Alabama Defense Contractor Agrees to $507K Settlement Over Cybersecurity Allegations

Huntsville-based defense contractor LOGZONE Inc. has reached a $507,144 settlement with the Department of Justice to resolve allegations of cybersecurity non-compliance. The settlement addresses claims that the company failed to meet mandatory security standards while performing on U.S. Navy contracts, violating the False Claims Act. This enforcement action underscores the federal government's commitment to holding contractors accountable for the protection of sensitive defense information through rigorous cybersecurity protocols.

The Department of Justice announced that LOGZONE Inc. agreed to the five-figure settlement to resolve allegations that it knowingly submitted claims for payment while failing to meet cybersecurity requirements outlined in two Navy contracts. According to federal officials, the company did not implement specific security controls required by the National Institute of Standards and Technology (NIST) Special Publication 800-171 between May 2021 and March 2025. These standards are essential for protecting sensitive defense information handled by private sector partners from unauthorized access or exploitation.

The deficiencies were brought to light following an assessment by the Defense Contract Management Agency (DCMA), which evaluated the contractor's adherence to required security measures. The DCMA assessment resulted in LOGZONE receiving a score of -170 on a scale ranging from -203 to 110, a result that indicated significant gaps in the company’s compliance with federal security mandates. The government alleged that these missing measures created an environment where sensitive information was at an increased risk of being accessed by unauthorized parties.

The settlement is the result of a coordinated investigation involving the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Alabama, the Naval Criminal Investigative Service (NCIS), and the Department of the Army Criminal Investigation Division. While LOGZONE has agreed to the financial penalty, the settlement does not include a formal determination of liability. For the broader defense contracting sector, the case serves as a warning that the Department of Defense is actively utilizing the False Claims Act to enforce cybersecurity obligations and verify NIST compliance scores through DCMA audits.