Alabama firm agrees to pay $507,000 to settle federal cybersecurity case
The DOJ said the firm risked “significant exploitation” of its system “or exfiltration of sensitive defense information.”
Mason Reed 
A Huntsville-based logistics and defense contractor has reached a settlement with the Department of Justice following allegations that it failed to uphold strict cybersecurity requirements mandated by federal military contracts.
Settlement and Security Risks
According to a statement released by the DOJ on June 18, LOGZONE Inc. has agreed to pay approximately $507,000 to resolve the claims. Federal officials noted that the firm’s failure to meet security standards created a risk of “significant exploitation” and potential “exfiltration of sensitive defense information.”
Contractual Context
Details from the settlement agreement outline that the Navy tapped LOGZONE in 2021 to manage logistical and inventory services for the Naval Oceanographic Command Property Management Program, based at Stennis Space Center, Mississippi. The contractor secured a follow-up agreement in 2022 to provide facilities support for the same office, bringing the total value of these contracts to roughly $682,000.
Compliance Failure
The Justice Department alleged that LOGZONE misrepresented its compliance with critical cybersecurity standards. While the company self-reported a high score of 110, an assessment conducted by the Defense Contract Management Agency (DCMA) in February 2024 told a much different story, rating the vendor at -170 out of a lowest possible score of -203.
Official Response
When contacted by 205focus.com, a representative for the company offered no comment regarding the case. U.S. Attorney Phillip W. Williams Jr. for the Northern District of Alabama emphasized that contractors must adhere to these vital security provisions. DCMA Director and Navy Vice Adm. Stephen Tedford echoed this sentiment, stating, “The cybersecurity provisions of federal contracts are critical to protecting sensitive information that may be transmitted in carrying out the mission of the contracts. DCMA will continue to ensure that contractors are fulfilling these obligations.”
The investigation and legal resolution were led by Fraud Section Trial Attorney Graham D. Welch and Assistant U.S. Attorney Don Long of the Northern District of Alabama.
