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Yes, as a government contractor handling CUI, you are required to ensure that any cloud service provider (CSP) used to store, process, or transmit CUI meets FedRAMP Moderate security requirements or an equivalent standard. Failure to use authorized CSPs risks non-compliance with DFARS and CMMC Level 2, and may result in the loss of contract eligibility.

Reference: Table 4 to § 170.19(c)(2)(i)—ESP Scoping Requirements

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