Navigating the complex world of security compliance frameworks can feel overwhelming, especially for federal contractors. CMMC and FedRAMP are two of the most prominent frameworks designed to secure sensitive data, but figuring out which is right for your organization can be challenging. 

Both frameworks support government cybersecurity initiatives, but they serve different purposes and target specific types of organizations. This blog will explain CMMC and FedRAMP (as well as FedRAMP equivalency) to help you determine which one your organization should pursue. 

What is CMMC? 

CMMC stands for Cybersecurity Maturity Model Certification. Launched by the U.S. Department of Defense, it’s a framework created to protect Controlled Unclassified Information (CUI) or Federal Contract Information (FCI) on unclassified contractor information systems.  

CMMC is designed to validate that defense contractors are meeting the security requirements currently outlined in DFARS 252.204-7012 through third-party validation. 

CMMC establishes three compliance levels, each corresponding to an increasing level of cybersecurity maturity: 

CMMC 2.0 Level 1 (“Foundational”) requirements  

Level 1 contractors handle Federal Contract Information (FCI) but not CUI. One of the more significant changes from CMMC 1.0 to 2.0 is that Level 1 is now a self-assessment only, placing this responsibility on the organization itself. Level 1 includes the same 15 controls outlined in Federal Acquisition Regulation (FAR) 52.204-21. 

CMMC 2.0 Level 2 (“Advanced”) requirements  

Level 2 contractors are those that handle CUI. Processes at this level are maintained and followed, and there is a comprehensive knowledge of cyber assets. The DoD has pared down the 130 practices in the original CMMC Level 3 baseline to the 110 practices outlined in the National Institute of Standards and Technology (NIST) Special Publication 800-171. “Critical” handlers of CUI will need a third-party assessment by a CMMC Third Party Assessment Organization (C3PAO) for CMMC certification every three years. Level 2 processes must be documented and managed to protect CUI.  

CMMC 2.0 Level 3 (“Expert”) requirements  

Level 3 is for organizations with the highest-priority programs with CUI. The processes involved at this level include continuous improvement across the enterprise and defensive responses performed at machine speed. This level will replace what was formally known as CMMC Level 5. Level 3 will add additional requirements pulled from NIST 800-172 in addition to the Level 2 requirements. It is expected that organizations will be required to be assessed by the DoD directly every three years for Level 3 requirements. 

CMMC ensures that contractors in the DoD supply chain can protect defense-related sensitive data from cyber threats. If your company operates in the DIB, compliance with the applicable CMMC level is mandatory. 

Who needs CMMC? 

Does your organization provide goods or services to the Department of Defense? If you handle Federal Contract Information (FCI) or Controlled Unclassified Information (CUI), you’ll need to comply with CMMC requirements.

The 48 CFR rule, which makes CMMC enforceable in DoD contracts, has an effective date of November 10, 2025. This marks the start of Phase 1 of the CMMC rollout, meaning readiness is no longer optional and all new DoD solicitations and contracts now include some level of CMMC requirement.

What is FedRAMP? 

FedRAMP stands for Federal Risk and Authorization Management Program, an initiative launched in 2011 by the U.S. government. Its primary goal is to ensure consistent cloud service security across all federal agencies. FedRAMP provides a standardized approach for assessing, monitoring, and authorizing cloud products and services, eliminating redundant security reviews and boosting operational efficiency. 

To align with FedRAMP requirements, cloud service providers must meet the given FedRAMP control baseline based on what federal data is stored, transmitted, or processed in their cloud product. From there, organizations will need to undergo a rigorous security assessment to obtain an Authorization to Operate (ATO). 

FedRAMP authorization encompasses four types: 

• FedRAMP Tailored for low impact SaaS providers 

• FedRAMP Low for services managing low-impact data 

• FedRAMP Moderate for services handling controlled and unclassified data 

• FedRAMP High for systems managing highly sensitive government data 

FedRAMP applies to all cloud service providers working with federal agencies outside of DoD operations. For CSPs that work with DoD agencies, there is a similar process going through DISA for Authorization with their agencies. 

Who needs FedRAMP? 

If your business offers cloud products or services (like data storage, SaaS platforms, or software hosting) to civilian federal agencies, FedRAMP authorization is a must. Examples of businesses that need FedRAMP include: 

• SaaS companies supplying compliance platforms to federal agencies 

• Cloud storage providers managing federal records 

• Application developers with government contracts 

Sometimes the requirements overlap or co-mingle. Here’s where FedRAMP equivalency comes in. 

What is FedRAMP Equivalency? 

FedRAMP Moderate Equivalency, often referred to as FedRAMP Equivalency, derives from DFARS clause 252.204-7012. It provides a pathway for DoD prime and subcontractors to use cloud service offerings to process, store, and transmit covered defense information. The contract clause reads: 

“If the Contractor intends to use an external cloud service provider to store, process, or transmit any covered defense information in performance of this contract, the Contractor shall require and ensure that the cloud service provider meets security requirements equivalent to those established by the Government for the Federal Risk and Authorization Management Program” 

When the CMMC 32 CFR rule was published, it stated that cloud service providers storing, transmitting, or processing CUI within their cloud environment must meet FedRAMP Moderate or Equivalent standard. 

The DoD released a memo that defines FedRAMP Equivalency. According to this memo, organizations are deemed FedRAMP Moderate Equivalent if they meet all the FedRAMP Moderate Baseline security requirements, get assessed by a 3PAO, and submit a body of evidence proving as such.  

Determining which framework applies to your business 

Does your business require CMMC? 

• Are you a contractor or subcontractor for the DoD? 

• Do you handle Federal Contract Information (FCI) or Controlled Unclassified Information (CUI)? 

• Is your work tied to national security or defense-related data? 

If the answer to any of these questions is “yes,” then CMMC compliance is essential.  

Learn how to successfully prepare for CMMC with our CMMC Checklist.

Does your business require FedRAMP? 

• Do you sell cloud-based solutions to federal government civilian agencies? 

• Does your platform store, process, or transmit government data?  

If so, FedRAMP compliance applies. 

Do you need FedRAMP equivalency? 

• Do you provide a cloud service offering (i.e. SaaS platform) to defense contractors that use it to store, transmit, or process CUI? 

If yes, you are required to have FedRAMP Moderate ATO or Equivalent. If you don’t have or don’t plan to get FedRAMP authorization, then FedRAMP Equivalency will be required. 

Do you need both CMMC and FedRAMP? 

Some organizations will meet the requirements for both CMMC and FedRAMP. There is no reciprocity between the two frameworks, but there are areas of overlap that can lead to efficiencies in the assessment processes. 

How to decide which compliance framework is right for you 

When choosing between CMMC, FedRAMP, or FedRAMP equivalency, think about your: 

• Client base: Are your contracts with the Department of Defense, federal civilian agencies, DoD contractors or some combination of the three? Start here to narrow your focus. 

• Core business model: Does your company operate in cloud technology, manufacturing, or service delivery? Your business activities determine which framework aligns with your operations. 

• Data flow: What types of data do you handle as part of fulfillment of contracts? Where all the data flow within your organization or externally? 

If you’re still unsure which compliance path is right for your business, partnering with experts in cybersecurity frameworks can simplify things. 

The bottom line on CMMC vs. FedRAMP 

Whether you decide on CMMC, FedRAMP, or a combined approach, meeting compliance requirements isn’t just about checking boxes. It’s about building trust, protecting sensitive information, and maintaining operational integrity. Consider your business model, customer base, and future goals to make an informed decision. 

A-LIGN is a top FedRAMP assessor and has completed over 1,000 federal assessments. As a 3PAO and C3PAO, A-LIGN can help your organization with CMMC, FedRAMP, FedRAMP Equivalency and other federal assessments. Contact our team to learn more.