CMMC Level 2 Certification for MSPs: Certify or Stay in Scope?

As MSPs increasingly support defense contractors, they face a critical decision: Should they pursue their own CMMC Level 2 certification, or operate within their client’s certification scope?

In this bog, we hope to be able to help you weigh up the business, operational, and regulatory implications of both paths – with specific attention to cost, risk, team structure, and long-term viability so you can choose the best route to CMMC Level 2 compliance..

The Two Paths at a Glance

CMMC Level 2 Certification: Why It Matters

CMMC Level 2 is the mandatory minimum for handling CUI under Department of Defense (DoD) contracts. It requires full implementation of NIST SP 800-171’s 110 security controls, a third-party assessment, and an ongoing commitment to operational maturity in security. This is not just a paperwork exercise, it’s an operational and financial transformation.

Option 1: Become CMMC Level 2 Certified

Benefits:

• Full autonomy to support any defense client operating under CMMC Level 1 or Level 2.
• Higher trust, credibility, and billable value.
• Establish long-term leadership in the DoD contractor supply chain.

Considerations:

1. Cost of Compliance
   • Upfront costs for policy development, system redesign, and training.
   • Ongoing investment in tools, documentation, and re-certification (every three years).
   • C3PAO audit fees: typically $15K–$50K+.
2. Background Checks & Personnel Controls
   • Background screening and access control policies for staff.
   • Insider threat management planning.
   • Segmentation of duties and role-based access control.
   • If no foreign nationals (NOFORN), EXPORT CONTROLLED, or ITAR/EAR applies to the DoD contract or if CUI data carries these labels then access to data and systems likely require restriction to US persons
3. Enclave Requirements
   • Separation of CUI data and operations from general MSP workloads.
   • Often requires a dedicated infrastructure environment (or hosted enclave).
   • Additional complexity if servicing both regulated and non-regulated clients.
4. Internal Workflow Changes
   • Change management processes must align with NIST controls.
   • Configuration management, auditing, and incident response must be documented and repeatable.
   • A full System Security Plan (SSP) and POA&M must be maintained and updated regularly.
5. Time to Compliance
   • Most MSPs report 6–12 months to fully implement and prepare for audit readiness.

Option 2: Stay Within the Client’s Scope

Benefits:

• Faster onboarding with CMMC projects.
• Fewer internal controls required (client absorbs responsibility).
• Easier to scale across clients with consistent CMMC infrastructure.
• No need to build or maintain dedicated enclave or compliance program.

Risks & Limits:

• Access limitations: You may not be allowed to process or view CUI directly.
• Dependency: Your ability to remain compliant is tied to client operations.
• Not marketable as a certified provider: You can’t advertise CMMC Level 2 compliance so must rely on being a Registered Practitioner Organization
• No standalone SSP or certification number.

Business Viability: What Should Drive the Decision?

Hybrid Approaches (Rising Trend)

Some MSPs adopt a middle-ground strategy:

• Build internal skills (e.g., train RP/RPA).
• Deliver CMMC services via clients’ scopes or in partnership with RPOs.
• Defer full certification until 2–3 clients warrant it.

How to Start – Either Path

If Certifying:

1. Appoint an internal compliance lead, a Registered Practitioner or Registered Practitioner Advanced preferably.
2. Perform a self-assessment aligned to NIST 800-171 and the CMMC Assessment Guide Level 2 from DoD.
3. Build a System Security Plan (SSP) and POA&M.
4. Set up or rent a compliant enclave environment.
5. Engage a pre-assessment consultant or RPO.
6. Schedule a C3PAO engagement via Cyber AB Marketplace.

If Staying in Scope:

1. Confirm client’s SSP includes your activities.
2. Review your contracts and SOWs for data handling clauses.
3. Standardize secure tooling.
4. Build a Shared Responsibility Matrix with the client
5. Ask the client’s auditor about expected evidence and responsibilities.
6. Use a shared documentation plan to align evidence, logs, and SOPs.

Real-World Insight

Some of our MSP partners start the journey and realize they can’t scale unless they certify themselves. Others lean on partners like Prescott or N‑able tools to stay lean and efficient. Either path works—just know the trade-offs early.

Should You Certify or Stay in Scope?

If your MSP plans to support multiple DoD contractors and handle CUI directly, CMMC Level 2 certification is the path to long-term growth and independence. If your government client base is small, operating under client’s certification scope may be a cost-effective interim solution.

Either way, building internal CMMC skills and readiness ensures your MSP stays competitive in the evolving DoD supply chain.

Links & Resources

• Cyber AB Marketplace – Find RPs, RPOs, and C3PAOs
• Prescott – CMMC Enablement and Certification Services
• NIST SP 800-171 Controls Reference
• N‑able CMMC Toolkit

For more on CMMC download our ebook: CMMC: A guide to the What, When, Why, and How?

Looking for more blogs on compliance and regulation, then check out the Compliance section of our blog.

Lewis Pope is the Head Security Nerd at N‑able. You can follow him on LinkedIn: thesecuritypope / Twitch: cybersec_nerd