I'M A SOFTWARE COMPANY, DO I NEED CMMC?

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At Vertosoft, we work with some of the most innovative technology companies doing business in the public sector, helping them apply commercial success to government missions. One of the many hurdles these companies have is understanding where their product stands within the complex interplay of COTS classification, DFARS clauses, and the emerging CMMC framework. 

The final Cybersecurity Maturity Model Certification (CMMC) program rule, formally establishing the program, was published in the Federal Register on October 15, 2024, and became effective on December 16, 2024. The one question that keeps surfacing among commercial software vendors is: Do we need to be CMMC certified to sell to the government? 

There have been posts and articles floating around trying to make this a black and white matter, however the answer isn’t a simple yes or no. In fact, it depends on what you’re selling—and how you’re delivering it. 

Let’s break it down. 

Understanding the Role of COTS 

The term “Commercial-Off-The-Shelf” (COTS) is more than procurement jargon—it’s a critical designation that can significantly reduce your compliance burden. Under federal acquisition regulations, a COTS product is defined as: 

  • Sold in substantial quantities in the commercial marketplace, and 
  • Offered to the government without modification. 

That last part often raises eyebrows. If your software is highly configurable, is it still COTS? The answer is yes—as long as the underlying product remains the same as what you sell commercially. In very simplistic terms, think custom dashboards that can be rearranged or permissions that can be tailored, but no government-specific code or features. 

The Hidden Power of the COTS Exemption 

Here’s where it gets interesting: If your software qualifies as COTS, you may be exempt from some of the federal cybersecurity regulations—specifically: 

  • DFARS 252.204-7012 – governing the safeguarding of Covered Defense Information (CDI), and 
  • CMMC certification requirements – the evolving framework for cybersecurity maturity across the defense supply chain. 

For vendors selling commercial software “as-is” to the DoD, this exemption can be a game-changer. You avoid the steep investment in compliance infrastructure, audits, and documentation required by CMMC. 

But—and it’s a big but—this exemption only goes so far. 

When the COTS Shield No Longer Applies 

COTS status isn’t a blanket pass. Your responsibilities change the moment you cross into certain operational or contractual territories. You’ll need to comply with DFARS and CMMC if you: 

  • Handle Controlled Unclassified Information (CUI): Hosting, processing, or storing DoD-sensitive data removes the COTS protection. 
  • Offer Custom Development: If you’re writing code, building new features, or tailoring your software to meet DoD-specific needs, you’ve left the COTS category. 
  • Act as a Subcontractor Receiving CUI: Even if your core product is off-the-shelf, receiving sensitive data from a prime contractor for integration or support purposes will trigger requirements. 
  • Deliver Services Beyond Software: Hosting, implementation, training, and customer support—if these involve interaction with sensitive government systems or data, you may fall under CMMC obligations. 

The Bottom Line for Software Vendors 

Here’s a quick self-check: 

If your product is: 

  • A standard, widely available commercial solution, 
  • Sold to the government without DoD-specific changes, and 
  • Not used to store or process sensitive data, 

Then congratulations—you likely fall within the COTS exemption and may not need CMMC certification for those contracts. 

However, the moment your solution steps outside those lines, you’ll need to prepare for CMMC Level 2 (or even Level 3). That means implementing NIST SP 800-171 controls, investing in compliance tools, and preparing for a third-party audit.  (That said, even if you are not required to be CMMC compliant, implementing the 110 controls in NIST SP 800-171 is just good cyber hygiene and should be done anyway.) 

Navigating What’s Next 

At Vertosoft, we specialize in helping commercial software companies make confident decisions as they expand into the public sector. Whether you’re unsure about your COTS classification or planning a roadmap for CMMC readiness, our team is here to guide you every step of the way. 

In today’s environment, understanding the nuance is more than just a legal necessity—it’s a strategic advantage. 

Want help evaluating your public sector sales strategies to include COTS status or CMMC readiness? Let’s talk.