At US base in Germany, a probe as building costs soar

Nearly two years after it was supposed to be completed, the Pentagon's largest single-site construction project is languishing unfinished, due to shoddy workmanship, poor planning, flawed design, spiraling costs, and an ongoing fraud investigation.

The problems are so severe that neither the US Air Force – overseeing the project – nor the construction company it has partnered with can predict the final budget or completion date, according to the US Government Accountability Office (GAO).

"The project is in serious trouble, and there are no good solutions," says Gregory Kutz, the GAO's managing director of special investigations. "Sorting it out could take years, if it can be sorted out at all."

The problem is the unfinished Kaiserslautern community center, that's designed to house 844,000 square feet of shops and lodging. It is part of a $2 billion makeover of Kaiserslautern Military Community, the US military's largest overseas base and a key player in its global troop realignment plan.

As other bases across Europe close, southwest Germany's "K-town" is picking up pieces of their missions and becoming a central gateway for American troops abroad and a logistical hub for Middle East operations.

The rapid pace of the base realignment has pushed many projects onto fast-track schedules. In the case of the Kaiserslautern Military Community Center, or KMCC, the original goal was to complete the $150-million project by December 2005, when a nearby base closed. KMCC's lodging was supposed to replace lost quarters for troops en route to places like Iraq and Afghanistan.

The tight timeline meant construction began before design plans were finished and no general contractor was hired. Instead, LBB-Kaiserslautern, the German state company responsible for construction, opted for a "trade lots" approach, which meant coordinating the work of more than 30 construction companies and their subcontractors.

The Air Force also rejected the help of the Army Corps of Engineers, which normally oversees military construction projects, and "did not conduct thorough project planning or architectural design reviews," according to a leaked report from Air Force auditors.

Investigators said that the result has been serious design flaws, poor coordination, and costly errors, including a new multimillion-dollar roof that will have to be ripped out and replaced because it's falling apart. Some of the building has been ruined by mold and rot.

$6.1 million in costs 'preventable'

One indicator of the hurdles the project has faced is the large number of change orders, issued when work needs to be altered or redone. So far, there have been at least 776. The Air Force, bogged down in paperwork and eager to keep the project going, authorized – and in many cases paid – the orders without reviewing them, making it possible for corruption to go unnoticed.

German police and Air Force investigators have launched a probe into 427 change orders worth $13.7 million, for which the invoices are missing and may have never existed. So far, no one has been charged in the case, and both the Air Force and LBB-Kaiserslautern have denied breaking any laws.

Of the change orders that are available, auditors found that at least 173 of them, worth $6.1 million, "resulted from the inadequate project planning and construction design and, thus, were preventable."

They also unearthed nearly $8 million in expenses stemming from "design deficiencies" and excess material costs. According to investigators, this is probably a fraction of the final tally, since some of the most expensive repairs, like a roof replacement, haven't yet been made.

The Air Force has begun clamping down on making payments without seeing paperwork. As a result, contractors are going unpaid, bringing work to a near-standstill.

These revelations have touched off a bipartisan fusillade on Capitol Hill.

"How could construction of a modern-day facility in a Western country on a US military base resemble the shoddy and makeshift practices of a war zone?" asked Rep. Henry A. Waxman (D) of California.

In 2004, officials warned of trouble

Air Force officials have maintained that most of the problems stem from factors beyond their control. Testifying before members of Congress last month, Brig. Gen. Danny Gardner, director of installations and mission support for the US Air Force in Europe (USAFE), laid the blame on LBB-Kaiserslautern for using the trade-lots approach.

LBB-Kaiserslautern spokesman Markus Ramp replied in an e-mail to the Monitor that the tight schedule was the reason his agency selected that approach, which meant coordinating with dozens of construction companies rather than hiring a single general contractor. "That was the only way to comply with the US side's timeline," which required construction to begin before the design plans were finished, he wrote.

Air Force spokeswoman Col. Susan Strednansky said via e-mail that "the project appeared to be on schedule" until November 2005, when minor delays were announced. The Air Force only learned of the deeper issues last September, when the large number of change orders came to light, she said. This discovery "drove USAFE to increase their staffing [on the project] to 17 personnel," roughly doubling the team's size.

But as far back as September 2004, senior officials at the Air Force Services Agency and the Army & Air Force Exchange Services, which are funding the bulk of the project, warned of trouble in a memo to the Air Force's European headquarters. It stated that the "accelerated process has contributed to critical design process omissions, design coordination problems, and schedule complications ... that may cause cost increases and project delays" and urged that the fast-track schedule be scrapped.

Affected: US troops and taxpayers

Getting the project on track now will be complicated and costly, according to Mr. Kutz. "The only way to get workers back is to pay them," he says. "But because of the change-order problem, we have no good evidence for what workers did or how much they are really owed."

The Air Force and LBB-Kaiserslautern expect a flurry of lawsuits from the construction firms. One million-dollar suit has already been filed, according to LBB-Kaiserslautern officials. Meanwhile, until the KMCC quarters are done, the Pentagon is paying $300,000 a month to house visiting troops off base – a cost that will likely be passed on to taxpayers.

But the brunt of the extra costs will be borne by the Army & Air Force Exchange Service, the project's main tenant. Its expenses are likely to double to around $180 million, according to the GAO. This could create fallout for troops since profits from the agency's retail centers fund programs for military personnel and their families, among them child care and counseling. "That is worst part of this ordeal – who may suffer because of it," says Kutz.