Why CMMC Readiness Is Non?Negotiable for the Defense Industrial Base

Michael Peters

9 hours ago

For organizations in the Defense Industrial Base, CMMC readiness is an immediate mandate to line up security requirements across the digital supply chain. With the DoD’s final rule now in effect, companies must treat compliance as a strategic business imperative. Delaying readiness is risky, if not business-ending, and could result in loss of contracts.

Here, we’re discussing some of the most common barriers to certification… and why they cannot stop you from pursuing compliance.

The Top Three Disruptions That Elevate and Complicate Readiness

Contrary to some misconceptions, the controls behind CMMC aren’t new; they’ve been enforceable since the DFARS 7012 clause became active in 2017. That rule required all DoD contractors handling CUI to implement the 110 controls in NIST SP?800?171. What CMMC adds is independent validation, transforming self?attestation into verified certification.

Despite this, many organizations skipped factoring assessment and implementation costs into contract pricing, assuming non?compliance was a manageable risk. That gamble has now backfired as certification becomes contractually mandatory.

Cost vs. Competitiveness: Missed or deferred implementation budgets have real consequences today. Firms often underbid projects to stay competitive, leaving out the real costs of compliance. But now, those omissions mean either absorbing expense post?award or failing compliance altogether. And spreading implementation investments across multiple contracts still doesn’t absolve you from the need to certify or charge accordingly in your bids.
Government Messaging: Many companies cite confusing federal guidance as a top challenge. Pressure ramps up when rules shift mid?rollout or new timelines are floated across administrations or congressional cycles. Expect further updates to CUI definitions and scoping from upcoming CFR guidance. Clarification is coming, but only after enough disruption has already occurred.
Ambiguity Around CUI Scoping: Almost 50% of companies are still unsure what qualifies as CUI under specific contracts. Though Defense is expected to define CUI scope in each contract, internal definitions are often vague. Contractors must proactively audit their data estate to identify systems handling CUI, including technical specs, security planning documents, and subcontractor data, rather than waiting for definitive guidance.

CMMC Is Now Contractual

With the official program rule published in late 2024 and inclusion in 32 CFR and DFARS underway, CMMC is embedded in governing contract law. Contracts are already beginning to reference CMMC levels, especially Level 2 for CUI handling, making certification a baseline requirement as early as Q3–Q4 2025, with full enforcement expected by Q4 2026.

CMMC Level 1 continues low-risk, annual self-assessment requirements for Federal Contract Information. Levels 2 and 3, by contrast, require third-party assessments and certification through officially recognized C3PAOs or the Defense Industrial Base Cybersecurity Assessment Center.

Why Delayed Readiness Is a Business Risk

Losing Ground in Competitive Bidding: Prime contractors are already conditioning awards on proof of CMMC readiness. If your organization isn’t certified or engaged in the process, you’re at risk of exclusion—not just from future awards, but existing supply chain roles.
Little Room for Error on Assessment: The old “assess first, fix later” mindset won’t cut it. Assessors expect evidence of consistent implementation, not aspirational policies. Failing an assessment may block you from rebidding for months or even over a year, given that there are only a limited number of C3PAOs while over 76,000 suppliers need certification.
Qualified Assessors Are Limited: DoD audit findings noted that some authorized C3PAOs lacked baseline qualifications—leaving organizations vulnerable to inconsistent judgments. The takeaway? Don’t risk leaving remediation until after the assessment. Establish NIST?based control fundamentals first, then engage vetted assessors.
Costly Last-Minute Fixes: Assessment costs typically run between tens of thousands of dollars for most organizations. When you fail and need to remediate under tight deadlines, you often end up paying more in rush fees, emergency solutions, and operational disruption.
Leadership Signals: DoD leadership, including CIO Katie Arrington, has been unwavering. “If you haven’t started getting engaged in CMMC, now is the time to do so. Now the light is flashing red,” she said.. The expectation is clear: organizations were overdue as early as 2024, and excuses are no longer acceptable.

How Organizations Should Respond Now

Conduct Gap Analysis Immediately

Identify where your current posture falls short of the NIST SP?800?171 control set. Understand exactly what systems store, process, or transmit CUI. This is a foundational practice for certification.

Create a Phased, Realistic Plan

Implement the plan in phases to minimize disruption. Focus first on critical controls like MFA, encryption, auditing/logging, and access controls. Spread cost and effort across performance periods and multiple contracts to minimize budget shock.

Start Evidence Collection Early

To ensure a smooth certification, begin collecting documentation, policies, training records, and operational evidence well before scheduling your formal assessment.

Book Your C3PAO

C3PAO slots are fully booked months out. For most DIB companies, working with a qualified readiness partner can streamline remediation, evidence gathering, and scheduling. Early engagement pays off—both in terms of cost savings and smoother audit outcomes.

Embed Governance and Audit Trails into Security Controls

Certification is about having governance that backs up practice. Audit trails, version control, executive affirmation,s and accountability structures are as important as technical controls.

CMMC Readiness Means Business Continuity

The message is clear: if your company wants to stay in the Defense Industrial Base, CMMC readiness is not optional. Non-compliance risks include exclusion from contracts, legal exposure, financial penalties, and reputational damage.

To learn more about how Lazarus Alliance can help, contact us.

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