US Cancels $2.4B Cybersecurity Deal with Leidos, Sparks Concerns

US Cancels $2.4B Cybersecurity Deal with Leidos, Sparks Concerns

Summary

• The Department of Homeland Security (DHS) terminated a $2.4 billion cybersecurity contract awarded to Leidos.
• The contract, Agile Cybersecurity Technical Solutions (ACTS), was meant to support the Cybersecurity and Infrastructure Security Agency (CISA).
• DHS said the work no longer matched CISA’s needs after organizational and priority changes.
• The move ended a long bid protest by rival Nightwing and raised questions about CISA’s future tooling.

Overview

The Department of Homeland Security has terminated a $2.4 billion cybersecurity contract with Leidos. The deal, called Agile Cybersecurity Technical Solutions (ACTS), was supposed to support the Cybersecurity and Infrastructure Security Agency (CISA). DHS disclosed the decision in a filing with the U.S. Court of Federal Claims in early May 2025.

Deal Termination: The What and Why

DHS awarded ACTS to Leidos in February 2024. The contract covered analysis, integration, testing, deployment and upkeep of cybersecurity tools for CISA. It was meant to replace the Domino contract, which Raytheon won in 2017 with a $1.15 billion ceiling.

Performance was not the stated reason. In its court filing, DHS said the requirements “no longer meet the needs” of CISA “in light of organizational changes and changes in priorities, unrelated to the protest.” DHS terminated the contract and its first task order for transition planning, and said it was planning how to meet its future requirements.

A Disruption in Cybersecurity Advancements

The losing bidder, Nightwing, had challenged the award for more than a year. Nightwing is the former Raytheon cyber business that kept the Domino work when it became a standalone company in 2024. It protested first at DHS and then at the Court of Federal Claims, arguing that the source selection was deeply flawed.

The termination came as CISA was being reshaped. The Trump administration had cut back the agency’s work on misinformation and election security and proposed reducing its roughly $3 billion annual budget by about $500 million.

For CISA, the question is what happens to the work ACTS was meant to cover, and how long a replacement will take.

Accountability and Future Contracting Procedures

Cancelling a contract of this size after a long protest raises questions about how agencies plan big cybersecurity purchases. Industry analysts noted that years of work on the acquisition ended without the contract ever really starting.

Contractors also face uncertainty. When requirements change mid-stream, companies that spend heavily on bids have little to show for it.

Some observers want clearer rules on when agencies can cancel large awards and more transparency about why. Others say agencies need room to change course when priorities shift.

Potential Path Forward

DHS has said it will decide how to meet CISA’s future needs, which could mean a new competition. Leidos and Nightwing are both likely bidders if that happens.

Until then, the existing arrangements stay in place. The bigger issue is continuity: CISA protects federal civilian networks, and gaps in the tools behind that work can create risk.

The Takeaway

The end of ACTS shows how quickly federal cybersecurity contracts can change when an agency’s priorities shift. It also shows what reorganization at CISA means in practice, beyond headcount.

Agencies, contractors and lawmakers will be watching what DHS does next.

Fred Templeton, CISA, CASP, SEC+

Fred Templeton is a practicing Information Systems Auditor in the Washington DC area. Fred works as a government contractor and uses his skills in cyber security to make our country's information systems safer from cyber threats. Fred holds a master's degree in cybersecurity and is currently working on his PHD in Information Systems.