What CMMC Deadlines Really Mean for Your 2026 IT Budget

Quick Answer

The CMMC compliance deadline should be reshaping your 2026 IT budget. This post explains what the recent CMMC deadlines mean for defense contractors and subcontractors, from gap assessments and System Security Plans to zero trust, SIEM, and cybersecurity training. You’ll see how to phase spending over a three-year cycle, balance CapEx vs. OpEx, and budget for C3PAO assessments so compliance supports both security and long-term contract viability.

Reliance on technology puts the fate of businesses, government and national security at issue as cybersecurity experts battle hackers. The federal government has been adamant about ramping up internal digital security and tasking contractors with meeting the standards set by the Cybersecurity Maturity Model Certification (CMMC) 2.0.

The first CMMC compliance deadline was November 10, 2025, putting organizations that benefit from lucrative Department of Defense contracts on notice. After the following string of cybersecurity failures the federal government suffered this year, industry leaders can expect pressure.

• U.S. Congressional Budget Office (CBO): The federal agency was reportedly breached on November 7, putting an enormous amount of legislative policy priorities at risk. The CBO was allegedly forced to implement new and more stringent data security measures.
• Emergency Directive: On October 15, the Cybersecurity and Infrastructure Security Agency (CISA) issued a critical warning to all federal agencies that a variety of devices and software packages had been compromised by nation-state hackers.
• Brickstorm Malware: On December 4, state-sponsored Chinese hackers reportedly infiltrated government networks using Brickstorm malware that gives digital spies stealth capabilities.

It’s essential for military contractors and subcontractors to keep in mind that the federal government has deep pockets and access to the latest cybersecurity tools and talents. Given that America’s adversaries have managed to penetrate these systems, it’s mission-critical to adhere to the recent CMMC compliance deadline and plan for the future. Failing to obtain the appropriate security clearance on time and to maintain it could leave your operation out in the cold.

Understanding the CMMC Deadlines

The recent November CMMC compliance deadline puts the onus on companies in the military industrial base to promptly harden their security measures. As we usher in the new year, business leaders should be aware that digital security requirements will be enforced.

The Defense Department is expected to focus on high-priority operations and programs that store and transmit Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). Contractors can also anticipate seeing CMMC requirements showing up in new contracts. At a minimum, Level 1 and Level 2 self-assessments would need to be filed with the federal government. These are other milestones decision-makers would be wise to plan for and adjust cybersecurity budgets appropriately.

• First Quarter 2026: Many Level 2 self-assessments will require the support of a Certified Third-Party Assessment Organization (C3PAO).
• October 31, 2026: All contracts involving CUI or FCI will require contractors to submit a certification and subcontractors to participate.
• Full Implementation: By 2028, all CMMC deadlines will have passed, putting the full weight of the data protection program on businesses. Direct military contractors, long-standing subcontractors and even outfits working in the supply chain need to show proof of compliance.

While full implementation may seem to be in the relatively distant future, it would be unwise to procrastinate. Getting stung by Chinese, Russian, Iranian or for-profit hackers would leave an indelible mark that the Defense Department would frown upon. It’s in every industry leader’s best interest to review 2026 budgets and make the adjustments necessary to position their organization for Defense Department awards.

Budgetary Planning for CMMC Compliance Deadlines

There are vastly different budgetary recommendations regarding cybersecurity. Some decision-makers adhere to a formula that allocates about 10 percent of the total managed IT budget to data security. In highly targeted sectors such as finance and healthcare, that figure ticks up to about 12 percent.

With national security on the line, the military industrial base doesn’t just attract hackers driven by financial gain. It also draws the attention of rogue countries willing to give sophisticated cybersecurity criminals the money, tools and technologies they desire. In other words, the nefarious individuals and groups assailing defense operations rank among the most skilled and determined. That’s why budgets may need to be increased to achieve CMMC 2.0 compliance before settling into ongoing maintenance. These are key compliance matters to consider when establishing your next cybersecurity budget.

Gap Assessment

It’s impossible to gauge the state of your cybersecurity without conducting a full review. Conducting a gap assessment involves testing a network to uncover vulnerabilities. These may include architecture deficiencies, software liabilities, subpar protocols and issues with best practices. The gap assessment is typically performed by a third-party cybersecurity firm without the knowledge of the company’s staff or vendors who have access to the system.

In many cases, the process reveals uncomfortable truths about how easily a garden variety hacker could steal valuable and sensitive information. The purpose is never to embarrass or target individuals or departments. A gap assessment is a find-and-fix mission that helps strengthen an organization’s security posture. In terms of CMMC deadline compliance, it’s only logical to enlist a C3PAO.

Documentation and System Security Plan

The federal government requires companies to provide full disclosure of their cybersecurity posture. Disclosures must demonstrate that an organization meets more than 100 Level 1, 2 or 3 NIST standards. While crafting the required documentation is not necessarily a heavy burden, gathering the intel and ensuring it accurately reflects the methods, infrastructure and best practices that are in place takes work hours and effort.

Although mom-and-pop outfits may not need a comprehensive System Security Plan (SSP), those for mid-sized and large corporations can run more than 200 pages and be filled with highly technical details. It’s not uncommon for an SSP that meets industry standards to take 4 months to complete. In terms of CMMC deadlines, this process can’t even begin until the results of the gap assessment have been compiled.

Infrastructure Updates and Changes

The arrival of CMMC 2.0 brings with it new infrastructure challenges for organizations. Some companies will need to integrate vastly new types of cybersecurity infrastructure to meet the data protection standards outlined in the mandate. These include multi-factor authentication, Federal Information Processing Standards (FIPS) validated encryption and network segmentation, among others. The latter is part of a broader trend within the Defense Department and the federal government to impose the zero-trust cybersecurity approach on systems handling CUI and FCI.

On November 18, the Department of Defense’s CIO published a memo directing the Zero Trust Portfolio Management Office “to coordinate, synchronize and accelerate adoption of ZT architecture and cybersecurity framework across the DoD enterprise.” Pivoting to zero trust architecture ranks among the best current defenses against hackers gaining access to CUI or FCI. If you are not already required to implement the policy, it’s coming down the pipeline.

It may also make sense for military contractors to establish a Security Information and Event Management (SIEM). Given the tedious and extensive CMMC 2.0 auditing obligations, it may prove more cost-effective to centralize monitoring data for analysis and reporting. Although staffing an in-house SIEM is normally cost-prohibitive, a third-party managed IT cybersecurity firm offers a scalable outsourcing solution.

Completing Final CMMC Assessment

Direct military contractors and subcontractors required to meet CMMC 2.0 Level 2 or 3 standards must budget for the unavoidable C3PAO assessment. It’s also important to note that many outfits that have the option to self-assess at Level 2 would be well served to outsource as well. Adopting more than 100 NIST standards and other data protections is not a DIY project. That being said, completing the process can take upwards of 12 months, depending on preparedness. If an organization is fully prepared, the timeline can be truncated down to a week or two.

Perhaps the greatest setback companies experience is remediation. When a business skips ahead – operating under the notion it has robust data security – infrastructure remediation takes time and money. This error puts ventures behind on meeting CMMC compliance deadlines and forces them to scramble to augment their cybersecurity budgets. But by investing in the step-by-step process and making the appropriate upgrades, passing the assessment may be just a formality.

Cybersecurity Awareness & Training Program

It may be a hard pill to swallow, but approximately 95 percent of data breaches could be traced to some form of human error in 2024. That figure had dipped in recent years, but the barrage of phishing schemes, unvetted endpoint devices and failure to utilize strong passwords has effectively greased the skids for hackers. As human beings, we’ll all make honest mistakes. But when it happens to a defense contractor or subcontractor, the consequences can be dire. Adversaries gain access to defense secrets and preparation and companies get sidelined.

The solution is to implement cybersecurity seminars and engage in ongoing awareness training. These sessions can be held on a secure platform that allows participants to join remotely. Cybersecurity awareness programs also help employees remember best practices, avoid using unsecure handheld devices and follow company policy consistently.

It’s also essential to state that training and awareness is not a one-size-fits-all program. Staff members in different departments handle a variety of information while performing goal-oriented tasks. A degree of tailoring will be needed to provide appropriate ongoing insight and guidance. Although such programs are not necessarily mandated, they are generally worth weighing the cost against the alternative. The average loss companies suffered due to a data breach reportedly hovered around $4.4 million. Integrating company-wide awareness programs may lower your cybersecurity insurance policy.

Costs Associated with Hiring CMMC 2.0 Personnel

The cost of hiring an in-house team to provide the constant monitoring mandated by CMMC 2.0 typically exceeds the benefits of even large corporations. A cybersecurity talent shortage persists, which reportedly topped 4.8 million at the start of 2025. Even if an organization could onboard enough skilled professionals to operate an in-house SIEM, the cost could exceed $1 million, without purchasing the infrastructure and licenses.

If there’s a silver lining to this multi-sector impediment, it’s that third-party firms make it their business to maintain the talent needed to oversee a virtual SIEM. Utilizing AI, machine learning and the latest software packages, an off-site SIEM detects, deters and expels emerging threats.

Crafting a Forward-Facing CMMC Compliance Budget

It’s fair to say that the seemingly sudden cost of CMMC 2.0 deadlines has fiscal hawks concerned about how best to allocate funds. The initial investment may exceed earlier predictions, given the rising costs of materials and labor. But CMMC compliance is attached to a profitable return on investment. Government contracts usually account for inflationary costs, making them well worthwhile.

When crafting a thoughtful CMMC 2.0 budget, it may be practical to think in three-year increments. The federal government expects Level 2 and 3 operations to undergo recertification at three-year intervals. Approving your 2026 budget in conjunction with three-year cybersecurity projections aligns with the cybersecurity measure. Consider this budgetary framework as a jumping off point.

• Year 1: Focus on the costs associated with conducting a gap assessment, documentation, any infrastructure upgrades and C3PAO accreditation. Don’t be surprised if the first year requires more than 50 percent of the total three-year budget to meet the CMMC compliance deadlines.
• Year 2: With the initial costs covering the costs of meeting Level 2 or 3 standards, consider investing in improved tools, software and upgrades to ongoing monitoring. This also might be the right time to implement a comprehensive cybersecurity awareness program.
• Year 3: By year three, your organization should have all its CMMC 2.0 ducks in a row. By working with a C3PAO, you’ll be well-positioned to have a worry-free audit conducted.

Chief financial officers can compartmentalize the CMMC 2.0 compliance budget into capital expenditures and operating expenditures. The former applies to purchasing in-house servers and hardware necessary to house, protect and transfer encrypted data. The latter applies to the relatively fixed costs of cloud storage, software licenses and managed IT cybersecurity services.

Contact Red River to Discuss Budgeting for CMMC Compliance Deadlines

At Red River, we recognize the difficulty of safeguarding digital information across multiple cloud locations and endpoint devices, while meeting data protection mandates such as CMMC 2.0. We work diligently to craft the determined cybersecurity protocols needed to detect, deter and expel threat actors.

Our cybersecurity experts are available to conduct a gap assessment and bring your organization into compliance before you miss CMMC deadlines. Contact us today by calling or filling out our online form. Let’s get the process started!