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Ask ten defense contractors what "compliance" means, and you'll probably get ten different answers.
For some, it's Cybersecurity Maturity Model Certification (CMMC). For others, it's Defense Federal Acquisition Regulation Supplement (DFARS), National Institute of Standards and Technology (NIST) 800-171, incident reporting, or protecting Controlled Unclassified Information (CUI).
In reality, it's all of those.
That's what makes defense contractor compliance challenging. Multiple requirements often apply at the same time, and each comes with its own expectations for documentation, reporting, cybersecurity, and ongoing oversight.
This guide explains the key defense contractor compliance requirements, when they apply, and the practical steps organizations can take to stay compliant.
TL;DR
- Defense contractor compliance involves multiple regulations, standards, and certification programs rather than a single requirement.
- FAR, DFARS, NIST 800-171, CMMC, and FedRAMP each play a different role in protecting government information.
- Organizations should identify whether they handle FCI, CDI, or CUI before implementing security requirements.
- A structured compliance program with clear ownership, documentation, and continuous monitoring helps maintain compliance over time.
- MotherBear helps defense contractors centralize documentation, manage remediation, organize evidence, and stay assessment-ready.
What Is Defense Contractor Compliance?
Defense contractor compliance is the process of meeting the contractual, cybersecurity, and regulatory requirements that apply to organizations working with the Department of Defense (DoD).
For many defense contractors, compliance means meeting several overlapping requirements rather than following a single framework or certification.
Main Compliance Frameworks and Requirements
Defense contractor compliance is built on several regulations, standards, and certification programs. Together, they establish the requirements organizations must follow when working with the DoD and other federal agencies.
Federal Acquisition Regulation (FAR)
The Federal Acquisition Regulation establishes the rules that govern how the federal government purchases goods and services.
It applies to virtually all federal contracts and provides the baseline requirements that government contractors must follow throughout the procurement process.
Defense contracts build on FAR through DFARS, which introduces additional defense-specific requirements.
Defense Federal Acquisition Regulation Supplement
The DFARS expands on FAR by introducing additional cybersecurity, cyber incident reporting, and safeguarding requirements for DoD contracts supporting national security.
Many of the cybersecurity obligations defense contractors deal with, including CUI protection and NIST 800-171, stem from DFARS clauses.
Reviewing the clauses included in each contract helps determine which FAR and DFARS requirements apply and what actions your organization needs to take.
NIST 800-171
Developed by the National Institute of Standards and Technology, NIST 800-171 defines the cybersecurity requirements for protecting CUI on nonfederal systems.
It outlines 110 security requirements covering areas such as access control, configuration management, incident response, risk assessment, and security awareness training.
For many defense contractors, implementing NIST 800-171 is a core part of DFARS compliance.
Organizations handling CUI are expected to implement the required security controls, maintain a System Security Plan (SSP), track remediation activities through a Plan of Action and Milestones (POA&M), and regularly review their current security posture.
Cybersecurity Maturity Model Certification
While NIST 800-171 defines many of the cybersecurity requirements for protecting CUI, the Cybersecurity Maturity Model Certification verifies that those requirements have been implemented.
Depending on the contract, organizations may complete a CMMC Level 1 self-assessment, a Level 2 self-assessment, or an independent Level 2 assessment conducted by a Certified Third-Party Assessment Organization (C3PAO).
The required CMMC level depends on the contract and the type of information being handled. Organizations pursuing Level 2 should maintain documentation, evidence, and assessment readiness alongside the required security controls.
Federal Risk and Authorization Management Program (FedRAMP)
The Federal Risk and Authorization Management Program defines the security and authorization process for evaluating cloud service providers supporting the federal government.
While it does not apply to every defense contractor, it becomes relevant when organizations use cloud-based solutions to store, process, or transmit government information.
Defense contractors should verify that any cloud services supporting regulated workloads meet the applicable FedRAMP requirements.
Choosing compliant cloud providers helps reduce compliance risk and supports broader cybersecurity and regulatory compliance efforts.
Protecting Government Information
Most cybersecurity and compliance requirements exist for one reason: protecting government information.
The type of information your organization handles determines which security requirements apply, what documentation is required, and whether additional assessments or certifications may be necessary.
Federal Contract Information (FCI)
Federal Contract Information is information provided by or generated for the federal government as part of a contract that is not intended for public release.
While FCI does not require the same level of protection as CUI, contractors are still expected to safeguard it by implementing the basic security requirements defined in FAR.
Covered Defense Information (CDI)
Covered Defense Information is information that requires protection under DFARS because of its connection to DoD programs, operations, or contracts. Depending on the contract, CDI may include CUI and other types of sensitive defense information.
Organizations handling CDI are often subject to additional cybersecurity obligations, including requirements related to protecting government information, reporting cyber incidents, and implementing the applicable DFARS clauses.
Controlled Unclassified Information
One of the most common types of CDI is Controlled Unclassified Information. CUI is government information that requires safeguarding but is not classified.
It can include technical drawings, engineering data, research, procurement information, and other sensitive information shared as part of DoD contracts.
Organizations that store, process, or transmit CUI are subject to additional cybersecurity requirements. Identifying where CUI resides helps organizations determine which systems, users, and business processes fall within scope.
How to Build a Defense Contractor Compliance Program
Once you've identified the applicable requirements, the next step is building a compliance program that helps your organization achieve compliance and support defense contracting activities. Here are the steps to do it.
1. Assign Compliance Ownership
Every compliance requirement should have a clearly defined owner. Depending on the size of the organization, responsibilities may be assigned to compliance teams or shared among IT, security, legal, and operations teams.
Clear ownership helps maintain security controls, complete remediation activities, and support assessments and internal audits.
2. Develop Security Policies
Security policies define how an organization meets its compliance obligations in practice. They establish consistent processes for areas such as access control, incident response, configuration management, acceptable use, and protecting sensitive information.
Policies should reflect the organization's actual business operations rather than generic templates.
Keeping them accurate, up to date, and aligned with current security practices helps reduce compliance risk and provides clear guidance for employees, auditors, and assessors.
3. Create a System Security Plan
An SSP documents how your organization meets applicable security requirements. It describes the systems within scope, the security controls that have been implemented, and the policies and procedures used to protect government information.
A well-maintained SSP supports assessments, demonstrates compliance, and serves as a central reference for the entire compliance program.
4. Maintain a Plan of Action and Milestones
A POA&M helps organizations track security gaps that have not yet been fully remediated. It documents planned corrective actions, assigns ownership, establishes target completion dates, and monitors progress over time.
Keeping the POA&M up to date helps compliance teams prioritize remediation activities, demonstrate progress during assessments, and reduce the risk of unresolved findings carrying over into future reviews.
5. Organize Documentation and Evidence
Compliance depends on more than implementing security controls. Organizations also need documentation and evidence that demonstrate those controls are operating as intended.
Keeping policies, procedures, assessment artifacts, training records, audit logs, and other compliance documentation in a centralized location makes it easier to support assessments, respond to customer requests, and prove compliance without searching through multiple systems.
Implement and Maintain Defense Contractor Compliance
Defense contractor compliance is an ongoing process. The following best practices help organizations strengthen their security posture, reduce compliance risk, and maintain assessment readiness.
Implement Security Controls
A compliance program should be supported by security controls that are implemented, monitored, and regularly reviewed.
This helps organizations maintain their security posture, reduce compliance risk, and respond more effectively to evolving cyber threats.
Perform a Gap Assessment
A gap assessment compares your current security posture against the applicable security requirements to identify missing or partially implemented controls.
Conducting a gap assessment before your actual assessment or contract award helps organizations prioritize remediation efforts, allocate resources more effectively, and identify significant challenges before they affect compliance.
Implement Security Controls
Once gaps have been identified, organizations should implement the technical and administrative security controls needed to address them.
Common areas include access control, multi-factor authentication, configuration management, system access, data encryption, and incident response.
These controls help protect sensitive data throughout the environment.
Conduct Regular Training
Technology alone cannot maintain compliance. Employees should receive regular cybersecurity and security awareness training so they understand their responsibilities for protecting sensitive information, recognizing cyber threats, and following established security practices.
Monitor Security Controls
Security controls should be reviewed regularly to verify they continue operating as intended.
Continuous monitoring, log reviews, internal audits, and periodic risk assessments help organizations identify issues early and maintain compliance as systems and business operations change.
Manage Vulnerabilities
Regular vulnerability scans help identify weaknesses, malicious software, and other security issues before they become security incidents or data breaches.
Organizations should prioritize remediation based on risk, verify that corrective actions are effective, and update documentation whenever significant changes are made.
Report Cyber Incidents
Defense contractors must be prepared to respond quickly when cyber incidents occur. Effective cyber incident reporting is a contractual obligation under certain DFARS clauses.
When DFARS reporting requirements apply, contractors are generally required to report covered cyber incidents through the Defense Industrial Base Network (DIBNet) within 72 hours of discovery.
Organizations should also preserve affected systems and related data for forensic analysis in accordance with the applicable contract requirements.
Manage Third-Party Compliance
Defense contractor compliance doesn't end with your own organization.
Prime contractors are often responsible for making sure subcontractors, cloud service providers, and other third parties meet applicable contractual and cybersecurity requirements when supporting government contracts.
Subcontractor Flow-Down Requirements
Many DFARS clauses include flow-down requirements, meaning prime contractors must pass specific obligations to subcontractors.
Before sharing CUI or other sensitive information, organizations should verify that subcontractors can meet the applicable security requirements and reporting obligations.
Managed Security Service Providers (MSSPs)
Many organizations rely on MSSPs to support cybersecurity operations, monitoring, and incident response.
While service providers can help strengthen an organization's security posture, responsibility for meeting contractual and regulatory requirements ultimately remains with the contractor.
Cloud Providers and FedRAMP
When CUI is stored, processed, or transmitted in the cloud, organizations should verify that cloud service providers meet the applicable FedRAMP requirements.
Choosing compliant cloud providers helps reduce compliance risk and supports ongoing cybersecurity compliance.
Maintain Compliance
Maintaining compliance requires regular reviews, updated documentation, and continuous monitoring.
CMMC software and NIST 800-171 compliance software can help organizations centralize documentation, manage evidence, track remediation activities, and maintain assessment readiness.
Common Defense Contractor Compliance Challenges
Organizations operating in the defense sector face many of the same compliance challenges:
- Keeping up with changing federal regulations and contract requirements.
- Balancing compliance activities with day-to-day business operations.
- Managing compliance for subcontractors and the broader defense supply chain.
- Responding to evolving cyber threats without disrupting operations.
- Preparing for future contracts with stricter cybersecurity and compliance expectations.
The good news is that most of these challenges can be addressed with a structured, repeatable process. As compliance responsibilities expand, many organizations move from manual processes to dedicated compliance platforms.
Simplify Defense Contractor Compliance With MotherBear
Building a strong defense contractor compliance program requires the right processes and the right tools to support them.
MotherBear helps organizations manage compliance activities, track remediation, organize documentation, maintain evidence, and prepare for assessments from a single platform.
FAQs About Defense Contractor Compliance
What does it mean to be DFARS-compliant?
Being DFARS-compliant means a defense contractor meets the cybersecurity and reporting requirements outlined in the Defense Federal Acquisition Regulation Supplement.
Depending on the contract, this may include implementing security controls based on NIST 800-171, reporting cyber incidents, protecting CUI, and demonstrating compliance with applicable DoD requirements.
What are the DFARS requirements?
DFARS requirements vary by contract but commonly include protecting CUI, implementing NIST 800-171 security controls, reporting cyber incidents within required timeframes, preserving forensic data, and meeting any additional cybersecurity clauses specified by the Department of Defense.
What is the DFARS compliance checklist?
A DFARS compliance checklist typically includes identifying applicable DFARS clauses, implementing required NIST 800-171 security controls, protecting CUI, performing risk assessments, and documenting policies and procedures.
It should also include preparing an SSP, maintaining a POA&M, and establishing processes for cyber incident reporting and ongoing compliance.
Do small businesses need to comply with DFARS and CMMC?
Yes. Small businesses supporting DoD contracts may still be required to comply with FAR, DFARS, NIST 800-171, or CMMC, depending on the contract requirements and the type of information they handle.