Veterans: CMMC 2.0 Simplification for 2026 DoD Contracts

Veteran-Owned Businesses (VOBs) face a significant hurdle in securing Department of Defense (DoD) contracts: the Cybersecurity Maturity Model Certification (CMMC). While designed to bolster supply chain security, its initial complexity and cost have often priced out smaller, agile VOBs, creating an unintended barrier to entry for businesses that often bring invaluable innovation and dedication. The promise of CMMC simplification aims to rectify this, but how effectively is it working for those who served?

The Initial Wall: What Went Wrong with CMMC 1.0

The initial rollout of CMMC, often referred to as CMMC 1.0, was ambitious but deeply flawed from the perspective of small businesses, particularly VOBs. The framework introduced five maturity levels, each with a growing number of cybersecurity practices and processes. Achieving these levels required significant investment in technology, personnel, and external consultants. For a VOB operating on thin margins, perhaps with fewer than 50 employees, the financial and operational burden was immense. According to a 2021 report by the Small Business Administration (SBA), the estimated cost for a small business to achieve CMMC Level 3 could exceed $100,000, not including ongoing maintenance or potential failed assessments. This was a direct contradiction to the spirit of promoting small business participation in defense contracting.

One of the primary issues was the “all or nothing” approach. Even if a VOB only handled a minimal amount of Controlled Unclassified Information (CUI), they were often pushed towards higher certification levels due to vague contract requirements or the fear of being non-compliant. The lack of clear guidance on what constituted CUI versus Federal Contract Information (FCI) further complicated matters. Many VOBs found themselves hiring expensive consultants not just to implement controls, but to decipher the regulations themselves. This created a bottleneck, where the very organizations designed to support the defense industrial base were inadvertently being excluded. The assessment process itself was another point of friction. The limited number of accredited assessors led to long wait times and inconsistent interpretations of the requirements. This was not a system built for rapid, efficient integration of small, innovative companies.

CMMC 2.0: A Step Towards Accessibility

Recognizing these significant challenges, the Department of Defense (DoD) initiated a strategic review, culminating in the announcement of CMMC 2.0 in November 2021. This revised framework represents a concerted effort to simplify requirements, reduce costs, and clarify the assessment process, particularly with CMMC simplification as a core objective for VOBs. The most significant change is the reduction from five maturity levels to three simplified tiers: Foundational (Level 1), Advanced (Level 2), and Expert (Level 3).

The core of CMMC 2.0 aligns directly with existing federal cybersecurity standards, primarily the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171 and NIST SP 800-172. This move away from proprietary CMMC-specific practices is a welcome change. It means VOBs can now focus on implementing well-established, publicly available cybersecurity controls rather than working through a unique, DoD-specific framework. For many, this alignment with NIST SP 800-171 is a familiar path, as many government contractors already have some level of compliance with these standards.

Level by Level: What VOBs Need to Know

Understanding the specific requirements for each CMMC 2.0 level is paramount for VOBs. The DoD has designed these levels to correspond with the type and sensitivity of information handled:

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• CMMC Level 1 (Foundational): This level applies to VOBs that only handle Federal Contract Information (FCI). FCI is information not intended for public release, provided by or generated for the Government under a contract, but not designated as CUI. The requirements for Level 1 are based on 15 practices from Federal Acquisition Regulation (FAR) Clause 52.204-21, “Basic Safeguarding of Covered Contractor Information Systems.” The critical simplification here is that Level 1 compliance will be achieved through an annual self-assessment. This is a big deal for many small VOBs, drastically reducing the financial burden and administrative overhead associated with external audits. A VOB can conduct its own assessment, attest to its compliance, and submit the results directly to the DoD. This self-attestation model helps VOBs to manage their own cybersecurity posture without external intervention unless a specific contract dictates otherwise.
• CMMC Level 2 (Advanced): This level is for VOBs that handle Controlled Unclassified Information (CUI). CUI is government-created or owned information that requires safeguarding or dissemination controls pursuant to law, regulation, or government-wide policy. The cybersecurity requirements for Level 2 are directly aligned with the 110 security controls outlined in NIST SP 800-171. This is where most VOBs engaged in significant DoD work will likely fall. While more rigorous than Level 1, the assessment process has also been simplified. For most Level 2 contracts, VOBs will undergo a triennial third-party assessment conducted by an authorized CMMC Third-Party Assessment Organization (C3PAO). This means an external, accredited entity will review the VOB’s implementation of NIST SP 800-171 controls every three years. The DoD has also stated that a subset of Level 2 programs, those deemed “non-prioritized acquisitions,” may still be eligible for annual self-assessments. However, VOBs should anticipate the third-party assessment requirement as the standard for Level 2.
• CMMC Level 3 (Expert): This is the most stringent level, reserved for VOBs handling CUI for the DoD’s highest priority programs. It incorporates a subset of controls from NIST SP 800-172, which builds upon NIST SP 800-171 with enhanced security requirements. Assessments for Level 3 will be conducted by government assessors. This level is expected to apply to a much smaller number of VOBs involved in highly sensitive defense projects.

The Cost Factor: Addressing the Financial Burden

One of the most persistent complaints about CMMC 1.0 was the prohibitive cost. CMMC 2.0 directly addresses this by introducing the self-assessment option for Level 1 and by signaling a commitment to assist small businesses with assessment costs for higher levels. According to statements from the DoD’s Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD A&S), the DoD intends to absorb the cost of CMMC assessments for small businesses, including VOBs, for contracts requiring third-party assessments. This is a critical development, as it removes a major financial barrier. While the exact mechanism for this cost absorption is still being finalized and integrated into contracting vehicles, the intent is clear: the DoD wants VOBs to focus on cybersecurity implementation, not on funding expensive audits. This commitment should allow more VOBs, particularly those in areas like the Marietta defense corridor or near Robins Air Force Base in Georgia, to compete more effectively for contracts. The cost of a third-party assessment can range from $5,000 to $20,000 or more, depending on the complexity of the VOB’s environment, so this financial relief is substantial.

The Path Forward: Measurable Results for VOBs

The measurable results of CMMC 2.0’s CMMC simplification efforts are beginning to emerge. We are seeing a clearer roadmap for VOBs, which translates into increased confidence and participation in the defense industrial base. The shift to self-assessments for Level 1 means that thousands of VOBs previously deterred by certification costs can now pursue DoD contracts more readily. This expands the pool of eligible contractors, fostering greater competition and innovation.

For VOBs targeting Level 2, the alignment with NIST SP 800-171 is a significant advantage. Instead of learning a new, complex framework, they can use existing knowledge and resources dedicated to NIST compliance. This makes the implementation process more efficient and less prone to misinterpretation. Plus, the triennial assessment cycle, rather than annual, reduces the frequency of disruptive audits, allowing VOBs to focus more on their core business operations.

The DoD’s commitment to covering assessment costs for small businesses is perhaps the most impactful change. This policy, once fully implemented, will directly address the financial disincentive that CMMC 1.0 created. It levels the playing field, ensuring that a VOB’s cybersecurity posture, not its deep pockets, determines its eligibility for critical defense work. This initiative supports the broader goal of strengthening the defense supply chain by including a diverse range of innovative businesses.

From my perspective working with numerous VOBs, the clarity and reduced burden of CMMC 2.0 are undeniable. I’ve seen businesses that were on the brink of abandoning DoD pursuits now re-engage with renewed optimism. For example, a veteran-owned IT services company in Alpharetta, Georgia, which previously struggled with the estimated $15,000 cost for a CMMC 1.0 Level 3 assessment, now finds CMMC 2.0 Level 2 achievable, especially with the prospect of assessment cost coverage. Their focus has shifted from budgeting for audits to investing in strong security tools and training their staff on NIST SP 800-171 controls, a far more productive endeavor. This is precisely the kind of outcome the DoD intended: a stronger, more secure defense industrial base powered by committed and capable VOBs.

The ongoing education efforts by organizations like the Procurement Technical Assistance Centers (PTACs) and industry associations are also critical. They are providing VOBs with the necessary resources and training to navigate the updated CMMC field, ensuring that the benefits of simplification reach the intended recipients. These centers often hold workshops and provide one-on-one counseling for VOBs looking to understand and implement cybersecurity controls, further reinforcing the policy’s positive impact.

While the full rollout and enforcement of CMMC 2.0 are still progressing, with the rulemaking process expected to conclude in late 2024 or early 2025, the direction is clear. The policy shift has demonstrably improved access and reduced the compliance burden for VOBs, ensuring they remain vital contributors to national security. The focus is now on proactive cybersecurity implementation rather than reactive, expensive certification chases. This approach better serves both the DoD’s security needs and the economic vitality of VOBs.

The simplification of CMMC 2.0 has created a more accessible and equitable pathway for Veteran-Owned Businesses to contribute their expertise to the Department of Defense, strengthening national security by fostering a strong and secure industrial base. VOBs should proactively engage with resources like their local PTACs and the CMMC Accreditation Body (The Cyber AB) to understand specific contract requirements and prepare for compliance. For more insights on how these changes affect the broader defense field, consider reading about 2026 DoD Policy and its implications for military families.

Sarah Connor

Senior Policy Analyst MPP, Commonwealth University

Sarah Connor is a Senior Policy Analyst with fifteen years of experience specializing in veterans' benefits policy. She previously served at the National Veterans Advocacy Group and as a consultant for Sentinel Policy Solutions. Her primary focus is on legislative changes impacting disability compensation and healthcare access. Sarah is widely recognized for her comprehensive analysis in the "Veterans' Policy Review" journal.

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