U.S. paid $32M for Iraqi base that wasn’t built

The U.S. military paid a Florida company nearly $32 million to build barracks and offices for Iraqi army units even though nothing was ever built, Pentagon investigators reported.

The project had to be abandoned because the Iraqi Defense Ministry couldn’t obtain rights to the land where the headquarters were to be built, according to a report released this month by the Defense Department’s Office of Inspector General. Contracting records show the buildings would have housed one brigade and three battalions of the Iraqi military in Ramadi, a hotbed of the Sunni Muslim insurgency and capital of Anbar province.

Still, the Air Force agency overseeing the project paid contractor Ellis Environmental Group $31.9 million of the $34.2 million obligated for the project, the report said.

An Air Force spokesman, Michael Hawkins, said in an e-mail that Air Force auditors are reviewing the contract. Although the inspector general’s report says the Air Force was considering suing the contractor, Hawkins said any talk of a lawsuit was premature until the Air Force audit is complete.

Ellis Environmental Group spokesman Steve Brownstein said the work was reassigned to Ellis World Alliance Corp., a related company. Bob Smith, of Ellis World Alliance headquarters in Gainesville, Fla., said contracting rules barred any official comment.

The Ramadi construction contract is one of many problems Pentagon investigators cited in this month’s report on the military’s oversight of $5.2 billion Congress approved in 2005 to help train and equip the Iraqi military and police.

The report says the military didn’t keep adequate records of equipment for the Iraqis ranging from generators and garbage trucks to thousands of guns and grenade launchers. Separately, the United States has launched a criminal investigation into allegations that weapons it bought for the Iraqis ended up in the hands of insurgent and terrorist groups.

The Air Force Center for Engineering and the Environment near San Antonio manages construction contracts for the Iraqi military assistance program.

In May 2006, the Air Force center awarded the Ramadi project to Ellis Environmental Group, according to federal contracting records.

The inspector general’s report says vouchers provided by the contractor don’t show purchased materials. But Hawkins said the Air Force had documentation on about $15 million worth of equipment and supplies meant for the Ramadi headquarters. That gear is in storage and available for other projects in Iraq, Hawkins said.

Hawkins said the contractor set up a camp for construction workers, performed design and engineering work and had begun building roads and an airstrip before the project was halted.

Government investigators have repeatedly faulted U.S. oversight of contracting in Iraq, and more than two dozen people have been charged with corruption related to the war and rebuilding effort.
http://www.usatoday.com/news/washington/2007-12-13-Iraqcontract_N.htm