For Managed Service Providers (MSP) operating in the Defense Industrial Base (DIB), Cybersecurity Maturity Model Certification (CMMC) Level 2 compliance isn’t just an option—it’s an absolute necessity. CMMC Level 2 guidelines are specifically aimed at safeguarding Controlled Unclassified Information (CUI) from increasingly sophisticated cyber threats.
With the adoption of the Cybersecurity Maturity Model Certification (CMMC) and the update within the 32 CFR Ruling, An MSP must ensure not only their own compliance but also their ability to support clients through their certification journeys. The stakes are high—non-compliance can lead to significant contract losses, regulatory penalties, or even reduced credibility with defense customers.
What is the 32 CFR Ruling?
The 32 CFR Ruling, introduced within the broader framework of CMMC, outlines the regulatory path for compliance across the DIB. Here are some key updates relevant to Managed Service Providers (MSPs):
- Role of External Service Providers (ESPs): While classified as ESPs, MSPs themselves are not required to achieve independent certification under this ruling. However, they will be subject to assessments focusing on the specific cybersecurity controls and protections they provide to their clients. MSPs must ensure they are audit-ready and compliant, as failures in their security posture can directly jeopardize their clients.
- Focus on CMMC Level 2: Current requirements align heavily with NIST SP 800-171 Rev.2 standards, ensuring core controls such as access management, encryption, and configuration management are consistently applied.
Learn more about the 32 CFR Ruling here.
How CMMC Level 2 Impacts Managed Service Providers (MSPs)
Certification is No Longer Optional for Managed Service Providers (MSPs)
When serving organizations required to meet CMMC Level 2, MSPs will automatically be within the scope of their clients’ audits. This means that the failure to meet CUI protection requirements will directly impact their clients’ assessments.
Increased Complexity for Multi-Client CMMC Managed Service Providers (MSPs)
For MSPs serving multiple clients in the DIB, navigating varying cyber assessment scopes and their individual compliance journeys is an emerging challenge. MSPs must streamline internal processes to address the administrative and technical complexities of managing multiple CMMC audits.
Market Differentiation
CMMC compliance offers proactive MSPs a competitive edge. Beyond meeting minimum operational standards, achieving and maintaining a high-security posture can position an MSP as a trusted partner for new DoD contractors seeking reliable cybersecurity stewardship.
Challenges Managed Service Providers (MSPs) Will Face
- Overlapping Assessments: Handling assessments for various clients will require operational finesse. The need for clear, organized documentation—such as inheritance matrices—is critical to ensure smooth navigation through multiple audits without redundancy.
- Managing Non-Compliant Partnerships: Subcontractors and partners in a client’s supply chain may fall short on compliance, thus adding a layer of risk for CMMC MSPs managing third-party vendors or CSPs.
- Time-Intensive Preparation: CMMC MSPs must pre-emptively identify gaps in existing policies, systems, or infrastructure. Without a proactive approach, clients’ certifications may be at risk, translating directly into consequences for MSPs.
Preparing for a Successful CMMC Level 2 Assessment as a Managed Service Provider (MSP)
1. Perform a Gap Analysis
Start with a thorough gap analysis of your cybersecurity posture against NIST SP 800-171 Rev. 2 controls. Identify vulnerabilities in areas such as access control, incident response, and data encryption.
2. Develop Robust Policies and Procedures
A successful assessment hinges on well-documented, clearly defined policies. This includes:
- Incident handling procedures
- Training programs for cybersecurity awareness
- Encryption and key management plans
3. Create a System Security Plan and Control Inheritance
For MSPs, inheritance offers an opportunity to reduce redundancies when managing multiple client assessments. By standardizing certain implemented controls, you can cascade compliance benefits across multiple customers.
4. Invest in Compliance Training
Train staff to be audit-ready! This includes educating employees about compliance protocols and preparing leadership for the rigor of assessments. Ensure cybersecurity maintenance checks are habitual and documented effectively.
5. Use Certification as a Marketing Tool
Once compliant, leverage your Level 2 readiness as a core selling point. Proactively communicate your reliability in helping clients meet cybersecurity requirements.
6. Stay Engaged in Ongoing Changes
Keep current with evolving guidelines such as DoD’s updates on 32 CFR and NIST. The cybersecurity ecosystem is dynamic, and staying ahead will safeguard both operational efficiency and client trust.
Axiom Is Here to Help
Not all CMMC Managed Service Providers (MSPs) are ready for the challenges of Level 2—but you don’t have to do it alone. At Axiom, we’ve perfected the roadmap for compliance and have achieved audited success under a C3PAO’s scrutiny.
Here’s what we can do for you:
- Help streamline your CMMC prep process with gap analysis and actionable recommendations.
- Align your inherited security protocols to reduce audit complexities for multi-client MSPs.
- Establish a roadmap for continuous compliance and audit readiness.
Secure your MSP’s success and build trust in the DIB marketplace. Contact us today for a consultation and take the first step toward CMMC Level 2 compliance.