Editor's note: CMMC has been updated several times since this post was first published, most recently when the Department of War suspended Phase 2 in July 2026. We have also rebranded: Intech Hawaii is now Intech Pacific. We updated this post in October 2026 to reflect the current state of the program. For the latest information, see our CMMC Overview and our CMMC Calendar.
Last updated: October 2026
There is no fixed CMMC fine. The consequences of missing CMMC compliance are contractual and legal: you cannot be awarded a contract that requires a CMMC status you do not have, you can lose work you already hold, and if you misrepresent your security to the government, you can face False Claims Act liability with treble damages. DIBCAC assessments and prime contractors add pressure of their own. For defense contractors managing SPRS in Guam and Hawaii, the bigger risk today is not a penalty letter. It is quietly losing eligibility and the trust of the primes you depend on.
Consequence 1: You Cannot Win the Contract
The most immediate consequence is ineligibility for award. When a solicitation includes DFARS 252.204-7021 or 252.204-7025, the contractor must have the required CMMC status, at the required level, posted in SPRS for each information system that will handle FCI or CUI. Each system is tied to a CMMC Unique Identifier. If the status is not there at award, the contracting officer cannot award to you.
This applies during the 2026 pause. Phase 1 began November 10, 2025, so Level 1 and Level 2 self-assessment requirements already appear in applicable solicitations. Under Class Deviation 2026-O0025 Revision 3, contracting officers accept a self-assessment in place of a C3PAO assessment, but they still require a valid status and affirmation.
A practical issue I see often: contractors who do not yet have SPRS or PIEE access. Getting access can take days to weeks. Do it before a solicitation lands. For Guam contractors, our CMMC Guam page explains how we help with access setup and the rest of the process on island.
Consequence 2: You Can Lose Work You Already Have
CMMC status has to be maintained for the life of the contract, not just at award. Under DFARS 252.204-7021, contractors must keep their status current, complete annual affirmations, and report changes to CMMC Unique Identifiers to the contracting officer.
If your status lapses or your affirmation is no longer accurate, standard contract remedies apply. In practice, that can mean an option that is not exercised, a cure notice, or termination. Lost options are the quiet version. Nobody sends a penalty notice. The work simply goes to someone else.
Consequence 3: False Claims Act Liability
The False Claims Act (FCA) is the largest financial exposure. It is not a "$10,000 per control" fine, a claim that circulated widely, including in an earlier version of this post. The FCA works this way:
- Liability attaches when a contractor knowingly submits, or causes, a false claim for payment, or makes a false statement material to one.
- "Knowingly" includes deliberate ignorance and reckless disregard. You do not need to intend fraud.
- Damages can reach three times the government's losses, plus a civil penalty for each false claim, adjusted annually for inflation.
- Whistleblowers, often employees, can file qui tam suits and share in the recovery.
Since the Department of Justice launched its Civil Cyber-Fraud Initiative on October 6, 2021, cybersecurity settlements have included MORSECORP ($4.6 million, March 2025), LOGZONE ($507,144, June 2026), and Honeywell Aerospace ($2,042,518, September 2026). We cover the full list and the mechanics in The False Claims Act and CMMC.
Consequence 4: DIBCAC Findings
The government can verify your claims directly. The Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) conducts Medium and High assessments, and the DoW kept that authority through the 2026 pause. DFARS 252.240-7997 (formerly 252.204-7020) requires contractors to give DoD assessors access.
The LOGZONE case shows what happens when a self-assessment does not hold up. The company reported an SPRS score of 110. DIBCAC found -170. That gap became the basis of an FCA settlement.
Consequence 5: Primes Drop Subcontractors Who Cannot Prove Status
Under 32 CFR 170.23 and DFARS 252.204-7021, a prime must confirm that a subcontractor has a current CMMC status at the appropriate level before awarding the subcontract. A subcontractor handling CUI needs at least the same Level 2 assessment type the prime contract requires.
Primes also write their own requirements into subcontracts. That is a private agreement. If your prime requires a C3PAO certification, it is a requirement for you, regardless of the pause. Until primes clarify flow-down, I advise subcontractors to match the level of the DoW contract.
Consequence 6: Incident Costs and Reputation
A contractor that does not meet NIST SP 800-171 is more likely to have an incident. DFARS 252.204-7012 then requires reporting within 72 hours through the DoD Cyber Crime Center (DC3) reporting portal, preserving images for 90 days, and submitting malware to DC3. Add forensics, downtime, and legal fees.
Reputation follows. In Hawaii's defense community, everyone knows each other. A prime that has to replace a subcontractor over a cyber issue remembers it.
SPRS in Guam: How to Protect Your CMMC Status
These steps address every consequence above:
- Read your contracts and subcontracts for DFARS 252.204-7012, 7021, and 7025.
- Get SPRS and PIEE access now.
- Get an independent gap assessment. Self-scored results are usually too generous.
- Post only scores you can support with evidence.
- Keep your System Security Plan current. You cannot pass a Level 2 assessment without one, because requirement 3.12.4 can never go on a POA&M.
- Close POA&M items within 180 days when you hold conditional status.
- Make sure any cloud service handling CUI meets FedRAMP Moderate or equivalent.
- Practice your incident reporting process, including the DoD-approved medium assurance certificate that DC3 incident reporting requires.
- Ask your primes in writing what they require.
Talk to Intech Pacific About CMMC Compliance
To see how we help contractors in Hawaii and Guam, from a free readiness session to fully managed compliance, visit our CMMC Solutions page.
