The 12 Security Policies Every Defense Contractor Needs

One of the most common questions I get from defense contractors is: "What security policies do I actually need for CMMC compliance?"

After 30 years in cybersecurity and countless policy implementations, I can tell you this: most organizations have too many policies or too few. The sweet spot for CMMC Level 1 compliance is 12 core security policies that comprehensively address all requirements without unnecessary complexity.

In this guide, I'll break down each policy, explain what it must cover, and show you why cookie-cutter templates often fall short.

Why Policy Quality Matters

Before diving into specific policies, let's address a critical point: policies are not checkboxes.

I've reviewed hundreds of security policies from defense contractors. The most common failure pattern? Organizations download generic templates, fill in their company name, and call it done. Then they wonder why:

• Employees don't follow the policies (because they're not practical)
• Auditors flag gaps (because templates miss specific requirements)
• Implementation stalls (because policies don't match reality)

Good policies are:

• ✅ Specific to your operations
• ✅ Aligned with CMMC/NIST requirements
• ✅ Implementable with available resources
• ✅ Clear enough for non-technical staff

Bad policies are:

• ❌ Copy-pasted without customization
• ❌ Filled with undefined jargon
• ❌ Impossible to implement
• ❌ Missing required elements

The 12 Essential Policies

1. Access Control Policy

What It Covers:

• Who can access which systems and data
• How access is granted, modified, and revoked
• Role-based access principles
• Privileged account management
• Account review procedures

CMMC Practices Addressed: AC.L1-3.1.1, AC.L1-3.1.2, AC.L1-3.1.20, AC.L1-3.1.22

Critical Elements:

• Least privilege principle — users only get access they need for their job
• Separation of duties — critical functions require multiple people
• Access request process — formal procedure for requesting access
• Periodic access reviews — quarterly or annual review of who has what access
• Termination procedures — immediate access removal when employees leave

Common Mistakes:

• Policy says "limit access" but doesn't define how
• No process for requesting or approving access
• Missing privileged account controls
• No access review schedule

Implementation Reality Check: Most small contractors can implement this with:

• Active Directory group policies
• Documentation of who has admin rights
• Quarterly spreadsheet review of user access
• Termination checklist

Estimated Time to Implement: 2-3 weeks

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2. Password & Authentication Policy

What It Covers:

• Password complexity requirements
• Password expiration and reuse rules
• Multi-factor authentication (MFA) requirements
• Account lockout procedures
• Password storage and transmission

CMMC Practices Addressed: IA.L1-3.5.1, IA.L1-3.5.2

Critical Elements:

• Minimum password requirements — length, complexity, expiration
• MFA for remote access — required for VPN, cloud services
• Account lockout — automatic lockout after failed attempts
• Password reset procedures — secure identity verification
• Service account management — how system passwords are handled

Common Mistakes:

• Requiring passwords so complex nobody can remember them
• Not enforcing MFA for remote access
• Missing account lockout settings
• No policy for shared/service accounts

Real-World Example: One contractor required 16-character passwords with special characters, changed monthly. Result? Everyone wrote passwords on sticky notes. Better approach: 12-character passphrases with MFA, changed every 90 days.

Implementation Reality Check:

• Windows Group Policy for password requirements
• Duo, Microsoft Authenticator, or similar for MFA
• Password manager for organization
• Document exceptions for service accounts

Estimated Time to Implement: 1-2 weeks

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3. Incident Response Plan

What It Covers:

• How to identify security incidents
• Who responds and what they do
• Communication procedures during incidents
• Recovery and lessons learned
• Reporting requirements to DoD

CMMC Practices Addressed: IR.L1-3.6.1, IR.L1-3.6.2

Critical Elements:

• Incident definition — what qualifies as a security incident
• Response team — roles and responsibilities
• Detection mechanisms — how incidents are identified
• Response procedures — step-by-step actions
• DoD reporting — 72-hour notification for CUI incidents
• Post-incident review — lessons learned process

Common Mistakes:

• Plan is theoretical with no practical steps
• No defined response team or backup contacts
• Missing DoD reporting procedures
• Never tested or practiced

Real-World Scenario: Contractor discovers ransomware on a system. Without an incident response plan:

• Nobody knows who to call
• Evidence gets destroyed by well-meaning IT staff
• DoD notification deadline missed
• Recovery takes 3 weeks instead of 3 days

Implementation Reality Check:

• Create simple flowchart of who does what
• Document contact information (kept offline)
• Practice tabletop exercise annually
• Template for DoD incident reporting

Estimated Time to Implement: 2-3 weeks

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4. Data Protection & Encryption Policy

What It Covers:

• Classification of data (public, internal, confidential, FCI/CUI)
• Encryption requirements for data at rest and in transit
• Data handling procedures
• Data retention and destruction
• Data loss prevention measures

CMMC Practices Addressed: SC.L1-3.13.1, SC.L1-3.13.8, MP.L1-3.8.3

Critical Elements:

• Data classification scheme — how to identify sensitive data
• Encryption standards — what algorithms and key lengths
• Storage requirements — where different data types can be stored
• Transmission rules — email, file transfer, cloud storage
• Mobile device encryption — laptops, phones, USB drives

Common Mistakes:

• Saying "encrypt everything" without defining how
• No process for identifying what needs protection
• Missing encryption key management procedures
• Allowing sensitive data on personal devices

Implementation Reality Check:

• BitLocker/FileVault for endpoint encryption
• TLS 1.2+ for web traffic
• VPN for remote access
• Encrypted email for sensitive communications
• Cloud storage with encryption (OneDrive, SharePoint with encryption)

Estimated Time to Implement: 2-4 weeks

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5. Physical Security Policy

What It Covers:

• Building and facility access controls
• Visitor management
• Equipment security
• Environmental controls
• After-hours procedures

CMMC Practices Addressed: PE.L1-3.10.1, PE.L1-3.10.3, PE.L1-3.10.4, PE.L1-3.10.5

Critical Elements:

• Access control mechanisms — locks, badges, keys
• Visitor procedures — sign-in, escort requirements, badge issuance
• Server room/data center security — who can access
• Equipment protection — desktop locks, laptop cables
• After-hours access — who can enter and under what circumstances

Common Mistakes:

• Policy describes Fort Knox but building has no access controls
• Visitor log exists but nobody uses it
• No procedures for after-hours cleaning crews
• Server room "secured" with regular office door lock

Real-World Example: Small contractor has excellent cyber controls but allows cleaning crew unsupervised access at night. Cleaning company subcontracts work. Subcontractor employee takes photos of whiteboards with FCI. Policy violation leads to contract loss.

Implementation Reality Check:

• Badge access or keypad entry for main entrance
• Visitor sign-in sheet with escort requirement
• Locked server closet with access list
• Cable locks for laptops
• After-hours access log

Estimated Time to Implement: 2-3 weeks

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6. Media Protection Policy

What It Covers:

• Sanitization before disposal or reuse
• Marking and labeling of media
• Physical media transportation
• Backup media storage and protection
• Media accountability

CMMC Practices Addressed: MP.L1-3.8.1, MP.L1-3.8.2, MP.L1-3.8.3

Critical Elements:

• Sanitization standards — NIST 800-88 methods
• Disposal procedures — hard drives, USB drives, paper
• Transport security — shipping laptops, drives, documents
• Media labeling — marking sensitivity levels
• Backup media — storage, encryption, retention

Common Mistakes:

• "We recycle old computers" — but drives aren't wiped
• No tracking of USB drives or external media
• Backup tapes stored in unlocked cabinet
• Shipping laptops without disk encryption

Implementation Reality Check:

• DBAN or vendor secure erase for drives
• Shredding service for paper/optical media
• Log of media disposal (date, method, who)
• Encrypted backups in locked cabinet/safe
• Media inventory for removable drives

Estimated Time to Implement: 1-2 weeks

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7. Configuration Management Policy

What It Covers:

• Baseline configurations for systems
• Change management procedures
• Configuration documentation
• Unauthorized change detection
• Software and hardware inventory

CMMC Practices Addressed: CM.L1-3.4.1, CM.L1-3.4.2, CM.L1-3.4.5

Critical Elements:

• Baseline configurations — standard builds for workstations, servers
• Change approval process — who can authorize changes
• Configuration documentation — as-built documentation
• Change tracking — log of what changed, when, why
• Testing before deployment — changes tested in non-production first

Common Mistakes:

• Every system configured differently
• No change control — IT makes changes at will
• Missing system inventory
• No rollback procedures

Implementation Reality Check:

• Standard Windows/MacOS image with required security settings
• Simple change request form for significant changes
• Spreadsheet inventory of systems
• Document current configurations

Estimated Time to Implement: 3-4 weeks

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8. System & Communications Protection Policy

What It Covers:

• Network boundary protection
• Security function isolation
• Communication encryption
• Network segmentation
• Remote access security

CMMC Practices Addressed: SC.L1-3.13.1, SC.L1-3.13.5

Critical Elements:

• Firewall requirements — boundary protection
• Network segmentation — separate guest/production networks
• Remote access — VPN requirements and MFA
• Wireless security — WPA2/WPA3, guest network isolation
• Communication encryption — TLS for web, encryption for email

Common Mistakes:

• Flat network with no segmentation
• Weak wireless security
• No firewall or misconfigured firewall
• Remote access without MFA

Implementation Reality Check:

• Business-grade firewall with basic rules
• Separate SSIDs for corporate/guest WiFi
• VPN with MFA for remote workers
• Web filtering/monitoring
• Document network diagram

Estimated Time to Implement: 2-3 weeks

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9. System & Information Integrity Policy

What It Covers:

• Flaw identification and remediation
• Malware protection
• Security alerts and advisories
• Security testing
• Software updates and patches

CMMC Practices Addressed: SI.L1-3.14.1, SI.L1-3.14.2, SI.L1-3.14.4

Critical Elements:

• Vulnerability scanning — monthly or quarterly scans
• Patch management — timeframes for critical, high, medium patches
• Antivirus/anti-malware — endpoint protection requirements
• Signature updates — automatic daily updates
• Security alerts — monitoring vulnerability announcements

Common Mistakes:

• Antivirus installed but not updated
• No patch management process
• Critical vulnerabilities unpatched for months
• No testing before patching

Real-World Example: Contractor had antivirus but signatures were 6 months old. Ransomware infection spread across network. Updated antivirus would have blocked it.

Implementation Reality Check:

• Endpoint protection (Windows Defender, CrowdStrike, etc.)
• Windows Update for Workstations
• WSUS or manual patching for servers
• Monthly review of patch status
• Subscribe to security mailing lists

Estimated Time to Implement: 2-3 weeks

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10. Audit & Accountability Policy

What It Covers:

• Event logging requirements
• Log review procedures
• Log protection and retention
• Time synchronization
• Audit record analysis

CMMC Practices Addressed: AU.L1-3.3.1, AU.L1-3.3.2

Critical Elements:

• Events to log — failed logins, privilege use, access attempts
• Log retention — minimum 90 days, recommended 1 year
• Log review — weekly or monthly review of security logs
• Log protection — prevent unauthorized modification/deletion
• Time sync — NTP for accurate timestamps

Common Mistakes:

• Logging enabled but nobody reviews logs
• Logs deleted after 30 days
• No log protection
• Inconsistent time across systems

Implementation Reality Check:

• Windows Event Logs configured
• Centralized collection (even simple network share)
• Monthly review of authentication failures, privilege use
• Backup logs to prevent tampering
• NTP configured on all systems

Estimated Time to Implement: 2-3 weeks

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11. Security Awareness & Training Policy

What It Covers:

• Initial security training for new employees
• Annual refresher training
• Role-based training requirements
• Training content and topics
• Training records and documentation

CMMC Practices Addressed: AT.L1-3.2.1, AT.L1-3.2.2

Critical Elements:

• New hire training — security training within first 30 days
• Annual training — refresher for all employees
• Specialized training — admin, privileged users get extra training
• Topics covered — passwords, phishing, data handling, physical security
• Documentation — attendance records, completion certificates

Common Mistakes:

• One-time training at hire, never again
• Generic training not relevant to organization
• No documentation of who completed training
• Training is email attachment nobody reads

Implementation Reality Check:

• KnowBe4, Cofense, or similar platform ($200-500/year)
• Or: create simple presentation, deliver annually
• Phishing simulation testing
• Sign-in sheet and completion records

Estimated Time to Implement: 1-2 weeks to set up, ongoing monthly

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12. Personnel Security Policy

What It Covers:

• Background screening requirements
• Termination procedures
• Access removal processes
• Personnel transfer procedures
• Sanctions for policy violations

CMMC Practices Addressed: PS.L1-3.9.1, PS.L1-3.9.2

Critical Elements:

• Screening standards — background checks before access to FCI/CUI
• Termination checklist — access removal, equipment return, exit interview
• Transfer procedures — access review when role changes
• Policy compliance — consequences for violations
• Third-party personnel — screening for contractors/vendors

Common Mistakes:

• No background checks for FCI/CUI access
• Access not removed when employees terminate
• Missing termination checklist
• No policy violation consequences

Implementation Reality Check:

• Background check service ($30-100 per check)
• Termination checklist with IT, HR, management sign-offs
• Documentation of screening and terminations
• Vendor agreements include security requirements

Estimated Time to Implement: 1-2 weeks

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Building Your Policy Library: Three Approaches

Option 1: DIY from Scratch

Time Investment: 80-120 hours Cost: Free (except your time) Pros: Fully customized to your organization Cons: Massive time investment, risk of missing requirements, no expert review

Best For: Organizations with dedicated security staff and plenty of time

Option 2: Professional Templates

Time Investment: 15-25 hours (customization) Cost: $149-$499 Pros: Complete CMMC coverage, expert-created, ready to customize Cons: Still requires customization work

Best For: Most small-medium defense contractors

Option 3: Full Consulting

Time Investment: 10-20 hours (your time) Cost: $5,000-$25,000 Pros: Fully customized, expert implementation Cons: Expensive, long timelines, possible vendor lock-in

Best For: Organizations with budget and no internal security expertise

My Recommendation: Option 2 for 90% of small contractors. Professional templates give you the structure and CMMC compliance while allowing customization for your specific needs. Our policy packs include all 12 policies plus System Security Plan template and complete CMMC mappings.

Implementation Order Matters

Don't try to implement all 12 policies simultaneously. Here's the recommended order:

Phase 1 (Weeks 1-4):

1. Access Control
2. Password & Authentication
3. Physical Security

Phase 2 (Weeks 5-8): 4. Data Protection & Encryption 5. System & Communications Protection 6. System & Information Integrity

Phase 3 (Weeks 9-12): 7. Incident Response 8. Media Protection 9. Configuration Management

Phase 4 (Weeks 13-16): 10. Audit & Accountability 11. Security Awareness & Training 12. Personnel Security

This order prioritizes foundational controls first, then builds on them.

The Bottom Line

These 12 policies form the foundation of CMMC Level 1 compliance. Done right, they're not just compliance documents — they're operational guides that genuinely improve your security posture.

Key Takeaways:

1. Quality over speed — rushing through policy development creates compliance gaps
2. Customize don't copy — generic templates need adaptation to your environment
3. Implement what you write — policies must match reality
4. Start with templates — professional templates save 80+ hours and ensure compliance

Ready to build your policy library? Download our free Password Policy template to see professional policy quality, or get the complete 12-policy pack and accelerate your compliance by months.

Questions about specific policies? Contact us for guidance.