Home > Security and Compliance Blog > Cybersecurity Risk Management > Government DSPM: Managing Classified and Sensitive Data at Scale

Government DSPM: Managing Classified and Sensitive Data at Scale

by Bob Ertl updated September 15, 2025 Cybersecurity Risk Management

Reading Time: 10 minutes

Government agencies face unique challenges in managing classified information and Controlled Unclassified Information (CUI) across increasingly complex cloud and hybrid environments. With public sector data breaches costing an average of $2.86 million and federal contractors risking loss of contracts for FISMA non-compliance, traditional security approaches prove inadequate for the stringent requirements of government data protection.

This comprehensive guide explores how Data Security Posture Management (DSPM) addresses the distinctive challenges government organizations face in securing classified and sensitive data across multi-cloud infrastructures. You’ll discover how DSPM enables continuous compliance with FISMA, FedRAMP, and CMMC requirements while supporting secure digital transformation initiatives that improve citizen services and operational efficiency.

Executive Summary

Main Idea: Government DSPM provides automated discovery, classification, and protection of classified and CUI data across cloud environments while ensuring continuous compliance with FISMA, FedRAMP, and CMMC requirements through integrated risk management and policy enforcement capabilities.

Why You Should Care: Public sector breaches cost an average of $2.86 million, and FISMA non-compliance can result in contract termination and regulatory penalties, making DSPM’s automated compliance monitoring and classified data protection essential for maintaining security clearances and government operations.

Key Takeaways

Classified and cui data discovery is mandatory for FISMA compliance. Government agencies must maintain comprehensive inventories of classified and CUI data across all systems to meet FISMA Security Rule requirements and continuous monitoring mandates.
FedRAMP authorization requires continuous data security monitoring. Cloud service providers must demonstrate ongoing data protection capabilities through automated monitoring and assessment, making DSPM essential for maintaining FedRAMP Authority to Operate status.
CMMC Level 2 certification demands automated cui protection. Defense contractors must implement automated CUI identification and protection controls to achieve CMMC Level 2 certification, with DSPM providing the visibility and control capabilities required.
Government breach costs include contract termination and clearance loss. Beyond the $2.86 million average cost, government breaches can result in contract cancellation, security clearance revocation, and exclusion from future federal work opportunities.
Multi-cloud environments require unified security posture management. Government agencies using multiple cloud platforms need centralized visibility and control to ensure consistent protection policies across all environments handling classified or sensitive data.

Government Data Security Requirements

Government agencies operate under a complex framework of security requirements that extend far beyond typical enterprise compliance. The intersection of classified information, Controlled Unclassified Information (CUI), and public trust creates unique challenges that require specialized data security approaches.

Understanding Government Data Classifications

Government data encompasses multiple classification levels, each with specific handling, storage, and transmission requirements that must be maintained throughout the data lifecycle.

Classified Information

Classified information includes data designated as Confidential, Secret, or Top Secret under Executive Order 13526. This information requires specialized systems, cleared personnel, and strict access controls that traditional commercial security tools cannot adequately support.

Modern government operations increasingly require classified data processing in cloud environments, creating new challenges for maintaining proper security boundaries while enabling necessary collaboration and analysis capabilities.

Controlled Unclassified Information (CUI)

Controlled Unclassified Information (CUI) is information that requires safeguarding or dissemination controls pursuant to and consistent with applicable law, regulations, and government-wide policies but is not classified under Executive Order 13526 or the Atomic Energy Act.

The CUI program was established by Executive Order 13556 to standardize how the executive branch handles unclassified information that requires safeguarding or dissemination controls pursuant to and consistent with law, Federal regulations, and Government-wide policies. This standardization effort replaced over 100 different agency-specific markings with a unified approach.

Regulatory Compliance Framework

Government data security operates within an interconnected framework of regulations and standards that create overlapping requirements and continuous monitoring obligations.

FISMA Requirements

The Federal Information Security Modernization Act (FISMA) requires federal agencies to establish comprehensive information security programs. It emphasizes confidentiality, integrity, and availability, mandates annual reviews, and assigns oversight to DHS and OMB.

FISMA compliance requires ongoing risk assessments, security control implementation, and continuous monitoring capabilities that traditional point solutions cannot provide across complex, distributed government IT environments.

FedRAMP Authorization

FedRAMP is FISMA for the cloud. Both FedRAMP and FISMA use the NIST SP 800-53 security controls. The FedRAMP security controls are based on NIST SP 800-53 baselines and contain controls, parameters, and guidance above the NIST baseline that address the unique elements of cloud computing.

FedRAMP authorization enables multiple agencies to leverage the same security assessment, but each agency must still ensure the cloud service meets their specific risk tolerance and data protection requirements.

CMMC Implementation

The Cybersecurity Maturity Model Certification (CMMC) Program establishes requirements for defense contractors to verify they have implemented required security measures necessary to safeguard Federal Contract Information (FCI) and Controlled Unclassified Information (CUI).

Defense contractors must achieve appropriate CMMC certification levels based on the sensitivity of information they handle, with CMMC Level 2 requiring implementation of all NIST 800-171 controls plus additional practices.

DSPM Capabilities for Government Data Protection

Government DSPM solutions must address unique requirements that extend beyond commercial data protection to include classified data handling, CUI management, and continuous compliance monitoring across complex regulatory frameworks.

Capability	Traditional Security Tools	Government DSPM	Compliance Impact	Mission Benefit
Classified Data Discovery	Limited to network boundaries	Multi-environment automated scanning	FISMA continuous monitoring	Risk reduction
CUI Classification	Manual processes	Automated CUI category identification	CMMC Level 2 certification	Operational efficiency
Multi-Cloud Visibility	Fragmented monitoring	Unified security posture view	FedRAMP continuous monitoring	Centralized oversight
Risk Assessment	Point-in-time evaluations	Continuous risk analysis	NIST 800-53 implementation	Proactive security
Audit Reporting	Manual compilation	Automated compliance documentation	Multiple framework support	Reduced audit burden

Automated Classification and Discovery

Government agencies require comprehensive visibility into classified and sensitive data across all authorized systems, including cloud platforms that support government operations.

Multi-Level Security Integration

DSPM solutions designed for government use must integrate with existing security infrastructure including Security Information and Event Management (SIEM) systems, identity management platforms, and classification guidance systems.

Advanced government DSPM platforms can identify and classify information based on content analysis, metadata inspection, and integration with authoritative classification sources to ensure accurate data handling throughout the information lifecycle.

CUI Category Recognition

Automated CUI identification capabilities help organizations meet CMMC requirements by scanning for the specific data types defined in the CUI Registry. By using the out-of-the-box or custom data classification rules available within DSPM configuration, organizations can quickly identify CUI within their cloud environments and map connections across cloud resources.

This automated visibility enables organizations to establish and justify their CMMC audit boundary more quickly, reducing audit scope and accelerating the documentation process for achieving certification.

Continuous Compliance Monitoring

Government compliance requirements demand ongoing assessment and documentation rather than periodic evaluations, making continuous monitoring capabilities essential.

FISMA Continuous Monitoring

DSPM platforms provide automated capabilities for the continuous monitoring required under FISMA, identifying configuration changes, access pattern anomalies, and potential security control failures before they result in compliance violations.

Integration with government change management processes ensures that all system modifications are properly documented and assessed for security impact, maintaining the comprehensive documentation required for FISMA compliance.

FedRAMP Ongoing Assessment

Cloud service providers must demonstrate ongoing security through continuous monitoring capabilities that provide real-time visibility into security control effectiveness and system changes that might impact authorization status.

DSPM solutions support FedRAMP continuous monitoring requirements by providing automated assessment of security controls, identification of unauthorized changes, and comprehensive logging of all data access and modification activities.

Government DSPM Implementation Strategy

Successful government DSPM implementation requires careful coordination with existing security infrastructure, compliance requirements, and operational procedures unique to government environments.

Phase	Duration	Key Activities	Compliance Milestone	Security Outcome
Assessment	4-6 weeks	Current state analysis, gap identification	FISMA risk assessment update	Baseline establishment
Classification	6-8 weeks	Classified and CUI data discovery	Data inventory completion	Visibility achievement
Integration	8-12 weeks	Security tool integration, policy mapping	Continuous monitoring activation	Unified oversight
Automation	10-16 weeks	Automated controls, workflow integration	Control implementation validation	Operational efficiency
Optimization	Ongoing	Performance tuning, scope expansion	Annual assessment preparation	Continuous improvement

Agency-Specific Deployment Approaches

Different government agencies have varying missions, data sensitivity levels, and operational requirements that influence DSPM implementation strategies.

Defense and Intelligence Agencies

Agencies handling classified information require DSPM solutions that integrate with existing security infrastructure including Cross Domain Solutions (CDS), High Assurance Internet Protocol Encryptor (HAIPE) networks, and specialized identity management systems.

Implementation must consider compartmented information handling requirements, need-to-know access controls, and integration with existing Security Technical Implementation Guides (STIGs) and security control overlays.

Civilian Agencies

Civilian agencies typically focus on CUI protection, FISMA compliance, and public-facing service delivery that requires balancing security with accessibility and citizen service quality.

DSPM implementations should integrate with existing enterprise architecture, support shared services initiatives, and enable secure information sharing with state and local government partners.

Integration with Government IT Infrastructure

Government DSMP solutions must integrate effectively with existing infrastructure investments including legacy systems, specialized security tools, and mandated technology platforms.

Enterprise Architecture Alignment

DSPM deployments should align with agency enterprise architecture principles, including use of shared services, common platforms, and standardized interfaces that support government-wide interoperability goals.

Integration with existing IT service management platforms ensures that DSPM findings are incorporated into standard change management, incident response, and risk management processes.

Identity and Access Management Integration

Government IAM systems typically include integration with PIV cards, FICAM requirements, and specialized access control systems that support both classified and unclassified operations.

DSPM solutions must integrate with these systems to provide context-aware access decisions based on both user attributes and data sensitivity levels.

Overcoming Government-Specific DSPM Challenges

Government agencies face unique operational and security challenges that require specialized approaches to DSPM implementation and ongoing management.

Multi-Level Security Environments

Government operations often require processing information at multiple classification levels, creating complex security requirements that commercial solutions cannot adequately address.

Cross-Domain Information Sharing

Agencies must securely share information across different classification levels and security domains while maintaining proper access controls and audit trails for all transactions.

DSPM solutions must support cross-domain sharing requirements by maintaining classification integrity, supporting guard and filter technologies, and providing comprehensive audit capabilities that satisfy security oversight requirements.

Compartmented Information Handling

Specialized programs and compartmented information require additional access controls and handling procedures that extend beyond standard classification levels.

Government DSPM implementations must accommodate special access programs, foreign disclosure restrictions, and other compartmentation requirements that affect data handling and sharing decisions.

Interagency Collaboration Requirements

Government operations frequently require information sharing between agencies with different security policies, technical infrastructures, and operational procedures.

Federated Identity and Access

Cross-agency collaboration requires identity federation capabilities that support different authentication systems while maintaining appropriate security controls and audit capabilities.

DSPM solutions must support federated access scenarios while ensuring that data protection policies are maintained regardless of the accessing user’s home agency or security clearance level.

Mission Partner Integration

Government agencies often work with contractors, state and local governments, and international partners who require access to specific information while maintaining strict security boundaries.

Advanced DSPM capabilities must support external collaboration while ensuring that sensitive information remains properly protected and that all access is appropriately logged and monitored.

Measuring Government DSPM Effectiveness

Government agencies require specific metrics and success indicators that demonstrate compliance program maturity and support continuous improvement efforts.

Compliance Metrics

Quantifiable compliance indicators help government agencies demonstrate adherence to multiple regulatory frameworks while identifying areas requiring additional attention.

Data Inventory Completeness

Agencies should measure the percentage of IT environments where classified and CUI data has been discovered and properly categorized, with the goal of achieving comprehensive visibility across all authorized systems.

Regular reporting on newly discovered sensitive data repositories helps agencies understand data sprawl patterns and ensures that security policies keep pace with system changes and mission evolution.

Control Implementation Status

Tracking the implementation status of required security controls across all systems and platforms provides insight into overall compliance posture and helps prioritize remediation efforts.

Automated assessment of control effectiveness helps agencies maintain the continuous monitoring required under FISMA while reducing the manual effort typically required for compliance reporting.

Operational Impact Assessment

DSPM implementations should enhance rather than impede government operations, making operational impact measurement crucial for long-term program success.

Mission Support Enhancement

Agencies should measure improvements in information sharing capabilities, decision-making speed, and overall mission effectiveness enabled by better data visibility and protection.

Tracking the reduction in security-related operational delays helps demonstrate that comprehensive data protection can support rather than hinder mission accomplishment.

Secure Government Data With DSPM

Government agencies cannot rely on traditional security approaches when managing classified and sensitive data in modern cloud environments. DSPM provides the comprehensive discovery, classification, and protection capabilities needed to meet FISMA, FedRAMP, and CMMC requirements while supporting digital transformation initiatives that improve citizen services and operational efficiency.

The consequences of inadequate government data protection extend far beyond financial costs to include contract termination, security clearance revocation, and mission impact that can affect national security and public safety. DSPM enables proactive risk management that prevents security incidents rather than simply responding to them.

Government agencies that successfully implement DSPM gain significant advantages through improved security posture, streamlined compliance processes, and enhanced ability to securely collaborate with mission partners while maintaining public trust and regulatory compliance.

Strengthen Your DSPM Investment With Kiteworks

While DSMP solutions excel at discovering classified and CUI data across government systems, they cannot protect that information when shared with contractors, mission partners, or during interagency collaboration—precisely where 40% of breaches now occur.

Kiteworks addresses the critical enforcement gap that leaves government agencies vulnerable despite significant DSPM investments. Kiteworks’ FedRAMP High authorized Private Data Network automatically consumes DSPM classifications and enforces FISMA-compliant protection policies when sensitive data moves beyond agency boundaries, ensuring continuous protection throughout government workflows.

Government agencies achieve transformative security outcomes by combining DSPM discovery with Kiteworks enforcement. Data classified as “CUI” by DSPM automatically receives CMMC-compliant encryption and access controls when shared with defense contractors, while classified information maintains appropriate protection levels during authorized cross-domain sharing.

With public sector breaches averaging $2.86 million and contract termination risks for compliance failures, Kiteworks transforms DSPM investments from inventory systems into complete mission-enabling security strategies. Automated policy enforcement based on DSPM classifications ensures compliance across all external collaboration channels, like email, managed file transfer, and web forms while secure interagency communication capabilities enable protected data sharing without compromising operational security. Continuous compliance monitoring satisfies ongoing FISMA requirements, and emergency access protocols maintain mission continuity during critical government operations while preserving security boundaries.

To learn more how federal and central governments, state and state and provincial governments, and local governments protect CUI, CJI, and other sensitive data on top of DSPM protection, schedule a custom demo today.

Frequently Asked Questions

You can use DSPM to improve FISMA compliance by implementing automated data discovery across all systems, continuous risk assessment monitoring, and comprehensive security control validation. DSPM provides the visibility and documentation needed to demonstrate ongoing compliance with NIST 800-53 requirements while reducing manual audit preparation and ensuring consistent policy enforcement across cloud and hybrid environments.

When implementing DSPM into your infrastructure with an eye on CMMC Level 2 certification, you should consider automated CUI identification capabilities, integration with existing security tools, and comprehensive audit trail generation. The solution must automatically discover and classify CUI across all environments while supporting the 110 NIST 800-171 security requirements and providing documentation needed for C3PAO assessments.

DSPM provides automated assessment capabilities that support FISMA, FedRAMP, and CMMC requirements simultaneously. The platform generates comprehensive compliance reports, tracks security control implementation status, and maintains detailed audit trails that satisfy multiple regulatory frameworks. This automation reduces manual effort while ensuring continuous monitoring requirements are consistently met.

You should expect DSPM ROI through reduced breach costs (public sector average $2.86 million), avoided contract termination penalties, and operational efficiency gains. DSPM prevents the loss of federal contracts due to compliance failures, reduces audit preparation costs, and enables secure digital transformation initiatives that improve citizen services while maintaining security requirements.

You can use DSPM to enable secure interagency collaboration by implementing automated data classification, federated access controls, and comprehensive audit capabilities. DSPM ensures that sensitive information shared between agencies maintains appropriate protection levels while providing visibility into cross-agency data flows and supporting mission partner integration without compromising security boundaries.

Additional Resources