Overview
If you distribute medical equipment, devices, consumables, or pharmaceuticals to the VA, military treatment facilities, or other federal health buyers, your contracts, purchase orders, delivery and tracking records, and invoices are Federal Contract Information. That triggers FAR 52.204-21 and a CMMC Level 1 self-assessment with an annual SPRS affirmation.
Straight supply and distribution work is usually Level 1. The data you hold for a typical order, the contract, the line items, the delivery record, is FCI, not CUI. Protected health information, where it appears, brings its own privacy obligations that sit alongside CMMC rather than changing the CMMC tier.
Distributors run on an ERP or order management system, EDI connections, and an email tenant. Level 1 covers the systems that hold federal contract and order information, which means named accounts, MFA, controlled access, and a clear boundary.
Typical contracts you'll see
- Medical and surgical supply contracts for the VA and military treatment facilities
- Pharmaceutical distribution under federal supply schedules and DLA Troop Support
- Equipment and device supply to federal health systems
- Prime vendor and distribution and pricing agreements
- Subcontracts under a medical supply prime
What FCI actually looks like for you
Anything below is Federal Contract Information and triggers FAR 52.204-21. None of it is CUI on its own.
Common pitfalls in this industry
- Running orders and invoices through personal email, which fails FAR 52.204-21 (b)(1)(i) and (iii).
- Sharing one login across the order desk for the ERP or order management system, which fails (b)(1)(i) and (ii).
- Leaving EDI and ordering portals accessible with weak or shared credentials.
- Confusing privacy obligations for health data with CMMC scope, and addressing neither.
- Assuming product distribution is too simple to be in scope. The FCI in the contracts and orders is what triggers CMMC.
- Letting the annual SPRS affirmation lapse.
Your Level 1 action plan
- 01Inventory the systems that hold federal FCI: ERP or order management, EDI connections, email, and shared drives.
- 02Move order and invoice exchange onto a paid Microsoft 365 or Google Workspace tenant with MFA enforced.
- 03Give each order desk and account user a named login and set access to least privilege.
- 04Protect EDI and ordering portals with strong, individual credentials and MFA where supported.
- 05Keep any protected health information handling aligned with its own privacy obligations, separate from but alongside CMMC.
- 06Write a short boundary description naming the systems that hold federal contract and order information.
- 07Run the 15 practice self-assessment, capture evidence, then have a senior official affirm the score in SPRS and set the annual reminder.
Most common NAICS codes
Use these when searching SAM.gov, filing for set-asides, or checking size standards.
- 424210Drugs & Druggists' Sundries Merchant Wholesalers
- 423450Medical, Dental & Hospital Equipment & Supplies Merchant Wholesalers
- 339112Surgical & Medical Instrument Manufacturing
- 339113Surgical Appliance & Supplies Manufacturing
- 446110Pharmacies & Drug Retailers
Frequently asked questions
Q.We just distribute medical supplies to the VA. Do we need CMMC?
Yes, once you hold a federal contract or subcontract. The contracts, delivery orders, line item data, delivery records, and invoices are Federal Contract Information, and FAR 52.204-21 applies to the systems that hold them. That means a Level 1 self-assessment and an annual SPRS affirmation.
Q.Does handling patient or health data change my CMMC level?
Not by itself. Protected health information carries its own privacy obligations that are separate from CMMC. CMMC Level 1 covers the systems that hold Federal Contract Information. The same basic protections, named accounts, MFA, access control, and encryption, help satisfy both sets of obligations.
Q.Could a medical supply contract be Level 2?
It is uncommon for straight supply and distribution. You would reach Level 2 only if the contract flows down DFARS 252.204-7012 and you receive marked CUI, such as controlled technical data for a device you also build. Ordinary distribution of catalog medical supplies is Level 1.
Q.Is our EDI or order management system in scope?
Yes, if it holds federal orders, line items, or contract data. That system, the email tenant, and the laptops that reach them are part of your Level 1 boundary and must meet the 15 practices: named accounts, MFA, access limited to authorized users, antivirus, and patching.
Related clauses
Related terms
Read more in the Library
- CMMC Level 1: All 15 FAR Safeguarding Requirements Explained in Plain English (2026 Guide)Every CMMC Level 1 safeguarding requirement, in language a non-cybersecurity founder can act on — what each control means, what evidence satisfies it, and where teams trip up.
- CMMC Level 1: The Complete 2026 Guide for Small DoD ContractorsThe single page to read first. What CMMC Level 1 is, who it applies to, what's actually required, what it costs, and the fastest honest path through it in 2026.
- How to Do CMMC Level 1 Yourself (Free, Complete Guide) — 2026CMMC Level 1 is self-assessed. You don't need a consultant. Here is the entire DIY path, with every template you'll need, written for the small defense contractors actually doing the work.
- CMMC Level 1 Scoping — How to Draw the Boundary (Free Worksheet) — 2026Treating the whole company as in-scope doubles your work for no compliance benefit. Here's the right way to scope CMMC Level 1.
- CUI vs FCI: What's the Difference? (With 12 Real Examples) — 2026FCI triggers CMMC Level 1. CUI triggers CMMC Level 2. Mix them up and you'll either over-spend by $20k or under-comply on a federal contract.
- What to Tell Your Prime When They Ask for Your SPRS Score (And You're Level 1)If your prime is asking for a 0–110 SPRS score and you're a Level 1 contractor, the answer is not zero. It's that you're a different tier of the regulation. Here's how to say that without losing the contract.