Honeywell agrees to settle allegations involving defense contract cybersecurity requirements.
Honeywell Aerospace Inc. has agreed to pay more than $2 million to settle allegations that a business unit failed to follow required cybersecurity rules while working under a U.S. Department of Defense contract. The Department of Justice (DOJ) announced the agreement September 1, saying the company will pay $2,042,518 to resolve claims brought under the False Claims Act. The case concerns cybersecurity requirements related to National Institute of Standards and Technology Special Publication 800-171 (NIST SP 800-171). The rules set out steps contractors must take to protect certain government information from unauthorized access.
According to the allegations, a Honeywell business unit did not meet the agency’s requirements on one of its networks in the three-year span between April 2020 and December 2023. The government alleged that the business unit still submitted claims for payment under a contract that required compliance with those cybersecurity standards.
The settlement involves Honeywell Aerospace, a company headquartered in Phoenix, Arizona, that provides aerospace products, systems and services to government and commercial customers. Its work includes products used in aircraft and other aviation systems, making the company a major supplier within the aerospace industry. Before June 29, Honeywell Aerospace operated as a business segment of Honeywell International Inc., which is headquartered in Charlotte, North Carolina.
The aerospace business had been part of the larger Honeywell organization before becoming an independent company. Honeywell Aerospace became a standalone public company before the settlement was announced, a significant change in how the business was organized and operated. The separation gave Honeywell Aerospace its own public company structure while Honeywell International continued operating as a separate company with its other businesses. The DOJ’s case, however, concerns conduct that allegedly took place while the aerospace business was still part of Honeywell International. The allegations involve activity between April 2020 and December 2023 and relate to cybersecurity requirements connected to a Department of Defense contract.
The DOJ said government contractors that handle defense information are expected to follow the cybersecurity rules included in their contracts. Officials said those requirements are intended to protect government systems and data from unauthorized access. The case also reflects the growing attention given to cybersecurity practices among companies doing business with the federal government.
The allegations came from an FCA whistleblower lawsuit. The act allows private individuals with information about possible fraud against the government to file a case on the government’s behalf in certain circumstances. A successful case can result in the whistleblower receiving part of the money recovered by the government. In this specific case, Rachel Tenney, a former Honeywell employee, filed the lawsuit and is set to receive $375,823 as her share of the recovery. The lawsuit is listed as United States ex rel. Rachel Tenney v. Honeywell International Inc., Civil Action No. 3:22-cv-129, in the U.S. District Court for the Western District of North Carolina.
The agreement does not mean that Honeywell was found liable in court. The DOJ stated that the claims resolved by the agreement were allegations only, and there was no determination of liability. However, the payout closes the allegations covered by the settlement without a court finding that the company committed the violations described in the lawsuit.
The case comes as federal agencies continue to place attention on cybersecurity protections for contractors handling government information. Companies working on defense contracts can face financial and legal consequences when required security practices are not followed. The Honeywell settlement shows that cybersecurity obligations can become part of False Claims Act cases when contractors are accused of seeking payment while failing to meet contract requirements.
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