How Much Does FedRAMP Compliance Cost?

FedRAMP compliance costs can be broken up into two parts: 1) initial ATO costs and 2) ongoing authorization or continuous monitoring costs. The initial FedRAMP compliance professional services costs for the most part vary between $250,000 to $750,000 depending on the support required, accreditation level and size of the environment. Generally, speaking FedRAMP compliance costs are accrued to support deployment engineering, documentation and 3PAO assessment as well as ongoing continuous monitoring costs. FedRAMP compliance is becoming the gold standard in security given its rigorous and comprehensive coverage of management, operational and technical controls. As organizations look to provide cloud services to the federal government, understanding the costs associated with Federal Risk and Authorization Management Program (FedRAMP) compliance becomes crucial. In this blog post, we’ll break down the various costs associated with FedRAMP to help you plan and budget effectively.

What is FedRAMP?

FedRAMP, the Federal Risk and Authorization Management Program, is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services. It aims to ensure that cloud services used by federal agencies meet strict security requirements to protect sensitive data.

Initial FedRAMP Assessment Costs

• Preparation Costs

1. 1. • Technical Assessment: Before you begin the formal assessment, conduct a technical assessment to make sure that encryption standards comply with FIPS 140-3, centralized authentication & authorization as well as essential security services like SIEM are addressed. 
      • Strategy Advisory Fees: Hiring experts to guide you through the strategy advisory on sponsorship, competitive market research and developing a business case can be invaluable. Consulting fees can vary widely, typically ranging from $50,000 to $200,000.

• Third-Party Assessment Organization (3PAO)

1. • Initial Assessment: A 3PAO must conduct an independent assessment of your system. The cost for this initial assessment can range from $100,000 to $300,000, depending on the scope and complexity of the system.

FedRAMP Implementation Costs

• Remediation Costs

1. 1. • System Improvements: Addressing gaps and implementing required security controls can be costly. These costs are highly variable, depending on the state of your current system and the specific controls needed, but they can easily run into hundreds of thousands of dollars.
      • Documentation: Developing the necessary documentation, including System Security Plan (SSP), Policies and Procedures, and Continuous Monitoring Plan, is a labor-intensive process. Costs for documentation preparation can range from $50,000 to $250,000 depending the Impact Level and whether or not DOD overlays are required.

• Tools and Technologies

1. • Security Tools: Implementing tools for continuous monitoring, incident response, and vulnerability management is essential. Costs for these tools can range from $50,000 to $100,000 annually.
   • Automation Solutions: Investing in automation solutions for compliance management (GRC) can streamline processes and reduce long-term costs. Initial investments can range from $50,000 to $100,000.

Continuous Monitoring Costs for FedRAMP

• Ongoing Assessments

1. 1. • Annual Assessments: Maintaining FedRAMP compliance requires annual assessments by a 3PAO. These assessments typically cost between $50,000 and $150,000 per year.
      • Continuous Monitoring: Continuous monitoring activities, including regular scans and reporting, require ongoing investment. Annual costs for continuous monitoring can range from $100,000 to $400,000.

• Staffing Costs

1. • Compliance Personnel: Hiring or designating staff to manage FedRAMP compliance efforts is necessary. Salaries for compliance professionals can range from $100,000 to $150,000 annually.
   • Training: Regular training for staff on compliance requirements and best practices is essential. Training costs can range from $10,000 to $30,000 annually.

Total Cost Estimate for FedRAMP Compliance

Given the various factors and wide range of potential expenses, the total cost for achieving and maintaining FedRAMP compliance can vary significantly. For small to mid-sized cloud service providers (CSPs), the initial costs can range from $500,000 to $1,000,000, with ongoing annual costs between $200,000 and $500,000.

Is FedRAMP Worth the Investment?

Understanding the costs associated with FedRAMP compliance is crucial for any organization looking to provide cloud services to the federal government. Conducting a total addressable market (TAM) analysis covering Federal, Defense, State and Public sector markets helps justify the investment. The FedRAMP Marketplace is a great place to start. While the investment can be substantial, achieving FedRAMP compliance can open doors to stable federal contracts and demonstrate your commitment to robust security practices. By planning and budgeting effectively, you can navigate the FedRAMP process and position your organization for long-term success.

For more insights and guidance on FedRAMP compliance, feel free to explore our resources at stackArmor.com or contact our team of experts for personalized support.

You can also learn more by reading our comprehensive whitepaper on preparing for FedRAMP.