Date: 17 January 2025
US defense contractors are some of the largest and most profitable companies in America’s supply chain. They provide essential resources to support government efforts that allow for ramping up or scaling down on some key defense operations as required.
However, to register and conduct business as a defense contractor, you must always obtain the Cybersecurity Maturity Model Certification (CMMC) Assessment & subsequently get certified.
CMMC certification is a requirement for conducting business with the Department of Defense (DoD) and protecting sensitive defense information (SDI) in the supply chain.
If you choose not to get CMMC certified—non-compliance is just one risk your company will be exposed to. Read this blog to learn more about 5 risks you’ll likely face when you skip the CMMC certification!
1. Lose Government Contracts
One of the most obvious consequences is that you will lose all eligibility to submit a bid on or maintain a contract with the DoD. The CMMC model requires contractors to meet specific cybersecurity standards to safeguard the Controlled Unclassified Information (CUI). If you aren’t certified, you get thrown out of the running for being considered a potential vendor.
This means that you not only lose existing revenue, but it will also affect your growth prospects. Government contracts are usually long-term and highly profitable sources of income, but if you don’t have the certification – your competitors will, and most definitely use it as a competitive edge.
You can always stay ahead and increase your prospects for lucrative government contracts by partnering with a reputable CMMC certification services provider. They will help you obtain the proper CMMC certification, ensuring you don’t cut off a huge section of the market for your business.
2. Face an Increased Risk of Cyber Attacks
Cybersecurity is a greater threat than ever, and small to medium-sized businesses are the targets. More than 40% of cyberattacks target these businesses, and the average cost of the breach exceeds $4m globally. Without CMMC's safeguards, your company becomes open to breaches that expose sensitive information or operational disruption.
One of the primary motivations for the DoD in developing the CMMC framework was to heighten cybersecurity. If you don't achieve certification, you might not have the appropriate measures to protect your company from cyber threats.
Considering how frequent and complex cyberattacks have become (particularly in the defense industry), noncompliance means you aren't ready for what's coming next. Typically, hackers routinely exploit weak links within supply chains, and those unprepared will be targeted.
By not being certified, you are putting yourself at risk of becoming one of these victims.
3. Possible Penalties and Legal Consequences
Failure to meet CMMC requirements doesn’t just mean losing your contracts; it can cost you dearly in the legal circles. The DoD is serious about cybersecurity breaches and noncompliance, and contractors found not meeting the bases of this certification may be fined or held liable for the costs associated with the violation or failure.
For example, if your lack of certification leads to a data breach with CUI, you may also be facing lawsuits, regulatory investigations, and claims for compensation against all affected parties. These can spiral so fast and beyond the costs associated with attempting to achieve CMMC certification in the first place.
Beyond fines, a lack of compliance can also result in losing valuable business relationships. Prime contractors and other organizations in the supply chain may terminate relationships to protect their compliance status.
4. Risk of Reputational Damage and Customer Mistrust
Reputation is everything in today's business climate. Both clients and partners will assume that you should be able to protect their data if they entrust you. Not achieving CMMC certification tells your clients that cybersecurity isn't one of your top priorities. That's a mark that can be hard to erase.
Within the defense industry, losing customer trust can mean the end for your company. If you're not meeting their standards, they won't be willing to work with you. And even if your business isn't breached, non-compliance is enough for potential partners and customers to view your business warily.
Because many competitors advertise that they are NIST SP 800-171/compliant CM/DFARS/ITAR compliant, when you aren’t certified, it shows clients that you’re not doing what’s needed to protect sensitive information. This risks your reputation and could lead to potential loss of customers.
5. You Lose Every Bit of a Competitive Advantage
Not getting CMMC certified will put your business at a major disadvantage in an already competitive market. As more businesses get CMMC certified, they will meet their compliance requirements and have a leg up on marketing.
The CMMC certification tells those interested in your services that you are serious about cybersecurity and can be trusted as part of the defense supply chain. Without accreditation, your competitors will have an edge that allows them to win contracts, get better partners, and become market leaders.
Also, the CMMC requirements will only become more intense over time, and so will the gap between companies in the industry with certifications and those without.
Final Thoughts
In an industry built on trust and reliability, the consequences of not becoming CMMC-certified are dire. Your business risks losing lucrative government contracts, more cybersecurity threats, financial penalties, and damage to your reputation within the industry.
Ultimately, this leads to financial instability and a lack of trust within the industry. Keeping all other compliance requirements in check is essential, but CMMC certification means ensuring business resiliency and proving trust to potential customers. By being CMMC certified, your company will be resilient, protect sensitive information, and set itself up for long-term success and growth in the defense supply chain.
