FedRAMP Equivalency Explained for Job Shops (DFARS 7012 and Your Cloud Vendors)

The memo applies to any cloud service that stores covered defense information under 7012. To count as equivalent to FedRAMP Moderate, the provider needs an assessment by an accredited third party (a 3PAO) against the FedRAMP Moderate baseline, the full body of evidence available to the government, and no open plan-of-action items. In other words, equivalency means the provider passed the same kind of test and closed every finding, not that it believes it would pass.

Several common shortcuts don't qualify. A SOC 2 report doesn't. A vendor saying it's 'working toward FedRAMP' doesn't. A 'FedRAMP Ready' designation is a milestone in the authorization process, not the finished assessment the memo describes. If a vendor uses any of those phrases, ask for the 3PAO assessment and the evidence package.

Follow the CUI. If a controlled drawing comes in by email, the email service is in scope. If it gets saved to a cloud drive, the drive is in scope. If it's attached to a job in cloud shop software, the shop software is in scope. The same goes for cloud backup, cloud CAD and PDM, and any quoting tool you upload models to.

This is why many defense shops end up in GCC High, Microsoft's government cloud, which runs roughly $60–93 per user per month. It's also why some shop software vendors build separate government-cloud offerings. ProShop's FedCloud, for example, runs on AWS GovCloud at $37,870 a year for 10 users, and as of our research ProShop said it was targeting 'FedRAMP Moderate Ready' in June 2026. Check the current status with any vendor before you rely on it.

A box you own, sitting on your network, isn't an external cloud service provider, so FedRAMP equivalency doesn't apply to it. That doesn't take it out of scope. The box becomes part of your own CUI environment and has to meet NIST SP 800-171 like your workstations and file server do.

There's one catch: remote access. If an on-prem vendor connects to your box to provide support, that relationship can make the vendor an External Service Provider in your scope. Before you buy on-prem software, find out whether the vendor needs standing remote access, who performs support, and whether you approve each session.

For cloud vendors: Do you store our data in a FedRAMP Moderate authorized environment, or do you have a 3PAO assessment against the Moderate baseline? Can you provide the body of evidence? Are any plan-of-action items open? Who can access our data, and are they US persons? Get the answers in writing, with dates.

For on-prem vendors: What remote access do you need, and can we turn it off? Who holds the encryption keys for backups? Does the product support MFA and audit logging? Do you provide documentation that maps the product to 800-171 controls? A vendor that can't answer these clearly will leave the work to you or your MSP.

The simplest way to avoid the FedRAMP question for your shop system is to keep it out of a third-party cloud entirely. Traveler's Shop Server is designed for that: the shop system runs on a box in your building, and remote support only happens with your approval. The Shop Server Defense edition, planned at $6,500 one-time with an optional $99/month continuity plan, adds a hardened FIPS-mode configuration, an encrypted backup drive with keys you hold, an 800-171 control mapping and SSP template excerpt, and US-persons-only support.

It's pre-launch, and it doesn't make your email or file sharing compliant, so you'll still need a plan for those. Compare the five-year cost of each route at /tools/cloud-vs-on-prem-cost, and see /shop-server for details and the free reservation form.