Written By Disha Patel
If your organization must protect Controlled Unclassified Information (CUI), it’s essential to understand why commercial Microsoft 365 for CUI is not allowed. Defense contractors still try to secure commercial tenants with MFA and encryption, but even with strong settings, the environment itself is not authorized for CUI and cannot meet DFARS, NIST 800-171, or CMMC requirements.
What Makes Commercial Microsoft 365 Non-Compliant for CUI?
Commercial Microsoft 365 and GCC High look similar on the surface, but their underlying infrastructure and protections differ greatly.
Key limitations of commercial Microsoft 365 for CUI include:
- Lack of FIPS 140-2 validated encryption
- No U.S. sovereign cloud
- No U.S. citizen-only support
- Missing government-compliant logging and access control
- Inability to meet DFARS 252.204-7012 (e–g) requirements
Because of these gaps, using commercial Microsoft 365 for CUI violates contract terms and puts your data at risk.
Government Requirements You Must Meet
If your contract includes DFARS 7012, you must use systems that follow NIST SP 800-171 and a cloud provider that meets FedRAMP Moderate requirements.
Microsoft’s documentation confirms that only:
- Microsoft 365 GCC High, and
- Azure Government
meet these requirements.
Using commercial Microsoft 365 for CUI is automatically non-compliant, even if your policies and security practices are strong.
CMMC Enforcement Is Increasing
CMMC 2.0 Level 2 assessments are becoming more frequent. Using non-compliant cloud tools can:
- Cause you to fail an audit
- Lead to a self-reported incident
- Remove your responsibility to protect CUI
- Make you ineligible to bid on DoD contracts
This risk alone makes remaining on commercial Microsoft 365 for CUI too dangerous.
The Correct Fix: Move to Microsoft 365 GCC High
To handle CUI properly, organizations must migrate to Microsoft 365 GCC High (and in some cases, Azure Government). GCC High provides:
- FedRAMP Moderate compliance
- FIPS-validated encryption
- U.S.-only data storage and support
- Controls aligned with DFARS and NIST 800-171
What the Migration Involves
Moving from a commercial tenant to GCC High is not a simple upgrade. The process includes:
- Verifying eligibility with Microsoft
- Standing up a new GCC High tenant
- Migrating email, files, Teams, identity, and devices
- Re-configuring security
- Establishing CUI boundaries and scope
How KTL Solutions Helps
KTL Solutions is a Microsoft Partner, RPO, and C3PAO candidate specializing in GCC High, Azure Government, and CMMC readiness. We’ve assisted organizations of all sizes in moving away from commercial Microsoft 365 for CUI and into compliant environments.
Learn more about our CMMC readiness services.
Need Help Understanding Your Tenant?
Not sure whether your existing setup is compliant? We can examine your environment and guide you on the necessary next steps. Contact KTL today.