In the defense sector, regulatory compliance is no longer just a box to check—it is the license to operate.
Recently, I had the privilege of hosting an episode of the ISC2 New Jersey Chapter podcast, Unencrypted Chatter, alongside my colleague Wesley Reinhardt, CompassMSP’s CMMC Program Director. Wes lives and breathes compliance, specifically helping clients navigate the labyrinth of ITAR, NIST, and the Cybersecurity Maturity Model Certification (CMMC).
Our conversation cut through the noise regarding the Department of Defense's (DoD) Final Rule. The takeaway is stark: The "wait and see" era is over.
If you are a business leader or IT Director in the Defense Industrial Base (DIB), the timeline has shifted from "eventual" to "imminent." Below, I’ve synthesized the critical takeaways from our discussion, outlining why November 2025 is your new hard stop and how to turn this regulatory burden into a competitive advantage.
The Executive Risk: Why the C-Suite Must Pay Attention
The Scoping Strategy: Don't Boil the Ocean
The Timeline Bottleneck: Why You Must Start Now
Turn Compliance into a Competitive Differentiator
The November 2025 Hard Stop
For years, contractors have self-attested to their compliance with NIST 800-171. Unfortunately, the DoD realized that self-attestation often meant "wishful thinking" rather than actual security.
As Wes explained during the podcast, the game changes officially in November 2025. Starting then, no new DoD contracts or modified task orders on existing contracts will be awarded to organizations handling Controlled Unclassified Information (CUI) unless they have achieved
CMMC Level 2 Certification.
This applies to everyone. Whether you are a prime contractor like Lockheed Martin or a ten-person machine shop making specialized bolts, if you handle CUI, the standard is the standard.
The "Flow Down" Reality
Even if you don’t hold a direct contract with the DoD, you are not immune. Prime contractors are required to ensure their entire supply chain is secure. We are already seeing Primes demanding third-party assessments from their subcontractors before the official DoD mandate kicks in to protect their own contract eligibility.
The Executive Risk: Why the C-Suite Must Pay Attention
One of the most critical points we discussed is the shift in liability. CMMC is not just an IT problem; it is a boardroom risk.
Under the new rules, a senior company official (CEO, COO, etc.) must sign off on the assessment, putting their name on the line to attest that the cybersecurity controls are functional. This opens the door to significant legal exposure under the False Claims Act.
We are seeing a rise in whistleblower suits where employees report their own companies for falsifying their Supplier Performance Risk System (SPRS) scores. If you attest to a perfect score of 110 but are found to be negligent, the consequences go beyond losing a contract—they can include massive fines and punitive damages against the organization.
The Scoping Strategy: Don't Boil the Ocean
A common panic reaction we see is companies trying to secure everything. Wes outlined a much more strategic approach during our talk: Scoping and Enclaves.
If you try to bring your entire enterprise network up to CMMC Level 2 standards, the cost and operational friction can be crippling. Instead, we often recommend an Enclave Solution. This involves creating a segmented, highly secure environment specifically for CUI handling, while leaving the rest of the business network to operate under standard commercial best practices.
The CompassMSP Methodology:
- Discovery: Map the flow of CUI. Where does it enter, where does it live, and who touches it?
- Scoping: Define the boundary. Can we shrink the "blast radius" of compliance?
- Gap Assessment: Compare the current state against the 110 controls of NIST 800-171.
- Remediation: Close the gaps (Policy, Procedure, and Technical Controls).
The Timeline Bottleneck: Why You Must Start Now
If you take nothing else away from this article, let it be this: You cannot pull this off in three months.
Wes highlighted a logistical reality that many leaders overlook. Even if you started your journey today, remediation—writing policies, implementing Multi-Factor Authentication (MFA), setting up change management, and gathering evidence—can take 6 to 12 months.
Once you are ready, you cannot simply walk into an exam. You must schedule an assessment with a C3PAO (Certified Third-Party Assessor Organization). Currently, the waitlists for these assessors are stretching 6 to 8 months.
If you do the math, starting today puts you roughly 18 to 24 months away from certification. With the November 2025 deadline passed, you need to move with a sense of urgency.
Turn Compliance into a Competitive Differentiator
We ended the podcast on a positive note. Yes, this is a burden, but it is also a massive opportunity.
The defense supply chain is going to shrink. Many companies will simply exit the market because they cannot or will not comply. By achieving CMMC Level 2 certification early, you position your firm as a "low-risk" partner to the Primes.
You become the preferred vendor not just because of your product quality, but because your cyber maturity safeguards their contracts. This is how you flip a cost center into a revenue driver. Your compliance becomes a true differentiator!
Watch the Full Conversation
There is so much more nuance to this discussion, including how to handle Plans of Action and Milestones (POAMs) and the specific cultural shifts required to get staff buy-in.
I highly encourage you to watch the full episode here:
Watch the Podcast on YouTube
For a deep dive into the regulatory changes, read our full breakdown:
CMMC Compliance 2025: What’s Changing and When
Frequently Asked Questions About CMMC Compliance
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What is CMMC and why was it created?
The Cybersecurity Maturity Model Certification (CMMC) is a unified standard for implementing cybersecurity across the Defense Industrial Base (DIB). It was created because the DoD found that many contractors were self-attesting to security compliance (NIST 800-171) but failing to actually implement the necessary controls, leaving sensitive government data vulnerable to exfiltration by foreign adversaries.
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When does the CMMC Final Rule go into effect?
The rollout begins in phases, but the critical date for most contractors is November 2025. By this date, CMMC Level 2 certification will be a condition of award for new DoD contracts and new task orders on existing contracts involving Controlled Unclassified Information (CUI).
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Can small businesses get an exemption from CMMC requirements?
No. As Wes noted in the podcast, the requirements are based on the data you handle, not the size of your company. Whether you are a large prime contractor or a small manufacturing shop, if you handle CUI, you must meet the same security standards.
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What is the difference between a Self-Assessment and a C3PAO Assessment?
Level 1 (Federal Contract Information only) allows for self-assessment. However, Level 2 (Controlled Unclassified Information) is bifurcated: a small portion of contracts may allow self-assessment, but the vast majority of contracts involving CUI will require a third-party assessment conducted by an accredited C3PAO.
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What is a POAM in the context of CMMC?
POAM stands for Plan of Action and Milestones. It is a document that outlines how you intend to fix security deficiencies found during an assessment. Under CMMC 2.0, you may be granted a conditional certification if you have a few minor gaps, provided they are placed on a POAM and remediated within 180 days. However, critical controls cannot be POAM-ed; they must be met before assessment.
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What happens if we fail to get certified by the deadline?
If you are not certified by the time a contract requiring CMMC is awarded, you will be ineligible to win that business. Furthermore, Prime contractors may remove you from their supply chain preemptively to protect their own compliance status, leading to a loss of revenue even before the DoD deadline.
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How long does the CMMC certification process take?
For most organizations, the journey from initial gap assessment to final certification takes between 12 to 24 months. This includes the time required for scoping, remediation, evidence gathering (usually 3+ months of logs), and the scheduling lead time for a C3PAO assessment.
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What is the "False Claims Act" risk regarding CMMC?
If a senior company official signs a self-attestation or affirms compliance status that turns out to be false, the company and the individual can be liable under the False Claims Act. This can result in treble damages (three times the government's loss) and significant penalties. The Department of Justice has launched a Civil Cyber-Fraud Initiative specifically targeting this behavior.
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What is CUI?
CUI stands for Controlled Unclassified Information. It is information that the government creates or possesses, or that an entity creates or possesses for or on behalf of the government, that a law, regulation, or government-wide policy requires or permits an agency to handle using safeguarding or dissemination controls. Examples include technical drawings, specifications, and proprietary business information related to defense contracts.
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Why do I need an MSP or Consultant if I have an internal IT team?
CMMC requires specialized governance, risk, and compliance (GRC) knowledge that most generalist IT teams do not possess. An MSP or RPO (Registered Provider Organization) like CompassMSP brings the specific architectural experience—such as building secure enclaves—and the documentation templates required to pass an audit, allowing your internal IT team to focus on day-to-day operations.
