LOGZONE Inc. has agreed to pay $507,144 to resolve False Claims Act liability over allegations that it failed to comply with cybersecurity requirements in Department of the Navy contracts, placing government contractor compliance back in the enforcement spotlight.
The Justice Department said the Huntsville, Alabama defence contractor knowingly submitted false or fraudulent claims for payment on two Navy contracts despite alleged non-compliance with contractual cybersecurity obligations.
The settlement, announced on June 18, 2026, concerns alleged failures between May 2021 and March 2025 to implement selected controls under National Institute of Standards and Technology Special Publication 800-171, commonly known as NIST SP 800-171.
For in-house counsel, the LOGZONE matter is a reminder that cybersecurity clauses in federal contracts are not background paperwork. They can become the basis for False Claims Act exposure where payment claims are made against contracts that require compliance with specified controls.
The Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Northern District of Alabama coordinated the resolution, with assistance from the Department of the Navy Office of the General Counsel, NCIS, the Department of the Army Criminal Investigation Division and the Defense Contract Management Agency.
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