FedRAMP Audit Cost — What You Actually Pay From Readiness to Continuous Monitoring

This is the line-item budget for a FedRAMP authorization. Every consultant pitch leads with the headline number; the value is in the breakdown. Numbers below reflect the actual market in 2025–2026 for SaaS companies pursuing Agency ATO at Moderate impact level. JAB and High deviate as noted.

Headline ranges

Path	One-time cost	Timeline	Recurring annual
FedRAMP Tailored (Low-Impact SaaS)	$150K–$400K	6–12 months	$80K–$200K
Agency ATO (Moderate) — typical	$500K–$1.2M	12–18 months	$200K–$400K
Agency ATO (Moderate) — complex	$1.2M–$2M	18–24 months	$300K–$500K
Agency ATO (High)	$1M–$2.5M	18–30 months	$400K–$700K
JAB P-ATO (Moderate or High)	$1.5M–$3M+	18–30 months	$400K–$700K

These numbers assume you're building on an authorized IaaS (AWS GovCloud, Azure Government, Google for Government). Building on commercial cloud and trying to authorize the whole stack adds 30–50% to every line.

Phase-by-phase line items

Phase 1 — Readiness Assessment

A 3PAO conducts a Readiness Assessment Report (RAR) to determine if you're ready for full authorization. Required for JAB; optional but strongly recommended for Agency ATO.

Line item	Typical
3PAO readiness assessment	$40K–$100K
Internal time to support assessment	80–200 hours
Pre-readiness gap remediation	$20K–$80K (variable)
Phase 1 total	$60K–$180K

The readiness assessment is the cheapest insurance you can buy. It tells you within 6 weeks whether your gap is 100 hours or 5,000 hours of remediation work. Skipping it and going straight to formal assessment is how companies end up with $1.5M assessment bills they didn't budget for.

Phase 2 — System Security Plan development

The SSP is the largest single document in the package. 200–500 pages depending on system complexity. Maps every applicable 800-53 control to your implementation.

Line item	Typical
SSP consulting (Moderate, ~325 controls)	$80K–$200K
OR internal SSP work (1,000–1,500 hours)	$150K–$300K loaded
Customer Responsibility Matrix from underlying CSP	$0 (CSP-provided)
Architecture diagrams + data flow diagrams	$5K–$20K
Privacy Impact Assessment	$5K–$15K
Configuration Management Plan	$5K–$15K
Incident Response Plan	$5K–$10K
Continuous Monitoring Strategy	$5K–$15K
Phase 2 total	$110K–$280K

The "consulting vs internal" choice is real. Outsourcing the SSP to a specialized firm runs $80K–$200K and finishes in 3–4 months. Doing it internally costs more in labor (1,000+ hours) but produces a document your team actually understands and can defend during assessment. Most successful authorizations use a hybrid: consultant drafts, internal team reviews and rewrites.

Phase 3 — Pre-assessment remediation

Fixing the gaps the readiness assessment identified. Most variable line item; depends entirely on the gap.

Common gap	Typical cost to fix
FIPS 140-2/3 cryptographic modules	$20K–$60K (re-architecture in some cases)
Centralized SIEM (Splunk Cloud Government, Microsoft Sentinel)	$50K–$150K/yr ongoing
Vulnerability scanning tooling (Tenable, Qualys, Rapid7)	$20K–$80K/yr
Privileged access management	$30K–$100K initial
Network boundary protection redesign	$50K–$200K
Background screening backlog	$5K–$30K (per-headcount)
Configuration baseline hardening across fleet	$20K–$80K
Continuous monitoring tooling integration	$40K–$150K
Phase 3 total	$200K–$800K

This is where budgets blow up. The readiness assessment is a snapshot; the remediation is the work. Plan a 3:1 contingency on this line.

Phase 4 — 3PAO Security Assessment

The formal assessment that produces the Security Assessment Report (SAR). 3PAO conducts evidence collection, control testing, and produces the package that goes to the AO.

Line item	Typical
3PAO security assessment (Moderate)	$80K–$200K
3PAO security assessment (High)	$150K–$350K
Internal time to support assessment	200–500 hours
Penetration testing (separate from controls assessment)	$30K–$80K
Vulnerability scan reports for assessment window	$5K–$20K
Phase 4 total	$120K–$320K for Moderate

3PAO selection matters. The market is small; reputation matters. Some 3PAOs specialize in specific industries or platforms. Get references from sponsoring agencies or other authorized SaaS in your space.

Phase 5 — Authorization

The AO (Authorizing Official, either an agency CIO/CISO or the JAB) reviews the package and issues the authorization decision. Cost here is largely time-based.

Line item	Typical
Sponsoring agency engagement (consulting on package presentation)	$20K–$60K
Internal time for AO Q&A and follow-up	100–300 hours
Final SSP/SAR/POA&M revisions	$10K–$40K
Phase 5 total	$30K–$100K

JAB P-ATO costs more here because the JAB process involves three agencies and a more rigorous review. Add $100K–$300K for JAB-specific consulting and presentation work.

Phase 6 — Continuous Monitoring (recurring)

This is the line item every company underestimates.

Line item	Annual
Monthly POA&M updates	60–120 internal hours/yr
Quarterly vulnerability scans + reporting	$20K–$60K/yr (tools + analyst time)
Annual control assessment by 3PAO	$60K–$150K/yr
Significant Change Requests (SCRs) when architecture changes	$10K–$50K per SCR
Continuous monitoring SaaS (Sentinel, Splunk Gov, etc.)	$50K–$200K/yr
Dedicated FedRAMP compliance lead (0.5–1.0 FTE)	$80K–$200K/yr loaded
Phase 6 annual total	$200K–$500K/yr

This is the cost you pay forever. A 5-year FedRAMP authorization at a typical mid-market SaaS runs $1M+ in continuous monitoring alone, on top of the $750K–$1.2M one-time authorization cost.

What you can compress and what you can't

Compressible:

• SSP development (in-house labor instead of consulting saves cash, costs time)
• 3PAO selection (shop the market — quality varies but pricing is somewhat negotiable)
• Continuous monitoring tooling (start with M365 Sentinel pay-as-you-go, scale up)
• Pen testing (annual rather than continuous if your release cadence allows)

Not compressible:

• The 3PAO assessment itself — controls testing takes the time it takes
• Pre-assessment remediation — you either fix the gaps or fail
• AO review timeline — agency-driven, not vendor-driven
• Continuous monitoring participation — required by the authorization

Where the 3:1 budget overruns actually come from

Companies plan for $500K–$800K and end up at $1.2M–$2M. The overruns concentrate in three areas:

1. Remediation underestimation. The readiness assessment surfaces ~80% of gaps. The full assessment uncovers the remaining 20% that cost the most to fix because they require architecture changes mid-flight.

2. Sponsoring agency turnover. Your AO leaves, the new AO wants to re-review, your 6-month timeline becomes 12. Engagement consulting time doubles.

3. CRM gaps in the underlying platform. AWS GovCloud and Azure Government CRMs are good, not perfect. Some controls you thought were inherited turn out to need additional implementation. Budget 5–10% of the SSP scope for this.

When to do FedRAMP and when to wait

A few honest tests:

Do FedRAMP now if:

• You have signed contracts (or sole-source justifications) representing $1M+ ARR contingent on authorization
• You have 18 months of runway above operating burn to fund the authorization
• You have leadership commitment to continuous monitoring spend forever after
• You have or can hire a FedRAMP compliance lead

Wait if:

• Your federal pipeline is < $500K ARR contingent
• You're hoping FedRAMP will create the demand (it won't — demand creates FedRAMP)
• You can sell into the federal market via FedRAMP-equivalent or via not-touching-CUI workloads
• You don't have leadership conviction that federal is your top market

The wrong reason to do FedRAMP: "competitors have it." Authorize when revenue requires it, not when you're afraid of falling behind. The companies that fail at FedRAMP usually had no real demand and underestimated the recurring cost.

What FieldLedger spends today (we're not authorized)

Zero on FedRAMP. We are commercial SaaS. Our customer's DCAA accounting data is the contractor's data, not federally-controlled CUI. We sit alongside the FedRAMP-authorized stack the customer uses for their CUI work.

When ARR justifies it, the path is FedRAMP Tailored on AWS GovCloud with a sponsoring agency — projected $400K–$800K one-time + $150K–$300K/yr recurring. That decision becomes economic at roughly $3M ARR contingent on authorization.

What to do this week

1. Compute your federal ARR-at-risk. If you can't authorize this year, what's the revenue impact?
2. Get a 3PAO readiness assessment quote. $40K–$100K, 4–8 weeks. Tells you the real number.
3. Identify a sponsoring agency candidate. No sponsor, no Agency ATO — start the conversation early.
4. Decide your platform (AWS GovCloud or Azure Government). See Azure FedRAMP vs AWS GovCloud.
5. Budget the recurring cost honestly. $200K–$500K/yr forever, on top of the one-time.

Related reading

• FedRAMP Low vs Moderate for SaaS contractors
• FedRAMP-approved cloud service providers list
• Azure FedRAMP vs AWS GovCloud — choosing your platform
• NIST 800-171 compliance for small government contractors