What Is FedRAMP?

FedRAMP Explained

FedRAMP began in 2011 as an OMB policy initiative and was later codified in statute through the FedRAMP Authorization Act. Its founding logic is do once, use many times: before FedRAMP, every agency independently assessed the same cloud provider, duplicating effort and producing inconsistent results. Under FedRAMP a cloud service offering is assessed once against a standard baseline, the resulting package is stored in a central repository, and any agency can review and reuse it to grant its own Authorization to Operate.

Impact level determines the baseline. Using FIPS 199 categorization for confidentiality, integrity, and availability, an offering is designated Low, Moderate, or High. The control baselines derive from NIST SP 800-53, with Moderate - the level most federal systems require - carrying several hundred controls plus FedRAMP-specific parameters and additional requirements. Low includes a streamlined Tailored path for low-risk SaaS. High is reserved for data whose compromise would have severe or catastrophic effect, such as law enforcement or emergency services systems.

The assessment itself is performed by a Third Party Assessment Organization, an accredited independent firm that tests controls, performs penetration testing, and produces a Security Assessment Report. The provider supplies a System Security Plan and remediates or documents findings in a Plan of Action and Milestones. Authorization comes either from a sponsoring agency or through a government-wide review body. Authorization is not a finish line: continuous monitoring requires monthly vulnerability scanning, POA&M updates, and annual assessment, with significant change requests reviewed before major architecture changes.

DoD adds a layer on top. The Cloud Computing Security Requirements Guide defines Impact Levels 2, 4, 5, and 6, where IL4 and IL5 handle CUI and higher-sensitivity unclassified data and IL6 handles classified information. A FedRAMP Moderate or High authorization is the prerequisite, and the DoD provisional authorization adds requirements around US-person access, physical location of data and support personnel, and connectivity through approved boundary points.

For defense manufacturers the operative phrase in DFARS 252.204-7012 is FedRAMP Moderate equivalency. A cloud provider handling covered defense information must meet requirements equivalent to the Moderate baseline. Equivalency has proven contentious because DoD has signaled it expects a genuine equivalent - a 3PAO-assessed body of evidence - rather than a vendor claim. This is a major reason defense suppliers either select government-community cloud regions with actual authorizations or keep controlled ERP and AI workloads on premises where equivalency arguments are unnecessary.