What Is an ATO? A Guide to Authority to Operate
Need an Authority to Operate (ATO) to win government contracts? This guide explains the 7-step process, what it costs, and how long it takes.
If you're selling to the federal government, you need an Authority to Operate (ATO).
An ATO proves your system meets federal security standards. But for many organizations, the ATO process is a blocker, holding them back from winning government contracts.
The ATO process can take 6-18 months and can cost anything from tens to hundreds of thousands of dollars.
At Workstreet, we've guided many organizations through federal authorization, here’s everything you need to know about Authority to Operate, why it's required, and what you need to know before you start the process.
What is an ATO?
An Authority to Operate (ATO) is the government's formal process for managing its supply chain risk. It’s the federal government's official stamp of approval that your system can safely handle its data. Think of it as a security clearance for your technology, without it, you can't process, store, or transmit any federal information.
The ATO process comes from the Federal Information Security Modernization Act (FISMA), which requires all federal systems to meet specific security standards. Every system that touches federal data, whether it's a cloud platform, mobile app, or internal database is required to go through this process.
An ATO must be authorized by a senior government official. When the Authorizing Official (AO) signs your ATO letter, they are personally signing off and stating they’ve reviewed your Authorization Package and the security posture of your system and accepting the risk it poses to the agency's mission.
This is why No ATO = No Contract. It's a legal and risk-management requirement for your government customer.
Receiving an ATO proves that your system meets the security requirements to work with sensitive government data. ATOs typically have an expiration date after which time you’ll have to go through the process and prove compliance again.
Why is an ATO important?
No federal system can go live without an ATO. Period. It's not optional, and there are no workarounds.
The ATO process exists because federal agencies handle sensitive information (like citizen data and national security details). A single security breach can have massive consequences, so agencies must take a strict approach to risk management.
For businesses, an ATO often determines whether you can win and deliver federal contracts as many federal RFPs explicitly require an ATO or state that one will be needed before system deployment
Having an ATO already in place can give you an edge over competitors who are still working through the process
The process also benefits your organization beyond federal work. Going through an ATO forces you to document your security controls and information systems thoroughly, which strengthens your overall security posture and can help with other compliance frameworks.
The ATO Process
To achieve an ATO your organization must follow a 7-step process defined by the National Institute of Standards and Technology (NIST): The Risk Management Framework (RMF).
Think of it this way: If the ATO is the license to operate, the RMF is the driver's test. It's the standardized playbook that all federal agencies and the organizations that support them use to prepare, build, assess, and authorize systems.
The 7 steps of the RMF are:
- Prepare
- Categorize
- Select Security Controls
- Implement Security Controls
- Assess Security Controls
- Authorize the System
- Monitor Security Controls
Your guide for this process is NIST Special Publication 800-53. It lists specific security controls (e.g., access control, incident response, encryption, personnel screening) you will have to implement and prove are working.
ATO Timeline and Costs
Getting an ATO can take anywhere from 6-18 months (occasionally longer) ans can cost six to seven figures in costs and internal resourcing.
If you already have a mature security posture (e.g., you already have a SOC 2 or ISO 27001), you may be able to expedite the timeline slightly, but you’ll still have to create RMF-specific documentation (SSP) and pass a third-party assessment with 3PAO.
What Are the Costs Involved with an ATO?
- Tooling: GRC platforms, logging/SIEM tools, vulnerability scanners, endpoint detection (EDR).
- Consulting and Advisory: Experts to help you understand NIST requirements, scope your boundary, and write the SSP.
- Assessment: The formal 3PAO audit. For a Moderate-impact system, this can easily run $50,000-$150,000 or more.
- Internal Time: It'll often take hundreds, if not thousands, of hours from your most senior engineers, plus IT, security, and legal, to get through the ATO process.
ATO vs. FedRAMP: What's the Difference?
Think of it this way:
- ATO is the concept (the license).
- FedRAMP is a specific program that creates a reusable ATO for cloud products.
FedRAMP (Federal Risk and Authorization Management Program) was created because agencies were all giving separate ATOs to the same cloud products (like Salesforce, AWS, or Google Workspace). It was a massive waste of time and money.
FedRAMP standardizes the process for cloud. A SaaS company gets one FedRAMP authorization (which is much more intensive than a single agency ATO), and all federal agencies can then reuse it by granting their own agency-specific ATO that "piggybacks" on the FedRAMP approval.
Here's the takeaway:
- If you are a SaaS company trying to sell your product to multiple government agencies, FedRAMP is your path.
- If you are building a custom system for a single agency (e.g., a specific claims-processing portal for the VA), you will get a direct agency ATO from the VA. It is not reusable by other agencies.
Go Deeper: How Much Does FedRAMP cost?
Start Your ATO Journey
Earning your first ATO is one of the most rigorous things your company will ever do. It forces a fundamental shift from a "move fast" culture to a "move securely and document everything" culture.
But the prize is worth it.
An ATO proves your maturity to all customers, public and private. It forces a level of operational discipline that makes your entire company better, more secure, and more resilient.
The process is daunting, but you don't have to navigate it alone. If you're looking to obtain an ATO or prepare for a FedRAMP authorization, you need a partner who has been through the process multiple times.
If you're looking to obtain an ATO or improve your overall security and compliance posture, to reach out to Workstreet. Our team of experts is ready to help you build and scale your security and compliance programs effectively.