In the world of government contracting, compliance is not a luxury—it’s a requirement. The ever-evolving regulations and standards imposed by federal agencies mean that even minor oversights can result in lost contracts, penalties, or reputational damage. For contractors—especially those working with sensitive data or defense-related projects—compliance is not just about passing audits. It’s about building trust and sustainability in a highly competitive marketplace.
Yet, many organizations continue to stumble over avoidable pitfalls. In this article, we’ll break down five of the most costly compliance mistakes that contractors make—and more importantly, how you can prevent them.
Federal compliance is a moving target. What secured you a contract last year may be insufficient today.
Frameworks like CMMC (Cybersecurity Maturity Model Certification), FISMA (Federal Information Security Modernization Act), and NIST SP 800-171 regularly receive updates. Even shifts in the FAR (Federal Acquisition Regulation) can drastically alter your responsibilities. Contractors that don’t stay ahead of these changes risk noncompliance by default.
Real-World Consequences: In 2023, a mid-sized tech contractor lost a five-year DoD renewal because it had not transitioned to CMMC 2.0 requirements. Despite delivering quality services, failure to prove security maturity disqualified their bid.
How to Avoid It:
- Subscribe to NIST, CMMC-AB, and GSA updates.
- Review contract modifications or re-competes for regulatory shifts.
- Conduct quarterly policy reviews to ensure your compliance program aligns with current laws.
Pro Tip: Assign a compliance analyst to monitor legislation and guidance updates across applicable frameworks.
Audits don’t rely on good intentions—they rely on evidence. Incomplete or outdated documentation can make your organization appear unprepared or non-compliant, even if your actual practices are sound.
Common Documentation Failures:
- Missing or outdated System Security Plans (SSPs)
- No Plan of Action and Milestones (POA&M) to track remediation
- Incomplete inventory of assets, software, or endpoints
- No documented employee training logs or access reviews
How to Avoid It:
- Use centralized tools like GRC (Governance, Risk, and Compliance) platforms
- Schedule regular documentation audits
- Require staff to log all security-related activities
Example: A recent FedRAMP audit rejected a contractor because they lacked documentation showing patch management timelines—even though the updates were performed on time.
Compliance doesn’t end with your internal systems. It extends to subcontractors, third-party vendors, and even cloud environments—especially when handling Controlled Unclassified Information (CUI) or Federal Contract Information (FCI).
How This Happens:
- Assuming cloud vendors are automatically compliant
- Failing to include subcontractors in compliance audits
- Not isolating federal data within segmented networks
How to Avoid It:
- Map all data flows to understand where FCI/CUI lives
- Require security attestations from all subcontractors
- Include compliance clauses in every vendor agreement
Case Study: An aerospace supplier was flagged by the DoD for failing to verify CMMC compliance among its subcontracted design team—costing them $1.2M in paused contract funding.
While some frameworks allow self-attestation, it’s increasingly viewed with skepticism. CMMC Level 2 and above now require third-party certification (via C3PAOs), and even FISMA assessments are being scrutinized by agency IGs.
Risks of Self-Attestation Alone:
- Biased evaluations
- Missed control gaps
- No audit trail to prove compliance readiness
How to Avoid It:
- Engage a third-party for mock audits or formal assessments
- Document every test, interview, and technical validation step
- Consider continuous monitoring to avoid point-in-time blind spots
Bonus Tip: Independent assessments double as powerful evidence when bidding on new contracts.
Security and compliance are human problems before they’re technical ones. Employees unaware of compliance obligations can easily become the weakest link—whether through poor password practices, phishing clicks, or unauthorized data sharing.
Where It Fails:
- New hires never complete security onboarding
- IT staff unaware of audit controls
- Executives disengaged from compliance initiatives
How to Avoid It:
- Conduct quarterly role-based training
- Make security awareness part of your culture
- Hold leadership accountable for participation in compliance reviews
Example: A recent NIST 800-171 audit uncovered that although a contractor had policies in place, none of the technical teams were aware of them—instantly failing the policy communication criteria.
Government contracting is an opportunity—but only for those who can navigate its regulatory terrain. Avoiding these five compliance mistakes doesn’t just keep you out of trouble—it positions your organization as a reliable, security-conscious partner.
Building a resilient compliance program takes time, strategy, and often outside expertise. At Mass Data Defense, we specialize in helping government contractors meet, maintain, and exceed federal compliance requirements—without overburdening your team.
Let’s work together to secure your contracts, protect your data, and prepare you for whatever audit comes next.