Huntsville defense contractor pays $507K to settle allegations of Navy cybersecurity violations

A Huntsville, Alabama defense contractor has agreed to pay more than $507,000 to settle federal allegations that it failed to meet cybersecurity requirements on Navy contracts, the Justice Department announced.

LOGZONE Inc. will pay $507,144 to resolve its liability under the False Claims Act for allegedly failing to comply with cybersecurity standards in two contracts with the Department of the Navy, according to the Justice Department.

The settlement resolves allegations that LOGZONE knowingly submitted false or fraudulent claims for payment on the contracts despite having not complied with their cybersecurity requirements. From May 2021 to March 2025, the company allegedly failed to implement certain cybersecurity controls required under National Institute of Standards and Technology Special Publication 800-171, a set of standards designed to protect sensitive defense information. According to the Justice Department, those failures could have led to significant exploitation of the system or exfiltration of sensitive defense information.

The deficiencies were identified after the Defense Contract Management Agency assessed LOGZONE’s implementation of the NIST security controls and the company received a score of -170, near the bottom of the possible range of -203 to 110.

“Government contractors that obtain sensitive defense information in administering their contracts must follow required cybersecurity standards,” Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division said. “The Justice Department will continue to investigate potential violations of these cybersecurity requirements in order to protect this critical information from external threats.”

U.S. Attorney Phillip W. Williams Jr. for the Northern District of Alabama said adherence to cybersecurity provisions must be a priority for all federal contractors and called the enforcement action “a reminder of that.”

Navy Vice Admiral Stephen Tedford, director of the Defense Contract Management Agency, said the agency “will continue to ensure that contractors are fulfilling these obligations.”

The settlement was the result of a coordinated effort involving the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Alabama, the Department of the Navy Office of the General Counsel, the Naval Criminal Investigative Service, the Army Criminal Investigation Division and the Defense Contract Management Agency’s Defense Industrial Base Cybersecurity Assessment Center.

The case was handled by Fraud Section Trial Attorney Graham D. Welch and Assistant U.S. Attorney Don Long.

The Justice Department noted that the claims resolved by the settlement are allegations only and that no determination of liability has been made.