What is FedRAMP? Complete Federal Cloud Authorization Guide 2025

TL;DR: Quick Takeaways

•FedRAMP is the standardized security assessment framework for cloud services used by federal agencies
•Three impact levels: Low (125 controls), Moderate (325 controls), High (421 controls)
•Authorization typically takes 12-18 months and costs $50K-$250K+ depending on level
•Two paths: JAB (highest recognition) or Agency (faster, specific agency)

If you're a cloud service provider (CSP) looking to serve federal government agencies, FedRAMP authorization isn't just a nice-to-have—it's the only way to get in the door. Without FedRAMP, federal agencies simply cannot use your cloud services, regardless of how good your product is.

The Federal Risk and Authorization Management Program (FedRAMP) was created in 2011 to standardize security assessments for cloud services across the federal government. Before FedRAMP, each agency conducted its own security assessments, creating massive redundancy and inconsistency.

In this comprehensive guide, we'll break down everything you need to know about FedRAMP—from understanding the three impact levels to navigating the authorization process efficiently.

What is FedRAMP?

FedRAMP (Federal Risk and Authorization Management Program) is a US government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.

The program uses a "do once, use many times" framework, allowing cloud service providers to complete a single security authorization that can be leveraged by any federal agency. This eliminates the need for individual agencies to conduct separate security assessments.

Key Benefits of FedRAMP

Federal Market Access:Required to sell cloud services to federal agencies
Reusable Authorization:One authorization works across all agencies
Competitive Advantage:Differentiates you in the government market
Security Validation:Third-party verification of security controls

📊

FedRAMP Process Overview

Three FedRAMP Impact Levels

FedRAMP uses three impact levels based on FIPS 199, which categorizes information and systems based on the potential impact if compromised:

LOW

FedRAMP Low

Low-impact data and systems

• 125 security controls (subset of NIST SP 800-53)
• Use Case: Public-facing information, non-sensitive data
• Timeline: 6-9 months
• Cost: $50K-$150K

Examples: Public websites, collaboration tools with non-sensitive data, content management systems

MOD

FedRAMP Moderate

Moderate-impact data (most common)

• 325 security controls from NIST SP 800-53
• Use Case: Personally Identifiable Information (PII), internal agency data
• Timeline: 12-18 months
• Cost: $100K-$250K+

Examples: CRM systems, financial management, HR systems, most SaaS applications

HIGH

FedRAMP High

High-impact data and critical systems

• 421 security controls (full NIST SP 800-53)
• Use Case: Law enforcement, emergency services, critical infrastructure
• Timeline: 18-24+ months
• Cost: $250K-$500K+

Examples: National security systems, law enforcement databases, emergency response systems

💡 Pro Tip:

Most CSPs start with FedRAMP Moderate, as it covers the majority of federal use cases and provides access to the broadest market. FedRAMP High is only necessary if you're specifically targeting high-impact systems.

Two Authorization Paths: JAB vs Agency

There are two paths to FedRAMP authorization, each with different requirements and benefits:

JAB Authorization

Joint Authorization Board (JAB) provides a government-wide authorization through a rigorous review process.

✅ Advantages:

• Highest level of recognition
• Accepted by all agencies automatically
• "Gold standard" of FedRAMP
• Competitive advantage

❌ Disadvantages:

• Highly competitive (limited slots)
• Longer timeline (18-24 months)
• More rigorous review process
• Higher costs

Best For: CSPs targeting multiple agencies or seeking maximum market recognition

Agency Authorization

Individual agency sponsors your authorization, providing a faster path to market.

✅ Advantages:

• Faster path to authorization
• Confirmed customer/revenue
• Agency supports the process
• Lower initial investment

❌ Disadvantages:

• Need agency sponsorship first
• Other agencies must review/accept
• Less immediate market access
• Potential for re-assessment

Best For: CSPs with an existing agency customer or specific agency target

Which Path Should You Choose?

The decision depends on your business goals, timeline, and existing relationships:

• Choose JAB if: You want maximum market access, have the resources, and can wait 18-24 months
• Choose Agency if: You have a sponsoring agency, need faster authorization, or want to prove market fit first

Ready for FedRAMP Authorization?

Get a free FedRAMP readiness assessment and learn exactly what controls you need to implement for your target impact level.

Book Free Assessment Download FedRAMP Guide

The FedRAMP Authorization Process

The FedRAMP authorization process is comprehensive and requires significant documentation. Here's what to expect:

FedRAMP Ready

Package your security materials and submit to FedRAMP PMO for review

Duration: 2-3 months | Cost: $10K-20K

Secure 3PAO Engagement

Contract with FedRAMP-authorized Third Party Assessment Organization

Duration: 1 month | Cost: $80K-200K

System Security Plan (SSP)

Develop comprehensive SSP documenting all security controls (300-1000+ pages)

Duration: 2-4 months | Cost: $20K-60K

Security Assessment

3PAO conducts thorough assessment, testing, and vulnerability scanning

Duration: 3-6 months | Included in 3PAO cost

Remediation

Address findings and develop Plan of Action & Milestones (POA&M)

Duration: 2-4 months | Cost: Varies

Authorization Decision

JAB or Agency reviews package and issues Authority to Operate (ATO)

Duration: 2-6 months | No additional cost

Continuous Monitoring

Ongoing security monitoring, monthly reporting, annual assessment

Duration: Perpetual | Cost: $50K-100K/year

Key FedRAMP Requirements

FedRAMP authorization requires implementing and documenting extensive security controls. Here are the key requirement areas:

📄 Documentation Requirements

• System Security Plan (SSP) - 300-1000+ pages
• Security Assessment Plan (SAP)
• Security Assessment Report (SAR)
• Plan of Action & Milestones (POA&M)
• Continuous Monitoring Plan
• Incident Response Plan
• Configuration Management Plan
• Contingency Plan and DR procedures

🔒 Technical Controls

• Encryption in transit and at rest (FIPS 140-2)
• Multi-factor authentication
• Security Information and Event Management (SIEM)
• Vulnerability scanning (monthly)
• Penetration testing (annual)
• Log management and retention
• Network segmentation and boundary protection
• Configuration management and baseline

👥 Personnel & Process

• Background checks for personnel
• Security awareness training
• Separation of duties
• Access reviews (quarterly)
• Change management procedures
• Incident response procedures
• Supply chain risk management

📊 Continuous Monitoring

• Monthly continuous monitoring reports
• Operating system, database, and web application scans
• Annual security assessment by 3PAO
• POA&M tracking and updates
• Significant change request process
• Incident reporting to FedRAMP PMO

FedRAMP Costs Breakdown

FedRAMP authorization is a significant investment. Here's a realistic cost breakdown for FedRAMP Moderate:

Total Cost: $150K-$300K (Year 1)

3PAO Assessment

Third-party security assessment

$80K-150K

Documentation & SSP

System Security Plan development

$20K-50K

Consulting Support

Expert guidance through process

$30K-60K

Security Tools & Infrastructure

SIEM, scanning, monitoring tools

$20K-40K

Internal Resources

Staff time (500-1000 hours)

Variable

Ongoing Annual Costs: $50K-100K

• Annual 3PAO assessment: $30K-50K
• Continuous monitoring tools: $10K-20K
• Compliance management platform: $5K-15K
• Consultant retainer: $5K-15K

💰

FedRAMP Investment Timeline

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Key Takeaways

1
FedRAMP is mandatory for cloud service providers selling to federal agencies—without it, you cannot access the federal market.
2
Choose the right impact level for your use case—Moderate covers most applications and provides the broadest market access.
3
JAB authorization provides maximum recognition but takes longer; Agency authorization is faster with a sponsoring agency.
4
Budget $150K-$300K for initial authorization and $50K-$100K annually for continuous monitoring and compliance.
5
Start early and use automation—FedRAMP takes 12-18 months, and automated tools can reduce both timeline and costs significantly.

Frequently Asked Questions

Can I sell to federal agencies without FedRAMP?

No. Federal agencies cannot procure cloud services that are not FedRAMP authorized. This is a hard requirement established by federal policy. Without FedRAMP authorization, federal agencies cannot sign contracts for your cloud services, regardless of how well your product meets their needs.

What's the difference between FedRAMP and StateRAMP?

FedRAMP is for federal agencies, while StateRAMP is for state and local governments. StateRAMP is less rigorous and less expensive than FedRAMP, but it's not recognized by federal agencies. Some CSPs pursue both certifications to access both markets. FedRAMP Moderate requires 325 controls while StateRAMP Impact Level 2 requires 200 controls.

How long does FedRAMP authorization last?

FedRAMP authorization doesn't have an expiration date, but you must maintain continuous monitoring and compliance. This includes monthly continuous monitoring reports, annual 3PAO assessments, and maintaining your POA&M. If you fall out of compliance or fail to submit required documentation, your authorization can be revoked.

Do I need to be FedRAMP authorized to bid on contracts?

It depends on the contract. Some contracts require FedRAMP authorization before you can bid, while others allow you to bid with the understanding that you'll achieve authorization before go-live. However, having FedRAMP authorization (or at least FedRAMP Ready status) significantly strengthens your competitive position and demonstrates commitment to federal requirements.

Can I inherit FedRAMP controls from my cloud provider?

Yes! If you build on a FedRAMP-authorized infrastructure provider (like AWS GovCloud, Azure Government, or Google Cloud), you can inherit many infrastructure-level controls. This significantly reduces your control implementation burden. However, you're still responsible for application-level controls and must document the inheritance in your SSP.