When national security interests are at stake “good enough” no longer cuts it. With the rollout of CMMC 2.0, the Department of Defense has made its position clear: if you handle Controlled Unclassified Information (CUI), your eligibility to win federal contracts will depend on your cybersecurity maturity.

By late 2025, CMMC compliance becomes a contractual requirement.  

For more than 220,000 defense contractors, this shift is seismic, and it’s already underway.

Why CMMC Exists

CMMC was created to protect the U.S. defense industrial base (DIB), which faces millions of cyber intrusion attempts daily, many from state-sponsored actors. According to the Department of Defense, these threats are consistent and rising.

In fact, according to the U.S. Government Accountability Office (GAO), cybersecurity threats targeting the DIB are increasing in both frequency and sophistication, with several contractors previously found lacking even basic cyber hygiene.

Even more alarming, a 2023 DoD Office of Inspector General audit revealed that 8 out of 10 contractors reviewed failed to implement all of the required security controls from NIST SP 800-171, controls that CMMC Level 2 now mandates.

That failure is a direct threat to national security and CMMC is the federal response. If you’re handling CUI, you must now prove your house is in order.

Who Needs to Be Compliant?

TLDR; if you handle contracts with the federal government, you need to be CMMC compliant.  

According to DoD data summarized in CMMC-AB projections and Cyber AB sources, and supported in our internal review:

  • 76,598 companies will need CMMC Level 2 certification via third-party audit
  • 139,201 companies currently at Level 1 will likely seek support from compliant partners or upgrade themselves

This includes:

  • Subcontractors at all tiers
  • Software developers, IT service providers, manufacturers, integrators
  • And external vendors who handle CUI or manage protected systems

CMMC applies not only to what your organization does, but also to how securely you do it and who you allow into that process.

The Stakes in 2025

The compliance clock is already ticking.

By Q4 2025, CMMC requirements will be written into DoD contracts. That means:

  • You must have a successful C3PAO-conducted audit to be eligible
  • All 110 controls from NIST SP 800-171 must be implemented and verifiable
  • Delays could mean losing contracts or being blocked from future bids

According to a GAO Report from 2022, over 50% of contractors would be ineligible for DoD contracts today if CMMC Level 2 requirements were enforced immediately.

Why Your MSSP Matters More Than Ever

Many federal contractors are just starting to realize that their provider must match the same level of compliance.

Under CMMC rules, External Service Providers (ESPs), such as MSPs and MSSPs, that store, process, or transmit CUI must be certified to the same level as their clients (CMMC Level 2 Assessment Guide).

Yet, a 2023 report by CISA and the Cyberspace Solarium Commission found that over 70% of small defense contractors are still relying on IT vendors with no formal security certification.

If your MSSP isn’t CMMC-certified:

  • You’ll be required to switch providers
  • Or risk failing your own audit and losing contract eligibility

How Legato Security Can Help

Legato Security is proud to be CMMC Level 2 certified. That means we’ve been through the audit process ourselves and we’re uniquely qualified to support your journey, end to end.

We help clients:

  • Conduct CMMC-aligned gap assessments
  • Implement and monitor all 110 required controls
  • Prepare evidence and documentation for third-party assessments
  • Maintain compliance through managed detection, response, and continuous monitoring

With over 75,000 companies expected to require a Level 2 certified MSSP by 2025, the demand for experienced security partners is growing quickly.

Final Thoughts: This Is a Strategic Moment

Companies that invest now will have the advantage. It’s as simple as that.  

A compliant cybersecurity posture:

  • Keeps you eligible for lucrative contracts
  • Lowers business risk and breach exposure
  • Signals trust and resilience to both government and private-sector partners

But most importantly, it ensures your business isn’t left behind.  

Don’t wait until the deadline is at your doorstep. Let’s talk about where you stand, what you’ll need, and how we can help.

Schedule a CMMC Readiness Consultation with Legato Security

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