Huntsville Defense Contractor LOGZONE Inc. to Pay $507,144 to Settle Cybersecurity Compliance Allegations

Huntsville-based defense contractor LOGZONE Inc. has agreed to pay $507,144 to resolve allegations of failing to meet cybersecurity standards required under its contracts with the U.S. Department of the Navy. The settlement addresses claims brought under the False Claims Act, which alleged the company knowingly submitted payment claims despite failing to implement mandatory safeguards for sensitive defense information. This enforcement action highlights the federal government's increasing focus on contractor compliance with National Institute of Standards and Technology (NIST) protocols to protect national security data.

The settlement resolves allegations that LOGZONE Inc. failed to implement required cybersecurity controls established under NIST Special Publication 800-171 between May 2021 and March 2025. These standards are mandatory for government contractors handling sensitive defense-related data and are designed to protect controlled information from unauthorized access and cyber threats. Federal officials noted that the missing controls significantly increased the risk of system exploitation or the unauthorized release of sensitive defense information during the performance of two specific Navy contracts.

Compliance issues were uncovered during a cybersecurity assessment conducted by the Defense Contract Management Agency (DCMA). During this review, LOGZONE received a score of negative 170 regarding its implementation of NIST SP 800-171 controls, a figure that falls near the bottom of the possible range from negative 203 to 110. Navy Vice Admiral Stephen Tedford, Director of the DCMA, emphasized that these cybersecurity provisions are essential for safeguarding sensitive information involved in government operations and missions, while U.S. Attorney Phillip W. Williams Jr. stressed that contractors must prioritize federal compliance to protect national security.

The investigation was a multi-agency effort 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. Support was also provided by the DCMA’s Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) and the Navy Office of the General Counsel. The case, handled by Fraud Section Trial Attorney Graham D. Welch and Assistant U.S. Attorney Don Long, is part of a broader federal initiative to ensure contractors receiving government funds strictly adhere to their contractual and legal cybersecurity obligations.