Key Points:
- FedRAMP scope could extend to MSPs managing clients that handle federal data indirectly, including law firms, healthcare providers, municipalities, and education institutions receiving federal funding.
- NIST SP 800-60 classifies litigation, judicial activities, and military health records as potential federal data, exposing MSPs serving those verticals to compliance obligations.
- RMM platforms, cloud backup, managed patching, remote access, and screenshare tools are potentially in-scope if they install agents, access internal environments, or store client data.
- Non-compliant tooling risks client contract loss, financial penalties, and MSP liability through investigation or litigation.
- Audit client lists for federal data exposure, cross-reference your stack against the FedRAMP Marketplace, and prioritize transitioning high-risk clients to authorized tooling.
There’s an old saying in law: ignorance is no defense.
FedRAMP (Federal Risk and Authorization Management Program) has long been treated as a federal government problem, something for agencies, contractors, and compliance teams in Washington to sort out. However, if you manage IT for clients who handle federal data, even indirectly, that assumption may already be costing you.
What is FedRAMP?
FedRAMP was established in December 2011, through an Office of Management and Budget (OMB) memorandum to safely accelerate the adoption of cloud computing products and services by Federal agencies and help those agencies avoid duplicating efforts by offering a consistent and reusable authorization process.
Today, FedRAMP is governed by OMB Memorandum M-24-15 (July 2024), and its scope covers cloud computing products and services, including IaaS, PaaS, and SaaS, that create, collect, process, store, or maintain federal information on behalf of a federal agency.
That last phrase, “on behalf of a federal agency,” is where things get interesting for MSPs.
Why is FedRAMP an MSP issue?
The scope of FedRAMP extends well beyond vendors with direct federal contracts. Any provider that touches federal data, regardless of whether the relationship is direct or downstream, can potentially fall within its reach, and federal data is much more common than most people realize.
Law firms are a clear example of why this impacts MSPs
The Federal Information Security Management Act (FISMA) sets the legal standards that require federal agencies and their contractors to protect federal data and directs the National Institute of Standards and Technology (NIST) to develop the security standards that define how that data is protected. One of those standards, NIST Special Publication 800-60, maps information types to security categories to ensure appropriate protection for confidentiality, integrity, and availability.
NIST SP 800-60 includes an entire section on “Litigation and Judicial Activities,” which covers federal judicial hearings, legal defense, legal investigation, legal prosecution and litigation, and resolution facilitation. Under NIST’s definitions, all of these could qualify as federal data.
In practical terms, if a law firm has a federal agency as a party in any of its cases, the information exchanged in that process is potentially federal data. That means a law firm handling civil rights cases, working on federal contracts, or receiving government documents during discovery could already be sitting on federal data, and so could the MSP managing their environment.
FedRAMP data and CUI risks: The broader industry picture
The same logic applies to healthcare. The NARA CUI Registry, the authoritative source for what qualifies as controlled unclassified information (CUI), includes both a Military Personnel Records category, which includes any member or former member of the armed forces, and a Health Information category, which includes records created or received by a healthcare provider that relate to an individual’s physical or mental health.
A healthcare provider that treats National Guard patients, handles military medical records, or administers federally funded programs like Medicare or Medicaid could potentially be holding CUI under those definitions. For an MSP managing that provider’s IT environment, the exposure is the same.
Other verticals worth considering include municipalities and local governments, K-12 and higher education institutions receiving federal funding or administering federal student programs, and defense contractors and their subcontractors.
What parts of your stack are exposed?
If your client environment needs to meet federal-grade compliance requirements, it’s worth taking a close look at which tools in your stack could fall within FedRAMP’s scope.
FedRAMP has published official scope guidance to help agencies determine whether a cloud service requires FedRAMP authorization. This guidance is written for federal agencies, but the illustrative examples provide a useful starting point for MSPs conducting their own analysis.
Based on those examples, here is how some common MSP tools might be evaluated:
| MSP tool | In scope? |
| RMM with installed agent and remote session capabilities | Potentially yes |
| Cloud backup storing client data | Potentially yes |
| Managed patching and remote administration tools | Potentially yes |
| Screenshare and remote access tools | Potentially yes |
| Uptime or ping monitoring of public-facing sites | Likely no |
These are interpretive assessments only. FedRAMP applicability ultimately depends on how a tool is used within a specific client environment, and every MSP should conduct their own analysis. However, any tool that installs agents on client systems, accesses internal environments with elevated privileges, or stores client data is worth evaluating carefully.
In our view, the RMM platform deserves particular attention. It’s the tool that binds everything else together, and if it isn’t FedRAMP authorized, it becomes difficult to make a credible compliance argument for the rest of the stack.
What’s the risk in getting FedRAMP requirements wrong?
The federal government is known for defining compliance requirements without spelling out the penalties for non-compliance. That vagueness makes this a risky area.
If your client is required to use FedRAMP authorized tools but doesn’t, they risk losing contracts and facing financial penalties or litigation. At best, your client could blame you for not telling them or not making clear that this was a requirement. At worst, you could get dragged into the investigation or litigation alongside them.
The upside: being the MSP who saw it coming
Most MSPs aren’t having this conversation with their clients yet, which is a huge opportunity.
Attorneys understand tort law and gross negligence, so when you walk into a law firm and raise the question of whether their IT tools need to be FedRAMP compliant, the implications land quickly. You become the trusted advisor who brought something meaningful to the table before it became a problem.
Three steps to get ahead of FedRAMP
- Audit your client list for federal data exposure.
- Use your next round of quarterly business reviews to ask clients directly: are you working with any federal data? For legal clients, get specific about whether they have a federal agency as a party in any of their cases. For healthcare clients, ask about federally funded programs or military patients.
- Cross-reference your stack against the FedRAMP Marketplace.
- The FedRAMP Marketplace is a publicly available, searchable list of authorized cloud tools. Start with your RMM. NinjaOne is listed in this marketplace, which means it’s one gap in the stack you can close today.
- Start transitioning where it matters most.
- If clients on your list are likely handling federal data, begin moving them to FedRAMP-authorized tooling.
Moving forward
This space will continue to evolve. Regulatory language is already specifically referencing legal and judicial data, NIST definitions are broader than most people realize, and enforcement tends to get more specific over time. We will continue to update our community as the picture gets clearer.
If you want to see how NinjaOne’s FedRAMP-authorized RMM fits into your stack, visit the NinjaOne FedRAMP Marketplace listing.
Note: The NinjaOne legal team reviewed this post before publishing. Nothing here is a definitive legal determination.
