MSPs and CMMC Compliance: What Managed Service Providers Need to Know
f you support Department of Defense contractors, CMMC applies to you too. Managed Service Providers (MSPs) are often treated as External Service Providers (ESPs) under CMMC, and your role can directly affect a client’s certification and contract eligibility.
When CMMC Applies to MSPs
If your MSP stores, processes, or transmits Controlled Unclassified Information (CUI) on behalf of a defense contractor, you must meet CMMC Level 2 requirements for the systems in scope. If you do not handle CUI directly, your controls still matter because they support your client’s CMMC environment.
CMMC scope is driven by what you touch, not your business model.
Key Security Requirements for MSPs
MSPs supporting CMMC environments are commonly assessed on:
Strong access control and least privilege
Multi-factor authentication for all privileged and remote access
Encryption for data in transit and at rest
Centralized logging, monitoring, and alerting
Secure remote management and maintenance practices
Weak MSP controls often become assessment findings for the prime contractor.
Cloud Services and FedRAMP
If your MSP provides cloud services that store or process CUI, those services must meet FedRAMP Moderate (or higher) requirements. Using a non-FedRAMP cloud for CUI is a frequent and costly failure point during assessments.
Preparation Steps for MSPs
To stay eligible and competitive:
Determine whether your services place you in CMMC Level 2 scope
Perform a NIST SP 800-171 gap assessment on relevant systems
Clearly define responsibilities in client contracts and shared responsibility matrices
Document controls that support customer compliance, including access and monitoring
Why This Matters
If an MSP cannot support CMMC requirements, the contractor may be forced to replace them. Many primes are already screening MSPs for CMMC readiness before awarding work.
Early preparation protects your clients and your revenue.
For MSPs serving the defense industrial base, CMMC is not optional. It is a business requirement.