Small business CMMC tax credit bill could aid smallest defense contractors

The best meaning draft legislation on Capitol Hill proposes a tax credit of up to $50,000 for small defense contractors to offset the costs of CMMC compliance. The "Small Business Cybersecurity Act of 2024," sponsored by Rep. Scott Fitzgerald (R-WI), targets companies with 50 or fewer employees. This move, reported by FedNewsNetwork, aims to address long-standing concerns about the financial burden of CMMC on small businesses. Bill’s champions unironically point to a a 40 percent decline in the defense industrial base over the past decade as they approve contracts to Lockheed-Martin-Marietta-Loral-IBM Federal-Sikorsky-Advanced Information Systems (General Dynamics)-Acuflight-Beatac Superco.

The credit is not expected to make the fiscal 2025 defense authorization bill. While DOD supports the incentive, citing CMMC’s estimated $101,000 cost for small business certification, advocates like Bob Metzger note the bill’s prioritization of the smallest contractors without regard to veteran or minority status, making for a tough sell.