• CMMC FCI controls are the baseline for federal contractors. They sit at Level 1 and map to the FAR 52.204-21 safeguards.
• Federal Contract Information FCI is not public. If you store it, send it, or process it, you need to show that your FCI security basics are solid.
• Controlled Unclassified Information (CUI) requires stronger protections.
• Strong FCI cybersecurity starts with access control, MFA, encryption, patching, and a living information security policy.

Federal Contract Information (FCI) is data created for or by the U.S. government under contract that is not intended for public release. This could be proposals, internal reports, schedules, or deliverables shared with agencies. It excludes public content like press releases or information on government websites.

In CMMC, protecting FCI is the core of Level 1 compliance. Contractors must safeguard every system that processes, stores, or transmits FCI, from laptops to cloud storage.

Controlled Unclassified Information (CUI) is government data that, while not classified, requires safeguarding due to laws, regulations, or policies. It is more about export-controlled designs, technical data, or sensitive research findings.

One of the most important aspects you must know is that all CUI is FCI, but not all FCI is CUI. Handling CUI automatically raises your CMMC obligations from Level 1 to Level 2.

Scope covers any system that touches FCI. This includes:

• Contractor laptops and desktops.
• Cloud drives, collaboration tools, and email.
• Subcontractor systems and vendor platforms.

Many organizations create a secure FCI enclave, which means a bounded IT zone where all federal contract information FCI is kept separate. This makes assessments easier and keeps CMMC FCI requirements contained.

Practical steps to strengthen FCI cybersecurity:

• Identity Management: Enable multi-factor authentication.
• Device Security: Enforce strong endpoint protection and patching cycles.
• Network Security: Segment networks and monitor traffic.
• Encryption: Always encrypt sensitive files in motion and at rest.
• Backups: Keep regular, secure backups of federal contract information.
• Training: Teach employees how to spot phishing and handle FCI responsibly.

Platforms like Egnyte simplify this by helping organizations discover, classify, and protect FCI and CUI across repositories, with automated controls and unified cloud data governance.

CMMC has made the protection of federal contract information (FCI) a non-negotiable rule. Level 1 is the foundation, focused on simple but vital cyber hygiene, while Level 2 digs deeper with stronger FCI cybersecurity for handling CUI. The gap between CUI vs. FCI decides how far your compliance efforts must go.

In 2025, federal audits show that over 40% of first-time government contractors fail to secure a second contract due to compliance and execution issues. To avoid this and build both compliance and resilience, Egnyte helps enterprises classify data, automate permissions, and strengthen governance across cloud and hybrid systems. With automated permissions, organizations can lock down access, prevent insider risks, and stop data leaks before they happen. 

Q. What are the best practices for safeguarding FCI?

Follow FAR 52.204-21’s 15 practices: access control, MFA, patching, monitoring, encryption, backups, and employee training. Keep everything documented.

Q. How can Egnyte help organizations protect their Federal Contract Information (FCI)?

Egnyte provides discovery, classification, and protection tools. With cloud data governance, organizations enforce access, track activity, and meet CMMC audits across hybrid and multi-cloud systems.

Q. What are the key risks associated with mishandling Federal Contract Information?

Risks include contract loss, fines, reputational damage, and potential exposure of sensitive government data. Weak FCI security often leads to breaches or non-compliance.

Q. How is FCI related to other sensitive government data, like CUI?

CUI is a subset of FCI. All CUI must be protected under NIST 800-171, while FCI falls under FAR 52.204-21. 

Q. Can FCI security be managed in the cloud?

Yes. Cloud platforms with proper governance, encryption, and access controls are CMMC-ready. Egnyte helps extend compliance frameworks into the cloud with FCI cybersecurity built in.