CMMC Small Business Impacts Roundtable – March 2026

What This Roundtable Was

On March 12, 2026, the Department of Defense convened a CMMC Program Small Business Impacts Roundtable. The session brought together defense contractors, compliance practitioners, and small business owners from across the Defense Industrial Base to provide direct input on the financial and operational realities of achieving and sustaining CMMC Level 2 certification.

The conversation was candid. Below is a structured summary of the key themes, real numbers shared during the session, and what small DIB contractors should understand as a result.

Context

CMMC final rules took effect November 10, 2025. Level 2 certification requirements are now appearing in new DoD solicitations. For the tens of thousands of contractors who handle Controlled Unclassified Information (CUI), the clock is running.

$100K+

Typical total implementation cost for smaller organizations

10–12%

Small business clients choosing to exit the defense market rather than comply

8–14 mo

C3PAO booking windows reported by participants as of this March 2026 roundtable

The Cost Burden Is Higher Than Government Estimates

This was the most consistent theme of the session. Participants reported that the actual cost of achieving CMMC Level 2 compliance significantly exceeds what official government estimates have suggested. Figures shared during the discussion included:

$30,000–$70,000	to prepare for a Level 2 assessment (documentation, gap remediation, policy development, staff time)
$50,000–$75,000	for the C3PAO third-party assessment itself
$100,000+	in total implementation costs for smaller organizations
One participant reported spending $1.5 million over several years	to reach and sustain Level 2 across multiple office locations

The debate over what counts as a "CMMC cost" surfaced repeatedly. Some attendees argued that only the cost of the third-party assessment should be attributed to CMMC, noting that many underlying requirements already existed under DFARS 252.204-7012 and NIST SP 800-171 since 2017. Small business owners largely rejected this framing. From their perspective, every dollar spent on infrastructure upgrades, security tooling, SSP documentation, and audit preparation is a direct result of needing to pass certification — and should be counted accordingly.

Practitioner Note

The preparation costs are often the largest line item. Technology upgrades, cloud enclave subscriptions, policy documentation, and the internal staff hours required to prepare an SSP and evidence package can dwarf the C3PAO assessment fee itself. Contractors who underestimate this consistently run into budget problems mid-remediation.

C3PAO Capacity Is a Real Bottleneck

Participants raised serious concerns about assessment capacity. With tens of thousands of organizations expected to require Level 2 certification and fewer than 100 authorized C3PAO assessors currently available, the math creates an obvious problem.

As of this March 2026 roundtable, some participants reported already experiencing booking windows of 8 to 14 months when attempting to schedule assessments. Other reporting from earlier in the year put typical lead times closer to 3 to 6 months, suggesting the window has been widening as Phase 2 approaches rather than holding steady — confirm current availability directly with a C3PAO. For contractors facing contract renewals or new solicitation requirements, this timeline gap could mean losing business before certification is even possible.

The capacity constraint affects not just scheduling but pricing. Limited supply of qualified assessors creates upward price pressure on assessment fees, compounding the cost burden that small businesses are already reporting.

Small Suppliers Are Leaving the Defense Market

Several compliance practitioners at the roundtable reported a measurable rate of small business attrition from the DIB. Estimates shared during the session suggested that roughly 10 to 12 percent of small business clients are choosing to exit the defense market entirely rather than absorb the cost and complexity of CMMC compliance.

This trend has structural consequences for the defense industrial base:

Reduced competition	on defense contracts as the supplier pool narrows
Higher acquisition costs	for the DoD as fewer bidders compete for work
Industry consolidation	benefiting large prime contractors who can absorb compliance overhead more easily
Potential capability gaps	as specialized niche suppliers — the kind that often exist only at the small business level — leave the market

The Core Tension

The government's position is clear: CUI must be protected equally regardless of company size. Adversaries don't attack based on contractor revenue. But applying identical compliance requirements to a one-person shop and a major defense corporation creates an unequal financial burden — and the DIB attrition data is starting to reflect that reality.

Competing Standards Create Multi-Framework Compliance Risk

A less-discussed but significant issue raised at the roundtable involves the divergence between federal agency cybersecurity standards. The DoD's CMMC program is built on NIST SP 800-171 Revision 2. Some civilian agencies, including GSA, have begun adopting Revision 3 of the same standard.

For contractors who hold both DoD and civilian agency contracts — a common situation for small businesses trying to diversify revenue — this creates the prospect of maintaining:

Different documentation sets aligned to different revision requirements
Different incident reporting timelines and procedures
Potentially different assessment frameworks and audit processes

No resolution to this fragmentation was announced at the roundtable. Contractors working across multiple federal agencies should monitor agency-specific requirements closely and build flexibility into their compliance programs.

What Participants Are Asking For

Participants offered a range of proposals to reduce the compliance burden on small businesses without compromising the security objectives of the CMMC program:

Government grants or direct subsidies	to offset certification and implementation costs for qualifying small businesses
Tax credits	for CMMC compliance expenditures, similar to R&D credit structures
Expanded readiness training programs	funded or coordinated through DoD or SBA channels
Clearer subcontractor guidance	— many small businesses operate as primes or subs on the same contracts and need explicit scoping direction
CUI scoping strategies	to help small businesses isolate CUI environments, potentially reducing the scope and therefore the cost of what requires certification

On CUI Scoping

CUI environment scoping is one of the highest-leverage cost reduction strategies available today. If a small business can credibly isolate where CUI flows and is stored, the surface area requiring full CMMC Level 2 controls shrinks — and so does the cost. This is worth examining with a compliance professional before assuming every system in your organization is in scope.

What This Means for Your Organization

The roundtable didn't produce policy changes or new guidance. What it produced was a documented, on-record acknowledgment that the burden is real — and that the DoD is hearing from the DIB about it.

For small defense contractors, the practical takeaways from the session are:

Start now.	C3PAO booking windows of 8–14 months, as reported at this March 2026 roundtable, mean that delaying the decision to pursue certification has real contract eligibility consequences.
Budget honestly.	Plan for total costs — preparation, tooling, documentation, and the assessment itself — not just the audit fee.
Scope carefully.	A qualified gap assessment and CUI scoping exercise before you build your remediation plan can save significant money downstream.
Track both NIST revisions	if you hold multi-agency contracts. Rev 2 and Rev 3 differences are not trivial for documentation purposes.
Know your SPRS score.	Contracting officers can see it. An honest, current score — even an imperfect one — is better than a stale or inflated self-assessment that a C3PAO will contradict.