7 Proven Steps to Securely Share CUI Between Agencies and Contractors

CUI often moves across organizational boundaries, systems, and jurisdictions. Each handoff—an email with a drawing, a file transfer to a supplier, an upload to a government portal—creates risk if labels, access controls, or handling rules are inconsistent. And complexity grows with multiple subcontractor tiers, legacy systems, and hybrid environments.

Secure CUI sharing isn’t a single tool or policy; it’s a coordinated operating model spanning classification, governance, controls, workflows, auditing, and incident readiness.

In this blog post, we outline essential steps for defense contractors when securely sharing CUI with the DoD, ensuring compliance and minimizing risks.

Executive Summary

Main idea: This post provides seven actionable steps—classification, governance alignment, FedRAMP/FIPS-grade protection, least-privilege access, standardized workflows, immutable auditing, and incident readiness—to securely share Controlled Unclassified Information (CUI) between agencies and contractors.

Why you should care: Secure, compliant CUI sharing reduces breach risk and penalties, protects contracts and missions, and streamlines audits—so you deliver faster with confidence.

Key Takeaways

1. Identify and classify CUI precisely. Use the CUI Registry to label data accurately, so protection and sharing rules apply consistently across systems, users, and partners.

2. Align governance to NIST SP 800-171 and DFARS flowdowns. Map controls, policies, and contracts to federal requirements to reduce audit gaps and ensure subcontractors inherit obligations.

3. Protect CUI with FedRAMP-authorized, FIPS-validated encryption. Ensure end-to-end encryption for data in transit and at rest, with validated crypto modules and hardened environments.

4. Enforce least privilege with MFA, RBAC, and Zero Trust. Limit access to only what’s required, strengthen authentication, and continuously verify trust to minimize insider and external threats.

5. Standardize, monitor, and be incident-ready. Automate policies, log immutably, maintain full chain-of-custody, and prepare for third‑party risk and rapid response to meet reporting timelines.

Step 1: Identify and classify CUI using the CUI Registry

Organizations should first identify and classify their CUI according to the CUI Registry. This centralized repository aids in understanding what information needs protection and informs how to implement security measures effectively.

Catalog systems and collaboration channels where CUI may reside—file shares, email, cloud storage, project tools, and endpoints. Work with data owners to define business contexts (program, contract, customer, part number) that distinguish CUI from non‑CUI. Use the CUI Registry to map content to categories and, where applicable, distinguish CUI Basic from CUI Specified to apply the right handling and decontrol rules.

Implement consistent markings and metadata. Standardized labels in file names, headers/footers, and document properties reduce ambiguity and enable enforcement. Use discovery and data classification tools that scan at rest and in motion, auto‑apply labels by pattern and context, and prompt users to confirm or correct tags. Ensure derivative works inherit accurate markings, and define clear decontrol and destruction procedures so CUI does not linger after it no longer requires safeguarding.

Train the workforce with role‑appropriate guidance on recognizing categories, applying markings, and escalating uncertain cases. Embed lightweight checkpoints—for example, before external email or workspace upload—so classification is a natural step, not an afterthought.

Step 2: Align governance with NIST SP 800-171 and DFARS flowdowns

Aligning governance practices with NIST SP 800-171 and DFARS flowdowns ensures that organizations meet federal security requirements. Implementing these standards protects sensitive information and facilitates compliance with regulatory expectations.

Translate requirements into policy and evidence. Map each relevant control to procedures, technologies, and owners, and maintain a current system security plan (SSP) and plan of action and milestones (POA&M). Address how CUI is identified, labeled, accessed, transmitted, stored, and disposed across channels. Document decisions and exceptions, and keep artifacts—policy acknowledgments, training completions, baselines, and test results—readily retrievable for assessments.

Strengthen contracts and supplier management. DFARS obligations must flow down to subcontractors and third parties that handle CUI for you. Incorporate clear language on safeguarding, incident reporting, audit cooperation, and offboarding. Evaluate suppliers at onboarding and periodically; require attestations aligned to your control set and verify technical controls such as encryption, access management, and logging. Maintain a living register of third parties with CUI access, including data types, scope, and expiration dates.

Operationalize governance through change management and continuous improvement. As projects and tools evolve, reassess control application and update the SSP. Integrate governance checks into DevSecOps and ITSM so configuration changes, integrations, and cloud moves preserve protections. Regular internal reviews and control testing identify gaps early and reduce audit surprises.

Step 3: Use FedRAMP-authorized, FIPS-validated encryption for transfer and storage

Utilizing FedRAMP-authorized, FIPS-validated encryption for data transfer and storage is essential for safeguarding sensitive information. Solutions like Kiteworks provide end-to-end encryption, ensuring that CUI remains secure throughout its lifecycle.

Select platforms in FedRAMP‑authorized environments where appropriate, and verify that cryptographic modules are FIPS 140-3 Level 1 validated. Apply strong encryption for data in transit and at rest across email, file transfer, SFTP, APIs, and web forms. Standardize modern protocols and ciphers, disable weak options, and enforce secure negotiation so external connections cannot silently downgrade protections. For at‑rest protection, manage keys in hardened modules with rotation policies and separation of duties.

Build a defensible key management strategy. Define ownership for key creation, escrow, rotation, and revocation; minimize key sprawl with centralized services; and test recovery procedures. Pair encryption with integrity controls—digital signatures or hashing—to detect tampering, and validate that encrypted content remains protected while stored, shared, archived, or disposed, including encrypted backups.

Ensure implementation quality. Monitor certificate health, automate renewal, and limit administrative access through strict roles and approvals. Document practices in your SSP and capture artifacts—FIPS validation references, configurations, and rotation logs—to demonstrate your posture to assessors.

Step 4: Enforce least privilege with MFA, RBAC, and Zero Trust access

Organizations must enforce a least privilege access model by implementing Multi-Factor Authentication (MFA), Role-Based Access Control (RBAC), and adopting zero trust security principles. These measures enhance security by ensuring that only authorized individuals can access sensitive data.

Start with strong identity assurance. Integrate with authoritative identity sources and use MFA by default, prioritizing phishing‑resistant methods where feasible. Implement session controls—short‑lived tokens, reauth for sensitive actions, and device binding—to limit exposure if credentials are compromised. Standardize single sign‑on and tie provisioning and deprovisioning to HR events so access controls track role changes in real time.

Design granular RBAC aligned to business functions, not individuals. Define roles at the right abstraction (e.g., program analyst, subcontract administrator, supplier quality engineer) and apply attribute‑based constraints such as contract, project, or data category. Enforce request/approval workflows with justification and use time‑bound or just‑in‑time access for elevated privileges. Periodically review roles and entitlements to remove drift and recertify high‑risk access.

Apply zero trust architecture continuously. Validate identity, device health, network context, and data sensitivity at each request. Restrict access paths to the minimum necessary—for example, secure portals and managed file exchange instead of broad network shares—and log every decision and action. Combine preventive controls with detective controls (anomaly detection, impossible travel, bulk download alerts) to identify and contain abuse quickly without impeding legitimate collaboration.

Step 5: Standardize secure workflows and automate policy controls

Standardizing secure workflows and automating policy controls streamline compliance efforts. Using a unified platform like Kiteworks helps enforce data governance policies seamlessly across various channels, reducing the risk of security gaps.

Document common CUI exchange patterns—sending drawings to suppliers, receiving test data from a lab, sharing statements of work with a prime, and submitting deliverables to an agency—and create standardized, templatized workflows for each. Predefine recipients, authentication requirements, allowed file types and sizes, retention periods, expirations, and watermarking/redaction options. When users launch a workflow, these controls should apply automatically, reducing reliance on memory and manual steps.

Automate enforcement at every choke point. Apply DLP and antivirus/anti‑malware scanning to detect sensitive content and block or quarantine violations. Use content inspection to flag mis‑markings or missing metadata, and set automatic expiration and revocation so links or packages do not remain accessible indefinitely. Route exceptions to approvers with clear audit trails, and provide users immediate guidance when a policy blocks an action so they can correct and proceed.

Unify exchange channels to minimize blind spots and inconsistencies. Consolidate email attachments, ad‑hoc sharing, managed file transfer, SFTP, APIs, and secure web forms into a governed platform with a single policy engine and consistent user experience. Integrate with productivity tools and repositories so users stay in flow while keeping exchanges compliant. Track usage, policy triggers, and completion times with dashboards, and use insights to refine workflows and training.

Step 6: Monitor, log, and audit with immutable evidence for compliance

Continuous monitoring and logging of data access and sharing activities are critical for maintaining compliance. Kiteworks enables detailed audit trails and chain-of-custody visibility, ensuring that organizations can demonstrate adherence to regulatory requirements.

Build complete, tamper‑evident records of CUI handling. Capture who accessed or shared what, when, from which device and location, through which channel, and under which policy. Include configuration changes, administrative actions, and exception approvals. Time‑synchronize logs, and protect them in write‑once or tamper‑evident storage with retention aligned to regulatory and contractual requirements. Where possible, cryptographically seal logs so unauthorized modification is detectable.

Make evidence retrieval fast and defensible. Structure logs and metadata to reconstruct chain of custody for a document or exchange—creation, classification, access, transfer, modification, and decontrol. Provide auditors read‑only views; export reports mapped to control families; and maintain saved queries for common assessments. Use dashboards to monitor indicators in real time: unusual download spikes, failed MFA attempts, policy bypass rates, or data egress to new endpoints.

Close the loop with continuous improvement. Feed monitoring insights into training, workflow design, and policy tuning. If policies generate frequent false positives, refine rules and prompts. If teams regularly need exceptions, evaluate whether a standard, safer workflow can meet their need. Treat your audit program as an operational capability that strengthens security and accelerates assessments rather than a periodic, reactive chore.

Step 7: Prepare for incidents and third-party risk; report and remediate fast

Organizations must be proactive in preparing for potential security incidents and third-party risks. Establishing an incident response plan facilitates timely reporting and remediation, essential for minimizing the impact of any security breach.

Develop and exercise a CUI‑focused incident response plan. Define roles, communications, and escalation paths that include legal, contracts, procurement, and external partners. Pre‑stage playbooks for common scenarios—compromised credentials, misdirected share, supplier breach, malware‑infected payload, or lost device—and specify containment steps for each channel (revoke links, suspend accounts, quarantine files, rotate keys). Preserve evidence to support investigation, and rehearse with tabletop exercises to validate readiness.

Integrate third‑party risk management into the lifecycle. Maintain current contacts and contractual requirements for all partners with CUI access, including notification and cooperation obligations. When an incident involves a supplier, coordinate on containment and reporting, verify corrective actions, and consider temporary restrictions or offboarding. Establish rapid verification for new or changed supplier connections—especially SFTP, API, and automated workflows—so trust is continuously earned, not assumed.

Plan for fast, compliant reporting and recovery. Know regulator and customer timelines and channels, and pre‑approve templates to accelerate communication. Use immutable audit logs for forensics and root‑cause analysis, then implement targeted remediation and control hardening. Update your risk register, training, and workflows to prevent recurrence, and share lessons learned to strengthen the broader ecosystem.

Kiteworks for Defense Contractors: Secure CUI Sharing with CMMC Alignment

Securely sharing CUI between agencies and contractors is a multi-step process essential for protecting sensitive information. By following these proven steps, organizations can enhance their security posture and ensure compliance.

If you already have components in place, use the steps as a maturity checklist to locate gaps, retire overlapping tools, and tighten policies. If you’re just getting started, prioritize quick wins that deliver visible control—labeling, encryption enforcement, and role cleanup—while planning for sustained automation and evidence generation. Platforms that unify exchange channels and governance simplify this journey and shorten time to value.

Kiteworks does this and more; it empowers organizations to manage their data securely and efficiently, enabling safe collaborations across all stakeholders.

Kiteworks provides a Private Data Network that unifies and governs sensitive content exchange across email, file transfer, SFTP, APIs, and web forms in a hardened, single-tenant architecture with end-to-end encryption, FIPS-validated cryptography, granular policy controls, and comprehensive chain-of-custody logging.

For CMMC 2.0 compliance, Kiteworks maps to NIST SP 800-171 practices with least-privilege RBAC, MFA/SSO, Zero Trust access controls, policy automation, DLP/AV, and tamper-evident, immutable audit evidence to streamline assessments and continuous monitoring. Government-focused deployments support FedRAMP-authorized environments, helping defense contractors securely share CUI with DoD.

To learn more about Kiteworks and protecting CUI in compliance with CMMC, schedule a custom demo today.

Additional Resources

• Blog Post
  CMMC Compliance for Small Businesses: Challenges and Solutions
• Blog Post
  CMMC Compliance Guide for DIB Suppliers
• Blog Post
  CMMC Audit Requirements: What Assessors Need to See When Gauging Your CMMC Readiness
• Guide
  CMMC 2.0 Compliance Mapping for Sensitive Content Communications
• Blog Post
  The True Cost of CMMC Compliance: What Defense Contractors Need to Budget For