Comprehensive and Detailed in Depth Explanation:

When a DoD contractor plans to use a CSP to store data that may contain CUI, the CSP must meet specific security requirements as outlined in DFARS Clause 252.204-7012, “Safeguarding Covered Defense Information and Cyber Incident Reporting.” This clause mandates that any CSP handling CUI must implement security controls equivalent to those specified in NIST SP 800-171, which aligns with CMMC Level 2 requirements for protecting CUI. Additionally, the DoD’s January 2024 FedRAMP Equivalency Memo clarifies that CSPs must achieve security requirements equivalent to the FedRAMP Moderate baseline, assessed by a FedRAMP Third-Party Assessment Organization (3PAO), with no reliance on Plans of Action and Milestones (POA&Ms) for compliance.

Option A (FedRAMP High ATO) exceeds the minimum requirement but is not mandated, making it unnecessary unless specified by the contract. Option B (DoD 8570 personnel compliance) pertains to workforce qualifications, not CSP security standards. Option C (CMMC Level 1) is insufficient as it addresses Federal Contract Information (FCI), not CUI, which requires Level 2 protections. Thus, Option D is the correct answer, ensuring the CSP meets the FedRAMP Moderate baseline or CMMC Level 2 standards, which are equivalent for safeguarding CUI.

Reference Extract:

DFARS 252.204-7012(b)(2)(ii)(D):“The cloud service provider shall meet security requirements equivalent to those established by the Government for the Federal Risk and Authorization Management Program (FedRAMP) Moderate baseline.”

DoD FedRAMP Equivalency Memo (January 2024):“CSOs must be 100% compliant with FedRAMP Moderate baselines, assessed by a 3PAO, without POA&Ms.”Resources:https://www.acquisition.gov/dfars/252.204-7012 ;https://dodcio.defense.gov/Portals/0/Documents/Library/FEDRAMP-EquivalencyCloudServiceProviders.pdf