Who needs to comply with FedRAMP?

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Compliance with the Federal Risk and Authorization Management Program (FedRAMP) can signal that your cloud service meets a trusted, government-validated security standard, and that opens doors to federal contracts. It also helps you get listed on the FedRAMP Marketplace, making it easy for federal agencies to discover you and verify your security posture.

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FedRAMP isn’t mandatory for every company. Because the compliance path is rigorous and resource-intensive, organizations should first discuss whether they’re in scope or if they want to pursue it for broader benefits.

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To walk you through the specifics, this guide will cover:

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• Who needs FedRAMP
• Why and when it’s required
• How different FedRAMP impact levels apply to organizations
• How FedRAMP fits into your broader compliance strategy

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Who needs FedRAMP?

Any cloud service provider (CSP) that creates, collects, stores, processes, or transmits federal data on the cloud—or wants to sell cloud services to federal agencies—should generally obtain the FedRAMP authorization. This requirement applies to both CSPs based in the United States and those operating internationally, but there are certain exceptions.

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Per the 2024 memorandum M-24-15, certain cloud services are explicitly out of FedRAMP scope. Examples:

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• Search engines
• Social media or comms platforms used under agency social media policies
• Single-agency systems hosted in the cloud but not offered as shared services
• Commercially available information services that don’t handle federal data
• Low-risk ancillary services

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A common misconception is that only vendors with direct federal contracts need FedRAMP, but in reality, any cloud service provider that processes, stores, or transmits federal data (whether directly or through a contractor) must comply.”

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Connor Synder

GRC Subject Matter Expert, Vanta

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LinkedIn

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Contractors and subcontractors that deliver cloud-based services to federal agencies must also use FedRAMP-authorized solutions. Other contractors that handle federal data but don’t offer cloud services typically fall under different federal compliance frameworks, such as the Defense Federal Acquisition Regulation Supplement (DFARS) and Cybersecurity Maturity Model Certification (CMMC).

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{{cta_withimage44="/cta-blocks"}} | FedRAMP checklist

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What are the different types of CSPs that need FedRAMP?

FedRAMP compliance can typically apply to three types of CSPs that deliver cloud-based products and services to federal agencies:

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1. Software-as-a-Service (SaaS): Cloud-based applications that store, process, or manage federal data
   
   • Example: a CRM-like platform to manage citizen requests
2. Platform-as-a-Service (PaaS): Cloud environments that enable agencies or developers to build and deploy applications and frameworks
   
   • Example: Cloudflare Workers to build a secure website
3. Infrastructure-as-a-Service (IaaS): CSPs that supply virtualized computing resources that federal agencies use to host systems or applications
   
   • Example: Amazon Web Services (AWS) or AWS GovCloud

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While these CSPs can operate across many industries, FedRAMP is commonly required for organizations in industries that integrate with federal systems, such as:

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• Healthcare SaaS providers
• Defense contractors
• Public sector and education technology vendors
• Security-focused SaaS platforms in regulated industries
• Data analytics and AI providers

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When is FedRAMP mandatory?

FedRAMP authorization is mandatory for in-scope CSPs when they store, process, or transmit federal data in a cloud environment, either directly or via subcontracting agreements. Non-compliant CSPs aren’t fined or penalized, but they can’t legally provide their services to any federal agency.

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Here are a couple of scenarios that show when FedRAMP is or isn’t required:

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Once you’re clear on the applicability, you need to scope how vast your compliance obligations are and what FedRAMP impact level you’ll follow.

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FedRAMP requirements and impact levels

The specific FedRAMP requirements and the controls you’ll implement aren’t affected by the size or structure of the company, but rather the sensitivity of federal data handled and system scope, your risk profile, and the potential impact of a data breach.

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To standardize how CSPs choose controls, FedRAMP assigns every cloud system an impact level (inspired by FIPS 199), classified into three categories:

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1. Low: Applies to CSPs where the loss of confidentiality, integrity, or availability of data would have a limited adverse effect on the agency 
2. Moderate: Applies to systems that store or manage controlled unclassified information (CUI) and other sensitive data, where the loss would have a serious adverse impact on assets, operations, and individuals
3. High: Applies to organizations that handle the most sensitive federal data (e.g., law enforcement, health, financial), where the loss would have a severe or catastrophic impact

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CSPs have to pursue a FedRAMP impact level that corresponds with their system’s CIA Triad assessment—i.e., Confidentiality, Integrity, and Availability of the federal data handled. Here’s what’s commonly required:

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{{cta_withimage44="/cta-blocks"}} | FedRAMP checklist

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Does FedRAMP support broader compliance goals?

FedRAMP shares some common requirements with other well-known cybersecurity standards, including SOC 2, ISO 27001, and NIST 800-53. Because of the overlap, if an organization has to pursue FedRAMP alongside other certifications depending on the market or client expectations, it may be able to reuse some controls and reduce the overall effort.

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Here’s how FedRAMP interacts with SOC 2, ISO 27001, and NIST 800-53

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While these frameworks complement one another, FedRAMP is the only one mandatory for federal engagement. It’s relevant if you handle federal data or target government contracts, which is why many private sector organizations rarely pursue it. However, if you specifically plan to sell to the U.S. government or federal contractors as a CSP, it’s best to start FedRAMP authorization workflows sooner.

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A CSP that works with both government agencies and private-sector clients should have FedRAMP authorization for federal work. The rest of their compliance strategy depends on whether their enterprise clients expect alignment with other standards and regulations like SOC 2, ISO 27001, or the GDPR.

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Mitigate common challenges to FedRAMP compliance

Achieving FedRAMP authorization can be a complex and exhaustive process that requires planned team effort, dedicated resources, and mandatory ongoing monitoring.

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Cost, planning, and expertise are some of the biggest challenges organizations face. There are also a few other key considerations, such as PMO review delays, government agency sponsor challenges, the obligation of continuous monitoring compliance, and the operational burden of maintaining documentation and evidence year-round."

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Connor Snyder

GRC Subject Matter Expert, Vanta

|

LinkedIn

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Common core FedRAMP compliance challenges are:

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• High resource investment: FedRAMP authorization requires substantial team resources throughout planning, collecting evidence, and remediation. Plus, to stay authorized, you must regularly monitor your compliance status and maintain reporting obligations, which can overwhelm both security executives and leaders.
• Comprehensive requirements: Implementing and validating hundreds of security controls can be tedious, especially since they need to be documented, and gaps can lead to a declined authorization.
• Long authorization process: Depending on system readiness, authorization can take over 18 months, which might affect your operations or business goals.
• Frequent updates and audits: FedRAMP, by design, requires frequent audits and updates for continuous compliance. This means you may need to build your security program around FedRAMP, which can be tricky in complex compliance environments.

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You can mitigate some of these challenges and streamline FedRAMP authorization by using compliance automation and trust management solutions, such as Vanta.

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Get FedRAMP-compliant faster with Vanta

Vanta is an agentic trust platform that supports organizations throughout the entire lifecycle of their compliance program. Whether you’re pursuing FedRAMP or a combination of security standards and frameworks, we set you up with automated, self-directed processes that help manage multiple compliance goals simultaneously, as well as support seamless continuous monitoring.

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Vanta offers a control framework designed to help CSPs, agencies, and government entities define the essential elements of a FedRAMP program and maintain continuous compliance. You can expedite the authorization process with expert guidance and agentic workflows. Our key features include:

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• Centralized FedRAMP dashboard
• Automated evidence collection through over 400 integrations
• Compliance progress monitoring and risk management
• AI-powered policy management
• Access to a vetted auditor network
• Pre-built, auditor-approved FedRAMP policies—and more

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Schedule a custom demo today to see how Vanta can streamline your compliance program.

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{{cta_simple39="/cta-blocks"}} | FedRAMP product page

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FAQs

When is FedRAMP authorization not needed?

FedRAMP isn’t required when a cloud service doesn’t handle sensitive federal data. This includes non-federal commercial services, on-premises systems, government-owned private clouds, and solutions used only by state and local governments.

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What happens if I fail to comply with FedRAMP?

Non-compliance can result in losing or having your FedRAMP authorization revoked, being removed from the FedRAMP Marketplace, and becoming ineligible for federal cloud contracts. In more serious cases, such as a security incident or inaccurate reporting, agencies may invoke contract remedies or take additional actions under applicable federal laws.

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Do I need a sponsor to get started with FedRAMP?

Most CSPs still go through a federal agency sponsor when pursuing FedRAMP authorization. The older Joint Authorization Board (JAB) path has been retired and replaced with a single authorization model managed by the FedRAMP Board.

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Note: The ongoing FedRAMP 20x pilot offers a more automated route, allowing FedRAMP to directly issue Low to Moderate authorizations without needing an agency sponsor upfront.

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Can I pursue FedRAMP voluntarily?

Yes, some organizations may decide to pursue FedRAMP voluntarily to:

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• Demonstrate that their cloud solutions are secure
• Show that their service is compliant with federal regulations
• Avoid duplicate security assessments during procurement
• Build trust with existing customers and new prospects
• Expand eligibility for federal opportunities

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What federal and government agencies require FedRAMP compliance?

All federal agencies, particularly civilian executive branch agencies, rely on FedRAMP to assess in-scope commercial cloud services that process federal information. This includes agencies like:

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• General Services Administration (GSA)
• Department of Health and Human Services (HHS)
• Department of Veterans Affairs (VA)
• Department of Justice (DoJ)
• Department of Homeland Security (DHS)

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Certain federal branches choose to layer FedRAMP with their own controls. For instance, the Department of Defense (DoD) typically requires CSPs to follow the DoD Cloud Computing Security Requirements Guide (SRG), have a FedRAMP Moderate or High baseline, as well as implement other controls specific to the engagement.

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