If you’re a defense contractor or part of the federal supply chain, you’ve likely heard about NIST SP 800-171. Maybe you’ve even started implementing controls or conducted a self-assessment.
But here’s the hard truth: there are real consequences if you’re not fully compliant. Some of which can put your business at risk.
This article explains what can happen if your organization fails to meet NIST 800-171 requirements, why this framework matters, and how to protect your contract eligibility and reputation.
What Is NIST 800-171?
NIST SP 800-171 outlines the cybersecurity standards for protecting Controlled Unclassified Information (CUI) in non-federal systems. You must comply if you handle CUI under a Department of Defense (DoD) contract or other federal agency engagement.
These requirements are legally enforced through the DFARS 252.204-7012 clause, which has been in effect since 2017.
What Happens If You’re Not Compliant?
Let’s look at the most common and serious consequences.
1. Loss of Current or Future Contracts
Federal agencies and prime contractors are under increasing pressure to work only with vendors who can prove compliance. If you can’t demonstrate that your systems meet NIST 800-171, you may:
- Be disqualified from proposals.
- Lose out on recompetes.
- Fail to pass audits or security reviews.
- Get removed from subcontractor lists.
Bottom line: Noncompliance can cut you off from government work. Even if you’ve delivered quality results in the past.
2. False Claims Act Liability
Suppose you claim to comply with a self-assessment, bid, or security questionnaire. But you’re not. You may expose your company to False Claims Act (FCA) violations.
For example, in 2022, Aerojet Rocketdyne agreed to pay $9 million to settle FCA allegations of misrepresenting cybersecurity compliance under federal contracts. A whistleblower inside the company brought that case.
Falsely claiming compliance is not just a risk. It’s a legal liability.
3. Audit Failure and Remediation Orders
Prime contractors and agencies are starting to enforce their right to audit vendors. If you’re subject to an audit and cannot provide the following:
- System Security Plan (SSP)
- Plan of Action and Milestones (POA&M)
- Evidence of controls being implemented
.You may be forced into immediate remediation, reporting, or contract suspension.
Sometimes, audits lead to temporary stop-work orders or disqualification from future bids until issues are resolved.
4. CMMC Requirements Are Catching Up
The Cybersecurity Maturity Model Certification (CMMC) program is rolling out across the DoD ecosystem. CMMC is built directly on NIST 800-171.
Under the upcoming rules:
- You must have an active NIST 800-171 self-assessment score in the Supplier Performance Risk System (SPRS)
- Scores must be accurate and justifiable.
- Level 2 contracts will require third-party assessments that validate your NIST 800-171 compliance.
The “we’ll get to it later” window is closing fast.
5. Increased Risk of Breach
Ignoring or postponing NIST 800-171 doesn’t just hurt you contractually. It increases the risk of real-world cyber incidents, including:
- Ransomware attacks
- Credential theft
- Insider threats
- Supply chain compromise
Many of the controls in 800-171 are there to protect sensitive data that attackers actively seek. If you haven’t implemented them, you’re more vulnerable than you may realize.
What You Should Be Doing Right Now
If you know, you’re not fully compliant. Or not sure where you stand. Here are your next steps:
Conduct a Gap Assessment
Understand precisely which controls you’ve met, which are partially in place, and which are missing.
Develop a System Security Plan (SSP)
This mandatory document outlines your environment, controls, and policies.
Create a POA&M
This is your roadmap for closing any gaps. It shows intent and progress. Which is better than pretending you’re already done.
Submit Your SPRS Score
For DoD contractors, scoring and uploading to the Supplier Performance Risk System is required.
Work With a Compliance Partner
If this process feels overwhelming, you’re not alone. Many companies benefit from working with firms that specialize in defense sector compliance.
Final Thought
Not meeting NIST 800-171 isn’t just a paperwork problem. It’s a business risk.
You could lose contracts, face legal action, damage your reputation, or open the door to cyberattacks. But the good news is this: it’s not too late to fix it.
At Black Rock Engineering & Technology, we help contractors assess where they stand, create realistic compliance plans, and implement controls that work.
Need help getting compliant?
We will walk you through the steps you need to take. Quickly and without confusion.