CMMC Returns! Do You Know the Impact to your Small- to Mid-sized Business? 

The enactment of 32 CFR Part 170, which formally establishes Cybersecurity Maturity Model Certification (CMMC) 2.0, will have a significant impact on medium and small businesses in sectors like healthcare, financial services, manufacturing, and others that must comply to remain eligible for government contracts, particularly with the Department of Defense (DoD). Below is an exploration of the key implications, challenges, and potential opportunities these businesses will face under the new regulations.

 

Overview of CMMC 2.0

CMMC’s root are imbedded in the National Institute of Science and Technology’s (NIST) Special Publication 800-171 (NIST SP 800-171), which defines the requirements in handling sensitive data, such as not just personal data (e.g., personal health information (PHI)), but ‘sensitive’ or ‘protected’ data (e.g., system design specifications).

 

CMMC 2.0 is a cybersecurity standard designed to safeguard controlled unclassified information (CUI) within the supply chain (i.e., third party vendors) of federal contractors, especially those doing business with the DoD. The regulation introduces a three-tiered framework of certification levels, depending on the sensitivity of the information a business handles:

 

 

CMMC certification will be a mandatory prerequisite for businesses bidding on DoD contracts.

 

Here are seven (7) things you should consider…

 

Impact on Medium and Small Businesses

1. Financial Burden

 

Pro 

Investing in cybersecurity can reduce the long-term risks and costs of cyber breaches.



Con

Small businesses with tight margins may struggle to absorb these costs, potentially making them less competitive compared to larger firms with more robust IT budgets.

 

2. Administrative and Operational Strain

 

Pro

Becoming CMMC 2.0 compliant could increase operational resilience and lead to improved cybersecurity practices overall.

 

Con

The diversion of resources could slow growth, product development, and innovation, limiting competitiveness.

 

 

3. Disruption of Supply Chain Relationships

 

Pro

Third Party compliance creates an incentive for businesses across industries to raise their cybersecurity standards.

 

Con

 It places an additional burden on smaller businesses to vet and ensure the compliance of all partners, which could slow down contracting processes.

 

4. Potential for Market Exclusion


Pro

For compliant businesses, there could be a reduction in competition as non-compliant companies are excluded, leading to more opportunities.

 

Con

 Smaller businesses that cannot afford to comply may be forced out of the federal contracting space altogether.



5. Long-Term Growth Opportunities

 

Pro

 CMMC compliance could become a differentiator in the marketplace, potentially leading to new business opportunities beyond government contracts.


Con

The certification process may take time, and smaller businesses may struggle to achieve compliance quickly enough to capitalize on immediate opportunities.

 


6. Technological Modernization and Cyber Resilience

 

Pro

 Maturing Cybersecurity enhancements may protect businesses from cyberattacks, data breaches, and ransomware incidents, which can be financially and reputationally devastating.


Con

The upfront costs and technical expertise required to achieve this modernization may be prohibitive, especially for firms without robust IT teams.

 

 

7. Liability and Legal Considerations

 

Pro

 Guideline clarity provided by CMMC 2.0 reduce ambiguity about compliance expectations.


Con

The risk of penalties for non-compliance or failure to maintain standards adds another layer of liability and could discourage small firms from seeking contracts.


 

Conclusion: We can Help…

While 32 CFR Part 170 and CMMC 2.0 both present small- and medium-sized businesses with considerable financial and operational challenges, the long-term benefits of compliance, including enhanced and maturing cybersecurity, increased market opportunities, and potential protection from cyber threats, are substantial.

 

However, for some businesses, especially smaller firms with limited resources, the burden of compliance may prove overwhelming, potentially pushing them out of government contracting opportunities unless adequate financial or technical support is provided. As CMMC 2.0 becomes an ingrained industry benchmark, those businesses that can adapt will likely emerge more resilient and competitive.

 

We can help: CR Advisory is well-versed in the history and practices of CMMC and complying with its tenets. How can we serve you?



For additional guidance, please feel free to reach out.


Thank You!


Paul Kriebel

Managing Director, Cybersecurity

paul.kriebel@cradvise.com





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