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Cybersecurity · Defense contractors

CMMC for small defense subcontractors, without the jargon

Which CMMC level applies to you, where the paused Phase 2 rollout stands, and what to do first if a prime is asking.

FCI means Level 1

CUI usually means Level 2

Start with scope and SPRS

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The short answer

CMMC (Cybersecurity Maturity Model Certification) is the Department of Defense program that checks whether contractors protect government information. As of 2026, a small subcontractor that only handles Federal Contract Information (FCI) needs Level 1: 15 basic safeguards, an annual self-assessment and an annual affirmation in the government’s SPRS system. A subcontractor that handles Controlled Unclassified Information (CUI), such as technical drawings or specifications marked CUI, needs Level 2: the 110 requirements of NIST SP 800-171, assessed either by yourself or by an authorized third party (C3PAO), depending on the contract.

CMMC clauses began appearing in contracts on November 10, 2025. Phase 2, which would have made Level 2 third-party certification a condition of award from November 10, 2026, was suspended on July 13, 2026 while the department reviews the program. Self-assessments, SPRS affirmations and the NIST SP 800-171 obligations in existing DFARS clauses still apply, so if you touch CUI, the work does not change. This is general information; confirm your contract requirements with your prime and counsel.

The three levels

Level 1: Foundational

For FCI only. 15 requirements from FAR 52.204-21, such as limiting system access, using passwords, updating software and protecting against malware. Annual self-assessment, scored met or not met, with no open action items allowed. Annual affirmation in SPRS.

Level 2: Advanced

For CUI. 110 requirements from NIST SP 800-171 Rev. 2. Self-assessment or C3PAO assessment every three years, depending on the contract, with annual affirmations. A limited plan of action (POA&M) is allowed if you score at least 88 of 110, closed within 180 days.

Level 3: Expert

For the most sensitive CUI programs. Level 2 certification plus 24 requirements from NIST SP 800-172, assessed by the government’s DIBCAC. Few small subcontractors will need it.

The level is set by the contract, and primes flow the requirement down to subcontractors that receive FCI or CUI. If a prime sends you drawings marked CUI, you inherit the Level 2 requirement for the systems that handle them.

The timeline as of 2026

  • December 16, 2024. The CMMC program rule (32 CFR Part 170) took effect, setting up the levels and assessment ecosystem.
  • November 10, 2025. The DFARS acquisition rule took effect and Phase 1 began: contracts can require Level 1 or Level 2 self-assessments.
  • July 13, 2026. The Department of War (the Department of Defense) suspended the Phase 2 requirements, which had been scheduled for November 10, 2026, and opened a review of the program. Phase 2 would have allowed contracts to require Level 2 certification by a C3PAO as a condition of award.
  • Later phases. The rule scheduled Phase 3 (Level 3) for November 10, 2027 and full implementation for November 10, 2028. Watch for changes once the review is published.

As of early October 2026, no outcome of the review had been announced. Level 1 and Level 2 self-assessments, SPRS scores and annual affirmations, and DFARS 252.204-7012 with its NIST SP 800-171 requirements remain in effect.

Assessor capacity was limited before the pause, with industry reports describing lead times of several months for C3PAO assessments, and remediation for a business starting from scratch often takes many months before an assessor is booked. Plan backwards from the contracts you want to bid on, and assume some form of third-party assessment may return. Many primes also ask suppliers for their SPRS status well before a bid, so a missing or weak entry can cost you work before any assessment is formally due.

Not sure how far your current setup is from Level 1 or Level 2? Our free Technology Health Assessment takes about 30 minutes of data collection. The next day you get a plain-language report rating your IT operations, cybersecurity, backups and business continuity as controlled, needs attention, significant exposure or unknown, with a short list of next steps in order. It is yours to keep, with no obligation. Book your assessment.

First steps for a small subcontractor

  1. Find out what data you receive. Ask your primes, in writing, whether you handle FCI, CUI or both, and which CMMC level your current and upcoming contracts will specify.
  2. Draw your scope. List every system, person, device and cloud service that stores, processes or sends that data. A smaller scope, for example one enclave for CUI work, makes Level 2 far cheaper than securing the whole company.
  3. Check your cloud services. Under DFARS 252.204-7012, cloud services that store CUI must meet FedRAMP Moderate or equivalent requirements. Ordinary commercial email and file sharing may not qualify for CUI.
  4. Do an honest self-assessment. Score yourself against the 15 Level 1 practices, or the 110 Level 2 requirements using NIST SP 800-171A. Most businesses discover gaps in MFA, logging, encryption and written policies.
  5. Write the System Security Plan. Level 2 requires an SSP describing how each requirement is met. It is the document assessors start with.
  6. Fix the gaps, then affirm. Post your score in SPRS and have a senior official sign the affirmation. Affirmations can carry False Claims Act exposure, so do not overstate.

FCI or CUI: how to tell

This question decides almost everything, and many small shops get it wrong in both directions.

  • Federal Contract Information is information provided by or generated for the government under a contract that is not intended for public release. A purchase order, delivery schedule or contract terms from a DoD prime usually count.
  • Controlled Unclassified Information is information the government has designated as needing protection under law or policy, such as export-controlled technical data or controlled technical drawings. It should be marked, for example with a CUI banner or a distribution statement.
  • Unmarked but sensitive. If you receive drawings or specifications that look controlled but are not marked, ask the prime in writing. Do not guess.
  • Publicly available information, such as a published catalog or a public solicitation, is neither.

Keep the prime’s answer on file. It defines your scope and is the first thing an assessor or a future prime will ask about.

What Level 1 looks like in practice

For a 20-person machine shop or engineering firm handling only FCI, Level 1 is achievable with good basic IT hygiene:

  • Every user has their own login; no shared accounts
  • Access limited to people who need it, and removed the day someone leaves
  • Visitors escorted and logged; physical access controlled
  • Media holding FCI wiped or destroyed before disposal
  • Firewall at the network edge and public systems separated
  • Updates applied promptly and malware protection on every device
  • Files scanned when downloaded or opened

These overlap closely with what our cybersecurity services already cover. Level 2 adds much more: audit logging, incident response, configuration baselines, security awareness training, encryption validated to federal standards and thorough documentation.

Common mistakes

  • Assuming CMMC only applies to primes; it flows down to subcontractors
  • Scoping the whole company when only one team touches CUI
  • Storing CUI in commercial cloud services that do not meet the DFARS requirements
  • Posting a high SPRS score without evidence to back it
  • Waiting for a solicitation before starting; remediation and assessor scheduling take months
  • Treating the SSP as paperwork rather than an accurate description of your systems

JLB USA provides managed IT and security for businesses with roughly 25 to 100 employees and can work alongside an existing IT person. We are not a C3PAO and do not perform certification assessments, but we can help you understand where you stand and do the technical work that gets you ready.

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Questions we hear

Does CMMC apply to small subcontractors?

Yes, if you receive Federal Contract Information or Controlled Unclassified Information under a DoD contract. Primes flow the requirement down, and the contract sets the level.

What CMMC level does a small business need?

Level 1 if you only handle Federal Contract Information. Level 2 if you handle Controlled Unclassified Information. Level 3 is reserved for a small number of high-priority programs.

Is CMMC Phase 2 still starting on November 10, 2026?

No. The Department of War suspended the Phase 2 requirements on July 13, 2026 and opened a review. As of early October 2026 no outcome had been announced. Level 1 and Level 2 self-assessments, SPRS affirmations and DFARS 252.204-7012 still apply.

Can a small business self-assess for CMMC?

Level 1 is always a self-assessment with annual affirmation. Level 2 may be a self-assessment or a C3PAO assessment, depending on the contract, although third-party (C3PAO) requirements are on hold while Phase 2 is suspended. Self-assessment scores are posted in SPRS.

How long does CMMC Level 2 preparation take?

It depends on your starting point and scope. Businesses starting from scratch often need many months of remediation and documentation before an assessment, and assessor availability adds lead time.

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