CMMC Cost Calculator: Realistic Budgets for Levels 1-3, C3PAO Fees, and ROI for Small DIB Suppliers
CMMC Cost Calculator: Realistic Budgets for Levels 1–3, C3PAO Fees, and ROI for Small DIB Suppliers
“WE’LL LOSE THE CONTRACT IF WE MISS THIS”
The COO was staring at a color‑coded spreadsheet: 110 controls, three quotes from C3PAOs, and a rough total north of six figures. The prime had just made it clear—no CMMC Level 2, no renewal. IT argued the numbers were inflated; finance thought they were low. No one agreed on what CMMC would actually cost, or when it might start paying back.
If that scene feels familiar, this article is for you. Using what DoD, Cyber‑AB, and leading advisors have already published, we’ll turn CMMC into a quantifiable business case: realistic budgets for Levels 1–3, how C3PAO fees fit in, and how small suppliers can model ROI instead of guessing.
What you’ll learn
- The real cost drivers for CMMC Levels 1, 2, and 3 (beyond “the audit fee”)
- Typical budget ranges for small and mid‑sized DIB suppliers, mapped to phases
- How C3PAO assessment pricing usually works, and what you can negotiate
- A practical way to calculate CMMC ROI in terms of contract value and risk reduction
- Scenario budgets (lean vs. robust) you can adapt to your own environment
- The counter‑intuitive budgeting mistake that derails many small contractors
Understanding CMMC Cost Drivers by Level
The cost curve is not linear. Level 1 is mostly governance and basic IT hygiene; Level 2 is a security transformation; Level 3 adds advanced monitoring and SOC‑grade capabilities. The bulk of spend is preparation and operations, not the assessment fee itself.
At a high level:
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Level 1 (FCI only)
- 15 basic safeguards from FAR 52.204‑21
- Annual self‑assessment and affirmation in SPRS
- For small suppliers, this is typically incremental: policies, some access control clean‑up, basic logging. Many can absorb it into existing IT budgets with modest consulting or tool uplift.
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Level 2 (CUI)
- All 110 NIST SP 800‑171 controls across 14 domains
- Annual self‑assessment or triennial C3PAO assessment, depending on contract risk
- This is where costs spike: CUI scoping, MFA everywhere it matters, EDR/SIEM, vulnerability management, secure email/file services, and a real SSP/POA&M cycle.
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Level 3 (high‑risk CUI/APT exposure)
- Level 2 + 24 NIST SP 800‑172 enhancements (e.g., threat hunting, SOC, pen testing)
- Triennial DIBCAC assessment only
- Budgets here start to resemble a small agency SOC: 24/7 monitoring, advanced analytics, disciplined incident and threat‑intel processes.
Key Takeaway
CMMC spend is dominated by standing up and running NIST 800‑171/172 controls over three years—identity, endpoints, logging, training, and secure cloud—not by the one‑time C3PAO invoice.
Building a Bottom‑Up Budget for Small DIB Suppliers
The most reliable way to budget is to mirror the lifecycle the DoD and Cyber‑AB describe: Assess → Remediate → Operate → Re‑assess. For a small Level 2 supplier, typical ranges often look like this (three‑year view, excluding internal salaries):
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1. Readiness and Gap Assessment
- Independent gap analysis + roadmap: roughly $5k–$40k, depending on scope and depth
- Output: initial SSP draft, POA&M, and an estimated SPRS score
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2. Remediation & Tooling (Capex / one‑time‑heavy)
- CUI enclave design, network segmentation, secure email/file services
- MFA, EDR/XDR, basic SIEM/logging, secure backup, vulnerability scanning
- For a small shop starting from minimal controls, advisors frequently cite $20k–$150k+ for this lift, with cloud migrations (e.g., GCC High or GovCloud) adding tens of thousands more if required.
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3. Advisory & Implementation Support
- RPO‑led projects to implement policies, procedures, and technical controls
- Often $10k–$40k spread over several months
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4. Assessment Costs
- Level 1: primarily internal time; some firms pay a few thousand for an external sanity‑check
- Level 2 C3PAO: commonly tens of thousands for a small environment; public examples and DoD analysis frames a multi‑year cost that includes prep + assessment well into six figures
- Level 3: higher again due to DIBCAC prep and the cost of getting the environment up to NIST 800‑172 expectations
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5. Continuous Monitoring & Upkeep
- MSSP/SOC services, vulnerability management, policy maintenance, refresher training
- Often $5k–$30k per year for a small supplier, not including in‑house staff time
Mini‑Checklist: Level 2 Budget Line Items
- Gap assessment and SPRS scoring
- CUI enclave or segmentation project
- MFA, EDR/XDR, SIEM/logging, secure backup
- Policy, SSP, and procedure development
- C3PAO assessment (if required by contracts)
- Ongoing monitoring / MSSP services
- Training and annual self‑assessment effort
A simple but effective step is to attach three‑year numbers to each bucket. CMMC is a rolling program; treating it as a one‑year project guarantees under‑budgeting.
What C3PAO Assessments Really Cost (and How to Reduce It)
The C3PAO invoice is the most visible line item, but it is not the largest. Still, it matters—especially for small suppliers. Publicly discussed ranges for a small Level 2 environment typically fall somewhere around the mid‑five figures for a full certification engagement, with the DoD’s own regulatory analysis embedding a three‑year Level‑2 cost per small entity that includes assessment and preparation in the low‑to‑mid six figures when internal labor is counted.
Key drivers of C3PAO fees:
- Scope complexity: One well‑defined enclave vs. a flat network with CUI everywhere
- Evidence maturity: Organized SSP/POA&M and mapped artifacts vs. last‑minute scrambling
- Control implementation quality: Clean, consistent configurations vs. one‑off exceptions
- Travel and logistics: On‑site days, multiple locations, or classified facilities
You can’t haggle away the work, but you can control the effort the C3PAO must expend.
Pro Tip
Use the Level 2 Assessment Guide and NIST 800‑171A to run an internal “mock audit” before you schedule your C3PAO. Every gap you find and fix yourself is billable time you don’t have to buy from the assessor.
Practical ways to reduce assessment cost and risk:
- Narrow the scope via a CUI enclave so the C3PAO isn’t assessing your whole enterprise
- Standardize evidence: one repository, one naming convention, mapped to each assessment objective
- Align with their expectations: most C3PAOs live in the Cyber‑AB marketplace; many publish prep checklists—use them
For Level 3, costs and stakes both rise: DIBCAC runs the assessment, and you must already hold a Final Level 2 C3PAO certification for the same scope. Budget not only for external assessment prep but for SOC capabilities and threat‑informed testing.
Calculating ROI: When CMMC Starts Paying for Itself
ROI for CMMC has three primary components: revenue protection, revenue enablement, and risk reduction. Unlike a pure cost‑savings project, you’re buying access and resilience.
A simple, defensible ROI model:
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Revenue at risk
- Identify DoD and flow‑down contracts that will require CMMC Level 2/3 in their next cycle.
- Sum the expected revenue across the three‑year certification window.
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Revenue upside
- Estimate conservative additional revenue you can only pursue once certified (e.g., new IDIQs or prime subcontracts).
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Program cost
- Add three‑year external spend: tools, assessments, consulting, managed services.
- Add internal labor where you can reasonably estimate it (project management, engineering time, compliance).
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Risk reduction value (qualitative and semi‑quantitative)
- Use breach benchmarking (cost per incident, downtime, recovery effort) as a sanity check: even a modest reduction in likelihood or impact can be worth more than the CMMC program costs.
A worked example (small Level 2 supplier):
- DoD revenue at risk over 3 years: $9M
- New opportunities you’d realistically bid on once certified: $3M
- Three‑year CMMC program cost (external only): $300k
Even before you try to quantify risk reduction:
- ROI (revenue side) ≈ (9M + 3M – 300k) / 300k ≈ 38x
Now sanity‑check with risk:
- One serious incident avoided over that period (IP theft, extended outage) could easily cost low‑ to mid‑seven figures. CMMC won’t eliminate risk, but it appreciably reduces it—and gives you evidence of due diligence if things still go wrong.
Key Takeaway
For most small DIB suppliers, one preserved or won contract dwarfs the three‑year CMMC cost. The real question is not “Is it ROI‑positive?” but “What’s our downside if we’re not ready when the clause shows up?”
Practical Budget Scenarios for Small and Mid‑Sized Contractors
To move from theory to planning, it helps to frame a few archetypal scenarios. Adjust the numbers for your scale, but keep the structure.
Scenario 1: 25‑Person Engineering Boutique, Level 1 Only
- Data type: FCI only, no CUI
- Environment: SaaS‑heavy, commercial cloud, single office + remote staff
Indicative three‑year external costs:
- Policy pack, basic training content, light consulting: $5k–$15k
- Annual self‑assessments: mostly internal time
For many such firms, Level 1 can be handled with standard IT best practice plus some governance uplift.
Scenario 2: 40‑Person Manufacturer, Moving to Level 2 for CUI
- Data type: CUI in drawings, ERP, and secure file exchange with primes
- Environment: On‑prem shop floor + Office 365, limited security tooling today
Preliminary three‑year external budget:
- Gap assessment + roadmap: $10k–$30k
- CUI enclave (segmented network, hardened file server or GCC High tenant): $30k–$80k
- MFA, EDR, centralized logging, vulnerability management: $20k–$70k
- Policy/SSP/POA&M consulting: $15k–$40k
- Level 2 C3PAO assessment and prep support: $40k–$80k
- Continuous monitoring / MSSP (basic): $10k–$25k per year
Total external spend can land in the low‑ to mid‑six figures over three years. Internal time to manage projects and operate controls is often of similar magnitude.
Scenario 3: 200‑Person Defense Software Firm Targeting Level 3
- Data type: high‑risk CUI and Covered Defense Information
- Environment: Hybrid cloud, CI/CD pipelines, existing SOC but not yet mapped to NIST 800‑172
Indicative external budget elements:
- Multiple in‑depth gap assessments (800‑171 + 800‑172): $50k+
- SOC maturity upgrades and 24/7 coverage: significant—often the largest recurring line item
- Threat‑hunting, red‑teaming, and pen‑testing activities
- Level 2 C3PAO + Level 3 DIBCAC prep
Here, you’re aligning with APT‑caliber defenses. Budgets frequently run into high six or seven figures over a three‑year cycle, but so do the supported programs.
Pro Tip
For small and mid‑size suppliers, CUI enclave strategies (isolated networks/tenants for CUI) can reduce Level 2 scope—and therefore cost—by tens of percent compared to “make everything Level 2.”
The Counter-Intuitive Lesson Most People Miss
Most organizations over‑index on the assessment fee and under‑index on time. The DoD’s phased rollout tempts suppliers to “wait until the clause shows up” and then scramble. That nearly always increases both cost and risk.
Why?
- Consulting and C3PAO capacity tightens as enforcement dates approach. Late movers pay more and get fewer scheduling options.
- Rushed remediation is expensive remediation: standing up MFA, SIEM, and a CUI enclave under deadline pressure leads to sub‑optimal design and high rework.
- Internal fatigue: trying to compress a multi‑month change program into a single quarter overloads staff and undermines adoption.
The counter‑intuitive move is to start spending earlier, in smaller, planned tranches:
- Year 1: scoping, gap analysis, highest‑impact fixes (identity, logging)
- Year 2: CUI enclave, documentation maturity, mock audit
- Year 3: official assessment and fine‑tuning, using most of the budget on polishing, not firefighting
Financially, you end up at roughly the same three‑year spend. Operationally and psychologically, it’s a different world: less overtime, better designs, fewer surprises in front of a C3PAO or DIBCAC team—and a real chance to use CMMC as a catalyst to modernize your environment instead of a grudging bolt‑on.
Key Terms mini-glossary
- CMMC – The Cybersecurity Maturity Model Certification is a DoD program that verifies DIB contractors implement specific cybersecurity controls for FCI and CUI.
- FCI (Federal Contract Information) – Non‑public information provided by or generated for the government under a contract, requiring at least CMMC Level 1 safeguards.
- CUI (Controlled Unclassified Information) – Unclassified information requiring safeguarding per law or policy, driving CMMC Level 2 or 3 requirements.
- NIST SP 800‑171 – A NIST publication defining 110 security requirements for protecting CUI in non‑federal systems, forming the basis of CMMC Level 2.
- NIST SP 800‑172 – Enhanced security requirements that build on 800‑171 to counter advanced persistent threats, underpinning CMMC Level 3.
- SSP (System Security Plan) – A formal document describing the system boundary, implemented controls, and how NIST/CMMC requirements are met.
- POA&M (Plan of Action and Milestones) – A tracked list of deficiencies, planned remediation actions, owners, and dates, subject to strict closure timelines under CMMC 2.0.
- C3PAO (Certified Third‑Party Assessment Organization) – A Cyber‑AB‑authorized organization allowed to perform Level 2 CMMC certification assessments.
- DIBCAC – The Defense Industrial Base Cybersecurity Assessment Center, which conducts Level 3 and some Level 2 assessments on behalf of DoD.
- SPRS (Supplier Performance Risk System) – The DoD system where contractors submit NIST/CMMC scores and annual affirmations.
FAQ
Q1: Is CMMC really an additional cost, or just enforcing what DFARS already required?
For many organizations it is both. DFARS has required NIST 800‑171 implementation for years, but enforcement was weak. CMMC adds verification and structured assessments, which surface gaps that were previously ignored—so the spend becomes explicit even if the obligations are not entirely new.
Q2: How much should a very small shop (under 20 people) budget for Level 2?
It depends heavily on current maturity and CUI scope. Broadly, many small suppliers end up in the low six‑figure external spend range over three years for Level 2: gap analysis, essential tools (MFA, EDR, logging), documentation help, and a C3PAO assessment if required. Internal labor is additional.
Q3: Can we “start at Level 3” if our program is highly sensitive?
No. CMMC is cumulative. Level 3 requires you already hold Final Level 2 (C3PAO) status for the same scope. You must first implement and verify all 110 800‑171 requirements before the 24 800‑172 enhancements are assessed.
Q4: Are POA&Ms a way to defer expensive controls indefinitely?
No. CMMC 2.0 permits POA&Ms in limited circumstances and with closure deadlines (on the order of 180 days) and minimum score thresholds. They are short‑term risk management tools, not a substitute for implementation.
Q5: Do we have to certify the entire company at the same level?
Not necessarily. CMMC supports enclave‑based scoping. You can segment networks and systems so that only the environment handling CUI must meet Level 2 or 3, while the rest of the enterprise remains at Level 1 or outside scope, if data flows and contracts allow.
Q6: How often will we be reassessed?
Certification cycles are three years, but you must perform annual self‑assessments/affirmations and maintain controls continuously. Non‑trivial changes in your environment or incidents may trigger earlier reviews.
Conclusion
The spreadsheet that started this article—controls in one tab, costs in another—captures the anxiety many small DIB suppliers feel about CMMC. But when you decompose the problem, three truths emerge:
- Most of the money goes into becoming a better‑secured organization, not into paying an assessor. Those investments—identity, logging, segmentation, training—have payoffs well beyond compliance.
- Budgeting is far more accurate when you mirror the lifecycle DoD has defined: assess, remediate, operate, and re‑assess. When you map each phase to realistic cost ranges and time, the fog lifts.
- For any supplier with meaningful DoD revenue, the ROI story is usually compelling: one saved or won contract can exceed the three‑year CMMC program cost by an order of magnitude, even before you price in avoided incidents.
If you treat CMMC as a rushed, last‑minute hurdle, it will feel like a tax. If you treat it as a multi‑year security and business modernization program—with scoped enclaves, phased spend, and a clear ROI model—it becomes an asset: a concrete signal to primes and the DoD that you are a reliable, resilient partner in the defense supply chain.
