FedRAMP High, Moderate or Low — Which is Best for Your CSP?

Considering FedRAMP? Not sure if Low, Moderate or High is right for your CSP? 

We’re here to take the stress out of starting FedRAMP. Here we’ll make it simple to know which level your CSP requires. 

Read on to learn about each FedRAMP impact level, why you might pursue a specific level, and how Paramify can streamline your compliance process.

What are the FedRAMP Levels?

The Federal Risk and Authorization Management Program (FedRAMP) is a U.S. government initiative designed to standardize security for cloud service providers (CSPs) working with federal agencies. 

FedRAMP puts cloud services into 3 impact levels — Low, Moderate, and High. These levels are based on the potential adverse effects of a security breach on confidentiality, integrity, and availability. 

A special Low Impact Software-as-a-Service (LI-SaaS) baseline also exists for low-risk applications. 

The different levels determine the number and rigor of security controls required for compliance.You can learn more about each level in the Federal Information Processing Standard (FIPS) 199. 

FedRAMP Impact Levels: What They Mean

FedRAMP impact levels reflect both how sensitive the data a CSP handles is and how severe the consequences would be if that data were compromised. 

Here’s a breakdown of each level, its characteristics, typical use cases, and security requirements.

Low Impact

This level is for non-sensitive or public data. It’s a good fit for systems where a breach would have a limited adverse effect on agency operations, assets, or individuals. 

Data Examples: Publicly available information, such as government websites, or applications storing minimal personally identifiable information (PII), like usernames, passwords, and email addresses for login purposes.

Security Controls: Requires ~156 security controls based on NIST Special Publication 800-53 Rev. 5.

Use Case: Ideal for CSPs offering basic cloud tools, such as collaboration platforms or public-facing websites, where data sensitivity is minimal.

Why Pursue Low Impact?

• Cost-Effective Entry: Low Impact requires fewer controls, making it the least expensive and fastest path to FedRAMP authorization.
• Market Access: It allows CSPs to enter the federal market with minimal risk services, appealing to agencies needing basic cloud solutions.
• Stepping Stone: Achieving Low Impact authorization can build credibility and experience for pursuing higher levels later.

FedRAMP 20X — FedRAMP Low Without a Sponsor

Don’t have a sponsor, but want to get on the marketplace? It’s now possible with the FedRAMP 20X pilot. 

Learn more to find out if 20X is the right opportunity for you. If you’re ready to get started, we’ve helped other orgs with 20X and would love to help you too. Reach out with any questions or request a demo to find out how much simpler (and less expensive) FedRAMP can be. 

Low Impact SaaS (LI-SaaS)

LI-SaaS is a streamlined subset of the Low Impact baseline for low-risk Software-as-a-Service (SaaS) applications that store minimal data, things like login credentials.

Data Examples: Basic user authentication data for tools like project management or lightweight collaboration apps.

Security Controls: Involves fewer than 156 controls, tailored to the minimal risk of these applications.

Use Case: Perfect for CSPs offering simple SaaS solutions, such as cloud-based productivity or task management tools, to federal agencies.

Why Pursue LI-SaaS?

• Simplified Compliance: The reduced control set lowers the time and cost of authorization, often significantly less than $250,000.
• Quick Market Entry: LI-SaaS enables small or new CSPs to quickly achieve FedRAMP compliance and compete in the federal marketplace.
• Agency Appeal: Agencies favor LI-SaaS for low-risk, cost-effective solutions that meet basic needs without extensive oversight.

Moderate Impact

FedRAMP Moderate is designed for systems where a breach could cause a serious adverse effect, such as significant operational damage, financial loss, or non-physical harm to individuals. 

Moderate is the most common FedRAMP level, accounting for nearly 80% of authorized CSPs.

Data Examples: Controlled Unclassified Information (CUI), PII (e.g., names, addresses), financial records, or data in email platforms and customer relationship management (CRM) systems.

Security Controls: Requires ~323 controls, building on the Low baseline with additional protections.

Use Case: Suited for CSPs providing cloud storage, email services, or data analytics platforms for federal agencies handling sensitive but unclassified data.

Why Pursue Moderate Impact?

• Broad Market Reach: Moderate Impact covers a wide range of federal contracts, making it a strategic choice for CSPs targeting diverse agencies.
• Balanced Investment: While more costly (estimated at $500,000–$1.5 million), it offers a balance between compliance effort and access to high-value contracts.
• Agency Demand: Many agencies require Moderate Impact for their sensitive data, ensuring steady demand for compliant CSPs.

High Impact

FedRAMP High protects the government’s most sensitive unclassified data. It’s reserved for systems where a breach could have a severe or catastrophic effect, potentially leading to loss of life, financial ruin, or significant national security risks.

Data Examples: Data in law enforcement, emergency services, financial systems, health systems, or critical infrastructure, such as secure defense or intelligence platforms.

Security Controls: Requires ~410 controls, the most extensive set, including rigorous measures like FIPS 140-2 validated encryption and U.S.-based personnel.

Use Case: Essential for CSPs operating mission-critical systems, such as AWS GovCloud or Azure Government, serving defense, intelligence, or healthcare agencies.

Why Pursue High Impact?

• Premium Contracts: High impact authorization unlocks access to high-stakes federal contracts, such as those with the Department of Defense or Department of Homeland Security.
• Competitive Edge: Few CSPs achieve High Impact due to its complexity, giving authorized providers a significant market advantage.
• Maximum Trust: Compliance demonstrates the highest level of security, appealing to agencies and private-sector clients prioritizing data protection.

Comparison of FedRAMP Impact Levels

The table below summarizes the key differences between FedRAMP impact levels to help CSPs understand their options:

How to Determine Impact Level for FedRAMP

Choosing the right FedRAMP impact level involves assessing the data your cloud service offering (CSO) handles and aligning that with agency requirements. 

Follow these steps:

1- Conduct a FIPS 199 Categorization:

• Use the FIPS 199 framework to evaluate the potential impact of a breach on confidentiality (unauthorized disclosure), integrity (unauthorized modification), and availability (disruption of access).

• Assign a Low, Moderate, or High rating to each security objective. The highest rating determines your overall impact level.
  For example, if confidentiality is High but integrity and availability are Moderate, the system is High Impact.
• FedRAMP provides templates and NIST SP 800-60 guidance to assist with this process.

2- Understand Agency Requirements:

• Engage with the target federal agency early to confirm their security needs. Agencies may require specific controls or impact levels based on their data. For example, the Department of Defense may mandate Moderate or High Impact for CUI or classified data.
• Check for additional regulations, such as DFARS 252.204-7012 for DoD contractors or CJIS for law enforcement data.

3- Evaluate CSO Functionality:

• If your CSO is a simple SaaS application with minimal data (e.g., a task management tool), LI-SaaS is likely sufficient.
• For platforms handling sensitive data (e.g., cloud storage or analytics), Moderate or High Impact is more appropriate.

4- Consider Cost and Market Strategy:

• Higher impact levels unlock more contracts but require significant investment. Low or LI-SaaS is cost-effective for entering the federal market, while Moderate offers a balance of cost and opportunity.
• Assess your budget and long-term goals. Moderate Impact is often the most strategic starting point with its prevalence and demand.

5- Consult Experts:

• Work with a FedRAMP advisor or FedRAMP-accredited Third-Party Assessment Organization (3PAO) for a readiness assessment to confirm the appropriate level.
• Leverage FedRAMP Marketplace resources (marketplace.fedramp.gov) for guidance and competitor analysis.

→ Get your inexpensive Gap Assessment with Paramify to get your compliance roadmap to FedRAMP Low, Moderate or High. 

Benefits of FedRAMP Authorization

Achieving FedRAMP authorization at any level offers significant benefits for CSPs:

• Market Access: FedRAMP compliance is mandatory for cloud services holding federal data, opening doors to lucrative government contracts.
• Consistency: Standardized security controls ensure uniform protection across agencies, simplifying compliance for CSPs.
• Trust and Credibility: Authorization signals robust security, attracting both public and private-sector clients.
• Efficiency: Agencies can quickly adopt pre-authorized services from the FedRAMP Marketplace, reducing procurement delays.

Better, Faster, Less Expensive FedRAMP Compliance with Paramify

Achieving FedRAMP authorization can be daunting, with costs ranging from $250,000 to $3 million and timelines spanning months or years. 

Paramify simplifies this process for organizations of all sizes. Whether you’re a small startup or a large enterprise, you’ll get faster, more accurate, and cost-effective compliance. 

Here’s how Paramify helps:

• Automated Compliance Tools: Paramify’s platform automates planning, documentation, evidence collection, and control mapping to reduce manual effort and errors. 
• Tailored Guidance: Paramify aligns your CSO with the appropriate impact level (Low, LI-SaaS, Moderate, or High) and provides an implementation roadmap/dashboard to guide your implementation. 
• Cost Savings: By streamlining your strategy, documentation, and assessments, Paramify significantly lowers compliance costs, saving organizations up to 50% or more.
• Faster Authorization: Paramify’s intuitive workflows and real-time monitoring tools accelerate readiness assessments and continuous monitoring, helping CSPs achieve Authority to Operate (ATO) faster.
• Scalable Solutions: If you’re a small SaaS provider targeting LI-SaaS or an enterprise aiming for High Impact, Paramify scales to your needs

Your CSP can confidently navigate FedRAMP’s complexities, meet stringent security standards, and unlock federal opportunities without breaking the bank with Paramify.

Get Started With FedRAMP

Whether it’s Low, LI-SaaS, Moderate, or High, finding the right impact level is essential. Once you’ve made this decision you can get started with your FedRAMP process. 

Tools like Paramify can make this journey faster, more accurate, and affordable, empowering your organization to achieve FedRAMP authorization and thrive in the federal marketplace.

Request a video demo of Paramify to see how you can streamline your compliance journey and raise your chance of success. Let us know if you have any questions or fill out the form below to request a live demo.

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Note: The control numbers (~156 for Low, ~323 for Moderate, ~410 for High) are based on NIST SP 800-53 Rev. 5 and may vary slightly depending on specific agency requirements or updates to FedRAMP baselines. Always consult the latest FedRAMP documentation for precise figures.

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