybersecurity Maturity Model Certification (CMMC) rule on October 15, 2024, and it’s crucial for small and medium businesses (SMBs) in the defense industrial base to understand how these changes affect them. Cybersecurity is no longer optional if you’re working with the DoD, and the CMMC final rule aims to standardize and strengthen how contractors protect Federal Contract Information (FCI) and Controlled Unclassified Information (CUI).

If you’re a small business working with the defense sector, here are the top 20 key takeaways from the CMMC final rule that you need to know:

Overview of CMMC Final Rule

1. CMMC Certification Levels

The CMMC framework consists of three levels of certification. Each level is designed to reflect the maturity of a company’s cybersecurity practices. Level 1 is the most basic, covering fundamental cybersecurity hygiene practices, while Level 3 requires advanced capabilities. SMBs may be required to achieve different levels based on the type of information they handle.

2. Assessment Types for Each Level

Different levels of CMMC require different assessment approaches. Level 1 can be achieved through a self-assessment, whereas Level 2 may require either a self-assessment or an external third-party audit by a certified assessor known as a C3PAO. Level 3, which involves handling more sensitive information, requires a government-led assessment by the Defense Contract Management Agency (DCMA).

3. Phased Implementation Plan

The implementation of the CMMC requirements will occur in phases over several years, allowing businesses ample time to comply. Here is a breakdown of the phased timeline:

• Phase 1: Initial rollout begins, focusing on the largest contractors and those handling the most sensitive data. During this phase, selected contracts will start including CMMC requirements.
• Phase 2: One year after Phase 1, the requirements expand to include more contractors and subcontractors handling Controlled Unclassified Information (CUI).
• Phase 3: Two years after Phase 2, more stringent enforcement is applied to contracts across the defense supply chain, and CMMC Level 2 and Level 3 requirements become more common.
• Phase 4: Full implementation is expected three years after Phase 3, at which point all DoD contracts will require appropriate CMMC certification for contractors and subcontractors.

This phased approach allows contractors and subcontractors time to achieve compliance without jeopardizing existing contracts. The aim is to gradually increase cybersecurity maturity across the entire defense supply chain.

4. Certification Validity and Annual Affirmation

Once certified, a company’s CMMC status is valid for three years. However, to maintain this status, annual affirmations are required to verify that cybersecurity practices are consistently implemented. This means that achieving CMMC compliance isn’t a one-time effort but requires ongoing vigilance.

5. Plan of Action and Milestones (POA&M)

If not all cybersecurity requirements are met during assessment, companies may be issued a “Conditional Status.” Contractors must achieve a minimum score of 88 out of 110 for Conditional Level 2 status with a Plan of Action and Milestones (POA&M). They must create a POA&M to address any unmet requirements within 180 days. This flexibility gives SMBs an opportunity to continue competing for contracts while working to close any compliance gaps. The POA&M process helps ensure that any identified weaknesses are addressed within a defined timeframe, demonstrating a commitment to achieving full compliance.

6. Requirements for Subcontractors

Prime contractors must ensure that their subcontractors comply with the appropriate CMMC level if they are handling FCI or CUI. This requirement highlights the need for SMBs to communicate closely with partners and subcontractors to ensure everyone in the supply chain is compliant. Failure of a subcontractor to comply could impact the prime contractor’s eligibility, making collaboration and oversight essential.

Managing Third Parties and Service Providers

7. Self-Assessment vs. Third-Party Assessment

Depending on the CMMC level, businesses may need a third-party assessment by a certified assessor, known as a C3PAO. For Level 1 and some Level 2 certifications, self-assessment is possible, which can help reduce costs for smaller businesses that may not be able to afford third-party assessments.

8. Cloud Providers and FedRAMP Requirements

Cloud Service Providers (CSPs) that handle Controlled Unclassified Information (CUI) must meet FedRAMP Moderate or an equivalent level of compliance. This means SMBs using cloud services need to verify that their cloud providers meet these standards to ensure data security. It is essential to work with CSPs that align with CMMC requirements, as any non-compliance could jeopardize the security of sensitive information and your CMMC certification.

9. Using Managed Service Providers (MSPs) and External Service Providers (ESPs)

Many SMBs rely on Managed Service Providers (MSPs) or External Service Providers (ESPs) to manage their IT infrastructure and cybersecurity needs. Under the CMMC framework, it’s important to understand that these providers must also meet the necessary compliance requirements, especially if they are handling FCI or CUI on behalf of your business. MSPs and ESPs that provide services such as data storage, IT security management, or network monitoring must adhere to the same level of cybersecurity standards required by your CMMC level.

When selecting an MSP or ESP, it is crucial to ensure that they are capable of supporting your compliance efforts and that they understand the specific requirements of the CMMC framework. Businesses should have clear agreements in place, detailing the responsibilities of the provider and the compliance measures they will implement. Additionally, organizations should conduct regular reviews and assessments of their MSP or ESP to verify compliance, as any shortcomings on the part of the provider could jeopardize the organization’s own CMMC status.

10. Scoping Information Systems

To comply with CMMC, organizations need to determine which of their systems are within the scope of CMMC requirements. This includes identifying all systems that process, store, or transmit FCI or CUI. Understanding which systems are subject to assessment is crucial for an SMB’s compliance strategy. Proper scoping helps businesses allocate resources efficiently and focus on securing critical information systems.

11. Scoring and Maintaining Compliance

The CMMC scoring methodology evaluates whether security practices are fully implemented, partially implemented, or not implemented. The scoring affects certification, with requirements needing to be “MET” for compliance. It’s crucial for SMBs to understand how their systems score and address deficiencies as soon as possible to maintain eligibility for contracts. The scoring methodology encourages continuous improvement and allows businesses to track progress over time, ensuring they stay ahead of evolving cybersecurity threats.

12. Importance of Incident Response Plans

Developing and implementing an incident response plan is crucial under the CMMC framework. SMBs must be able to detect, respond to, and recover from cyber incidents effectively. Contractors must notify the Contracting Officer within 72 hours of any lapses in information security or changes in CMMC status. Having an incident response plan in place helps mitigate damage during a breach and can be a determining factor in maintaining certification.

Implementing Controls Based on NIST 800-171

13. Employee Training and Awareness

Employee training and awareness programs are essential for maintaining cybersecurity. The CMMC framework emphasizes the need for continuous training to ensure all employees understand their role in protecting sensitive information. Regular training sessions can help reduce human error, which is often a significant cybersecurity vulnerability.

14. Multi-Factor Authentication (MFA)

The implementation of Multi-Factor Authentication (MFA) is a requirement under the CMMC framework. MFA adds an extra layer of security to systems by requiring more than one form of verification to access sensitive information. SMBs must ensure MFA is implemented for all accounts that have access to FCI or CUI.

15. Regular Vulnerability Assessments

Conducting regular vulnerability assessments is a key component of the CMMC requirements. Vulnerability assessments help identify weaknesses in your systems that could be exploited by cyber attackers. SMBs must conduct these assessments regularly to identify and fix vulnerabilities before they can be used in an attack.

16. Configuration Management

Configuration management involves maintaining the security of IT systems throughout their lifecycle. Under CMMC, SMBs must establish and maintain baseline configurations for information systems, as well as implement security configurations that minimize vulnerabilities.

17. Encryption Requirements

Encryption of data at rest and in transit is a critical requirement of the CMMC framework. SMBs must ensure that sensitive data, especially CUI, is encrypted using industry-standard encryption methods to protect it from unauthorized access.

18. Access Control Policies

CMMC requires businesses to implement strict access control policies. This involves ensuring that only authorized individuals have access to systems and information that contain FCI or CUI. SMBs must establish policies that define who can access specific information and under what circumstances.

19. Monitoring and Logging

Monitoring and logging are important for detecting unauthorized activity and ensuring compliance. Under CMMC, businesses must maintain logs of system activity and regularly review them to detect and respond to potential security incidents. Effective monitoring helps identify issues before they escalate into significant security breaches.

20. Physical Security Measures

Physical security is often overlooked in cybersecurity plans, but it is an important aspect of the CMMC framework. SMBs must implement measures to ensure that physical access to systems and data is restricted to authorized personnel. This includes securing facilities, using access control systems, and monitoring physical access points.

Final Thoughts

The Final Rule takes effect on December 16, 2024, with a separate rulemaking process for the associated contract clause. For SMBs in the defense sector, compliance with the CMMC Final Rule is a necessity, not an option. While the new requirements may seem daunting, they are designed to ensure that sensitive information is adequately protected throughout the supply chain. By understanding these 20 key takeaways and planning accordingly, SMBs can take the necessary steps to achieve and maintain compliance while securing their position within the defense industry.

About Bright Defense

Bright Defense can help SMBs in the Defense Industrial Base (DIB) achieve CMMC Level 1 and Level 2 compliance efficiently and effectively. By leveraging compliance automation from Drata and secure Controlled Unclassified Information (CUI) management through PreVeil’s CUI Enclave, Bright Defense simplifies the path to compliance. Drata’s automated compliance platform streamlines the auditing process, ensuring that your organization meets key cybersecurity requirements without excessive manual effort. Meanwhile, PreVeil’s CUI Enclave provides an end-to-end encrypted environment for managing CUI, meeting strict DoD standards.

Take the first step towards ensuring your compliance today. Partner with Bright Defense and benefit from a comprehensive solution that integrates the best of compliance automation and secure information handling. Contact us to learn more about how we can support your CMMC journey.