FedRAMP Low vs Moderate vs High: Impact Levels and How to Choose

Last updated: December 2025

Why impact levels matter

One of the first FedRAMP questions a buyer, consultant, or 3PAO will ask is:

“Are you going for Low, Moderate, or High?”

Your impact level affects:

• How many controls you must implement and document
• How deep the assessment will be
• Timeline and cost (labor + 3PAO effort)
• What types of agencies can use your system and for what data

Quick definitions

• FedRAMP Low: for low-impact federal information where compromise would cause limited harm.
• FedRAMP Moderate: the most common baseline for cloud services used by agencies; often associated with sensitive but unclassified information.
• FedRAMP High: for the most sensitive unclassified data and mission-critical systems where compromise could cause severe harm.

Control counts (what to expect)

Exact control counts vary depending on baseline versions, parameters, and overlays, but typical expectations are:

What drives the impact level? (FIPS 199 in plain English)

FedRAMP impact levels are derived from FIPS 199, which categorizes information systems based on the potential impact of a loss of:

• Confidentiality (data exposure)
• Integrity (unauthorized modification)
• Availability (outage or denial of service)

In practice, you choose the baseline by answering two questions:

1. What data will agencies put in the system?
2. What could realistically go wrong if the system is compromised or unavailable?

How to choose the right FedRAMP baseline (step-by-step)

Step 1: List the data types you will handle

Be specific. Don’t just say “federal data.” Identify what the system stores, processes, or transmits:

• User identity data (names, emails, roles)
• Operational logs and audit trails
• Documents (SSPs, POA&Ms, reports)
• Security findings (vuln results, configurations)
• Customer evidence artifacts and screenshots

Step 2: Define your system boundary

Your impact level applies to the authorized system boundary. If your product integrates with third-party systems (e.g., GitHub, AWS, Okta), you’ll need to decide:

• What is inside your boundary (hosted, controlled, monitored by you)
• What is outside your boundary (customer systems, external SaaS, inherited services)

Tip for CSPs: A clean boundary definition avoids months of rework later in the SSP and assessment.

Step 3: Map CIA impact (Low/Moderate/High) for each major function

Think like an Authorizing Official:

• Confidentiality: Would disclosure cause limited, serious, or severe harm?
• Integrity: Would tampering create minor issues, major compliance failures, or severe mission impact?
• Availability: Would downtime be annoying, disruptive to operations, or catastrophic?

The resulting categorization typically drives you toward Low, Moderate, or High.

Practical guidance: which level do you likely need?

When FedRAMP Low is a fit

• You truly handle low-impact information and your use case remains low-risk.
• The agency confirms they will not place sensitive data in your platform.
• Your service is informational, public-facing, or non-sensitive by nature.

When FedRAMP Moderate is the default choice

• You handle sensitive but unclassified data, common operational data, or materials that agencies treat as sensitive.
• Your platform includes identity, access control, audit logging, and security workflows.
• You want broad applicability across agencies without constantly defending a Low categorization.

Reality: Most SaaS CSPs selling into the federal market should plan for Moderate unless they have a strong reason not to.

When FedRAMP High is required

• Your service supports highly sensitive federal missions.
• The agency requires High due to the sensitivity of the information or operational risk.
• Failure or compromise would have severe consequences.

Note: FedRAMP High is significantly more demanding. Many companies build maturity with Moderate first unless they have a clear buyer requiring High.

Where LI-SaaS fits (and where it doesn’t)

LI-SaaS (Low Impact Software as a Service) is designed for certain low-impact SaaS offerings. It can reduce scope and streamline documentation, but it is not a shortcut for systems that will handle Moderate-level data.

LI-SaaS tends to work best when:

• The agency use case is clearly low-impact
• The system is SaaS
• The system does not process or store data that pushes categorization toward Moderate

If your buyers are asking about CUI, Moderate, or deeper auditability, LI-SaaS is usually not the right path.

Common mistakes CSPs make when choosing an impact level

1. Picking Low “to start” even though target agencies require Moderate (creates rework).
2. Assuming the impact level is purely a product decision (agency context matters).
3. Not scoping the boundary early, then discovering later that “out-of-boundary” services create control gaps.
4. Ignoring availability impact (mission-critical availability pushes categorization upward).

How consultants and MSPs should use this

If you help CSPs prepare FedRAMP packages, you can use this baseline decision as an early-stage checklist:

• Confirm target agencies and expected data types
• Draft a boundary statement and major components inventory
• Create a first-pass FIPS 199 rationale
• Identify “scope bombs” (external dependencies that complicate controls)

What to do next

• If you’re early: Draft your boundary, list data types, and build a first-pass categorization rationale.
• If you’re actively selling: Ask prospects what impact level they require and align your roadmap accordingly.
• If you’re preparing documentation: Make sure your SSP scope and CRM assumptions match your chosen baseline.

Summary

Choosing between FedRAMP Low, Moderate, and High is not a guess — it’s a structured decision based on FIPS 199, your system boundary, the data types you handle, and agency expectations. In most cases, CSPs targeting federal buyers should plan for Moderate unless there’s a well-documented low-impact use case.